From
http://online.wsj.com/article/SB10001424052748703427704575051443279877452.html?mod=WSJ_hps_RIGHTTopCarousel
"We know that in the wake of Mr. Cuomo's agitation [as President Clinton's Secretary of Housing and Urban Development], Fannie and Freddie's purchases of subprime loans skyrocketed. Subprime and "liar" loans became loss leaders that eventually caused the two mortgage giants to fail—with taxpayers so far on the hook for $111 billion in losses and perhaps hundreds of billions more to come. The problem wasn't merely that HUD under Mr. Cuomo was raising the volume of risky loans for which taxpayers were guaranteeing. HUD was also encouraging a dangerous decline in underwriting standards at these government-sponsored enterprises (GSEs). Says former Fannie Mae chief credit officer Edward Pinto, "HUD commissioned much research aimed at forcing the adoption of more flexible lending standards by the GSEs." In 1999, the Urban Institute published a HUD-commissioned study of Fannie and Freddie's credit guidelines. Among its findings: "Almost all the informants said their opinion of the GSEs has changed for the better since both Fannie Mae and Freddie Mac made substantive alterations to their guidelines and developed new affordable loan products with more flexible underwriting guidelines." Keep in mind that Mr. Cuomo was doing this Fan and Fred cheerleading even as his colleagues in the Clinton Treasury were publicly raising red flags about their too-rapid expansion. Had Larry Summers, who was then Treasury Secretary, and Republican Paul Ryan, prevailed in their reform attempts, Fan and Fred wouldn't have been able to pile up so much rotten debt and turbocharge the housing boom. In 2008, Wayne Barrett wrote in detail in the Village Voice about the changes Mr. Cuomo also wrought at the Federal Housing Administration, encouraging bigger loans with smaller down payments. Mr. Barrett wrote that Mr. Cuomo "made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down . . . ." Mr. Barrett summed up Mr. Cuomo's tenure in the Clinton cabinet by noting that "the country will be living with his HUD mistakes, ill- or well-intended, for a long time to come."" Andrew Cuomo can fairly be blamed for a significant role in the current economic crisis. Yet this man is the undisputed front runner to become New York's next governor.
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written by chancehaywood , February 09, 2010
I see Rupert is doing all he can to help us by trying to make really old news new again.
written by Quickjustice , February 12, 2010
Given that Cuomo's actions had consequences in 2008, it's appropriate for the WSJ to connect the dots.
More important, this issue, if properly developed, could win the gubernatorial election for Rick Lazio. Mark my words: Lazio will fumble the ball.
written by Jay Golub , February 12, 2010
If the Left wants to blame the bad economy that hit in 2008 on GWB, then there is no reason not to blame Cuomo and his liberal buddies for the Housing crash and the sub-prime crisis.
The housing crisis was fundamentally the result of the politicization of economic affairs. Every time this is done, a crisis follows.
Just think how many more problems are on the way now that Obama has politicized just about every part of the American economy...
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