New GOP Video Blames Dems for Wall St. Collapse
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A popular YouTube video blames congressional Democrats and Barrack Obama for the Wall Street meltdown, saying they backed the Community Reinvestment Act that the video alleges forced banks to make sub-prime loans. Moreover, the video says John McCain sought to regulate the mortgage monster years ago.
As of Sunday morning, the video had 560,000 hits.
The CRA sought to ensure banks loan money to sectors of society shunned by traditional lenders. However, the banks affected by this legislation -- community banks and neighborhood lenders -- were not the corporate investments banks that led Wall Street's frenzy of irresponsible lending and packaging those loans into new securities sold to investors.
The video also handily omits is that everyone who had a stake in the housing bubble -- banks, mortgage brokers, real estate agents, appraisers -- all went crazy pushing these loans and home sales to make fortunes, and Wall Street treated these loans as hot potatoes - handing them off as soon as possible to other lenders, or hiding them in securities that were packaged to mask problem loans.