Collapse of the Housing Market.

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Collapse of the Housing Market.
The purpose of self-governing is to make government work better by allowing people to help govern themselves. And the people do that by electing Representative to talk for them, to protect life, liberty and personal properties. “The absolute rights of individuals may be resolved into the right of personal security, the right of personal liberty, and the right to acquire and enjoy property… and that consists in being protected and governed by laws made, or assented to, by the representatives of the people, and conducive to the general welfare” (James Kent, Commentaries on American Law, Lecture XXIV). Yes I believe that the congress lived up to protect life, liberty and personal properties, because they used “…Federal financial supervisory agency to use its authority when examining financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions…” (Community Reinvestment Act, October 12, 1977) They did this so everyone could get a house. They also wanted to get more people into house so the economy could move. Because of that the demand for houses increased and so did the prices and most people were not able to afford and could not get a loan form the bank. Because of that the government “…in 1995 gave the CRA serious teeth: regulators could now deny a bank with a low CRA rating approval to merge with another bank—at a time when the arrival of interstate banking made such approvals especially valuable—or even to open new branches. Complaints from community organizations would now count against a bank’s CRA rating.” (Lawrence H. White, “How Did We Get into This Financial Mess?,” Cato Institute, November 18, 2008). HUD also “actively pushed Fannie Mae and Freddie Mac into backing the enormous expansion of the nonprime mortgage market…. To fund their enormous growth, Fannie Mae and Freddie Mac had to borrow huge sums in wholesale financial markets. Institutional investors were willing to lend to the government-sponsored mortgage companies cheaply … because they thought that the Treasury would repay them should Fannie or Freddie be unable.” (Lawrence H. White, “How Did We Get into This Financial Mess?,” Cato Institute, November 18, 2008). Congress tried to help the people by putting out more funds like The American Dream Down payment Initiative (ADDI). ADDI helped first time house buyers by paying their down payment or the closing cost. This helps more people to buy a house. “The American Dream Downpayment Assistance Act authorized up to $200 million annually. Funds were appropriated for fiscal years 2004-2008…. ADDI helped first-time homebuyers with the biggest hurdle to homeownership: downpayment and closing costs” The original purpose of the president was to carry out any decisions that congress made, but the president was not independent of Congress. Congress still remained completely in charge of how their decisions were carried out. The president is part of the executive who was to look up to congress so there is not a person making all the decision. All the powers of government, legislative, executive, and judiciary, result to the legislative body [in the Virginia Constitution of 1776]. The concentrating these in the same hands is precisely the definition of despotic government. It will be no alleviation that these powers will be exercised by a plurality of hands, and not by a single one. 173 despots would surely be as oppressive as one.” (Thomas Jefferson, Notes on the State of Virginia, Query 13, 1784). But when it came to the housing market the president/ executive department and agencies did not live up to their purpose in their actions in the area of housing. For example “President Bill Clinton's HUD agreed to let Fannie and Freddie get affordable-housing credit for buying subprime securities that included loans to low-income borrowers. The...
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