While Barack Obama pounds John McCain and the Republicans for the current financial crisis he might want to take a look at what one of his advisers wrote about the subprime issue.

From ABC News’ Jake Tapper.

New York Times oped, March 29, 2007: “Irresponsible’ Mortgages Have Opened Doors to Many of the Excluded,” a defense, of sorts, of the subprime housing market, in which the author cautions that “regulators should be mindful of the potential downside in tightening too much.”

After all, the author pointed out, the Center for Responsible Lending “estimated that in 2005, a majority of home loans to African-Americans and 40 percent of home loans to Hispanics were subprime loans. The existence and spread of subprime lending helps explain the drastic growth of homeownership for these same groups. Since 1995, for example, the number of African-American households has risen by about 20 percent, but the number of African-American homeowners has risen almost twice that rate, by about 35 percent. For Hispanics, the number of households is up about 45 percent and the number of homeowning households is up by almost 70 percent.

“And do not forget that the vast majority of even subprime borrowers have been making their payments. Indeed, fewer than 15 percent of borrowers in this most risky group have even been delinquent on a payment, much less defaulted. When contemplating ways to prevent excessive mortgages for the 13 percent of subprime borrowers whose loans go sour, regulators must be careful that they do not wreck the ability of the other 87 percent to obtain mortgages.”.

Tapper points out some other writings by Obama policy adviser Austan Goolsbee in the last few years that the candidate isn’t mentioning, because they don’t pin the blame squarely on the Republicans but people who ignored reality.

 

Share This

• 
• 
• 
• 
• 
• 
• 
• 
• 

About the author