http://blogs.abcnews.com/politicalpunch/2008/10/barney-frank-sa.htmlThe Chairman of the House Financial Services Committee, Rep. Barney Frank, D-Mass., yesterday said Republicans are misplacing blame when they target Democrats' efforts to expand affordable housing -- and Frank alleged there was a racial component to the criticism.
"They get to take things out on poor people," Frank said at a mortgage foreclosure symposium, as reported by the Associated Press's Glenn Johnson. "Let's be honest: The fact that some of the poor people are black doesn't hurt them either, from their standpoint. This is an effort, I believe, to appeal to a kind of anger in people."
Frank in August told CNN that a new guiding principle for the housing market should be "we basically have to tell people who want to make mortgage loans something terribly radical: Do not lend money to people who can't pay it back."
Asked how the US mortgage market got to this horrible place, Frank said, "We had too little regulation at a point of great financial innovation. Twenty years ago, most loans were made by someone who expected to be paid back by the borrower. And lenders who want to be paid back by the borrower are careful about who they lend to. Then came this great innovation called securitization. Securitization means that I lend you money and quickly sell the right to be paid back by you to other people. Well, when the lender ceased to have an ongoing relationship with the borrower, a tremendous amount of banking discipline was lost. And it was much harder to replace than we thought."
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