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I am directing.
Hud secretary cisneros.
To develop in cooperation with the most significant members of the housing industry and government at all levels.
A plan to boost homeownership.
Do an all time high in the United States before this century is out.
-- former President Bill Clinton launching the homeowners hit program that many say sparked the 2008 financial meltdown.
How reckless endangerment as a brand new book by New York Times reporter Gretchen Morgan -- she's gonna join us in just a moment.
Health pinpoints the democratic policies and the politicians that brought -- about.
How mortgage and chronicles how Clinton's homeowners hit initiative encourage.
Mortgage giants Fannie Mae and Freddie Mac to make risky loans to people who could not repay them.
Not to facilitate these loans Fannie and Freddie while they needed help from lawmakers -- allow them to toss out mortgage requirements you know like.
The good credit history for example.
So former Fannie Mae chairman Jim Johnson Franklin Raines both major democratic contributor is called on their friends in congress.
On their urging lawmakers like former democratic senator Chris Dodd and democratic congressman Barney Frank Maxine Waters.
And Greg Meeks served as Fannie and Freddie east champions in congress.
When others raised eyebrows they responded forcefully for example remember this.
Let me just let you get on a surprise.
So the -- -- what's in business they don't like the success that you've accomplished.
But putting people.
With decent booms in their homes and -- within hits seven we just don't like that.
I don't see any new report to break -- safety and soundness problems mr.
chairman we do not have a crisis at Freddie Mac and in particular that I have made.
Under the outstanding leadership of mr.
frank -- this narrative about the political lynching of Franklin Raines.
-- democratic economist serving in the Clinton and Obama administrations did much of the same as deputy secretary of the treasury in the 1990s Larry Summers.
He ordered the re writing -- -- report which found that Fannie and Freddie should be privatized.
And should stop receiving your hard earned tax dollars.
Treasury secretary tax cheat Tim Geithner and former OMB director Peter Orszag well they don't emerge from Gretchen Morgan since book.
Looking much better and she joins me now -- -- this book is phenomenal.
I really I wanna say that upfront there's so much information and here.
We could never get we get a whole hour special.
And you have a co author -- shore up -- has got extra.
Steady Freddie and Fannie.
The community reinvestment act all of these things together.
The got -- -- the days of my right in saying that the government forced banks and financial institutions.
Less than these lending requirements.
So that people can get mortgages knowing that the people would never make the be able to repay these loans.
-- -- that clip that you showed -- outside of the show is absolutely what we're talking about here Clinton said let's get everybody together.
The government everybody was on board for -- and so yes it was all about encouraging expanding homeownership this meant to people who.
Previously had not been able to afford a home.
Minorities lower income people immigrants yes it was absolutely necessary to expand to those people because.
We -- -- had a flat line on homeownership up until now.
Tell us about Jimmie Johnson is specially go into great detail about Franklin Raines and then later I think it was Jamie -- Hundred million dollars he made.
That's the reports absolutely -- he's important to know Sean because he's sort of escaped under the radar and that as the crisis developed in 2008.
This person was -- -- to be seen Jim Johnson ran Fannie Mae with an iron fist.
Extremely shrewd political animal turned the company into a political machine from 1991.
Very crucial period end -- history because that's when they really ballooned the balance sheet.
Started to lead that weighed down -- not degrading would be due diligence that normally gets done when you -- make a home loan.
And he made a tremendous amount of money for himself.
He also was very -- this isn't very shrewd about buying off the academic community.
About making sure he could call lopped his regulator and that that regulator would be in 98 pound weakling this is a very shrewd guy.
They even describe how they took it from Hud and moved it to congressional oversight in a way.
But you also talk about the incestuous relationship like -- describe an instance where Barney Frank got a job but bad but I think was -- for a friend.
And then he's in is look look at his role -- all of the so Chris Dodd's role in all -- and if friends of Angelo -- countrywide getting all these sweetheart you know loans for themselves.
Explain the -- connection between congress and and this -- -- these failing institution.
It was a crucial importance that Fannie may be allowed to keep its very lucrative government perquisites we were basically taxpayers were backing it.
If that went away and then the whole golden goose was cooked so -- was crucial for congress to be.
And co opted to be taken over should be bought and paid for and so that was what Jim Johnson did Franklin rains continue down that path.
So you had.
Basically anytime anyone criticized.
Homeownership any time anybody said well wait a minute what if maybe these are.
People who can't we -- these poisonous loans right these toxic loans.
You wouldn't be ridiculed you would be steamroller and they wrap themselves in the American flag of homeownership and dispel all critic.
Is -- -- talking about hundreds of billions of dollars in corruption.
Why have a -- people on the investigative work did you have this is a web.
Look and tell me if I'm wrong this happen in the private sector -- people go to jail.
You know -- the question of why no one has gone to jail -- any the financial crisis is one that you know we have been reporting on and that is I think that conundrum for a lot of people.
But this is especially.
Damaging because the taxpayers -- on the hook now for a 150 billion dollars.
And the very people that we were supposed to be helping.
They can't hurt fell lower east in -- -- this incredible you know partnership courtroom.
And it also.
Help jump start this slowdown in the economy I mean -- yet they have very informative.
A web -- if you want to know about government corruption well chronicled and a lot of people in Washington today or around then.
Including that the two that I mentioned and more many others anyway great job -- appreciate being a -- term -- and coming up stupid and mean that's what.
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