Apparently, the Bush administration attempted to regulate Fannie and Freddie. Here’s and article from 2003.
"The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry"
"After the hearing, Representative Michael G. Oxley, chairman of the Financial Services Committee, and Senator Richard Shelby, chairman of the Senate Banking Committee, announced their intention to draft legislation based on the administration’s proposal. Industry executives said Congress could complete action on legislation before leaving for recess in the fall. " (they’re republicans)
"Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.” "
Democrats opposed the bill to help poor people and people with bad credit get loans. These of course are the people who defaulted on their loans and bankrupted the companies.
http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print
The republicans had a slim majority. It takes 60 votes to beat a fillabuster
Good question. The Clinton administration and his cronies (some of which are current Obama advisers and contributors) like Franklin Raines, James A. Johnson, Janet Reno, and Jamie Gorelick are to blame for much of the financial mess we are in right now, namely running Fannie Mae into the ground.
In an effort to make housing “affordable” to everyone, they created the market for the high-risk subprime loans. New regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making, or face stiff government penalties.
Meanwhile, Fannie Mae executives received maximum bonus payouts in the millions by overestimating earnings. You can now see the domino effect this has had with corporations like AIG, who owned a large stake in Fannie Mae. President Bush and Senator McCain have pushed for change in the mortgage giant’s structure since 2002, but Congress has largely ignored them. This shouldn’t come as a surprise though considering Democrats were the biggest benefactors of Fannie and Freddie lobbying, with Christopher Dodd receiving the most in contribution money at $165,400, followed by Barack Obama at $126,349, and John Kerry at $111,000.