Our financial crisis is a result of the Community Reinvestment Act, which required banks to make mortgage loans to low-income people. Banks were required to lower standards and make loans people could not repay. If banks did not make these loans, they were subject to legal action, fines and penalties.

Democrats in Congress required government-sponsored agencies, Fannie Mae and Freddie Mac, to buy these subprime mortgages. Many of these subprime mortgages were packaged by Wall Street and sold as mortgage-backed securities to banks, insurance companies and other financial institutions.

Republican legislators, Alan Greenspan, the chairman of the Council of Economic Advisors and the secretary of the Treasury warned that these practices would create a financial crisis as early as 2003. The Republicans introduced legislation to regulate Fannie Mae and Freddie Mac. Liberal Democrats led by Barney Frank, Chris Dodd and others denied that Fannie Mae and Freddie Mac were taking big risks with subprime mortgages and stopped the regulation.

When borrowers stopped paying on mortgages they could not afford, this house of cards collapsed. Financial institutions that held these mortgage-backed securities could not sell them, because no one knew their value if they had any. As mortgages went south, so did the banks who made them.

High-energy prices caused by not allowing drilling for oil, stopping the construction of nuclear power coal plants and preventing the construction of new refineries contributed. The rise in gas prices forced people to choose between buying gas to drive to work or paying the mortgage. They had to drive to work or starve.

Fannie Mae and Freddie Mac were controlled by Democrats like Franklin Raines and Jim Johnson, who became very wealthy helping to cook the books. They are all now advisers to Barack Obama. Wake up America.

Martin Samchalk

Pinehurst