Clinton Housing Chief Paved the Way for Risky Loans

How American Dream Became Economic Nightmare
By Mary Papenfuss,  Newser User
Posted Oct 19, 2008 11:27 AM CDT
Hillary Rodham Clinton applauds as former US Secretary of Housing and Urban Development Henry Cisneros, right, makes his way to the podium to introduce her in Las Vegas, Saturday, Jan. 12, 2008.   (AP Photo/Elise Amendola)
camera-icon View 2 more images

(Newser) – The top housing chief of the Clinton administration helped launch a major financing wave that transformed the American dream of homeownership into reality for thousands of people—whether they could afford it or not, reports the New York Times. From his post, Henry Cisneros loosened mortgage restrictions for first-time buyers, then later joined the board of a major housing developer and the nation's largest mortgage lender.

Scores of homes his own company built in San Antonio have been foreclosed in part of a cascade of bad mortgages. Cisneros stands behind what he helped change, but says the system was corrupted by “unscrupulous participants," who hurt people and the economy. "Henry did everything he could for builders at HUD," said one observer. “That laid the groundwork for where we are now.”