Timeline of The United States Housing Bubble - 1992 - 2000

2000

• 1992:Federal Housing Enterprises Financial Safety and Soundness Act of 1992 required Fannie Mae and Freddie Mac to devote a percentage of their lending to support affordable housing increasing their pooling and selling of such loans as securities; Office of Federal Housing Enterprise Oversight (OFHEO) created to oversee them.
• 1994: Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (IBBEA) repeals the interstate provisions of the Bank Holding Company Act of 1956 that regulated the actions of bank holding companies.
• 1995: New Community Reinvestment Act regulations break down home-loan data by neighborhood, income, and race; encourage community groups to complain to banks and regulators by allowing community groups that marketed loans to collect a brokers fee; Fannie Mae allowed to receive affordable housing credit for buying subprime securities.
• 1997: Mortgage denial rate of 29 percent for conventional home purchase loans.
  • July: The Taxpayer Relief Act of 1997 repealed the Section 121 exclusion and section 1034 rollover rules, and replaced them with a $500,000 married/$250,000 single exclusion of capital gains on the sale of a home, available once every two years. This encouraged people to buy more expensive first homes, as well as invest in second homes and investment properties.
  • November: Fannie Mae helped First Union Capital Markets and Bear, Stearns & Co launch the first publicly available securitization of CRA loans, issuing $384.6 million of such securities. All carried a Fannie Mae guarantee as to timely interest and principal.
• 1998:
  • September 23, 1998: New York Fed brings together consortium of investors to bail out Long-Term Capital Management.
  • 1998: Inflation-adjusted home price appreciation exceeds 10%/year in most West Coast metropolitan areas.
  • October: "Financial Services Modernization Act" killed in Senate because of no restrictions on Community Reinvestment Act-related community groups written into law.
• 1999:
  • September: Fannie Mae eases the credit requirements to encourage banks to extend home mortgages to individuals whose credit is not good enough to qualify for conventional loans.
  • November: Gramm-Leach-Bliley Act "Financial Services Modernization Act" repeals Glass–Steagall Act, deregulates banking, insurance and securities into a financial services industry allow financial institutions to grow very large; limits Community Reinvestment Coverage of smaller banks and makes community groups report certain financial relationships with banks.
• 1995–2001: Dot-com bubble.
  • March 10, 2000: NASDAQ Composite index peaked, Dot-com bubble collapse begins.
• 2000:
  • October: Fannie Mae committed to purchase and securitize $2 billion of Community Investment Act-eligible loans.
  • November: Fannie Mae announced that the Department of Housing and Urban Development (“HUD”) would soon require it to dedicate 50% of its business to low- and moderate-income families" and its goal was to finance over $500 billion in Community Investment Act-related business by 2010.
  • December:Commodity Futures Modernization Act of 2000 defines interest rates, currency prices, and stock indexes as "excluded commodities," allowing trade of credit-default swaps by hedge funds, investment banks or insurance companies with minimal oversight, and contributing to 2008 crisis in Bear Stearns, Lehman Brothers, and AIG.