Clinton HUD Secretary Andrew Cuomo announced a settlement of a lending discrimination complaint with Accubanc, a Texas lender whose prerequisites for mortgages came under attack from “community organizers” at the Fort Worth Human Relations Commission and the city of Dallas. I clipped out this sequence to underscore its importance:
CUOMO: To take a greater risk on these mortgages, yes. To give families mortgages that they would not have given otherwise, yes.
Q: [unintellible] … that they would not have given the loans at all?
CUOMO: They would not have qualified but for this affirmative action on the part of the bank, yes.
Q: Are minorities represented in that low and moderate income group?
CUOMO: It is by income, and is it also by minorities? Yes.
CUOMO: With the 2.1 billion, lending that amount in mortgages — which will be a higher risk, and I’m sure there will be a higher default rate on those mortgages than on the rest of the portfolio …
Here, in fact, is the genesis of the problem, the ideology that created the monster. Cuomo, the Clinton administration, and Congress believed they had the right and the power to determine acceptable risk for the lenders, rather than lenders determining it for themselves in a free market. Even while imposing risk standards on lenders, Cuomo admits that he expects a higher default rate on the new loans — which is why the lenders didn’t want to write them in the first place.
In other words, the CRA didn’t get used to fight discrimination, but to force lenders to give money to high-risk borrowers for political purposes. And Cuomo knew it.
That was the political arrogance at the heart of the collapse. However, the CRA was more a sideshow than the actual problem. When Congress decided that enforcement alone wouldn’t generate enough mortgages to boost their political fortunes, they had Fannie Mae and Freddie Mac eliminate the risk entirely for lenders through the purchase of the sub prime loans. Without that risk and with almost-guaranteed short-term profits of sub prime loans, lenders went wild while Fannie and Freddie repackaged them as quasi-government bonds for investors.
For the rest of the original post from Hotair-original post 10/12/08
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Post I did 11/1/2009
Sunday, November 1, 2009
WHAT REALLY CAUSED OUR ECONOMIC CRISIS?
These videos are right on target. I worked in the title business for 12 years. I can't tell you the volume of loans that closed that should have never been approved. The lax requirements pushed by the Democrats and their agenda continued this train wreck to where we are today.In 2005 I approached the Vice President of the company I worked with and voiced my concern over the obvious loans consumers were approved for that were destined for foreclosure. I do not have a degree in economics, yet even I could see this coming. You can't possibly believe that these highly educated individuals running our country and ruining our financial industry did not see this coming as well. When President Bush and John McCain tried to rein in this out of control lending, (they obviously saw what I saw) they were voted down by every Democrat.
It is as if this was a deliberate act to destroy our financial industry. Create a financial crisis, and then point fingers at the Bush administration. I truly believe this was deliberate by the democrats...to create a crisis. As Rahm Emmanuel said, "you should never let a good crisis go to waste."
I wonder how much money these scumbags made through hedge-funds etc that were betting against the housing market. It would be interesting to know if George Soros was heavily involved in this or not.
Don't you think it is bizarre that Chris Dodd and (then) Senator Obama were the number 1 and 2 recipients of campaign contributions? They were as deeply embedded in this implosion as anyone.
Do your homework.....you'll find that this was a disaster that didn't have to happen....at least to the extent it did. If the Democrats would have done the right thing and voted to rein these out of control lending practices 4-5 years before now, this could have been avoided....but you see that would have been a win for the Bush administration. That would have pulled back the curtain on the corruption and the cooking of the books for Freddie, Fannie, and any number of other financial institutions. That would have dried up the campaign contributions for the Dems as well as uncovered some possible improprieties.
The Bush administration was not the cause of this economic tsunami. On the contrary, they were trying to do what they could to get it under control. The Democrats own this...but they will never admit it. That is why we need to educate those that are easily led by these liars in the White House, Senate and Congress. They all need to be voted out of office and we need to start with a clean slate.
We need God-fearing men and women of honor, good morals, integrity and those that really have our best interest at the forefront of every decision that they make. Anything less and there won't be any real change...it will just remain the same.
EVIDENCE FOUND!!! Clinton administration's "BANK AFFIRMATIVE ACTION" They forced banks to make BAD LOANS and ACORN and Obama's tie to all of it!!! (longer version of video)
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Originally posted 9/2/2009
Wednesday, September 2, 2009
The Truth About Fannie Mae and Freddie Mac from my perspective
More on what caused our financial crisis:Timeline shows Bush, McCain warning Dems of financial and housing crisis; meltdown
Obama and Democrats are Responsible: Fannie Mae/Freddie Mac
To those who do not know my background....I worked in the Title business for 12 yrs. I can assure you that this economic tsunami of housing foreclosures was not a surprise to anyone in the mortgage, title, or real estate industry. I can personally attest to the fact that a large number of loans that closed in our office should have never made it to the closing table. The relaxed and/or non-existent credit guidelines truly allowed for almost anyone to get a loan. Thus the name "liar loans."
Most buyers had no skin in the game (no down payment). Instead, the seller would raise the price of the home and participate in a "down payment assistance program" that provided the necessary 3% down pmt for the buyer or they would have an 80/20 loan that would also not require any down payment. Most loans were sub-prime and/or had adjustable rates as well as pre-payment penalties. If the customer tried to pay off the loan either through a sale or refinance within 2-5 yrs they would have to pay a substantial penalty. The majority of 80/20 loans had inflated interest rates 2-5 pts. above the going interest rate.
Many times I would ask the loan officers "how in the world could you get this customer approved?" They would respond: "This will at least get them into a house and I tell them to refinance in a couple of yrs to get a better rate." Well those couple of years have now passed for those customers and it is now impossible to refinance. Their homes aren't worth what they owe and now the requirements are stricter to qualify. So these homeowners that shouldn't have been approved for the loan in the first place, are stuck with these loans...or worse yet, have been or will soon be foreclosed on and we will be stuck with the tab.
About 5 years ago, the company I worked for lost it's biggest builder's business. At that time, I discussed marketing options with the President of our company. Our company primarily worked with Realtors and had very little business with lenders (refinance business mainly). I told him that it was my opinion that we needed to aggressively market the mortgage lender business as it was my prediction that the market would soon experience a mortgage implosion greater than the late 70's and 80's. I could foresee that the main sellers in the near future were going to be the mortgage companies. It was obvious they were going to be holding the majority of homes for sale as foreclosures would explode.
I was given the title of "Title Police" by my fellow co-workers. Whenever I saw obvious signs of loan fraud, I would sound the bells and blow the whistle. My co-workers would joke that they were going to give me a whistle to sound when I suspected a "fishy" loan. I do have to say that the company I worked for was very conservative and always stood behind their employees if they felt the loan didn't pass the "smell test". They would encourage us to pass any information to our underwriter to review in order to determine if we should decline closing the transaction. Every time we had clear concerns, they supported our decision to not close the loan. Unfortunately, other title companies weren't as conservative and the loan would be moved down the road to close. Even worse, they would close these loans even after we would suggest that they take a close look at the file as there were concerns about the loan.
In 2005, John McCain introduced these videos that show that the Bush Administration, Alan Greenspan and John McCain had also seen this coming and tried to rein in Fannie Mae and Freddie Mac. The most compelling video shows Barney Frank and other Democrats defending this mortgage fraud frenzy and touted how stable the mortgage industry was and how it had moved to put more people into homes than ever before (exactly..these were people that should have never been allowed to get these loans)...all the while Fannie Mae and Freddie Mac are " cookin their books" and lining the pockets of their top leaders that also were major contributors to the Democratic party and Barrack Obama specifically.
I also hold Acorn and others responsible as well. They were the thugs threatening banks with lawsuits if they didn't relax their loan requirements. Freddie and Fannie helped perpetrate this loan fraud with complete support from Barney Franks, Franklin Raines and any number of willing participants that turned a blind eye for the sake of the almighty dollar or power.
The sad thing is that I am no economist, I have no special skills at predicting the future. While Obama and his Gangster Governmment want to continue to make Bush the demon behind this economic tsunami, I believe that if the mortgage lending had been reined in as far back as 2001, we would not find ourselves digging out of the mess we are currently in.
Full video from 1998:
Participants spoke about the importance of equality in housing opportunities, both in housing and lending. Secretary Cuomo stated that while much progress has been made the Department of Housing and Urban Development still has much work to do in enforcing the law. A video recording was shown of Nick Conner speaking about the racist incident involving Lisa Costa. This event marked the thirtieth anniversary of the Fair Housing Act and the tenth anniversary of its amendment to cover persons with disabilities or children. It also honored the thirtieth anniversary of the death of the Rev. Martin Luther King, Jr., and Mr. Brown read a letter from Martin Luther King III in honor of his father. 4/6/1998 Michele
Additional links: http://hotair.com/archives/2008/10/06/was-sub-prime-lending-ever-a-good-idea/
The IUSB give an EXCELLENT breakdown of the crisis and the chain of events
"I realize that on the sea of life, I can't control the weather, but I can adjust my sails." unknown
Most buyers had no skin in the game (no down payment). Instead, the seller would raise the price of the home and participate in a "down payment assistance program" that provided the necessary 3% down pmt for the buyer or they would have an 80/20 loan that would also not require any down payment. Most loans were sub-prime and/or had adjustable rates as well as pre-payment penalties. If the customer tried to pay off the loan either through a sale or refinance within 2-5 yrs they would have to pay a substantial penalty. The majority of 80/20 loans had inflated interest rates 2-5 pts. above the going interest rate.
Many times I would ask the loan officers "how in the world could you get this customer approved?" They would respond: "This will at least get them into a house and I tell them to refinance in a couple of yrs to get a better rate." Well those couple of years have now passed for those customers and it is now impossible to refinance. Their homes aren't worth what they owe and now the requirements are stricter to qualify. So these homeowners that shouldn't have been approved for the loan in the first place, are stuck with these loans...or worse yet, have been or will soon be foreclosed on and we will be stuck with the tab.
About 5 years ago, the company I worked for lost it's biggest builder's business. At that time, I discussed marketing options with the President of our company. Our company primarily worked with Realtors and had very little business with lenders (refinance business mainly). I told him that it was my opinion that we needed to aggressively market the mortgage lender business as it was my prediction that the market would soon experience a mortgage implosion greater than the late 70's and 80's. I could foresee that the main sellers in the near future were going to be the mortgage companies. It was obvious they were going to be holding the majority of homes for sale as foreclosures would explode.
I was given the title of "Title Police" by my fellow co-workers. Whenever I saw obvious signs of loan fraud, I would sound the bells and blow the whistle. My co-workers would joke that they were going to give me a whistle to sound when I suspected a "fishy" loan. I do have to say that the company I worked for was very conservative and always stood behind their employees if they felt the loan didn't pass the "smell test". They would encourage us to pass any information to our underwriter to review in order to determine if we should decline closing the transaction. Every time we had clear concerns, they supported our decision to not close the loan. Unfortunately, other title companies weren't as conservative and the loan would be moved down the road to close. Even worse, they would close these loans even after we would suggest that they take a close look at the file as there were concerns about the loan.
In 2005, John McCain introduced these videos that show that the Bush Administration, Alan Greenspan and John McCain had also seen this coming and tried to rein in Fannie Mae and Freddie Mac. The most compelling video shows Barney Frank and other Democrats defending this mortgage fraud frenzy and touted how stable the mortgage industry was and how it had moved to put more people into homes than ever before (exactly..these were people that should have never been allowed to get these loans)...all the while Fannie Mae and Freddie Mac are " cookin their books" and lining the pockets of their top leaders that also were major contributors to the Democratic party and Barrack Obama specifically.
I also hold Acorn and others responsible as well. They were the thugs threatening banks with lawsuits if they didn't relax their loan requirements. Freddie and Fannie helped perpetrate this loan fraud with complete support from Barney Franks, Franklin Raines and any number of willing participants that turned a blind eye for the sake of the almighty dollar or power.
The sad thing is that I am no economist, I have no special skills at predicting the future. While Obama and his Gangster Governmment want to continue to make Bush the demon behind this economic tsunami, I believe that if the mortgage lending had been reined in as far back as 2001, we would not find ourselves digging out of the mess we are currently in.
Full video from 1998:
Participants spoke about the importance of equality in housing opportunities, both in housing and lending. Secretary Cuomo stated that while much progress has been made the Department of Housing and Urban Development still has much work to do in enforcing the law. A video recording was shown of Nick Conner speaking about the racist incident involving Lisa Costa. This event marked the thirtieth anniversary of the Fair Housing Act and the tenth anniversary of its amendment to cover persons with disabilities or children. It also honored the thirtieth anniversary of the death of the Rev. Martin Luther King, Jr., and Mr. Brown read a letter from Martin Luther King III in honor of his father. 4/6/1998 Michele
Additional links: http://hotair.com/archives/2008/10/06/was-sub-prime-lending-ever-a-good-idea/
The IUSB give an EXCELLENT breakdown of the crisis and the chain of events
"I realize that on the sea of life, I can't control the weather, but I can adjust my sails." unknown
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