NYP: THE 'PREDATOR' MYTH--EASY VILLAINS FOR HOUSING MESS

New York Post ^ | April 5, 2008 | Rich Lowry

[OESY]

...But the real cause of the housing mess is a classic bubble in the housing market, the bursting of which has hammered lenders as well as borrowers. If the market had continued to rise, we never would have heard complaints about subprime loans. In fact, Washington had long encouraged these sorts of loans through the Community Reinvestment Act (CRA) as a way to make marginal - largely minority - borrowers into homeowners.

What's the difference between socially responsible loans extending the American dream to deserving people with poor credit histories and predatory lending? It's whether those loans work out or not. If they don't, lenders suddenly become "predatory."

Strangely, the more "predatory" they become, the more likely they are to go out of business under the weight of worthless mortgages.

Consider Countrywide Financial, a leading purveyor of subprime loans rocked by the housing downturn. A few years ago, everyone was covering Countrywide in laurels. In 2000, the Spanish-language newspaper La Opinion named Countrywide "Corporation of the Year" for "outstanding work in the Latino community in 2004, the National Housing Conference lauded Countrywide's CEO for his "longstanding commitment to reducing the barriers to homeownership in 2005, the Lending Industry Diversity Conference gave Countrywide its "Best in Minority Lending Award."

Though Countrywide wasn't technically covered by the CRA, it complied with the act. The CRA forced lenders to lower their standards to get mortgages to more minorities and permitted the "securitization" - the sale on secondary markets - of subprime loans. Hillary Clinton complains, "Subprime loans are five times more likely in predominantly black neighborhoods." As if that weren't the entire point....

[OESY]

Scapegoating:
Sen. Clinton & Co. would rather blame lenders
than confront the real mortgage crisis.

.

[freemike]

Also,, it has become obvious that any more calamities, problems, bumps will no longer be the fault of just Bush, but of the free market and capitalism. This is going to be the new chant. It will all be shouts for more government control, which will create more problems and will lead to further regulations until the Utopian dream is realized.

[EggsAckley]

Ooh........that is a scary picture. Chills.

[whitedog57]

The Clinton and Bush Administration pushed homeownership to households that should have rented. When housing prices were going up, they were heroes. Now they (at least the Bush Administration) are villians.

First, Fannie and Freddie purchased a staggering number of PRIME second home and investor loans.

Second, many of the borrowers were actually speculators in housing. We tell them it is a good thing, the banks provide it, then we criticize the banks.

Third, investors (pension funds, hedge funds, insurance companies, banks) forgot about due diligence and purchased securities they knew were risky, but loved the yield pickup.

So, let’s blame public policy, investor greed/negligence and fraud by borrowers. Oh wait, people want to blame a CORPORATION! Okay Hillary, the banks are an easy target.

You obese, wrinkled, compulsive lying Communist POS.

[Grut]

The problem isn't the CRA; the problem is that loan officers were eager to drive house prices unsustainably upwards because those loan officers were rated (and paid) on how much they loaned, not on the loans' quality. One of the ways they did that was to ignore the ability of the mortgagee to repay, and to write the loan with terms that misled the (admittedly) fiscally illiterate borrower into thinking he was taking on something he could handle. That'll do for 'predatory lending' as far as I'm concerned.

If someone can't keep up with a mortgage on an $85,000 house, maybe that's the CRA; but defaults on $600,000 houses aren't. Yes, there were borrowers who gamed the system; but the system was there for them to game. This business about the CRA is just an excuse.

[LomanBill]

No mention at all about how Long Beach Savings gave up its banking charter and transformed itself into Ameriquest.

 

Who forced Roland Arnall and his merry crew to do that?

 

They were rather proud of "Revolutionizing" the mortgage industry.

 

Were Ameriquest's Boiler Rooms a "myth"?

 

And then there's this:

 

Subject: Justice

To: MLee [at] innercitypress.org

From: [Name withheld]

Sent: Thu, 21 Sep 2006 1:23 AM

Dear Mr. Lee: I was previously employed by Argent Mortgage for two and a half years and managed, among other areas, the corporation's fraud investigation, borrower complaints and repurchase departments. There are currently over 568 open fraud investigations involving hundreds of brokers and hundreds of millions of dollars in fraudulent loans that are being covered up by top executives in the company. If a broker sustains a certain monthly volume, Argent management looks the other way and, not only does not suspend the bad brokers, but knowingly sells these fraudulent loans on the secondary market to unwitting investors.

I was terminated today and left with just my purse in tow, but I have names of individuals in the company who need to be served with subpoenas to enable them to turn over their spreadsheets and boxes full of documentation and evidence of all the fraud they have found that is being covered up by Argent Mortgage's executive management. The state regulators need to know the truth about the blind eye Argent turns to the fraud perpetrated on innocent consumers by high volume brokers. They also need to be aware that Argent knowingly bundles these fraudulent loans and sells them as mortgage-backed securities on Wall Street, thereby compromising the SEC, as well as our country's economic stability.

At a recent fraud seminar attended by hundreds of mortgage lenders in Washington D.C. a week ago, an attorney who works for Argent's retained law firm, Buchalter Nemer, stood up and told the seminar attendees that the wholesale lenders in the audience had better beware, unless their name is Argent. Argent is safe from investigation because the government got their $325 million settlement from Ameriquest and won't be looking into Argent, per the settlement agreement. I hope this isn't true because Argent Mortgage funded over $50 billion in 2005 and is gearing up to fund well over $80 billion dollars of fraudulent loans in 2007.

Did Congress force them to commit fraud?

Did Congress force them to fabricate FICO scores?

Got FICO?

 

NO SALE, Mr. Lowry.

[Gorzaloon]

"What's the difference between socially responsible loans extending the American dream to deserving people with poor credit histories and predatory lending?

Do deserving people have poor credit histories?

[ProtectOurFreedom]

An ultra-leftist in our office absolutely believes the mortgage mess was entirely caused by the evil capitalist corporations. No explanation of how faulty legislation, lousy public policy, and easy money after the tech-wreck caused this mess could ever dissuade her. In her simplistic, sophomoric world —>
BUSINESS = EVIL, BAD
GOVERNMENT = WONDERFUL, GOOD, DO NO WRONG

The funny thing is she’s not a starry-eyed young utopian, but a senior citizen.

I’d love for her to spend a year in the monolithic, all-grey, stifling public housing common in all communist countries. Maybe then she’d change her tune.

[LomanBill]

I’d love for her to spend a year in the monolithic, all-grey, stifling public housing common in all communist countries. Maybe then she’d change her tune.

 

Maybe what she's trying to articulate is a recognition that corporatism and communism, these days, are two sides of the same coin?

 

The word "Corporate" means a group of people acting as a single collective body.   

 

Within the corporatist/communist environment, individual, inalienable rights are subservient to the worship and benefit of the collective.

 

"ProtectOurFreedom"

 

Interesting screen name.   Who's protecting the 1st amendment in the corporatist/communist hive these days? 

 

God is rejected from within the contemporary corporate environment, even in America.

 

The object of worship in that environment is the corporate structure itself.  Exactly the same as in the communist state - where the state is god.  In Biblical terms, it is the worship of Baal.

 

Ex 32:2-4

 

2 Aaron answered them, "Take off the gold earrings that your wives, your sons and your daughters are wearing, and bring them to me." 3 So all the people took off their earrings and brought them to Aaron. 4 He took what they handed him and made it into an idol cast in the shape of a calf, fashioning it with a tool. Then they said, "These are your gods , O Israel, who brought you up out of Egypt."

Isn't Secular humanism wonderful?

[Husker8877]

Well said!

[Merta]

Don’t you realize, businesses are bad because they can be. All of the welfare office bureaucrats are so saintly nobody does a documentary on them and you don’t even hear a peep about scandal there. But businesses are bad because they can be and they have eeeeeeevil people at the top who punish the toiling workers in their cubicles.(sarc.)

I thought that Liberals all saw things in shades of grey?

These are the same people who, when faced with oppression and persecution from what they call a big government want a bigger government because it can “change their lives”. The same people who would take John Lee Anderson’s book on Che narrated by Fidel Castro to heart, but nobody from the Bush Administration will write a book detailing how fantastic Bush is will get the same credibility. The same people who constantly chant about having a revolution to overthrow the government(something that I actually heard in the pool a few hours ago) yet they believe that everybody is like them and will agree to the same kinds of “revolutionary” aspects.

(Bozo your revolution begat the 70s and all of the screwy stuff that happened then)

It takes a lot of hypocrisy, cognitive dissonance and gullibility, along with arrogance to be a Liberal. Even a family friend has fallen prey to the easy thinking of the Left.

[Jimmy Valentine]

Lets remember that when Deval Patrick was at the Justice Department thiswas his big thing. He sued or threatened to sueany banks he felt were not doing enough forthe deserving poor and underserved.

Memoriesare short, but even Hillary ought to remember that one.

[ninonitti]

Deval Patrick

Not this Deval Patrick:
http://www.devalpatrickwatch.com/

[Jimmy Valentine]

Yes, actually. Slimey as two oysters screwing in a bucket of snot.............so to speak.