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Roots of rotten mortgages
Pittsburgh Tribune-Review ^ | September 29, 2008 | Ralph R. Reiland

Posted on 09/29/2008 3:48:08 AM PDT by Schnucki

The roots of today's mortgage-based financial crisis can be traced back to the Community Reinvestment Act (CRA), which Jimmy Carter signed in 1977. Seeking to address complaints from anti-poverty activists and housing advocates about banks allegedly discriminating against minority borrowers and "redlining" inner-city neighborhoods, the CRA decreed that banks had "an affirmative obligation" to meet the credit needs of victims of discrimination in borrowing.

To add a government stick to the process, the CRA decreed that federal banking regulators would consider how well banks were doing in meeting the goal of more multiculturalism in loaning when considering requests by banks to open new branches or to merge.

A good "CRA rating" was earned by way of increasing loans in poor neighborhoods. Conversely, lenders with low ratings could be fined.

The Fed, for instance, warned banks that failure to comply with government guidelines regarding the delivery of "equal credit" could subject them to "civil liability for actual or punitive damages in individual or class actions, with liability for punitive damages being as much as $10,000 in individual actions and the lesser of $500,000 or 1 percent of the creditor's net worth in class actions."

However well-intentioned in terms of delivering "economic justice," this push for more government-directed social engineering produced a widespread weakening of long-established industry standards for credit worthiness.

Led by Congressional Democrats, this policy of replacing private and decentralized decision-making with a system of centrally-delivered rewards and punishments was basically a one-party effort. Republicans, it seems, were more aware of the unintended consequences that flow from government interference in the market.

As Investor's Business Daily recently put it, succinctly and correctly: "Over the past 30 years, Democrats, along with a handful of Republicans, have demonized lenders as racist and passed regulation after regulation pressuring them to make more loans

(Excerpt) Read more at pittsburghlive.com ...


TOPICS: Business/Economy; Culture/Society; Editorial; Government
KEYWORDS: acorn; bailout; carter; carterlegacy; communityorganizer; communityorganizing; corruption; cra; mortgage; multiculturalism; origins; tammanyhall; teapotdome; wallsreet
"By intervening -- even just threatening to intervene -- in the CRA review process, left-wing nonprofit groups have been able to gain control over eye-popping pools of bank capital, which they in turn parcel out to individual low-income mortgage seekers," reported Husock. "A radical group called ACORN Housing has a $760 million commitment from The Bank of New York."
1 posted on 09/29/2008 3:48:08 AM PDT by Schnucki
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To: Schnucki
Seeking to address complaints from anti-poverty activists and housing advocates about banks allegedly discriminating against minority borrowers and "redlining" inner-city neighborhoods, the CRA decreed that banks had "an affirmative obligation" to meet the credit needs of victims of discrimination in borrowing.

Anotherwords COMMUNITY ACTIVISTS like Saul Alinsky, Barack Obama and Bill Ayers!!

2 posted on 09/29/2008 3:52:32 AM PDT by 2ndDivisionVet (Barack Obama: In Error and arrogant -- he's errogant!)
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To: Schnucki

Bump


3 posted on 09/29/2008 3:57:16 AM PDT by nuconvert (Obama - Preferred by 4 out of 5 Dictators & Terrorists// Rove>Biden is a Big,Blowhard Dufus)
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To: Schnucki

The massive transfer of money from the “haves” to the “have nots” failed, and now the “haves” will be asked to come up with the tax money to pay for the fix.


4 posted on 09/29/2008 3:59:18 AM PDT by BooksForTheRight.com (Fight liberal lies with knowledge. Read conservative books and articles.)
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To: BooksForTheRight.com

we need anfround swell on this.


5 posted on 09/29/2008 4:01:16 AM PDT by scooby321 (Cai)
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To: scooby321
we need anfround swell on this.

I couldn't have said it better myself. Well . . . if I tried . .

6 posted on 09/29/2008 4:04:50 AM PDT by BipolarBob (I overinflate my tires, so the gas fairy will fill my tank.)
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To: Schnucki

Roots in Carter, watered and fed by democrats from that day forward.

Lied lied and lied to is what we got from the dems, every single day.


7 posted on 09/29/2008 4:12:21 AM PDT by Carley (she's all out of caribou.............but does have a bracelet!!!!)
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To: Schnucki

I’m glad to see the truth is starting to come out.


8 posted on 09/29/2008 4:13:34 AM PDT by syriacus (Under Bush, Dems controlled the Senate for MOST of the 107th Congress and for ALL of the 110th)
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To: Schnucki

http://www.freerepublic.com/focus/news/2083123/posts?page=50

http://findarticles.com/p/articles/mi_m1282/is_n25_v45/ai_14779796

http://www.freerepublic.com/focus/f-news/1965239/posts
http://www.ibdeditorials.com/IBDArticles.aspx?id=306978378974502
http://www.ibdeditorials.com/IBDArticles.aspx?id=307149667289804&kw=cra
http://www.freerepublic.com/focus/f-news/2088795/posts

I’ve added this article to my collection.


9 posted on 09/29/2008 4:18:29 AM PDT by rockinqsranch (Dems, Libs, Socialists, Call 'em what you will, they ALL have Fairies livin' in their Trees.)
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To: BooksForTheRight.com
while part of the problem, there is plenty of blame to go around. what about the derivatives? also the margins of 30 to 1. i do not feel bad for the bankers, my grand kids will be paying for this fiasco.
10 posted on 09/29/2008 4:19:32 AM PDT by bronxboy
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To: Schnucki
By intervening -- even just threatening to intervene -- in the CRA review process, left-wing nonprofit groups have been able to gain control over eye-popping pools of bank capital, which they in turn parcel out to individual low-income mortgage seekers," reported Husock. "A radical group called ACORN Housing has a $760 million commitment from The Bank of New York."

If the MSM were unbiased, it would be interviewing Husock.

He is terrific.

I read his book America’s Trillion-Dollar Housing Mistake The Failure of American Housing Policy last year.

It's extremely well written, well-organized, informative, and hard-to-put-down.

Amazingly, it doesn't take long to read.

11 posted on 09/29/2008 4:23:58 AM PDT by syriacus (Under Bush, Dems controlled the Senate for MOST of the 107th Congress and for ALL of the 110th)
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To: Schnucki

I work in a mtg dept @ a Credit Union. We sell to Freddie Mac and we used to have to do manual underwriting. My boss is very conservative and would deny loans. Then we had to go to Loan Prospector, a computer generated underwriting system with Freddie Mac. The concept was to streamline underwriting and give the member a faster yes or no answer to their application. Basically in about 5 minutes, after the loan application is downloaded to LP, you get an ACCEPT or CAUTION. While there are limits to LTV and TLTV %’s, regardless, if LP came back with an ACCEPT, we HAD to give the person the loan. Freddie was willing to buy it and we could not deny the loan. Now we did verify employment/income/reserves and the like, but the feedback would at times say you didn’t have to. My boss always required it, but we do still have a few that have gone bad. There are alot delinquent though, getting worse each month. We were amazed at some of the loans that went through, ones that never would have been approved the old way. But if he would have denied the loan and it was an ACCEPT, the Credit Union could get into trouble, being accused of profiling or the like.


12 posted on 09/29/2008 4:24:12 AM PDT by southernindymom
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To: Schnucki
left-wing nonprofit groups have been able to gain control over eye-popping pools of bank capital, which they in turn parcel out to individual low-income mortgage seekers," reported Husock. "A radical group called ACORN Housing has a $760 million commitment from The Bank of New York.

Can you believe an anti-American, Marxist group, the likes of A.C.O.R.N. has been able to fleece the US Treasury this way?!! And, we are going to let all the low-lifes that let this happen walk away with their forunes intact by indebting our children? When do we, as a nation, say enough is enough? Will John McCain? Is he really a "maverick"? Or will he go along with all of the rest of the crowd and embrace expediency over principle?

WaMu CEO Alan Fishman Gets $18 Million Golden Parachute

Alan H. Fishman, the CEO of Washington Mutual, will likely be unemployed after only a few weeks on the job. But don't cry for Fishman. He's set to walk away with about $18 million in bonuses after his three week stint at the failed savings and loan giant. His "golden parachute" is raising eyebrows, particularly because of his short tenure at WaMu. Washington Mutual was the nation's largest savings and loan. It was taken over Thursday night by federal bank regulators and then sold to JP Morgan Chase for $1.9 billion. This, as lawmakers continued to work on a $700 billion bailout for bad debt in the financial industry. According to the Securities and Exchange Commission, Washington Mutual gave Fishman a $7.5 million bonus when it hired him on Sept. 8, and guaranteed him $11.6 million in severance if he was terminated, the so-called "golden parachute" that has created controversy when failed executives walk with huge rewards. Fishman also was eligible for annual bonuses of up to 365 percent of his annual base pay of $1 million

http://www.associatedcontent.com/article/1066149/wamu_ceo_alan_fishman_gets_18_million.html


13 posted on 09/29/2008 4:25:26 AM PDT by XR7
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To: syriacus

14 posted on 09/29/2008 4:29:45 AM PDT by syriacus (Under Bush, Dems controlled the Senate for MOST of the 107th Congress and for ALL of the 110th)
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To: syriacus

http://www.youtube.com/user/TheMouthPeace


15 posted on 09/29/2008 4:33:06 AM PDT by unspun (Tell the truth about Obama to all you know.)
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To: Schnucki

Barney FRANK(Rep.D)immediatly launched the accusation of racism against E.CANTOR in a debate yestrday on CNN trying to make him shut up about those roots of the mortgage mess.

Then CANTOR seemed intimidated and stopped on that issue


16 posted on 09/29/2008 4:33:55 AM PDT by Ulysse
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To: Schnucki

bump!


17 posted on 09/29/2008 4:36:21 AM PDT by nmh (Intelligent people recognize Intelligent Design (God).)
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To: Schnucki

btt


18 posted on 09/29/2008 4:37:50 AM PDT by KSCITYBOY
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To: scooby321
Pretty much sums it up for me, we need anfround swell on this....as I can't grasp the idea that mortgages are even a part of this mess. Or even the idea that there is a $700 billion housing market. What are the yearly figures on housing? And if the figure covers a number of years, surely this was a dam designed to fail. What company in their right mind would allow those kind of dollar amounts to accumulate with little to nothing on the plus side to offset them? It boggles the mind.
19 posted on 09/29/2008 4:39:06 AM PDT by Retch_Sweeney (Men for whom God is dead worship on another...Crews maybe)
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To: unspun

http://www.youtube.com/user/TheMouthPeace

I’ve seen that video. Watching it is time well spent.


20 posted on 09/29/2008 4:42:12 AM PDT by syriacus (Under Bush, Dems controlled the Senate for MOST of the 107th Congress and for ALL of the 110th)
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To: Ulysse

Republicans should point out that it is racist to give minorities UNaffordable mortgages.


21 posted on 09/29/2008 4:43:33 AM PDT by syriacus (Under Bush, Dems controlled the Senate for MOST of the 107th Congress and for ALL of the 110th)
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To: rockinqsranch

bttt


22 posted on 09/29/2008 4:49:29 AM PDT by Nascar Dad (Nobama!)
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To: Carley

Let me see if I have this straight.

The liberals put policies in place that led to the current monetary crisis.

The liberals set policies that have caused the price of gasoline to increase dramatically.

The liberals established policies (the “wall”) and took ineffective actions when the islamofascists declared war on us.

Do I have this about right?


23 posted on 09/29/2008 4:49:45 AM PDT by 2nd Bn, 11th Mar (The "P" in Democrat stands for patriotism.)
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To: syriacus

I’ve seen it a million times in California - - “affordable housing” is just a polite left wing elitist euphemism for “slaves’ quarters.”

Of course, it is just that “affordable housing” and the unsound lending practices that got the country in this mess.


24 posted on 09/29/2008 4:49:50 AM PDT by Sir Francis Dashwood (LET'S ROLL!)
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To: Schnucki

FNC focusing on ACORN this morning. 39 members of Congress have signed on to a request to the DOJ to look into this group.


25 posted on 09/29/2008 4:49:53 AM PDT by randita
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To: Schnucki
As Investor's Business Daily recently put it, succinctly and correctly: "Over the past 30 years, Democrats, along with a handful of Republicans, have demonized lenders as racist and passed regulation after regulation pressuring them to make more loans

PCism has destroyed this country

Even now Bush and the GOP including McCain are afraid to even mention the root cause __

With cowardice on domestic matters why bother to have our military sacrifice their lives, limbs and family overseas
26 posted on 09/29/2008 4:51:49 AM PDT by uncbob
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To: 2nd Bn, 11th Mar

You have it exactly right.

It’s Bush’s fault

It’s the republicans fault.

God help us if the voters don’t wake up to the truth.


27 posted on 09/29/2008 4:52:18 AM PDT by Carley (she's all out of caribou.............but does have a bracelet!!!!)
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To: Ulysse

Frank revealed the Dems response when the GOP starts hammering the Dems fault in all this. Racism.


28 posted on 09/29/2008 4:52:38 AM PDT by randita
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To: 2nd Bn, 11th Mar

You have it exactly right.

It’s Bush’s fault

It’s the republicans fault.

God help us if the voters don’t wake up to the truth.


29 posted on 09/29/2008 4:52:39 AM PDT by Carley (she's all out of caribou.............but does have a bracelet!!!!)
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To: Schnucki

This addresses the mortgage situation but I wish they had also mentioned the credit card bubble where banks keep pushing cards on people who gladly pay 20% interest

That ain’t good either and is a disaster waiting in the wings

This other easy credit problem is going to blow eventually


30 posted on 09/29/2008 4:56:28 AM PDT by uncbob
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To: Schnucki
The governments can raise taxes and hand out money.

But they didn't.

Instead they ordered, as they do often, people and their business to do this and that. With no compensation.

This is slavery.

So, since these diktats, this behavior has been going on for a hundred years, each year more than the last, I don't see why it shouldn't continue.

Slavery is not made overnight.

31 posted on 09/29/2008 4:56:40 AM PDT by Leisler
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To: Carley
Lied lied and lied to is what we got from the dems, every single day.

And Bush and McCain sit back as the dems blame the GOP

Hell this morning there was an Obama ad on blaming lack of regulation on Bush etc etc
32 posted on 09/29/2008 4:58:46 AM PDT by uncbob
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To: BooksForTheRight.com
“The massive transfer of money from the “haves” to the “have nots” failed, and now the “haves” will be asked to come up with the tax money to pay for the fix.”

We ain't seen nothing yet. Wait until the Dem's reveal their payback plan to the “people”. This will be a nothing more than a classic socialist redistribution of wealth scheme. People who pay little or no taxes will wind up receiving the larger percentage of this money via so called tax credits and checks in the mail while those who actually do pay taxes will receive little to none of it. It seems to me that the correct way to “pay back the people” would be by the inverse method of financing this bail-out. Being that Treasury will print money to pay for it and thereby reduce the value of wealth in this country proportionately, the pay back should be to remove from circulation the equivalent amount as the payback accrues. But, the Dem's will never do this. They will treat this huge pot of money as their personal fund for whatever pet scheme they choose to support. Thus, the “real taxpayers” those who actually pay taxes, will continue to be screwed, and screwed, and screwed....

33 posted on 09/29/2008 5:00:37 AM PDT by snoringbear (Government is the Pimp,)
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To: Ulysse
Then CANTOR seemed intimidated and stopped on that issue

Yeah the GOP is cowed because they know they have no allies in the MSM that will tell the truth

That is where the MAIN problem is

If people knew the truth on any subject the dems would be out in one election year

Iguess it is too much to ask any politician to stand up to the MSM --They are too powerful
34 posted on 09/29/2008 5:05:32 AM PDT by uncbob
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To: snoringbear
Thus, the “real taxpayers” those who actually pay taxes, will continue to be screwed, and screwed, and screwed....

The is only s omuch screwability in the system

It will all collapse
35 posted on 09/29/2008 5:08:58 AM PDT by uncbob
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To: randita
39 members of Congress have signed on to a request to the DOJ to look into this group (ACORN...sic).

Someone is out there researching and revealing details of the astronomical salaries/bonuses being given to corporate CEO's. And people gasp! I want to see the same sources research and reveal the salaries/bonuses paid to the leaders of such entities as ACORN.

36 posted on 09/29/2008 5:17:09 AM PDT by REPANDPROUDOFIT
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To: nuconvert

the housing market was out of control due to some very special people and McCain needs to make them his poster children.We know who caused it, but housing prices are out of control and this wont get better until prices tank. The bail out will only prolong the pain.


37 posted on 09/29/2008 5:34:55 AM PDT by dalebert
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To: uncbob

WHAT the fù@q!
CANTOR could fightback immediatly and tell that such an accusation of racism was defamatory and accuse the dems of using “racism” as a blanket of smoke to hide and flee that issue of their responsability and for fooling people!

Now if Republicans don’t want to launch the fire McCAIN could and should do it as he is supposed willing to win


38 posted on 09/29/2008 5:41:04 AM PDT by Ulysse
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To: Schnucki

CRA =

Community Redistribution Act


39 posted on 09/29/2008 5:49:23 AM PDT by 4Liberty (discount window + moral hazard = bank corporate welfare + inflation tax)
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bttt


40 posted on 09/29/2008 9:09:37 AM PDT by ELS (Vivat Benedictus XVI!)
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To: Schnucki
The result was widely praised. "It's one of the hidden success stories of the Clinton era," wrote Ronald Brownstein in May 1999 in the Los Angeles Times. "In the great housing boom of the 1990s, black and Latino homeownership has surged to the highest level ever recorded. The number of African-Americans owning their own homes is now increasing nearly three times as fast as the number of whites; the number of Latino homeowners is growing nearly five times as fast as that of whites."

Of course they did. Reverse discrimination at its finest. Home ownership of whites should have grown tremendously as well. When they lowered the bar, it should have been lowered for everyone, but it wasn't. They kept whites from being included.

41 posted on 09/29/2008 10:44:28 AM PDT by Netizen (If McCain really put 'Country First' he'd have been working on securing our borders.)
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To: All
THE ROOT OF THE PROBLEM: Congress enabled this financial disaster. Sap-happy liberal Congressmen threatened banks with legal action. Banks were hounded, accused of "red-lining," .......when banks were simply doing a lender's job to qualify people for mortgages.

This is the political correctness atrocity at work. It would have been too "judgemental" to tell marginal people they could not afford to buy a house beyond their means.

Political correctness is the sword that slew the economic dragon.

Many of the laws requiring government oversight of the market written after the last great market crash-----in 1929---- were eliminated during the Clinton administration---one of many ignorant moves by the self-absorbed "tolerant and compassionate" liberal Clintons.

It's not beyond reason to conclude that the mortgage/market debacle is the consequences of (1) moral relativity----and (2) disestablimentarianism (the deranged obsession with tearing down the foundation of Western Civilization).

Anything remotely connected to moral absolutes of right and wrong smacks of "religion" to disturbed religion-hating liberals.....and has to be destroyed.

TAXPAYERS DEMAND POLITICIANS (1) SAY THEY WILL REPLACE REGULATORY LAWS, (2) throw out political correctness, AND (3) NEVER EVER ALLOW ILLEGALS AND OTHER MARGINALS TO PROFIT FROM OUR ECONOMIC SYSTEM.

42 posted on 09/29/2008 12:39:03 PM PDT by Liz (Taxpayer: one who works for the govt but doesn't have to take a civil service test. R. Reagan.)
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To: 2ndDivisionVet
COMMUNITY ACTIVISTS like Saul Alinsky, Barack Obama and Bill Ayers!!

You have the choice of socialism or sustaining assets.

With Carter out on the road getting massive media attention every time he criticizes Bush, everyone should know that this crisis started with his program; one that was encouraged and protected by Democrats almost exclusively. Democrats through government agencies built a scheme to require lenders to loan to less qualified as a means of helping the less fortunate and driving campaign contributions.

We are finding out that mass socialism or "free property" can not coexist with growth, safe assets, low taxes and low unemployment.

43 posted on 10/10/2008 5:23:02 AM PDT by alrea (Yard sale proceeds go to the Jimmy Carter/Fidel Castro center for community organizers.)
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