HUD is at the heart of the subprime scandal, yet it's empowered as never before by FinReg. It'll manage various slush funds underwriting more Acorn-type housing activism. Housing and Urban Development is one of two federal agencies regulating Fannie Mae and Freddie Mac, with HUD supervising the mortgage giants' congressionally chartered "affordable housing" mission.
In the run-up to the subprime crisis, HUD gutted underwriting standards at Fannie and Freddie to help them meet a 50%-plus affordable lending quota. HUD also authorized the now-toxic twins to receive credits toward these affordable-lending goals by purchasing and issuing subprime securities.
So HUD not only drove Fannie and Freddie headlong into the subprime market, but also helped create the subprime securities market, thereby spreading the mortgage-backed securities risk on Wall Street. Its relationship with Fannie and Freddie won't change under the new law. FinReg doesn't rein in HUD, just like it doesn't rein in Fannie or Freddie.
Far from reforming HUD, the new law gives the agency even more power over the housing industry — including setting up new grant programs that will funnel billions of dollar in aid to the same housing-rights activists and community organizers that originally pushed lenders off the subprime cliff.
The Dodd-Frank Wall Street Reform and Consumer Protection Act — named after HUD's biggest boosters in the Senate and House — authorizes HUD to set up: • A housing "stabilization program" for redeveloping urban neighborhoods, with funding starting at $1 billion. (Excerpt) Read more at investors.com ...
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Village Voice 8-5-08 Andrew Cuomo, the youngest Housing and Urban Development Secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country’s current economic crisis.
Cuomo took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments.
Cuomo turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded “kickbacks” to brokers that have fueled the sale of overpriced and unsupportable loans.
Three to four million families are facing foreclosure (as of 2008), and Cuomo is one of the reasons why....
SOURCE http://www.villagevoice.com/2008-08-05/news/how-andrew-cuomo-gave-birth-to-the-crisis-at-fannie-mae-and-freddie-mac/
The buzz was that then-HUD Secy Cuomo was pocketing bigtime from his HUD machinations. Enough to finance his gubernatorial bid; politicians always plan ahead (/snix).
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Sen Candidate Kirsten Killibrand appointed to Hillary's Senate seat was also at HUD....... Gillibrand played a key role in furthering HUD’s Labor Initiative and *New Markets initiative, working to strengthen enforcement of the Davis-Bacon Act and drafting new markets legislation for public and private investment in building infrastructure to revitalize lower income areas across the nation."
NOTE * New Market Initiatives are also known as "subprime markets," the self-same sub-prime markets that precipitated the destruction of the US economy.
If not one new home was built, it will still take three years to move all the inventory cuurently on the market.
That does not factor in all the new foreclosures coming down the pike in the next two years as the Obama depression suffocates Americans who will not be able to afford underwater homes and skyrocketing property taxes.