Skip to comments.How Newt Gingrich and Official English would have saved Fannie Mae
Posted on 11/19/2011 5:43:58 AM PST by dangus
The real cause of the housing bubble and collapse is very simple: An Executive Order by Bill Clinton and enthusiastically championed by George Bush, 13166, forced banks to make bad loans or no loans at all. And Newt Gingrich was championing putting an end to EO 13166 years before the collapse of the banking industry.
In the late 1990s, a grand compromise was reached between President Clinton and Senate Banking Chairman Phil Gramm. Long ago, government types decided that home ownership was the key to fiscal stability, but too many blacks didn't qualify for loans. The banking industry argued that blacks were, on average, greater risks that non-blacks, based purely on economic data. The Clinton administration argued that nonetheless, the effect of these policies were discriminatory. Fannie Mae, being a creation of the government, could not engage in policies which had even an unintentional discriminatory effect. Since most housing loans involved Fannie Mae, the Clinton Administration used this leverage to argue that banks themselves, by participating with Fannie Mae, made themselves subject to such anti-discrimination laws.
The compromise was to spread the risk so the bank which made the higher-risk loan to a black family wouldn't absorb the full cost of the loan default, should the family actually default. The problem is that Sen. Gramm had been taken in: President Clinton soon signed an Executive Order ruling on 1964 Civil Rights Act' prohibition on discrimination against someone based on their national origin.
Congressional testimony had made very clear that what had been meant by "national origin" was their ethnic origin. Clinton was twisting it in a new way, equating ethnic origin with linguistic background, and by doing so finding that you could not discriminate against anyone based on their inability to speak English.
Here's the problem: American schools require English. Immigration requires English. Anyone who cannot speak English in America is likely to be either horribly poorly educated, or, more likely, an illegal immigrant. Under the E.O. 13166, the banking law passed to make home ownership feasible for blacks, was being used to demand loans to illegal aliens!
Try finding an illegal alien who qualifies for a loan. A bank is willing to give YOU money, because you can't just disappear. If you change your identity, you lose not only your down payment, but your college education, your professional work history, and thus, your future earning potential. An illegal alien simply goes back to Mexico, leaving the bank hanging.
So, the banks had to scrap loan requirements which differentiate you from an illegal alien. No money down! No work history, no problem, if you speak only Spanish! Home ownership rates exploded, and with them, home prices
The banks were willing to make bad loans for two reasons: If the loan defaulted, they took the house, which was now worth more than it was when the bank made the loan, so the loan really was a way for the bank to directly invest in real estate, not just merely the interest rate of the borrower. And if the bank actually DID take a loss, they could pass it on to other holders of CDOs, the creation of Gramm's law by which banks could trade loans on the open market, so long as no-one could see what the loans were actually on.
In 2007, the Bush administration, stinging from brutal losses in 2006, got the message that the American people wanted immigration enforcement. The explosive flow of illegal immigrants to America slowed to trickle, and even began to reverse. Certain specific counties in America... those with the highest percentages of illegal aliens making up their populations.. started experiencing their housing markets collapse. Prince William's County, imploded, while nearby Prince George's County continued to grow. The difference? "PW's" new homebuyers were illegal immigrants, while "PG's" were black Americans.
In 2008, Every one of the top 20 counties with the fastest real-estate depreciation was also among the counties with the highest rate of non-English-speaking home-owners. But then Bear Stearns fell. And AIG. And banks would no longer risk giving money to illegal aliens, and therefore couldn't loan money to anyone else. And so English-speaking Americans couldn't buy houses, and the housing collapse spread throughout America.
Long before the collapse, a very excellent organization named Pro-English was sounding the alarm about Executive Order 13166. And there was one politician willing to work with them: NEWT GINGRICH.
This is very interesting indeed...
How come nobody talks about RENTING a house until youcan afford to BUY one?
Interesting insight thanks for sharing, this helps fill in the overview better.
I checked out this organization and you are correct. It seems to be a small but impressive organization. Here is a bit more information on Executive Order 13166: http://www.proenglish.org/projects/eo-13166
“Newt touts English as the official language of government, yet __snip__ speaks __snip__....in fluent Spanish!”
Good for him!!! Thomas Jefferson was also fluent in a number of languages.
Mr. Obama does not speak Spanish.
Finally an article that tells the truth about what started this mess we are in.
Entitlements ,and bought and paid for Democrat votes.
How is that amusing? It’s impressive that our Presidential nominee can speak a foreign language fluently.
Maybe he can speak Austrian too!!!!!!!!!!!!!
“ENGLISH the OFFICIAL LANGUAGE” this would have help ward off some of the problems we face today. One of the catch phrases for years now has been “Diversity is what made this country great”. Diversity means to divide as in “divide and conquer”. What made this country great is our Constitution, our Representative Republic and our Capitalistic Society that has allowed people of different nationalities, races religeons to work for their common goals of providing for their families by living and working in a free society.One of the first thing these legal immigrants did was to learn our common language. When they started teaching schools in Spainish I believe it was by design to divide America.
He doesn’t even speak the Truth very well.
Wow. How did these idiots ever get from “don’t ask about skin color” when determining a person’s ability to spy back a loan to allowing illegal aliens who do not speak English to buy property here??
When did this happen?
My son is working towards his MBA and I am thankful he has a Chicano wife to teach him American Spanish—certainly money speaks in all languages but knowing the various dialects definitely gives you an advantage..
Illegal Mexicans...Spanish...amnesty....Spanish...policy speech in Mexico...illegals....Spanish...
See how it all ties together?
I understand, but this was not the context. I’ll have to go out and find the news video and post it.
At the time, it was out of sorts when folks in America were steamed about the open borders, Illegal aliens, crime, tax dollars to deal with all this that Newt travels to Mexico and addresses the Mexican people regarding Immigration reform.
That bothers me, do you guys not see anything odd about that?
It’s been true for many, many decades. People don’t realize it because
(1) The testing was so bad: Prior to the closing years of the Bush administration, anyone only had to memorize, “A B A D C B A,” etc., to pass, since the same test was administered to everyone and was publicly available.
(2) People figure that if you’re naturalized then you came here legally, forgetting that we’ve given several amnesties to a total of almost 10 million previously ILLEGAL ALIENS.
There are various exceptions to the English requirement, but these are insiginicant compared to these two reasons. For instance, elderly, supposedly invalid parents (who wouldn’t be buying a new house for themselves), refugees granted asylum, etc.
I can’t respond if you don’t provide a link of any sort.
The bill, H.R. 1246, would eliminate Executive Order 13166, which Clinton signed aboard Air Force One in August 2000. That order required each federal agency to "examine the services it provides and develop and implement a system by which LEP persons can meaningfully access those servic
And yet Newt had NO problem taking $1.6 million in consulting fees from them from 1999 to 2008. So apparently he was opposed to it in public while profiting from it in private.
Mr. Obama does not speak Spanish.
Seems to me that he doesn't do too well with English either unless its on a TelePrompter.
Newt speaks spanish?
Between his leaving the House and announcing his 2012 POTUS candidacy he out Mitt Romneyed Mitt Romney and now he is pleading with us to forgive his many screw-ups during that period.
Do we believe him is the make or break and is Newt infamously known for perfidy?
His recent poll numbers indicate many potential voters are leaning towards the veracity of his declared “ I Came to Jesus.”
Course this is all academic since GOP nominee Super Cain is gonna whomp the naked Marxist's narrow mom-jeaned sorry gay butt come next November;)
Lol! I almost added another post about his English not being all that wonderful either. Even WITH the teleprompter, it’s not all that terrific.
Maybe we are talking about two different things. Are you saying that the ability to speak English is required in order to come into the US? I have worked with lots of legal immigrants who had VERY little English.
I always thought English was only required for citizenship.
Just researching transcripts of Newt speeches and or interviews, It does appear he’z changed positions quite a few times regarding immigration as well as a whole host of issues from healthcare to global warming.
I kinda get a feeling, it wouldn't really matter what I post, Newts the man on this thread.
Now thats damn funny and well put.
Mr. Obama’s knowledge of history is in the “faulty” column as well.
Newt is the exact opposite of the perfect ten who drops to a five when she opens her mouth.
Old news here - all this was pointed out several years ago, but the media, democrats and RINOs kept it quiet.
See this 2009 article: http://www.humanevents.com/article.php?id=33821
The subprime mortgage collapse was due almost in its entirety to illegal aliens getting subprime mortgages they were certainly unable to pay. They were the target audience from the beginning. Bankers and mortgage holders knew they could make a quick killing on the subprimes and their derivatives and then get out before the house of cards collapsed. They knew the taxpayers would be ultimately the ones stuck with the bill.
It all worked out as planned. Don’t ask what went wrong - everything went the way it was intended.
Bustin a gut!!
Isn’t that the same mistake that Mr. Obama once made?
He consulted for Freddie Mac. EO 13166 killed Freddie Mac. How in your fanatical imagination does that mean he profited off of EO 13166?
You are falling for the media-establishment line if you think house flippers caused the subprime collapse. That was their cover story to mask the real story about how democrat/RINO/WSJ/ChamberofCommerce wanted illegal immigration to be kept out of the discussion when it came to subprime mortgage collapse. See Post 31.
You are absolutely correct about this!
I’m sorry the reality doesn’t match the PR Cult of Personality trying to be manufactured about St Newt
That’s because Mr. Obama believe that the “end justifies the means.” Therefore he will lie to accomplish his goals.
He has done this several times.
Yes, to be clear: Neither a “visitor” nor a “temporary worker” are (or, should be regarded as) immigrants, and neither would be very wise to buy real estate. And from the context, I hope it was obvious that I was referring to LEGAL immigrants. The fact that people on “temporary work visas” are presumed to “immigrants” shows how desperately corrupted our government and economy has become.
But I still slipped up slightly: One can certainly move to the United States with the expectation of EVENTUALLY learning English before you are naturalized, and such a person is an immigrant, so I should have said, “naturalized citizen,” not “immigrant.”
Help Restore America
Stamp out use of the word “Underserved”
(except in connection with adult beverages)
What you need to worry about is why newt was lobbying to keep this fraud rolling.
I do not see anything wrong or amusing. Newt wants immigrants to speak English in the United States. He is applied the same standard to himself and spoke Spanish in Mexico.
Don’t know whether I buy it. But bookmarking anyway.
The Current FReepathon Pays For The Current Quarters Expenses?
I have just finished reading one of the best books on the subprime crisis: "Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon" by Gretchen Morgenson and Joshua Rosner.
In 1995, Jim Johnson (Fannie Mae CEO) the corrupt liberal SOB responsible for damaging our economy more than any other single person (in my opinion) was in the process of opening up Fannie Mae branches all over the country.
James Johnson saw the company as the cash cow it was for the bureaucrats who ran it, and implemented a strategy that was on the job 24x7 with eyes and ears everywhere. He created Fannie Mae branches in a huge number of cities across America (I think it was between 50 and 100) staffed by like-minded people who served as the canary in the coal mine for any push back. They had armies of powerful lobbyists with lots of important connections.
At the opening of one of these newly opened, metastatic evil Fannie Mae branches in Atlanta NEWT GINGRICH got on stage with that damned CRIMINAL, and this is what he said:
GINGRICH: "Fannie Mae is an excellent example of a former government institution fulfilling its mandate while functioning in the market economy...Fannie Mae has had a regional presence in Atlanta for over 40 years and the announcement of a partnership office demonstrates its continued commitment to affordable housing in the Atlanta metropolitan area."
(Note that as the authors state, it was COMPLETELY FALSE AND INACCURATE to characterize Fannie Mae as a "former government institution".)
More to the point...Newt shouldn't have been up on the stage with this guy because he was a crook and a damned evil liberal hack, he shouldn't have been up there because he was for small government (and Fannie Mae was the complete ANTITHESIS of that) and he shouldn't have praised Fannie Mae, which more than any other institution has damaged the economy immeasurably.
In my opinion, there is a lot to like about Newt and the way he changed the political scene when he entered it, but I have a hard time explaining his support for Fannie Mae, the epitome of the government food trough and wealth redistribution while enriching the pockets of those who run it and those who politically support it (Like Gingrich and President Bush). Gingrich wasn't in 1995 even and isn't in 2011 the same guy he was in 1994.
Maybe I was just being dense. I should probably have some coffee.
Yes, that's what Sodpoodle was referring to.
I'm sorry, but this article shows a woeful lack of knowledge about what Bush actually did during his first term to accommodate the banks' own desires to tap into the illegal alien market.
Fast-forward to 2006? You completely glossed over Bush's first term and that's the one where all the damage to the economy was done.
Why did Bush meet with El Presidente de Mexico, Vicente Fox on February 16, 2001, just 3 weeks after his inauguration?
Exactly what was the purpose of the US/Mexico Partnership for Prosperity Agreement?
New Alliance Task Force?
American Dream Down Payment Act?
Why did the Bush Justice Dept. and Treasury Dept. give their blessings to the change in banking regulation to allow banks to accept the Matricula Consular card as ID?
Why did the Bush Administration change the rules to allow banks that served the 'minority' market through international remittances to claim CRA credit?
Why did Bush champion amnesty for Mexican illegal aliens?
Why did the Bush administration claim that national security was a priority and form the TSA and DHS while supposedly fighting a "War on Terrorism", then leave the southern borders wide open by ordering border and interior immigration enforcement to the lowest levels in years?
Why didn't the Bush administration complete the southern border fence despite the signing the appropriations into law?
The answer is simple.
Here's the Cliffs Notes version. If you want to see more details, visit my FR home page.
On February 16, 2001, just 3 weeks after his inauguration, President George W. Bush met with Mexican President Vicente Fox to discuss the terms of the Partnership for Prosperity Agreement (with Mexico). (See: Partnership for Prosperity Agreement (with Mexico))
The P4P agreement was signed on September 6, 2001.
On June 17, 2002, Bush held a press conference. In this press conference he said that by 2010 he wanted to see 5.5 million new 'minority' home owners.
He called on Fannie Mae and Freddie Mac to increase commitments to the 'minority' market by $440 billion. (See: President Calls for Expanding Opporunities to Home Ownership)
Why would a President, supposedly concerned with Fannie and Freddie overspending call on them to increase their outlays to the tune of almost $500 billion dollars?
The answer is he wouldn't.
On October 26, 2001, Bush signed the USA PATRIOT Act of 2001 into law. Contained in section 326(b) was the provision that allowed US banks to accept the Mexican Matricula Consular card as valid ID for opening a bank account.
Congress sent a request for opinion to Bush's Treasury Dept. about 326(b). Bush's Treasury responded:
|The proposed rules set forth the requirement that financial institutions would have to establish a customer identification and verification program applicable to all new accounts that are opened, regardless of whether the customer is a U.S. citizen or a foreign national. While the proposed rules prescribe minimum standards for such programs, they leave sufficient flexibility to permit financial institutions to tailor their program to fit their business operations. The customer identification program would have to contain reasonable procedures for identifying any person, including a business, that opens an account, setting forth the type of identifying information that the financial institution will require. At a minimum, for U.S. persons the proposed rules would require financial institutions to obtain the following information: name, address, taxpayer identification number, and, for individuals, date of birth. While a taxpayer identification number is not required for non-U.S. persons, a financial institution must describe what type of information it will require of a non-U.S. person in place of a taxpayer identification number. The regulations state that financial institutions may accept one or more of the following: a U.S. taxpayer identification number; a passport number and country of issuance; an alien identification card number, or the number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard.|
This also contained a footnote (17):
|Thus, the proposed regulations do not discourage bank acceptance of the matricula consular identity card that is being issued by the Mexican government to immigrants. (See: Treasury Department Issues USA PATRIOT Act Report to Congress)|
Note that no Mexican banks accept their own government's Matricula Consular card as valid ID for opening a bank account because the bearer's identity is all but untraceable. In contrast, thanks to Bush's Treasury Dept., almost all US banks accept it.
In response to the mandate contained in the P4P agreement, the New Alliance Task Force was formed in May 2003. (See: New Alliance Task Force)
The NATF is a broad-based coalition of 62 members, including the FDIC, Mexican Consulate, 34 banks, community-based organizations, federal bank regulatory agencies, government agencies, and representatives from the secondary market and private mortgage insurance (PMI) companies.
Their goal was to open the Mexican illegal alien market to US banks and visa-versa using low-cost remittances as the bait. As Bush's 2002 speeches show he was talking about hundreds of billions of U.S. tax dollars going to directly benefit millions of Mexican illegal aliens.
The NATF was organized into four working groups that were tasked with the following goals:
In Bush's June 17, 2002 speech, he also called for the creation of the American Dream Down Payment Fund. "And so here are some of the ways to address the issue. First, the single greatest barrier to first time homeownership is a high downpayment. It is really hard for many, many, low income families to make the high downpayment. And so that's why I propose and urge Congress to fully fund the American Dream Downpayment Fund. This will use money, taxpayers' money to help a qualified, low income buyer make a downpayment. And that's important."
And, the 108th Congress (2003-2005) responded with the American Dream Downpayment Act:
"Amends the Cranston-Gonzalez National Affordable Housing Act to: (1) authorize the Secretary of Housing and Urban Development to make grants to State and local participating jurisdictions for downpayment assistance and related home repair to low-income, first-time home buyers; and (2) limit family assistance to the greater of six percent of the purchase price or $10,000. Requires a participating jurisdiction to include intended grant uses in its fiscal year comprehensive housing affordability strategy under such Act."
"Sets forth State and local jurisdiction allocation formulas. Permits fund reallocation."
"Requires the Comptroller General to report respecting the impact of such grants on a State-by-State basis."
"Terminates grant authority after December 31, 2007. Authorizes specified FY 2004 through 2007 appropriations."
"Makes the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 inapplicable to such assistance."
The act was authorized to appropriate up to $200 million per year of US taxpayer funds between FY2004 through FY2007 to go to Bush's 'minorities'.
The sponsor and co-sponsors of this $800 million giveaway:
Sponsor: Sen. Wayne Allard [R-CO]
Sen. Samuel Brownback [R-KS]
Sen. Conrad Burns [R-MT]
Sen. Ben Campbell [R-CO]
Sen. Michael Crapo [R-ID]
Sen. Michael Enzi [R-WY]
Sen. Charles Hagel [R-NE]
Sen. Lisa Murkowski [R-AK]
Sen. Richard Santorum [R-PA]
Sen. Jefferson Sessions [R-AL]
The truth is that Bush was only concerned with helping out one constituency --Wall Street bankers.
Never forget that like his daddy before him, George W. Bush comes from a long line of Wall Street bankers and it is this constituency that he served from the time he came into office until the day he left.
I’ll concede at the very least that in 1995, Newt liked Fannie Mae. Fannie Mae was not SUPPOSED to be federally funded, which is part of why Newt liked Fannie Mae. In 1995, Fannie Mae had not yet been used as a tool for tying the banks to the federal government. In my article, you’ll note that the Clinton Administration used novel reasoning to make Fannie Mae a tool of tying the banks to federal policies, and that still required the passage of Gramm’s banking bill, the grand compromise I referred to.
Anyone who blames “Ambition, Greed and Corruption” on the failure of a system is someone you should run screaming from. That title alone suggests that Morgenson and Rosner don’t have a freaking clue about how the American system works. Because ambition, greed and corruption are constants in the human condition, which cannot be removed from the human soul by government, and cannot be countered successfully by laws.
What a society CAN do is create laws which redirect the God-given motives which greed and corruption are the perversions of into legal acts which are mutually beneficial for the tempted individual and the larger society. People don’t corrupt governments; governments corrupt people. If someone asserts that a system was ruined by greed, the question is what God-damned idiot — and I mean that literally — designed a system that would rely on the nonexistent altruism of the marketplace or the logically impossible spiritual cleansing of government?
(Please read “Democracy in America.”)
Morgenson is the business and financial editor of the NEW YORK TIMES. Not someone you want to be taking lessons in capitalism from. She has been busted on dozens of times for plagiarizing from blogs, and has been called by Calculated Risk, as “a noxious mixture of fact and hype, information and innuendo.” Business Insider titled an article, “Gretchen Morgenson Officially Blows Her Credibility On Derivatives With Ridiculous Confusion About Swaps.”
You’re attacking my criticism of Bush by piling on more criticism of Bush?
Why do you presume I have a “woeful knowledge” because my criticisms of Bush are only along one line of criticism? If I wanted to write an article on the bad decisions of the Bush administration, I could go on for books!