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.
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