Skip to comments.Governor Romney's Housing Crisis (FR Exclusive)
Posted on 01/27/2012 1:41:24 PM PST by BuckeyeTexanEdited on 01/27/2012 3:02:28 PM PST by Sidebar Moderator. [history]
At the CNN Florida Republican Presidential debate in Jacksonville on January 26th, Governor Romney attempted to link Speaker Newt Gingrich to the 2007 Housing Crisis by questioning the Speakers role as a consultant at the troubled mortgage giant Freddie Mac. He made the same connection in the NBC debate on January 23rd. Governor Romney claimed in the debates that Speaker Gingrich peddled his influence in Washington D.C. to promote Freddie Mac when he should have been blowing the whistle on the government-sponsored entities' practices.
Well, I think you know that Fannie Mae and Freddie Mac were a big part of why we have the housing crisis in the nation that we have. And we've had this discussion before.
Speaker Gingrich was hired by Freddie Mac to promote them, to -- to influence other people throughout Washington, encouraging them to -- not to dismantle these two entities. I think that was an enormous mistake. I think, instead, we should have had a whistle-blower and not horn-tooter.
He should have stood up and said, look, these things are a disaster; this is a crisis. He should have been anxiously telling the American people that these entities were causing a housing bubble that would cause a collapse that we've seen here in Florida and around the country.
Romney ignores the fact that there were whistle-blowers who pointed out that Fannie Mae and Freddie Mac as government-sponsored entities (GSEs) needed regulation to prevent financial trouble. In a September 2003 article, the New York Times reported that President George W. Bush introduced the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. Likewise in April 2005, Fed Chairman Alan Greenspan testified before the Senate Committee on Banking, Housing, and Urban Affairs regarding the necessity of reforming and regulating Fannie Mae and Freddie Mac.
From now on, limiting the potential for systemic risk will require the significant strengthening of GSE regulation and the GSE regulator. ( ) Left unresolved, such uncertainties could threaten the stability of financial markets.
In a 2008 Financial Times article, George Soros said:
The current financial crisis was precipitated by a bubble in the US housing market. ( ) Boom-bust processes usually revolve around credit and always involve a bias or misconception ( ) The super-boom got out of hand when the new products became so complicated that the authorities could no longer calculate the risks and started relying on the risk management methods of the banks themselves.
And according to the April 2008 International Monetary Funds World Economic Outlook, the financial market crisis that erupted in August 2007 has developed into the largest financial shock since the Great Depression, inflicting heavy damage on markets and institutions at the core of the financial system.
Mitt Romney served as Governor of Massachusetts from January 2, 2003 to January 4, 2007. As Governor, Romney aggressively promoted affordable housing as a key component of his jobs initiative. In several 2003 and 2004 press releases, Governor Romney claimed that Massachusetts needed more affordable housing to stay economically competitive and that employers werent moving their operations to Massachusetts for lack of affordable housing. As was the common theme among liberal Republicans and Democrats at the time, Romney proclaimed in a March 3, 2004 press release that fair and affordable housing should be a right, not a privilege. According to a review of press releases from his administration, Governor Romney pledged approximately $350 million in state and federal funds and low-income housing tax credits to build more affordable housing and assist low-income borrows with special mortgage financing. So when President Bushs administration was attempting to regulate GSEs to avert a financial crisis, Governor Romneys affordable housing policies were significantly contributing to the bad assets on the books of Fannie Mae and Freddie Mac. According to data from the Federal Reserve Bank of Boston the number of subprime mortgage originations in Massachusetts spiked between 2003 and 2006.
Not only did Governor Romney aggressively promote access to affordable housing, he also convened private and state entities to develop ideas for creative financing programs that would allow low-income borrowers to purchase the affordable housing units the state was building. One such program developed by MassHousing and United Cooperative Bank was Take the PVTA [Pioneer Valley Transportation Authority] Home which Governor Romney launched with a personal appearance and press release on January 31, 2003.
United Cooperative Bank is currently offering the Take the PVTA Home mortgage with a 30-year fixed interest rate of 5.75 percent. Banks like United Cooperative are willing to make the no-downpayment loans because MassHousing insures them. As an added incentive, lenders receive enhanced Community Reinvestment Act (CRA) credit for the loans for partnering with MassHousing. ( ) According to MassHousing Executive Director Tom Gleason, When we designed the program, we took into account that people who take mass transit have fewer car-related expenses, and have more money to spend on a mortgage.
Given that there were whistle-blowers warning the U.S. Government about the potential dangers of Fannie Mae and Freddie Mac, why was Governor Romney still pushing affordable housing in Massachusetts? Apparently, riding the bus in Massachusetts had some great benefits under Governor Romney.
The next article on Governor Romneys role in the 2007 Housing Crisis will address that question and more.
Well done! No comment on Danae though.
I was gonna put it on my own blog and excerpt it, but I feared thy wrath. ;p
You ROCK Buckeye!!! Brilliant work!!
Ping to my freepathon pals.
Bank of Boston; Romney’s tenure as Governor!
Just DAMN!!!! Way to go.
As was the common theme among liberal Republicans and Democrats at the time, Romney proclaimed in a March 3, 2004 press release that fair and affordable housing should be a right, not a privilege. According to a review of press releases from his administration, Governor Romney pledged approximately $350 million in state and federal funds and low-income housing tax credits to build more affordable housing and assist low-income borrows with special mortgage financing.
Please send this to the Gingrich people
Limousine liberal pretending to be an "R".
Think about it..how hard would it be to pull that off with the liberal Media on your side?
The guy is over the top, pathetically liberal..you never hear about any of it.
Okay. Will do.
Rombama called Newt an "influence peddler" for Freddie/Fannie, yet HE "peddled" the very same "product" that caused the housing crisis!
I just heard today that Bamster is sicking the Feds on "the banks who've caused this (housing) crisis". The banks? The banks were forced to make these crap loans!!
I don't know who's campaign is spinning faster - Bamster's or Rombama's.
Like Soros says...They're one and the same.
The only argument between Romney and Obama is who pitches and who catches... ;^)
You just proved what I always knew, Freepers ROCK!
Profiting from the collapse of the housing market in it of itself is not the issue but gaming the system is. Romney may be squeaky clean on this however the rats are going to look into this given their playbook.
Thanks. IMHO, Romney’s allegations of Newt peddling his influence pale in comparison to Romney’s aggressive affordable housing push in MA. His instincts as governor directly affected the bad assets on Fannie’s and Freddie’s books. It seems his revered business prowess didn’t serve him well as governor. What makes anyone think he’d have better instincts as POTUS?