A 2009 Wall Street Journal investigative report WRT the subprime mortgage borrowing spree that wreaked havoc on the US economy reveals that----according to the Federal Financial Institutions Examination Council, financial schemes by low-income housing groups, Hispanic lawmakers, a congressional Hispanic housing initiative, subprime mortgage lenders and brokers, colluded together in fradulent schemes to increase homeownership among Latinos using falsified applications, and other tricks of the trade.
The massive mortgage fraud ended in disaster for which no one has been held responsible. Taxpayers got saddled with billions of dollars in bailout bills.
These subprime activities were not simply the mortgage market at work. They were fueled by avarice, greed, stupidity--all enabled by Congressmen and other groups which leave a trail at the door of Cong Joe Baca.
Between 2000 and 2009, Hispanic populations increased; but Hispanic home ownership grew even faster, increasing by 47%, to 6.1 million from 4.1 million, according to the US Census Bureau. Over that same period, homeownership nationally grew by an enemic 8%. In 2005 alone, mortgages to Hispanics jumped by 29%; Latinos with multiple fraudulent identities in low-paying jobs obtainedg costly non-prime mortgages---soaring to a shocking 169%, (Research provided by Wall Street Journal)
The subprime mortgage bank fraud network was spearheaded by Cong Joe Baca (D-Calif 43rd), in his powerful position as chairman of the Congressional Hispanic Caucus. Baca's district ranks No.5 among all US Congressional districts in percentage of home loans tailored to sub-prime borrowers.
Baca used his the legislative power of his office and his leadership position in the Congressional Hispanic Caucus to calculatedly launch a housing initiative called "HOGAR"-- Spanish for home. The entities engaged in conspiracies to collude with industry and community groups to increase mortgage lending to Latinos--knowing full well forged fraudulent identities and fasified mortgage applications were being used.
Mortgage lenders---lured by huge profits---eagerly provided funding to Baca's group, and fielded an army to bestow with mortgage loans on unquaified lations which were destined for default.
In years past, minority borrowers seeking loans were often stopped because banks and mortgage companies with sound business practices were reluctant to lend within particular low-income geographical areas. This reasonable business practice was mischaracterized as "racialist" as a way to intimidate lenders.
However, the soundness of the earlier business practices resonated as the subprime financial devastation began to wreak havoc on the nation's economy. Taxpayers were saddled with monstrous bills as defaults reached stratospheric heights.
Cong Baca's modus operandi and his collusive efforts to open the mortgage pipeline to unqualified borrowers proved highly successful.
BACA ORGANIZES A close look at the network Cong Baca organized, pushing for increased mortgage lending to unquaified buyers reveals a disturbing picture.
<><> HOGAR-—the initiative to promote Latino homeownership-—was created by the Congressional Hispanic Caucus Institute Inc., a non-profit entity founded and run by Baca and the Congressional Hispanic Caucus along with corporate and nonprofit representatives.
<><>Subprime-industry executives got in early, as advisers to “HOGAR” bankrolled more than $2 million of HOGAR’s flawed research (NOTE so-called “research money” could have been laundered into Baca-related entities).
<><>Lawmakers and latino advocacy groups pushed hard to weaken credit criteria that inexorably led to the subprime debacle.
<><>Members of the Congressional Hispanic Caucus, who received donations from the lending industry, stood idly by as their constituents moved into new homes bought with fraudulent documents and fasified mortgage apps. The lawmen had undermined US law by pushing for eased lending standards, which led to massive foreclosures, tax burdens, and UNTOLD DAMAGE TO THE US economy.
The Congressional Hispanic Institute, Inc, created by Baca’s Congressional Hispanic Caucus created “HOGAR” in 2003 to work with industry and community groups to increase mortgage lending to unqualified Latinos.
At that time, Baca hyped the fact that the national Latino homeownership rate was 47%, compared with 68% for the overall population. “HOGAR” called the figure “alarming,” and said a concerted effort was required to ensure that “by the end of the decade Latinos will share equally in
the American Dream of home ownership.”
Most of the “dreamers” were citizens of Third World countries who had violated US borders.
Predictably, HOGAR’s backers included mortgage companies that ran into big trouble: Fannie Mae and Freddie Mac, both now under federal control after billions in taxpayer bailouts; Countrywide Financial Corp., sold to Bank of America Corp.; Washington Mutual Inc., taken over by the US government and sold to J.P. Morgan Chase & Co.; and New Century Financial Corp. and Ameriquest Mortgage Corp, both now defunct, killed by unpaid Latino mortgages.
HOGAR’s ties to the subprime industry were substantial. A Washington Mutual Bank vice president served as chairman of its advisory committee.
Bribery and self-dealing was rampant. Companies that donated $150,000 to Cong Baca got the right to place a research fellow who would conduct HOGAR’s fraudulent studies, which were used by industry lobbyists. For donations to Baca of $100,000 a year, HOGAR offered to provide optimistic news releases from Baca’s Hispanic Caucus promoting a lender’s commercial products for the Latino market, a shocking example of bribery well-substantitated by the group’s literature.
“HOGAR” worked with Freddie Mac on a self-serving two-year examination of Latino homeownership in 63 congressional districts.
The study found Hispanic ownership on the rise thanks to “new flexible mortgage loan products” that the industry was adopting at the urging of Cong Baca’s coterie. HOGAR recommended further easing of down-payment and underwriting standards.
However, as the subprime debacle ensued, representatives for HOGAR declined repeated requests for comment despite the economic havoc their activities precipitated.
Interesting. I wonder if Cong. Baca is any relation to Sheriff Lee Baca of Los Angeles County?