no money down, interest only loans to uneducated low income workers with no or bad credit history for more money than thy could pay back in two lifetimes, what could possible go wrong???
Posted on 04/26/2014 5:21:06 PM PDT by neverdem
Subprime Scandal: Newly released memos from the Clinton presidential library reveal evidence the government had a big hand in the housing crisis. The worst actors were in the White House, not on Wall Street.
During the 1990s, former Clinton aides bragged that more aggressive enforcement of the Community Reinvestment Act pressured banks to issue riskier mortgages, lending more proof the anti-redlining law fueled the crisis.
A 2012 National Bureau of Economic Research study found "that adherence to that act led to riskier lending by banks," with "a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam, (and) the effects are larger for loans made within CRA tracts," or low-income and minority areas.
To satisfy CRA examiners, Clinton mandated "flexible" lending by large banks. As a result, CRA-approved loans defaulted about 15% more often, the NBER found. Exhibit A in the 7,000-page Clinton Library document dump is a 1999 memo to him from his treasury secretary, Robert Rubin.
"Public disclosure of CRA ratings, together with the changes made by the regulators under your leadership, have significantly contributed to ... financial institutions ... meeting the needs of low- and moderate-income communities and minorities," Rubin gushed. "Since 1993, the number of home mortgage loans to African Americans increased by 58%, to Hispanics by 62% and to low- and moderate-income borrowers by 38%, well above the overall market increase...
(Excerpt) Read more at news.investors.com ...
Lets try that again. Sheesh.
They should have been able to find that evidence in about an hour after the collapse. You could Google Obama and see where he was a litigant forcing lending institutions to give bad loans. Everyone in government gets a free ride.
Note that they all blamed Wall Street though. They were the real criminals. Bankers, lending institutions, all trashed as if they caused the problem.
Capital Hill baby, they and all their cronies doing what came naturally. Not a one of them getting any push-back whatsoever.
that’s about it isn’t it
she was in the command position on Waco the day of the burn-out
The Clinton Library..., the first double wide in presidential library history.
Geez, all this time I thought the republicans drove the country into a ditch.
The Co-President will claim a share of the credit for any perceived accomplishments, and deny any responsibility for the failures.
I’m no fan of Clinton, but if the government told me that I had to lend money to people that had NO CHANCE OF EVER PAYING IT BACK, I would tell the government to take a hike and throw me in jail.
But Countrywide and the other banks just saw HUGE REVENUE while the gravy train was running and could not GIVE A DAMN about the crash that was certain to happen.
It didn’t take a genius to figure out what was going on, it only took a quick comparison of average incomes versus average prices of houses being sold. Additionally, ANYONE WITH ACCESS could have pulled the paper for some of the loans and compared loan amounts to verified income levels (at least for the loads that they bothered to check income levels on, which were not many at the end) and it was NOT HARD to see what was going on, not hard at all. I even bought a nice car by shorting Countrywide and a few other IDIOT lenders back then - the only time I’ve ever made money in stocks, by the way.
The economic depression the country is in today is the direct result of corrupt mortgage lending Congress required. Many banks were destroyed by it already. America's financial survival now hangs by a thread.
So Bill and Barney, where did all the money go? Somebody got it.
This is news? I hope I'm not the only one who saw this coming.
no money down, interest only loans to uneducated low income workers with no or bad credit history for more money than thy could pay back in two lifetimes, what could possible go wrong???
“I have lib relatives that...still support O and plaster Hitlery for Prez....”
It’s absolutely amazing that they’ll still say that it’s someone else’s fault.
(My lib relatives are irritatingly the same.)
IMHO
CRA was a catalyst. But the banks realized they could make higher risk loans to everybody, and they did.
Lots of money to be made at the front end, then sell the loans off. Who cares who gets stuck with the bad loans, later?
This is an “NSS” (no sh*t, Sherlock) revelation.
CRA pushed the banks to lend to weak borrowers; increased demand pushed up prices, making the loans even riskier; securitization let the lenders offload them on Fannie and Freddie, as well as institutional investors worldwide.
The best book I read on the 2008 disaster was “The Sellout”, by Charles Gasparino. “The Big Short” by Michael Lewis is also good, but doesn’t provide as much background.
Ob sued Citibank under CRA to force it to issue subprime loans and created thereby not only bad loans, but enhanced the numbers of mortgages securitised by the banks, which with no title transfers done with the securitisations, were sold to Fannie and Freddie in the Executive Branch of govt. where they remain today,over a trillion of which were bought and continue to be bought from Fannie and Freddie to the tune of $35-45B a month since Sept. of 2012.
http://www.mediacircus.com/2008/10/obama-sued-citibank-under-cra-to-force-it-to-make-bad-loans/
UPDATED: Obama Sued Citibank Under CRA to Force it to Make Bad Loans
Posted on 03 October 2008
Do you remember how we told you that the Democrats and groups associated with them leaned on banks and even sued to get them to make bad loans under the Community Reinvestment Act which was a factor in causing the economic crisis (see HERE ) … well look at what some fellow bloggers have dug up while researching Obama’s legal career. Looks like a typical ACORN lawsuit to get banks to hand out bad loans.
In these lawsuits, ACORN makes a bogus claim of Redlining (denying poor people loans because of their ethnic heritage). They protest and get the local media to raise a big stink. This stink means that the bank faces thousands of people closing their accounts and get local politicians to lobby to stop the bank from doing some future business, expansions and mergers. If the bank goes to court, they will win, but the damage is already done because who is going to launch a big campaign to get the bank’s reputation back?
It is important to understand the nature of these lawsuits and what their purpose is. ACORN filed tons of these lawsuits and ALL of them allege racism.
Thanks to the IUSB Vision Weblog for providing additional details of this story.
We pulled the docket down, but here’s a brief for your summary:
Case Name
Buycks-Roberson v. Citibank Fed. Sav. Bank Fair Housing/Lending/Insurance
Docket / Court 94 C 4094 ( N.D. Ill. ) FH-IL-0011
State/Territory Illinois
Case Summary
Plaintiffs filed their class action lawsuit on July 6, 1994, alleging that Citibank had engaged in redlining practices in the Chicago metropolitan area in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691; the Fair Housing Act, 42 U.S.C. 3601-3619; the Thirteenth Amendment to the U.S. Constitution; and 42 U.S.C. 1981, 1982. Plaintiffs alleged that the Defendant-bank rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories. Plaintiffs sought injunctive relief, actual damages, and punitive damages.
U.S. District Court Judge Ruben Castillo certified the Plaintiffs’ suit as a class action on June 30, 1995. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 322 (N.D. Ill. 1995). Also on June 30, Judge Castillo granted Plaintiffs’ motion to compel discovery of a sample of Defendant-bank’s loan application files. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 338 (N.D. Ill. 1995).
The parties voluntarily dismissed the case on May 12, 1998, pursuant to a settlement agreement.
Plaintiff’s Lawyers Alexis, Hilary I. (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Childers, Michael Allen (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Clayton, Fay (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Cummings, Jeffrey Irvine (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Love, Sara Norris (Virginia)
FH-IL-0011-9000
Miner, Judson Hirsch (Illinois)
FH-IL-0011-7500 | FH-IL-0011-9000
Obama, Barack H. (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Wickert, John Henry (Illinois)
FH-IL-0011-9000
UPDATE : Hotair.com comments on this story HERE .
New York Post Article HERE :
THE seeds of today’s financial meltdown lie in the Community Reinvestment Act – a law passed in 1977 and made riskier by unwise amendments and regulatory rulings in later decades.
CRA was meant to encourage banks to make loans to high-risk borrowers, often minorities living in unstable neighborhoods. That has provided an opening to radical groups like ACORN (the Association of Community Organizations for Reform Now) to abuse the law by forcing banks to make hundreds of millions of dollars in “subprime” loans to often uncreditworthy poor and minority customers.
Any bank that wants to expand or merge with another has to show it has complied with CRA – and approval can be held up by complaints filed by groups like ACORN.
In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America’s financial institutions .
The Woods Fund report makes it clear Obama was fully aware of the intimidation tactics used by ACORN’s Madeline Talbott in her pioneering efforts to force banks to suspend their usual credit standards. Yet he supported Talbott in every conceivable way. He trained her personal staff and other aspiring ACORN leaders, he consulted with her extensively, and he arranged a major boost in foundation funding for her efforts.
And, as the leader of another charity, the Chicago Annenberg Challenge, Obama channeled more funding Talbott’s way – ostensibly for education projects but surely supportive of ACORN’s overall efforts.
Surprise, surprise......
In spite of this coming out,The new democrat darling,Elizabeth Warren,the phony Indian is running around screeching someone should have gone to jail for the banking crisis that caused the housing collapse,this just shows how brazen and confident the Marxists are in knowing the press will not expose the truth and the Republicans are worse because of their total incompetence in explaining what most of us here have know for years.
When I brought this up years ago to my Democrat relatives I was laughed at as well,these Clinton papers will just be looked at as another right wing plot to smear Hillary
GENESIS OF THE SUB-PRIME BILKING OF TAXPAYERS
Clinton appointee, Fannie Mae CEO Franklin Raines, Pens a Letter to Shareholders
excerpted from Raines 2003 Fannie Mae Annual Report
Excerpt ...Ten years ago the typical conforming mortgage required a down payment of 10-20%, and low-down payment mortgages were considered too risky. But then we helped to standardize the 3-5% down payment loan, brought it to global capital markets, and made it available to lenders and communities nationwide. Now low-down payment loans are commonplace. And we just adopted a new variance in our underwriting standards that will make the $500 down payment loan widely available as well...
In 1994, we pledged to provide $1 trillion in capital to ten million underserved families by the end of 2000. Thanks to our housing and industry partners, we met that goal early.
Then in 2000, we launched our American Dream Commitment, a pledge to provide $2 trillion in capital to 18 million underserved families by the year 2010, including $400 billion targeted specifically for minority families (later raised to $700 billion in response to President Bush’s Minority Homeownership Initiative). After four of the strongest years in housing and mortgage finance history, we’ve already surpassed the top-line goals of this commitment. But our work is far from complete.
So in January 2004, we announced our Expanded American Dream Commitment and pledged significant new resources to tackle America’s toughest housing challenges. Our new commitment has three main goals.
First, we will expand access to homeownership for six million first-time home buyers in the next ten years, including 1.8 million minority first-time home buyers.We also will help raise the national minority homeownership rate from 49 percent to 55 percent, with the ultimate goal of closing it entirely.
Second, we will help new and long-term homeowners stay in their homes through a series of initiatives, and commit $15 billion to preserve affordable rental housing and $1.5 billion to support the revitalization of public housing communities.
Third, we will increase the supply of affordable housing and support community development activities in at least 1,000 neighborhoods across the country through our American Communities Fund, and through targeted investments like Low-Income Housing Tax Credits that help finance affordable rental housing.
It is because of initiatives like our Trillion Dollar Commitment and our American Dream Commitment that we have exceeded our HUD affordable housing goals for ten consecutive years. (End Raines excerpt.) (NOTE Raines is a Clinton appointee)
===============================================
NOTE: Raines was fired for being a crook---cooking the books to get bonuses. But he walked away a multi-millionaire---extorting millions from taxpayers for pensions, bonuses, lifetime healthcare, donations to his fave charites....etc, etc, and so on, and so forth, ad infinitum ad nauseaum.
Obama's speech on the US economy spelled out the beginning of the end for federally-controlled mortgage buyers Fannie Mae and Freddie Mac. “We’ll work with both parties to turn the page on Fannie and Freddie, and build a housing finance system that’s rock-solid for future generations,” Obama said, according to a copy of his prepared remarks
The House Financial Services Committee approved a bill on Tuesday that would get rid of the firms in five years, to be replaced by a National Mortgage Market Utility to help securitize mortgages.(Excerpt) Read more at blogs.marketwatch.com
ADDENDUM---what Obama left out of his remarks Wall Street Journal report on page A15---article entitled “Treasury’s Fannie Mae Heist“.
WSJ: The Federal government is seizing the substantial profits of the government-chartered mortgage firms, Fannie Mae and Freddie Mac, taking for itself the property and potential gains of private investors the government induced to help prop up these companies. This conduct is intolerable.” A scathing article follows--a must read.
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