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 ...
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 then-Cong Joe Baca (D-Cali). The subprime mortgage bank fraud network was spearheaded by then-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 tax resources, 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. Then-Cong Baca calculatedly hyped the fact that the national Latino homeownership rate was 47%, compared with 68% for the overall population.
HOGAR was coached to call the figure "alarming," and to say "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." HOGAR and then-Cong Baca conned the public, failing to note that most of the "dreamers" were illegals, citizens of Third World countries who had violated US borders.
Predictably, HOGAR colluded w/ co-conspirators which included:
(a) shaky mortgage companies that ran into big trouble;
(b) Fannie Mae and Freddie Mac, both now under federal control after billions in taxpayer bailouts;
(c) Countrywide Financial Corp., sold to Bank of America Corp;
(d) Washington Mutual Inc., taken over by the US government and sold to J.P. Morgan Chase & Co.; and,
(e) New Century Financial Corp. and Ameriquest Mortgage Corp, both now defunct, killed by defaulted subprime Latino mortgages.
HOGAR's ties to Countrywide and the subprime mortgage industry were substantial. Bribery and self-dealing were rampant: Companies that donated $150,000 to then-Cong Baca got the right to have their own research fellow who would conduct fraudulent studies, which were cunningly used by industry lobbyists to pump fraudulent lending. Bribery and extortion in the form of $100,000 annual donations to then-Cong Baca, for which HOGAR provided phony news releases from then-Cong Baca's Hispanic Caucus promoting a lender's commercial products to the Latino market,
The most shocking example of bribery well-substantitated by Hogar's literature..... HOGAR announced it 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 collusive coterie.
HOGAR conned lenders into even more lenient down-payment and underwriting standards. As the subprime debacle unfolded, HOGAR declined repeated requests for comment despite the economic havoc their activities precipitated. The fraudulent mortgage schemes demonstrated the criminal activities of border violators with multiple identities---perhaps violent, terrorist-connected foreigners---colluding and conspiring to defraud private companies and public entities. And mortgage racketeering enterprises which employed sub rosa finance and business practices to carry out deceptions and frauds.
The alleged ring of swindlers---a Congresman, individuals with multiple identities, banks, insurance companies, mortgage brokers--might be charged with cheating the US govt, taxpayers and bank share holders out of hundreds of millions of dollars via an elaborate web of mortgage and bank frauds. The mortgage "Dreamers" used multiple phony identities, fraudulent Social Security numbers (purchased from identity forgers) in order to obtain govt-subsidized benefits. L/E will find that individuals with multiple identities obtained fraudulent mortgages then flipped the houses at ever-higher prices to family member who then absconded to foreign countries, sticking banks (and taxpayers) with hundreds of millions in fraudulent mortgages.
BACKGROUND A Wall Street Journal investigative report related that, according to the Federal Financial Institutions Examination Council examination of the borrowing spree, uncovered financial schemes by low-income housing groups, Hispanic lawmakers, a congressional Hispanic housing initiative, mortgage lenders and brokers, all colluding in fraduent schemes to increase homeownership among Latinos with forged documents which enabled massive fraud.
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Baca and the separatist tax-funded "Hispanic Congressional Caucus" has been close-mouthed about its role in financing, and, earmarking the blood-thirsty America-hating La Raza. Race-pimping "La Raza" was given tax dollars...... and Congressional earmarks...... to finance its so-called "mortgage activities." La Raza's "strategic partnerships” with Wachovia and Bank of America forced the falsification of mortgage-applications. The dumbing down of mortgage requirements and documentation standards caused taxpayers to be socked w/ billions of dollars in bailouts...and decimated the US economy.
La Raza aided and abetted risky federal and private-home loans to latinos over the last decathanks to the lending industry’s version of “don’t ask, don’t tell.”
Plus----in addition to pocketing millions of federal tax dollars, La Raza also collected a $1 million Democratic earmark that funded “community-development” projects. Analysts report that much of it went to "mortgage counseling."
All of the official documents need to be scrutinized for fraud and falsification (a felony); as well, the Bank Secrecy Act needs to be mobilized to uncover the whereabouts of tax dollars and whether money laundering and tax-financed terrorism took place.
During Cisneros' tenure he championed Clinton's goal of social engineering within the housing market forcing lenders to issue loans to those that would not financially qualify for the lending. Cisneros left office in a scandal involving lying to the FBI over payouts to a mistress, Cisneros subsequently pleaded guilty to a misdemeanor and though never sent to prison received a pardon from Bill Clinton in 2001.
Andrew Cuomo took the HUD reins and not only furthered Cisneros and Clinton's policies but greatly expanded them.
Henry Cisneros moved the GSEs toward a requirement that 42 percent of their mortgages serve low and moderate income families. Andrew Cuomo raised that number to 50 percent and dramatically hiked GSE mandates to buy mortgages for the "very-low-income."
These bad loans were purchased and sold throughout the secondary market and the pyramid grew and the bottom collapsed resulting in the subprime crisis we are still reeling from today.
In 2008, the Village Voice published a compelling report detailing Andrew Cuomo's policy decisions "that gave birth to the country's current crisis."
The report touched on how Cuomo's 187-page rules "opened the door to abuse." The rules explicitly rejected the idea of imposing any new reporting requirements on the GSEs. In other words, HUD wanted Fannie and Freddie to buy risky loans, but the department didn't want to hear just how risky they were.
Cuomo got lucky-- New York voters were distracted by his gubernatorial opponent's racist jokes; and failed to see the actual harm to the minority community directly caused by Cuomo's policies..
Cuomo's top aide said, "We believe that there are a lot of loans to black Americans that could be safely purchased by Fannie Mae and Freddie Mac if these companies were more flexible."
NOT TO MENTION MASSIVE BAILOUTS W/ OUR TAX DOLLARS Andrew Cuomo doubled down and had this to say about his HUD standards, "GSE presence in the subprime market could be of significant benefit to lower-income families, minorities, and families living in underserved areas."
How's that working out for the minority community, where foreclosures and unemployment rates have hit the hardest as a result of such failed policies and blatant social engineering?
SOURCE http://voices.yahoo.com/cuomos-social-engineering-as-hud-chief-contributed-7077218.html
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INCONVENIENT FACTOID: Cuomo failed to pass his bar exam FIVE times; he's just another not-so-bright politician looking to shore up his lack of self-esteem on the backs of an electorate he despises.
Whoa, who pulled them out of Sandy Bergers trousers?
Where is Sandy Berger?
When Deval Patrick was in the Clinton Justice Dept he hammered banks with CRA
Hardly breaking news...
Well well well! what a suprise! said it all along This was and still is a generated crisis to push us to a point NWO
They weren’t just told to make the bad loans. They were told they couldn’t make good loans if they didn’t make the bad loans, in an environment where the price of their collateral was going up faster than the rate of default. They also couldn’t buy sell, or merge with other companies.
I’m sure you’re right...but even so, THEY KNEW the loans were crap and they saw them getting AAA Ratings and DID NOTHING.
Maybe I live by a different set of ethics?
What the Bloviator did to her was without conscience, ignorant, nasty and arrogantly fascist.
He decried her absolutely correct analysis as FALSE, humiliated her, talked 100% over her protestations and rebuttals.....and then cut her off with that smug, patented know-it-all look of his.
By her facial expression she was plenty ticked off as the segment came to an abrupt, disgusting end.
I would have never come back on his show. However, this know-nothing jerk rules the roost at Fox and all who appear there want to stay in his good graces so they can remain on the Fox payroll.
Leni
I am a simple person who was raised rural & went to a one room schoolhouse.
I have worked in some level of bookkeeping/accounting since I was 17 years old. I am now 74.
I figured out when Jinnah Carter started the CRA that it would cause major problems.
Reagan made a big mistake when he didn’t kill that bill. I loved Reagan, but he made that mistake.
Under Clinton, CRA got put on steroids. Henry Cisneros couldn’t say enough about pushing CRA. I recall Janet Reno in a press conference telling the banks that she would use the strength & depth of the Federal government to put banks out of business if they DID NOT lend money on homes to everybody.
Hence, mortgages were given to people who didn’t qualify to buy a T-Shirt on payment plans.
Am illegal from Mexico who was a strawberry picker got a loan to buy a $650,000 house in Fresno, Calif. Who could possibly have been surprised when he defaulted??????
The banks then created ‘dirivatives’ to make money to offset the massive losses in the mortgages they were forced by the Feds to hand out. One real estate developer told me “If you could fog a mirror & sign an”X”, you could get a loan for ANY house.
Fannie Mae & Freddie Mac were created in the same time frame, to give the banks a place to dump their bad paper.
The origin of the CRA belongs directly at the feet of Jimmah Carter. Clinton, Reno & Cisneros just added fuel to the fire.
IMO, all 4 of them should be indicted for such actions, and thrown into prison for the next 90 years.
It's an editorial. After all the outrageous crap under Obama, people could use a reminder of the effects of the Clinton regime as well as what happens when you vote third party to spite the GOPe. We need a new GOP!
Keep in mind that the Feds redline all the time. They use our money and power to socially engineer outcomes desired by the ruling class. It has to stop. We must make government live by the rules it sets for us.
Thanks neverdem for the ping.
Still have my electronic copy.
They are taught to vote altruistically, share with others, etc. Let them read “Rules for Radicals” and show them the papers written by Hitley and Moochelle, and unless there’s major denial which can’t be swayed with facts, you’ll see some really ticked off people.
Also keep in mind that the Boston Fed study that kicked this into high gear was another example of “secret science”, which turned out to not say what it was said to have said.
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