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.
You’d be surprised at the quotes I read in his press releases. Proof of his liberal, socialist values and policies on record for conservatives to see.
This is great work, but my only critique would be to add a good summary intro paragraph — the good old “who, what, when, where and why.” This will draw readers into the details which you have spelled out nicely. Remember, on the web, people tend to skim, so the more you can chunk it up, create bulleted lists of info, the easier it will be to scan. Let’s make your work as effective as possible!
I’m open to anything that will help get this in front of more voters. I can write a summary, but I doubt JR/mods will allow me to update the article. I’d probably have to re-post it.
I would love to see a list, with all of the liberal politicians that say the same things - I’ve been debating with Romney supporters all day at work.
Well Done. This information needs to be shared with as many people as possible, including Levin.
Looks largely like a scheme to line the pockets of the mortgage holders—with state support. To what extent did they fund his campaign for governor? In effect, that would make Romney a bribe-taker ante factum. Follow the money trail.
Even back in the 90s, El Rushbo frowned upon government promoting home sales in preference to renting. Usually, though, he just had in mind the mortgage deduction. Romney’s housing scheme added a new and awful dimension.
It is also forgotten that in W.'s first SOTU address ( the one before 9/11, he also said that he wanted the government to help people buy houses. Even with the then very common low down, or no down payment mortgages that were rampant Bush said that some poeple still had trouble buying a home. He proposed a government program to "loan" poor people the funds for the down payment and closing costs.
So many things wrong with that,,
But one thing I know he was doing, is he was standing up as the former Speaker of the House and someone who many people respected as a conservative leader, he was standing up and defending Freddie Mac and Fannie Mae. And so conservatives in Congress and conservatives around the country, instead of arguing to get rid of these entities, to scale the market back and get rid of these guys, they said, Well, if Newt Gingrich thinks its a good idea, why, we ought to go along with it.Um, ... what?! Republicans in Congress were arguing to "scale the market back." All the while Romney was expanding the market in MA. What a total liar.
Did he really think he could hide it all?
Buying those computers was obviously an attempt to hide something.
We’ll be examining Romney’s motivations in the next article, but I hope that interested bloggers and journalists will become interested and do some digging of their own.
Romney is a Liberal Democrat in the wrong party. Maybe he thinks a “pro life” stance is enough... a “Business” background is good enough.... mkay.
No, Romney will not do ANYTHING to any degree great enough to make any difference in this Obamanation of an economy.
Ping to the Usual Suspects!
Please hit your ping lists folks. This is a story with legs, and there is more to come!
President George W. Bush
Setting the Record Straight: Six Years of Unheeded Warnings for GSE Reform
The Washington Times Fails To Research The Administration’s Efforts To Reform Fannie Mae And Freddie Mac
Over the past six years, the President and his Administration have not only warned of the systemic consequences of failure to reform GSEs but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties.
In fact, it was Congress that flatly rejected President Bush’s call more than five years ago to reform the GSEs. Over the years, the President’s repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems with the GSEs.
Rest, listing ALL his many attempts
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Documented .. Pres Bush started to rein in this monstrosity in 2001 .. with the last plea in Sept 2008. He was blocked in the main by the outright LIAR, Barney ‘Frankly Twisted’ Frank.
Franks Stopped Bush in 03 to regulate Fannie Mae 17 times!