Posted on 10/09/2008 5:55:46 PM PDT by Kaslin
House Financial Services Chairman Barney Frank has suggested that linking the banking crisis to the high-risk bank lending mandates of the Community Reinvestment Act and the "affordable" housing goals set by Congress for Fannie Mae and Freddie Mac constitutes a Republican effort to scapegoat poor, minority households that took out such mortgages.Frank says such people are the victims, not the cause.
He not only fails to acknowledge the role the government-sponsored mortgage giants played in the flight to unsafe lending. He also doesn't understand the wrongheadedness of government lending mandates for low-income neighborhoods: They tend to harm the prospects of the households and areas they purport to help.
That's why it's crucial, once markets begin to right themselves and Congress turns to the work of crafting a post-crisis regulatory regime, that such lending mandates end.
The unanticipated consequences of the CRA, which pushes banks to make loans they'd otherwise not originate, and the HUD "affordable housing goals," which forced Fannie Mae and Freddie Mac to buy such loans, stem from the same fundamental mistake: the misguided belief that it is enlightened public policy to mandate lending for reasons other than the capacity of households to make their payments.
I first encountered the fallout from this on a visit to Barack Obama's home turf, the near South Side neighborhood of Chicago known as the Back of the Yards. It's the place where the original community organizer, Saul Alinsky, plied his trade.
(Excerpt) Read more at ibdeditorials.com ...
barney frank grasps what????
Barney will never grasp your’s truely.......
Saying Barney Frank and “grasp” in the same sentence is creepy.
Barney grasps foot tapping.
Anthony Sanders at Arizona State University has been saying this for years. I did a search on the Frank issue and whether this is good for low income households and here is what he said in 1988 when he apparently was at Ohio State University:
But Anthony Sanders, professor of finance at Ohio State University’s business college, said that even if the I.R.A. proposal attracted substantially more home buyers, which he was not sure it would, it was a bad plan.
‘’Ask investors in Houston how they would have liked it if they’d been stimulated to buy housing,’’ Professor Sanders said, referring to the housing crash in Texas.
He said many people would be better off putting what savings they have into other investments. And the Government, he added, would be better off focusing its resources on incentives to rehabilitate rental housing in the inner cities.”
Females.
Another Lawyer without any grasp of basic economics. ;-)
Barney Frank doesn’t give a rat’s a$$ about the poor. He wants to hold on to power and perks - for himself and his Democrat cronies - and bribing the poor to get their votes is his means of doing that.
The only thing Barney the Butt Pirate grasps is something in the proximity of said Butt.
It would have neen cheaper to just buy homes for these poor folks.
I don't believe that they were unanticipated consequences. I bet there were those who foresaw this, warned against it, and were ignored, or worse. Like arguments against raising the minimum wage, the luxury tax, etc.
No Barney.
Its an effort to scapegoat YOU!
Barney Frank, like Pelosi, Boxer, Maxine Water, ad nauseam - all used CRA to help destroy yet another part of the American economy SO THAT THEIR BELOVED COMMUNISM MIGHT HAVE A CHANCE TO GET CONTROL OF AMERICA ! ! ! !
I almost bought a smoked pork butt for dinner-——but it reminded me too much of Bwaney.
I dropped it like a hot potato and went for the pork chops instead.
By Bill Sammon, FOX News’ Washington Deputy Managing Editor.
Unqualified home buyers were not the only ones who benefited from Massachusetts Rep. Barney Frank’s efforts to deregulate Fannie Mae throughout the 1990s.
So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions. Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank’s relationship with Herb Moses, who was Fannie’s assistant director for Fannie Mae Product Initiatives.
Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie. Both Frank and Moses assured the Wall Street Journal in 1992 that they took pains to avoid any conflicts of interest. Critics, however, remain skeptical.
‘It’s absolutely a conflict,’ said Dan Gainor, vice president of the Business & Media Institute. “He was voting on Fannie Mae at a time when he was involved with a Fannie Mae executive. How is that not germane? “If this had been his ex-wife and he was Republican, I would bet every penny I have - or at least what’s not in the stock market - that this would be considered germane,’ added Gainor, a T. Boone Pickens Fellow. ‘But everybody wants to avoid it because he’s gay. It’s the quintessential double standard.’
A top GOP House aide agreed. ‘C’mon, he writes housing and banking laws and his boyfriend is a top exec at a firm that stands to gain from those laws?’ the aide told FOX News. ‘No media ever takes note? Imagine what would happen if Frank’s political affiliation was R instead of D?
Imagine what the media would say if [GOP former] Chairman [Mike] Oxley’s wife or [GOP presidential nominee John] McCain’s wife was a top exec at Fannie for a decade while they wrote the nation’s housing and banking laws.’ Frank’s office did not immediately respond to requests for comment.
Frank met Moses in 1987, the same year he became the first openly gay member of Congress. ‘I am the only member of the congressional gay spouse caucus,” Moses wrote in the Washington Post in 1991. “On Capitol Hill, Barney always introduces me as his lover.’
The two lived together in a Washington home until they broke up in 1998, a few months after Moses ended his seven-year tenure at Fannie Mae, where he was the assistant director of Fannie Mae Product Initiatives.
According to National Mortgage News, Moses ‘helped develop many of Fannie Mae’s affordable housing and home improvement lending programs.’ Critics say such programs led to the mortgage meltdown that prompted last month’s government takeover of Fannie Mae and its financial cousin, Freddie Mac. The giant firms are blamed for spreading bad mortgages throughout the private financial sector.
Although Frank now blames Republicans for the failure of Fannie and Freddie, he spent years blocking GOP lawmakers from imposing tougher regulations on the mortgage giants.
In 1991, the year Moses was hired by Fannie, the Boston Globe reported that Frank pushed the agency to loosen regulations on mortgages for two- and three-family homes, even though they were defaulting at twice and five times the rate of single homes, respectively.
Three years later, President Clinton’s Department of Housing and Urban Development tried to impose a new regulation on Fannie, but was thwarted by Frank.
Clinton now blames such Democrats for planting the seeds of today’s economic crisis. ‘I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was president, to put some standards and tighten up a little on Fannie Mae and Freddie Mac,’ Clinton said recently.”
Excerpt ...Ten years ago, for example, the typical conforming mortgage required a down payment of 10 to 20 percent, and low-down payment mortgages were considered too risky. But then we helped to standardize the 3 to 5 percent 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.
And we have increased our financing of mortgages to African Americans by over 400 percent and to Hispanic Americans by 470 percent in the past ten years, compared with a 205 percent increase in overall financing. Our Expanded American Dream Commitment will help us do even more.
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WHERE ARE THE FANNIE MAE CROOKS NOW?
FRANKLIN RAINES? Raines works for the Obama Campaign as Chief Economic Advisor
TIM HOWARD? Howard is also a Chief Economic Advisor to Obama
JIM JOHNSON? Johnson hired as a Senior Obama Finance Advisor and was selected to run Obama's Vice Presidential Search Committee
I think he grasps just fine - no double entendre intended (well, maybe a little...)
I think that he understands perfectly, that he can use the inevitable failures as another excuse to blame those wascawy Wepubwicans, and then pit class against class.
(The dons at Hah-vud must be so very proud of their boys these days. You reap what you sow.)
Just as college admission mandates hurt the forcibly admitted (as well as the school.) I had been a college tutor in such a state school and the lack of even the most fundamental academic skills (much less the desire to obtain them) was completely horrifying.
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