Posted on 09/26/2009 10:00:22 PM PDT by Lorianne
The visits had a ritual quality. Three times a year, a coalition of Chicago community groups met with the Federal Reserve and other banking regulators to warn about the growing prevalence of abusive mortgage lending.
They began to present research in 1999 showing that large banking companies including Wells Fargo and Citigroup had created subprime businesses wholly focused on making loans at high interest rates, largely in the black and Hispanic neighborhoods to the south and west of downtown Chicago.
The groups pleaded for regulators to act.
The evidence eventually led Illinois to file suit against Wells Fargo in July for discrimination and other abuses.
But during the years of the housing boom, the pleas failed to move the Fed, the sole federal regulator with authority over the businesses. Under a policy quietly formalized in 1998, the Fed refused to police lenders' compliance with federal laws protecting borrowers, despite repeated urging by consumer advocates across the country and even by other government agencies.
The hands-off policy, which the Fed reversed earlier this month, created a double standard. Banks and their subprime affiliates made loans under the same laws, but only the banks faced regular federal scrutiny. Under the policy, the Fed did not even investigate consumer complaints against the affiliates.
(Excerpt) Read more at washingtonpost.com ...
More banking infomation
WOW! The info is starting to pour out now.
bump for later
This is something I need to get a better understanding of. Parts of this whole fiasco just don’t make sense, like when a prisoner escapes out of prison in broad daylight and the guards start saying, “Well, it wasn’t my turn to watch him.”
you might be interested in this.
FYI
“a coalition of Chicago community groups” -— that caught my eye; I wonder who they might be?
In all these most recent posts tonight, Hoosiermama & PhiKapMom, I keep thinking of something Rush said last Thursday (I think). He was on a 10 minute rant that should have been broadcast in prime time into every home in America.
He was talking about BHO nationalizing everything & he said something to the effect: “And even the banks. Every one of them, except for Goldman Sachs, has a bulls eye painted on them.”
He was talking about BHO nationalizing everything
***Sherlock Holmes solved a case due to a dog that didn’t bark, but this is reality, not fiction. The Watchdogs that refuse to bark are complicit in the destruction of our republic. This is naked fascism being revealed.
I think Rush is right and think this was planned a long time ago. In fact, I would be we have sitting Senators/Reps who are only in office because of ACORN voter fraud.
I would bet we have ...
When the CRA was created during the Carter administration, the administration also funded with tax dollars numerous “community groups” that have helped the Fed, the Comptroller of the Currency, and other federal regulatory agencies to enforce the act. Under the CRA, if a bank wants to make virtually any change in its business operations — merging, opening up a new branch, getting into a new line of business — it must first prove to regulators that it has made “enough” loans to the government’s preferred borrowers.
The (partially) tax-funded “community groups” like ACORN (Association of Community Organizations for Reform Now) can file petitions with regulators that stop the bank’s activities in their tracks, perhaps defeating them altogether. The banks routinely buy off ACORN and other “community groups” by giving them millions of dollars as well as promising to make even more dubious loans.
http://www.freerepublic.com/focus/news/2084666/posts
...........
To move from the abstract to the concrete, we can look to, for example, a Sept. 20, 2004 press release,
“Citigroup and ACORN Sign Groundbreaking Agreement to Expand Access to Financial Services in Communities Around the Country”. There Citibank touted that it and Association of Community Organizations for Reform Now (ACORN) agreed to collaborate on several initiatives, including:
— Form an affordable mortgage-lending program between Citigroup and ACORN Housing Corp. (AHC) to develop a specialized mortgage product for all AHC’s homeownership centers, and make mortgages available to immigrants who have previously been shut out of credit markets. ***
— Focus on community development lending to increase affordable housing in areas where the Citibank Community Development and ACORN footprints coincide.
— Provide borrowers with access to the best combination of loan product, price, service, and attributes.
— Establish a net-benefit test for real estate secured loans.
We now call real estate secured loans issued in compliance with these programs, “Subprime.”
Barack Obama has had an intimate and long-term association with ACORN. Acorn’s Madeleine Talbot first drew Mr. Obama into his alliance with ACORN. Toni Foulkes, a Chicago Acorn leader, has described that it specifically sought out Mr. Obama’s representation in a case it filed seeking to force the State of Illinois to comply with motor voter requirements.
So, the “Community Reinvestment Act” seeks input from “Community Organizers” like ACORN in rating financial institutions on their compliance is issuing subprime loans.
http://www.freerepublic.com/focus/news/2076874/posts
..............
Obama was a key player behind the mortgage crisis
“In a 1995 case known as Buycks-Roberson v. Citibank, Obama and his fellow attorneys charged that Citibank was making too few loans to black applicants and won the case. As one commentator noted in May 2008, legal “successes” such as this were probably responsible for the sub-prime mortgage crisis of 2007 AND 2008. That is, banks were not loaning to blacks whose credit was poor. When the law forced them to lend money anyway, the inevitable collapse occurred.”
Obama was a key player in the lawsuit that started the government on a course of forcing lenders to give more loans to those who had poor credit. Lending companies were forced to come up with imaginative ways of fulfilling the quotas that were required. Sub-prime lending was born as a result. The mortgage crises was forecast by many who were able to look beyond the quota. Buycks-Roberson v. Citibank Fed. Sav. Bank
http://www.freerepublic.com/focus/news/2091975/posts
meant to ping you to post #11
It does seem to be a rather long article that appears to studiously avoid mention of CRA, Fannie Mae or Freddie Mac.
“Price signals” being an Orwellian-Marxist code word for "punitive taxes and fees." "Spread-the-Wealth Obama" doesn’t seem to care much that the working class would be hurt by punishing taxes and fees.
SAP-HAPPY OBAMA We're finding out the toxic mortgages poisoning the global economy (that brought the US economy to its knees) were held by leeches with larceny on their minds, who never intended to payback banks.
Sap-happy Barack Obama represented ACORN---suing banks into loaning to marginal people.
Illegals were never asked for proofs of employment or citizenship---pay stubs, SS numbers, etc. As long as they had a pulse and could write the name of one of their phony identities, they got a loan.
Many illegals were scam artists----flipping the home back and forth among immigrant families at higher and higher profits, duping banks at every turn. When they were done looting, the last "homeowner" defaulted and absconded to Mexico with $tens of thousands in cash.........leaving banks (and taxpayers) holding the bag.
Later we learned that Mexican papers ran ads that promised "free houses in the US."
Screwing banks and US taxpayers must get lotsa laughs over tequila shots in downtown Tijuana.
The predatory lending “hype” was designed to clear the way for the community organizations like Acorn to have a virtual monopoly on the subprime and prime lending business to the minority groups.
The got the government to make mortgage brokers the bad guys, yet mortgage brokers only sold the products offered by the big banks.
You saw Acorn going to give a loan to Hannah Giles so she can start prostitution ring? That is predatory isnt it.
The whole thing is a sham!!!
They were to busy fleecing everything they could.
Post #7 -—“a coalition of Chicago community groups”
That’s why I am wondering who these groups are mentioned in the article. Could it possibly be that the same groups that were complicit in this debacle are the same groups that were “warning” those many years?
The higher interest rate reflect higher risk? The higher interest rate increase the cost, and force the consumer into a smaller home or no home until the consumer was in a position to afford the home?
Were the community groups interested in just getting lower interest rates for higher risk groups? Lower interest rates allow the consumers who couldn’t afford the home to get a bigger home now (or one at an inflated price)?
Several good threads put up last night re:banking therefore; acorn??????...
Are you on Starwise list?
“Illegals were never asked for proofs of employment or citizenship-—pay stubs, SS numbers, etc. As long as they had a pulse and could write the name of one of their phony identities, they got a loan.”
At B of A and Countrywide Home Loans, all an illegal immigrant needed to get a loan was
utility bills
Mexican I.D.
Great research and tying all of this together. I had heard about the lawsuit where Obama was one of the lawyers but this is the first time I have seen it laid out with the others to connect the dots.
This is getting more interesting by the day!
Thanks for posting this!
Thank you. I loved it. Here are some excerpts:
It was crippled by the doubts of senior officials about the value of regulation, by a tendency to discount anecdotal evidence of problems and by its affinity for the financial industry.
The Fed’s reluctance was part of a broad governmental retreat from oversight of the financial industry. Greenspan and many politicians in both parties saw regulation as a blunt instrument that often deprived more people than it protected.
Like I been saying, this “gov’t shouldn’t do anything” mentality of the libertarians is stupid and has pretty much gutted the GOP over the last 30 years. Electing a current republican is like putting a neutered bull in the pasture and expecting some calves. It ain’t gonna happen.
parsy, who is disgusted
Thanks for your post and info. This is all beginning to make sense and lends credibility that Obama was going to win this election one way or the other. He had to be put in power so the powers behind him could begin their work to nationalize whole industries like banks, automobile (except Ford would bite), healthcare, energy, etc. All done on a march toward socialism and then communism. This bunch of Marxist never counted on the research that conservatives would be doing to find the answers.
It was obvious even to me from the time of this earliest chart, and I know next to nothing about finance or macroeconomics.
"The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear..... Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts.... "[they] are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."
- Warren Buffett, Berkshire Hathaway Annual Report [2003]
Without Fannie and Freddie buying most of these loans..they would never have been made.
But this scenario assumes that Wall Street was just making the goiv’t happy, and the better view IMHO, is that gov’t tends to make Wall Street happy. The CRA loans were never more than 3% of loan originations. Wall Street saw a chance to make a bundle with higher fee subprimes. They often threw people with good credit scores into subprime for the higher fees. They then massaged them into AAA paper and made a bundle selling the paper, and taking side on the paper.
I amj still trying to understand the full impact of the derivatives mess. I will send you a really fun link by a Wall Street guy who caught on and made tons of money shorting the crap.
parsy, who notes the big boys are putting more of the derivatives on exchanges now.
Thanks for the ping.
If conservatives find the answers, then you are going to desert the GOP in droves. The GOP has been taken over by LICE (Libertarians Infiltrating Conservative Entities)the last 30 years or so. As such, all regulation is presumed bad and you are in effect sending atheists into to be the pastors of a church.
Libertarianism and conservatism are two different distinct things. They may have a few points in common, but libertarians are basically little kids masquerading as adults with a simplistic little world view (often based on the writings of an idiot named Ayn Rand). You might as well put a bunch of people who believe the world is 6,000 years old into the heads of geology departments.
The libertarians think any form of regulation is socialism, despite the clear intent of the founding fathers that we have a strong national gov’t with the ability to regulate commerce.
parsy, who is fed up with GOP
"Regulation" seems to mean letting the crooks know exactly whom to bribe.
The actions of Rubin, Paulson, et al. are just too obvious to dismiss.
Been contemplating the ways the internet could conquer the world.....and now it's right here....at the tips of our digitized fingers.
They ain't seen nothin' yet.
“ACORN’s so-called ‘muscle for money’ strategy extorts ‘donations’ from targeted government and corporate officials by offering them Mafia-like protection from protests by the group’s own paid thugs, many of them convicted felons. ACORN has also blocked bank mergers until the targeted financial institutions agreed to change their lending policies to ACORN’s satisfaction.”
ping
I agree that regulation often doesn’t work. That is why it would be nice if BOTH political parties concentrated on business for a change.
But, you are forgetting something new. Its called the internet. And now, the average citizens across the country can get together to put heat on Congress to do their jobs.
What if 10,000 freepers read these articles on regulating Wall Street and each email their reps and sens and tell them, “No More of this no regulation crap! You let Wall Street get out of control and you better do something about it now or your name is getting smeared all over the internet as a friggin crony of Wall Street!”
Can you imagine the impact of this coming from a conservative web site? The liberals have been b*tching about Wall Street for years, and the truth is the conservatives have been so durn brain-washed by these moronic libertarians they have lapsed into insanity when it comes to even sensible regulations.
There are still freepers who blame the CRA and poor folks for the meltdown and think the answer to it all is to let Wall Street have even more power.
parsy, who guesses the average republican will have to be reduced to peonage before they catch on
As I said, the government purporting to "regulate" the industry gives it a fake imprimatur of fairness. Far better for the industry to convince each potential customer that they want his business, and will insure fairness to get it.
Lately we've had the worst of both worlds, a veneer of regulation, all while both parties tilt the rules in Wall Street's favor, and incestuous "regulators" asleep at the switch.
Trailerpark badass, who's too old to believe in competent, altruistic, disinterested "public servants"
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