Free Republic

Why did the mortgage market melt down so badly? Why were there so many defaults when the economy was not particularly weak? Why were the securities based upon these mortgages not considered anywhere as risky as they actually turned out to be? This report concludes that, in an attempt to increase home ownership, particularly by minorities and the less affluent, virtually every branch of the government undertook an attack on underwriting standards starting in the early 1990s. Regulators, academic specialists, GSEs, and housing activists universally praised the decline in mortgage-underwriting standards as an “innovation” in mortgage lending. This weakening of...

Has the so-called Prosperity gospel turned its followers into some of the most willing participants — and hence, victims — of the current financial crisis? That’s what a scholar of the fast-growing brand of Pentecostal Christianity believes. While researching a book on black televangelism, says Jonathan Walton, a religion professor at the University of California at Riverside, he realized that Prosperity’s central promise — that God will “make a way” for poor people to enjoy the better things in life — had developed an additional, dangerous expression during the subprime-lending boom. Walton says that this encouraged congregants who got dicey...

Call me “old-fashioned” and call me “retro,” but I remember the time when you had to have a twenty-percent down payment to even consider buying a house. The banks didn’t like it if you borrowed this down-payment either. And they checked to see if you did. The banks also rigorously checked your income and job history to make sure you could pay them back. I remember when people celebrated getting a mortgage - not just because they could buy a house - but because they had been judged responsible and creditworthy by a major American institution. Twenty-five or thirty years...

NEW YORK — Washington's financial bailout plan is now law. So the credit spigot will start flowing again, banks will resume lending, and an economic recovery can begin, right? Wrong. Experts say the most important thing that needs to happen before the $700 billion bailout even has a chance of working: Home prices must stop falling.

What few today remember is that one of the government's central goals in undertaking mortgage market reform was to segregate American cities by race. As the insurer of much of the national mortgage industry, the FHA fixated obsessively on fears that racial integration would harm real estate values and leave the government responsible for bailing out legions of failed loans. (snip) Wall Street Street's apologists have tried to blame the subprime crisis on the Community Reinvestment Act, Congress' tepid attempt in 1977 to atone for the FHA's sins. This argument, of course, is completely ludicrous, since the vast majority of...

  Assault on the mortgage lenders: in the name of racial justice, the Clintonites want the power to decide who gets a home of his own - efforts to impose regulations on banks to make loans even if applicants are not creditworthy Robert Stowe England QUIETLY, behind the scenes, the Clinton Administration is preparing for the biggest regulatory crackdown of recent years. Attorney General Janet Reno is linking up with banking regulators and with HUD Secretary Henry Cisneros to end the supposed epidemic of discrimination against minorities in making home loans. The implications for society at large are ominous. Here,...

Ten reasons why it's all going to go horribly wrong By Jeff Randall Last Updated: 12:37AM BST 03 May 2006 In my first year as business editor of the BBC, 2001-02, I became known by Television Centre veterans, such as Michael Buerk and Peter Sissons, as a harbinger of gloom. Whenever I turned up at the Ten O'Clock News desk with a business update, it seemed always to presage a corporate disaster. The implosion of dot.com dreamland, the subsequent shake-out in global stock markets, revelations of some heavy-duty corruption in America and the atrocities of 9/11 led to a remarkable...

Excerpt... Measure seen as most significant housing legislation in decades. The number of homeowners who could lose their homes to foreclosure by the end of 2009 is estimated by some to be around 2.8 million. Under the legislation, 400,000 having trouble with payments could avoid it by trading their loans for new, more affordable mortgages through the Federal Housing Administration.Their banks would have to agree to allow the swap and to take a large loss in exchange for avoiding the lengthy and costly foreclosure process. To qualify, homeowners would have to be paying more than 31 percent of their incomes...

RUSH: Here's Rick in Minneapolis. Rick, I'm glad you waited. Welcome to the EIB Network. CALLER: Yeah, Rush, thanks for taking my call. I'm an avid listener. I love your show, and I think you're an asset to the United States of America. RUSH: Thank you, sir, very much. Very perceptive of you. CALLER: If you give me ten seconds, I'm going to say press as who I am. I'm a small business owner who is downsizing. I have four children, a wonderful wife. RUSH: How do you do it? CALLER: I almost ran for mayor in my small town...

Todd Kruse has an interesting “observation and question to the CDA’s representative stating, “since there is already an oversupply of housing on the market today your development plans, using our tax dollars, would simply add more housing stock to an already saturated market. This will further reduce our homes’ values don’t you think?”

The Saginaw home that hit the housing market at a cut-rate price sold Wednesday for less than the price of a McDonald's value meal. The abandoned home on 1606 Perkins received eight bids on eBay.com and sold for $1.75. The high bidder was 30-year-old Joanne Smith of Chicago. ''I am going to try to sell it,'' she said of the house. ''I don't have any plans to move to Saginaw. I don't have any plans of moving from (Chicago).''

BEGIN TRANSCRIPT RUSH: Folks, I, your beloved and respected host, can fix the mortgage crisis with one word: rent. I'll say the one word again: rent. What is the mortgage crisis? A bunch of people that have no business being given loans to buy houses being given loans to buy houses. There was a time when you and I couldn't afford a house. What did we do? Rent. And what did we hear? "Stop renting. You're throwing your money down the sewer. You gotta get into home ownership. You need equity and you need to get the mortgage deduction." So...

On "The G. Gordon Liddy Show" yesterday I called House Financial Services Committee chairman Barney Frank (D-Massachusetts) a "big shmegege" for supporting the Community Reinvestment Act, which helped to lay the foundation for our current economic problems. We discussed the crisis on Wall Street and how liberal community activist groups such as ACORN, the Greenlining Institute, and the National Council of La Raza contributed to the market meltdown. We also discussed my article, "Financial Affirmative Action," that was published in the American Spectator. An audio file (MP3) of the interview is available here.

ACORN activists at the side of L.A. mayor Antonio Villaraigosa (at lectern) yesterday * * * * * The vote fraud factory known as ACORN (Association of Community Organizations for Reform Now) is apparently supporting Los Angeles mayor Antonio Villaraigosa’s crazy push for $5 billion in so-called affordable housing. (See above photo from yesterday which shows the mayor surrounded by ACORN activists wearing red shirts bearing the ACORN logo.) As the nation stares into the economic abyss precisely because of housing-related tomfoolery, Villaraigosa’s plan calls for $1 billion in government to be spent as part of the $5 billion...

She was only 21 when she decided to become a mortgage broker. A newlywed, Michelle LaPiana felt that her own broker had misled her and her husband during the daunting purchase of their first home in Hialeah. She claims she fell prey to a bait and switch. The closing costs were nearly double what the couple previously had been told. By the time they sat with a title agent to sign the loan documents, it was too late to walk away without losing thousands of dollars. ''The closing costs were $9,680,'' recalled LaPiana, now 38 and divorced. ``I remember everything....

Having difficulty coping with financial stress? Forget Bernanke and Paulson. Think Rogers & Hammerstein. In the excellent production of South Pacific at the Lincoln Center in New York (something tells me tickets there will be easier to get soon), one of the highlights is the song "Happy Talk." "Happy talk, keep talking happy talk," sings Bloody Mary. "Talk about things you like to do." Elsewhere in New York, there's a sense afoot that the real problems we face aren't the crippled financial system or the slowing economy, but rather all the bad stuff people are saying about them. In other...

They keep telling us that this is the worst financial crisis since the Great Depression. But there is at least one difference: in the Great Depression, nobody needed to be told they were in a depression. Today, except for relatively few investment bankers and somewhat more middle-class homeowners, who would guess that things are so dire? Life goes on, reasonably normally. Maybe it's easier to get a cab in New York City--a reliable real-life indication of an economic downturn--but then maybe the effect of the financial crisis is canceled out by the effect of that other crisis, the one about...

1. The Federal Reserve cut interest rates to as low as 1% so that after inflation we had negative interest rates.

““SEC. 1338. Housing Trust Fund. “(a) Establishment and purpose.—The Secretary of Housing and Urban Development (in this section referred to as the ‘Secretary’) shall establish and manage a Housing Trust Fund, which shall be funded with amounts allocated by the enterprises under section 1337 and any amounts as are or may be appropriated, transferred, or credited to such Housing Trust Fund under any other provisions of law. The purpose of the Housing Trust Fund under this section is to provide grants to States for use— “(1) to increase and preserve the supply of rental housing for extremely low- and...

The Dems won in 2006 on the culture of corruption theme and by playing the guilt by association card. This should be their downfall this year. This crisis has Dems' hands all over it, and if the GOP beats the drumb none stop and exposes this over and over again in ads, they should win in a landslide. The dems caused and benefited from this, even clinton admitted this http://newsbusters.org/blogs/noel-sheppard/2008/09/25/fox-news-blames-democrats-financial-crisis-bill-clinton-agrees http://www.economicpolicyjournal.com/2008/06/bank-of-america-basically-wrote-bank.html http://townhall.com/Common/PrintPage.aspx?g=8bafcc31-eb71-40c6-baf9-75b3f31e293b&t=c http://stuckon-stupid.com/2008/09/25/fannie-mae-officials-former-clinton-officials-benefit-from-countrywide-mortgage-vip-program/ http://stuckon-stupid.com/2008/09/25/how-bill-clinton-andrew-cuomo-robert-rubin-made-the-subprime-crisis-inevitable/ http://ace.mu.nu/archives/274081.php http://newsbusters.org/blogs/nb-staff/2008/09/25/mrc-nbs-bozell-media-covered-enron-more-year-fannie-mae-freddie-mac-corrup http://ace.mu.nu/archives/273508.php http://www.wsj.com/article/SB122091796187012529.html?mod=most_emailed_day http://article.nationalreview.com/print/?q=NDA4YTY1N2ZhMDhmNjIwNTk4OTI2MDYxZWU4NDg1Y2Q= http://frum.nationalreview.com/post/?q=Y2NkMTVkNTczNGFlOTZjZTBjMmJkMDgxMTY5ODU3YzY= http://newsbusters.org/blogs/jeff-poor/2008/07/14/cnbc-s-questions-dodd-s-leadership-abilities-wake-countrywide-association http://redstate.com/stories/elections/2008/democrats_whose_interest_is_it_to_settle_anything_now_0 http://michellemalkin.com/2008/07/07/the-continuing-saga-of-the-deadbeat-defaulting-dem/ http://michellemalkin.com/2008/07/07/stop-the-doddcountrywide-bailout-boondoggle/ http://www.wxyz.com/news/local/story.aspx?content_id=55ceb5e0-83c7-4cdf-9347-e05c4ab4e98a http://www.freerepublic.com/focus/f-bloggers/2040591/posts http://politicallydrunk.blogspot.com/2008/06/obamas-subprime-contributors-part-ii.html http://redstate.com/stories/breaking_news/why_is_christopher_dodd_still_the_chairman_of_the_senate_banking_committee http://redstate.com/blogs/soren_dayton/2008/jun/18/shouldnt_the_senate_banking_chair_know_interest_rates http://michellemalkin.com/2008/06/17/dodd-knew-since-1993/ http://michellemalkin.com/2008/06/16/how-stupid-do-unscrupulous-borrowers-chris-dodd-and-kent-conrad-think-you-are/ http://michellemalkin.com/2008/06/09/more-unpaid-debts-for-the-deadbeat-defaulting-democrat/ http://www.freerepublic.com/focus/f-news/2031963/posts http://www.nypost.com/seven/06132008/news/nationalnews/loan_sleaze_spreads_115310.htm http://michellemalkin.com/2008/05/27/deadbeat-dem-defaulted-on-three-home-loans-while-lending-her-campaign-77500-hellllooo-congress/ http://www.freerepublic.com/focus/f-news/1993613/posts Thursday, June 26, 2008...

Human suffering became a reality for millions of Americans as the depression continued. Many died of disease resulting from malnutrition. Thousands lost their home because they could not pay the mortgage. In 1932,at least 25,000 families,and more than 200,000 young people wandered through the country seeking food,clothing,shelter,and a job. Many of the young people traveled in freight trains,and lived near train yards called hobo jungles. The homeless,jobless travelers obtained food from welfare agencies,or religious missions in town along the way. Most of their meals consisted of soup,beans,or stew and had very little nourishment. The travelers begged for food,or stole it...

Existing-home sales resumed falling in August and prices took a record drop of 9.5% from a year earlier, but inventories decreased sharply. Sales of previously owned homes declined in August, but in a promising sign the backlog of unsold homes shrank. Sales of existing homes fell 2.2% in August from the previous month to an annual sales pace of 4.91 million units, the National Association of Realtors said Wednesday. The data cover sales of homes, condominiums, and townhouses. The inventory of unsold houses fell to a 10.4-month supply at the current sales pace, compared to July's 10.9-month supply. The current...

MIAMI (Sept. 23) - Al Ray is so strapped for cash, the only time he eats out is on Wednesday or Sunday, when the local McDonald's sells hamburgers for 49 cents.

Did Ken Lay Get to Write Sarbanes-Oxley? The $700 billion that Treasury Secretary Hank Paulson is requesting from Congress to restore liquidity in the financial markets is a breathtaking sum of money. But it is also important to remember Paulson has already committed $200 billion to recapitalize Fannie Mae and Freddie Mac. The size of their bailout should tip Americans off: Fannie and Freddie were the key enablers of the mortgage crisis.Fannie and Freddie’s implicit government stamp of approval on these risky investments fueled Wall Street’s appetite for subprime securities. As of last June, Fannie alone owned or guaranteed more...

The US Financial system needs a bailout. Only the govt. aka the US taxpayers can do this. It needs to be done as fairly as possible. The solution is to give $7000 (about 700 billion) to each taxpayer but with the following restrictions. If you are in default on any debt (auto, home, credit card, student), then the 7000 will first go to repaying the loans. This helps keep people in their homes, cars, schools, etc. and helps liquify the lenders with payments on loans. If you are not in default, the money will be held in a self directed...

Last week saw the demise of the shadow banking system that has been created over the past 20 years. Because of a greater regulation of banks, most financial intermediation in the past two decades has grown within this shadow system whose members are broker-dealers, hedge funds, private equity groups, structured investment vehicles and conduits, money market funds and non-bank mortgage lenders. Like banks, most members of this system borrow very short-term and in liquid ways, are more highly leveraged than banks (the exception being money market funds) and lend and invest into more illiquid and long-term instruments. Like banks, they...

"Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal." - John McCain

Newt Gingrich has just written a good piece on the Corner on National Review Online. Here are some of his main points: "Before D.C. Gets Our Money, It Owes Us Some Answers [Newt Gingrich] Watching Washington rush to throw taxpayer money at Wall Street has been sobering and a little frightening. We are being told Treasury Secretary Henry Paulson has a plan which will shift $700 billion in obligations from private companies to the taxpayer. We are being warned that this $700 billion bailout is the only answer to a crisis. We are being reassured that we can trust Secretary...

Obama’s Real-Estate Bust He did for Illinois taxpayers what shady mortgage lenders have done for the economy... Using his elected office and his clout, Obama helped Tony Rezko and other unscrupulous low-income housing developers obtain millions of dollars in state grants, tax credits, low-interest loans, and regulatory advantages. Taxpayers had no serious chance of recouping these “investments” in Rezko and other developers. And many beneficiaries went one step farther, depriving the public of even the benefits they could have gotten. These developers took government help to build low-income housing, and then let their buildings deteriorate into uninhabitable slums... To date,...

For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as 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. The White House released this list of attempts...

The Bush administration today [in 2003] recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry. The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of...

Now, Dems will claim that these are all lies, but Gibson is only getting his information from media sources. So, either those sources are lying or it is true. The burden is on liberals to disprove these allegations. Here are the facts:

Housing finance company Freddie Mac plans to put $1 billion into mortgages and home-repair loans in areas damaged by Hurricane Katrina, an effort praised by critics of the company as Congress considers legislation to increase regulation of Freddie and its larger rival, Fannie Mae. In Baton Rouge, La., yesterday, Freddie Mac chairman and chief executive Richard F. Syron and members of the Louisiana congressional delegation announced Freddie Mac's plan to buy $1 billion worth of bonds from state and local housing finance agencies. By accepting a below-market rate of return on the bonds, the purchase will allow cut-rate financing for...

Home sales in California surged 13.6 percent in August as a flood of foreclosures drove down prices. The figures released Thursday by MDA DataQuick showed 37,988 new and preowned homes were sold statewide last month, up 13.6 percent from August 2007 but down 3.8 percent from July. The firm said 46.9 percent of all homes sold last month were foreclosed properties. That helped send the statewide median home price plunging 35.3 percent to $301,000 during the year ended in August. Most of the foreclosed homes were located in inland regions that have taken the worst hits during the housing crisis....

We are in the midst of the worst financial turmoil since the Great Depression. Absent bold action, matters could well get worse. Neither the markets nor the ordinary diet of regulatory orders, bank examinations, rating downgrades and investigations can do the job. Extraordinary emergency actions by the Federal Reserve and the Treasury to date, while necessary, are also insufficient to resolve the crisis. Fannie Mae and Freddie Mac, the giants in the mortgage market, are overextended and now under new government protection. They are not in sufficiently robust shape to meet all the market's needs. The fact is that the...

Barney Frank just threw Alan Greenspan under the bus. Frank essentially states that if only Alan Greenspan had taken the authority given to him back in 1994, and exercised it like Ben Bernanke did in 2006 we wouldn't have the mess we have today. Yes, you read that right - Barney Frank said the Clinton Fed Chair Greenspan screwed up, and the Bush Fed Chair did things right. In other news, snow is reported to be falling in Hell; Lucifer is perplexed!

A top Democrat on the House Financial Services Committee had strong words Tuesday for the banking industry and the U.S. Department of Housing and Urban Development as she reiterated the strong position her party intends to place on housing issues this year. Rep. Maxine Waters, D-Calif., incoming chairwoman of the Housing and Community Opportunity Subcommittee, said affordability and fairness issues are two of her major concerns. She said federal regulators and the lending industry should be prepared to discuss these issues and possible solutions during hearings.

Imagine receiving a call from a mortgage company promising you a lower monthly mortgage payment if you refinance. But you may need to pay a slightly higher amount for a few months prior to the lower rate taking effect. Sounds good, right? That's what millions of Americans thought too--especially Black and Latino homeowners, many of whom were first-time buyers. A report titled "State of the Dream 2008: FORECLOSED" by United for a Fair Economy pinpoints how mortgage companies and banks targeted people from traditionally underrepresented groups with subprime loans. In addition, the report illustrates how severely affected the Black and...

US foreclosure rates up 27 percent in August, slower than July and June Foreclosure filings in August increased 27 percent compared to the same month a year ago, a significantly slower pace than in previous months, according to data released Thursday. Nationwide, 303,800 homes received at least one foreclosure-related notice in August, up 12 percent from July, RealtyTrac Inc. said. That means one in every 416 U.S. households received a foreclosure filing last month. August's increase, however, was smaller than the two prior months. June and July both had year-over year increases in foreclosure filings of 50 percent or more....

ELLIE WOOTEN, the likable mayor of this likable Central Valley city, is on her way to the office when her cellphone rings. A constituent wants her mortgage payments reduced, and is hoping that the mayor has some clout with her lender. Although Merced has one of the highest foreclosure rates in the country, this borrower isn’t in such dire straits. She’s not even behind on her mortgage. But her oldest daughter is turning 18, which means an end to $500 a month in child support. She just wants a better deal. The mayor hangs up and shrugs: “It’s a surprise...

The foreclosure market is getting wild in Lake Elsinore: "Taking advantage of a slump in local real estate, a family of bobcats has moved into a foreclosed Lake Elsinore home, lolling about on fences and walls and riveting an entire neighborhood."Neighbors first noticed the feline squatters Aug. 27 hanging out on a side wall of the empty house in the Tuscany Hills development. ... The foreclosed home is one of several on the block. Its lawn is brown but still being watered by the sprinklers. The house sits right up against barren, chaparral-covered hills.

September is the cruellest month Gerard Baker: American View For financial markets, if not for poets, September is the cruellest month. It may only be curious coincidence, but the durability and reliability of the September Curse is striking. Since 1929, US stock prices have declined in September on average by more than in any other month - down by 1.2 per cent, compared with a gain of 0.6 per cent for all months of the year. And, in case you were wondering, that's not because the average of all those 80 Septembers has been driven lower by one or two...

The suburbs have been hit hard by the housing crisis. But reports of their death are exaggerated ___ “KEEP your house” reads the handwritten sign on a chain-link fence some 60 miles east of downtown Los Angeles. It is an advertisement, although it could be the attitude of an overstretched buyer who owes the bank more money than his home is worth. Many people in Moreno Valley have simply walked away from their properties. As abandoned lawns turn brown in the desert climate, the fallout spreads. It is no longer a matter of saving individual houses, but a whole city....

The eight houses and nine mobile homes are clustered in a pair of dusty lots on a farm road east of Oxnard, bordered by farms, agricultural warehouses and Pacific Coast Highway. Most of the houses have been expanded in some slapdash way, with plywood lean-tos a common feature. The houses and trailers have broken windows, walls patched with more plywood, and extension cords stretching from the windows. Inside the homes, county inspectors have found mold infestations, leaking pipes, sinks that don't drain and walls that leave daylight streaming in. "It's up there with the worst places I've seen," said Ron...

Hey brother Barack, forget about how well McCain lives, can you spare a room in your mansion for me?

Dollar surge will not stop America feeling the effects of a global crunch By Ambrose Evans-Pritchard Last Updated: 11:07pm BST 17/08/2008 Two alerts landed on my desk this weekend from the elite markets team at Goldman Sachs. One was entitled "The Dollar Has Bottomed!". Those betting on an imminent disintegration of American economic and political power may have to wait another cycle. Rival hegemons are falling like ninepins. The US dollar index hit an all-time low in March. It crept slowly upwards in the early summer before smashing through layers of resistance over the past month. The surge against sterling,...

More than 30 American black bears have been sighted in Known as Ursus americanus and native to North America, there are some 600,000 black bears across Canada, the United States and Mexico, but the large populations of northern Mexico are dwindling to a only a few thousand as deforestation and cities destroy their habitats. The bears, with black fur and brown muzzles, stand often over 6.5 feet (2 meters) tall, live off plants, fruits and nuts, as well as carrion. But deforestation and droughts in northern Mexico can force many bears to seek food in rubbish dumps on the edge...

Under the Section 8 federal housing voucher program, thousands of poor, urban and often African-American residents have left hardscrabble neighborhoods in the nation’s largest cities and resettled in the suburbs. Law enforcement experts and housing researchers argue that rising crime rates follow Section 8 recipients to their new homes, while other experts discount any direct link. But there is little doubt that cultural shock waves have followed the migration. Social and racial tensions between newcomers and their neighbors have increased, forcing suburban communities like Antioch to re-evaluate their civic identities along with their methods of dealing with the new residents....

In response to the housing crisis, the American Housing Rescue and Foreclosure Prevention Act of 2008 (H.R. 3221) passed in the House (272-152) on July 23 and in the Senate (72-13) on July 26. This legislation added another new agency to the goliath federal bureaucracy, the Federal Housing Finance Agency (FHFA), to oversee and regulate three Government Sponsored Enterprises (GSEs): Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System. The new FHFA is required to consult the Federal Reserve before issuing any regulations, orders, or guidelines concerning GSEs through 2009. Thus the Federal Reserve’s power has been enhanced...

Though most of Europe has avoided the real estate slump, the euro zone is feeling the pinch from disparities among its member states.For most of August, business across Europe grinds to a halt as ... the Continent head[s] off for month-long vacations. This year, Europe's sun-seekers may want to savor their time away from the office a little more than usual. That's because bad economic news awaits their return to work as the euro zone moves headlong toward recession. Business activity hit a seven-year low in July, and growth in the region's gross domestic product is expected to slump to...