Posted on 09/18/2008 9:03:17 AM PDT by KCengineer
The Clinton administration has turned the Community Reinvestment Act, a once-obscure and lightly enforced banking regulation law, into one of the most powerful mandates shaping American cities—and, as Senate Banking Committee chairman Phil Gramm memorably put it, a vast extortion scheme against the nation's banks. Under its provisions, U.S. banks have committed nearly $1 trillion for inner-city and low-income mortgages and real estate development projects, most of it funneled through a nationwide network of left-wing community groups, intent, in some cases, on teaching their low-income clients that the financial system is their enemy and, implicitly, that government, rather than their own striving, is the key to their well-being.
The CRA's premise sounds unassailable: helping the poor buy and keep homes will stabilize and rebuild city neighborhoods. As enforced today, though, the law portends just the opposite, threatening to undermine the efforts of the upwardly mobile poor by saddling them with neighbors more than usually likely to depress property values by not maintaining their homes adequately or by losing them to foreclosure. The CRA's logic also helps to ensure that inner-city neighborhoods stay poor by discouraging the kinds of investment that might make them better off.
(Excerpt) Read more at city-journal.org ...
The Republicans are wimps for not letting everyone know what was going on. Please NOTE the connection to Community Organization in pushing these bad loans.
Now I know why BO doesn't talk about his CO days. He was peddling this financial bilge to the market.
Yup...After five years, they sold out....making a $50,000 profit. Nice country, this America.
Why McCain’s people are not pounding this is just beyond me. Are they deaf, blind and dumb ?
CRA pushed "Ninja" loans.No income, no job, no assets
Guess why they failed !
Some wags on the net think this was done deliberately
by the Democrat Party(Marxist/anarchists) in order to seize power.
remember “redlining” and clinton’s threats?
Email this kind of stuff to everyone you know. I have a “Daily American Update” email that I send out to about fifty people. Think of it this way: if even 10% of your list forwards it out, then another 10% of that list forwards it, and so on, and so on... that’s how a grassroots movement starts.
Get the word out.
“The Republicans are wimps for not letting everyone know what was going on.”
The Republicans, and especially W and his administration, spent a good deal of time bragging about the “ownership society” and the increase in minority home ownership during his administration.
This article might correctly describe part of the problem, but deregulation that has allowed more and more speculation based on tiny margin requirements. And the above mentioned Phil Gramm could well turn out to be a “star” in a way he might not enjoy.
Both political parties played a big role in this crisis, as well as the financial community itself. There will be plenty of blame to go around, and new world records set for finger pointing, dodging responsibility and excuse making in DC.
This is exactly what I said, yesterday. The cause of this mortgage crunch can be traced to the community activism groups, like ACORN (probably the largest). This all started as a type of affirmative action in the mortgage market.
Politicians on both sides were jumping through hoops to to please these people, for fear of being called racists. Congress passed laws to force banks to offer mortgages to unqualified, low income home purchasers, in order to get permission to expand. Then when the loan market seemed to slow down, they passed another law to allow the expansion of the credit market into the insurance industry and facilitate bank mergers and buy outs.
Bush was at fault for expanding these housing loans even further under the banner of “compassionate conservatism”.
This gov’t involvement in banking and insurance is not even socialism. It is fascism, pure and simple. It is government
interference and regulation in private industry,to the benefit of politicians and favored businessmen (Franklin Raynes comes to mind).
That’s part of the problem. The other part of the problem is the irresponsibility of Washington politicos, some of whom are looking for work in the Obama Administration.
How can this be? Yesterday Pelosi was saying it’s Bush’s fault. This article can’t be true. (/sarc)
If you like what the government did to the financial market, you will love what they are trying to do to the energy market. Green jobs and green energy are just more fascism, designed to line the pockets of the politicians and their chosen investors.
Pelosi and her husband are heavily invested in the wind energy company that is owned by Pickens and GE. The company was formerly owned by ENRON.
I just mailed the following message under the headline:
THE CAUSE OF MORTGAGE CRISIS
he Trillion-Dollar Bank Shakedown That Bodes Ill for Cities
http://www.city-journal.org/html/10_1_the_trillion_dollar.html
Must-read article written in the Winter 2000 edition of “The City Journal,” predicted the financial meltdown we’re now experiencing and demonstrates that it is due to Clinton’s policy & political correctness to force banks to lend to unqualified buyers.
“....as Senate Banking Committee chairman Phil Gramm memorably put it, a vast extortion scheme against the nation’s banks. Under its provisions, U.S. banks have committed nearly $1 trillion for inner-city and low-income mortgages and real estate development projects, most of it funneled through a nationwide network of left-wing community groups...” And much much more at the link above.
EVERYONE on both sides of the aisle should take time to read this thoughtful article..
bump
I was living in the Charlotte area in the late ‘80s-early ‘90s and NCNB was one of the first and largest banks accused of “redlining”. This post sparked led me to google “ncnb redlining” and this popped up: http://lists.cohousing.org/archives/cohousing-l/msg00082.html
I found it quite intresting to say the least
reference ping
Obviously the banks had created or found a secondary market for all of these mortgages. Wall Street figure out how to package them (put lipstick on a pig) and sell them.
When you have thousands of companies and banks competing with each other for the closing fees while at the same time you have unlimited funding - you have a recipe for millions of sub prime loans.
Bump for the smartest article on the economy.
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