Posted on 09/21/2008 8:10:24 AM PDT by milwguy
While earning a salary of $21,000 a year, Leesa Robinson landed on top of the real estate world in 2006, overseeing nearly $1 million in property.
The 45-year-old single mom started buying houses after watching late-night infomercials and their tales of fast wealth.
Lenders from across the country wrote more than $800,000 in home loans in 2005 and 2006 so Robinson could buy eight north side rental properties, half of which she purchased with no money down. All but one of the loans came with high-interest, adjustable rates.
Today, her credit is shot. She lost all eight houses. She went bankrupt.
(Excerpt) Read more at jsonline.com ...
Will you post the article when Sanders revises it?
Thanks for the info. (and a self-ping for Monday)
well we still got a do nothing congress that wants failure in this country for some reason. How do we fix that?
Write him back and ask if he is adding info on the role of the Congressional Black Caucus also.
So many culpapble parties in these schemes:
1. The buyers.
2. The lenders.
3. The appraisers (often times appraisals were inflated so they could borrow more.)
4. The government for knowing it was going on, and doing nothing to stop it.
5. The hedge funds and folks on Wall Street who bought and sold the mortgages.
6. The pushers of no money down schemes like was mentioned in this article. Infomercials that told people they could be millionaires w/no money down.
And, IMHO, there was a certain measure of greed in realtors that made commissions on overinflated properties. They weren’t doing anything illegal, but they fueled the furor. We thought about buying a second home a few years ago, right as the run up was starting, and the realtor was playing several buyers against each other, contributing to an almost hysterical pitch of “you’ve got to get in on this now,” thus jacking up the price till it was way above asking (we quit that game early on.)
Just my 2 cents.
Must read BTTT!
Visit any social ministry where the American poor come for assistane. Many drive SUVs, have several cell phones in the family and all have credit cards.
Corruption contains both the letters D and R.
The president tried in 2003, but Fannie and Freddie seem to have had too many friends in congress.
This is a very interesting article, it mentions what the president tried to do, but he ran into strong opposition.
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/13/AR2008091302638_4.html
Politics. I can just imagine what the Democrats would have done had a newly elected Republican president issued an executive order cancelling away a 30-year program that gave away loans to "the working poor".
Clinton revised the rules and added the extortion part of the law in 1995. It went into effect in 1997.
A bit lengthy but it does give a pretty good background on the CRA - Here is the link to the .pdf
The Community Reinvestment Act (CRA) is a remarkable law. Not only does it prohibit discrimination against working class and minority neighborhoods, it also imposes an affirmative obligation on banks to serve these communities. It is not good enough for a bank to establish branches and passively wait for customers to walk into branches. Instead, banks must proactively assess community needs, conduct marketing and outreach campaigns in all communities, and consult with community stakeholders in developing financing options for affordable housing and economic development activities.
Another ingenious aspect of CRA is that it requires community participation. Banks are custodians of community wealth; thus they have an obligation to determine the credit needs of bank customers and depositors. There is no better way for banks to serve credit needs than to listen to members of the community articulate what those needs are. Thus, CRA establishes formal mechanisms for banks and regulators to seriously consider community needs and input. Members of the community can comment at any time on a bank’s CRA performance in a formal or informal manner. When federal agencies conduct CRA exams of banks’ lending, investing, and service activities in low- and moderate-income communities, federal agencies are required to consider the comments of members of the public concerning bank performance. Likewise, federal agencies are required to consider public comments when deciding whether to approve a bank’s application to merge or open and relocate branches.
It is important for community organizations to contact CRA officers of several banks in their community and discuss needs and opportunities with the CRA officers. As a result of advocacy and collaboration, CRA has leveraged trillions of dollars of bank financing and services for low- and moderate-income communities over the last three decades. Our nation’s low- and moderate-income communities would stand no chance of economic revitalization and empowerment if CRA was not the law of the land.
The CRA regulation establishes various tests for lending institutions of different sizes and a strategic plan option. Under each test, examiners rate banks according to their lending records and responsiveness to community needs. Banks receive a score based on their evaluations of “outstanding”, “satisfactory”, “needs to improve”, or “substantial noncompliance.” The last two scores can result in delays or denials of mergers, acquisitions, or expansions of services
A CRA rating can be downgraded if a federal agency uncovers evidence of illegal, abusive or discriminatory lending on fair lending exams that occur at about the same time as CRA exams. Community groups should bring fair lending concerns to attention of CRA examiners.
Borrower characteristics The lending test evaluates the distribution of loans to borrowers of different income levels to ensure that low- and moderate-income borrowers are receiving an adequate share of loans. This analysis can include all types of home loans from home purchase, home improvements, to refinancings. Federal examiners will also analyze consumer lending if such lending represents a substantial majority of the institution’s business. Finally, under the borrower characteristics section of the lending test, examiners will assess lending to small business and small farm borrowers of different sizes.
Pardon my ignorance, but are these homes all foreclosures?
GOOD, GOOD, GOOD milwguy. We all have to keep hammering the point across that there was a beginning, a root cause and that was Democrats and the CRA Legislation that was rammed through Congress in spite of major controversy at the time, and signed into law by Jimmy Carter.
Many are targeting an array of irresponsible activities that occured that contributed to the demise of our Mortgage Industry, thus creating the Financial crisis.
To survive the CRA-Government forced “lending” (actually to survive Government sanctioning of throwing away millions of Bank/Lender dollars) to blatantly unqualified borrowers, the Banks/Lenders were compelled to “create” new profits to replace that which the Government coerced them to throw away. This is where the other activities (derivitives etc.) come in to play that so many are targeting as the reasons for the collapse.
It started with the Democrats, was protected by the Democrats as late as 2003 when President Bush attempted to cause reform, and today the Democrats “Don’t know What To Do”, so they are going to bail out, close down Congress and go hide.
THE FAULT IS FIRMLY IN THE CORNER OF THE DEMOCRATS FROM THE GIT-GO.
Lots of blame to go around. They should all be hanging their heads in shame - but they won’t.
It's the process ~ not the folks who got the loans. The folks who walked away with all the money were the former owners.
If all the federales did was CANCEL all title transfers made over the last 4 years where a mortgage was involved, and then went back to the original owners to demand repayment, they'd probably nab 90% of the criminal minded greedballs.
Bush in 2003 proposed a bill for additional regulatory oversight of the housing finance industry. In 2005, the House overwhelming passed the Federal Housing Finance Reform Act, designed "to create a stronger regulator for Fannie Mae and Freddie Mac." Chuck Hagel and John McCain co-sponsored a bill to provide additional oversight of Fannie and Freddie. The Senate never pushed any bill out of committee so their was no rat filibuster.
The rats created a poisonous atmosphere for reform. The rats gave strong signals that pushing reform of the housing finance industry would be fought fiercely. The rats had their usual support (race hustlers and ACORN). In addition, they had strong industry and labor support. The rats have repeated this pattern many times. They can gain support of an unholy alliance between labor, welfare advocates, and industry. The long standing CRA created a wall that no one would touch.
The rats are up to their eyeballs in culpability for this mess. The Republicans played a passive role by proposing legislation but not pushing it in the Senate.
You can't rent out enough rooms to make a $4000 mortgage payment.
Besides, IIRC, he had most of his extended family living with him when the crap hit the fan.
I think the Obama statement about wanting the bailout program to "help Main Street" translates as a proposal to stop foreclosures on those bogus loans the government will be buying. So, I think the program's already on the way.
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