Posted on 01/27/2012 1:41:24 PM PST by BuckeyeTexan
Edited on 01/27/2012 3:02:28 PM PST by Sidebar Moderator. [history]
At the CNN Florida Republican Presidential debate in Jacksonville on January 26th, Governor Romney attempted to link Speaker Newt Gingrich to the 2007 Housing Crisis by questioning the Speaker’s role as a consultant at the troubled mortgage giant Freddie Mac. He made the same connection in the NBC debate on January 23rd. Governor Romney claimed in the debates that Speaker Gingrich peddled his influence in Washington D.C. to promote Freddie Mac when he should have been blowing the whistle on the government-sponsored entities' practices.
Well, I think you know that Fannie Mae and Freddie Mac were a big part of why we have the housing crisis in the nation that we have. And we've had this discussion before.
Speaker Gingrich was hired by Freddie Mac to promote them, to -- to influence other people throughout Washington, encouraging them to -- not to dismantle these two entities. I think that was an enormous mistake. I think, instead, we should have had a whistle-blower and not horn-tooter.
He should have stood up and said, look, these things are a disaster; this is a crisis. He should have been anxiously telling the American people that these entities were causing a housing bubble that would cause a collapse that we've seen here in Florida and around the country.
Romney ignores the fact that there were whistle-blowers who pointed out that Fannie Mae and Freddie Mac as government-sponsored entities (GSEs) needed regulation to prevent financial trouble. In a September 2003 article, the New York Times reported that President George W. Bush introduced “the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.” Likewise in April 2005, Fed Chairman Alan Greenspan testified before the Senate Committee on Banking, Housing, and Urban Affairs regarding the necessity of reforming and regulating Fannie Mae and Freddie Mac.
From now on, limiting the potential for systemic risk will require the significant strengthening of GSE regulation and the GSE regulator. (…) Left unresolved, such uncertainties could threaten the stability of financial markets.
In a 2008 Financial Times article, George Soros said:
The current financial crisis was precipitated by a bubble in the US housing market. (…) Boom-bust processes usually revolve around credit and always involve a bias or misconception (…) The super-boom got out of hand when the new products became so complicated that the authorities could no longer calculate the risks and started relying on the risk management methods of the banks themselves.
And according to the April 2008 International Monetary Fund’s World Economic Outlook, the “financial market crisis that erupted in August 2007 has developed into the largest financial shock since the Great Depression, inflicting heavy damage on markets and institutions at the core of the financial system.”
Mitt Romney served as Governor of Massachusetts from January 2, 2003 to January 4, 2007. As Governor, Romney aggressively promoted affordable housing as a key component of his jobs initiative. In several 2003 and 2004 press releases, Governor Romney claimed that Massachusetts needed more affordable housing to stay economically competitive and that employers weren’t moving their operations to Massachusetts for lack of affordable housing. As was the common theme among liberal Republicans and Democrats at the time, Romney proclaimed in a March 3, 2004 press release that “fair and affordable housing should be a right, not a privilege.” According to a review of press releases from his administration, Governor Romney pledged approximately $350 million in state and federal funds and low-income housing tax credits to build more affordable housing and assist low-income borrows with special mortgage financing. So when President Bush’s administration was attempting to regulate GSEs to avert a financial crisis, Governor Romney’s affordable housing policies were significantly contributing to the bad assets on the books of Fannie Mae and Freddie Mac. According to data from the Federal Reserve Bank of Boston the number of subprime mortgage originations in Massachusetts spiked between 2003 and 2006.
Not only did Governor Romney aggressively promote access to affordable housing, he also convened private and state entities to develop ideas for creative financing programs that would allow low-income borrowers to purchase the affordable housing units the state was building. One such program developed by MassHousing and United Cooperative Bank was “Take the PVTA [Pioneer Valley Transportation Authority] Home” which Governor Romney launched with a personal appearance and press release on January 31, 2003.
United Cooperative Bank is currently offering the “Take the PVTA Home” mortgage with a 30-year fixed interest rate of 5.75 percent. Banks like United Cooperative are willing to make the no-downpayment loans because MassHousing insures them. As an added incentive, lenders receive enhanced Community Reinvestment Act (CRA) credit for the loans for partnering with MassHousing. (…) According to MassHousing Executive Director Tom Gleason, “When we designed the program, we took into account that people who take mass transit have fewer car-related expenses, and have more money to spend on a mortgage.”
Given that there were whistle-blowers warning the U.S. Government about the potential dangers of Fannie Mae and Freddie Mac, why was Governor Romney still pushing affordable housing in Massachusetts? Apparently, riding the bus in Massachusetts had some great benefits under Governor Romney.
The next article on Governor Romney’s role in the 2007 Housing Crisis will address that question and more.
We'll be examining Romney's motivations in the next article. Stay tuned.
special mortgage financing.. wow
How special? Is that was it was?
Good job, Buckeye Texan!
There’s money to be made in dirt..
Ask the guys slinging it for Mitt. ;-)
If you would like to be on my low volume ping list, please FReepmail me.
I object to calling this scheme “affordable housing”. It was encouraging risky loans that normal lending standards would not permit.
The bubble during that period actually made homes less affordable as prices inflated. Course there is no doubt that the foreclosed homes are now imminently affordable. Somehow, I don't think that is what most Americans have in mind when they hear this term.
The “Take the PVTA Home” program was just one of many such programs Romney and his special panels created.
Indeed. We went with Romney's own terminology. Hopefully, voters will realize what was really going on in MA.
Great job!
Good on you! I hope Newt’s people read FR. One of FR’s strengths is FReeper research! You just reinforced that in spades. :-)
I hope Newt has someone reading this..Excellent!
I can only wish the media would run with this analysis. In the primary I mean. I have no doubt that they’ll run with it and blast him as a sub-prime kingpin once the convention is over.
I can only wish our side would develop a permanent opposition research effort whose primary purpose is to sling mud at the media liars whenever they start trashing a conservative. You work is a much-needed step in the right direction.
I sent this to Newt, Rush, Levin, Breitbart, and Drudge. So we’ll see if it’s worthy of some attention. Personally, I can’t believe Romney had the audacity to go after Newt on Freddie Mac when he had this lurking out there.
I’d appreciate your analysis on this - positive or negative - do you have any thoughts?
Well, I did my part. Sent Newt a message that he needs somebody monitoring FR so we can tell him how to win and to get a "feel" for what conservatives are saying and doing.
YOU FOLKS ARE BRILLIANT,!!!!! OK so this is the beginning LET’S
ROLL, if we as a group want to take this country back you have just
proven that you all have what it takes to do it. Get the information into
the right hands. YOU ARE THE BEST,!!!!!
Good for you, Nan!
Nice context piece for Romney’s claims.
Isn’t it just FASCINATING how having a BUS PASS could get you a low interest home loan?
Who knew!
But hey, Romney didn’t do anything as bad as consulting for Freddie Mac... who knows, maybe Newt was trying to help the organization straighten up it’s act? Maybe helping to get the needed reforms through congress by helping Freddie navigate the swamp? Nah.... pffffft.
I’ll bet you can take many of Romney’s quotes over the years and just replace his name with Obama’s and you wouldn’t be able to tell the difference.
We should start a special “Romney Quotes “ page.
Good idea.
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