And You Thought the Housing Crisis Was Over! The Community Reinvestment Act is back

The American Spectator ^ | July 27, 2012 | William Tucker

[reaganaut1]

Do you remember that thing about how the banks wouldn't lend to blacks and Hispanics because they were racists? And do you remember how they passed the Community Reinvestment Act so that banks were forced to reduce down payments practically to zero and lend to a lot of people they knew were bad credit risks? And do you remember how Wall Street bundled all these risky subprime mortgage and sold them to investors around the world so that when it became clear that those people weren't going to be able to pay their mortgages banks everywhere were left holding the bag and all five of the Wall Street investment houses either went under or had to be bailed out by the federal government?

And do you remember how, when it was all over, liberals said it was actually the banks' fault for "deceiving" all those people into thinking they could afford to buy homes and that the banks should be punished for it and some of those people be allowed to keep their homes anyway? And do you remember how all this cost the government close to a trillion dollars and put the whole economy in a hole that we really haven't begun to dig ourselves out of yet?

Well, get ready because the whole thing is about to happen again.

...

I think what we are witnessing is the looting of America on behalf of minorities in a way that better end soon or we are going to bring the whole system down upon our heads.

With the current administration in power, the perception is growing among minorities that everything in the economy is rigged against them but that President Obama and his administration are going to solve everything for them.

[my small voice]

I think you nail it. Nobody is punished for crime anymore...except the peasants. If you are an elected official (esp and Dem), you just wait it out, call it racist or politically motivated, and you are good to go.

The reason corruption is so rampant is because nobody has any fear of being punished (Look at Rangel and Waters). If we eased restrictive business policies, cut taxes and made sure that all who cheated to get more were punished to the point of regret, all would be just fine.

Equal protection under the Law is on a holiday.

[khelus]

“I’ve often thought we were way too soft on “white collar” crime myself. Thieves who sit behind desks steal more than thieves who hold up liquor stores.
_____
If I remember correctly it was Al Capone who stated that “You can steal more money with a pencil than a gun”, Things haven’t changed any that I can see,

Only now you can wield that pencil globally.

[kearnyirish2]

“Their default rate was higher than everybody else’ default rates, meaning they were already being held to lower underwriting standards.”

It is worse than that; the government put a gun to the banks’ heads to force them to lend to unqualified minority borrowers, then accused them of deceiving those same people.

In the meantime, whole neighborhoods were destroyed and hardworking taxpayers forced to flee even further from the welfare influx that had been foisted on them.

[upchuck]

There never was discrimination against minorities in lending.

You're absolutely correct. However, there's always been, at least up until now, discrimination against those who cannot afford to repay the debt.

[sickoflibs]

RE :”Yes, believe it or not, the federal government is now starting another initiative to force banks to lend to low-credit-rated blacks and Hispanics — not just anybody but specifically blacks and Hispanics — and is threatening — and already imposing — huge punitive fines if they don't. Moreover, this time they're going even further. They're going to take over the credit rating agencies and force them to change their standards to accommodate blacks and Hispanics so that nobody will have any idea who is a bad credit risk and who is not. In so many words, the government is about impose its will on the whole home-lending market and force another round of bad loans so that the banks are going to be looted once again so that even the federal government may not be able to bail them out this time...........
The principle instrument this time is not the Justice Department, Fannie Mae and Freddie Mac, as it was last time, but the brand-new Consumer Finance Protection Bureau, designed by good old Elizabeth “Nobody-Ever-Made-It-On-Their-Own” Warren, which should really be called the Bureau for Bringing Down the Entire Economy. As reported in last Sunday's New York Post by Hoover Institution Media Fellow Paul Sperry, the CFPB has just announced that it is adopting a 20-page “Policy Statement on Discrimination in Lending” issues by the Interagency Task force on Fair Lending in 1994 that kicked off Attorney General Janet Reno's draconic enforcement of the Community Renewal Act. Part of the policy statement reads, “Applying different lending standards or offering different levels of assistance to applicants who are members of a protected [i.e., minority] class is permissible in some circumstances. Providing different treatment to applicants to address past discrimination would be permissible if done in response to a court order.” There are already plenty of court orders sitting around.
.......
Just two weeks ago Wells Fargo caved to a Justice Department offensive and paid $175 million for alleged past discriminating against minority borrowers. All this occurred even though the bank received an "outstanding" grade in its most recent Community Reinvestment Act exam. The government did not even bother to prove discrimination in a single instance but relied instead on statistics showing lower rates of homeownership in minority neighborhoods. Thomas Perez, the Justice Department honcho who is spearheading this campaign, says banks discriminate "with a smile" and "fine print" and are "every bit as destructive as the cross burned in a neighborhood." Nice objective evaluation there.
As in most such cases, Wells Fargo chickened out about going to court and refused to admit any wrongdoing but agreed to all kinds of diversity training and sensitivity counseling. The bank will have to “prominently display” a notice informing minority customers that they cannot be turned down for loans just because they are receiving public assistance such as unemployment benefits, welfare payments or food stamps. (Maybe they can even use food stamps for the down payment.) Wells Fargo must provide minority customers $50 million for down-payment and closing-cost assistance, including “Borrower Assistance Grants” of up to $15,000 per individual. It was also ordered to pay $125 million to as yet unnamed victims of previous discrimination. But get this! If those past victims don't show up, the money must be handed over to community organizing groups. President Obama, you have a job waiting for you if you lose office this fall.’

CRA is back ping. Chilling stuff.

I have to question the part about the Warren Consumer Protection Agency taking over the credit ratings. I dont see how they can even punish the agencies for their ratings let alone take them over.

Is the House investigating this?

[danielmryan]

It is worse than that; the government put a gun to the banks’ heads to force them to lend to unqualified minority borrowers, then accused them of deceiving those same people.

It's a trick that's worked for decades. When a political fad becomes embarrassing, in many cases because it sanctions evil, the politicos and pampered pets duck out and blame the scapegoat - and hope that everyone forgets their own participation in said fad.

Case in point: The Third Reich In The Ivory Tower.

If America ever turns against the Muslims, you'll see the usual suspects blaming the usual scapegoats. "The oil companies made us like them!" or some such rot.

[Paine in the Neck]

It is the fault of the banks FOR NOT STANDING UP AGAINST A DISHONEST PRACTICE.

They don't care. As long as Fannie Mae will swallow the bad mortgages and the banks get to keep their origination fees they're good to go. The taxpayer's on the hook to backstop Fannie Mae's losses.

[kearnyirish2]

With the housing it fell apart in a few years, not decades; it quickly became clear WHY banks had refused to lend to many people.

I looked at the link; I’m not familiar with that story. I know many Americans (more so at the time of WWI) never comprehended how many Americans come from German descent (having nothing to do with politics). It is the main reason the United States has no official language; there were so many Germans in Washngton’s army. Here in northern NJ many ironworkers were imported prior to the American Revolution.

[oldernittany]

http://www.thegatewaypundit.com/2011/09/obama-administration-sues-17-banks/

[SVTCobra03]

Obama is leaving this country with two alternatives - economic collapse or race war.

It's all part of The Plan.

0bama was sent here to accomplish three objectives:

1. Destroy Israel.

2. Facilitate the establishment of a Middle East Caliphate.

3. Bankrupt America.

He needs another four years to finish the job.

[familyop]

But the default process will leave them and us with much smaller government and no money for them to rule the world. Watch other governments that have recently repudiated debt to various extents, including so-called “haircuts” for bond investors.

And that’s the fear of political folks on every side. Even most of those who claim to be conservative are getting their incomes directly or indirectly from government debt (more leaning toward continuing federal funding and tax/fee hikes for state and local government socialism for those labeling themselves as conservatives). They want to keep their incomes going today, for now, and the only way to do that is to continue the debt game.

We’re witnessing the fall of the political/regulator class, left and right. The only future hope for the bipartisan socialists is in small shop manufacturers, where real revenues come from. But they’re immoral and won’t allow real “males” to run real domestic businesses (zoning, many other regulations).

[buffyt]

I as just thinking, did the minorities who were denied home loans have a job? I used to work at a bank, and we didn’t care if you HAD skin at all, so long as you could repay the loan!

[TurboZamboni]

deny a loan=”redlining”

approve a loan= “predatory lending”

“pwedatowy wending” if you’re Barney.

[Major Matt Mason]

At this point, it should be fairly easy to create a political ad that states (or implies) that Democrats are attacking our economy and our way of life. They have truly become the anti-American party. Will the GOP have the stones to do this? Probably not.

[dsrtsage]

The good news is if property values momentarily spike (which they will just before it collapses again), I can sell off my rental, pay off my home with the profit, and be debt free. Two mortgages gone with one bad decision from the government.

[the anti-liberal]

"The money was stolen..."

Unfortunately, we don't seem to be smart enough to keep this from happening - again :(

[OneWingedShark]

“I’ve often thought we were way too soft on “white collar” crime myself. Thieves who sit behind desks steal more than thieves who hold up liquor stores.
_____
If I remember correctly it was Al Capone who stated that “You can steal more money with a pencil than a gun”, Things haven’t changed any that I can see,

Only now you can wield that pencil globally.

Silly bird! Nooses are for politicians.

[AngelesCrestHighway]

Housing Crisis: Chapter 2...Thanks Obama!

[AngelesCrestHighway]

It was so much fun the first time...Let's do it again!

[stephenjohnbanker]

” CRA is back ping. Chilling stuff.

I have to question the part about the Warren Consumer Protection Agency taking over the credit ratings. I dont see how they can even punish the agencies for their ratings let alone take them over.

Is the House investigating this?

WHAT House ? You don’t mean that old one in D.C. ?

LOL!