Posted on 12/22/2012 2:54:00 PM PST by george76
In his early activist days, Barack Obama the community organizer sued banks to ease lending practices... During his time as a community organizer Barack Obama led several protests against banks to make loans to high risk individuals.
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A new study by the respected National Bureau of Economic Research found that Democrats are to blame for the subprime mortgage crisis.
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Republicans warned Democrats of the impending doom in 2004.
(Excerpt) Read more at thegatewaypundit.com ...
All the CRA loans had federal backing. The banks had to loan the money, and were guaranteed the backing of U.S. tax dollars in case of default. The banks complied, not only because they had no choice, but didn't fight back because every bad loan would be paid by U.S. tax dollars anyway. They had nothing to lose.
Once they got too many bad loans, they shipped them back to the feds, i.e., Fanny and Freddie. F&F had to bury them, because the tax payers were on the hook (not good for democrats if people found out about all this), so F&F (the Feds) dumped them on the market, thinking out of sight is out of mind. BUT, their plan crashed, and international investors wanted their money.
We had to pay it. The democrats promised the banks the tax payers had their backs. The banks got their "promised" money back through the bail out.
I am also past President of several mortgage industry associations.
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Mortgage Bankers Association STRATEGIC DEFAULTS on it’s Washington D.C. HQ !!
http://dailybail.com/home/must-see-bust-mortgage-bankers-association-strategic-default.html
Government was indeed a problem but so was the mortgage industry. What to do when you take on to much risk? Package it and sell it to CDS specialists like AIG. Then when AIG fails to pay up on insured risk, steal the money from taxpayers. Rinse and repeat.
I am not stating that FRAUD was not happeneing. But dont use words like “most cases” like you have first hand experience.
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When an industry creates an entity like MERS to hide ownership and make FRAUD easier to perpetrate ... and an industry demands the creation of a document forgery outfit such as DocX (there are others owned by Title insurers) that’s sole purpose is to facilitate the theft of homes by entities that have no legal claim on them ...
You are a disgrace.
You can’t hide behind the CRA.
Secondly, the CRA covered loans had lower rates of failure than the non CRA accounts.
If you want a target to blame: Easy money, ie Federal Reserve, local thrifts, Fannie and Freddie, failed credit rating companies.
Finally, the fact that everything was put into housing and 'risk' was securitized, and not diversified in a prudent way led to a financial disaster. Throw in globalization and the middle class being knee capped and you have a financial disaster, not a group of people who couldn't pay back a loan, and that group was poor anyway!
Barney Frank was warned about the likely failure of the idea, and he said, “We want to roll the dice”. His gamble cost the US trillions... and yet the MSM allows him to continue as if he wasn’t primarily responsible for the greatest loss of wealth in world history.
btt
Unfortunately Republican politicians are about as good at explaining these things as Democrats are at understanding economic growth.
So don’t vote for them.
Democraps sent two democraps to head up fannie and freddie, then gave them bonuses tied to their “assets” (loans they bought). So the two democraps made millions while the banks were all too happy to sell them the loans. That’s where the SHTF.
The measure to curtail risky lending was sponsored by rino senators Hagel, McCain, Dole and Sununu.
Where were the vaunted conservatives?
And not a pip squeak out of any Republican as to these events. There have been plenty of times/opportunities for Republicans to set the record straight. However, Boehner and others have been silent or playing golf with Obama from whom they buy doublespeak.
Odd.
It was banks complying with the law that were at fault. Odd, indeed!
The CRA loans by themselves were not the problem. The problem was the mechanism the Democrats put in place to make it possible for lenders to fulfill the CRA lending goals.
Witness the contributions of Jamie Gorelick, who enriched herself to the tune of $26m off Fannie crony capitalism:
In 2001, Gorelick announced that Fannie was buying subprime loans encouraged by the Community Reinvestment Act (CRA) and bundling them as securitized financial instruments. Securities made from bundles of guaranteed mortgages were to contribute to the banking crisis later in the decade.“Fannie Mae will buy CRA loans from lenders' portfolios; we'll package them into securities; we'll purchase CRA mortgages at the point of origination; and we'll create customized CRA-targeted securities,” she said in 2001. “This expanded approach has improved liquidity in the secondary market for CRA product, and has helped our lenders leverage even more CRA lending. Lenders now have the flexibility to use their own, customized loan products.”
In remarks before the American Bankers Association on Oct. 30, 2000, Gorelick explicitly how the procress would work and what Fannie Mae would do to make it feasible for banks to lend to low-income applicants.
“We will take CRA loans off your hands--we will buy them from your portfolios, or package them into securities--so you have fresh cash to make more CRA loans,” she said. “Some people have assumed we don't buy tough loans. Let me correct that misimpression right now. We want your CRA loans because they help us meet our housing goals.”
That's how the housing bubble machine worked. The GSEs backed the bad paper, allowing lenders to comply with the CRA and get rich off origination fees, and Wall Street stepped forward to package the poison and fob it off on suckers. And, of course, you as a taxpayer backed the GSEs.
For me, one of the funnier episodes of the financial crisis was hearing that a Bavarian bank had failed because it had inadvertently invested in obligations of deadbeat California homeowners.
Such is the cost of the Low Information Voter.
BRAVO , That is exactly what happened ... Can you somehow get Rush to understand that it wasn’t the CRA , it was the banks abusing the mechanism... he doesn’t understand and it makes him sound idiotic.
I have always wanted to know what Andrew Cuomo’s roll in this whole fiasco was.
What????? I thought it was George Bush’s fault! ///>>>/s
It's hard to know what level of criminal intent should be ascribed to the particular players in this mess, though it's clear that those who sought to stifle the alarm bells going off can hardly be considered "clean", even if they didn't know most of the dangers the alarm bells signified.
Ability to handle risk is in some sense a commodity, and there is nothing wrong with trading in it, provided that all of the risks are in fact being borne by the people who are being paid to assume them. If a situation arises, however, where people can accept payment for assuming risks on behalf of a third party who has no say in the matter, such a situation will predictably devolve into one where the third party will be stuck holding the bag. Not only will the third party have to assume liability if some potential event occurs, but the event in question will be extremely likely to occur--far more likely than if the situation hadn't existed in the first place.
What's most unfortunate about this whole debacle is that when everything came crashing down, the government undertook a massive money-laundering operation which may have been intended to protect small-time crooks in government, but probably also protected many larger crooks who should have been prosecuted, and from whom it might have been possible to recover some of the loot.
While I detest what the democrats have done, and I believe they are much responsible. It is nonsense to say that they are wholly responsible. I don’t like such misrepresentations, and they can easily be proven false. For one the Big bankers are very much responsible as they committed fraud after fraud in the name of a quick buck. For two the Republicans are also responsible for some pretty heavy things. One of those in fact is what enabled the whole banking system to fail and put the US taxpayer on the hook. That is the repeal of Glass-Steagall by a bill sponsored by 3 Republicans. That is the single worst thing that caused all of this. One could argue that most of the rest of the fraud and corruption was enabled by that one greedy act. Of course the Democrats had quite a hand in Repealing Glass-Steagall as well.
This is a MUST READ for all here .. http://www.zerohedge.com/contributed/2012-12-22/lie-prosecuting-bank-fraud-will-destabilize-economy-what-really-destroying-ec
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