Posted on 01/26/2015 7:05:04 AM PST by SleeperCatcher
A former member of a panel created to examine the causes of the financial crisis of 2007 says government policies that were really at the core of the crash are being quietly resurrected by the Obama administration, and that they are creating another housing bubble similar to the one that burst more than eight years ago.
Appearing Friday on The Mark Levin Show, Peter Wallison, author of the new book “Hidden in Plain Sight,” and the Arthur F. Burns Fellow in Financial Policy Studies at the American Enterprise Institute, said that the federal government “was the central player” in the crash, which was caused primarily by lax housing policies enacted during the Clinton administration – and not the big banks that are routinely blamed by Democrats and many in the media.
(Excerpt) Read more at absoluterights.com ...
When government gets as big as ours is now everything is Governments Fault except the part where we are at fault for letting the damn government get so powerful. That is our responsibility!
as before
...and of course Clinton skated off down the road and never faced any accountability.
In this, the media isn't lying. While Clinton had a part, the real estate collapse in 2007 was a direct result of the economic policies George W. Bush put into place during his first term.
The gory details are on my FR home page. Feel free to peruse them at your leisure.
But, remember one thing: Bush comes from a long line of greedy Wall Street Bankers and it was this 'master' he served while in office.
Make no mistake as all the Mortgage buying by the FED coupled with propping up low income home ownership will cause another crash just like the NINJA loans and all the loans to people with sup par credit.
Wow that’s quite a lot of research on your page...bump for later...thanks
Well Burns makes this about as clear as mud.
He should listen to Rush’s explanation of this.
Most people still have no idea of the relationship between CRA, GLBA, Fannie and Freddie and government regulations.
True. Many forget the Community Reinvestment Act.
Reagan and Bush I ignored the Community Reinvestment Act a little bit of evil originated in the Carter admin. But Clinton and his dopes eagerly plucked it out of obscurity and inflicted it on the nation's lending institutions. No enforcement of that act, and the crash of 2007 wouldn't have happened.
Fewer still even know about what GWB did to make the CRA even worse.
In June 2004, the FDIC released a report detailing the goals and the progress to date, of the Partnership for Prosperity Agreement (with Mexico)
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"During the past several years, bilateral agreements and U.S. banking laws and regulations have facilitated remittance transfers for immigrants (read: Mexican illegal aliens) and helped bring the unbanked into the formal banking system. For example, in 2001 the United States and Mexico launched the U.S.-Mexico Partnership for Prosperity which fosters economic and labor opportunities in less developed parts of Mexico and expands access to capital in Mexico. The Partnership also addresses the high cost of sending money from the United States to Mexico and encourages banking institutions to market accounts that offer remittance features to Mexican workers. (read: Mexican illegal aliens) In addition, the G-8 countries are promoting programs to alleviate poverty in developing countries, including Latin America. These programs facilitate remittances through the formal banking system and, at the same time, attempt to reduce the cost of these transfers." "In June 2004, in an effort to encourage more banks to enter the remittance market and improve access to the U.S. banking system among recent Latin American immigrants, (read: Mexican illegal aliens) bank regulatory agencies clarified that financial institutions offering low cost international remittance services would receive credit under the Community Reinvestment Act (CRA). Regulated financial institutions are required under the CRA to serve the convenience and credit needs of their entire communities, including low- and moderate-income areas. Most remittance senders to Latin America are low- to moderate-income immigrant wage earners (read: Mexican illegal aliens) who operate outside the formal banking system." "In addition, a growing number of U.S. banks accept alternative forms of identification to help taxpaying immigrants (read: Mexican illegal aliens) open bank accounts and secure other banking services; these include the Individual Taxpayer Identification Number (ITIN) and foreign government issued identification, such as the Mexican Matricula Consular card. The USA PATRIOT Act allows financial institutions to accept both forms of identification, enabling insured financial institutions to serve unbanked immigrants who live and work in the United States. The ITIN, created by the U.S. Internal Revenue Service (IRS) for foreign-born individuals who are required to file federal tax returns, is a nine-digit number similar to the social security number (SSN) and is issued to individuals who are not eligible for the SSN. (read: Mexican illegal aliens) The Matricula Consular card is an identification card issued by the Mexican consulate to individuals of Mexican nationality who live in the United States. (read: Mexican illegal aliens) According to the Mexican government, an estimated 4 million Matricula cards have been issued in the United States." "As an example of the effectiveness of using this form of identification, Wells Fargo opened more than 400,000 new accounts for Mexican immigrants, using the Matricula Consular card between November 2001 and May 2004. In recent months, Wells Fargo has averaged 22,000 new accounts per month, many of which feature the bank's remittance product.20 For example, the bank offers InterCuenta Express, an account-to-account wire transfer service that charges $8 to transfer up to $3,000 per day directly into a beneficiary's bank account in Mexico. Transfers can be initiated at the bank's branch or ATM in the United States, and the receiving party can access monies via the bank's sizeable remittance distribution network of more than 4,000 banking offices and 10,700 ATMs in Mexico. According to the Mexican government, 178 banks in the United States accept the Matricula Consular card to open bank accounts; 86 of these institutions are in the Midwest. " |
GWB's economic policies during his first term could hardly be called 'little relaxation of standards'.
Prior to the policies enacted by Bush, it was against the law for an illegal alien to formally enter the US banking system in any form, including holding a checking/savings account, auto, home or business loans. Nor could they even obtain a US-based credit card.
They couldn't do this because they lacked a US Social Security number or a valid US form of identification.
This all changed when GWB signed the USA PATRIOT Act of 2001 into law.
On October 26, 2001, Bush signed the USA PATRIOT Act of 2001 into law. Contained in section 326(b) was the provision that allowed US banks to accept the Mexican Matricula Consular card as valid ID for opening a bank account.
Congress sent a request for opinion to Bush's Treasury Dept. about 326(b). Bush's Treasury responded:
| “The proposed rules set forth the requirement that financial institutions would have to establish a customer identification and verification program applicable to all new accounts that are opened, regardless of whether the customer is a U.S. citizen or a foreign national. While the proposed rules prescribe minimum standards for such programs, they leave sufficient flexibility to permit financial institutions to tailor their program to fit their business operations. The customer identification program would have to contain reasonable procedures for identifying any person, including a business, that opens an account, setting forth the type of identifying information that the financial institution will require. At a minimum, for U.S. persons the proposed rules would require financial institutions to obtain the following information: name, address, taxpayer identification number, and, for individuals, date of birth. While a taxpayer identification number is not required for non-U.S. persons, a financial institution must describe what type of information it will require of a non-U.S. person in place of a taxpayer identification number. The regulations state that financial institutions may accept one or more of the following: a U.S. taxpayer identification number; a passport number and country of issuance; an alien identification card number, or the number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard.” |
This also contained a footnote (17):
| “Thus, the proposed regulations do not discourage bank acceptance of the ‘matricula consular’ identity card that is being issued by the Mexican government to immigrants.” (See: Treasury Department Issues USA PATRIOT Act Report to Congress ) |
Note that no Mexican banks accept their own government's Matricula Consular card as valid ID for opening a bank account because the bearer's identity is all but untraceable. In contrast, thanks to Bush's Treasury Dept., almost all US banks accept it.
On June 17, 2002, Bush held a press conference. In this press conference he said that by 2010 he wanted to see 5.5 million new 'minority' home owners.
He called on Fannie Mae and Freddie Mac to increase commitments to the 'minority' market by $440 billion. (See: President Calls for Expanding Opporunities to Home Ownership )
Here's how Bush described the minorities he wanted to 'help':
| "Three-quarters of white America owns their homes. Less than 50 percent of African Americans are part of the homeownership in America. And less than 50 percent of the Hispanics who live here in this country own their home. And that has got to change for the good of the country. It just does." |
In response to the mandate contained in the P4P agreement, the New Alliance Task Force was formed in May 2003. (See: New Alliance Task Force )
The NATF is a broad-based coalition of 62 members, including the FDIC, Mexican Consulate, 34 banks, community-based organizations, federal bank regulatory agencies, government agencies, and representatives from the secondary market and private mortgage insurance (PMI) companies.
Their goal was to open the Mexican illegal alien market to US banks and visa-versa using low-cost remittances as the bait. As Bush's 2002 speeches show he was talking about hundreds of billions of U.S. tax dollars going to directly benefit millions of Mexican illegal aliens.
The NATF was organized into four working groups that were tasked with the following goals:
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And Obama has doubled down on the CRA.
Thanks, and you're welcome.
I keep that information on my FR home page for anyone who cares to look and to remind them of the damage to the US economy GWB did while in office.
And has kept all of Bush's bad policies in place and working against the US economy, just as Bush did with Clinton's and Carter's bad policies.
As we can clearly see, the Wall Street Bankers are gearing up for round 2.
Wallison does not absolve Bush from blame. But he puts the most blame on the Clinton admin. Bush made mistakes but did try to correct Fanny Mae. He was rebuffed. The fact remains no CRA and subsequent forcing of banks to creat sub-prime mortgages by the Clinton admin, no crash in 2007.
I agree.
Do you have a source that shows that the bulk of 'bad' loans went to legal hispanic aliens and for the bulk of defaults are from blacks?
I'm not challenging you, just asking for the details.
The information I've found shows that the number black homeowners were only slightly above hispanics, (49.4% for blacks and 49.8% for hispanic, legal and illegal) and that the level of homeownership of legal hispanics vs. illegals is about 8.9% higher. (71.5% for legals and 53.3% for illegals)
In the foreclosure data, there is no information about the race, ethnicity or nativity. But using correlations of foreclosure rates and immigrant share of the county population, the foreclosure rate for immigrant Latinos is higher than average. It's possible that the presence of immigrants in representative counties skews the data.
Like I say, race, ethnicity and nativity is not present in the national foreclosure data. But by population, hispanic communities have higher rates of foreclosures than non-hispanic communities.
See:
Mortgage Lending and Foreclosures in Immigrant Communities: Expanding Fair Housing and Fair Lending Opportunity Among Low Income and Undocumented Immigrants - PDF
Foreclosures by Race and Ethnicity - PDF
Minorities, Immigrants and Homeownership - Through Boom and Bust
But the impetus of the enforcement of the CRA was not to help illegal aliens. Most of it was generated by people who wanted low income blacks to get easier loans. These people believed blacks were being discriminated against. Why lending institutions would turn down good loans to eligible people of any color was not explained. In short...they wouldn't.
It's just the black Americans were easily the biggest lending risks. And since blacks default at a much higher rate than other groups, I have to believe blacks with subprime loans were probably the biggest culprits.
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