What does a Community Organizer like ACORN have to do with Fannie and Freddie?

self | September 7, 2008 | frithguild

[frithguild]

When I was young, jobs grown-ups had were doctors, plumbers, lawyers, dentists, stock brokers and so on. I had never heard of "Community Organizer" until this Presidential season. What is this job and how does it connect with important current issues? Today, the Department of the Treasury exerted a conservatorship over Fannie Mae and Freddie Mac at the cost of billions to taxpayers. The role of community organizers like ACORN and Barak Obama played in our present financial dislocations may be more direct and pervasive than what first meets the eye.

The present subprime financial strains have as its genesis the policies promoted in the Community Reinvestment Act (CRA), compliance with which is a prerequisite for financial institution innovation. The CRA requires the “[A]ppropriate Federal financial supervisory agency” to assess a financial institution's record of “[m]eeting the credit needs of its entire community, including low- and moderate-income neighborhoods…” 12 U.S.C. § 2903. The supervising agency then, “[S]hall prepare a written evaluation of the institution's record of meeting the credit needs of its entire community, including low-and moderate-income neighborhoods. 12 U.S.C. § 2906(a)(1). In this report, it assigns a rating of: "outstanding"; "satisfactory"; "needs to improve"; or "substantial noncompliance." 12 U.S.C. 2906(b)(2).

Under the regulatory scheme, the FDIC assesses the CRA performance of a bank based upon lending, investment, and service tests. 12 CFR § 345.24(a)(1). The FDIC evaluates the performance of a bank in predetermined “assessment areas.” 12 C.F.R. § 345.41. The FDIC takes into account any views expressed by “interested parties” in considering CRA performance. 12 C.F.R. § 345.29(c).

Alternatively, financial institutions may submit a “strategic plan.” 12 C.F.R. § 345.27. As part of this submission, “[A] bank shall … [i]nformally seek suggestions from members of the public in its assessment area(s) covered by the plan while developing the plan.” 12 C.F.R. § 345.27(d)(1).

Gramm-Leach-Bliley Financial Services Modernization Act, passed in 1999, makes the CRA ratings assigned by a supervising authority of critical importance to financial institutions. One of the reforms under Gramm-Leach-Bliley is the repeal of the depression era Glass-Steagall Act , which prohibited combining insurance and securities companies. However, under Gramm-Leach-Bliley, regulators may withhold authorization for a financial institution to enter into new lines of business, based upon its CRA ratings.

Thus, multi-billion dollar transactions may rise or fall based upon the input of “community organizations.” For example, Bruce Marks of the Neighborhood Assistance Corporation of America won loan commitments totaling $3.8 billion from Bank of America, First Union Corporation, and the Fleet Financial Group in one city - Boston.

To move from the abstract to the concrete, we can look to, for example, a Sept. 20, 2004 press release, “Citigroup and ACORN Sign Groundbreaking Agreement to Expand Access to Financial Services in Communities Around the Country”. There Citibank touted that it and Association of Community Organizations for Reform Now (ACORN) agreed to collaborate on several initiatives, including:

-- Form an affordable mortgage-lending program between Citigroup and ACORN Housing Corp. (AHC) to develop a specialized mortgage product for all AHC's homeownership centers, and make mortgages available to immigrants who have previously been shut out of credit markets. *** -- Focus on community development lending to increase affordable housing in areas where the Citibank Community Development and ACORN footprints coincide. -- Provide borrowers with access to the best combination of loan product, price, service, and attributes. -- Establish a net-benefit test for real estate secured loans.

We now call real estate secured loans issued in compliance with these programs, “Subprime.”

Barak Obama has had an intimate and long-term association with ACORN. Acorn’s Madeleine Talbot first drew Mr. Obama into his alliance with ACORN. Toni Foulkes, a Chicago Acorn leader, has described that it specifically sought out Mr. Obama’s representation in a case it filed seeking to force the State of Illinois to comply with motor voter requirements. Mr. Foulkes likewise makes it clear that Mr. Obama’s post-law school role organizing “Project VOTE” in 1992 was undertaken in direct partnership with ACORN. Likewise, Mr. Obama’s volunteered his services yearly a key figure in Acorn’s leadership-training seminars. Furthermore, Obama’s service on the boards of Woods Fund and the Joyce Foundation allowed him to help direct tens of millions of dollars in grants to various liberal organizations, including Chicago Acorn, whose endorsement Obama sought and won in his State Senate race.

So, the “Community Reinvestment Act” seeks input from “Community Organizers” like ACORN in rating financial institutions on their compliance is issuing subprime loans. Without satisfying “Community Organizers,” financial institutions cannot escape depression era restrictions on innovation. What is the price of this satisfaction? Today it seems to be the federal bailout of Fannie Mae and Freddie Mac, at the cost of billions of taxpayer dollars.

***************

frithguild is a Fellow at the Sunday Boredom Research Society

[GloriaJane]

Every time I see ACORN written anywhere it reminds me of ACORN members here in Ohio getting busted for paying their help off with crack. So I don’t think very much of zerobama when he reminds us of his Community Organizing. LOL!!

[frithguild]

NJ ping

[EGPWS]

So I don’t think very much of zerobama when he reminds us of his Community Organizing.

Blasphamy!

Someday, long after Obama has served his purpose and has passed the responsibility to another, all of America will be worshiping at the bronze statue of Barack Obama, the community organizer who saved the world. LOL!

[rightwingintelligentsia]

Here's a story from a local Pittsburgh TV news channel from a few months back, with video at the link, showing a group of ACORN thugs storming a local bank to "demand" they halt mortgage foreclosures.

http://www.wpxi.com/news/16727813/detail.html

Oh, the power of community organization!

[BurbankKarl]

Acorn received millions in that last housing bill.

[Enchante]

bump to a great post/thread!! This is huge -- I was aware of some of Obama's connection with ACORN, radical front for socialism, but I did not know all these details. We need to get this out to the media (for any who will actually care) -- Obama has many critical weaknesses on BOTH policy and left-wing activities that will make him unelectable to a majority of US voters once they know about him. THAT is why the MSM has been so determined to keep the veil over him and not do any serious vetting!!!!

====================================================

" Barak Obama has had an intimate and long-term association with ACORN. Acorn’s Madeleine Talbot first drew Mr. Obama into his alliance with ACORN. Toni Foulkes, a Chicago Acorn leader, has described that it specifically sought out Mr. Obama’s representation in a case it filed seeking to force the State of Illinois to comply with motor voter requirements. Mr. Foulkes likewise makes it clear that Mr. Obama’s post-law school role organizing “Project VOTE” in 1992 was undertaken in direct partnership with ACORN. Likewise, Mr. Obama’s volunteered his services yearly a key figure in Acorn’s leadership-training seminars. Furthermore, Obama’s service on the boards of Woods Fund and the Joyce Foundation allowed him to help direct tens of millions of dollars in grants to various liberal organizations, including Chicago Acorn, whose endorsement Obama sought and won in his State Senate race. So, the “Community Reinvestment Act” seeks input from “Community Organizers” like ACORN in rating financial institutions on their compliance is issuing subprime loans. Without satisfying “Community Organizers,” financial institutions cannot escape depression era restrictions on innovation. What is the price of this satisfaction? Today it seems to be the federal bailout of Fannie Mae and Freddie Mac, at the cost of billions of taxpayer dollars. "

[TheThinker]

The present subprime financial strains have as its genesis the policies promoted in the Community Reinvestment Act (CRA), compliance with which is a prerequisite for financial institution innovation. The CRA requires the “[A]ppropriate Federal financial supervisory agency” to assess a financial institution's record of “[m]eeting the credit needs of its entire community, including low- and moderate-income neighborhoods…” 12 U.S.C. § 2903. The supervising agency then, “[S]hall prepare a written evaluation of the institution's record of meeting the credit needs of its entire community, including low-and moderate-income neighborhoods. 12 U.S.C. § 2906(a)(1). In this report, it assigns a rating of: "outstanding"; "satisfactory"; "needs to improve"; or "substantial noncompliance." 12 U.S.C. 2906(b)(2).

So until this law is changed, we will see another mortgage crisis and the rise of more Barack Obamas.

[ikka]

That is a funny clip, considering the "token white guy"!

He seems like a typical PA dumb*ss, of which I have met so many whether in Pittsburgh, Manheim and Columbia (in Lancaster County, on the other side of the state), etc.

[frithguild]

http://michellemalkin.com/2008/06/25/the-acorn-obama-knows/

[Alia]

ACORN has all kinds of linked sisterhood-is-powerful organizations throughout the nation. ACORN'S "sister" in CA is Greenlining Institute. California’s Greenlining Institute: Arm-Twisting for Financial Affirmative Action By John Gizzi---snip

The Greenlining Institute goes where the money is. Last month’s Foundation Watch described its role in promoting a philanthropy disclosure bill that prompted large private foundations in California to promise more grants for minority group nonprofits.

A master at shaking down deep-pocketed institutions, Greenlining ordinarily takes on banks and other financial institutions, pushing them to make more credit available to higher-risk, low-income homeowners and businesses, and its efforts may very well have contributed to the nation’s current economic problems.

--end snip

another snip; next article in the pdf:

---snip

Dale Rathke, brother of ACORN founder Wade Rathke, embezzled nearly $1 million from ACORN and affiliated groups in 1999 and 2000, the New York Times reported July 9. Amazingly, Dale Rathke remained a paid employee of ACORN until June when word of the scandal broke in ACORN circles.

Meanwhile, the vote fraud specialists at ACORN have already gotten their fall vote fraud campaign underway. ACORN National President Maude Hurd said she did not believe a former employee in Dauphin County, Pennsylvania, who collected up to 150 questionable voter registrations, deliberately sought to register ineligible people. The excuse always seems to be that the worker was temporary.”

---end snip

A must read article for those interested in seeing exactly what ACORN is; the following is a superb expose of ACORN, Greenlining, ad nauseum (the sister groups of ACORN through diverse states).

Published in 2004, The Manhattan Institute via Wall Street Journal:

Credit Where It's Not Due, February 10, 2004, By Howard Husock

--snip

But the bank-haters -- including activist groups like ACORN, the Greenlining Institute, and National Community Reinvestment Coalition, whose collective raison d'etre lies in the supposed market failure of the mortgage lending industry -- don't see all this as an advance at all. With HUD oversight, they pressure Fannie and Freddie not to purchase sub-prime loans, which are denounced as "predatory." They have pushed a wave of "anti-predatory" lending legislation through state legislatures, based in such vague criteria that rating agencies, fearful of potential liability, have said they can't rate the risk of mortgage bonds which include sub-prime loans. Were it not for the courageous decision by Comptroller of the Currency John Hawke to exempt nationally chartered banks from these state laws, sub-prime mortgage lending might well dry up. Mr. Hawke was undeterred by threats of lawsuits by Eliot Spitzer, and his Connecticut counterpart Richard Blumenthal.

--end snip

[Alia]

More. This out of Oakland, CA, 2000, the Oakland Don't Borrow Trouble™ Coalition, Oakland, CA

Background

On August 10, 2000, the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, announced its campaign to alert Americans of the dangers of predatory lending through its "Don't Borrow Trouble™" campaign. The "Don't Borrow Trouble™" campaign used the model pioneered in Boston, and is using ads, Internet websites, public service announcements in English and Spanish, and a toll free number for referrals.

Oakland is one of the twelve pilot cities in Phase I chosen by Freddie Mac for this campaign, which included $25,000 seed money from Freddie Mac and a one-day on-site training by the Boston-based National Consumer Law Center (NCLC). Oakland's Community and Economic Development Agency (CEDA) coordinated program development with a working group consisting of CEDA's Housing and Community Development Division, Freddie Mac, Association of Community Organizations for Reform Now (ACORN), Home Buyer Assistance Center (HBAC), Consumer Credit Counseling Service of the East Bay (CCCS), ACORN Housing Corporation (AHC), National Association of Real Estate Brokers - Investment Division, Inc. Housing Counseling Agency (NID-HCA), Neighborhood Assistance Corporation of America (NACA), the Unity Council, consumer advocates, and others involved with anti-predatory lending activities.

The Oakland campaign was launched June 18, 2001.

---end snip

But dang, this GOVERNMENT WEBSITE doesn't mention at all how much real estate was transacted by Your Black Muslim Bakery of Oakland, CA. They too hated "predatory" lending.

snort.

[antonia]

September 16, 2008

American Thinker

ACORN, Fannie Mae and Motor Voter

Clarice Feldman

M. Simon traces the funds Fannie Mae pumped into vote fraud specialists ACORN, and explains how that organization pressed for the grant of mortgages to unqualified buyers, leading to the subprime mortgage mess and Fannie Mae collapse.
http://powerandcontrol.blogspot.com/2008/09/best-congress-fannie-could-buy.html

He also links the organization to Chicago politician and "post-partisan" nominee for President, Barack Obama:

ACORN is a former legal client of Senator Obama's, as the Sun-Times reported in 2007:

In 1995, former Republican Gov. Jim Edgar refused to implement the federal "Motor Voter" law, which Republicans argued could invite fraud and which some Republicans feared could swell the ranks of Democratic voters.

The law mandated people be allowed to register to vote in government offices such as driver's license renewal centers.

Obama sued on behalf of ACORN, the Association of Community Organizations for Reform Now. The League of Women Voters and other public-interest groups joined in.

" He and his client were the ones who filed the original case -- they blazed the trail," said Paul Mollica, who represented the League.


The Chicago Sun-Times

Strong, silent type

OBAMA'S LEGAL CAREER | He was 'smart, innovative, relentless,' and he mostly let other lawyers do the talking

December 17, 2007

BY ABDON M. PALLASCH

The oratorical skills White House hopeful Barack Obama has shown on the stump -- and in his "There's not a black America and white America ... there's the United States of America" speech -- would seem to make him a natural for wowing juries.

So why did Obama never make impassioned speeches in court when he returned to Chicago from Harvard Law School in the early '90s to, as his Web site says, "practice as a civil rights lawyer"?

A review of the cases Obama worked on during his brief legal career shows he played the "strong, silent type" in court, introducing himself and his client, then stepping aside to let other lawyers do the talking.

Only once did Obama appear before the prestigious 7th Circuit U.S. Court of Appeals, where Judge Richard Posner is legendary for tearing into inexperienced lawyers. But Posner knew Obama as a fellow senior lecturer at the University of Chicago Law School and kept his grilling polite. Obama never lost his cool, and he won the case.

Obama campaigns as a Harvard Law grad but never claims to match the courtroom skills of rival John Edwards, who won multimillion-dollar verdicts for his clients; or even of Hillary Clinton, whom opposing counsel remember as a formidable adversary during 15 years as a litigator at Little Rock's Rose Law Firm.

Obama admits he played a mostly behind-the-scenes role at his law firm, Miner Barnhill & Galland. He researched the law, drafted motions, prepared for depositions and did other less glamorous work during his three years full-time and eight years "of counsel" to the firm. Many trial lawyers spend their time similarly, part of a trend over the last 20 years of settling a greater percentage of cases before trial.

" I was an associate, and a lot of my work was in the research and writing," Obama told the Sun-Times on Sunday.

" I was one of the better writers. I ended up doing the more cerebral writing, less trial work," Obama added. "That's actually something I regret -- not doing more trial work."

" He wrote lots of substantial memos, but he didn't try any cases," said Judson Miner, a partner in the firm who was Obama's boss.

A search of all the cases in Cook County Circuit Court in which Obama made an appearance since he graduated from Harvard in 1991 shows: Zero.

His practice was confined mainly to federal court in Chicago, where he made formal appearances in only five district court cases and another five in cases before the 7th U.S. Circuit Court of Appeals -- a total of 10 cases in his legal career. He was on the winning side of just about all those cases. Miner said there were 30 cases to which Obama contributed in some way. Drove 'Motor Voter' victory

In 1995, former Republican Gov. Jim Edgar refused to implement the federal "Motor Voter" law, which Republicans argued could invite fraud and which some Republicans feared could swell the ranks of Democratic voters.

The law mandated people be allowed to register to vote in government offices such as driver's license renewal centers.

Obama sued on behalf of ACORN, the Association of Community Organizations for Reform Now. The League of Women Voters and other public-interest groups joined in.

" He and his client were the ones who filed the original case -- they blazed the trail," said Paul Mollica, who represented the League.

Transcripts show that at court hearings, Obama identified himself, then let Mollica begin speaking. Maria Valdez of the Mexican-American Legal Defense and Education Fund sometimes spoke. The U.S. Justice Department joined in.

Letting the heavy-hitters at the Justice Department make the arguments appears to have been a sound strategy -- Obama's side won, even without him talking.

" Obama was involved to some extent in the legal work, but he was not the leader in actually litigating the thing -- Paul [Mollica] probably was the leader of the coalition and did most of the legal work," said David Melton, who represented Cook County Clerk David Orr. "Obama did have some expertise in certain constitutional aspects of the case." He was just 'a young kid'

" Barack was a young kid when he came here," Miner said. "Senior lawyers are not going to be very deferential to Barack. He was not 'THE Barack Obama' yet." Obama was 32 in 1993, having entered law school at 27.

After Obama's side won in court, Edgar appealed. Obama's side won again -- without Obama talking. The lawyers then gathered in a small room in the courthouse to decide how to push the state to fix the problems.

" We had a raucous meeting shortly after the remand, and Barack was a very adamant spokesman for taking a very aggressive stance to try to repair the damage," Mollica said. "He's the one who put a charge in us that it was time to move and hold the state accountable."

Around that time, Obama announced he was running for state Senate and bowed out of the case. Fought red-lining

Obama represented Calvin Roberson in a 1994 lawsuit against Citibank, charging the bank systematically denied mortgages to African-American applicants and others from minority neighborhoods.

" I don't recall him ever standing up and giving an impassioned speech -- it was a lot of behind-the-scenes stuff," said Fay Clayton, the lead lawyer on the case.

" He was the very junior lawyer in that case," said attorney Robert Kriss. "He had just graduated from law school. I don't recall him being in court at any time I was there. I was the lead lawyer for Citibank and he was not very visible to me."

Kriss, Clayton and every other co-counsel and opposing counsel interviewed for this story praised Obama's legal ability, temperament and everything about his courtroom demeanor, even though, they agree, he didn't say much in the courtroom. Many are now donors to his campaign.

On Feb. 23, 1995, Obama billed 2 hours and 50 minutes for an appearance before Judge Ruben Castillo on behalf of his client, and also for reviewing some documents in advance of a deposition. That cost Citibank -- which ultimately had to pay the winning side's fees -- $467 at Obama's hourly rate of $165.

Miner commanded the higher rate of $285 an hour. During his appearance before the judge, Obama said he would need more time to file a response to a motion, and the judge agreed. That was all Obama said during the half-hour hearing.

His final bill on the case was 138 hours, or $23,000.

Obama had offers from more prestigious, higher-paying firms. But he chose to work for Miner -- former Mayor Harold Washington's counsel -- because of his firm's focus on civil rights litigation and community redevelopment.

Obama was also recruited in law school by developer Antoin "Tony" Rezko, who back then had a reputation as "a star" of the urban renewal movement in Chicago. More recently, Rezko was indicted for allegedly using his clout with elected officials to amass taxpayer funds for self-enrichment.

Rezko was a client of the Miner firm, and Obama worked on some of his redevelopment projects. Miner says Obama put in six to seven hours of work on Rezko projects. He has not produced detailed records of Obama's billings on the cases.

The firm was headed by Allison Davis, who eventually left the firm to become a developer of low-income housing himself, sometimes in partnership with Rezko. Obama worked on some of those projects.

Rezko and his friends have donated at least $168,000 to Obama's campaigns over the years. 'Nuances' over simple answers

During Obama's three years working as a full-time associate at Miner's firm, Miner noticed some of the qualities that have become known as his strengths and weaknesses on the campaign trail:

" As smart as he is, he is very quick to appreciate all kinds of nuances with legal issues," Miner said. "He finds it very hard to shoot back a real quick, simple answer. His instinct was to better understand what the nuances were." Defending a whistleblower

In 1994, Obama went before the 7th Circuit to defend Ahmad Baravati, a trader blackballed by his bosses after he reported them for fraud.

An arbitrator awarded Baravati $60,000 in damages plus $120,000 in punitive damages against the former bosses.

They appealed, saying arbitrators don't have the power to award punitive damages.

Obama had a tough job because the same court had ruled a week earlier that an arbitrator could not award punitive damages. But Obama convinced them this case was different.

" You're suggesting that there's a federal common law that likes punitive damages, but this could be preempted by a state law that says 'no punitive damages,'" Posner told Obama.

" I don't think I'm saying there's a federal law that 'likes punitive damages,'" Obama responded, not dropping his tone of respect. "I think what I'm saying is that there's a federal law that likes the notion that the same remedies that will be available in court will be available in arbitration."

Obama won, and Baravati got to keep the extra $120,000. He still is grateful.

" I found he's a very smart, innovative, skilled, relentless advocate for his client," Baravati said. "When I met him, he reminded me of Abraham Lincoln."

After three years doing "first-rate" work as an associate, Obama was elected to the state Senate, and Miner offered to keep him on salary and let him open a Springfield branch of the firm.

" He's such an honest guy. On the third day, he calls me up, 'Jud, I'm not going to have any time here, so I don't want to take a draw,'" Miner recalled him saying.

So instead, Obama became "of counsel," working out of the office during the Legislature's summer breaks until he was elected to the U.S. Senate.

Obama said he laments missing his chance to argue before the U.S. Supreme Court a case he had helped brief on behalf of a psychologist fired by Cook County for blowing the whistle on the county mis-spending a federal grant. Obama was launching his U.S. Senate campaign at the time. His firm won the case.

[Coleus]

ACORN and the Catholic Campaign for Human Development