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.

[Liz]

THE CONGRESSMAN AND THE SUBPRIME DEBACLE (how the US economy was devastated)

FACT SOURCE--EDITED EXCERPTS New York Times report: Lawmakers generosity on big corporations' tab.
Copyright 2012 stltoday.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Read more: http://www.stltoday.com/news/national/govt-and-politics/article_dfea2768-b95b-11df-bd41-0017a4a78c22.html#ixzz1rfgdnEAe NARRATIVE

Rep. Joe Baca (D-Calif 43rd) has achieved near celebrity status in his suburban LA district, as much for his record of giveaways — turkeys, scholarships, boots for firefighters — as for anything he has done in the US Congress.

Baca's generosity is made possible by The Joe Baca Foundation, a so-called "charity" he and his family set up circa 2008 under the pretext of "aiding" local organizations. The Joe Baca Foundation is run out of the family residence by Baca's son at a publicized salary of $51,800 (could be more, much more and could include numerous perks, credit cards, expense accounts, cars, free $5 gas fillups, health benefits, and so on). NOTE: Running a foundation out of a residence usually allows the resident to evade real estate taxes.

Perhaps nowhere is the mixing of charitable and political agendas more evident than with Baca's family-run The Joe Baca Foundation. Foundation's key function is to help the self-serving Democrat and Latino separatist run a near-permanent political campaign. Joe Baca T-shirts and caps are given out at district events, where banners display Baca's name. Local newspapers highlight The Joe Baca Foundation’s donations, and TV stations run appearances by Baca and his family at these "charitable" functions---amounting to free publicity for Baca's election campaigns .

Baca benefits from the good will corporate-financed philanthropy generates among his voting base b/c very little of the money to finance The Joe Baca Foundation's high-profile activities comes out of Baca’s pocket.

Instead, Baca appears to be engaged in multiple sub rosa activities----exchanging donations from local companies and major corporations in exchange for easy access to him. Baca's foundation donors step to the head of the line when needing Baca's assistance, and usually succeed in getting his Washington office to get the job done.

The Foundation prefers not to call attention to its finances, usually underplaying its size and influence, but the list of The Joe Baca Foundation corporate donors and supporter serves almost like a road map to Baca’s major legislative actions in Congress.

<><>Coca-Cola donated $40,000 as it prepared to fight a proposal to prohibit the use of food stamps to buy sugary sodas, an issue before the Congressional agriculture subcommittee conveniently headed by Cong Joe Baca.

<><>The Lewis Group of Companies, a local development firm and a frequent sponsor of The Joe Baca Foundation events, will start construction on a 2,000-unit housing project built on land that Cong Joe Baca helped deliver by steering legislation through Congress to close the Rialto Municipal Airport, the current occupant.

<><> Baca secured an infamous Congrressional earmark in the amount of $500,000 for Telacu, a local housing group that donates to The Joe Baca Foundation.

<><> Another donor to The Joe Baca Foundation is Rentech, a California-based biofuels company that wants to build a new fuel plant in Baca’s district. After it made two donations, Baca’s son, who serves on the Rialto City Council (after losing reelction to the Calif state Assembly), voted to endorse federal tax dollars for the project. Eeven before the company had completed the local environmental permit reviews, Cong Baca sent a letter to the US Energy Department on his office stationery urging approval of the federal financial assistance.

Cong Baca’s Washington office declined to address reporter's questions about the foundation, or about positions the congressman has taken that appear to benefit donors. “They do a lot of great work,” said Stephen Wall, a spokesman for Baca, referring to The Joe Baca Foundation. “But as far as what we do, it is separate.” Baca’s son, who is paid to handle administrative matters at the Joe Baca Foundation, said many of the other donors were small California businesses with no issues before lawmakers in Washington.“We have always been about giving back,” Baca, Jr said.

NB: The IRS has targeted non-profit foundations as RABID MONEY LAUNDRIES AND TAX EVASION MACHINES.

More below.

[Liz]

MORTGAGE MELTDOWN---BACA MOVES AGENDA

A 2009 Wall Street Journal investigative report WRT the subprime mortgage borrowing spree that wreaked havoc on the US economy reveals that----according to the Federal Financial Institutions Examination Council, financial schemes by low-income housing groups, Hispanic lawmakers, a congressional Hispanic housing initiative, subprime mortgage lenders and brokers, colluded together in fradulent schemes to increase homeownership among Latinos using falsified applications, and other tricks of the trade.

The massive mortgage fraud ended in disaster for which no one has been held responsible. Taxpayers got saddled with billions of dollars in bailout bills.

These subprime activities were not simply the mortgage market at work. They were fueled by avarice, greed, stupidity--all enabled by Congressmen and other groups which leave a trail at the door of Cong Joe Baca.

Between 2000 and 2009, Hispanic populations increased; but Hispanic home ownership grew even faster, increasing by 47%, to 6.1 million from 4.1 million, according to the US Census Bureau. Over that same period, homeownership nationally grew by an enemic 8%. In 2005 alone, mortgages to Hispanics jumped by 29%; Latinos with multiple fraudulent identities in low-paying jobs obtainedg costly non-prime mortgages---soaring to a shocking 169%, (Research provided by Wall Street Journal)

The subprime mortgage bank fraud network was spearheaded by Cong Joe Baca (D-Calif 43rd), in his powerful position as chairman of the Congressional Hispanic Caucus. Baca's district ranks No.5 among all US Congressional districts in percentage of home loans tailored to sub-prime borrowers.

Baca used his the legislative power of his office and his leadership position in the Congressional Hispanic Caucus to calculatedly launch a housing initiative called "HOGAR"-- Spanish for home. The entities engaged in conspiracies to collude with industry and community groups to increase mortgage lending to Latinos--knowing full well forged fraudulent identities and fasified mortgage applications were being used.

Mortgage lenders---lured by huge profits---eagerly provided funding to Baca's group, and fielded an army to bestow with mortgage loans on unquaified lations which were destined for default.

In years past, minority borrowers seeking loans were often stopped because banks and mortgage companies with sound business practices were reluctant to lend within particular low-income geographical areas. This reasonable business practice was mischaracterized as "racialist" as a way to intimidate lenders.

However, the soundness of the earlier business practices resonated as the subprime financial devastation began to wreak havoc on the nation's economy. Taxpayers were saddled with monstrous bills as defaults reached stratospheric heights.

Cong Baca's modus operandi and his collusive efforts to open the mortgage pipeline to unqualified borrowers proved highly successful.

[Liz]

BACA ORGANIZES A close look at the network Cong Baca organized, pushing for increased mortgage lending to unquaified buyers reveals a disturbing picture.

<><> HOGAR-—the initiative to promote Latino homeownership-—was created by the Congressional Hispanic Caucus Institute Inc., a non-profit entity founded and run by Baca and the Congressional Hispanic Caucus along with corporate and nonprofit representatives.

<><>Subprime-industry executives got in early, as advisers to “HOGAR” bankrolled more than $2 million of HOGAR’s flawed research (NOTE so-called “research money” could have been laundered into Baca-related entities).

<><>Lawmakers and latino advocacy groups pushed hard to weaken credit criteria that inexorably led to the subprime debacle.

<><>Members of the Congressional Hispanic Caucus, who received donations from the lending industry, stood idly by as their constituents moved into new homes bought with fraudulent documents and fasified mortgage apps. The lawmen had undermined US law by pushing for eased lending standards, which led to massive foreclosures, tax burdens, and UNTOLD DAMAGE TO THE US economy.

The Congressional Hispanic Institute, Inc, created by Baca’s Congressional Hispanic Caucus created “HOGAR” in 2003 to work with industry and community groups to increase mortgage lending to unqualified Latinos.

At that time, Baca hyped the fact that the national Latino homeownership rate was 47%, compared with 68% for the overall population. “HOGAR” called the figure “alarming,” and said a concerted effort was required to ensure that “by the end of the decade Latinos will share equally in
the American Dream of home ownership.”

Most of the “dreamers” were citizens of Third World countries who had violated US borders.

Predictably, HOGAR’s backers included mortgage companies that ran into big trouble: Fannie Mae and Freddie Mac, both now under federal control after billions in taxpayer bailouts; Countrywide Financial Corp., sold to Bank of America Corp.; Washington Mutual Inc., taken over by the US government and sold to J.P. Morgan Chase & Co.; and New Century Financial Corp. and Ameriquest Mortgage Corp, both now defunct, killed by unpaid Latino mortgages.

HOGAR’s ties to the subprime industry were substantial. A Washington Mutual Bank vice president served as chairman of its advisory committee.

Bribery and self-dealing was rampant. Companies that donated $150,000 to Cong Baca got the right to place a research fellow who would conduct HOGAR’s fraudulent studies, which were used by industry lobbyists. For donations to Baca of $100,000 a year, HOGAR offered to provide optimistic news releases from Baca’s Hispanic Caucus promoting a lender’s commercial products for the Latino market, a shocking example of bribery well-substantitated by the group’s literature.

“HOGAR” worked with Freddie Mac on a self-serving two-year examination of Latino homeownership in 63 congressional districts.

The study found Hispanic ownership on the rise thanks to “new flexible mortgage loan products” that the industry was adopting at the urging of Cong Baca’s coterie. HOGAR recommended further easing of down-payment and underwriting standards.

However, as the subprime debacle ensued, representatives for HOGAR declined repeated requests for comment despite the economic havoc their activities precipitated.

[Liz]

Cong Baca has received numerous honors for his "public service." Recent awards include:

1) the US Hispanic Chamber of Commerce President's Achievement Award,

2) the National Farmers Union Presidential Award for Leadership,

3) the Walter Kaitz Foundation Diversity Advocate Award,

4) the U.S. Department of Agriculture Coalition of Minority Employees Award of Excellence.

5) Latino Leaders Magazine lists Baca as one of the top 100 most influential Hispanic leaders in America,

6) ranked twelfth on the list of the top 42 Hispanics on the "Who's Hot" list,

7) there's the Joe Baca Senior Field at the Empire Center,Fontana; and the Joe Baca Field at the Rialto Boys and Girls Club.

8) Colton Joint Unified School District broke ground on the "Joe Baca Middle School" at 1640 S. Lilac Avenue in Rialto, Cali, to open for the 2012-2013 school year.

BACA KNOWS PUBLIC SERVICE IS LUCRATIVE---HERE'S HOW HE CASHES IN

<><>In 2005, mortgage banks and finance companies gave Baca at least $2.3 million dollars.

<><>In October 2008, a charitable foundation set up by Baca received $25,000 from AmeriDream Inc, a so-called " nonprofit" housing program (did AmeriDream get earmarks?).

<><> AmeriDream's activities included providing down-payment money to unqualified buyers, a cost that was covered by home builders in the form of "donations" to the nonprofit. (NOTE Such loans--known as bridge loans--are considered illegal.) New housing legislation circa 2009 outlawed the program.

<><> Undeterred, Baca then co-sponsored a bill that would allow AmeriDream and similar nonprofits to resume arranging illegal seller-financed down-payment assistance to low-income latino FHA borrowers. Such seller-financed loans to latinos comprise one-third of the loans backed by the FHA, and have defaulted at nearly triple the rate of other FHA-insured loans, according to FHA's William Glavin.

In a self-serving news release, the latino mortgage facilitator----AmeriDream---said its "donation" to The Joe Baca Foundation was intended to "fund the purchase of gear for firefighters" in Baca's district.

<><> Local news reports say the Joe Baca Foundation gave away a measly $36,000 in scholarships in 2009.

Cong Baca's office declined to comment on the AmeriDream contribution. Baca remains resolutely opposed to strict lending rules (especially since taxpayers are saddled with the billions in mortgage defaults). "We nhighly eed to keep credit easily accessible to our minority communities," Baca said in a statement released by his office.

IRS records indicate that Baca's son, Joe Baca Jr, pockets an annual salary of $51,800 as executive director of The Joe Baca Foundation, which is run out of the congressman's Caifornia home. Joe Baca Jr. insisted he takes half of the salary listed by the IRS. No word on the amount Baca Jr pays taxes on.

Mortgage lending to Hispanics took off between 2004 and 2007, powered by nonprime loans. The biggest jump occurred in 2005. The 169% increase in nonprime mortgages to Hispanics that year outpaced a 122% gain for blacks, and a 110% increase for whites, according to a Journal analysis of mortgage-industry and federal-housing data.

Nonprime mortgages carry high interest rates and are tailored to borrowers with low credit scores or few assets. Between 2004 and 2007, black borrowers were offere nonprime loans at a slightly higher rate than Hispanics, but the overall number of Hispanic borrowers was much larger. From 2004 to 2005, thanks to Baca, total nonprime home loans to Hispanics more than tripled to $69 billion from $19 billion, and peaked in 2006 at $73 billion.

It comes as no surprise that the race-based "La Raza" was given tax dollars and Congressionsl earmarks to finance its mortgage activities. La Raza's "strategic partnerships” with Wachovia and Bank of America forced the lowering mortgage-application requirements and documentation standards. La Raza aided and abetted risky federal and private-home loans to latinos over the last decade thanks to the lending industry’s version of “don’t ask, don’t tell.”

In addition to millions of federal rax dollars, La Raza also collected a $1 million Democratic earmark that funded “community-development” projects. Analysts report that much of it went to "mortgage counseling." Baca is quiet about his role in (a) financing, and, (b) earmarking La Raza.

[HereInTheHeartland]

“deny a loan=”redlining”

approve a loan= “predatory lending”

You nailed it. And the lender can sued either way. Especially if they use credit scores to set terms.

“Encourage all of your Democrat friends to get out and vote on November 7th, the stakes are high.”
“

[dalebert]

I wish they would invetigate this and alot more..but of course they have pool parties to worry about right now.

[Almondjoy]

You assume that banks are using racism to keep blacks and other minorities from getting homes. If that was the case you would be correct.

However, the problem with your logic is that most banks comply with the CRA, where the Justice Department brings down their hammer as in the recent case with Wells Fargo was that blacks and other minorities were being charged higher fees and interest rates, even if their credit and income was close to the same.

Therefore is lending is flowing to minorities but banks are charging them more. While some racism does exist in the system, I think a majoritity of these charges show up because of a lack of knowledge by the borrowers not because of some overt racism.

[E. Pluribus Unum]

You assume that banks are using racism to keep blacks and other minorities from getting homes.

No, I'm not.

I said that if banks were wrongly denying loans to blacks, blacks would have a lower default rate than everybody else, meaning they were being held to a higher standard.

Blacks have historically had higher default rates than everybody else, meaning they were held to lower standards.

It's not racism to hold blacks to lower standards. That's what affirmative action does.

But just because you are holding them to lower standards than everyone else, don't you dare say they are inferior.

THAT would be racist.

[Almondjoy]

You assume that banks are using racism to keep blacks and other minorities from getting homes. If that was the case you would be correct.

However, the problem with your logic is that most banks comply with the CRA, where the Justice Department brings down their hammer as in the recent case with Wells Fargo was that blacks and other minorities were being charged higher fees and interest rates, even if their credit and income was close to the same.

Therefore is lending is flowing to minorities but banks are charging them more. While some racism does exist in the system, I think a majoritity of these charges show up because of a lack of knowledge by the borrowers not because of some overt racism.

[E. Pluribus Unum]

You assume that banks are using racism to keep blacks and other minorities from getting homes.

Whatever.

[E. Pluribus Unum]

However, the problem with your logic is that most banks comply with the CRA, where the Justice Department brings down their hammer as in the recent case with Wells Fargo was that blacks and other minorities were being charged higher fees and interest rates, even if their credit and income was close to the same.

That's because their default rates are higher, so there is less likelihood of getting the money back.

[Zhang Fei]

Therefore is lending is flowing to minorities but banks are charging them more. While some racism does exist in the system, I think a majoritity of these charges show up because of a lack of knowledge by the borrowers not because of some overt racism.

I suspect it's affinity exploitation - wherein minority salespeople take advantage of the ignorance of the minority clients they serve. This kind of thing shouldn't be difficult to flag given the fact that everything is computerized these days. There'd be less of this type of discrepancy without affirmative action in hiring, since incomes would track ability, rather than today's reality, in which legally-mandated racial preferences promote favored minorities above their innate abilities at every level of employment. Nonetheless it should be possible to companies to filter for this kind of affinity exploitation. The downside is that protected minorities will also have higher default rates at every level of income, since the ability to handle money is correlated with innate intelligence, and most protected minorities make more money at a given level of IQ than their white or Asian counterparts, thanks to Federally-mandated racial preferences.

[DAC21]

Due to redistricting I'm losing Gary Miller as my rep and most likely will be saddled with this cretin Baca come Nov.

[Almondjoy]

In Wells Fargo’s case they just fired their whole independent channel and decided to keep everything in house where they could better monitor pricing.

[Liz]

Sorry to hear it——pass along all this info-—might be able to defeat the crook.

Solomon Ortiz in Congress since 1983 had a solid Mexican-centered district...and got defeated in 2010 by Repub conservative, Blake Farenthold.

[1035rep]

“Solomon Ortiz in Congress since 1983 had a solid Mexican-centered district...and got defeated in 2010 by Repub conservative, Blake Farenthold.”

WOW, I missed hearing about this 2010 victory. I’ll go look up the details.

[3catsanadog]

Thomas Sowell wrote an excellent book on the background of the housing crisis - The Housing Boom and Bust.

[Fast Moving Angel]

Interesting. I wonder if Cong. Baca is any relation to Sheriff Lee Baca of Los Angeles County?

[RipSawyer]

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

Alternatives? It looks to me as though he intends us to have both!

[scrabblehack]

California has a “jungle primary” now...Democrats finished 1-2 in Baca’s district. Baca may lose (he was #2), but it won’t be to a Repub conservative.