Posted by
CKHustler on Friday, October 24, 2008 2:49:08 PM
I thought these posts were really good by wiseone, so I put them up.
From Hawkins column (Which I didn't like, but some of the comments were good)
Reply #
72
Date: Oct 24, 2008 - 2:16 PM EST
Educate yourself, Jack (Part 1)
A friend sent this to me. You might as well research your denial of
this while you're trying to refute mt earlier posts.
Chronology of the Mortgage Mess
If you had any questions about the 'bail out' that was just passed and why it was necessary, read on...
The following is a condensation of a series from the Investor's Business Daily explaining 'What Caused the Loan Crisis':
1977:
Pres. Jimmy Carter signs the Community Reinvestment Act (CRA) into law.
The law pressured financial institutions to extend home loans to those
who would otherwise not qualify. The Premise: Home ownership would
improve poor and crime-ridden communities and neighborhoods in terms of
crime, investment, jobs, etc.
Results: Statistics bear out that it did not help.
How did the government get so deeply involved in the housing market?
Answer: Bill Clinton wanted it that way.
1992:
Republican representative Jim Leach (IA) warned of the danger that
Fannie and Freddie were changing from being agencies of the public at
large to money machines for the principals and the stockholding few.
1993:
Clinton extensively rewrote Fannie Mae and Freddie Mac's rules turning
the quasi-private mortgage-funding firms into semi-nationalized
monopolies dispensing cash and loans to large Democratic voting blocks
and handing favors, jobs and contributions to political allies. This
potent mix led inevitably to corruption and now the collapse of Freddie
and Fannie.
Reply #
74
Date: Oct 24, 2008 - 2:19 PM EST
Educate yourself, Jack (Part 2)
1994: Despite warnings, Clinton unveiled his National Home-Ownership
Strategy which broadened the CRA in ways congress never intended.
1995:
Congress, about to change from a Democrat majority to Republican,
Clinton orders Robert Rubin's Treasury Dept to rewrite the rules. Robt.
Rubin's Treasury reworked rules, forcing banks to satisfy quotas for
sub-prime and minority loans to get a satisfactory CRA rating. The
rating was key to expansion or mergers for banks. Loans began to be
made on the basis of race and little else.
1997 - 1999: Clinton,
bypassing Republicans, enlisted Andrew Cuomo, then Secretary of Housing
and Urban Development, allowing Freddie and Fannie to get into the
sub-prime market in a BIG way. Led by Rep. Barney Frank and Sen. Chris
Dodd, congress doubled down on the risk by easing capital limits and
allowing them to hold just 2.5% of capital to back their investments
vs. 10% for banks. Since they could borrow at lower rates than banks
their enterprises boomed.
With incentives in place, banks poured
billions in loans into poor communities, often 'no doc', 'no income',
requiring no money down and no verification of income. Worse still was
the cronyism: Fannie and Freddie became home to out-of
work-politicians, mostly Clinton Democrats. 384 politicians got big
campaign donations from Fannie and Freddie. Over $200 million had been
spent on lobbying and political activities. During the 1990's Fannie
and Freddie enjoyed a subsidy of as much as $182 Billion, most of it
going to principals and shareholders, not poor borrowers as claimed.
Did
it work? Minorities made up 49% of the 12.5 million new homeowners but
many of those loans have gone bad and the minority homeownership rates
are shrinking fast.
Reply #
75
Date: Oct 24, 2008 - 2:20 PM EST
Subject:
Educate yourself, Jack (Part 3)
1999: New Treasury Secretary, Lawrence Summers, became alarmed at
Fannie and Freddie's excesses. Congress held hearings the ensuing year
but nothing was done because Fannie and Freddie had donated millions to
key congressmen and radical groups, ensuring no meaningful changes
would take place. 'We manage our political risk with the same intensity
that we manage our credit and interest rate risks,' Fannie CEO Franklin
Raines, a former Clinton official and current Barack Obama advisor,
bragged to investors in 1999.
2000:
Secretary Summers sent Undersecretary Gary Gensler to Congress seeking
an end to the 'special status'. Democrats raised a ruckus as did Fannie
and Freddie, headed by politically connected CEO's who knew how to
reward and punish. 'We think that the statements evidence a contempt
for the nation's housing and mortgage markets' Freddie spokesperson
Sharon McHale said. It was the last chance during the Clinton era for
reform.
2001: Republicans try repeatedly to bring fiscal
sanity to Fannie and Freddie but Democrats blocked any attempt at
reform; especially Rep. Barney Frank and Sen. Chris Dodd who now run
key banking committees and were huge beneficiaries of campaign
contributions from the mortgage giants.
2003: Bush proposes what
the NY Times called 'the most significant regulatory overhaul in the
housing finance industry since the savings and loan crisis a decade
ago'. Even after discovering a scheme by Fannie and Freddie to
overstate earnings by $10.6 billion to boost their bonuses, the
Democrats killed reform.
Reply #
76
Date: Oct 24, 2008 - 2:22 PM EST
Educate yourself, Jack (Part 4)
2005: Then Fed chairman Alan Greenspan warns Congress: 'We are placing
the total financial system at substantial risk'. Sen. McCain, with two
others, sponsored a Fannie/Freddie reform bill and said, 'If congress
does not act, American taxpayers will continue to be exposed to the
enormous risk that Fannie Mae and Freddie Mac pose to the housing
market, the overall financial system and the economy as a whole'. Sen.
Harry Reid accused the GOP ;of trying to 'cripple the ability of Fannie
and Freddie to carry out their mission of expanding homeownership' the
bill went nowhere.
2007:
By now Fannie and Freddie own or guarantee over HALF of the $12
trillion US mortgage market. The mortgage giants, whose executive
suites were top-heavy with former Democratic officials, had been
working with Wall St. to repackage the bad loans and sell them to
investors. As the housing market fell in '07, subprime mortgage
portfolios suffered major losses. The crisis was on, though it was 15
years in the making.
2008: McCain has repeatedly called for
reforming the behemoths, Bush urged reform 17 times. Still the media
have repeated Democrats' talking points about this being a 'Republican'
disaster. A few Republicans are complicit but Fannie and Freddie were
created by Democrats, regulated by Democrats, largely run by Democrats
and protected by Democrats. That's why taxpayers are now being asked
for $700 billion!!
If you doubt any of this, just click the link below and listen to your lawmakers’ own words. They are condemning!
http://www.youtube.com/watch?v=68D9XrqyrWo&feature=related
http://www.youtube.com/watch?v=pIgqfM5C8lY
http://www.youtube.com/watch?v=H9juJr8CSY4&feature=related
Postscript:
ACORN is one of the principle beneficiaries of Fannie/Freddie's slush
funds. They are currently under indictment or investigation in many
states. Barack Obama served as their legal counsel, defending their
activities for several years.