News-Record.com

"Why is it the bank I’ve dealt with for 35 years scrutinizes my finances for any personal or business loan, while millions of people apparently waltzed through the process who obviously weren’t qualified?"

It's called 'community organizing', Jimmy.

In 2004 they were doing a investigation in to Fannie and Freddie, it was called a Bush witch hunt, by who Barney Franks*! Neocon, I sold my Wachovia stock, when a family got a huge home on a minimum wage type job. It used to be you had to prove you did not need a loan to get one. Now you must prove you can not pay your loan back. Have any of you noticed, that our small home town banks are doing just fine!

Who got the most money from Fannie and Freddie, Chris Dodd* and Obama . That some change!
* Hold your breath to the liberal media prints this!

Dog, a memo written by Jimmy Carter has been discovered that clears the democrats of any wrong doing in this matter:

http://www.presidency.ucsb.edu/ws/index.php?pid=7327

... the memo clears Jimmy of "MANDATING" stupidity, which is what you constantly - and wrongfully - imply.

For the curious:

http://blog.news-record.com/opinion/letters/archives/2008/10/republican_party_is_fiscally_i.shtml

I understand that those contributions came from employees at the lower level, not the organization itself. If you look at who is running the McCain campaign, many lobbyist, that might tell you something also.

It is time to stop all the partisan blame...as was stated by Dan, the problem is with the greedy consumers as well as the greedy CEO's who received outlandish packages. It would appear to me that it would be hard for any company to stay afloat with that kind of money coming off the top.

Another big problem is loans which were made with no down payment. This is basically rent to own with no loss to the borrower if they lose the home.

Below is a link to a brilliant ten-minute video illustrating how the federal government used legislation — the “Community Reinvestment Act” — to force banks to lend to high risk borrowers, and later used “government sponsored enterprises” (GSEs) — that is, Fannie Mae and Freddie Mac — to create a huge market for such “subprime” mortgages.

The video moves at a very fast clip. Make frequent use of the “pause button” to look closely at text and graphs.

“Burning Down the House: What Caused Our Economic Crisis” is partisan, but the wealth of information compensates:

BURNING DOWN THE HOUSE: What Caused Our Economic Crisis? (10 minutes)
September 30, 2008
http://www.youtube.com/watch?v=1RZVw3no2A4&feature=iv&annotation_id=even

Note: There have been attempts to pull this video from the Internet. If the link above should become inoperative, find a working link at the video producer’s web site: www.youtube.com/themouthpeace.com

For balance, here’s a link to a seven-minute video compilation of President Bush cheerleading the attack on lending standards that produced the debacle:
http://www.youtube.com/watch?v=vLUbb2DUYGk

Jimmy, your letter nails it quite well.

Yeah, I second Oak Ridge Runner.

Jimmy you nailed it.

John McCain is right about getting lobbyists out of Washington. Especially lobbyists for mortgage lenders. It was greedy lobbyists who ramped up the mortgage industry in the first place and made millions in fees at our expense.

Here's a quote from one of the worst offenders. This was said in 2000 and it really epitomizes the whole easy-money mortgage fiasco:

“You can say what you want about free-market distortions, but people like the system because it gets them into houses cheap.”

Free market distortions=getting into houses cheap. Ooo-rah.

Such was the mentality behind the deregulation of the mortgage industry that has now led to a $700 billion dollar+ bailout of the American economy.

Know who said those words in 2000?

Rick Davis.

Rick Davis owns a consulting (lobbying) firm called Davis Manafort. Since 2006, Manafort got more money from Freddie Mac than any politician: $15,000 a month, plus expenses.

Prior to that, Davis' lobbying firm, Homeownership Alliance, was paid $30,000 a month by Freddie Mac and Fannie Mae. And what was HA's sworn duty? According to Davis, it was "exposing and defeating trends that would harm consumer access to the lowest-cost mortgage option."

Ooh-rah again, Rick! Defeat those trends that would limit access to sub-prime mortgages for homeowners who really aren't qualified for traditional fixed-rate financing.

In all, Freddie Mac paid Rick Davis and his companies over $2 million dollars in consulting fees- payments that continued right up until the Fed takeover.

So, who is Rick Davis?

He's Chief Executive Officer of
John McCain for President 2008.

I'm with Carol. It is time to stop all the partisan blame and time to let the very same people whose legislative machinations pushed us into this looming depression make the legislative solutions to get us out.

Hey, wow, look. There's two of them running for president. One of them even has his name on a law which specifically restricts private speech that incumbents may find disagreeable. The other has his name on a bill to send billions and billions overseas for a worldwide War on Poverty. I'll leave out the easy comedy regarding his half-brother.

http://www.govtrack.us/congress/bill.xpd?bill=s110-2433

Let's reaffirm them all by electing one for President, re-electing 90+% of Congress, and then allowing the loser in the presidential race to return to his Senate seat.

Incumbents have a better chance of dying in office than they do being voted out.

We're such collective morons.

Amen, Roger.

BAN ALL POLITICAL PARTIES. They do not have the interest of America or its people at heart. Start with the GOP since they are [currently] the most corrupt (Democrats are busy trying to catch up).

R, I will have to take a pass on the moron part...As I have said I haven't voted for a winner, local, state or national since Bill, except for Anita Sharpe. Not saying that my choices would have been a lot better, but I didn't vote for our President or Governor, neither of whom I am proud.

Thanks for the reference Carol, I'm just now getting to read this letter. I can agree with most, greed by lenders and consumers, ignorance by consumers who didn't understand the word "adjustable" in the term "adjustable rate mortgage".

We bought our home at a fixed rated mortgage and even that isn't fixed as property taxes continue to rise. Gotta pay for those bonds ya know.

Call me old fashioned Carol but my goal is to pay for my house and everything else I buy for that matter.

Like the writer, it pisses me off that those of us who play by the rules have to pay for others greed and ignorance.

neocon

Obviously, they did not consider a pychological test, or perhaps you were part of the unqualified borrrows who slipped through the hugh crack.

OK Tom – I watched your video. Maybe you can fill in some gaps for me:

Video Time 0:06: - I had to laugh at this: they are citing the Fair Use Doctrine! The same doctrine over which Con’ies have been screaming, “NASTY” for decades. Too funny.

Video Time 1:08: - Jimmy Carter Caused it .. I KNEW IT ..

Video Time 1:26: - “The Democrats Added Massive New Provisions.

Not according to Ben Bernanke:

“The CRA regulations adopted in 1995 established … a new rule that allowed small banks to meet their requirements by means of a streamlined examination focused on lending activities ..

“ .. reviewing the regulations in 2002 … bankers and community organizations generally agreed that the fundamental elements of the regulations were sound and that the agencies should maintain the overall structure of the 1995 regulations …”


http://www.federalreserve.gov/newsevents/speech/Bernanke20070330a.htm

==

Video Time 2:39: “Remember the banks had to issue Sub-Prime Mortgages or pay big penalties .. “

What “required” the banks to issue Sub-Prime Mortgages or pay big penalties? Nothing I know of … unless “pay big penalties” means they have to hold these toxic loans themselves .. and take their own hit rather than dump it off on Freddie or and Fannie.

I did hear elsewhere Federal Money would not to be available to support those bundled loans with an insufficient percentage of low income neighborhoods .. but that’s not "Forcing" .. no one is forcing “the banks” to take a g-man subsidy.

“Good Republicans” (and therefore “producers”) should be scorning g-man subsidies. Anyway Clinton signed Senator Phil Gramm (R-TX)’s 1999 bill to further deregulate the financial sector. “Good Republicans” applaud deregulation.

==

Video Time 4:02: “Why is the expansion of the Community Reinvestment Act to blame?

Bernanke: “The CRA regulations adopted in 1995 established … a new rule that allowed small banks to meet their requirements by means of a streamlined examination focused on lending activities.”

==

Video Time 4:16: Look at that curve a little closer .. when “Home prices become unhinged from inflation” gets crazy AFTER the year 2000 (something we all knew anyway).

Bernanke: “ .. reviewing the regulations in 2002 … bankers and community organizations generally agreed that the fundamental elements of the regulations were sound and that the agencies should maintain the overall structure of the 1995 regulations …”

==

Video Time 4:16: Now we’re back to GEORGE TRIED TO FIX IT. Consider instead this from an unimpeachable scoundrel:

“Had in the Spring of 2003, GWB come out and said "We're going into Iraq [because that's how we'll capture Osama bin Laden], and we are also [going to] reshape Fannie and Freddie because they represent a different but still very real threat to the security of the United States" ... don't you think it would have sailed through?

http://blog.news-record.com/opinion/letters/archives/2008/10/republican_party_is_fiscally_i.shtml

==

Video Time 5:12: Now we’re at JOHN TRIED TO FIX IT ..

Baloney.

McCain said on May 25, 2006: "I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. 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."

Video Time 5:18: Hey – the same link I used!
All sounds good, but by May 25, 2006 the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190 was effectively DEAD. Why? Never got out of committee.
http://www.govtrack.us/congress/bill.xpd?bill=s109-190&tab=summary

Video Time 5:26: … The Democrats Blocked It.

Absolutely not true and a bold face big ass lie.
S. 190 was approved along party lines - 11R’s to 9D’s. The make-up of then Senate Committee on Banking, Housing, and Urban Affairs, 109th Congress:

DEMOCRATS: Paul S. Sarbanes (Md.), Ranking Member / Christopher Dodd (Conn.) / Tim Johnson (S.D.) / Jack Reed (R.I.) / Chuck Schumer (N.Y.) / Evan Bayh (Ind.) / Thomas R. Carper (Del.) / Debbie Stabenow (Mich.) / Robert Menendez (N.J.)

REPUBLICANS: Richard Shelby (Ala.), Chairman / Robert Bennett (Utah) / Wayne Allard (Colo.) / Mike Enzi (Wyo.) / Chuck Hagel (Neb.) / Rick Santorum (Pa.) / Jim Bunning (Ky.) / Mike Crapo (Idaho) / John E. Sununu (N.H.) / Elizabeth Dole (N.C.) / Mel Martinez (Fla.)

If you count .. you’ll find 11R’s and 9D’s.


Here’s the funny part - the committee DID try to bring it to the Senate Floor .. but the Senate Floor was controlled by Frist (R-TN). http://www.nlihc.org/detail/article.cfm?article_id=886&id=19

S. 190 DIED with the 109th congress. http://www.govtrack.us/congress/bill.xpd?bill=s109-190&tab=summary

S. 190 was also a bit of a mixed bag. In hindsight: S. 190: “contains no affordable housing fund” – that may be good, I’m generically OK with it – “and drastically reduces allowed investments … it would require Fannie and Freddie to engage in a massive sell-off or run-down of existing holdings. “We feel this would disrupt the mortgage markets and greatly harm the housing finance system.” At this point we all wish that had been done (assuming that means less Fannie Mae purchasing of Toxics).
http://www.nbnnews.com/NBN/issues/2005-08-01/Front+Page/index.html

==
Video Time 5:30: … It Came Back in 2007.

True .. re-introduced as S. 1100: Federal Housing Enterprise Regulatory Reform Act of 2007 .. Same Sponsor, except McCain is conspicuously missing as Co-sponsors.
http://www.govtrack.us/congress/bill.xpd?bill=s110-1100
==
Video Time 7:14: Now we’re getting somewhere: “Calling for Regulation of Fannie Mae Doesn’t Pay … “ Hell that was the whole point of my earlier post!

Video Time 8:13: “A Bad Government Regulation that Made Main Street Banks Become Predatory Lenders”. Come on people, I’m still looking for the “MANDATE that Made ‘em do it”. Anyone else wanna provide it?

What .. skippped right through that did ja .. come-on look at it with an open mind .. it took me a VERY long lunch to watch Tom’s video opposite consulting with Ben Bernanke

No? What ever - all the above said:

1 – It is clear that the implied government guarantee of Fannie / Freddie mortgages at best motivates honest people and at worst provides a nice scapegoat for savage money-changers (think Jesus at the Temple Nicodemus).

2 – It is clear that there is enough blame to go around – Bushie “tried” to correct things, Barney “bullied” Bushie, Clinton appointees qualified fully for the money-changer moniker .. etc ..

3 – It is clear that ALL politicians are now scrambling for Holy ground

4 – It is clear that no matter what is said or done, Minds are made up, facts be dammed. Prove me wroing; PLEASE.

Here's my consultation with Bernanke:

Yo Ben - Why is the expansion of the Community Reinvestment Act to blame?

“… the [original] CRA can be interpreted as an attempt to rectify market failures--for example, by inducing banks to invest in building the knowledge and expertise necessary to lend profitably in lower-income neighborhoods …”

“ .. the Financial Institution Reform and Recovery Act of 1989 (FIRREA) an amendment to the CRA statute to require public disclosure of institutions' ratings and performance evaluations. FIRREA also expanded data collection and made public certain data reported ..”

“[Following] the enactment of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 [repealed restrictions on interstate banking and started a wave of bank mergers, thereafter] public scrutiny of bank merger and acquisition activity escalated [and] advocacy groups increasingly used the public comment process to protest bank applications on CRA grounds”. In other words – community organization started happening. “ In response to these new pressures, banks began to devote more resources to their CRA programs.” Could this explain the curve shown a Video Time ???

“Deregulation also contributed to the changes in the marketplace. Notably, the lifting of prohibitions against interstate banking was followed by an increased pace of industry consolidation. Also, the preemption of usury laws on home loans created more scope for risk-based pricing of mortgages. Securitization of affordable housing loans expanded, as did the secondary market for those loans, in part reflecting a 1992 law that required the government-sponsored enterprises, Fannie Mae and Freddie Mac, to devote a percentage of their activities to meeting affordable housing goals (HUD, 2006).

“Notably, the passage of the Community Development Financial Institutions (CDFI) Act of 1994 created the CDFI Fund at the Department of Treasury.”

“The CRA regulations adopted in 1995 established … a new rule that allowed small banks to meet their requirements by means of a streamlined examination focused on lending activities.”

Let me see if I read that right: Wouldn’t “Streamlined” mean still less regulation? Don’t “Good Republicans” applaud deregulation?

“ .. reviewing the regulations in 2002 … bankers and community organizations generally agreed that the fundamental elements of the regulations were sound and that the agencies should maintain the overall structure of the 1995 regulations …”

“In each of the major regulatory revisions, the goal of the regulators has been to increase the effectiveness of the CRA in promoting the economic development of lower-income communities while reducing the associated compliance burden.” Don’t “Good Republicans” applaud “increase the effectiveness” and “reducing the associated compliance burden”?

Bernanke on “The Future of the CRA” :

“ the concept of the "local community" is no longer as clear … defining a "local community" may become increasingly difficult, and the concept eventually may require reconsideration by regulators or even the Congress”.

“ .. changes in the structure of the financial industry [have lead to ] Most mortgages are now packaged by brokers, and nearly two in three mortgages are originated by nondepositories not covered by the CRA.”

Opps .. there goes any claim of the CRA as being the exclusive bad guy ...

http://www.federalreserve.gov/newsevents/speech/Bernanke20070330a.htm

==

Bernanke also referred us to
http://www.urban.org/UploadedPDF/311418_Second_Housing_Boom.pdf … which states :

Both presidents Bill Clinton and George W. Bush have engaged in significant cheerleading for the growth in homeownership. At this point most of
the cheerleading has been from the bully pulpit, since there has been very little new federal money behind the growth in homeownership.

REPEAT: “most of the cheerleading has been from the bully pulpit.”

REPEAT: “little new federal money behind the growth in homeownership.”

What Caused the Changes?

“Several factors opened up housing markets. One clear factor is the disappearance of usury laws against unreasonable or excessively high interest rates … Many new mortgage brokers and subprime lenders have emerged .. Financial regulation of these new entities is a good deal less stringent than for the traditional banking sector … the 1977 Community Reinvestment Act (CRA) .. encouraged banks to make low- and moderate-income mortgage loans in redeveloping areas. To their surprise, banks often found these loans to be profitable.”

There’s that word again “encouraged” ..

REPEATED QUESTION: What “required” the banks to issue Sub-Prime Mortgages or pay big penalties. Answer: Nothing – or as Mona Lisa Vito said in My Cousin Vinnie, “It’s a Bull Shit Question”.

REPEATED QUESTION: What “required” the Wall Street Guru’s to do stupid things with other people’s money? Answer: Greed, pure and simple.

BINGO - FINALLY.

One thing NOT on the Video included:

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992.

See http://www.ofheo.gov/about.aspx?Nav=55

“OFHEO's oversight responsibilities include: Conducting broad based examinations of Fannie Mae and Freddie Mac; Developing a risk-based capital standard, using a "stress test" that simulates stressful interest rate and credit risk scenarios; Making quarterly findings of capital adequacy based on minimum capital standards and a risk-based standard; Prohibiting excessive executive compensation; Issuing regulations concerning capital and enforcement standards; and Taking necessary enforcement actions.

“The legislation that established OFHEO also requires Fannie Mae and Freddie Mac to meet certain affordable housing goals set annually by the Secretary of Housing and Urban Development. These goals specify the share of mortgages that the two GSEs are required to purchase annually from low-income, moderate-income and central-city homebuyers.”

… so Fannie Mae and Freddie Mac are required to purchase what may be subprime mortgages .. but “… the share of mortgages ..” which I interpret to mean the NUMBER (as a percentage from 0% to 100%) annually. So THEY are the ones who “MANDATE” .. let’s dig deeper:

First off .. it is run by James B. Lockhart, III .. nominated by President Bush and confirmed by the Senate in June 2006. So he’s had two years to do something. Of course the problem was known about Before Lockhart came to power, http://money.cnn.com/2005/04/04/news/fortune500/fannie.dj/

Second: Lockhart was preceded by Armando Falcon Jr. .. a Clinton appointee who .. at least apparently .. tried to reign in Fannie and Raines.

http://www.washingtonpost.com/wp-dyn/articles/A30436-2004Dec27.html

“[An] investigation of Fannie Mae [under Falcon’s tenure] resulted in the proverbial heat being turned up in the kitchen. Sen. Christopher S. Bond (R-Mo.) -- who, as chairman of a Senate Appropriations subcommittee, has jurisdiction over OFHEO's budget -- tried to withhold $10 million of the agency's funds until Falcon was replaced.

http://www.washingtonpost.com/wp-dyn/articles/A30436-2004Dec27_2.html

Here’s a note from someone BEGGING Armando to kiss Fannie Mae’s ass:

http://www.ofheo.gov/Media/Archive/docs/regs/rbcamend/6sdhda.pdf

p.s.: OFHEO are also “Prohibiting excessive executive compensation” .. so perhaps Raines should be called to THEIR Principal’s Office …

I await digested responses.

Question JDR if I may. How do you crank out four lengthy posts, complete with timeframes and multiple links, in 12 minutes? I realize you typed the 7:11 post prior to submitting it, but three more lengthy ones in rapid fire succession. How do you do it?

It was all one thought stream, Dan developed over a 2-plus hour lunch break. That's one advantage of working for yourself. Reading - taking then re-writing notes into [hopefully coherent] sentences - helps me digest and organize. I simply broken it up for clarity and digestion.

I'm a curious person and today I took the time to look for answers to a couple things that had been troubling me. I've been asking for several days where the mandate for stupidity came from. Frankly no answers were being provided - so - modesty aside - I did my own heavy lifting. Like most things, a little truth was found somewhere in the middle of all the rhetoric.

It was also probably 2 hours wasted on everyone but me, because the sharing herein part will almost certainly be wasted. No minds will be opened; the BS will continue. We will hear how everything is 100% the fault of either the blue or the red tie wearers .. but damn-it, I learned some stuff - so it's really for me.

==

btw - Sarah did fine tonight .. but I still won't vote for her, at least not this time around.

Two other thoughts on Sarah.

I felt she was trying to goat Biden .. constantly directing her answers directly towards him .. looking at him .. etc. Now part of me wants this stuff - screw the moderator, let them actually debate .. on the other side, if he had done the same, the "Patronizing" and "Belittling" charges would have been hurled for the next four weeks.

Second - I thought it actually got interesting towards the end when they started talking about the power of the V.P. .. then on to more the personal - kitchen table stuff

I read all of your sentences and visited a few of your links, JDR, if it makes you feel like your 2 hours weren't quite so wasted.

Seconded on reading the posts/links.
--

Wasn't one of the moderator's constant complaints in the Presidential debates that Obama and McCain wouldn't address each other?

It might've been an effort to avoid that same complaint. Damned do/don't sort of thing.

Thanks.