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Old 03-22-2009, 10:29 PM   #121
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Dated September 9, 2008 (still long before the "November Surprise" announcement of the failed economy).

Fannie and Freddie: Time to Clean up the Mess and Move Forward
by J.D. Foster, Ph.D., David C. John and Stephen Keen
WebMemo #2055
After years of warning and months of high drama, the Treasury Department recently took the unfortunate but necessary step of seizing Fannie Mae and Freddie Mac (Fannie and Freddie). Treasury placed the two institutions into conservatorship and provided the means and terms by which Treasury would recapitalize them as necessary. The cost to the taxpayer is unknown at this time and represents payment for serious mistakes made years ago and repeated regularly.

The Treasury's actions were unfortunate because the problems with Fannie and Freddie could have been avoided had previous Congresses heeded the many warnings about their systemic risk.[1] The actions were necessary, however, because the collapse of either or both of Fannie and Freddie would have had devastating repercussions for the housing market, credit markets, and the economy generally. By acting as it did, Treasury chose the lesser of two evils.

The takeover of Fannie and Freddie was a vital move toward reform, but this should be seen only as the first step. Fannie and Freddie are the result of outdated "Great Society" programs, and they should be wound down—not replaced, reformed, or rejuvenated. The private sector can and should be allowed to perform the roles formerly exercised by Fannie and Freddie. At the very least, as Congress crafts future legislation it must ensure that neither Fannie and Freddie nor any successor institution ever again becomes a systemic risk by becoming "too big to fail."
The First Step

Placing Fannie and Freddie into a conservatorship is not an end unto itself but a first step toward the final breakup. Unfortunately, the vital step of settling the long-term policy will have to be left to the next President and Congress.

Looking to the future, the worst action Congress could take would be to retain the current structure whereby Fannie and Freddie are quasi-governmental entities with conflicted goals and distorted incentives. This system has failed at an as yet untold cost to U.S. taxpayers.

The Treasury's current plan is to shrink Fannie and Freddie's portfolios of mortgage-backed securities gradually over the coming years. Just as important is denying Fannie and Freddie the authority to continue securitizing mortgages in the future. Many years ago the private sector could not have picked up this business, which is why Fannie Mae was created in the first place. However, the private sector today is already a major participant, rising to a market share that reached 56 percent in 2006. Fannie and Freddie should be forced to step aside and allow private-sector participants to perform this role. If preserved in any form, Fannie and Freddie should be so constrained in their activities that they can never again be suspected of being too big to fail.

Going Forward

First, clean up the mess. Then, implement real reform. The Treasury Department was put in a tough spot, and Secretary Henry Paulson did what was necessary. Decades of policy mistakes creating and protecting Fannie and Freddie finally led the predicted system risk to become a dangerous financial reality. However, once the market is stabilized, free-market reform must be implemented to prevent a recurrence. The next President and Congress should allow Fannie and Freddie in their current form to wither to extinction. The private sector is ready, well-prepared, and subject to the proper incentives to continue to ensure a steady flow of correctly priced capital to America's housing markets.

J. D. Foster, Ph.D., is Norman B. Ture Senior Fellow in the Economics of Fiscal Policy, David C. John is Senior Research Fellow in Retirement Security and Financial Institutions, and Stephen A. Keen is a Research Assistant in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.


http://www.heritage.org/Research/Economy/wm2055.cfm

++++++++++++++++

But, of course, the Obama plan is not to kill Freddie and Fannie but to prop it up and continue its "Great Society" goal of providing home mortgages to all Americans regardless of credit worthiness and ability to pay...

Again, the above article is education
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Old 03-22-2009, 10:32 PM   #122
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What I'm hearing from you is that Bill Clinton as much as said: "Let's let the niggers have houses, too."

Is that right?
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Old 03-22-2009, 10:38 PM   #123
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Originally Posted by wmbwinn View Post
I am going to have to post a lot of stuff to educate you. It is clear that a simple response is not going to work. Your responses show a great depth of ignorance about how Fannie and Freddie work and what happened in the mortgage crisis. So, you will have to give me some time to gather enough data to teach you what is going on.
yawn.

Quote:
OK, so note a few facts that can be gleaned from this article:

1)Fannie and Freddie were chartered by the Federal Government as pseudo "private" entities under heavy federal control.
2)Fannie and Freddie underwrite at least 80 percent of all home mortgages in the nation
2 is absolutely false.

Quote:
3)The government oversight was failing
4)the government was so clueless about the impending disaster that they actually thought they could take more money that was in Fannie/Freddie and use that to arrange a sort of bail out/buy out of bad papers on bad mortgages in the market place. So, it is clear that the government and Wall Street knew that the bad paper/mortgage problem was out there. But, the government who oversees Freddie/Fannie was clueless about the weakness of Freddie/Fannie because they thought Freddie/Fannie could bail the system out.
the problem was the underwriting of the loans.

Quote:
1)Freddie/Fannie get a government mandate to guarantee mortgage loans made to poor people who normally can't get a home mortgage.
2)Freddie/Fannie and Government regulators go to banks with the program.
3)Some banks look at it as easy money: make the loans to a big eager population. sell the notes off to various programs which eventually ends up as bundled financial products that are owned by Freddie/Fannie OR which are insured/backed by Freddie/Fannie.
that is NOT the "mandate" of either freddie or fannie. you are totally wrong.

Quote:
Now, I will have to do some more homework for your benefit. I need to find the issue of Clinton starting this program of "affordable housing for all Americans" and I need to find the names of all the crooks who left Freddie/Fannie with big bonuses and ended up in Obama's cabinet/administration.
good luck finding what doesn't exist.

Last edited by Mavdog; 03-22-2009 at 10:38 PM.
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Old 03-22-2009, 10:45 PM   #124
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This one also speaks for itself and I will not add anything to it...

Quote:
February 25, 2009
12 Problems with the Obama Mortgage Stability Initiative Plan
by Ronald D. Utt, Ph.D. and David C. John
WebMemo #2311
Revised and updated February 27, 2009

On February 21, 2009, President Obama released his Homeowner Affordability and Stability Plan to help stabilize the deeply troubled housing finance market by providing several forms of assistance to as many as 7-9 million borrowers who may be at risk of defaulting on their mortgages. Two of the bill's three key components are designed to provide subsidies and benefits primarily to homeowners who are still current in their payments.

The first provision will assist those who may not be able to take advantage of attractive refinancing opportunities at lower interest rates because the value of their home has declined beyond the loan-to-value ratio permitted by rules governing mortgage investments made by Fannie Mae and Freddie Mac. The second such provision of the plan would provide taxpayer and investor subsidies to mortgage borrowers who have taken on more debt than they could safely manage including, in some cases, credit card and automobile debt. The third component of the plan encourages the enactment of legislation allowing bankruptcy judges to alter the terms of certain mortgage loans, a practice that to date has been prohibited by federal law.

The Obama plan suffers from 12 specific weaknesses and risks:

The plan's Stability Initiative bestows new and costly benefits on those who took on more debt than they could handle, including credit cards, automobile loans, and mortgages (including refinancings and seconds). Worse, the value of the benefits will vary in direct proportion to the degree of borrower financial irresponsibility, and the intensity of community land regulations. Homeowners with a first mortgage as large as $729,750 are eligible for the initiative, meaning that the well-to-do will receive more financial benefits than those of modest means. And as analysts at one nationwide financial firm noted: "The modifications would go disproportionately to borrowers who overstretched and who lied about their income." This moral hazard sends a clear message to the American people: The worse the behavior the greater the reward.
Under this Stability Initiative borrowers with a ratio of mortgage debt service to income greater than 31 percent can have their mortgage interest rate reduced to as little as 2 percent if that is what it takes to achieve the 31 percent ratio—with government paying half the subsidy and the investor/lender surrendering the other half. If this concession is insufficient to reach 31 percent, then the servicer (as opposed to the lender/investor holding the mortgage) can lengthen the term of the loan and/or reduce the principal amount owed to achieve the 31 percent. Eligible borrowers may also have loans that are as much as 50 percent greater than the value of the house.
It is also likely that, under the Stability Initiative, borrowers with a ratio of debt service payment to income as high as 55 percent—because of combined mortgage, credit card, and automobile debt—will be eligible to receive temporary payment reductions if they merely agree to HUD-approved counseling. Such borrowers may then be eligible for permanent payment reductions. This reduction scheme will be disclosed in rules that the Administration has announced it will release on March 4, 2009.
Because the investor/lenders will be responsible for a portion of the mortgage rate reduction, this program will deter private sector investment in all but the best mortgages. Combined with the proposed "cram down" bankruptcy proposals, the net effect will be to require a substantial and permanent federal presence in the housing finance market to accommodate those many potential borrowers who are not highly qualified.
The plan also includes a formal endorsement by the President of a bankruptcy provision that allows judges to alter the terms of certain mortgages. This provision will increase the risk to lenders of all mortgages. The industry is already treating this as a permanent measure. Increased risk requires higher costs to compensate lenders, and either down payments or interest rates would have to rise, while potential borrowers with checkered credit histories would be denied access to credit. However, these costs would not rise evenly for all borrowers: Higher risk borrowers (first-time buyers and moderate-income workers) would see costs rise more and have fewer opportunities to buy a house.
Anticipating such criticisms, the proposal contends that it will "seek careful changes to personal bankruptcy provisions." However, because any changes in bankruptcy law must be passed in legislation, this outcome may merely be wishful thinking. As the President wants to make sure that "millionaire homes don't clog bankruptcy courts," mortgages eligible for judicial "cram down" cannot exceed $729,750 in value. Moreover, the most recent version of the legislation weakens language adopted earlier by the House Judiciary Committee to prevent borrowers who committed fraud in their mortgage application from taking advantage of cram down.
The plan's Refinancing Initiative creates a new right for American borrowers now current in their mortgage payments: the right to refinance their home at a lower interest rate even if the quality of the loan—as measured by the loan-to-value ratio—would otherwise pose a risk to the lender. As such this proposal establishes the act of being highly leveraged or slightly "underwater" (the amount that a borrower owes on his or her mortgage is more than the value of the house) as a legitimate reason to default, and as a policy problem worthy of taxpayer support and federal intervention. The creators of this new right fail to recognize that many other consumer credit markets operate comfortably, successfully, and safely despite the fact that many borrowers are underwater the minute they sign the contract, notably home improvements, mobile homes, automobiles, RVs and HDTVs. Though those borrowers do expect to be "underwater" for these kinds of purchases, it raises the question of whether future legislation will extend this concession to car loans and credit card debt, which are also experiencing significant levels of default?
Only borrowers with loans held or repackaged by the federally-controlled and subsidized Fannie Mae and Freddie Mac will be eligible to exercise this new right to refinance. Borrowers whose loans are held by private investors are denied this right, further distorting the housing markets with government-selected winners and losers.
To date, the several, federal loan modification programs that have been put in place have had very limited success, and the rate of failures exceeds that of successes, especially for loans where one or more payments have been missed. For loans that were four months past due at time of modification the recidivism rate is 80 percent after 12 months. For loans one month past due, the recidivism rate after 12 months is 60 percent. With the nationwide decline in house prices accelerating in recent months, the risk of recidivism under the new program could remain at high levels.
The program will cost $275 billion ($75 billion for problem mortgages and $200 billion for Fannie Mae and Freddie Mac).
Obama's plan will take a great deal of time to implement. A recent MarketWatch.com article notes that loan refinancing applications are up 47 percent at a time when a substantial portion of the loan originating infrastructure has disappeared due to bankruptcy and bank consolidation. The prospect that a shrunken mortgage lending system could expeditiously accommodate the 7-9 million borrowers expected by the Obama plan is wishful thinking. The result will be long waits for refinancing that will come too late for some borrowers, and may also crowd out efforts by unsubsidized borrowers to refinance due to the generous financial incentives offered to servicers participating in the new federal program.
Perhaps the most troubling part of the plan is the increased reliance being placed on the now federally-controlled Fannie Mae and Freddie Mac, whose lax and corrupt behavior over the past decade was an important contributing factor to the present economic crisis. Although nominally privately-owned, both are now run by the U.S. Treasury, whose massive holdings of preferred shares in both give it a huge implicit ownership stake. As is clear from the refinancing plan—which will reduce Fannie and Freddie's earnings and thus weaken them further—the two GSEs have become little more than the federal government's captive mortgage financing banks to be used at will for any housing policy initiatives that the President and/or Congress wish to pursue. And with the plan's many provisions discouraging the private sector from getting involved in mortgage finance, this plan substantially advances the de facto nationalization of America's housing finance system for all but the "jumbo" mortgages that exceed conforming limits.
Given the 12 weaknesses discussed above, there is little indication that President Obama's Homeowner Affordability and Stability Plan will provide any relief—short-term or long-term—to the beleaguered housing market.

Ronald D. Utt, Ph.D., is the Herbert and Joyce Morgan Senior Research Fellow and David C. John is Senior Research Fellow in Retirement Security and Financial Institutions in the Thomas A. Roe Institute for Economic Policy Studies, at The Heritage Foundation.
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Old 03-22-2009, 10:46 PM   #125
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Originally Posted by chumdawg View Post
What I'm hearing from you is that Bill Clinton as much as said: "Let's let the niggers have houses, too."

Is that right?
once again, you insert a race card where no race card existed...
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Old 03-22-2009, 10:50 PM   #126
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"Together, these entities underwrite about 80 percent of the mortgage-backed securities market. The failure or severe mismanagement of either one could have major consequences for the rest of the economy."

The above quote is from the earlier linked article. You can jump on me for not wording it exactly the same way as they did. My statement that Freddie and Fannie back 80 percent of all home mortgages was a statement I made based on the quote above. I am not exactly correct but now you know what I meant.
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Old 03-22-2009, 10:54 PM   #127
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Quote from wmbwinn:
Quote:
1)Freddie/Fannie get a government mandate to guarantee mortgage loans made to poor people who normally can't get a home mortgage.
2)Freddie/Fannie and Government regulators go to banks with the program.
3)Some banks look at it as easy money: make the loans to a big eager population. sell the notes off to various programs which eventually ends up as bundled financial products that are owned by Freddie/Fannie OR which are insured/backed by Freddie/Fannie.
Quote from Mavdog:
Quote:
that is NOT the "mandate" of either freddie or fannie. you are totally wrong.
again, you can divide straws and pick apart the words. Agreed that the above is not the only mandate/role of Freddie/Fannie. Disagree if you think that Freddie and Fannie do not play the role I stated.

The articles I have dropped in support my position. And, if you disagree with me, then give me some evidence rather than just your angry opinion
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Old 03-22-2009, 10:58 PM   #128
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Originally Posted by wmbwinn View Post
once again, you insert a race card where no race card existed...
Please. If you are a Republican, who else was responsible?
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Old 03-22-2009, 11:00 PM   #129
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from wikipedia,

Quote:
House Financial Services Committee

[edit] Fannie Mae and Freddie Mac
In 2003, while the ranking Democrat on the Financial Services Committee, Frank opposed a Bush administration proposal for transferring oversight of Fannie Mae and Freddie Mac from Congress and the Department of Housing and Urban Development to a new agency that would be created within the Treasury Department. The proposal reflected the administration's belief that Congress "neither has the tools, nor the stature" for adequate oversight. Frank stated, "These two entities...are not facing any kind of financial crisis.... The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."[42] He clarified in 2009 that Fannie and Freddie were not in crisis at the time and many financial institutions, like Lehman Brothers, also fell into crisis from 2003 to 2008.[43]

Conservative groups criticized Frank for campaign contributions totaling $42,350 between 1989 and 2008. They claim the donations from Fannie and Freddie influenced his support of their lending programs, and they blame Frank for not playing a stronger role in reforming the institutions in the years leading up to the Economic crisis of 2008.[44][45] Frank's former partner, Herb Moses, was an executive at Fannie from 1991 to 1998, where Moses helped develop many of Fannie’s affordable housing and home improvement lending programs. In 1991, Frank pushed for reduced restrictions on two- and three-family home mortgages. During the time that Frank was in a relationship with Moses, he blocked tougher regulations on the banking companies while voting for the Government Sponsored Housing Enterprises Financial Safety and Soundness Act of 1991 and the Housing and Community Development Act of 1992.[46] Frank and Moses' relationship ended around the same time Moses left the company.[47]

In a response to these criticism Frank pointed out that "during twelve years of Republican rule no reform was adopted regarding Fannie Mae and Freddie Mac. In 2007, a few months after I became the Chairman, the House passed a strong reform bill; we sought to get the [Bush] administration’s approval to include it in the economic stimulus legislation in January of 2008; and finally got it passed and onto President Bush’s desk in July 2008. Twelve years of Republican rule produced no reform of Fannie Mae and Freddie Mac. We were able to adopt it in nineteen months, and we could have done it much quicker if the [Bush] administration had cooperated."[48] In 2009 Frank again responded to what he called "wholly inaccurate efforts by Republicans to blame Democrats, and [me] in particular" for the subprime mortgage crisis which is linked to the financial crisis of 2007-2009.[43] He outlined his efforts to reform these institutions and add regulations but was thwarted by Republican efforts with the main exception a bill with Republican Mike Oxley that died because of opposition from President Bush.[43] Once control was turned over to Democrats, Frank was able to push through the Federal Housing Reform Act (H.R. 1427) and the Mortgage Reform and Anti-Predatory Lending Act (H.R. 3915) both in 2007.[43] Frank also pointed out the neglect of overlooking the Republican-led Gramm-Leach-Bliley Act of 1999, opposed by Frank), which removed the wall between commercial and investment banks.[43] The statute, which repealed part of the Glass-Steagall Act of 1933, has been criticized for having contributed to the proliferation of the complex and opaque financial instruments which are at the heart of the crisis.
Barney sounds like a great guy to put in Obama's administration, right?

And, will you continue to argue with me that Freddie and Fannie are not used to create home loans for those who usually can't get home loans???
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Old 03-22-2009, 11:01 PM   #130
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Please. If you are a Republican, who else was responsible?
I don't understand your question
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Old 03-22-2009, 11:04 PM   #131
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I don't understand your question
Yeah, you really do.
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Old 03-22-2009, 11:15 PM   #132
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From Wikipedia....


Quote:
Franklin Delano "Frank" Raines (born January 14, 1949 in Seattle, Washington) is the former chairman and chief executive officer of the Federal National Mortgage Association, commonly known as Fannie Mae, who served as White House budget director under President Bill Clinton. His role leading Fannie Mae has come under scrutiny.

Early life
The son of a Seattle janitor [1], Raines graduated from Harvard College, Harvard Law School; and Magdalen College, Oxford University as a Rhodes Scholar.


[edit] Career
In 1969, Raines first worked in national politics, preparing a report for the Nixon administration on the causes and patterns of youth unrest around the country related to the Vietnam War.[2] He served in the Carter Administration as associate director for economics and government in the Office of Management and Budget and assistant director of the White House Domestic Policy Staff from 1977 to 1979. Then he joined Lazard Freres and Co., where he worked for 11 years and became a general partner. In 1991 he became Fannie's Mae's Vice Chairman, a post he left in 1996 in order to join the Clinton Administration as the Director of the U.S. Office of Management and Budget, where he served until 1998. In 1999, he returned to Fannie Mae as CEO, "the first black man to head a Fortune 500 company."[3]
On December 21, 2004 Raines accepted what he called "early retirement" [4] from his position as CEO while U.S. Securities and Exchange Commission investigators continued to investigate alleged accounting irregularities. He is accused by The Office of Federal Housing Enterprise Oversight (OFHEO), the regulating body of Fannie Mae, of abetting widespread accounting errors, which included the shifting of losses so senior executives, such as himself, could earn large bonuses [5].

In 2006, the OFHEO announced a suit against Raines in order to recover some or all of the $90 million in payments made to Raines based on the overstated earnings [6] initially estimated to be $9 billion but have been announced as 6.3 billion.[7].

Civil charges were filed against Raines and two other former executives by the OFHEO in which the OFHEO sought $110 million in penalties and $115 million in returned bonuses from the three accused.[8] On April 18, 2008, the government announced a settlement with Raines together with J. Timothy Howard, Fannie's former chief financial officer, and Leanne G. Spencer, Fannie's former controller. The three executives agreed to pay fines totaling about $3 million, which will be paid by Fannie's insurance policies. Raines also agreed to donate the proceeds from the sale of $1.8 million of his Fannie stock and to give up stock options. The stock options however have no value. Raines also gave up an estimated $5.3 million of "other benefits" said to be related to his pension and forgone bonuses.[9]

An editorial in The Wall Street Journal called it a "paltry settlement" which allowed Raines and the other two executives to "keep the bulk of their riches." [10] In 2003 alone, Raines's compensation was over $20 million.[11
]

A statement issued by Raines said of the consent order, "is consistent with my acceptance of accountability as the leader of Fannie Mae and with my strong denial of the allegations made against me by OFHEO."[12]

In a settlement with OFHEO and the Securities and Exchange Commission, Fannie paid a record $400 million civil fine. Fannie, which is the largest American financier and guarantor of home mortgages, also agreed to make changes in its corporate culture and accounting procedures and ways of managing risk. [13]

In June 2008 The Wall Street Journal reported that Franklin Raines was one of several public officials who received below market rates loans at Countrywide Financial because the corporation considered the officeholders "FOA's"--"Friends of Angelo" (Countrywide Chief Executive Angelo Mozilo). He received loans for over $3 million while CEO of Fannie Mae. [14]

[edit] Role in the subprime mortgage crisis
See also: Subprime mortgage crisis
In accordance with the mission of Fannie Mae to enable home ownership by a greater proportion of the population, Franklin Raines, while Chairman and CEO, began a pilot program in 1999 to issue bank loans to individuals with low to moderate income, and to ease credit requirements on loans that Fannie Mae purchased from banks. Raines promoted the program saying that it would allow consumers who were "a notch below what our current underwriting has required" to get home loans. The move was intended in part to increase the number of minority and low income home owners.[15] Some observers have noted that the expansion of easy credit to home buyers with a lesser ability to pay them back was one of the major contributing factors to the subprime mortgage crisis.[16] Although under Raines, Fannie Mae invested in some securities backed by subprime loans, it didn't start buying subprime and Alt-A loans directly (and bundling them into securities) until late 2004 after the accounting scandal. Purchasing of subprime and alt-A mortgages expanded exponentially under the guidance of Raines's successor Daniel H. Mudd.[17][18] (See also Subprime lending.)

In the New York Times John Steele Gordon wrote an opinion criticizing Raines' contribution to the 2008 financial crisis caused by the failure of Fannie Mae. "He cooked the books at Fannie to increase his compensation (more than $90 million)." [19]

On December 9, 2008, he testified before the United States House Committee on Oversight and Government Reform on Capitol Hill regarding Fannie Mae, Freddie Mac, and financial market instability.[20][21][22]


[edit] Question of Raines and Obama connection
On 16 July 2008 The Washington Post reported that Franklin Raines had "taken calls from Barack Obama's presidential campaign seeking his advice on mortgage and housing policy matters." [23]. Also, in an editorial in August 27, 2008 titled "Tough Decision Coming", the Washington Post editorial staff wrote that "Two members of Mr. Obama's political circle, James A. Johnson and Franklin D. Raines, are former chief executives of Fannie Mae."[24] On September 18, 2008, John McCain's campaign published a campaign ad that quoted the Washington Post reporting regarding Raines and Obama. The ad also notes that "Raines made millions and then left Fannie Mae while it was under investigation for accounting irregularities".[25]

Neither Raines nor the Obama campaign had disputed the Post's reporting before the ad. The text in question consisted of one sentence in each article. After McCain's attack ad however, both denied that Raines was or had been a provider of advice to Obama or the Obama campaign.[26][27][28
].

In later commentary the Washington Post (the original source) described McCain's attempts to connect Obama with Franklin Raines based on their reporting as "a stretch" and said all reporting they did about the matter actually stems from a single conversation a reporter had with Raines in which she recalls Raines said he "had gotten a couple of calls from the Obama campaign". When the reporter queried Raines to the nature of the calls he said "oh, general housing, economy issues".[29]

Additionally, an email hoax falsely claims Raines was made "Chief Economic Advisor" for the Obama presidential campaign
http://en.wikipedia.org/wiki/Franklin_Raines

I bolded the areas that add support to my general arguements...

I am not tying Raines to Obama. I am supporting the role of Freddie/Fannie in the worldwide economic collapse that began with our mortgage crisis. And, I am reiterating that Freddie/Fannie were under government guidance to loosen home lending practices.
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Old 03-22-2009, 11:30 PM   #133
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uh, barney frank is an elected us representitve, he is not in the obama administration.

neither is raines, and in fact raines was never involved with the obama campaign either.

you like to cut and paste from wiki, go look up fannie mae and see what they say is its primary function . hint: it is not "to guarantee mortgage loans made to poor people who normally can't get a home mortgage".
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Old 03-22-2009, 11:33 PM   #134
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from Wikipedia,

Quote:
Countrywide Financial loan controversy
Further information: Countrywide financial political loan scandal
As Dodd in his role as chairman of the Senate Banking Committee proposed a housing bailout to the Senate floor in June 2008 that would assist troubled subprime mortgage lenders such as Countrywide Financial in the wake of the United States housing bubble's collapse,[25] Condé Nast Portfolio reported that in 2003 Dodd had refinanced the mortgages on his homes in Washington, D.C. and Connecticut through Countrywide Financial and had received favorable terms due to being placed in a "Friends of Angelo" program. Dodd received mortgages from Countrywide at allegedly below-market rates on his Washington, D.C. and Connecticut homes.[25] Dodd has not disclosed the below-market mortgages in any of six financial disclosure statements he filed with the Senate or Office of Government Ethics since obtaining the mortgages in 2003.[26]

Dodd's press secretary said the "Dodds received a competitive rate on their loans", and that they "did not seek or anticipate any special treatment, and they were not aware of any", then declined further comment.[27] Republican State Chairman Chris Healy stated that "Dodd has crossed the ethics line by obtaining two generous mortgage deals with a company that is the corporate poster-child for the national subprime lending meltdown."[28] The Hartford Courant reported Dodd had taken "a major credibility hit" from the scandal.[29] The Chairman of the Senate Budget Committee Kent Conrad and the head of Fannie Mae Jim Johnson received mortgages on favorable terms due to their association with Countrywide CEO Angelo Mozilo.[30] The Wall Street Journal, The Washington Post, and two Connecticut papers have demanded further disclosure from Dodd regarding the Mozilo loans.[31][32][33][34]

On June 17, 2008, Dodd met twice with reporters and gave accounts of his mortgages with Countrywide. He admitted to reporters in Washington, D.C. that he knew as of 2003 that he was in a VIP program, but claimed it was due to being a good customer, not due to his political position. He omitted this detail in a press availability to Connecticut media.[35]

The top recipient of insurance industry contributions was Senator Christopher Dodd (D-CT).[36] The leading contributor from the insurance industry — as measured by total political contributions — was AFLAC, Inc., which contributed $907,150 in 2007.[37]

Countrywide has also contributed a total of $21,000 to Dodd’s campaigns since 1997. Dodd has received approximately $70,000 in campaign contributions from Bank of America, which is buying Countrywide, in the last year-and-a-half before the Countrywide Financial loan scandal broke.[38] Only then-Senators Barack Obama and Hillary Clinton have received more money from Bank of America than Dodd with Senator John McCain slightly trailing him at $64,000. [38] However, no American politician has received more contributions from Fannie Mae and Freddie Mac than Dodd's combined $133,900.[39]
On June 20, 2008, the Heritage Foundation alleged staffers from Bank of America had drafted Dodd's housing bailout bill (FHA Housing Stabilization and Homeownership Retention Act of 2008) in March 2008, before it was introduced in the Senate.[40] The Los Angeles Times also reported on this story on June 21.[41]

On June 19, Dodd told the Danbury News-Times "I don't believe I did anything wrong."[42] The state's leading newspaper, The Hartford Courant however concluded Dodd was negligent in accepting the Countrywide mortgage and suggested it was time "Dodd got off his high horse, came clean and admit he screwed up."[43] A New York Times editorial the same day accused Dodd and fellow Senator Kent Conrad of being painfully out of touch regarding the "Friends of Angelo" loans.[44] Citizens for Responsibility and Ethics in Washington (CREW) has called for House and Senate to investigate Senators Dodd and Conrad.[45]

In a Connecticut public appearance in October 2008, Dodd again refused to release his Countrywide loan documents[46] and suggested the press was inappropriately placing blame for the mortgage crisis. An October 21, 2008 editorial in the New York Times sharply criticised Dodd's failure to produce his loan documents, stating "his excuses are wearing ridiculously thin."[47]

An October 2008 poll taken by UConn confirmed the Countrywide controversy had seriously damaged Dodd's image in Connecticut, as 42% of voters approved of his job performance, while 48% disapproved.[48]

On February 2, 2009 Dodd held a press conference in Hartford with CT media. Dodd made available all documents in his possession related to his 2003 refinancing with Countrywide Financial. He did not permit the media to copy any documents and did not post these documents for public inspection. Reaction to this disclosure, which the Dodd camp claimed vindicated the Senator, ranged from tepid [49] to negative [50]


[edit] Fannie Mae/Freddie Mac controversies
Further information: Federal takeover of Fannie Mae and Freddie Mac
Senator Dodd was involved in issues related to the federal takeover of Fannie Mae and Freddie Mac during the 2008 subprime mortgage crisis.

As part of Dodd's overall mortgage bill the Housing and Economic Recovery Act of 2008 before Congress in the summer of 2008, Treasury Secretary Hank Paulson sought provisions enabling the Treasury to add additional capital and regulatory oversight over these government sponsored enterprises. These provisions were part of the bill signed by President George W. Bush. At the time, it was estimated that the federal government would need to spend $25 billion on a bailout of the firms.[51]

During this period, Dodd denied rumors these firms were in financial crisis. He called the firms "fundamentally strong",[52] said they were in "sound situation" and "in good shape" and to "suggest they are in major trouble is not accurate".[53]

In early September, after the firms continued to report huge losses,[54] Secretary Paulson announced a federal takeover of both Fannie Mae and Freddie Mac. Dodd expressed skepticism of the action
, which the Treasury estimated could cost as much as $200 Billion.

Dodd is the number one recipient in Congress of campaign funds from Fannie Mae and Freddie Mac.[55] Critics also charge that Dodd ignored repeated warnings that the two firms were in need of major reform.

[edit] Irish Cottage Controversy
In February 2009 Kevin Rennie, a columnist at the Hartford Courant ran an op-ed concerning Dodd's acquisition of his vacation home in Roundstone, Ireland. [56] The article alleged that Dodd's former partner in buying the home had ties to disgraced Bear Stearns principal Edward Downe, Jr. who has since been convicted of insider trading by the Securities and Exchange Commission. [57] After paying an $11 million fine for his role in the scam, Downe later obtained a pardon in the waning days of the Bill Clinton administration. The controversial pardon was granted after Dodd lobbied Clinton on Downe's behalf. [58] Dodd's letter to the President said "Mr. President, Ed Downe is a good person, who is truly sorry for the hurt he caused others,"[59]. After Downes' pardon, Dodd bought out the interests of his partner for a price allegedly based on a 2002 bank appraisal of the Roundstone home, which yielded little profit for Dodd's partner.[60] [61] Rennie criticized Dodd for claiming the Roundstone home was worth less than $250,000 in Senate ethics filings; some observers estimated the likely value in excess of $1 million USD. [62]


[edit] AIG bailout and bonuses
From the fall of 2008 through early 2009, the United States government spent nearly $170 Billion to bailout the failing insurance giant, AIG. AIG then spent $165 million of this money to hand out executive "retention" bonuses to its top executives. Public outrage ensued over this apparent misuse of taxpayer dollars.

Senator Chris Dodd was responsible for the inclusion of a clause limiting excessive executive pay in the American Recovery and Reinvestment Act. On February 14, 2009, the Wall Street Journal published an article, Bankers Face Strict New Pay Cap, discussing a retroactive limit to bonus compensation inserted by Chris Dodd into the stimulus bill which passed in the Senate.[63]

The same article went on to mention that Treasury Secretary Timothy Geithner and Lawrence Summers "had called Sen. Dodd and asked him to reconsider".

When the bill left conference, Dodd's provision had been amended to include a provision preventing limits on bonuses previously negotiated and under contract. This provision was lobbied for by Geithner and Summers.

As Dodd explained in his March 18th interview on CNN,[64] at Geithner and the Obama Administration's insistence he amended his provision's original language to include Geithner and Summers' request, which thus allowed AIG to give out bonuses under previously negotiated contracts. However, Dodd's provision also includes language allowing the Treasury Secretary to examine bonuses doled out and, if they are found to be in violation of the public interest, recoup those funds.

Dodd retreated from his original statement that he did not know how the amendment was changed[65] Dodd was criticized by many in the Connecticut media for the apparent flip-flop.[66][67] In a March 20, 2009 editorial the New Haven Register called Dodd "a lying weasel"[68] The same day, Hartford Courant columnist Rick Green called on Dodd not to seek re-election in 2010.[69]

The Washington, DC press described Dodd as "reeling" from the controversy [70] and having "stepped in it" after changing his story as to the bonus amendment.[71]

At a press conference in Enfield, Connecticut, on Friday, March 20, Dodd responded to critics and explained that his original answer to a CNN answer was based on a misunderstanding of the question.[72] He also said he was disappointed that the Treasury officials who asked him to make the legislative changes had not identified themselves, refusing to confirm the actual identity of the individuals responsible for changing the amendment.[73]

The next day, voters in Ridgefield rallied against Dodd and the Obama economic agenda [74] [75] The Manchester Journal Inquirer suggested that "Chris Dodd's explaining may have only begun" [76]

Opensecrets.org reports Dodd has received over $223,000 from AIG employees for his recent campaigns

http://en.wikipedia.org/wiki/Christopher_Dodd

Just more evidence of how Fannie/Freddie work with Washington...
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Old 03-22-2009, 11:35 PM   #135
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Quote:
Originally Posted by Mavdog View Post
uh, barney frank is an elected us representitve, he is not in the obama administration.

neither is raines, and in fact raines was never involved with the obama campaign either.

you like to cut and paste from wiki, go look up fannie mae and see what they say is its primary function . hint: it is not "to guarantee mortgage loans made to poor people who normally can't get a home mortgage".
no disagreement with you anywhere.

I already said that the issue of putting those into houses who can't really afford them is not the primary mandate of Fannie/Freddie. But, if you act like they aren't used for that, then your head is in the sand.

the articles support my position.
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Old 03-22-2009, 11:56 PM   #136
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From Wikipedia,

Quote:
Rahm Israel Emanuel[1] (born November 29, 1959) is an American politician currently serving as White House Chief of Staff to President Barack Obama. He served previously as Democratic member of the United States House of Representatives, representing Illinois's 5th congressional district from 2003 until his resignation in 2009 to take up his current position in the Obama Administration.

Emanuel was chair of the Democratic Congressional Campaign Committee during the 2006 mid-term elections and remained a top strategist for House Democrats during the 2008 cycle. After Democrats regained control of the House in 2006, Emanuel was elected chairman of the Democratic Caucus. This made him the fourth-ranking House Democrat, behind Speaker Nancy Pelosi, Majority Leader Steny Hoyer and Majority Whip Jim Clyburn.[2] Two days after Obama's election victory, he was announced as Barack Obama's designate for White House Chief of Staff.[3] Emanuel resigned from the House on January 2, 2009[4] and began his current job on January 20, 2009, the day of Obama's inauguration.[3]

Emanuel is an influential member of the New Democrat Coalition. He is noted for his combative style and his political fundraising abilities.[5]



Quote:
Career in finance
After serving as an advisor to Bill Clinton, in 1998 Emanuel resigned from his position in the Clinton administration. He then became an investment banker at Wasserstein Perella (now Dresdner Kleinwort), where he worked until 2002.[27] In 1999, he became a managing director at the firm’s Chicago office. Emanuel made $16.2 million in his two-and-a-half-year stint as a banker, according to Congressional disclosures.[27][28] At Wasserstein Perella, he worked on eight deals, including the acquisition by Commonwealth Edison of Peco Energy and the purchase by GTCR Golder Rauner of the SecurityLink home security unit from SBC Communications.[27]

Emanuel was named to the Board of Directors for the Federal Home Loan Mortgage Corporation ("Freddie Mac") by then President Bill Clinton in 2000. His position paid him $31,060 in 2000 and $231,655 in 2001.[29] During the time Emanuel spent on the board, Freddie Mac was plagued with scandals involving campaign contributions and accounting irregularities.[30] The Office of Federal Housing Enterprise Oversight (OFHEO) later accused the board of having "failed in its duty to follow up on matters brought to its attention." Emanuel resigned from the board in 2001 when he ran for congress.
Quote:
Emanuel declared in April 2006 that he would support Hillary Rodham Clinton should she pursue the presidency in 2008. Emanuel remained close to Bill Clinton since leaving the White House, talking strategy with him at least once a month as chairman of the DCCC.[11] However, Emanuel's loyalties came into conflict when his home-state senator Barack Obama expressed interest in the race; asked in January 2007 about his stance on the Democratic presidential nomination, he said: "I'm hiding under the desk. I'm very far under the desk, and I'm bringing my paper and my phone."[38] Emanuel remained neutral in the race until June 4, 2008, the day after the final primary contests, when he endorsed the eventual winner Obama.[39]

Emanuel easily won re-election to the House, defeating Republican candidate Tom Hanson. Open Secrets reported that Emanuel "was the top House recipient in the 2008 election cycle of contributions from hedge funds, private equity firms and the larger securities/investment industry".

So, there is your example of an ex Freddie/Fannie crook in Obama's cabinet...
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Old 03-23-2009, 12:03 AM   #137
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ok, I have given you everything I said I would except for the issue of going back to Clinton to show that the changes in Freddie/Fannie began then which changes started putting people in houses who couldn't afford them.

I'll find that also


But, I'm going to bed now.

I don't drop by here every day. But, I'll come back and finish the research you said I couldn't find.

I'll show you the rest of the data to support my views.

But, for now, I am sure you learned some things that you didn't know even if you won't admit that you did.

and, Chum, nothing about this is racial in any sort of sense. a disproportionate share of some races are poor. But, the arguement is not about race. the arguement is about putting people in houses they can't afford.

and, the big problem was not even with poor people. the big problem was the side effect. Government wanted to put poor people in houses and so they changed the credit rules to make it happen.

people who were better off used the same rule changes to move into houses they couldn't afford. the real problem is the middle class that tried to move up to a higher income neighborhood. It was the guy making 60K who took a house worth 600K that caused this mess.

It was not the guy making 20K buying a 40K house. But, the problem started with changing the rules.

You seem to think I am a racist pig. Really, I am not.
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Old 03-23-2009, 09:17 AM   #138
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Originally Posted by wmbwinn View Post
From Wikipedia,

Emanuel "was the top House recipient in the 2008 election cycle of contributions from hedge funds, private equity firms and the larger securities/investment industry".

So, there is your example of an ex Freddie/Fannie crook in Obama's cabinet...
are you serious? THAT is your example of someone from freddie mac or fannie mae in obama''s administration?

the word inaccurate comes to mind, but that's too mild. disingenious? dishonest?

maybe just wacky.

try again. emanuel was never a part of these two firms, he was an elected representitive.

Quote:
ok, I have given you everything I said I would except for the issue of going back to Clinton to show that the changes in Freddie/Fannie began then which changes started putting people in houses who couldn't afford them.
you have done nothing. you haven't shown how lenders were forced to give mortgages to people who can't afford them, you have not shown anyone from fannie or freddie who is in the obama administration, you haven't been able to show that fannie's mission is "to guarantee mortgage loans made to poor people who normally can't get a home mortgage".

you've failed on all counts. good job....
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Old 03-23-2009, 11:24 AM   #139
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Interesting counterpoint

Quote:
Yes, the Community Reinvestment Act Really Did Help Cause the Housing Crisis
March 17, 2009 09:42 AM ET | James Pethokoukis | Permanent Link | Print

There has been a lot of push back against the idea that the Community Reinvestment Act nudged banks to give mortgages to people who should have not gotten them. But then here comes this fantastic story, courtesy of the Boston Business Journal, about East Bridgewater Savings in Boston:

Quote:
Bad or delinquent loans? Zero. Foreclosures? None. Money set aside in 2008 for anticipated loan losses? Nothing. ... The bank even squeaked out a profit of $87,000. And its Tier 1 risk-based capital ratio was 31.6 percent, or more than three times higher than many community banks in Massachusetts. “We’re paranoid about credit quality,” Petrucelli said. The 62-year-old chief executive has run the bank since 1992.
Yet the FDIC has turned up the heat on Petrucelli's bank, giving it an apparently rare "needs to improve rating," for not making more risky loans under the Community Reinvestment Act. Here is how the FDIC puts it: “There are no apparent financial or legal impediments that would limit the bank’s ability to help meet the credit needs of its assessment area. The FDIC examiners also faulted East Bridgewater "for not advertising and marketing its loan products enough. The bank, which does not have a Web site, offers fixed-rate mortgages."

Me: How many East Bridgewaters are out there that knuckled under to the pressure and started handing out mortgages to whomever? I am not saying that CRA is the only factor here. There is plenty of blame to go around, regulators, Alan Greenspan, derivatives desks on Wall Street. But to let CRA and its enablers off the hook is ridiculous.

Link
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Old 03-23-2009, 12:22 PM   #140
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The FDIC gave his bank a crappy rating for being responsible?
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Old 03-23-2009, 12:41 PM   #141
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the fdic did not say east bridgewater savings needed to make "more risky loans", the fdic said it needs to make more loans. there is a huge difference, the fdic isn't telling it how to underwrite but what it needs to do according to its charter.

the investors in the bank should be unhappy, with about $30 Million invested the bank made a profit of $87,000. the investors in the bank would have done better just putting their money in a cd, even when cd's only are paying what? 1.5%?
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Old 03-23-2009, 09:14 PM   #142
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Mavdog, I don't bold stuff so that you can skip the rest of the content I give you. You obviously did not read the material I gave you. Rham Emanuel worked for Freddie Mac.

Again, I'll post the article and link and this time I'll bold it so you will read it:

Quote:
Emanuel was named to the Board of Directors for the Federal Home Loan Mortgage Corporation ("Freddie Mac") by then President Bill Clinton in 2000. His position paid him $31,060 in 2000 and $231,655 in 2001.[29] During the time Emanuel spent on the board, Freddie Mac was plagued with scandals involving campaign contributions and accounting irregularities.[30] The Office of Federal Housing Enterprise Oversight (OFHEO) later accused the board of having "failed in its duty to follow up on matters brought to its attention." Emanuel resigned from the board in 2001 when he ran for congress.
I have shown you how Freddie and Fannie were used to incentivize and protect investors who would offer loans to those who traditionally could not get a home mortgage.

Did Freddie/Fannie force the issue? No. If that is your whole arguement, then fine.

But, they set it up to make the loans happen to put people who could not afford a certain home into that home.

It was done to offer poor people a home mortgage. Emotionally that is great. That sounds wonderful.

But, they meddled with the free market. The changes made it possible for a person who could get a loan able to get a loan for more house than he could previously.

In other words, the changes put in place for the little man made it possible for the middle class to buy upper eschelon homes they could not really afford.

Rahm Emmanuel was in Freddie Mac.

So, I showed that Obama's cabinet included a Freddie Mac crook. I showed how Freddie and Fannie incentivized and protected/backed the risk issue.

And, if you read my body of material (which you obviously never do as we have had this problem repeatedly in the past on other threads), you can see a lot of hints that the Freddie/Fannie changes occurred in the Clinton administration. Rahm Emanuel served in Freddie Mac under Clinton. So did Raines.

Your post illustrates your failure to read what I already gave you.
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Old 03-23-2009, 09:23 PM   #143
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Quote:
Originally Posted by Mavdog View Post
the fdic did not say east bridgewater savings needed to make "more risky loans", the fdic said it needs to make more loans. there is a huge difference, the fdic isn't telling it how to underwrite but what it needs to do according to its charter.

the investors in the bank should be unhappy, with about $30 Million invested the bank made a profit of $87,000. the investors in the bank would have done better just putting their money in a cd, even when cd's only are paying what? 1.5%?
Keep talking. Your inability to understand what you do read is only exceeded by your failure to read in the first place.

The bank profit of 87K is not the return on the 30 million investment. The 87 thousand is their profit which takes into account all of their banking expenses.

No one said that they GROSSED a 87K return on 30 million invested. They said that was the profit (net).

And, yes, this is not the first article to suggest pressure to loan money to those that are not as good a credit risk.

And, besides, this is what the Federal Government did via Freddie/Fannie:
1)they agreed to have Freddie/Fannie back the loans in the form of packaged financial products.
2)they removed the risk to the lender of monies.
3)they removed the risk to the middle men
4)they set up Freddie/Fannie to take the risk
5)they set up the Federal Government to back Freddie/Fannie

So, the system allows for easy profits and no risk. There is always risk but the risk belonged to the Feds ultimately. And, the Feds paid the price.
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Old 03-23-2009, 09:36 PM   #144
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Quote:
February 12, 1995
The Reinvented Community Reinvestment Act
by Scott, Hal S.
Heritage Lecture #516

(Archived document, may contain errors)



The Reinvented Community Reinvestment Act By Hal S. Scott The Community Reinvestment Act (CRA), enacted in 1977 during the Carter Admini- stration, requires federal banking agencies to encourage banks and thrifts (banks, for short) to meet the credit needs of their local communities (including low and moderate income neighborhoods) consistent with safety and soundness considerations. Communities are the areas contiguous to bank offices. At the outset, there are major flaws in the concept. First, absent racial discrimination- which is subject to attack under a variety of other federal laws including the Equal Credit Opportunity and Fair Housing Acts (see the Justice Department's action in the Chevy Chase case)-why wouldn't the market dictate that banks loan to their communities when it was consistent with safety and soundness? The Act can only be understood as pressuring banks to make non-market loans. Second, why is this obligation put only on banks, as compared with other lenders- for ex- ample, finance companies or credit unions? If the idea is that banks should invest a portion of local savings in the communities from which they are taken, this flies in the face of the basic idea behind banking-to direct savings to their highest economic use. Only in this way can savers in poor communities get high rates of interest. Less profit for banks will translate into lower returns for savers who will eventually move their funds into other insti- tutions (mutual funds, for example) without such reinvestment obligations. Moreover, poor communities are capital poor, not capital rich. Real development cannot be meaningfully fi- nanced from local savings. If the idea is that banks should repay society for the benefit they receive from the federal safety net-deposit insurance, bailouts, lender-of-last resort facilities-those benefits have been vastly curtailed since the thrift crisis. Ken McLean, the key staffer for Senator Proxmire, the Chairman of the Senate Banking Committee in 1977 who pushed for CRA, has recently made this point. We now have risk-based deposit insurance, least-cost resolu- tion requirements for bank failures, and restrictions on central bank support. Indeed, banks over the last few decades have become less profitable; many large U.S. banks' shares have traded at discounts from book value. The imposition of social lending requirements on banks will mean that capital will go elsewhere. Third, it discourages banks from locating in poorer communities where they will be saddled with legal obligations to loan money.

CRA Today Under current regulations, four different CRA ratings are assigned to institutions based on examinations with regard to 12 very general assessment factors, many of which are proce- dural- for example, the extent of participation by the bank's board of directors in formulating and reviewing the bank's CRA policies. Some, however, are substantive- for example, the bank's participation in government-subsidized loans for housing, small busi-
Hal S. Scott is Nomura Professor of International Financial Systems, Harvard Law School. 11is is an updated version of his March 30, 1994, remarks to The Heritage Foundation's Regulatory Reform Advisory Council. ISSN 0272-1155 0 1995 by The Heritage Foundation.


ness, or small farms. There is no specific mention of racial minorities, women, or poor peo- ple; the emphasi's is on meeting the general credit needs of the community. CRA performance is taken into account by banking regulators whenever a banking organi- zation applies for permission to open a new branch or make an acquisition. Interest groups have used this requirement to file extensive protests against applications based on banks' al- leged shortcomings in fulfilling their CRA obligations under the general assessment factors. These protests can lead to hearings and significant costly delays in approving applications. In many cases, groups have threatened to file oppositions unless the bank agreed to loan an agreed amount of money to certain groups or projects, a form of regulatory blackmail. While regulators have generally given banks high CRA ratings based on examinations-94 percent were rated in the top two categories in 1994-they have not relied exclusively on these ex- aminations; instead they have been susceptible to the protests of interest groups.

The Clinton Administration Proposals In December 1993, the Clinton Administration proposed a new set of regulations to rein- vent the Community Reinvestment Act. It described its proposals as "performance" -based rather than "process" -based. Compliance was to be measured not by whether a bank had a process designed to achieve more community-based lending, but by whether such lending actually occurred. The proposals were also justified as providing more objective measures of CRA compliance in lieu of examiner discretion. The proposals were actually put forward on a coordinated basis by the banking regulators. The Administration has political control over three of them: the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and the Office of the Comptroller of the Cur- rency. The Fed, which is independent, has reluctantly gone along, some governors secretly hoping, I believe, that adverse reaction would derail the proposals. When the December 1993 proposals were widely criticized by the industry as being too rigid and burdensome, and by community groups as being too lax, a new set of proposals were put forward in September 1994. Under the revised proposals, CRA compliance for large retail banks ($250 million or more in assets) is to be primarily measured by ratings under three performance tests-Lending, Investment, and Service Tests. Unlike the original proposal, performance is to be judged in "the context" in which the institution being evaluated operates. Thus, the agencies would take into account the demographics and credit needs of an institution's service area and the banks' product offerings, business strategy, and condition. The introduction of "context" represents a retreat from objectivity and a return to regulatory discretion.

The Lending Test The objective of the LendingTest is to increase certain types of lending-small business and small farm (annual revenues of $1 million or less), home mortgage, community develop- ment, and, at a bank's election, consumer loans (target loans)-to low- and moderate-income areas (target areas). "Community development loans" are explicitly de- fined as nonmarket loans for affordable housing or other community economic development needs. Performance under the LendingTest is measured by a number of factors, including the proportion of an institution's lending within its service area and the extent to which such loans are made to preferred borrowers within that area. Five rating categories are formulated

to measure performance (Outstanding, High Satisfactory, Low Satisfactory, Needs to Im- prove, Substantial Noncompliance). Under the original proposal, ratings were to be assigned primarily on the basis of a market share test: how a bank's market share of target loans in its target area compared with its mar- ket share of target loans in the rest of its service area. This test was heavily criticized. The measurement device did not insure more preferred lending. Suppose a bank had a market share of 20 percent in the target area and 40 percent outside. It could respond by decreasing its market share in target loans outside the target area, for example, by making more loans to large corporations, or increasing its loans within the target area by buying loans from banks with surplus target area loans. Deadweight compliance costs would be incurred with no benefit for low- or moderate-income areas. On the other hand, any real increase in target area lending could well lead banks to make riskier loans, given the limited pool of sound credits in these areas. Having rejected an objective but flawed market share performance measure, the proposal now ostensibly uses a catalog of factors to arrive at a rating, all of which call for substantial discretion on the part of examiners. For example, among the factors leading to an "outstand- ing" rating would be "excellent responsiveness" to the credit needs of its service area, being a "leader" in making community development loans, or "extensive use" of innova- tive or flexible lending practices. However, one suspects market share calculations may still be used in the background.

The Investment Test The Investment Test seeks to increase certain target investments that would benefit low- and moderate-income areas or persons within a bank's service area or a broader statewide or regional area that includes the service area. Target investments include investments (or grants) in support of affordable housing or other community economic development needs that are not being met by the private market. They also include investments that primarily benefit low- or moderate-income individuals and small businesses or small farms, as well as rent-free donations of branches in minority neighborhoods to any minority depository insti- tution or women's depository institution. Under the original proposal, Investment Test ratings would have been based on the ratio of target investments to capital. This would have penalized banks with high capital. For safety and soundness reasons we want to keep capital high; this would have given banks the opposite incentive. Under the revised proposal, the ratio test was dropped in favor of more discretionary criteria like those used for the Lending Test.

The Service Test The Service Test would evaluate a bank's systems for delivering retail banking services. For example, it would look at the distribution of a bank's branches and ATMs among differ- ent income areas, and its record of opening and closing branches and ATMS, or the availability of alternative systems for delivering retail services (e.g., home banking) as be- tween such areas. The Service Test would also evaluate the extent to which banks offer community development services-services provided to preferred groups (e.g., low- or mod- erate-income individuals) or small businesses or small farms. Again, a variety of discretionary criteria are used to arrive at a rating.

Composite Ratings A complex two-step system is used to arrive at an overa 11 CRA rating for retail banks. First, a bank's rating for each of the component tests would be assigned on the following ba- sis: Component Test Ratings Lending Investment Service Outstanding 12 6 6 High Satisfactory 9 4 4 Low Satisfactory 6 3 3 Needs to Improve 3 1 1 Substantial Noncompliance 0 0 0

Second, a bank's total points would be combined to reach an overall rating: Outstanding, 18 or more; Satisfactory, 9-17; Needs to Improve, 5-8; and Substantial Noncompliance, 0-4. At the urging of community groups who wished to put primary weight on lending, points as- signed to investment and service cannot, in combination, exceed those for lending. For example, if lending was 5 and combined investment and service were 8, the total score would-be 10 (5+5). High ratings do not ensure regulatory approvals-they are not conclusive evidence of per- formance. Community group protests can still be taken into account.

Special Rules: Strategic Plans, Wholesale and Small Banks The proposal would afford all banks an alternative to using the various Tests discussed above. A bank could have its CRA performance evaluated under a "strategic plan" submit- ted for public comment and approved by regulators. The plan has to specify measurable goals for lending, investment, and services. The rating would he based on whether a bank subs-tantially achieved those goals. Special rules are used to assess the performance of "wholesale" or "limited-purpose" banks, basically banks not engaged in the business of making retail loans. CRA performance for these banks is evaluated under a "Community Development Test" which focuses on community development loans and services in addition to application of the Investment Test. Banks will receive credit for loans, service, and investment both within and outside their service areas, but credit for outside the service area cannot normally exceed credit for inside. Small banks (less than $250 million in assets) are subject, at their election, to a stream- lined CRA review. Their performance would be evaluated on the basis of a watered-down version of the LendingTest.

Data Reporting Large banks would have new data reporting requirements with respect to target loans. Loan data would have to include the number of applications and denials and the number and amount of approvals for loans secured by properties outside a bank's mortgage service


area, data not presently required under the Home Mortgage Disclosure ACL While some of the additional reporting is less than originally proposed, the revised proposal requires, for the first time, that race and gender data be reported for small business and small farm loans.

Enforcement The revised proposal, like the original, calls for new enforcement techniques. Enforce- ment of the regulations would no longer be done exclusively through the application review process. The proposal would allow the regulatory agencies to impose cease-and-desist or- ders and civil money penalties in cases of the lowest rating-Substantial Noncompliance. The Department of Justice, however, determined in December 1994 that there was no authority under CRA for these new enforcement measures.

Commentaq These proposals will impose serious new compliance costs. The Independent Bankers As- sociation has estimated that current CRA compliance costs are $1 billion annually, and the American Bankers Association's recent survey estimated that the original proposals would cost an additional $100 million. Also, there is the potential for significantly higher loan losses. It is thus likely that, in the short term, the marginal cost of credit for all borrowers will increase (or the returns to savers will decrease) as banks pass on some of these new costs. And the amount of government tax revenue will decrease as banks become less profit- able. In the longer term, bank safety and soundness may be significantly eroded. Credit allocation schemes have indeed bankrupted banking systems in other countries. The Clinton Administration began reinventing CRA by trumpeting the virtue of perform- ance- rather than "process" -based assessments. At first, many banks were sympathetic to the approach; given CRA, they wanted to make a reasonable amount of targeted lending and be done with it. The original proposals, however, imposed costly new requirements with no safe harbors. After being widely criticized, the agencies retreated into the more shadowy world of regulatory discretion. The proposal is full of vague concepts like "con- text" and "innovative" lending. The scoring system is arbitrary. For example, why does lending count less than investment and service for an Outstanding score (12 compared with 6+6) than it does for a High Satisfactory score (9 compared with 4+4)? The Clinton propos- als demonstrate proverbial weaknesses of state planning-it is either too rigid or too discretionary. There is no way out of this dilemma short of discarding CRA entirely and per- mitting the market to determine who receives bank loans, investments, and services. The original purpose of CRA- to encourage lending within the bank's local community - has been significantly distorted by the Clinton proposals. Now, only loans to preferred borrowers (low- and moderate-income, small businesses, and small farms) within the local community count. Rather than recognizing that wholesale banks have no "local commu- nity" but rather serve national and international markets, wholesale banks are directed to steer investments or grants to preferred recipients. And by asking for new data on the sex and gender of borrowers, a clear message is being sent as to which preferred borrowers or re- cipients may count the most. These initiatives are completely misguided. The entire class of targeted borrowers would be better served by loans made to the most productive enter- prises because those firms can provide more jobs to everyone, including the targeted borrowers. It is wrong to require consumers to subsidize non-market (e.g., overly risky) loans by paying higher bank charges. The original and revised proposals were importantly shaped by the input of community groups. These groups have been successful in securing their own piece of the pie in these

proposals. Under the Investment Test, qualified investments include grants to minority- and women-owned. financial institutions and to organizations engaged in affordable housing rehabilitation and construction, as well as not-for-profit 'Organizations serving community economic development needs or supporting activities essential to the capacity of low- or moderate-income individuals to utilize credit or sustain economic development. Naturally, the regulations do not require any assessment of the performance of the grantees. Similar goodies for community groups are available under the Community Development Test for wholesale banks. Small banks get an exemption from these requirements; instead, they must comply with a watered-down version of the regulation. Why is there an exemption for small banks at all? Is this another manifestation of small is beautiful? The reason, of course, is clear-the Admini- stration feared their opposition. Small banks were not exempt from previous CRA requirements. There is no reason to give small banks a competitive edge over large banks, and at the margin such exemptions may discourage productive consolidations or mergers. These new proposals will be quite costly and counterproductive. Real costs will be im- posed on the general public. Borrowing costs will go up, and tax revenues (which will have to be made up somewhere) will go down. Productive activity will decrease. In the longer term we risk endangering the banking system, and ultimately the American economy, by adopting those kinds of command-and-control credit policies. The only virtue of the Clinton proposals is to show how costly the CRA is when taken se- riously. The right thing to do now is to repeal CRA; even in its watered-down form it was undesirable, basically offering leverage to community groups to grind their particular axes or enrich their own coffers.
I'm not going to bold it for you this time. Read the whole article.

Here is good evidence to support (further) two of my points:
1)Freddie and Fannie have been manipulated to put people in homes they couldn't get before
2)The bigger changes occurred under Clinton
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Old 03-23-2009, 09:55 PM   #145
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I lifted one paragraph out of an article dated September 23, 2008


Quote:
Revise the Community Reinvestment Act (CRA): The CRA and other initiatives require banks and other financial institutions to better serve lower-income workers. While a worthy cause, the net effect is often to encourage loans at lower credit standards and to encourage people to buy houses they really cannot afford. As a result, too often they lose their homes, thereby losing savings that took a great effort to accumulate. Congress should revise these laws to ensure normal lending standards are maintained for all prospective mortgage borrowers.
http://www.heritage.org/Research/Economy/wm2075.cfm

If you are a good student, you will read the entire article and learn its context
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Old 03-23-2009, 09:58 PM   #146
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And, more daggers to make sure the dead horse I am beating is truly dead...

Quote:
October 15, 2008
The CRA Cover-Up
by Ernest Istook
As always, it's the cover-up that sinks people. Liberals are working overtime to cover up their role in the mortgage meltdown. Not only did they block attempts to reform Government Sponsored Enterprises (GSEs) such as Fannie Mae and Freddie Mac before they could drag down our economy, but liberals also abused the Community Reinvestment Act (CRA), turning it into a vehicle for directing loans to unqualified homebuyers. The left knows that whoever shapes public understanding of what caused today's economic crisis can shape America's politics -- and its future -- for a great many years to come. Thus, they're pushing the notion that too little government regulation was at fault.

If the country buys this idea, liberals can enact a carbon-copy of FDR's response to the Great Depression, building a larger, more activist and ever-more-controlling federal government. They can exploit the mess by establishing a conventional wisdom that more government is the solution, rather than understanding how big government is a root cause of the current financial meltdown. Claiming it all sprung from a lack of regulation is a half-truth, and a Yiddish proverb says a half truth is a whole lie. Over-regulation opened the money spigot by requiring lenders to make poorly underwritten loans. Under-regulation then allowed politicians to exploit that. Although greed and dishonesty among both borrowers and lenders had major roles, the CRA and the GSEs were at the heart of what happened, setting up the now-toppled dominoes of Bear Stearns, Lehman Brothers, and others. Over-regulation through CRA, aided by HUD, became a huge problem and, alas, wasn't even addressed in the multi-billion dollar bailout. The Clinton Treasury Department's tough new regulations in 1995 compelled the banks to engage in far-riskier lending practices or receive a failing CRA grade.

To avoid an "F" from the CRA, which could jeopardize their viability, the banks were pressured to direct hundreds of billions of dollars in high-risk mortgages to inner-city and low-income neighborhoods. Moreover, under CRA pressure, banks would "hire" radical, non-profit groups like ACORN to find them customers. Once trillions of dollars began to flow, politicians and lobbyists tapped into this stream, and so did left-wing activist groups. According to George Mason University's Russell Roberts, the CRA was buttressed by other new regulations during the Clinton Administration. As Roberts writes, "For 1996, the Department of Housing and Urban Development (HUD) gave Fannie and Freddie an explicit target -- 42 percent of their mortgage financing had to go to borrowers with income below the median in their area. The target increased to 50 percent in 2000 and 52 percent in 2005. For 1996, HUD required that 12 percent of all mortgage purchases by Fannie and Freddie be "special affordable" loans, typically to borrowers with income less than 60 percent of their area's median income. That number was increased to 20 percent in 2000 and 22 percent in 2005. The 2008 goal was to be 28 percent." The banks were kept from rebelling by using Fannie Mae and Freddie Mac's deep pockets to buy these poor-quality loans and take them off the banks' books. Under-regulation of the GSEs -- Fannie Mae and Freddie Mac -- allowed the money stream to widen and keep flowing. There has always been an implicit understanding that taxpayers would cover GSE losses and this enabled them to attract money and pour it into the CRA-induced sub-prime market.

The Bush Administration had warned about this for years. Fannie and Freddie, however, could skim enough to pay for political protection, plus pay sky-high executive salaries and bonuses to well-connected political figures. Over the past decade, Fannie and Freddie combined to spend a reported $200 million on lobbying and campaign contributions. Now bailing them out may cost taxpayers $200 billion directly, and far more indirectly. The circle of political back-scratching centered around the theme of affordable housing, which the GSEs marketed heavily. Politicians wanted housing for low-income and poor credit risks, so they used Fannie and Freddie to further that objective, and the GSEs responded with campaign help for those politicians. In return, politicians resisted reforms. This was demonstrated at a 2004 House hearing, where Rep. Maxine Waters (D.-Calif.) denounced attempts to stiffen oversight and regulation of this duo "so as not to impede their affordable housing mission, a mission that has seen innovation flourish, from desktop underwriting to 100 percent loans." "Desktop underwriting" meant undocumented loans. No proof of income or credit history required. And zero down payment. Members of both parties were involved in protecting the system. But liberal Democrats were the dominant force. Recently, House Financial Services Chairman Barney Frank (D-Mass.) told The Boston Globe, "[Republicans'] failure to regulate sensibly ... endangered the economy and ... burdened it with bad stuff.... Their own philosophy blew up in their face. They were so extreme in their insistence that there be no government intervention that they have wound up provoking far more government intervention than the Democrats ever would have." But Frank is covering up his own role because he sang a far different tune in 2003, when the Bush Administration and many Republicans (including Sen. John McCain) tried to require Fannie and Freddie to comply with Securities and Exchange Commission regulations and other additional oversight requirements. Treasury Secretary John Snow, in fact, had specifically warned Congress that Fannie and Freddie needed a new supervisory structure so that both institutions would "maintain capital and reserves sufficient to support the risks that arise or exist in its business." Rep. Frank was unconcerned. He told a hearing, "Fannie Mae and Freddie Mac are not in a crisis." Rather, he said, they were "fundamentally sound," and criticisms of them were unjustified exaggerations and "disaster scenarios." Then he confirmed why: "The more pressure there is [to regulate] then the less I think we see in terms of affordable housing" He wanted to continue both the giveaway train supplying mortgages to those who couldn't afford them and the gravy train for politicians. This appealed to liberals and in particular to the Congressional Black Caucus, which received six-figure support from both Fannie and Freddie in 2007. The GSEs' major campaign largesse went to well-placed friends in key positions. The top six from 1998 thru 2008, according to the Center for Responsive Politics: Sen. Chris Dodd (D.-Conn.) $165,400 Sen. Barack Obama (D.-Ill.) $126,349 Sen. John Kerry (D.-Mass.) $111,000 Sen. Robert Bennett (R.-Utah) $107,999 Rep. Spencer Bachus (R.-Ala.) $103,300 Rep. Roy Blunt (R.-Mo.) $ 96,950 And almost everyone in Congress got something.

The GSEs lobbied hard, too. Their combined lobbying budget averaged $17 million a year. As described by Rep. Chris Shays (R.-Conn.), "They hire every lobbyist they can possibly hire. They hire some people to lobby and they hire other people not to lobby so the opposition cannot hire them." But friends at the top were not enough. They needed them in every community, too. The Community Reinvestment Act guaranteed a steady stream of low-quality, but highly political, loans. Congress passed the CRA in 1977 to combat "redlining," a lending practice that prevented loans to minority communities. Clinton Administration regulations in the '90s added teeth to CRA, requiring banks to show compliance with meeting low-income loan targets or face civil actions that could assess a $500,000 penalty for each violation. Banks were "encouraged" to comply by hiring community groups (including ACORN) who contracted with financiers to steer low-income applicants to their institutions. As the Manhattan Institute's Howard Husock wrote in 2000: "The Senate Banking Committee has estimated that, as a result of CRA, $9.5 billion so far has gone to pay for services and salaries of the nonprofit groups involved." The left created the system that paid its community organizers very handsomely, thanks to the regulations on the financial community.

As The Heritage Foundation's J.D. Foster recently noted, "While a worthy cause, the net effect [of CRA] is often to encourage loans at lower credit standards and to encourage people to buy houses they really cannot afford." The net effect has also brought the economy to the brink of disaster. But unless the American public is told, re-told, and educated about how we got here, there won't be reform of the bailed-out-but-still-alive GSEs nor of the CRA. Then we would witness more big government, giving us far more help than we can afford.

Ernest Istook is recovering from serving 14 years in Congress and is now a distinguished fellow at The Heritage Foundation.

First appeared in WorldNetDaily
http://www.heritage.org/Press/Commentary/ed101508b.cfm
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Old 03-23-2009, 10:10 PM   #147
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this article is written on a more simple level. It is informative.

Quote:
September 26, 2008
The wheat and the tares
by Ernest Istook
You can't fix the mortgage mess if you don't understand what caused it.

That's not finger-pointing. That's common-sense.

A Biblical parable offers insight into why bad mortgage loans now threaten America's finances.

In Matthew 13, Jesus taught the parable of the wheat and the tares. Tares are weeds that resemble wheat. In the parable, a wheat field had deliberately been polluted by an enemy who sowed the seeds of the weeds intermixed with the wheat. Only after the plants were partly grown did the problem become apparent. The landowner's servants asked if they should go in and pull out the tares. He told them no:

Nay; lest while ye gather up the tares, ye root up also the wheat with them. Let both grow together until the harvest: and in the time of the harvest I will say to the reapers, Gather ye together first the tares, and bind them in bundles to burn them: but gather the wheat into my barn.
In other words, the inability to distinguish the good from the bad made it too damaging to separate them until the plants matured and were ready to be harvested.

Now America's good mortgages – 90 to 95 percent of home loans – are mixed in with bad loans, through Wall Street packaging that has sold them in groups that make it hard to distinguish the good from the bad.

We've all seen retailers sell things as a package, usually marked "Items not packaged for individual sale." These mortgages are akin to that.

The Bush administration proposed spending 700 billion tax dollars to buy those packages, not knowing which would be good loans and which would be bad – a plan that seems to be collapsing due to opposition in Congress and public outcry.

But who mixed the bad seeds in with the good ones, and why? How did mortgages to bad credit risks become so common?

Much has been made of how Fannie Mae and Freddie Mac – led by political insiders – provided a market to buy sub-standard and sub-prime home loans. That would take them off the hands of the original lenders, who could then use their capital to repeat the process by making further sub-prime loans. But what pushed the banks to make faulty loans in the first place?

Many of the bad seeds were sown 30 years ago by the Community Reinvestment Act of 1977.

As Harvard professor Hal S. Scott told a Heritage Foundation audience in 1995, "The Act can only be understood as pressuring banks to make non-market loans," a problem that he described as worsened by further Clinton administration regulations under the CRA. Scott went on to predict: "In the longer term, bank safety and soundness may be significantly eroded."

That was an understatement.

CRA started with a worthy-sounding goal: to enable low-income persons to buy a home of their own. So long as property values were rising, the risks of putting people in houses they couldn't afford remained dormant. But the bubble has burst.

While intact, the bubble empowered unscrupulous individuals. While cloaked in noble purpose, they processed loan papers for bad credit risks, knowing that Fannie Mae and Freddie Mac would buy the loans and take them off their hands. (Even after their recent takeovers, these institutions are still trumpeting their commitment to providing money for "affordable" housing, as they call it.)

What's at fault here was regulation, not deregulation.

Boston's Federal Reserve Branch led the way with a "manual" for lenders, which told them:

"Lack of credit history should not be seen as a negative factor";


"Accumulating enough savings to cover the various costs associated with a mortgage loan is often a significant barrier to homeownership by lower-income applicants. Lenders may wish to allow gifts, grants, or loans from relatives, nonprofit organizations, or municipal agencies to cover part of these costs," and


"Valid income sources [include] unemployment benefits."
The manual also reminded lenders that failure to loosen their standards could be a violation of federal equal opportunity laws, giving rise to actual damages plus punitive damages of up to $500,000.

The mortgage industry developed a term for many of the loans made under these standards – "liar loans," because falsehoods were readily accepted unquestioningly. Total lack of documentation from borrowers was rampant as well. A study from BasePoint Analytics earlier this year reported that as much as 70 percent of mortgage defaults involved fraudulent misrepresentations on loan applications.

But it didn't matter to those who snapped up the loans, re-packaged them and sold them to others. Now many institutions who bought them are holding "surprise packages" of unknown value.

Whatever else is done to fix the current mortgage crisis, the same mess could happen again unless this system is fixed.

Lending to bad credit risks isn't the only cause of the mortgage meltdown contaminating our economy, but not enough attention has been paid to the fact that government policies have encouraged lending to bad risks. Lenders faced government sanction if they didn't increase their lending to bad credit risks. Underwriting standards were weakened to comply with federal dictates.

Certainly, others deserve to share the blame – but the politicians who say they want to steer our economy to safety are also the group that steered it onto the shoals.

That's why every proposed solution needs to be studied carefully. It may be designed to solve the politicians' problems rather than the economy's.


--------------------------------------------------------------------------------

Ernest Istook is recovering from serving 14 years in Congress and is now a distinguished fellow at The Heritage Foundation.

First Appeared in the WorldNetDaily
http://www.heritage.org/Press/Commentary/ed0926508b.cfm
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Old 03-24-2009, 06:44 AM   #148
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Mavdog, I don't bold stuff so that you can skip the rest of the content I give you. You obviously did not read the material I gave you. Rham Emanuel worked for Freddie Mac.
you believe that a member of a company's board of directors "worked for" that company? yikes.

in addition the time on the board was for a length of two years?

you can't be serious.
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Old 03-24-2009, 06:51 AM   #149
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Keep talking. Your inability to understand what you do read is only exceeded by your failure to read in the first place.

The bank profit of 87K is not the return on the 30 million investment. The 87 thousand is their profit which takes into account all of their banking expenses.

No one said that they GROSSED a 87K return on 30 million invested. They said that was the profit (net).
you post the most inane comments.

not familiar with and do not understand the phrase "return on equity" do you? maybe you should do some research before you post.
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Old 03-24-2009, 07:01 AM   #150
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And, more daggers to make sure the dead horse I am beating is truly dead...
when are you going to show that there is a regulation saying that a lender must make a loan to "persons who can't afford them"?

so far you've failed.

apparently you believe that low income borrowers should never be given any loans.

is that your position?
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Old 03-24-2009, 09:22 AM   #151
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I miss Bush.
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Old 03-24-2009, 09:46 AM   #152
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I miss Bush.
Are you kidding me???

The '70s can keep Bush - I prefer Shaved...




(is that joke old enough to be funny again yet?)
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Old 03-24-2009, 03:16 PM   #153
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i'm with alby...

bush is the new shaved.
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Old 03-24-2009, 11:19 PM   #154
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you believe that a member of a company's board of directors "worked for" that company? yikes.

in addition the time on the board was for a length of two years?

you can't be serious.
if you think that being on the board of Freddie Mac means he has no connection to what Freddie Mac did in that time period....

then yikes back to you...
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Old 03-24-2009, 11:21 PM   #155
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Mavdog:
Quote:
when are you going to show that there is a regulation saying that a lender must make a loan to "persons who can't afford them"?

so far you've failed.
you have either failed to read or have failed to understand. I doubt that many others reading this would agree with you.
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Old 03-25-2009, 12:09 AM   #156
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I miss Bush.
Looks like we are all going to miss bush in the future.

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Old 03-25-2009, 12:46 AM   #157
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TOTUS...hilarious...

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The Teleprompter Of The United States (TOTUS) has released the following excerpts of what it will be providing for the POTUS to read tonight:

Obama will tell Americans: “[W]e’ve put in place a comprehensive strategy designed to attack this crisis on all fronts. It’s a strategy to create jobs, to help responsible homeowners, to re-start lending, and to grow our economy over the long-term. And we are beginning to see signs of progress.”

“The budget I submitted to Congress will build our economic recovery on a stronger foundation, so that we do not face another crisis like this ten or twenty years from now. We invest in the renewable sources of energy that will lead to new jobs, new businesses, and less dependence on foreign oil. We invest in our schools and our teachers so that our children have the skills they need to compete with any workers in the world. We invest in reform that will bring down the cost of health care for families, businesses, and our government. And in this budget, we have made the tough choices necessary to cut our deficit in half by the end of my first term – even under the most pessimistic estimates.
Right...
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Old 03-25-2009, 01:13 AM   #158
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Obama failed tonight.
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Old 03-25-2009, 02:48 PM   #159
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you have either failed to read or have failed to understand. I doubt that many others reading this would agree with you.
oh? then please tell us again, in a short sentence or two, just what law or regulation requires lenders to make loans to people "that can't afford them"? you seem to believe it is somewhere in the cut and pastes you're so fond of providing, but it's not.
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Old 03-25-2009, 04:17 PM   #160
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Mav,

Are you stating that people are not influenced by pressure...if it's not a written law it didn't happen?
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