Preaching to the Choir

[jaybet]

HISTORY LESSON :

The seeds for the "MORTGAGE CRISIS"  and those that helped fuel it, along with those that called for reform.
 
The videos are exceptionally revealing .....
   
 
 September  30, 2008
   
 Dear  Friends,   
 
This is not being  discussed by the Liberal media and for some reason conservatives are  not making their case:  IT  IS SO  IMPORTANT!!!!!    The following is a condensation of a series from  the Investor's Business Daily explaining "What  Caused the Loan  Crisis":
 
 1977:   Pres. Jimmy Carter signs the  Community  Reinvestment  Act into  Law.  The law pressured financial  institutions to extend home loans to those who  would otherwise not qualify.   The  Premise:  Home ownership would improve poor  and crime-ridden communities and neighborhoods  in terms of crime, investment, jobs, etc.   
 
 Results:   Statistics bear out that it did not help.
 
 How  did the government get so deeply involved in the  housing  market?    Answer:  Bill Clinton wanted it that  way.
 
 1992:   Republican representative Jim Leach (IO) warned of the danger that Fannie and  Freddie were changing from being agencies of the  public at large to money machines for the  principals and the stockholding  few.
 
 1993:   Clinton  extensively rewrote Fannie Mae and Freddie Mac's  rules turning the quasi-private mortgage-funding  firms into semi-nationalized monopolies  dispensing cash and loans to large Democratic  voting blocks and handing favors, jobs and  contributions to political allies.  This  potent mix led inevitably to corruption and now  the collapse of Freddie and  Fannie.
 
 1994:   Despite warnings, Clinton  unveiled his National Home-Ownership Strategy  which broadened  the CRA  in ways congress never  intended.
 
 1995:   Congress, about to change from a Democrat  majority to Republican, Clinton orders Robert  Rubin's Treasury Dept to rewrite the  rules.  Robt Rubin's Treasury  reworked rules, forcing banks to satisfy  quotas for sub-prime and minority loans to get a  satisfactory CRA rating.  The rating was  key to expansion or mergers for banks.   Loans began to be made on the basis of race and  little else.
 
 1997  - 1999:   Clinton,  bypassing Republicans, enlisted Andrew  Cuomo, then Secretary of Housing and Urban  Development, allowing Freddie and Fannie to  get into the sub-prime market in a BIG  way.  Led by Rep. Barney Frank and Sen.  Chris Dodd, congress doubled down on the risk by  easing capital limits and allowing them  to hold just 2.5% of capital to back their  investments vs. 10% for banks.  Since  they could borrow at lower rates than banks  their enterprises boomed.   
 
 With  incentives in place, banks poured billions  in loans into poor communities, often "no  doc", "no income", requiring no money down and  no verification of income.   Worse  still was the cronyism:  Fannie and Freddie  became home to out-of work-politicians, mostly  Clinton Democrats.  384 politicians got big  campaign donations from Fannie and  Freddie.  Over $200 million had been spent  on lobbying and political activities.   During the 1990's Fannie and Freddie enjoyed a  subsidy of as musch as  $182 Billion,  most of it going to principals and shareholders,  not poor borrowers as claimed.     
 Did  it work?  Minorities made up 49% of the  12.5 million new homeowners but many of those  loans have gone bad and the minority  homeownership rates are shrinking  fast.
 
 1999:  New Treasury Secretary, Lawrence Summers, became  alarmed at Fannie and Freddie's excesses.   Congress held hearings the ensuing year but  nothing was done because Fannie and Freddie had  donated millions to key congressmen and radical  groups, ensuring no meaningful changes would  take place.  "We manage our political risk  with the same intensity that we manage our  credit and interest rate risks," Fannie CEO  Franklin Raines, a former Clinton  official and current Barack Obama advisor,  bragged to investors in  1999.
 
 2000:   Secretary  Summers sent Undersecretary  Gary Gensler to Congress seeking an end to  the "special status".  Democrats raised a  ruckus as did Fannie and Freddie, headed by  politically connected CEO's who knew how to  reward and punish.  "We think that the  statements evidence a contempt for the nation's  housing and mortgage markets" Freddie  spokesperson Sharon McHale said.  It was  the last chance during the Clinton era for  reform.
 
 2001:    Republicans try repeatedly to bring fiscal  sanity to Fannie and Freddie but Democrats  blocked any attempt at reform; especially Rep.  Barney Frank and Sen.Chris Dodd who now run key  banking committees and were huge beneficiaries  of campaign contributions from the mortgage  giants.
 
 2003:   Bush proposes what the NY Times called "the most  significant regulatory overhaul in the housing  finance industry since the savings and loan  crisis a decade ago".  Even after  discovering a scheme by Fannie and Freddie to  overstate earnings by $10.6 billion to boost  their bonuses, the Democrats killed  reform.
 
 2005:   Then Fed chairman Alan Greenspan warns  Congress:  "We are placing the total  financial system at substantial risk".   Sen. McCain, with two others, sponsored a  Fannie/Freddie reform bill and said, "If  congress does not act, American taxpayers will  continue to be exposed to the enormous risk that  Fannie Mae and Freddie Mac pose to the housing  market, the overall financial system and the  economy as a whole".  Sen. Harry Reid  accused the GOP ;of trying to "cripple the  ability of Fannie and Freddie to carry out their  mission of expanding homeownership"  The  bill went  nowhere.
 
 2007:   By now Fannie and Freddie own or guarantee over  HALF of the $12  trillion US  mortgage market.  The mortgage giants,  whose executive suites were top-heavy with  former Democratic officials, had been  working with Wall  St. to repackage the  bad loans and sell them to investors.  As  the housing market fell in '07, subprime  mortgage portfolios suffered major losses.   The crisis was on,  though it was 15  years in the  making.
 
 2008:   McCain has repeatedly called for reforming the  behemoths, Bush  urged reform 17  times.  Still  the media have repeated Democrats' talking  points about this being a "Republican"  disaster.  A few Republicans are complicit  but Fannie and Freddie were created by  Democrats, regulated by Democrats, largely run  by Democrats and protected by Democrats.   That's why taxpayers are now being asked for  $700 billion!!
 
 If  you doubt any of this, just click the links  below and listen to your lawmakers own  words.  They are  condeming!
 
 http://wwwyoutube.com/watch?v=68D9XrqyrWo&feature=related

 
 http://www.youtubecom/watch?v=pIgqfM5C8lY

 
 
http://www.youtube.com/watch?v=H9juJr8CSY4&feature=related#
 
 Postscript:   ACORN is one of the principle beneficiaries of  Fannie/ Freddie's slush funds.  They are  currently under indictment or investigation in  many states.  Barack Obama served as their  legal counsel, defending their activities for  several years.