Newt Teaches Juan Conservatism

[Uncensored2008]

Right out of the gate you're wrong!

Yeah, you and JakeStarkey - a couple of Republican heroes..

More failure. You did not mention it combines and eliminates agencies as well. But that wouldn't fit into your confirmation bias, now would it?

Are you (or rather, Think Progress) claiming a net DECREASE in federal agencies?

Title I creates the Financial Stability Oversight Council and the Office of Financial Research.

Two added, zero reduced.

Title II creates – Federal Insurance Office.

One added, zero reduced.

Title III abolishes the Office of Thrift Supervision.

One reduced, finally.

Title IX adds 6 new departments to the SEC.

One agency doubled in size, zero reduced.

Title X - the coup de grace, establishes the Bureau of Consumer Financial Protection. Don't expect vaseline on this one, they're doing you dry.

Please provide evidence I have a "government everywhere" philosophy. You couldn't be more wrong and I can direct you to topics which demonstrate that if you are too stupid to find them.

ROFL

Seriously - the post I'm responding to is sufficient.

This is just a repeat of the failure above which neglects the reality that some agencies are removed and some are combined.

ONE, sparky - one. You Think Progress Republicans are kind of loose with the facts...

But if you can give us specific examples of these "hundreds of layers" that have been added, that would be great. Just so we know you aren't blowing rhetorical projectile diarrhea out of your ass.

Come on little Obamabot, the CFP starts with;

Supervision, Enforcement, and Fair Lending
Research, Markets, and Regulations
Office of the Chief Operating Officer
General Counsel
Consumer Education and Engagement
External Affairs .[168]

This is the most intrusive and bureaucratic mess since SOX.

Please point us to the provisions in the bill which do this. And quote the relevant parts that prove your point.

The proper response to your petulant demand would be "blow me."

But for the lurkers..

For a period of five years after enactment, the Office shall submit an annual report to the Senate Committee on Banking, Housing and Urban Affairs, and the House Committee on Financial Services, what amounts to a management report, including:[65]

Training And Workforce Development Plan – that includes:
Identification of skill and technical expertise needs and action taken to meet the requirements
Steps taken to foster innovation and creativity
Leadership development and succession Planning
Effective use of technology by employees
Workplace Flexibility Plan – that includes:
Telework
Flexible work schedules
Phased retirement
Reemployment annuitants
Part-time work
Job sharing
Parental leave benefits and childcare assistance
Domestic partner benefits
Other workplace flexibilities
Recruitment and Retention Plan – that includes:
The steps necessary to target highly qualified applicant pools with diverse backgrounds
Streamlined employment application process
Timely notification of employment applications
Measures of hiring effectiveness

I am guessing you have not actually read the legislation and therefore don't know it only has reporting requirements for financial institutions that have more than $50 billion in assets. Which means only "behemoths" fall under those requirements.

I'm guessing that you are reciting directly from Democratic Underground.

Careful. If you keep repeating an untruth, you will begin to believe it. That's how you have acquired so many self-delusions.

Yep, you're the epitome of conservatism - you and George Soros...

 

[g5000]

Title III abolishes the Office of Thrift Supervision.

One reduced, finally.

Not reduced. Eliminated. Guess which federal agency had the most oversight of banks?

OTC.

Title X - the coup de grace, establishes the Bureau of Consumer Financial Protection. Don't expect vaseline on this one, they're doing you dry.

This is the one which regulates credit card agencies which the OCC ignored for years. It also defines "end users" for commodities and derivatives trading. A function which has also been ignored and which was a leading factor in the crisis.

Come on little Obamabot, the CFP starts with;

Supervision, Enforcement, and Fair Lending
Research, Markets, and Regulations
Office of the Chief Operating Officer
General Counsel
Consumer Education and Engagement
External Affairs .[168]

And?

This is not evidence of hundreds of layers of new bureacracy.

This is the most intrusive and bureaucratic mess since SOX.



The proper response to your petulant demand would be "blow me."

But for the lurkers..

For a period of five years after enactment, the Office shall submit an annual report to the Senate Committee on Banking, Housing and Urban Affairs, and the House Committee on Financial Services, what amounts to a management report, including:[65]

"The Office."

Not the start-ups about which you made the claim.

I am guessing you have not actually read the legislation and therefore don't know it only has reporting requirements for financial institutions that have more than $50 billion in assets. Which means only "behemoths" fall under those requirements.

I'm guessing that you are reciting directly from Democratic Underground.[/quote]

That's all you got? You got caught with your pants down. You said this legislation would require start-ups to be buried in paperwork to the benefit of the behemoths. A complete fabrication.

The only reporting requirements are for the behemoths themselves!

Read the legislation. Idiot.

 

[Caroljo]

I and some friends decide to run a bakery. Our philosophy states that pastries cook best when gunpowder is a prime ingredient. So we mix up batches and batches of gunpowder-laden batters and doughs. Then we pop it all in the oven.

BOOM!

We decide we are no longer in the bakery business.

Another guy decides to try to run the bakery. But first he has to clean up the mess left by the other guys. He also needs the cooperation of an industrial waste removal service, but the drivers have decided to fuck him over and not send any trucks.

Along comes Newt Gingrich. "This bakery owner has the messiest bakery in the history of America. What a fucking idiot! He has no idea how to run a bakery."

WOW! What a sob story!

 

[PoliticalChic]

Did you note the fingerprints of the Democrats all over the meltdown?
Good.
You're welcome.

Please provide evidence the following entities were subject to the CRA or negro blackmail or whatever it is you go on about:

Lehman Brothers
Bear Stearns
Northern Rock
Iceland
Ireland
Deutsche Bank
UBS
Goldman Sachs
JP Morgan Chase
Morgan Stanley
AIG
Spain
Allied Irish Bank

Go ahead. I'll wait.

While you are at it, show us any CEO of any failed financial institution who blames the CRA. Do you need a list of names of CEOs for Bear Stearns, Goldman Sachs, Lehman Brothers, AIG? I can roll them off in my sleep if you need help in your futile search for evidence.

You cannot see the forest for the trees. How did a few loans to some negroes cause a global credit crisis? Are ten million foreclosures, in America alone, all negroes? What about the foreclosures from the property bubbles in Ireland and Iceland? I bet negroes are thin on the ground in Iceland...

We are in the middle of another credit crisis. Perhaps you heard. Same players, same factors. Just different underlying assets.

What fools like you don't know is that the structured finance products and credit derivatives market doesn't give a shit what the underlying assets are. Home loans, commercial loans, sovereign debt, whatever. And until the unregulated derivatives disaster force mulitplier effect is stopped, we will see crisis after crisis.

Need further remediation?
Not unexpected.

1. 'In “Reckless Endangerment,” Gretchen Morgenson and Joshua Rosner argue that cozy connections between government and the financial industry were the primary cause of the financial crisis. In a series of clearly written narratives with many names, dates and figures, they show that government officials took actions that benefited well-connected individuals, who in turn helped the government officials. This mutual support system thwarted good economic policies and encouraged reckless ones. It thereby brought on the crisis, sending the economy into a tailspin.'
http://www.washingtonpost.com/enter...-joshua-rosner/2011/05/11/AGs4cqCH_story.html


2. The villains? An unholy alliance between Wall Street, the Democratic establishment, community organizing groups like ACORN and La Raza, and politicians like Barney Frank, Nancy Pelosi and Henry Cisneros. (Frank got a cushy job for a lover, Pelosi got a job and layoff protection for a son, Cisneros apparently got a license to mint money bilking Mexican-Americans of their life savings in cheesy housing developments.)

3. If Morgenstern and Rosner are to be believed, the American dream didn’t die of old age; it was murdered and most of the fingerprints on the corpse come from Democratic insiders. Democratic power brokers stoked the housing bubble and turned a blind eye to the increasingly rampant corruption and incompetence at Fannie Mae and the associated predatory lenders who sheltered under its umbrella; core Democratic ideas may well be at fault.

4. Big government, affirmative action and influence peddling among Democratic insiders came within inches of smashing the US economy.

5. The Great Villain, the man who almost ruined America according to the book, is James Johnson, long one of the most important members of the Democratic establishment. ...Barack Obama, impressed by this track record of discernment, reportedly asked him to lead Obama’s search in 2008 ...

6. Politically, this story is a killer app for the GOP. It demonizes Dems, lends itself to attack ads, divides Democrats between their Wall Street and union bases, and combines GOP hate figures in ways calculated to unify the GOP and heighten the intensity of the faithful. The story illustrates everything the Tea Party thinks about the corrupt Washington establishment and the evils of big government. It demonstrates the limits on the ability of government programs to help the poor.

7. ...if the GOP plays its cards right, Fanniegate could push this country into a new political era."
Fanniegate: Gamechanger For The GOP? | Via Meadia


Now, as you are the kind of fellow who requires the CliffNotes version...

....here it is:

"The villains? An unholy alliance between Wall Street, the Democratic establishment, community organizing groups like ACORN and La Raza, and politicians like Barney Frank, Nancy Pelosi and Henry Cisneros."

 

[g5000]

Bad Points - establishes a Stalinesq "5 year plan" with levels of reporting that will suck any efficiency out of financial firms. This is done primarily to sabotage start-up competitors and ensure the primacy of established institutions like GS and Chase. Essentially, the federal government will put any competitors out of business for the next five years through layers of absurd bureaucracy that only the behemoths can absorb.

After this, I requested: "Please point us to the provisions in the bill which do this. And quote the relevant parts that prove your point."


Now this is precious. In response, you provided the following as evidence that Dodd-Frank provides levels of reporting that are designed to sabotage start-ups and ensure the primacy of "behemoths".

For a period of five years after enactment, the Office shall submit an annual report to the Senate Committee on Banking, Housing and Urban Affairs, and the House Committee on Financial Services, what amounts to a management report, including:[65]

Training And Workforce Development Plan – that includes:
Identification of skill and technical expertise needs and action taken to meet the requirements
Steps taken to foster innovation and creativity
Leadership development and succession Planning
Effective use of technology by employees
Workplace Flexibility Plan – that includes:
Telework
Flexible work schedules
Phased retirement
Reemployment annuitants
Part-time work
Job sharing
Parental leave benefits and childcare assistance
Domestic partner benefits
Other workplace flexibilities
Recruitment and Retention Plan – that includes:
The steps necessary to target highly qualified applicant pools with diverse backgrounds
Streamlined employment application process
Timely notification of employment applications
Measures of hiring effectiveness

I guess you were hoping all the verbosity would cover up the fact you were quoting from a section dealing with the "Financial Research Fund" within the Treasury Department. All these reporting requirements are requirements placed on a government agency, not a bank!

"The Office" should have been a clue, dumbass.

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h4173enr.txt.pdf

See Section 156 to see where this idiot quoted from.

Next, I said:

I am guessing you have not actually read the legislation and therefore don't know it only has reporting requirements for financial institutions that have more than $50 billion in assets. Which means only "behemoths" fall under those requirements.

The brilliant retort:

I'm guessing that you are reciting directly from Democratic Underground.

I am reciting directly from the legislation. See the link above.

Right above the part Dumbass quoted:

Beginning 2 years after the
date of enactment of this Act, the Secretary shall establish, by
regulation, and with the approval of the Council, an assessment
schedule, including the assessment base and rates, applicable to
bank holding companies with total consolidated assets of
$50,000,000,000 or greater and nonbank financial companies supervised
by the Board of Governors, that takes into account differences
among such companies, based on the considerations for establishing
the prudential standards under section 115, to collect assessments
equal to the total expenses of the Office.

See? The "Office" reports deal with "behemoths". No start-ups.

From Section 116:

GENERAL.—Subject to subsection (b), the Council, acting
through the Office of Financial Research, may require a bank
holding company with total consolidated assets of $50,000,000,000
or greater or a nonbank financial company supervised by the Board
of Governors, and any subsidiary thereof, to submit certified reports
to keep the Council informed as to—
(1) the financial condition of the company;
(2) systems for monitoring and controlling financial, operating,
and other risks;
(3) transactions with any subsidiary that is a depository
institution; and
(4) the extent to which the activities and operations of
the company and any subsidiary thereof, could, under adverse
circumstances, have the potential to disrupt financial markets
or affect the overall financial stability of the United States.

It is the behemoths which have the reporting requirements.

You fabricated a lie, and have been caught.

I told you guys I know this shit.

 

[g5000]

Did you note the fingerprints of the Democrats all over the meltdown?
Good.
You're welcome.

Please provide evidence the following entities were subject to the CRA or negro blackmail or whatever it is you go on about:

Lehman Brothers
Bear Stearns
Northern Rock
Iceland
Ireland
Deutsche Bank
UBS
Goldman Sachs
JP Morgan Chase
Morgan Stanley
AIG
Spain
Allied Irish Bank

Go ahead. I'll wait.

.

Need further remediation?
Not unexpected.

No evidence those entities were subject to the CRA or negro blackmail?

Didn't think so.

I'm still here. Waiting.

 

[g5000]

If Morgenstern and Rosner are to be believed...

And there's the rub.

Fannie and Freddie are but a small part of the problem. And really, they are simply enablers, not the root cause.

 

[oreo]

Newt Gingrich's Standing Ovation at South Carolina GOP Debate - YouTube

Newt slammed another home run with this comment also.

Newt Plan for America's Enemies: Kill Them - YouTube

 

[PoliticalChic]

Please provide evidence the following entities were subject to the CRA or negro blackmail or whatever it is you go on about:

Lehman Brothers
Bear Stearns
Northern Rock
Iceland
Ireland
Deutsche Bank
UBS
Goldman Sachs
JP Morgan Chase
Morgan Stanley
AIG
Spain
Allied Irish Bank

Go ahead. I'll wait.

.

Need further remediation?
Not unexpected.

No evidence those entities were subject to the CRA or negro blackmail?

Didn't think so.

I'm still here. Waiting.

No prob.

"Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.[4][5]

The Act requires the appropriate federal financial supervisory agencies to encourage regulated financial institutions to help meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation (Section 802.) To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions (Section 804.)[6]"

Community Reinvestment Act - Wikipedia, the free encyclopedia

 

[PoliticalChic]

If Morgenstern and Rosner are to be believed...

And there's the rub.

Fannie and Freddie are but a small part of the problem. And really, they are simply enablers, not the root cause.

The root cause is government attempting to manipulate the economy.

Had FDR not used taxpayer funds to advance what he deemed social benefits, the problem never would have occurred.

Of course, you can pretend to not see the dots to connect....
...but you do.

 

[Uncensored2008]

Not reduced. Eliminated.

Ah, as opposed to abolished.. Got it.

Guess which federal agency had the most oversight of banks?

OTC.

So for all the new agencies, departments and bureaucracy, we end up with less oversight and accountability.


Such a deal you of the left have for us....

This is the one which regulates credit card agencies which the OCC ignored for years. It also defines "end users" for commodities and derivatives trading. A function which has also been ignored and which was a leading factor in the crisis.

Yeah, last time Obama helped with consumer credit cards, maximum interest went from 19.2% to 37.9% (Can you say loan sharking? I knew you could!)

I assume that 190% can be expected this go round?

Barry is helping......

And?

This is not evidence of hundreds of layers of new bureacracy.

One minor provision yielding a dozen new reporting requirements? You best get your thinking cap adjusted, son.

"The Office."

Not the start-ups about which you made the claim.

Dude, put down the bong and the koolaid - you've had enough.

The regulatory and reporting burden make it impossible to turn a profit. The established and entrenched players can absorb this with reserves and government exclusions. Startups cannot. This is EXACTLY a measure to kill off competitors. The administration is ensuring that the big players are protected from smaller and leaner firms who would push competition.

That's all you got? You got caught with your pants down. You said this legislation would require start-ups to be buried in paperwork to the benefit of the behemoths. A complete fabrication.

Are you on crack?

{The Director has Subpoena power and may require from any financial institution (bank or non-bank) any data needed to carry out the functions of the office}

ANY financial institution!

The only reporting requirements are for the behemoths themselves!

False, any financial institution can be compelled to provide any data requested.

Read the legislation. Idiot.

Irony.

You've read nothing save ThinkProgress, as we both know.

 

[g5000]

Need further remediation?
Not unexpected.

No evidence those entities were subject to the CRA or negro blackmail?

Didn't think so.

I'm still here. Waiting.

No prob.

"Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.[4][5]

The Act requires the appropriate federal financial supervisory agencies to encourage regulated financial institutions to help meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation (Section 802.) To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions (Section 804.)[6]"

Community Reinvestment Act - Wikipedia, the free encyclopedia

Catastrophic failure. None of the entities I listed were subject to the CRA.

Quoting what the CRA is does not prove they were.

Jesus! Is this the best you guys can do?

 

[g5000]

Are you on crack?

{The Director has Subpoena power and may require from any financial institution (bank or non-bank) any data needed to carry out the functions of the office}

ANY financial institution!

See, this is why I ask for people to provide the actual sections of the bill. That part you just quoted is for "the purpose of assessing the extent to which a financial activity or financial market in which the financial company participates, or the financial company itself, poses a threat to the financial stability of the United States."

Section 153.

Again, systemically important institutions. Behemoths.

You've read nothing save ThinkProgress, as we both know.

You really obliterate your integrity when you make shit up.

 

[skookerasbil]

yup..........aint it great when the PC drones get pwned in a public forum??

 

[PoliticalChic]

No evidence those entities were subject to the CRA or negro blackmail?

Didn't think so.

I'm still here. Waiting.

No prob.

"Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.[4][5]

The Act requires the appropriate federal financial supervisory agencies to encourage regulated financial institutions to help meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation (Section 802.) To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions (Section 804.)[6]"

Community Reinvestment Act - Wikipedia, the free encyclopedia

Catastrophic failure. None of the entities I listed were subject to the CRA.

Quoting what the CRA is does not prove they were.

Jesus! Is this the best you guys can do?

Now, now...don't beg.
It's so unbecoming.

OK...I'll throw you another life-line...

1. t was a welcome departure from the typical Democratic side-stepping to hear Geithner admit that “Fannie and Freddie were a core part of what went wrong in our system.” in hearings on the hill where he was hoping to garner support for sweeping financial regulations.
Business Idea & Application


2. Fannie, Freddie Were at Center of Financial Crisis But Are Not Included in Obama’s New Financial Regulations
Fannie Mae and Freddie Mac, the two government-run mortgage giants, are absent from the Obama administration's sweeping new financial regulations, despite the fundamental role played by both organizations in the financial system's collapse.
Thursday, June 18, 2009
By Matt Cover

Treasury Secretary Timothy Geithner (AP Photo)
(CNSNews.com) - Fannie Mae and Freddie Mac, the two government-run mortgage giants, are absent from the Obama administration’s sweeping new financial regulations, despite the fundamental role played by both organizations in the financial system’s collapse.

Testifying before the Senate Banking Committee on Thursday, Treasury Secretary Tim Geithner said that the administration’s new regulations were only meant to address the most fundamental issues of the recession.

“We considered a full range of options and decided that now is the time to pursue the essential reforms,” Geithner said. “Those that address the core causes of the current crisis, and that will help to prevent or contain future crises.”

http://cnsnews.com/news/article/49791

 

[Uncensored2008]

See, this is why I ask for people to provide the actual sections of the bill. That part you just quoted is for "the purpose of assessing the extent to which a financial activity or financial market in which the financial company participates, or the financial company itself, poses a threat to the financial stability of the United States."

That is directly out of the bill, dumbass.

Section 153.

Again, systemically important institutions. Behemoths.


You really obliterate your integrity when you make shit up.

No dumbass.

{The Council has very broad powers to monitor, investigate and assess any risks to the US financial system. The Council has the authority to collect information from any State or Federal financial regulatory agency, and may direct the Office of Financial Research, which supports the work of the Council, "to collect information from bank holding companies and nonbank financial companies".[47] The Council monitors domestic and international regulatory proposals, including insurance and accounting issues, and advises Congress and the Federal Reserve on ways to enhance the integrity, efficiency, competitiveness and stability of the US financial markets}

Again, verbatim from the bill.

 

[rdean]

Every man for himself. Unless you have at least 10 millions dollars. Then you need to be "pampered".

 

[logical4u]

You would think George W Bush was still the president listening to the Obama knee-pad brigade.
What has Obama done for 3years to make this any better?

Not much. And what has Congress done for 3 years to make this any better? Oh, yeah. Nothing.

I'm all for tossing every last sonofabitch to the curb, man. Congress, Obama, Newt, Romney, Santorum, Biden, the whole bunch.

Bush inherited a recession and national security crisis from Clinton. I dont recall him blaming Clinton for any of that.

You must have been in diapers then. Clinton Derangement Syndrome lasted well into Bush's Administration.

And there is a HUGE difference between the recession of the 2001 and the crash of 2008.

Obama has made his career as president blaming otehrs for his own failures. When will he take responsibility for something? Anything?

All those people on food stamps. How did that happen? Was that Obama's doing?

No. That was the result of an 11 percent unemployment which was in full swing before he took office. And Newt makes it a special point to attach that to the Presidency. And so using his own rules, it's Bush who is the "food stamp president". He lost all those jobs and made all those poor people. Not Obama.

This is why I detest Newt to my very core. He is destroying the GOP. He talks like a fucking marxist out of one side of his mouth, and distorts the ever loving shit out of American history out of the other. He is the living emodiment of the old joke about how you can tell a politician is lying because his lips are moving. He is not the kind of fucking role model we need in the party. He is a piece of shit scumbag.

You ever notice that whenever he talks about anything in which he was involved, personal or professional, the story changes every time? What is that a pretty good indication of?

Fuck Newt. Fuck him all the way to hell.

Just make it up as you go along....

 

[ClosedCaption]

Newt is belittling and condescending and that is the point.

 

[logical4u]

The fact that you aren't smart enough to have researched same, and learned that they are correct, doesn't mean that they aren't true.

I can almost guarantee I have researched this subject more than everyone on this board put together.

1. Welcome to the board, grasshopper.
I read your previous post, in which you've identified the facts as a meme, implying that you have been instructed in said manner numerous times.

Wouldn't this lead you to believe that you might have missed something when you "have researched this subject more than everyone on this board put together"?


Could you have erred?

2. I appreciate the fact that you are willing to take the brickbats that you will certainly be receiving....since you are totally incorrect in your perspective.

It should be noted that we, on the right owe you, as you make us appear learned, when we have simply realized the error of Left-wing thinking.

3. So, as an olive branch, let me offer the following to you, and save you future embarrassment. Don't hesitate to relate any errors you find:

a. Congress passed a bill in 1975 requiring banks to provide the government with information on their lending activities in poor urban areas. Two years later, it passed the Community Reinvestment Act (CRA), which gave regulators the power to deny banks the right to expand if they didn’t lend sufficiently in those neighborhoods. In 1979 the FDIC used the CRA to block a move by the Greater NY Savings Bank for not enough lending.

b. In 1986, when the Association of Community Organizations for Reform Now (Acorn) threatened to oppose an acquisition by a southern bank, Louisiana Bancshares, until it agreed to new “flexible credit and underwriting standards” for minority borrowers—for example, counting public assistance and food stamps as income.

c. In 1987, Acorn led a coalition of advocacy groups calling for industry-wide changes in lending standards. Among the demanded reforms were the easing of minimum down-payment requirements and of the requirement that borrowers have enough cash at a closing to cover two to three months of mortgage payments (research had shown that lack of money in hand was a big reason some mortgages failed quickly).

d. ACORN then attacked Fannie Mae, the giant quasi-government agency that bought loans from banks in order to allow them to make new loans. Its underwriters were “strictly by-the-book interpreters” of lending standards and turned down purchases of unconventional loans, charged Acorn. The pressure eventually paid off. In 1992, Congress passed legislation requiring Fannie Mae and the similar Freddie Mac to devote 30 percent of their loan purchases to mortgages for low- and moderate-income borrowers.

e. Clinton Administration housing secretary, Henry Cisneros, declared that he would expand homeownership among lower- and lower-middle-income renters. His strategy: pushing for no-down-payment loans; expanding the size of mortgages that the government would insure against losses; and using the CRA and other lending laws to direct more private money into low-income programs.

f. Shortly after Cisneros announced his plan, Fannie Mae and Freddie Mac agreed to begin buying loans under new, looser guidelines. Freddie Mac, for instance, started approving low-income buyers with bad credit histories or none at all, so long as they were current on rent and utilities payments. Freddie Mac also said that it would begin counting income from seasonal jobs and public assistance toward its income minimum, despite the FHA disaster of the sixties.

g. Freddie Mac began an “alternative qualifying” program with the Sears Mortgage Corporation that let a borrower qualify for a loan with a monthly payment as high as 50 percent of his income, at a time when most private mortgage companies wouldn’t exceed 33 percent. The program also allowed borrowers with bad credit to get mortgages if they took credit-counseling classes administered by Acorn and other nonprofits. Subsequent research would show that such classes have little impact on default rates.

h. Pressuring nonbank lenders to make more loans to poor minorities didn’t stop with Sears. If it didn’t happen, Clinton officials warned, they’d seek to extend CRA regulations to all mortgage makers. In Congress, Representative Maxine Waters called financial firms not covered by the CRA “among the most egregious redliners.”

i. Mortgage Bankers Association (MBA) shocked the financial world by signing a 1994 agreement with the Department of Housing and Urban Development (HUD), pledging to increase lending to minorities and join in new efforts to rewrite lending standards. The first MBA member to sign up: Countrywide Financial, the mortgage firm that would be at the core of the subprime meltdown.

j. A 1998 sales pitch by a Bear Stearns managing director advised banks to begin packaging their loans to low-income borrowers into securities that the firm could sell. Forget traditional underwriting standards when considering these loans, the director advised. For a low-income borrower, he continued in all-too-familiar terms, owning a home was “a near-sacred obligation. A family will do almost anything to meet that monthly mortgage payment.” Bunk, says Stan Liebowitz, a professor of economics at the University of Texas: “The claim that lower-income homeowners are somehow different in their devotion to their home is a purely emotional claim with no evidence to support it.”

k. Any concern was quickly dismissed. When in early 2000 the FDIC proposed increasing capital requirements for lenders making “subprime” loans—loans to people with questionable credit, that is—Democratic representative Carolyn Maloney of New York told a congressional hearing that she feared that the step would dry up CRA loans. Her fellow New York Democrat John J. LaFalce urged regulators “not to be premature” in imposing new regulations.

l. In July 1999, HUD proposed new levels for Fannie Mae’s and Freddie Mac’s low-income lending; in September, Fannie Mae agreed to begin purchasing loans made to “borrowers with slightly impaired credit”—that is, with credit standards even lower than the government had been pushing for a generation.

m. In 2004 Congress pressed new affordable-housing goals on the two mortgage giants, which through 2007 purchased some $1 trillion in loans to lower- and moderate-income buyers. The buying spree helped spark a massive increase in securitization of mortgages to people with dubious credit.

n. In October 1994, Fannie Mae head James Johnson had reminded a banking convention that mortgages with small down payments had a much higher risk of defaulting. (A Duff & Phelps study found that they were nearly three times more likely to default than conventional mortgages.) Yet the very next month, Fannie Mae said that it expected to back loans to low-income home buyers with a 97 percent loan-to-value ratio—that is, loans in which the buyer puts down just 3 percent—as part of a commitment, made earlier that year to Congress, to purchase $1 trillion in affordable-housing mortgages by the end of the nineties. According to Edward Pinto, who served as the company’s chief credit officer, the program was the result of political pressure on Fannie Mae trumping lending standards.

o. In 1992, the Boston Fed produced an extraordinary 29-page document that codified the new lending wisdom. Conventional mortgage criteria, the report argued, might be “unintentionally biased” because they didn’t take into account “the economic culture of urban, lower-income and nontraditional customers.” Lenders should thus consider junking the industry’s traditional income-to-payments ratio and stop viewing an applicant’s “lack of credit history” as a “negative factor.” Further, if applicants had bad credit, banks should “consider extenuating circumstances”—even though a study by mortgage insurance companies would soon show, not surprisingly, that borrowers with no credit rating or a bad one were far more likely to default. If applicants didn’t have enough savings for a down payment, the Boston Fed urged, banks should allow loans from nonprofits or government assistance agencies to count toward one. A later study of Freddie Mac mortgages would find that a borrower who made a down payment with third-party funds was four times more likely to default, a reminder that traditional underwriting standards weren’t arbitrary but based on historical lending patterns.

p. The Congressional Hispanic Caucus launched Hogar in 2003, an initiative that pushed for easing lending standards for immigrants, including touting so-called seller-financed mortgages in which a builder provided down-payment aid to buyers via contributions to nonprofit groups. As a result, mortgage lending to Hispanics soared. And today, in districts where Hispanics make up at least 25 percent of the population, foreclosure rates are now nearly 50 percent higher than the national average, according to a Wall Street Journal analysis.

q. Republicans and Democrats, meanwhile, have scrambled to reignite the housing market through ill-conceived tax credits and renewed federal subsidies for mortgages, including the Obama administration’s mortgage bailout plan, which recalls the New Deal’s HOLC. Behind these efforts is a fundamental misconception among politicians that housing drives the American economy and therefore demands subsidy at virtually any cost. Our praiseworthy initial efforts—to eliminate housing discrimination and provide all Americans an equal opportunity to buy a home—were eventually turned on their heads by advocates and politicians, who instead tried to ensure equality of outcomes.
Obsessive Housing Disorder by Steven Malanga, City Journal Spring 2009


Did you note the fingerprints of the Democrats all over the meltdown?
Good.
You're welcome.

I believe that you were just evidence (bitch)-slapped.