Should The GOP Fear Phil Angelides' Financial Crisis Commission?

[Procrustes Stretched]

I am just starting to pay attention to this. Don't know what it is? That's what Google is for.

I understand a Assitant Director at FBI ewarned the Congress that the morgtage fraud would lead to a crisis to rival the S&L scandal.

Commission Chairman Phil Angelides grilled Holder on a Sept. 4, 2004, warning from a top FBI official about “an epidemic of mortgage fraud coursing across this country” and the dire crisis that could occur if it were left unchecked.

That was four years before the financial meltdown on Wall Street that led to unprecedented government bailouts of some of the nation's largest banks and financial institutions.

Angelides asked Holder to evaluate what steps were taken after the 2004 FBI warning. “What warnings were sent up the line?” Angelides asked.

Holder said he was not familiar with the 2004 warning “but we will look at that.”

“We are constantly in the process of reviewing that which we can do better,” Holder said.

At issue are findings by the FBI in 2004 that mortgage fraud was on the rise and posed a threat to financial markets that could equal the savings and loan crisis of the late 1980s. Angelides, a Democrat and former treasurer of California, cited an undercover FBI investigation that discovered more than 380 fraudulent loans worth more than $70 million.

Chris Swecker, an assistant director at the FBI, described the fraud at the time as a “potential epidemic.” A month later, Swecker testified before a House Banking subcommittee and told lawmakers the problem was “pervasive and growing.”

hmmmmmm..,

========

Limbaugh falsely asserted "Banking Queen" Barney Frank "created" subprime mortgage crisis
- Barney vs Rush...just the facts ma'am

Link...Barney Frank and the truth...

Limbaugh falsely asserted "Banking Queen" Barney Frank "created" subprime mortgage crisis
January 08, 2009 3:24 pm ET


SUMMARY: Rush Limbaugh falsely asserted that Rep. Barney Frank "created the problem" of the subprime mortgage crisis, claiming that Frank's "definition of affordable housing was to make sure that people who couldn't pay the loans back got the loans, the mortgages. He forced Fannie Mae and Freddie Mac to do this." In fact, Frank has advocated for policies that emphasize low-income home rentals as opposed to homeownership and supported legislation to strengthen oversight over Fannie and Freddie.

In 2005, Frank, then the ranking Democrat on the House Financial Services Committee, worked with committee chairman Rep. Michael Oxley (R-OH) on the Federal Housing Finance Reform Act of 2005, which would have established the Federal Housing Finance Agency (FHFA) to replace the Office of Federal Housing Enterprise Oversight (OFHEO) as overseer of the activities of Fannie Mae and Freddie Mac.

After voting for the bill in committee, Frank voted against final passage of the bill on the House floor, stating that he was doing so because an amendment to the bill on the House floor imposed restrictions on the kinds of nonprofit organizations that could receive funding under the bill.

In early 2007, as chairman of the House Financial Services Committee, Frank sponsored H.R. 1427, a bill to create the FHFA, granting that agency "general supervisory and regulatory authority over" Fannie Mae and Freddie Mac, and directing it to reform the companies' business practices and regulate their exposure to credit and market risk.

Among other things, Frank's legislation, titled the "Federal Housing Finance Reform Act of 2007," directed the FHFA director to "ensure" that Fannie Mae and Freddie Mac "operate[] in a safe and sound manner, including maintenance of adequate capital and internal controls" and to establish standards for "management of credit and counterparty risk" and "management of market risk."

The FHFA was eventually created after Congress incorporated provisions that House Speaker Nancy Pelosi (D-CA) said were "similar" to those of H.R. 1427 into the Housing and Economic Recovery Act of 2008, which the president signed into law on July 30, 2008.

 

[Procrustes Stretched]

Wall Street Journal

Angelides: Wall St like used car salesmen
2:29 pm January 14, 2010, by ctucker

Obama’s Treasury Department has been much too deferential to Wall Street, and the president’s own pronouncements about its excesses have rarely conveyed the anger and sense of betrayal that much of the country feels. But there’s a new sheriff in town — Phil Angelides, head of the Financial Crisis Inquiry Commission — and he’s taken the right attitude toward the Masters of the Universe.

At yesterday’s opening hearing, he compared Wall Street financiers to used car salesmen: “It sounds to me a little bit like selling a car with faulty brakes, then buying an insurance policy on the buyer of those cars.”

From The Wall Street Journal:

Phil Angelides, head of the commission digging into causes of the 2008 financial crisis, has a reputation as a political pit bull.

During his eight-year tenure as California treasurer, he sued the state’s huge public pension funds to force shakeups on corporate boards. He joined with New York and other states in pushing for caps on executive pay and pressuring companies to make more socially responsible decisions. He led a movement to divest from firms doing business in the Sudan and other countries with questionable human rights records. . .

“I am troubled by the inability (among bankers) to take responsibility, because I think it’s fundamental,” he said after Wednesday’s hearing. “It’s important there be a self-examination, and I think we’re well short of that at this moment.”

Amen, brother!
Angelides may be just the man to force some accountability on the Wall Street wizards. His hearings may channel public anger and force Congress into passing tough financial regulations.

notice the talk about Obama's Treasury?

We'll see what the WSJ writers have to say when the investigation's recommendations come out.

WASHINGTON — Attorney General Eric Holder told a commission investigating the financial crisis on Thursday he would find out whether anything was done in response to an FBI warning in 2004 of an “epidemic of mortgage fraud” that could plunge the country into financial collapse.

2004?

Who was in charge in 2004? What Democrats?

Next week, the Financial Crisis Inquiry Commission -- the bi-partisan 10-member panel established by Congress to examine the causes of the financial crisis -- will hold its first public hearings featuring a selection of the nation's top bank executives --

Lloyd Blankfein of Goldman Sachs,

Jamie Dimon of JPMorgan Chase,

John Mack of Morgan Stanley

and Brian Moynihan of Bank of America.

On Sunday night, FCIC released the full witness list for the first public hearing. List and press release below:

The Commission will begin its thorough examination of the root causes of the crisis, hearing testimony on the causes and current state of the crisis from top leaders of both private and public sector entities.

When: Wednesday, January 13, 2010: 9:00 a.m. ET

Thursday, January 14, 2010: 9:00 a.m. ET

 

[cawacko]

Looks like Mr. Angelidies might have a few conflict of interest issues along with others on the panel. Ahh, isn't Washington D.C. beautiful?

businesses-criticize-cast-of-inquiry-panel: Personal Finance News from Yahoo! Finance

 

[Procrustes Stretched]

Looks like Mr. Angelidies might have a few conflict of interest issues along with others on the panel. Ahh, isn't Washington D.C. beautiful?

businesses-criticize-cast-of-inquiry-panel: Personal Finance News from Yahoo! Finance

Attack the messenger? How pathetic.

btw, he is part of a bipartisan commission I will judge them by the work they do...not one man's personal issues.

So what do you think is wrong with the man being on the commission?

 

[KissMy]

--1991-- ACORN interfered with a House Banking Committee meeting for two days protesting a move to bring CRA reform. "According to the Times, "the same study showed no evidence that nonwhite mortgage applicants were being discriminated against."

--1992-- Enforcement of CRA was "sporadic," as the Washington Times notes, until a Federal Reserve Bank of Boston study asserted that there were "substantially higher denial rates for black and Hispanic applicants than for white applicants."

Lynn Browne was approached by co-author Alicia Munnell to do the study because "community activists were complaining that mortgage loans were not being made in minority communities." According to the Times, however, "the study had mishandled statistics on minority default rates. When the errors were accounted for, the same study showed no evidence that nonwhite mortgage applicants were being discriminated against."

Frank Quaratiello, writing in the Boston Herald, cites Stan Liebowitz: "My guess is that they were interested in finding a particular result." Said Liebowitz, "Richard Syron was head of the Boston Fed at the time. He went on to be the head of Freddie Mac. They were looking for mortgage discrimination, and they found it." According to Quaratiello, Syron became Freddie Mac CEO and chairman in 2003 and "faced increasing pressure to buy up more and more risky mortgages, some of which the Boston Fed's guide had, in effect, served to legitimize." Regarding Syron's total compensation in 2007 of $18.3 million, Liebowitz reportedly quipped, "Nice reward for presiding over unprofessional research behavior, bankrupting Freddie Mac and crippling our financial system, all in the name of politically correct lending."

--September 1992-- The Chicago Tribune described the ACORN agenda as "affirmative action lending." And writes Stanley Kurtz, senior fellow with the Ethics and Public Policy Center in Washington, "ACORN was issuing fact sheets bragging about relaxations of credit standards that it had won on behalf of minorities."

--October 1992-- Congress, enacting the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, It "established HUD-imposed housing goals for financing of affordable housing and housing in central cities and other rural and underserved areas." Rep. Jim Leach, R-Iowa, warned about the impending danger non-regulated GSEs posed. According to the Washington Post, he was concerned that Congress was "hamstringing" the regulator. The complaint was that OFHEO was a "weak regulator." Leach worried that Fannie Mae and Freddie Mac were changing "from being agencies of the public at large to money machines for the stockholding few." Democrat Barney Frank, countered that "the companies served a public purpose. They were in the business of lowering the price of mortgage loans."

--September 1993-- The Chicago Sun-Times reports an initiative led by ACORN's Talbott with five area lenders "participating in a $55 million national pilot program with affordable-housing group ACORN to make mortgages for low- and moderate-income people with troubled credit histories." Kurtz notes that the initiative included two of her former targets, Bell Federal Savings and Avondale Federal Savings, who had apparently capitulated under pressure.

--July 1994-- Represented by Obama and others, plaintiffs filed a class-action lawsuit alleging Citibank had "intentionally discriminated against the plaintiffs on the basis of race with respect to a credit transaction" and calling its action "racial discrimination and discriminatory redlining practices." Buycks-Roberson v. Citibank

--November 1994-- President Clinton addresses the housing issue: "I think we all agree that more Americans should own their own homes, for reasons that are economic and tangible and reasons that are emotional and intangible but go to the heart of what it means to harbor, to nourish, to expand the American dream"..."I am determined to see that you have the opportunity and together we can make that opportunity for the young families of our country. I am committed to a new and unprecedented partnership between industry leaders and community leaders and government to recommit our nation to the idea of homeownership and to create more homeowners than ever before." "The Clinton administration announced the bold new homeownership strategy, which included monumental loosening of credit standards and imposition of subprime lending quotas."

--May 1995-- The FDIC's Board of Directors approved a final rule implementing the Community Reinvestment Act (CRA). The Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Office of Thrift Supervision have approved parallel regulations for the institutions they supervise. The joint final rule largely retains the principles and structure of the proposals issued in December 1993 and October 1994. The new CRA regulation replaces the 12 assessment factors contained in the old rule with a more performance-based evaluation process to assess whether financial institutions are meeting the credit needs of their communities, including low- and moderate-income neighborhoods. The new rule establishes different tests for large and small institutions, as well as for retail and wholesale or limited purpose banks.

--June 1995-- Republicans had won control of Congress and planned CRA reforms. The Clinton administration, however, allied with Rep. Frank, Sen. Ted Kennedy, D-Mass., and Rep. Maxine Waters, D-Calif., did an end-around by directing HUD Secretary Andrew Cuomo to inject GSEs into the subprime mortgage market. As Kurtz notes, "ACORN had come to Congress not only to protect the CRA from GOP reforms but also to expand the reach of quota-based lending to Fannie, Freddie and beyond." What resulted was the broadening of the "acceptability of risky subprime loans throughout the financial system, thus precipitating our current crisis."

The administration announced the bold new homeownership strategy, which included monumental loosening of credit standards and imposition of "SUBPRIME LENDING QUOTAS." HUD reported that President Clinton had committed "to increasing the homeownership rate to 67.5% by the year 2000." The plan was "to reduce the financial, information and systemic barriers to homeownership" which was "amplified by local partnerships at work in over 100 cities."

Kurtz concludes, "Urged on by ACORN, congressional Democrats and the Clinton administration helped push tolerance for high-risk loans through every sector of the banking system — far beyond the sort of banks originally subject to the CRA. So it was the efforts of ACORN and its Democratic allies that first spread the subprime virus from the CRA to Fannie and Freddie and thence to the entire financial system. Soon, Democratic politicians and regulators actually began to take pride in "LOWERED CREDIT STANDARDS" as a sign of "fairness" — and the contagion spread. Attorney General Janet Reno, who had already won a number of bank lending discrimination settlements, sternly announces, "We will tackle lending discrimination wherever it appears." With the new policy in full force, "No loan is exempt; no bank is immune. For those who thumb their nose at us, I promise vigorous enforcement."

--1997-- HUD Secretary Cuomo said, "GSE presence in the subprime market could be of significant benefit to lower-income families, minorities, and families living in underserved areas. "

--1998-- By falsifying signatures on Fannie Mae accounting transactions, $200 million in expenses was shifted from 1998 to later periods, thereby triggering $27.1 million in bonuses for top executives. James A. Johnson received $1.932 million; Franklin D. Raines received $1.11 million; Lawrence M. Small received $1.108 million; Jamie S. Gorelick received $779,625; Timothy Howard received $493,750; Robert J. Levin received $493,750.

--April 1998-- HUD announced a $2.1 billion settlement with AccuBanc Mortgage Corp. for alleged discrimination against minority loan applicants. [ame="http://www.youtube.com/watch?v=ivmL-lXNy64"] Affirmative Action Lending [/ame] The funds would provide poor families with down payments and low interest mortgages. "Discrimination isn't always that obvious," said Secretary Cuomo in announcing the AccuBanc deal. "Sometimes more subtle but in many ways more insidious, an institutionalized discrimination that's hidden behind a smiling face." Before the camera, Cuomo admitted the mandate amounted to "affirmative action" lending that would result in a "higher default rate."

The institution would "take a greater risk on these mortgages, yes; to give families mortgages who they would not have given otherwise, yes; they would not have qualified but for this affirmative action on the part of the bank, yes. It is by income, and is it also by minorities? Yes. "With the $2.1 billion, lending that amount in mortgages which will be a higher risk, and I'm sure there will be a higher default rate on those mortgages than on the rest of the portfolio." The CRA allowed ACORN "organizations to collect a fee from the banks for their services in marketing the loans. The Senate Banking Committee had estimated that, as a result of CRA, $9.5 billion had gone to pay for services and salaries of the organizers."

--May 1999-- The Los Angeles Times reports that African-American homeownership is increasing three times as fast as that of whites, with Latino homeowners growing five times as fast, attributing the growth to breathing "the first real life into enforcement of the Community Reinvestment Act." Mandateing that Fannie Mae and Freddie Mac buy mortgages with deviant down payments and debt-to-income ratios, which allowed lenders to approve mortgages for lower-income families that would have been denied otherwise. By now, all pretense had disappeared and lending practices were based upon concerns of discrimination in the banking system regardless of the consequences. Clinton threatened to veto a bill passed by the Senate that had "shortsightedly voted to retrench" CRA, as the Times put it. Under pressure, Fannie Mae was resisting increased targeting, arguing that the result would be more loan defaults. Barry Zigas, head of Fannie Mae's low-income efforts, argued, "There is obviously a limit beyond which (we) can't push (the banks) to produce," the Times reported.

--Fall 1999-- Treasury Secretary Lawrence Summers issued a warning: "Debates about systemic risk should also now include government-sponsored enterprises, which are large and growing rapidly."

--September 1999-- New York Times "With pressure from the Clinton administration, Fannie Mae eased credit requirements on loans it would purchase from lenders, making it easier for banks to lend to borrowers unqualified for conventional loans. Fannie Mae's Raines explained that "there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market."

With this action, Fannie Mae put itself at substantial risk in the event of an economic downturn. "From the perspective of many people, including me, this is another thrift industry growing up around us," warned Peter Wallison, a fellow in financial policy studies at the American Enterprise Institute (AEI). "If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry." The danger was known.

A study by Freddie Mac, confirming earlier Federal Reserve and FDIC studies, contradicts race discrimination arguments for CRA. The study found that African-Americans with annual incomes of $65,000-$75,000 have on average worse credit records than whites making under $25,000. This showed that the difficulty in qualifying was not because of race but bad credit records. Accordingly, the Federal Reserve Bank of Dallas entitled a paper "Red Lining or Red Herring?"

"City Journal warned that the Clinton administration had turned CRA into 'a vast extortion scheme against the nation's banks,'committing $1 trillion for mortgages and development projects, most of it funneled through the community organizers."

--November 1999-- President Bill Clinton signed into law S.900 Financial Services Modernization Act of 1999 This bill had CRA loan mandates & allowed banks to sell the mandated bad loans to GSEs Fannie, Freddie, pension funds, foreigners & anyone else. This made it legal for banks to create bad risky loans with the government backing it allowing it to get a AAA rating.This gave banks a license to steal!!!

--December 2000-- President Bill Clinton signed into law H.R. 4577: Consolidated Appropriations Act, 2001. Consolidated in this bill was Commodity Futures Modernization Act of 2000. This law made most over-the-counter derivatives (“OTC derivatives&#8221 transactions between “sophisticated parties” un-regulated as “futures” under the Commodity Exchange Act (CEA) or as “securities” under the federal securities laws. Instead, banks and securities firms would continue to have their dealings in OTC derivatives supervised by their federal regulators under general “safety and soundness” standards. “Functional regulation”. This was to create an international derivatives market for comodities securities. Clinton & Gore were trying to built the framework for Carbon Cap & Trade Energy Trading Market Scheme with this law. This gave birth to the Enron Loophole. [ame="http://www.youtube.com/watch?v=vFK-UTGH1Zw"]This gave birth to the Enron Loophole.[/ame]

--April 2001-- The Bush Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."

--May 2002-- President Bush calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)

--September 2003-- Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.

The New York Times published on Sept 10th 2003 "The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry. The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios."

--November 2003-- Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

--February 2004-- The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)

--February 2004-- CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)

--June 2004-- Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

[ame="http://www.youtube.com/watch?v=_MGT_cSi7Rs&feature=related"]--Late 2004-- Democrats in congress blocked action to regulate the GSEs Fannie & Freddie.[/ame] These Democrats & Obama were paid off by by GSEs Fannie & Freddie!!!

--December 2004-- ACORN used congress to force Trillions in CRA loans & payoffs. They recently hit Bank of America for over $800 billion. (see page 25) of this congress hearing. That is some serious money. Don't tell me ACORN is not pouring on some serious pressure using the CRA compliance criteria.

--2005-- Fannie Mae CEO Frank Raines affirms partnership with Barack Obama & The Congressional Black Caucus" [ame="http://www.youtube.com/watch?v=usvG-s_Ssb0&feature=related"]Frank Raines[/ame]

--April 2005-- Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)

--August 2007-- President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)

--September 2007-- Obama - "Subprime lending started off as a good idea - helping Americans buy homes who couldn’t previously afford to. Financial institutions created new financial instruments that could securitize these loans, slice them into finer and finer risk categories and spread them out among investors around the country and around the world. In theory, this should have allowed mortgage lending to be less risky and more diversified." Top Contributors to Barack Obama's Campaign

--December 2007-- President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)

--February 2008-- Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)

--March 2008-- President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

--April 2008-- President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

--May 2008-- President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

--June 2008-- President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

In 2008, Fannie and Freddie have purchased about 80% of all new home mortgages in the United States. Their combined investment portfolios held mortgage assets (loans and MBSs) valued at $1.5 trillion (as of June 30, 2008) - These GSE will never pay back tax payer for losses like all the banks have.

--April 2009-- Obama on his world appology tour in Strasbourg, France "difficult to imagine that the inability of somebody to pay for a house in Florida could contribute to the failure of the banking system in Iceland. Today what's difficult to imagine is that we did not act sooner to shape our future."

--JULY 2009-- Committee on Oversight and Government Reform released a report on "The Role of Government Affordable Housing Policy in Creating the Global Financial Crisis of 2008"

 

[Baruch Menachem]

The right wing zanies have been howling about this forever. And we got the response back ... RAAACist.

Bush really should have pushed harder on fixing this. It was his responsibility. But the Dems in congress wanted it this way. And we are now reaping the whirlwind

 

[CrusaderFrank]

--1991-- ACORN interfered with a House Banking Committee meeting for two days protesting a move to bring CRA reform. "According to the Times, "the same study showed no evidence that nonwhite mortgage applicants were being discriminated against."

--1992-- Enforcement of CRA was "sporadic," as the Washington Times notes, until a Federal Reserve Bank of Boston study asserted that there were "substantially higher denial rates for black and Hispanic applicants than for white applicants."

Lynn Browne was approached by co-author Alicia Munnell to do the study because "community activists were complaining that mortgage loans were not being made in minority communities." According to the Times, however, "the study had mishandled statistics on minority default rates. When the errors were accounted for, the same study showed no evidence that nonwhite mortgage applicants were being discriminated against."

Frank Quaratiello, writing in the Boston Herald, cites Stan Liebowitz: "My guess is that they were interested in finding a particular result." Said Liebowitz, "Richard Syron was head of the Boston Fed at the time. He went on to be the head of Freddie Mac. They were looking for mortgage discrimination, and they found it." According to Quaratiello, Syron became Freddie Mac CEO and chairman in 2003 and "faced increasing pressure to buy up more and more risky mortgages, some of which the Boston Fed's guide had, in effect, served to legitimize." Regarding Syron's total compensation in 2007 of $18.3 million, Liebowitz reportedly quipped, "Nice reward for presiding over unprofessional research behavior, bankrupting Freddie Mac and crippling our financial system, all in the name of politically correct lending."

--September 1992-- The Chicago Tribune described the ACORN agenda as "affirmative action lending." And writes Stanley Kurtz, senior fellow with the Ethics and Public Policy Center in Washington, "ACORN was issuing fact sheets bragging about relaxations of credit standards that it had won on behalf of minorities."

--October 1992-- Congress, enacting the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, It "established HUD-imposed housing goals for financing of affordable housing and housing in central cities and other rural and underserved areas." Rep. Jim Leach, R-Iowa, warned about the impending danger non-regulated GSEs posed. According to the Washington Post, he was concerned that Congress was "hamstringing" the regulator. The complaint was that OFHEO was a "weak regulator." Leach worried that Fannie Mae and Freddie Mac were changing "from being agencies of the public at large to money machines for the stockholding few." Democrat Barney Frank, countered that "the companies served a public purpose. They were in the business of lowering the price of mortgage loans."

--September 1993-- The Chicago Sun-Times reports an initiative led by ACORN's Talbott with five area lenders "participating in a $55 million national pilot program with affordable-housing group ACORN to make mortgages for low- and moderate-income people with troubled credit histories." Kurtz notes that the initiative included two of her former targets, Bell Federal Savings and Avondale Federal Savings, who had apparently capitulated under pressure.

--July 1994-- Represented by Obama and others, plaintiffs filed a class-action lawsuit alleging Citibank had "intentionally discriminated against the plaintiffs on the basis of race with respect to a credit transaction" and calling its action "racial discrimination and discriminatory redlining practices." Buycks-Roberson v. Citibank

--November 1994-- President Clinton addresses the housing issue: "I think we all agree that more Americans should own their own homes, for reasons that are economic and tangible and reasons that are emotional and intangible but go to the heart of what it means to harbor, to nourish, to expand the American dream"..."I am determined to see that you have the opportunity and together we can make that opportunity for the young families of our country. I am committed to a new and unprecedented partnership between industry leaders and community leaders and government to recommit our nation to the idea of homeownership and to create more homeowners than ever before." "The Clinton administration announced the bold new homeownership strategy, which included monumental loosening of credit standards and imposition of subprime lending quotas."

--May 1995-- The FDIC's Board of Directors approved a final rule implementing the Community Reinvestment Act (CRA). The Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Office of Thrift Supervision have approved parallel regulations for the institutions they supervise. The joint final rule largely retains the principles and structure of the proposals issued in December 1993 and October 1994. The new CRA regulation replaces the 12 assessment factors contained in the old rule with a more performance-based evaluation process to assess whether financial institutions are meeting the credit needs of their communities, including low- and moderate-income neighborhoods. The new rule establishes different tests for large and small institutions, as well as for retail and wholesale or limited purpose banks.

--June 1995-- Republicans had won control of Congress and planned CRA reforms. The Clinton administration, however, allied with Rep. Frank, Sen. Ted Kennedy, D-Mass., and Rep. Maxine Waters, D-Calif., did an end-around by directing HUD Secretary Andrew Cuomo to inject GSEs into the subprime mortgage market. As Kurtz notes, "ACORN had come to Congress not only to protect the CRA from GOP reforms but also to expand the reach of quota-based lending to Fannie, Freddie and beyond." What resulted was the broadening of the "acceptability of risky subprime loans throughout the financial system, thus precipitating our current crisis."

The administration announced the bold new homeownership strategy, which included monumental loosening of credit standards and imposition of "SUBPRIME LENDING QUOTAS." HUD reported that President Clinton had committed "to increasing the homeownership rate to 67.5% by the year 2000." The plan was "to reduce the financial, information and systemic barriers to homeownership" which was "amplified by local partnerships at work in over 100 cities."

Kurtz concludes, "Urged on by ACORN, congressional Democrats and the Clinton administration helped push tolerance for high-risk loans through every sector of the banking system — far beyond the sort of banks originally subject to the CRA. So it was the efforts of ACORN and its Democratic allies that first spread the subprime virus from the CRA to Fannie and Freddie and thence to the entire financial system. Soon, Democratic politicians and regulators actually began to take pride in "LOWERED CREDIT STANDARDS" as a sign of "fairness" — and the contagion spread. Attorney General Janet Reno, who had already won a number of bank lending discrimination settlements, sternly announces, "We will tackle lending discrimination wherever it appears." With the new policy in full force, "No loan is exempt; no bank is immune. For those who thumb their nose at us, I promise vigorous enforcement."

--1997-- HUD Secretary Cuomo said, "GSE presence in the subprime market could be of significant benefit to lower-income families, minorities, and families living in underserved areas. "

--1998-- By falsifying signatures on Fannie Mae accounting transactions, $200 million in expenses was shifted from 1998 to later periods, thereby triggering $27.1 million in bonuses for top executives. James A. Johnson received $1.932 million; Franklin D. Raines received $1.11 million; Lawrence M. Small received $1.108 million; Jamie S. Gorelick received $779,625; Timothy Howard received $493,750; Robert J. Levin received $493,750.

--April 1998-- HUD announced a $2.1 billion settlement with AccuBanc Mortgage Corp. for alleged discrimination against minority loan applicants. Affirmative Action Lending The funds would provide poor families with down payments and low interest mortgages. "Discrimination isn't always that obvious," said Secretary Cuomo in announcing the AccuBanc deal. "Sometimes more subtle but in many ways more insidious, an institutionalized discrimination that's hidden behind a smiling face." Before the camera, Cuomo admitted the mandate amounted to "affirmative action" lending that would result in a "higher default rate."

The institution would "take a greater risk on these mortgages, yes; to give families mortgages who they would not have given otherwise, yes; they would not have qualified but for this affirmative action on the part of the bank, yes. It is by income, and is it also by minorities? Yes. "With the $2.1 billion, lending that amount in mortgages which will be a higher risk, and I'm sure there will be a higher default rate on those mortgages than on the rest of the portfolio." The CRA allowed ACORN "organizations to collect a fee from the banks for their services in marketing the loans. The Senate Banking Committee had estimated that, as a result of CRA, $9.5 billion had gone to pay for services and salaries of the organizers."

--May 1999-- The Los Angeles Times reports that African-American homeownership is increasing three times as fast as that of whites, with Latino homeowners growing five times as fast, attributing the growth to breathing "the first real life into enforcement of the Community Reinvestment Act." Mandateing that Fannie Mae and Freddie Mac buy mortgages with deviant down payments and debt-to-income ratios, which allowed lenders to approve mortgages for lower-income families that would have been denied otherwise. By now, all pretense had disappeared and lending practices were based upon concerns of discrimination in the banking system regardless of the consequences. Clinton threatened to veto a bill passed by the Senate that had "shortsightedly voted to retrench" CRA, as the Times put it. Under pressure, Fannie Mae was resisting increased targeting, arguing that the result would be more loan defaults. Barry Zigas, head of Fannie Mae's low-income efforts, argued, "There is obviously a limit beyond which (we) can't push (the banks) to produce," the Times reported.

--Fall 1999-- Treasury Secretary Lawrence Summers issued a warning: "Debates about systemic risk should also now include government-sponsored enterprises, which are large and growing rapidly."

--September 1999-- New York Times "With pressure from the Clinton administration, Fannie Mae eased credit requirements on loans it would purchase from lenders, making it easier for banks to lend to borrowers unqualified for conventional loans. Fannie Mae's Raines explained that "there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market."

With this action, Fannie Mae put itself at substantial risk in the event of an economic downturn. "From the perspective of many people, including me, this is another thrift industry growing up around us," warned Peter Wallison, a fellow in financial policy studies at the American Enterprise Institute (AEI). "If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry." The danger was known.

A study by Freddie Mac, confirming earlier Federal Reserve and FDIC studies, contradicts race discrimination arguments for CRA. The study found that African-Americans with annual incomes of $65,000-$75,000 have on average worse credit records than whites making under $25,000. This showed that the difficulty in qualifying was not because of race but bad credit records. Accordingly, the Federal Reserve Bank of Dallas entitled a paper "Red Lining or Red Herring?"

"City Journal warned that the Clinton administration had turned CRA into 'a vast extortion scheme against the nation's banks,'committing $1 trillion for mortgages and development projects, most of it funneled through the community organizers."

--November 1999-- President Bill Clinton signed into law S.900 Financial Services Modernization Act of 1999 This bill had CRA loan mandates & allowed banks to sell the mandated bad loans to GSEs Fannie, Freddie, pension funds, foreigners & anyone else. This made it legal for banks to create bad risky loans with the government backing it allowing it to get a AAA rating.This gave banks a license to steal!!!

--December 2000-- President Bill Clinton signed into law H.R. 4577: Consolidated Appropriations Act, 2001. Consolidated in this bill was Commodity Futures Modernization Act of 2000. This law made most over-the-counter derivatives (“OTC derivatives”) transactions between “sophisticated parties” un-regulated as “futures” under the Commodity Exchange Act (CEA) or as “securities” under the federal securities laws. Instead, banks and securities firms would continue to have their dealings in OTC derivatives supervised by their federal regulators under general “safety and soundness” standards. “Functional regulation”. This was to create an international derivatives market for comodities securities. Clinton & Gore were trying to built the framework for Carbon Cap & Trade Energy Trading Market Scheme with this law. This gave birth to the Enron Loophole. This gave birth to the Enron Loophole.

--April 2001-- The Bush Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."

--May 2002-- President Bush calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)

--September 2003-- Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.

The New York Times published on Sept 10th 2003 "The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry. The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios."

--November 2003-- Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

--February 2004-- The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)

--February 2004-- CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)

--June 2004-- Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

--Late 2004-- Democrats in congress blocked action to regulate the GSEs Fannie & Freddie. These Democrats & Obama were paid off by by GSEs Fannie & Freddie!!!

--December 2004-- ACORN used congress to force Trillions in CRA loans & payoffs. They recently hit Bank of America for over $800 billion. (see page 25) of this congress hearing. That is some serious money. Don't tell me ACORN is not pouring on some serious pressure using the CRA compliance criteria.

--2005-- Fannie Mae CEO Frank Raines affirms partnership with Barack Obama & The Congressional Black Caucus" Frank Raines

--April 2005-- Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)

--August 2007-- President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)

--September 2007-- Obama - "Subprime lending started off as a good idea - helping Americans buy homes who couldn’t previously afford to. Financial institutions created new financial instruments that could securitize these loans, slice them into finer and finer risk categories and spread them out among investors around the country and around the world. In theory, this should have allowed mortgage lending to be less risky and more diversified." Top Contributors to Barack Obama's Campaign

--December 2007-- President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)

--February 2008-- Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)

--March 2008-- President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

--April 2008-- President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

--May 2008-- President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

--June 2008-- President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

In 2008, Fannie and Freddie have purchased about 80% of all new home mortgages in the United States. Their combined investment portfolios held mortgage assets (loans and MBSs) valued at $1.5 trillion (as of June 30, 2008) - These GSE will never pay back tax payer for losses like all the banks have.

--April 2009-- Obama on his world appology tour in Strasbourg, France "difficult to imagine that the inability of somebody to pay for a house in Florida could contribute to the failure of the banking system in Iceland. Today what's difficult to imagine is that we did not act sooner to shape our future."

--JULY 2009-- Committee on Oversight and Government Reform released a report on "The Role of Government Affordable Housing Policy in Creating the Global Financial Crisis of 2008"

Not only are facts stubborn things, they also tend to make Libruls look like idiots

 

[American Horse]

Should The GOP Fear Phil Angelides' Financial Crisis Commission?

No; it's clear that Rs and Bush did their best to ring alarms on this, which is exactly what the FBI guy was doing. This will enure to the harm of the Ds not Rs.

 

[Soggy in NOLA]

No, considering Bush warned Congress repeatedly of the same thing.

 

[Soggy in NOLA]

And Frank, Pelosi, Waters, etc. basically called him a racist for even suggesting that banks and Fannie Mae clean up their act.

 

[The Rabbi]

When are the reps from Fannie Mae/Freddie Mac going to testify?
Oops, never seems to be the answer. Glad Angelides has such an open mind about this. Not.

 

[Claudette]

And Frank, Pelosi, Waters, etc. basically called him a racist for even suggesting that banks and Fannie Mae clean up their act.

You can add Franks and Dodd to that list also. Fannie and Freddie were the Dems pet projects. You know, lets give eveyone a house. Doesn't matter if they have bad credit, no credit. What the hell. This is one of the prime reasons for the financial meltdown in this country. These guys have all skated on the blame. Typical.

 

[Procrustes Stretched]

When are the reps from Fannie Mae/Freddie Mac going to testify?
Oops, never seems to be the answer. Glad Angelides has such an open mind about this. Not.

What are you rambling about?

 

[Procrustes Stretched]

Should The GOP Fear Phil Angelides' Financial Crisis Commission?

No; it's clear that Rs and Bush did their best to ring alarms on this, which is exactly what the FBI guy was doing. This will enure to the harm of the Ds not Rs.

save this post!!!!!!!!!!

 

[amrchaos]

I am just starting to pay attention to this. Don't know what it is? That's what Google is for.

I understand a Assitant Director at FBI ewarned the Congress that the morgtage fraud would lead to a crisis to rival the S&L scandal.

Commission Chairman Phil Angelides grilled Holder on a Sept. 4, 2004, warning from a top FBI official about “an epidemic of mortgage fraud coursing across this country” and the dire crisis that could occur if it were left unchecked.

That was four years before the financial meltdown on Wall Street that led to unprecedented government bailouts of some of the nation's largest banks and financial institutions.

Angelides asked Holder to evaluate what steps were taken after the 2004 FBI warning. “What warnings were sent up the line?” Angelides asked.

Holder said he was not familiar with the 2004 warning “but we will look at that.”

“We are constantly in the process of reviewing that which we can do better,” Holder said.

At issue are findings by the FBI in 2004 that mortgage fraud was on the rise and posed a threat to financial markets that could equal the savings and loan crisis of the late 1980s. Angelides, a Democrat and former treasurer of California, cited an undercover FBI investigation that discovered more than 380 fraudulent loans worth more than $70 million.

Chris Swecker, an assistant director at the FBI, described the fraud at the time as a “potential epidemic.” A month later, Swecker testified before a House Banking subcommittee and told lawmakers the problem was “pervasive and growing.”

hmmmmmm..,

Everybody from Washington to Wall street knew things were getting out of control--but there was money to be made!!


GOP has nothing to worry about because they have successfully put the Blame on Obama and the Democrats.

 

[Procrustes Stretched]

Link...Barney Frank and the truth...

Limbaugh falsely asserted "Banking Queen" Barney Frank "created" subprime mortgage crisis
January 08, 2009 3:24 pm ET


SUMMARY: Rush Limbaugh falsely asserted that Rep. Barney Frank "created the problem" of the subprime mortgage crisis, claiming that Frank's "definition of affordable housing was to make sure that people who couldn't pay the loans back got the loans, the mortgages. He forced Fannie Mae and Freddie Mac to do this." In fact, Frank has advocated for policies that emphasize low-income home rentals as opposed to homeownership and supported legislation to strengthen oversight over Fannie and Freddie.

In 2005, Frank, then the ranking Democrat on the House Financial Services Committee, worked with committee chairman Rep. Michael Oxley (R-OH) on the Federal Housing Finance Reform Act of 2005, which would have established the Federal Housing Finance Agency (FHFA) to replace the Office of Federal Housing Enterprise Oversight (OFHEO) as overseer of the activities of Fannie Mae and Freddie Mac.

After voting for the bill in committee, Frank voted against final passage of the bill on the House floor, stating that he was doing so because an amendment to the bill on the House floor imposed restrictions on the kinds of nonprofit organizations that could receive funding under the bill.

In early 2007, as chairman of the House Financial Services Committee, Frank sponsored H.R. 1427, a bill to create the FHFA, granting that agency "general supervisory and regulatory authority over" Fannie Mae and Freddie Mac, and directing it to reform the companies' business practices and regulate their exposure to credit and market risk.

Among other things, Frank's legislation, titled the "Federal Housing Finance Reform Act of 2007," directed the FHFA director to "ensure" that Fannie Mae and Freddie Mac "operate[] in a safe and sound manner, including maintenance of adequate capital and internal controls" and to establish standards for "management of credit and counterparty risk" and "management of market risk."

The FHFA was eventually created after Congress incorporated provisions that House Speaker Nancy Pelosi (D-CA) said were "similar" to those of H.R. 1427 into the Housing and Economic Recovery Act of 2008, which the president signed into law on July 30, 2008.

 

[Procrustes Stretched]

I am just starting to pay attention to this. Don't know what it is? That's what Google is for.

I understand a Assitant Director at FBI ewarned the Congress that the morgtage fraud would lead to a crisis to rival the S&L scandal.

Commission Chairman Phil Angelides grilled Holder on a Sept. 4, 2004, warning from a top FBI official about “an epidemic of mortgage fraud coursing across this country” and the dire crisis that could occur if it were left unchecked.

That was four years before the financial meltdown on Wall Street that led to unprecedented government bailouts of some of the nation's largest banks and financial institutions.

Angelides asked Holder to evaluate what steps were taken after the 2004 FBI warning. “What warnings were sent up the line?” Angelides asked.

Holder said he was not familiar with the 2004 warning “but we will look at that.”

“We are constantly in the process of reviewing that which we can do better,” Holder said.

At issue are findings by the FBI in 2004 that mortgage fraud was on the rise and posed a threat to financial markets that could equal the savings and loan crisis of the late 1980s. Angelides, a Democrat and former treasurer of California, cited an undercover FBI investigation that discovered more than 380 fraudulent loans worth more than $70 million.

Chris Swecker, an assistant director at the FBI, described the fraud at the time as a “potential epidemic.” A month later, Swecker testified before a House Banking subcommittee and told lawmakers the problem was “pervasive and growing.”

hmmmmmm..,

Everybody from Washington to Wall street knew things were getting out of control--but there was money to be made!!


GOP has nothing to worry about because they have successfully put the Blame on Obama and the Democrats.

The facts will surface without the spin of FOX, MSNBC, GOP, DNC,..

 

[Procrustes Stretched]

--1991-- ACORN interfered with a House Banking Committee meeting for two days protesting a move to bring CRA reform. "According to the Times, "the same st...

Not only are facts stubborn things, they also tend to make Libruls look like idiots

In a nutshell, what was his (Greenspan) economic philosophy?

It's been reported pretty broadly that Alan was a laissez-faire, Ayn Rand, free-market economist. I think that's simplistic. He was much more than that. He was thoughtful, careful, measured, not at all impulsive, very traditional and pretty set in his ways. …

------- FRONTLINE: the warning: analysis: the alan greenspan era | PBS

… Arthur Levitt said, "He was the wizard, and he was the best wizard I ever saw." In what sense?

He was unintelligible. … It was almost a joke, the way he would speak. It was so imponderable, the sentence constructions. … He so qualified everything. The circumlocutions were so complex that you couldn't understand practically what he was saying. And you know, people tend to think, "Wow, I can't understand him, he must be smart." And he is smart.

If you read his memoirs, they're engaging and surprisingly plainspoken, pleasingly so. But that was not how he was. So that was one element of his wizardly-ness.

He was very willing to go with arcane data, indicators that hadn't been widely watched. He was very willing to say, "In the bad old days of high inflation, people were very afraid to let the unemployment rate get too low." You didn't mishear me. I mean, unemployment's a bad thing. Low unemployment's a good thing, but not for central bankers, because they're worried if unemployment was too low, companies would have to pay too much for labor, and then inflation would go up.

And Greenspan would say, you know, maybe we can let this ride a little more, just because more people are getting work, nothing bad is happening, and maybe the economy is so productive that it won't result in price increases. And that basically happened.

The simplest answer for why he was viewed as an oracle is if you take the period -- he came in right before the market crash of '87. Of course, that was a rough start, but they managed through it. From that point on, markets had a 12-year glorious run, really, around the world. Equity markets went up. Interest rates went down. Inflation went down.

So chicken and egg. Did Greenspan cause it? Are we right to call him a wizard? Or was he running the ship in a buoyant period? I'm sure it's some of each. But good things were happening around the world. …

 

[The Rabbi]

Thread didnt quite turn out to be the GOP-bash you thought it would, did it?
In fact the Dums own not only the housing crisis but also the recession. The only GOP "guilt" here comes from appointing Bernanke the Fed chairman and his keeping rates way too low for long.
Everything else can be safely attribute to corrupt democratic politicians and their big business pals.