XPost: alt.non.racism, alt.politics, alt.society.liberalism   
   XPost: talk.politics.misc   
   From: sid9@bellsouth.net   
      
   "Way Back Jack"  wrote in message   
   news:4900dae2.30959609@news.newsguy.com...   
   > On Thu, 23 Oct 2008 12:21:54 -0700, "Gandalf   
   > Grey"   
   >  wrote:   
   >   
   >>So. Jack, what's the underlying cause of the   
   >>financial crisis?   
   >   
   > How A Clinton-Era Rule Rewrite Made Subprime   
   > Crisis Inevitable   
   > By TERRY JONES   
   > INVESTOR'S BUSINESS DAILY | Posted Wednesday,   
   > September 24, 2008 4:30   
   > PM PT   
   >   
   > One of the most frequently asked questions about   
   > the subprime market   
   > meltdown and housing crisis is: How did the   
   > government get so deeply   
   > involved in the housing market?   
   >   
   >   
   > The answer is: President Clinton wanted it that   
   > way.   
   >   
   > Fannie Mae and Freddie Mac, even into the early   
   > 1990s, weren't the   
   > juggernauts they'd later be.   
   >   
   > While President Carter in 1977 signed the   
   > Community Reinvestment Act,   
   > which pushed Fannie and Freddie to aggressively   
   > lend to minority   
   > communities, it was Clinton who supercharged the   
   > process. After   
   > entering office in 1993, he extensively rewrote   
   > Fannie's and Freddie's   
   > rules.   
   >   
   > In so doing, he turned the two quasi-private,   
   > mortgage-funding firms   
   > into a semi-nationalized monopoly that dispensed   
   > cash to markets, made   
   > loans to large Democratic voting blocs and   
   > handed favors, jobs and   
   > money to political allies. This potent mix led   
   > inevitably to   
   > corruption and the Fannie-Freddie collapse.   
   >   
   > Despite warnings of trouble at Fannie and   
   > Freddie, in 1994 Clinton   
   > unveiled his National Homeownership Strategy,   
   > which broadened the CRA   
   > in ways Congress never intended.   
   >   
   > Addressing the National Association of Realtors   
   > that year, Clinton   
   > bluntly told the group that "more Americans   
   > should own their own   
   > homes." He meant it.   
   >   
   > Clinton saw homeownership as a way to open the   
   > door for blacks and   
   > other minorities to enter the middle class.   
   >   
   > Though well-intended, the problem was that   
   > Congress was about to   
   > change hands, from the Democrats to the   
   > Republicans. Rather than   
   > submit legislation that the GOP-led Congress was   
   > almost sure to   
   > reject, Clinton ordered Robert Rubin's Treasury   
   > Department to rewrite   
   > the rules in 1995.   
   >   
   > The rewrite, as City Journal noted back in 2000,   
   > "made getting a   
   > satisfactory CRA rating harder." Banks were   
   > given strict new numerical   
   > quotas and measures for the level of "diversity"   
   > in their loan   
   > portfolios. Getting a good CRA rating was key   
   > for a bank that wanted   
   > to expand or merge with another.   
   >   
   > Loans started being made on the basis of race,   
   > and often little else.   
   >   
   > "Bank examiners would use federal home-loan   
   > data, broken down by   
   > neighborhood, income group and race, to rate   
   > banks on performance,"   
   > wrote Howard Husock, a scholar at the Manhattan   
   > Institute.   
   >   
   > But those rules weren't enough.   
   >   
   > Clinton got the Department of Housing and Urban   
   > Development to   
   > double-team the issue. That would later prove   
   > disastrous.   
   >   
   > Clinton's HUD secretary, Andrew Cuomo, "made a   
   > series of decisions   
   > between 1997 and 2001 that gave birth to the   
   > country's current   
   > crisis," the liberal Village Voice noted. Among   
   > those decisions were   
   > changes that let Fannie and Freddie get into   
   > subprime loan markets in   
   > a big way.   
   >   
   > Other rule changes gave Fannie and Freddie   
   > extraordinary leverage,   
   > allowing them to hold just 2.5% of capital to   
   > back their investments,   
   > vs. 10% for banks.   
   >   
   > Since they could borrow at lower rates than   
   > banks due to implicit   
   > government guarantees for their debt, the   
   > government-sponsored   
   > enterprises boomed.   
   >   
   > With incentives in place, banks poured billions   
   > of dollars of loans   
   > into poor communities, often "no doc" and "no   
   > income" loans that   
   > required no money down and no verification of   
   > income.   
   >   
   > By 2007, Fannie and Freddie owned or guaranteed   
   > nearly half of the $12   
   > trillion U.S. mortgage market — a staggering   
   > exposure.   
   >   
   > Worse still was the cronyism.   
   >   
   > Fannie and Freddie became home to out-of-work   
   > politicians, mostly   
   > Clinton Democrats. An informal survey of their   
   > top officials shows a   
   > roughly 2-to-1 dominance of Democrats over   
   > Republicans.   
   >   
   > Then there were the campaign donations. From   
   > 1989 to 2008, some 384   
   > politicians got their tip jars filled by Fannie   
   > and Freddie.   
   >   
   > Over that time, the two GSEs spent $200 million   
   > on lobbying and   
   > political activities. Their charitable   
   > foundations dropped millions   
   > more on think tanks and radical community   
   > groups.   
   >   
   > Did it work? Well, if measured by the goal of   
   > putting more poor people   
   > into homes, the answer would have to be yes.   
   >   
   > From 1995 to 2005, a Harvard study shows,   
   > minorities made up 49% of   
   > the 12.5 million new homeowners.   
   >   
   > The problem is that many of those loans have now   
   > gone bad, and   
   > minority homeownership rates are shrinking fast.   
   >   
   > Fannie and Freddie, with their massive loan   
   > portfolios stuffed with   
   > securitized mortgage-backed paper created from   
   > subprime loans, are a   
   > failed legacy of the Clinton era.   
   > _________   
   >   
   >   
   >>   
   >>"Way Back Cracker"  wrote in message   
   >>news:4900caf9.26887062@news.newsguy.com...   
   >>>   
   >>> Trailer park cracker forced to 'marry' pig   
   >>>   
   >>> A trailer park man has been forced to take a   
   >>> pig as his "wife", after he   
   >>> was caught having sex with the animal.   
   >>   
   >>Fixed that for you, cracker.   
   >>   
   >>   
      
      
      
      
   from the White House website:   
      
   President Bush Signs American Dream Downpayment   
   Act of 2003   
   Remarks by the President at Signing of the   
   American Dream Downpayment Act   
   Department of Housing and Urban Development   
   Washington, D.C.   
      
   1:57 P.M. EST   
      
   THE PRESIDENT: Thank you all. Thank you for   
   coming. Thanks for the warm welcome. It's great to   
   be back at the Department of Housing and Urban   
   Development. This is not my first time here, nor   
   will it be my last. (Applause.) I am here today   
   because we are taking action to bring many   
   thousands of Americans closer to owning a home.   
   Our government is supporting homeownership because   
   it is good for America, it is good for our   
   families, it is good for our economy.   
      
    One of the biggest hurdles to homeownership is   
   getting money for a down payment. This   
   administration has recognized that, and so today   
   I'm honored to be here to sign a law that will   
   help many low-income buyers to overcome that   
   hurdle, and to achieve an important part of the   
   American Dream.   
      
   I appreciate Alphonso Jackson agreeing to step up   
   and become the Acting Secretary of the Housing and   
   Urban Development. I look forward to his Senate   
      
   [continued in next message]   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)