THEY GAVE YOUR MORTGAGE TO A LESS QUALIFIED MINORITY
by Ann Coulter
September 24, 2008
On MSNBC this week, Newsweek's Jonathan Alter tried to connect John McCain to the current financial disaster, saying: "If you remember the Keating Five scandal that (McCain) was a part of. ... He's really getting a free ride on the fact that he was in the middle of the last great financial scandal in our country."
McCain was "in the middle of" the Keating Five case in the sense that he was "exonerated." The lawyer for the Senate Ethics Committee wanted McCain removed from the investigation altogether, but, as The New York Times reported: "Sen. McCain was the only Republican embroiled in the affair, and Democrats on the panel would not release him."
So John McCain has been held hostage by both the Viet Cong and the Democrats.
Alter couldn't be expected to know that: As usual, he was lifting material directly from Kausfiles. What is unusual was that he was stealing a random thought sent in by Kausfiles' mother, who, the day before, had e-mailed: "It's time to bring up the Keating Five. Let McCain explain that scandal away."
The Senate Ethics Committee lawyer who investigated McCain already had explained that scandal away -- repeatedly. It was celebrated lawyer Robert Bennett, most famous for defending a certain horny hick president a few years ago.
In February this year, on Fox News' "Hannity and Colmes," Bennett said, for the eight billionth time:
"First, I should tell your listeners I'm a registered Democrat, so I'm not on (McCain's) side of a lot of issues. But I investigated John McCain for a year and a half, at least, when I was special counsel to the Senate Ethics Committee in the Keating Five. ... And if there is one thing I am absolutely confident of, it is John McCain is an honest man. I recommended to the Senate Ethics Committee that he be cut out of the case, that there was no evidence against him."
It's bad enough for Alter to be constantly ripping off Kausfiles. Now he's so devoid of his own ideas, he's ripping off the idle musings of Kausfiles' mother.
Even if McCain had been implicated in the Keating Five scandal -- and he wasn't -- that would still have absolutely nothing to do with the subprime mortgage crisis currently roiling the financial markets. This crisis was caused by political correctness being forced on the mortgage lending industry in the Clinton era.
Before the Democrats' affirmative action lending policies became an embarrassment, the Los Angeles Times reported that, starting in 1992, a majority-Democratic Congress "mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains."
Under Clinton, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton's secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low- to moderate-income borrowers by the year 2001.
Instead of looking at "outdated criteria," such as the mortgage applicant's credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named "Caylee."
Threatening lawsuits, Clinton's Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn't a joke -- it's a fact.
When Democrats controlled both the executive and legislative branches, political correctness was given a veto over sound business practices.
In 1999, liberals were bragging about extending affirmative action to the financial sector. Los Angeles Times reporter Ron Brownstein hailed the Clinton administration's affirmative action lending policies as one of the "hidden success stories" of the Clinton administration, saying that "black and Latino homeownership has surged to the highest level ever recorded."
Meanwhile, economists were screaming from the rooftops that the Democrats were forcing mortgage lenders to issue loans that would fail the moment the housing market slowed and deadbeat borrowers couldn't get out of their loans by selling their houses.
A decade later, the housing bubble burst and, as predicted, food-stamp-backed mortgages collapsed. Democrats set an affirmative action time-bomb and now it's gone off.
In Bush's first year in office, the White House chief economist, N. Gregory Mankiw, warned that the government's "implicit subsidy" of Fannie Mae and Freddie Mac, combined with loans to unqualified borrowers, was creating a huge risk for the entire financial system.
Rep. Barney Frank denounced Mankiw, saying he had no "concern about housing." How dare you oppose suicidal loans to people who can't repay them! The New York Times reported that Fannie Mae and Freddie Mac were "under heavy assault by the Republicans," but these entities still had "important political allies" in the Democrats.
Now, at a cost of hundreds of billions of dollars, middle-class taxpayers are going to be forced to bail out the Democrats' two most important constituent groups: rich Wall Street bankers and welfare recipients.
Political correctness had already ruined education, sports, science and entertainment. But it took a Democratic president with a Democratic congress for political correctness to wreck the financial industry.
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?
IBD Exclusive Series: What Caused The Loan Crisis?
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.
September 28, 2008
McCain/Palin Could Win this Election by Exposing the Trillion Dollar Scam
Sarah Barracuda could win this election on Friday night for the Republicans. All she needs is the courage to tell the truth in her debate with human gaffe machine Joe Biden -- with John McCain's permission and support -- to tell it like it is.
If the great American middle class ever figures out the trillion dollar phony mortgage scam from Freddie and Fannie, they will finally rise up in wrath and throw the liberal bums out. Let it start hitting their pocket books, their ATM cards and credit cards, let their home prices fall like a rock -- and Barack Obama will be out of politics, along with the Democrat majority in Congress.
For conservatives this is the opportunity of the century.
That is why the Democrats are screaming with fear about the abyss that has suddenly opened at their feet. Since the Carter Administration first threatened the banks with punishment if they didn't allow themselves to be robbed by sub-prime borrowers, since the Clinton Administration made it all even worse in 1995, even the Democrats have known full well that the bills had to come due at some time.
There is a sane reason why bankers and trustees have to exercise "due diligence" over other people's money. All the politicians are lawyers, and they know about money and theft. But "due diligence" was criminalized for bankers through Federal law. They were compelled, on penalty of law, to lend money at high-risk through Fannie and Freddie. It is the Great Stock Market Crash of 1929 all over again, where everybody bought stocks on margin until they could see the abyss opening up at their feet. Well, this time it was the Feds who created an insane lending scheme themselves. The US Government threatened to punish bankers for "redlining" -- which in real life means giving money only to people who can pay it back.
You can only bend the market through coercion for so long -- then things fall apart. That's what's happened here.
The taxpayers are now on the hook for a trillion dollars, if you add the failed 300 billion dollar rescue package from two weeks ago to the 700 billion dollar Paulson package. This is a trillion dollar scam, and all the politicians in Congress, the ACORN mafia, the people who played the market on unsecured mortgages, and the scam artists who were hired by Freddie and Fannie -- they all knew it. In case you haven't been watching, that includes all of Barack Obama's "home mortgage advisors" -- Franklin Raines, Jim Johnson and Jamie Gorelick. It includes Senate Banking Committee members like Chris Dodd. It includes House members like Barney Frank. Watch this video and you can see them strutting their stuff when the US watchdog agency criticized Fannie and Freddie in 2003.
They knew exactly what was going on.
This crisis is not financial -- it is political. It's not a market failure. It's a decades-long robbery by the Left, finally exposed for what it is.
The Democrats deserve the wrath of the voters this time.
Sarah Palin could defeat Obama and Biden Friday night. All she has to do is tell the truth about the Democrats and the Trillion Dollar Scam. Not to do so would be collude in a massive Ponzi scheme, designed to fall on the shoulders of the taxpayers.
This is precisely why we have elections.
John McCain and Sarah Palin will need a lot of guts to do this. But the scam has to be exposed, or the fetid wounds in the financial sector will fester and metastasize.
James Lewis blogs at dangeroustimes.wordpress.com.
Tags: politics, racist crap
Even if McCain had been implicated in the Keating Five scandal -- and he wasn't -- that would still have absolutely nothing to do with the subprime mortgage crisis currently roiling the financial markets.