Monthly Archives: September 2013

News

Obama administration pressuring banks to lower mortgage lending standards

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Remember the housing bubble and the mortgage lending crisis of 2008? Well guess what – the Democrats want an encore.

Investors Business Daily explains.

Bankers warn the administration’s new “disparate impact” home-lending regulation will wreak havoc in credit markets, replacing merit standards with political correctness.

The Department of Housing and Urban Development issued the controversial new anti-discrimination rule earlier this year. Now enforced by every federal regulator dealing with banks, it has the effect of criminalizing credit standards used to qualify borrowers for home loans.

Last week, the Mortgage Bankers Association and Independent Community Bankers of America jointly filed a Supreme Court brief arguing that under the new HUD rule:

“Virtually every lender in the United States could be sued for using non-discriminatory credit standards simply because variations in economic and credit characteristics produce different credit outcomes among racial and ethnic groups.”

In their 33-page brief, filed in support of a landmark housing case pending before the court, they complain that HUD recently launched 22 separate investigations against lenders alleging that their policies of requiring minimum credit scores “had a disparate impact on minorities in violation of the Fair Housing Act.”

Dozens of similar actions have been brought against lenders by Attorney General Eric Holder. He is basing claims of bias on statistics showing differences in loan outcomes by race while ignoring racially neutral credit-risk factors that explain those differences.

Under disparate impact’s low standard of proof, the government doesn’t have to show lenders intentionally discriminated against borrowers.

For the first time in history, businesses are being ordered to justify the necessity of a certain level of return on investment given the racial impact resulting from the use of credit-score thresholds.

The mortgage trade groups argue the formalized disparate-impact rule also effectively criminalizes other legitimate business practices, including minimum down-payment requirements, sliding loan rates and the charging of brokers’ fees.

Banks today face increased litigation risk simply by complying with sensible lending standards for hedging against risk.

[…]The social engineers and race demagogues in this administration are trying to enforce a balance in financial outcomes that risks another collapse of the housing market. The Supreme Court must put an end to a scheme so reckless, unfair and unconstitutional.

Does that sound familiar? Yes. In the last recession, the government forced banks to make risky loans in order to increase home ownership. That is exactly what gave us the 2008 recession.

Excerpt:

[Democrat] Congressman [Barney] Frank, of course, blamed the financial crisis on the failure adequately to regulate the banks. In this, he is following the traditional Washington practice of blaming others for his own mistakes. For most of his career, Barney Frank was the principal advocate in Congress for using the government’s authority to force lower underwriting standards in the business of housing finance. Although he claims to have tried to reverse course as early as 2003, that was the year he made the oft-quoted remark, “I want to roll the dice a little bit more in this situation toward subsidized housing.” Rather than reversing course, he was pressing on when others were beginning to have doubts.

His most successful effort was to impose what were called “affordable housing” requirements on Fannie Mae and Freddie Mac in 1992. Before that time, these two government sponsored enterprises (GSEs) had been required to buy only mortgages that institutional investors would buy–in other words, prime mortgages–but Frank and others thought these standards made it too difficult for low income borrowers to buy homes. The affordable housing law required Fannie and Freddie to meet government quotas when they bought loans from banks and other mortgage originators.

At first, this quota was 30%; that is, of all the loans they bought, 30% had to be made to people at or below the median income in their communities. HUD, however, was given authority to administer these quotas, and between 1992 and 2007, the quotas were raised from 30% to 50% under Clinton in 2000 and to 55% under Bush in 2007.

[…]It is certainly possible to find prime mortgages among borrowers below the median income, but when half or more of the mortgages the GSEs bought had to be made to people below that income level, it was inevitable that underwriting standards had to decline. And they did. By 2000, Fannie was offering no-downpayment loans. By 2002, Fannie and Freddie had bought well over $1 trillion of subprime and other low quality loans. Fannie and Freddie were by far the largest part of this effort, but the FHA, Federal Home Loan Banks, Veterans Administration and other agencies–all under congressional and HUD pressure–followed suit. This continued through the 1990s and 2000s until the housing bubble–created by all this government-backed spending–collapsed in 2007. As a result, in 2008, before the mortgage meltdown that triggered the crisis, there were 27 million subprime and other low quality mortgages in the US financial system. That was half of all mortgages. Of these, over 70% (19.2 million) were on the books of government agencies like Fannie and Freddie, so there is no doubt that the government created the demand for these weak loans; less than 30% (7.8 million) were held or distributed by the banks, which profited from the opportunity created by the government. When these mortgages failed in unprecedented numbers in 2008, driving down housing prices throughout the U.S., they weakened all financial institutions and caused the financial crisis.

Reduced lending standards caused the last recession, and now the same party that pushed for reduced lending standards are pushing for reduced lending standards again. Hold onto your hats, there’s a storm coming.

Videos

Video: compilation of interruptions by Lawrence Krauss from debates with William Lane Craig

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Here is the video:

Now compare that video with this story about a professor who was denied tenure for being personally pro-ID:

Internal e-mails and other documents obtained under the Iowa Open Records Act contradict public claims by Iowa State University (ISU) that denial of tenure to astronomer Guillermo Gonzalez was unrelated to his writing on the theory of intelligent design. According to these documents:

  • Dr. Gonzalez was subjected to a secret campaign of vilification and ridicule by colleagues in the Department of Physics and Astronomy who explicitly wanted to get rid of him because of his intelligent design views, not his scholarship.
  • Dr. Gonzalez’s work and views on intelligent design were repeatedly attacked during department tenure deliberations.
  • Dr. Gonzalez’s colleagues plotted to evade the law by suppressing evidence that could be used against them in court to supply proof of a hostile work environment.
  • One of Dr. Gonzalez’s colleagues admitted to another faculty member that the Department of Physics and Astronomy had violated the principle of academic freedom “massively” when it came to Gonzalez, while other colleagues expressed qualms that their plotting against Gonzalez was unethical or dishonest.
  • Dr. Gonzalez’s department chair misled the public after the denial of tenure by insisting that “intelligent design was not a major or even a big factor in this decision”–even though he had privately told colleagues that Gonzalez’s support for intelligent design alone “disqualifies him from serving as a science educator.”
  • In voting to reject tenure for Dr. Gonzalez, members of the Department of Physics and Astronomy all but ignored recommendations made by the majority of their own outside scientific reviewers, who thought Gonzalez clearly deserved tenure.

The bottom line according to these documents is that Dr. Gonzalez’s rights to academic freedom, free speech, and a fair tenure process were trampled on by colleagues who were driven by ideological zeal when they should have made an impartial evaluation of Gonzalez’s notable accomplishments as a scientist.

I have noticed a troubling trend during the last few years as I have blogged about the secular left. It seems to me that people on the left tend to have a strong, intense intolerance for any opinions that are different from their own. And they act on this intense intolerance by aggressively attacking the free speech and religious liberty of others.

You can see examples of this in the public schools and especially in the universities. Students being denied degrees, students being charged with offensive speech, students having secular leftist propaganda rammed down their throats, professors being prevented from teaching anything critical of the secular left, professors being denied tenure, and so on. It’s not a surprise either when you think that authoritarian regimes are typically atheistic, like in North Korea, Cambodia, the Soviet Union, etc. North Korea would be a paradise for an atheist like Lawrence Krauss. If anyone said anything about Jesus or even owned a Bible, then he could just have them killed. It’s less work than interrupting us, and more permanent.

I’m not saying that every atheist is like Krauss, but there does seem to be this tendency to silence, coerce and intimidate anyone who says anything that disagrees with atheism. Especially in the rank and file of the atheist movement. The whole atheist political effort (e.g. – Freedom from Religion Foundation, etc.) seems to be about forcing Christians to act like atheists in public, so that atheists don’t have to be offended by hearing views that disagree with their own views. They want to silence Christians by using the coercive power of big government. You can see it in debates, you can see it in the universities, and you can see it in the courtroom. They’re not trying to win arguments with evidence, they’re trying to end the argument with threats and coercion.

You can see a video and summary of the third Craig-Krauss debate from Australia here.

You can read a statement of how militant atheists view Christians here. (Warning: reader discretion is advised)

Polemics

Christina Hoff Sommers: how to make school better for boys

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Christina Hoff Sommers
Christina Hoff Sommers

One of the most troubling things I see in the modern church is the tendency of church people and pastors to blame men for not being more aggressive about marrying. Often, the blame is placed on men. Men are told that we need to do better in school, work harder at work, and that we need to be more aggressive about courting and marrying. Very often, you hear the slogan “man up” directed at men, and we are told to stop playing video games and looking at porn and grow up.

The first thing to note is that marriage is much less attractive to men these days. First, the value proposition of marriage changed – especially the problem of no-fault divorce and divorce courts. The economic situation facing men has changed as well – the economy is poor, but the debt is very very high. Those are two important factors.

Another problem is fatherlessness, which is caused by welfare incentives. A lot of the behavior of young men is based on whether there is a father present in the home. The fact of the matter is that single motherhood by choice has become commonplace, and the aggravating factor for this trend is support for welfare. Welfare is bad for two reasons. First, it encourages women to raise children without a father. Boys raised without a father are not as likely to pursue courtship and marriage as boys raised with a father, because fatherlessness harms a boy’s ability to learn to do the things needed for marriage.

Another problem is the availability of pre-marital sex. When a man can get sex without marriage, then he doesn’t feel the same desire to get married.

So there are a few examples of things that we can change to nudge men toward marriage. Just speaking slogans like “man up” to men doesn’t really address these problems.

But in this post, I want to look at a problem that I haven’t even mentioned yet – the problem of schools that don’t produce men who can provide for a family.

Education Reform

Here is Christian equity-feminist Christina Hoff Sommers of the American Enterprise Institute to do that, writing in the left-leaning Atlantic about this problem.

Excerpt:

Women in the United States now earn 62 percent of associate’s degrees, 57 percent of bachelor’s degrees, 60 percent of master’s degrees, and 52 percent of doctorates.

[…]Boys in all ethnic groups and social classes are far less likely than their sisters to feel connected to school, to earn good grades, or to have high academic aspirations. A recent working paper from the National Bureau of Economic Research documents a remarkable trend among high-achieving students: In the 1980s, nearly the same number of top male and female high school students said they planned to pursue a postgraduate degree (13 percent of boys and 15 percent of girls). By the 2000s, 27 percent of girls expressed that ambition, compared with 16 percent of boys. During the same period, the gap between girls and boys earning mostly A’s nearly doubled—from three to five percentage points.

I was a minority boy before I became a minority man – look at this:

This gap in education engagement has dire economic consequences for boys. A 2011 Brookings Institution report quantifies the economic decline of the median male: For men ages 25 to 64 with no high school diploma, median annual earnings have declined 66 percent since 1969; for men with only a high school diploma, wages declined by 47 percent. Millions of male workers, say the Brookings authors, have been “unhitched from the engine of growth.”  The College Board delivered this disturbing message in a 2011 report about Hispanic and African-American boys and young adults: “Nearly half of young men of color age 15 to 24 who graduate from high school will end up unemployed, incarcerated or dead.” Working-class white boys are faring only slightly better. When economist Andrew Sum and his colleagues at the Center for Labor Market Studies at Northeastern University examined gender disparities in the Boston Public Schools, they found that for the class of 2007, among blacks and Hispanics, there were 186 females for every 100 males attending a four-year college or university. For white students: 153 females to every 100 males.

Is this a U.S. – only problem? No. The problem exists in many places. But Dr. Sommers lists some of the initiatives those other countries are taking – trying to understand why boys are different and what needs to be done differently in order to get them to engage and succeed.  But we are not doing anything here. Why not?

Well, first – let’s see what works:

In a rare example of the academic establishment taking note of boys’ trouble in school, the Harvard Graduate School of Education recently published a major study, Pathways to Prosperity, that highlights the “yawning gender gap” in education favoring women: “Our system… clearly does not work well for many, especially young men.” The authors call for a national revival of vocational education in secondary schools. They cite several existing programs that could serve as a model for national reform, including the Massachusetts system, sometimes called the “Cadillac of Career Training Education.”

Massachusetts has a network of 26 academically rigorous vocational-technical high schools serving 27,000 male and female students. Students in magnet schools such as Worcester Technical, Madison Park Technical Vocational, and Blackstone Valley Regional Vocational Technical take traditional academic courses but spend half their time apprenticing in a field of their choice. These include computer repair, telecommunications networking, carpentry, early childhood education, plumbing, heating, refrigeration, and cosmetology. AsPathways reports, these schools have some of the state’s highest graduation and college matriculation rates, and close to 96 percent pass the states’ rigorous high-stakes graduation test.

Blackstone Valley Tech in Upton, Massachusetts, should be studied by anyone looking for solutions to the boy problem.  It is working wonders with girls (who comprise 44 percent of the student body), but its success with boys is astonishing. According to a white paper on vocational education by the Commonwealth’s Pioneer Institute, “One in four Valley Technical students enter their freshman year with a fourth-grade reading level.” The school immerses these students in an intense, individualized remediation program until they read proficiently at grade level. These potentially disaffected students put up with remediation as well as a full load of college preparatory courses (including honors and Advanced Placement classes), because otherwise they could not spend half the semester apprenticing in diesel mechanics, computer repair, or automotive engineering.

In former times, vocational high schools were often dumping grounds for low achievers. Today, in Massachusetts, they are launching pads into the middle class.

Who could possibly be opposed to turning boys into marriage-minded men? Look:

Recent research shows that enrollment in high school vocational programs has dramatic effects on students’ likelihood of graduating from high school—especially boys. But efforts to engage more boys in career and technical programs face a formidable challenge. In a series of scathing reports, the National Council on Women and Girls Education (NCWGE—a 38-year-old consortium that today includes heavy hitters such the AAUW, the National Women’s Law Center, the ACLU, NOW, the Ms. Foundation, and the National Education Association) has condemned high school vocational training schools as hotbeds of “sex segregation.”

Because of decades of successful lobbying by NCWGE groups, high school and college career and technical training programs face government sanctions and loss of funds if they fail to recruit and graduate sufficient numbers of female students into “non-traditional” fields. Over the years, untold millions of state and federal dollars have been devoted to recruiting and retaining young women into fields like pipefitting, automotive repair, construction, drywall installing, manufacturing, and refrigeration mechanics.  But according to Statchat, a University of Virginia workforce blog, these efforts at vocational equity “haven’t had much of an impact.”  Despite an unfathomable number of girl-focused programs and interventions, “technical and manual occupations tend to be dominated by men, patterns that have held steady for many years.”

In March 2013 NCWGE released a report urging the need to fight even harder against “barriers girls and women face in entering nontraditional fields.” Among its nine key recommendations to Congress: more federal funding and challenge grants to help states close the gender gaps in career and technical education (CTE); mandate every state to install a CTE gender equity coordinator; and impose harsher punishments on states that fail to meet “performance measures” –i.e. gender quotas.

Instead of spending millions of dollars attempting to transform aspiring cosmetologists into welders, education officials should concentrate on helping young people, male and female, enter careers that interest them. And right now, boys are the underserved population requiring attention.

So. We know what works to make boys into marriage-ready men. And now we know who is standing in the way. What I’d like to see from the man-up crowd, especially the man-up crowd in the church, is a serious assessment of the research on this issue and some action.

But this is what we get from Mark Driscoll: (whom I almost always agree with)

The number one consumer of online pornography is 12- to 17-year-old boys. What that means is he’s home eating junk food, drinking Monster energy drinks, downloading porn, masturbating and screwing around with his friends. That really doesn’t prepare you for responsible adulthood. That’s a really sad picture, especially if you’re a single gal hoping to get married someday. You’re like: “Seriously, that’s the candidate pool? You’ve got to be kidding me.” That’s why 41 percent of births right now are to unmarried women. A lot of women have decided: “I’m never going to find a guy who is actually dependable and responsible to have a life with. So I’ll just get a career and have a baby and just intentionally be a single mother because there are no guys worth spending life with.”

We really need better leadership – informed leadership – on these issues from prominent pastors. They need to start to read some research (e.g. – what Dr. Sommers presented) on these issues. Maybe pastors need to affirm the traditional view of the Bible on sexual morality, and then take on the root cause of the disengaged boys problem: feminism in the schools. We don’t want to take on these problems in a superficial way and then actually make the problem worse by making excuses for views of sexuality that are unBiblical.

By the way, you should subscribe to the AEI podcast, which is on my list of favorite podcasts. And Dr. Sommers has a new edition of her classic book defending young men. If you have ever wondered what is going wrong with men, that book is required reading. It is required reading for anyone who wants to comment on this issue, in fact.