Tag Archives: Mortgage

Commentary

Who caused the recession? How did the housing bubble happen?

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Republicans on the House Oversight have released a report that explains what caused the subprime crisis.

I can’t read the whole thing! But Hot Air has the key facts so you don’t have to read it either!

* Political pressure led to the erosion of responsible lending practices:

In the early 1990s, Fannie and Freddie began to come under considerable political pressure to lower their underwriting standards, particularly on the size of down payments and the credit quality of borrowers. (p.6)

* Lower down payments led to housing prices that outpaced income growth: Once government-sponsored efforts to decrease down payments spread to the wider market, home prices became increasingly untethered from any kind of demand limited by borrowers’ ability to pay. Instead, borrowers could just make smaller down payments and take on higher debt, allowing home prices to continue their unrestrained rise. Some statistics help illustrate how this occurred. Between 2001 and 2006, median home prices increased by an inflation-adjusted 50 percent, yet at the same time Americans’ income failed to keep up. (p. 11)

* Members of an “affordable housing” coalition shared profits with political allies to help legitimize their business practices: Fannie Mae created and used The Fannie Mae Foundation to spread millions of dollars around to politically-connected organizations like the Congressional Hispanic Caucus Institute. It also hired well-known academics to give an aura of academic rigor to policy positions favorable to Fannie Mae. One paper coauthored by now-Director of the Office of Management and Budget Peter Orszag, concluded that the chance was minimal that the GSEs were not holding sufficient capital to cover their losses in the event of a severe economic shock. The authors suggested that “the risk to the government from a potential default on GSE debt is effectively zero,” and that “the expected cost to the government of providing an explicit government guarantee on $1 trillion in GSE debt is just $2 million.” (p.7)

* The Government Sponsored Enterprises led the way into the housing crisis: Fannie Mae and Freddie Mac were leaders in risky mortgage lending. According to an analysis presented to the Committee, between 2002 and 2007, Fannie and Freddie purchased $1.9 trillion of mortgages made to borrowers with credit scores below 660, one of the definitions of “subprime” used by federal banking regulators. This represents over 54% of all such mortgages purchased during those years. (p.24)

My comprehensive post on this issue is here. In that post, I collected videos of Democrats admitting that their plan was to force banks to make loans to unqualified borrowers, as well as news articles by the New York Times and Los Angeles Times on the topic.

News

Round-up of news on Obama’s economic policies

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Tax policies that destroy traditional families

New taxes on married couples with intact families to subsidize out-of-wedlock births. (This is basically an incentive to not marry, by the way)

Hans Bader at the CEI’s blog reports: (H/T ECM)

Not content with repealing welfare reform through the job-killing stimulus package, and proposing a massive marriage penalty in the tax code, Obama and his Congressional allies are now planning to make married and widowed taxpayers subsidize benefits for which they are not eligible, such as payments to households with out-of-wedlock births. For example, they are pushing a bill that will allow even households that receive tens of thousands of dollars a year in child support to demand food stamps.

…Intact families, and widows, usually have every dollar they make considered in whether they qualify for food stamps. But under the Obama-backed proposal, unwed mothers, and divorced mothers, would not, since the child-support dollars they receive would be arbitrarily excluded.

Stop and think about what sorts of incentives this creates. What kind of man would be stupid enough to consider getting married and being a father to his own children? This is how Democrats destroy the family with tax policies, so that women with children depend on the state, and the state can in turn influence the way children are raised by getting them into day care, pre-K and government-run schools.

The goal is to prevent parents from influencing their own children with benighted traditional beliefs about traditional religion and morality. According to Democrats, that is the job of qualified public school teachers using approved teaching materials designed by experts like Kevin Jennings. And besides, the more children are raised without fathers, the more government jobs are created to deal with the fallout.

And there’s more:

The Obama-backed bill also increases the federal matching funds states receive for maximizing their collection of child support payments, giving them an incentive to artificially jack up child support obligations in order to reap federal money (as many states did in the aftermath of the 1988 Family Support Act), even if that means forcing fathers who have never missed a payment to pay much more than the actual cost of raising a child. I have previously written about how court-ordered child support payments generally exceed the actual cost of raising a child under most existing state child-support guidelines.

Democrat women that I know (single/divorced women and single/divorced mothers) are so mystified as to why men are not lining up to marry them. Maybe they should be thinking about the policies that they actually voted in favor of – they are not husband-friendly or father-friendly.

Democrat women think that they can crush the last drop of liberty and autonomy out of a man, and still expect him to love, protect and provide for women and children. Inexplicable. They want the security of the state and they don’t realize how it decreases the number of men willing to make commitments.

Home sales will require government approval

The Democrats cap-and-trade bill will require you to fix your house up to be eco-friendly, before you will be allowed to sell it. What? Global warming isn’t going to solve itself, you know…. Oh, wait!

CNSNews reports on what we can expect. (H/T Gateway Pundit)

The 1,400-page cap-and-trade legislation pushed through by House Democrats contains a new federal policy that residential, commercial, and government buildings be retrofitted to increase energy efficiency, leaving it up to the states to figure out exactly how to do that.

This means that homeowners, for example, could be required to retrofit their homes to meet federal “green” guidelines in order to sell their homes, if the cap-and-trade bill becomes law.

This is the first time since these subprime mortgage bank bailouts started that I’ve ever been happy about renting.

New Republican cap-and-trade TV ad

Here’s the new ad put out by Republicans to educate the public about the cap-and-trade bill that just passed the house. (H/T ECM)

Now that’s a great ad.

Why Democrats voted for Obama

Because they don’t know anything about economics!

The second one is from Nice Deb.

News

ACORN sues whistleblower for exposing their secrets

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Let’s learn about ACORN

In case you don’t know anything about ACORN, Michelle Malkin can introduce this organization. (post dated June 20, 2008)

Excerpt:

The radical left-wing, government-subsidized group ACORN uses your tax dollars to engage in voter fraud, enrich itself as part of the mortgage counseling racket, and serve as an activist branch of the Democrat Party.

There’s more. Ashley Eiler e-mails about a new report: “The Consumers Rights League just released a collection of whistleblower documents from an ACORN staffer that raise some new concerns about how the organization has established policies for its housing counselors to use undocumented / under-the-table income for processing loan applications from low-income individuals. In addition to pushing these and other exotic loans, the documents reveal that ACORN has engaged in some apparently illegal activities by commingling government funds from its tax-exempt offshoot entities to fight political battles against corporate lenders. ”

Who has close ties to this suspicious group? Is it Dick Cheney?

Obama’s close relationship with ACORN

Michelle Malkin can tell you all about Obama’s close ties with ACORN. (post dated June 25, 2008)

Excerpt:

Who in Washington will fight to ensure that your money isn’t being spent on these radical activities?

Don’t bother asking Barack Obama. He cut his ideological teeth working with ACORN as a “community organizer” and legal representative. Naturally, ACORN’s political action committee has warmly endorsed his presidential candidacy. According to ACORN, Obama trained its Chicago members in leadership seminars; in turn, ACORN volunteers worked on his campaigns. Obama also sat on the boards of the Woods Fund and Joyce Foundation, both of which poured money into ACORN’s coffers. ACORN head Maude Hurd gushes that Obama is the candidate who “best understands and can affect change on the issues ACORN cares about” — like ensuring their massive pipeline to your hard-earned money.

…For excellent background on Obama and ACORN, see Stanley Kurtz’s NR piece here, plus City Journal pieces here and here. Also here and here.

This article has some startling numbers on ACORN’s operations.

How is ACORN funded?

ACORN is funded by taxpayer money, and Obama’s porkulus bill included 4.19 billion dollars for his former employer. (post dated January 26, 2009)

Excerpt:

House GOP leader John Boehner’s office reports that the left-wing voter fraud/illegal alien/housing entitlement racketeers at ACORN “could get billions” more in federal taxpayer funding from the Democrats’ stimulus bill.

Remember, these guys are accused of voter fraud, and they are being asked by Obama to go door-to-door to assist with the US census. I’m sure they will not use that opportunity to commit more voter fraud. Not at all.

ACORN sues whistleblower

Remember that whistleblower that I mentioned earlier? Michelle has the latest news.

Excerpt:

The White House is on a witch hunt against inspectors general who blow the whistle on waste, fraud, and abuse of taxpayer dollars.

And now, taxpayer-subsidized ACORN affiliate Project Vote — where President Obama cut his teeth as a community organizer and learned Leftist intimidation tactics up close and personal — is going after whistleblower Anita MonCrief and an anonymous “John Doe” defendant for posting invaluable documents that reveal the money-shuffling racket.

Obama. ACORN. Project Vote. Corrupt birds of a feather bully together.

The scoop: Project Vote has filed a federal lawsuit against MonCrief for blogging about her experience and knowledge of the non-profit 501(c)(3) organization’s partisan and political activities, including coordination with the Obama campaign. Project Vote seeks compensatory damages and exemplary damages “of at least $5 million” and all costs and attorney’s fees on trumped-up charges of “trademark infringement” and publication of “trade secrets.”

Should we be surprised that the left is willing to bully and intimidate people for exposing them?

ACORN was instrumental in causing the current recession by suing banks so that they would be forced to make loans to people who would never be able to pay the money back. Remember, Democrats caused this recession and Republicans tried to stop them.