UPDATE 10/13 12:34PM: Dan FrIEdman WRITES,
I recently had a phone conversation with my cousin, a newly retired attorney who spent most of his working life as a banking regulator and was at the top of the heap when he left. For decades, all he did was interact with banks, savings & loans, mortgage lenders - and ACORN. He is a fine, scrupulous man who never discussed issues he dealt with at work, but now retired he felt at liberty to talk.
My dear cousin told me in unambiguous terms that the entire subprime mortgage phenomenon, which precipitated the worldwide financial crisis, was basically an affirmative action program pursued by liberal politicians and "community organizers" who imposed their "affordable housing" agenda on our financial system via legislation, leaning on banking executives, and using Fannie and Freddie as facilitators, regulatory muscle and as a Potemkin proxy for US government backing. He wasn't just making an assertion, either. Cousin Richard peppered our conversation with inside anecdotes to illustrate the point, including one instance of a major financial center bank writing ACORN a million dollar check just to get them off its back.
Have you read anything about this in "the media" other than inklings in the WSJ and on Fox? Have the normally inquisitive, risk-averse business writers at the NYT done any features - even to throw us off the scent (as they did with Ayers)? And hey, how about that business channel, CNBC? The answer is no, because so much of the real story leads to Obama, his Chicago years, his associates, supporters and his party. No time for that now. Not in the middle of a presidential campaign.
What we have here is a conspiracy of silence being imposed by "the media," an embargo on the truth to keep it from sullying their Anointed One. Only way I can think of for the average citizen to run the blockade is through the Internet where, if you look, there is plenty of alternate information, such as this this startling video - which Time Warner (CNN) attempted to suppress. Take a look at this and this too. Then push the word digitally to an ever widening circle of friends, acquaintances and family. If you have other ideas and better resources, employ them. But let's face it, today, without an honest, independent press, we are underground pamphleteers..
And so here's another reason - and one of the best - to keep Obama and his clique as far away from the Oval Office as possible. In the space of a few short months, and with one wave of his magic wand, Obama has effectively corrupted the nation's entire media establishment. If he should take over the White House, the whitewash of President Obama will likely continue and cause even more damage to our democracy. Since the nations' mass media has become the propaganda arm of the Obama campaign, there's every reason to believe, with so much invested, it will continue to aid and abet the Obama White House too. "Agents of change," indeed. Dan Friedman NYC
Sen. John McCain's 2006 demand for regulatory action on Fannie Mae and Freddie Mac could have prevented current financial crisis.
McCain's letter -- signed by nineteen other senators -- said that it was "...vitally important that Congress take the necessary steps to ensure that [Fannie Mae and Freddie Mac]...operate in a safe and sound manner.[and]..More importantly, Congress must ensure that the American taxpayer is protected in the event that either...should fail."
Sen. Obama did not sign the letter, nor did any other Democrat.
Atlas reader Jim L has written me the most informative explanation of the the ongoing crisis,
"as a mortgage lender and an ex-bond dealer I am fully conversant with the shift that occurred in the securities industry from the early 90s when one could buy a portfolio of sub prime mortgages priced well above treasuries to the late 90s when the spread had all but disappeared. The earlier portfolio had mortgages that one knew were going to have a high default rate. These were the early mortgages given to people with bad credit who had decent incomes. The trouble was, the rates were too high for "minority" bad credit people who didn't have jobs or high paying jobs to be able to use the sub prime loans to purchase a home. Solution, have Fannie/Freddie buy the junk loans and blend them into their portfolios of good credit loans. This meant the people who were putting out the junk loans had a buyer for their junk paper and the junk paper could be priced at a low enough rate so the bad credit buyers could qualify for mortgages though Fannie/Freddie more relaxed credit requirements.
I noticed this change when in the late 90s New Century Mortgage, one of the big players, began to offer loans to really shitty credit people at perhaps 2% lower than they had been able to a few years before. Ignoring rate changes due to increased or declining rate: in mid 90s, the spread between a good credit borrower and a bad credit borrower was perhaps 4 points 6% vs. 10%. Late 90s the spread had narrowed to 6% vs. 8%. What had changed? The ability for a company like Great West Financial, a sub prime lender (owned by the Sandlers, big Obama and left wing supporters) to sell the same junk loans at the lower rate. Previously if they packaged low credit score loans the market for that package of loans was limited to people who were willing to take the risk of a higher probability of some defaults in exchange for a higher rate of return on their mortgage portfolio.
Why were they able to sell these risk laden portfolios with reduced spread over the high quality portfolios? Congress had done two things: pressured Fannie/Freddie to buy them and encouraged Fannie/Freddie (through people like Barney Franks boy friend) to develop loan programs that banks could use for low credit mortgage applicants. How could Fannie/Freddie buy them? By blending them into their previously pristine portfolios. The portfolios were sold to insurance companies and the like as income vehicles and were rated AAA by Moody's and S & P. They retained that rating even after the insertion in them of an increasingly larger percentage of the junk loans, either through deceit or collusion with bond raters within S & P and Moody's. It isn't unthinkable that some people within the rating agencies had the same agenda as the left in congress. The only way to keep the junk mortgage rates low was to hide them within a portfolio of otherwise AAA paper. That way the spread over good quality loans could be minimized.
Hope this help explain the issue a little.
Interview with Stanley Kurtz who is the person doing the most research on the Annenberg Challenge. The AC funded Acorn and was also the strongest connection between Ayers and Obama. They would picket banks, officers homes, the lobbies etc. as a bad press threat to intimidate the banks into getting into the "bad loan" programs. Kurtz, in the links video inbed discusses Obama's role in both funding and training the Acorn people in Chicago.
This is the link to the full piece from Media Circus.
UPDATED: Obama Sued Citibank Under CRA to Force it to Make Bad Loans Posted on 03 October 2008 Do you remember how we told you that the Democrats and groups associated with them leaned on banks and even sued to get them to make bad loans under the Community Reinvestment Act which was a factor in causing the economic crisis (see HERE and HERE ) … well look at what some fellow bloggers have dug up while researching Obama’s legal career. Looks like a typical ACORN lawsuit to get banks to hand out bad loans.
In these lawsuits, ACORN makes a bogus claim of Redlining (denying poor people loans because of their ethnic heritage). They protest and get the local media to raise a big stink. This stink means that the bank faces thousands of people closing their accounts and get local politicians to lobby to stop the bank from doing some future business, expansions and mergers. If the bank goes to court, they will win, but the damage is already done because who is going to launch a big campaign to get the bank’s reputation back?
It is important to understand the nature of these lawsuits and what their purpose is. ACORN filed tons of these lawsuits and ALL of them allege racism.
Buycks-Roberson v. Citibank Fed. Sav. Bank Fair Housing/Lending/Insurance
Docket / Court 94 C 4094 ( N.D. Ill. ) FH-IL-0011
Plaintiffs filed their class action lawsuit on July 6, 1994, alleging that Citibank had engaged in redlining practices in the Chicago metropolitan area in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691; the Fair Housing Act, 42 U.S.C. 3601-3619; the Thirteenth Amendment to the U.S. Constitution; and 42 U.S.C. 1981, 1982. Plaintiffs alleged that the Defendant-bank rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories. Plaintiffs sought injunctive relief, actual damages, and punitive damages.
U.S. District Court Judge Ruben Castillo certified the Plaintiffs’ suit as a class action on June 30, 1995. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 322 (N.D. Ill. 1995). Also on June 30, Judge Castillo granted Plaintiffs’ motion to compel discovery of a sample of Defendant-bank’s loan application files. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 338 (N.D. Ill. 1995).
The parties voluntarily dismissed the case on May 12, 1998, pursuant to a settlement agreement. Plaintiff’s Lawyers Alexis, Hilary I. (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000 Childers, Michael Allen (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000 Clayton, Fay (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000 Cummings, Jeffrey Irvine (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Love, Sara Norris (Virginia)
Miner, Judson Hirsch (Illinois)
FH-IL-0011-7500 | FH-IL-0011-9000
Obama, Barack H. (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Wickert, John Henry (Illinois)