Debunking the Latest Right Wing Hoax

[Rohirrim]

Poor people, Bill Clinton and Jimmy Carter are responsible for this financial mess. That's the message from the Right's flapping bags of gas now (Hannity, Limbaugh, Krauthammer). So what's wrong with it? Nothing except that it is complete :bs:

Third, lending money to poor people and minorities isn't inherently risky. There's plenty of evidence that in fact it's not that risky at all. That's what we've learned from several decades of microlending programs, at home and abroad, with their very high repayment rates. And as The New York Timesrecently reported, Nehemiah Homes, a long-running initiative to build homes and sell them to the working poor in subprime areas of New York's outer boroughs, has a repayment rate that lenders in Greenwich, Conn., would envy. In 27 years, there have been fewer than 10 defaults on the project's 3,900 homes. That's a rate of 0.25 percent.

On the other hand, lending money recklessly to obscenely rich white guys, such as Richard Fuld of Lehman Brothers, or Jimmy Cayne of Bear Stearns, can be really risky. In fact, it's even more risky, since they have a lot more borrowing capacity. And, here, again, it's difficult to imagine how Jimmy Carter could be responsible for the supremely poor decision-making seen in the financial system. I await the Krauthammer column in which he points out the specific provision of the Community Reinvestment Act that forced Bear Stearns to run with an absurd leverage ratio of 33:1, that instructed Bear Stearns hedge-fund managers to blow up hundreds of millions of their clients money, and that required its septuagenarian CEO to play bridgewhile his company ran into trouble. Perhaps Neil Cavuto knows which CRA clause required Lehman Brothers to borrow hundreds of billions of dollars in short-term debt in the capital markets and then buy tens of billions of dollars of commercial real estate at the top of the market. I can't find it. Did AIG plunge into the credit-default swaps business with abandon because ACORN members picketed its offices? Please. How about the hundreds of billions of dollars of leveraged loans—loans banks committed to private equity firms that wanted to conduct leveraged buyouts of retailers, restaurant companies, and industrial firms? Many of those are going bad now, too. Is that Bill Clinton's fault?

http://www.newsweek.com/id/162789

[L.A. BRONCOS FAN]

Yep.

The same right-wing sociopaths who tried to blame Clinton and/or the Dems for 9/11, Iraq, Katrina, and every other Bush failure are doing the same thing with this latest crisis.

Well, at least the American people finally got a chance to see what the far right would do if they gained control of all three branches of government.

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[cutthemdown]

So Clinton signing the bill you all say led to the deregulation means nothing to you all? Why didn't he veto it?

[L.A. BRONCOS FAN]

So Clinton signing the bill you all say led to the deregulation means nothing to you all?

I didn't say that it means nothing: I say that it doesn't mean what you want it to mean. Not even close.


Why didn't he veto it?

The veto would most likely have been overridden.

[L.A. BRONCOS FAN]

So Clinton signing the bill you all say led to the deregulation....

What do you mean "the bill you all say led to the deregulation?"

Deregulation was the bill's sole purpose.

[Needa Pass Rush]

It's clearly Shrub's fault. <SARCASM>This from 2203.



September 11, 2003
New Agency Proposed to Oversee Freddie Mac and Fannie Mae


The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.
''There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,'' Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.
Mr. Snow said that Congress should eliminate the power of the president to appoint directors to the companies, a sign that the administration is less concerned about the perks of patronage than it is about the potential political problems associated with any new difficulties arising at the companies.
The administration's proposal, which was endorsed in large part today by Fannie Mae and Freddie Mac, would not repeal the significant government subsidies granted to the two companies. And it does not alter the implicit guarantee that Washington will bail the companies out if they run into financial difficulty; that perception enables them to issue debt at significantly lower rates than their competitors. Nor would it remove the companies' exemptions from taxes and antifraud provisions of federal securities laws.
The proposal is the opening act in one of the biggest and most significant lobbying battles of the Congressional session.
After the hearing, Representative Michael G. Oxley, chairman of the Financial Services Committee, and Senator Richard Shelby, chairman of the Senate Banking Committee, announced their intention to draft legislation based on the administration's proposal. Industry executives said Congress could complete action on legislation before leaving for recess in the fall.
''The current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,'' Mr. Oxley said at the hearing. ''We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,'' the independent agency that now regulates the companies.
''These irregularities, which have been going on for several years, should have been detected earlier by the regulator,'' he added.
The Office of Federal Housing Enterprise Oversight, which is part of the Department of Housing and Urban Development, was created by Congress in 1992 after the bailout of the savings and loan industry and concerns about regulation of Fannie Mae and Freddie Mac, which buy mortgages from lenders and repackage them as securities or hold them in their own portfolios.
At the time, the companies and their allies beat back efforts for tougher oversight by the Treasury Department, the Federal Deposit Insurance Corporation or the Federal Reserve. Supporters of the companies said efforts to regulate the lenders tightly under those agencies might diminish their ability to finance loans for lower-income families. This year, however, the chances of passing legislation to tighten the oversight are better than in the past.
Reflecting the changing political climate, both Fannie Mae and its leading rivals applauded the administration's package. The support from Fannie Mae came after a round of discussions between it and the administration and assurances from the Treasury that it would not seek to change the company's mission.
After those assurances, Franklin D. Raines, Fannie Mae's chief executive, endorsed the shift of regulatory oversight to the Treasury Department, as well as other elements of the plan.
''We welcome the administration's approach outlined today,'' Mr. Raines said. The company opposes some smaller elements of the package, like one that eliminates the authority of the president to appoint 5 of the company's 18 board members.
Company executives said that the company preferred having the president select some directors. The company is also likely to lobby against the efforts that give regulators too much authority to approve its products.
Freddie Mac, whose accounting is under investigation by the Securities and Exchange Commission and a United States attorney in Virginia, issued a statement calling the administration plan a ''responsible proposal.''
The stocks of Freddie Mac and Fannie Mae fell while the prices of their bonds generally rose. Shares of Freddie Mac fell $2.04, or 3.7 percent, to $53.40, while Fannie Mae was down $1.62, or 2.4 percent, to $66.74. The price of a Fannie Mae bond due in March 2013 rose to 97.337 from 96.525.Its yield fell to 4.726 percent from 4.835 percent on Tuesday.
Fannie Mae, which was previously known as the Federal National Mortgage Association, and Freddie Mac, which was the Federal Home Loan Mortgage Corporation, have been criticized by rivals for exerting too much influence over their regulators.
''The regulator has not only been outmanned, it has been outlobbied,'' said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ''Being underfunded does not explain how a glowing report of Freddie's operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.''
Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.

[Rohirrim]

Had you actually read the article I posted you'd see that the FMs were only a part of the deal. The real villains were those who used the instruments devised to manipulate the sub-prime markets across the board. Who paid to devise those instruments and then used and abused them to stuff money into their own pockets? Actually, if you want to play the blame game then you have to go to the people who dismantled the regulations that would have stopped the creation of these derivatives and swaps. And that would be Phil Gramm, McCain's economic advisor. You remember him? The one who called the American people a "bunch of whiners?"

[tnedator]

I didn't say that it means nothing: I say that it doesn't mean what you want it to mean. Not even close.



The veto would most likely have been overridden.

Meaning, not only did Clinton support it, but also it had sweeping support in BOTH parties in Congress/Senate?

[L.A. BRONCOS FAN]

Had you actually read the article I posted you'd see that the FMs were only a part of the deal. The real villains were those who used the instruments devised to manipulate the sub-prime markets across the board. Who paid to devise those instruments and then used and abused them to stuff money into their own pockets? Actually, if you want to play the blame game then you have to go to the people who dismantled the regulations that would have stopped the creation of these derivatives and swaps. And that would be Phil Gramm, McCain's economic advisor. You remember him? The one who called the American people a "bunch of whiners?"

Exactly.

The same morally-challenged, right-wing pissants who tried to blame Clinton for 9/11 and every other Bush failure are doing the same thing here.

Never mind the fact that (a) the looting a pillaging started and took place on Bush's watch - not Clinton's, and (b) Trifecta Boy and his rubber stamp GOP Congress sat on their collective ass and did nothing to stop the thievery (indeed, Bush and the repugs aided and abetted the thieves at nearly every turn.)

[Garcia Bronco]

Meaning, not only did Clinton support it, but also it had sweeping support in BOTH parties in Congress/Senate?

Meaning both these asshole parties are responsible. If governemnt keeps it's effing nose out of it we might not be in the shape we are.

[BroncoInferno]

Had you actually read the article I posted you'd see that the FMs were only a part of the deal. The real villains were those who used the instruments devised to manipulate the sub-prime markets across the board. Who paid to devise those instruments and then used and abused them to stuff money into their own pockets? Actually, if you want to play the blame game then you have to go to the people who dismantled the regulations that would have stopped the creation of these derivatives and swaps. And that would be Phil Gramm, McCain's economic advisor. You remember him? The one who called the American people a "bunch of whiners?"

You see what the neocons are doing now, don't you? They know that their philosophy has been exposed as an utter failure. So, rather than championing their owns views, they just want to drag the other side down with them. They just hope they can make it tie. "The Democrats are just as bad as we are!" This is what their bankrupt philosophy has reduced them to Ha!

[Garcia Bronco]

You see what the neocons are doing now, don't you? They know that their philosophy has been exposed as an utter failure. So, rather than championing their owns views, they just want to drag the other side down with them. They just hope they can make it tie. "The Democrats are just as bad as we are!" This is what their bankrupt philosophy has reduced them to Ha!

LOL. I still don't understand what a "neocon" is but if you are refering to conservative ideals, I would say there isn't a party out there now that does believe or practice conservatism. Not the two "major" ones anyway.

[L.A. BRONCOS FAN]

You see what the neocons are doing now, don't you? They know that their philosophy has been exposed as an utter failure. So, rather than championing their owns views, they just want to drag the other side down with them. They just hope they can make it tie. "The Democrats are just as bad as we are!" This is what their bankrupt philosophy has reduced them to Ha!

Hammer, nail, head.

For the last eight years, the righties have run this same play every time their frauds and felonies have come to light.

[Rohirrim]

You see what the neocons are doing now, don't you? They know that their philosophy has been exposed as an utter failure. So, rather than championing their owns views, they just want to drag the other side down with them. They just hope they can make it tie. "The Democrats are just as bad as we are!" This is what their bankrupt philosophy has reduced them to Ha!

I'm not one to write off the Dems hand in this either. They definitely F'd it up as well. But the overarching villain in this whole debacle to me is not Bill Clinton, or poor people who wanted houses - it's greed and the philosophy that catered to that greed, the philosophy that said if we cut out all the regulation and let greed rule our markets we will all get rich. Greed is not good. It just disgusts me to see the Right once again using their attack politics in order to dodge their own responsibility in this collapse, and this time blame it on the poor. Really despicable stuff.

[L.A. BRONCOS FAN]

LOL. I still don't understand what a "neocon" is but if you are refering to conservative ideals, I would say there isn't a party out there now that does believe or practice conservatism. Not the two "major" ones anyway.

The whole "get government off our backs," "government is the problem," and "the free market will regulate itself" philosophy that brought us to the current crisis is a conservative ideal.

But even if you were right, conservatives still chose to hitch their wagons to the BushCo express - and now it's time for them to pay their fare.

[Needa Pass Rush]

As panicked politicians prepare to fork over $1 trillion in taxpayer funding to rescue the financial industry, they've fingered regulation, deregulation, Fannie Mae and Freddie Mac, the Community Reinvestment Act, Jimmy Carter, Bill Clinton, both Bushes, greedy banks, greedy borrowers, greedy short-sellers and minority home ownership mau-mauers (can't call 'em greedy, that would be racist) for blame.
But there's one giant paternal elephant in the room that has slipped notice: how illegal immigration, crime-enabling banks and open-borders policies fueled the mortgage crisis.
It's no coincidence that most of the areas hardest hit by the foreclosure wave -- Loudoun County, Va., California's Inland Empire, Stockton and San Joaquin Valley, and Las Vegas and Phoenix, for starters -- also happen to be some of the nation's largest illegal alien sanctuaries.
Half of the mortgages to Hispanics are subprime (the accursed species of loan to borrowers with the shadiest credit histories). A quarter of all those subprime loans are in default and foreclosure.
Regional reports across the country have decried the subprime meltdown's impact on illegal immigrant "victims." A July report showed that in seven of the 10 metro areas with the highest foreclosure rates, Hispanics represented at least one-third of the population. In two of those areas -- Merced and Salinas-Monterey, Calif. -- Hispanics compose half the population.
The amnesty-promoting National Council of La Raza and its Development Fund have received millions in federal funds to "counsel" their constituents on obtaining mortgages with little to no money down; the group almost succeeded in attaching a $10-million earmark for itself in one of the housing bills passed this spring.
For the last five years, I've reported on the rapidly expanding illegal alien home loan racket. The top banks clamoring for their handouts as their profits plummet -- led by Wachovia and Bank of America -- launched aggressive campaigns to woo illegal alien homebuyers.
The quasi-governmental Wisconsin Housing and Economic Development Authority jumped in to guarantee home loans to illegal immigrants. The Washington Post noted, almost as an afterthought in a 2005 report: "Hispanics, the nation's fastest-growing major ethnic or racial group, have been courted aggressively by real estate agents, mortgage brokers and programs for first-time buyers that offer help with closing costs.
Ads proclaim: "Sin verificacion de ingresos! Sin verificacion de documento!" -- which loosely translates as, "Income tax forms are not required, nor are immigration papers."
In addition, fraudsters have engaged in massive house-flipping rings using illegal aliens as straw buyers. Among many examples cited by the FBI: a conspiracy in Las Vegas involving a former Nevada First Residential Mortgage Co. branch manager who directed loan officers and processors in the origination of 233 fraudulent Federal Housing Authority loans valued at over $25 million.
The defrauders manufactured and submitted false employment and income documentation for borrowers; most were illegal immigrants from Mexico. To date, the FBI reported, "Fifty-eight loans with a total value of $6.2 million have gone into default, with a loss to the Housing and Urban Development Department of over $1.9 million."
It's the tip of the iceberg. Thanks to lax Bush administration-approved policies allowing illegal aliens to use "matricula consular cards" and taxpayer identification numbers to open bank accounts, more forms of mortgage fraud have burgeoned. Moneylenders still have no access to a verification system to check Social Security numbers before approving loans.
In an interview about rampant illegal alien home loan fraud, a spokeswoman for the U.S. General Accounting Office told me five years ago:
"(C)onsidering the size of Los Angeles, New York, Chicago, Houston and other large cities throughout the United States known to be inundated with illegal aliens, I don't think the federal government is willing to expose this problem for financial reasons as well as for fear of political repercussions."
The chickens are coming home to roost. And law-abiding, responsible taxpayers are going to pay for it.

[Garcia Bronco]

As panicked politicians prepare to fork over $1 trillion in taxpayer funding to rescue the financial industry, they've fingered regulation, deregulation, Fannie Mae and Freddie Mac, the Community Reinvestment Act, Jimmy Carter, Bill Clinton, both Bushes, greedy banks, greedy borrowers, greedy short-sellers and minority home ownership mau-mauers (can't call 'em greedy, that would be racist) for blame.
But there's one giant paternal elephant in the room that has slipped notice: how illegal immigration, crime-enabling banks and open-borders policies fueled the mortgage crisis.
It's no coincidence that most of the areas hardest hit by the foreclosure wave -- Loudoun County, Va., California's Inland Empire, Stockton and San Joaquin Valley, and Las Vegas and Phoenix, for starters -- also happen to be some of the nation's largest illegal alien sanctuaries.
Half of the mortgages to Hispanics are subprime (the accursed species of loan to borrowers with the shadiest credit histories). A quarter of all those subprime loans are in default and foreclosure.
Regional reports across the country have decried the subprime meltdown's impact on illegal immigrant "victims." A July report showed that in seven of the 10 metro areas with the highest foreclosure rates, Hispanics represented at least one-third of the population. In two of those areas -- Merced and Salinas-Monterey, Calif. -- Hispanics compose half the population.
The amnesty-promoting National Council of La Raza and its Development Fund have received millions in federal funds to "counsel" their constituents on obtaining mortgages with little to no money down; the group almost succeeded in attaching a $10-million earmark for itself in one of the housing bills passed this spring.
For the last five years, I've reported on the rapidly expanding illegal alien home loan racket. The top banks clamoring for their handouts as their profits plummet -- led by Wachovia and Bank of America -- launched aggressive campaigns to woo illegal alien homebuyers.
The quasi-governmental Wisconsin Housing and Economic Development Authority jumped in to guarantee home loans to illegal immigrants. The Washington Post noted, almost as an afterthought in a 2005 report: "Hispanics, the nation's fastest-growing major ethnic or racial group, have been courted aggressively by real estate agents, mortgage brokers and programs for first-time buyers that offer help with closing costs.
Ads proclaim: "Sin verificacion de ingresos! Sin verificacion de documento!" -- which loosely translates as, "Income tax forms are not required, nor are immigration papers."
In addition, fraudsters have engaged in massive house-flipping rings using illegal aliens as straw buyers. Among many examples cited by the FBI: a conspiracy in Las Vegas involving a former Nevada First Residential Mortgage Co. branch manager who directed loan officers and processors in the origination of 233 fraudulent Federal Housing Authority loans valued at over $25 million.
The defrauders manufactured and submitted false employment and income documentation for borrowers; most were illegal immigrants from Mexico. To date, the FBI reported, "Fifty-eight loans with a total value of $6.2 million have gone into default, with a loss to the Housing and Urban Development Department of over $1.9 million."
It's the tip of the iceberg. Thanks to lax Bush administration-approved policies allowing illegal aliens to use "matricula consular cards" and taxpayer identification numbers to open bank accounts, more forms of mortgage fraud have burgeoned. Moneylenders still have no access to a verification system to check Social Security numbers before approving loans.
In an interview about rampant illegal alien home loan fraud, a spokeswoman for the U.S. General Accounting Office told me five years ago:
"(C)onsidering the size of Los Angeles, New York, Chicago, Houston and other large cities throughout the United States known to be inundated with illegal aliens, I don't think the federal government is willing to expose this problem for financial reasons as well as for fear of political repercussions."
The chickens are coming home to roost. And law-abiding, responsible taxpayers are going to pay for it.



I work with a programmer that used to work for a home loan company. She literally saw most of the loan work that pushed through and you would not believe the amount of loans that were put together for people that couldn't even verify income on loan work. And they were able to borrow money. It's just crazy.

[Mr.Meanie]

I lived in Vegas during the boom and bust...and I can assure you the bust wasn't because of illegal aliens. ::)

[Rohirrim]

I lived in Vegas during the boom and bust...and I can assure you the bust wasn't because of illegal aliens. ::)

This is turning into the Repug version of "Usual Suspects." ;)

[ak1971]

thing is you/we can point fingers in every direction..this just ended up being the 'perfect storm' with everyone being at fault. now lets fix it.

[L.A. BRONCOS FAN]

thing is you/we can point fingers in every direction..

President Katrina?

Is that you?

[Needa Pass Rush]

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[Bronco Bob]

Meaning both these a-hole parties are responsible. If governemnt keeps it's effing nose out of it we might not be in the shape we are.

You could also look at it as if the government would have put its effing
nose into it a lot harder and more decisively we might not be in the shape
we are in.