MediaMatters continues to deny the facts about the subprime crisis.
A November 13 Wall Street Journal op-ed claimed that loans made “under the pressure of” the Community Reinvestment Act helped to “fuel the greatest housing bubble our nation has ever seen.” The claim that affordable housing initiatives were responsible for the housing crisis is a widely discredited myth.
Widely discredited? By who?
Bernanke: Experience “runs counter to the charge that CRA was at the root of, or otherwise contributed in any substantive way to, the current mortgage difficulties.” In a November 25, 2008, letter, Federal Reserve chairman Ben Bernanke stated: “Our own experience with CRA over more than 30 years and recent analysis of available data, including data on subprime loan performance, runs counter to the charge that CRA was at the root of, or otherwise contributed in any substantive way to, the current mortgage difficulties.”
SF Reserve Bank’s Yellen: “[S]tudies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households.” Janet Yellen, president and CEO of the Federal Reserve Bank of San Francisco, stated in a March 2008 speech that “studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households.”
Oh, liberals. Gotcha’.
So Ben Bernanke and Janet Yellen comments constitute a widely discredited claim, apparently. A man who is trying to push trillions of inflated dollars out the door and a woman whose own speech contradicts MediaMatters assertions.
Perhaps the most notable change, however, is that in the last 25 years, consumer credit markets have shifted dramatically, moving from a credit rationing approach to a risk-based pricing system. In other words, today, far fewer applicants are denied credit—rather, they are offered credit at higher prices intended to reflect the greater risk posed by these loans. This shift, coupled with other innovations in the financial markets, has significantly increased access to credit, with both positive and negative effects.
On the positive side, expanded access to credit has greatly increased the ability of low- and moderate-income households of all races and ethnicities to become homeowners. None of us would want to turn back the clock to the days when the prospects of being approved for a loan were more limited in certain neighborhoods and for certain classes of borrowers. But, as has become apparent over the past year with the rise in mortgage delinquencies and foreclosures, the risks associated with the changes in the consumer credit markets were greatly underestimated, and we are now grappling with the consequences.
I guess MediaMatters didn’t want people actually reading the speech which is the reason for the cropped quotes. Maybe they were just hiding something….like the Democrats complete ignorance of all things concerning the subprime crisis.
BARNEY FRANK: “Those who argue that housing prices are now at a point of a bubble seem to me to be missing a very important point. Unlike previous examples we have had when substantial excessive inflation of prices later caused problems we are talking here about an entity, home ownership, homes where there is not the degree of leverage where we have seen elsewhere. This is not the dot-com situation. We had problems with people having invested in business plans of which there was no reality; people building fiber optic cables for which there was no need. Homes that are occupied may see an ebb and flow in the price at a certain percentage level. But you’re not going to see the collapse that you see when people talk about a bubble and so those of us on our committee in particular will continue to push for home ownership.”
OK, so that just proves Barney Frank is an idiot.
Nope…certainly there was nothing wrong with Fannie and Freddie buying billions in bad loans.
Neither Fannie nor Freddie has turned a profit in the past year, accumulating $14.9 billion in combined quarterly losses, largely related to bad subprime and Alt-A mortgage assets.
Yeah, got that MediaMatters? All this is directly tied to the CRA.
On top of that MediaMatters also ignores the fact that Obama and ACORN have repeatedly coerced banks to make bad loans as well and when the loans were defaulted on those same banks were accused of predatory lending.
Obama’s mendacity continues to amaze me in, among other things, his framing of the economic situation and sub-prime mortgage crisis as a failure of Republican policy, neglecting his own involvement as attorney for and subsequent association with ACORN (Association of Community Organizations for Reform Now); the donations he received from Fannie Mae and Freddie Mac; and the sequelae of “affirmative action” credit initiatives by the Carter and Clinton administrations in context of the Community Reinvestment Act, forcing banks to “distribute risk more broadly” by extending high-risk loans to low- and moderate-income borrowers “who would not have gotten credit otherwise”
ACORN: While not all subprime loans are predatory, predatory lending is concentrated in the subprime loan market. There is a place for responsible subprime loans, where somewhat higher interest rates balance the genuinely higher risk of lending to borrowers with past credit problems. Today, however, too many subprime loans include abusive terms or conditions, too many have rates and fees much higher than can reasonably be justified by the credit records of the borrowers, and too many are going to borrowers who could and should qualify for loans at significantly lower rates. A Freddie Mac study suggested that about one third of the borrowers who have received subprime loans could have qualified for prime loans, while Fannie Mae Chairman Franklin Raines estimated that as many as half could have.
What about the rest of those subprime loans? I guess we are to assume they were clean legitimate loans to low risk people.
Sorry MediaMatters, but Edward Pinto’s article was right on target. The part MediaMatters edited out of their cropped quote:
The 1992 GSE Act was the fuse, and the trillions of dollars in subsequent CRA and GSE affordable-housing loans would fuel the greatest housing bubble our nation has ever seen. But who lit the fuse?
The previous year, as Allen Fishbein, currently an adviser for consumer policy at the Federal Reserve, has noted, Acorn and other community groups were informally deputized by then House Banking Chairman Henry Gonzalez to draft statutory language setting the law’s affordable-housing mandates. Interim goals were set at 30% of the single-family mortgages purchased by Fannie and Freddie, and the Department of Housing and Urban Development has increased that percentage over time. The goal of the community groups was to force Fannie and Freddie to loosen their underwriting standards, in order to facilitate the purchase of loans made under the CRA.
Thus a provision was inserted into the law whereby Congress signaled to the GSEs that they should accept down payments of 5% or less, ignore impaired credit if the blot was over one year old, and otherwise loosen their lending guidelines.
The proposals of Acorn and other affordable-housing advocacy groups were acceptable to Fannie. Fannie had been planning to use the carrot of affordable-housing lending to maintain its hold over Congress and stave off its efforts to impose a strong safety and soundness regulator to oversee the company. (It was not until 2008 that a strong regulator was created for Fannie and Freddie. A little over a month later both GSEs were placed into conservatorship; they have requested a combined $112 billion in assistance from the federal government, and much more will be needed over the next few years.)
The result of loosened credit standards and a mandate to facilitate affordable-housing loans was a tsunami of high risk lending that sank the GSEs, overwhelmed the housing finance system, and caused an expected $1 trillion in mortgage loan losses by the GSEs, banks, and other investors and guarantors, and most tragically an expected 10 million or more home foreclosures.
As a result of congressional and regulatory actions, the percentage of conventional first mortgages (not guaranteed by the Federal Housing Administration or the Veteran’s Administration) used to purchase a home with the borrower putting 5% or less down tripled from 9% in 1991 to 27% in 1995, eventually reaching 29% in 2007.
Fannie and Freddie acquired $1.2 trillion of loans from banks and other lenders from 1993 to 2007. This amounted to 62% of all such conventional home purchase loans with a down payment of 5% or less that were originated nationwide over the same period.
Fannie and Freddie also acquired $2.2 trillion in subprime loans and private securities backed by subprime loans from 1997 to 2007. Acorn and the other advocacy groups succeeded at getting Congress to mandate “innovative and flexible” lending practices such as higher debt ratios and creative definitions of income. And the serious delinquency rate on Fannie and Freddie’s $1.5 trillion in high-risk loans was 10.3% as of Sept. 30, 2009.
This is about seven times the delinquency rate on the GSEs’ traditional loans. Fifty percent of the high-risk loans are estimated to be CRA loans, with much of the remainder useful to the GSEs in meeting their affordable-housing goals.
I guess the actual facts and figures weren’t important enough to mention to your readers. All that was necessary was to continue the defense of the embattled ACORN. Priorities, people. Get your head out of Soros’ ass.
In an ironic twist, two often diametrically opposed organizations have taken on the roles of the other, short lived as it may be. NASA is vigorously attacking rumors of the Earth’s demise in the year 2012.
“There is no factual basis for these claims,” NASA said in a question-and-answer posting on its website.
Speaking about the possibility of a cosmic collision NASA was quick to point out the obvious.
If such a collision were real “astronomers would have been tracking it for at least the past decade, and it would be visible by now to the naked eye,” it added. “Obviously, it does not exist.”
Of course the Catholic Church isn’t being so dismissivein the search for life on other worlds. Centuries after the hasty condemnation of notable astronomers like Galileo, the church is turning it’s gaze upwards for a different reason.
Father Jose Funes, a Jesuit astronomer at the Vatican Observatory and one of the organisers of the conference, said: “As a multiplicity of creatures exists on Earth, so there could be other beings, also intelligent, created by God.
Of course this new stance isn’t without criticism.
Paul Davies, a theoretical physicist and author of The Goldilocks Enigma, told The Washington Post that the threat to Christianity is “being downplayed” by Church leaders. He said: “I think the discovery of a second genesis would be of enormous spiritual significance.
“The real threat would come from the discovery of extraterrestrial intelligence, because if there are beings elsewhere in the universe, then Christians, they’re in this horrible bind.
“They believe that God became incarnate in the form of Jesus Christ in order to save humankind, not dolphins or chimpanzees or little green men on other planets.”
Fair enough, but that is subjective as to how “in His image” is defined and father Funes disagrees with you.
Father Funes, director of the Vatican Observatory near Rome, is a respected scientist who collaborates with universities around the world.
“The search for forms of extraterrestrial life, he says, does not contradict belief in God.”
Fine, but don’t come crying to me when this happens.
Certainly not this.
If Vitter were successful — and if non-citizens were excluded from the census count for congressional apportionment — states with fewer immigrants would fare significantly better in the upcoming allocation of House seats.
Yes, how dare those legal citizens demand more say in their government than the standing army of illegal immigrants! What right do they have to demand that? La Raza deserves more influence. They should just shut up and let the government do what it needs to do. I mean, we need more pro-amnesty “representatives” in congress. Then we can get more people voting….
This is not unexpected. While some people will tell you, “just because they’re counted doesn’t mean they get a vote,” the truth is it will cause some votes to count more than others. If a blue state with 10 representatives has more illegal immigrants than a red state with 10 representatives and you end up counting those illegals, you now give the blue state more say in the federal government. True states like Texas would benefit, but so would California and swing states like New Mexico, Arizona, Colorado, Florida and Nevada and the representatives they send would likely be Democrats.
Districts are determined by population and if you have a Democrat-leaning district (as is likely with low-pay areas) with enough illegal immigrants then you must redraw the district lines. Possibly splitting that district in two or having parts merge into other districts, effectively marginalizing the parent district’s voters. Districts MUST be equal in population, so illegal immigrants can influence the vote without ever casting a ballot.
According to the Constitution of the United States, this decennial census has one fundamental purpose: to ensure that number of seats each State has in the U.S. House of Representatives reflects the relative size of the State’s population as compared with other States. Currently there are 435 representatives divided among the 50 States. Each of these representatives is elected by the voters of a congressional district, defined as an area established by law for the election of representatives to the U.S. Congress. Each congressional district is to be as equal in population to all other congressional districts in the State as practicable, based on the decennial census count.
To continue this practice is nearly treasonous. What other country gives their illegal immigrants a drivers license and welfare, instead of pinstripes and handcuffs? Of course, why not give them a silent vote too?
The borders need to be closed and businesses who employ them should be prosecuted. Politicians who dangle the amnesty carrot and pander for votes instead of advocating principles are complicit in every crime committed by these criminals.
How many Dani Countryman’s and Adrienne Shelley’s will it take?
While much of the country was tuned into the state elections in Virginia, New Jersey and the special congressional election in the NY-23rd district, there was a vote going on in Maine. No, it wasn’t to elect some RINO fund-sucking leftist. It was a referendum on gay marriage that repealed a law allowing gay marriage in Maine and passed by a slim margin. Gay marriage has now lost all 31 states it has been put to popular vote. Of course the cries of “HOMOPHOBE” are heard far and wide:
“I’m ready to start crying,” said Burnett, a 58-year-old massage therapist, walking out of the ballroom with Swanson at her side. “I don’t understand what the fear is, why people are so afraid of this change.
“It hurts. It hurts personally,” she said. “It’s a personal rejection of us and our relationship, and I don’t understand what the fear is.”
Let me enlighten you: It’s not fear. It’s the institution stupid.
“The institution of marriage has been preserved in Maine and across the nation,” said Frank Schubert, the chief organizer for Stand for Marriage Maine, which lobbied for the repeal.
Personally, I couldn’t care any less about gays and their lifestyle as long as it’s kept out of schools and isn’t in-your-face like a San Fransicko gay arrogance pride parade.
Of course you have the bleeding-heart morons who will completely distort the reason for opposition to gay marriage:
Portland resident Sarah Holman said she was torn, but decided — despite her conservative upbringing — to vote in favor of letting gays marry.
“They love and they have the right to love. And we can’t tell somebody how to love,” said Holman, 26.
Conservative upbringing? Why was that even mentioned? Nevermind, we all know why. The point was never about their ability to love or with whom the felt that way, it’s always been about what marriage is and should remain. The proponents know this but they’d rather push for special-status of a “protected” group. Which, of course, negates the whole “equality” argument. Marriage is, and should remain, a religious ritual.
If you want the tax breaks, argue that. If you want rights as a spouse, argue that. Stop forcing everyone else to accept your “lifestyle”.
“We’re in this for the long haul,” said Jesse Connolly, manager of the pro-gay marriage campaign. “For next week, and next month, and next year — until all Maine families are treated equally. Because in the end, this has always been about love and family and that will always be something worth fighting for.
A similar note was sounded by Democratic Gov. John Baldacci, who signed the bill into law last May and spoke out in defense of the law.
“If we don’t get to the top of the mountain tonight, we’ve made a significant stride. And we’re going to get there,” he said late Tuesday. “We will get to the top of the mountain.”
A significant stride indeed. I can’t wait to see what’s next:
Stanley Kurtz, a senior fellow with the Hoover Institute at Stanford University, said the state of marriage in American society is already undermined by high cohabitation and out-of-wedlock birth rates.
Gay marriage, he said, will reinforce the idea that traditional marriages formed for the purpose of having children and providing a healthy mother-father environment is out, and alternative partnerships are in. He points to a decade of legalized gay unions in Scandinavia, where marriage rates have declined as the number of babies born to cohabitating has risen.
“The idea of marriage is outdated,” he said. “Parents lost the sense that marriage was about being a parent.”
Kurtz said he does not anticipate a future “patchwork” of state laws in which some will be gay marriage-friendly while others will not recognize the unions. Either a uniform definition of marriage between a man and a woman will be affirmed or not. In the case of the latter, he warned, “We will eventually turn into Scandinavia.”
Like I said, I can’t wait…
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