The Housing Bubble Link Round up

First you must read Robert Bidinotto’s synopsis here:

While Barack Obama was getting campaign contributions from Fannie Mae’s Franklin Raines, John McCain was sounding the alarm about the crisis to come and trying to do something about it. On May 25, 2006, McCain spoke on the floor of the Senate on behalf of his proposed Federal Housing Enterprise Regulatory Reform Act of 2005:

Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation

Robert’s done the best collection of pertinent links, after poking through those please read Lee Cary’s piece on the Obama/Daley housing debacle in Chicago at the American Thinker.

Friends of Fannie and Freddy

The real impact of all of this will go against the taxpayers, the thrifty, those who have thought of their future and saved. This will impact your pension, your 401K, your life savings. Meantime Jamie Gorelick, Democrat operative, is waltzing away with a cool 26 Million.

The friends of Fannie Mae and Freddy Mac in government turn out to be the usual cast of culprits. We have Obama, Gorelick, Johnson, Raines, Dodd, Frank, and the Congressional Black Caucus who all fought reforms even though this speech in 2005 clearly indicated they were needed. McCain was campaigning for reforms (see enough is enough) but they were beat down.

The real impact of all of this will be felt by the taxpayers, the thrifty, those who have thought of their future and saved. This will impact your pension, your 401K, your life savings. Meantime Jamie Gorelick, Democrat operative, is waltzing away with 26 Million. Special shame should also be attached to the Republicans who assisted the lobbyists and Democrats who fought these needed reforms, and we will be hunting those names down in the future as well.

Meantime this is definitely not leadership, this is definitely not change, it’s despair:

Lawmakers say they are unlikely to take action before, or to delay, their planned adjournments — Sept. 26 for the House of Representatives, a week later for the Senate. While they haven’t ruled out returning after the Nov. 4 elections, they would rather wait until next year unless Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke, who are leading efforts to contain the crisis, call for help.

One reason, Senate Majority Leader Harry Reid said yesterday, is that “no one knows what to do” at the moment.

At a campaign rally in Elko Obama had this to say:

“I will crack down on predatory lenders — who all too often target the African-American community, target the Hispanic community — with tough new penalties that treat mortgage fraud like the crime that it is,” he said.

Obama and his compadres in the Democrat caucus have been “cracking down on predatory lending” since 2000 1990’s, and that’s exactly what has led to this mess. They systematically took away the profit from high risk loans, making it a losing, giveaway business backed by your tax dollars. They cut options to have high risk loans credit insured and rolled into loan cost, which led directly to increased foreclosures.

More on this from IBD Editorials:

A visibly annoyed House Speaker Nancy Pelosi rejected suggestions that Democrats share blame for the meltdown. “No,” she snapped at reporters who dared ask.

Stick to our narrative, she scolded: The bursting of the housing bubble was another story of market failure and deregulation.

“The American people are not protected from the risk-taking and the greed of these financial institutions,” she said, while calling for investigations of the industry.

Only, the risk-taking was her idea — and the idea of all the other Democrats, along with a handful of Republicans, who over the past 30 years have demonized lenders as racist and passed regulation after regulation pressuring them to make more loans to unqualified borrowers in the name of diversity.

They were the ones who screamed — “REDLINING!” — and sent banks scurrying for cover in low-income neighborhoods, where they have been forced to lower long-held industry standards for judging creditworthiness to make the subprime loans.

If they don’t comply, they are threatened with stiff penalties under the Community Reinvestment Act, or CRA, a law that forces banks to make home loans to people with poor credit risks.

Here’s an example of one of these shakedown programs that started way back, under guise of fighting predatory lending Chuck Schumer and Jesse Jackson fight to have Freddy and Fannie lower standards:

Also from IBD :

The [CRA] revisions also allowed for the first time the securitization of CRA-regulated loans containing subprime mortgages. The changes came as radical “housing rights” groups led by ACORN lobbied for such loans. ACORN at the time was represented by a young public-interest lawyer in Chicago by the name of Barack Obama.

Previously:
Enough is Enough
Obama 2nd Biggest Recipient of Fannie Mae and Freddie Mac Money in Last Ten Years

More at Big Lizards

Obama Number Two on the Fannie Mae Contributions List

Will team Obama be chanting “We’re number 2! We’re Number 2! ?” somehow I doubt it.

** Video removed due to slow loading from Fox news
Previously:
Enough is Enough
Obama 2nd Biggest Recipient of Fannie Mae and Freddie Mac Money in Last Ten Years

Enough is Enough

;”>”Today, he claimed that the Congressional stimulus package was his idea. That’s news to those of us in Congress who supported it. Senator Obama didn’t even show up to vote.

Before you view this remember that the Dems have been in control of congress in the two years leading up to the latest financial debacle. Remember that Joe Biden’s committee should have prevented this, but instead encouraged it. Remember that Barack Obama’s favorite housing advisor is Franklin D. Raines, former CEO of Fannie Mae who got out before the community outreach bad loan stack of cards collapsed. Remember that when the bad news hit Wall St yesterday that Obama was enroute to hobnob with Hollywood Highrollers.

John McCain’s 8 part economic plan, “Jobs for America” can be found here.

Here’s John speaking in Ohio today:

Transcript:

John McCain
Remarks
Vienna, OH
September 16, 2008

John McCain: “We’ve seen a telling moment in this campaign today. Senator Obama saw an economic crisis, and he’s found a political opportunity. My friends, this is not a time for political opportunism; this is a time for leadership.

“Too often, we hear people say America’s in decline. I reject that. I believe America’s best days are ahead of us. Governor Palin and I are going to reform Wall Street. We’re going to reform Washington. I’m going to fight for you, and I’m going to lead our nation forward in the greatest periods of prosperity in its history.

“And let’s have some straight talk. Senator Obama is not interested in the politics of hope, he’s interested in his political future and that’s why he is hurling in insults and making up facts about his record.

“Today, he claimed that the Congressional stimulus package was his idea. That’s news to those of us in Congress who supported it. Senator Obama didn’t even show up to vote.

“He talks a tough game on the financial crisis, but the facts tell a different story. Senator Obama took more money from Fannie Mae and Freddy Mac than anyone but the chairman of the committee they answer to, and he put Fannie Mae’s CEO, who helped create this problem in charge of finding his Vice President. That’s not change, that’s what’s broken in Washington.

“He talked about siding with the people, siding with the people, just before he flew off to Hollywood for a fundraiser with Barbara Streisand and his celebrity friends. Let me tell you, my friends, there’s no place I’d rather be than here, with the working men and women of Ohio. I’m going to fight for you and together we’re going to win in November.”

More on who really created the crisis at Hot Air
UPDATE: Here’s Chuckie Schumer and Jesse Jackson teaming up back in 2001 to help create this mess can you say “community organizer?”
Under the guise of stopping “predatory lending practices” Obama also participated in legislation like this in 2000. These programs supposedly stiffened controls, but at the same time took away all profitability from higher risk loans. By making it mandatory to treat risky borrowers just like borrowers with good credit through neighborhood HOME and HELP projects they created this crisis.
From the Chicago Tribune, 10-1-2000:

The senator believes that these inclusions will help reduce the number of foreclosures that have occurred in the state. The senator stated that “foreclosures started by subprime lenders in the Chicagoland area increased from 131 in 1993 to 4,958 in 1999, an increase of more than 3,600 percent.”

The senator obtained his foreclosure information from the National Training and Information Center, a non-profit organization in Chicago that does research on housing and other community related issues, including lending and neighborhood safety. It also provides training for those interested in how to do community organizing.

The NTIC currently also works with several affiliate groups, including the Indianapolis-based Organization for a New Eastside which compiles information that it receives from borrowers about their particular lending issues, as well as provides them with education, counseling and advocacy. O.N.E provides no funding to borrowers, though it refers them to local lenders and credit unions after counseling.

O.N.E recently took on the plight of a local family that felt it had been victimized during the purchasing of its home. The organization went to the local branch of the lender for a protest rally, demanding that the loan be looked at again.

So how can I say that when supposedly they were just worried about predatory lending practices and protecting borrowers? One of the things they enforced against was mandatory credit insurance for high risk loans. Without that they guaranteed more foreclosures even though they were supposedly preventing them.

UPDATE: Boston Globe reminds us of the other housing iniatives of Barack Obama
UPDATE: Who Supports Barack Obama’s Amazing fund raising abilities? Investment Bankers.
UPDATE: McCain Called for reform two years ago, See HERE.
UPDATE: Just a reminder that Republicans were calling for oversight of Freddie and Fannie five years ago but were blocked repeatedly by Democrats in Congress:

”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.