Blame Bush? Pot, meet Kettle

http://dailycaller.com/2012/09/03/wi...can-americans/

President Barack Obama was a pioneering contributor to the national subprime real estate bubble, and roughly half of the 186 African-American clients in his landmark 1995 mortgage discrimination lawsuit against Citibank have since gone bankrupt or received foreclosure notices.

As few as 19 of those 186 clients still own homes with clean credit ratings, following a decade in which Obama and other progressives pushed banks to provide mortgages to poor African Americans.

The startling failure rate among Obama’s private sector clients was discovered during The Daily Caller’s review of previously unpublished court information from the lawsuit that a young Obama helmed as the lead plaintiff’s attorney. [RELATED: Learn about the 186 class action plaintiffs]

Since the mortgage bubble burst, some of his former clients are calling for a policy reversal.

“If you see some people don’t make enough money to afford the mortgage, why would you give them a loan?” asked Obama client John Buchanan. “There should be some type of regulation against giving people loans they can’t afford.”

Banks “were too eager to lend to many who didn’t qualify,” said Don Byas, another client who saw banks lurch from caution to bubble-inflating recklessness. [RELATED: Obama's Citibank plaintiffs hit hard when housing bubble burst]

“I don’t care what race you are. … You need to keep financial wisdom [separate] from trying to help your people,” said Byas, an autoworker.

Read more: http://dailycaller.com/2012/09/03/wi...#ixzz25QcxTbZ2

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“There should be some type of regulation against giving people loans they can’t afford.”

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How about if you can't afford it, you don't apply for it? Its called "personal responsibility". That isn't to say much of the blame lies at the feet of those FORCING the banks to loan to low income or folks who could not afford what they were approved for. We purschased the home we are in back in 2003-2004. We were pre-approved for way more than what we purchased because I knew what we could and could not afford.

Doc, it would be nice for people to take that personal responsibility but when they won't as far as getting a job and working rather than a handout, then we can't expect them to actually be responsible as far as a home mortgage goes. hey, go buy it, can't afford it, big deal just leave.
The GOP does a bad job of describing the mort failures and the banking disaster being the democrats fault as they forced this issue on the banks, and Obama and company when he was that community guy went as far as targeting bank presidents at their homes and letting people know where they lived and encouraged them to make families feel unsafe. They went into banks and threatened people. Then you had the crooks in fannie and freddie with their buds in some banks who had direct ties to certain democrat senators on the banking committee and poof you had major problems.
If course the democrats won't admit any of this and the republicans aren't pushing it hard enough imo to the American voters.

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Originally Posted by Doc

How about if you can't afford it, you don't apply for it? Its called "personal responsibility". That isn't to say much of the blame lies at the feet of those FORCING the banks to loan to low income or folks who could not afford what they were approved for. We purschased the home we are in back in 2003-2004. We were pre-approved for way more than what we purchased because I knew what we could and could not afford.

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The difference is that real property purchasers risk their money and credit. Banks risk OUR money. Banks should know better, even when loan applicants do not. Banks bent over backwards, some committing fraud, to get purchasers into homes. Some of this was the fault of placing short-timers in the mortgage department and not keeping an eye on what they were doing. Some is the blame of legislators who were reckless.

The banks largely didn't want to make these loans. They were sued into doing it, by Obama but lots of others, many filed as discrimination suits.

That alone wasn't getting enough such loans made, so then Barney Frank and Chris Dodd had an orgy with the National Realtors Assn and the Mortgage Bankers Assn and got Fannie/Freddie to float the loans b/c banks couldn't possibly loan enough.

But no that wasn't enough, so along with this Bill Clinton and Phil Graham (both parties gladly jumped in bed on this one, money talks) repealed Glass Steagall. Now the big banks could make those loans with money they didnt' have, generated by selling securities in the loans.

Business exist to make money, and will always do so. If we're waiting for anyone, individual or company, to decide they have enough money, we're doomed. The system was designed with limited government to allow businesses to slug it out and balance each other, b/c when you can just buy politicians you can destroy the free market and end up funneling money to those who did the buying.

So they get the government to guarantee deposits, separating the risk of the bank from the cost of them raising money, then loan the money at high risk/return, then when it dies the government pays off the bill.

Obama's actions were a key part of the whole process. Obama, Dodd, Frank, all used discrimination and the need to help the poor to win these lawsuits, which set up the government's ability to pressure banks to make the loans. As part of that the deal was cut to also lean on Fannie and to repeal Glass Steagall.

He isn't solely responsible, but if he denies being one of those who merrily led the financial markets off a cliff b/c of a complete lack of understanding of economics and a long failed social agenda then he's either an idiot or a liar, and either way is a hypocrite.

I worked in real estate for many years, and saw the growing pressures from people like Obama, and the risks it created helped the banks to then lobby for things they wanted ostensibly so they could make these loans, like being able to sell securities in them.

He's responsible. So is Dodd, so is Frank, so is Clinton, so is Phil Graham, John McCain, and just about every other key leader in both parties for the last 20 years. What Obama doesn't want you to know is that his current list of policies are all just as doomed b/c they involve only more avenues for corruption where businesses buy politicians to distort markets so they can make more money.

The solution is to minimize the amount of power politicians have over the nation, then it's not as worthwhile to pay them b/c they can't do much to help you. Then you have to actually do things like make good cars or properly appraise home values.

As long as this nation is set up where you can go to DC with enough money and come out with the barriers to entry and subsidies and trade protection you want, we're only going "forward" towards a very steep precipice. Obama only wants to concentrate and grow that power, which means watering the weed instead of digging it up.

Citizen, when the heck are you going to run for Mitch's seat? seriously you know more about our history and what it takes to run things than the majority of what is up there.

lol. If our standard for running is just knowing more or having more sense than those running the country we'll need a HUGE stage for the debates. :)

The S&L crisis was just a dress rehearsal for this debacle, and in fact I wrote a paper to that effect for a business law class that examined the legal machinations that led to that mess. All the same characters were even in on it, McCain (The Keating Five), Dodd, Frank, all of them.

Honestly it didn't take any great insight to see it if you approach these things with the right framework. if you start with the general world view of Milton Friedman and Murray Weidenbaum, assuming that government is largely a vehicle manipulation of economic outcomes, often in corrupt ways, and further assume that politicians are corrupt and also dumb, it's not hard to put the stones in order.

I just dont' get how those on the Left cannot accept and see the significance of one of the great truisms of humanity: power corrupts. Once you accept that you realize the goal of political economy and governmental structure must be to diffuse power as much as possible, not centralize it. It is the basic idea of free markets and the exact opposite of the governmental management approach of the Left. All such systems, like in Western Europe, only exist to the degree they allow some modicum of decentralization and free markets to function.

China is a great example. They have allowed some economic liberty, enough to create wealth to maintain their corrupt and burdensome regime.

Anyway, I had this discussion with appraisers in the 80s. They were very happy about the Fed (Congressman Barr, a good man but who didn't understand what would happen) enacting regulation of real estate appraisers. You had to become certified under USPAP. It was passed to prevent the banks, mortgage bankers and S&Ls from having their golf buddy rubber stamp appraisals. There would be standards and reviews and it would all be better.

here's the problem as I explained it to them: now the decisions as to what constitutes an acceptable appraisal are made in Washington. The Appraisal Institute and the others have maybe 100,000 members on a good day. The Natl Assn Realtors has over 1 million members and tons more money. The Mortgage bankers Assn has even more money than that. So when the congressional staff for the House Banking Cmte sits down, and the NAR and MBA have given huge donations to their bosses, do you think they may have a voice in it? Do you think they'll fight for tougher standards?

See, the NAR and MBA just want to close loans. They don't hold the loans, they don't have any risk. They are happy to sell anything to anyone b/c if it forecloses they still got their commissions. They have ZERO incentive to want an accurate appraisal, they just want the loan closed.

So in the 80s doing a "drive by" appraisal (where you don't even enter the home to appraise it) was an insult, but before this blew up not only were drive bys becoming common but there was a move from the investment community to do away with them altogether for certain ranges of loans and just going on PVA data b/c, according to them, statistically that was a good enough predictor of value for such large securities pools.

Of course that's self-determining. As long as the bubble keeps going of course the numbers from last month are good, and the pools are so large a few foreclosures are no big deal, but you don't need good asset valuation when the market is on fire, you need it when the market is tight.

So a law passed in the mid 80s, even passed honestly by Rep. Barr (from Georgia), became a mechanism for those with more power and money to undermine free market forces (in this case having to pay a higher rate for higher risk in financial markets).

The list of such cases is so long we literally couldn't list them all. It's not like it take insight to predict we'll make the same mistake we just made 10 million other times. It just takes knowing that particular industry or policy segment. I happened to be in real estate and also happen to ascribe to a view of political economy that is deadly accurate at describing and predicting behavior. The credit goes to Milton Friedman and Murray Weidenbaum.

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Originally Posted by jazyd

Citizen, when the heck are you going to run for Mitch's seat? seriously you know more about our history and what it takes to run things than the majority of what is up there.

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It is a real shame that the nations brightest and educated in common, business, and historical sense eschew the thought of entering government office at all costs. I know CBBN spent time in the halls of congress in DC and I suspect it killed any idea he ever had of entering the political arena that we are saddled with today.

I would prefer him as governor of KY. He can do so much more to improve the economy and lives of all of us as governor than he could wallowing among the national hogs at the trough. He might have to kill a few people to get the job done in KY, but what is a few despicable lives lost in the battle for the prosperity of a few million.;)