Sunday, February 10, 2013

NBER: Yep, Bill Clinton, Andrew Cuomo, and Janet Reno Were Directly Responsible for the 2008 Mortgage Meltdown

Any careful and honest analysis puts the blame for the 2008 financial crisis on Bill Clinton and his sycophants who implemented the Community Reinvestment Act (CRA). The National Bureau for Economic Research (NBER) just put the final nail in the coffin.

Democrats and the media insist the Community Reinvestment Act, the anti-redlining law beefed up by President Clinton, had nothing to do with the subprime mortgage crisis and recession... But a new study by the respected National Bureau of Economic Research finds, "Yes, it did. We find that adherence to that act led to riskier lending by banks."

Added NBER: "There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts," or predominantly low-income and minority areas.

To satisfy CRA examiners, "flexible" lending by large banks rose an average 5% and those loans defaulted about 15% more often... The strongest link between CRA lending and defaults took place in the runup to the crisis — 2004 to 2006 — when banks rapidly sold CRA mortgages for securitization by Fannie Mae and Freddie Mac and Wall Street.

CRA regulations are at the core of Fannie's and Freddie's so-called affordable housing mission. In the early 1990s, a Democrat Congress gave HUD the authority to set and enforce (through fines) CRA-grade loan quotas at Fannie and Freddie... It passed a law requiring the government-backed agencies to "assist insured depository institutions to meet their obligations under the (CRA)." The goal was to help banks meet lending quotas by buying their CRA loans.
But they had to loosen underwriting standards to do it. And that's what they did.

"We want your CRA loans because they help us meet our housing goals," Fannie Vice Chair Jamie Gorelick beseeched lenders gathered at a banking conference in 2000, just after HUD hiked the mortgage giant's affordable housing quotas to 50% and pressed it to buy more CRA-eligible loans to help meet those new targets. "We will buy them from your portfolios or package them into securities."

She described "CRA-friendly products" as mortgages with less than "3% down" and "flexible underwriting." ... From 2001-2007, Fannie and Freddie bought roughly half of all CRA home loans, most carrying subprime features.

...Obama officials, who are cracking the CRA whip anew against banks, insist the law played no role in the mortgage meltdown... While the 1977 law was passed 30 years before the crisis, it underwent a major overhaul just 10 years earlier. Starting in 1995, banks were measured on their use of innovative and flexible" lending standards, which included reduced down payments and credit requirements.

Banks that didn't meet Clinton's tough new numerical lending targets were denied merger plans, among other penalties. CRA shakedown groups like Acorn held hostage the merger plans of banks like Citibank and Washington Mutual until they pledged more loans to credit-poor minorities... WaMu CEO Kerry Killinger has blamed the CRA for his bank's overexposure to risky loans. He said he wanted to tighten lending requirements, but "such measures would have presented other issues such as the company's CRA rating and its commitment to serving its (low-income and minority) customers and communities."

President Obama, in his younger days, was an attorney for Acorn and party to a lawsuit against Citibank. He, too, had a direct hand in triggering the mortgage meltdown.


Aurelius said...

You've been linked:

BackwardsBoy said...

Was the US a victim of an economic 9/11 in 2008?

Anonymous said...

@BackwardsBoy tying in with your comment, I just finished reading "Secret Weapon: How economic terrorism brought down the US Stock Market and Why it can happen again" it is an eye-opener, I believe economic terrorism is real and has been carried out against the US OBL boldly stated he would use it against the West. Soros has brought down curriencies. The book is well sourced, it has a large section of notes supporting each chapter. Think about the downfall of the USSR, do you really think Putin would sit back and do nothing? Islamists and Marxists have teamed up to bring us down but hey, let's focus on gun control, we certainly don't want to cut spending and get the debt under control, Nancy says all is ok, not to worry.

Joe Kidd said...

“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.”
With landmark lawsuit, Barack Obama pushed banks to give subprime loans to Chicago’s African-Americans

Fact Check: Obama Had More to Do With 2008 Economic Meltdown Than Bush Ever Did
“Here’s something you’ll never read about in the liberal media. Barack Obama played a leading role in the mortgage crisis of 2008 that sunk the US economy.” ~Jim Hoft

Obama suffers amnesia blaming Bush for economy
Democrats pumped subprime mortgage market, triggering banking collapse

Wall Street Prosecutions under Obama: Zilch
Jean-Claude Groulx: “For all the bluster of Obama, pre- and post-2008, as well as that of Attorney General Eric Holder concerning the alleged criminal activities on Wall Street, there have been zero Wall Street prosecutions under Obama/Holder. Compare that with his predecessors Bush and Clinton: Bush: 1,300 convictions; Clinton: 1,000 convictions; Obama: Zero attempts. And why the difference in prosecuting the law? The GAI report reveals that the Department of Justice upper echelon is stacked with attorneys, including Eric Holder, from law firms representing the very same companies involved in the financial meltdown of 2008, as well as financial corporations with questionable actions during the Obama administration. ... AIG, Goldman Sachs, Wells Fargo, J.P. Morgan Chase, Bank of America, CitiBank, Deutsche Bank, ING, Morgan Stanley, UBS, Wilmington Trust, and John Corzine's MF Global.”

REPORT: Obama “pioneering contributor” to devastating subprime lending bubble...
2008: Burning Down The House: What Caused Our Economic Crisis? Bombshell
“This video is an informative look at the factors that are causing our current financial and economic crisis. It discusses policy changes 13 years ago that unleashed the sub-prime mortgage-backed securities market, which accelerated prices erratically, inviting speculation and loose lending practices which were both condoned and encouraged by existing regulation and carried out by risk-blind executives and Fannie Mae and Freddie Mac.”