The Mortgage Crisis
Tentacles Of Corruption
Social Engineering Run Amok
'Investors Business Daily' is doing a series of front page articles (Not Editorials) about the cause of the mortgage crisis. It started with the Carter Administration in 1976 and 'The Community Reinvestment Act' created by a Democratic Congress.
The archaic term 'Red Lining' came into being then and asserted that robber baron banks were taking Capital as deposits from poor neighborhoods and reinvesting into other communities creating housing disparities between rich and poor communities.
Coming just years after other civil rights movements, the 'Community Reinvestment Act' had teeth. Audit committees were formed and banks were forced to keep records of their minority lending practices. Those that didn't pass muster could be denied the right to expand branches, merge or enter new markets. Radical community groups such as 'ACORN' and 'NACA' siphoned literally Billions of $$'s from banks to loan the funds in minority communities booking thousands of dollars for commission earned on every loan.
If a community group decided a bank was operating in 'Bad Faith' it could affect the 'Community Investment Act' ratings - a scorecard for how well lending institutions they were doing in minority areas. Banks became easy targets for shakedown, channeling Billions into groups that had little to show for it.
During the Clinton administration in 1992, mortgage lending was put on Steroids. Ordinary lending standards were thrown out the window to the extent that no income verification was required. Freddie & Fannie became involved buying up bad loans and securitizing them for sale on World financial markets stamped with AAA ratings. The seeds for the subprime meltdown were sown everywhere.
For all the effort of more than $1 Trillion loaned under the auspices of 'C.R.A'., home ownership by Black families rose from 42% in 1970 to merely 47% last year while contributing disproportionately to the number and amount of mortgage arrears in default. Much of that progress has been lost over the past year.
There was a clear pattern of corruption emminating from both Fannie & Freddie with payments to certain House & Senate members. Reminiscent of the Enron scandal, the Government Sponsored Enterprises 'Cooked The Books' and made payments for favoritism, precluding proper investigative action by Congress.
Clearly, friends were 'Bought' in high places with funding offices channeling millions of dollars to supporters, $150 Million over ten years. Most notably, Christopher Dodd, the head of the Senate Banking panel received $165,000 and Senator Obama received the second most ($125,000) in the brief time that he was in the Senate.
A blind eye was turned to the accounting fraud in return for the continuing flow to supporters. From 1999 to 2005, Clinton appointee Franklin Raines, CEO of Freddie personally earned $95 Million mostly in bonus', escaping amid accounting fraud without consequences to him.
Over the years, President Bush tried no fewer than 17 times to raise the issue of Fannie & Freddie reform and was rebuffed each time by a Democratic Congress.
Spearheading the fight was Rep. Barney Frank who runs the powerful 'House Financial Services Committee'. Other Congressman trying to hold hearings on Fannie & Freddie were overruled or stripped of committee responsibilities.
So clearly the I.B.D article portrays a picture of criminal corruption. Appointees from the Clinton administration paid off select members of Congress for silence to enrich themselves and fleece the nations wealth.
These same corrupt people among them Christopher Dodd and Barney Frank are throwing their authority around in the current bailout crisis, pretending they have concern for the dilemma and American interests. How's this for a picture of how & why American government operates ?
What should an American do? Write to your Congressman and Senators demanding accountability. The capital of a nation was squandered on Social Engineering run amok by government. You'll hear the politicians blaming 'Wall Street', but the truth be known, they are merely offloading responsibility to the victims.