Tag Archives: Freddie Mac

Obama wants banks to make home loans to people with poor credit

my work here is done
If you need more evidence of Obama being a psychopath, here it is.
Recall the Great Recession that began in 2008 was in large part due to the bursting of the housing bubble. That bubble, in turn, was caused by risky mortgage lending to too many people whose financial profiles make them poor candidates for loans.
Today, five years after the collapse of the housing market and contrary to the insistence that the market is “recovering,” the U.S. landscape is still littered with 301,874 “zombie” properties in which homeowners in foreclosure have moved out, leaving vacant  property susceptible to vandalism and degradation. The number of U.S. homes in foreclosure or bank-owned actually increased by 9% to 1.5 million properties nationally in the first quarter of 2013 compared to a year ago, while another 10.9 million homeowners nationwide are “under water” because they owe more than their property is worth. (See DCG’s post of March 28, “Obama’s New America….“)

houses-underwaterNearly 11 million U.S. homes are still under water

And yet the POS is pushing to make more home loans available to people with weak credit, which was exactly what had created the housing bubble and its subsequent bursting!
What if those people default on their mortgages?
Why, the 49% of hard-working Americans suckers who still pay income taxes will make up the difference! That’s wealth redistribution socialism, bro!
Zachary A. Goldfarb reports for The Washington Post, April 2, 2013, that Obama pledged in his State of the Union address to do more to make sure more Americans can enjoy the benefits of the housing recovery. His  economic advisers say the housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

In response, the Obama administration wants banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administrationthat insure home loans against default.Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.Deciding which borrowers get loans might seem like something that should be left up to the private market. But since the financial crisis in 2008, the government has shaped most of the housing market, insuring between 80% and 90% of all new loans, according to the industry publication Inside Mortgage Finance. It has done so primarily through the Federal Housing Administration, which is part of the executive branch, and taxpayer-backed mortgage giants Fannie Mae and Freddie Mac, run by an independent regulator.The FHA historically has been dedicated to making homeownership affordable for people of moderate means. Under FHA terms, a borrower can get a home loan with a credit score as low as 500 or a down payment as small as 3.5%. If borrowers with FHA loans default on their payments, taxpayers are on the line — a guarantee that should provide confidence to banks to lend.
But banks are largely rejecting the lower end of the scale, and the average credit score on FHA loans has stood at about 700. After years of intensifying investigations into wrongdoing in mortgage lending, banks are concerned that they will be held responsible if borrowers cannot pay. Under some circumstances, the FHA can retract its insurance or take other legal action to penalize banks when loans default.
“The financial risk of just one mistake has just become so high that lenders are playing it very, very safe, and many qualified borrowers are paying the price,” said David Stevens, Obama’s former FHA commissioner and now the chief executive of the Mortgage Bankers Association.
But critics say encouraging banks to lend as broadly as the administration hopes will sow the seeds of another housing disaster and endanger taxpayer dollars. “If that were to come to pass, that would open the floodgates to highly excessive risk and would send us right back on the same path we were just trying to recover from,” said Ed Pinto, a resident fellow at the American Enterprise Institute and former top executive at mortgage giant Fannie Mae.
But Administration officials say they are looking only to allay unnecessary hesi­ta­tion among banks and encourage safe lending to borrowers who have the financial wherewithal to pay. An unnamed senior administration official who was not authorized to speak on the record said, “There’s always a tension that you have to take seriously between providing clarity and rules of the road and not giving any opportunity to restart the kind of irresponsible lending that we saw in the mid-2000s.”
Blah, blah, blah.
H/t FOTM’s Christy.
~Eowyn
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State attorney generals sue powerful fed agency blocking bank lending

I just heard a snippet of a very interesting interview on Mike Huckabee’s radio talk show this morning.

Guv. Huckabee was speaking to South Carolina Attorney General (AG) Alan Wilson about a lawsuit Wilson and other state AGs just filed against the federal government over the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law by Obama in July 2010.

Wilson maintains that one big reason why the U.S. economy is stalled and unemployment remains high is because banks won’t lend money to businesses, although they’re sitting on a lot of cash. Wilson attributes this to the Consumer Financial Protection Bureau (CFPB) — a creation of the Dodd-Frank Act and a powerful federal govt agency that has no Congressional oversight and restricted judicial review, but answers only to the even more powerful Federal Reserve System, itself a bastard hybrid of part-govt part-private banks which is also not subject to Congressional oversight.

The very powerful director of the CFPB is Richard Cordray, an Obama appointee. The even more powerful director of the Federal Reserve is Ben Bernanke.

The authors of the Dodd-Frank Act are both unaccountable: Sen. Chris Dodd had already retired from the Senate in 2011, and Congressman Barney Frank is not seeking reelection. Both also had a direct hand in the housing collapse that began America’s Great Recession in that, in their respective roles as chair of the Senate Banking Committee and chair of the House Financial Services Committee, the two men had ignored the imprudent reckless lending policies of the government-sponsored mortgage lenders Fannie Mae and Freddie Mac.

~Eowyn

A rogues gallery (l to r): Chris Dodd, Barney Frank, POS, Richard Cordray, Ben Bernanke

Here is an article, “Republican State AGs Resisting Cooperation with CFPB,”  by Carter Dougherty for BusinessWeek on the lawsuit:

A group of Republican state attorneys general has declined to sign cooperation agreements with the Consumer Financial Protection Bureau, part of an escalating Republican revolt against the agency that began in the U.S. Congress.

Richard Cordray, the agency’s director, asked all 50 states in March to sign a memorandum of understanding designed to protect confidential information shared among states and the bureau. To date, only 12 states — all but one with Democratic attorneys general — have signed, according to the bureau and documents obtained in a public records request.

Oklahoma Attorney General Scott Pruitt said in an interview that he is declining to sign the agreement because of legal objections to the law that created the consumer bureau, the 2010 Dodd-Frank Act. “There are misgivings I have about the authority and scope and power of the CFPB and the power granted to the director,” Pruitt said in an interview. “Frankly, until some of those issues are fleshed out, it is very premature for a state to enter into an MOU.”

Four attorneys general, led by Pruitt, plan to join an existing lawsuit that challenges the constitutionality of Dodd-Frank and the CFPB, according to a person briefed on the decision. Pruitt and attorneys general from South Carolina, Michigan and Kansas may become plaintiffs in the suit as soon as tomorrow, said the person, who spoke on condition of anonymity because the decision wasn’t public.

Separation of Powers

The lawsuit in federal court in Washington was filed June 21 by State National Bank of Big Spring, Texas. The bank argues that the structure of the consumer bureau violates the constitutional principle of separation of powers because Congress does not appropriate its budget, the president has limited ability to remove its director and courts face restrictions in reviewing its actions.

South Carolina Attorney General Alan Wilson, told a campaign rally last week in Greenville, South Carolina, of plans for legal action.

“We’re going to challenge that law,” Wilson said on Sept. 14, in remarks reported by Fox News. “We’re going take the battle back to Washington, D.C., because community banks on Main Street shouldn’t be choked to death so that big banks on Wall Street can take our money.”

The CFPB was created by Dodd-Frank to consolidate federal financial consumer protection authority in a single agency. Since starting work in July 2011, it has set up a complaint system for consumer services, proposed regulations on housing finance and is studying areas including mandatory arbitration, payday lending and overdraft protection.

State Cooperation

Cooperation with state attorneys general has been a signature effort of the consumer bureau since Harvard professor Elizabeth Warren began setting it up in late 2010. Warren, who is now running for the Senate as a Democrat from Massachusetts, touted state law enforcers as “natural partners” for the agency because of their focus on consumer protection.

Republicans opposed creation of the bureau, and Senate Republicans refused to confirm anyone to the position of CFPB director. That standoff led President Barack Obama to install Cordray as director on Jan. 4 using a process known as a recess appointment.

Republican opposition to CFPB and Cordray hasn’t been absolute.

Republican state attorneys general including Rob McKenna of Washington, John Suthers of Colorado and Mark Shurtleff of Utah signed an Oct. 18, 2011 letter supporting Cordray as CFPB director. Cordray, in response to a personal request from Suthers, publicly promised to help AGs combat payday lenders who dodge state laws by affiliating with Native American tribes.

Constitutionality Challenged

Pruitt of Oklahoma has spearheaded the work among attorneys general on challenging the constitutionality of Dodd-Frank, according to the person briefed on the lawsuit. Diane Clay, a spokeswoman for Pruitt, declined to comment on the lawsuit.

“General Pruitt has been leading the discussion on legal challenges to the unconstitutional provisions in Dodd-Frank for more than a year, and will work with South Carolina to lead the state litigation once plans are announced,” she said.

Michigan attorney general Bill Schuette and his counterpart in Kansas, Derek Schmidt, will also join the lawsuit, the person said. Schuette’s spokeswoman Joy Yearout declined to comment. Schmidt spokesman Jeff Wagaman did not return an e-mail or phone call seeking comment.

‘Disdain’ for States

Pruitt, Wilson and Schuette all signed a March 5 memo from the Republican State Leadership Committee, an association of Republican state officials, that criticizes the Obama administration’s “disdain for states, federal laws it finds inconvenient, the Constitution and the courts.” The memo includes Cordray’s recess appointment on a list of Obama’s objectionable actions.

Pruitt has opposed other initiatives backed by the Obama administration. In February, he declined to join a 49-state settlement with five large mortgage servicers over foreclosure practices, preferring to cut his own deal instead.

The CFPB and the National Association of Attorneys General signed a “joint statement of principles” in April 2011. In a March 6 speech, Cordray, a former Ohio attorney general, asked states to also sign individual MOUs, and asked for a “quick turnaround.”

“We want to expand on what you already do so well — and we want you to take advantage of new resources we bring to the arena,” Cordray said in an address to NAAG in Washington.

Agreements Tallied

More than five months later, only 10 states had signed the memorandum: New Hampshire, New Mexico, Montana, New York, Vermont, North Carolina, Hawaii, Iowa, Mississippi and Nevada, according to copies obtained on Aug. 22 under a Freedom of Information Act request.

Since then, the District of Columbia, Wyoming and North Dakota have signed such memorandums with the consumer bureau, agency spokeswoman Moira Vahey said in an e-mail.

“We are pleased that we have a dozen agreements and additional agreements in the works. However, this is a state-by- state process and will take time,” Vahey said.

The purpose of the memorandum is to “preserve the confidentiality of information the parties share,” according to the documents. It states that any non-public “written or oral information exchanged between the parties will be deemed confidential.”

North Dakota attorney general Wayne Stenehjem is the only Republican among state officials who have signed the memorandum. Those who have declined gave differing reasons.

Greg Zoeller, the Republican attorney general of Indiana, said the pact was “unnecessary” because his office can sign confidentiality agreements that cover specific enforcement cases they work on with CFPB.

“I never quite understood why they wanted a common memorandum of understanding,” Zoeller said in an interview. “It has not really caught on well.”

At the same time, Zoeller downplayed the need for broader challenges to the CFPB. He called potential lawsuits evidence that the country is in a “silly season” before the election, and said that a Republican-only lawsuit “hurts our credibility in challenging federal laws.”

For instance, no Democratic attorneys general joined lawsuits against the Obama health care law, Zoeller said. The Supreme Court eventually ruled against them.

Other Republicans involved with state issues took a harder line on the Obama administration and Cordray’s work.

“This effort for bipartisan cooperation with the states has clearly failed at this point,” Chris Jankowski, president of the Republican State Leadership Committee, said in an interview.

The bank’s case is State National Bank of Big Spring v. Geithner, 1:12-cv-01032, U.S. District Court, District of Columbia (Washington).

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Ode to Barney Frank

November 28, 2011, was a sad day for America.
After 16 terms and 30 years in the U.S. House of Representatives, Massachusetts Democrat Congressman Barney Frank announced he’s retiring and won’t be seeking reelection next year.
As the ranking minority member and then Chairman (2007-2011) of the powerful House Financial Services Committee, Frank not only was lax in overseeing the liberal lending policies of Fannie Mae and Freddie Mac — policies that led to the bursting of the housing bubble and the subprime mortgage crisis that began in 2007. Frank actively encouraged Fannie and Freddie’s loose lending policy, insisting in 2003 that: “These two entities …are not facing any kind of financial crisis … The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
As a modest token of our gratitude for his service to America, We the Taxpayers sing this song of praise to Barney Frank:
[youtube=https://www.youtube.com/watch?v=a5NrqqK60OI&feature=related]
H/t our beloved Miss May.
~Eowyn

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Barney Frank Supports the Commie "Protesters" While Seeking Wall Street Cash

The New Three Stooges


Yes, you read that right, and no, you have not accidentally swerved into the Onion.
Bawney Fwank, who I have posted about previously concerning his culpability when it comes to the financial and economic meltdown that this entire planet is now facing, actually supports those who, if they were even remotely bright enough, would be trampling the petunias into mush on his own front lawn.
Via politico.com:

Rep. Barney Frank might sympathize with the Occupy Wall Street protesters, but he’s still got friends in the financial world.
The Massachusetts Democrat is heading to New York hoping to raise tens of thousands of dollars Thursday at a fundraiser at the home of Charles Myers, a senior investment banking advisor at Evercore Partners. Myers is one of several Wall Street execs listed on the invite soliciting up to $2,500 from attendees for Frank’s reelection committee, according to a copy obtained by POLITICO.
Frank, the co-author of the sweeping financial regulatory reform bill signed into law last year, said in a recent interview with POLITICO that he didn’t see any conflict between supporting the protests and taking financial services money.
“If you take money from them, but you don’t vote [for] the things they want, how does that put you in conflict?” Frank questioned.
Frank said he supports the movement “to the extent that they obey the law” and that he wishes “that kind of energy was around two years ago when we were voting on the financial reform bill. We’d have a tougher bill.”
Frank spokesman Harry Gural said the event isn’t exclusively a Wall Street fundraiser, and will include members of the gay and lesbian community and others.

You will find the rest of the article at this link.
Justice is going to find this cretin one day – if not in this life, then most certainly the next.
When that day comes, I am going to be soooooooo glad that my name is not Barney Frank.
-Dave

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