by his own account, Mr. Obama wrote a letter to the Treasury Secretary, allegedly putting himself on record that subprime loans were dangerous and had to be dealt with. This is revealing; if true, it indicates Sen. Obama knew there was a problem with subprime lending -- but was unwilling to confront his own party by pressing for legislation to control it. As a demonstration of character and leadership capacity, it bears a strong resemblance to something else in Sen. Obama's past: voting present.
But, let's not forget, one-time and future Obama advisor Austan Goolsbee defended these sub-prime mortgages in this editorial from 2007.
You can read his editorial at the link, but I want to quote his concluding line: "For be it ever so humble, there really is no place like home, even if it does come with a balloon payment mortgage."
The ubiquitous balloon payment. Seeing that line reminded me of the old Simpsons episode where they bought a Canyonero. In that episode, Homer wants to buy a large SUV, despite not being able to afford it. So, the car dealer comes up with a ludicous payment schedule: down payment, monthly payment, weekly payment, and the crippling balloon payment, or CBP. As Homer noted though, "But that's not for a while." What does this have to do with anything? The Simpsons were making fun of those people who go out and buy something despite being unable to afford them, instead, relying on these outlandish payment schedules, culminating in a CBP. Now, Austan Goolsbee defends these subprime mortgages as getting people who wouldn't ordinarily be able to afford a house, but for Homer-like payment schedules, also culminating in a CBP. At some point, it was accepted that owning a home was a dream, a life-time of saving; instead, it became something available to those who shouldn't own a home, for whatever reason. I mean, there's a reason why there is a rental market.
So, Obama and Biden can blame deregulation all they want (even though Biden voted for Gramm-Leach-Bliley), but simply because you keep repeating it does not make it true.
By the way, I would be remiss if I didn't note that a certain organization that's been in the news recently waged a very vocal (and at times intimidating) campaign to loosen credit requirements for the secondary housing market to allow Fannie Mae and Freddie Mac purchase and repackage these loans. For a history, you can read this Stanley Kurtz article. As he noted-
"Unless Fannie and Freddie were willing to relax their credit standards as well, local banks would never make home loans to customers with bad credit histories or with too little money for a downpayment. ... ACORN had come to Congress not only to protect the [Community Reinvestment Act] from GOP reforms but also to expand the reach of quota-based lending to Fannie, Freddie and beyond. By steamrolling the GOP that March [1995], it had crushed the last potential barrier to 'change.'"
Now, you could say that it's unfair to quote from a noted conservative writer. But from this 1992 NY Times article, it's clear that this organization had set its next target:
Yet at present, the three Philadelphia banks seem responsive. They have lobbied with Acorn in Washington to find ways to make it easier to package these mortgages and sell them in the secondary market. This would reduce the banks' risk and free up more money to lend.[Courtesy of No Quarter]
The biggest buyer of mortgages is the Federal National Mortgage Association, known as Fannie Mae, which resells them to investors. But Fannie Mae has been reluctant to buy such unconventional mortgages. Acorn hopes that large commitments like that of Nationsbank will help bring pressure on Fannie Mae.
It's perhaps not at all surprising to know that through ACORN's intimidation tactics at silencing Republican attempts to reform the CRA, and Democrats unwillingness to step up against ACORN (see Obama, Barack; Frank, Barney), the very same people ACORN purports to represent are the very same people bearing the brunt of mortgage failures. And you and I get to bail them out.
3 comments:
I don't understand the fixation with Fannie and Freddie. Yes, they were part of the problem. But the bad mortgages we're talking about? 84% were private sector loans.
Without Fannie and Freddie agreeing to take these loans, you think other companies would take these loans? So, while Barney Frank and Chris Dodd go on and on about companies taking these loans (while they and Obama are the largest recipents of Fannie lobbying money), and ACORN demanding that mortgage companies take these loans, we've ended up with people who shouldn't have loans get loans.
Of course Congress doesn't want to investigate how their own actions created this mess by forcing entities such as Fannie and Freddie to take on these loans.
But, who cares about all this right? I mean, can you believe that Joe the Plumber is being investigated more than Obama himself, and is the subject of a smear attempt by the left because he dare ask a question and getting an answer from Obama about his inherent socialist views on wealth redistribution.
Would other companies have taken those loans without Fannie and Freddie? I think so. I think that they already were. Nothing I've seen indicates that the temporal relationship worked the other way. Link?
I can't even answer your Joe the Plumber stuff...if you really believe that the media has done more work on him than Obama, you've fallen into a vat of the Kool-Aid and there's no hope.
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