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Opinion

Democrats can lie but not hide as architects of mortgage collapse


A Column by the Editor
web posted September 22, 2008
COLUMN – While Democrat Presidential hopeful Barack Obama and his fellow Democrats blame the collapse of the housing giants Fannie Mae and Freddie Mack on President Bush and Sen. John McCain, they are obviously having a mental block for truth. The Democrats fingerprints, and mostly Democrat President Bill Clinton’s, are all over what lead to the crisis. But do not take my word for it; let’s look at the history that is recorded even in the liberal papers like the New York Times among others.

As the corrupt and scandal riddled years of the Clinton era were coming to a close, Bill Clinton’s fawning admirers in the media were desperately seeking to find a legacy (other than the scandals, impeachment, and the number of close Clinton operatives that died mysteriously) for their “first black president”.

Alas, it was the birth of the mortgage crisis that began in the mid 1990’s with Fannie Mae and Freddie Mack which was run by Clinton appointees who are now paying back millions of dollars in fines for “cooking the books”.

On September 30, 1999, the New York Times lauded how Democrat President Bill Clinton forced mortgage giants Freddie and Fannie (quasi-private-government companies) to loan money to people they knew would not be able to pay back the exorbitant amounts they received.

“Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits,” the Times reported.

“Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Raines took over Fannie Mae after leaving his post as Director of the Office of Management and Budget for Bill Clinton and paid himself over $100 million as he and others “cooked the books” to make it appear the company was making a profit, when in fact it was losing money faster than Enron.

The Times went on to report, “In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.”
 
That is significant, Democrats running the corrupt business with the threat of government fines imposed by Bill Clinton’s administration, knew that the failure would happen and that the government would have to bail them out. But the downturn cycle happened during President Bush’s final year in office (as happens in every presidential election) so it must be his fault. Not so fast.

Earlier that year on May 31, 1999, another bastion of liberal reporting, the L.A. Times reported Clinton being the undeniable force giving birth to the crisis we are feeling now.

“It’s one of the hidden success stories of the Clinton era. In the great housing boom of the 1990s, black and Latino homeownership has surged to the highest level ever recorded. The number of African Americans owning their own home is now increasing nearly three times as fast as the number of whites; the number of Latino homeowners is growing nearly five times as fast as that of whites. These numbers are dramatic enough to deserve more detail. When President Clinton took office in 1993, 42% of African Americans and 39% of Latinos owned their own home. By this spring, those figures had jumped to 46.9% of blacks and 46.2% of Latinos.”

How did Clinton accomplish the wonderful feat we suffer with now? As the L.A. Times reported – “All of this suggests that Clinton’s efforts to increase minority access to loans and capital also have spurred this decade’s gains. Under Clinton, bank regulators have breathed the first real life into enforcement of the Community Reinvestment Act, a 20-year-old statute meant to combat “redlining” by requiring banks to serve their low-income communities. The administration also has sent a clear message by stiffening enforcement of the fair housing and fair lending laws. The bottom line: Between 1993 and 1997, home loans grew by 72% to blacks and by 45% to Latinos, far faster than the total growth rate.”

Congress tried to stop him, “But with discrimination in the banking system not yet eradicated, maintaining the momentum of the 1990s will also require a continuing nudge from Washington. One key is to defend the Community Reinvestment Act, which the Senate shortsightedly voted to retrench recently.” Clinton threatened a veto if the House concurred, the L.A. Times also reported.

Clinton put the Community Reinvestment Act (brought about by fellow Democrat President Jimmy Carter) on steroids and through threat of fines and government sanctions forced Freddie and Fannie, and thus other banking institutions, to make loans that they knew people were not qualified to receive, all because the banking industry was “racist”. Government social engineering forced into the private market at its finest.

These were loans that were available through the directive with little or no down payment and for 100, 110, to 125% of the value of the home thus luring the unqualified borrowers to jump at the chance of buying a home and getting tens of thousands of dollars in cash to boot.

So we have Democrat Bill Clinton using the CRA, which was instituted by Democrat Jimmy Carter, with Clinton’s former Director of Management and Budget Raines (a Democrat) in charge of Fannie Mae (the first black to hold the position) pushing the non-stop lending to minorities and low income families for homes everyone knew they could not afford.

Something the Democrats are now calling “predatory lending” by the banking institutions they ran, designed, and implemented and are blaming it on Republican President George Bush. And, of course, the liberal media will carry the water by repeating the lies and concealing the truth for Obama, and other Democrats who all know they are to blame for the mess.

I wonder how much money Obama was getting from these “predatory lenders” for his people in Chicago while he was a “community organizer”, along with Jessie Jackson and Al Sharpton? No blame there either, according to the liberal media.

Of course, I do blame President Bush for part of the mess, he bailed them out with taxpayers money. The government backed Fannie and Freddie (socialized lending companies) should have been allowed to fail, close, and the private sector taking over. But Bush did it because refusing to do so would have been considered “racist” because the overwhelming vast majority of the failed loans were (as designed by Democrats) those to minorities.

So rather than let yet another social engineering scheme by the Democrats fall flat on its face, disappear into obscurity, and off the taxpayers back, President Bush cringed and propped it up. What a coward.




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