Please read the following overview:

Bankrupt "Exploiters" by Thomas Sowell, Ph.D. Economics

Pt.1 http://townhall.com/columnists/Thoma...upt_exploiters
Pt.2 http://townhall.com/columnists/Thoma...oiters_part_ii

After reading the above please see "Community Reinvestment Act"
http://en.wikipedia.org/wiki/Community_Reinvestment_Act

The Community Reinvestment Act (CRA) was passed into law by the U.S.
Congress in 1977 (CARTER) as a result of national grassroots pressure
(LIberal Fascists) for affordable housing, and despite considerable
opposition from the mainstream banking community. Only one banker [in
the entire U.S.], Ron Grzywinski from ShoreBank in [south side]
CHICAGO, testified in favor of the act.

The largest and oldest community development financial institution is
ShoreBank, headquartered in the South Shore neighborhood of Chicago.

In 1985, Ron Grzywinski worked closely with then Arkansas Governor
Bill CLINTON to set up the Southern Development Bancorporation.
http://en.wikipedia.org/wiki/Ron_Grzywinski

CLINTON later credited ShoreBank’s success with inspiring a movement
of community development financial institutions (CDFI’s).
http://en.wikipedia.org/wiki/Communi...al_institution

In a 1992 speech, CLINTON called ShoreBank “the most important bank in
America." [Indeed!]

In addition to ShoreBank, Ron Grzywinski currently works with the
board of the Aga Khan Foundation in PAKISTAN

In 1995, as a result of interest from President CLINTON's
administration, the implementing regulations for the CRA were
strengthened by focusing the financial regulators' attention on
institutions' performance in helping to meet community credit needs.

The 1995 revisions were credited with helping to substantially
increase the amount of loans to small businesses and to low- and
moderate-income borrowers for home loans. Part of the increase in the
latter type of lending was no doubt due to increased efficiency in the
secondary market for mortgage loans. The revisions allowed the
securitization of CRA loans containing SUBPRIME mortgages. The first
PUBLIC SECURITIZATION (Socialism- your taxes!) of CRA loans STARTED IN
1997.
(...)
Changes to tests conducted on the Intermediate Small category were
viewed by some as decreasing the institutions' obligations to meet
lending requirements of low- and moderate-income households. Racial
inequities in mortgage acceptance rates (as reported by Inner City
Press, the National Community Reinvestment Coalition, ACORN [see
below] and other groups) are cited as a primary reason to maintain or
even increase the scope of the CRA.

[ Notice that ShoreBank and its banker, Ron Grzywinski, is from the
south side of Chicago. The exact same area that ObaMao became a
"Community Organizer". ]

***

The thousands of mortgage defaults and foreclosures in the "subprime"
housing market (i.e., mortgage holders with poor credit ratings) is
the direct result of thirty years of government policy that has forced
banks to make bad loans to un-creditworthy borrowers. The policy in
question is the 1977 Community Reinvestment Act (CRA), which compels
banks to make loans to low-income borrowers and in what the supporters
of the Act call "communities of color" that they might not otherwise
make based on purely economic criteria.

The original lobbyists for the CRA were the hardcore leftists who
supported the Carter administration and were often rewarded for their
support with government grants and programs like the CRA that they
benefited from. These included various "neighborhood organizations,"
as they like to call themselves, such as "ACORN" (Association of
Community Organizations for Reform Now). These organizations claim
that over $1 trillion in CRA loans have been made, although no one
seems to know the magnitude with much certainty. A U.S. Senate Banking
Committee staffer told me about ten years ago that at least $100
billion in such loans had been made in the first twenty years of the
Act.

So-called "community groups" like ACORN benefit themselves from the
CRA through a process that sounds like legalized extortion. The CRA is
enforced by four federal government bureaucracies: the Fed, the
Comptroller of the Currency, the Office of Thrift Supervision, and the
Federal Deposit Insurance Corporation. The law is set up so that any
bank merger, branch expansion, or new branch creation can be postponed
or prohibited by any of these four bureaucracies if a CRA "protest" is
issued by a "community group." This can cost banks great sums of
money, and the "community groups" understand this perfectly well. It
is their leverage. They use this leverage to get the banks to give
them millions of dollars as well as promising to make a certain amount
of bad loans in their communities.

A man named Bruce Marks became quite notorious during the last decade
for pressuring banks to earmark literally billions of dollars to his
organization, the "Neighborhood Assistance Corporation of America." He
once boasted to the New York Times that he had "won" loan commitments
totaling $3.8 billion from Bank of America, First Union Corporation,
and the Fleet Financial Group. And that is just one "community group"
operating in one city – Boston.

Banks have been placed in a Catch 22 situation by the CRA: If they
comply, they know they will have to suffer from more loan defaults. If
they don’t comply, they face financial penalties and, worse yet, their
business plans for mergers, branch expansions, etc. can be blocked by
CRA protesters, which can cost a large corporation like Bank of
America billions of dollars. Like most businesses, they have largely
buckled under and have surrendered to their bureaucratic masters.

Consequently, banks in every community in America have been forced to
hold a portfolio of bad loans, euphemistically referred to as
"subprime" loans. In order to compensate themselves for the added risk
of extending these loans, many lenders have increased the lending fees
associated with mortgage loans. This is simply an indirect way of
doing what banks always do – and what they must do to remain solvent:
charging effectively higher rates of interest on riskier loans.

But this is discriminatory!, complained the "community organizations."
Thus, if one browses the ACORN web site, one can read of their boasts
of having "predatory lending laws" passed in numerous states which
outlaw such fees, prohibiting banks from protecting themselves from
the added risk involved in making forced loans to "subprime"
borrowers.

These are price control laws, and price controls always cause
shortages. Normally, banks would respond to such laws by extending
fewer riskier loans. But in this case the banks are forced to continue
making the marginal loans by their bureaucratic masters at the Fed and
the other three federal bureaucracies mentioned above. So-called
predatory lending laws therefore force the banks to "eat" the losses.
This is undoubtedly a contributing factor to the bankruptcy of dozens
of mortgage lenders over the past year.

Then of course there is the issue of the Fed’s monetary policy having
created the housing bubble, characterized by a spectacular escalation
of real estate values in every American city over the past decade or
so. This created a further problem for the financial institutions that
are victimized by the CRA. They are forced to make a certain amount of
bad loans, but because of the Fed-created explosion in housing prices,
many thousands of subprime borrowers no longer qualified, by a long
stretch, for conventional mortgages based on their incomes.

The only way these borrowers could qualify for their mortgage loans
(even ignoring their bad credit ratings) was to take out adjustable
rate mortgages, some of which had astonishingly low first-year rates
in the 3 percent range, and sometimes lower. This is what has largely
fueled the subprime mortgage meltdown – the inability of thousands of
subprime borrowers to afford their mortgages now that their rates have
adjusted upward. Thus, the combination of the Fed’s enforcement of the
CRA ( with the help of political pressure groups like ACORN [see
below] ) and its post 9/11 monetary policy in general are the reasons
for the bursting real estate bubble and the "subprime" mortgage
meltdown.

Don’t expect to read about this in the "mainstream media," however,
which generally views groups like ACORN as heroic champions of the
poor, laws like the CRA as anti-discrimination laws, and places all of
the blame for the subprime mortgage meltdown on greedy capitalists,
especially mortgage brokers. Encouraged by such reporting, the odious
Senator Charles Schumer of New York has promised federal legislation
that will reign in these miscreants, while the Bush administration is
proposing an indirect bank bailout by having the Federal Housing
Administration cover many of the bad "subprime" loans. This will
create what economists call a "moral hazard" by encouraging even more
bad loans to be extended in the future. Every banker in America will
be glad to extend loans (at high rates of interest) to the most
uncreditworthy borrowers if he thinks there is no possibility of
default with the FHA effectively guaranteeing the loan.

http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

WHAT IS "ACORN"
(Association of Community Organizations for Reform Now)

ACORN is a grassroots political organization that grew out of George
Wiley's National Welfare Rights Organization (NWRO), whose members in
the late 1960s and early 70s invaded welfare offices

http://www.discoverthenetwork.org/gr...asp?grpid=6967

across the U.S. -- often violently -- bullying social workers and
loudly demanding every penny to which the law "entitled" them. In the
late 1960s, ACORN co-founder

Wade Rathke http://www.discoverthenetwork.org/in...asp?indid=1773

was a NWRO organizer and a protegé of Wiley. Rathke also organized
draft resistance for the militant group

Students for a Democratic Society (SDS)
http://www.discoverthenetwork.org/gr...asp?grpid=6723

during the same period.

In 1970 Rathke -- along with the aforementioned Wiley (best known for
his effective use of the so-called

"Cloward-Piven strategy," http://www.discoverthenetworks.org/g...asp?grpid=6967

which called for swamping the welfare rolls with new applicants and
thereby creating an economic crisis) and Gary Delgado (a lead
organizer for Wiley's NWRO) -- formed a new entity called ARKANSAS
Community Organizations for Reform Now (ACORN) [Clinton's territory].
The group's name was later changed to Association of Community
Organizations for Reform Now, but the acronym ACORN remained. Instead
of focusing only on welfare recipients, ACORN’s mandate included all
issues touching low-income and working-class people.

Rathke and his ACORN co-founders enlisted civil rights workers and
trained them

http://www.sonoma.edu/users/w/wallsd...ganizing.shtml

in a program (at Syracuse University) patterned after Saul Alinsky's
activist tactics.

http://www.discoverthenetworks.org/i...asp?indid=2314

Today ACORN claims 175,000 dues-paying member families, and more than
850 chapters in 70 U.S. cities in 38 states. (The organization is also
active in Canada and Mexico). It owns two radio stations, a housing
corporation, and a law office, and maintains affiliate relationships
with a host of trade-union locals. ACORN also runs schools where
children are trained in class consciousness; a network of "boot camps"
for training street activists; and operations that extort
contributions from banks and other businesses under threat of racial
violence and trumped-up civil rights charges.

In 1998, ACORN founded the

Working Families Party in New York,
http://www.discoverthenetwork.org/gr...asp?grpid=6965

which endorses candidates for political office. It endorsed Hillary
CLINTON in her 2000 Senate race. Canvassers from ACORN and its sister
groups launched a statewide voter-mobilization drive that proved
influential in CLINTON's victory. In November 2001, a coalition of
radical politicians led by ACORN-sponsored candidates running on the
Working Families Party ticket won a veto-proof majority on the New
York City Council, giving ACORN de facto control of the New York City
government.

With little opposition from Republicans or moderate Democrats, ACORN
radicals pushed laws tightening their control over New York City
government and stripping the Mayor of executive power. Their current
platform calls for a rollback of welfare reforms; a crackdown on NYC
police, including a ban on "racial and ethnic profiling"; and the
appointment of a politicized Civilian Review Board newly empowered to
prosecute police officers. ACORN also seeks to use its influence to
raise corporate taxes, increase regulation, and empower unions with an
array of new rights. ACORN seeks to prevent any corporation from being
free to leave New York without an "exit visa" from the City Council.

On March 12, 2003, the ACORN-controlled City Council passed a
resolution, by a 31-17 margin, condemning the U.S. invasion of Iraq.

In the 2004 election cycle, ACORN and its sister group

Project Vote http://www.discoverthenetwork.org/gr...asp?grpid=6966

ran a nationwide voter mobilization drive that was marred by
allegations of fraudulent voter registration, vote-rigging, voter
intimidation, and vote-for-pay scams. ACORN’s get-out-the-vote
activists were implicated in schemes that included the falsification
and destruction of thousands of voter registration forms, and the
registering of convicted felons even in states where felons are
ineligible to vote.

In 2006, approximately 20,000 questionable voter registration forms
http://www.nationalreview.com/commen...0410311142.asp

were turned in by ACORN officials in Missouri -- virtually all in the
St. Louis and Kansas City areas, where ACORN purportedly sought to
help empower the “disenfranchised” minorities living there. Similar
allegations of ACORN voter fraud were made in Pennsylvania, Ohio and
Colorado. Between 2004 and 2006, ACORN employees were accused of
submitting fraudulent voter registration cards and forging signatures
on ballot initiatives in 12 states.

Syndicated columnist Michelle Malkin writes:

http://www.gopusa.com/commentary/mma...mm_06251.shtml

"[In July 2007] ACORN settled the largest case of voter fraud in the
history of Washington State. Seven ACORN workers had submitted nearly
2,000 bogus voter registration forms. According to case records, they
flipped through phone books for names to use on the forms, including
'Leon Spinks,' 'Frekkie Magoal' and 'Fruto Boy Crispila.' Three ACORN
election hoaxers pleaded guilty in October [2007]. A King County
prosecutor called ACORN's criminal sabotage 'an act of vandalism upon
the voter rolls.'

"The group's vandalism on electoral integrity is systemic. ACORN has
been implicated in similar voter fraud schemes in Missouri, Ohio and
at least 12 other states. The Wall Street Journal noted: 'In Ohio in
2004, a worker for one affiliate was given crack cocaine in exchange
for fraudulent registrations that included underage voters, dead
voters and pillars of the community named Mary Poppins, Dick Tracy and
Jive Turkey. During a congressional hearing in Ohio in the aftermath
of the 2004 election, officials from several counties in the state
explained ACORN's practice of dumping thousands of registration forms
in their lap on the submission deadline, even though the forms had
been collected months earlier.'

"In March [2008], Philadelphia elections officials accused the
nonprofit advocacy group of filing fraudulent voter registrations in
advance of the April 22nd Pennsylvania primary. The charges [were]
forwarded to the city district attorney's office."

ACORN makes a great deal of money from its "community organizing"
campaigns, and shows little tolerance for rival leftist groups
infringing on its turf. For instance, when ACORN set up shop in San
Francisco in May 2002, it discovered that many of its potential
recruits - low-income blacks and Hispanics - were networked with the
Outer Mission Resident's Association (OMRA). The San Francisco
Examiner reports, "ACORN soon began a process of intimidation by
busing in activists from Oakland to disrupt OMRA events. ACORN members
then began showing up at some neighbors' homes, and in one case jabbed
a person in the chest."

Since ACORN is a private corporation, it does not divulge its
finances. Further complicating any effort to calculate ACORN's income
is the fact that it operates an unknown number of front groups, many
of which conceal their relationship to ACORN. But as of March 2006
ACORN claimed 175,000 member families on its website, each
contributing at least $120 per year, which amounts to about $21
million in annual membership fees. ACORN's website states, "Membership
dues and a host of grassroots and chapter-based fundraising programs
pay for 70 to 75 percent of the entire organization's budget."

Since its inception in 1970, ACORN's overriding mission has been to
enact "living wage" ordinances at the local, state and - ultimately -
federal levels. It has succeeded in getting many such laws passed.
ACORN's model legislation contains a clause that exempts unionized
businesses from paying the minimum wage. As a result, those companies
that stubbornly resist unionizing founder and, in many cases, go
bankrupt. Those that unionize thrive, providing an ever-expanding
membership base for union recruiting. This is the main reason that
unions such as AFSCME and SEIU contribute so generously to ACORN.

Housing activism is another major focus for ACORN, which forms housing
collectives in targeted areas. The collective applies pressure on
local authorities to place it in charge of renovating and managing
abandoned or dilapidated properties for poor tenants. Local
authorities provide money for renovation -- much of which ends up in
ACORN bank accounts. The poor tenants are compelled to “earn” their
new homes by investing "sweat equity" -- that is, working without pay
on renovating the properties. ACORN or its designated "housing
collective" retains title to the land on which the building stands.
If the tenants decide to move out, they are required to sell their
property back to ACORN, at cost, no matter what the market value of
the property.

In recent years, ACORN has received funding from many foundations,
including but not limited to

the Annie E. Casey Foundation;
http://www.discoverthenetwork.org/fu...02&category=79

the Minneapolis Foundation
http://www.discoverthenetwork.org/fu...80&category=79

the Open Society Institute;
http://www.discoverthenetwork.org/fu...asp?fndid=5181

the Public Welfare Foundation;
http://www.discoverthenetwork.org/fu...98&category=79

the Surdna Foundation;
http://www.discoverthenetwork.org/fu...01&category=79

the WOODS FUND of CHICAGO;
http://www.discoverthenetwork.org/fu...02&category=79

the Scherman Foundation;
http://www.discoverthenetwork.org/fu...56&category=79

and the Ben and Jerry's Foundation.
http://www.discoverthenetwork.org/fu...23&category=78

At the March 2008 “Take Back America” conference sponsored by

Campaign for America's Future (CAF),
http://www.discoverthenetworks.org/g...asp?grpid=7331

ACORN joined CAF and five additional leftist organizations in
announcing plans for “the most expensive [$350 million] mobilization
in history this election season.”

http://www.cnsnews.com/ViewPolitics....20080319b.html

The initiative focused on voter registration, education, and get-out-
the-vote drives. Other members of the coalition
http://www.cnsnews.com/ViewPolitics....20080319b.html

included MoveOn.org,
http://jewishworldreview.com/jeff/jacoby032408.php3

Rock the Vote,
the National Council of La Raza,
http://www.discoverthenetworks.org/g....asp?grpid=153

the Women's Voices Women Vote Action Fund, and the AFL-CIO.

On June 2, 2008, Wade Rathke stepped down from his role as ACORN's
chief organizer.

Also in 2008, ACORN publicly acknowledged
http://therealacorn.blogspot.com/200...-huh-wade.html
that Dale Rathke -- the brother of Wade Rathke -- had embezzled nearly
$1 million from ACORN and affiliated groups in 1999 and 2000. ACORN
further admitted that for eight years its executives had kept this
information secret from almost all of their organization's board
members and from law-enforcement authorities. Wrote journalist
Stephanie Strom in July 2008:

http://therealacorn.blogspot.com/200...-huh-wade.html

“Dale Rathke remained on Acorn’s payroll until a month ago, when
disclosure of his theft by foundations and other donors forced the
organization to dismiss him. ‘We thought it best at the time to
protect the organization, as well as to get the funds back into the
organization, to deal with it in-house,’ said Maude Hurd, president of
ACORN. ‘It was a judgment call at the time, and looking back, people
can agree or disagree with it, but we did what we thought was
right.’”

According to Strom,
http://therealacorn.blogspot.com/200...-huh-wade.html

Wade Rathke “said the decision to keep the matter secret was not made
to protect his brother but because word of the embezzlement would have
put a ‘weapon’ into the hands of enemies of ACORN, a liberal group
that is a frequent target of conservatives who object to its often
strident advocacy on behalf of low- and moderate-income families and
workers.”

http://www.discoverthenetworks.org/g...asp?grpid=6968
__________________________________________________ _____

This financial disaster is a direct and unquestionable result of the
Socialist Liberal Fascist policies of the Neo-Communist Democrat Party
and its ilk such as ObaMao!

wrote:
Please read the following overview:


Nobody has time to read all that ****. Obviously what happened is the
retail lenders made bad loans and greedy bankers swallowed them up. I
say let the whole thing crash and then we can start over and try to do a
better job this time.

It has nothing to do with party lines. The guilty are found on both
sides of the aisle. Start with Phil Gramm and Bill Clinton

Dave wrote:

wrote:
Please read the following overview:


Nobody has time to read all that ****.

Make time, boy.

Obviously what happened is the
retail lenders made bad loans and greedy bankers swallowed them up. I
say let the whole thing crash and then we can start over and try to do a
better job this time.

It has nothing to do with party lines.

Yes, it certainly does and the cognoscenti have known that for a very long time.

Wise up, boy!

dxAce, cognoSCENTED, wrote:

Yes, it certainly does and the cognoscenti have known that for a very long time.


A backwoods drunk, such as yourself, having delusions of grandeur never
ceases to amuse. This is as good as you stating God may not have the
same high standards you do.

Take care of your ego, Bozo. It's all you've got.






mike

--
__ __ __ __ __ __ __ __
/ /\ / /\ / /\ / /\ / /\ / /\ / /\ / /
/ /\ \ /'Think Tanks Cleaned Cheap'/ /\ \/ /
/_/ \/_/ \/_/ \/_/ \/_/ \/_/ \/_/ \/_/

Densa International©
For the OTHER two percent.



Due to the insane amount of spam and garbage,
I block all postings with a Gmail, Google Mail,
Google Groups or HOTMAIL address.
I also filter everything from a .cn server.


For solutions which may work for you, please check:
http://improve-usenet.org/

m II wrote:

dxAce, cognoSCENTED, wrote:

Yes, it certainly does and the cognoscenti have known that for a very long time.

A backwoods drunk, such as yourself, having delusions of grandeur never
ceases to amuse. This is as good as you stating God may not have the
same high standards you do.

Take care of your ego, Bozo. It's all you've got.

Beats having nothing, like a dumbass Canuck, boy!

On Sep 15, 12:04*pm, wrote:
Please read the following overview:

Bankrupt "Exploiters" *by Thomas Sowell, Ph.D. Economics

Pt.1http://townhall.com/columnists/ThomasSowell/2008/07/22/bankrupt_explo....
Pt.2http://townhall.com/columnists/ThomasSowell/2008/07/23/bankrupt_explo....

After reading the above please see "Community Reinvestment Act"http://en.wikipedia.org/wiki/Community_Reinvestment_Act

The Community Reinvestment Act (CRA) was passed into law by the U.S.
Congress in 1977 (CARTER) as a result of national grassroots pressure
(LIberal Fascists) for affordable housing, and despite considerable
opposition from the mainstream banking community. Only one banker [in
the entire U.S.], Ron Grzywinski from ShoreBank in [south side]
CHICAGO, testified in favor of the act.

The largest and oldest community development financial institution is
ShoreBank, headquartered in the South Shore neighborhood of Chicago.

In 1985, Ron Grzywinski worked closely with then Arkansas Governor
Bill CLINTON to set up the Southern Development Bancorporation.http://en.wikipedia.org/wiki/Ron_Grzywinski

CLINTON later credited ShoreBank’s success with inspiring a movement
of community development financial institutions (CDFI’s).http://en.wikipedia.org/wiki/Communi...al_institution

In a 1992 speech, CLINTON called ShoreBank “the most important bank in
America." [Indeed!]

In addition to ShoreBank, Ron Grzywinski currently works with the
board of the Aga Khan Foundation in PAKISTAN

In 1995, as a result of interest from President CLINTON's
administration, the implementing regulations for the CRA were
strengthened by focusing the financial regulators' attention on
institutions' performance in helping to meet community credit needs.

The 1995 revisions were credited with helping to substantially
increase the amount of loans to small businesses and to low- and
moderate-income borrowers for home loans. Part of the increase in the
latter type of lending was no doubt due to increased efficiency in the
secondary market for mortgage loans. The revisions allowed the
securitization of CRA loans containing SUBPRIME mortgages. The first
PUBLIC SECURITIZATION (Socialism- your taxes!) of CRA loans STARTED IN
1997.
(...)
Changes to tests conducted on the Intermediate Small category were
viewed by some as decreasing the institutions' obligations to meet
lending requirements of low- and moderate-income households. Racial
inequities in mortgage acceptance rates (as reported by Inner City
Press, the National Community Reinvestment Coalition, ACORN [see
below] and other groups) are cited as a primary reason to maintain or
even increase the scope of the CRA.

[ Notice that ShoreBank and its banker, Ron Grzywinski, is from the
south side of Chicago. *The exact same area that ObaMao became a
"Community Organizer". ]

***

The thousands of mortgage defaults and foreclosures in the "subprime"
housing market (i.e., mortgage holders with poor credit ratings) is
the direct result of thirty years of government policy that has forced
banks to make bad loans to un-creditworthy borrowers. The policy in
question is the 1977 Community Reinvestment Act (CRA), which compels
banks to make loans to low-income borrowers and in what the supporters
of the Act call "communities of color" that they might not otherwise
make based on purely economic criteria.

The original lobbyists for the CRA were the hardcore leftists who
supported the Carter administration and were often rewarded for their
support with government grants and programs like the CRA that they
benefited from. These included various "neighborhood organizations,"
as they like to call themselves, such as "ACORN" (Association of
Community Organizations for Reform Now). These organizations claim
that over $1 trillion in CRA loans have been made, although no one
seems to know the magnitude with much certainty. A U.S. Senate Banking
Committee staffer told me about ten years ago that at least $100
billion in such loans had been made in the first twenty years of the
Act.

So-called "community groups" like ACORN benefit themselves from the
CRA through a process that sounds like legalized extortion. The CRA is
enforced by four federal government bureaucracies: the Fed, the
Comptroller of the Currency, the Office of Thrift Supervision, and the
Federal Deposit Insurance Corporation. The law is set up so that any
bank merger, branch expansion, or new branch creation can be postponed
or prohibited by any of these four bureaucracies if a CRA "protest" is
issued by a "community group." This can cost banks great sums of
money, and the "community groups" understand this perfectly well. It
is their leverage. They use this leverage to get the banks to give
them millions of dollars as well as promising to make a certain amount
of bad loans in their communities.

A man named Bruce Marks became quite notorious during the last decade
for pressuring banks to earmark literally billions of dollars to his
organization, the "Neighborhood Assistance Corporation of America." He
once boasted to the New York Times that he had "won" loan commitments
totaling $3.8 billion from Bank of America, First Union Corporation,
and the Fleet Financial Group. And that is just one "community group"
operating in one city – Boston.

Banks have been placed in a Catch 22 situation by the CRA: If they
comply, they know they will have to suffer from more loan defaults. If
they don’t comply, they face financial penalties and, worse yet, their
business plans for mergers, branch expansions, etc. can be blocked by
CRA protesters, which can cost a large corporation like Bank of
America billions of dollars. Like most businesses, they have largely
buckled under and have surrendered to their bureaucratic masters.

Consequently, banks in every community in America have been forced to
hold a portfolio of bad loans, euphemistically referred to as
"subprime" loans. In order to compensate themselves for the added risk
of extending these loans, many lenders have increased the lending fees
associated with mortgage loans. This is simply an indirect way of
doing what banks always do – and what they must do to remain solvent:
charging effectively higher rates of interest on riskier loans.

But this is discriminatory!, complained the "community organizations."
Thus, if one browses the ACORN web site, one can read of their boasts
of having "predatory lending laws" passed in numerous states which
outlaw such fees, prohibiting banks from protecting themselves from
the added risk involved in making forced loans to "subprime"
borrowers.

These are price control laws, and price controls always cause
shortages. Normally, banks would respond to such laws by extending
fewer riskier loans. But in this case the banks are forced to continue
making the marginal loans by their bureaucratic masters at the Fed and
the other three federal bureaucracies mentioned above. So-called
predatory lending laws therefore force the banks to "eat" the losses.
This is undoubtedly a contributing factor to the bankruptcy of dozens
of mortgage lenders over the past year.

Then of course there is the issue of the Fed’s monetary policy having
created the housing bubble, characterized by a spectacular escalation
of real estate values in every American city over the past decade or
so. This created a further problem for the financial institutions that
are victimized by the CRA. They are forced to make a certain amount of
bad loans, but because of the Fed-created explosion in housing prices,
many thousands of subprime borrowers no longer qualified, by a long
stretch, for conventional mortgages based on their incomes.

The only way these borrowers could qualify for their mortgage loans
(even ignoring their bad credit ratings) was to take out adjustable
rate mortgages, some of which had astonishingly low first-year rates
in the 3 percent range, and sometimes lower. This is what has largely
fueled the subprime mortgage meltdown – the inability of thousands of
subprime borrowers to afford their mortgages now that their rates have
adjusted upward. Thus, the combination of the Fed’s enforcement of the
CRA ( with the help of political pressure groups like ACORN [see
below] ) and its post 9/11 monetary policy in general are the reasons
for the bursting real estate bubble and the "subprime" mortgage
meltdown.

Don’t expect to read about this in the "mainstream media," however,
which generally views groups like ACORN as heroic champions of the
poor, laws like the CRA as anti-discrimination laws, and places all of
the blame for the subprime mortgage meltdown on greedy capitalists,
especially mortgage brokers. Encouraged by such reporting, the odious
Senator Charles Schumer of New York has promised federal legislation
that will reign in these miscreants, while the Bush administration is
proposing an indirect bank bailout by having the Federal Housing
Administration cover many of the bad "subprime" loans. This will
create what economists call a "moral hazard" by encouraging even more
bad loans to be extended in the future. Every banker in America will
be glad to extend loans (at high rates of interest) to the most
uncreditworthy borrowers if he thinks there is no possibility of
default with the FHA effectively guaranteeing the loan.

http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

WHAT IS "ACORN"
(Association of Community Organizations for Reform Now)

ACORN is a grassroots political organization that grew out of George
Wiley's National Welfare Rights Organization (NWRO), whose members in
the late 1960s and early 70s invaded welfare offices

http://www.discoverthenetwork.org/gr...asp?grpid=6967

across the U.S. -- often violently -- bullying social workers and
loudly demanding every penny to which the law "entitled" them. In the
late 1960s, ACORN co-founder

Wade Rathkehttp://www.discoverthenetwork.org/individualProfile.asp?indid=1773

was a NWRO organizer and a protegé of Wiley. Rathke also ...

read more »

SFS - These is more than an ACORN of Truth
in all that you have presented to read. ~ RHF

There's one big problem with all this, and that is the fact that CRA
does NOT cover private mortgage lenders, and far more of the
adjustable rate mortgages came out of these private lenders than CRA
covered banks.

"16. According to the 2006 HMDA data, 19 percent of the conventional
first lien mortgage loans originated by depository institutions were
higher-priced, compared to 23 percent by bank subsidiaries, 38 percent
by other bank affiliates, and more than 40 percent by independent
mortgage companies.

Robert B. Avery, Kenneth P. Brevoort, and Glenn B. Canner, “The 2006
HMDA Data,” Federal Reserve Bulletin, Volume 94 (2007), p. A89."

http://www.frbsf.org/news/speeches/2008/0331.html#16


Independent mortgage companies DO NOT fall under CRA, and bank
subsidiaries and affiliates largely fall under limited CRA
regulations.

This all comes down to one question: were banks forced to make bad
loans to satisfy CRA requirements, or did banks make bad loans to make
money. According to those numbers, CRA really had little impact on
"forcing" bad loans to bad debtors.

The CRA changes that Clinton made appear to have facilitated abuse by
allowing AR mortgages to be securitized, but it does not seem to have
forced banks to make bad loans to risky borrowers.

In article
,
wrote:

There's one big problem with all this, and that is

SNIP

that this post does not belong in this news group.

So get lost loser.

--
Telamon
Ventura, California

See Complete Republican Administration Corruption and Scandal List
athttp://www.netrootsmass.net/Hugh/Bush_list.html