ObamaDems can't make low income borrowers their policy beneficiaries also be the victims of lenders
As another Election Day nears, so does the need for another failed super-majority of Democrats to demonize business as a scapegoat for the recessionary results of their liberal policies. Hence, this week's attempts by President Barack Obama and his party to blame "predatory lenders" and un-notarized statements for the recent and ongoing waves of mortgage foreclosures since 2008.
The ordinary meaning of the term "predatory lending" is the practice of defrauding the buyer of a home with respect to its value and cost for the purpose of later seizing the home when the buyer inevitably defaults. HUD-1 forms and Truth-in-Lending statements have largely eliminated the practice for decades, as the typical case used to be "surprises" at the interest charged and, hence, a mortgage payment that the buyer did not anticipate. The predatory lender would then foreclose on the property when the borrower went into default and re-sell the property for additional profit, as the buyer had usually paid 10-20% down and could not recover same.
The housing boom of the naughts decade was not fueled by predatory lending, but rather by a predatory government
To the contrary, borrowers in the 2000s paid little or nothing down; knew exactly what their payments would be initially and any later interest increases, down to the penny. Most of those foreclosed upon were no different than Daniel Boone, trying to better themselves albeit, by taking advantage of Democratic Party-enacted and protected Fannie Mae and Freddie Mac policies that specifically targeted such borrowers having a "right to affordable housing." The new lending practices were deemed a positive good with the borrowers being the beneficiaries.
Moreover, the lenders were threatened with fines for "discrimination" if they didn't make the risky sub-prime loans but the government sweetened the deal by reducing the risk to lenders with Fannie/Freddie loan guarantees.
Most of the borrowers had been renters; paid little to nothing down; and then rented again after foreclosure. They are victims, but not because of any tragedy related to their specific loans. No, they are victims only in the sense that all Americans are victims of a predatory government policy whose main purpose was to perpetuate the myth of how much Democrats like Barack Obama, Barney Frank and Chris Dodd "care" about the poor, and to grow a bureaucracy and Fannie/Freddie as a jobs program for cronies.
The bubble burst in 2008 and the rest is the Great Recession history in which we live. Yet now, with foreclosures finally catching up after long periods of self-imposed moratoriums due to the massive inventory that made keeping non-payers in the homes and misguided government attempts to "modify" loans for those whose incomes afforded no such hope, the government wants to re-define their previous beneficiaries as victims of wicked bankers. The pitchforks are being called out again to try and avert the eyes of voters from 10% unemployment.
All of the housing policies of ObamaDems have failed by their own terms and also have prevented the market from reaching a natural bottom, which is a necessary predicate to any housing recovery.
The latest salvo is worse than all previous post-bust policies, as the threat of predatory lending will keep investors on the sidelines given the uncertain status of so many idle properties. Yet another example of the truth of President Ronald Reagan's recitation of the most feared words in the English language: I'm from the government and I'm here to help.
The ObamaDems will not let us bail ourselves out, so we must kick them out.
Yes, the Bush Administration did continue many of the housing initiatives begun under President Bill Clinton via the Community Redevelopment Act and other policies, but President George W. Bush, Senator John McCain and Republicans in Congress also tried to rein in Fannie/Freddie, but were rebuffed by Democrats, including filibuster threats in the Senate.
Moreover, since the bubble burst, ObamaDems have imposed onerous regulations on banks but have left Fannie and Freddie intact and with ongoing mandates to make the same kind of sub-prime loans that led to the recession. Except that now, the race-based regulations are more racist.
The only remedy for what ails America is to vote against the predatory government "D" jackasses in November.
Drink more tea till America is healed.
"One man with courage makes a majority." - Andrew Jackson