Future Mortgage Meltdown 2.0: Obama hiring Clinton hands whom helped create the first mortgage meltdown
You have got to be kidding me. Not again. I guess the first crisis they helped create didn’t do enough for them. Crises mean always mean more regulation.
n the 1990s, convinced that the US mortgage market was racist, the Clinton administration launched a massive campaign of social engineering.
Through government entities Fannie Mae and Freddie Mac, officials encouraged extending mortgages to people with little or no credit. They targeted private banks with discrimination lawsuits if they didn’t lend to enough minorities or people with low incomes. Housing prices skyrocketed as people with no down payment or shaky salaries suddenly were able to buy homes.
Then the bubble burst.
Millions were unable to pay their subprime loans, and they took the banks down with them. The housing market — and the economy — is still recovering from the folly.
Now the Obama administration wants to do it all over again.
Blithely ignoring the lessons of the housing bubble, Obama has rehired many of the Clinton hands who inflated it in the first place, pursuing the same misguided policies that try to force people into homes they can’t afford in the name of “fairness.”
“The administration is launching subprime 2.0,” warns former chief Fannie Mae credit officer Edward Pinto….
One banking official, ex-BB&T CEO John Allison, predicts that because of these policies, “There will be another incredibly destructive crisis in our financial system in the next 10 to 15 years.”
Here are some of the usual suspects Obama has brought back and how they’re re-inflating the bubble that ravaged our economy:
Sara Pratt, John Trasvina, Shaun Donavan, Ellen Seidman, Eric Holder, Thomas Perez, Eric Halperin, and Gary Gensler.
I particularly like this incredulous tidbit about Holder:
As Reno’s deputy, Holder accused banks of racism for failing to market mortgages to poor minorities with weak credit. Fear of prosecution set off a stampede of risky inner-city lending that led, in part, to today’s record subprime foreclosures.
Now as Obama’s attorney general, Holder has sued the nation’s largest home lenders — including Bank of America, Wells Fargo and SunTrust Banks — to “reinvest” in minority communities devastated by those foreclosures. They’ve been told by the government they cannot reject loans to applicants on “public assistance,” and must set aside millions in “special financing programs” for African-American and Latino homebuyers.
In some cases, Justice has actually ordered banks to open new branches in depressed areas of Detroit and other cities. It also encouraged a Detroit bank to “apply more flexible underwriting standards” for minorities, while ordering a St. Louis bank to originate low-rate home loans for black borrowers who, according to a court document, “would ordinarily not qualify for such rates for reasons including the lack of required credit quality, income or down payment.”
I’ve seen some bewildering recipes for stupid in my lifetime, but Holder’s actions takes the cake. Using public assistance as qualifying income to finance a loan on a home?? Face, meet palm. I hope the banks simply drag out the court process with continuances, endless motions, and the like. I guess the government needs to create more crises so government can save the people from their created crises…again. They can’t let people get too self-sufficient and stop depending on government you know.