Rather Than Investigating Foreclosure Fraud, House Republicans Vow To Investigate Loans To Poor People

[one...two...tree 2,762]

Over the weekend, the Washington Post provided some more details about the ongoing foreclosure fraud scandal, noting that "virtually everyone involved – loan servicers, law firms, document processing companies and others – made more money as they evicted more borrowers from their homes, creating a system that was vulnerable to error and difficult for homeowners to challenge." A bevy of Democratic lawmakers have called for examinations of the banks' potentially fraudulent activities, while the Attorneys General of all fifty states have pledged a coordinated investigation. Republicans, however, have been largely silent on the issue. And according to Rep. Darrell Issa (R-CA), who is slated to take over the House Committee on Government and Oversight should the Republicans gain a majority, the GOP is not really interested in the banks' malpractice. Instead, Issa wants to "launch aggressive inquiries" into whether the government helped poor people buy houses they couldn't afford:

The conservative Republican from California, who would become chairman of the powerful House oversight and government reform committee, said

hearings would focus on whether the federal government should be involved at all in sponsoring home loans for the poor.

Such hearings would evidently "centre on the roles of Fannie Mae and Freddie Mac," which Republicans have blamed for the financial collapse of 2008, despite the overwhelming evidence to the contrary. As the Wonk Room explains, Issa's pronouncement is part of an ongoing conservative effort to scapegoat homeowners and government for Wall Street's malfeasance.

While the GOP likes to blame homeowners for the country's economic woes, in the last decade, as the Center for American Progress has documented, banks were still systematically charging minorities higher costs for loans and pushing them into expensive subprime mortgages, making government policies to ensure fair access to credit a necessary step. It says a lot about the Republican mindset that banks evicting homeowners who aren't in foreclosure doesn't merit an investigation, but a low-income family receiving a mortgage in a traditionally under-served community does.

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[Ban Hammer 13,355]

Instead, Issa wants to "launch aggressive inquiries" into whether the government helped poor people buy houses they couldn't afford:

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and there's something wrong with that?

[ready4ONE 5,400]

Instead, Issa wants to "launch aggressive inquiries" into whether the government helped poor people buy houses they couldn't afford:

-----------

and there's something wrong with that?

Can't investigate both? Or is making money at whatever cost too important a value to you?

[Ban Hammer 13,355]

Can't investigate both? Or is making money at whatever cost too important a value to you?

how is loaning money to someone too poor to make the payments "making money"

[ready4ONE 5,400]

how is loaning money to someone too poor to make the payments "making money"

Make a bad loan, parse it out, sell to suckers. Lather, rinse, repeat.

[Ban Hammer 13,355]

Make a bad loan, parse it out, sell to suckers. Lather, rinse, repeat.

so maybe you're suggesting with the above, investigating loans to the poor is a good place to start.

[one...two...tree 2,762]

Instead, Issa wants to "launch aggressive inquiries" into whether the government helped poor people buy houses they couldn't afford:

-----------

and there's something wrong with that?

This is the Republican talking point - "It was the guvmint that gave home loans to poor people who didn't pay their mortgages and that's what caused the financial crisis." It's nothing but smoke and mirrors bullsh!t, but political hacks like Dan Issa have no real interest in the truth.

Fannie Mae, was established in 1938 after the Great Depression to create a liquid secondary mortgage market and thereby free the loan originators to originate more loans, primarily by buying Federal Housing Administration (FHA) insured mortgages.^[5] In 1968 Fannie Mae was converted into a private shareholder-owned corporation in order to remove its activity from the annual balance sheet of the federal budget.^[6] Fannie Mae was split into the current Fannie Mae and the Government National Mortgage Association (GNMA), colloquially known as Ginnie Mae, to support the FHA-insured mortgages as well as Veterans Administration (VA) and Farmers Home Administration (FmHA) insured mortgages, with the full faith and credit of the United States government.^[7]

......

In 1999, Fannie Mae came under pressure from the Clinton administration to expand mortgage loans to low and moderate income borrowers by increasing the ratios of their loan portfolios in distressed inner city areas designated in the CRA of 1977.^[10] Because of the increased ratio requirements, institutions in the primary mortgage market pressed Fannie Mae to ease credit requirements on the mortgages it was willing to purchase, enabling them to make loans to subprime borrowers at interest rates higher than conventional loans. Shareholders also pressured Fannie Mae to maintain its record profits.^[10]

In 2000, because of a re-assessment of the housing market by HUD, anti-predatory lending rules were put into place that disallowed risky, high-cost loans from being credited toward affordable housing goals. In 2004, these rules were dropped and high-risk loans were again counted toward affordable housing goals.^[11]

The intent was that Fannie Mae's enforcement of the underwriting standards they maintained for standard conforming mortgages would also provide safe and stable means of lending to buyers who did not have prime credit. As Daniel Mudd, then President and CEO of Fannie Mae, testified in 2007, instead the agency's underwriting requirements drove business into the arms of the private mortgage industry who marketed aggressive products without regard to future consequences: "We also set conservative underwriting standards for loans we finance to ensure the homebuyers can afford their loans over the long term. We sought to bring the standards we apply to the prime space to the subprime market with our industry partners primarily to expand our services to underserved families.

"Unfortunately, Fannie Mae-quality, safe loans in the subprime market did not become the standard, and the lending market moved away from us. Borrowers were offered a range of loans that layered teaser rates, interest-only, negative amortization and payment options and low-documentation requirements on top of floating-rate loans. In early 2005 we began sounding our concerns about this "layered-risk" lending. For example, Tom Lund, the head of our single-family mortgage business, publicly stated, "One of the things we don't feel good about right now as we look into this marketplace is more homebuyers being put into programs that have more risk. Those products are for more sophisticated buyers. Does it make sense for borrowers to take on risk they may not be aware of? Are we setting them up for failure? As a result, we gave up significant market share to our competitors. "^[12]

^{[url=http://en.wikipedia.org/wiki/Fannie_Mae#cite_note-11][/url]}

http://en.wikipedia.org/wiki/Fannie_Mae

[Ban Hammer 13,355]

This is the Republican talking point - "It was the guvmint that gave home loans to poor people who didn't pay their mortgages and that's what caused the financial crisis." It's nothing but smoke and mirrors bullsh!t, but political hacks like Dan Issa have no real interest in the truth.

uh huh - and fannie and freddie got us started down that path. ever heard of caveat emptor?

[one...two...tree 2,762]

ever heard of caveat emptor?

Is that a new pizza?

[웃 910]

99% of Americans don't know it but banks are loaning to the piss poor still to this day!

My wife makes $10.40 / hour and works about 30 hours a week. Takes home maybe $1300 gross per month ($15,600 per year approx.). She was approved of an FHA loan up to $60,000.

The trick is you need excellent credit. She has a 720 avg. score. There is a trick for that too. I have a clean credit card (never went over 35% the limit, always paid on time, and more than the minimum, etc.) that has been open since 2007. In 2009, when Diana arrived I added her as an "authorized user". So basically what the credit companies report is that Diana has had credit since 2007 (going on 4 years) instead of when in reality she got her credit started in 2009 (1-2 years). That is a huge difference in terms of credit history (1 vs. 4 years). So that is the only possible way her credit can be so high in such a short time!

I knew something was up when she got a Chase Credit app in the mail, and I said to apply just for kicks considering she never gets any credit offers. Bam, $5,000 limit instant approval.

Long story short is my wife is dirt poor but is in the process of closing on a house for approximately $25,000 that can be rented out for $1,000 per month.

Her mortgage payment per month is around $325 and that includes taxes. And taxes will be reassessed and drop significantly in the next year.

The other qualification you need is 2 years work history....

So the formula is 2 years work history (avg. yearly pay $15,000) + good credit score = house with payment less than $350/month including taxes

Edited October 19, 2010 by Lord Infamous

[Heracles 417]

Instead, Issa wants to "launch aggressive inquiries" into whether the government helped poor people buy houses they couldn't afford:

-----------

and there's something wrong with that?

So the government approves all of these lines of credit people have do they? When was the last time you had a credit card, auto loan, personal loan or mortgage approved by the US Dep of x?

Why do you guys fail to grasp that private lenders approved these loans?

[Ban Hammer 13,355]

So the government approves all of these lines of credit people have do they? When was the last time you had a credit card, auto loan, personal loan or mortgage approved by the US Dep of x?

Why do you guys fail to grasp that private lenders approved these loans?

va home loan

next?

[Heracles 417]

how is loaning money to someone too poor to make the payments "making money"

Exactly, therefore....

Make a bad loan, parse it out, sell to suckers. Lather, rinse, repeat.

What ready4ONE describes is what caused the financial crisis. This Freedie, Clinton, Barney etc is baloney, it's a Red herring from the real culprit.

People did not have their 401K and savings wiped out both here and across the pond because of sub-prime, it was because they invested their pensions in this loans, believing the were sound investments; as they were marked as safe, though they were actually sub-prime.

Spare me the BS that Repubs were against subprime because they saw it as a risk. Repubs were against this as if handled correctly, it would allow the poor and middle class Americans to rise and access the 75% of wealth that the top 10% of Americans now hold; something the dirty money repubs cannot stand.

Sure as hell did not see it enough of a risk to loan the sub-prime borrowers the money. These are the same genius repubs who think someone who cannot pay a mortgage or credit card at x percent, will magically be able to come up with the money when they double the rate.

[Heracles 417]

va home loan

next?

Well you're a defense contractor and probably have access to some defense federal loan. The rest of us have to actually go to a private lender to acquire finance. I highly doubt anyone has a loan from the Department of x. The fact is with zero credit, zero documentation, I could have acquired a $400k mortgage. How many illegal aliens do you guys think did this themselves?

The governments mistake is not mandating and regulating this #######, as it is in other countries like AUS; where sub-prime represents less than 0.5% of borrowers. Heck, even to acquire a credit card there requires over one months worth of paychecks.

Edited October 20, 2010 by Heracles

[웃 910]

Top 100 Corporations by Market Cap

US: 37 US companies make list (37% = 3.7 out of every 10 = 37 out of every 100)

AUS: 4 AUS companies make list (4% = 0.4 out of every 10 = 4 out of every 100)

http://www.corporateinformation.com/Top-100.aspx?topcase=b