The LAW of

UNINTENDED CONSEQUENCES

 

"How Democrats lied to America."

AND DESTROYED

“THE AMERICAN DREAM”

And cost

American Homeowners & Taxpayers

10 TRILLION DOLLARS

 

1977: President Jimmy Carter signs the Community Reinvestment Act (CRA) into law.

• The law pressured financial institutions to extend home loans to those who would otherwise not qualify.
• The LIBERAL Premise:
• Home ownership would improve poor and crime-ridden communities and neighborhoods in terms of crime, investment, jobs, etc.
• Results:  Statistics bear out that it did not help.
• How did the government get so deeply involved in the housing market?
• Answer: Bill Clinton wanted it that way.

 

1992: Republican Representative Jim Leach (Iowa) warned of the danger that Fannie and Freddie were changing from being agencies of the public at large to money machines for the principals and the stockholding few.

 

1993: President Clinton extensively rewrote Fannie Mae and Freddie Mac's rules turning the quasi-private mortgage-funding firms into semi-nationalized monopolies dispensing cash and loans to large Democratic voting blocks and handing favors, jobs and contributions to political allies. 

• This potent mix led inevitably to corruption and now the collapse of Freddie and Fannie.

 

1994: Despite warnings, President Clinton unveiled his National Home-Ownership trategy that broadened the CRA in ways congress never intended.

 

1995: Congress, about to change from a Democrat majority to Republican, President Clinton orders Robert Rubin's Treasury Department to rewrite the rules.

• Robert Rubin's Treasury reworked rules, forcing banks to satisfy quotas for sub-prime and minority loans to get a satisfactory CRA rating.
• The rating was key to expansion or mergers for banks.  Loans began to be made on the basis of race and little else.

 

1997 - 1999: President Clinton, bypassing Republicans, enlisted Andrew Cuomo, then Secretary of Housing and Urban Development, allowing Freddie and Fannie to get into the sub-prime market in a BIG way.

• Led by Representative Barney Frank and Senator Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5% of capital to back their investments vs. 10% for banks.
• Since they could borrow at lower rates than banks, their enterprises boomed.
• With incentives in place, banks poured billions in loans into poor communities, often "no doc," "no income," requiring no money down and no verification of income.
• Five Million Undocumented loans went to Illegal Aliens.
• Worse still was the cronyism: Fannie and Freddie became home to out-of-work politicians, mostly Clinton Democrats.
• Politicians numbering 384 got big campaign donations from Fannie and Freddie.
• Over $200 million had been spent on lobbying and political activities.  During the 1990's Fannie and Freddie enjoyed a subsidy of as much as $182 billion, most of it going to principals and shareholders, not poor borrowers as claimed.

Did the CRA work?

• Minorities made up 49% of the 12.5 million new homeowners but many of those loans have gone bad and the minority homeownership rates are shrinking fast.

 

1999: New Treasury Secretary, Lawrence Summers, became alarmed at Fannie and Freddie's excesses.

• Congress held hearings the ensuing year but nothing was done because Fannie and Freddie had donated millions to key congressmen and radical groups, ensuring no meaningful changes would take place.
• "We manage our political risk with the same intensity that we manage our credit and interest rate risks," Fannie CEO Franklin Raines, a former Clinton official and current Barack Obama advisor, bragged to investors in 1999.

 

2000: Secretary Summers sent Undersecretary Gary Gensler to Congress seeking an end to the "special status."

• Democrats raised a ruckus as did Fannie and Freddie, headed by politically connected CEO's who knew how to reward and punish.
• "We think that the statements evidence a contempt for the nation's housing and mortgage markets," Freddie spokesperson Sharon McHale said.
• It was the last chance during the Clinton era for reform.

 

2001: Republicans try repeatedly to bring fiscal sanity to Fannie Mae & Freddie Mac

• Democrats blocked any attempt at reform;
• Especially Representative Barney Frank and Senator Chris Dodd who now run key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants.

 

2003: Bush proposes what the New York Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago."

·                                 Even after discovering a scheme by Fannie and Freddie to overstate earnings by $10.6 billion to boost their bonuses, the Democrats killed reform.

 

2005: Then Fed Chairman Alan Greenspan warns Congress: "We are placing the total financial system at substantial risk."

·                                 Senator McCain, with two others, sponsored a Fannie/Freddie reform bill and said, "If congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole."

·                                 Senator Harry Reid accused the GOP of trying to "cripple the ability of Fannie and Freddie to carry out their mission of expanding homeownership."

·                                 The bill went nowhere.

 

2007: By now Fannie and Freddie own or guarantee over HALF of the $12 trillion US mortgage market.

·                                       The mortgage giants, whose executive suites were top-heavy with former Democratic officials, had been working with Wall Street to repackage the bad loans and sell them to investors.

·                                       As the housing market fell in '07, sub-prime mortgage portfolios suffered major losses.

·                                       The crisis was on, though it was 15 years in the making.

 

2008: John McCain has repeatedly called for reforming the behemoths.

·                                       Bush urged reform 17 times.

·                                       Still, the media have repeated Democrats' talking points about this being a "Republican" disaster.

·                                       A few Republicans are complicit but Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats. 

·                                       That's why taxpayers are now being asked for $700 billion.

·                                       If you doubt any of this, just click the links below and listen to your lawmakers own words.  They are condemning!

  

http://www.youtube.com/watch?v=68D9XrqyrWo

Should this address not work, search Google for
"Fannie & Freddie: The Real Story Behind The Economic Crisis"

 

http://www.youtube.com/watch?v=pIgqfM5C8lY#

Should this address not work, search Google for
"The origins of the 2008 financial crisis."

http://www.youtube.com/watch?v=H9juJr8CSY4

 Should this address not work, search Google for
"How Democrats lied to America."

 

Postscript:

The Association of Community Organizations for Reform Now (ACORN) is one of the principal beneficiaries of Fannie/ Freddie's slush funds.

·                                       They are currently under indictment or investigation in many states.

·                                       Barack Obama served as their legal counsel, defending their activities for several years.

DO YOU WANT

MORE OR LESS

OF THIS CRIMINAL

GOVERNMENT BEHAVIOR

IN THE NEXT FOUR YEARS?

 

Ronnie Stapleton

All Points Logistics

Agents for FAK

5280 Trail Lake Dr

Ft Worth, TX 76133

E-mail: ronnie@allpointslogistics.net

PH: 817-263-1906

FX: 817-509-1900

Cell: 817-247-4762

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