Obama Sued Citibank Under CRA to Force it to Make Bad Loans – UPDATED
Posted by iusbvision on September 30, 2008
NEW UPDATE 2-19-2010 – Congressional Report says that ACORN/SEIU a criminal conspiracy that played a roll in the mortgage collapse (just as we have said from minute one) – LINK.
UPDATE 9-22-2009: Here we go again, introducing the Community Reinvestment Modernization Act.
[Please see the special editors note at the bottom of this post – Editor]
UPDATE 10-12-2008: Hotair.com posts a video From April 3, 1998 of Clinton’s HUD Secretary Andrew Cuomo telling how they forced banks to make high risk affirmative action loans. See Update VIII towards the bottom of this post.
UPDATE V: AUDIO – OBAMA SAID IN 2007 THAT GIVING SUB-PRIME LOANS TO PEOPLE WHO COULDN’T AFFORD THEM WAS A GOOD IDEA!!! Hotair.com comments HERE.
“I’ve been fighting alongside ACORN on issues you care about my entire career. Even before I was an elected official, when I ran Project Vote voter registration drive in Illinois, ACORN was smack dab in the middle of it, and we appreciate your work.” — Barack Obama, Speech to ACORN, November 2007
*****ORIGINAL STORY BEGINS HERE******
Do you remember how we told you that the Democrats and groups associated with them leaned on banks and even sued to get them to make bad loans by abusing the Community Reinvestment Act (see HERE and HERE)? The abuse of this act by ACORN and officials like Janet Reno was a factor in causing the economic crisis. The harassment suits filed under this act were used to get banks to lower credit standards and hand out high risk loans. We have dug up the lawsuit below while researching Obama’s legal career. It is a typical example of an ACORN harassment lawsuit.
In these lawsuits, ACORN makes a bogus claim of Redlining (denying poor people loans because of their ethnic heritage). They protest and get the local media to raise a big stink. This stink means that the bank faces thousands of people closing their accounts and get local politicians to lobby to stop the bank from doing some future business, expansions and mergers. If the bank goes to court, they will win, but the damage is already done because who is going to launch a big campaign to get the bank’s reputation back?
It is important to understand the nature of these lawsuits and what their purpose is. ACORN filed, or threatened to file, tons of these lawsuits and ALL CRA suits allege racism (usually the press involved and such with the threat of the CRA lawsuit is enough to get the bank to give in and put them in a catch 22, they also had a willing Janet Reno Justice Department to work with – see below for more on Reno). As we have said in our series or articles analyzing every aspect of this story (links at the very bottom of this post), the series of ACORN harassment lawsuits and intimidation against banks to lower credit standards was not the sole reason for the mortgage crisis, it was one important layer of many that brought us to the mortgage crisis and the largest financial scandal in the history of the world.
Case Name
Buycks-Roberson v. Citibank Fed. Sav. Bank Fair Housing/Lending/Insurance
Docket / Court 94 C 4094 ( N.D. Ill. ) FH-IL-0011
State/Territory IllinoisCase Summary
Plaintiffs filed their class action lawsuit on July 6, 1994, alleging that Citibank had engaged in redlining practices in the Chicago metropolitan area in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691; the Fair Housing Act, 42 U.S.C. 3601-3619; the Thirteenth Amendment to the U.S. Constitution; and 42 U.S.C. 1981, 1982. Plaintiffs alleged that the Defendant-bank rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories. Plaintiffs sought injunctive relief, actual damages, and punitive damages.U.S. District Court Judge Ruben Castillo certified the Plaintiffs’ suit as a class action on June 30, 1995. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 322 (N.D. Ill. 1995). Also on June 30, Judge Castillo granted Plaintiffs’ motion to compel discovery of a sample of Defendant-bank’s loan application files. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 338 (N.D. Ill. 1995).
The parties voluntarily dismissed the case on May 12, 1998, pursuant to a settlement agreement.
Plaintiff’s Lawyers Alexis, Hilary I. (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Childers, Michael Allen (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Clayton, Fay (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Cummings, Jeffrey Irvine (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Love, Sara Norris (Virginia)
FH-IL-0011-9000
Miner, Judson Hirsch (Illinois)
FH-IL-0011-7500 | FH-IL-0011-9000
Obama, Barack H. (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Wickert, John Henry (Illinois)
FH-IL-0011-9000
[Editor’s Note – Like so many of these cases, when faced with the bad publicity, the awareness of how the local media would sensationalize such a story, the awareness of ACORN’s close ties with the federal government and the Democratic Leadership, Citi chose to settle the case. All of the details are not known but according to court documents in our possession part of the settlement included $950,000 in attorneys fees.]
UPDATE: Hotair.com comments on other CRA lawsuits HERE.
New York Post Article HERE:
The seeds of today’s financial meltdown lie in the Community Reinvestment Act – a law passed in 1977 and made riskier by unwise amendments and regulatory rulings in later decades.
CRA was meant to encourage banks to make loans to high-risk borrowers, often minorities living in unstable neighborhoods. That has provided an opening to radical groups like ACORN (the Association of Community Organizations for Reform Now) to abuse the law by forcing banks to make hundreds of millions of dollars in “subprime” loans to often uncreditworthy poor and minority customers.
Any bank that wants to expand or merge with another has to show it has complied with CRA – and approval can be held up by complaints filed by groups like ACORN.
In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America’s financial institutions.
The Woods Fund report makes it clear Obama was fully aware of the intimidation tactics used by ACORN’s Madeline Talbott in her pioneering efforts to force banks to suspend their usual credit standards.Yet he supported Talbott in every conceivable way. He trained her personal staff and other aspiring ACORN leaders, he consulted with her extensively, and he arranged a major boost in foundation funding for her efforts.
And, as the leader of another charity, the Chicago Annenberg Challenge, Obama channeled morefunding Talbott’s way – ostensibly for education projects but surely supportive of ACORN’s overall efforts.
UPDATE II: Fox News gets on the story
UPDATE III: CNS News Analysis
Under the Clinton administration, federal regulators began using the act to combat “red-lining,” a practice by which banks loaned money to some communities but not to others, based on economic status. “No loan is exempt, no bank is immune,” warned then-Attorney General Janet Reno. “For those who thumb their nose at us, I promise vigorous enforcement.”
The Clinton-Reno threat of “vigorous enforcement” pushed banks to make the now infamous loans that many blame for the current meltdown, Richman said. “Banks, in order to not get in trouble with the regulators, had to make loans to people who shouldn’t have been getting mortgage loans.”
This threat combined with the government backing of Fannie and Freddie set the stage for the current uncertainty, because the “banks could just sell the loans off to Fannie or Freddie,” who could buy them with little regard for negative financial outcomes, Richman said.
http://www.cnsnews.com/public/content/article.aspx?RsrcID=36048
UPDATE IV:It’s about time …
Update VI: Investors business daily reports more on Obama’s work with ACORN
As the New York Times reports, “Aides to Mr. Obama said he had not directly reached out to try to sway any House Democrats who opposed the measure.” Is the reason the fact that the slush fund for ACORN in the original bill, siphoning off 20% of any future profits for such activist groups, was trimmed from the tree?
Obama, who once represented ACORN in a lawsuit against the state of Illinois, was hired by the group to train its community organizers and staff in the methods and tactics of the late Saul Alinsky. ACORN would stage in-your-face protests in bank lobbies, drive-through lanes and even at bank managers’ homes to get them to issue risky loans in the inner city or face charges of racism.
In the early 1990s, reports Stanley Kurtz, senior fellow at the Ethics and Policy Center, Obama was personally recruited by Chicago’s ACORN to run training sessions in “direct action.” That’s the euphemism for the techniques used under the cover of the federal Community Reinvestment Act to intimidate financial institutions into giving what have been called “Ninja” loans — no income, no job, no assets — to people who couldn’t afford them.
CRA was designed to increase minority homeownership. Whenever a bank wanted to grow or expand, ACORN would file complaints that it was not sufficiently sensitive to the needs of minorities in providing home loans. Agitators would then be unleashed.
Chicago’s ACORN used Alinsky’s tactics against institutions such as Bell Federal Savings and Loan and Avondale Federal Savings. In September 1992, the Chicago Tribune described the group’s agenda as “affirmative action lending.”
Obama also helped ACORN get funding. When he served on the board of the Woods Fund for Chicago with Weather Underground terrorist William Ayers, the Woods Fund frequently gave ACORN grants to fund its activist agenda.
In 1995, Kurtz reports, Obama chaired the committee that increased funding of ACORN and other community organizers. The committee report boasted that the fund’s “non-ideological” image “enabled the Trustees to make grants to organizations that use confrontational tactics against the business and governmental ‘establishments’ without undue risk of being accused of partisanship.”
The CRA empowered regulators to punish banks that failed to “meet the credit needs” of “low-income, minority and distressed neighborhoods.” It gave groups such as ACORN a license and a means to intimidate banks, claiming they were “redlining” poor and minority neighborhoods. ACORN employed its tactics in 1991 by taking over the House Banking Committee room for two days to protest efforts to scale back the CRA.
As a former White House staff economist writes in the American Thinker, Obama represented ACORN in a 1994 suit against redlining. ACORN was also a driving force behind a 1995 regulatory revision pushed through by the Clinton administration that greatly expanded the CRA and helped spawn the current financial crisis.
Obama was the attorney representing ACORN in this effort. Last November, he told the group, “I’ve been fighting alongside ACORN on issues you care about my entire career.” Indeed he has. Obama was and is fully aware of what ACORN was doing with the money and expertise he provided. The voters should be aware on Nov. 4 of the roles of both in creating the current crisis.
http://www.ibdeditorials.com/IBDArticles.aspx?id=307667123149723
UPDATE VII: Some on the left are saying that SNOPES.com has debunked this story, this is not so. Snopes is talking about another story that makes a different claim about this same lawsuit. It does not dispute that this lawsuit was one of a series of lawsuits that were filed by ACORN using “redlining and racism” allegations to lower credit standards. It does not dispute that all of the ACORN CRA lawsuits claimed redlining and racism. It does not dispute that at other times ACORN used intimidation tactics against bank managers to try to make them give high risk loans. ACORN’s activities have been widely reported by many news outfits in the last few days. We also never claimed that Obama was the main lawyer in the suit, just a part of the “team” that used these tactics to rip banks off. We are glad that we were one of the first to get this story right.
[Editor’s Note – Why would anyone be surprised that a far left group would accuse anyone of racism when not given what they want? This is their favorite tactic. “Oppose ObamaCare your racist” (SIC), oppose nationalization of banks, your racist, oppose 20 new Czar positions that don’t have enough transparency and accountability, your racist, catch Obama in a little white lie, your racist and the list goes on and on.]
UPDATE VIII: (10-12-2008) Hotair.com posts a video From April 3, 1998 of Clinton’s HUD Secretary Andrew Cuomo telling how they forced banks to make high risk affirmative action loans. A CNN Story HERE.
CUOMO: To take a greater risk on these mortgages, yes. To give families mortgages that they would not have given otherwise, yes.
Q: [unintellible] … that they would not have given the loans at all?
CUOMO: They would not have qualified but for this affirmative action on the part of the bank, yes.
Q: Are minorities represented in that low and moderate income group?
CUOMO: It is by income, and is it also by minorities? Yes.
CUOMO: With the 2.1 billion, lending that amount in mortgages — which will be a higher risk, and I’m sure there will be a higher default rate on those mortgages than on the rest of the portfolio …
Our other posts that explain every facet of the mortgage crash scandal are in detail HERE, HERE, HERE, HERE, HERE, HERE, HERE, HERE and HERE. – Editor
Special Editor’s Note:
This post has become one of the most discussed articles on the internet, literally linked to by thousands of blogs and discussion forums. After seeing time and time again how this article is used and misused by partisans on both sides, I finally decided to add this note to help give you all a little perspective.
First of all, neither my article, nor most of the other articles I have seen blame the CRA exclusively for the mortgage crisis. The steps that lead to the meltdown are multi-layered and the CRA and its abuse by the Clinton Administration and ACORN was merely a layer of the problem.
There is no question that Janet Reno and Andrew Cuomo and ACORN sought and did use the CRA to scare banks into loosening credit standards to benefit their own constituencies. Cuomo, ACORN and Reno are all on the record doing/saying so.
When Freddie Mac and Fannie Mae started buying any mortgage no matter how bad or risky to sell as mortgage securities, enforcement of the CRA was no longer necessary because banks were given every incentive and were pressured by the House and Senate Banking Committee (mostly by Dems on the committee to be fair)to just give the loans and the banks could sell them to Fannie/Freddie taking the risk away from the bank.
I see many of the hundreds of message boards and blogs that link to my post, but few arguing one way or another are really reading the arguments and the evidence and addressing them. I wrote a dozen articles on this story and as I indicated there were many layers including the Sarbanes-Oxley legislation and abuse by Fannie/Freddie and the abuse/neglect by Chris Dodd and Barney Frank. If you want to get a better grasp on the entire story, read the articles linked above at the bottom of the post as each explains another layer/facet of the problem.
I would like to address some of the sources you guys are quoting because most of them, on the substance are making misleading/ridiculous claims.
The 100K challenge “source” was pretty amusing. He says he will debate anyone that CRA was not a prima cause of the crisis, but the narrative that this post and some of the others give was that since it wasn’t a primary cause, that it was of no cause at all and that is indeed a false narrative. Abuse of the CRA was an important layer, but only one layer of many. The post then goes to say that it wasn’t a major factor, well what is major to one person is not major to another.
These people making these claims would not be so foolish to argue this from the other angle; eg. to make the case that CRA and its later abuse, in no way loosened up credit to those who were high risk and/or had no business trying to obtain such a large loan.
I saw the “source” that was a post on the Businessweek Blog that said CRA wasn’t to blame, and then went on to say that essentially that Freddie/Fannie couldn’t be blamed either, which is preposterous. It was those Mortgage Securities issued by Fannie/Freddie that spread like a toxic poison in the investment markets and everyone knows it.
Many of the other “sources” quoted were merely appeals to authority proclaiming themselves correct and experts and then tell you their view with nothing verifiable for people like you and me to look up.I hope that this post helped to add a little perspective to your discussion.
The “source” that was from the Federal Reserve Bank mentioned in the Wall Street Journal was greeted with skepticism by the WSJ and Investors Business daily. Besides a government report declaring a big government regulation and its abusive enforcement innocent should not surprise anyone.
As far as how most of you have approached this argument, you throw up all these links, but few of you really address the arguments and specific points that are in the links themselves.
Also I encourage you all to avoid emotional attachments to candidates. Have any of you known a bratty kid who is a little terror, whose parents act as if their kid can do no wrong? They act that way because they can’t see passed their own emotional attachments and that is how many of you are behaving.
Here is a simple truth, economic policy in the first Bush term and the second were profoundly different and policy wise the Obama policies are very much like Bush second term policies just on steroids. It also didn’t help that Bush’s second term Treasury Sec. Mr. Paulsen and Obama’s Treasury Sec. Mr. Geithner are two of the very worst Treasury heads ever.
The IUSB Vision Weblog 
Um, what? said
This is ridiculous. Did you even read the case summary? Did you even read ANYTHING before posting this nonsense?
The plaintiffs sued because the bank was discriminating against black applicants with similar financial characteristics as white applicants. It had nothing to do with “forcing” banks to give mortgages to ANYONE…rich or poor. Only that IF a bank CHOSE to give a mortgage to a white applicant with financial characteristics equaling XYZ, it must also give a mortgage to black applicants with financial characteristics equaling XYZ. Banks could have still chosen not to give a mortgage to ANYONE, black or white or brown, unless they had had an income above $100K, for example. Or unless they had a credit rating of 700 or above, for example. The bank STILL had the choice of whether to write bad mortgages.
Are you a moron? Do a little research and use a little common sense next time. Stop blaming Obama, and start putting the blame where it belongs…on the banks and lenders who gave billions in mortgages to people who couldn’t afford it, and now the banks and lenders are reaping the whirlwind of their stupid business decisions. And we, the taxpayers, are expected to “save” these banks and lenders from the consequences of their poor business decisions? Please.
[Of course I read the summary, all of ACORN’s CRA lawsuits allege the same thing, I discussed the allegation in the post because they are always the same……but whoops I guess you didn’t read the entire post. This is what happens when you type BEFORE you read the post carefully.
Next time try reading the ENTIRE post and then start typing. The order of those things IS important. – Editor]
Joan Donahue said
It’s particularly racist to assume that all blacks who apply for loans are poor. Banks in Chicago had routinely denied blacks loans when they were just as qualified as whites. This was such a problem that many organizations worked to end this self-destructive practice by banks. The term redlining was invented in Chicago, because it happens so often there.
The Department of Justice as recently as 2004 charged a bank with redlining:
http://www.usdoj.gov/opa/pr/2004/July/04_crt_478.htm
WASHINGTON, D.C. – The Justice Department today announced the filing and resolution of a lawsuit against a Chicago lender. First American intentionally avoided serving the credit needs of residents and small businesses located in minority neighborhoods, a practice commonly referred to as redlining. First American has agreed to invest $5.7 million and open new branches in these minority neighborhoods to settle the lawsuit.
“All Americans should be able to access the financial markets without regard to their race,” said R. Alexander Acosta, Assistant Attorney General for Civil Rights. “We will continue to oppose vigorously any discrimination in credit and lending services.”
[IUSB Vision Editor Responds –
Hi Joan,
These bogus allegations of racism was one of the tools used to lean on banks to make bad loans. Janet Reno made it clear in no uncertain terms that this was a tool that she would use to pressure banks into making more high risk loans. Keep in mind that for a loan to be a good risk the property values in the area cannot have a lowering property value. It is no secret that areas where there are lots of innner city minorities have the worst schools. The school system is a major factor in a property’s value. Interesting that almost all failing inner city schools are controlled by Democrats. That is just one factor of many that goes into a property’s increasing or decreasing value.
– Editor]
Oil Energy Me said
After reading your ENTIRE article (and by calling your ramblings that I’m lowering the standards of journalism), your central conceit is clearly wrong.
The banks weren’t forced to make bad loans, they were forced to stop discriminating against financially-similar borrowers of different ethnicities.
You might have heard of something called the civil rights movement, this is a clear extension of that. There are enough legitimate reasons to criticize Obama, stopping racism is not one of them.
Next time try thinking about that and then start typing (and I’m lowering the standards of thought to include what you do)
[Bank’s weren’t forced to make bad loans you say?? Where have you been in the last two weeks? How do you think this economic crisis happened? Have you not seen the text of the hearings on Fannie Mae and Freddie Mac, the videos, the articles in the press like the NYP, WSJ, the IBD, etc etc?? The evidence is overwhelming which is why we have several lengthy, evidence filled articles on the subject posted on this very site.
You don’t find it peculiar that ACORN’s lawsuits are all basically the same and that the Clinton Administration was on the record abusing the CRA as a means of pressuring banks to ignore their risk rules in the name of “affirmative action”? What can I say folks, denial is more than just a river in Egypt – Editor]
Marianne said
It is interesting that corrupt former Fannie Mae CEOS are now financial advisers to Obama. That says a lot about Democrats.
marianne
http://heavenawaits.wordpress.com/
http://heavenawaits.wordpress.com/democrats-crashed-wall-street/
Larry Cox said
Very Interesting clip. I had no Idea Osama i mean Obama did such things. But we all know he’s somewhat of a socialist at heart. I don’t care if he’s black, white, or purple with orange polka dots. Keep him away from the White House. America isn’t ready for a Marxist revolution or a Muslim invasion. Just vote for Ron Paul and have him repeal the 16th amendment, abolish the IRS, make a 24% sales tax across the 50 states and we’ll get out of this financial bind we’re in. Check out http://www.fairtax.org and you’ll see why!
Dan said
Some people just don’t get it. It is a common tactic to file a motion for discovery based on a bogus complaint in the hopes of finding “facts” that will back up the original complaint. A fishing expedition is all it is. They then get the media involved in the claim of discrimination and seek to totally discredit the financial institution. Rather than have it’s name dragged through the mud the financial institution settles to save time, money and further exploitation by the press.
isilanes said
Dear iusbvision,
I read your post and can’t but cry for the poor banks. You see, being forced to do bad things to preserve the good fame they have always been renowned for… That’s so sad.
It is us the poor that crashed the banks, not their greed to harvest money form even the poorest of the poorest, giving every guy and the dog a credit they don’t need at a rate they can barely pay.
Thanks for making me see it.
[IUSB Vision Editor Responds –
So you blame the Fannie/Freddie/banks for wanting their loans repaid back? Should the banks have just handed out the depositors money? Should Fannie/Freddie just handed out houses using taxpayer dollars?
Your statement ignores a fundamental truth, that loans to high risk borrowers, loans for at risk properties, would never have taken place if it were not for the market intervention of the government to force these things to happen. And if not for the Federal reserve keeping interest rates artificially low. Both of these two circumstances setting up the conditions for the market bubble that just blew.]
C.S. White said
In the end, EVERYONE is to blame for this mess, from Dems for saying there wasn’t a problem with Fannie and Freddie, most likely because they benefited from the program politically and financially (checkout the 2004 C-Span 2 video on hearing warning about the today’s crisis at http://newsmediaexposed.wordpress.com/) to Republicans for not following through on instituting proper oversight and charges against the offenders, to the banks for lending the money.
I have a theory that this popular culture of political correctness is what has scared Republicans into submission and will post my thoughts on this at http://bycwhite.com.
Newagegop said
The underlying “facts” proported by Obama and ACORN have been proven to be false. The study they cited was wrong. The study cooked the numbers to falsely accuse Citibank of racism. It is their tactic.
Reality will eventually have to be accepted, if those represented by liberals ever want a better life. Racism is not murdering 4000 blacks a year or forcing 13,000,000 black abortions since 1973 liberalism is. Racism isn’t providing the worst schools in America or creating urban poverty liberalism is.
Facts exist and liberalism kills. Don’t believe me go look up the 10 worst urban crime, poverty, and school systems in America, then look up who has run those cities for the last 20 years. Black America has been enslaved by liberals, they just don’t realize it.
rex84 said
The banks weren’t forced to give bad loans? Are you sure? Read this:
From the Wall Street Journal:
P. Soliz said
Vote NO to the bailout plan…contact your representative…this plan is giving money to all the wrong places.
20% to Acorn??? why is a democratic liberal group being given our tax payer money!
VOTE NO
DGSaunders said
Last I recall, in 1994 credit lending standards were much much tighter, and 99% of the people delinquent with loans today received their mortgages within the last 5 years. Fail.
[In 1994 the standards were much tighter, what we have been cataloging here is the efforts to make them not just less tight, but loose as a grease covered goose. The ACORN lawsuits, lowering Fannie Mae standards, and pressure from Janet Reno to make high risk loans were big steps in that process. – Editor]
Ed Darrell said
If it’s a bogus claim, the judge wouldn’t allow it.
In short, you’re claiming that enforcing the law and getting justice is not a good thing. How bizarre.
Doesn’t that make you more anarchist than libertarian?
[Is this the best argument you can come up with in the face of overwhelming verifiable facts? – Editor]
Linda said
This is completely ridiculous. Red-lining has been illegal and enforced since the 60’s. Obama was a civil rights attorney. The issue was a civil rights issue. WTF are you talking about? The sub-prime mortgage mess has happened because the lenders are greedy and the borrowers are stupid and want more than they can afford.
Apples and oranges.
[Linda,
Take a look around, every major newspaper including the New York Times as far back as 1999 has been saying that the government coercing lenders into making these loans is going to lead to a disaster. The Federal reserve testified to it and the Mortgage Regulator OFHEO warned Congress for years to fix this. All the evidence is not only here on this site, but everywhere you can look that has any credibility. Even elite media outlets are admitting that the redlining accusations were a tactic. Time to stop drinking the Kool-Aide and wake up. – Editor]
Linda said
Yuck. I feel sullied. I just looked around your website. You are a Coulter-clone. Ace.
[I am sure you do feel sullied. All those verifiable facts is enough to make any radicalized ideologue go crazy. No I am not an Ann Coulter clone as I have not written five best selling books yet. Linda, I would challenge you to come back with some substance or some verifiable evidence, if you have any. – Editor]
goodtimepolitics said
Obama has recivied more money from Fannie Mae than any congressman except for Dodd! Tell me why “Linda” Tell me why “Ed Darrell”
There is no way a bank could stay in business and give out loans to people that can not pay them back! Thats what Obama force them to do!
quick question said
Why didn’t the republicans fix this when they were in control of the house, senate and presidency?
Why didn’t they reverse all of these damaging policies many years ago, simply cut them off?
Oh – I think I know why. Look at the board of directors, the paychecks and cuts out of “being forced” to loan money the various parties received.
[Follow the links at the bottom where it says HERE, HERE, HERE,… Republicans did try to stop it, eventually they got legislation passed the House but the GOP never had enough votes in the Senate to challenge the Democrat filibuster. That’s right, the Democrats filibuster threated this legislation to preserve the status quo. – Editor]
Ed Darrell said
I stated the facts under the law. The best argument you can make is a hallucination?
Ed Darrell said
GTP, Fannie Mae and Freddie Mac aren’t loan originating agencies.
Neither agency can donate money to campaigns.
What in the world are you talking about?
[Once again Ed you are not reading for comprehension, if you followed the links at the bottom of the page you would know that later the government realized that they did not have to coerce banks to make high risk loans using CRA pressure alone; they had Fannie/Freddie eager and willing to buy all the at risk loans the banks could write. So if the banks upheld smart market based lending standards they risked punishment from ACORN and the government, but if they just handed out loans to anyone who wanted them Fannie/Freddie would take the loans off their hands so the bank could wash their hands of the matter. – Editor]
quick question said
[Obama has recivied more money from Fannie Mae than any congressman except for Dodd! Tell me why “Linda” Tell me why “Ed Darrell”]
http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html
Look at the header of the column.
“Total from Individuals”
So that’s not money FROM the institution, that’s money from individuals who work at the institution.
If I donate to a political campaign, you’d hardly say my place of employment is the one donating to it.
That page also goes on to say that 57% of the funds fannie mae had given to congress were to democrats.
Let’s do some rough math, shall we:
Pretend the total was 100,000 for simplicity’s (your) sake.
57,000 of that went to democrats in congress
43,000 of that went to non-democrats
236 dems in the house versus 198 repubs.
57000/236 = ~2.42% of the total donations per member
43000/198 = ~2.17% of the total donations per member
So slice those numbers any way you want, fannie mae’s contributions evened out to being non-partisan. Seeing as how the boards are decided within the gov and there was a point when republicans had complete control over everything, I’m not sure what your point is.
Because it should be the simple answers to the question:
If this was so threatening to the wellbeing of our country, why didn’t the republicans fix it when they had complete control over everything?
Why are the times when they DIDN’T have control constantly referred to?
Ed Darrell said
Exactly correct, which is why I wondered about GTP’s claim that it came from the corporation.
Plus, there is the unspoken assumption that an employee donating money represents the views of the employer — which certainly is not true for most people I know — and the unspoken assumption that there is a quid pro quo for the donations, which is not evidenced anywhere.
Thanks for the data.
[Ed – First you said that they cant give money to anyone – and now you have this wrong too because you don’t understand what you are looking at. That 57% is over the course of a 20 year period and that is to individual politicians. Look at the donations since BCRA was passed. Look at the amounts given to top Democrats vs top Republicans. While Fannie and Freddie gave at least a little money to everyone, the Republicans tried to get the enforcement out from under the bought off congressional banking committees and under real bank regulators in the Treasury Dept or the Fed. The Democrats blocked it in party line votes with the GOP never having enough votes in the Senate to stop a filibuster threat.
Look at this article HERE. http://online.wsj.com/article/SB121728651034091275.html
Fannie and Freddie spent $200 Million in partisan activities and donations, the vast majority to Democrat organizations. Also look at the amounts that they got since BCRA with the vast majority going to Democrats. Obama has been in the Senate three years and took more than all of the other senators put together but one and this list is of donations over a 20 year period.
https://iusbvision.wordpress.com/2008/09/15/corruption-you-can-believe-in-failed-sub-primes-and-mortgage-fraud-lendors-funneled-money-to-dodd-obama-the-most-fannie-freddie-gave-200-million-to-partisans-most-went-to-democrats-dodd-obama/
Be sure to read the above link carefully and watch the video of the hearings and you can watch the Democrats accuse the OFHEO monitors of lying when they told these congressional committees what was going on at Fannie Mae and Freddie Mac.
In OFHEO reports going at least back to 2003, they told the banking committees in Congress that they needed to reform the regulations and put real banking regulators in charge because Fannie and Freddie were not following Generally Accepted Accounting Practices.
Ed, you are so eager to exonerate your Democrat Party friends that you have lost all perspective. Perhaps you should take a deep breath stop and reconsider yourself and try and think objectively, because with all due respect, you haven’t carefully read the information presented to you and are kinda making a fool of yourself. – Editor]
Sisyphus said
It is unfortunate that many of loudest comments here are from those so uninformed.
The mortgage mess began with the Community Reinvestment Act of 1977 signed by Carter. The law was lightly enforced and not given serious force until the mid-1990s under Clinton and AG Janet Reno (D-Waco, Elian). Banks were bullied to give mortgages to high-risk borrowers without regard to typical standards like credit rating. It was a total disregard for normal credit standards.
In recent years, President Bush and John McCain sought to bring attention to FannieMae/Freddie Mac time bomb. They were ignored. Meanwhile, many Democrat Representatives like Barney Frank and Maxine Waters assured us that Fannie Mae and Freddie Mac were in good condition; there was nothing to worry about.
Democrats Franklin Raines, Jamie Gorelick, and Jim Johnson, profited millions thanks to exaggerated profits. Democrats in Congress — Chris Dodd and Barack Obama among them — received donations from Fannie Mae/Freddie Mac. (While these donations may have come from individuals, are we told who these individuals were?)
One cannot ignore basic economics. Democrats did exactly that (and do so in other areas as well) and I need not tell you where it’s gotten us.
[Hi Sis,
Thanks for the post, Lets talk about individual contributions for a moment. Why is it that donations from employees of companies count as donations from that company? When you look at even Factcheck.org’s and the Center for Responsive Politics definition of corporate donations, they include donations from that companies employees.
The reason they do that is because when the BCRA restricted soft money donations and limited the amount of money that corporations could give, those companies would engage in employee bundling to get around the law. Employees would get a little bonus and they would in turn give money to a campaign that a company likes. America is a divided country almost 50/50 politically, so when the employees in a company give a single candidate or party over 80% of their so called “individual donations” since BCRA you know someone is gaming the system. That is why the Center for Responsive Politics, Factcheck.org and most newspapers include these donations as corporate donations. Corporate employees did not give maxed donations in such uniformity untill this law was made. Any solid Poli Sci student knows this. Next time some partisan tries to use the “individual donations” argument against you, slap them with this little nugget of campaign finance reality. – Editor]
The One and Only Vice Presidential Debate « Nicki’s Thoughts, Art & Friends said
[…] how Obama had to know what was coming with subprime mortgages as he had, as a community organizer, sued Citibank under the Community Reinvestment Act in 1994 to force the bank to make bad loans. He did this as a partner with […]
BobC said
I have 3 points I have gathered from these mess of posts. I am a very tough, very undecided voter.
1) The case from its description was simply a lawsuit against a bank. It was settled out of court so there were no details to be made public. Any talk why it came about (in either direction) is speculation.
2) Some institutions donated money to politicians (their legal right) whose principles shared common goals? CALL THE MEDIA! Oh wait, that is not news. If I am choosing who I am going to donate money to I am going to donate to the candidate most likely to vote for what I want enacted. Why would I give my money to the candidate least like that? Donations are not the news story. The voting record is.
3) As a matter of history, Democratic involvement in promoting borrowing by risky homeowners is important. As a matter of current events, It has less to do with the current crisis. The economy would be fine if it was just subprime loans turning bad. The problem was their widespread tranching and use in the derivatives market. Who made that possible?
Seriously, who? It could be the same people. I don’t know. Was it even wrong for it to be allowed?
[Hi BobC,
1. ACORN filed tons of these harassment suits and Janet Reno threatened banks with it. Democrats leaned on lenders to make more high risk loans. All of this we have fully sourced and documented. We are not the only ones to report these facts, so keep reading.
2. Yes they had principles in common alright, the principle was to enrich themselves by abandoning Generally Accepted Accounting Practices while slicking the palms of everyone around it with $200 million. OFHEO, the Treasury and the Federal Reserve all warned Congress to fix the problem and Democrats said that all of these people raising concerns were either racist, lying or just plain wrong…. we posted the video of the hearings for your viewing pleasure.
3. The securities based on those mortgages went bad because the banks and Freddie and Fannie knew that these loans were bad. The banks at least have an excuse, they were coerced (strong armed) by the government to make these bad loans and sell them to Fannie and Freddie (but some of them were gaming the system like Freddie and Fannie were).
I am glad that you are reading the articles posted here, but you may wish to read them more carefully next time. – Editor]
BobC said
Wow. There was some misunderstandings here.
1) Yes, I got that. I am a strong believer that government exists only for rent seeking. I am looking at this case with reasonable doubt. I know we do not have to apply that concept to dismissed cases or in public opinion but without details of the case there is a lot of speculation. I am not saying it isn’t a bogus suit. We live in a society that settles out of court a lot of bogus suits. But that is not solid enough that this case is one of them. It is fishy, but I am not convinced it is fact.
Also, this would be a win for Obama. Citing him as a good lawyer doesn’t really discourage votes.
2) Once again, you are stating their political record and trying to inflate the behavior by coupling it with donations. The donations aspect does not affect me. I only care about the individual’s record. I AM NOT DEFENDING ANYBODY’S RECORD.
3) They went band for a lot of reasons. As I said before, governments engage in rent seeking. Wait, I am not even sure if there is an argument on point. I agree with,”The securities based on those martgages went bad because the banks and Freddie and Fannie knew that these loans were bad.” My statement was if the securities did not penetrate the market so deeply we also would not have this problem. I don’t see a contradiction between us.
BobC said
Oh, and one more thing. Do not take the “convinced as fact” thing as an edorsement on this issue or any issue. It is just very hard to prove what a person’s intentions were to the extent it is a fact.
I agree these lawsuit arguement has a lot of believability. I hope you can agree that it does not have certainty.
[That’s fine BobC – as you know plain text is often a difficult and incomplete form on communications, especially in a shorthand format like this. So I have no problem at taking you at your word :-)
– Editor]
nextgen08 said
This is not the reason for the mortgage meltdown, not even close. If you want to learn about the actual events that lead to this crisis we are in, check out this link:
http://www.nextgen-politics.com/2008/09/the-evolution-of-a-financial-crisis-part-i-the-back-story/
This is a step-by-step account of what actually happened that lead us to where we are today. It was the investment industry that pushed banks to make bad loans, not community organizers, but it makes for a flashy headline doesn’t it?
Jerame Clough
-Next Gen Politics
[Jerame,
Community organizers like ACORN were a step in the process, we have written five articles here explaining all that happened and Human Events, and Investers Business Daily and Bloombrg News came out with a similar analysis AFTER we did. After the ball was rolling some in the investment industry did indeed push mortgage investments because the price of the house could be used as an asset and in an inflating housing market that could skew the value of the mortgage securities, which is why we need mark to market rules fixed.
The real question is, who got this ball rolling, and who was warned repeatedly to stop the ball, had the power to do it easily and simply refused to.
Deregulation wasn’t deregulation at all, it was just some changes to put our rules more in line with the international community and Bill Clinton said so. By the way, Biden Voted for Gramm-Leach-Bliley and Clinton signed it. It passed the Senate 90-8.
https://iusbvision.wordpress.com/2008/10/01/clinton-says-that-obama-is-wrong-about-economic-crisis/
https://iusbvision.wordpress.com/2008/09/21/in-plain-english-how-did-the-biggest-financial-scandal-in-history-happen/
https://iusbvision.wordpress.com/2008/09/28/the-video-that-says-it-all-democrats-on-banking-committee-lying-about-status-of-fannie-mae-and-freddie-mac-saying-they-are-fine-and-dont-need-reform/
https://iusbvision.wordpress.com/2008/09/21/bush-administration-warned-congress-over-20-times-reforms-were-needed/
Factcheck.org:
Factcheck.org isnt always right but they get it right most of the time.
I read the analysis that you linked to and with all due respect, it is not a serious attempt at an honest explanation… it is closer to CYA for the man who took the second highest amount of money from those directly responsible for this mess and Bush bashing when his administration repeatedly asked Congress to fix the problem. OFHEO and the Feferal Reserve even asked the Congressional banking committies to fix this. Republicans voted for it and Democrats blocked it. This was all so avoidable and if it was fixed just a few years ago we would not be here talking about this.
This problem happened in a series of layers, but some layers are far thicker than others and you are ingnoring some of the thickest. – Editor]
Darky said
All I got to say is the gov’t pressured banks into giving out risky loans. Obama supported people who launched frivolous lawsuits against said banks, alleging racism. Banks were willing to give out bad loans. People were more than happy to take out loans they couldn’t afford and now that it’s all hitting at the same time, everyone’s looking for someone else to blame. You can’t blame the bank for giving the loan to someone who couldn’t afford it without taking a look at the person choosing to take on a bigger payment than they can handle. Adding on the rediculousness of ARMs, and come on, people! You take out a loan with an adjustable rate, hoping said rate will go down. But when has the bank ever lowered an interest rate? That costs them money, so the only place for the rates to go is up. I place a big chunk of blame on those who took out too much loan and especially on those who willingly took on an ARM.
Neo said
Chicago Sun-Times
Diane Stearns said
I worked for Bell Savings & Loan Association from 1960 to 1970. Now, I know that’s a long time ago, but red-lining at that time was not at all a secret–if anything, the loan officers boasted and laughed about it. There were certain areas of the city (non-white) where home loans would not even be considered regardless of ability to pay.
Here’s another oldie you can laugh about, but it is the absolute truth. When a husband and wife wanted a mortgage, and the worman was working, she had to sign a pledge that she would not become pregnant during the term of the loan.
Illinois at that time did not allow branch banking–so, people couldn’t easily go somewhere else to get a loan. There were only so many lenders, and if you were a person of color, regardless of your excellent credit or the amount of money you had to put down, there would not be a loan granted. Was this wrong? Of course! Was anything done about it? No! The result of red-lining then and now is that you end up with white neighborhoods and black neighborhoods–and never the twain shall meet.
The problem we have now is NOT that lenders made bad loans in black neighborhoods, it is because lenders made bad loans in white neighborhoods to people who were spending far more than they could afford. Families bought homes with ARM’s, often with balloon payments down the line, and their salaries didn’t adjust to meet the payments. The financial crisis has absolutely nothing to do with integration–it has to do with greed and thinking that the bigger, the better. Buy the largest home on the block, max out the credit cards, have three cars in the garage, etc., etc. We have become a nation of spenders who don’t seem to feel any concern about what might be down the road. Well folk’s, this is what is down the road!
[Hi Diane thanks for your post, while I do not disagree that redlining was done in the 60’s and 70’s. It wasn’t until the 1990’s that the CRA was abused and misapplied deliberately to force banks to lower credit standards. CRA abuse from 1993 on was one of the important layers that contributed to this mortgage collapse. – Editor]
LT said
Did anybody read the above article about the expansion of Fannie in the 1990’s? The CRA was being expanded at that time to ease the requirements of ‘conventional’ loans. Fannie and Freddie, by lowering their standards, were making it easier for low to moderate income people to get lower rate loans. The article states that, until this move was made, those borrowers had to take loans in the `subprime’ market at interest rates ‘several points higher’. Not to mention, that these loans reduced to the conventional rate after two years of payments. These do not sound like the 5 year interest only loans with huge balloon payments that are, from what I understand, in large part responsible for the current foreclosure pandemic.
Also, it makes this statement about where much of the pressure (and lobbying I suspect) came from:
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.
I don’t really believe the current economic problem is necessarily partisan (I tend to lean to the left, so of course I would love to place more responsibility right…, but as I was saying :) ). I think the real problem here is the conflict of interest that is becoming increasingly evident from nearly all politicians in Washington. Special interests are dictating policy, and, as it is happening, the rest of us are left arguing over who is “more responsible” for problem X and how politician Y is better than Z because Y is wearing garment A.
Seriously folks, we were just smacked in the face by the whole of our elected body. It is time that, as a country, we demand that the real issues facing this country be addressed. Personally, I would like to see campaign finance reform that removes the corporate and special interest influence from politics, but at any rate I think its time we demand real leadership from both party candidates. When it is not provided we need to demand accountability from our congressional representatives – after all, they are responsible for keeping the executive branch in check (as opposed to caving into scare tactics).
Point – we need to stop playing on the sideline. One thing Obama had right, whether or not you agree with his position or motives, he made moves to organize and fight for issues. This country would be a better place if more Americans got involved at that level.
Subpoint – Maybe we are to blame for the current mess. We put politicians in office (through action or inaction) who are not serving our interests as a country. Many of these are still in office.
[Well said. – Editor]
Silent Running » Blog Archive » A Trajectory Analysis said
[…] best work was on the case against Citi; that case was the judicial trench warfare that cemented the foundation of the sub-prime mortgage […]
Anti-Idiotarian Rottweiler » Interesting Rumor… said
[…] looks like ACORN, The Obamessiah’s former employer as he was representing them in a suit against CitiBank for failing to provide enough loans to people with not a shadow of a chance of every paying them […]
Obama Sued Citibank To FORCE BAD LOANS « Mcnorman’s Weblog said
[…] Obama | Enjoy! This is the real Barack. Via Townhall.com that provided me with the direct link. ACORN makes a bogus claim of Redlining (denying poor […]
Obama: Subprime Loans a Good Idea « Porcupine Rim said
[…] H/T: The IUSB Vision Weblog Obama Sued Citibank Under CRA to Force it to Make Bad Loans -Updated […]
averageuscitizen said
So Acorn and Barack Obama are responsible for a global economic meltdown? Hello….planet earth come in.
I guess that the 50% of non-CRA regulated private mortgage companies pushing 0% down loans like candy had nothing to do with it…These sleazebags were advertised these loans extensively. On what? Talk radio…which is 80% conservative.
I guess that it had nothing to do with the Gramm-Leach-Bliley Act which led to the reckless and rampant repackaging of loans and the explosive expansion of derivatives and undecipherable new financial “products” from 2000-2006.
I guess it had nothing to do with the bull run frenzy of real estate speculators buying and flipping, quick flipping into higher valued and ever larger properties or the wild west building boom.
Though the CRA and it’s supporters certainly did not help matters, it is completely ignorant to place the blame this mess on ACORN and the CRA.
Get a life…or at least a half a brain.
[Dear Ignorant Citizen,
Since you did not leave your name I don’t know what else to call you.
We have covered Gramm-Leach-Bliley at length and both Bill Clinton and Factcheck.org and every economist worth his salt said that the bill actually lessened the impact of this crisis.
If you bothered to read the information on this site, we cover every layer of how all of this happened from start to finish. NO where did we say that the abuse of CRA by ACORN was the only cause of this, rather it was a layer on the cake if you will, or a snowball effect that grew bigger and bigger.
They adverstised these loans for two reasons, one because Janet Reno and the government had twisted their arms to make them, and two because they could sell these loans to Fannie Mae and Freddie Mac and make money doing it.
Every facet of the mortgage crisis story, who benefited and who is lying can be found HERE, HERE, HERE, HERE, HERE, HERE, HERE, HERE and HERE.
Next time try reading all the info FIRST, know what you are talking about THEN start typing in comments. The order of those things IS important. – Editor]
John E. said
…it’s a fact of physics that human beings will often *see what they want to believe*…different people will see different things and each group will claim THEY are right – that the FACTS match what they SEE – and that the OTHERS are WRONG.
All I know is, I’m *working-class*. NOT “Middle-Class”. I guess the honest phrase “working-class” is too communist for American politicians these days. Maybe I should say instead that I am one of the “working poor”. And so, I am for whichever candidate I feel will most help THE POOR OF AMERICA. Now, you guys and gals can sit here till our Sun burns up all its nuclear fuel and debate this or any other issue your dear hearts desire, but for me, it *mostly* comes down to, again, WHO IS MOST LIKELY TO HELP THE POOR. And so…please, please, PLEASE don’t try to convince me that a REPUBLICAN is going to help the poor. Hell, a Republican isn’t even gonna CARE about helping the poor, much less actually make something HAPPEN. Now I suppose I’ll get a bunch of facts thrown at me to prove how wrong I am, but that’s alright. Like most everyone else, I’m going by what I’ve seen in the past and what I can see right now. Thanks for the opportunity to rant.
[John,
The black middle class came to exist as a serious demograpghic under Reagan. Also Newt Gingrich, John Kasich and Bill Clinton worked together to pass welfare reform, lowered taxes including cutting the capital gaines tax in half, and they worked together to pass Gramm-Leach-Bliley that helped to lower the impact of the sub-prime credit crunch. No one likes to say it now but back then, the far left was none to happy that Clinton, Gingrich and Kasich worked so well together. In spite of Clinton’s flaws, he was a pragmatist.
I could give you lots more reasons why traditional republican policy helps the poor, indeed it helps pretty much everyone, but no example is more apparent than this. After the “New Deal” and the “Great Society” we have learned that “tax the rich – redistribute the wealth” policies which have resulted in a transfer of wealth in the trillions, didnt work. The government has spent so much money on anti-poverty programs that they could have made the poor “rich” by now. Socialist style transfer of wealth poverty programs have all of the wrong incentives, they are worse than leftist policies they are dumb policies that have hurt a lot of good people who got caught up in them. – Editor]
Political Mavens » ATLAS SHRUGGING? said
[…] Efforts to subvert capitalism are leading to its downfall and one of the men responsible (he sued Citibank to force it to make bad loans) for its demise may be elected president. The only silver […]
Obama Sued Citibank Under CRA to Force it to Make Bad Loans « iWill Blog said
[…] click here for more details. […]
javabeanwill said
This is very good information. Thanks for posting it.
rjjrdq said
Wow, plenty of people just do not want to hear the truth.
nextgen08 said
I wanted to come back and check in to see if anyone had responded to my comment. I was pretty happy to have been responded to by none other than the editor. Nice! Thanks for getting back to me with a lot of information.
One piece of information that I think you must have forgotten though was that the legislation that Bill Clinton signed along with Biden, was actually an omnibus spending bill. (i.e. the entire federal budget), that was submitted just before the end of the congressional session, after Bush had won the election, and Bill Clinton was on his way out as a lame duck.
In the dead of night Gramm threw in his deregulation amendment. That doesn’t excuse Biden and Clinton from signing it, but let’s keep that in perspective.
I think it’s disingenuous at best to throw around the fact that almost all Democrats signed it, when there would have been no time at the end of the session to stop the bill, take out the amendment, and resubmit it. The entire federal budget depended on it passing before congress ended it’s session for that year, and Gramm knew that. It is a common political strategy to get unpopular legislation passed. It’s called a “rider”. You add the unpopular legislation to another popular piece of legislation that is sure to pass, or that would make the other party look bad for not passing it. (i.e. “Look at the Dems. They hate America! They don’t want to fund the government! Look at how inefficient they are with your money!”)
Was it the only reason we have this crisis, no, but it was a huge factor that led to it.
Thanks for responding to my comment. I hope to read more from you in the future.
Jerame Clough
-Next Gen Politics
[Jerame –
With all due respect, what you are saying is just not the case and your response shows that you did not even read my response to you carefully or the links provided. Also, Senate Rules make the scenario you are providing nearly impossible.
Dereugulation wasn’t deregulation at all, it was just some changes and Bill Clinton said so. Clinton says in his article that he considered it carefully and has no regrets. Yet you come here and pretend that this evidence or statements on both sides and by most economists and even factcheck.org saying you are dead nuts wrong never happened.
I dont know who is feeding you this nonsense, but the banking regulation change in Gramm-Leach-Bliley was debated and considered for years and it was not something that Clinton was tricked into signing. The whole issue in the finance and banking industry had a great deal of press. Bill Clinton defends the legislation and is right to do so.
Clinton:
Clinton is right and so is Factcheck and a load of economists – Gramm Leach Bliley helped in this crisis. When the Bill also should have had however is having the OFHEO report to Treasury or the Federal Reserve instead of the Financae committee’s in Congress.
The evidence is crystal clear that Democrats on the Finance Committee’s in both houses were warned by the Bush Admin and by the OFHEO year after year after year if they did not act. Instead Dodd and Frank and their people blocked all attempts at reform while denying a problem existed.
Jerame, when I give you some links please take the time to read them carefully before you respond and please don’t insult my intelligence by saying you did. If you had read the links you would know how seriously the Congress and President Clionton took this legislation instead of coming up with the “tricked” conspiracy theory. It takes 60 votes to do anything in the Senate if one side wants to fight including adding an amendment because 40 Senators can resist cloture on the amendment. The amendment also has to be submitted enough in advance unless there is a unanimous consent vote otherwise.
The Senate rules covering all this are here—>>> http://rules.senate.gov/senaterules/rule22.php
If what you are saying is true then the Senate could have passed the mortgage reform act S.190 just by tagging it on too, after all every Republican wanted it. While the House passes legislation using these kind of tricks, Senate rules make it near impossible to get away with such a thing. Clinton and the other members in the Senate did not complain to the press that the Republican majority changed traditional Senate rules or violated them just to get it to pass. – Editor]
Top Posts « WordPress.com said
[…] Obama Sued Citibank Under CRA to Force it to Make Bad Loans – UPDATED UPDATE V: AUDIO – OBAMA SAID IN 2007 THAT GIVING SUB-PRIME LOANS TO PEOPLE WHO COULDN’T AFFORD THEM WAS A GOOD […] […]
g lesh said
obama sues citybank to force bad loans under cda
Ed Darrell said
Except, there is no indication that these loans were bad, or even sub-prime; and except, Obama did nothing but insist on equal rights for people who lived in redlined areas.
What this demonstrates is that Obama is one fine advocate. I want him to advocate for me.
He’s got my vote.
[No sir, after Obama trained ACORN people to harass bank officers and work as activists to force banks to give high risk loans, and after ACORN filed so many of these lawsuits as a harassment tool to lower credit standards, it is OBVIOUS that CNN and others who have exposed this are quite correct.
No indication that these loans were bad you say….. Ed have you watched the news at ALL in the last three weeks??? How can you run an education blog and have no understanding of these events? (Actually I am writing a book that helps answer that question but that is another subject…)
Obama had a role to play in the largest financial scandal in the history of the world. You can keep drinking Kool-Aide sir or wake up. – Editor]
[Hey all take a look at how an Obama supporter sees the world and lies about people who report things he doesnt like –
This is how Ed reported our story on his blog –
No where did we say any of these things
As we have said in our many writings analyzing this matter the series of ACORN harassment lawsuits and intimidation thuggary against banks to get them to lower credit standards was just one more important layer of many that became the mortgage crisis and the largest financial scandal in the history of the world.
Perhaps I was mistaken to try and talk reason and facts with a far left ideologue, but at least it provided a few minutes of good entertainment. – Editor]
Urban Myth?…straight from the horse’s mouth! « My Political Rant said
[…] Here’s another fellow WordPress Blogger…you can check it out HERE AT https://iusbvision.wordpress.com/2008/09/30/obama-sued-citibank-under-cra-to-force-it-to-make-bad-loa… […]
Affirmative Action+Lending Practices=Financial Meltdown | Right Voices said
[…] Obama Sued Citibank Under CRA to Force it to Make Bad Loans – UPDATED « The IUSB Vision Weblog […]
Arlen Williams said
Want to know what strategy is behind the ACORN, the Mortgage Meltdown, and Barack Obama’s opportunism?
http://www.americanthinker.com/2008/09/barack_obama_and_the_strategy.html
Ever heard of the Cloward-Piven Strategy? You have, now.
[Indeed I have Arlen, it is amazing that we here at IUSB Vision, American Thinker, and Investors Business Daily were all working this story at the same time and published it within hours of each other. I am glad that I did not see either of their pieces until after we published here as it might have skewed our research, but we ended up getting the story right. While they considered it a small point buried deep in an article, we were the first to focus on it in this way. For a little college blog of part time writers to be competitive with IBD and American Thinker makes us proud of the hard work that we put in here for our readers. – Editor]
pj said
Interesting, frightening and consistent with observed facts. ACORN launched a guerilla war against the mortgage industry. Don’t nod your head, this isn’t some nut job theory. Many organizations study Sun Tzu and Von Clausewitz for tactical and strategic insights. In this case the model is Ho Chi Min and the asymmetrical war he waged against us in Viet Nam. The intent of filing lawsuits was to keep the bank busy defending itself and impede its growth and limit its expansion into new markets. Only ACORN had something Ho lacked, air power in the form of the Clinton era DOJ. The individual redline suits could be defended. However, by simply filing them, ACORN brought the local issue to the attention of Janet Reno. Reno’s public pronouncements in favor of ACORN’s objectives and the public threat to bring the full power of her office to bear if ACORN did not prevail was the final inducement to cause the banks to surrender. That Fannie Mae later bought the bad paper completed the first step toward disaster.
Frank Livingston said
I am looking for the document or story that says Bush increased the percwentage of loans over what Clinton had authorized. I remember reading it but I cannot find it in my files There was a push for home ownership for minorities.
[Yes there was, but it was in the context of making the middle class/working wealthier by growing the economy, not by handing out loans that people had little chance of paying back – Editor]
as a community organizer obama trained ACORN staff, ran leadership training seminars for ACORN leaders and funded ACORN « Freebies From The Obama Camp said
[…] to african-american applicants and others from minority neighborhoods.” » obama sued citibank under cra to force it to make bad loans – updated » google query: buycks-roberson v. citibank fed. sav. bank defendant’s […]
Tired of being called racist said
To the Editor,
Thank you very much, I have been following and researching this crisis and I come to the same conclusion.
I like very much how you respond to each and every comment.
It is very easy for commentators to just throw things at the article in order to confuse the situation. The fact that you respond to each and every one of them must drive them up the wall. And, I again thank you for spending the time to reply to each and every one of their comments.
It’s awful hard to convince liberals that have their mind closed up. Researching for facts and then logically arriving on an opinion requires work. Instead, they just regurgitate liberal propaganda. Confronting each and every one of them is hard work. And, again, I appreciate the amount of work you’re putting in.
I do have soem additional comment.
1. The reason why ACORN wanted to pressure the banks to alter the criteria for approving loans was in order to make money.
Banks changed from financial consideration, such as Down Payment percentage, Monthly payment in relation to Income, Credit History, to whether applicant was attending a Credit Counseling Program.
So, even with no money down, bad credit history, and not enough income, if the applicant was attending one of these Credit Counseling Program, the application was approved.
Guess who offered and ran these Credit Counseling Programs?
ACORN, of course, for a fee. What a racket.
2. When ACORN went to pressure Congressional Democrats to pressure Fannie/Freddie, it is my belief that they also threatened them.
As you well know, Office Holders are in the business of holding office. Let’s see what else is ACORN known for? Oh, yes, organizing blacks to vote. Just imagine for a moment. Democratic party primary is where Democrats vote. If all blacks go to poll and vote, they can easily determine whether a candidate will win or lose the primary.
Are you willing to bet your house that they didn’t threaten the Congressional Democrats, who have to run for their seats every 2 years, with this?
I can just see the conversation.
Mr. Representative, if you don’t do what we want, we will mobilize our group to vote you out of your seat. Of, course, if you do as we want, we’ll make sure that anyone challenging you will lose. What do you say?
There is nothing more terrifying to a sitting congressman than the possibility of losing their seat.
Of course Fannie/Freddie didn’t have any of this ground force, so they used political contributions.
However, ACORN has massive ground force. They don’t need money because the have the votes.
What do you think? Does it sound like a radical enough tactic?
Are you willing to bet that they didn’t use it?
Oh, by the way, just were do you think they would get such and idea from, hmmmmmmmmmmmm?
Again, thank you for all your work. I’ll be dropping by often to read you response to the commentators.
Economic Issuses - Conservative Republican Discussion Forums said
[…] Economic failure = people giving out bad loans and bad judgement. Thank you OBAMI! Obama Sued Citibank Under CRA to Force it to Make Bad Loans – UPDATED The IUSB Vision Weblog __________________ Young Conservative. Obamismash 08. The […]
Open to Fact said
[FYI – Last comment from J. Pot is total spam and the site is a third-rate crap site trying to get you to click on links.. nothing more.]
As someone who appreciates Fact more than just people throwing around labels Dems are this, Repubs are that, thank you for an informative site. I also appreciate several of the posts which provide additional insight. In particular the Rex84 who cites an article from the WSJ September 30, 1999
“Fannie Mae Eases Credit To Aid Mortgage Lending” This paragraph shows the writing was on the wall
[…n/ P] “In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.”
I also appreciate the comment by Sisyphus outlining the rough development points over the longhaul.
This site and page in particular has been excessively clear in stating there were many layers or levels to the development of the current financial depression/failure. This is tantamount to any discussion dealing with such complexity.
It is only reasonable to examine these layers and I appreciate this article doing so. I’ve read about this topic for nearly a year and have come to see that it is a complicated on-going plan of greed, cleverly disguised as many other things.
Let me offer my 2 cents of analysis on the subject. I believe that the greedier of the banks (meaning those who work for it in top decision making roles and perhaps Boards..) along with the greedier of the politicians intentionally took away the safe guards in place to protect everyone from the Lender, to the Future Home Owner. Would you lend to a complete stranger who you had every reason to believe would never pay you back (no down payment on the line, history of defaulting on loans, ect)? No, not unless you stood to gain by other means. What if the Gov’t who asked you to take the loan, told you to feel free to pass them any loans you didn’t think were viable. And the Gov’t offered you a chance to write your own ticket for rates and pricing for loans (non-fixed rate mortgages) so you could come out ahead. I am simplifying here, but the paradigm is based on the facts I’ve observed. Greedy Members in the Banking Community met with Greedy Members in Government and/or Government-owned interests and found a way to subvert the a system based on proven-worthiness, instead to be mutated and used for their own racket. (An inside job). This scam jeopardizes the value for everyone who saves, spends or earns in the form of the ole mighty dollar.
I believe banks walked into the trap, but it was heavily baited by Greedy in Government (who offered banks “perks” at the cost of tax payers and credit consumers). Those banks that didn’t take the bait initially were intimidate (sued, accused, and reputation targeted and tainted).
We are on the road to a nationalized banking system, or at least for absorbing it’s government mandated losses.
Our Government currency is essentially ‘owned’ by banks (bigger ones) as the Federal Reserve is nothing more than a collection of Foreign/Global banks. The Fed must be giddy with delight now that the US “local” banking competition has been practically demolished.
If nothing is done, I project a future world where is it is very hard for even proven and reliable business owners to get a reasonable loan. If this happens at a minimum 1/3 of American jobs will dry up within a few years (from deterioration of local business stability and growth) and the US entrepreneurial spirit and inventor ethic may go dead in the water. Allowing us only to be worker for other’s agenda.
The best thing for the American people is if this scandal (and other like it) be exposed for what it is. And people of all teams and colors would do best to listen to one another and fact find, rather than arguing their &#it don’t stink. We need solutions that are fair for all, based on action not on re-action.
Clarification needs to be set: Money-motivated does not equate greed. Wanting to eat or live well, does not make you crooked. Solid business has driven this country since day one and has been fundamental in lifting a great many from poverty and beyond. Cheats, cons and greedy charlatans have always been a threat, but it appears their numbers are rich in positions of power.
Just for Lowell an article written in TWO THOUSAND « Smash Mouth Politics said
[…] the Dumbo-eared One and his buddies at ACORN climbed right in and “mau-maued” banks along with the best […]
Bdaman said
Regardless of my side, your side, anybody’s side. Who are the people that started defaulting on the loans first. The poor black and white people who were approved for loans they could’nt afford because of the actions that lie here within this post. The defaults started from the bottom and worked it’s way to the top. End of Story.
Remember: The old rules don’t apply. . . | Texas Startup Blog said
[…] biggest risk we face now is that there are no rules. The government might force you to make loans that you know are bad. Then again they might not force you to make loans. The government might […]
Obama Socialist Housing Plan: Let’s reward the worst behaviors « Start Thinking Right said
[…] When liberal politicians decreed that home ownership was a “fundamental right,” banks didn’t run out and say, “Shoot, yeah! We’ll make risky loans! Can’t pay us back? No collateral? Can’t make a down payment? No problem!” They were forced to make these home loans by people like our new President. […]
Pres. Obamas Address to Congress - Page 5 - said
[…] […]
Either Obama is a total MORON or he's EVIL - Page 3 - Mustang Forums at StangNet said
[…] 02:12 PM Don’t forget. People like Obama sued to force these loans to go through. Obama Sued Citibank Under CRA to Force it to Make Bad Loans – UPDATED The IUSB Vision Weblog I caught teh HIV from Timeless2. Is dissent still patriotic, or is it racist now? Obama: […]
The Horsey Truth « Theoptimisticconservative’s Blog said
[…] standards for lenders, and for Fannie Mae and Freddie Mac. (See here, here, here, and here, for a start.) Both Democrats and Republicans share responsibility, for omissions and […]
Pasadena Real Estate said
Just researching loans and came across this site…interesting comments!
Next time someone blames the Democrats - Elections - Page 10 - City-Data Forum said
[…] […]
Non Vivant said
It explicitly says the lawsuit is about redlining. If you choose to see some hilarious left-wing conspiracy in it, that’s your own problem.
[Hey there Ace, if you had bothered to read the material for comprehension you would know that in each of these cases they claimed red-lining, when the truth was that ACORN and members of the administration demanded banks to give unqualified people high risk loans to their political constituents. If you had read the material and links you would have seen Andrew Cuomo in a video bragging about giving a huge fine to a bank under CRA for not treating the act like “an affirmative action program for loans”. Could it be that your emotional attachment to partisanship trumps your ability to comprehend overwhelming facts? – Editor]
Unempoyment rate June 2006 compared to June 2009 - Politics and Other Controversies - Page 3 - City-Data Forum said
[…] […]
Unempoyment rate June 2006 compared to June 2009 - Politics and Other Controversies - Page 7 - City-Data Forum said
[…] […]
Biden: ‘We Misread the Econony’ – And it’s all the Republicans’ Fault « Start Thinking Right said
[…] Obama as a private citizen was one of the ACORN lawyers who sued Citibank in 1994 and forced – FORCED – them to reduce their credit standards and make extremely housing […]
improvisingtunes said
The Democrats’ attempt to appeal across party lines has clearly not been the preferred tactic of the Republican Party. Angry over their likely loss of power in the upcoming election, they have become increasingly desperate in their attacks on the Democrats and the legitimacy of the two party state. This is particularly disturbing at a time when it is becoming harder and harder to discern concrete or substantive differences in the economic policies of the two parties. In reality, Obama and Biden’s vague references to “regulation” don’t amount to a whole lot when they fail to follow them up with actual policy proposals. That these Democrats are demonized by Republicans as sub-human, dangerous, or terrorist is more a sign of the growing extremism of conservatives than of the moral weakness or treachery of the Democrats. The Democratic Party today may be morally bankrupt, spineless, and bland, but none of those are anywhere near as dangerous as the Republican Party’s fundamentalist contempt for multi-party elections and bi-partisan politics.
[Ummm ya, the Democrats are so bipartisan….. which is why the Democrats lock Republicans out of bill negotiations and shoot down any ideas or amendments they bring to the floor. They also add on 300 page amendments at the last minute and ask Republicans to vote on stuff they are not given time to read.
The Republicans are extreme you say …… umm the Democrats are trying to take over 1/7 of the US Economy . Republicans ask tough questions about it and oppose it and its REPUBLICANS who are extreme??
It’s not that you are stupid, its just that everything here that you think you know just isn’t so. – Editor]
Paul said
I currently work in the Mortgage Foreclosure industry, in Pennsylvania. I also previously worked as a Real Estate Agent. I witnessed with my own eyes Mortgage Brokers give people, who had no business getting a loan, exotic mortgages, just so they can get their commission.
As a Foreclosure specialist, I see the loan origination files. Many of these foreclosures are not for what are considered poor people. The loans in default run an average of $200,000. I can’t tell you how many loans in default are over $300,000.
It was not just poor people who are defaulting on their loans. A lot of middle-class to upper-middle-class people are also defaulting. The banks were giving everybody 100% loans and exotic mortgages. They did this to make additional money from the PMI (Private Mortgage Insurance) that was attached to a 100% loan and also to collect other fees associated with exotic mortgages Mortgage Broker’s and the corresponding banks didn’t even attempt to offer 80/20 loans to people. The banks were not afraid of defaults because they figured that their risk was securitized and toxic assets were sold off to the government. They figured they were in a win win situtation.
The number 1 reason for Mortgage Foreclosure is medical bills.
The number 2 reason for Mortgage Foreclosure is 2nd houses.
The number 3 reason for Mortgage Foreclosure is creative financing for a 1st house that was too expensive.
[Bingo and well said, this is exactly the same point we have made in our other articles, the CRA pressure from ACORN and the Justice Department became completely unnecessary when Fannie Mae and Freddie Mac allowed banks to sell risky loans to the government GSE’s.
Lots of those second and third mortgages were people who were engaging in “flipping” – Editor]
Your House Is On Fire, Oh, I Didn’t Notice « Publius Forum said
[…] Obama the lawyer for ACORN […]
Here We Go Again: Democrats Trying to Lower Mortgage Loan Standards « The IUSB Vision Weblog said
[…] Posts Mark Levin Interviews ESPN's Stephen A. Smith, a FORMER Obama Supporter.Obama Sued Citibank Under CRA to Force it to Make Bad Loans – UPDATEDCNC: Rachel Maddow Ratings Down 20%. Predicts show cancelation.JP Morgan/Chase Bank gets bailout […]
Facts: ACORN & OBAMA (video diary) « FactReal said
[…] Obama trained ACORN’s local leaders – Obama represented the organization in court – Obama sued Citibank under the Community Reinvestment Act (CRA) to force it to make bad loans (PDF) – Obama funneled funds to ACORN – Obama campaign donated $800,000 to an ACORN affiliate (FEC […]
jef Costello said
Why is this not front page news every day? Professor Obama blames everyone but himself for the fiscal disaster we find ourselves in, yet this alone proves that he’s to blame.
Shaunta Meeuwsen said
Greetings and thanks for a intriguing article. I thank you what you said.
Paul Geer said
This has got to be one of the greatest examples of government bungling ever. This may have lowered our economy down enough to it’s knees to even screw the very people who believes in this nonsense of “redistribution”. I know of one Ball State professor who lost money in his 401K, there are many more. Chris Dodd and Barny Frank should not be in office now, both belong in prison for mass theft… just for starters.
Volcker: Taxes likely to rise eventually to tame deficit - Page 9 said
[…] | FH-IL-0011-7501 | FH-IL-0011-9000 Wickert, John Henry (Illinois) FH-IL-0011-9000 Obama Sued Citibank Under CRA to Force it to Make Bad Loans – UPDATED The IUSB Vision Weblog. We'll wait while you find a way to claim that the lawsuit didn't actually force the bank to do […]
Huge Mob of SEIU Goons Attacks Banker’s Home : Stop The ACLU said
[…] Exiting the subprime sinkhole could be the problem. As a lawyer for SEIU’s Siamese twin ACORN, Obama sued banks for not issuing subprime loans based on race rather than ability to pay. […]
The color PURPLE - US Message Board - Political Discussion Forum said
[…] SEIU and Obama are thugs We are not buying the excuses As a lawyer for SEIU's Siamese twin ACORN, Obama sued banks for not issuing subprime loans based on race rather than ability to pay. Easton touches on other possible motives:SEIU has said it wants to organize bank tellers and call […]
Live from the studios of 3TV. It’s Vote 2010. The U.S. Senate Debates with the Democratic candidate. « Constitutional Republic Party said
[…] New Times don’t pay so good, huh? (See also: Fannie Mae and the Vast Bipartisan Conspiracy, Obama Sued Citibank Under CRA to Force it to Make Bad Loans – UPDATED. See also this video and this […]
learn-finance said
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Flashback Obama: ACORN Will Shape My Agenda « The IUSB Vision Weblog said
[…] Posts Obama Sued Citibank Under CRA to Force it to Make Bad Loans – UPDATEDHow Low Will Democrats Go: Democrat Congressman Threatens Cystic Fibrosis Charity if they Honor Lt. […]
Gateway Pundit said
[…] 1994 Barack Obama represented Calvin Roberson and ACORN in a lawsuit against Citibank, charging the bank systematically denied mortgages to […]
Terry said
You’d think something signed “Editor” would use proper grammar. ie. “your racist” really? mine?- “you’re racist” appears to be more correct unless you own them. If editors don’t know the language what hope do the children have.
[I see that someone doesn’t know what (SIC) means… – Editor]
patriot gate solor said
Thank you, nice post! This was the stuff I needed.
Unemployment Rises To 9.8% – When Will Obama Failure Quit Being ‘Unexpected’? « Start Thinking Right said
[…] Why don’t we blame the president who actually sued banks to force them to make bad loans to pe… […]
Obama is a SELLOUT!!!!!!!!! - Page 16 - US Message Board - Political Discussion Forum said
[…] Trillion-Dollar Bank Shakedown That Bodes Ill for Cities by Howard Husock, City Journal Winter 2000 Obama Sued Citibank Under CRA to Force it to Make Bad Loans – UPDATED The IUSB Vision Weblog Quote: Originally Posted by HUGGY Has Obamas stewardship improved the economy? What a […]
Howard Meek said
“Open to Fact” is not as open as he
appears. If he thinks govt politicians
are as greedy as banks, realators,
mtge cos, and Wall Streeters, he is
really in a fog. Politicians may be
influenced by lobbyists and their gifts
but they don’t get direct profits from
this scenario like the biz people. It
all STARTS somewhere, and that was with the realators, etc., WHO MADE THE
LOANS; NOT with Fannie and Freddie, who
merely guraranteed many (but not all).
Obama was right; it was when those biz
people started making huge profits, and
got greedy, that’s when the whole thing
collapased.
[Umm it wasn’t the profits that made it collapse. If you bothered to read the post you know what would have happened if banks started denying those high risk loans. The government would have been all over them again. It was the government GSE’s that were issuing all of those bad securities based on the mortgages they were buying. While banks tried to make what they could in the environment the government made it is still undeniable that if the government wasn’t meddling in the market this never would have happened. – Editor]
"Fannie Mae Made Me Do it": Why Can't Conservatives Back Their Claims With Hard Evidence? - Page 3 - Religious Education Forum said
[…] […]
CRA Not to Blame for Housing Debacle - Page 16 - US Message Board - Political Discussion Forum said
[…] application files. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 338 (N.D. Ill. 1995). Obama Sued Citibank Under CRA to Force it to Make Bad Loans – UPDATED The IUSB Vision Weblog __________________ "An armed man is a citizen. An unarmed man is a subject" "When […]
Jestine Hoose said
yeah bookmaking this wasn’t a risky decision great post! .
George Girty said
Deference to article author , some excellent entropy.
U.S. Initial Jobless Claims Rose 25,000 to 410,000 Last Week said
[…] […]
3M chief warns Obama over business regulation said
[…] […]
indianapolis landscaping said
I’d come to recognize with you one this subject. Which is not something I typically do! I love reading a post that will make people think. Also, thanks for allowing me to comment!
portfolio said
aurich…
Obama Sued Citibank Under CRA to Force it to Make Bad Loans – UPDATED « The IUSB Vision Weblog…
Other than Reagan appointee greenspan keeping interest rates low, how did the govt. cause the housing bubble? | Commercial Loan Refinance said
[…] is rather a communist validation.This help you? https://iusbvision.wordpress.com/2008/09/… http://www.youtube.com/watch?v=hxMInSfan…I walked away from my […]
BizzyBlog said
[…] Obama was a prominent community-organizing, frontline advocate for the very policies which destroyed so much wealth and which, as IBD noted, disproportionately […]
Finance Talking » Blog Archive » IBD: ‘Progressive’ Policies Hit Minority Wealth Hardest; Fan, Fred, and Dems to Blame said
[…] to housing, President Obama was a prominent community-organizing, frontline advocate for the very policies which destroyed so much wealth and which, as IBD noted, disproportionately […]
Conor Mccartney said
this is terrible
Liberals what de regulation did bush do to cause the housing crises? - Page 4 - US Message Board - Political Discussion Forum said
[…] […]
Diana said
http://www.snopes.com/politics/obama/loans.asp
*************************************************
IUSB Vision Editor Responds:
Diana, we address what Snopes had to say about this lawsuit IN OUR ARTICLE. This is why you should READ before you post.
iusbvision said
Special thanks to GateWay Pundit for the link in his latest masterpiece! – http://www.thegatewaypundit.com/2011/09/obama-administration-sues-17-banks/
In His Activist Days Obama Sued Banks to Ease Lending Practices… Now He’s Suing Banks For Risky Mortgages
Posted by Jim Hoft on Friday, September 2, 2011, 3:59 PM
Employers add no net jobs in Aug.; rate unchanged - Page 162 said
[…] […]
(2008) Examining the underreported ideology, alliances, and allegiances of a “Commander in Chief” « Trying Times said
[…] as ACORN’s lawyer, sued Citibank in 1994, to force them into giving subprime loans to home buyers with poor credit ratings, […]
Liebegone said
Those of you who actually want to learn the truth might look at this article:
http://en.wikipedia.org/wiki/Community_Reinvestment_Act
The myth that the CRA is responsible for the financial crisis of 2008 is laughable. It is the little lie conservatives tell themselves before the go to bed so that they don’t feel so bad about the financial catastrophe they caused with their BS “economic theory.” Their theory is essentially that if you give all the money in the nation to a very small group of people, the country will do very well. Umm, yeah. Tell me how that one is working out for ya…..
Relation to 2008 financial crisis
See also: Subprime mortgage crisis and Global financial crisis of 2008–2009
Economist Stan Liebowitz wrote in the New York Post that a strengthening of the CRA in the 1990s encouraged a loosening of lending standards throughout the banking industry. He also charges the Federal Reserve with ignoring the negative impact of the CRA.[100] In a commentary for CNN, Congressman Ron Paul, who serves on the United States House Committee on Financial Services, charged the CRA with “forcing banks to lend to people who normally would be rejected as bad credit risks.”[105] In a Wall Street Journal opinion piece, Austrian school economist Russell Roberts wrote that the CRA subsidized low-income housing by pressuring banks to serve poor borrowers and poor regions of the country.[106]
However, many others dispute that the CRA was a significant cause of the subprime crisis. Nobel laureate Paul Krugman[107] noted in November 2009 that 55% of commercial real estate loans were currently underwater, despite being completely unaffected by the CRA.[108] According to Federal Reserve Governor Randall Kroszner, the claim that “the law pushed Itbanking institutions to undertake high-risk mortgage lending” was contrary to their experience, and that no empirical evidence had been presented to support the claim.[109] In a Bank for International Settlements (BIS) working paper, economist Luci Ellis concluded that “there is no evidence that the Community Reinvestment Act was responsible for encouraging the subprime lending boom and subsequent housing bust”, relying partly on evidence that the housing bust has been a largely exurban event.[110] Others have also concluded that the CRA did not contribute to the financial crisis, for example, FDIC Chairman Sheila Bair,[111] Comptroller of the Currency John C. Dugan,[112] Tim Westrich of the Center for American Progress,[113] Robert Gordon of the American Prospect,[114] Ellen Seidman of the New America Foundation,[115] Daniel Gross of Slate,[116] and Aaron Pressman from BusinessWeek.[117]
Legal and financial experts have noted that CRA regulated loans tend to be safe and profitable, and that subprime excesses came mainly from institutions not regulated by the CRA. In the February 2008 House hearing, law professor Michael S. Barr, a Treasury Department official under President Clinton,[63][118] stated that a Federal Reserve survey showed that affected institutions considered CRA loans profitable and not overly risky. He noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates. Barr noted that institutions fully regulated by CRA made “perhaps one in four” sub-prime loans, and that “the worst and most widespread abuses occurred in the institutions with the least federal oversight”.[119] According to Janet L. Yellen, President of the Federal Reserve Bank of San Francisco, independent mortgage companies made risky “high-priced loans” at more than twice the rate of the banks and thrifts; most CRA loans were responsibly made, and were not the higher-priced loans that have contributed to the current crisis.[120] A 2008 study by Traiger & Hinckley LLP, a law firm that counsels financial institutions on CRA compliance, found that CRA regulated institutions were less likely to make subprime loans, and when they did the interest rates were lower. CRA banks were also half as likely to resell the loans.[121] Emre Ergungor of the Federal Reserve Bank of Cleveland found that there was no statistical difference in foreclosure rates between regulated and less-regulated banks, although a local bank presence resulted in fewer foreclosures.[122]
During a 2008 House Committee on Oversight and Government Reform hearing on the role of Fannie Mae and Freddie Mac in the financial crisis, including in relation to the Community Reinvestment Act, asked if the CRA provided the “fuel” for increasing subprime loans, former Fannie Mae CEO Franklin Raines said it might have been a catalyst encouraging bad behavior, but it was difficult to know. Raines also cited information that only a small percentage of risky loans originated as a result of the CRA.
IUSB Vision Editor reponds:
If Obama Says it … Believe the Opposite « The Arizona Conservative said
[…] lawyer, sued Illinois in 1993, to weaken voter registration law.Obama as ACORN’s lawyer, sued Citibank in 1994 (Buycks-Roberson case, above), to force them into giving subprime loans to home […]
Wells Fargo pays 175 million dollar fine, aye - Page 13 said
[…] […]
Liberals: Are you happy about today's economic news? - Page 9 - City-Data Forum said
[…] […]
Who thinks our country is better off since the Bush tax cuts? - Democrats, Republicans, Libertarians, Conservatives, Liberals, Third Parties, Left-Wing, Right-Wing, Congress, President - Page 9 - City-Data Forum said
[…] […]
30 Obama Fact-Check Failures « The Arizona Conservative said
[…] sued Illinois in 1993, to weaken voter registration law.Obama as ACORN’s lawyer, sued Citibank in 1994 (Buycks-Roberson case, above), to force them into giving subprime loans to home […]
Obama’s Truth-Challenged Presidency | Obama Christians said
[…] sued Illinois in 1993, to weaken voter registration law.Obama as ACORN’s lawyer, sued Citibank in 1994 (Buycks-Roberson case, above), to force them into giving subprime loans to home […]
If At First, You Don’t Crash the Economy, Try, try Again | Red Statements said
[…] since 1994, when a young community organizer by the name of Barack Obama, at the behest of ACORN, sued Citibank, he sowed the seeds of destruction on the US economy. The suit used the CRA (Community […]
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Obama Sued Banks To Force Them To Issue Sub-Prime Loans | Real Science said
[…] https://iusbvision.wordpress.com/2008/09/30/obama-sued-citibank-under-cra-to-force-it-to-make-bad-loa… […]
Where is the US economy headed? - Page 371 said
[…] about forcing bad loans. The kids at ISUB have done quite a bit of research on that as posted HERE: https://iusbvision.wordpress.com/2008/09/30/obama-sued-citibank-under-cra-to-force-it-to-make-bad-loa… This was just the first site I came to. I can probably find other stuff if necessary, but this […]
July leading to Bye Bye America! said
[…] More so, it was Franklin D Raines himself who was encouraging the lenders to make these loans, assuring them that he would buy them, and not to worry about things such as credibility, cash down, or ability to pay, just make the loans! https://iusbvision.wordpress.com/2008/09/30/obama-sued-citibank-under-cra-to-force-it-to-make-bad-loa… […]
There Is A Greater Foundation | Talk Wisdom said
[…] squad” that used prosecutors and sheriffs to police what people said about him; who threatens banks and businesses to make them to bend to his will; whose “justice department” warns states that […]