Subprime Lending Crises including Barack Obama's Involvement in the 90's (Part 1)

Today we are going to focus on the banking and mortgage crises that has driven the US to the brink of economic ruin. Just how much was Obama involved in contributing to this crises starting in the mid 90's when he represented clients who could not afford to buy a house but were eventually able to buy because they claimed it was because of race they couldn't get loans? This led to the sub-prime mortgage mess we see today. How can you loan money to anyone that cannot afford to pay it back and do absolutely no checking on their income for them to qualify. No wonder the economic crises is getting worse not better as more of these loans go into foreclosure.

A lot of mismanagement has been involved including outright greed and fraud. Who is going to straighten out the mess when the President was part of the group that help create the mess and the Democrat heads of Congress contributed. Why didn't Republicans yell louder to be heard when they figured out what a mess the banking industry had become especially with subprime mortgages on the books? Why did Pres Bush take the advice of Democrat Senator Schumer to hire Paulson as Treasury Secretary from Goldman Sachs. The old adage is to follow the money and in this case a lot of the investigation leads right to Goldman Sachs.

How is Goldman Sachs involved with this White House? That question and more will be answered as you read about this economic disaster that is likely to get worse in the months ahead. Our thanks to the Free Republic investigators who wanted to find the truth and have provided the links!

As Subprime Lending Crisis Unfolded, Watchdog Fed Didn't Bother Barking Washington Post
Binyamin Appelbaum
Sunday, September 27, 2009

When the CRA was created during the Carter administration, the administration also funded with tax dollars numerous “community groups” that have helped the Fed, the Comptroller of the Currency, and other federal regulatory agencies to enforce the act. Under the CRA, if a bank wants to make virtually any change in its business operations — merging, opening up a new branch, getting into a new line of business — it must first prove to regulators that it has made “enough” loans to the government’s preferred borrowers.

The (partially) tax-funded “community groups” like ACORN (Association of Community Organizations for Reform Now) can file petitions with regulators that stop the bank’s activities in their tracks, perhaps defeating them altogether. The banks routinely buy off ACORN and other “community groups” by giving them millions of dollars as well as promising to make even more dubious loans.

http://mises.org/story/2963
http://www.freerepublic.com/focus/news/2084666/posts
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To move from the abstract to the concrete, we can look to, for example, a Sept. 20, 2004 press release, “Citigroup and ACORN Sign Groundbreaking Agreement to Expand Access to Financial Services in Communities Around the Country”. There Citibank touted that it and Association of Community Organizations for Reform Now (ACORN) agreed to collaborate on several initiatives, including:

-- Form an affordable mortgage-lending program between Citigroup and ACORN Housing Corp. (AHC) to develop a specialized mortgage product for all AHC’s homeownership centers, and make mortgages available to immigrants who have previously been shut out of credit markets.
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— Focus on community development lending to increase affordable housing in areas where the Citibank Community Development and ACORN footprints coincide.
— Provide borrowers with access to the best combination of loan product, price, service, and attributes.
— Establish a net-benefit test for real estate secured loans.

We now call real estate secured loans issued in compliance with these programs, “Subprime.”

Barack Obama has had an intimate and long-term association with ACORN. Acorn’s Madeleine Talbot first drew Mr. Obama into his alliance with ACORN. Toni Foulkes, a Chicago Acorn leader, has described that it specifically sought out Mr. Obama’s representation in a case it filed seeking to force the State of Illinois to comply with motor voter requirements.

So, the “Community Reinvestment Act” seeks input from “Community Organizers” like ACORN in rating financial institutions on their compliance is issuing subprime loans.

http://www.freerepublic.com/focus/news/2076874/posts
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Obama was a key player behind the mortgage crisis

In a 1995 case known as Buycks-Roberson v. Citibank, Obama and his fellow attorneys charged that Citibank was making too few loans to black applicants and won the case. As one commentator noted in May 2008, legal “successes” such as this were probably responsible for the sub-prime mortgage crisis of 2007 AND 2008. That is, banks were not loaning to blacks whose credit was poor. When the law forced them to lend money anyway, the inevitable collapse occurred.”

Obama was a key player in the lawsuit that started the government on a course of forcing lenders to give more loans to those who had poor credit. Lending companies were forced to come up with imaginative ways of fulfilling the quotas that were required. Sub-prime lending was born as a result. The mortgage crises was forecast by many who were able to look beyond the quota. Buycks-Roberson v. Citibank Fed. Sav. Bank

http://clearinghouse.wustl.edu/detail.php?id=10112&search=source%7Cgeneral;caseCat%7CFH;orderby%7CcaseName;

http://www.freerepublic.com/focus/news/2091975/postshttp://www.freerepublic.com/focus/news/2349231/posts?page=14