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MONEY CULTURE | Daniel Gross

Subprime Suspects

The right blames the credit crisis on poor minority homeowners. This is not merely offensive, but entirely wrong.

By Daniel Gross | Newsweek Web Exclusive
Oct 7, 2008 | Updated: 12:58  p.m. ET Oct 7, 2008

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  • Posted By: ComplainceAuditor @ 10/23/2008 1:35:50 PM

    Comment: The sub prime and conventional markets dies nearly 2 years before the collapse. According to Maher Soliman, a housing analyst from Los Angeles, CA ???There was excess capital being sourced and allocated from world investment money managers and Wall Street could not resist???. Pure and simple the capital investment from domestic and off shore money mangers was artificial stimulation for non existent demand for housing. So the market remained strong. Now, come the problem - how do you manipulate a market when the demand for housing subsides and rates make refinancing unattractive? DROP THE FLOOR ON THE QUALIFYING RATE & CREDIT, TREND VALUES BASED ON THE PRIO BULL RUN UPWARDS, LOWER ALL STANDARDS USING EXCEPTIOON TO GUIDELINES LENDEING , PAY PEOPLE TO QUALIFY (USE THEIR SCORE) AND JACK UP THE LOAN ADVANCE AMOUNT (LTV). Minorities, con-men called straws, Donald Trump seminar fools, brokers turned investor flipping properties, and I saw it all. Is it a minority thing when you show someone who earns a minimum wage, under the table, how to submit a Stated Income file showing they make $12,000 a month? How did the lenders of America get caught up in the crimes and why did Wall Street give them a playing field. I can't take even writing about it , I get so upset. www.borrwerhotline.com ???Keep your Home & fight back! The Blog is www.foreclosureinfoshare@blogspot.com

  • Posted By: mb-bythesea @ 10/23/2008 2:51:26 AM

    Comment: Excellent reporting. I have worked 10 years in the mortgage industry. I saw lenders pushing adjustable rate mortgages onto people--in order to justify selling them a refi in a few years--who knew values would decline and make them ineligible? Adjustable rate mortgages (ARMs) are not practical for any consumer--esp. when the Fed was upping interest rates 16 consecutive times. ARMs should be recalled or extremely limited. No income documentation loans should be recalled. Having these kind of mortgage products in huge volume on the market is an example of regulatory oversight. And NO it is not POOR People's fault. That is a disgusting lie perpetrated by self-serving oppressors.

  • Posted By: tech4u2hire @ 10/22/2008 10:59:21 PM

    Comment: Now, now, lets be fair......
    "Lending money to poor people doesn't make you poor. Lending money poorly to rich people does." Lets revise that to "Poorly lending money to ANY people makes you poor." I have little pity on the majority of people who are getting foreclosed on in this mess. Do you think it is reasonable for someone who works for minimum wage to expect that they can afford a $500,000 dollar home? Lets do some simple math here, $500,000/360 payments = $1389 per payment, and that is without even including interest...... then lets take that $1388 and divide it by, lets say, $9/hour that is 154 hours a month JUST FOR THE COST OF HOUSING, and that assumes a 0% interest rate. I mean seriously do the consumers have any responsibility in this fiasco ABSOLUTELY, regardless of race or any other socio-economic factors, these people have to accept some level of responsibility.

  • Posted By: roger55113 @ 10/13/2008 1:59:06 PM

    Comment: I???ll disagree with anyone that thinks the Community Reinvestment Act is to blame for the housing crisis, but to call someone racist just because you disagree is an outrage. Are you ignorant in what the Community Reinvestment Act is or intentionally misleading readers? There is absolutely nothing in CRA that has to do with ethnicity or race. It's about serving communities based on the census tract or the income of the borrower. Disagreeing with the policy does not make someone a racist!

  • Posted By: Nowforthetruth @ 10/12/2008 10:22:02 PM

    Comment: Bill Clinton points to liberal Congressional Democrats' protection of Fannie and Freddie from scrutiny as a primary cause of the current economic meltdown.

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

    To prove Bill Clinton's point, this is a link to a C-SPAN video clip of the Congressional hearings at roughtly the time McCains attempt at S.190. to fix fannie and freddie.

    http://www.youtube.com/watch?v=_MGT_cSi7Rs

    "Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis"

    The link below describes how some of those Democrats in Congress tried to use the original version of the bailout bill to divert money eventually recovered to groups like ACORN. See: Wall Street Journal

    http://online.wsj.com/article/SB122247015469280723.html?mod=googlenews_wsj

    And here is Lou Dobbs reporting on ACORN corruption and ties to Obama, including Obama Campaign paying ACORN $800,000 for voter registration activities, and Obama representing them when he was a practicing attorney.

    http://www.cnn.com/video/#/video/bestoftv/2008/10/09/ldt.tucker.acorn.under.fire.cnn

  • Posted By: Nowforthetruth @ 10/12/2008 8:24:19 PM

    Comment: This link of a CSPAN video clip may help set the context, as these hearings were at the time of McCains attempt at S.190.

    http://www.youtube.com/watch?v=_MGT_cSi7Rs

    "Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis"

  • Posted By: lovethiscountry @ 10/12/2008 4:25:29 PM

    Comment: James Scott-you misunderstood my point. I live in a middle class intergrated neighborhood. Many of the homes bought were not only over-priced, but many were bought by people whose incomes could not pay those prices. This is not a question of race, color or ethnicity. Just like in many parts of this country, there are foreclosures and houses for sale. Many houses are boarded up, that not only lower housing prices, but destroy comunities with dirty lots, garbage, and graffitti. What is considered a "nice" neighborhood is not so nice anymore. So again my question is if someone cannot afford a home beyond their ability to pay, that is not related to losing a job or health emergency, why should they receive any mortgage at all?One more thing, I'm an independent, never voted republican, and will vote for Obama. Hope I cleared up things for you

  • Posted By: Believer587 @ 10/12/2008 2:53:15 PM

    Comment: U need to feel sorry for yourself. Somewhere along the line, you must have failed all of your English courses or someone else was doing your work while you were playing football or something else.Your ignorance is apparent from your writing. I do feel sorry for you because you have to blame the white race for your weaknesses and failures. Typical for your race

  • Posted By: James Scott @ 10/12/2008 9:10:56 AM

    Comment: Lovethiscountry's comments are the new Welfare mothers of the Republican party. No one who doesn't have "the job income" is allowed to buy 350K homes.
    I was A YOUNG BLACK POSTDOC living in DC 5 years ago with an income over 50K. I bought a house for 150K in the 3 years that I lived in it appraisers, not me drove the price of the homes in my neighborhood through the roof. A year before I sold my house for less then 290,000 (had to relocate for a real job), the houses on either side of me were sold to WHITE FAMILIES for 450K in one instance and 550K in the other.
    Your world view lovethiscountry is absurd, but the Republicans and supply siders rely on you thinking someone is getting something your aren't and you are too dumb to realize that it is the RICH WHITE GUY not some POOR BLACK person who is getting what you aren't because your bigotry is so much of your identity. People like you need to grow up. If you love this country so much you need to stop hating people who are different then you. Good luck to you. I don't hate you I feel sorry for you.

  • Posted By: Nowforthetruth @ 10/12/2008 1:33:19 AM

    Comment: This link of a CSPAN video may help set the context, as these hearings were at the time of McCains attempt at S.190.

    http://www.youtube.com/watch?v=_MGT_cSi7Rs

    "Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis"

  • Posted By: lovethiscountry @ 10/11/2008 5:21:21 PM

    Comment: So can someone explain to me this...How can someone who cannot afford a home worth $175 K or 250K, get a mortgage for homes worth 350K or more.Many of the people who bought these homes did not have the job income or assets to qualify for an "honest" mortgage. Are they totally responsible, no...the lenders who tricked them, confused them, or even used fraud, but they signed these bad loans, asked for ridculous rents to offset the costs, and many took the money and ran. Minorities a group, or a person who is "called a minority" should not be blamed based on skincolor, or ethnic backround, but its this simple I cannot afford to live in an upscale community and the superrich,then a person who cannot afford to live in a middle class community as I do, should not be allowed to buy a house and then ruin a block and neighborhoods for the rest of us whose families have struggled to achieve the American dream through education and hard work.

  • Posted By: mfb82 @ 10/11/2008 3:49:04 PM

    Comment: It's the same as the sexual harasser blaming the victim for her victimization...disgusting fascists. Those in the position of power are always culpable. Who will deny that the poor have little power in our society?

  • Posted By: mfb82 @ 10/11/2008 3:49:01 PM

    Comment: It's the same as the sexual harasser blaming the victim for her victimization...disgusting fascists. Those in the position of power are always culpable. Who will deny that the poor have little power in our society?

  • Posted By: Jerry Creel @ 10/11/2008 9:53:40 AM

    Comment: I do not have a comment at this point but I do have a question. I am deeply alarmed by the current national economic situation. A co-worker told me this week that CNN had reported that more than 5 million of the
    recently failed mortgages in the U.S. were for Illegal Aliens. Is this true? As a government employee who
    deals with CDBG (Community Development Block Grant ) funds on a daily basis, I am consistently working
    to provide eligible and deserving families (both white and minority) with money for both Down Payment Assistance for new homes, and HOME FUNDS for existing home repairs and improvement. You would not believe the level of detailed documentation that is required for the applicants to qualify for these funds
    FUNDS (Some do not qualify and their application is denied). And city goverments that do not follow the rules either have their HUD funding eliminated or seriously reduced. How, with these stringient requirements for legal citizens, is it possible for Illegal Aliens to qualify for a mortgage. Someone in authority must have been "dead at the switch" when this train derailed and everyone from us to our great grandchildren are going
    to pay the price.

  • Posted By: cani77 @ 10/11/2008 9:29:27 AM

    Comment: In a few weeks we will make a choice that will decide our future.
    I follow an economist named Bob Proctor. He has called the top and bottom of every market crash since the 70s correctly.
    Also, he perfectly predicted the current real estate market meltdown and the picture he paints about what will happen in the next couple years
    is terrifying.He thinks it will be worse then the great depression.
    The banks in the U.S. are going under one after the other. Countrywide ,Bear Stearns, Lehman Brothers and Merrill Lynch , Fanny and Freddy Mae ,AIG
    The government took them over because they are essentially bankrupt. Even with the goverment nationalizing hundreds of billions of dollars in debt the stock market is crashing
    the credit markets are frozen and all of us may suffer beyond anything in the last 80 years.
    McCain just like Bush " doesn't understand the economy".
    That not just my opinion its his own words. Not only does he not understand how to fix it but he does not understand exactly what is broken.
    It is no surprise that he doesn't. The people that make up these securities use complex mathematical models very few people understand.
    Bush and McCain both can take the credit for this mess since they helped deregulate the laws that were protecting us.
    Bush's economic advisor Phil Graham wrote the deregulation bill that allowed banks to take huge risks with all of our future.
    Now, Phil Graham is the head of McCain's economic policy.He is also McCain's choice for the next secretary of the treasury.
    No one in this country can afford for that to happen. The last time Bush met with his economic advisors was in March. He didnt realize that anything was wrong. Phil Graham had the guts to say that we are in a mental recession after he helped create the worst economy meltdown in our lifetime. Check out this link to the truth http://my.barackobama.com/keatingvideo
    It will take the best and brightest minds in the world to get us out of this nightmare. As bad as Bush has done, McCain would be
    even more destructive because things are in much worse shape. The next president will not inherit a surplus like Bush did but a crashing economy and a 11,600,000,000,000 (trillion) dollars deficit. Most of it Bush created and it will take decades to pay it back.
    If you do what you have always done then you will get what you have always got.
    When it comes to policy Bush and McCain are the same 90 percent of the time.
    So why are the polls even close then ?
    Mccains team just said they no longer want to talk about the economy.Instead they would like to spend time talking about obama
    which means running the biggest smear campaign in history.
    They think they can just tell you lies and you wont be smart enough to see through it
    Let's teach him we are smarter than that .
    Elect Obama Biden 2008


    Check out this video of sarah palins interview and ask your self if she understands what she is talking about.
    http://www.youtube.com/watch?v=r36Xc0GG4iQ

  • Posted By: cani77 @ 10/11/2008 9:29:17 AM

    Comment: In a few weeks we will make a choice that will decide our future.
    I follow an economist named Bob Proctor. He has called the top and bottom of every market crash since the 70s correctly.
    Also, he perfectly predicted the current real estate market meltdown and the picture he paints about what will happen in the next couple years
    is terrifying.He thinks it will be worse then the great depression.
    The banks in the U.S. are going under one after the other. Countrywide ,Bear Stearns, Lehman Brothers and Merrill Lynch , Fanny and Freddy Mae ,AIG
    The government took them over because they are essentially bankrupt. Even with the goverment nationalizing hundreds of billions of dollars in debt the stock market is crashing
    the credit markets are frozen and all of us may suffer beyond anything in the last 80 years.
    McCain just like Bush " doesn't understand the economy".
    That not just my opinion its his own words. Not only does he not understand how to fix it but he does not understand exactly what is broken.
    It is no surprise that he doesn't. The people that make up these securities use complex mathematical models very few people understand.
    Bush and McCain both can take the credit for this mess since they helped deregulate the laws that were protecting us.
    Bush's economic advisor Phil Graham wrote the deregulation bill that allowed banks to take huge risks with all of our future.
    Now, Phil Graham is the head of McCain's economic policy.He is also McCain's choice for the next secretary of the treasury.
    No one in this country can afford for that to happen. The last time Bush met with his economic advisors was in March. He didnt realize that anything was wrong. Phil Graham had the guts to say that we are in a mental recession after he helped create the worst economy meltdown in our lifetime. Check out this link to the truth http://my.barackobama.com/keatingvideo
    It will take the best and brightest minds in the world to get us out of this nightmare. As bad as Bush has done, McCain would be
    even more destructive because things are in much worse shape. The next president will not inherit a surplus like Bush did but a crashing economy and a 11,600,000,000,000 (trillion) dollars deficit. Most of it Bush created and it will take decades to pay it back.
    If you do what you have always done then you will get what you have always got.
    When it comes to policy Bush and McCain are the same 90 percent of the time.
    So why are the polls even close then ?
    Mccains team just said they no longer want to talk about the economy.Instead they would like to spend time talking about obama
    which means running the biggest smear campaign in history.
    They think they can just tell you lies and you wont be smart enough to see through it
    Let's teach him we are smarter than that .
    Elect Obama Biden 2008


    Check out this video of sarah palins interview and ask your self if she understands what she is talking about.
    http://www.youtube.com/watch?v=r36Xc0GG4iQ

  • Posted By: cani77 @ 10/11/2008 9:29:07 AM

    Comment: In a few weeks we will make a choice that will decide our future.
    I follow an economist named Bob Proctor. He has called the top and bottom of every market crash since the 70s correctly.
    Also, he perfectly predicted the current real estate market meltdown and the picture he paints about what will happen in the next couple years
    is terrifying.He thinks it will be worse then the great depression.
    The banks in the U.S. are going under one after the other. Countrywide ,Bear Stearns, Lehman Brothers and Merrill Lynch , Fanny and Freddy Mae ,AIG
    The government took them over because they are essentially bankrupt. Even with the goverment nationalizing hundreds of billions of dollars in debt the stock market is crashing
    the credit markets are frozen and all of us may suffer beyond anything in the last 80 years.
    McCain just like Bush " doesn't understand the economy".
    That not just my opinion its his own words. Not only does he not understand how to fix it but he does not understand exactly what is broken.
    It is no surprise that he doesn't. The people that make up these securities use complex mathematical models very few people understand.
    Bush and McCain both can take the credit for this mess since they helped deregulate the laws that were protecting us.
    Bush's economic advisor Phil Graham wrote the deregulation bill that allowed banks to take huge risks with all of our future.
    Now, Phil Graham is the head of McCain's economic policy.He is also McCain's choice for the next secretary of the treasury.
    No one in this country can afford for that to happen. The last time Bush met with his economic advisors was in March. He didnt realize that anything was wrong. Phil Graham had the guts to say that we are in a mental recession after he helped create the worst economy meltdown in our lifetime. Check out this link to the truth http://my.barackobama.com/keatingvideo
    It will take the best and brightest minds in the world to get us out of this nightmare. As bad as Bush has done, McCain would be
    even more destructive because things are in much worse shape. The next president will not inherit a surplus like Bush did but a crashing economy and a 11,600,000,000,000 (trillion) dollars deficit. Most of it Bush created and it will take decades to pay it back.
    If you do what you have always done then you will get what you have always got.
    When it comes to policy Bush and McCain are the same 90 percent of the time.
    So why are the polls even close then ?
    Mccains team just said they no longer want to talk about the economy.Instead they would like to spend time talking about obama
    which means running the biggest smear campaign in history.
    They think they can just tell you lies and you wont be smart enough to see through it
    Let's teach him we are smarter than that .
    Elect Obama Biden 2008


    Check out this video of sarah palins interview and ask your self if she understands what she is talking about.
    http://www.youtube.com/watch?v=r36Xc0GG4iQ

  • Posted By: cani77 @ 10/11/2008 9:28:56 AM

    Comment: In a few weeks we will make a choice that will decide our future.
    I follow an economist named Bob Proctor. He has called the top and bottom of every market crash since the 70s correctly.
    Also, he perfectly predicted the current real estate market meltdown and the picture he paints about what will happen in the next couple years
    is terrifying.He thinks it will be worse then the great depression.
    The banks in the U.S. are going under one after the other. Countrywide ,Bear Stearns, Lehman Brothers and Merrill Lynch , Fanny and Freddy Mae ,AIG
    The government took them over because they are essentially bankrupt. Even with the goverment nationalizing hundreds of billions of dollars in debt the stock market is crashing
    the credit markets are frozen and all of us may suffer beyond anything in the last 80 years.
    McCain just like Bush " doesn't understand the economy".
    That not just my opinion its his own words. Not only does he not understand how to fix it but he does not understand exactly what is broken.
    It is no surprise that he doesn't. The people that make up these securities use complex mathematical models very few people understand.
    Bush and McCain both can take the credit for this mess since they helped deregulate the laws that were protecting us.
    Bush's economic advisor Phil Graham wrote the deregulation bill that allowed banks to take huge risks with all of our future.
    Now, Phil Graham is the head of McCain's economic policy.He is also McCain's choice for the next secretary of the treasury.
    No one in this country can afford for that to happen. The last time Bush met with his economic advisors was in March. He didnt realize that anything was wrong. Phil Graham had the guts to say that we are in a mental recession after he helped create the worst economy meltdown in our lifetime. Check out this link to the truth http://my.barackobama.com/keatingvideo
    It will take the best and brightest minds in the world to get us out of this nightmare. As bad as Bush has done, McCain would be
    even more destructive because things are in much worse shape. The next president will not inherit a surplus like Bush did but a crashing economy and a 11,600,000,000,000 (trillion) dollars deficit. Most of it Bush created and it will take decades to pay it back.
    If you do what you have always done then you will get what you have always got.
    When it comes to policy Bush and McCain are the same 90 percent of the time.
    So why are the polls even close then ?
    Mccains team just said they no longer want to talk about the economy.Instead they would like to spend time talking about obama
    which means running the biggest smear campaign in history.
    They think they can just tell you lies and you wont be smart enough to see through it
    Let's teach him we are smarter than that .
    Elect Obama Biden 2008


    Check out this video of sarah palins interview and ask your self if she understands what she is talking about.
    http://www.youtube.com/watch?v=r36Xc0GG4iQ

  • Posted By: Nowforthetruth @ 10/10/2008 4:25:39 PM

    Comment: CNN Reports Acorn Faking Voter Registrations:

    http://www.cnn.com/2008/POLITICS/10/09/acorn.fraud.claims/index.html?iref=newssearch

  • Posted By: Nowforthetruth @ 10/10/2008 4:23:11 PM

    Comment: Obama is getting a bump out of this because people are not being reminded of the whole history where the economy is concerned, and who did what when. Call it bias by omission. The media simply says that the economy is Obamas strong issue, but never discusses the facts in detail. Further, who had a majority when is rarely relevant. If the simplistic Party In Power model were true, then the Democrats would not have needed the House Republicans when they tried to pass the bailout bill, as Democrats have the majority in both houses and there is no threat of a veto. In theory, they do not need the Republicans to vote at all. In fact, something like twelve (12) Democrats from Barney Franks own banking committee voted against the bill. Obviously, it is not so simple and the media does the voter a disservice by doing little more than reinforcing the error. A similar argument would be to say that the economy appeared to be doing fine until the Democrats took over control of Congress and the power of the purse in 2006, then it tanked. As an aside, the media also misleads regarding the Clinton economy when they fail to mention that it also ended in a recession, requiring the first round of Bush stimulus checks immediately after he took office..


    Do Obama and the Democrats deserve a lift in the polls as a result of the financial and mortgage problems? The answer from history is a clear NO. Here's the lead of a New York Times story on September 30, 1999:

    "Fannie Mae Eases Credit To Aid Mortgage Lending" [link below]. That's 1999 folks. Clinton Administration, I believe.

    Here's the lead of a New York Times story on Sept. 11, 2003:

    "The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. "[see link below] The Democrats killed the reforms.

    McCain said in co-sponsoring the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190:

    "If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole. The Democrats killed the Bill.

    What was Barney Frank and fellow Democrats saying at the time of these attempted reforms? According to reports, Representative Barney Frank(D-MA) claimed of the thrifts :

    "These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

    Representative Mel Watt (D-NC) added of the reforms "I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing." [ See Community Reinvestment Act,

  • Posted By: Nowforthetruth @ 10/10/2008 4:23:00 PM

    Comment:

    Even Bill Clinton points to liberal Congressional Democrats??? protection of Fannie and Freddie from scrutiny as a primary cause of the current economic meltdown.

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

    The link below contains a purported list of the top 25 in Congress who got contributions from the folks at Fannie and Freddie. Obama is listed third, after Dodd and Kerry, even though Obama is just a junior Senator. Obama is followed next by Clinton. Barney Frank and Nancy Pelosi are on the list as well.

    http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20080918

    Then there is the Senate Banking Committee Chairman Christopher J. Dodd who allegedly got special mortgage deals from Countrywide, who gave preferential rates to 'friends' of company's chairman.

    http://www.msnbc.msn.com/id/25140560/

    For an interesting article purporting to detail the House Financial Services Committee Chairs long history with Fannie Mae, See http://www.businessandmedia.org/printer/2008/20080924145932.aspx

    "House Financial Services Committee Chair promoted GSEs while former 'spouse' was Fannie Mae executive."

    The link below describes how some in Congress tried to use the original version of the bailout bill to divert money eventually recovered to groups like ACORN, a group Obama has a long association with. See:

    http://online.wsj.com/article/SB122247015469280723.html?mod=googlenews_wsj

    And then there is House Speaker Nancy Pelosi, who allegedly has directed nearly $100,000 from her political action committee to her husband's real estate and investment firm.

    http://www.washtimes.com/news/2008/oct/01/pelosis-pac-pays-bills-for-spouses-firm.

    See also:
    http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20080918

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

    http://article.nationalreview.com/print/?q=M2QwNDhkZTg2OGYzZjkzM2E2NDEwM2U5OGVkNTc0YzU=

    http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63

    http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260

    http://www.businessandmedia.org/printer/2008/20080924145932.aspx

    http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20080926

    http://online.wsj.com/article/SB122247015469280723.html?mod=googlenews_wsj

    Where is the article about Joe Bidens longstanding relationship with the credit card industry lobby? Is that what you call looking out for the middle class?

  • Posted By: Magnolialabelle @ 10/10/2008 4:18:31 PM

    Comment: Don't you actually mean, "Lending money poorly to people does." ???

  • Posted By: rufftrader @ 10/10/2008 3:10:46 PM

    Comment: shouldnt it say minorities and po white trash? lmao. yes minorities brought this country to its financial knees. what a crock of s**t. Those in power blaming those who arent.

  • Posted By: newsweek123 @ 10/10/2008 8:43:11 AM

    Comment: Using the logic of Mr. Gross, one can definitively reach any conclusion on any subject. A single high end condo builder going bankrupt and a single affordable house builder with a low default rate on 3,900 mortgages, and presto, all other evidence becomes meaningless. So pick the answer you want on ANY subject, find a couple of obscure facts to support your conclusion, and present it as the real evidence. Can anyone think of other subjects to apply such logic, like maybe the world is flat?

  • Posted By: cliffordvance @ 10/10/2008 2:15:13 AM

    Comment: Had to get a rabies shot after being exposed to all the feral foaming ranters in this blog. Thanks to those of you who wrote thoughtful, referenced comments. I found Mr. Gross' article to be a helpful storyline based on fact. Neither perfect nor complete, but concise and useful. Certainly consistent with information I've gleened from the broad reading I've been doing. TX.

  • Posted By: Nowforthetruth @ 10/10/2008 2:12:47 AM

    Comment: Obama's Campaign Paid Over $800,000 To ACORN For Get-Out-The-Vote Efforts, But "Mistakenly Misrepresented" Their Work To The FEC:

    Obama's Campaign "Paid More Than $800,000" To ACORN For Get-Out-The Vote Efforts; The Campaign Originally "Misrepresented" The Group's Work To The FEC. "U.S. Sen. Barack Obama's presidential campaign paid more than $800,000 to an offshoot of the liberal Association of Community Organizations for Reform Now for services the Democrat's campaign says it mistakenly misrepresented in federal reports. An Obama spokesman said Federal Election Commission reports would be amended to show Citizens Services Inc. -- a subsidiary of ACORN -- worked in 'get-out-the-vote' projects, instead of activities such as polling, advance work and staging major events as stated in FEC finance reports filed during the primary." (David M. Brown, "Obama To Amend Report On $800,000 In Spending," Pittsburgh Tribune Review, 8/22/08)

  • Posted By: Nowforthetruth @ 10/10/2008 2:12:36 AM

    Comment:

    Obama Formerly Represented ACORN, Taught Classes For Future Leaders Of ACORN, And They Endorsed His 2008 Presidential Campaign:

    Obama Directed Project Vote And Later Taught Classes For "Future Leaders Identified By ACORN And The Centers For New Horizons." "He [Obama] says he is drawn to politics, despite its superficialities, as a means to advance his real passion and calling: community organization. ... In 1992 Obama took time off to direct Project Vote, the most successful grass-roots voter- registration campaign in recent city history. Credited with helping elect Carol Moseley-Braun to the U.S. Senate, the registration drive, aimed primarily at African-Americans, added an estimated 125,000 voters to the voter rolls -- even more than were registered during Harold Washington's mayoral campaigns. 'It's a power thing,' said the brochures and radio commercials. ... Obama continues his organizing work largely through classes for future leaders identified by ACORN and the Centers for New Horizons on the south side." (Hank De Zutter, Op-Ed, "What Makes Obama Run?" ChicagoReader, 12/8/95)

    Obama Was Part Of Team Of Lawyers Who Represented ACORN In A Suit Against The State Of Illinois. "Obama was part of a team of attorneys who represented the Association of Community Organizations for Reform Now (ACORN) in a lawsuit against the state of Illinois in 1995 for failing to implement a federal law designed to make it easier for the poor and others to register as voters." (Mike Robinson, "Obama Got Start In Civil Rights Practice," The Associated Press, 2/20/07)
    ACORN's Political Action Committee Endorsed Obama. "[A]CORN's political action committee endorsed Barack Obama for President. ... The endorsement reflects a belief that Obama -- who worked as a community organizer on the South Side of Chicago -- understands that change must come from the ground-up, as part of a working coalition, rather than from position papers." (Katrina Vanden Heuvel, Op-Ed, "ACORN: Obama Gets It," The Nation, 2/23/08)

    http://www.marketwatch.com/news/story/rnc-obama--acorn-fact/story.aspx?guid=%7B29569FA1-136D-4B95-9D51-4EF9E87ED547%7D&dist=hppr


    The link below describes how some in Congress tried to use the original version of the bailout bill to divert money eventually recovered to groups like ACORN, a group Obama has a long association with. See:

    http://online.wsj.com/article/SB122247015469280723.html?mod=googlenews_wsj

  • Posted By: Nowforthetruth @ 10/10/2008 2:11:00 AM

    Comment: 1977: Pres. Jimmy Carter signs the Community Reinvestment Act into Law. The law pressured financial institutions to extend home loans to those who would otherwise not qualify. The Premise: Home ownership would improve poor and crime-ridden communities and neighborhoods in terms of crime, investment, jobs, etc.

    Results: Statistics bear out that it did not help.

    How did the government get so deeply involved in the housing market? Answer: Bill Clinton wanted it that way.

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

    1993: Clinton extensively rewrote Fannie Mae and Freddie Mac's rules turning the quasi-private mortgage-funding firms into semi-nationalized monopoies dispensing cash and loans to large Democratic voting blocks and handing favors, jobs and contributions to political allies. This potent mix led inevitably to corruption and now the collapse of Freddie and Fannie.

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

  • Posted By: Nowforthetruth @ 10/10/2008 2:10:47 AM

    Comment:

    1995: Congress, about to change from a Democrat majority to Republican, Clinton orders Robert Rubin's Treasury Dept to rewrite the rules. Robt. Rubin's Treasury reworked rules, forcing banks to satisfy quotas for sub-prime and minority loans to get a satisfactory CRA rating. The rating was key to expansion or mergers for banks. Loans began to be made on the basis of race and little else.

    1997 - 1999: Clinton, bypassing Republicans, enlisted Andrew Cuomo, then Secretary of Housing and Urban Developement, allowing Freddie and Fannie to get into the sub-prime market in a BIG way. Led by Rep. Barney Frank and Sen. Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5% of capital to back their investments vs. 10% for banks. Since they could borrow at lower rates than banks their enterprises boomed.

    With incentives in place, banks poured billions in loans into poor communities, often "no doc", "no income", requiring no money down and no verification of income. Worse still was the cronyism: Fannie and Freddie became home to out-of work-politicians, mostly Clinton Democrats. 384 politicians got big campaign donations from Fannie and Freddie. Over $200 million had been spent on lobbying and political activities. During the 1990's Fannie and Freddie enjoyed a subsidy of as musch as $182 Billion, most of it going to principals and shareholders, not poor borrowers as claimed.

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

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

  • Posted By: Nowforthetruth @ 10/10/2008 2:10:23 AM

    Comment:

    2000: Secretary Summers sent Undersecretary Gary Gensler to Congress seeking an end to the "special status". Democrats raised a ruckus as did Fannie and Freddie, headed by politically connected CEO's who knew how to reward and punish. "We think that the statements evidence a contempt for the nation's housing and mortgage markets" Freddie spokesperson Sharon McHale said. It was the last chance during the Clinton era for reform.

    2001: Republicans try repeatedly to bring fiscal sanity to Fannie and Freddie but Democrats blocked any attempt at reform; especially Rep. Barney Frank and Sen.Chris Dodd who now run key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants.

    2003: Bush proposes what the NY Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago". Even after discovering a scheme by Fannie and Freddie to overstate earnings by $10.6 billion to boost their bonuses, the Democrats killed reform.

    2005: Then Fed chairman Alan Greenspan warns Congress: "We are placing the total financial system at substantial risk". Sen. McCain, with two others, sponsored a Fannie/Freddie reform bill and said, "If congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole". Sen. Harry Reid accused the GOP ;of trying to "cripple the ability of Fannie and Freddie to carry out their mission of expanding homeownership" The bill went nowhere.

    2007: By now Fannie and Freddie own or guarantee over HALF of the $12 trillion US mortgage market. The mortgage giants, whose executive suites were top-heavy with former Democratic officials, had been working with Wall St. to repackage the bad loans and sell them to investors. As the housing market fell in '07, subprime mortgage portfolios suffered major losses. The crisis was on, though it was 15 years in the making.

    2008: McCain has repeatedly called for reforming the behemoths, Bush urged reform 17 times. Still the media have repeated Democrats' talking points about this being a "Republican" disaster. A few Republicans are complicit but Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats. That's why taxpayers are now being asked for $700 billion!!
    -----------------------------------------------------------------------------------------
    Posted elsewhere by: BryanW (October 7, 2008 at 5:14 PM)

  • Posted By: Nowforthetruth @ 10/10/2008 2:08:34 AM

    Comment: Obama is getting a bump out of this because people are not being reminded of the whole history where the economy is concerned, and who did what when. Call it bias by omission. The media simply says that the economy is Obamas strong issue, but never discusses the facts in detail. Further, who had a majority when is rarely relevant. If the simplistic Party In Power model were true, then the Democrats would not have needed the House Republicans when they tried to pass the bailout bill, as Democrats have the majority in both houses and there is no threat of a veto. In theory, they do not need the Republicans to vote at all. In fact, something like twelve (12) Democrats from Barney Franks own banking committee voted against the bill. Obviously, it is not so simple and the media does the voter a disservice by doing little more than reinforcing the error. A similar argument would be to say that the economy appeared to be doing fine until the Democrats took over control of Congress and the power of the purse in 2006, then it tanked. As an aside, the media also misleads regarding the Clinton economy when they fail to mention that it also ended in a recession, requiring the first round of Bush stimulus checks immediately after he took office..


    Do Obama and the Democrats deserve a lift in the polls as a result of the financial and mortgage problems? The answer from history is a clear NO. Here's the lead of a New York Times story on September 30, 1999:

    "Fannie Mae Eases Credit To Aid Mortgage Lending" [link below]. That's 1999 folks. Clinton Administration, I believe.

    Here's the lead of a New York Times story on Sept. 11, 2003:

    "The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. "[see link below] The Democrats killed the reforms.

    McCain said in co-sponsoring the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190:

    "If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole. The Democrats killed the Bill.

    What was Barney Frank and fellow Democrats saying at the time of these attempted reforms? According to reports, Representative Barney Frank(D-MA) claimed of the thrifts :

    "These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

    Representative Mel Watt (D-NC) added of the reforms "I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing." [ See Community Reinvestment Act,

  • Posted By: Nowforthetruth @ 10/10/2008 2:08:21 AM

    Comment:

    Even Bill Clinton points to liberal Congressional Democrats and their protection of Fannie and Freddie as a primary cause of the current economic meltdown.

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

    The link below contains a purported list of the top 25 in Congress who got contributions from the folks at Fannie and Freddie. Obama is listed third, after Dodd and Kerry, even though Obama is just a junior Senator. Obama is followed next by Clinton. Barney Frank and Nancy Pelosi are on the list as well.

    http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20080918

    Then there is the Senate Banking Committee Chairman Christopher J. Dodd who allegedly got special mortgage deals from Countrywide, who gave preferential rates to 'friends' of company's chairman.

    http://www.msnbc.msn.com/id/25140560/

    For an interesting article purporting to detail the House Financial Services Committee Chairs long history with Fannie Mae, See http://www.businessandmedia.org/printer/2008/20080924145932.aspx

    "House Financial Services Committee Chair promoted GSEs while former 'spouse' was Fannie Mae executive."

    The link below describes how some in Congress tried to use the original version of the bailout bill to divert money eventually recovered to groups like ACORN, a group Obama has a long association with. See:

    http://online.wsj.com/article/SB122247015469280723.html?mod=googlenews_wsj

    And then there is House Speaker Nancy Pelosi, who allegedly has directed nearly $100,000 from her political action committee to her husband's real estate and investment firm.

    http://www.washtimes.com/news/2008/oct/01/pelosis-pac-pays-bills-for-spouses-firm.

    See also:
    http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20080918

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

    http://article.nationalreview.com/print/?q=M2QwNDhkZTg2OGYzZjkzM2E2NDEwM2U5OGVkNTc0YzU=

    http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63

    http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260

    http://www.businessandmedia.org/printer/2008/20080924145932.aspx

    http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20080926

    http://online.wsj.com/article/SB122247015469280723.html?mod=googlenews_wsj

    Where is the article about Joe Bidens longstanding relationship with the credit card industry lobby? Is that what you call looking out for the middle class?

    • Posted By: 4carol @ 10/10/2008 11:26:38 AM

      Comment: Please, please don't tell me Repubs were involved, too!!! What a horror that would be!!

  • Posted By: Patriotgamer2 @ 10/10/2008 2:07:58 AM

    Comment: Are we Americans, or not?! When did we become so weak as a nation? Pointing the finger of blame gives nothing but cold comfort. Truth is we're all in it. Our kids and grandkids depend on us to figure this mess out.
    There's enough blame to be parceled out to each and every side of the debacle we have found ourselves in.
    No one, and I mean no one, is blameless. You want to blame something? How about unfettered greed? You
    see folks Gordon Gekko had it wrong, greed, for lack of a better word is not good. In fact I believe it was once considered a mortal sin. Like many a morality play that has been long forgotten or ignored, the moral of the
    story of Wall Street is that we are all invested. We can all be touched. If wrapping yourself around a particular
    idea about who is or isn't to blame for this mess gives you comfort then you are part of the problem. It's time that Americans stop looking at themselves as this group or that group. Turn off the radio, and put down the rhetoric. Start really thinking for yourself, and ask the question "How long can a house stand devided?" If energy
    is one of our most precious commodities then let's stop wasting it on blame assesment. Let's become Americans again, and fix this problem. Yes how we got there is important, but what's more important is how do
    we get out of it. Our children's future depend on it.

    • Posted By: 4carol @ 10/10/2008 11:37:33 AM

      Comment: You are about the only one on this blog who gets it!!! Americans of all walks are tired and disgusted by this continual blame game, mostly I might add by the GOP.
      It is time to come together again as a nation, Dems and GOP, poor and RICH, black, white and all, if we want to have anything decent to pass on to future generations!!!
      Don't know about you but I personally have had about all I can stomach with this negative campaigning and the continual barage spewed of hate, racism, fear and untruths!!
      WHAT HAVE OUR PEOPLE COME TO??? IS THIS ANY WAY TO DEMONSTRATE OUR MORALITY, OUR COMPASSION, OUR OBLIGATION TO OUR OWN PEOPLE???? REMEMBER, THIS NOT ONLY REFLECTS TO OUR COUNTRY, BUT TO THE WORLD!!!!!!!!!!!!!!!!!!!!!!! IT IS SHAMEFUL!!!!!

  • Posted By: Nowforthetruth @ 10/10/2008 2:06:20 AM

    Comment: Hey jarcher1 @ 10/08/2008 11:08:05 PM: Works for me!

  • Posted By: kids_md @ 10/10/2008 1:15:25 AM

    Comment: What a biased article. Mr Gross, do you actually have a MBA? I don???t think most people blame the current financial crisis on actual poor minority homeowners. I think greedy banks and their CEOs, investors/speculators and people who live beyond their means are to blame for this mess. But politicians are just as much to blame (OR MORE TO BLAME) for turning a blind eye to what was going on with the mortgage industry, especially while the government was financially backing companies like Fannie Mae and Freddie Mac with taxpayer???s money. Chris Dodd and Barney Frank are just a couple of congressmen who should be held partially responsible for allowing this to happen. Did you know that Barney Frank???s partner/boyfriend, Herb Moses worked at Fannie Mae from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie Mae? ( http://www.foxnews.com/story/0,2933,432501,00.html ). Also we should also not ignore the fact that other politicians were basically ???paid off??? with large contributions in order to ignore what was going on while the CEOs of these lending institutions and Fannie/Freddie just got richer.
    Lastly, lending institutions should never have been forced to lower their lending standards (ie. engage in subprime lending) and loan to anyone with little or poor credit history, with no verification or income, etc. If these banks did NOT give these loans, then their CRA (community reinvestment act) rating was lowered, which in turn impeded their ability to expand and grow. If these lending standards had not been relaxed, we would not have seen this kind of abuse. Anyway, that???s my take. Here???s another article which further explains this mess. http://www.eppc.org/publications/pubID.3566/pub_detail.asp

  • Posted By: kids_md @ 10/10/2008 1:14:07 AM

    Comment: What a biased article. Mr Moore, do you actually have a MBA? I don???t think most people blame the current financial crisis on actual poor minority homeowners. I think greedy banks and their CEOs, investors/speculators and people who live beyond their means are to blame for this mess. But politicians are just as much to blame (OR MORE TO BLAME) for turning a blind eye to what was going on with the mortgage industry, especially while the government was financially backing companies like Fannie Mae and Freddie Mac with taxpayer???s money. Chris Dodd and Barney Frank are just a couple of congressmen who should be held partially responsible for allowing this to happen. Did you know that Barney Frank???s partner/boyfriend, Herb Moses worked at Fannie Mae from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie Mae? ( http://www.foxnews.com/story/0,2933,432501,00.html ). Also we should also not ignore the fact that other politicians were basically ???paid off??? with large contributions in order to ignore what was going on while the CEOs of these lending institutions and Fannie/Freddie just got richer.
    Lastly, lending institutions should never have been forced to lower their lending standards (ie. engage in subprime lending) and loan to anyone with little or poor credit history, with no verification or income, etc. If these banks did NOT give these loans, then their CRA (community reinvestment act) rating was lowered, which in turn impeded their ability to expand and grow. If these lending standards had not been relaxed, we would not have seen this kind of abuse. Anyway, that???s my take. Here???s another article which further explains this mess. http://www.eppc.org/publications/pubID.3566/pub_detail.asp

  • Posted By: Hiersekorn @ 10/09/2008 7:54:52 PM

    Comment: If you are correct, that this problem was caused by bad loans to rich white guys, then there ought to be a whole lot of formerly-rich white guys running around. But, there aren't.

    Frankly, you are misunderstanding the argument that CRA caused this. CRA created a culture and Fannie and Freddie. The CRA required Fannie and Freddie to alter standards and buy loans that they wouldn't have otherwise bought. The lenders then tood advantage of the loosey-goosey standards and made loans to people who shouldn't have gotten them. In other words, it isn't the minority loans, per se. It's the fact that standards were lowered in order to make those loans. Lower standards led to the implosion.

    You can't very well argue that this would have happened if the standards were higher. Certainly, lower standards played a part in it. The only question is what force made it possible to make and sell risky loans. The answer is the CRA.

  • Posted By: ishegonnabeok @ 10/09/2008 7:40:19 PM

    Comment: Mr. Gross, how did you get your job? Can anyone as clueless as you write for Newsweek? Reading you is like watching someone take a crap in the middle of the street - one is just speechless.

    "What you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul." - From Billy Madison

  • Posted By: ishegonnabeok @ 10/09/2008 7:38:15 PM

    Comment: Mr. Gross, how did you get your job? Can anyone as clueless as you write for Newsweek? Reading you is like watching someone take a crap in the middle of the street - just speechless. LOL.

    'What you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul." - Billy Madison

  • Posted By: Nowforthetruth @ 10/09/2008 7:33:15 PM

    Comment: From: http://www.marketwatch.com/news/story/rnc-obama--acorn-fact/story.aspx?guid=%7B29569FA1-136D-4B95-9D51-4EF9E87ED547%7D&dist=hppr

    Obama's Campaign Paid Over $800,000 To ACORN For Get-Out-The-Vote Efforts, But "Mistakenly Misrepresented" Their Work To The FEC:

    Obama's Campaign "Paid More Than $800,000" To ACORN For Get-Out-The Vote Efforts; The Campaign Originally "Misrepresented" The Group's Work To The FEC. "U.S. Sen. Barack Obama's presidential campaign paid more than $800,000 to an offshoot of the liberal Association of Community Organizations for Reform Now for services the Democrat's campaign says it mistakenly misrepresented in federal reports. An Obama spokesman said Federal Election Commission reports would be amended to show Citizens Services Inc. -- a subsidiary of ACORN -- worked in 'get-out-the-vote' projects, instead of activities such as polling, advance work and staging major events as stated in FEC finance reports filed during the primary." (David M. Brown, "Obama To Amend Report On $800,000 In Spending," Pittsburgh Tribune Review, 8/22/08)

    The link below describes how some in Congress tried to use the original version of the bailout bill to divert money eventually recovered to groups like ACORN, a group Obama has a long association with. See:

    http://online.wsj.com/article/SB122247015469280723.html?mod=googlenews_wsj

  • Posted By: bronzee @ 10/09/2008 7:16:17 PM

    Comment: Yep, this is what the fast and loose rich and their gullable suburban counterparts do when they get caught screwing around with the money they should've never touched: they blame in on poor people. And since we're talking about community investment, I'm sure the assumption is that a lot of brown people are to blame for breaking the economy because they "got loans they couldn't repay."

    Fact: a white couple making 30K normally gets the same amount of mortgage as a black couple making 90K. Fact: the majority of people on "welfare" are caucation--66%! So, with these facts in mind, there were probably more whites in the defaulting category than browns simply because they were the ones more likely to get the mortgages.

    But let's think for a minute here. How many 100K mortages does it take to bankrupt a bank that needs 85B to bail it out? Do we really think that many mortages were made to poor people? Come one people! What about also speculating investors who drove the price of those houses through the roof, borrowed against them and then left them to foreclosure when things got rough? How many of them qualified for 500K to 5M in loans and never lived in any of these residences?

    I'm sure there are plenty of people at the bottom have problems that probably shouldn't have gotten some of those loans. But to make them the full weight of this problem is just business as usual--blame the poor folks when cheating and stealing boils over and causes monumental problems that can no longer be swept under the rug. That's not going to solve our problems. And it certain won't keep them from happening again in the future.

  • Posted By: bronzee @ 10/09/2008 5:50:12 PM

    Comment: Once again, when rich country-clubites' fun-loving, money-grabbing "projects" turn into fiascos, the cheapest, easiest and most palatable excuses turn on the poor, who are traditionally shut out of such rot. Come on people, check the stats. Traditionally, it takes a black couple earning 90K to get the mortgage a white couple earning 30K gets. These are long-running facts. So I'm not sure who these "welfare" folk are unless they're the white folks who make up 66% of the welfare rolls. Even more so, let's say it's the poor white couple who got that loan the middle-classed black couple did not. Stands to reason, on his 30K salary, at most he got, let's be generous, was, say 200K, probably more like 150K. How many of those does it take to match the 800 Million we just gave wall street to bail it out? Isn't it much more the rich investors who could routinely get 500k to 1.5M who defaulted on the properties they help to speculate incredibly upward? Not to say that there weren't some losses at the bottom. However, how naive and incredibly stupid it would be to suggest that high-end cheating was not going on here--I mean outright immoral theft. You see, not admitting that means it will continue. Look at Lehman Brother's junket after being bailed out. Do you think that idea just accidently for the first time jumped into their heads? Or are they used to carrying on and getting away with this type of stuff all the time, they and others like them.

    You're talking about the very people who make the economy run. How convenient for people to turn on the organizations there to help them get a fair shake they hadn't been getting, during this time of crisis instead of truly pulling the blame where it should be, and somehow, digging ourselves out of this mess, never to return again. Elitism at its worst.

  • Posted By: captoe @ 10/09/2008 5:25:47 PM

    Comment: This is one of the most absurd articles that I have ever read!!! Mr. Gross writes that the CRA was to "expand homeownership to people who had been shut out for economic reasons." "Economic reasons!!" Oh, maybe like THEY CAN'T AFFORD TO PAY BACK THE MOTGAGE!!!! Mr. Gross even has the gall to admit that the definition of subprime lending is lending to "people who were borrowing over their heads." And what is he inferring to when he says that subprime lending is a "symptom, not a cause?" A symptom of what? That capitalism without government intervention does not lend money to people who can't possibly pay it back? Wow! I must be a radical to think that you shouldn't loan money to people who can't pay it back. Is Mr Gross inferring that homeownership and borrowing money you can't afford is a right! You socialist pig! Borrowing money is an obligation, and one that shouldn't be taken lightly. Mr. Gross was correct on one point, Wall Street firms and banks that had no obligation under the CRA to make subprime loans were a bunch of dumb sons of $!^@#&$ that we should have never bailed out with public funds. However, Mr. Gross you need to do your homework. The largest holders of the subprime loans is Fannie and Freddie by many multiples. Without the implied guarantee that Fannie and Freddie were backed by the full faith and credit of the federal government it unlikely that those Wall Street dumb @$$%$$ would have followed them over the cliff. And, without congress Freddie, Fannie and the CRA would not exist.

  • Posted By: agreen11111222222222 @ 10/09/2008 5:24:27 PM

    Comment: The article writer completely skewed the facts and clearly doesn't get the deep roots ACORN and Obama along with others had in starting this fiasco years ago with their lending practices that focused on lending to unqualified individuals, whether they were poor or minorities was not the factor, that they couldn't pay it back is. It worked out fine when prices were rising for years but once the housing market started correcting all these deserving folks that couldn't pay back the loan now defaulted. Oh, yeah, ACORN used ties and the Dems to bullied Fannie and Freddie to revise their credit standards and buy all the crap loans.
    Anyone who listens to the liberal media and all the lies it spins should be slapped. It shouldn't be what can the government do for me, but what can you do for your country. Anyone thinking they should get something will be voting for Obama and further crushing this country with taxation and the mistake of thinking you are entitled to things you aren't.

    • Posted By: 4carol @ 10/10/2008 11:44:01 AM

      Comment: In your case, you mean what can you do TO your country!! There are many more Repubs who have gotten rich off of this than Dems including the whole of this administration!! You think our prez or Cheney had no knowledge of this??? They along with many just sat back and racked it in while they watched this happen!!You are sure naive!!!!

  • Posted By: HDubinski @ 10/09/2008 5:21:22 PM

    Comment: Why isn't anyone talking about what would have happened if Bush's plan to privatize Social Security, which McCain voted for, had passed. McCain's plan on health insurance would result in hundreds of thousands of people joining the ranks of the uninsured. HIs attack on the working person, and support of rich thieves who have decimated our retirment plans makes me want to puke. Wake up America.

    • Posted By: Ron Burgendy @ 10/13/2008 10:43:39 AM

      Comment: "Privatize" means letting individuals invest the money the way they want instead of the government "investing" it for them. It does not mean they have to put the money in stocks, they can do with it as they wish. Surely individuals who did choose to invest in the stock market over the past 20-30 years did recieve a much better return than what Social Security has returned in investment income, despite downturns in the economy.

  • Posted By: HDubinski @ 10/09/2008 5:15:48 PM

    Comment: Why isn't anyone talking about what would have happened if Bush's plan to privatize Social Security, which McCain voted for, had passed. McCain's ridiculous plan regarding health insurance, which would basically result in hundreds of thousands of more people being uninsured, combined with his support of screwing up Social Security, are the most important issues in this election.

  • Posted By: camalot @ 10/09/2008 4:43:14 PM

    Comment: I have been listening to Rush and Savage and several of the right wing fanatics for the last few days and they are trying to start race wars by claiming that this whole mess occurred becuase we MADE banks give loans to minorities. This country will continue to go to Hell in a handbasket as long as freedom of press means hatemongering and blatant racist lies. I am amazed at people wholisten to this every day as if these radio buffoons are actually objective people who care about the country.

  • Posted By: juanpabla @ 10/09/2008 3:37:19 PM

    Comment: go ahead and call me racist right off the bat so i can get on with my comment....minorities and poor people are the majority of folks who are on some form of public assistance. because we have a govt that keeps offering more and more to them, they get to a point where it is now called "entitlements". no one is entitled to anything. the more we give them, the more they expect...if we don't give them these "entitlements" we are then somehow racist. get a job and get off the govt dole.

    • Posted By: wethepeopleco @ 10/15/2008 7:08:14 PM

      Comment: I don't know if you are racist or not, but I do know that you are really ignorant. The majority of the people on public assistance reflect the majority of people in this country--racially they are WHITE. You can check the U.S. Department of Health and Human Services for the facts. I hope you can read.

  • Posted By: phiomalibumalibu @ 10/09/2008 3:35:11 PM

    Comment: The number one cause of the mortgage problem was shipping jobs overseas and hiring 2 million H1-B's during the last 10 years. Minorities are NOT to blame

  • Posted By: Concerned Canadian @ 10/09/2008 3:10:06 PM

    Comment: The blame rests with the fat cat Democrats who received huge sums of money and did nothing to warn or regulate Fannie Mae and Freddie Mac...names....Chris Dodd , Barney Franks , Barack Hussein Obama should all face jail time.
    Barack Hussein Obama is the key guy behind ACORN , now involved with voter fraud registration and its the same organization who intimidated and bankers to make bad loans to poor people who couldn't afford the mortgage in the first place...your man..Barack Hussein Obama is behind all this.

    Barack Hussein Obama "KNOWS" Bill Ayers is an unrepented terrorist yet he starts his political career with a party in Bill Ayers living room , he chairs the same left-wing board in Chicago with Bill Ayers funnelling millions of dollars into the radical teaching program. This is anti- American !!
    Terrorists knocked down the Twin Towers on September 11 and now this Muslim who still says he's a Christian is about to go into the White House ! ..are Americans nuts ?
    Remember ..you are who you keep....that makes Obama a traitor , terrorist , radical , elitist and a liar. !!!!!
    His circle of close friends and advisors are ; BILL AYERS , REV WRIGHT, LOUIS FARRAKHAN, REV PFLEGGER, FANNIE MAE & FREDDIE MAC CEO's, ACORN.....THIS AUTOMATICALLY DISQUALIFIES BARACK HUSSEIN OBAMA TO BE COMMANDER - IN - CHIEF. FURTHERMORE HE OWES THE US TROOPS AN APOLOGY...." THE US MILITARY IS AIR RAIDING & KILLING INNOCENT CIVILIANS IN AFGHANISTAN "...BARACK IS A TRAITOR AND A LOW LIFE. OH YA, HE GOT HIS MANSION IN CHICAGO FOR FREE FROM TONY REZKO ...AT LEAST MCCAIN PAID FOR HIS HOUSES...AND TONY REZKO IS A CRIMINAL !!

  • Posted By: MichaelMN @ 10/09/2008 2:25:16 PM

    Comment: When I refinanced my house a few years back, I specifically told the lending company that I wanted a 30 year fixed rate mortgage. When the showed up at my house they had an ARM, not what I asked for at all. What's more I did not realize this until I was half way through the signing, and noticed the rate increased after a few years - the person I was working with never said anything, and when I brought it up he strongly pushed for a signing, trying to tell me how much better it would be to have the lower intial rate. He seemed astounding that I would actually want a rate that didn't vary over time.
    Well, we were half way through the paperwork, so we completed it - then my wife and I discussed it afterward. The next day we went in and cancelled the agreement (we have a three day period in Minnesota in which this can be done).
    This story provides at least anecdotal evidence of how hard lending companies can push a client to buy something they dont actually want and might not be able to handle. In this case, I feel that I was nearly the victim of fraud, and it would have been extrodinarily easy to have been trapped by the malfesance of the lender. Not all cases are like this, of course, but when confronted by a system where this occurs blaming the victim is not the best answer.
    Michael
    PS The loan company continues to call us, years later, even though we have asked to be put on thier Do Not Call list

  • Posted By: celticdreaming @ 10/09/2008 1:28:34 PM

    Comment: Actually Crystal, part of what Mr Gross said was ???On the Republican side of Congress, in the right-wing financial media (which is to say the financial media), and in certain parts of the op-ed-o-sphere, there's a consensus emerging that the whole mess should be laid at the feet of Fannie Mae and Freddie Mac, the failed mortgage giants, and the Community Reinvestment Act, a law passed during the Carter administration. The CRA, which was amended in the 1990s and this decade, requires banks???which had a long, distinguished history of not making loans to minorities???to make more efforts to do so.???
    And he is right. We do place blame here. It is part of the problem. Probably the beginning of the problem, which in turn greedy CEOs intensified. Unfortunately, no matter what good the CRA may have intended, it did FORCE banks to loan to low-income people with little or no credit history, and with no verification of income, or if there were verification, they were forced to include welfare payments and unemployment checks as viable income. You have your MBA. You tell me???.is that good business practice? If banks did NOT give the loans, then their CRA rating was lowered, which in turn impeded their ability to expand and grow. Since these loans were guaranteed by Fannie and Freddie (guaranteed by the government)???and they held the greatest percentage of high risk paper, that is why they are at the forefront of this issue.
    Unfortunately, and it is a fact, a great percentage of these people getting these types of loans were minority. Do I blame them for taking advantage of a system? Yes. It???s called personal responsibility. But I blame the well off too for purchasing homes they couldn???t afford or second homes they are defaulting on, developers for building huge McMansion communities and then not being able to sell them, and also speculators who just wanted to flip houses over and over again and now they are stuck because they didn???t pay attention to the market. They just walk away, and now we are left holding the bag. Bad regulations and de-regulations were at fault. Both Democrat and Republican. Minoritys are not all to blame???but they also share part of the pie of guilt.

  • Posted By: bartsimpson2008 @ 10/09/2008 1:22:52 PM

    Comment: Is it just me or is the republican party becoming the most racist party ever?

    • Posted By: captoe @ 10/09/2008 5:35:16 PM

      Comment: No, it't just you and your left-wing nutjob friends that think that.

  • Posted By: Crystal481 @ 10/09/2008 12:54:22 PM

    Comment: The article is not blaming the rich as Edward Thomas below claims- the main goal of this article is to clarify that minority and poor people aren't to blame. I feel like minorities are used more often as an example than any other group. Turn on Good Morning America, or the World News at night and chances are the person they'll interview about being foreclosed on with be either African-American or Hispanic person. As a young African American woman who has been house hunting I have encountered numerous stereotypes and generalizations that people have made about me before actually getting to know me. I have my MBA, great credit and a high paying job with the largest commercial bank in the country yet realtors and lenders automatically assume that I'm just barely keeping my head above water and can't afford a home. And the news media only panders to these stereotypes. I'm glad that Mr. Gross took the time to focus on the fact that it is not minorities and lower-income people that are to blame.

  • Posted By: Edward Thomas @ 10/09/2008 12:02:31 PM

    Comment: Shame on Mr. Gross for cleverly using the article to blame the rich. This assesment is shallow at best as it fails to capture the real essence of what happened. Now is not the time for liberal or conservative ranting and raving so with all due respect Mr. Gross we need you to rise up beyond the rantings. You are focusing only on one segment of the problem and are contributing to divisions among us as a people rather than helping with any solution. I understand you feel an urgency to defend your liberal views but now is the time to put the country ahead of your rantings. If the Fed didn't lower the Fed Funds rate to 2% back in 2001 we would not have seen so many bad entries into the housing market. Many of the new homeowners during that time had their rates readjust some five years later when the Fed had moved the rate up to 5.25%. During the housing boom prices escalated beyond reasonableness and compounded the problem.
    Whether anyone likes it or not the reality is that the CRA opened the door for this problem especially since the Fed didn't recognize the new repercusions of changing the Fed rate would be so severe. During the 1990's Fannie and Freddie had over 40% of their portfolios in low to moderate income homes and this was fine then. It became a problem when the economy changed and the recession of 2001 hit. During this time the move to reduce the Fed Funds rate to 2% was considered the best option available. The Fed slowly raised the rates to 5.25% (due to inflation concerns over potentially rising fuel and food costs) and then held it there there for more than a year. This led to a lot of people no longer keep up with their adjusting mortgages at the much higher tates. This led many of them to put there homes on the market only to find a large many others doing the same and driving down prices. The media caught wind of this and started shouting "recession" and so people panicked and pulled money out of investments and then others did and the mess reached down to where it is now. Many others that got the no doc LIAR loans simply walked away from their homes. This left the value of their notes hard to price (ergo worthless). The severity is far too big to now blame the companies left holding this paper. Let us hope for positives from the CDS auction tomorrow for Lehmans.

    With all due respect is childish and petty to blame the rich people on Wall Street. There is too much to blame to go around to blame the rich people you despise. We are all to blame so lets all learn form this, get out of this mess and never allow it again.

    Now is the time to pull together and bring our best to the equation.

  • Posted By: think4yourself @ 10/09/2008 11:57:42 AM

    Comment: It is up to the American Citizens to demand from the media to find out if Obama Ever sent a letter about the Bailout he claimed he sent during the second debate. There is evidence according to C-Span that he DID NOT!!!!!!!!!!!!!!!

    And for all of you sympathizers of the poor. Why dont you go live in Section 8 housing for one week and see if they deserved to buy a home with NO MONEY DOWN, NO CREDIT HISTORY AND NOT ENOUGH INCOME TO QUALIFY. Now they are going to get yet another check off of the back of middle class who are already paying the taxes that they are not?????? 40% of Americans dont even PAY TAXES AT ALLL! WE NEED THE FAIR TAX!!!



    Finally Good news! YOU CANT STOP THE TRUTH!!!!!

    After much protesting - Hulu.com brought back the Saturday Night Live Congress Bailout skit back. CHECK IT OUT!!!!!!!!!!!!

    http://www.hulu.com/watch/38041/saturday-night-live-washington-approves-the-bailout#s-p1-st-i1

    NOW WITNESS THE REST OF THE STORY B-4 THE MEDIA TAKES IT OFF THE SITE AGAIN!

    • Posted By: THOMASAY637 @ 10/09/2008 4:21:29 PM

      Comment: I'd rather save a poor person, working for a living and trying to make ends meet than some a-hole millionaire. The greed at the top in this country is astounding. Don't you know that if you don't help your neighbor keep his house, yours will lose a great deal of value and you may wind up ion the same situation as them. When will the right wing middle class learn that trickle down economics is bullsh-t. Economies need to built from the bottom up. If you and I have money to spend rich people will get it honestly by providing goods and services that we all need and want. What do we get when the rich spend money (if they ever do, most rich folks don't pay for squat)?

      • Posted By: Bernice's Mom @ 10/10/2008 2:36:08 PM

        Comment: Spoken like a person who is not a millionaire, I bet everyone on this blog calling people money had some of their own they would think differently. There is nothing wrong with protecting what your work hard for wether it be twenty thousand a year or a million a year. Those that say people who make money dont pay their fair share of taxes are wrong. The more you earn the more of a percetage of income taxes that you pay. Every year that my salary goes up the more taxes that I pay.

        • Posted By: wethepeopleco @ 10/15/2008 8:30:08 PM

          Comment: Then you need to do what your friends are doing and find those shelters.

  • Posted By: Debbie2008 @ 10/09/2008 10:05:29 AM

    Comment: Predatory wolf mortgage lenders preying on sheep home buyers are to blame for this mortgage mess. I have little sympathy for them other than the fact that letting the lenders fail affects all of us on some level.

  • Posted By: Garnish @ 10/09/2008 9:41:26 AM

    Comment: I agree that it is incorrect (and quite intentional) to blame poor people and minorities specifically for the aggregate sit