Letitia, another DEI hire, campaigned to get Trump

The latest non-crime and ridiculous "award" of nearly half a million (paid out to whom since there was no victim and no crime?) for "civil fraud" against Trump brings back to memory how our federal government created a housing/mortgage free fall in 2007-2008 and sent our entire nation into a recession by over valuing homes and getting inadequately funded suckers to fall for the trap. The government backed mortgage agencies have been over evaluating the real estate market for decades. We were helping our son buy a home at that time, and the ridiculous financing of that era was unbelievable--so we went the standard route with a solid down payment. Just call me Fannie Mae/Freddie Mac. The only crime was that of AG Letitia, another DEI hire, vowing in her campaign to get Trump. She used Trump to get elected. She called him "illegitimate" meaning she publicly campaigned on not believing in the results of the 2016 election. Isn't that illegal? Republicans are call Nazis for believing the 2020 election was a fraud. No one else would have ever been charged with what the government has done for decades.

See what New York AG said while running for office about charging Trump | CNN Politics

In 2008 I wrote a poem about the fed chair and the Secretary of the Treasury.

"I’ve got the low down, trillion dollar, Ben and Henry Blues"
by Norma Bruce ©

Woke up this morning ‘bout five fifteen,
Read my big ol Bible and a new magazine,
Jumped in the van, turning on the key
Let me tell you mama, there’s no stopping me.

Driving on to Main Street, stopping at the light
Heading for the coffee shop the other side of night,
Singing with the radio, changing stations now
Got the dog and pony show, candidates take a bow.

(refrain) Mitigating factors, oozing out the wazoo,
Sell ‘em or hold ‘em, it’s all a rescue.
I’ve got the low down, trillion dollar
Ben and Henry blues.

Warm bakery bread and yeasty brown rolls
Congress still propping up the C-E-Os
Espresso coffee chai and tea
The government ya know--that’s just you and me.

NINJA loans for aliens, flipping for the rich,
From coastal homes, to buildings in the sticks,
McBama to Fannie to Goldman Sachs
They’re pointing fingers and covering tracks.

(refrain) Mitigating factors, oozing out the wazoo,
Sell ‘em or hold ‘em, it’s all a rescue.
I’ve got the low down, trillion dollar
Ben and Henry blues.

Home buyers are much older today than in 1962 when we did it

What would the media do without a constant stream of crises? Home buyers are getting older! Sure, we were first time buyers at 22 with a baby in tow, but that was an important value for my generation. Today? Hey, at 22 they are still hanging out in college or back packing in Europe, waiting for Joe to pay their college loans. Even at 35, a lot of young adults prefer granite countertops, a gym and a swimming pool they can get with their pricey rental. Our first home was a duplex with a dirt floor basement and no garage. You only make money in real estate if someone else is paying the mortgage.

"Repeat buyers were a median age of 58 in 2023, while first-time buyers were 35, per National Association of Realtors annual data released this week."

America's first-time and repeat homeowners are getting older (axios.com)

                                    First home on White St. , 40+ years later--many changes.

First time home buyers

I heard on the news today that the median age for a first time home buyer is 33. I was 22 when we bought our first home (a duplex in Champaign-Urbana so the renters could pay the mortgage for us). I think I know the problem. Today young people sell their lives to various tech companies for their phones, cable,Netflix , Facebook and Instagram and they drive nice cars. Fifty years ago we didn’t have any of that. TV, no cost but the set; phone, no cost but rent from the phone company and monthly charge; movies were something you went to in a theater, not that came to us; an automobile--we didn’t have one in 1962, but had a bike. Today’s young families spend so much on their tech contracts they can’t afford a mortgage. Oh, and at 22 we had no college loans to pay back. No one did. We bought an older home in a racially mixed neighborhood with mixed zoning. Today people would rather rent for 10 years with amenities, then start big.

The typical first-timer now rents for six years before buying a home, up from 2.6 years in the early 1970s, according to a new analysis by the real estate data firm Zillow. The median first-time buyer is age 33 — in the upper range of the millennial generation, which roughly spans ages 18 to 34. A generation ago, the median first-timer was about three years younger.

The delay reflects a trend that cuts to the heart of the financial challenges facing millennials: Renters are struggling to save for down payments. Increasingly, too, they're facing delays in some key landmarks of adulthood, from marriage and children to a stable career, according to industry and government reports.

 http://www.newsmax.com/Finance/StreetTalk/Older-First-Time-Homebuyers-houses/2015/08/17/id/670406/

Pittsburgh has the best deal for home owners

http://www.hsh.com/finance/mortgage/salary-home-buying-25-cities.html#cleveland

In Pittsburgh home buyers would need an annual income of $32, 617 and the median home price is $135,000.

http://www.trulia.com/property/3191271042-116-Woodgate-Rd-Pittsburgh-PA-15235

But in San Francisco, at the other end, buyers would need an annual income of $142,338 to buy a home in the median range of $742,900!

http://www.trulia.com/homes/California/San_Francisco/sold/7146643-138-Shakespeare-St-San-Francisco-CA-94112

How to create a new housing crisis

The Community Reinvestment Act of 1977 (CRA) evolved to the mess that gave us lower standards for mortgages and the meltdown of 2007. Now Obama wants one of his own and is pushing loosened standards for credit and home ownership again. Now all we need is packaging the loans and selling them. What a concept.

http://pubcit.typepad.com/clpblog/2013/04/obama-administration-wants-to-loosen-home-loan-availability-for-people-with-weak-credit.html

http://www.bizjournals.com/albuquerque/blog/morning-edition/2013/04/obama-urges-banks-to-loosen-credit.html

Your home is shelter, not a retirement nest egg or a bank or a tax shelter

"Since the housing market began to turn in 2007, Washington has tried to keep prices from falling with every policy gimmick known to politics: Foreclosure mitigation, more guarantees from the FHA, higher guarantee thresholds from Fannie Mae and Freddie Mac, Fed purchase of mortgage assets, and the $8,000 home buyer's tax credit promoted by the White House and Georgia Republican Senator Johnny Isakson.

Their main result, other than subsidizing some Americans at the expense of others, has been to sustain the housing recession over a longer period of time. The price decline would have been sharper without them, but the recovery would have happened sooner." Review & Outlook, WSJ, June 2, 2011

Fannie-Freddie Fix at $160 Billion With $1 Trillion Worst Case

When will Congress call Fannie and Fred in for the hot seat tongue lashing?. Never. Both parties are to blame. Better to go after "big oil" or bankers or evil capitalists. Their mistakes were no accident, they are 100% the fault of the Congress which created the Federal National Mortgage Association, known as Fannie Mae, in 1938 to expand home ownership by buying mortgages from banks and other lenders and bundling them into bonds for investors. It set up the Federal Home Loan Mortgage Corp., Freddie Mac, in 1970 to compete with Fannie.

Fannie Mae and Fred Mac will cost the American taxpayer more than the BP spill and clean up. Estimated at $160 billion and rising, possibly to $1 trillion.

Fannie-Freddie Fix at $160 Billion With $1 Trillion Worst Case « Finance Blog

More bad mortgages if these guys have their way

These guys want to strengthen the Carter era legislation of Community Reinvestment Act (CRA) which helped create our current recession and explosion of defaults by lowering credit standards and recruiting marginally qualified buyers to be "home owners." I suspect they just want to keep their cushy jobs. Lots of money in workshops to recruit and train, and then more money on how to budget, then more on how to avoid foreclosure. Oh sure, it's House Dems who are pushing it, but whodathunkit without these guys?

http://206.130.110.176/wordpress/

Obama Moves to worsen the housing mess

Haven't we been this route before? Didn't it lead to the bubble bursting in 2008? Did you know you can still get 100% financing, no money down, home mortgages (check out USDA--the food people--they also throw money at new mortgages). Now today we get the news that "The Obama administration on Friday announced broad new initiatives to help troubled homeowners, potentially refinancing millions of them into fresh government-backed mortgages with lower payments." Duh! 11,000,000 homeowners with property worth less than they owe, and the government continues to provide no-money down, 100% mortgage financing which is a 100% guarantee that the cycle will continue. Administration Moves to Assist Struggling Homeowners - NYTimes.com

Maybe we need a refresher on how our friendly government loan officer and enforcer got us here.

The story of the housing meltdown from an economist

Nobody caught on--not Greenspan, Bush, or Frank. And Barney Frank is still pushing more home ownership--without standards. But Bush will continue to be blamed because it happened on his watch. Video interview June 29, 2009



Sowell asserts in his book, "The Housing Boom and Bust," that politicians in Washington were trying to solve a problem that didn't exist.

"The problem that didn't exist was a national problem of unaffordable housing," Sowell explained. [And he's quite correct--housing was quite affordable in central Ohio.]

"The housing in particular areas, particularly coastal California and some other areas around the country, were just astronomically high. It was not uncommon for people to have to pay half of their family income just to put a roof over their head. So that was a very serious problem where it existed.

"But it existed in various coastal communities primarily and a couple of other places. Unfortunately, the elites whose strongholds are on the East and West Coasts don't seem to understand that there's a whole country in between, and in most of that country housing was quite affordable by all historical standards.

"So they set out to solve the problem by setting up a federal program to bring down the mortgage requirements, the 20 percent down payment and that sort of thing, and by forcing Fannie Mae and Freddie Mac to buy up those mortgages from the people who no longer had to meet the same requirements.

"The banks had no choice but to go along because the regulators controlled their fate. So the banks would simply sign up people, sell the mortgages to Fannie Mae and Freddie Mac. It now became Fannie Mae and Freddie Mac's problem. And that meant it became the taxpayers' problem." [quotes from Newsmax interview]

More rules for banks--how's that working out?

Obama loves a straw man, doesn't he? If it's not fat cat CEOs, it's banks, it's lobbyists, or Americans who haven't heard enough of his speeches on healthcare. Anyone but him. On Thursday he proposed more rules that would impede the growth of large banks. In Wednesday's WSJ there was an article about HAMP, Home Affordable Modification Program--the $75 billion mortgage modification program which is suffocating the banks with its accounting rules. I think it's part of ARRA and so far has a 1% success rate. Has there ever been a boondoggle like ARRA with so many billions and so little to show for it? It requires banks to declare a loss when they haven't had one. Now how would you like to step into that cess pool and have the IRS or some regulator 5 years from now send you to jail? And you can bet your old passbook that strategic defaulters will learn how to muck it up and make it work and the plumber or university professor who foolishly bought at the top of the real estate run up won't be able to make it through the red tape, or will just walk away from their mortgage. (Call me a conspiracy theorist, but I don't think any of these programs are designed to work.)

Read Arkadi Kuhlmann's article "Why mortgage modification isn't working."

Fixing troubled mortgages for the elderly

Sometimes older is not wiser. It seems that Pedro Garcia, a retired corrections officer, refinanced the home he bought for $23,000 40 years ago for $490,000 with what is known as an exotic "option ARM." In 2009 the house was valued at $150,000. When his payments had balooned beyond his pension's monthly income he quit paying. Bank of America, under pressure from tax cheat Geithner to remedy these bad decisions and "predatory lending" when money was flowing, refinanced it for $85,000 and then gave him a reverse mortgage on that, so he is now paying nothing. Of course, he'd already used that refinancing money--$70,000 to fix up the house, medical bills for his ill wife, and monthly living expenses. I guess the bank just eats that. But he still has a small second mortgage, which has also been modified by that lender. Something like 500,000 borrowers have been rescued by Obama's $75,000,000,000 foreclosure prevention plan. (WSJ story here) According to the article, Mr. Garcia and others were misled by these predators and the ARMs they pushed. No mention in this article about the number of non-profit organizations (like ACORN) that worked with banks and pushed both subprimes and ARMs especially for minorities. 32% of option ARMs were in foreclosure or delinquent as of August, compared to 48% of subprime. The difference is the option ARM people were good credit risks, sensible and wiser. Go figure. Pot. Rainbow. Free money.

And we're still seeing schemes from the government to put people into more housing debt, this time it's Obama instead of the Bushes or Clinton. Earlier this week there was an article on the tax credit plan for first time buyers. Claims for the $8,000 tax credit might have significant fraud. What a surprise! This little goodie if it is extended, will cost the tax payers an additional $16.7 billion. The new proposed ceiling might be $300,000 income per couple instead of the current $150,000. Under the current stimulus plan we the tax payers pay $43,000 for each borrower who uses that $8,000 tax credit. If they raise the ceiling, each tax credit will cost us $250,000 per home sale. (WSJ story here) Folks, you all took second grade math. Does this make any sense to you?

Update: On April 3, 2008 Michelle Malkin exposed the housing counseling racket, deep within the Bush Administration: ". . . mortgage counseling is a thriving racket that benefits far Left groups ranging from the AARP to ACORN to La Raza and Legal Aid. The Department of Housing and Urban Development funds hundreds, if not thousands, of these groups across the country. In October, HUD announced more than $44 million in new housing counseling grants to over 400 state and local efforts. The White House has increased funding for housing counseling by 150 percent since taking office in 2001." http://michellemalkin.com/2008/04/03/the-left-wing-mortgage-counseling-racket/

But wait--she appears on Fox News from time to time, so it must not be reliable.

Softball article on BOA and ACORN in WSJ

Isn't that just so sweet. James R. Hagerty wrote, Bank of America, "a corporate partner of ACORN" is going to end its relationship. I'm not diminishing the seriousness of the video'd prostitution sting at the ACORN offices, but really, these ACORN guys at the top of the chain were high class hookers long ago selling mortgages to people who can't pay for them. Clinton knew it; Bush knew it; Obama says he's clueless and clean. Sex just got the public's attention. Go to American Spectator to see how this works using Greenlining as an example. Greenlining is another nonprofit partner which you can see on this long list.

The requirements for an ACORN-assisted mortgage is still on their web page--it looks pretty loosey goosey to me. And we wonder why CRA contributed to the housing crash?

• 2003 and 2004 year tax returns and W2s [what's wrong with 2007 and 2008?]
  
• One month of current paystubs
  
• 3 most recent bank account statements
  
• $20 in check or money order for a credit report
  
• Rental history for the last 12 months: cancelled checks, receipts, landlord letter, etc.

Banks were being forced to lend to non-credit worthy applicants, to set aside all the known principles of sound financing to reduce the possibility of default. Take a look at what minorities were borrowing, as compared to whites, and guess who was pushing them there--certainly not the banks! Immigrant homeowners were actually failing less than native born minorities--probably had traditional resources backing them.

From Winter 2000 City Journal:

"The Clinton administration's get-tough regulatory regime mattered so crucially because bank deregulation had set off a wave of mega-mergers, including the acquisition of the Bank of America by NationsBank, BankBoston by Fleet Financial, and Bankers Trust by Deutsche Bank. Regulatory approval of such mergers depended, in part, on positive CRA ratings. "To avoid the possibility of a denied or delayed application," advises the NCRC in its deadpan tone, "lending institutions have an incentive to make formal agreements with community organizations." By intervening—even just threatening to intervene—in the CRA review process, left-wing nonprofit groups have been able to gain control over eye-popping pools of bank capital, which they in turn parcel out to individual low-income mortgage seekers. A radical group called ACORN Housing has a $760 million commitment from the Bank of New York; the Boston-based Neighborhood Assistance Corporation of America has a $3-billion agreement with the Bank of America; a coalition of groups headed by New Jersey Citizen Action has a five-year, $13-billion agreement with First Union Corporation. Similar deals operate in almost every major U.S. city. Observes Tom Callahan, executive director of the Massachusetts Affordable Housing Alliance, which has $220 million in bank mortgage money to parcel out, "CRA is the backbone of everything we do."

Now ACORN is back in the swim, getting federal dollars to run foreclosure workshops. Sweet deal. You get the homeowner in the mess, charge a fee and get a kick back from the bank; then get government funds to run workshops, collect fees, to get them out of the mess you made for them.

NeighborhoodWorks America is just another branch of ACORN, as are others on this list. ACORN has so many tentacles interwoven with state, local, federal and church agencies, we may never get it figured out.

Remembering how we got here

Was it just two years ago we woke up to the damage the sub-prime loans and putting people into mortgage products they couldn't possibly pay was going to do to all of us? Usually, I don't search out Wikipedia for answers, but this little paragraph really sums it up nicely. The numbers refer to its footnotes.

The Community Reinvestment Act (or CRA, Pub.L. 95-128, title VIII, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.[1][2][3]

Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.[4][5] The Act requires the appropriate federal financial supervisory agencies to encourage regulated financial institutions to meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation. (See full text of Act and current regulations.[1] To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions.[6]

Reading through it, you see all the intentions were good--by community activists, the FHA, Fannie and Fred, oh, and lookee here

Community groups only slowly organized to take advantage of their right under the Act to complain about law enforcement of the regulations."

So soon banks and lending institutions were being threatened and pushed into unwise credit risks by these "community groups," [who were taking their cut from the applicants.] Hmmm. Now those same groups are threatening Americans who are exposing them--like the film maker in the Baltimore ACORN and Glenn Beck and Fox News. [I don't know if they've intimidated NYT and CNN and broadcast news, but they are certainly quiet.] Time to wake up, folks, You've been scammed big time--the intentions of the Democrats 30 years ago were good (I was one so I know). And the Republicans and business CEOs fell in line and were afraid of being called racists if they resisted. Who could not support a welfare mother or a Latina housekeeper with suspect documentation getting her own home?

Interesting that I got to this article through another article on "Centrally Planned Economies" which used the CRA to show how it's done in America.

What really caused the mortgage meltdown?

Zero money down, not subprime loans, led to the mortgage meltdown says Stan Liebowitz in today's WSJ. "The evidence from a huge national database containing millions of individual loans strongly suggests that the single most important factor is whether the homeowner has negative equity in a house -- that is, the balance of the mortgage is greater than the value of the house. This means that most government policies being discussed to remedy woes in the housing market are misdirected." Take a look at the "do you qualify" page at The Obama administration's "Making Homes Affordable" plan, and you'll see the government throwing more money after bad at homeowners with negative equity. The government is leading the way to a deeper recession with its higher taxes and poor policies.

Isn't this how we got in this housing mess?

State of Florida helps single mom with child purchase home with stimulus money. Neighborhood stabilization program.

Well, lookee here. "Neighborhood Stabilization" money to go to ACORN, the voter fraud folks. Wonder if this has anything to do with payback for 2008 election?

More of what got us to our financial meltdown in housing

Have you noticed that the GSEs Fannie and Freddie are front and center of the stimulus?

"Before Wall Street screamed bloody murder at the opening of 2008, President Bush was resisting pressure to lift the financial limit on the mortgages Fannie Mae and Freddie Mac purchase and securitize. The Office of Federal Housing Enterprise Oversight (OFHEO), the GSEs’ wimpy watchdog, also objected to lifting the limit and continues to do so post stimulus agreement. The present GSE limit is $417,000. The stimulus would snap the cap to $625,500, and to $729,750 in extra pricey housing markets. Allowing Fannie and Freddie to purchase and securitize jumbo mortgages, the oversize loans MBS investors now shun as too risky. Link

How we got here--a quick review



HT Taxmanblog

Where was the investigative reporting three years ago?

The Wall Street Journal top notch investigative reporters, who could find every flaw and mispronounced word in a George Bush speech or each supposedly murky thought of Karl Rove, couldn't see this one coming. A 47% increase in Hispanic home ownership fueled through a combination of congressional misdeeds, a collection of myths about red lining by banks and realtors, pressure from low income housing groups taking money hand over fist from federal agencies, and a coalition of groups pushing subprime mortgages--all of which ignored sound credit practices. And to think we criticize other countries for lack of a free press. Maybe if they'd spent less time lionizing and chasing every speech of the man from Kenya, they'd have seen what was under their noses.

Foreclosure counseling

Yesterday I was listening to 700 am in Cincinnati and heard an ad for Hope Now Alliance which was all warm and fuzzy about helping people facing foreclosure. "Betcha they put them there," was my response to the radio. So today I looked them up. Yessiree, same old gang that put people into homes with "gift" downpayments, and balooning mortgages and probably did no credit checks or background sifting are part of this group, thrown together to get more government money for foreclosure counseling when they were about to loose their sorry as- jobs in the mortgage industry.

So how does a floundering GSE with ties to Congress and in the tank lobbyists for Obama (if no party is mentioned, assume Democrat, because Republicans are usually noted) put on a Santa Claus face?

"Freddie Mac** has instructed its national network of mortgage servicers and foreclosure attorneys to stop all planned foreclosure sales and evictions involving Freddie Mac-owned mortgages during the holiday season.

The move is designed to give more homeowners facing foreclosure or eviction additional time to take advantage of the newly announced streamlined mortgage modification program, says Freddie Mac CEO David M. Moffett.

This should allow homeowners to work out agreements with mortgage services to avoid foreclosure. All foreclosure sales slated from Nov. 26, 2008, to Jan. 9, 2009, will be temporarily stopped. The program applies to single-family and 2-4 unit properties.

Not all these apples are bad, but I wouldn't want to be in the same basket with ACORN and La Raza, one a communist agitation group spoiling many elections with illegal voters, the other wants the SW to return to Mexico.

Members:

ACORN Housing Corporation
Catholic Charities USA
Citizens’ Housing and Planning Association, Inc.
Consumer Credit Counseling Service of Atlanta
HomeFree- USA
Homeownership Preservation Foundation
Housing Partnership Network
Mission of Peace
Mississippi Homebuyer Education Center- Initiative
Mon Valley Initiative
Money Management International, Inc.
National Association of Real Estate Brokers- Investment Division, Inc.
National Community Reinvestment Coalition
National Council of La Raza
National Credit Union Foundation
National Foundation for Credit Counseling, Inc.
National Urban League
NeighborWorks America
Neighborhood Assistance Corporation of America
Rural Community Assistance Co.
Structured Employment Economic Development Co.
West Tennessee Legal Services, Inc.

**Who is Fred? The Federal Home Loan Mortgage Corporation (FHLMC) (NYSE: FRE), commonly known as Freddie Mac, is an insolvent government sponsored enterprise (GSE) of the United States federal government.

The FHLMC was created in 1970 to expand the secondary market for mortgages in the US. Along with other GSEs, Freddie Mac buys mortgages on the secondary market, pools them, and sells them as mortgage-backed securities to investors on the open market. The U.S. government seized control of the mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE), called GSEs, in September 2008, placing the liabilities of more than $5 trillion of mortgages onto the backs of the U.S. taxpayer.

Bailing with a hole in the bucket

Guest blogger Murray says:

I know that you know it is not too comforting knowing that the same people who allowed this country's subprime mortgage crisis to happen are the ones that our government put in charge of fixing it. I also know that you know that they really don't have the slightest knowledge how to fix it. I also know that you know that this is really a bailout to the Wall Street high flyers and the sleazy investment banking business. Now they are adding the very bankers that caused the stink to the team assigned to fix the problem. It seems that once you're in bed with them you can't get rid of them. Kinda like bedbugs.

Since it's the subprime mortgages that are the basis of the problem I would think the first thing they would do is put a stop to making these ridiculous loans. They have not done this. Banks and mortgage companies are still creating such loans. You can go to google and ask for "low price no money down mortgages" and you'll find all kinds of ads for these kinds of loans. It's pretty obvious to me that if we don't stop loaning with no money down and bad credit the "bailout" will go on forever.You can even apply on line. Here are a couple of examples:

http://www.mortgage-helper.com/zerodown.html

http://www.forthebestrate.com/no-money-down-mortgage.aspx

OK, the damage has been done. Our astute legislators are throwing billions of our hard earned tax dollars all over the place. They say not to worry cause the are going to sell these worthless mortgage packages and they will get the money back. Why... they say we might even make a profit!! Well, let me tell you. IF THEY DO FIND SOMEONE DUMB ENOUGH TO BUY THESE WORTHLESS PACKAGES JUST WHAT DO YOU THINK THEY WILL DO WITH THE MONEY? Pay it towards the national debt? No, No, NO..... They will do the same thing they always do. THEY WILL SPEND IT. Folks, once they voted to spend that 700 billion, that money was spent never to return. That money can only be returned by you and I. The tax man cometh. If OBAMA gets elected it will come immediately. Find a way to protect yourself. Your first attempt would be to vote for McCain as feeble as that may be.

MURRAY