Prior to law school, Barack Obama worked as an organizer for their affiliates in New York and Chicago. He always has been an ACORN person -- meeting and working with them to advance their causes. Through his membership on the board of the Woods Fund for Chicago and his friendship with Teresa Heinz Kerry, Obama has helped ensure that they remain funded well.
Question: Which presidential candidate warned years ago that Fannie Mae and Freddie Mac were important problems that needed to be fixed?
Answer: John McCain.
Question: Which political party took control of Congress and blocked the reforms called for by both the Bush administration and McCain?
Question: Will enough voters be fooled into believing that Democrat control of the White House and Congress will be good for the American economy?
Answer: We will know soon.
Question: What should a voter who puts America first do?
Answer: Don't be insane--VOTE FOR McCAIN!
Don’t expect the mainstream media to identify ACORN and its favorite community organizer and lawyer, rookie United States Senator and current Democrat presidential nominee Barack Hussein Obama, Jr. among the villains in the current financial crisis.
“…in Chicago, the Association of Community Organizations for Reform Now (ACORN) is more important than Iraq or Washington. ACORN and its associated Midwest Academy, both founded in the 1970s, continue to train and mobilize activists throughout the country, often using them to manipulate public opinion through ‘direct action.’ It's sometimes a code for illegal activities.
“Prior to law school, Barack Obama worked as an organizer for their affiliates in New York and Chicago. He always has been an ACORN person -- meeting and working with them to advance their causes. Through his membership on the board of the Woods Fund for Chicago and his friendship with Teresa Heinz Kerry, Obama has helped ensure that they remain funded well.
“Since he graduated from law school, Obama's work with ACORN and the Midwest Academy has ranged from training and fundraising, to legal representation and promoting their work.”
Note: Terry Kerry’s husband John made Obama a national figure by letting him deliver the keynote address at the 2004 Democrat National Convention.
In the case of Hurricane Katrina, the Democrats and their liberal media allies cleverly (but incorrectly) put the blame of the Bush Administration and, ironically, scapegoated former FEMA director Michael D. Brown (even though he had foreseen the possibility of such a catastrophe and worked to prepare for it to the extent the rest of the Bush Administration and Congress would let him).
Katrina really was primarily a Democrat scandal. Louisiana had been dominated by Democrats at the state level since Reconstruction ended and it had not prepared well at all, in either the long term or the short term, for The Big One that finally struck in 2006.
As Katrina approached Louisiana, Democrats—Governor Kathleen Blanco, a white woman, and Mayor Ray Nagin, a black Democrat—were feuding and would not cooperate with Brown, even after Brown had President Bush personally intervene. New Orleans’ supposed disaster plan was a disaster.
Similarly, the truth is that the current financial crisis is a result of a reckless form of affirmative action or reparation of sorts.
Stan Liebowitz, professor of Economics at the University of Texas’ Business School at Dallas, explained the genesis of the financial crisis without malarky or malice in “The Real Scandal: How Feds Invited the Mortgage Mess,” published in The New York Post on February 5, 2008.
”PERHAPS the greatest scandal of the mortgage crisis is that it is a direct result of an intentional loosening of underwriting standards - done in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults.
“At the crisis' core are loans that were made with virtually nonexistent underwriting standards - no verification of income or assets; little consideration of the applicant's ability to make payments; no down payment.
“Most people instinctively understand that such loans are likely to be unsound. But how did the heavily-regulated banking industry end up able to engage in such foolishness?
“From the current hand-wringing, you'd think that the banks came up with the idea of looser underwriting standards on their own, with regulators just asleep on the job. In fact, it was the regulators who relaxed these standards - at the behest of community groups and ‘progressive’ political forces.
“In the 1980s, groups such as the activists at ACORN began pushing charges of ‘redlining’ - claims that banks discriminated against minorities in mortgage lending. In 1989, sympathetic members of Congress got the Home Mortgage Disclosure Act amended to force banks to collect racial data on mortgage applicants; this allowed various studies to be ginned up that seemed to validate the original accusation.
“In fact, minority mortgage applications were rejected more frequently than other applications - but the overwhelming reason wasn't racial discrimination, but simply that minorities tend to have weaker finances.
“Yet a ‘landmark’ 1992 study from the Boston Fed concluded that mortgage-lending discrimination was systemic.
“That study was tremendously flawed - a colleague and I later showed that the data it had used contained thousands of egregious typos, such as loans with negative interest rates. Our study found no evidence of discrimination.
“Yet the political agenda triumphed - with the president of the Boston Fed saying no new studies were needed, and the US comptroller of the currency seconding the motion.
“No sooner had the ink dried on its discrimination study than the Boston Fed, clearly speaking for the entire Fed, produced a manual for mortgage lenders stating that: ‘discrimination may be observed when a lender's underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants.’
“Some of these ‘outdated’ criteria included the size of the mortgage payment relative to income, credit history, savings history and income verification. Instead, the Boston Fed ruled that participation in a credit-counseling program should be taken as evidence of an applicant's ability to manage debt.
“Sound crazy? You bet. Those ‘outdated’ standards existed to limit defaults. But bank regulators required the loosened underwriting standards, with approval by politicians and the chattering class. A 1995 strengthening of the Community Reinvestment Act required banks to find ways to provide mortgages to their poorer communities. It also let community activists intervene at yearly bank reviews, shaking the banks down for large pots of money.
“Banks that got poor reviews were punished; some saw their merger plans frustrated; others faced direct legal challenges by the Justice Department.
“Flexible lending programs expanded even though they had higher default rates than loans with traditional standards. On the Web, you can still find CRA loans available via ACORN with ‘100 percent financing . . . no credit scores . . . undocumented income . . . even if you don't report it on your tax returns.’ Credit counseling is required, of course.
“Ironically, an enthusiastic Fannie Mae Foundation report singled out one paragon of nondiscriminatory lending, which worked with community activists and followed ‘the most flexible underwriting criteria permitted.’ That lender's $1 billion commitment to low-income loans in 1992 had grown to $80 billion by 1999 and $600 billion by early 2003.
“Who was that virtuous lender? Why - Countrywide, the nation's largest mortgage lender, recently in the headlines as it hurtled toward bankruptcy.
“In an earlier newspaper story extolling the virtues of relaxed underwriting standards, Countrywide's chief executive bragged that, to approve minority applications that would otherwise be rejected ‘lenders have had to stretch the rules a bit.’ He's not bragging now.
“For years, rising house prices hid the default problems since quick refinances were possible. But now that house prices have stopped rising, we can clearly see the damage caused by relaxed lending standards.
“This damage was quite predictable: ‘After the warm and fuzzy glow of 'flexible underwriting standards' has worn off, we may discover that they are nothing more than standards that lead to bad loans . . . these policies will have done a disservice to their putative beneficiaries if . . . they are dispossessed from their homes.’ I wrote that, with Ted Day, in a 1998 academic article.
“Sadly, we were spitting into the wind.
“These days, everyone claims to favor strong lending standards. What about all those self-righteous newspapers, politicians and regulators who were intent on loosening lending standards?
“As you might expect, they are now self-righteously blaming those, such as Countrywide, who did what they were told.“
Wikipedia on the Community Reinvestment Act (CRA):
“The CRA was passed into law by the 95th United States Congress in 1977 as a result of national grassroots pressure for affordable housing, and despite considerable opposition from the mainstream banking community. Only one banker, Ron Grzywinski from ShoreBank in Chicago, testified in favor of the act The CRA mandates that each banking institution be evaluated to determine if it has met the credit needs of its entire community. That record is taken into account when the federal government considers an institution's application for deposit facilities, including mergers and acquisitions. The CRA is enforced by the financial regulators (FDIC, OCC, OTS, and FRB).
“The bill encouraged the Federal National Mortgage Association, commonly known as Fannie Mae, to enable mortgage companies, savings and loans, commercial banks, credit unions, and state and local housing finance agencies to lend to home buyers. It also encouraged the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, to buy mortgages on the secondary market and sell them as mortgage-backed securities on the open market. Due to massive financial losses, on September 7, 2008 the Federal Housing Finance Agency (FHFA) put Fannie Mae and Freddie Mac under the conservatorship of the FHFA.
“Clinton Administration Changes of 1995
“In 1995, as a result of interest from President Bill Clinton's administration, the implementing regulations for the CRA were strengthened by focusing the financial regulators' attention on institutions' performance in helping to meet community credit needs.
“These revisions with an effective starting date of January 31, 1995 were credited with substantially increasing the number and aggregate amount of loans to small businesses and to low- and moderate-income borrowers for home loans. These changes were very controversial and as a result, the regulators agreed to revisit the rule after it had been fully implemented for seven years. Thus in 2002, the regulators opened up the regulation for review and potential revision.“Part of the increase in home loans was due to increased efficiency and the genesis of lenders, like Countrywide, that do not mitigate loan risk with savings deposits as do traditional banks using the new subprime authorization. This is known as the secondary market for mortgage loans. The revisions allowed the securitization of CRA loans containing subprime mortgages. The first public securitization of CRA loans started in 1997 by Bear Stearns. The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.
“Other rule changes gave Fannie and Freddie extraordinary leverage, allowing them to hold just 2.5% of capital to back their investments, vs. 10% for banks. By 2007, Fannie and Freddie owned or guaranteed nearly half of the $12 trillion U.S. mortgage market.
“George W. Bush Administration Proposed Changes of 2003
“In 2003, the Bush Administration recommended what the NY Times called ‘the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.’ This change was to move governmental supervision of two of the primary agents guaranteeing subprime loans, Fannie Mae and Freddie Mac under a new agency created within the Department of the Treasury. However, it did not alter the implicit guarantee that Washington will bail the companies out if they run into financial difficulty; that perception enabled them to issue debt at significantly lower rates than their competitors. The changes were generally opposed along Party lines and eventually failed to happen. 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 ‘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.’
“Changes of September 2005
“Among banks and the regulatory agencies, there was a consensus that data collection, recordkeeping, and reporting requirements imposed a heavy burden on small community institutions. As a result of a 2002 review of the CRA regulations, and revision of an initial Federal Deposit Insurance Corporation (FDIC) proposal following a public commenting period that was largely negative, the FDIC, Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board (FRB), made substantive changes to the implementation of regulations for the CRA for banks (not thrifts).
“Previously, all institutions over $250 million in assets were subject to a three-part CRA test that covered lending (including community development loans), qualified investments, and services (including community development services) to their assessment areas. Institutions less than $250 million were subject only to a lending test.
“However, as of September 1, 2005, only those institutions with more than $1 billion in assets were subject to the three-part test. Institutions below $250 million remain subject to only a lending test, and a new CRA test was created for institutions with assets between $250 million and $1 billion. This latter category, referred to as Intermediate Small Banks, is subject to the same lending test to which institutions under $250 million were subject, along with a new combined community development test that covers community development loans, qualified investments, and community development services. The $250 million and $1 billion asset thresholds also were indexed to the consumer price index and could change annually. Thus, all institutions remain subject to the CRA test. These substantive changes were intended to be a compromise between changes advocated by banks and community groups.
“However, the changes were not received positively by all community groups. Changes to tests conducted on the Intermediate Small category were viewed by some as decreasing the institutions' obligations to meet lending requirements of low- and moderate-income households. Racial inequities in mortgage acceptance rates (as reported by Inner City Press, the National Community Reinvestment Coalition, ACORN and other groups) are cited as a primary reason to maintain or even increase the scope of the CRA."
Michael J. Gaynor has been practicing law in New York since 1973. A former partner at Fulton, Duncombe & Rowe and Gaynor & Bass, he is a solo practitioner admitted to practice in New York state and federal courts and an Association of the Bar of the City of New York member.
Gaynor graduated magna cum laude, with Honors in Social Science, from Hofstra University's New College, and received his J.D. degree from St. John's Law School, where he won the American Jurisprudence Award in Evidence and served as an editor of the Law Review and the St. Thomas More Institute for Legal Research. He wrote on the Pentagon Papers case for the Review and obscenity law for The Catholic Lawyer and edited the Law Review's commentary on significant developments in New York law.
The day after graduating, Gaynor joined the Fulton firm, where he focused on litigation and corporate law. In 1997 Gaynor and Emily Bass formed Gaynor & Bass and then conducted a general legal practice, emphasizing litigation, and represented corporations, individuals and a New York City labor union. Notably, Gaynor & Bass prevailed in the Second Circuit in a seminal copyright infringement case, Tasini v. New York Times, against newspaper and magazine publishers and Lexis-Nexis. The U.S. Supreme Court affirmed, 7 to 2, holding that the copyrights of freelance writers had been infringed when their work was put online without permission or compensation.
Gaynor currently contributes regularly to www.MichNews.com, www.RenewAmerica.com, www.WebCommentary.com, www.PostChronicle.com and www.therealitycheck.org and has contributed to many other websites. He has written extensively on political and religious issues, notably the Terry Schiavo case, the Duke "no rape" case, ACORN and canon law, and appeared as a guest on television and radio. He was acknowledged in Until Proven Innocent, by Stuart Taylor and KC Johnson, and Culture of Corruption, by Michelle Malkin. He appeared on "Your World With Cavuto" to promote an eBay boycott that he initiated and "The World Over With Raymond Arroyo" (EWTN) to discuss the legal implications of the Schiavo case. On October 22, 2008, Gaynor was the first to report that The New York Times had killed an Obama/ACORN expose on which a Times reporter had been working with ACORN whistleblower Anita MonCrief.