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06 Nov 08 Obama Can Clean up the Mortgage Mess and ACORN

The financial markets were teetering on the edge of an abyss last week. The secretary of the Treasury was literally on his knees begging the speaker of the House not to sabotage the bailout bill. The crash of falling banks and mortgage lenders made the earth tremble.  McCain once suspended his campaign to deal with the financial and foreclosure crisis.  Foreclosure rates continued to increase dramatically in the fall of 2008.  Obama has said many times that foreclosure prevention and loan work-outs for distressed homeowners. 

ACORN stands for the Association of Community Organizations for Reform Now, a busy hive of left-wing agitation and “direct action” that claims chapters in 50 cities and 100,000 dues-paying members. ACORN is where Sixties leftovers who couldn’t get tenure at universities wound up. That the bill-writing Democrats remembered their pet clients during such an emergency speaks volumes. This attempted gift to ACORN (stripped out of the bill after outraged howls from Republicans) demonstrates how little Democrats understand about what caused the mess we’re in.

  ACORN does many things under the umbrella of “community organizing.” They agitate for higher minimum wages, attempt to thwart school reform, try to unionize welfare workers (that is, those welfare recipients who are obliged to work in exchange for benefits) and organize voter registration efforts (always for Democrats, of course). Because they are on the side of righteousness and justice, they aren’t especially fastidious about their methods. In 2006, for example, ACORN registered 1,800 new voters in Washington. The only trouble was, with the exception of six, all of the names submitted were fake. The secretary of state called it the “worst case of election fraud in our state’s history.” As Fox News reported:

ACORN explained that this was an “isolated” incident, yet similar stories have been reported in Missouri, Michigan, Ohio, and Colorado — all swing states, by the way. ACORN members have been prosecuted for voter fraud in a number of states. Their philosophy seems to be that everyone deserves the right to vote, whether legal or illegal, living or dead.

ACORN recognized very early the opportunity presented by the Community Reinvestment Act (CRA) of 1977. As Stanley Kurtz has reported, ACORN proudly touted “affirmative action” lending and pressured banks to make subprime loans. Madeline Talbott, a Chicago ACORN leader, boasted of “dragging banks kicking and screaming” into dubious loans. And, as Sol Stern reported in City Journal, ACORN also found a remunerative niche as an “advisor” to banks seeking regulatory approval. “Thus we have J.P. Morgan & Co., the legatee of the man who once symbolized for many all that was supposedly evil about American capitalism, suddenly donating hundreds of thousands of dollars to ACORN.” Is this a great country or what? As conservative community activist Robert Woodson put it, “The same corporations that pay ransom to Jesse Jackson and Al Sharpton pay ransom to ACORN.”  Article written by Mona Charen



01 Nov 08 Presidential Candidates Want FHA to Play Role in Mortgage Restructuring

On Capitol Hill and along the campaign trail, Democrats and Republicans have traded blame for the troubles at Fannie Mae and Freddie Mac. For a decade, Fed officials and two presidential administrations have exerted pressure to overhaul the mortgage loan giants.  Republican presidential candidate Sen. John McCain supports breaking up Fannie and Freddie, selling them off and cutting their government ties. Democratic candidate Sen. Barack Obama opposes a total privatization, supporting some degree of public involvement in the firms. 

Both candidates believe that FHA home loans should play a significant role in foreclosure prevention.  It will be interesting to see how involved the new president will be in reshaping the home financing sector that needs a serious overhaul immediately.


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30 Oct 08 No More Home Loans Without Down Payment

Former treasury secretary, Paul O’Neill says Congress should scrap plans for a new economic stimulus package and instead require that no future home mortgage loan be awarded without a twenty percent down payment.  Paul O’Neill said Tuesday it doesn’t surprise him that neither presidential candidate has endorsed his position, but he insisted it is the best way to quickly improve the nation’s economic footing.

“Unfortunately we’ve gotten to a point where people that want to run for president don’t think they can tell the truth and still get elected,” O’Neill told reporters before speaking at a conference. “I’m hopeful whichever person gets elected, they’ll be better than what they’ve said. An awful lot of presidential campaigns now are pandering to the lowest common denominator. They promise people everything.”  O’Neill said he is disappointed that the political response from both parties includes wide support for another economic stimulus package rather than curbing additional bad mortgages.

O’Neill, who hasn’t endorsed a candidate in the race and says he wouldn’t be interested in serving in either administration, made a personal pitch last month to Democratic nominee Barack Obama concerning his idea to mandate down payments. He declined to characterize Obama’s response.  O’Neill, a former CEO of aluminum giant Alcoa Inc., served as treasury secretary for the first two years of Bush’s presidency, including leading the financial response to the Sept. 11, 2001, terrorist attacks.

While he praised aspects of the recent $700 billion financial bailout, which he says has allowed world markets to take a “deep breath,” O’Neill said there should have been government action to combat predatory mortgage loans far earlier. In 2006, he said, “Thirty percent of mortgage loans had no down payment and a large number of those 1st time home buyers defaulted on their first payment.”That was a strong enough signal we should have shut down this flagrant abuse of the principles of home finance,” O’Neill said. “It was bound to crater. It was absolutely bound to come down around our ears, which it has.”  If every home loan was backed by a twenty percent down-payment, O’Neill said, the financial system would be protected long-term, even if some individual investments or businesses failed. “If you can’t afford a home mortgage, we shouldn’t give you one,” he said.

Read Complete Mortgage Article written by JEFFREY McMURRAY


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