Unlike 2006 and 2007, this is an economy that clearly would not be able to sustain another crisis. That is unfortunate since there appears to be another manufactured crisis on the rise. You might think the Obama administration would have learned that predatory lending, which is disguised as a “moral imperative,” was not a smart or proper role for the government. But alas, you can’t teach an old government new tricks.
The issuing of subprime mortgages, which is helping to keep us in this economic malaise, is apparently still good business to the people at the FHA. And business is booming! The Federal Housing Administration, over a 37 year period, has managed to smash the dreams of 3.2 million homeowners. Or, at least they were homeowners until they became a statistic in the 1 in 7 foreclosure rate the FHA can proudly boast.
Edward Pinto, from the American Enterprise Institute, characterized the FHA as “a tale of two cities.” Currently, over 40 percent of the FHA’s book of business is subprime lending. They are using the good loans they have on the books, which is less than 60 percent, to subsidize the failing subprime mortgages. Of course, it is not working. Aside from the Obama administration’s economic ignorance and reckless redistributionist policies, there are powerful special interest groups who vociferously oppose reforming the FHA.
For instance, NAR, or National Association of Realtors, says they “oppose any changes to FHA that will cause disruptions to the housing sector.” Naturally, they mean any change that will cause a disruption in the flow of dollars to their bank accounts. Yet, true to the liberal doctrine, they actually run ads like FHA Facts pretending as if they care about minorities and “responsible” first-time homebuyers. Thank god for liberalism. What would the poor minority communities do without them? Look at how well they are doing.
In a Pew Research Center study, they found that:
The median wealth of white households is 20 times that of black households and 18 times that of Hispanic households, according to a Pew Research Center analysis of newly available government data from 2009. These lopsided wealth ratios are the largest since the government began publishing such data a quarter century ago and roughly twice the size of the ratios that had prevailed between these three groups for the two decades prior to the Great Recession that ended in 2009.
Wait… What? And what pray tell is the cause of this first order human tragedy:
The Pew Research analysis finds that, in percentage terms, the bursting of the housing market bubble in 2006 and the recession that followed from late 2007 to mid-2009 took a far greater toll on the wealth of minorities than whites. From 2005 to 2009, inflation- adjusted median wealth fell by 66% among Hispanic households and 53% among black households, compared with just 16% among white households.
The recent study from the The National Bureau of Economic Research correctly identifies the lending practices outlined in the Community Reinvestment Act (CRA) by HUD, Fannie Mae, Freddie Mac, and FHA caused the financial collapse. IBD analysis of the recent study stated, “the federal government caused the problem and continues to distort the market by encouraging those who can’t afford homes to buy them and forcing banks to make loans that aren’t sound to low-income borrowers.”
Republicans would do well to start communicating to minorities that liberals are preying on them. Since Republican candidates and office holders alike, are obviously incapable of “down to earth” speak, allow me to demonstrate. Members of the African American and Latino communities, may I please have your attention?
Liberals could care less about you, your American dream, whether or not you can afford a home, feed your family, or if you have a job. They are preying on you and will make sure they make money whether you are homeless or not. They are corrupt and have been bought by other rich people, like the NAR, whom they will eat steak dinners with while they laugh at your expense. Literally!
Sitting next to them are your so-called “community leaders” such as race-baiter Rev. Sharpton, adulterer Rev. Jackson (his son is sorry he couldn’t make it but, he is prepping for his trip to prison for stealing your communities money), Los Angeles Mayor Villaraigosa (he is treating tonight with the extra money he stole from the L.A. road construction fund), and so on.
Liberalism personally offends me, and it would offend minority communities as well if we did our job. If you want power, then have the courage to say so instead of pretending you care about the human misery you purposefully cause.
Conservatives needs to get off their perches, and educate our fellow Americans in these communities. Even if we have to do so one-by-one. Considering how easy it is to win an argument when the truth is on your side, speaks volumes about the modern Republican image. Introspection anyone?
Related articles
- Barack Obama’s ‘Fairness’ Economy Has Backfired (humanevents.com)
markecaddo / March 6, 2013
Your simplistic view of the housing crisis shows you know nothing about what actually happened and haven’t even made the effort to do anything but put forward some partisan BS.
For example, unemployment has been highest among African American and Hispanic workers. Do you think that had anything to do with why they lost their houses? Do you think the majority of them could afford those houses before they lost their job?
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richardbaris / March 6, 2013
Wow. For starters, the National Bureau on Economic Research, and Pew Research Center are hardly partisan studies. IBD, which you might legitimately claim as partisan, merely commented on their study. Secondly, I worked in the financial services sector when the housing crisis happened, so I might be more informed than you think. I don’t know if you understand how the mortgages were structured, but the adjustable rate mortgages increased the amount of monthly mortgages payments. People with subprime credit scores received the majority of subprime mortgages. Those mortgages by law, were forced by the government into the market through the Community Reinvestment Act. All the security firms did was bundle them into “in-house” package products to try and make up the losses they were forced to incur. Sure if Glass-Steagal wasn’t deregulated, then they wouldn’t have been allowed to do that. But Bill Clinton deregulated Glass-Steagal, as well as signed the extension of the CRA. Even if they didn’t package the securities, the market would still have had a liquidity crisis. That still would have raised interest rates, which would have increased the monthly mortgage payments anyway. It wasn’t like Wall Street investment houses sent financial advisors out into lower-income neighborhoods to prey on people who couldn’t make the payments. If you buy that narrative, then your drinking the liberal Kool-Aid. They like making money not losing money. However, that is exactly what the NAR did and has found another avenue to continue to do so through the FHA that was largely ignored. Unlike banks and investment houses, realtors receive commission at the close of the sale regardless of whether or not the mortgage is paid. They are a lobby that disproportionately supports the Democratic party. Secondly, African Americans and Hispanics are on the receiving end of increasing unemployment for a variety of factors. As far as the financial crisis contributed, the bottom falling out of the housing market destroyed manufacturing and construction sectors, of which, employed minorities more than professional services that require a higher degree of education. A liquidity freeze will do that. When there is no capital, there will be no building. Prior to the crisis, the housing bubble provided many employment opportunities for lower educated citizens. Speaking of which, another group that supports liberal politicians, the unions, care more about the stranglehold they have on public education than they do opportunities for minorities to escape downtrodden school systems. For example, New Orleans after Katrina, did not allow the public school system monopoly to return during the rebuilding of the community. Instead, they provided contracts to charter schools willing to take on inner city children. African Americans families wouldn’t return to the public school system that existed before if you paid them. And here you will find the nonpartisan study, which compares results of standardized tests, that will educate you on why African Americans in New Orleans Parish prefer charter schools.
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markecaddo / March 7, 2013
First of all, I didn’t say either of those organizations are partisan. I said your interpretation was partisan.
You are actually drinking the Kool-aid by not recognizing the fact that in your own words:
“I don’t know if you understand how the mortgages were structured, but the adjustable rate mortgages increased the amount of monthly mortgages payments. People with subprime credit scores received the majority of subprime mortgages.”
You are a finance person, I am a Senior business student. We both are pretty well versed in the way these things work. Laymen tend to only understand that they have a chance to own a house (i.e. The American Dream) and are told that the Market isn’t likely to make their adjustable rate mortgage a 1000 dollars higher than it was before.)
Also, by your own words:
“…the bottom falling out of the housing market destroyed manufacturing and construction sectors, of which, employed minorities more than professional services that require a higher degree of education.”
Which meant they couldn’t pay their mortgages…even though a large majority could afford them (Even if at worst they were living paycheck to paycheck).
Finally, go after unions all you like but those states with the highest union coverage are also the majority of the top ten. Those states with the lowest union teachers are the majority of the lowest rated states. Now we can argue over correlation not proving causation but it is a bit ironic don’t you think? Especially, when you consider that you are advocating for Charter Schools that have been found to be teaching things like “Hippies worshipped rock bands and Satan” or the lockness monster proves Creationism.
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