Hey Otter

[Bottomfeeder 244]

Predatory Lenders' Partner in Crime

How the Bush Administration Stopped the States From Stepping In to Help Consumers

By Eliot Spitzer

Thursday, February 14, 2008; Page A25

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

The writer is governor of New York.

http://www.washingtonpost.com/wp-dyn/conte...8021302783.html

Hmmm. Do you think this article help put him in the cross hairs?

[pensacola tiger 0]

You didn't ask me and I'm not really answering your question anyway. I want to pose a question of my own. WHile I think that the lending institutions used some underhanded methods to sell people loans that they ultimately can't afford I wonder why the lack of personal responsibility and fiscal good sense has been ignored in all of the ranting and nail biting concerning this "crisis". I bought a house during this time. I was approved for a loan amount that was well over what I could have afforded in payments. Consequently I looked for houses with prices I could afford and ignored what I was told I qualified for. THat just made sense to me. And had I agreed to a much larger loan with increasingly large payments and I now could not afford to make the payments I would not think it was the banks fault or that the governement should bail me out. I'd know I had done a stupid thing. So where are the nightly news people, the newspaper writers, the columints and even just the general public? Why is no one saying hey, I hate it that you can't afford the house you bought that you couldn't afford but why should I have to help you keep it? I mean I guess I know something has to be done in order to help the economy, but isn't anyone else just a little ticked that these people seem to think they have been taken advantage of by the big bad bank and now feel entitled to help that they wouldn't have needed if they had just not been greedy and irresponsible to begin with? Again, I know this is not really related to your post but I've wanted to say that for a long time and this seemed like a good place to do it. Thanks for the opening.

[CCTAU 3,346]

Great dim selling point, "Da gubmint allowed me to do it. So it's the gubmint's fault."

Pcola, this is great for the dims. They can blame it on a republican president and promise to save all of those poor unfortunate souls that were duped by dubya and those mean ole loan companies.

The reality is that most of these folks are not responsible like you. They want theirs and they want it now. I mean they could die tomorrow. Why worry about the future? That's what the dims will take care of.

Personal responsibility and the dims have never gone together. And the media is as left wing as it gets. Therefore, you will not here a word about how these folks made bad decisions. Just that it's dubya's fault.

[autiger4life 3]

First, my liberal disclaimer:

I believe that a lot of these people should be helded responsible for taking loans that they should have known they couldn't afford. Many of these loans were obviously too high and they should have known that.

However, I have heard many reports that the lenders had fine print that raised the rate beyond what the person could afford, things that normally don't raise the rate. For instance, if you send extra money in, you rate increases, if you were barely late, your rate increased, etc. Now again, these people should have read and understood the fine print. But just like the people should be held accountable, IF the lending companies were unethical they should also be held accountable.

[pensacola tiger 0]

First, my liberal disclaimer:

I believe that a lot of these people should be helded responsible for taking loans that they should have known they couldn't afford. Many of these loans were obviously too high and they should have known that.

However, I have heard many reports that the lenders had fine print that raised the rate beyond what the person could afford, things that normally don't raise the rate. For instance, if you send extra money in, you rate increases, if you were barely late, your rate increased, etc. Now again, these people should have read and understood the fine print. But just like the people should be held accountable, IF the lending companies were unethical they should also be held accountable.

IF they were unethical they should be held responsible, yes. However, I still don't believe that the people who accepted these terms should be bailed out just because they were duped. That's what legal recourse is for. Let them sue the lenders if they were unethical. I also don't have a problem with individuals (or groups) bargaining for lower interest rates. THat seems like what they should do if the interest rate increase is the problem. But if they bought houses that they couldn't afford and it has come back to haunt them well too bad. No one is volunteering to pay bills that I can't afford. Next thing you know someone will want to sunsidize the gasoline bills for the owners of gas hogging SUVs. Personal responsibility for anything has just about gone the way of the dinosaur.

[autiger4life 3]

I never said who should hold the unethical companies responsible. I simply said if unethical conduct did take place they should be held responsible whether it be through civil suits, government punishments, or something else. I also think the people should be held responsible, but a lot of them were duped and though they should have been more careful, some are more trusting when they should learn not to trust anyone, terrible lesson that we have to teach.

[CCTAU 3,346]

And right on queue:

Clinton calls for $30 billion housing fund

Thu Mar 20, 2008 6:16pm EDT

ANDERSON, Indiana (Reuters) - Democratic presidential hopeful Hillary Clinton called on Thursday for a second stimulus package, including a $30 billion emergency housing fund, to help boost the ailing U.S. economy.

Stating that "the housing and credit crisis is the biggest threat to the health of our economy," the New York senator said the emergency fund would help states buy foreclosed properties and provide mortgage restructuring.

Her proposal also included expanding the Mortgage Revenue Bond Program by giving state housing agencies up to $10 billion to refinance "unworkable mortgages," the Clinton campaign said in a statement.

The campaign said the newly enacted $168 billion stimulus package passed by the U.S. Congress and signed by President George W. Bush did not do enough to address the housing problem.

"Declining home values and record foreclosures threaten to not only devastate millions of American families but send communities across the country spiraling into deep recession."

The $30 billion emergency housing fund would put cash in the hands of local governments and nonprofit organizations to buy and resell properties to low-income people or turn them into affordable rental housing units.

The fund would also offer financial support to state programs aimed at educating and supporting people at risk of losing their homes.

The U.S. Senate this month approved a budget plan that includes about $35 billion for another round of economic stimulus if the first package fails to adequately invigorate the U.S. economy.

The House of Representatives-approved budget does not have such a provision and the two chambers must work out their differences.

(Reporting by Jeff Mason, additional reporting by Rick Cowan; Editing by Peter Cooney)

Link

[Auburn85 432]

"Declining home values and record foreclosures threaten to not only devastate millions of American families but send communities across the country spiraling into deep recession."

more of those bush economic policies

and while they're at it, why not help pay for the mortgages of people who are being responsible and paying their mortgages?

there you have it folks, incentives to be irresponsible.

One extreme to the other; went from everyone getting their hands on a loan, including the mcdonald's employee to now, someone with good credit is having a hard time getting a loan unless they put down 25-30% down.

[Bottomfeeder 244]

Personally, I hate the banking system. And, I would never, ever have mortgage. I don't like paying taxes and I hate giving my money to banks. I am a Libertarian and hate socialism of any kind whether corporate, public or private. $30 billion given to a bank to buy Bare Stearns, WTF is that? Corporate socialism is what it is and we cannot afford these give aways to banks or individuals. I say let the chips falls where they may. and those knocked down can pick themselves back up with a bit more wisdom and start over. Banks and lending institutions included.