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Breaking News
ACORN's Food Stamp Mortgages
With wanton disregard for the economic well being of America, a decade ago the social justice entrepreneurs of the ultra-leftist Association of Community Organizations for Reform Now (ACORN) let Americans know their strategy for bringing equality of result to the housing market -- at all costs.
In a circa 1999 document, "To Each Their Home: Success Stories from the ACORN Housing Corporation," the ACORN affiliate called the American Dream a sham and bragged about undermining banks' underwriting standards.
The brochure acknowledged there may be scattered "stories of hope and success" in ACORN-targeted communities, but "they also belie the supposition that if you simply work hard, sacrifice and save, you can easily buy a home of your own." (The document is available here.)
ACORN Housing took credit for developing "several innovative
strategies" to get around pesky traditional lending guidelines,
which were unfair because they "were geared to middle class
borrowers."
Instead of using passé measures of creditworthiness such as, say, credit history and having an adequate income, ACORN convinced lenders to adopt "more flexible underwriting criteria that take into account the realities of lower income communities." Henceforth, some banks serving inner cities would accept "less traditional income sources such as food stamps." (See Foundation Watch, November 2008.)
It's unclear why ACORN stopped there. Perhaps the rent-a-mob group, renowned for occupying banks, disrupting legislative hearings and emergency medical facilities, surrounding the homes of politicians and CEOs, and annoying trapped motorists into paying tribute as part of its "toll roads" program, could have convinced narrow-minded bankers to accept another financial innovation. How about accepting "Monopoly" money for down payments?
Financial tomfoolery like including food stamps on loan applications was encouraged by the Carter-era Community Reinvestment Act (CRA), which opened banking to ACORN-style agitation that over time weakened underwriting criteria and helped to alter the culture of financial institutions in the U.S. This 1977 law, whose enactment ACORN lobbied for, punishes lenders for limiting loans to wealthier, more creditworthy markets, a practice called "redlining." It gives banking regulators discretionary authority to make trouble for banks that fail to lend enough money to "underserved" minority communities.
After the CRA went into effect, Saul Alinsky-inspired groups such as ACORN and the Greenlining Institute used the law to get into the shakedown business. Rev. Jesse Jackson egged them on at an ACORN "banking summit" in 1992, asking rhetorically, "Why did Jesse James rob banks? Because that's where the money was."
The shaking down of lenders intensified when then-Treasury Secretary Robert Rubin presided over the Clinton administration's effort to put the CRA on steroids. Banks began to make risky subprime loans and Fannie Mae and Freddie Mac aggregated them for sale in the secondary market as mortgage-backed securities. These practices made it easier for banks to give in to ACORN's demands to originate more and more doomed mortgages because they knew they could offload their high-risk debt on quasi-governmental suckers Fannie and Freddie, which were under intense political pressure to service the subprime market.
Economists like Stanley Liebowitz of the University of Texas blame the CRA for helping to cause Wall Street's current problems. He writes that the current mortgage market debacle 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." Liebowitz is hardly alone in pointing out that U.S. financial markets are now being strangled by a terrible credit crunch that might have been avoided if lenders had refrained from doling out loans they ought to have known were doomed to default.
Of course, even now as the economic fallout from the collapse of the housing market spreads, getting class-warriors to admit they're wrong about anything is an exercise in futility. Liberals, who reflexively defend ACORN, have twisted themselves into rhetorical pretzels in recent weeks while defending the catastrophic economic egalitarianism of the CRA.
An ardent proponent of the CRA, ACORN benefactor, organizer, and trainer Barack H. Obama, Esq., contributed to the increasingly hostile environment for banks when he represented the plaintiffs in the 1995 class action lawsuit Buycks-Roberson v. Citibank. The suit demanded that the bank grant mortgages to an equal percentage of minority and non-minority mortgage applicants. The bank settled the case three years later and reportedly agreed to beef up its lending to unqualified applicants.
ACORN refuses to acknowledge the role that it and the CRA played in the current crisis on Wall Street, and as recently as Jan. 21 Obama said in a candidates' debate that the CRA should be more strictly enforced.
Michael Ettlinger of John Podesta's Center for American Progress feverishly derides CRA critics as "antigovernment ideologues," while Business Week's Aaron Pressman calls them "know-nothings." Not to be outdone, ACORN ally House Financial Services Committee chairman Barney Frank (D-Mass.) says criticism of the law is tantamount to attacking poor people and minorities. Cynthia Tucker of the Atlanta Journal-Constitution concurs, arguing that pointing out the flaws of the CRA constitutes "playing the race card."
ACORN's overall strategy has a name. It's called the "Cloward-Piven Strategy" of manufactured crisis (named after two anti-capitalist sociologists) and it calls for packing the welfare rolls to encourage dependency on the government and to overload it with financial demands in order to hasten the collapse of American capitalism.
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Rocco| 10.30.08 @ 6:43AM
One of the major reasons for our current state of affairs is the abject cowardice of the corporate CEO's responsible for the virtual abolition of underwriting standards and their childish fear of being called names (racist, etc.) These communists should have been smacked down to nip this in the bud. They weren't, and we are well on our way towards becoming a North American banana republic for this and a myriad of other reasons.
Drudge Ette Obama (a blog)| 10.30.08 @ 7:44AM
ACORN. WHAT NUTS!
Anyway, the best defense is a vigorous defense; hence, Atlanta Journal Constitution's Cynthia Tucker's quick (and standard) response that the race card is played when anyone criticizes the CRA.
We are all too familiar with the irrationality of Cynthia Tucker here in Georgia. Recently, we read that Atlanta's only main rag suffers critical declines in circulation - understandable if you've ever read it. (It's a 5 minute read compared to the Wall Street Journal's 1 hour read.)
This article has spurred me to read up more on these anticapitalist sociologists. For years I have heard the Halliburton/DeLay/Rover/Reagan-haters deride capitalism. In college in the 1970s, it was a theme that seemed everywhere - why? It seemed to make no sense to me because we were the companies, the people who worked there and earned money. I disregarded those ideas then. But now, those college kids are in the power range. We are seeing the fruits planted years ago now in full bloom.
I actually know a 40-something, former community organizer, who hates capitalism, Rove (a criminal who should be in jail),Bush, Halliburton. He wants national healthcare and believes that it is Republican suppression of the vote to require a photo id. He is not unique in his beliefs, but I don't think he is the norm, either.
Finally, following the money is the interesting path to find golden tidbits of influence. For example, William Metterperl of PNC, which has received bailout funds and has been the subject of the Denver Post's debate re bailout funds being used for bonuses, has given thousands of dollars this year to Obama and other DNCers. There's the quid pro quo.
Do we really believe that if Obama gets into power that the Pelosi/Reid Congress will investigate CRA/Fannie Mae/Freddie Mac abuses?
Fannie and Freddie (and members of lawfirms who get on the "preferred lists" country-wide that give them sole right to represent Fannie Mae and Freddie Mac lenders in bankruptcy and foreclosure work, like PNC) have contributed thousands to democratic party members on the banking committees which oversee housing/CRA/Freddie/Fannie. It's all interelated and incestuous. There will be no real investigation and money will go to the same players as before.
It's almost too much for one person to bear.
Ghastlyone| 10.30.08 @ 10:10AM
Food Stamps as a source of income?! Wow...just....wow.
What I would give, to find out the percentage of all these home foreclosures that are from blacks and illegal mexicans. Or maybe the percentage of these sub-prime mortgages that were handed out, are registered democrats??
More than likely we won't catch these statistics anytime soon on the 6 o'clock news from Wolf Blitzer.
Could you imagine if Bush back in 03', came out in a news conference talking about we need stop handing out crappy sub-prime loans to blacks, mexicans, etc.? There would have been a non-stop drum beat from the liberals about racism and bigotry. So I guess republicans were damned if they did and are damned because they didn't.
Ghastlyone| 10.30.08 @ 11:08AM
Obama Rules:
So securing the Texas border is a state issue not federal?? Hmmm...I never knew that.
You remember that awesome leftists governor from California.....what was his name....hmm....oh yeah Gray Davis? Remember him signing into law issuing photo ID licences to illegal mexicans right before he was thrown out of office. Remember that? Of course not, you were too busy wondering if Bush was still on vacation in Crawford.
You're an absolute moron if you don't think Illegals weren't able to get in on these sub-prime mortgages also (that was the whole point of the banks handing them out you ass-hat!, and why were in this situation!!) We're finding out now that some of these "home owners" weren't even checked at all, ex. pay stubs, ss numbers, etc.
As long as the "home owner" had a pulse and could write his name, he got a loan.
Marc Jeric| 10.30.08 @ 11:16AM
We used to have communists; when that name became associated with mass murder and total poverty, our communists renamed themselves as socialists; and when that name became associated with unemployment and falling standards of living, our socialists renamed themselves as liberals. When their messiah loses on November 4, prepare for widespread riots, looting, and burning of inner cities, while liberal mayors restrain the police from "overreacting".
Marc Jeric, Las Vegas
Ghastlyone| 10.30.08 @ 11:24AM
Marc,
haha I'm in LV also. If there are riots, I hope for their sake they come into my area heavily armed.
Mortgages| 10.30.08 @ 1:14PM
This was an interesting and informative article. Thanks!
Theresa| 10.30.08 @ 4:34PM
Hey Ghastly one...don't feed into the immaturity of the Obama Rules fella'. That guy is as dumb as a stump. Of course anyone can get a fake SS, ID and anything else they want. Why do you think there are millions of illegals here now.
Anyway, it's not worth the air he breaths. The points you make is exactly how this whole thing panned out and guess what? When we wake up on 11/5 and the newsies are saying "What happened but we're sure we got away with getting out messiah" We on the right will be saying - remember the silent majority it still exists in this country - so does the values voters.
If that isn't the news headlines than one thing for sure from this Sara Palin supporter I will never support any wars that Obama brings our country into. I was dumb enough to support Clinton with the thought of "Well he's the commander and chief so he knows better" not this time around - this time everyone will hear my yells of how much of a terrorist Obama really is if he ever uses our military in any situation - that's a promise.
I am sick of the last 8 years of whining and cry babying about Bush this and Bush that. God not matter what happens in life as far as the left is concerned it's always Bush's fault. Well so be it - I can be whiny too.
But all that won't be the case because JOhn McCain will be our next Commander and Chief
rickyb| 10.31.08 @ 2:42PM
I have to weigh in on this one. I have to assume I have been part of the silent Majority and a values based voter so it would come as no surprise to anyone interested, that I am a conservative white male over 50, with a successful third career in progress because I have worked since I was about 8 years old with my Dad selling newspapers in So Cal. I have had zero problems getting four house loans over the years and have to say, after reading about what the CRA and ACORN have done to our country - I am ashamed of their behavior. People can twist this into a race issue, the poor not being taken care of fairly or whatever, but the bottom line to me is that the liberal far left is trying to bring their so called vision of equality to the masses via deceit, and theft. Ultimately having Obama as President to continue the "spreading the wealth" idea. If that is not a part of socialism, I don't know what is - and I don't want it.
For Obama rules - I am sure you know there is only one savior - and it is not your Barack Obama.