Fred Martinez's Monitor

Obama/Acorn Sued Banks to make Subprime Loans

- Case Name Buycks-Roberson v. Citibank Fed. Sav. Bank Fair Housing/Lending/Insurance
Docket / Court 94 C 4094 ( N.D. Ill. ) FH-IL-0011
-FH-IL-0011-7500 | FH-IL-0011-9000 Obama, Barack H. (Illinois)

-OBAMA SAID IN 2007 THAT GIVING SUB-PRIME LOANS TO PEOPLE WHO COULDN’T AFFORD THEM WAS A GOOD IDEA

http://iusbvision.wordpress.com/2008/09/30/obama-sued-citibank-under-cra-to-force-it-to-make-bad-loans/

What caused our economic crisis?
The answer is Subprime risky mortgages to low income bad credit risk borrowers.
And where did these subprime risky mortgages come from?
[http://www.audacityofhypocrisy.com/2008/09/29/what-caused-our-economic-crisis/]

http://iusbvision.wordpress.com/2008/09/30/obama-sued-citibank-under-cra-to-force-it-to-make-bad-loans/

Obama Sued Citibank Under CRA to Force it to Make Bad Loans - UPDATED
September 30, 2008 — iusbvision
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UPDATE V: AUDIO - OBAMA SAID IN 2007 THAT GIVING SUB-PRIME LOANS TO PEOPLE WHO COULDN’T AFFORD THEM WAS A GOOD IDEA!!! Hotair.com comments HERE.


“I’ve been fighting alongside ACORN on issues you care about my entire career. Even before I was an elected official, when I ran Project Vote voter registration drive in Illinois, ACORN was smack dab in the middle of it, and we appreciate your work.” — Barack Obama, Speech to ACORN, November 2007

Do you remember how we told you that the Democrats and groups associated with them leaned on banks and even sued to get them to make bad loans by abusing the Community Reinvestment Act (see HERE and HERE)? The abuse of this act by ACORN and officials like Janet Reno was a factor in causing the economic crisis. The harasment suits filed under this act were used to get banks to lower credit standards and hand out high risk loans. Fellow bloggers have dug up the lawsuit below while researching Obama’s legal career. It is a typical example of an ACORN harassment lawsuit.

In these lawsuits, ACORN makes a bogus claim of Redlining (denying poor people loans because of their ethnic heritage). They protest and get the local media to raise a big stink. This stink means that the bank faces thousands of people closing their accounts and get local politicians to lobby to stop the bank from doing some future business, expansions and mergers. If the bank goes to court, they will win, but the damage is already done because who is going to launch a big campaign to get the bank’s reputation back?

It is important to understand the nature of these lawsuits and what their purpose is. ACORN filed tons of these lawsuits and ALL of them allege racism.

Case Name
Buycks-Roberson v. Citibank Fed. Sav. Bank Fair Housing/Lending/Insurance
Docket / Court 94 C 4094 ( N.D. Ill. ) FH-IL-0011
State/Territory Illinois
Case Summary
Plaintiffs filed their class action lawsuit on July 6, 1994, alleging that Citibank had engaged in redlining practices in the Chicago metropolitan area in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691; the Fair Housing Act, 42 U.S.C. 3601-3619; the Thirteenth Amendment to the U.S. Constitution; and 42 U.S.C. 1981, 1982. Plaintiffs alleged that the Defendant-bank rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories. Plaintiffs sought injunctive relief, actual damages, and punitive damages.

U.S. District Court Judge Ruben Castillo certified the Plaintiffs’ suit as a class action on June 30, 1995. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 322 (N.D. Ill. 1995). Also on June 30, Judge Castillo granted Plaintiffs’ motion to compel discovery of a sample of Defendant-bank’s loan application files. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 338 (N.D. Ill. 1995).

The parties voluntarily dismissed the case on May 12, 1998, pursuant to a settlement agreement.
Plaintiff’s Lawyers Alexis, Hilary I. (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Childers, Michael Allen (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Clayton, Fay (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Cummings, Jeffrey Irvine (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Love, Sara Norris (Virginia)
FH-IL-0011-9000
Miner, Judson Hirsch (Illinois)
FH-IL-0011-7500 | FH-IL-0011-9000
Obama, Barack H. (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Wickert, John Henry (Illinois)
FH-IL-0011-9000

UPDATE: Hotair.com comments on this story HERE.

New York Post Article HERE:

THE seeds of today’s financial meltdown lie in the Community Reinvestment Act - a law passed in 1977 and made riskier by unwise amendments and regulatory rulings in later decades.

CRA was meant to encourage banks to make loans to high-risk borrowers, often minorities living in unstable neighborhoods. That has provided an opening to radical groups like ACORN (the Association of Community Organizations for Reform Now) to abuse the law by forcing banks to make hundreds of millions of dollars in “subprime” loans to often uncreditworthy poor and minority customers.

Any bank that wants to expand or merge with another has to show it has complied with CRA - and approval can be held up by complaints filed by groups like ACORN.

In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America’s financial institutions.

The Woods Fund report makes it clear Obama was fully aware of the intimidation tactics used by ACORN’s Madeline Talbott in her pioneering efforts to force banks to suspend their usual credit standards. Yet he supported Talbott in every conceivable way. He trained her personal staff and other aspiring ACORN leaders, he consulted with her extensively, and he arranged a major boost in foundation funding for her efforts.

And, as the leader of another charity, the Chicago Annenberg Challenge, Obama channeled more funding Talbott’s way - ostensibly for education projects but surely supportive of ACORN’s overall efforts.

UPDATE II: Fox News gets on the story


UPDATE III: CNS News Analysis

Under the Clinton administration, federal regulators began using the act to combat “red-lining,” a practice by which banks loaned money to some communities but not to others, based on economic status. “No loan is exempt, no bank is immune,” warned then-Attorney General Janet Reno. “For those who thumb their nose at us, I promise vigorous enforcement.”

The Clinton-Reno threat of “vigorous enforcement” pushed banks to make the now infamous loans that many blame for the current meltdown, Richman said. “Banks, in order to not get in trouble with the regulators, had to make loans to people who shouldn’t have been getting mortgage loans.”

This threat combined with the government backing of Fannie and Freddie set the stage for the current uncertainty, because the “banks could just sell the loans off to Fannie or Freddie,” who could buy them with little regard for negative financial outcomes, Richman said.

http://www.cnsnews.com/public/content/article.aspx?RsrcID=36048



http://www.audacityofhypocrisy.com/2008/09/29/what-caused-our-economic-crisis/

What caused our economic crisis?

Posted by adminSeptember 29, 2008The housing bubble caused it. And what caused the housing bubble?

The answer is Subprime risky mortgages to low income bad credit risk borrowers.

And where did these subprime risky mortgages come from?

It was the Community Reinvestment Act passed by the Democrats and signed into law by President Carter in 1977. <—(Google it)

It required banks and thrifts to offer credit throughout their entire market area. It gave incentives to help low-income borrowers get a home.

Not a bad idea if done right.

The CRA helped a little, but only a little until 1995, when the Clinton Administration gave new subprime authorization to lenders with massive additional provisions in the CRA. Home loans skyrocketed.

Part of the increase in home loans was due to lenders, like Countrywide, which did not mitigate loan risk…using the new subprime authorization the revisions allowed the securitization of CRA loans containing subprime mortgages which forced banks to issue $1 trillion in new subprime loans and created subprime mortgage securities.

Bear Stearns was the first to do it.

Fannie Mae added fuel to the fire when on Oct. 30, 2000, it announced plans to purchase $2 billion of “My Community Mortgage” loans.

Soon subprime mortgages started to grow and home prices started to rise.

A little background on Fannie Mae…It is a government sponsored enterprise that guarantees mortgages, then sells them to banks and investors…the more mortgages…the more money Fannie Mae makes.

The way Fannie May increased the mortgages was to move down the income ladder, and as it tried to increase its business, it gave risks short shrift with “affordable mortgages.”

The banks were required by the CRA to issue sub-prime mortgages or pay big penalties.

Now, how were these sub-prime mortgages kept “affordable”?

Answer:NO money down, interest only, low variable rates, no income verification, no attention was paid to credit or bad credit risks.

In 2004, 92% of Fannie Mae’s subprime mortgages were of the variable rate variety; and in 2005, 91% were variable rate.

Fannie told the banks..go ahead , make the loans..we will guarantee them.

Home ownership kept rising, as did the prices of homes.

All was well, as long as interest rates did not rise and home prices did not fall.

Uh, oh! a big problem developed:

Interest rates rose–banks raised the variable rate.

Gas prices shot up

Paychecks got squeezed, especially low-income paychecks.

Some borrowers stopped paying, so banks stopped lending.

The subprime market was collapsing.

Foreclosures started piling up.

Buyers were in short supply, so sellers had to lowere home prices.

More borrowers stopped paying.

Fannie mae “guarantees” became worthless because they kept overstating their assets.

Banks collapsed due to worthless government sponsored securities issued by Fannie Mae.

Jobs disappeared and here we are today in this financial crisis.

You may ask, why is the expansion of the Community Reinvestment Act (CRA) to blame?

Well, before the CRA expansion authorization under President Clinton and the Democrats, home prices increased with inflation, but after the CRA expansion authorization, home prices became unhinged from inflation.

The CRA caused home prices to rise too fast as economicfundamentals did not support the “wedge” or spread between the Consumer Price Index (CPI) and the price of homes. What supported the high home prices was regulation motivated credit.

The housing bubble was bursting…

Did it have to happen?

NO!

Someone tried to stop it…

Guess who?

It was President Bush…who Nancy Pelosi says is to blame for the economic mess.

Well, in 2003, the Bush Administration proposed a new agency to oversee and regulate Freddie Mac and Fanie Mae, (the government sponsored companies that are the two largest players in the mortgage lending industry) This would have been the most significant regulatory overhaul in the housing finance industry since the S and L crisis a decade ago.

The Democrats stopped it…supporters of Freddie Mac and Fannie Mae said efforts to regulate the lenders tightly under the proposed agency might diminish their ability to finance loans for lower-income families.

Barney Frank (D-MA)

“The more people exaggerate these problems, the more pressure there is on these companies (Freddie and Fannie), the less we will see in terms of “affordable housing.”

Melvin Watt (D-NC)

“…and in the process weakening the bargaining power of poorer families and their ability to get “affordable housing.”

Someone else tried to stop the economic time-bomb before it went off…

Guess who?

Barack Obama? NO

John McCain? YES



In 2005, John McCain warned of the pending mortgage collapse. He co-sponsored a bill…The Housing Enterprise Regulatory Act of 2005.

(Google it at www.govtrack.usBillS-190)

The bill would have regulated Fannie May and Freddie Mac, but again the Democrats blocked it and it never became law.

It came back in 2007…but again, bo luck because Fannie Mae had friends in the Senate…

Chris Dodd (D-CT) Sweetheart loan recipient

Guess who else——-> also covered Fannie’s ass?

You guessed it…Barack Obama

and guess who Obama chose to select his VP?

It was James A. “Jim” Johnson who had also received a sweetheart loan from Countrywide Mortgage.

1985-1990, He was the managing director of the now bankrupt Lehman Brothers.

1991-1998, He was CEO of Fannie Mae when CRA was expanded.

Johnson is now a wealthy private banker and on the Board of Goldman Sachs which gave $700,000 to Barach Obama and raised another $500,000 through “Bundling.”

Barach Obama gets advice on housing issues from Franklin Raines, who lives in a 7.6 million house.

Background on Raines:

1977-1979 In the Carter Administration when CRA was first enacted.

1980-1996 Vice-Chairman Fannie Mae when CRA was expanded

1996-1998 Clinton Administration OMB Director

1999-2004 CEO Fannie Mae

Raines recieved a $25 million golden parachute from Fannie Mae

He also got sweetheart loans from Countrywide:

Amount Date Interest Rate Fixed Market Ave.

$982,253 4/29/2003 5.125% 10 yr 5.5%

$986,340 7/31/2003 4.125% 10 yr 5.1%

By the way, he resigned from Fannie Mae due to what were called “accounting irregularities.”

Do you know who got more money from Fannie mae than anyone?

Christopher Dodd D-CT $165,400

Barach Obama D-IL $126,349

John Kerry D-MA $111,000

In just 3 years, Barach Obama collected more than John Kerry did in 20 years. In fact, Obama has received FOUR TIMES more money from Fannie Mae per year than any other Senator over the last 20 years.

Obama received FORTY NINE times more money from Fannie Mae than did John McCain.

I guess you could say calling for the regulation of Fannie Mae doesn’t pay.

Did you know that Barach Obama worked for a lawfirm Miner, Barnhill and Galland that sued banks for not issuing enough subprime mortgage loans?

Obama was on the legal team that represented Calvin Roberson in a 1994 lawsuit against Citibank, charging the bank systematically denied mortgages to African-American applicants and others from minority neighborhoods.

Nobody likes discrimination, except bigots.

Everybody deserves a home, not a house of cards ready to fall, so why not focus on providing good inner-city schools with accountable teachers which will help people to get better jobs?

And why not fopcus on protecting low-income workers from undocumented workers who take their jobs at half the wage?

I haven’t seen where Barach Obama has focused on these issues.



Poor people did not cause themess we are in…

Free markets did not cause the mess we are in…

Deregulation did not cause the mess we are in…



What did cause it was a bad government regulation that made Main Street banks become predatory lenders, in order to fulfill a government mandate to offer souped up, shell game “affordable mortgages.”

Self-interested lawyers caused this…

Greed and stupidity on Wall Street caused this…

And Carter, Clinton, Obama and the rest of the Dems. got their wish…lots of “affordable mortgages” that people could not really afford while their friends got richer and the rest of us got poorer.

Bad social engineering caused the mess we are in…as it created the environment and the wrong incentives that set up low-income families to fail to have their dreams torn away by reality…while getting Wall Street to finance it all was not HOPE…It is not CHANGE.

It was cruel.

Obama’s heart may be in the right place, but his head is not.

His friends at Fannie Mae caused the mess we are in.

In an article posted Sat. Sept. 6, 2008 at www. KansasCity*com

(the Kansas City Star) it states despite warnings by mortgage experts, Fannie Mae and Freddie mac were blind to the housing bubble.

Nancy Pelosi (D-CA) who doesn’t know that natural gas is a fossel fuel, said on 9/16/2008 that Democrats accept no responsibility for the economic crisis. She blames it all on Bush. ha ha.

The political philosophy of Barach Obama, Carter, Clinton, etc. etc. caused this and now Obama lectures the country about “failed economic policies” and he ridicules John McCain for sticking with “an economic philosophy that has completely failed.”

Such is not change.

Obama is more of the same of the failed Carter and Clinton policies.

This is hypocrisy! or Hope-o-crisy…And

posted by Fred Martinez @ 7:08 AM