I have read extensively about the housing bubble. Most objective documentation seems to chronicle it this way. First, going back to Clinton, the government decided it was a reasonable goal to state that every American should own their own home. It sounds lofty and fits the Great Society, but does it make any sense? Not every American has a job or the means to pay for a home. Not every America wants to have a job. Not every American has the education and training to qualify for the type of job that can pay a mortgage and have money left over for food. But, why would we think the politicians pushing this idea would consider any of this?
To accomplish this we needed low interest rates. We got that.
To get the banks to go along, we needed intimidation. If the government or PUSH or the Rainbow Coalition found a bank did not have a target percentage of mortgage loans to people of color, the bank was beset with lawsuits and protests. Basically, the banks were forced to get that percentage in line even if it meant making sub prime mortgage loans. Why would banks do that?
There appeared to be little, if any, risk, since the mortgages were insured by Freddie, Fannie, and the FHA, all government insurance. Now, Freddie is suing banks for handing off bad loans that are far underwater. Guess there was some risk from the usual place, the same government that forced those minority percentages on the bank in the first place, and the same government controlled agency that insured the loan in the second place. First, your government double crosses you, blames you for doing what the government forced you to do, then sues you to get their losses back.
But, we all learned a lesson from all that, right? Wrong, guess what the Department of Justice is up to now?
Eric Holder, the Republicans’ best friend in Washington, has created a “fair lending” unit. Assistant Attorney General, Thomas Perez, equates the impact of foreclosures on people of color to cross burning and the Klu Klux Klan. Where does Holder get these fools? When they aren’t running guns into Mexico, they are trying to repeat the same mistakes that put us in this recession.
Perez is applying statistical based analysis to decide which banks are not meeting their goals on minority loans and suing the banks for damages. They are initiating action that will require banks to lend to minorities at below-market rates and dish out cash to politically favored ‘community groups” and once again either make sub-prime mortgages or pay a blackmail fee to Justice for not doing so.
Here we go again. If you agree with this, you need to keep Obama and Holder around. If you believe the government should not be blackmailing banks and extorting cash using minority statistical goals for lending, here’s another reason for expunging this form of Hope and Change from government.
