Saturday | September 27, 2008
==== It is not ours by inheritance; it must be fought for and defended constantly by each generation, for it comes only once to a people. Those who have known freedom and then lost it, have never known for.It stands alone as a sentinel for freedom of express
The present National financial crisis is a shock for most Americans who believed the Federal Reserve and Our Treasury officials would guide our nation through any crisis that happened.
But we did not understand that the very people charged with protecting our economy and our individual savings would lie to us for political reasons.
For more than four years President Bush has tried to get both the public and key members of Congress to agree to revisions in the major mortgage lending government sponsored organizations, Fannie Mae and Freddie Mack. But his cries for reform have fallen on closed ears! First there was the collapse of the "FM's" and then the mortgage and bank crisis followed. Barney Frank (D-MA), as Chairman of the House Financial Services Committee and Chris Dodd (D-CT), Chairman of the Senate Banking, Housing & Urban Affairs Committee had ample knowledge of President Bush’s and Senator McCain’s concerns about the need for oversight reform for the financial markets, yet they chose to play the roles of obstructers instead of reformers. They had the power all along to effect reforms for the financial oversight process and failed to act! source: New Media Journal
It used to be that individuals bought homes to live in the rest of their lives. They would put down roots, work in the community, send their children to school, look after the neighborhood, and be vigilant with crime and decay.
Perhaps most importantly to politicians, they voted. And if legislators helped them get that dream home the homeowners would vote for them!This thinking resulted in the formation, during the Clinton Administration of: THE NATIONAL HOME OWNERSHIP STRATEGY
Out of this logic arose the National Home ownership Strategy, prepared by the U.S. Department of Housing and Urban Development (HUD), under the direction of Secretary Henry G. Cisneros, in response to a request from President Clinton.
In the spring and summer of 1994, Secretary Henry Cisneros met with leaders of major national organizations from the housing industry to solicit their views about establishing a national home ownership partnership. In August 1994 these planning sessions culminated in a historic meeting at which industry representatives agreed to the formation of working groups to help develop the National Home ownership Strategy,��
This financial scheme was most likely meant to bolstering Clinton's legacy as a man who “cared about the little people. It promoted irresponsibly low down payments and forced lenders(Banks and Mortgage Co.) into giving home loans to first-time buyers with unstable financing and very low incomes.Most of whom had not the means to pay the loan payments.
Their Strategy acknowledged that, “In many instances,prospective first-time home buyers find that developing the proper savings patterns to accumulate sufficient cash for the down payment is difficult.��
The Strategy also admitted that, “…although the variety in loan products available to the borrower is commendable, it can prove confusing to a first-time home buyer,�� (The National Home ownership Strategy: Partners in the American Dream, Chapter 4: Financing). A great many of the present ills could have been avoided had some of those warnings been heeded before politicians were lured by the siren song of home ownership and the votes it brings. They identified three types of Borrowers.
1. Borrowers who attempted to abide by the original purpose of the Strategy should, indeed, be helped wherever possible. 2. Borrowers, usually already homeowners, who sought to increase leverage with the creative financing tools developed to meet the Strategy goals, whether to augment income from cash-out refinancing or to trade up to larger houses before they can afford them in any stable fashion, need to learn that those tools are not for them. 3. Borrowers who were mere speculators and perpetrators of fraud need to face market discipline.
So today we have a mortgage market in which the products and approaches encouraged by the National Home ownership Strategy have been misused to increase leverage throughout the market and encourage speculation by builders, buyers, and financial institutions, alike.
The Strategy certainly helped some renters achieve the dream of home ownership. But the Strategy was also fundamentally misused to extend more credit to prime borrowers, fueling home price inflation.
That home price inflation led builders to build ever more developments, using creative financing to sell the homes. In the process, speculators also used the creative financing to leverage their bets on home price appreciation in the bubble environment.
This has resulted in record foreclosures in the present marketplace. And guess who was responsible for pushing the legislation through Congress? Senator Christopher Dodd and the Clinton controlled Congress!
Now he and Congressman Barney Frank of "roommate gate" fame, are trying to push this 700 billion dollar bail-out to cover their muddled leftist thinking in pushing the original legislation that put US in this financial mess! And that is not all the Democrats want to do! House Democrats said they were still considering a separate plan to increase taxes to pay for a portion of the bailout, possibly by taxing stock transfers or levying a "surtax" on millionaires. What their definition of millionaires is, remains to be learned, but it is the same old tax and spend Democrats! Voters BEWARE