Fear has always been the Achilles heel of human compassion. We like to tell ourselves that we’ll give to the less fortunate during the holiday season, support and stand-up for what is right, and lend our neighbors a hand if they need it when asked, but many times, reality never plays out that way. The fear of not having enough time and money for yourself, the fear of what the backlash may be, and the fear of a grumpy and crazy neighbor excuse our apathy.
The times of this day are no different, only lending itself to an international stage because of the severity of crisis our world economy is in.
What really perplexes me, however, in moments where it logically makes more sense to stop squabbling and work together, is the constant finger-pointing of what got us here.
Take, for instance, the rising misconception that the affirmative action policies of the Clinton administration are the result of our current mortgage meltdown because Fannie and Freddie Mac were mandated to include minority lending in majority of their loans. Here is Ann Coulter’s (rolls eyes) approach:
This crisis was caused by political correctness being forced on the mortgage lending industry in the Clinton era.Before the Democrats’ affirmative action lending policies became an embarrassment, the Los Angeles Times reported that, starting in 1992, a majority-Democratic Congress “mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains.”
Under Clinton, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton’s secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low- to moderate-income borrowers by the year 2001.
Instead of looking at “outdated criteria,” such as the mortgage applicant’s credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named “Caylee.”
Threatening lawsuits, Clinton’s Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn’t a joke — it’s a fact.
Now, the I told you so, short-sighted reader may think her argument has some merit. I mean, doesn’t it make sense that those with no money shouldn’t get loans?
Let’s take a closer look, however, specifically, numbers and dates…because that’s all I work in.
1.) Coulter is posturing her position based on the Community Reinvestment Act (CRA) of 1977 that aimed to eliminate redlining and discrimination in lending practices. The argument is that the CRA, in an attempt to end discrimination, mandated that communities of color were no longer required to provide all of the standard mortgage documents such as verification of income, proof of employment, credit history, or even provide a down payment.
2.) This act was put into law three decades before this debacle.
3.) 50% of subprime loans were made by finance companies that do not have to comply with CRA, while another 30% were made by savings and thrifts who could voluntarily include the CRA rating.
4.) According to data of the Home Disclosure Mortgage Act from 2005 – 2007, 58% of higher-cost loans were made by White borrowers in contrast to 18% of minority borrowers.
Outside of the numbers, however, is the more important fact that we are all in this together. The tactics to divide our country in times of uncertainty is a dying principle that has never served our interests, as Obama alluded to in yesterday’s debate regarding the days after 9/11. NYTimes op-ed columnist Thomas Friedman summoned it up best:
You may not own any stocks, but your pension fund owned some Lehman Brothers commercial paper and your regional bank held subprime mortgage bonds, which is why you were able refinance your house two years ago. And your local airport was insured by A.I.G., and your local municipality sold municipal bonds on Wall Street to finance your street’s new sewer system, and your local car company depended on the credit markets to finance your auto loan  and now that the credit market has dried up, Wachovia bank went bust and your neighbor lost her secretarial job there.We’re all connected. As others have pointed out, you can’t save Main Street and punish Wall Street anymore than you can be in a rowboat with someone you hate and think that the leak in the bottom of the boat at his end is not going to sink you, too. The world really is flat. We’re all connected. “Decoupling†is pure fantasy.
I totally understand the resentment against Wall Street titans bringing home $60 million bonuses. But when the credit system is imperiled, as it is now, you have to focus on saving the system, even if it means bailing out people who don’t deserve it. Otherwise, you’re saying: I’m going to hold my breath until that Wall Street fat cat turns blue. But he’s not going to turn blue; you are, or we all are. We have to get this right.
Updated: Apparently, Newsweek agrees as well.
earlmah
Ann Coulter. Clearly the best thing to do during an economic crisis is to begin pointing fingers instead of uniting to start solving the problem. All you know how to do is stir up the pot, pit people against each other, and offend anyone that doesn't have a view that perfectly aligns with yours.
You are exactly what this country needs now.
October 9, 2008 at 10:38 am
Disappointed
This was a pathetic response to Coulter. I am trying to keep an open mind here but since there are more whites, of course there will be more whites getting homes, so who cares about the 58% number. This is the question: What percentage of white renters failed to meet their mortgage obligations versus the minority owned mortgages obtained whithout having to provide all of the standard mortgage documents such as verification of income, proof of employment, credit history, or even provide a down payment? What was the overall affect of the minority owned homes who failed to meet their obligations? If it was negligable, forget about it, I beleive in helping out minorities so long as there is a time table… maybe two generations… with expectations of results that can be tabulated.
October 10, 2008 at 11:49 am
ybpguide
Two things.
1.) More in-depth math and clarification can be found on the Newsweek article, so I suggest you read that.
2.) To answer your question directly, per Newsweek, the historical percentage of poorer people (because white people can be poor too) that defaulted on their mortgages is lower because the risk is greater for them. Quote:
October 10, 2008 at 12:29 pm
Disappointed
Thanks for the reply, wait, but per that article it seemed that this was an initiative to help communities of color only. I thought that meant you had to be a minority to get those rates. So this was for poor whites in those communities as well?
BTW, trust me, lol, I know whites can be poor…
October 10, 2008 at 1:00 pm
Signature payday loans
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October 10, 2008 at 2:04 pm
Hussien Obammer
IT's too bad Ann is correct. It all stems from carter and the CRA. Then we got that pig clinton and he came along and made welfare and unemployment count as income. His agencies also threatened lawsuits if the loan agancies didn't make these loans to unqualified peoples of color. I want to know why is it always the blacks that have problems? The chinese and vietnamese come here and do just fine. They own stores and homes and create employment. But then we have the blacks and what do the ydo? From what i have seen so far in my 49 years, all they do is look for another hand out. It's time to eliminate all aid to all blacks. make the work, make them be productive oir starve.
October 12, 2008 at 7:49 am
TheJennTafur
I thik I am understanding this a little bit more. Thank you so much for helping. The newsweek article cleared up some questions I had. I appreciate the education.
October 12, 2008 at 3:31 pm
TheJennTafur
Thank for helping to clear up this situation to some of us like me who were confused with the crisis and the Clinton administration's involvement with it. That is what I had heard on CNN that minorities were to blame for on CNN they brought up this article here, Fannie Mae Eases Credit To Aid Mortgage Lending By STEVEN A. HOLMES
Published: September 30, 1999 http://query.nytimes.com/gst/fullpage.html?res=... The Newsweek article and your response helps me understand the situation better. I appreciate you breaking it down for me.
October 12, 2008 at 3:44 pm
ybpguide
I guess it's a good thing you only have 1 vote, then, there in Pennsylvania (I traced your IP address).
While I won't get into a history lesson about 'what us blacks' have done, I will say that I will continue to pray for you and your narrow mindset. I also hope that it changes, but if it doesn't, I feel comforted in the fact that opinions like it are a dying breed.
October 13, 2008 at 6:25 am
arizona auto insurance
It seems there were cries a few years ago about freddie and fannie that were being ignored. As it is in Washington these days, as long as the good ole boys are receiving their fair share of the goodies, things like this will be ignored. It's a good old boy network on both sides of the ticket that are to blame.
October 18, 2008 at 9:09 am
kalambouryilo
Looks very very interesting!
Thanks for letting us know about it.this why i love internet the power of sharing .I am in love with your blog
My best regards,
Mortgage approvals still falling
December 1, 2008 at 2:50 am
kalambouryilo
Looks very very interesting!
Thanks for letting us know about it.this why i love internet the power of sharing .I am in love with your blog
My best regards,
Mortgage approvals still falling
December 1, 2008 at 2:51 am
Mortgage Site
This is the question: What percentage of white renters failed to meet their mortgage obligations versus the minority owned mortgages obtained whithout having to provide all of the standard mortgage documents such as verification of income, proof of employment, credit history, or even provide a down payment
December 10, 2008 at 9:50 am
fuckoff
The real reason is the democrats wanting to buy the low income vote……. Plain and simple. Buy the minority vote get elected. been going on forever. Now real working people are fetting FUCKED while the low like minorities still get everything for nothing. Great country huh> NOT!!!!!!!!!!
January 5, 2009 at 5:40 pm
Amortization
I tend to believe this too, this mortgage crisis is reaching to us all and it's changing our perspectives and financial plans. The mortgage crisis is definitely not a minority problem.
February 20, 2009 at 8:26 am
refinancing mortgage loan
this is a good idea,reaching others to help is a good attitude
hop you succeed!
February 24, 2009 at 10:34 pm