The Democratic ACORN Bailout
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| Fri, 09-26-2008 - 9:05am |
Thank God! that our Senators and Representatives stopped this bill dead in it's tracks!!!
The Democratic ACORN bailout; Update: Video added
posted at 7:55 am on September 26, 2008 by Ed Morrissey
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House Republicans refused to support the Henry Paulson/Chris Dodd compromise bailout plan yesterday afternoon, even after the New York Times reported that Treasury Secretary Henry Paulson got down on one knee to beg Nancy Pelosi to compromise. One of the sticking points, as Senator Lindsey Graham explained later, wasn’t a lack of begging but a poison pill that would push 20% of all profits from the bailout into the Housing Trust Fund — a boondoggle that Democrats in Congress has used to fund political-action groups like ACORN and the National Council of La Raza:
In the Roosevelt Room after the session, the Treasury secretary, Henry M. Paulson Jr., literally bent down on one knee as he pleaded with Nancy Pelosi, the House Speaker, not to “blow it up†by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.
“I didn’t know you were Catholic,†Ms. Pelosi said, a wry reference to Mr. Paulson’s kneeling, according to someone who observed the exchange. She went on: “It’s not me blowing this up, it’s the Republicans.â€
Mr. Paulson sighed. “I know. I know.â€
Graham told Greta van Susteren that Democrats had their own priorities, and it wasn’t bailing out the financial sector:
And this deal that’s on the table now is not a very good deal. Twenty percent of the money that should go to retire debt that will be created to solve this problem winds up in a housing organization called ACORN that is an absolute ill-run enterprise, and I can’t believe we would take money away from debt retirement to put it in a housing program that doesn’t work.
Here’s the relevant part of the Dodd proposal:
TRANSFER OF A PERCENTAGE OF PROFITS.
- DEPOSITS.Not less than 20 percent of any profit realized on the sale of each troubled asset purchased under this Act shall be deposited as provided in paragraph (2).
- USE OF DEPOSITS.Of the amount referred to in paragraph (1)
- 65 percent shall be deposited into the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Regulatory Reform Act of 1992 (12 U.S.C. 4568); and
- 35 percent shall be deposited into the Capital Magnet Fund established under section 1339 of that Act (12 U.S.C. 4569).
REMAINDER DEPOSITED IN THE TREASURY.All amounts remaining after payments under paragraph (1) shall be paid into the General Fund of the Treasury for reduction of the public debt.
Profits? We’ll be lucky not to take a bath on the purchase of these toxic assets. If we get 70 cents on the dollar, that would be a success.
That being said, this section proves that the Democrats in Congress have learned nothing from this financial collapse. They still want to game the market to pick winners and losers by funding programs for unqualified and marginally-qualified borrowers to buy houses they may not be able to afford — and that’s the innocent explanation for this clause.
The real purpose of section D is to send more funds to La Raza and ACORN through housing welfare, via the slush fund of the HTF. They want to float their political efforts on behalf of Democrats with public money, which was always the purpose behind the HTF. They did the same thing in April in the first bailout bill, setting aside $100 million in “counseling†that went in large part to ACORN and La Raza, and at least in the former case, providing taxpayer funding for a group facing criminal charges in more than a dozen states for fraud.
It’s bad enough that taxpayers have to pay the price for Congress’ decade-long distortions of the lending and investment markets. If we realize a profit from the bailout, that money should go to pay down the debt or get returned to taxpayers as dividends from their investment — not to organizations committing voter fraud, and not to restarting the entire cycle of government meddling in lending markets. I’d support a rational bailout package, but anything that funds the HTF needs to get stopped.
Update: Here’s the video with Graham:
Update II: The Wall Street Journal reported on the HTF/ACORN/Democratic connections in July:
The housing bill signed Wednesday by President George W. Bush will provide a stream of billions of dollars for distressed homeowners and communities and the nonprofit groups that serve them.
One of the biggest likely beneficiaries, despite Republican objections: Acorn, a housing advocacy group that also helps lead ambitious voter-registration efforts benefiting Democrats. …
Partly because of the role of Acorn and other housing advocacy groups, the White House and its allies in Congress resisted Democrats’ plans to include money for a new affordable-housing trust fund and $4 billion in grants to restore housing in devastated neighborhoods. In the end, the money stayed in the bill; the White House saw little choice.
What most riles Republicans about the bill is the symbiotic relationship between the Democratic Party and the housing advocacy groups, of which Acorn is among the biggest. Groups such as the National Council of La Raza and the National Urban League also lobby to secure government-funded services for their members and seek to move them to the voting booth. Acorn has been singled out for criticism because of its reach, its endorsements of Democrats, and past flaws in its bookkeeping and voter-registration efforts that its detractors in Congress have seized upon.
Once again, the Democrats want to set up a self-funding mechanism, this time by exploiting a severe financial crisis. Despicable.
http://hotair.com/archives/2008/09/26/the-democratic-acorn-bailout/?print=1

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There were minorities who were steered to the sub-prime market when there was no reason to.
"while upper-income African-Americans receive 3 times as many subprime loans as do whites with comparable incomes."
Except what I posted can be backed up by facts. Check out the video thread,
ok
Minorities hit with higher fees, AG says
Lawsuit accuses former H&R Block mortgage arm of discrimination
Globe Staff / June 4, 2008
The state attorney general's office yesterday sued Option One Mortgage Corp., alleging it targeted blacks and Latinos for subprime mortgages - which were likely to wind up in foreclosure - and required them to pay higher initial fees than white customers.
Black and Latino borrowers were charged higher points and fees for subprime loans, Attorney General Martha Coakley said.
'A CLEAR PATTERN'
more stories like this
The lawsuit, which was filed in Suffolk Superior Court in Boston, resembles similar private class-action suits that have expanded the growing legal caseload against subprime lenders beyond initial allegations they sold risky mortgages to people who could not afford the payments. In this case, the suit charges that Option One's lending policies were discriminatory.
Academic research based on loan company filings with federal regulators has established that even high-income blacks and Latinos in Massachusetts were far more likely to obtain risky subprime mortgages. For example, 70 percent of black and Latino borrowers earning $92,000 to $152,000 received the high-risk loans in 2005.
"A clear pattern emerged of similarly situated black and Latino borrowers who were charged higher points and fees" for subprime loans, Attorney General Martha Coakley said. The suit demonstrates "a pretty widespread practice, not just in this company but in Massachusetts," she said.
Coakley asked the court for a preliminary injunction to prevent foreclosures on mortgages secured through Option One. The state is also seeking civil penalties and restitution for borrowers. H&R Block Inc., which owned Option One and closed it in December, did not respond to a request for comment.
In March, H&R Block sold its mortgage servicing unit to AH Mortgage Acquisition Co., which was created by the New York buyout firm, WL Ross & Co. LLC. AH Mortgage is also named in the suit. In an e-mail, Wilbur Ross, WL Ross & Co.'s chief executive, said the allegations predate the deal, protecting his firm against the state's legal claims.
The attorney general's allegation that Option One violated antidiscrimination laws between 2004 and 2007 turns on the contention that brokers charged minority borrowers higher points and fees to originate their loans. The state cited four examples of unnamed minority borrowers who paid between $1,993 and $8,360 more in fees and closing costs than white borrowers with similar loans, incomes, and credit scores.
In the most extreme case, a black borrower with a 523 credit rating paid $10,635 in fees for a $167,000 refinance loan, while a white borrower with a 520 credit score paid $2,275 in fees to borrow $200,000. The suit also said Option One "knowingly targeted" minority borrowers for subprime mortgages.
H&R Block's share price has rebounded from a $17 low in January and was virtually unchanged yesterday at $23.70. One reason for the turnaround is that the company was "able to exit the mortgage business," said Kartik Mehta, a stock analyst for FTN Midwest Securities Corp. H&R Block, the national tax preparer, acquired Option One in 1997 to make its business less seasonal. That proved to be a good move during the early years of the housing boom, Mehta said. "Unfortunately, the market turned so quickly the losses were much greater than anybody anticipated," he said.
The state estimated 24 percent of Option One's loans in 2007 were made to H&R Block's tax customers. In 2005, Option One made 62 subprime mortgages in Massachusetts; that grew to 570 in the first nine months of last year.
Boston lawyer Gary Klein, who has filed discrimination suits on behalf of minority borrowers against several major subprime lenders, including Option One and Countrywide Home Loans, said the subprime industry's selling methods fostered discrimination. Loan brokers had an incentive to charge as much as they could and were not bound by objective criteria when setting fees, he said. "They're using subjective criteria, which lead loan brokers to add more to the cost for minority homebuyers," Klein said.
"The theory is that while Option One gouged borrowers of all races, they gouged black and Hispanic borrowers more," he said.
Obviously encouraging home ownership
If the allegations are true, they should burn.
I didn't see where CNN a reputable organization named Acorn for giving any of these loans.
Do you honestly think a group like ACORN had more political clout than this guy did in 2002?
http://www.youtube.com/watch?v=ecwdBb4gAVI
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http://www.pnhp.org/news/2009/october/meet_the_new_health_.php
http://www.youtube.com/watch?v=DQTBYQlQ7yM
As a small business owner , do you engage in risky business practices? If your business was ABC bank otherwise known as Countrywide, would you have given loans to people with
"Their CEO's should be sent to jail for running the corps. into the ground just like other greedy CEO's.have been and cronies in the government should be
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