The GOP Scapegoats ACORN

John McCain And Republicans Are Trying To Blame ACORN For Crisis That Deregulation Helped Bring About

(The Nation) 
In contrast, the CRA actually penalizes banks for reckless, irresponsible or otherwise predatory lending. According to Ellen Seidman, director of the Treasury Department's Office of Thrift Supervision from 1997 to 2001, federal regulators warned CRA-covered institutions that "badly underwritten subprime products that ignored consumer protections were not acceptable." Lenders not subject to CRA did not receive similar warnings.

And unlike the institutions that offer unregulated predatory subprime loans, banks that make CRA loans are required by federal regulation to verify borrowers' incomes to make sure they can afford the mortgages. In 2006 the Federal Reserve reported that just 11.5 percent of mortgages made by CRA-regulated institutions were high-cost loans, compared with 33.5 percent for lenders not covered by the CRA. Janet Yellen, president and CEO of the Federal Reserve Bank of San Francisco, has criticized those who blame CRA lending for the subprime crisis: "Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans, and studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households."

While the CRA helped boost the nation's homeownership rate, particularly among black and Latino borrowers, subprime and other exotic mortgages had very little impact on homeownership. Most subprime loans were refinances of existing mortgages. From 1998 through 2005, more than half of all subprime mortgages were for refinancing, while less than 10 percent of subprime loans went to first-time home buyers. Moreover, a significant number of borrowers who took out subprime loans could have qualified for conventional, prime-rate mortgages with much better terms. Even the Wall Street Journal acknowledges that "plenty of people with seemingly good credit are also caught in the subprime trap." Brokers and lenders misled many of these homeowners, replacing safe thirty-year fixed-rate mortgages with deceptive, risky loans.

The CRA gave federal regulators the power to deny approval for lucrative bank mergers or acquisitions if the companies engaged in persistently irresponsible or discriminatory lending. Under Reagan and George W. Bush, regulators failed to enforce the law, so activist groups like ACORN used the CRA to hold banks accountable. They conducted their own studies, uncovered banks with a pattern of irresponsible lending, exposed these practices to the media and demanded that regulators do their job. To avoid costly and harmful confrontations, many lenders forged "community reinvestment agreements" with ACORN and other community groups, pledging to make loans to borrowers who could afford them and whose neighborhood banks had ignored them. According to a study by the Harvard Joint Center for Housing Studies, the CRA helped catalyze more than $1 trillion in bank lending.

ACORN and its allies, including the Center for Responsible Lending, the Greenlining Institute, the Center for Community Change and the National Community Reinvestment Coalition, carried on the battle against abusive lenders on many fronts to ensure that loans in minority areas did not put borrowers in risky situations. ACORN's homeownership counseling program for prospective borrowers was successful in helping families avoid taking out loans they could not afford. In 2006 the foreclosure rate of loans to borrowers who went through ACORN's homeowner counseling program stood at .032 percent.

ACORN and other consumer groups fought for rules requiring lenders to document that borrowers had the ability to repay. They warned that adjustable-rate mortgages--those that started with a low "teaser" rate, which would adjust to a much higher rate later--were a ticking time bomb and that such loans should be made only to people who were able to afford the regular rates after the teasers had run out. But the lenders and the securitizers (Wall Street firms that packaged loans into mortgage-backed securities and sold them)--and too often the regulators and the lawmakers--didn't heed the warnings. The industry convinced its political cronies that government regulation was too costly and cumbersome.

ACORN and its allies opposed banks whose fees and other charges inflated the cost of loans while padding their profits from transactions and diminishing the long-term safety of these loans. These groups denounced compensation systems that rewarded lenders and brokers for putting borrowers in higher-cost loans regardless of their credit-worthiness. They exposed the outrageous practice called "yield spread premium." This is a kickback from lenders to brokers for selling loans that are more expensive than what borrowers qualify for. It is essentially a bonus for cheating the borrower and upping the risk of default. Earlier this year, after a long battle by the Center for Responsible Lending, the first state--North Carolina--made this practice illegal.

ACORN joined other consumer advocates and lawyers to promote the notion of "assignee liability"--arguing that companies that buy, and profit from, loans bear responsibility for illegal acts committed when those loans were originally made. Without it, the mortgage originators, who typically hold loans briefly before they sell them, can make fraudulent or risky loans without suffering any consequences. Again and again, Wall Street argued that it was too burdensome to scrutinize the loans they were buying or to be held responsible for the original transactions.

Several of ACORN's battles were notably successful. It got some major lenders to reduce the outrageously high interest rates and fees they charged borrowers. For example, in 2001 ACORN persuaded Household Finance Corporation to abolish its practice of selling bogus credit insurance that had been costing a billion dollars a year straight out of homeowners' pockets. ACORN's activism spurred state attorneys general to sue Household Finance in 2002, forcing the firm to distribute a record $484 million to abused borrowers. In a separate suit against Household Finance, ACORN won a $150 million settlement that it put partly into a foreclosure prevention fund.

But ACORN and its counterparts have only been able to stick their fingers in the crumbling dike of American finance. Their warnings were prescient, but their victories were too small, their opponents too strong. So it is richly ironic that John McCain--a longtime ally of the banking industry whose mentor Phil Gramm orchestrated the 1999 Financial Modernization Act, opening the floodgates to irresponsible lending practices--is trying to scapegoat ACORN for the subprime crisis. Powerful business groups and their right-wing allies will continue to attack ACORN because it exposed and battled the real culprits of the financial crisis.

[zante99]

In my search for recent news I found this interesting article from last year. I would like to know if any of the posters above would go back and post a correction or an apology to all the people that questioned ACORN's operation they called Nazis, given the recent news of voter registration fraud in Nevada, Washington, Florida and of course the videos of housing loan advise to open underage illegal alien brothels. Nor do I see an update article from the authors of the article above regarding ACORN's operation! The silence is deafening!

[noloyalisti]

Typical Republi Cons, blaming someone for their failed "free" market policy disaster. I am just glad that this happened now, that Ray Guns has been exposed as the 2nd worst pResident of all time.

It''s simple: whatever a Republican says, it is exactly the opposite. That goes for charges of terrorist, communist and claims to be for the people of the United States and patriotic. It is all exactly the opposite.

[noloyalisti]

That''s rich, the Government of Pigs (GOP) party, corrupt and crooked, blaming others for vote fraud. After stealing two elections and setting the standard for low life slime.

Let''s vote for more of the McSame and show the world how smart we are. More debt, war, torture, spying and corporate crime.

[xlib]

My, my, brnging this story back I guess we can expect more of the same. Race baiting and class envy.
Where''s the story on joe biden that was running this morning? Must be the facists at cbs didn''t like some of the posts.
Guess we''re the next Venezuela where the government takes over the media. H(*l, they already have. Just ask the Orlando station.

[prb333-2009]

). Poor legislation + ACORN (a paper "non-partisan" but overtly democratic biased organization) = a train wreck looking for a place to happen. ACORN activities specify time and the place of the demo- sponsored train-wreck, right before the selection of ACORN%u2019s choice for the next president Barack Obama%u2026Coincidence, it is not.

[element51]

junglejimy12....Please explain exactly HOW Acorn is committing voter fraud. You claim that they are and I''m calling you to explain yourself. Can''t do it can you? I don''t know who "Dodaddy" is but, correct me if I''m wrong, Sadam is DEAD. As for Hamas, please show proof of your claim. Just one item of proof from a non partisian source. Can''t do that either, can you? As usual, you trolls come on here with all these wild claims and when someone asks you to back it up you disppear or simply ignore the questions.

[element51]

There was a time not long ago when I would read the neocon posts on here and let my blood pressure almost max out. I knew it was just a pack of lies but I was afraid that people would believe the lies. But as time passed and lie after lie was debunked I started to think that, as my parents always told me, the truth will always win out. But now as I watch the same old lies being used over and over I have more of a tendency to laugh than to get angry. I actually feel sorry for OneAmerican7 as his posts are so pathetic. With less than two weeks to go, we have not won yet but we are in a pretty good position. If we lose, especially in states where the vote is very close, it will mean that the republican cheaters have done their job well. We can expect the worst from the republican trolls,you know who you are, on here so don''t let them get to you. Desperation usually brings out the worst in people.

[nixnax-2009]

CACA DEL TORO

[nixnax-2009]

***

[ofbyfor3]

''...Michael Barr reported that only about 20 percent of subprime mortgages were issued by banks regulated by the CRA. The other 80 percent of predatory and high-interest subprime loans were offered by financial institutions not covered by the CRA and not subject to routine examination or supervision. "The worst and most widespread abuses occurred in the institutions with the least federal oversight," Barr told Congress.''

In other words, the CRA, if anything, had regulations that prevented further financial abuse.

Institutions that were not regulated by the CRA should not have been allowed to get involved in offering low-income loans. Either accept the CRA regulations or stay out of this sector.

In any case, the facts show that the CRA did NOT cause this crisis.

[frankie2fing]

To actually perpetrate fraud a person would have to go to the polling location, present id showing that he/she is the person on the voter registration card, and then actually be given permission to vote. The journey is long and difficult.
Posted by afmca

But not impossible. There were many suspected voter fraud occurrences in OHIO in 2004. Oh, that is right, they were in Republican districts. That CAN NOT be voter fraud, we all KNOW how honest the GOP is. Couple this with sending 40% less voting machines to low to middle class districts and cutting off voting, even though there were people in line (some estimates as high as 40,000 in Democratic areas) and out pops 4 more years of dubya. Voter fraud? Never heard of it.

[jimesmith2]

Only when these hypocrite politicians come clean with their own lives should they cast stones. Make them eat their own vile. Don''t let Lindsay Graham hide in the closet any more! Force him out of the South Carolina closet and let him get a good taste of his own bigotry!!!

[jimesmith2]

For the party who declares night is day and is full of (BS) transparency: Let''s have all the gay Republicans come out of the closet. first in line should be all the biggest of hypocrites like Lindsay Graham who is not just a little gay, but like flaming gay.

[mumu11]

Is there no way to charge those crooks with label? The first amendment may cover spin and it definitely covers opinions, but it doesn''t cover slander, so why do those outright lies go unpunished?

[idnnsg]

The GOP is toast. The neocons killed it, and the current financial crisis is the final nail in the coffin. McCain has championed DEregulation of the financial markets and "trickle-down" (a.k.a, "voodoo") economics for his entire career, so McCain''s campaign is toast. And there ain''t nuthin'' nobody can do to change that! Regardless, the GOP tries really hard to blame everybody else for their own failures. Blaming ACORN is simply laughable. You''ve got be be REALLY, REALLY, REALLY STU.PID to fall for it. Is anybody here that stu.pid? (Oh yeah, OneAmerican7 is!!!)

America needs a change in direction. America is ready for a change in direction. And McCain just offers more of the same Bush cr@ppola, only he''s even more desperate and pathetic sounding than scrub!

Now is our chance. Barack Obama is the change we''ve been looking for. VOTE!

[walt1944-2009]

It has been learned that the neocon Fascist Nazi Republicans have determined that the voting registration group ACORN, one of those evil social activist groups, is responsible for the economic chaos gripping Wall Street, the freeze of credit between banks, the loss of millions of jobs, and the advent of a global recession!

The Republicans are also blaming ACORN for the Iraq War, the losing situation in Afghanistan, global warming, the Russian invasion of Georgia, tainted milk from still-RED China, high energy costs, and John McBush McCain unable to remember how many houses and cars he has!

The neocon Fascist Nazi Republicans are convinced that ACORN is a "front" for Al Qeada, that the real brains behind ACORN is Osama Bin Laden (remember him?), and that Bill Ayers is secretly training ACORN for world domination using "terrrrrorist" tactics such as waterboarding, electric shock, sleep deprevation, and using pit bulls with lipstick!!!

SIG HEIL, THAT SOUNDS LIKE MY KIND OF GUY!!!, BUSH!!!
sig heil, I VOTE AGAINST TORTURE, WHEN I''M NOT THERE TO VOTE FOR IT!!!, McBush!!!
sig heil, I HAVEN''T DONE A THING WRONG, NO MATTER WHAT THEY SAY!!!, Palin!!!

[caldwellptr]

Barack Obama is a terrorist-supporting, Jew-hating Socialist who wants to impose a dictatorship on America.
--------------------------------------------------------------------------------
Posted by OneAmerican7 at 06:15 PM : Oct 25, 2008
+ report abusea

Ah ... the ties that bind, except for any ties to reality.

[wogerwabbit]

Then ACORN checks for fraud and throws some out.
Posted by afmca at 03:23 PM

Actually, it''s against the law for them to throw the bogus registrations out. They flag them and give them to the election officials to approve or disqualify.

[skysoldier75]

The Republicans always spin lies into truth and truth into lies.

It''s the GOP''s primary political modus operandi, and it really surprises no one anymore.

If it comes from the GOP as "truth" you can bet your last dime that it''s a lie.

If the GOP claims something is a "lie", then you can rest assured that it is, in fact, the truth.

The Republican party is all about deceit, pure and simple. If they actually stuck to the truth NOBODY would EVER vote for them.

The GOP is the party of lies.

[afmca]

Of course the are scape goating ACORN. Fear and lies are what the Republican Party is about. Minorities are crashing through the plantation gates and the rich, white ruling class is going back to what works so well ... appeal to the latent bigotry in their white base.

Why is the ACORN scare a hoax? First, ACORN is actually registering no one. They are taking applications for registration. Then ACORN checks for fraud and throws some out. Then they are presented to the state which also check for fraud and throws some more out. To actually perpetrate fraud a person would have to go to the polling location, present id showing that he/she is the person on the voter registration card, and then actually be given permission to vote. The journey is long and difficult.

If you really want to discuss fraud look to the hanging chads in Florida in 2000, the Supreme Court awarding Bush his first term, and Ohio irregularities both in 2004 and again this year. That is fraud and it is a policy of the Republican National Party.

If ACORN was not associated with blacks and other minorities this attack would never be made; it is only possible because of the ignorance, intolerance and bigotry rampant in the Republican Party and its base.