http://www.motherjones.com/news/feature/2008/07/foreclosure-phil.html

Foreclosure Phil

By David Corn
July/August 2008 Issue

“Years before Phil Gramm was a McCain campaign adviser and a lobbyist for a Swiss bank at the center of the housing credit crisis, he pulled a sly maneuver in the Senate that helped create today’s subprime meltdown.

Who’s to blame for the biggest financial catastrophe of our time? There are plenty of culprits, but one candidate for lead perp is former Sen. Phil Gramm. Eight years ago, as part of a decades-long anti-regulatory crusade, Gramm pulled a sly legislative maneuver that greased the way to the multibillion-dollar subprime meltdown. Yet has Gramm been banished from the corridors of power? Reviled as the villain who bankrupted Middle America? Hardly. Now a well-paid executive at a Swiss bank, Gramm cochairs Sen. John McCain’s presidential campaign and advises the Republican candidate on economic matters. He’s been mentioned as a possible Treasury secretary should McCain win. That’s right: A guy who helped screw up the global financial system could end up in charge of US economic policy. Talk about a market failure.”

Read the whole thing and the look at this Youtube:

http://www.youtube.com/watch?v=1mHsuL6FfY4

Most of the politicians in Washington are dirty, on both sides of the fence. How come we’re not hearing about no special committees to get to the bottom of this. If this was all the Republicans fault, the Dem’s would be screaming in Washington. Hell, Fannie and Freddie were the Dems babies as Sen Ried said on C-SPAN a coupler of months ago.

Washington needs to be cleaned up, on both sides and that is where we the voters come in. Both we will most likely do nothing but sit back, blame the other side of who ever we voted for.

What is McCain’s plan?

Ahh, forget it. I feel dirty just doing that. I agree with your point–I want some specifics from Obama as well.

Thus far, all he has proposed is the creation of a Universal Mortgage Credit for homeowners who do not itemize; manadate accurate load disclosure with a standardizes borrow score/rating so buyers can more easily compare loan offers, and change the bankruptcy laws so courts can modify mortgage payments.

It’s also worth noting that as a congressman, he introduced legislation that the Republicans blocked to fight mortgage fraud and protect consumers against abusive lending practices. In addition to defining mortgage fraud (right now, there is no single definition, his legislation would have increased funding for federal and state law enforcement programs, created criminal penalties for mortgage professionals found guilty of fraud, and required industry insiders to report suspicious activity.

That’s not enough to make a difference here, I agree.

So, what is McCain offering? I don’t know. Sara Palin is speaking about the issue right now, and she says she and John McCain will “reform” Washington and Wall Street, but she’s not saying how other than those bad Wall Street CEOs who are running their companies are due for a serious hand slapping.

McCain also is offering to back FHA loans for people who took out a sub-prime mortgage taken after 2005, who live in their home (primary residence only); who can prove creditworthiness at the time of the original loan; who are either delinquent, in arrears on payments, facing a reset or otherwise demonstrate that they will be unable to continue to meet their mortgage obligations; and who can meet the terms of a new 30 year fixed-rate mortgage on the existing home.

This is actually an interesting plan, I think, but I have some issues if a family pruchased a $350,000 home they really couldn’t afford, but want owners of $100,000 homes to bail them out with federally backed loans. Also, when he says FHA contacts mortgage servicer which writes down and retires the existing loan, what does that mean? Once again, this smacks of publicizing risk and privatizing profit.

And Harden, do you even read the “evidence” you push to prove your points?

When the idea was first discussed, HUD expected that Freddie and Fannie would impose their high lending standards on subprime lenders. Freddie and Fannie didn’t do that, though.

In 2000, according to the article you cited, HUD imposed new restrictions (obviously, not enough). Unfortunately, between 2001 and 2004, it was under Republican leadership the practice of grew tenfold.

And this is the Democrat’s fault how?

It’s not so much what Dem economic policies, but what policies period. We’ve enjoyed 8 years of unfettered supply-side economics with a couple of heavy dollops of unregulated capital markets. Combined with 7 years of GOP control, and the first decade of the new century has been a showcase of Republican political, economic, and regulatory ideas.

What we’re living through is is the best they could do, under the most optimal circumstances.

And Avinash is right: Time to make the switch to lead parachutes!

As to the mortgage crisis, let’s not forget that every single mortgage contract out there has the exact same two things on it, probably near the bottom:

* The signature(s) of the homeowner(s) receiving the mortgage

* The signature(s) of the lending officer(s) giving the mortgage

Squeal and cry like a little girl all you want, about one side or the other, but the blame goes both ways.

Agnostick
agnostick@excite.com
http://www.uscentrist.org
http://www.independentvoting.org

http://www.villagevoice.com/content/printVersion/541234
http://www.washingtonpost.com/wp-dyn/content/article/2008/06/09/AR2008060902626.html

This is EXACTLY where Keynesian economics gets a country. You want to blame it on the horrible market. Fine, but first look and see who is providing the MARKET for this subprime loans before going after the originators. It was the federal government. I think better management of HUD would be a good place to start, but it easier to play this bullshit class warefare game. CEO compensation has nothing to do with it and the fact is — if Fannie & Freddie weren’t willing to buy the securities, no such market would have existed.

This is going to be very similar to Sarbanes/Ox, where in a rush to appease morons, Congress will pass bad legislation just so they can say they did something – regardless of its effectiveness or its downside. Basically, our federal government at work.