mortgage mess

mortgage mess: Page 1

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Brown-Whitman 10/02/10 debate: a very disturbing view of California's future - 10/05/10

It's a good thing I didn't watch Saturday's Jerry Brown / Meg Whitman debate in the California governor's race: I might have ended up defenestrating the TV. The debate provides a very disturbing preview of the Quebec-style future of California and ultimately the U.S.

The Economist in 2004: "More Mexicans, please" (promoted home loans to illegal aliens) - 12/14/09

I haven't looked into how much of the mortgage mess is due to financial institutions giving mortgages to low-wage workers, including illegal aliens from Mexico; for that, see Steve Sailer. Some but not all of it was, making the June 10, 2004 article from The Economist called "More Mexicans, please" (no author given; economist.com/world/unitedstates/displaystory.cfm?story_id=2752598) a cautionary tale about a) giving in to corruption, and b) trusting The Economist:

NATIVISTS in Texas and Arizona may still want to keep Mexicans out of America, but in the mid-west, far from the border, a growing chorus is calling for better integration of the large Mexican population that already exists. Employers need them, schools are full of their children, politicians seek their votes and, increasingly, banks want their money.

The integration push is already under way at the Mexican consulate in Chicago. Under a programme set up this spring by the Institute for Mexicans Abroad (a government agency created by Mr Fox), daily lectures are held there on topics ranging from worker rights to banking and health care. From 7am each day, crowds of people line up to apply for an identity card known as a matricula consular, which is now accepted as valid ID by 800 law-enforcement agencies across America. As the matriculas have gained wider acceptance, doors have opened to immigrants in other areas, blurring the line between services available to legal and illegal Mexicans.

Now financial institutions are courting these hard-working people. No wonder: Mexicans sent $13.3 billion in remittances home from America last year (providing the second-largest source of income after oil), and three-quarters of those who remit funds have no bank accounts. A growing number of banks (118 nationwide, including 86 in the mid-west) now accept alternative forms of identification—generally the matricula card along with a taxpayer identification number—to open bank accounts. Thirty-three of the 48 American banks that offer international remittance services are in the mid-west, and America's bank regulators are encouraging the efforts. “Banks aren't so interested in the remittances, they're interested in the relationships,” says Michael Frias, an official with the Federal Deposit Insurance Corporation (FDIC). “They're looking at this as a long-term proposition.”

Indeed, and we'll be paying for the decisions made by the FDIC and those like them for a while. For more on this from around the same time as the Economist article, see this, this, this, and more recent examples of this type of corruption are listed on the immigration banks page.

Obama home mortgage bailout open to illegal aliens - 02/25/09

From this:
Illegal aliens can apply for mortgage relief under the Obama administration's $275 billion [home mortgage bailout] plan, according to immigration experts and a group the government will use to help homeowners modify loans.

..."There is no legal prohibition against illegal immigrants owning homes," (Steven Camarota, director of research at the Center for Immigration Studies) said, "and in most cases mortgage lenders will accept a taxpayer ID or a Matricula Consular card issued by a Mexican Consulate office as identification to illegal immigrants from Mexico."

Chad Buchanan, a manager at SaveMyHomeUSA - a group cooperating with the Obama administration that assists homeowners facing foreclosure - told WND illegal immigrants who own a home "could certainly apply under our program."

"Financial Crisis Tab Already In The Trillions and Counting" - 02/16/09

The article "Financial Crisis Tab Already In The Trillions and Counting" (link) is from Nov. 28, 2008 and thus before the trillion/multi-trillion dollar stimulus plan:
it's a complicated cocktail of budgeted dollars, actual spending, guarantees, loans, swaps and other market mechanisms by the Federal Reserve, the Treasury and other offices of government taken over roughly the last year, based on government data and news releases. Strictly speaking, not every cent is a direct result of what's called the financial crisis, but they're all arguably related to it.

The bulk of the sum falls under the Federal Reserve's umbrella, while another good chunk ($700 billion) is the under the Troubled Asset Relief Program (TARP) as defined under the Emergency Economic Stabilization Act, signed into law in early October.
See the table at the link.

Who or what precipitated the financial crisis? (Soros? China? a setup to elect Obama? Did it just happen?) - 02/10/09

Someone needs to snug their tinfoil hat down tight and try to figure out who or what got us into this financial mess. Did it just happen, or was it a deliberate plan in order to make money or help Obama get elected? Consider the attached video featuring Rep. Paul Kanjorski saying the following:

CBO: predicts "slow recovery in 2010", non-disastrous recession *without a stimulus* - 02/09/09

On January 8, 2009, Robert Sunshine, Acting Director of the Congressional Budget Office, offered "The Budget and Economic Outlook: Fiscal Years 2009 to 2019" (PDF link, via this) in testimony before Congress. While the situation described sounds bleak, it's far from disastrous. In fact, they suggest that - without having to enact a stimulus - we'd have a "slow recovery in 2010".

So, while we'd go through some pain for a year or two, we'd come out of OK and without having to spend around a trillion dollars. Why not just grit our teeth for the next couple of years, perhaps taking a few relatively minor actions in order to help cushion the downtime?

Not only that, but - still not taking the stimulus plan into account - they say:

CBO anticipates that the current recession, which started in December 2007, will last until the second half of 2009, making it the longest recession since World War II. (The longest such recessions otherwise, the 1973–1974 and 1981–1982 recessions, both lasted 16 months. If the current recession were to continue beyond midyear, it would last at least 19 months.) It could also be the deepest recession during the postwar period: By CBO’s estimates, economic output over the next two years will average 6.8 percent below its potential - that is, the level of output that would be produced if the economy’s resources were fully employed (see Figure 1). This ecession, however, may not result in the highest unemployment rate. That rate, in CBO’s forecast, rises to 9.2 percent by early 2010 (up from a low of 4.4 percent at the end of 2006) but is still below the 10.8 percent rate seen near the end of the 1981–1982 recession.

Note that they are taking the TARP (mortgage mess) and fannie mae freddie mac bailouts into account, just not the stimulus bill.

The $78 billion rip-off: Treasury overpaid for bank assets (TARP) - 02/06/09

From this:
The Bush administration received assets that were worth $78 billion less than the amount it invested as part of the massive infusion of capital into the country's banks, congressional investigators have found.

The investigators concluded that the Treasury under the federal bailout had invested $254 billion into companies but the preferred stock it got in return had a market value at the time of only $176 billion, or 69 percent of what the government paid, according to a congressional oversight panel report scheduled to be released today.

Elizabeth Warren, the chairwoman of the panel, said former Treasury secretary Henry M. Paulson Jr. had promised that the government would buy the assets at their market value and that it was alarming that he didn't do so. "At various points, Treasury has articulated policy objectives which could result in a program involved paying substantially more for investments than they appear to have been worth at the time of the transaction," she said in written testimony submitted to the Senate Banking Committee yesterday. "The American people want to know what's going on and they deserve answers...
Earlier today, she hinted (link) the possibility that Paulson should be criminally charged with something at some point.

Bailout: banks wanted thousands of foreign workers as they laid-off Americans (H-1B) - 02/01/09

From this:
Major U.S. banks sought government permission to bring thousands of foreign workers into the country for high-paying jobs even as the system was melting down last year and Americans were getting laid off, according to an Associated Press review of visa applications.

The dozen banks now receiving the biggest rescue packages, totaling more than $150 billion, requested visas for more than 21,800 foreign workers over the past six years for positions that included senior vice presidents, corporate lawyers, junior investment analysts and human resources specialists. The average annual salary for those jobs was $90,721, nearly twice the median income for all American households...
Diane Casey Landry of the American Bankers Association spins it as being an artifact of the good times, with the current situtation being different. A Michael Bloomberg spokesman is quoted as supporting the scheme. The Associated Press wasn't able to get any specific banks on the record, but they've filed a FOIA request for more information.

"Housing Push for Hispanics Spawns Wave of Foreclosures" (Joe Baca, Hispanic Caucus) - 01/04/09

From this, much more at the link:
California Rep. Joe Baca has long pushed legislation he said would "open the doors to the American Dream" for first-time home buyers in his largely Hispanic district. For many of them, those doors have slammed shut, quickly and painfully.

Mortgage lenders flooded Mr. Baca's San Bernardino, Calif., district with loans that often didn't require down payments, solid credit ratings or documentation of employment. Now, many of the Hispanics who became homeowners find themselves mired in the national housing mess. Nearly 9,200 families in his district have lost their homes to foreclosure.

For years, immigrants to the U.S. have viewed buying a home as the ultimate benchmark of success. Between 2000 and 2007, as the Hispanic population increased, Hispanic homeownership grew even faster, increasing by 47%, to 6.1 million from 4.1 million, according to the U.S. Census Bureau. Over that same period, homeownership nationally grew by 8%. In 2005 alone, mortgages to Hispanics jumped by 29%, with expensive nonprime mortgages soaring 169%, according to the Federal Financial Institutions Examination Council.

An examination of that borrowing spree by The Wall Street Journal reveals that it wasn't simply the mortgage market at work. It was fueled by a campaign by low-income housing groups, Hispanic lawmakers, a congressional Hispanic housing initiative, mortgage lenders and brokers, who all were pushing to increase homeownership among Latinos...
Others involved: the Congressional Hispanic Caucus, the National Association of Hispanic Real Estate Professionals, Fannie Mae, Freddie Mac, Countrywide Financial Corp, New Century Financial Corp, Ameriquest Mortgage Corp. The program started by the CHC was called "Hogar", and:
Hogar's ties to the subprime industry were substantial. A Washington Mutual vice president served as chairman of its advisory committee. Companies that donated $150,000 a year got the right to place a research fellow who would conduct Hogar's studies, which were used by industry lobbyists. For donations of $100,000 a year, Hogar offered to provide news releases from the Hispanic Caucus promoting a lender's commercial products for the Latino market, according to the group's literature.
There's also a possibly questionable donation from AmeriDream Inc to the foundation started by Baca and run by his son, Joe Baca Jr.

UCLA professor Stephen Bainbridge deletes comments showing how he was wrong - 09/28/08

UCLA law professor Stephen Bainbridge recently tried to debunk illegal immigration's role in the mortgage crisis. Along with issuing smears, his only data points in support of his position came from data that was over a decade old. Not only didn't he tell his readers that the data was incredibly out of date, but he deleted two comments pointing out that the data he was using was woefully out of date.

One of the comments he deleted was from me:

Bainbridge should be embarrassed: for relying on data that's over a decade old (h/t a previous comment). And, all to support illegal activity, to show that he's one of the "good conservatives", and in order to avoid pointing out the truth and then having the left call him names.

The previous comment referenced above was also deleted; it wasn't adversarial, simply stating that the data was out of date and suggesting that that made it worthless in this case. There was no link and I forget the person's name, but their email address was at watson.ibm.com.

The bottom line here is that you can't trust anything you read at Bainbridge's site, because he's willing to try to silence those who fact-check him. If you're a UCLA student in one of his classes, make sure and double-check every assignment he gives you for anything he left out.

Stephen Bainbridge, Matt Yglesias embarrass themselves in support of illegal immigration (minorities, bailout) - 09/28/08

A few days ago, Michelle Malkin offered "Illegal immigration and the mortgage mess" (link).

Now, if there's one thing that the corrupt on both the right and the left can agree on it's that illegal immigration is the best thing since 8ulova watches.

Thus it is that UCLA Professor Stephen Bainbridge [1] offers "They Make You Embarrassed to be a Conservative" in which he ironically embarrasses himself (link):

...the raving of people like Malkin and Krikorian [2] should be taking place in a padded room in Arkham Asylum not in the public discourse... Put simply, the freezing up of the credit markets doesn’t have anything to do with either affirmative action or illegal immigration, and people who believe it does are on a par with the conspiracy theorists who think fluoridation is a Chicom plot... When you look at the data, it’s true that minorities are slightly over-represented in the sub-prime mortgage market...

In the above, the word "data" is linked to this PDF file, and that's the only data he provides. That PDF says:

Our sample was drawn from a population of borrowers originating mortgages between January 1996 and June 1997

In other words, Bainbridge is basing his smears on data that's over a decade old.

Needless to say, simply relying on someone else who relied on faulty data wasn't enough for Matt Yglesias, he needed to race bait and smear those who, unlike him, support our laws [3]:

This is one of these wingnut talking points that I can't even begin to unpack in a coherent argument, but white supremacist sentiment has always been an important element of the modern conservative movement so it's not surprising to see it rear its head even in odd contexts.

While I haven't looked into illegal immigration's links to the mortgage bailout, I will point out that many banks are eager to lend to illegal aliens. In fact, the FDIC was working with the Mexican consulate to give home loans to illegal aliens. See also this, this, this, this, and this. The issue of the "unbanked" - including dissembling by Bill Clinton and Arnold Schwarzenegger - is related.

UPDATE: Steven Bainbridge deleted two comments pointing out how he was misleading.

[1] Bainbridge is such an idiot, he said "I like it, let's do it" about Bush's original "guest" worker scam.
[2] Bainbridge is misunderstanding a Corner post from Mark Krikorian, and probably doing so intentionally. I saw the update where Krikorian explained what he (pretty obviously) meant but can't locate it presently.
[2] yglesias.thinkprogress.org/archives/2008/09/
did_minority_homeowners_cause_the_financial_crisis.php

Arizona Republic almost does expose on Western Union - 03/19/06

Chris Hawley of the AZ Republic offers the somewhat surprising article "Wire firm a force in debate over immigration".

It's surprising because in a rare move for the AZ Republic it comes close to reporting the actual truth. They come close to implying that Western Union and their parent company First Data are profiting off illegal immigration, are encouraging illegal immigration, and are corrupting our political system.
...In recent years, Denver-based First Data has openly campaigned for immigration reform, which could legalize millions of undocumented workers, and has created a $10 million "Empowerment Fund" for the same purpose.

It has held seminars on migration law, published how-to guides for migrants, sponsored English classes, given money to a charity that helps Mexican women whose husbands are in the United States, and showered immigrant-sending communities with aid.

First Data has stepped up its political donations in recent years. It also "directly, actively" fought against Arizona's Proposition 200, a First Data official told the Mexican Senate in 2004.

...Those migrants send a torrent of money to their families. Mexicans in the United States alone sent home some $20 billion in 2005, up from $6.6 billion just five years ago.

The increase has been a windfall for wire-transfer companies. Western Union, which also owns the Vigo and Orlandi Valuta chains, saw its revenue nearly double from $2.3 billion in 2000 to $4.2 billion in 2005. It made $1.3 billion in profit last year.

"Their real key to success is the immigration from Third World to Second World and First World countries. That is the ultimate secret sauce," said Kartik Mehta, an analyst with FTN Midwest Securities.

...The company also sponsored the printing of 300,000 guides telling Salvadorans how to apply for the U.S. Temporary Protected Status program. The program gave legal residency to 248,000 migrants following two earthquakes in El Salvador in 2001.

In 2000 the company formed the First Data Western Union Foundation, which is funded by First Data, its employees and its agents in other countries.

The foundation has given out more than $16 million, funding everything from seminars on home buying for migrants in Broward County, Fla. to English classes at the Chicago and San Antonio campuses of the National Autonomous University of Mexico.

It gives money to a legal aid groups and organizations like the Massachusetts-based Immigrant Learning Center, which along with running English classes, produces studies "promoting immigrants as assets to America," according to one of its reports.

...Furthermore, some of the foundation's programs almost seem to reward migration, say some border-control advocates.

In the Mexican state of Oaxaca, the foundation gave $250,000 "to provide assistance to women living alone because their husbands are working in the United States," according to a foundation news release...

It also has pledged $1.25 million to the Mexican government's 4x1 Program in Zacatecas state. The program provides matching funds for each peso that migrants invest in small businesses in their hometowns...

Another foundation-funded program helps Mexican migrants go to U.S. universities "because they don't have the documents necessary to go to a college and pay tuition as international students," First Data's public relations director Mario Hernandez said during a forum in the Mexican Senate on Nov. 10, 2004.

The foundation made headlines by funding a 56-page booklet for migrants called "A Survival Guide for Newcomers to Colorado."

..."They're promoting whatever is going to enhance their bottom line, and if that means encouraging mass immigration, that's what they're going to do," said Mike McGarry, acting director of the Colorado Alliance for Immigration Reform, which has opposed First Data's advocacy efforts in its home state.

...During a panel discussion organized by the company at the National Press Club in Washington, D.C., First Data's then-chief executive, Charlie Fote, announced the creation of a $10 million "Empowerment Fund" to push for an overhaul of U.S. immigration laws, though he gave few details of how the money would be used.

...Since then, First Data has held panel discussions around the country to campaign for immigration reform. The company also said it used its money to fight Arizona's Proposition 200, a measure passed in 2004 that bars illegal immigrants from receiving some state services.

"Our company directly, actively and with financial support, supported the business, political and community groups that opposed this proposition," Hernandez, the public relations director, told lawmakers during the 2004 forum at the Mexican Senate.

First Data also has stepped up its campaign donations. The company has spent $247,000 on federal elections since 2001, compared to $145,000 in the five years before that, according to the Center for Responsive Politics.

A political action committee, First Data Employees for Responsible Government, has donated $128,000 since it was formed in 2000. And that's not counting hefty donations by individual executives. Fote and his wife, for example, gave $46,800 to 32 federal candidates between the beginning of 2000 and Fote's retirement in November.

Most of First Data's beneficiaries are members of the Senate and House committees on banking and financial services. Much of the money also has gone directly to the Republican and Democratic parties in the form of "soft money" donations.

Left out of the largesse: Republican Rep. Tom Tancredo, one of the most vocal immigration-control activists, who also happens to be First Data's hometown congressman. First Data, its PAC and many of its executives gave money to Joanna Conti, his Democratic opponent, in the 2004 election.

It is unclear if the $10 million Empowerment Fund has gone into campaign donations. First Data would not give The Republic details on how that money is being spent...
In brief: First Data not only profits off illegal immigration, they encourage massive immigration. I'll leave it to the reader to determine whether what they do qualifies as encouraging illegal immigration. However, note that Proposition 200 was designed to fight illegal immigration, and First Data opposed it.

And, they then donate part of the money they've obtained from those engaging in illegal activity to politicians, including Democrats like Conti.