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Qtec
03-15-2008, 10:13 PM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Predatory Lenders' Partner in Crime
How the Bush Administration Stopped the States From Stepping In to Help Consumers

By Eliot Spitzer
Thursday, February 14, 2008; A25

Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

The writer is governor of New York. </div></div> Wash Post (http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783_pf.html)


The plot thickens.
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> When the housing bubble burst and the paint flaked off, investors were left with the poop and the bankers were left with bonuses. Countrywide’s top man, Angelo Mozilo, will ‘earn’ a $77 million buy-out bonus this year on top of the $656 million - over half a billion dollars – he pulled in from 1998 through 2007.

But there were rumblings that the party would soon be over. Angry regulators, burned investors and the weight of millions of homes about to be boarded up were causing the sharks to sink. Countrywide’s stock was down 50%, and Citigroup was off 38%, not pleasing to the Gulf sheiks who now control its biggest share blocks.

Then, on Wednesday of this week, the unthinkable happened. Carlyle Capital went bankrupt. Who? That’s Carlyle as in Carlyle Group. James Baker, Senior Counsel. Notable partners, former and past: George Bush, the Bin Laden family and more dictators, potentates, pirates and presidents than you can count.

The Fed had to act. Bernanke opened the vault and dumped $200 billion on the poor little suffering bankers. They got the public treasure – and got to keep the Grinning’s house. There was no ‘quid’ of a foreclosure moratorium for the ‘pro quo’ of public bailout. Not one family was saved – but not one banker was left behind.

Every mortgage sharking operation shot up in value. Mozilo’s Countrywide stock rose 17% in one day. The Citi sheiks saw their company’s stock rise $10 billion in an afternoon.

And that very same day the bail-out was decided – what a coinkydink! – the man called, ‘The Sheriff of Wall Street’ was cuffed. Spitzer was silenced.</div></div> link (http://www.gregpalast.com/elliot-spitzer-gets-nailed/)

Guess who [ supposedly] snitched on Spitzer?












His bank.


Q...........Mmmmmmmmmmm..........................

LWW
03-16-2008, 06:06 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Qtec</div><div class="ubbcode-body">Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks.

Q...........Mmmmmmmmmmm.......................... </div></div>
And the problem here is that Spitzer relied on the lie as he always did.

1-Nobody makes loans without regard for a customer's ability to pay. What he refers to are "stated income" loans which carried a higher rate and was designed for clients who didn't want to undergo a full financial examination and for the self employed who for tax reasons write everything off to show zero income even though they have huge positive cashflow in comparison.

These programs were abused by people who had been told by other lenders that they didn't qualify for a conventional FANNIE or FREDDIE loan.

2-Deceptive "TEASER" rates were simply adjustable rate loans. The borrowers bet that rates would never rise above the all time low ... IOW they were stupid ... and they lost the bet. Had rates gone even lower or stayed there they would have been fine

It's called risk management, and this is a continuation of the idea that whenever someone make a wrong decision the gubmint should steal the cheese of the person behaving responsibly and give it to those who didn't.

3-You cannot have "hidden charges" on a mortgage in the USA. Each loan requires full disclosure and no lender will accept a loan inb violation. FANNIE, FREDDIE, and the FHA will all refuse to insure it as well.

What you do get is people who when given a disclosure will just sign it without even a cursory review. Now, again, we have the stupid demanding protection from their own actions.

4-If their were "illegal kickbacks" and Spitzer was AG then why didn't he prosecute them?

Keep trying Q, sooner or later you will link something to a credible source.

LWW

Qtec
03-16-2008, 07:21 AM
More info.

why Spitzer? (http://harpers.org/archive/2008/03/hbc-90002589)

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> However, there is a second tier of questions that needs to be examined with respect to the Spitzer case. They go to prosecutorial motivation and direction. Note that this prosecution was managed with staffers from the Public Integrity Section at the Department of Justice. This section is now at the center of a major scandal concerning politically directed prosecutions. During the Bush Administration, his Justice Department has opened 5.6 cases against Democrats for every one involving a Republican. Beyond this, a number of the cases seem to have been tied closely to election cycles. Indeed, a study of the cases out of Alabama shows clearly that even cases opened against Republicans are in fact only part of a broader pattern of going after Democrats. So here are the rather amazing facts that surface in the Spitzer case:

(1) The prosecutors handling the case came from the Public Integrity Section.

(2) The prosecution is opened under the White-Slave Traffic Act of 1910. You read that correctly. The statute itself is highly disreputable, and most of the high-profile cases brought under it were politically motivated and grossly abusive. Here are a few:

*

Heavyweight boxing champion Jack Johnson was the first man prosecuted under the act — for having an affair with Lucille Cameron, whom he later married. The prosecution was manifestly an effort “to get” Johnson, who at the time was the most famous African-American. (All of this is developed well in Ken Burns’s film “Unforgiveable Blackness”).
*

University of Chicago sociologist William I. Thomas was prosecuted for having an affair with an officer’s wife in France. Thomas was targeted because of his Bohemian social and his radical political views.
*

In 1944 Charles Chaplin was prosecuted for having an affair with actress Joan Barry. The prosecution again provided cover for a politically motivated effort to drive Chaplin out of the country.
*

Canadian author Elizabeth Smart was arrested and charged in 1940 while crossing the border with the British poet George Barker.

(3) The resources dedicated to the case in terms of prosecutors and investigators are extraordinary.

(4) How the investigation got started. The Justice Department has yet to give a full account of why they were looking into Spitzer’s payments, and indeed the suggestion in the ABC account is that it didn’t have anything to do with a prostitution ring. The suggestion that this was driven by an IRS inquiry and involved a bank might heighten, rather than allay, concerns of a politically motivated prosecution.

All of these facts are consistent with a process which is not the investigation of a crime, but rather an attempt to target and build a case against an individual.

The answer of the Justice Department to all this is likely to be: Trust us. But in the current environment, the reservoir of trust is tapped. The Justice Department needs to submit to some questions about how this probe got launched, who launched it, and to what extent political appointees were involved in its direction. This has nothing to do with Spitzer’s guilt or innocence. But it has everything to do with the fading integrity of the Public Integrity Section. </div></div>

Siegelman, Spitzer, whos next.......Obama?

Q

LWW
03-16-2008, 08:33 AM
Next for what?

LWW