"Cut It Out" HILLARY BLAMED HOMEOWNERS FOR 2008 FINANCIAL CRASH, "Should Have Known"
Last edited Wed Apr 20, 2016, 02:31 PM - Edit history (2)
According to Hillary Clinton, if you were a victim of the foreclosure crisis, it was probably your fault.
The only problem with that argument is that it’s not even close to factually correct.
Clinton in 2007: Homeowners “should have known they were getting in over their heads”
When Clinton ran for president during her second term as New York’s U.S. Senator, she gave a tepid speech at the NASDAQ headquarters on December 5, 2007 — before the financial crisis reached a boiling point — about reforming Wall Street’s housing loan practices, largely excusing financial criminals for their behavior.>“Now these economic problems are certainly not all Wall Street’s fault – not by a long shot,” Clinton said early in the speech. Clinton’s NASDAQ address amounted to essentially asking the financiers assembled to take voluntary action or else she would “consider legislation” to stop banks from kicking families out of their homes. But early on in the speech, Clinton placed equal blame for the subprime mortgage crisis on low-income homeowners alongside Wall Street.
“Homebuyers who paid extra fees to avoid documenting their income should have known they were getting in over their heads,” Clinton said.
One YouTube user found video of the statement and put it side-by-side with her claim at the first Democratic debate in which she said she went to Wall Street before the crisis and told them to “cut it out."
To her credit, Hillary Clinton did indeed give several detailed speeches criticizing Wall Street for the dishonest practices that led to the boom and burst of the subprime mortgage bubble. She also put forth a concrete proposal to crack down on predatory lending, although that bill died before even going to a committee vote. Clinton is a great orator and knows how to make a convincing argument to a captive audience. But what the former New York U.S. Senator says she’ll do is different than what she’s actually done when given the opportunity.
-Banks, not homeowners, caused financial crisis- Out of all 50 states, Hillary Clinton’s constituents in NEW YORK were some of the hardest hit by the foreclosure crisis. The U.S. Department of Justice’s $13 billion mortgage fraud settlement with JP Morgan set aside an entire $1 billion in restitution just for New York homeowners, out of a total $4 billion allocated for consumer relief. The bank was sued for selling mortgage-backed securities to investors, knowing full well the investments were bogus.
-In 2014, Bank of America paid a larger $16 billion settlement for committing the same crime in the years leading up to the financial meltdown. While Bear Stearns helped package mortgage-backed securities for JP Morgan, Bank of America’s partner-in-crime in peddling bogus securities was Merrill Lynch. Out of the $16.65 billion, $300 million was set aside for New York homeowners. The loans Hillary Clinton referred to in her December 2007 speech, in which potential home buyers pay extra fees to not disclose their income, accounted for 40 percent of new mortgages between 2006 and 2007, according to Forbes.
But unlike Clinton, financial experts put 90 percent of the responsibility for the housing crash on the backs of Wall Street banks. The subprime mortgage bubble was built as Bank of America and JP Morgan gave out home loans with no underwriting, meaning homeowners weren’t required to prove they could pay back the loans. This means, effectively, the banks knew the loans were destined for foreclosure before a loan was even granted.
In one instance, a JP Morgan home loan officer admitted to making up an applicant’s income level to make the income-to-loan ratio work. One applicant emailed Marc Bristol, a senior home loan officer for JP Morgan, telling him he had “concern” about the applicant’s income listed on the official mortgage loan application: I do not make $34,000 a month or anything close to this figure. I am not comfortable signing a document with a number I can not document in some form. Bristol responded by acting as if inflating the applicant’s income was standard procedure: This is a stated-income deal. We had to state an amount that will be consistent through each deal. There are certain ratios that have to be met for income to debt. With taxes and insurance on your current, this is the figure that made the ratios fit.
Besides, nobody forced the banks to make those loans in the first place: People shouldn’t be sympathetic to banks that effectively say: “Hey, we knew the applicants were lying and wouldn’t be able to repay the loans. We didn’t care because we didn’t hold onto the loans. We offloaded the risk to investors through the securitization process. But so what? Blame the deadbeat borrowers for the volume of foreclosures today.” When those homeowners went into foreclosure, the banks then refused to accurately modify mortgages, dooming families to eventual homelessness. These banks then bundled these bogus home loans, had them securitized by Bear Stearns and Merrill Lynch and rated AAA by the top ratings agencies, then turned them over to investors and ensured stockowners that they were making a solid investment, pocketing the profits and inflating the bubble they knew would eventually burst.
-Tough talk and soft treatment from Senator Hillary Clinton -As the Daily Beast pointed out, Clinton’s tough talk doesn’t jibe with her Senate record. When a sweeping housing reform passed the Senate in 2008, it did so without Clinton’s leadership. Senator Clinton didn’t even vote in favor of a bipartisan bill that would have repealed the carried-interest tax loophole often exploited by hedge fund managers and Wall Street executives, something she’s campaigned on as recently as last year. One reason Hillary Clinton makes tough talk about the financial firms but stops short of meaningful action might be due to her representing the same Wall Street banks that played a major role in the financial crisis as New York’s junior U.S. Senator. In addition to being former constituents of hers, JP Morgan and Bank of America are also some of Hillary Clinton’s main campaign donors. Throughout the course of her political career, JP Morgan contributed nearly $700,000 to her campaign war chest, making them her 4th-largest all-time donor. After Clinton left the State Department, she was paid $225,000 by Bank of America for just one speech. Bear Stearns contributed approximately $50,000 to Clinton’s campaign between 1999 and 2004. Merrill Lynch gave over $33,000 in that same time cycle.
If you plan on voting in the Democratic primary and you want a candidate to be tough on Wall Street, it’s important to compare Hillary Clinton’s words to her legislative record and her campaign finance filings before making your decision.
http://usuncut.com/politics/video-surfaces-of-hillary-clinton-blaming-homeowners-for-financial-crisis/
= new reply since forum marked as read
for the sales commissions and fees, and had no risk since loans were passed on, rated A, B, C, D and packaged as MBS, Mortgage Backed Securities, high risk derivative products used as instruments to speculate and gamble with on the stock market. Many of the junk financial products were filled with subprime, high risk loans as insiders knew. The intricacies and systemic fraud in the housing bubble and crash, notably financial players who bought, insured and shorted dangerous products certain to collapse is the subject of the new movie, "THE BIG SHORT" (2015).
In the late 1990s, BROOKSLEY BORN, head of the CFTC (Commodities Futures Trading Commission) federal regulatory agency warned key financial regulators Greenspan, Rubin and Summers about the potential for a mass economic meltdown from serious risk by the growing, dark and multi-trillion dollar derivatives market that she tried to regulate and was not successful, but which was the trigger for the 2008 Financial Crash. The high risk activity and positions in the financial world, and Born's efforts have been written about and featured in PBS FRONTLINE 2009 Program "THE WARNING", http://www.businessinsider.com/the-warning-brooksley-borns-battle-with-alan-greenspan-robert-rubin-and-larry-summers-2009-10
Owning a home is something people have wanted in the US as a key part of the American Dream. Clinton advanced the home ownership concept with an initiative that Bush continued. Why did so many in related industries participate in unscrupulous behavior and the widespread housing bubble- the Realtors, Mortgage and Insurance Companies, Underwriters, Rating Agencies, Regulators, Fannie and Freddie, and on down the line? What was Their responsibility? It was disregarded at the time because everyone was making too much money from it.
In the 2000s, large financial institutions like Wells Fargo even peddled "Wealth Management Seminars", often using well known spokespersons for credibility in minority, lower income and immigrant communities and neighborhoods to deliberately entice and sell people on owning a home as a path to 'build wealth'. The fact that many of the people were inexperienced with large, complex financial products and obligations, especially first time owners was known by and an advantage for banks, and precisely why these populations were targeted, as has been documented in interviews with financial employees involved.
The financial industry was also well aware that INCOMES at the time were not going up but rather mostly stagnant for decades, and yet they overlooked that critical factor to approve thousands of people for subprime credit loans who had insufficient credit scores, incomes and resources to afford such large loans especially for the long term. The practice is still occurring in the home mortgage and auto loan industries, with customers entering into agreements for loans with exorbitant interest rates.
Home loans that were particularly encouraged by lenders were 'teaser' IO, Interest Only, and ARM, Adjustable Rate Mortgages, usually 3 or 5 year, that required a smaller down payment and usually a low introductory interest rate. Many people did not fully understand what they were getting into, as I know from the evidence and personally from several people who experienced it. Purchasers were also Not informed that ARM loans would reset at intervals often based on higher current interest rates that would be impossible for many to afford to pay. In the official record also are documented cases of people who qualified for good, prime loans but were deceitfully put into subprime products instead by seamy operators.
In the peak housing boom years, 2000-2007 savvy individuals and groups were involved in purchasing multiple properties knowing the easy requirements and for the purpose of investment or gain from resale at a higher price. Some took out equity for additional purposes. But overwhelmingly the vast number of Americans who bought real estate at that time went into the process with honest intentions and are not responsible for the widespread fraud perpetrated which has made major banks like BOA to later pay large penalties for their recklessness and illegal behavior yet face no prosecution or incarceration.
As a result of the 2008 Economic Crash, the largest US financial crisis in 75 years since the Crash of 1929 and the Great Depression, millions lost their homes from foreclosure, faced homelessness, and lost their jobs from the economic crisis. Many Americans also permanently lost their life savings and retirement funds. A large number of properties, particularly in states with heavy new construction like Florida, Nevada and Arizona are underwater and will never ever recover anything close to the original cost.
http://www.motherjones.com/politics/2008/07/where-credit-due-timeline-mortgage-crisis
Four denizens in the world of high-finance predict the credit and housing bubble collapse of the mid-2000s, and decide to take on the big banks for their greed and lack of foresight.
Director: Adam McKay
Writers: Charles Randolph (screenplay), Adam McKay (screenplay) | 1 more credit »
Stars: Christian Bale, Steve Carell, Ryan Gosling | See full cast & crew »
http://www.imdb.com/title/tt1596363/
https://en.wikipedia.org/wiki/The_Big_Short_(film)
http://www.democraticunderground.com/1017359784
widespread profit, greed and fraud that we're supposed to forget and sweep under the carpet so business as usual can continue.
>As to the outrageous, scapegoating blame placed on DEFRAUDED HOMEOWNERS, have a look at post #6 where I cover some of that.
P.S. In the finance and corporate world as you may know, 'IT'S THE STOCK OPTIONS STUPID', the real payoff on top of relatively modest base salaries ranging from 75-200K for executives. Even junior level execs and directors receive stock bonuses in some companies. Stock options bonuses can amount to 100s of thousands of dollars annually. It was Reagan who enabled that major change, stocks as exec compensation c. 1987 I think. What a world...
