RACISM CAUSED 2008 MORTGAGE MARKET COLLAPSE & HOUSING BUST

“Too Big To Fail,” Ruling Elite Bailed Out Buddies With Tax Money

“We have a problem here in America because fewer than half of the Hispanics and half of the African Americans own their home.  That’s a homeownership gap   .   .   .   I set an ambitious goal, that by the end of this decade we’ll increase the number of minority homeowners by at least 5.5 million families.”  President George W. Bush, October 15, 2002.

A laudable goal, right?  First, some of his figures were wrong because homeownership among Hispanics was 70% compared to that of “whites” at 75%.  Not much of a gap.  He made no mention of Asian minorities who had higher homeownership than “whites.” 

Secondly, Bush II went about it the wrong way.  He failed to address the primary reason that some “blacks” cannot get a home mortgage: poor credit records.  In 1999 48% of “blacks” had bad credit histories compared to 27% for “whites.”  Indeed, the average “white” American with income less than $25,000 had a higher credit score that the average “black” with income between $65,000 & $75,000.*

WHEN PANDERING, FACTS JUST GET IN THE WAY

With the promise that Fannie Mae and Freddie Mac (federal agencies) would buy them, the Bush Administration plowed ahead to pressure local banks to give mortgages to home-buyers who could not qualify under long established prudent loan standards, and/or had insufficient income to make the monthly mortgage payments.  Millions of sub-prime (AKA borrowers with low credit scores) mortgages were then sold by the banks to Fannie and Freddie.  That allowed these local banks to use fresh money to make additional risky mortgages.  Those, in turn, were also sold to Fannie & Freddie, who bundled them into securities and sold them to Wall Street banks. 

According to the Weekly Standard magazine, by mid-2006 minority homeownership grew by 2.7 million.  How many retained their ownership after the crash?  THAT information was never released.    

This risky lending behavior DOUBLED home prices in just six years.  As the Fed started raising interest rates for new mortgages, home values fell.  Homeowners with mortgage payments they could not make tried to sell their homes, but they could not get enough money to pay off the mortgage balance.  Their homes had negative equity.  Then, the banks began to foreclose and the homeowners were evicted.  Big Bank, buddies of the Ruling Elite, wound up with their homes, REGARDLESS the color of their skin.

HOW MANY MINORITIES LOST THEIR HOMES?

This reckless loan behavior allowed many to buy homes.  BUT, it also created the pathway for EXISTING homeowners to lose their homes.  Second, third and even fourth mortgages (as well as refinancing), were given out, sucking up every penny of equity existing homeowners had in their homes.  Second, third & fourth mortgages were sold under the guise of “equity loans.”  Banks trained their loan officers to call these loans “equity” loans and never call them “mortgages.”**

This scam worked on many homeowners.  As a practicing attorney I was often the one who delivered the bad news.  When they came to my office for bankruptcies and divorces, they heard for the first time that their “equity” loans were liens on their houses.  [A mortgage cannot be wiped out in bankruptcy without losing the home.]^

BIG BANKS WERE “TOO BIG TO FAIL,” THE HELL WITH HOMEOWNERS

In late September 2008, Republican presidential candidate, John McCain, joined in a summit with Democrat presidential candidate, Barack Obama, and the out-going president, George W. Bush to discuss this government-made crisis.  Senator McCain rushed back to Washington DC to vote “yes” to rescue his Big Bank donors.

The Emergency Economic Stabilization Act of 2008 (AKA: The Rescue Political Donors Act) was passed by the US House & Senate and signed into law by Bush on October 3, 2008.  It created the $700 billion Troubled Asset Relief Program (TARP) to purchase toxic assets from banks, but NOT from homeowners. Thus, tax dollars were used to transfer wealth from homeowners to Big Bank investors.  The taxpayers bailed out Big Bank, thus rewarding them for their reckless lending behavior.  Taxpayers who were also homeowners paid twice: losing their homes and providing Big Bank with the funds to continue operating.

The Biden Administration is bailing out California’s Silicon Valley Bank’s depositors and investors because most of them are green energy companies, and because the Board of Directors is made up of Hillary Clinton donors.  The Board has ONLY one director with banking experience.  As they were terrorizing major cities all over the nation, SVB gave over $73 Million to Black Lives Matter and other Marxist organizations.  New York’s Signature Bank, another woke bank that recently failed, gave $850,000 to BLM. Why doesn’t the administration demand that these donations be refunded to the banks?  Why should the taxpayers be the only ones to suffer from bank mismanagement?

HANDED A DAMAGED ECONOMY, OBAMA PUT IT INTO A RECESSION

By promising “Hope & Change” that he never explained, white guilt put him in the Oval Office TWICE.  To fulfill his America-Last goals, Obama made sure the economy never improved.  The Bush/Obama recession began with politicians ignorantly pandering to minorities. Obama intentionally maintained a sluggish economy his eight years to continue the work begun during the Clinton Administration: destroy the middle class.  It took President Trump’s policies to give Americans a robust economy for the first time in almost two decades.  Virtually EVERY America who wasn’t a member of the Ruling Elite suffered FOR YEARS under Bush & Obama who looked out for buddies and not the American people.

RACING TOWARD GLOBALISM: BIDEN PICKED UP WHERE FOUR FORMER PRESIDENTS LEFT OFF

*These figures are from Patrick J. Buchanan’s 2011 book, “SUICIDE OF A SUPERPOWER: Will America Survive To 2025?”

**This writer went round & round over the phone with a loan officer at Key Bank in Lake Oswego, Oregon.  He INSISTED that “equity” loans are not second mortgages.  I INSISTED that “equity” loans ARE second mortgages renamed to fool homeowners.

^The situation with a married couple with two teenagers still sticks in my mind.  They had received refinancing on the home they had owned for many years.  Their monthly income was about $2,300 and their monthly mortgage payments were about $2,300.  What loan officer in his right mind would approve such a loan?  He KNEW the bank would own their home in short order.  I cannot explain WHAT this couple was thinking.  Of course, the bank foreclosed and evicted them about 18 months after the loan papers were signed.