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Three Diaries in One!

First up: Comments from 1999 on the passage of the Gramm-Leach-Bliley Act.

Second: Comments from 2005 on the rising CDS bubble

And Finally: A citation for the Rolling Stone report that stated that the CDS bubble was exempted from gambling laws.

Hat-tip to Denniger who provided this link to a NYT article from 1999
I found this to be an interesting blast from the past.

CONGRESS PASSES WIDE-RANGING BILL EASING BANK LAWS
By STEPHEN LABATON
Published: Friday, November 5, 1999

nytimes.com

Congress approved landmark legislation today that opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another's businesses.

The measure, considered by many the most important banking legislation in 66 years, was approved in the Senate by a vote of 90 to 8 and in the House tonight by 362 to 57. The bill will now be sent to the president, who is expected to sign it, aides said. It would become one of the most significant achievements this year by the White House and the Republicans leading the 106th Congress.

"Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,'' Treasury Secretary Lawrence H. Summers said. ''This historic legislation will better enable American companies to compete in the new economy.'

"The world changes, and we have to change with it,'' said Senator Phil Gramm of Texas, who wrote the law that will bear his name along with the two other main Republican sponsors, Representative Jim Leach of Iowa and Representative Thomas J. Bliley Jr. of Virginia. ''We have a new century coming, and we have an opportunity to dominate that century the same way we dominated this century. Glass-Steagall, in the midst of the Great Depression, came at a time when the thinking was that the government was the answer. In this era of economic prosperity, we have decided that freedom is the answer.

In the House debate, Mr. Leach said, ''This is a historic day. The landscape for delivery of financial services will now surely shift."

"I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010,'' said Senator Byron L. Dorgan, Democrat of North Dakota. "I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness."

Senator Paul Wellstone, Democrat of Minnesota, said that Congress had ''seemed determined to unlearn the lessons from our past mistakes."

''Scores of banks failed in the Great Depression as a result of unsound banking practices, and their failure only deepened the crisis,'' Mr. Wellstone said. ''Glass-Steagall was intended to protect our financial system by insulating commercial banking from other forms of risk. It was one of several stabilizers designed to keep a similar tragedy from recurring. Now Congress is about to repeal that economic stabilizer without putting any comparable safeguard in its place.''

''The concerns that we will have a meltdown like 1929 are dramatically overblown,'' said Senator Bob Kerrey, Democrat of Nebraska.

''If we don't pass this bill, we could find London or Frankfurt or years down the road Shanghai becoming the financial capital of the world,' said Senator Charles E. Schumer, Democrat of New York. ''There are many reasons for this bill, but first and foremost is to ensure that U.S. financial firms remain competitive.''

But other lawmakers criticized the provisions of the legislation aimed at discouraging community groups from pressing banks to make more loans to the disadvantaged. Representative Maxine Waters, Democrat of California, said during the House debate that the legislation was ''mean-spirited in the way it had tried to undermine the Community Reinvestment Act.'' And Representative Barney Frank, Democrat of Massachusetts, said it was ironic that while the legislation was deregulating financial services, it had begun a new system of onerous regulation on community advocates.

One Republican Senator, Richard C. Shelby of Alabama, voted against the legislation. He was joined by seven Democrats: Barbara Boxer of California, Richard H. Bryan of Nevada, Russell D. Feingold of Wisconsin, Tom Harkin of Iowa, Barbara A. Mikulski of Maryland, Mr. Dorgan and Mr. Wellstone.

Senator Byron L. Dorgan (ND) wins the internets!
Senator Paul Wellstone (MN) comes in a close second.

You can find Denninger's commentary here:
http://market-ticker.denninger.net/...

The following op-ed is not quite as prescient and doesn't skewer the lawmakers, but is an interesting look from 2005. Another guy who earned his 'told you so' stripes.

See a Bubble?
By ROGER LOWENSTEIN
Published: June 5, 2005

... Although my bank did not describe it this way, an adjustable-rate mortgage is a bet between the bank and the homeowner. If rates fall or remain stable, I win; if rates rise, I lose. Of course, if I lose, the bank might also lose. I might, heaven forbid, default.

Why would a bank finance a home that under a conventional mortgage the borrower could not afford? Some computer in its vault was evidently mollified by the variability of the rate. What makes this bet rather interesting is that millions of other people have the same kind of loan that I do. If rates should take a sudden upturn, it is conceivable that a good many will default, in which case an instrument (a floating-rate mortgage) conceived to help the bank manage interest-rate risk will have resulted in increasing the bank's losses.

The saving grace is that home loans generally are the last thing people default on. But imagine how scary it would be if, say, businesses extended floating-rate contracts to one another -- if virtually every company were dependent on making the right calculation about how these risk-avoidance vehicles would function.

Well, actually, they do. They are called derivatives. Derivatives are contracts that call for one party to pay another according to the movement of an underlying yardstick, like a foreign currency, a bond, a stock or even the weather. Since the 1980's, Wall Street has marketed derivatives as a tool for making risk more palatable, and Alan Greenspan has consistently praised them for enabling firms to spread, or ''manage,'' their risk. For instance, a bank can hedge against the risk that one of its loans will sour. It simply -- well, not so simply -- purchases a ''credit default swap,'' which entitles it to a payoff if a specified company, G.M. for instance, goes into default or suffers a material downgrade in its credit rating. The party on the other side might be a hedge fund that is more sanguine on G.M.'s bonds or has a way (it thinks) to hedge that risk. Every financial firm uses some varieties of derivatives, which, again, are contracts that call for a payment (one way or other) depending on some underlying asset. Their growth has been explosive. Credit-default swaps, for instance, didn't exist a decade ago; today there are $8 trillion of them.[tcb: that number ballooned to over $150 trillion] No one has any idea of the losses that could ensue from a panic; credit-default swaps ''have never been stress-tested,'' notes the analyst James Bianco.

Neither the Fed nor the S.E.C. has ever really clamped down on derivatives or insisted on a form of disclosure that would tell folks what is going on. So forget hedge funds; if you're searching for the next financial storm, try derivatives. (Nothing much you can do about them, either.) Come to think of it, most of the sudden financial disasters of the previous decade -- Orange County, L.T.C.M., Enron -- involved derivatives, too.

There is a paradox here. A vehicle developed to help reduce individual risk has heightened risk to the system. At some point, the anxiety turned counterproductive. There was a time, of course, when people could buy only the homes they could afford and invested in only a few, carefully chosen stocks -- when traders could not run certain risks because no derivatives existed to provide a hedge. Today, whether you are a trader or homeowner, bank or corporate treasurer, our financial culture offers a prophylactic against every conceivable worry. Maybe weaving a giant insurance net is really the way to manage anxiety, but maybe it has us worrying about what we will do if the insurance fails. Perhaps, if there were fewer traders dulling their anxieties with financial Zoloft and fewer investment options available to the rest of us, we would make better decisions -- and sleep more soundly.

http://www.nytimes.com/...

I heard an interview with the author of a piece published by the Rolling Stone on Democracy Now! the other night. What they claimed is that the Credit Default Swaps market not only looked like gambling  - with companies buying insurance on the survival of other companies  - but the case could be made legally that the CDS market was a form of gambling and that Congress had specifically exempted companies like AIG from regulation under 'gaming' laws. Sounded more like urban legend than congressional legislation to me, but here it is:

10 ``(2) This Act shall supersede and preempt the
11 application of any State or local law that prohibits
12 or regulates gaming or the operation of bucket shops
13 (other than antifraud provisions of general applicability) in the case of
15 ``(A) an electronic trading facility excluded
16 under section 2(e) of this Act; and
17 ``(B) an agreement, contract, or trans
18 action that is excluded from this Act under sec
19 tion 2(c), 2(d), 2(f ), or 2(g) of this Act or title
20 IV of the Commodity Futures Modernization
21 Act of 2000, or exempted under section 2(h) or
22 4(c) of this Act (regardless of whether any such
23 agreement, contract, or transaction is otherwise
24 subject to this Act).''.

http://www.cftc.gov/...

Now this act was not passed into law directly. Wiki explains that it was incorporated by reference into the omnibus spending bill passed into law just before Christmas, Dec 2000. Lets look at the players behind that bill.

The "Commodity Futures Modernization Act of 2000" (H.R. 5660) was introduced in the House on December 14, 2000 by Rep. Thomas W. Ewing (R-IL) and cosponsored by Rep. Thomas J. Bliley, Jr. (R-VA) Rep. Larry Combest (R-TX) Rep. John J. LaFalce (D-NY) Rep. Jim Leach (R-IA) and never debated in the House.[2]

The companion bill (S.3283) was introduced in the Senate on December 15, 2000 (The last day before Christmas holiday) by Sen. Richard Lugar (R-IN) and cosponsored by Sen. Peter Fitzgerald (R-IL) Sen. Phil Gramm (R-TX) Sen. Chuck Hagel (R-NE) Sen. Thomas Harkin (D-IA) Sen. Tim Johnson (D-SD) and never debated in the Senate.

http://en.wikipedia.org/...

Don't get me wrong. Deregulation is only one leg of the stool. Those who argue that the mortgage market was increasingly distorted by multiple revisions to the Community Reinvestment Act and other manipulations of the mortgage market such as the ADDI in which the govt made millions of down payments on houses for those who couldn't afford it have a point. And then there is the Main Street personal responsibility of consumers taking on too much debt and Wall Street corporate responsibility of taking on too much risk.

Part of playing the political game is defending your guys in power. But there comes a time when the establishment must be broken and the gates crashed. Summers, Schumer, Frank, and Dodd are all neck-deep in this shit. They are all establishment members. I'm not keen on turning on each other, knives in hand. But now that we have won the electoral victory are we going to continue to allow the banking and financial industry to own the DNC in Washington?

Originally posted to TellerCountyBlue on Sat Mar 28, 2009 at 10:41 AM PDT.

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Comment Preferences

  •  Thanks, TCB, for the great info and... (0+ / 0-)

    ...all your hard work.

    Looks like you had lots to do during the blizzard. (I'm down the pass in El Paso County).

    Dorgan and Wellstone hit homers.

    When my credit union tried to push variable rate crap (did so without asking!) on my son's new place about 5 years ago, I told them, understanding the risk, to  go back to the drawing board. Not sure my kids would have recognized or understood what was at play. Kids need more education in applied economics.

  •  A couple of problems with an otherwise excellent (1+ / 0-)
    Recommended by:
    TellerCountyBlue

    diary.  Frank is not the evil one; he has been a brake and has stood up for sanity and low income people. He has kept things from being much worse. Remember, until January 2007 he was fighting Repub majorities.

    The others, yeah, evil. Wish someone could rid the place of Schumer. AG anyone?
    Put on your hip boots; you'll be wading thru a lot of bullshit. There is no copyright problem; they are public docs.

    Oct 15, 2002

    President Hosts Conference on Minority Homeownership
    George Washington University
    Washington, D.C.

    Fact sheet Policy in Focus: Minority Homeownership

    1:55 P.M. EDT

    President George W. Bush addresses the White House Conference on Increasing Minority Homeownership at The George Washington University Tuesday, Oct. 15. Sitting behind the President are new homeowners the Horton Family and Kim Berry, who is laughing with Secretary of Housing and Urban Develop Mel Martinez. White House photo by Paul Morse. THE PRESIDENT: Thank you, all. Thanks, for coming. Well, thanks for the warm welcome. Thank you for being here today. I appreciate your attendance to this very important conference. You see, we want everybody in America to own their own home. That's what we want. This is -- an ownership society is a compassionate society.

    More and more people own their homes in America today. Two-thirds of all Americans own their homes, yet we have a problem here in America because few than half of the Hispanics and half the African Americans own the home. That's a homeownership gap. It's a -- it's a gap that we've got to work together to close for the good of our country, for the sake of a more hopeful future. We've got to work to knock down the barriers that have created a homeownership gap.

    I set an ambitious goal. It's one that I believe we can achieve. It's a clear goal, that by the end of this decade we'll increase the number of minority homeowners by at least 5.5 million families. (Applause.)

    Some may think that's a stretch. I don't think it is. I think it is realistic. I know we're going to have to work together to achieve it. But when we do our communities will be stronger and so will our economy. Achieving the goal is going to require some good policies out of Washington. And it's going to require a strong commitment from those of you involved in the housing industry.

    Just by showing up at the conference, you show your commitment. And together, together we will work over the next decade to enable millions of our fellow Americans to own a piece of their own property, and that's their home.

    I appreciate so very much the home owners who are with us today, the Arias family, newly arrived from Peru. They live in Baltimore. Thanks to the Association of Real Estate Brokers, the help of some good folks in Baltimore, they figured out how to purchase their own home. Imagine to be coming to our country without a home, with a simple dream. And now they're on stage here at this conference being one of the new home owners in the greatest land on the face of the Earth. I appreciate the Arias family coming. (Applause.)

    We've got the Horton family from Little Rock, Arkansas, here today. Actually, it's not Little Rock; it's North Little Rock, Arkansas. I was corrected. (Laughter.) I appreciate so very much these good folks coming all the way up from the South. They were helped by HUD, they were helped by Freddie Mac. Obviously, they've got a young family. And when we start talking about owning a home, a smile spread right across the face of the dad that could have lit up the entire town of Washington, D.C. (Applause.) I appreciate you all coming. Thanks for coming. He had to make sure I knew that he was educated in Texas. (Laughter.)

    Finally, Kim Berry from New York is here. She's a single mom. You're not going to believe this, but her son is 18 years old. (Laughter.) She barely looked like she was 18 to me. And being a single mom is the hardest job in America. And the idea of this fine American working hard to provide for her child, at the same time working hard to realize her dream, which is owning a home on Long Island, is really a special tribute to the character of this particular person and to the character of a lot of Americans. So we're honored to have you here, Kim, and thanks for being such a good mom and a fine American. (Applause.)

    I told Mel Martinez I was serious about this initiative. We started talking about it and I said, well, you know, I'm the kind of fellow, I don't like to lay out a goal and don't mean it. I think it's not -- I don't think it's fair for the American people to be -- to have a President or anybody else, for that matter, lay out a goal and just kind of say it, but don't mean it. I mean it. And the good news is, Mel Martinez believes it and means it, as well. He's doing a fine job of running HUD, and I'm glad he has joined my Cabinet. (Applause.)

    And I picked a pretty spunky deputy, as well, Alphonso Jackson -- my fellow Texan. (Applause.) I call him A.J.

    I appreciate the Secretary of Agriculture being here. She's got a lot of money having to do with rural housing. I appreciate Ann's commitment to rural America. And I'm really proud of the job she's doing, as well, for the American people, serving in my Cabinet. Thanks for coming, Ann. (Applause.)

    I've got some others in my administration, as I look around. I see Rosario Marin, who's the Treasurer of the United States. Rosario used to be a mayor. Thank you for coming, Madam Mayor. (Applause.) She understands how important housing is. I see other mayors around here, and I want to thank the mayors for coming. After all, it's in your interest that this project succeed.

    I know we've got some folks from the faith-based community here. Luis Cortes, from Philadelphia is here; and my friend, Kirbyjon Caldwell, from Houston, Texas. Kirbyjon, I had breakfast with him this morning. He told me he was going to have to leave before my speech. He's a wise man, that Kirbyjon Caldwell. (Laughter.) But he has gone back home to Texas. I appreciate Margaret Spellings and her staff. Margaret is the Domestic Policy Advisor to the President, and I want to thank you for putting on this conference, Margaret.

    All of us here in America should believe, and I think we do, that we should be, as I mentioned, a nation of owners. Owning something is freedom, as far as I'm concerned. It's part of a free society. And ownership of a home helps bring stability to neighborhoods. You own your home in a neighborhood, you have more interest in how your neighborhood feels, looks, whether it's safe or not. It brings pride to people, it's a part of an asset-based to society. It helps people build up their own individual portfolio, provides an opportunity, if need be, for a mom or a dad to leave something to their child. It's a part of -- it's of being a -- it's a part of -- an important part of America.

    Homeownership is also an important part of our economic vitality. If -- when we meet this project, this goal, according to our Secretary of Housing and Urban Development, we will have added an additional $256 billion to the economy by encouraging 5.5 million new home owners in America; the activity -- the economic activity stimulated with the additional purchasers, the additional buyers, the additional demand will be upwards of $256 billion. And that's important because it will help people find work.

    Low interest rates, low inflation are very important foundations for economic growth. The idea of encouraging new homeownership and the money that will be circulated as a result of people purchasing homes will mean people are more likely to find a job in America. This project not only is good for the soul of the country, it's good for the pocketbook of the country, as well.

    To open up the doors of homeownership there are some barriers, and I want to talk about four that need to be overcome. First, down payments. A lot of folks can't make a down payment. They may be qualified. They may desire to buy a home, but they don't have the money to make a down payment. I think if you were to talk to a lot of families that are desirous to have a home, they would tell you that the down payment is the hurdle that they can't cross. And one way to address that is to have the federal government participate.

    And so we've called upon Congress to set up what's called the American Dream Down Payment Fund, which will provide financial grants to local governments to help first-time home buyers who qualify to make the down payment on their home. If a down payment is a problem, there's a way we can address that. And when Congress funds the program, this should help 200,000 new families over the next five years become first-time home buyers.

    Secondly, affordable housing is a problem in many neighborhoods, particularly inner-city neighborhoods. You may -- we may have qualified home buyers, but if there's no home to buy, this initiative isn't going anywhere. And so one of the things that we're going to -- that I'm doing is proposing a single-family affordable housing credit to encourage the construction of single-family homes in neighborhoods where affordable housing is scarce. (Applause.)

    Over the next five years the initiative will provide home builders and therefore home buyers with -- home builders with $2 billion in tax credits to bring affordable homes and therefore provide an additional supply for home buyers. It's really important for us to understand that we can provide incentive for people to build homes where there's a lack of affordable housing.

    And we've got to set priorities. And one of the key priorities is going to be inner-city America. Good schools and affordable housing will help revitalize our inner cities.

    Another obstacle to minority homeownership is the lack of information. You know, getting into your own home can be complicated. It can be a difficult process. I had that very same problem. (Laughter and applause.)

    Every home buyer has responsibilities and rights that need to be understood clearly. And yet, when you look at some of the contracts, there's a lot of small print. And you can imagine somebody newly arrived from Peru looking at all that print, and saying, I'm not sure I can possibly understand that. Why do I want to buy a home? There's an educational process that needs to go on, not only to explain the contract, explain obligation, but also to explain financing options, to help people understand the complexities of a homeownership market, and also at the same time to protect people from unscrupulous lenders, people who would take advantage of a good-hearted soul who is trying to realize their dream.

    Homeownership education is critical. And so today, I'm pleased to announce that through Mel's office, we're going to distribute $35 million in 2003 to more than 100 national, state and local organizations that promote homeownership through buyer education. (Applause.)

    And, of course, one of the larger obstacles to minority homeownership is financing, is the ability to have their dream financed. Right now, we have a program that all of you are familiar with, maybe our fellow Americans are, and that's what they call a Section 8 housing program, that provides billions of dollars in vouchers to help low-income Americans with their rent. It encourages leasing. We think it's important that we use those vouchers, that federal money to help low-income Americans go from being somebody who leases to somebody who owns; that we use the Section 8 program to not only help with down payment, but to help with continuing monthly mortgage payments after they're into their new home. It is a -- it is a way to help us meet this dream of 5.5 million additional families owning their home.

    I'm also going to encourage the lending industry to develop a mortgage market so that this script, these vouchers, can regularly be used as a source of payment to provide more capital to lenders, who can then help more families move from rental housing into houses of their own.

    He's talking about people who can't afford to RENT!

    These are some of the barriers that home owners face, potential home owners face, and this is what we intend to do about it. But like in a lot of our life, government can't do everything. It's impossible to provide every aspect of a national strategy, particularly in this case. And that's why we need the help of private and nonprofit sectors in our country to help play a vital role in helping to meet the goal. Many of you here represent the nonprofit, as well as the private sectors of our economy and our country, and I want to thank you for your commitment.

    Last June, I issued a challenge to everyone involved in the housing industry to help increase the number of minority families to be home owners. And what I'm talking about, I'm talking about your bankers and your brokers and developers, as well as members of faith-based community and community programs. And the response to the home owners challenge has been very strong and very gratifying. Twenty-two public and private partners have signed up to help meet our national goal. Partners in the mortgage finance industry are encouraging homeownership by purchasing more loans made by banks to African Americans, Hispanics and other minorities.

    Representatives of the real estate and homebuilding industries, through their nationwide networks or affiliates, are committed to broadening homeownership. They made the commitment to help meet the national goal we set.

    Freddie Mae -- Fannie Mae and Freddie Mac -- I see the heads who are here; I want to thank you all for coming -- (laughter) -- have committed to provide more money for lenders. They've committed to help meet the shortage of capital available for minority home buyers.

    Fannie Mae recently announced a $50 million program to develop 600 homes for the Cherokee Nation in Oklahoma. Franklin, I appreciate that commitment. They also announced $12.7 million investment in a condominium project in Harlem. It's the beginnings of a series of initiatives to help meet the goal of 5.5 million families. Franklin told me at the meeting where we kicked this office, he said, I promise you we will help, and he has, like many others in this room have done.

    Freddie Mac recently began 25 initiatives around the country to dismantle barriers and create greater opportunities for homeownership. One of the programs is designed to help deserving families who have bad credit histories to qualify for homeownership loans. Freddie Mac is also working with the Department of Defense to promote construction and financing for housing for men and women in the military.

    There's all kinds of ways that we can work together to meet the goal. Corporate America has a responsibility to work to make America a compassionate place. Corporate America has responded. As an example -- only one of many examples -- the good folks at Sears and Roebuck have responded by making a five-year, $100 million commitment to making homeownership and home maintenance possible for millions of Americans.

    There have been other steps that are being taken to close the homeownership gap. And you've heard some of the stories here today, people much more eloquent than me, to talk about what's taking place on the front line of meeting this national goal.

    The non-profit groups are bringing homeownership to some of our most troubled communities. And as you know, I'm a strong advocate of what I call the faith-based initiative. And the reason I am is because I understand the universal call to love a neighbor like you'd like to be loved yourself, and that includes helping somebody find a home.

    One such example is the Enterprise Foundation, a national non-profit organization that provides assistance to grassroots homeownership organizations. Because of their work, as one example, 185 affordable homes will be available in the Baltimore neighborhood that was once so crime-ridden that people had written it off. Revitalizing neighborhoods is a real possibility if people put their mind to it. And at the same time, you're helping people own a home in America.

    And the faith-based community is doing some fantastic work when it comes to encouraging homeownership, whether it be financial counseling, or job training or other outreach services, to help people understand what it takes to buy a home.

    And then there's my friend Kirbyjon Caldwell. He not only provides counseling and job training, he actually decided to encourage a development of homes in the Houston area. People -- low-income people are going to be able to more afford a home in Texas because of Kirbyjon's vision and work. He's answered the call of faith to help people help themselves and to help them realize dreams.

    The other thing Kirbyjon told me, which I really appreciate, is you don't have to have a lousy home for first-time home buyers. If you put your mind to it, the first-time home buyer, the low-income home buyer can have just as nice a house as anybody else. And I know Kirbyjon. He is what I call a social entrepreneur who is using his platform as a Methodist preacher to improve the neighborhood and the community in which he lives.

    And so is Luis Cortes, who represents Nueva Esperanza in Philadelphia. I went to see Luis in the inner-city Philadelphia. Luis is -- at least he was -- he's probably still there -- in what one would call a tough neighborhood. There's a lot of abandoned buildings. And I mean, beautiful old structures just empty. Luis had a dream to revitalize his neighborhood, starting with a good charter school, one that would work, one that would teach kids how to read and write and add and subtract.

    But he also understood that a homeownership program is incredibly important to revitalize this neighborhood that a lot of folks had already quit on. I suspect one day we'll all go back to Luis' neighborhood and we'll find first-time home owners there, and a good education system. And this will be the beginning of a -- of a neighborhood revitalization in that part of Philadelphia, because there was vision and drive and hope for our fellow citizens.

    So I want to thank you all for coming. I want to thank you for your determination to help close the minority homeownership gap. It's an incredibly important initiative for this country. See, America is a good and generous country. It's a great place. Part of it was to make sure that the dream, the American Dream, the ability to come from anywhere in our society and say, I own this home, is a reality -- can be achievable for anybody, regardless of their status, regardless of their -- of whether or not they -- whether or not they think the dream is meant for them.

    I mean, we can put light where there's darkness, and hope where there's despondency in this country. And part of it is working together as a nation to encourage folks to own their own home.

    Again, I want to tell you, this is an initiative -- as Mel will tell you, it's an initiative that we take very seriously. We're going to stay on it until we're -- until we achieve the goal. And as we all achieve the goal, we can look back and say, America is a better place for our hard work, our efforts and our desires for our fellow Americans to realize the greatness of our country.

    Thank you for coming. May God bless your vision. May God bless America. (Applause.)

    END 2:18 P.M. EDT

    For Immediate Release
    Office of the Press Secretary
    October 15, 2003

    Fact Sheet: Expanding Homeownership Opportunities and Strengthening Our Economy

        Fact sheet en Español

    Today's Presidential Action

    Today, President Bush traveled to Ruiz Foods in Dinuba, California to discuss the economy, the strong housing market, and his homeownership agenda including the American Dream Downpayment Fund. The strong housing market is beneficial for communities across the Nation. Because of rising home values, Americans are enjoying three trillion dollars of greater housing wealth than they did in 2000. America's families are refinancing due to the lowest mortgage rates in 45 years, saving hundreds of dollars a month on their home payments.

    The President called on the Senate to pass The American Dream Downpayment Act, which would help approximately 40,000 families a year with their down payment and closing costs, and further stimulate America's housing market.

    Background on Today's Presidential Action

    In June 2002, President Bush announced the goal of increasing the number of minority homeowners by at least 5.5 million before the end of the decade. The President's aggressive housing agenda to dismantle the barriers to homeownership includes providing down payment assistance through the American Dream Downpayment Fund; increasing the supply of affordable homes through the Single-Family Affordable Housing Tax Credit; increasing support for self-help homeownership programs like Habitat for Humanity; simplifying the home-buying process; and increasing home-buying education. President Bush issued America's Homeownership Challenge to the real estate and mortgage finance industry to join the effort to take concrete steps to close the gap that exists between the homeownership rates of minorities and non-minorities.

    The Bush Administration and the America's Homeownership Challenge partners in the private sector have been working hard to increase minority homeownership, and have already seen positive results:

       * There are 809,000 new minority homeowners in the U.S. since the President's announcement.
       * Nearly 1,500 low-income families are now using housing vouchers to pay their monthly mortgage or other costs of owning a home, and the Department of Housing and Urban Development (HUD) is working with public housing authorities to allow the sale of units to tenants.
       * The Federal Trade Commission and HUD are working together to protect homebuyers from predatory lenders.
       * The Federal Deposit Insurance Corporation is implementing their Money Smart program, which is providing financial education services for potential homebuyers.
       * Through America's Homeownership Challenge, more than 2 dozen companies have made commitments to increase minority homeownership, including pledges to provide more than $1.1 trillion in mortgage purchases for minority homebuyers this decade.

    According to a study released in 2002 by HUD, meeting the President's goal to close the gap will involve $256 billion in economic activity in the form of construction and remodeling jobs, spending on household goods, and other benefits.

    10K for rehab, closing costs gives you about zip for an actual down payment. It's just enough to get you in the door of your friendly bank.

    This has nothing to do with CRA; those loans were fine. They were not made to credit unworthy.

    We are in a time where it is risky NOT to change. Barack Obama 7-30-08

    by samddobermann on Sun Mar 29, 2009 at 04:13:28 PM PDT

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