(OT) Bailout Revealed on CNBC Kudlow-For Foreign Banks! - Page 1

http://www.cnbc.com/id/15840232?video=873682522&play=1

1 minute...CA Congressman Sherman reveals it!

 Let's look at an article from 9 years ago:

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260

"In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits."

NO bailout for recklessly handing out money like water, to people with NO ABILITY TO PAY IT BACK!!!!!!!!

Yesterday's news.

 From Mother Jones (July 1, 2000):

http://www.motherjones.com/cgi-bin/print_article.pl?url=http://www.motherjones.com/news/outfront/2000/07/outfrontja00.html

Home Cheat Home

Tabatha evans didn't set out to buy a house. An unemployed single mother living on $12,000 a year in government assistance, Evans was looking to rent a place in Baltimore when she was approached by a speculator who told her she could become a homeowner for just $500 down with a loan backed by the Federal Housing Administration. After looking at a house that had been approved by the FHA, she signed some papers, secured a $78,000 government loan, and moved in with her two boys.

Evans quickly discovered that the house was worth much less than she paid for it. The investor, it turned out, had purchased the run-down house from the government only a few months earlier for $6,672. He had billed it as "fully rehabilitated," but the repair work consisted of a paint job and a drop ceiling to hide structural damage. The foundation was crumbling, and the house had no working furnace. The gas leaked, and kitchen cabinets fell from the wall. When it rained, water poured into the kitchen. "That house got the duct-tape version of home improvements," says Carl Cleary, a housing counselor in Baltimore.

The cost of repairs left Evans strapped for cash. "I could fix the house so the kids would be safe," she explains, "or I could pay the $500 mortgage." While the investor walked away with a hefty profit, Evans now faces foreclosure. And should she lose her home, taxpayers will pick up the tab to pay off her defaulted loan.

Evans is among tens of thousands of low-income homeowners victimized by a scam called "flipping" that is being repeated every day in inner-city neighborhoods from Syracuse to Los Angeles. To resurrect blighted urban areas, the government sells abandoned houses to real estate investors for renovation. But some speculators simply slap on cosmetic repairs and "flip" the properties, reselling them for many times their true value. Because the FHA co-signs the loans, it gets stuck with the bill when homeowners can't pay the inflated mortgages. Last year the agency spent $6.5 billion to bail out 78,890 home loans that went bad-up 30 percent in three years. The foreclosed homes are seized, boarded up, and put back on the market, and the cycle starts all over again.

"We have found flipping scams in every city we've investigated," says an official with the Department of Housing and Urban Development, which recently indicted 41 Realtors, lenders, and appraisers in California. "What has me shaking is that we have these kinds of numbers on defaults and we are in a bull market."

Federal investigators call flipping more lucrative than bank robbery -- but it was mortgage bankers who lobbied to make the scheme possible. Historically, the FHA assigned independent appraisers to inspect houses and set a fair value. But lenders wanted to select their own appraisers. They claimed it would streamline the process. But it would also make it easier to find someone who would ignore shoddy repairs and approve jacked-up prices.

The industry certainly had plenty of clout on Capitol Hill. From 1991 to 1994, lenders handed out $2.3 million in campaign contributions, and the investment paid off. At a meeting of the Mortgage Bankers Association in 1993, the FHA unveiled a "lender select" policy allowing bankers to choose appraisers. The news was greeted by a standing ovation.

Because the FHA supports low-income home buyers with shak

 Con't

Because the FHA supports low-income home buyers with shaky credit, defaults on agency loans have always been above the industry average. But since lenders have been allowed to handpick their own appraisers, investigators say, foreclosures have skyrocketed. In Baltimore, lenders filed 5,000 petitions for foreclosure on FHA loans last year, up from just 1,900 in 1994. In Chicago, 150 homeowners in a single neighborhood are suing a realty firm called Easy Life that they accuse of selling dilapidated housing at inflated prices. In Milwaukee, lawmakers are investigating investors who bought up entire city blocks and fixed prices -- sometimes buying homes for as little as $3,000 and reselling them weeks later for $40,000.

Appraisers are supposed to serve as the FHA's last checkpoint against such fraud. But a review of federal records and interviews with dozens of housing inspectors and federal regulators reveals that some lenders are pressuring appraisers to overlook defects and inflate values. "One guy threatened to break my legs if I didn't pass his house," says Jim Hawthorne, who inspects repairs for the FHA in New Jersey. "Another pulled a gun on me because I wouldn't pass his house."

In one loan document obtained by Mother Jones, a Florida lender added a handwritten note instructing the appraiser to pass a house at a set price -- or pass up the job. "Please do not complete this appraisal," the note reads, "if you cannot get the value I need."

"Lenders and brokers are dependent on each other for their income," says Michael Comstock, a former FHA appraiser in California. "It is pretty well recognized by everyone that this relationship is corrupt."

The FHA is supposed to review 10 percent of all appraisals to ensure that homeowners and taxpayers aren't being cheated -- but sources familiar with the agency say such reviews rarely take place. "There just isn't the staff or the know-how to pull off that kind of thing," says a former official who asked not to be identified.

As a result, lenders are using the federal loan program to cheat the very people it is intended to help. Families "place their trust in someone they thought was an agent of the government, and they get taken for a ride," says Cleary, the housing counselor.

The government has attempted to address the loan crisis by penalizing appraisers and lenders who have disproportionately high default rates. But when a firm called Capital Mortgage and 19 other lenders suspended from the FHA program sued, the agency backed down and reinstated the companies.

"It's the perfect scam, really," says Ira Rheingold, an attorney representing hundreds of homeowners in Chicago. "Appraisers need the work, the real estate agents get their commissions up front, and FHA cleans up the mess. I call FHA the enabler in this scam. There are lots of people preying on poor people, but for the government to approve these shoddy loans is a disgrace." -- Kathryn Wallace

To blame all of our current fiancial distress in the USA on the homeloan problem is wrong.  It is true many criminals used financial fraud to make many bad mortgages, but this is just a cover story for an administration who has spent like drunken sailors the last eight years.  All the money for the 2.9 trillion dollar war was borrowed from the federal reserve.  Add to this the oil companies raising all their prices, some of it gouging and some due to the decreased value of the dollar.  This is the weimar republic in slow motion. 

But it may be speeding up if the gov't get this big 700 billion dollar bailout (really it is a payoff and only the first installment of what will be an issuing of an additional 5 trillion US dollars.  This will probably inflate our dollar to the point where we will have to have a new currency and this will take most of the world down with us, thus allowing the worlds elite secret rulers to create a one world currency and gov't, which is what they have been working so hard for.  Over the last twenty years all administrations have worked hard to gut and strip the USA of manufacturing and heavy industry under nafta, gatt, WTO.  Of course our standiard of living will be cut by 50-75%.  What else could happen when all our manufacturing is  moved out of the country and the good paying jobs are being eliminated?

Micky...FHA has always had strict criteria for lending. Usually its been NO EXCEPTION.

DTI/Debt Ratios are very strict. Always were.   FHA appraisal requirements were the strictest & most complete.

The housing market was overvalued. Too much credit, made possible BY the Federal Reserve.

You cant fault the borrower here, its blaming the victim.

Nor do you lay any blame on the US economy which is killing homeowners,  work in every sector is now gutted  except in healthcare, which will be socialized, soon enough.  Would you like a list of the Closed Retail Businesses & Fortune 500 Companies?

I cant believe they are going through with it. a stab in the back to all taxpayers

Just Bend Over & take your medicine. Dont question authority,  & OBEY PROPOGANDA.  Be a good little Tax Serf.

That is all...hope youre well,  Andy

ps Forget Liberal politics. Buy a gun, or better yet, guns as in plural..

ugly I am thinking about it. things will get worse, now the major banks, how many left 2? will get our money and lend it to ford, gm, so they can build plants in mexico. Why not give the money to small banks across the country to help ma and pop business. I say no bail out