By: Jeffrey Klein
U.S. Attorney General Eric Holder and his boss, President Barack Obama, both took “victory laps” all over the media today, because the awesome force of the United States government, along with 49 state Attorneys General, and Obama’s “class warfare” mantra, allowed them to squeeze five of the largest banks in America for a $25 billion mortgage foreclosure “abuse” settlement, according to a FOXNews article today.
The heights of audacity and hypocrisy have finally reached the ionosphere.
As the resulting financial and emotional agony was spreading among millions of voters across the land, federal and state Democrat lawmakers, led by President Obama, and aided by the mainstream media, were swift to paint “big banks” as the “evil boogeyman,” whose unethical actions caused the devastating financial crisis since the Great Depression.
But, this is total fiction, delivered through self-serving political theatre.
False premises are at the heart of this fiction, made up to fit an emotional narrative, articulated perfectly in Dunstan Prial’s FOXNews article today.
First, that many thousands of Americans were wrongly thrown out of their homes as a result of shady foreclosure practices.
Second, providing financial reparations to the “victims” of these supposedly shady practices, will “right” the grievous wrongs, and the housing market–specifically the mortgage lending process, making it somehow operate more efficiently in the future.
Finally, as Anthony B. Sanders, finance professor George Mason University, pointed out in Prial’s article … “There’s no economic purpose to this settlement. It’s not going to undo the damage done by people defaulting.”
According to research firm, CoreLogic, 3.2 million people had lost their homes by foreclosure since September 2008–but under the settlement, checks of just $1,800 each will be sent to the estimated 750,000 borrowers who are deemed victims of these fraudulent foreclosure practices.
“Do we owe money to people asked to leave premises they weren’t paying for?” asked Sanders. “And is $1,800 going to get that house back?”
Sanders holds the view of most people who know the facts regarding the real origin of this financial catastrophe, because they don’t rely on the mainstream media for news and information, saying … “It’s been a witch hunt from the start. This has been driven by [Democrat] politicians and a desire for blatant retaliation or revenge against the banks.”
Many of these Democrat politicians taking the fight to the banks, were led by President Bill Clinton, to legislate new Community Reinvestment Act regulations in 1995, which “forced” these same banks, under penalty of law, to make these mortgage loans to low income, high risk residents of formerly “red-lined” (unstable and dangerous) neighborhoods.
Following that, many ACORN “boots on the ground” representatives, funded by the federal government as community outreach organizers, were behind every dissed low income borrower, threatening to file complaints with bank regulators.
So, sub-prime mortgages and debt-swap derivatives were designed by mortgage lenders and Wall Street respectively, so the government’s will could be done.
And the problem quietly grew to biblical proportions.
Former Sen. Chris Dodd (D-CT), who was chairman of the Senate Banking and Finance Committee, and soon to be former Rep. Barney Frank (D-MA), who was chairman of the House Banking and Finance Committee, both blocked several Bush Administration efforts to audit and investigate Fannie Mae and Freddie Mac, the largest purchasers of these mortgages.
In fact, Barney Frank, whose boyfriend was a marketing executive at Freddie Mac, testified before Congress, as recently as the mid 2007, that ‘there is no danger of a financial problem’ with either of these entities.
Six months later the rapid real estate market collapse began.
The late Bear Stearns and Lehman Brothers, both vaunted investment houses of world renown, were large holders of such assets–both of which collapsed into the largest bankruptcies of all time.
This necessitating the creation of the now famous trillion-dollar bailout fund T.A.R.P.–Troubled Asset Recovery Program, the effectiveness of which is still being decided.
As far as the current settlement goes, it was intentionally dressed up as “social justice,” with President Obama describing the deal as a “landmark settlement” that would “begin to turn the page on an era of recklessness,” while speeding relief to hard-hit homeowners.
Someday soon, a real justice might prevail–by applying the same ruthless effort shown by Eric Holder against the banks, to arrest and criminally prosecute Dodd and Frank–who both, ironically, sponsored the Financial Reform Act of 2009.
Perhaps they did it as a final act of penance.
Copyright (c) 2012 by Jeffrey Klein