This is an email response to a friend of mine who forwarded a power point presentation that was done to explain the current economic crisis. The basis of the presentation was that most of our troubles started with Bill Clinton in 1998 and because Barack Obama was a recepient of money from Fannie Mae and Acorn that this is why we are in an mortgage crisis. Thought you would like to see my response...I am sure a few wont either.
"Since I was knee deep in this bulls%*t for the last 10 years (1998 just like the power point said) I thought I would fill you into some of the events that happened before 1998 that lead up to this crap.There is a piece that the power point left out...it was a bi-partisan vote for all of the decisions that I am about to discuss.
1. The reason that Fannie Mae started getting more aggressive was because of a loop-hole in the compliance standards of mortgage brokers. Since mortgage brokers do not service the loans that they write, they are only forced to take a loan back if it fails to preform within the first 12 months the loan is originated. Many of the questionable loans that I am aware of, involved a mortgage broker would make sure the customer had 12 months reserves and set the loan on automatic withdrawl...the first 12 months would always make it on time. The loan is a ticking time bomb, waiting to go off in 13 months or so. If a brokers loans would preform, he would get more business. Not to mention all of the false documentation (pretty easy to make fake tax returns on your laptop these days), fake business cards, fake phone numbers and verification. Unrealistic appraisal values, fradulent title work and closings...there was more than Obama invloved with this.
Now, how could this happen? I mean these people are trained in right? They have ethics classes and continuing education requirements right??? Wrong... MN in response to all of the foreclosures in the past year required all mortgage brokers in the State of MN to take 15 hours of education, so they could continue doing business in our state. Did you notice I said education and not Continuing Education or Required Education? That is because last year, 2007, was the 1st time in our state's history we required these f&*kers to go to training. I have held my Notary License, Life, Accededent and Health Insurance License, Property Casualty Insurance Licsense and my Real Estate Lisence in the State of MN. All together that took me over 300 hours, not to mention the yearly requirements to retain the license. (Hell, my babysitter has to do more required education than these guys...)
Mortgage brokers, on the other hand, 0 untill last year and now the State of MN is not requiring continuing ed for mortgage brokers in MN...too big of a hassle I guess to educate people that can ruin lives.
If you don't believe me here is a quote from the WFW 2006-11 Regulation of Brokers PDF..."An increasing number ofstates are requiring these originators to pass tests in order to become licensed." Not even 1/2 of our states require this yet. And let's not forget who is also a culprit in this crisis? The LAST Savings and Loan crisis...Freddie Mac and Fannie Mae were founded during the last S&L situation in the 1970's. That is why we even have these organizations to begin with...
In 1971, Freddie Mac offered its first conventional mortgage security, the Mortgage Participation Certificate (PC). Freddie Mac bought mortgages from lenders, primarily savings and loan associations (S&Ls), and then bundled them together in the form of mortgage-backed securities that were sold to investors. The holders of the PCs--most often institutional investors--received monthly principal and interest payments based on the underlying mortgages. Now almost every American is investing their retirement in whether or not their neighbor is going to pay on time...if those loans go bad they are worth 0.
In the 1960s, the United States violated a rule of economics. In Economics 101 classes, students learn about the guns or butter economy. Basically, if a nation is fighting a war, it has to divert resources that are normally used for domestic consumption into feeding the war machine. A nation cannot practically do both, even the world’s richest...this also needs to enter into the conversation about the economy.
If you ask little old me...I think there is plenty of blame to go around. This seems less like a partisan issue and more like a Male Issue to me...
P.S. Even though McCain was cleared of all the charges in the last S&L crisis (The Keating 5), he was still good enough friends with them that they had his phone number...interesting.
Feel free to pass this email out to anyone you feel like...including the professor that wrote the power point!!!"
...thanks for reading...VOTE or DIE
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