On Sep 15, 12:04*pm, wrote:
Please read the following overview:

Bankrupt "Exploiters" *by Thomas Sowell, Ph.D. Economics

Pt.1http://townhall.com/columnists/ThomasSowell/2008/07/22/bankrupt_explo....
Pt.2http://townhall.com/columnists/ThomasSowell/2008/07/23/bankrupt_explo....

After reading the above please see "Community Reinvestment Act"http://en.wikipedia.org/wiki/Community_Reinvestment_Act

The Community Reinvestment Act (CRA) was passed into law by the U.S.
Congress in 1977 (CARTER) as a result of national grassroots pressure
(LIberal Fascists) for affordable housing, and despite considerable
opposition from the mainstream banking community. Only one banker [in
the entire U.S.], Ron Grzywinski from ShoreBank in [south side]
CHICAGO, testified in favor of the act.

The largest and oldest community development financial institution is
ShoreBank, headquartered in the South Shore neighborhood of Chicago.

In 1985, Ron Grzywinski worked closely with then Arkansas Governor
Bill CLINTON to set up the Southern Development Bancorporation.http://en.wikipedia.org/wiki/Ron_Grzywinski

CLINTON later credited ShoreBank’s success with inspiring a movement
of community development financial institutions (CDFI’s).http://en.wikipedia.org/wiki/Communi...al_institution

In a 1992 speech, CLINTON called ShoreBank “the most important bank in
America." [Indeed!]

In addition to ShoreBank, Ron Grzywinski currently works with the
board of the Aga Khan Foundation in PAKISTAN

In 1995, as a result of interest from President CLINTON's
administration, the implementing regulations for the CRA were
strengthened by focusing the financial regulators' attention on
institutions' performance in helping to meet community credit needs.

The 1995 revisions were credited with helping to substantially
increase the amount of loans to small businesses and to low- and
moderate-income borrowers for home loans. Part of the increase in the
latter type of lending was no doubt due to increased efficiency in the
secondary market for mortgage loans. The revisions allowed the
securitization of CRA loans containing SUBPRIME mortgages. The first
PUBLIC SECURITIZATION (Socialism- your taxes!) of CRA loans STARTED IN
1997.
(...)
Changes to tests conducted on the Intermediate Small category were
viewed by some as decreasing the institutions' obligations to meet
lending requirements of low- and moderate-income households. Racial
inequities in mortgage acceptance rates (as reported by Inner City
Press, the National Community Reinvestment Coalition, ACORN [see
below] and other groups) are cited as a primary reason to maintain or
even increase the scope of the CRA.

[ Notice that ShoreBank and its banker, Ron Grzywinski, is from the
south side of Chicago. *The exact same area that ObaMao became a
"Community Organizer". ]

***

The thousands of mortgage defaults and foreclosures in the "subprime"
housing market (i.e., mortgage holders with poor credit ratings) is
the direct result of thirty years of government policy that has forced
banks to make bad loans to un-creditworthy borrowers. The policy in
question is the 1977 Community Reinvestment Act (CRA), which compels
banks to make loans to low-income borrowers and in what the supporters
of the Act call "communities of color" that they might not otherwise
make based on purely economic criteria.

The original lobbyists for the CRA were the hardcore leftists who
supported the Carter administration and were often rewarded for their
support with government grants and programs like the CRA that they
benefited from. These included various "neighborhood organizations,"
as they like to call themselves, such as "ACORN" (Association of
Community Organizations for Reform Now). These organizations claim
that over $1 trillion in CRA loans have been made, although no one
seems to know the magnitude with much certainty. A U.S. Senate Banking
Committee staffer told me about ten years ago that at least $100
billion in such loans had been made in the first twenty years of the
Act.

So-called "community groups" like ACORN benefit themselves from the
CRA through a process that sounds like legalized extortion. The CRA is
enforced by four federal government bureaucracies: the Fed, the
Comptroller of the Currency, the Office of Thrift Supervision, and the
Federal Deposit Insurance Corporation. The law is set up so that any
bank merger, branch expansion, or new branch creation can be postponed
or prohibited by any of these four bureaucracies if a CRA "protest" is
issued by a "community group." This can cost banks great sums of
money, and the "community groups" understand this perfectly well. It
is their leverage. They use this leverage to get the banks to give
them millions of dollars as well as promising to make a certain amount
of bad loans in their communities.

A man named Bruce Marks became quite notorious during the last decade
for pressuring banks to earmark literally billions of dollars to his
organization, the "Neighborhood Assistance Corporation of America." He
once boasted to the New York Times that he had "won" loan commitments
totaling $3.8 billion from Bank of America, First Union Corporation,
and the Fleet Financial Group. And that is just one "community group"
operating in one city – Boston.

Banks have been placed in a Catch 22 situation by the CRA: If they
comply, they know they will have to suffer from more loan defaults. If
they don’t comply, they face financial penalties and, worse yet, their
business plans for mergers, branch expansions, etc. can be blocked by
CRA protesters, which can cost a large corporation like Bank of
America billions of dollars. Like most businesses, they have largely
buckled under and have surrendered to their bureaucratic masters.

Consequently, banks in every community in America have been forced to
hold a portfolio of bad loans, euphemistically referred to as
"subprime" loans. In order to compensate themselves for the added risk
of extending these loans, many lenders have increased the lending fees
associated with mortgage loans. This is simply an indirect way of
doing what banks always do – and what they must do to remain solvent:
charging effectively higher rates of interest on riskier loans.

But this is discriminatory!, complained the "community organizations."
Thus, if one browses the ACORN web site, one can read of their boasts
of having "predatory lending laws" passed in numerous states which
outlaw such fees, prohibiting banks from protecting themselves from
the added risk involved in making forced loans to "subprime"
borrowers.

These are price control laws, and price controls always cause
shortages. Normally, banks would respond to such laws by extending
fewer riskier loans. But in this case the banks are forced to continue
making the marginal loans by their bureaucratic masters at the Fed and
the other three federal bureaucracies mentioned above. So-called
predatory lending laws therefore force the banks to "eat" the losses.
This is undoubtedly a contributing factor to the bankruptcy of dozens
of mortgage lenders over the past year.

Then of course there is the issue of the Fed’s monetary policy having
created the housing bubble, characterized by a spectacular escalation
of real estate values in every American city over the past decade or
so. This created a further problem for the financial institutions that
are victimized by the CRA. They are forced to make a certain amount of
bad loans, but because of the Fed-created explosion in housing prices,
many thousands of subprime borrowers no longer qualified, by a long
stretch, for conventional mortgages based on their incomes.

The only way these borrowers could qualify for their mortgage loans
(even ignoring their bad credit ratings) was to take out adjustable
rate mortgages, some of which had astonishingly low first-year rates
in the 3 percent range, and sometimes lower. This is what has largely
fueled the subprime mortgage meltdown – the inability of thousands of
subprime borrowers to afford their mortgages now that their rates have
adjusted upward. Thus, the combination of the Fed’s enforcement of the
CRA ( with the help of political pressure groups like ACORN [see
below] ) and its post 9/11 monetary policy in general are the reasons
for the bursting real estate bubble and the "subprime" mortgage
meltdown.

Don’t expect to read about this in the "mainstream media," however,
which generally views groups like ACORN as heroic champions of the
poor, laws like the CRA as anti-discrimination laws, and places all of
the blame for the subprime mortgage meltdown on greedy capitalists,
especially mortgage brokers. Encouraged by such reporting, the odious
Senator Charles Schumer of New York has promised federal legislation
that will reign in these miscreants, while the Bush administration is
proposing an indirect bank bailout by having the Federal Housing
Administration cover many of the bad "subprime" loans. This will
create what economists call a "moral hazard" by encouraging even more
bad loans to be extended in the future. Every banker in America will
be glad to extend loans (at high rates of interest) to the most
uncreditworthy borrowers if he thinks there is no possibility of
default with the FHA effectively guaranteeing the loan.

http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

WHAT IS "ACORN"
(Association of Community Organizations for Reform Now)

ACORN is a grassroots political organization that grew out of George
Wiley's National Welfare Rights Organization (NWRO), whose members in
the late 1960s and early 70s invaded welfare offices

http://www.discoverthenetwork.org/gr...asp?grpid=6967

across the U.S. -- often violently -- bullying social workers and
loudly demanding every penny to which the law "entitled" them. In the
late 1960s, ACORN co-founder

Wade Rathkehttp://www.discoverthenetwork.org/individualProfile.asp?indid=1773

was a NWRO organizer and a protegé of Wiley. Rathke also ...

read more »

SFS - These is more than an ACORN of Truth
in all that you have presented to read. ~ RHF