I had an entry a day or two ago about Tom Tancredo (retiring from Congress, but the Congressman from Colorado who tried to make illegal immigration a front burner issue--in which he was frustrated by the 'establishment" I referenced in yesterday's blog entry).
Tancredo's assertion, which has been supported by a number of reports although it is difficult to measure the extent of the portion of the overall problem it may involve, is that illegal immigration is a significant part of the housing crisis. The point is that a number of these "activists" have helped illegal immigrants get house loans they could not afford. Then, when the illegal immigrant loses his job, is deported, or just can't afford the house, the house goes into foreclosure because the illegal immigrant walks away For example, if you are an illegal immigrant, and you owe more on a house than it can now be sold for, or you decide you need to return to your own country, what are you going to do? There is no question. You are going to walk away from the house.
I suspect that illegal immigrants are only a minor part of the housing "bubble" However, they are symptomatic of the "cnetral planning" policy pushed by the Federal Government, and supported by activists like in ACORN, that every American should won a home--whether they could afford a home or not.
There is no question that Tancredo is right that illegal immigrants (who should never have gotten house loans in the first place) have been involved in the foreclosure problem. For example, part of the "news" this week in El Paso was a story about one example of an illegal immigrant with a job being deported, and therefore "forced" to let his house go into foreclosure.
Now read the above paragraph, and ask yourself where the story came from? Did it come from people like Tom Tancredo, who oppose illegal immigration? Not on your life. It came from "activists" trying to show how horrible it is that we are now sporadically actually enforcing the immigration laws.
These are the same kind of "activists" who got us into the housing "crisis" by pushing financial institutions to loan to any number of people (illegal immigrants, minorities, poor people, etc.) who could not afford a house. These are the leftist Democrats who pushedthe expansion of Fannie Mae and Freddie Mac. These are the people, like Barney Frank and Maxine Waters, who opposed more regulation of Fannie Mae and Freedie Mac, and opposed investigation of Democrat Franklin Raines, because Fannie Mae and Freddie Mac were doing their "mission" of providing "affordable" (turned out to be not affordable) housing.
These are the people who now are interested i simply giving the unqualified borrowers the houses, once it is shown they can't afford them. To be plain: The way these activists have operated is to pressure lenders into making unsound loans, and then to attack the lenders for doing what the activists virtually forced them to do.
Now it turned out the lenders liked it, in the end, because there was the false appearance that they were making money Democrat Frenklin Raines got 90 million dollars out of Fannie Mae, based on inflated loans and accounting that would eventually bring down Fannie Mae and Freddie Mac (forcing the recent taxpayer bailout of those Democrat dominated and protected entities). Franklin Raines and Jim Johnson (another Democrat who was CEO of Fannie Mae) are cronies and advisors of Barack "World" Obama, who was the second largest recipient of campaign contributions from Fannie Mae and Freddie Mac over the past eight years (when Obama has only been n the Senate for 3). Chris Dodd, the ranking Democrat on the Senate banking committee considering legislation to regulate Fannie Mae and Freddie Mac was the top recipient of money He also got a sweetheart loan fro Countrywide Mortgage, as did Jim Johnson (forcing him to resign from the committee chosen by Obama to "vet" his VP nominees). I am not exaggerating when I say that Fainnie Mae and Freddie Mac were "Democratic" organizations. Most of the people in them, including the leaders at the time this mortgage problem was brewing, were Democrats.
The accounting problems with Fannie Mae and Freddie Mac first surfaced in 2004 and 2005. That is when John McCain and the Republicans tried to pass a bill providing more "oversight" for Fannie Mae and Freddie Mac. Barney Frank, Maxine Waters, and Chris Dodd--along with Obama--saw no problem with Fannie Mae and Freddie Mac. They opposed further regulation of those entities Yes, Obama is a liar when he blames the present crisis on Republican deregulation. Democrats protected Franklin Raines (althogh he was forced to resign with his 90 million), Fannie Mae and Freddie Mac.
For Democrats (politician kind), it was all about protecting Democrats and "affordable housing". So nothing was done about Fannie Mae in 2005, or after Democrats took control of Congress. We had time then. By this summer, we had no more time, and Fannie Mae and Freddie Mac went under--threatening to bring down other financial institutions with them Worse, the culture of easy mortgages that Fannie Mae and Freddie Mac had created is the real cause of our present "crisis". Everyone--especially Democrats--thought it was "easy money", since house prices were always going to go up.
As always (with both central planners and people who think that they "can't lose"), these people were wrong. The housing "bubble" burst. The illegal immigration part of this is probably small, but it illustrates the larger reasons (nothing to do with "deregulation") that we got to where we are.
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