BANK OF AMERICA FORCED TO FINANCE LIBERAL ACTIVIST GROUPS
EXTORTION USED TO BE ILLEGAL
This story begins in 1977 with the passage of the Community Reinvestment Act. This law was passed in an effort to make home ownership more easily accessible to low income citizens. The original law encouraged banks to lower lending standards so that more minority and low income people could qualify for mortgages. Initially there was resistance by the banks, but as time went by the foreclosure rate was low and banks became accustomed to lowering standards in some neighborhoods. The real estate market at the time was stable with just normal growth in market values, but as time went on more pressure was exerted on banks to lower down payment requirements and to overlook poor credit ratings. The lowering of standards was encouraged by both the Clinton and Bush administrations. In 2000 HUD Secretary Andrew Cuomo promised to buy 2 trillion dollars worth of affordable mortgages through Fannie Mae and Freddie Mack. This led to competition between all lenders to lower standards till eventually there were no down payments required. It also lowered standards on all mortgages as real estate values were increasing and those that got in trouble could usually unload the properties with minimal losses. This led to the packaging of mortgages into collateralized mortgage obligations. These mortgage-backed securities were then traded and purchased by many pension funds and other entities who wanted to participate in the housing boom. When mortgages could be had for less interest than banks were paying on CD's, it became obvious to some that there was a growing problem. I also remember Alan Greenspan stating that all was well and he saw no problems on the horizon. He stated he was shocked when all went bust, but keep in mind that he resigned in 2006 just before the market collapsed.
As home prices skyrocketed, and everyone was convinced that the best investment was real estate, many knew that the end was near. The hysteria over the real estate market came to an end when gas prices rose to $4.00 a gallon and crimped the already tight budgets of many over-mortgaged home owners. It started with the sub-prime mortgages and soon spread to many other mortgages. Investments in mortgage-backed securities plunged in value and the collapse of investment companies began.
After Lehman Brothers went bankrupt, Countrywide and Merrill Lynch were the next in line to fail. Henry Paulson, Treasury Secretary, and Fed Chairman, Ben Bernanke, pressured Bank of America to buy Countrywide and Merrill Lynch to stop the implosion. The executives at Bank of America looked at the financials and considered backing out of the deal. The Feds then pressured them so they could not back out and assured them they needed to do this to save the financial system; furthermore, the Fed guaranteed they would help Bank of America with this deal. Bank of America lost an estimated $40 billion on the Countrywide deal alone. But that was just the beginning of their problems. When Barack Obama was elected, he did not feel he owed anyone for deals made by the former administration. His Attorney General, Eric Holder, then indicted Bank of America for fraud in the investments of Countrywide. They threatened criminal charges against the executives if they would not agree to a settlement. Bank of America executives agreed to pay 16.6 billion in August 2014.
It has now been reported by several newspapers that part of this settlement was a side deal arranged by Holder that would allow the bank to make contributions to non profit organizations specified by the administration rather than pay the settlement to the Treasury Department as required by law. The deal would allow Bank of America to take a $2 credit for every $1 they contributed to the list of several hundred qualifying organizations. This required Bank of America to contribute a minimum of $50 million to community development organizations, $20 million to affordable housing groups, and $30 million to legal aid groups. This was the minimum; there is no limit to the amount they can give. The administration claims this is all legal because they allowed Bank of America to choose who on the list that they contributed to. This arrangement is similar to the deals that have been given to CitiGroup and probably other banks.
Now some may say that the banks deserve this ill treatment and these non-profit groups are all good causes. In reality, this is an example of government corruption at its worst. This is the type of behavior seen in third world countries and dictatorships. You have coercion and the threat of government legal and/or criminal suits if you do not lower standards, then when it all goes bust you use coercion to buy the worst companies, and then extortion to take money and give it to the administration's political supporters. This is in effect exactly what has been done. Congress is supposedly investigating this, and those who have asked to see what groups have received these funds have been told it is confidential. These are the acts of lawless politicians who now believe they can do whatever they want and it seems they may be right.
This article was originally published 1/26/16
As home prices skyrocketed, and everyone was convinced that the best investment was real estate, many knew that the end was near. The hysteria over the real estate market came to an end when gas prices rose to $4.00 a gallon and crimped the already tight budgets of many over-mortgaged home owners. It started with the sub-prime mortgages and soon spread to many other mortgages. Investments in mortgage-backed securities plunged in value and the collapse of investment companies began.
After Lehman Brothers went bankrupt, Countrywide and Merrill Lynch were the next in line to fail. Henry Paulson, Treasury Secretary, and Fed Chairman, Ben Bernanke, pressured Bank of America to buy Countrywide and Merrill Lynch to stop the implosion. The executives at Bank of America looked at the financials and considered backing out of the deal. The Feds then pressured them so they could not back out and assured them they needed to do this to save the financial system; furthermore, the Fed guaranteed they would help Bank of America with this deal. Bank of America lost an estimated $40 billion on the Countrywide deal alone. But that was just the beginning of their problems. When Barack Obama was elected, he did not feel he owed anyone for deals made by the former administration. His Attorney General, Eric Holder, then indicted Bank of America for fraud in the investments of Countrywide. They threatened criminal charges against the executives if they would not agree to a settlement. Bank of America executives agreed to pay 16.6 billion in August 2014.
It has now been reported by several newspapers that part of this settlement was a side deal arranged by Holder that would allow the bank to make contributions to non profit organizations specified by the administration rather than pay the settlement to the Treasury Department as required by law. The deal would allow Bank of America to take a $2 credit for every $1 they contributed to the list of several hundred qualifying organizations. This required Bank of America to contribute a minimum of $50 million to community development organizations, $20 million to affordable housing groups, and $30 million to legal aid groups. This was the minimum; there is no limit to the amount they can give. The administration claims this is all legal because they allowed Bank of America to choose who on the list that they contributed to. This arrangement is similar to the deals that have been given to CitiGroup and probably other banks.
Now some may say that the banks deserve this ill treatment and these non-profit groups are all good causes. In reality, this is an example of government corruption at its worst. This is the type of behavior seen in third world countries and dictatorships. You have coercion and the threat of government legal and/or criminal suits if you do not lower standards, then when it all goes bust you use coercion to buy the worst companies, and then extortion to take money and give it to the administration's political supporters. This is in effect exactly what has been done. Congress is supposedly investigating this, and those who have asked to see what groups have received these funds have been told it is confidential. These are the acts of lawless politicians who now believe they can do whatever they want and it seems they may be right.
This article was originally published 1/26/16
The above article was written during the Obama administration, the money was all funneled to non-profits that then could funnel the money to Democrat political organizations, since then, we have seen the money laundering done through Hunter Biden through Ukraine and now a connection to the collapsed Crypto exchange that funneled more money to Democrats from Ukraine.
Of course, there was the Clinton foundation, that also received money from foreign countries often after receiving aid and grants from the U.S., this money was also after a few layers to be used for political purposes. It is classic money laundering and extortion that it seems is now more blatant than ever, no wonder, no one has ever been held accountable.
I suspect that we are only looking at the tip of enormous corruption in Washington that if left unchecked and without accountability will destroy this nation.
Many of these deals had the approval and knowledge of our intelligence officials, they know what is going on, and obviously are making no effort to stop these transactions.
It’s the same story over and over for my entire life. Early on the feds backed loans by the Federal Savings and Loan Association. Eventually they all had to be bailed out. That had been the biggest bailout up til then. (Think Whitewater scandal) Then as the article states it was government backed home mortgages, eventually another bailout. More recently it is the student loan program. Same exact scheme, eventually same results. Government legislation upsets the natural order of things, creating unfair opportunities for some and eventual costs paid with taxpayer money. It’s been totally predictable every time. When the government backs the loans their is no incentive to lend carefully.
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