Promoting Affordable Housing

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

I didn’t believe it when I read it; the bailout bill is “earmarked” and ACORN is one of the beneficiaries of the largesse.   ACORN may control up to 20% of the $700 billion proffered by the Bush/Obama Bailout Plan.

ACORN?  Are you kidding me?  THIS is what ACORN really is (from Sol  Stern):

ACORN’s bedrock assumption remains the ultra-Left’s familiar anti-capitalist redistributionism. “We are the majority, forged from all the minorities,” reads the group’s “People’s Platform,” whose prose Orwell would have derided as pure commissar-speak. “We will continue our fight . . . until we have shared the wealth, until we have won our freedom . . . . We have nothing to show for the work of our hand, the tax of our labor”—claptrap that not only falsifies the relative comfort of the poor in America but that also is a classic example of chutzpah, given ACORN’s origins in a movement that undermined the work ethic of the poor. But never mind—ACORN claims that it “stands virtually alone in its dedication to organizing the poor and powerless.” It organizes them to push for ever more government control of the economy, as if it had learned no lessons about the free-market magic that made American cities unexampled engines of job creation for more than a century, proliferating opportunity and catapulting millions out of misery.

Remember, ACORN has been one of the largest groups to criticize “predatory lending” and the use of sub-prime loans.  Here’s ACORN President Maude Hurd, speaking about last night’s Presidential Debate:

“Given the recent turmoil in our financial markets and the ongoing negotiations around a bailout package for Wall Street, it’s not surprising that much of the debate focused on the current economic crisis, which was in many ways predictable.  ACORN has been sounding the alarm for years as more and more deregulation stripped protections for consumers and basic safeguards of sound lending.

Senator McCain failed to acknowledge the trigger of this explosive crisis: predatory lending, which entrapped hundreds of thousands of homeowners into toxic mortgages they could not afford fueling record numbers of foreclosures.  If Mr. McCain is unwilling or unable to acknowledge such facts, how is he suitable to lead our country out of the worst financial mess since the Great Depression?

Okay.  Forget that opportunistic borrowers used subprime loans to cash in on the housing boom.  Forget that close to 70% of the early-default borrowers lied on their loan applications.  Forget that even if the default rate rises to 25%, 3 out of 4 of those “toxic” loans were successful in completing the mandate of a driveway for every family.  Remember, if you will, the original loan program designed to grant credit to borrowers with disregard for their history of and ability to repay those loans; the Community Reinvestment Act.  Who was behind this “predatory” loan program?

You got it, ACORN:

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.

What do you think ACORN will be doing with the $140 Billion they get?  Promote the agenda of “keeping Americans in their homes“.  Homes they clearly can not afford.  THAT, ladies and gentlemen, is predatory lending defined.

There is one way to promote affordable housing; reject the Bush/Obama Bailout bill. Rates will go up (temporarily) and housing prices will plummet….but houses will be a WHOLE lot more affordable.

Market pricing, without government intervention, may be the best affordable housing program going.  Of course, that ain’t gonna happen cuz someone has to get paid off.  Let’s just hope it won’t be ACORN.

UPDATE:  My initial statement was incorrect.  I said:

ACORN may control up to 20% of the $700 billion proffered by the Bush/Obama Bailout Plan

The earmark for ACORN is for 20% of the hopeful profits from the bill.  I still don’t like funding a socialist organization with profits from a planned economy policy.