Cavuto suggests Congress should have warned that "[l]oaning to minorities and risky folks is a disaster"
On September 18, Fox News' Neil Cavuto conflated giving home mortgages to minorities with risky lending practices, suggesting that there should have been "a clarion call that said, 'Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster.' "
Neil Cavuto, host of Fox News' Your World, conflated giving home mortgages to minorities with risky lending practices, suggesting that efforts to increase homeownership among minority borrowers contributed to financial problems at Fannie Mae and Freddie Mac. Discussing the decision by the U.S. Treasury Department and the Federal Housing Finance Agency to place Fannie Mae and Freddie Mac into conservatorship, Cavuto asked Rep. Xavier Becerra (D-CA) on September 18, "[W]hen you and many of your colleagues were pushing for more minority lending and more expanded lending to folks who heretofore couldn't get mortgages, when you were pushing homeownership ... Are you totally without culpability here? Are you totally blameless? Are you totally irresponsible of anything that happened?" Cavuto later said, "I'm just saying, I don't remember a clarion call that said, 'Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster.'"
Previously, on the September 16 edition of Your World, Cavuto said to House Majority Leader Steny Hoyer (D-MD): "[Y]ou wanted to encourage minority lending -- obviously, a lot of Republicans did as well. There was a lot of -- expand lending to those to get a home," Cavuto went on to ask, "Do you think, intrinsically, it was a mistake, on both parties' part, to push -- to push for homeownership for everybody?"
From the September 18 edition of Fox News' Your World with Neil Cavuto:
CAVUTO: I just wonder, you know, with Congress holding all these hearings -- and you're right, there are a lot of them planned -- does anyone hold hearings on what you guys knew or didn't know or whether -- or whether you were ignorant or not? I mean, does anyone look at -- I know the buck stops with the president -- but at least it stops by you guys. What were you doing?
BECERRA: Well, we were trying to get answers from the administration. Unfortunately, it didn't seem like they were giving us a complete picture of what was going on. We can only know what the administration tells us about their administration of the government. But you're right.
CAVUTO: All right, but let me ask you -- but, Congressman, when -- when you and many of your colleagues were pushing for more minority lending and more expanded lending to folks who heretofore couldn't get mortgages, when you were pushing homeownership --
BECERRA: Neil, who did that?
CAVUTO: -- again, no, no, seriously, again with the best of interests --
BECERRA: Who did that?
CAVUTO: I'm not saying -- I'm not blaming one or the other. I'm just saying you and a lot of --
BECERRA: Yeah, but who did that? I'm not aware of anyone asking anyone to make a loan to someone who couldn't afford it.
CAVUTO: I'm just saying, are you -- are you totally -- wait a minute. Are you totally without culpability here? Are you totally blameless? Are you totally irresponsible of anything that happened?
BECERRA: Neil, if you can tell me what Congress did not do that it should have done, I'm more than willing to take a look at that, and -- and answer your question. But, as far as I can tell, with regard to what the Fed did, the Fed is -- is an entity, a body, that is under the administration, at least to some degree. We can only ask for oversight responses from the Fed or from the administration. But, again, if you can point out something that Congress did not do --
CAVUTO: But, no, it's your -- no, no, no, your hindsight, Congressman, is 20/20. I'm not denying that. I'm just wondering whether --
BECERRA: Yeah.
CAVUTO: -- did you warn or express concern about any of the things that happened? I'm not saying that one or the other is beyond blame --
BECERRA: Oh, absolutely, we did. Absolutely.
CAVUTO: -- I'm just saying, I don't remember a clarion call that said, "Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster."
BECERRA: Oh, Neil --
CAVUTO: Maybe if you said it, enlighten me.
BECERRA: -- oh, Neil, no, no. Yes, absolutely. Absolutely. Absolutely, we did. If you look at the record -- and if you want me to -- want to have me on again soon, I can bring you a record of time after time where members of Congress pointed out to a then-Republican majority that deregulating too many of these industries was going to cause this mismanagement and reckless-abandon activity that we now see by a lot of these money-changers. And, so, absolutely, Congress was alerted by members of Congress about what would happen if we stopped the oversight responsibilities that Congress has. So, absolutely, that's the case.
CAVUTO: All right, so --
BECERRA: And, if you want to have me back, I could bring you that evidence.
CAVUTO: I would look forward to that, Congressman.
From the September 16 edition of Fox News' Your World with Neil Cavuto:
HOYER: Well, we see the subprime problem. You know, we passed legislation on the subprime, and, frankly, Alan Greenspan didn't enforce it. Bernanke now has. We passed legislation on Fannie Mae and Freddie Mac in April of '07. It languished in the Senate. Mr. Shelby was opposed to it, on regulation. Secretary Paulson was for it.
CAVUTO: But do you think --
HOYER: And, in any event, the question is, going forward --
CAVUTO: -- all I'm saying, Congressman, all I'm saying is, do you think that -- obviously, there's enough blame to go on both sides --
HOYER: Sure.
CAVUTO: -- that -- that you wanted to encourage minority lending -- obviously, a lot of Republicans did as well. There was a lot of -- expand lending to those to get a home. Do you think, intrinsically, it was a mistake, on both parties' part, to push --
HOYER: I think --
CAVUTO: -- to push for homeownership for everybody?
HOYER: I think clearly what happened is, Fannie and Freddie got caught up in trying to do what the Congress wanted done.
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WOW! Thanks for this James!
OFFICIAL CONGRESSIONAL WARNING:
Be advised. Loaning to minorities and risky folks is a disaster.
It's outrageous regardless of who says it.
Not remotely surprising. But still outrageous.
Banks were not "forced to lend to minorities", you racist moron! They were ALLOWED by racist McBush's deregulation mania to lend to low income people with poor credit scores in order to falsely prop-up a failing economy. They did this to win votes and make obscene amounts of money off of the unsuspecting poor and then run to the Government to help bail them out when they fell. Eactly what racist Republicans complain about poor people doing! Where is the outrage from racist Republicans when huge corporations are looking for hand-outs!
You got it right, iowadem. The only thing that gave Bush's economy any semblance of normalcy was rising home prices and rampant equity re-financing. It was a house of cards, one that's falling right now before our very eyes.
You
Iowa Dem posted:
Banks were not "forced to lend to minorities", you racist moron! They were ALLOWED by racist McBush's deregulation mania to lend to low income people with poor credit scores in order to falsely prop-up a failing economy. They did this to win votes and make obscene amounts of money off of the unsuspecting poor and then run to the Government to help bail them out when they fell.
You almost got it right, well at least the part about lending. I would add a caveat about "Allowed" though. It was actually Clinton who signed this into law, not McBush, (whoever that is?), and it made clear that lending institutions could not "turn down" low income/poor credit borrowers or be faced with penalties and fines. This seed planted turened into the sub-prime mess as predatory lenders in the mid-nineties started to bundle bad loans.
NIce spin trying to deflect this to todays problems, but this started squarely in '93 and was law by '95. I'll let you deduce who was in charge then. Never let a good talking point get in the way of facts though!
Thanks for the assist T-Bone! You're exactly right, the Republican Congress did pass these laws, "The De-regulator" McCain and his buddies (like his Economic Advisor Grahmm) pushed these initiatives through and Clinton went along. No argument there. There was nothing in the legislation forcing banks to lend to low credit score people? If there was, please feel free to post your links. You also got your time frame wrong, the Commodity Futures Modernization Act and Gramm-Leach-Bliley Act went through in 1999 and led to Enron and the subprime mess that occurred during the Bush administration and the McCain-Republican Congress. So nice try deflecting blame.
Not to stray to far from topic, though, the point is that trying to blame MINORITIES for this mess is like blaming the victim of rape. "HEY, they were askin' for it!"
IowaDem posted:
You're exactly right, the Republican Congress did pass these laws, "The De-regulator" McCain and his buddies (like his Economic Advisor Grahmm) pushed these initiatives through and Clinton went along. No argument there. There was nothing in the legislation forcing banks to lend to low credit score people? If there was, please feel free to post your links.
Nice try at revisionist history Iowa, but '93 was a dem congress with a dem president. The bill was signed into law in '94. Here are some quotes from then:
"The Community Reinvestment Act of 1977 was supposed to prevent banks from taking deposits in one neighborhood and making loans in other neighborhoods. But since President Clinton took office, the federal government has largely ignored the law and instead relied on massive threats against banks to force them to loan more to favored groups. As former Assistant Treasury Secretary Paul Craig Roberts observed, `The Justice Department is simply trying to establish by consent decree [also known in the Clinton administration as `Alternative Dispute Resolution', or ADR] a system of racial quotas in lending regardless of credit risks." (Washington Times, page A16, by James Bovard, 01/19/99, no link available.)
answering letter to the editor:
The Community Reinvestment Act has worked for homeowners and lenders
What James Bovard calls "shakedowns" in his outrageous attack on the Community Reinvestment Act ("Urban bank loan shakedowns targeted," Commentary, Jan. 19), is actually the flow of much needed credit to communities long denied by discrimination. The "payoff" dollars he refers to are mortgages for credit-worthy lower-income and minority first-time home buyers . . . "
Community Reinvestment Act
As for Phil Grahm, you have a point. I will add that Clinton could have vetoed this bill. Why didn't he? Ultimately the buck stops with him.
Why don't you include a link to the Washington Times article? The WA Times is a notorious right-wing newspaper. Your proof seems to be one article, which we can't read. However, I just did a google search on James Bovard, and found he is a libetarian idealogue. In other words, what you posted here is an opinion which you tried to present as fact.
Do you have any facts that show that lending to minorites led to the current crisis? Did the bad loans that banks made *only* go to minorities? Were they really forced to make thes loans, or did they willingly do it to enrich themselves?
The phrase is "minorities and risky folks" here. If the point is just that people with lower credit shouldn't get loans, then why on earth would you bring up minority status? Just say "risky folks".
Far more white people defaulted on these loans (houses in the 200,000-350,000) range and Cavuto is just plain ignorant. Lower income and minorities simply don't make up the numbers of people defaulting on their loans. Banks don't get forced to loan money, listen to Rushbag a little less and you'd be a little more informed.
Also, the reason why they defaulted is because of the BAD ECONOMY. Job loss and the like, not because they were flakes.
The right-wing is trying to falsely blame this whole mess on lower income people who just happened to stop paying their easy, corrupt loans. But that's not what happened-- the economy tanked, and this little tidbit is being ignored.
Let's see, bush, mcsame and the rightwingers push for an ownership society, then the buying creates a housing bubble that can't be sustained, the bubble collapses making homes worth less than they were bought for, and Cavuto wants to pass the buck off onto minorities and the poor. Today's republicans sure give christianity a bad name what with all their lying.
Flashback: In 2004 Bush Campaigned For Re-Election On The Backs Of Subprime Mortgages
During the 2004 campaign, President Bush declared his pride in making America what he called “an ownership society.” He promoted expanding home-ownership as the best way to ensure a strong economy, campaigning constantly on the idea:
Of course, what the current enormous crisis — rooted in subprime mortgages — proves is that promoting home ownership without regulatory safeguards is inherently risky. As economist Paul Krugman explained, “[B]orrowing to buy a home is like buying stocks on margin: if the market value of the house falls, the buyer can easily lose his or her entire stake.” And that’s just what happened: More homeowners now owe more money than their homes are actually worth, while foreclosure filings in August rose 12 percent from July — and represented a 27 percent increase from Aug. 2007.Further, the quest for an all-encompassing ownership society led to the policies that have created the crisis. From dramatically low interest rates to ignoring the warnings about predatory lending to quashing state regulations that would have helped prevent such massive Wall Street investment in subprime loans, Bush and his allies built an economy on a house of cards that was bound to collapse.
Today, Bush declared, “There will be ample opportunity to debate the origins of this problem.” That debate will need to focus on his own failed promise of an “ownership society” as an economic panacea.
Thank you for this, Snoopy. What used to amuse me is that Bush proudly declared home ownership was at an all-time high, when that had been true every year since they started keeping the statistic. But it doesn't amuse me anymore, because I'll bet home ownership is, for the first time, not at an all-time high.
On a personal note, if I had taken one of the ARM schemes I was offered, instead of insisting on a 30-year fixed, I'd be out of my own house right now. Imagining that always helps me put it in perspective when somebody goes out of his or her way to blame the borrowers in this mess. Didn't the president want more "folks" to own our homes?
But singling out minority borrowers is simply beyond the pale. It's disgusting. And it's almost exactly like an Imus statement, except that Imus is not "news," so Cavuto's slip of the forked tongue is even worse. I hope very soon that someone else will be describing "my world."
I have heard Sec Paulson say that borrowers were to blame for much of this financial crisis!!!! The credit does not have to be extended if the lender deems it too risky. They the lender are solely to blame. If one lied on a loan application, it doesn't matter . The borrower must still be checked out.
Because the banks making mortgage loans had no risk or consequences to their lending practices(IT was even financially lucrative to do so), they made loans that were not prudent. Minority status has nothing to do with it. Credit score and references are the key.
The only reason a lender would extend a mortgage to someone they know could not repay it is because the lender knew that they could resale the mortgage to Fannie Mae in the secondary market. County Wide was Fannie Mae's biggest customer in 2007. Face it the American tax payers are being scammed by this whole mess on a bi-partisan bases.
Banks were forced to lend to minorities (who happened to have lower credit scores on average)
See, that's the racist part. Even if it were true, it doesn't matter. And what's this lumping-in thing of "minorities?" Credit reports are an individual factor.
THe bigot who wrote that probably believes it no matter what you say. The republicans screwed us? Nope...it was darky who caused all this...
Give me a break.
This is definitely appealing to right wing racism, but loans to minorities is in no way the root cause of our current problems. Legislation signed by Clinton did not force lenders to make unsecured loans for overvalued property. It did not force the bundling of unsecured loans into securities that were then sold as high-return/low-risk investments to a market hungry for better returns (remember, interest rates have been at extreme lows for much of the Bush administration in order to stimulate the economy so Bush could pretend his tax cuts were effective). It did not force the accounting irregularities to happen, the overvaluation of near-worthless securities that eventually had to be unwound. Unfortunately this is such a tangled and complex web of finance that the right wing can use the public's cluelessness about the problems that are occurring. An unducated public is the best friend of the right wing.
Republican response to Wall Street meltdown: black people caused it... Whew...
(OK, so Fox's genius said 'minorities and risk folks' but we know what he means. Idiot hatemonger...meanwhile, the 'white'-collar criminals skate free...Welcome to Bush and McCain's America...)
Because reading is fundamental and cherry picking doesn't work.
How about reading the whole quote:
BECERRA: -- oh, Neil, no, no. Yes, absolutely. Absolutely. Absolutely, we did. If you look at the record -- and if you want me to -- want to have me on again soon, I can bring you a record of time after time where members of Congress pointed out to a then-Republican majority that deregulating too many of these industries was going to cause this mismanagement and reckless-abandon activity that we now see by a lot of these money-changers. And, so, absolutely, Congress was alerted by members of Congress about what would happen if we stopped the oversight responsibilities that Congress has. So, absolutely, that's the case.
Nice try though.
My only guess is that MMFA counts Becerra as "not conservative," since he's a Democrat, and that MMFA's mission is about conservative misinformation. It's left to the clever posters in the comments section to find any liberal misinformation.
I will say, if Becerra really heard what he was answering, then what he answered Cavuto with was wrong. I doubt anyone who reads MMFA would disagree with that.