Rahm Emanuel Was Freddie Mac Board Member When They Cooked The Books

Astonishing. Change. Yep, this is a glimpse at the near future under Barack Obama. He is going to bring about lots of change. He offered the position of Chief of Staff to Rahm Emanuel.

There are many disturbing aspects to this pick. Emanuel may be a genius in tax evasion. He may be part of the Illinois corruption machine, I wonder if Rezko is going to out Emanuel too. He is extremely partisan, possibly more so than Obama himself.

The most disturbing is his past position as a Clinton appointed Board of Director at Freddie Mac during the time it was deceiving investors. This is the change that Obama wants to bring about. Freddie Mac & Fannie Mae are the leading cause of today’s financial crisis and Barack is bring in one of the people responsible for the meltdown to be his Chief of Staff.

Not to mention his extensive ties to Wall Street. He spent many years working as an investment banker and earned millions, he also has received about $1.5 million in campaign funds from Wall Street, making them his single largest financial backer. This year alone, Wall Street backed him heavily even though he had no real competition, he was the large recipient in the House. 

My fellow Americans who voted for Barack Obama you have been duped. Your vote was stolen from you.

More Change You Can Believe In!

President-elect Barack Obama’s newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot “red flags,” according to government reports reviewed by ABCNews.com.

According to a complaint later filed by the Securities and Exchange Commission, Freddie Mac, known formally as the Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002.

Emanuel was not named in the SEC complaint (click here to read) but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO) (click here to read) of having “failed in its duty to follow up on matters brought to its attention.”

In a statement to ABCNews.com, a spokesperson said Emanuel served on the board for “13 months-a relatively short period of time.”

The spokesperson said that while on the board, Emanuel “believed that Freddie Mac needed to address concerns raised by Congressional critics.”

Freddie Mac agreed to pay a $50 million penalty in 2007 to settle the SEC complaint and four top executives of the Federal Home Loan Mortgage Corporation were charged with negligent conduct and, like the company, agreed to settle the case without admitting or denying the allegations.

The actions by Freddie Mac are cited by some economists as the beginning of the country’s economic meltdown.

The federal government this year was forced to take over Freddie Mac and a sister federal mortgage agency, Fannie Mae, pledging at least $200 billion in public funds.

Freddie Mac records have been subpoenaed by the Justice Department as part of its investigation of the suspect accounting procedures.

Emanuel was named to the Freddie Mac board by President Bill Clinton in 2000 and resigned his position when he ran for Congress in May, 2001.

During the years 2000, 2001 and 2002, according to the SEC, Freddie Mac substantially misrepresented its income to “present investors with the image of a company that would continue to generate predictable and growing earnings.”

The role of the 18-member board of directors, including Emanuel, was not addressed in the SEC’s public action but was heavily criticized by the oversight group (OFHEO) in 2003.

The oversight report said the board had been apprised of the suspect accounting tactics but “failed to make reasonable inquiries of management.”

The report also said board members appointed by the President, such as Emanuel, serve terms that are far too short “for them to play a meaningful role on the Board.”

As a Congressman, Emanuel recused himself from any votes dealing with Freddie Mac until just this year.

In dealing with the nation’s economic crisis, the new White House chief of staff will almost certainly be involved in discussions about the house and mortgage markets.

Emanuel’s spokesperson said, “As White House chief of staff he will work with President-elect Obama and his economic advisers to help ensure we protect taxpayers and homeowners.”

An Inconvenient Truth For Liberals

The truth behind the economic crisis. Liberals would have you believe that this is all the fault of McCain. They use the Bush administration as a proxy to attack McCain. The truth of the matter is the Bush administration, McCain and the conservative base has been warning and trying to prevent this mess.

Timeline

Money For Nothing

Detailed points of 2004 attempt to regulate Fannie Mae and Freddie Mac by Conservatives and the undermining by Liberals in Congress. Please listen to the whole think. Listen to the Money Made by the leaders of Fannie Mae…

 

 

Deal or No Deal

The Liberals are trying to say John McCains trip to Washington undermined a bipartisan deal already reached. This of course is part of their claim that he is politicizing the economic crisis…

Well it seems that liberal cohorts must have been in different negotiations as everyone else..

McCain did not “sabotage” their deal, he made them work with Republicans… Prior to his arrival there was no deal.

Supplement Bailout By Having Banks Contribute Through Insurance Purchases

The Republicans want the bailout to implement an insurance program to reduce the taxpayers liability and risk in the bailout of financial giants. The plan would require the banks to pay for insurance on some of the mortgage risk, thus reducing the amount of money the government must use to purchase these bad mortgages. This is good for us as taxpayers, I am curious on how much they would be responsible for and how much of a reduction it would be on the bailout numbers…

I would like to see the banks have to be responsible for at least half of the amount.

After temporarily derailing the Bush administration’s $700 billion proposal to bail out the financial system on Thursday, House Republicans pared back their goals on Friday and demanded that the plan rely at least partly on an industry-financed insurance program for troubled mortgages.

Issuing a vague declaration of “economic rescue principles” to limit the use of taxpayer money, the Republican lawmakers focused primarily on the insurance program.

The proposal would have banks and investment firms that own mortgages and mortgage-backed securities pay premiums for insurance that would guarantee them against losses if the mortgages default.

Supporters of the plan said it would restore confidence in mortgage-backed securities without putting taxpayer money at risk. “Instead of making the taxpayers pay, the securities holders would pay,” said Representative Paul Ryan, a Wisconsin Republican who helped create the plan.

That would be sharply different from the plan developed by Treasury Secretary Henry M. Paulson Jr., which would have the government buy up to $700 billion worth of currently unsalable mortgage-backed securities.

Treasury officials have argued that their plan would address the heart of the financial crisis, which is that banks and investment firms are holding vast quantities of securities that have little or no market value. By having the government buy up and hold those securities until the panic dies down, Mr. Paulson has been hoping to free the balance sheets of financial institutions, allow them to raise fresh capital from investors and start making loans again.

But Republican lawmakers said on Friday that they were not trying to scrap Mr. Paulson’s plan entirely. Instead, they said, they would simply try to insert an insurance program into the overall package.

“We don’t want to undermine the negotiations,” Mr. Ryan said. “We want to honor the spirit of the negotiations.”

That was a retreat from Thursday, when John A. Boehner of Ohio, the House Republican leader, told President Bush and Democratic Congressional leaders that most House Republicans would oppose the administration’s plan.

The idea of the insurance plan, championed by Representative Eric Cantor of Virginia, was to reduce uncertainty and restore confidence without actually using taxpayer money.

The federal government would guarantee the underlying mortgages in a mortgage-backed security, much as Fannie Mae and Freddie Mac have done for years and as the Federal Housing Administration does, as well.

In theory, the cost of that insurance would be borne by the companies that hold the mortgages or mortgage-backed securities.

Treasury officials had already told Republican lawmakers they had considered an insurance approach, but rejected it. The problem, from Mr. Paulson’s standpoint, was that insuring against mortgage defaults would do little to increase liquidity, or the amount of money available for making loans. By contrast, the Treasury plan would inject hundreds of billions of dollars in fresh, although borrowed, money into the marketplace.

But the insurance plan could pose other risks to taxpayers. The government would be insuring the riskiest and most default-prone mortgages made during the housing bubble, including loans that required no down payment and no income verification by the borrowers.

The allure of insuring mortgages, rather than buying them as Mr. Paulson would, is that the government would not have to put up any taxpayer money. But because the government would be guaranteeing nearly all mortgages in the country, since it already owns Fannie Mae and Freddie Mac, taxpayers could face big losses if losses from defaults turn out to be higher than expected.

Many House Republicans, including Mr. Ryan, had come up with a far more detailed rival plan earlier in the week that included Republican policy evergreens like new tax breaks and more flexible regulation as well as the insurance idea.

Some lawmakers wanted to at least temporarily eliminate taxes on capital gains and dividends, though senior Republicans knew they had no chance of getting that past Democratic leaders.

Members of the Republican Study Group, a group of conservative House Republicans, proposed lifting the mortgage market by letting companies reap retroactive tax rebates from their current losses. A company would be able to apply its losses this year against its profits from any of the last five years and get a rebate for taxes it had already paid.

But with lawmakers hoping to wrap up their work by Monday, Republicans dropped the idea as impractical because it would take too long for the Joint Committee on Taxation to estimate the measure’s cost.

On the regulatory front, some House Republicans championed the idea of relaxing what are known as mark-to-market rules that require investment firms to revise the value of their securities in line with changes in market prices of those securities.

Over the last year, Wall Street’s biggest investment banks have been forced to take huge write-downs on mortgage-related holdings, not because the securities were actually losing money but because the securities had become almost impossible to sell in the open market. For many securities, especially the arcane derivative securities known as “collateralized debt obligations,” there are virtually no buyers and no market prices.

“If you don’t have to sell the securities today, you shouldn’t have to mark it at today’s value,” said Peter Ferrara, a senior researcher at the Institute for Policy Innovation, a research group in Virginia with ties to many Republican lawmakers.

But Mr. Ryan said the issue was complicated. While critics of the current rules complained that they artificially understated a company’s financial position, other experts argue just as vehemently that marking to market is a crucial way of preventing companies from covering up bad investments.

Leadership 101

The fourth column is at it again, campaigning for Obama. The latest is John McCain’s “bailout” of the debate. First off, he has not bailed out of the debate, he said that if the issue of our country’s financial crisis are not solved by the time of the debate, then he will not participate, at that time, as he will be working to come to a bi-partisan agreement that Congress and the White House will approve. He has requested to push the debate off until our nation has a solution working, that is not cancelling and therefore not a bail out, it is a delay.

Secondly, we are now a week into this problem and nothing has been definitively been accomplished, this is something that affects every American and needs immediate attention of Congress and the White House.

Third, the Democrats in Congress have already said their vote to pass this bailout is dependant on John McCain’s vote. Therefore John McCain’s presence in the Capital is needed and until Congress can agree on what terms need to be outlined and what addons they want nothing is going to get accomplished.

Lastly, John McCain has shown what Presidential leadership is. Obama has shown what a senatoral action is. Omaba is willing to help when asked, John McCain is helping without being asked.

As for the fourth column, look at the bullshit in their articles, this one for example, is trying to paint that Bush bailed McCain out of bailing out by inviting Obama… What Bush did is say, one of you two is going to be the next President of the United State and therefore should be involved in the solution which they will have to work to ensure is enforced. Since we do not know who is going to be President, he has invited both to work on the issue. That is leadership. Obama is following the call step up, when he should have already stepped up.

Talk about bail-outs.

John McCain had just made one of the riskiest, and perhaps costliest, moves of his presidential campaign, in attempting to bail out of the first televised debate of the candidates so that he could return to Washington, rise “above politics” and concentrate on the federal bail-out of the nation’s bad mortgage debt underway.

Barack Obama, for his part, had no intention of forgoing the first debate, and voiced some dismay in allowing that, yes, McCain had talked to him about skipping the debate when the two spoke by telephone yesterday but then the next thing Obama heard, McCain was announcing that he had decided to skip Friday night’s debate and he was calling on the president to summon a meeting of congressional leaders and both of the presidential candidates, senators, of course..

But the debate was on, Obama maintained later, ultimately accepting the president’s invitation to that meeting today but leaving McCain looking like something less than the statesman which he was attempting to play with this call for putting “country first.”

McCain, in turn, was looking somewhat desperate in the odd, campaign-suspending transaction. For many long months now, McCain and Obama have waged a close contest for the White House, if the polls are any judge – and they are.

They went into their summer nominating conventions in a dead heat nationally, and they came out of their conventions – after the “bounces” of their own unique events, Obama’s appearance before 80,000 people filling a football stadium in Denver, and McCain’s selection of a suddenly popular Sarah Palin for a running mate – in another virtual tie.

And then something happened: An economic crisis of proportions unseen since the Great Depression started unfolding. And Obama’s numbers started climbing, with voters telling the pollsters – by double-digit margins – that they view Obama as better-suited than McCain to handle the economic crisis.

After months of staring one another down, and with Obama’s political fortunes suddenly ramping up with a crisis that even President Bush was now willing to characterize as the start of a “long and painful recession” if the government does not act, the senior senator from Arizona blinked. He pulled what Democrat Barney Frank called a “Hail Mary pass,” MSNBC commentator Chris Matthews dismissing it as more McCain “razzle dazzle.”

“We’re ‘suspending’ the campaign,” late night comedy host David Letterman said last night, stood up by slated-guest McCain — with Letterman derisively suggesting that this is not the “hero” McCain whom he knows. “Are we suspending the campiagn because there’s an economic crisis, or because the poll number are sliding?”

“What John McCain was thinking was, this was a close race,” said Doug Schoen, a pollster who served President Clinton – someone who knows about running on the economy, and perhaps running one as well. “He was slightly ahead and then the economy became the issue and all of a sudden he is nine points behind.”

 

That 9-point gap is the result of the newest ABC News and Washington Post measure this week, coming from a survey that found the two candidates virtually tied two weeks before – now a Democrat was topping 50 percent for the first time in an ABC/Post poll. It found voters, by a 14-point margin, more confident in Obama’s ability to handle the economy than McCain’s.

McCain somberly stepped to a podium on Wednesday and declared that he was “suspending” his campaign, starting today, returning to Washington and giving full attention to the resolution of the financial bail-out that the Bush administration is pressuring Congress to enact before adjournment for the fall elections.

“His comments were a tacit indication that he sees the economy as literally taking over the campaign and the country,” Schoen told the Tribune. “It has become all-pervasive.”

And why shouldn’t it be oervasive in this campaign, judging from the president’s own dramatic comments televised to the nation last night: “We’re in the midst of a serious financial crisis… Without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold… More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet… And ultimately, our country could experience a long and painful recession.”

So what is Bush doing to push his $700 billion bail-out through Congress? Not only going on national television, prime-time, but also summoning that meeting of congressional leadership today, leaders from both houses and from both parties – and also two senators who have been out on the road a lot lately, Sens. John McCain of Arizona and Barack Obama of Illinois.

At 4 pm EDT, the leaders and candidates will join the president in the Cabinet Room of the White House for a closed-door session starting with, of course, a photo opportunity at the top.

The meeting may not be all that necessary, however. It seems that congressional leaders are close to an agreement already, and the president signaled his own willingness to compromise on the question of limiting the profits that financial executives extract from this buyout. Basically, they’re nearly ready to deal.

But what better cover for the Republican presidential nominee’s bail-out from the campaign and sudden return to Washington than a presidential pardon of sorts, an invitation from the president to both of the presidential candidates to join them all in resolving this crisis together: Bush’s personal bail-out

The question, then, is who’s meeting is it? McCain asked for it. Bush called it.. And Obama is going to it. Clearly, it’s the Republicans’ meeting, and the Democrats are ready to do business — so, effectively, McCain has claimed the higher ground that he was seeking: Attending to the affairs of state in front of the affairs of the campaign.

Effectively, the ground campaign of these two will be suspended for the day – though there are precious photos to be gained from their appearances in the Cabinet Room.

With this hastily summoned meeting, Bush has bailed McCain out of a jam, for a day. Suddenly, this is the senator who can organize a pow-wow at the White House.

Yet the debate remains another question. McCain already has suggested that, if Congress can reach a deal by Friday he will be prepared to go through with the debate. Of course he will. McCain is the one who has demanded more debates all along.

Should McCain really bail out, imagine the Commission on Presidential Debates plowing ahead with a solo appearance by Obama on stage at the University of Mississippi in Oxford. At that point, the campaign would effectively be suspended for good. Should Obama concede to the postponement, it ultimately will become McCain’s responsibility for scuttling the first, long-awaited debate of a contest that Americans are getting ready to settle on their own. They will settle it on their specific terms, not on McCain’s or Obama’s.

Bailout Hinges On McCain

Odd, Congress is looking to John McCain to determine what to do about the bailout. They are not looking to Obama. This is Democrats and Republicans working together for a common good hopefully.

What it really shows is that there is no faith in Obama’s economic abilities, but there is faith in McCains. It shows who is ready to lead our country. This is what makes a president.

Now Congress lets put in safeguards and oversights and get this thing rolling before it is too late. I am not suggesting rushing in, but put some expediency into play and work things out.

ABC News’ George Stephanopoulos reports: If Republican presidential candidate Sen. John McCain doesn’t vote for the Bush administration’s $700 billion economic bailout plan, some Republican and Democratic congressional leaders tell ABC News the plan won’t pass.

“If McCain doesn’t come out for this, it’s over,” a Top House Republican tells ABC News.

A Democratic leadership source says that White House Chief of Staff Josh Bolten has been told that
Democratic votes will not be there if McCain votes no — that there is no deal if McCain doesn’t go along.

McCain has expressed concerns about Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke’s plan, which would amount to costing the American taxpayer two Iraq wars.

The Republican presidential candidate has suggested the original proposal lacks sufficient oversight, and he has said whatever plan emerges should protect family savings, homes, and student loans, and should eliminate obscene CEO compensation packages.

McCain said this week that any company that receives government aid should not be compensated more than $400,000 — the highest-paid government employee.

McCain spokesman Tucker Bounds told ABC News’ Jake Tapper that McCain has not made a decision one way or another.

“John McCain has been very clear that he has certain reservations about the details of the agreement that has been released at last notice,” Bounds said. “There is no final agreement to review, but when there is John McCain will weigh in responsibly and appropriately.”

Administration officials went to Capitol Hill Tuesday to urge Congress to pass the bailout package quickly, arguing the nation’s economy is teetering on the brink of a major recession.

Some senior Democrats on Capitol Hill have voiced concern that McCain will continue to oppose the Bush administration’s plan as a way to position himself as a critic of Wall Street and the Bush Administration.

If McCain doesn’t vote for the legislation, other Republicans might follow suit, leaving the Democratic-led majority to fight in Congress to pass the risky bailout plan.

However a Democratic congressional leadership source tells ABC News’ Jake Tapper that Paulson went so far as to assure Democratic leaders that McCain “won’t be a problem” — in other words that McCain will vote for the proposal.

Unitited We Stand, Divided We Fall – Camp Obama Dividing

Funny, you look at Palin and McCain and they do have different views on issues, however they support each other and acknowledge that they have those different views, but they do not bash the other over those views.

Barack and Biden seem to be at odds with each other, both with jabs to the other. I was taught growing up to lead by example… I thought Obama was all about Unity…

And to think this is just what we have seen publically…

The best part is that Obama has criticized McCain for not wanting to bail out AIG, which his own running mate agreed with McCain… So what does Obama do, he slaps Joe around a bit in public…

Now this divide in the Obama camp is Change you can believe in…

Barack Obama and Joe Biden stepped out of sync again Tuesday, as the Democratic presidential nominee criticized his running mate for voicing opposition to the government bailout of American International Group early last week.

It was the second off-message moment for the Democratic team in two days. Biden had to ratchet back his own rhetoric Monday after an interview aired in which he called one of his own campaign ads “terrible.”

The lack of harmony suggests the Obama team, for months a rancor-free institution, is running into the kind of message discipline problems that John McCain’s campaign faced before he started to cut back his interaction with reporters.

The latest friction happened when Obama was asked on NBC’s “Today Show” about why he criticized McCain for initially opposing a federal bailout of AIG when Biden was also speaking out against it.

“I think … that in that situation, I think Joe should have waited, as well,” Obama said.

He was referring to Biden’s interview with NBC last Tuesday in which he said, “I don’t think (AIG) should be bailed out by the federal government.”

That echoed McCain’s comment the same day. But all the while Obama had stayed relatively mum on the crisis at AIG. He released a statement last Wednesday expressing his hopes for the rescue plans, but did not give a clear verdict on whether he supported the plan.

Having censured Biden for his remarks, Obama continued to criticize McCain Tuesday for initially opposing federal action on AIG.

“(McCain) said the government should stand aside and allow one of the nation’s largest insurers, AIG, to collapse,” Obama said. ” I think what has been clear during this entire past 10 days is John McCain has not had clarity and a grasp on the situation.”

The internal static, however, was not quite as pronounced as when Biden denounced his own campaign’s ad the day before.

In an interview with CBS News, the Delaware senator took issue with an attack ad from his own side that criticized McCain for his lack of savvy when it comes to computers and e-mail.

“I thought that was terrible by the way,” Biden said. “I didn’t know we did it and if I had anything to do with it, we would have never done it.”

The McCain campaign pounced on the statement, and Biden later issued a clarification.

“Having now reviewed the ad, it is even more clear to me that given the disgraceful tenor of Senator McCain’s ads and their persistent falsehoods, his campaign is in no position to criticize,” Biden later said, criticizing McCain for an ad accusing Obama of voting to teach kindergartners about sex. The Obama campaign has said the bill would help children avoid predators.

Biden also raised eyebrows two weeks ago when he said Hillary Clinton “might have been a better pick than me” to be Obama’s running mate.

While Obama has worked intently to patch up the rifts between his campaign and supporters loyal to Clinton, he hasn’t gone so far as to say Clinton would be a better running mate.

Biden, however, told the audience at a town hall meeting in New Hampshire that Clinton “is as qualified or more qualified than I am to be vice president of the United States of America.”

He was responding to an audience member who criticized Clinton.

The Real Cost Of Illegal Aliens On Our Health System

Listen carefully, this is not the only case out there. This is where our tax dollars go… This is why we need stricter immigration laws, need to refine the deportation process and impove border security and why we need to stay away from Socialized medicine..

Senate Passes Housing Bill To Make The Rich Richer and the Poor Poorer

A Senate approved housing bill, designed allegedly to ease the crunch on foreclosures and encourage growth in the housing sector is nothing more than a Democrat driven hand out to those with money, with banks possibly making even more money off of those that cannot afford to keep their homes. In a worst case scenario, it wil create an over abundance of homes on the market and drive prices further down.

This will cause people to sell earlier, rich people can buy foreclosed property cheaper, abandoned homes will be fixed up by the big construction companies with the money to invest, then sold for them.

The Senate on Thursday passed a bipartisan package of tax breaks and other steps designed to help businesses and homeowners weather the housing crisis.

The measure passed by an impressive 84-12 vote, but even supporters of it acknowledge it’s tilted too much in favor of businesses like home builders and does little to help borrowers at risk of losing their homes.

The plan combines large tax breaks for homebuilders and a $7,000 tax credit for people who buy foreclosed properties, as well as $4 billion in grants for communities to buy and fix up abandoned homes.

Despite the impressive vote, the bill will be significantly redrawn by critics in the House who say it’s tilted toward businesses such as home builders instead of borrowers.

The White House opposes the plan but has not issued an explicit veto threat. It says parts of the legislation would make the problem worse by depressing some home values and the measure inappropriately uses taxpayer money to bail out lenders saddled with foreclosed houses.

The House is likely to reject key portions of the Senate measure, including $25 billion over three years in tax breaks for money-losing businesses such as home builders. A plan adopted Wednesday by a key House panel dropped that idea as well as the tax credit for purchasers of foreclosed homes.

Senate Majority Leader Harry Reid, D-Nev., acknowledged changes will be needed in upcoming talks with the House and the White House.

“This is just the beginning of the process,” Reid said. “This bill will go to the House. With the House and the White House we can come up with a piece of legislation fairly quickly.”

Before passing the measure, the Senate added $6 billion in unrelated tax breaks for renewable energy producers, despite Senate rules that say tax cuts need to be “paid for” with revenue increases elsewhere in the tax code.

The bill also offers $150 billion for pre-foreclosure counseling and stronger loan disclosure requirements

The $25 billion tax break the plan offers to homebuilders and other businesses absorbing heavy losses and the energy tax package were both dropped from an economic rescue plan enacted in February. Critics of those proposals said they were overly expensive and would not stimulate the economy.

But deepening public worries about the housing crisis appear to have emboldened lawmakers to swell the $9 trillion deficit to pay for the measures.

The $7,000 tax credit for the purchase of foreclosed homes, opponents argue, would unfairly reward purchases that would have happened anyway while possibly devaluing other homes. It also could give banks an incentive to foreclose on homes by subsidizing purchases of such properties.

The measure calls for a long-awaited modernization of the Federal Housing Administration that would enable more homeowners to refinance into loans backed by the Depression-era agency.

It includes $10 billion in tax-free mortgage revenue bonds to help homeowners refinance subprime loans, a move endorsed by President Bush.

Clinton Campaing Manager Was Board Member Of Sub-Prime Mortgage Lenders

Well it turns out that long time associate Maggie Willams, Campaign Manager for Hillary Clinton, earned $175,000 for being on the board of directors for Delta Financial Corporation. Delta was the 9th largest Sup-Prime lender until it went bankrupt last year.

Look at the numbers below for detailed information on what this country did to the poor people trying to buy homes. In summary, an average 14.9% interest rates…

No I can see why Hillary has been so gungho about bailing out the mortgage companies…

WASHINGTON – While Hillary Clinton campaigns for the Democratic presidential nomination in neighborhoods where many have lost their homes in unscrupulous lending schemes, her campaign manager, Margaret “Maggie” Williams, sits on the board of one of the nation’s once-largest and now-bankrupt sub-prime mortgage lenders.

Williams joined the board of directors at New York-based Delta Financial Corporation in 2000, one month after a federal settlement was reached with Delta Financial over discriminatory lending practices.

As of September 2007, Williams owned 12,500 shares of Delta’s common stock, and by 2007 had earned at least $175,000 for her board obligations, according to company filings available in the Securities & Exchange Commission online database.

Clinton’s Tough Stand on Housing Crunch

Intently focused on the nation’s housing crisis in recent appearances, Clinton has been clear that sub-prime mortgage lenders, particularly in poor, working class urban neighborhoods shoulder much of the blame for the credit crunch.

“I am reminded every day as I meet with families and listen to their stories that the effective functioning of our financial markets isn’t just about Wall Street. It’s about Main Street,” she said recently.

In a proposal last week, Clinton suggested giving “a $30 billion lifeline to avoid a crisis for Wall Street banks” by providing assistance to at-risk communities and families facing foreclosure. In a speech earlier this week, the New York senator suggested protecting lenders from lawsuits by investors who bought mortgages expecting big profits off high interest rates.

“Many mortgage companies are reluctant to help families restructure their mortgages because they’re afraid of being sued by the investment banks, the private equity firms and others who actually own the mortgage papers,” Clinton said.

“This is the case even though writing down the value of a mortgage is often more profitable than foreclosing,” she said, offering legislation “to provide mortgage companies with protection against the threat of such lawsuits.”

Delta’s Sub-Prime Lending

But as it turns out, Clinton’s top aide is on the board of what had been — until its bankruptcy — the ninth-leading sub-prime lender in the nation, handling almost $800 million worth of sub-prime lending in the third quarter of 2007 alone, according to National Mortgage News.

Delta Financing — and subsidiary Delta Funding — made much of its money by turning around and selling its loans at a profit — either through securitization or straight sale. Financial statements and federal filings indicate that Delta made huge profits between 2004 and 2007 mostly by refinancing loans to homeowners with moderate and middle incomes, in urban neighborhoods.

In 2006, it reported a net income of $28.8 million compared to $18 million a year earlier. It also originated a record $4 billion in loans that year, a 5 percent increase over 2005. In 2006, it had increased its line of credit by $500 million to a total of $1.75 billion.

Te average interest rate on a 30-year mortgage is 6.25 percent. Financial sources and the company’s public records show that in the last decade Delta brokered thousands of fixed-rate refinancing loans with rates of anywhere from 11.3 to 13.6 percent.

Reports provided by the Federal Financial Institutions Examination Council (FFIEC), an inter-agency body that proscribes standards for U.S. financial institutions, found that in 2006 the vast majority of Delta’s refinancing loans had rates of around 13.3 percent. The average rate on home mortgages was 14.9 percent.

“They were basically trying to extract whatever blood they could get away with and then sell their loans on the secondary market,” said Irv Ackelsberg, a Philadelphia attorney who assists homeowners in complaints against lenders and brokers.

Industry experts say the company’s demise did not come from its struggle against various lawsuits or foreclosures, but its being a victim of the credit market. The value of its loan-backed securities plummeted at the same time its investors stopped buying new loans. Delta’s creditors soon came calling and the company couldn’t keep up with its own financing agreements.

Delta’s status is in the hands of a federal bankruptcy judge. All operations out of its Woodbury, N.Y., headquarters have ceased.

The Williams Difference

Williams joined Delta’s board less less than a month after one federal official said Delta’s practices were “turning the American dream of homeownership into a nightmare.”

At the time, Delta had a 5 percent foreclosure rate nationwide — double the industry standard — and was in the midst of settling several state and federal lawsuits that alleged predatory and discriminatory lending practices.

Williams, now 53, was between jobs with the Clintons when she got the overture to join the board at Delta. She had worked as the former first lady’s chief of staff from 1993 to 1997, and had just become president of Fenton Communications, one of the largest public relations shops in the country in 2000. It made her the highest-ranking African-American woman in a top 50 public relations firm in the country. Williams joined Bill Clinton’s Harlem office in 2001. She later became a partner in management consulting firm Griffin Williams.

The Clinton campaign did not return requests for comment from FOXNews.com, but according to a June 2000 article in Directors and Boards magazine, Williams spent the six months prior to her decision to join the board asking a lot of questions and making a flurry of calls to Hugh Miller, president and CEO of Delta Financial Corp.

It was the period of time when Delta was embroiled in the state and federal lawsuits. According to the magazine, Williams said she was convinced that the company was enabling individuals who would otherwise not qualify for mortgages to get loans.

“There are people who miss payments and have bad credit for all kinds of reasons,” she told the magazine. “It is a very middle-American kind of problem, although I believe it does affect poor people disproportionately.”

Miller told the magazine he was most attracted to Williams’ skill at anticipating “issues and problems before they come up and then develop(ing) a battle plan. It’s something that we’ve previously been remiss in doing.”

Delta company officials would not elaborate on Williams’ role other than to say that “like other board members, Ms. Williams served in an advisory and oversight role and did not have a role in the day-to-day operations and management of the company.” A 2002 annual report, the only one found with this figure, shows Williams attended at least 70 percent of the company’s board meetings.

Predatory Practices

Delta, which declared bankruptcy in December 2007, settled lawsuits with both federal and state regulators in 2000, before Williams’ era, but has maintained dubious lending practices, allege consumer advocates in New York and Philadelphia.

“They were one of the worst and most abusive sub-prime lenders in New York City,” said Josh Zinner, co-director of the Neighborhood Economic Development Advocacy Project (NEDAP).

Zinner helped bring a 1999 lawsuit against Delta Funding through the New York State Banking Department and then-state Attorney General Eliot Spitzer’s office. The case was settled with an agreement that included $12 million in payouts to borrowers. It has been caught up in court ever since over the price tag.

A separate class action suit against Delta by some 67,000 New York borrowers in 1998 is also ongoing, according to attorneys for Lopez v. Delta Funding Corp. In that case, the company agreed to settle on claims that Delta violated federal and state statutes governing fair lending practices. The plaintiffs are appealing for additional restitution.

In March 2000, the federal government charged Delta with violating consumer protection and fair lending laws by approving and funding loans regardless of the borrowers’ ability to pay, paying unearned fees and kickbacks to brokers and disproportionately charging African-American females higher rates and fees than “similarly situated” white males.

The immediate settlement of the suit filed jointly by the Department of Justice, Federal Trade Commission and Department of Housing and Urban Development did not result in restitution to anyone but an agreement by the company to adhere to stricter, fairer lending standards and to submit to greater governmental oversight.

Delta never admitted any wrongdoing in the New York or federal cases, and not everyone believes the company was as nefarious as the headlines made it out to be. Jonathan Pinard, a lending expert and president of the Empire State Mortgage Bankers Association, said Delta “stayed in the agreement” set out in the federal settlement and kept its nose clean. Later, when the sub-prime lending market went sour, Delta was “painted with a broad brush” as one of the bad guys, he said.
But since Williams joined the board, Ackelsburg has assisted clients embroiled in predatory lending schemes that involve Delta.

“(Delta) didn’t have as big a market share as they did in New York,” Ackelsberg said. “But the most unscrupulous brokers tended to work with Delta.”

He pointed to a near million-dollar settlement presided over by the Pennsylvania Human Relations Commission in 2002, in which an African-American brokerage firm linked to Delta was found guilty of predatory lending and discriminatory practices in predominantly black Philadelphia neighborhoods.

In six of the cases named in the Taylor, Poindexter v. McGlawn & McGlawn and Reginald McGlawn lawsuit, the loans were signed with Delta Funding. At least four of the 10 loans had originated in 2000 or afterward.

Each of the individuals who received Delta loans through McGlawn & McGlawn also filed complaints with the PHRC against Delta Funding, according to commission sources. Those cases were all settled, but terms of the agreements are confidential. Delta officials did not respond to multiple requests for comment by FOXNews.com.

“I would say Delta Funding, in the ’90s in particular, sort of epitomized predatory lending,” said Zinner, who worked for the Foreclosure Prevention Project at South Brooklyn Legal Services at the time of the New York suit. After the 2000 settlement, Zinner said his group “didn’t get the high volume of calls (about Delta loans) … but we definitely got quite a few complaints.”