I wrote a special column for the NYPost today about how ACORN snagged a piece of the bailout pie. Although House Republicans stripped an overt subsidy to Barack Obama’s left-wing housing entitlement and fraud-enabling friends at ACORN, they rolled over to the group’s demands for radical “loan modification” and foreclosure mitigation measures that spell more trouble. Many experts say this loan modification business is plagued by junk science — with its backers refusing to release data on re-default rates. It is also apparently an invitation to appraisal fraud. And, of course, patently unfair. (I remind you that Joe Biden made a deliberate point during the vp debate of floating and repeating the idea that bankruptcy court judges should be empowered to reduce loan principal as well.) In other words: Same old, same old. As I’ve said before, “Getting credit is not a constitutional right. Preserving home ownership should not be a government imperative to be pursued at all costs.” Neither should foreclosure prevention at all costs. (See also: “Not everyone should own a home.”)
I know, I know: I’m a RAAAAAAAACIST!
Another must-read from intrepid Stanley Kurtz: Planting the seeds of disaster.
“Rescue” rewards housing hustlers
by Michelle Malkin
For the NYPost
If you thought the trillion- dollar-plus “financial-rescue plan” signed into law Friday had been stripped of the radical group ACORN, think again: The Chicago-based Association of Community Organizations for Reform Now’s fingerprints are still all over the law.
ACORN’s participation in “fixing” a crisis it helped create is flabbergasting.
For decades, the left-wing activist group pressured lenders to give loans to lower-income borrowers who couldn’t otherwise afford homes. The grateful homeowners then become political recruits, serving as foot soldiers for ACORN’s radical agenda.
Problem is, such mortgages are now going bad all across America. ACORN’s answer: Pressuring the banks not to foreclose on bad risks. And now, with the “rescue” bill, they’re getting ready to simply rewrite mortgages to make them affordable.
House Republicans removed one pro-ACORN measure from the rescue bill – torpedoeing a provision devoting 20 percent of all profits from the bailout to a housing slush fund – which would’ve funneled money to ACORN and similar groups.
In its place, however, ACORN’s favorite lawmakers – led by Maxine Waters (D-Calif.) and Barney Frank (D-Mass.) – got ACORN-championed “foreclosure-mitigation” provisions into the rescue.
This will radically expand the federal role in meddling with mortgage loans. The key sections mandate that the Treasury “consent” to rewriting loans to prevent foreclosures – not only by reducing interest, but also by cutting loan principal.
Stuck with a $300,000 mortgage you can’t pay? Get the government to wave its magic wand and cut your debt to $150,000.
The deal is only for those who have fallen behind on their mortgages, of course – not for all you chumps who’ve been paying on time.
And it’s a good bet that ACORN mortgage counselors will “help” decide which distressed borrowers benefit, and how.
The group’s housing arm, the Acorn Housing Corp., is already funded with millions of taxpayer dollars to renegotiate loans for low-income people who should have never received them in the first place. Loan modification is ACORN’s bread and butter.
And when the group doesn’t get what it wants, it will sue, protest and shake down until business and government bend again.
Rep. John Culberson (R-Texas) foresees havoc: “Liberals who manage these programs will give away millions of free or reduced homes in neighborhoods all over America to families who could not otherwise afford them.
“The federal government now has the power to create federal housing projects, house by house, in neighborhoods all over America. Just imagine what that means for property values and the safety and security of your neighborhood.”
All this comes on top of the $5 billion ACORN-backed housing bill passed in July, which hands $600 million-plus to ACORN and similar groups to bail out homeowners under water and help countless more risky loan prospects.
During the floor debate on Friday, Reps. Frank and Waters assured Democratic colleagues that they had personally lobbied Treasury Secretary Hank Paulson on these measures and would press him to consent to “do the kind of loan modifications we’ve been urging.”
Waters exulted: “We’re in charge! . . . We own them now.”
If the banks and others that collect payments on these distressed mortgages don’t write down enough loan principal to keep Rep. Frank happy, he threatens hearings and new legislation next year.
He’ll have the backing of ACORN. ACORN President Maude Hurd warns that her “members plan to hold Secretary Paulson accountable and ensure he uses this authority to make streamlined loan modifications a priority for struggling American families.”
What’s next? Principal write-downs on credit cards and car loans? What incentive do responsible borrowers have left to pay their bills on time?
As independent housing-bubble analyst and blogger Patrick Killelea (patrick.net) notes: “Nobody was ever forced to borrow money. People who borrowed too much money made a mistake. If they can do that with impunity, they will keep on doing it . . . Every prevented foreclosure also prevents a deserving family from buying at a reasonable price.”
Thanks to ACORN, the bailout enshrines the homeownership-at-all-costs mentality that got us into this mess in the first place.
Reader Pieter e-mails: “Can someone please tell me when the ‘American Dream’ became the ‘American Guarantee?’ I must have missed the memo.”