House of Representatives Rejects Bailout Bill

[Shayna]

@Sam_Stone

I didn’t say it was the fault of poor black people. But the rules that were put in place to allow poor people to buy homes are the ones that everyone exploited. Republicans have been holding hearings and trying to get movement on the problems with these mortgages and Fannie/Freddie for a long, long time. They have been staunchly opposed by Democrats every step of the way.

Oh Rly?

@George W. Bush

Thank you, all. Thanks, for coming. Well, thanks for the warm welcome. Thank you for being here today. I appreciate your attendance to this very important conference. You see, we want everybody in America to own their own home. That’s what we want. This is – an ownership society is a compassionate society.

More and more people own their homes in America today. Two-thirds of all Americans own their homes, yet we have a problem here in America because few (sic) than half of the Hispanics and half the African Americans own the home. That’s a homeownership gap. It’s a – it’s a gap that we’ve got to work together to close for the good of our country, for the sake of a more hopeful future. We’ve got to work to knock down the barriers that have created a homeownership gap.

I set an ambitious goal. It’s one that I believe we can achieve. It’s a clear goal, that by the end of this decade we’ll increase the number of minority homeowners by at least 5.5 million families. (Applause.)

Some may think that’s a stretch. I don’t think it is. I think it is realistic. I know we’re going to have to work together to achieve it. But when we do our communities will be stronger and so will our economy. Achieving the goal is going to require some good policies out of Washington. And it’s going to require a strong commitment from those of you involved in the housing industry.

. . .

All of us here in America should believe, and I think we do, that we should be, as I mentioned, a nation of owners. Owning something is freedom, as far as I’m concerned. It’s part of a free society. And ownership of a home helps bring stability to neighborhoods. You own your home in a neighborhood, you have more interest in how your neighborhood feels, looks, whether it’s safe or not. It brings pride to people, it’s a part of an asset-based to society. It helps people build up their own individual portfolio, provides an opportunity, if need be, for a mom or a dad to leave something to their child. It’s a part of – it’s of being a – it’s a part of – an important part of America.

Homeownership is also an important part of our economic vitality. If – when we meet this project, this goal, according to our Secretary of Housing and Urban Development, we will have added an additional $256 billion to the economy by encouraging 5.5 million new home owners in America; the activity – the economic activity stimulated with the additional purchasers, the additional buyers, the additional demand will be upwards of $256 billion. And that’s important because it will help people find work.

Low interest rates, low inflation are very important foundations for economic growth. The idea of encouraging new homeownership and the money that will be circulated as a result of people purchasing homes will mean people are more likely to find a job in America. This project not only is good for the soul of the country, it’s good for the pocketbook of the country, as well.

To open up the doors of homeownership there are some barriers, and I want to talk about four that need to be overcome. First, down payments. A lot of folks can’t make a down payment. They may be qualified. They may desire to buy a home, but they don’t have the money to make a down payment. I think if you were to talk to a lot of families that are desirous to have a home, they would tell you that the down payment is the hurdle that they can’t cross. And one way to address that is to have the federal government participate.

And so we’ve called upon Congress to set up what’s called the American Dream Down Payment Fund, which will provide financial grants to local governments to help first-time home buyers who qualify to make the down payment on their home. If a down payment is a problem, there’s a way we can address that. And when Congress funds the program, this should help 200,000 new families over the next five years become first-time home buyers.

[snip]

And we’ve got to set priorities. And one of the key priorities is going to be inner-city America. Good schools and affordable housing will help revitalize our inner cities.

Another obstacle to minority homeownership is the lack of information. You know, getting into your own home can be complicated. It can be a difficult process. I had that very same problem. (Laughter and applause.)

Every home buyer has responsibilities and rights that need to be understood clearly. And yet, when you look at some of the contracts, there’s a lot of small print. And you can imagine somebody newly arrived from Peru looking at all that print, and saying, I’m not sure I can possibly understand that. Why do I want to buy a home? There’s an educational process that needs to go on, not only to explain the contract, explain obligation, but also to explain financing options, to help people understand the complexities of a homeownership market, and also at the same time to protect people from unscrupulous lenders, people who would take advantage of a good-hearted soul who is trying to realize their dream.

. . .

Last June, I issued a challenge to everyone involved in the housing industry to help increase the number of minority families to be home owners. And what I’m talking about, I’m talking about your bankers and your brokers and developers, as well as members of faith-based community and community programs. And the response to the home owners challenge has been very strong and very gratifying. Twenty-two public and private partners have signed up to help meet our national goal. Partners in the mortgage finance industry are encouraging homeownership by purchasing more loans made by banks to African Americans, Hispanics and other minorities.

Representatives of the real estate and homebuilding industries, through their nationwide networks or affiliates, are committed to broadening homeownership. They made the commitment to help meet the national goal we set.

**Freddie Mae – Fannie Mae and Freddie Mac – I see the heads who are here; I want to thank you all for coming – (laughter) – have committed to provide more money for lenders. They’ve committed to help meet the shortage of capital available for minority home buyers.

Fannie Mae recently announced a $50 million program to develop 600 homes for the Cherokee Nation in Oklahoma. Franklin, I appreciate that commitment. They also announced $12.7 million investment in a condominium project in Harlem. It’s the beginnings of a series of initiatives to help meet the goal of 5.5 million families. Franklin told me at the meeting where we kicked this office, he said, I promise you we will help, and he has, like many others in this room have done.

Freddie Mac recently began 25 initiatives around the country to dismantle barriers and create greater opportunities for homeownership. One of the programs is designed to help deserving families who have bad credit histories to qualify for homeownership loans. Freddie Mac is also working with the Department of Defense to promote construction and financing for housing for men and women in the military.**

. . .

The other thing Kirbyjon told me, which I really appreciate, is you don’t have to have a lousy home for first-time home buyers. If you put your mind to it, the first-time home buyer, the low-income home buyer can have just as nice a house as anybody else. And I know Kirbyjon. He is what I call a social entrepreneur who is using his platform as a Methodist preacher to improve the neighborhood and the community in which he lives.

. . .

But he also understood that a homeownership program is incredibly important to revitalize this neighborhood that a lot of folks had already quit on. I suspect one day we’ll all go back to Luis’ neighborhood and we’ll find first-time home owners there, and a good education system. And this will be the beginning of a – of a neighborhood revitalization in that part of Philadelphia, because there was vision and drive and hope for our fellow citizens.

So I want to thank you all for coming. I want to thank you for your determination to help close the minority homeownership gap. It’s an incredibly important initiative for this country. See, America is a good and generous country. It’s a great place. Part of it was to make sure that the dream, the American Dream, the ability to come from anywhere in our society and say, I own this home, is a reality – can be achievable for anybody, regardless of their status, regardless of their – of whether or not they – whether or not they think the dream is meant for them.

I mean, we can put light where there’s darkness, and hope where there’s despondency in this country. And part of it is working together as a nation to encourage folks to own their own home.

Again, I want to tell you, this is an initiative – as Mel will tell you, it’s an initiative that we take very seriously. We’re going to stay on it until we’re – until we achieve the goal. And as we all achieve the goal, we can look back and say, America is a better place for our hard work, our efforts and our desires for our fellow Americans to realize the greatness of our country.

Thank you for coming. May God bless your vision. May God bless America.

Briefing Room | The White House

So what is it you were saying about the Republicans fighting this again?

[davidw]

@ArizonaTeach

I’m trying to figure out why people are blaming the Republicans while refusing to acknowledge the failures of the Democrats here.

Like I’ve said, if the Democrats wanted to pass this, they could have done so without a single Republican vote.

Yeah, and the Democrats could have wrote a bill that ignored Republican concerns, and just offer liberal solutions. But they chose to make a bi-partisan effort, which the Republicans chose to sink. I say the Dems should go back and create a straight liberal bill and say FU to the Republicans.

[ralph124c]

Suppose the Chinese (concerned about their $1 trillion in US cash) decide that the dollar will collapse. So they start dumping US bonds and stocks-would they be so foolish to do this? The collapse of the US dollar would bite them in the ass-and there would be nobody to buy their products.
Would the Chinese be so foolish?

[Jolly_Roger]

@Maeglin

This non-logic is kind of insulting. Republican leadership claims to have wanted to pass it, too. Should the fact that Republican leadership failed mean that the Democrats’ bar gets raised? Pelosi delivered enough of her caucus. That was, in all probability, her job. Blaming her for not doing more to compensate for Boehner’s failure to rally enough people to back their president is just ex post illogic. Arguing otherwise is moving the goalposts.

I thank you for saying that. I wanted to but couldn’t overcome my shock at the brassballedness of saying its the dems fault.

[Maeglin]

@ralph124c

Suppose the Chinese (concerned about their $1 trillion in US cash) decide that the dollar will collapse. So they start dumping US bonds and stocks-would they be so foolish to do this? The collapse of the US dollar would bite them in the ass-and there would be nobody to buy their products.
Would the Chinese be so foolish?

No.

That was easy.

[Mighty_Girl]

@Superfluous_Parentheses

You owe me a beer. And a new keyboard.

I would, but by the look of things I doubt I will be able to afford a beer soon (my income is US-based).

I suggest that you start buying clothes in smaller sizes and punching extra holes in your belts.

[Jolly_Roger]

@Shayna

Oh Rly? So what is it you were saying about the Republicans fighting this again?

Shayna if I wasn’t married I’d ask to buy you a drink.

[Oy]

@Jolly_Roger

Shayna if I wasn’t married I’d ask to buy you a drink.

Shayna, the girl with kaleidoscope cites.

[Leaper]

On one hand, this guy thinks we’re well on our way to another Great Depression.

On the other hand, many people have been noting that today’s drop, as a percentage, isn’t nearly as high as crises past, pointing at that as proof that all the “crisis” hysteria of the past week were smoke and mirrors. (They may be right, but I find this “proof” incredibly poor.)

[Mosier]

@Oy

Shayna, the girl with kaleidoscope cites.

Enh, I’m not impressed. That cite shows Bush showing support for some programs that help minorities and poor people to own homes. There’s nothing sinister about that.

On the other hand, various other cites show Bush specifically targeting sub-prime lending practices. Shayna’s cite doesn’t prove that Bush favored adjustable mortgage rates or anything like that. No matter how we try to make it stick, I think Bush is blameless on this one.

[Spoke]

@RyJae

Which “vast majority of economists” are you listening too?

The ones who remember 1933?

The ones not ensconced at the (notably conservative) Universities of Chicago and Stanford? (Who together seem to comprise about 1/4 of the economists on your little list. Hmm.)

[RyJae]

@Shayna

Oh Rly? So what is it you were saying about the Republicans fighting this again?

Both parties share responsibility. Your party isn’t innocent, neither is the other party. Blaming one or the other for the current problems is pure and simply bias.

[Gangster_Octopus]

I have a solution,

Evey member of Congress should stay at a Holiday Express for a night.

[RyJae]

@spoke-

The ones who remember 1933?

The ones not ensconced at the (notably conservative) Universities of Chicago and Stanford? (Who together seem to comprise about 1/4 of the economists on your little list. Hmm.)

Conservative list hmm interesting. I thought perhaps they where economists, and not people trying to get elected to an office.

[UltraVires]

Where was the “deal” that was reached yesterday? Two-thirds of the GOP voting against AND 40% of the DEMS voting against tells me it was a lousy bill.

How did either leader claim to have the pulse of their respective caucus with that much dissent?

[brickbacon]

@Sam_Stone

You’d better check your facts. The only responsible party in all of this for the past 8 years has been the Bush administration. The administration has begged and pleaded with Congress to do something about the problem.

Nonsense. You needn’t look any further than the White House website to see him tout some of the initiatives that have led to this crisis. Here’s one interesting part:

The President set a goal to increase the number of minority homeowners by 5.5 million families by the end of the decade. Through his homeownership challenge, the President called on the private sector to help in this effort. More than two dozen companies and organizations have made commitments to increase minority homeownership - including pledges to provide more than $1.1 trillion in mortgage purchases for minority homebuyers this decade.

President Bush signed the $200 million-per-year American Dream Downpayment Act which will help approximately 40,000 families each year with their downpayment and closing costs

The Administration proposed the Zero-Downpayment Initiative to allow the Federal Housing Administration to insure mortgages for first-time homebuyers without a downpayment. Projections indicate this could generate over 150,000 new homeowners in the first year alone.

This last initiative happened in Feb 2004. From here.

By the end of 2005, the Nat’l Association of Realtors reported that more than four out of every 10 recent first-time home buyers financed their purchases with no-down-payment loans. The median down payment first-time buyers was just 2 percent. For all buyers, it was 13 percent.

Median home prices peaked approximately at $230,000 in 2005. 2% of that valuation is $4,600. Today, the median home price, as of January 2008, had fallen to around $208,000. The loan value outstanding today is still around $225,000. Negative amortization of median first time homeowners is approximately $17,000 or 7.5% and growing.

So it was Bush, among others, that advocated the practices that led to these mortgages being issued. Not to mention that blaming Fannie and Freddie for buying mortgage-backed securities that have blown up seems to be somewhat misguided considering they didn’t lend the money to under-qualified people in the first place. At best, they are only partially responsible.

@Sam_Stone

Bush warned of a potential financial disaster in his budgets, in speeches to Congress, and in one-on-one sessions with Congressional leaders.

His budgets have been astronomical. These wars will cost trillions of dollars. How can you argue he has shown any sort of fiscal discipline in light of the dramatic increase in spending and the deficit?

[Spoke]

@RyJae

Conservative list hmm interesting. I thought perhaps they where economists, and not people trying to get elected to an office.

You really are not aware of the reputation of the University of Chicago?

The Chicago school of economics describes a neoclassical school of thought within the academic community of economists, with a strong focus around the faculty of University of Chicago, some of whom have constructed and popularized its principles.

The school emphasizes non-intervention from government and rejects regulation in laissez-faire free markets as inefficient.

So your list is basically a compendium of economists who are dyed-in-the-wool advocates of laissez faire policies.

I.e., precisely the sort of deregulation advocates who got us into this latrine in the first place.

[GIGObuster]

@RyJae

Both parties share responsibility. Your party isn’t innocent, neither is the other party. Blaming one or the other for the current problems is pure and simply bias.

Don’t think so, when you consider all the (also underhanded) work Bush did to make Republicans and Democrats pass those Iraq, FISA, and other resolutions then the blame for the poor piss job made to reign on this early (with a Republican controlled house and Senate) has to be put mostly on Republican hands.
“The buck stops here!” - Harry S. Truman.

[Pleonast]

@RickJay

Lots of disasters could happen, but my entire point is that they WON’T re-fight the last war. The Depression was the catastrophe it was because the government did things they would never do today, such as the Smoot-Hawley Tariff; I’m sorry to keep picking on a Ferris Bueller joke, but it was arguably the worst peice of legislation ever passed by a democratically elected legislature.

Obviously, something ELSE horrible could happen, but it’s not going to be what happened in 1929. So at least some things that we know to be disasters will not take place.

I’m not so sure. There’s been an increase in pro-protectionist rhetoric, from both Democrats and Republicans. I don’t think Congress and the President would be stupid enough to go to an extreme as Smoot-Hawley, but they may be very tempted to pass some protectionist measures. I hope they don’t.

[RyJae]

@spoke-

You really are not aware of the reputation of the University of Chicago?

So your list is basically a compendium of economists who are dyed-in-the-wool advocates of laissez faire policies.

I.e., precisely the sort of deregulation advocates who got us into this latrine in the first place.

Are all economists who disagree with this bill, trying to cause a depression? I’ve never heard of all those schools being conservative hideaways.