As of now, I am in control here, in the White House

Setting the Table for the Next Financial Meltdown

It’s like the guy who has a heart attack and a week after emerging from the hospital finds himself at Outback Steakhouse enjoying a prime rib and the fried onion loaf.

It’s all just too good to pass up, near death experience be damned.

Mell WattWith barely a pause, we’re headed back toward another housing crisis, and Mel Watt (D-N.C.), who was confirmed Tuesday as the overseer of Fannie Mae and Freddie Mac, is all set to lead us there. He likes to give loans to people who seem nice and deserving but who unfortunately can’t afford it. And that’s what caused financial Armageddon 2008

Honestly, I thought we were supposed to be doing away with Fannie and Freddie. Nope. They’re still using your money to back up mortgages. And according to Peter Wallison, writing in today’s Wall Street Journal, the standards for a loan guaranteed by you are about to drop:

The stage has already been set. The Consumer Financial Protection Bureau (CFBP), an agency created by the Dodd-Frank Act, has outlined a minimum quality mortgage that will permit a borrower to get a loan with a 3% down payment and a FICO credit score well below 660. Under Dodd-Frank, a lender could be subject to severe penalties if it turns out that the borrower cannot repay the loan—but the CFPB’s rule protects the lender against liability if Fannie and Freddie’s automated underwriting systems approve the loan.

Wallison says it’s only natural then that Watt is President Obama’s man for the job:

The North Carolina congressman is a consistent, long-time supporter of affordable-housing quotas. He joined Barney Frank in 2003 to block the Bush administration’s attempt that year to increase government oversight of Fannie and Freddie.

According to the Daily Caller . . .

In 2002, Watt  teamed up with Freddie Mac and Fannie Mae, Bank of America, BB&T, and UJAMMA Inc., to announce Pathways to Homeownership, a pilot initiative designed to give home loans to welfare recipients . . .

In 2007, a full year after the real estate market peaked and began to plummet under the weight of millions of mortgage defaults, Watt and Frank co-sponsored a bill forcing Fannie and Freddie to meet even higher quotas for affordable lending.

The Wall Street Journal recently questioned Watt’s readiness for the job, noting his own admission as recently as December 2011 that he didn’t know much if anything about derivatives.

But the fellows in the White House understand derivatives, and they’ll be explaining to Watt what to do.

Well, at least Watt’s a nice guy. Not the person we want in the job, but a nice guy.

Years ago, as a reporter covering alternative fuels, I went to a briefing on Capitol Hill – I think it was about natural gas vehicles. Anyhoo, the briefing was scheduled for like 9:00 am – way too early for reporters, who back then were used to filing their one story of the day in the early evening and then rolling in to work at 10:00 am or later.

So I walked in, a little late myself, to see three Congressmen and approximately no reporters in a room with about 70 chairs. One of the lawmakers was speaking. It was Mel Watt.

I sat down to listen, and as I finished I noticed him walking toward me. And then toward me some more. And then right next to me. And then I realized what was happening: his seat was the one right next to me, on the aisle.

Well, he had to make a choice. If he didn’t sit down, he might seem impolite, like you know, he didn’t want to be next to me. On the other hand, sitting down would be ridiculous. Two big dudes – I’m over six feet and I think he is too – sittin’ right next to each other in a big empty room.

He sat down.

And there we remained for the rest of the briefing, two oversized male storks perched side by side amid a sea of empty nests, each leaning slightly away from each other in polite discomfort.

26 Responses to Setting the Table for the Next Financial Meltdown

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  1. Two things:
    1. Go for it, pal. Crank up that Fed money machine.
    I’m dying to unload this big, empty house that I haven’t been able to sell because of all the strict financial guildelines that prevented poor people from getting in debt over their head. Open House!!
    (all about me here)

    2. The gentleman chose to sit next to you because he might have had unmentionable designs on you, you being all handsome and such.
    Or, like Sheldon, you might have been sitting in “his” seat so he hoped you would be uncomfortable and leave.

  2. And the $$$$ waste keeps piling up. When it’s all over, B.O. will have a big, fat pension, generous speaking fees and be adored like Clinton. In this case, he’s driving us to bankruptcy.

    • “In this case, he’s driving us to bankruptcy.”

      Wasn’t that the plan all along. Judicial jihad. Harry Reid planted the bomb in the Senate to control the DC Court of Appeals. The EPA has issued more regs for 2014 that will cost the economy $100 billion.
      We will now see if our so-called defenders of the Constitution fight back or try to make nice-nice with the enemy.

      • Someone on here was saying if you can’t find a job, move-this is another reason people can’t move…To get rid of a house, YOU bring a check to closing instead of getting one.

    • We just unloaded our house after two years. Yes, we had to bring a check to closing. The worst part was the government loan agency forced us to fix up the place way beyond what the selling price was before they would agree to close (after we already paid for new roof and new bathroom). It was infuriating that a house we lived in for 10 years to save enough money to get out of the neighborhood wasn’t “fit to live in” according to the gov’t bureaucracy.

  3. Terrific ! More NINJA loans…No Income, No Job, Income.
    On welfare, no problem, here’s the money, after all it’s not ours.

  4. Great article and really funny recollection, Keith.

    This guy reminds me a lot of Franklin Delano Raines. Wouldn’t be surprised if he fills his pockets at the public trough, just like his predecessor. Where are our fearful leaders in the Republican party on all this lawlessness? They are fighting against their constituents and not the communists. They’re putting their stupid party politics over the survival of our Republic.

  5. So do we call these ObamaLoans or ObamaHomes? If you own a ObamaPhone and have signed up for ObamaCare, your just one step closer!

    Laughing.. “severe penalties” for defaulting. All they did was throw more money at them! Meanwhile, those of us who are responsible and keep making ends meet to pay our debts, get saddled to bail out the system again.

  6. Doesn’t all of this dove-tail with Obama’s neighborhood ‘mapping’ scheme? The govt has ‘race’ data on every zip code in the country and the goal is going to force minority inclusion wherever they deem it necessary. It happened in Westchester County a few years ago. It’s a very big deal!

    • Interesting thing, the minority inclusion in neighborhoods. It’s been my observation that minorities are not um, comfortable when thrown into a mostly White environment.
      We’ve had Blacks, Muslims, and Hispanics move in and out of our neighborhood over the last 10 years. There was no trouble or confrontations and it’s a nice conservative area.
      None of them lasted more than two years here.

      There’s more to living than inhabiting a nice house.

      • That’s what makes the ‘mapping’ scheme so ridiculous – ‘forced integration’. We are all ‘tribal’ in a sense. We ‘colonize’ according to mutual socio-economic conditions.
        One of the worst experiences in social engineering was the busing during the 70’s and 80’s. White kids forced to ride a bus for 2 hours to get to the ghetto, and vice-versa. No one was happy.
        This time around, Federal funding is going to be withheld for cities that don’t comply with Obama’s grand scheme. And too bad for anyone who objects – the nuclear option has been invoked and the DC circuit court will be filled with radical judges. There will be a revolution!

        • Honestly, it would be a good thing for more states to reject the federal money and strings. I know the congressmen like to come home and tell us all about the funding they secured for us, but I’d rather let someone else have it.