In December of last year, I posted on Hillary Clinton’s views of the mortgage meltdown. So it was with great interest that I read Moe’s post on Barack Obama and the mortgage crisis. In fact, I liked it so much that I asked permission to cross post it here.
Moe runs the blog Loan Modification & Home Loan News, which is dedicated to assisting homeowners facing the mortgage crisis. If you are facing a mortgage or foreclosure problem, it would do you some good to check out his blog. He has already helped 19 homeowners save their homes. For that I tip my hat and also thank him for allowing me to cross post his article.
My take on the article is that Moe is right on. This article exposes Obama as being part of the same old problem in Washington. Which in a nutshell is money over people. So not only is Obama a hypocrite with respect to the mortgage crisis, he is one based on his campaign theme of “change”. What Moe’s post exposes isn’t change at all. Rather it’s the same old, same old. Obama is either ignorant of where his money is coming from or a hypocrite, you decide. Either way, these are not qualities that endear me to any Presidential candidate.
The last thing this country needs, in these very critical times, is more political cronyism. This is true even if the favoritism is wrapped in the word “change”.
Is Obama for the People or the Banks?
By Moe on March 2nd, 2008
Let’s get something straight here America.
The President of the United States is to work for the common good of the people for which they represent and serve. Yes, represent and serve. They do not take the oval office to work for the “special interests” of corporate America and the money that fills their campaign buckets.
Or do they?
I have been watching Barrack Obama for quite sometime and what I have seen, has been nothing short of disappointing. Obama has been mostly silent in regards to his policy on the mortgage and housing crisis. He has done little to address the millions of Americans that are “suffering” as a result of these loans they were sold by irresponsible lenders.
I came across this interesting article in the Huffington Post by Earl Ofari Hutchinson. Here are some quotes that I thought I would share with my readers. Since they need to know what candidates truly have their backs. Meaning, which candidate is truly here for the people which they represent and the millions of homeowners that were swindled by the banks.
Democratic presidential contender Barack Obama says he’ll crack down on fraudulent sub-prime lenders. If he really means it he can start by firing his campaign finance chair, Penny Pritzker. Before taking over Obama’s campaign finances, she headed up the borderline shady and failed Superior Bank. It collapsed in 2002. The bank’s sordid story and its abominable role in fueling the sub-prime crisis are well known and documented. It engaged in deceptive and faulty lending, questionable accounting practices, and charged hidden fees. It did it with the sleepy-eyed see-no-evil oversight of federal. It made thousands of dubious loans to mostly poor, strapped homeowners. A disproportionate number of them were minority.
I am not really familiar with this Penny Pritzker. So, I thought I would do a Google search and this is what I found. This is from wikipedia.
On February 20, 2008, Flashpoints Radioproduced an investigative report segment into how Penny Pritzker’s possible role in the current predatory lending(aka. sub-prime) crisis. According to investigative reporter Tim Anderson, Superior Bank, FSB of Hinsdale, Illinois, was owned by the Pritzker family until closed by the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. Superior Bank was among the original lending institutions who used their investors money to purchase “subprime” mortgages for securitization. Pritzker banking resources working with Ernst & Young and Merrill Lynch developed the original mortgage securitation package, putting mortgages into a bond and then selling the bond. Like many banks nationwide, the decision to participate and underwrite subprime business ultimately proved fatal for their mortgage division.
Here is the podcast that I feel everyone should listen to from Flashpoints Radio.
Wednesday, February 20, 2008 Listen D’load Podcast - Today on Flashpoints: Today on Flashpoints, An investigative report into Penny Pritzker, the 2008 campaign finance chairman for Barack Obama, who was a key mover and shaker in creating the sub-prime meltdown;
It doesn’t end there and keep in mind, this is all as easy as doing a 30 second Google search. This is a November 8, 2002 article is from Inside These Times:
After federal regulators closed the $2.3 billion Superior Bank in July 2001, investigations revealed that the suburban Chicago thrift was tainted with the hallmarks of a mini-Enron scandal. New legal developments are adding additional twists, including racketeering charges. And yet the bank’s owners, members if one of America’s wealthiest families, ultimately could end up profiting from the bank’s collapse, while many of Superior’s borrowers and depositors suffer financial losses.
The Superior story has a familiar ring. Using a variety of shell companies and complex financial gimmicks, Superior’s managers and owners exaggerated the profits and financial soundness of the bank. While the company actually lost money throughout most of the ’90s, publicly it appeared to be growing remarkably fast and making unusually large profits. Under that cover, the floundering enterprise paid its owners huge dividends and provided them favorable loans and other financial deals deemed illegal by federal investigators.
Wanting to avoid a lawsuit, the secretive Pritzkers quickly agreed to what the FDIC hailed in December as the biggest settlement they had ever negotiated. The Pritzkers would pay $100 million immediately, then $360 million over 15 years. But there were lots of little provisions in the agreement that benefit the Pritzkers. First, as former bank consultant and longtime thrift watchdog Tim Anderson notes, the $100 million doesn’t even quite pay back all of the unpaid loans made to the owners. The Pritzkers also pay no interest on the $360 million, and since it is paid over many years, the real cost to the Pritzkers may be only around $250 million. As of September 2002, according to FDIC figures, the insurance fund was still out $440 million after this settlement.
But it gets even sweeter for the Pritzkers. The FDIC also agreed to pay the Pritzkers 25 percent of any claim won in a lawsuit against Ernst & Young. Since the FDIC is now suing for $548 million, the Pritzker share could be $137 million. On top of that, the agreement stated that the Pritzkers get half of any civil penalties from such a lawsuit (after certain agency expenses). The FDIC is asking for triple damages, or $1.64 billion; the Pritzker share could be over $800 million.
Even taking into account the “record” settlement they made with the FDIC, the Pritzkers could make more than $700 million in additional profit for running a financial institution into the ground. They had already profited handsomely, sharing in the more than $200 million in dividends to the owners in the ’90s. They accomplished all this with an investment of about $21 million for each partner—though the Pritzkers had also already benefited from $645 million in tax credits.
Meanwhile, roughly 1,000 depositors who had deposits above $100,000 in a Superior account—money above the FDIC-insured limit—lost about $65 million. Most of them were middle-class individuals, attracted by Superior’s high interest rates.
Here is the failed Superior Bank information from the FDIC
So, what does all this tell the American people? The suffering American homeowner that is struggling in one of the very same loans that Penny Pritzker used to pedal at her “Superior Swindle of a Bank”?
How can Barack Obama say you have a splinter in your eye when there is a log in his?
Personally to me, it shows that Mr. Obama is all about the Benjamin’s (AKA Money) and speeches with his big white toothed grin and hollow words that seem to have Americans under his spell and hanging on to his every word as his pockets are lined by the very sharks that feed off of suffering Americans.
Isn’t Obama supposed to protect the people against these corporations or is he to align himself with them to win an election? Hell, it seems like it doesn’t matter where that money came from to fund his campaign. As long as it serves his purpose and this purpose seems to be rearing its ugly head in the form of campaign contributions from the very same people that he criticises.
You are contradicting yourself Obama. Why don’t you read exactly what this means and I’ll help you by posting the wikipedia version of the term “contradiction.”
In logic, a contradiction consists of a logical incompatibility between two or more propositions. It occurs when the propositions, taken together, yield two conclusions which form the logical inversions of each other. Illustrating a general tendency in applied logic, Aristotle’s law of noncontradiction states that “One cannot say of something that it is and that it is not in the same respect and at the same time.”
More from Inside These Times:
Ernst & Young provided inaccurate audits, resisted regulators, and did not test or properly disclose crucial financial assumptions. The OTS didn’t investigate or follow up on problems adequately, ignored warning signs for years, and unduly relied on the expertise of managers, the auditor’s report, and the promise of the wealthy owners to put their money behind the bank’s strategy, which they ultimately refused to do. While the FDIC lawsuit against Ernst & Young correctly highlights the accounting firm’s sorry record of accounting malpractice, it ignores the dubious history of the Pritzkers and Dworman in cases ranging from tax evasion to bank mismanagement, instead praising the Pritzkers for their charity.
What looked like a good deal for the FDIC in resolving Superior’s failure is now looking like yet another opportunity for the wealthy Pritzkers to further profit from their misdeeds. Certainly, the record suggests that Ernst & Young bears responsibility, but so do the Pritzkers and Dworman. The question is not just who will extract money from whose pocket in the aftermath of the bank failure, but also whether the rich are simply above the law. The RICO lawsuit against bank managers, owners and auditors raises the issue of criminal conspiracy and at least attempts to recover damages for the uninsured depositors. But beyond that, argues thrift watchdog Anderson, “I think there ought to be a criminal investigation.”
More wise words from Earl Ofari Hutchinson from the Huffington Post:
Obama boosters will try to muddy the water by fingering Pritzker’s brother, Jay Robert Pritzker, who heads up a campaign committee for Hillary Clinton. That’s irrelevant. Jay Robert did not head up Superior Bank when it ran roughshod over homeowners in Illinois and nationally. He does not head up Clinton’s campaign finance committee. The campaign committee he started is one of dozens of Clinton campaign committees that operate in many states.
Obama’s message is one of hope and especially change. He can prove it by changing his finance chair, and doing it now. And then telling the public what he will do to stop bank’s like the one his financial point person headed from bleeding needy and desperate home buyers dry.
The predictable happened when many of those lost their homes. When the bank collapsed Pritzker and bank officials skipped away with their profits and reputations intact. Aside from the financial and personal misery sub prime lenders caused the thousands of distressed homeowners, sub-prime lending has been a major cause of the housing crisis in many areas, and has dealt a sledgehammer blow to the economy. Obama has said nothing about Pritzker, Superior Bank, or their dubious practices.
Instead, there was a touching, even teary eyed photo op, moment during one of Obama’s Texas campaign swings. There was Obama talking to a group of San Antonio residents and lambasting the CEO of a sub-prime lender for greedily snatching at a $100 million buy out package while thousands of home borrowers that his company snookered into loans at below market rates faced foreclosure or the threat of foreclosure.
So let me get this straight Obama. You can berate a CEO like Angelo Mozilo (I assume that is who you are speaking of) for taking profits as a result of snookering the American people. But when it comes to accepting money for your campaign, it is quite all right to take money from a woman who snookered American Homeowners and was made rich off the backs of people for which she made toxic loans to.
Excuse me Barack Obama, Penny Pritzker is guilty of the very same thing for which you had a lambasting fest in San Antonio. Now, lets see if main stream media is also under Obama’s goofy grinned spell and if they will pick up this very important information that the American people “need” to know.
Tags: Current Events, Finance & Economy, Mortgages, Real Estate by The Mortgage Guy
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If it makes for good press, you can bet your last dollar that politicians will jump on the band wagon. This is so even if what makes good press, is a disaster in disguise. Saving people’s homes from foreclosure is good press.