by Deb Cupples | Roughly a year after our nation's financial system began to crash, the House Oversight and Government Reform Committee has finally launched a probe of mortgage lenders purportedly to determine , among other things, whether lenders used predatory or deceptive practices and whether lenders corruptly sought to thwart regulations. The Hill reports:
The details get juicier, and I can't help thinking of hen houses and foxes."The Committee will demand information from mortgage giant Countrywide, Bank of America (which now owns Countrywide), Wells Fargo, JP Morgan Chase (including Chase Manhattan Bank), Citigroup, Residential Capital (GMAC), and U.S. Bank Home Mortgage. The panel also plans to issue subpoenas for records on Countrywide’s VIP program, including information on details of any mortgages held by members of Congress, as early as Friday, according to an internal e-mail obtained by The Hill.
"'The actions of mortgage lenders contributing to the foreclosure and financial crisis are of serious concern to many Americans and to the Members of this Committee,” said [Committee chair Edolphous] Towns. 'That is why I have opened an investigation into whether mortgage companies employed deceptive and predatory lending practices, or improper tactics to thwart regulation, and the impact of those activities on the current crisis."
Mr. Towns has reportedly done a 180 after spending months blocking investigation of Countrywide. The Hill continues:
"Countrywide, now owned by Bank of America, was reported to have given VIP loans and treatment to lawmakers and officials at the federal and local level who were in a position to influence policy affecting the mortgage giant. Rep. Edolphus Towns (D-N.Y.), the chairman of the panel, has two Countrywide mortgages, although he insists that he received no special favors."
I wonder just how effectively drafted the Committee's subpoenas will be. Memeorandum has commentary.
Probing mortgage pushers, too, are they? Bawney Fwank loves a good pwobing. Fwank, the first House member to come out of the closet voluntarily, and also the first member of the House to be censured for providing the feces-smeared apartment out of which a gay boyfriend ran a gay prostitution ring, made these points clear on the floor of Congress on June 27, 2005, in support of the recognition of National Home Ownership Month:
"I think we have an excessive degree of concern right now about home ownership and its role in the economy. Obviously, speculation is never a good thing. But those who argue that housing prices are now at the point of a bubble seem to me to missing a very important point. Unlike previous examples we have had, where substantial excessive inflation of prices later caused some problems, we are talking here about an entity — home ownership, homes — where there is not the degree of leverage we have seen elsewhere. This is not the dot-com situation; we have problems with people having invested in business plans for which there was no reality. People building fiber-optic cable for which there was no need. Homes that are occupied may see an ebb and flow in the price at a certain percentage level, but you’re not going to see the collapse that you see when people talk about a bubble. And so, those of us on our committee in particular, will continue to push for home ownership."
http://hotair.com/archives/2009/04/24/video-frank-in-2005-bubble-what-bubble/
Posted by: flowerplough | October 27, 2009 at 12:28 AM