Barney Frank Pimping For Big Banks
Why is Barney Frank pimping for big banks?
This morning, HR 3915 goes to markup in the Financial Services Committee. I know this sounds about as thrilling as clipping your toe nails, but the reality is that this bill will effect your life in a number of ways, especially if you want to buy or refinance a home. If this bill becomes law the mortgage industry, already suffering under a difficult credit cycle, will cease to exist as we know it.
In it’s place will return the bad old days of mortgage lending, when it was impossible to buy a home with less than 10% down and when big banks set the interest rate, not the market. This isn’t a return to local lending, something that already exists with the millions of mortgage brokers that provide financing to Americans today. This is a return to big corporate banking and unless your credit is perfect, get ready to rent for a long, long time. The only question is, why would Barney Frank do this?
Here’s the skinny on what’s so wrong…
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November 6th, 2007 at 1:08 pm
good grief , just when i thought that Frank had reached a new low with ENDA out comes this - this dude has been in Washington way way too long.
November 6th, 2007 at 1:11 pm
ProudP:
At one point in my life I thought Barney was among the few who had their heads screwed on right. Now, I think he is just as blinded by Washington BS and corruption as the rest of them.
November 6th, 2007 at 7:37 pm
Oh…the ignorance in Washington. I hope that cooler heads prevail. The thought of shutting down my mortgage company and going back corporate lending makes me want to throw up.
November 6th, 2007 at 10:04 pm
It truly makes your head spin thinking of all the things Washington has screwed up. I guess I’ll stay in the house I have so I won’t have to deal with another Washington mess.
November 7th, 2007 at 11:42 am
That is a great way of putting it. The one thing that not enough people are talking about is how this bill gives immunity to banks. The bottom line is that Frank and others like him have decided that we, the mortgage broker, are the bad guys in the mortgage crisis. We all know that the reality is a lot more complicated. The one thing I know is no one would blame the borrower. They are poor and helpless of course. The banks, on the other hand, have excellent lobbies. So, of course, Frank pimps for them. They have plenty of money and power behind them. That leaves the mortgage broker as the easy and good target. We, as a community, must stand up and be counted. We must all sign the petition first and foremost. We must all contact our Reps. Most importantly we must all get in touch with our borrowers and let them know what is going on. Here is how I see the bill…
November 7th, 2007 at 12:09 pm
Mike:
Sorry for the delay in your post. I just found you in spam.
November 7th, 2007 at 12:16 pm
Thank you, I never get used to answering those spams. My statement stands and I hope we all do come together now. No lobby is as powerful as the lobby we employ known as the borrowers that we have taken care of.
November 7th, 2007 at 12:43 pm
Mike:
Your welcome. While I am not in the mortgage industry, as a home owner I can easily see how this bill if passed will screw me.
I read your post and you point out some very unnecessary items in the federal bill that Illinois already cover. I just have to keep reminding myself that it wouldn’t be the federal governent if they can’t complicate and screw things up.
November 7th, 2007 at 12:53 pm
Ronald Reagan had an excellent quote that applies,
“the nine most terrifying words in the English language are ‘I’m from the government and I’m here to help’”
That is what this bill is. If you are merely a homeowner I encourage you to contact your rep. Again, Congress expects people like me to be against it but when homeowners demand that this bill get killed then they will take notice.
By eliminating mortgage brokers, we leave the huge banks as an oligopoly that WILL act as a monopoly. If you thought it was difficult navigating your mortgage before, try and do it when the banks have no one to compete with. Your first born and your DNA will be necessary before you get approved.
Furthermore, I want everyone to realize the practical effect of Title II is YOU HAVEN’T SIGNED ENOUGH PAPERWORK YET. Anytime you find any legislation related to the mortgage industry and it is vague as Title II is, all that means is another useless document created to deal with the vague language at closing. Why do you think there is so much to sign now?
After reading all that I think Reagan is appropriate again (also because I really love the quote)
“The nine most terrifying words in the English language are ‘I’m from the government and I’m here to help’”
November 7th, 2007 at 1:06 pm
By the way, I just noticed that we are polar opposites in general politically. In fact, now I am surprised you allowed the Reagan quote, however I commend you for seeing this bill for what it is even if it is strictly being peddled by Dems.
November 7th, 2007 at 2:06 pm
Mike:
While I may be politically opposed to republicans on many issues that does not mean I suppress or delete their voices.
I only have one rule on my blog “no racism of an kind will be tolerated”
With that said feel free to comment any time.
November 7th, 2007 at 2:08 pm
Mike:
BTW:
I saw the Ronald Reagan quote on your site and that is probable the only thing he said that I can agree with. Also bad bills, corrupt candidates and stupidity from either side of the isle will get exposed on this blog. Even if it is a democrat
November 7th, 2007 at 2:14 pm
With that said, for my next comment I would like to copy and paste my email to my rep Rahm Emanuel. No racism whatsoever just a lot of big passionate words. Hopefully everyone will be inspired to write something similar.
Congressman, I am a mortgage broker and there is a bill floating through Congress that will devastate my industry. The bill is called H.R. 3915. I fully disclose my industry because I believe that unlike you and your colleagues full disclosure is mandatory. While this bill is dressed up as some sort of antidote to the nebulous term, predatory
lending, the reality is that you and your colleagues are looking to put people like me out of business. The bill outlaws Yield Spread Premium, a means of making money for me. It is frankly unprecedented that Congress should take it upon itself to ban a means of making money for an industry. Furthermore, this bill only applies to mortgage brokers. Retail banks are exempt. That means WAMU, Wells Fargo et al don’t have to conform to this bill. As you may or may not know, banks are already exempt from all sorts of regulations that only apply to brokers. For instance, the insidious SB 1167 only applies to brokers. While a broker is forced to have their borrower pay
$300 to meet with a counselor, the loan officers at WAMU are exempt. How exactly you folks think this makes sense is a mystery?
What this bill will do is create an unfair advantage that even the best mortgage broker cannot overcome. The industry will crumble. It won’t only be mortgage brokers that get devastated, but every industry that
relies on them: wholesale lenders, appraisers, realtors, title companies, credit reporting agencies, and technology companies will also be devastated. This bill will put millions of people out of work. I don’t know what the intent is but that will be the result.
You have no right to take away my liberty to make money. I have the right to earn a living in an industry without you and your colleagues exhibiting the height of hubris and trying to regulate it out of existence.
I hope others are inspired to also write and call.
November 8th, 2007 at 1:40 pm
First, for full disclosure again, I am the polar opposite politically of the author as well as most of the regulars on the site. The reason I bring this up is that I am about to post a list that should challenge your sensibilities. This is a list of the sponsors of the bill.
Melissa Bean (D Il8)
Michael Capuano (D MA8)
Julia Carson (D IN7)
Willaim Clay (D MO1)
Emaneul Clay (D MO5)
Keith Ellison (MN 5)
Barney Frank (D MA4)
Al Green (D TX9)
Luis Gutierrez (D IL4)
Paul Hodes (D NH 2)
Stephanie Jones (D Oh11)
Marcy Kaptur (D Oh 9)
Carolyn Maloney (D NY14)
Greg Meeks (D NY 6)
Gwen Moore (D WI4)
Christopher Murphy (D CT5)
Betty Sutton (D Oh13)
Maxine Waters (D Ca 35)
Melvin Watt (D NC 12)
Albert Wynn (D MD4)
As you can see, they are all Dems. I hope that anyone reading this who is represented by any of these folks immediately makes their voice heard to them.
I also published a piece listing most of the villains of H.R. 3915. There are several special interest groups that have backed this bill purely for misguided self interest. These groups are also almost entirely left of center. If the readers truly despise this bill, they will put ideology aside and contact them all.
http://proprietornation.blogspot.com/2007/11/villains-of-hr-3915.html
Incidentally, I want to direct everyone to a piece I wrote about something totally different. If you read this piece, you will see that I put my own ideology aside in the interest of justice. (Incidentally anyone residing in Florida should be very interested in this piece)
http://proprietornation.blogspot.com/2007/11/definitive-dossier-on-dr-andrew.html
November 8th, 2007 at 5:12 pm
Mike:
Thanks for the list. I’m sure many homeowners will take advantage of contacting them. However, I’m sure there are republicans who also signed the bill and they too should be listed and called.
November 10th, 2007 at 10:08 am
There are republicans that voted for the bill however I can’t find the banking committee vote anywhere on the net. If anyone can, please provide. The list I provided is of the sponsors of the bill and those are entirely Democrat.
I just finished parsing through the bill. It appears that YSP is not eliminated at least not for prime loans. It is definitely eliminated for sub prime. I got an email last night that said the NAMB (our lobbyists) convinced Frank that YSP is vital. There are six major problems with the current bill
1)It again shows favoritism toward banks.
2)It WILL end sub prime lending
3)There will be lots and lots of new paperwork to sign
4)It is either heavy handed toward Wall Street or worse only appears to be while actually giving it a pass (the language in this section like most of it is so vague that there will be all sorts of interpretation
5)It appears to actually give an incentive to get foreclosed on. (again, the language is vague and open to interpretation, and you can bet the bank will have dozens of new disclosures just for this part)
6)It creates a counseling program. We have tried that here in Illinois through HB 4050 and a new law not yet in place called SB 1167 and surprise, surprise, property sales plummetted wherever it was tried.
Finally, the number one Republican villain is Judy Biggert vis a vis this bill.
Here is my full analysis…
http://www.proprietornation.blogspot.com/2007/11/parsing-language-on-hr-3915.html
October 21st, 2008 at 11:26 pm
Keep up the good work.