Several reasons have referenced Barack Obama’s decision-making abilities and process. This reason focuses on Obama’s judgment coming when it would be most beneficial – in advance of an all-out spiralling down before our eyes crisis.
The example for this reason comes courtesy of Jeff Hess of Have Coffee Will Write. In the letter below, Barack Obama puts into writing, and very specific and concerned language, the exact fears that those of us who live and observe from Ohio and in Ohio, as well as other locales like Nevada and Florida, were feeling 18 months ago in regard to the already collapsing housing market here as a result of predatory lending, among other factors:
Dear Chairman Bernanke and Secretary Paulson,
There is grave concern in low-income communities about a potential coming wave of foreclosures. Because regulators are partly responsible for creating the environment that is leading to rising rates of home foreclosure in the subprime mortgage market, I urge you immediately to convene a homeownership preservation summit with leading mortgage lenders, investors, loan servicing organizations, consumer advocates, federal regulators and housing-related agencies to assess options for private sector responses to the challenge.
We cannot sit on the sidelines while increasing numbers of American families face the risk of losing their homes.
And while neither the government nor the private sector acting alone is capable of quickly balancing the important interests in widespread access to credit and responsible lending, both must act and act quickly.
Working together, the relevant private sector entities and regulators may be best positioned for quick and targeted responses to mitigate the danger. Rampant foreclosures are in nobody’s interest, and I believe this is a case where all responsible industry players can share the objective of eliminating deceptive or abusive practices, preserving homeownership, and stabilizing housing markets.
The summit should consider best practice loan marketing, underwriting, and origination practices consistent with the recent (and overdue) regulators’ Proposed Statement on Subprime Mortgage Lending. The summit participants should also evaluate options for independent loan counseling, voluntary loan restructuring, limited forbearance, and other possible workout strategies. I would also urge you to facilitate a serious conversation about the following:
* What standards investors should require of lenders, particularly with regard to verification of income and assets and the underwriting of borrowers based on fully indexed and fully amortized rates.
* How to facilitate and encourage appropriate intervention by loan servicing companies at the earliest signs of borrower difficulty.
* How to support independent community-based-organizations to provide counseling and work-out services to prevent foreclosure and preserve homeownership where practical.
* How to provide more effective information disclosure and financial education to ensure that borrowers are treated fairly and that deception is never a source of competitive advantage.
* How to adopt principles of fair competition that promote affordability, transparency, non-discrimination, genuine consumer value, and competitive returns.
* How to ensure adequate liquidity across all mortgage markets without exacerbating consumer and housing market vulnerability.
Of course, the adoption of voluntary industry reforms will not preempt government action to crack down on predatory lending practices, or to style new restrictions on subprime lending or short- term post-purchase interventions in certain cases. My colleagues on the Senate Committee on Banking, Housing and Urban Affairs have held important hearings on mortgage market turmoil and I expect the Committee will develop legislation.
Nevertheless, a consortium of industry-related service providers and public interest advocates may be able to bring quick and efficient relief to millions of at-risk homeowners and neighborhoods, even before Congress has had an opportunity to act. There is an opportunity here to bring different interests together in the best interests of American homeowners and the American economy. Please don’t let this opportunity pass us by.
When did Obama send that correspondence? March 22, 2007.
Eight months after 35 year old former Goldman Sachs compatriot of Paulson’s and now bailout chief-designee Neel Kashkari arrived at the Treasury, and, coincidentally, eight months before he was promoted to Assistant Secretary of the Treasury for International Economics and Development. [According to this description of Kashkari’s Treasury position, he will continue in both capacities – overseeing the bailout as an interim leader and retaining his IED position as well.]
Again, living in NE Ohio, where articles about the lending crisis and the impact on neighborhoods and individuals have been coming for years now, it is not shocking to read Barney Frank’s sentiments, as quoted in The Huffington Post:
Congressman Barney Frank says Republican criticism of Democrats over the nation’s housing crisis is a veiled attack on the poor that is racially motivated.
Frank told a mortgage foreclosure symposium in Boston on Monday that Republicans are appealing to their base by blaming the economic crisis on efforts to expand affordable housing.
He said “the fact that some of the poor people are black doesn’t hurt” the GOP critics with their political base.
I confess. I heard that lob land when it first got tossed several days ago and I was appalled. And I knew exactly what was being referenced.
How might today be different if Bernanke and Paulson had taken Obama’s cautions more seriously? Sadly, we’ll never know. Let’s not condemn ourselves to having to say that over the next four years.
On November 4, vote for Obama/Biden.
Here are the previous reasons: