No More Federal Reserve Part 2

“We are in danger of being overwhelmed with irredeemable paper, mere paper, representing not gold nor silver; no sir, representing nothing but broken promises, bad faith, bankrupt corporations, cheated creditors and a ruined people.” “We are in danger of being overwhelmed with irredeemable paper, mere paper, representing not gold nor silver; no sir, representing nothing but broken promises, bad faith, bankrupt corporations, cheated creditors and a ruined people.” Daniel Webster,  speech in the Senate, 1833

“We are in danger of being overwhelmed with irredeemable paper, mere paper, representing not gold nor silver; no sir, representing nothing but broken promises, bad faith, bankrupt corporations, cheated creditors and a ruined people.” “We are in danger of being overwhelmed with irredeemable paper, mere paper, representing not gold nor silver; no sir, representing nothing but broken promises, bad faith, bankrupt corporations, cheated creditors and a ruined people.” Daniel Webster, speech in the Senate, 1833

Continuing on with the *bankers* I’m still going to have to bring up the past.  It must be very clear how this financial crisis was engineered.

I’ve gone back in time all the way to the 1970s and ’80s where massive changes were made to existing laws concerning the lending ability of banks and other financial institutes.  Up until 1980, there were stricter guidelines in place which protected both the lender and the person borrowing.

The bankers decided to change these laws in order to allow them to loan to people who would otherwise NOT have qualified for a loan.  Implementing their plans took some time, but time they had.  Having been working in the shadows since before Hitler was even born, these are very patient men.  They are cautious, careful, intelligent and absolutely driven in their desires and intentions.

DEPOSITORY INSTITUTIONS DEREGULATION AND MONETARY
CONTROL ACT OF 1980

An Act

To facilitate the implementation of monetary policy, to provide for the gradual elimination of all limitations on the rates of interest which are payable on deposits and accounts, and to authorize interest-bearing transaction accounts, and for other purposes.
STUDY OF MORTGAGE PORTFOLIOS
SEC. 406.  (a)(1)  The President shall convene an interagency task force consisting of the Secretary of the Treasury, the Secretary of Housing and Urban Development, the Federal Home Loan Bank Board, the Board of Governors of the Federal Reserve System, the Board of Directors of the Federal Deposit Insurance Corporation, the Comptroller of the Currency, and the National Credit Union Administration Board. The task force shall conduct a study and make recommendations regarding–
(A)  the options available to provide balance to the asset-liability management problems inherent in the thrift portfolio structure;
(B)  the options available to increase the ability of thrift institutions to pay market rates of interest in periods of rapid inflation and high interest rates; and
(C)  the options available through the Federal Home Loan Bank system and other Federal agencies to assist thrifts in times of economic difficulties.
(2)  In carrying out such study, the task force shall solicit the views of, and invite participation by, consumer and public interest groups, business, labor, and State regulators of depository institutions.

(b)  Not later than three months after the date of enactment of this Act, the task force shall transmit to the President and the Congress its findings and recommendations for such action as it deems appropriate.

TITLE V—STATE USURY LAWS

PART A—MORTGAGE USURY LAWS
MORTGAGES
SEC. 501.  (a)(1)  The provisions of the constitution or the laws of any State expressly limiting the rate or amount of interest, discount points, finance charges, or other charges which may be charged, taken, received, or reserved shall not apply to any loan, mortgage, credit sale, or advance which is–
(A)  secured by a first lien on residential real property, by a first lien on all stock allocated to a dwelling unit in a residential cooperative housing corporation or by a first lien on a residential manufactured home;

(B)  made after March 31, 1980; and
(C)  described in section 527(b) of the National Housing Act (12 U.S.C. 1735f-5(b)), except that for the purpose of this section–
(i)  the limitation described in section 527(b)(1) of such Act that the property must be designed principally for the occupancy of from one to four families shall not apply;

(ii)  the requirement contained in section 527(b)(1) of such Act that the loan be secured by residential real property shall not apply to a loan secured by stock in a residential cooperative housing corporation or to a loan or credit sale secured by a first lien on a residential manufactured home;
(iii)  the term “federally related mortgage loan” in section 527(b) of such Act shall include a credit sale which is secured by a first lien on a residential manufactured home and which otherwise meets the definitional requirements of section 527(b) of such Act, as those requirements are modified by this section;
(iv)  the term “residential loans” in section 527(b)(2)(D) of such Act shall also include loans or credit sales secured by a first lien on a residential manufactured home, and any individual who finances the sale or exchange of residential real property or a residential manufactured home which such individual owns and which such individual occupies or has occupied as his principal residence;

And the changes continue on and on. You can get lost in the *legalese* that is used here or the codes being referred to. It is a very long document. Included in it, and of interest to myself, were the following sections:

Changes to the Truth in Lending Act

Foreign Control of United States Financial Institutions

And the changes to the section under Moratorium

So, as far back as 1980 and, in some cases, the 1970s,  some serious changes were being done to many of the banking policies which continued throughout the 1990s.  Now we come to December 27, 2000.

Release Date: December 27, 2000

For immediate release

The Federal Reserve Board is seeking public comment on a proposal to permit financial holding companies to act as real estate brokers and managers.

Comment is due by March 2, 2001.

The rule, proposed by the Board on December 13, would determine that real estate brokerage and management services are financial in nature or incidental to financial activity and are therefore permissible for financial holding companies.

Concurrently with the Board, the Secretary of the Treasury developed a proposal that would allow financial subsidiaries of national banks to act as real estate brokers and managers.

The Board and the Secretary will jointly publish their proposed rule in the Federal Register.

The Board’s notice is attached.

Attachment (59 KB PDF)

2000 Banking and consumer regulatory policy

And so began the business of buying and selling mortgages on the open stock market.  As you can see, this was an intentional plan.  Those who had anything to do with financial policy got together and changed the laws to suit their purposes.

What they Bankers told Congress to get these measures passed is anyone’s guess.  I’d have to go way back  into Open Secrets in order to see which laws were passed and when.  Something this article won’t be able to cover.  The end result was that the Citizens of this country weren’t paying attention to either Congress OR the financial institutions!!! The fox knew this and licked his paws with glee!  He could wait, OH YES HE COULD!

In a speech given by Governor Edward M. Gramlich on May 21, 2004 the subprime situation was discussed and the following statements were made.  I’m taking this out of context but will link to the whole speech HERE:

The growth in subprime lending represents a natural evolution of credit markets. Two decades ago subprime borrowers would typically have been denied credit. But the 1980 Depository Institutions Deregulatory and Monetary Control Act eliminated all usury controls on first-lien mortgage rates, permitting lenders to charge higher rates of interest to borrowers who pose elevated credit risk, including those with weaker or less certain credit histories. This change encouraged further development and use of credit scoring and other technologies in the mortgage arena to better gage risk and enabled lenders to price higher-risk borrowers rather than saying no altogether. Intense financial competition in the prime market, where mortgage lending was becoming a commodity business, encouraged lenders to enter this newer market to see if they could make a profit.

This evolutionary process was pushed along by various federal actions. The Community Reinvestment Act (CRA) of 1977, and later revisions to the regulation, gave banking institutions a strong incentive to make loans to low- and moderate-income borrowers or areas, an unknown but possibly significant portion of which were subprime loans. The Federal Housing Administration, which guarantees mortgage loans of many first-time borrowers, liberalized its rules for guaranteeing mortgages, increasing competition in the market and lowering interest rates faced by some subprime mortgage borrowers. Fannie Mae and Freddie Mac, giant secondary market purchasers, sought to meet their federally mandated affordable housing goals by expanding into the prime and lower-risk segment of the subprime mortgage market. They now provide many direct mortgage lenders with other potential buyers or their subprime mortgages. Fannie and Freddie are both working on techniques to extend automated underwriting to the subprime market, an innovation that should further lower costs in this market.

The governor talks about lending practices going back to the 1970s. Man, have we been asleep or what?  The bankers saw an opportunity to take advantage of a sleeping public and took it.  And it seems that No One with an ounce of integrity wanted the public to realize it.  It is highly likely  that our government knew exactly what was going on and where it was leading.  Congress had to ratify the changes in the banking system and the president had to sign off on them.

I’m sure there are many, many more documents located at the Federal Reserve than what I’ve grabbed here.  For myself this is enough, but you may want to go into this further.  If you would like to find out more, I suggest you go to the Federal Reserves website and do a search on *subprime mortgages* or whatever you can think of.  They keep immaculate records… Click Here to go to their website:

Now I’ll jump ahead to 2007.  Here is one of the first ripples noted concerning the financial bubble that had formed around the housing market.  However, the bankers were pulling out and dumping their stocks in certain areas.  They KNEW what was coming because they set it in motion.  And now it was time to cash in…

Top investor sees U.S. property crash

Wed Mar 14, 2007 12:59pm EDT

US MARKETS ROGERS

By Elif Kaban

MOSCOW (Reuters) – Commodities investment guru Jim Rogers …

“You can’t believe how bad it’s going to get before it gets any better,” the prominent U.S. fund manager told Reuters by telephone from New York.

“It’s going to be a disaster for many people who don’t have a clue about what happens when a real estate bubble pops.

“It is going to be a huge mess,” said Rogers, who has put his $15 million belle epoque mansion on Manhattan’s Upper West Side on the market and is planning to move to Asia.

These stock market ripples were going around the globe.  Asia and Europe were the first and hardest hit by the collapse of the bubble.  But predictions were that the market would go down 40-50% in areas where the bubbles were.  And as we know from hind-sight, those bubbles were EVERYWHERE.  Not a State was spared, not a neighborhood or financial institution.  And the foxes growled in pleasure to see the results of their guarding of the hen house!

With the monetary system we have now, the careful saving of a lifetime can be wiped out in an eyeblink.” Larry Parks, Executive Director, FAME

And so it was and is. How prophetic some can be when they know what they are dealing with. But the Citizens of this country, having been asleep for so long, had no idea what was coming.  Encouraged as we had been to spend, spend, spend, and invest, invest, invest, we were tripply shocked to see everything wiped out almost in that eye-blink…  We’d been playing with the big boys, and they were tired of us.

On December 20, 2005 the bankers decided the time was ripe to start the process of collapsing the united States economy.  They started the process by asking for comments on proposed changes to the mortgage industry and the sub-prime mortgages.

Federal Financial Regulatory Agencies Propose Guidance on Nontraditional Mortgage Products

While innovations in mortgage lending can benefit some consumers, the agencies are concerned that these practices can present unique risks that institutions must appropriately manage. They are also concerned that these products and practices are being offered to a wider spectrum of borrowers, including subprime borrowers and others who may not otherwise qualify for more traditional mortgage loans or who may not fully understand the associated risks of nontraditional mortgages.

The proposed guidance discusses the importance of carefully managing the potential heightened risk levels created by these loans. Toward that end, management should:

  • Assess a borrower’s ability to repay the loan, including any balances added through negative amortization, at the fully indexed rate that would apply after the introductory period. The agencies recognize that this requirement differs from underwriting standards at some institutions and are specifically requesting comment on this aspect of the guidance.
  • Recognize that certain nontraditional mortgage loans are untested in a stressed environment and warrant strong risk management standards as well as appropriate capital and loan loss reserves.
  • Ensure that borrowers have sufficient information to clearly understand loan terms and associated risks prior to making a product or payment choice.

Comment is requested on all aspects of the guidance, particularly on the section regarding comprehensive debt service qualification standards. Comments are due sixty days after publication in the Federal Register. The guidance is attached. Note: Comment period has been extended to March 29, 2006.
Attachment (148 KB PDF)
Media Contacts:

Federal Reserve Susan Stawick (202) 452-2955
FDIC David Barr (202) 898-6992
NCUA Cherie Umbel (703) 518-6337
OCC Kevin Mukri (202) 874-5770
OTS Erin Hickman (202) 906-6677

2005 Banking and consumer regulatory policy

The ripples in the pond, lots of ponds, spread wider and wider.  The fox, now turned wolf, howled in pleasure and licked its lips.

UBS writes off $10 billion in subprime losses

Move comes in addition to $3.4 billion in bad debt announced in October

updated 11:27 a.m. MT Mon., Dec. 10, 2007

ZURICH, Switzerland – Swiss banking giant UBS AG said Monday it will write off a further $10 billion on losses in the U.S. subprime lending market and will raise capital by selling substantial stakes to Singapore and an unnamed investor in the Middle East.

UBS will now record a loss for the fourth quarter and said “it is now possible that UBS will record a net loss attributable to shareholders for the full year 2007.”

GE seeks buyer for subprime mortgage unit

By Rachel Layne     Bloomberg News

Published: July 16, 2007

BOSTON:General Electric plans to sell WMC Mortgage, the company’s three-year-old U.S. subprime mortgage unit, following a surge in defaults by borrowers.

“The mortgage industry has greatly changed since the purchase of WMC,” Laurent Bossard, chief executive of the division, said in an e-mail to employees last week. “The current subprime market environment has made a significant negative impact on the business.”

Few there were who attempted to explain the crisis to most Americans.  What had happened?  Where was all the money and credit going?  How did this happen?  Most importantly, WHO was responsible?  But we now know WHO was responsible, the banks and bankers.  Was this engineered?  Oh yes!  With the economy in free fall, the bankers were poised to reap the profits, buying up banks that didn’t have enough in reserves to carry them through, buying up properties, and offering to help if only someone would bail them out, FIRST!

I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country; corporations have been enthroned, an era of corruption in High Places will follow, and the Money Power of the Country will endeavor to prolong its reign by working upon the prejudices of the People, until the wealth is aggregated in a few hands, and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war”  Abraham Lincoln in reference to the passage of the National Banking Act of 1863 less than five months before he was assassinated in a letter to one Col. William F. Elkins,

End Part 2

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~ by justmytruth on March 20, 2009.

2 Responses to “No More Federal Reserve Part 2”

  1. Loved these first two parts! Can’t wait to see the rest. I have no idea how you are able to make any sense out of this stuff…it just boggles my brain most of the time.

    Keep up the great work!

  2. Thank you. The first two parts were much easier than the next one. I’m getting a brain ache trying to figure out what these bankers are talking about, LOL. But I am so glad you enjoyed reading the first two. Thanks for leaving me a note!

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