Of the issues we have chronicled on this website that explain Guy Ciarrocchi’s past, no one issue is more important – or more on the minds of voters – than the current economic catastrophe unfolding in this country. And it turns out that Guy was actively involved in the failed policies that brought us to the point of financial collapse that we are today.
As we know, Guy’s very first presidential appointment was to HUD. In the spring, he had this to say about his job:
“During his tenure, Guy had two priorities: increasing homeownership; and, educating consumers against “predatory lenders.”
How did that turn out exactly, Guy?
We know how it turned out. Guy played a part in the enormous, crushing, $700,000,000,000 debt we, the taxpayers, are now responsible for. Which is why you won’t read about it on one of Guy’s “makeover” mailings. (More on that tomorrow.)
We reference this article from the Washington Post:
“In 2004, as regulators warned that subprime lenders were saddling borrowers with mortgages they could not afford, the U.S. Department of Housing and Urban Development helped fuel more of that risky lending.
Eager to put more low-income and minority families into their own homes, the agency required that two government-chartered mortgage finance firms purchase far more “affordable” loans made to these borrowers. HUD stuck with an outdated policy that allowed Freddie Mac and Fannie Mae to count billions of dollars they invested in subprime loans as a public good that would foster affordable housing.
Housing experts and some congressional leaders now view those decisions as mistakes that contributed to an escalation of subprime lending that is roiling the U.S. economy.
The agency neglected to examine whether borrowers could make the payments on the loans that Freddie and Fannie classified as affordable. From 2004 to 2006, the two purchased $434 billion in securities backed by subprime loans, creating a market for more such lending. Subprime loans are targeted toward borrowers with poor credit, and they generally carry higher interest rates than conventional loans.
Today, 3 million to 4 million families are expected to lose their homes to foreclosure because they cannot afford their high-interest subprime loans. Lower-income and minority home buyers — those who were supposed to benefit from HUD’s actions — are falling into default at a rate at least three times that of other borrowers.
“For HUD to be indifferent as to whether these loans were hurting people or helping them is really an abject failure to regulate,” said Michael Barr, a University of Michigan law professor who is advising Congress. “It was just irresponsible.”
We can understand why Guy doesn’t want to talk about it anymore. Although it is a noble cause to try to increase homeownership, to what lengths did our government go to do so, and for what reason?
What kind of Guy helped George Bush in creating his “Ownership Society” along with a $700,000,000,000 price tag? What Kind of Guy doesn’t want to talk about his time working with the very people, on the very issues that have gotten us into this mess? And What Kind of Guy – on this issue as much as all the others – keeps hoping that his past will be swept under the rug, and that voters will somehow make their choice on Election Day based on the New & Improved Guy?
The Wrong Guy.
Come back tomorrow for another installment of “What Kind of Guy…”