Mortgage meltdown culprit identified!

The radical advocacy group ACORN shares much of the responsibility for the mortgage market meltdown, according to an explosive new book.

"ACORN blackmailed banks into lowering their lending standards," said Matthew Vadum, an award-winning investigative journalist whose stunning new book, "Subversion Inc.: How Obama's ACORN Red Shirts are Still Terrorizing and Ripping Off American Taxpayers," tells the real story about the outlaw activist group with longstanding ties to President Obama and the Democratic National Committee.

Vadum, senior editor for Capital Research Center, a Washington think tank that studies left-wing advocacy groups and their funders, has compiled the information from nearly three years of research and hundreds of interviews.

The smoking gun is a 1999 document, "To Each Their Home: Success Stories from the ACORN Housing Corporation," produced by ACORN's housing subsidiary which has since changed its name to Affordable Housing Centers of America Inc., or AHCOA.

The ACORN affiliate called the American Dream a sham and bragged about undermining banks' underwriting standards, according to Vadum's book.

The brochure acknowledged there may be scattered "stories of hope and success" in ACORN-targeted communities, but "they also belie the supposition that if you simply work hard, sacrifice and save, you can easily buy a home of your own."

The document is available online.

ACORN Housing also took credit for developing "several innovative strategies" to get around pesky traditional lending guidelines, which it said were unfair because they "were geared to middle class borrowers."

Instead of using accepted measures of creditworthiness such as credit history and income, the in-your-face activist group threatened and cajoled lenders to adopt what the brochure called "more flexible underwriting criteria that take into account the realities of lower income communities."

The document announced that going forward, banks serving inner cities would accept "less traditional income sources such as food stamps."

"Only the radical socialist agitators of ACORN could argue with a straight face that giving people on public assistance houses with other people's money could possibly be a good idea," Vadum told WND.

Vadum's book explains that financial tomfoolery like including food stamps on loan applications was encouraged by the Carter-era Community Reinvestment Act (CRA), which opened banking to ACORN-style agitation that over time weakened underwriting criteria and helped to alter the culture of financial institutions in the U.S. This 1977 law, whose enactment ACORN lobbied for, punishes lenders for limiting loans to wealthier, more creditworthy markets, a practice called "redlining." It gives banking regulators discretionary authority to punish banks that fail to lend enough money to "underserved" minority communities.

After the CRA went into effect, Saul Alinsky-inspired groups such as ACORN, Neighborhood Assistance Corp. of America (NACA), and the Greenlining Institute used the law to get into the shakedown business. Rev. Jesse Jackson egged them on at an ACORN "banking summit" in 1992, asking rhetorically, "Why did Jesse James rob banks? Because that's where the money was."

The shaking down of lenders intensified when then-Treasury Secretary Robert Rubin presided over the Clinton administration's effort to expand the scope of the CRA. Banks began to make risky subprime loans and government-backed Fannie Mae and Freddie Mac aggregated them for sale in the secondary market as mortgage-backed securities.

"These practices made it easier for banks to give in to ACORN's demands to originate more and more doomed mortgages because they knew they could offload their high-risk debt on quasi-governmental suckers Fannie and Freddie, which were under intense political pressure to service the subprime market," Vadum said.

Economists like Stanley Liebowitz of the University of Texas blame the CRA for helping to cause Wall Street's current problems. He has written that the current mortgage market debacle is "a direct result of an intentional loosening of underwriting standards – done in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults."

Liebowitz hardly is alone in pointing out that U.S. financial markets are now being strangled by a terrible credit crunch that might have been avoided if lenders had refrained from doling out loans they ought to have known were doomed to default.

An ardent proponent of the CRA, ACORN benefactor, organizer, and trainer Barack Obama contributed to the increasingly hostile environment for banks when he represented the plaintiffs in the 1995 class action lawsuit Buycks-Roberson v. Citibank.

The suit demanded that the bank grant mortgages to an equal percentage of minority and non-minority mortgage applicants. The bank settled the case three years later and agreed to increase its lending to otherwise unqualified applicants.

Because of the potentially criminal activity documented in this explosive book, copies of "Subversion Inc.," by Matthew Vadum have been sent by the publisher, WND Books, to all 535 members of the House and Senate in hopes of prompting further investigation of ACORN and its tentacles.