Subprime Intelligence

Obama the IdiotAmerica is suffering through trying times and such trying times called for men of character and intelligence to step up and lead the way to better days. Sadly for each and every American, we’re saddled with Obama and the boy has no character of note and an obviously subprime intelligence

Yes, it’s probably too much to ask that Obama to learn from history. One could, however, quite reasonably expect anyone approaching the average human intellect to be able to learn from current events.

Such expectations that Obama had the basic human capacity to learn and adapt seem to have misplaced. In the wake of the Subprime Mortgage Crisis that caused the Great Recession, Obama’s policies for the FHA have been to do the same thing again with the same borrowers who defaulted the last time.

After two foreclosures and two bankruptcies, Hermes Maldonado, a Honduran immigrant, recently qualified for an FHA loan for a home in the Los Angeles area.

“After everything that happened, thank God I was able to buy another house.”

Under Obama, the FHA has more and more backed new home loans to so-called rebound borrowers, those who have recently defaulted on previous mortgages. The agency is now allowing lower-income borrowers with extremely low credit scores to get loans a mere three years after foreclosure and with as little as 3% down. This has resulted 40% of newer FHA-backed loans being subprime.

The natural result of this stupidity is that a large percentage of these loans are more than 90 days delinquent and many more are actively in foreclosure. These losses have depleted the agency’s reserve fund to 0.24% during fiscal 2011, which is barely more than one tenth of the Congressionally-mandated 2% level.

With cash reserves almost nonexistent and analysts predicting that over 30% of FHA backed mortgages will be in delinquency within the next five years it’s expected that FHA will need a taxpayer-funded bailout in the very near future – to the tune of over $50 billion.

I’ll give Obama and his handlers and sycophants credit though. They don’t do stupidity in a small way; theirs is a larger than life sort of idiocy.

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Equality Of Result

The Liberals’ idea of race relations and mitigating the racism that they see everywhere – except in the mirror or in the eyes of non-Whites – has always centered on accommodation, appeasement, excuses, and lowering standards in order to foster an equality of result. This has, in general, had poor results but was especially harmful to everyone when they applied it to creditworthiness.

Thomas Sowell sums up how well this helped the Blacks:

Government agencies, from the Department of Housing and Urban Development to the Federal Reserve leaned on lenders to lower lending standards, and the Department of Justice threatened prosecutions for discrimination if the racial makeup of people approved for mortgage loans did not match their preconceptions.

It worked. In fact, it worked so well that many blacks got loans that they could not have gotten otherwise.

Now the statistics tell us, belatedly, that blacks lost out, big time, from this “favor” done for them by politicians.

Reality being what it is, these Blacks who were handed loans that they didn’t except by grace of their skin color and Liberal stupidity qualify for, were “overrepresented” among those who later defaulted on their mortgages.

Of course a certain equality of outcome or result was achieved by the Liberals’ policies. The banks’ move to shield themselves from the inherent risks in sub-prime mortgages by bundling them into securities and the federal governments’ regulations that coerced financial firms to heavily buy those securities was a large part of what led to America’s current economic woes which have affected us all.

It’s a simple fact that lowering the standards and applying coercive force to ensure any form of demographic quotas can and will only achieve an equality of results when those results are negative and such negative results are the most likely outcome.

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