Mortgages Quotes

This is one of the earliest expositions of the legal and economic doctrine that if a borrower is made unable to pay the interest and principle of the loan by an act beyond anyone’s control. The obligation to pay for that year is cancelled. In modern times most cultures go the other way. When the banks caused the economic Meltdown of 2008, millions of Americans could not pay their loan obligations and mortgages. They received no relief whereas in the “primitive” world of 4,000 years ago they would have relief for that year. Note the subtle difference in Hammurabi {611462} where someone had prepaid and rented land for a year and the crop fails, and this situation where there is borrowed money.

Usury in orthodox Muslim terms means the charging of interest. Modern Islamic societies have developed a variety of methodologies for dealing with the usury prohibition yet functioning in a modern capitalist system. Orthodox Jews also have a Biblical prohibition against loans with interest. Fundamentalist Protestants of some sects also believe that loaning or borrowing money and charging interest is a sin prohibited by God.

The Great Depression was afflicting the nation. Farmers and homeowners who lost jobs (over 35%) or could not sell produce at a decent price could not pay their mortgage debts and homes and farms were being foreclosed in record numbers. Veterans who had saved the nation in WWI and farmers who had fed the population were impoverished and homeless. Rankin appealed to President Herbert Hoover to place a moratorium in bank foreclosures, which not only ruined the individuals but drove down the value of real estate by throwing so much on the market at a time when few had money to buy. Hoover, an otherwise decent man and an excellent administrator, had a blind spot and would not consider having the government solve or alleviate any of these problems as he felt that this would be bad for the national character. By 1932, the voters threw Hoover out and elected Franklin Delano Roosevelt who used the power of government in new and imaginative ways, improved the economy. Profided relief, and prevented a popular revolution and many believed saved capitalism from its own excesses.

Barry Bonds was a star professional baseball player whose accomplishments were aided by taking illegal drugs. He lied about his use of drugs, and the Department made a very large effort over years to finally prosecute him. However during that time there were almost no prosecutions of the thousands of bankers and financiers who had lied, cheated, forged legal documents and in the process almost permanently ruined the American economy—the Great Recession of 2008. The Justice Department claimed that white collar cases are very complex and take longer to prepare prosecutions. Critics claimed that there are so many law breakers, that the government does not want to prosecute all the felons, but just go after a few, and this is easier if time has gone by and public anger has receded or been forgotten.

For many years, the interest on home mortages have been deductible from Federal Income tax and most state income taxes. Originally, this tax subsidy was instituted to promote the idea of personal home ownership and help the real estate industry which has always had a great deal of political clout. See {634700}.

At this time it was 6 years after the Home Financing Crisis and the Meltdown of 2008 and despite tens of thousands of law violations by the bank, the Justice Department was finally finishing their investigations and requiring some penalties. Other negotiations with other banks were in progress, but no bank executives were going to jail for the millions they handled fraudulently, whereas a burglar who stole household goods would do jail time.

He was the first FHA administrator to make statements saying that non-discriminatory housing services should be available to the American people. At the time the Southern states had laws allowing and protecting legal segregation especially in housing. The Southern field staff interpreted his instruction to be sure that both blacks and whites had access to FHA services, but they used the “separate but equal” doctrine: Provide services to both races but always in segregated housing projects. This was typical of the kinds of problems that motivated the Civil Rights Acts offered by President Kennedy in 1963 and passed by President Johnson in 1964. See {637272} for a similar Mason statement.

There was concern that there might be a housing bubble developing with consequent overpricing of houses. The bubble broke and when it did, it was sudden and dramatic with the Meltdown of 2008

He was the first FHA administrator to make statements saying that non-discriminatory housing services should be available to the American people. He was not able to change the agency’s equal opportunity performance because the Southern states had laws allowing and protecting legal segregation especially in housing. The Southern staff interpreted his position to be sure that both blacks and whites had access to FHA services, but they used the “separate but equal” doctrine: Provide services to both races but always in segregated housing projects. This was typical of the kinds of problems that motivated the Civil Rights Acts offered by President Kennedy in 1963 and passed by President Johnson in 1964 See {637271} for a similar Mason statement.

The President had a series of radio talks to the people in which he addressed them directly and explained things as he then understood them.

He maintained these policies even after President Eisenhower’s January 1954 speech calling for people who were displaced as the result of urban renewal projects to be provided with Federal assistance in housing regardless of race. It is not known whether Sherman Adams shared Cole’s position with the President. Adams himself was forced to resign in a corruption scandal.

In the Great Recession thousands of bank executives of the banks that received government bailouts committed fraud and perjury providing false information under oath and foreclosing on mortgages illegally. There were so many bank felons that the Justice Department decided not to prosecute any of them and let the Banks pay relatively small fines instead. Then the banks paid the crooked employees bonuses. Paul was one of the few members of Congress who favored prosecution of all the guilty bankers regardless of the number.

This was yet another warning about an area that became a major factor 4 years later in the Meltdown of 2008 and the Great Recession. The George W. Bush administration, however, rejected proposals to prevent more mortgage abuses by regulating the banks and mortgage brokerage industry more.

The Federal Housing Authority actually developed policies that literally prohibited private mortgage lenders from writing mortgages for black neighborhoods and to not lend to blacks who wanted to buy houses in predominantly white neighborhoods. The Nuremburg Laws were the laws passed by Nazi Germany to make prohibit Jews from engaging in most civil activities.

This quotation shows how the government has been encouraging home ownership for years. In 1936, a 20 year fixed interest mortgage was considered a great step forward in providing mortgages for average Americans. As was only a 20 percent down payment in cash. Consider her use of the word “safe”. The New Deal in many ways was conservative—certainly much more so than the banking and home mortgage industries of the early years of the millennium. Mrs. Roosevelt would not consider a down payment of less than 20% safe for the family of safe for the mortgage lender. In the meltdown of 2008, there were many mortgages being written for Zero down payment.

A restrictive covenant was a condition that was written into the deed on a piece of property. Even if the owner of the home did not want to discriminate, the previous owners who wrote the restrictive covenant into the deed (or his relatives and heirs) could sue and invalidate the sale. In many cases, insurance would not sell title insurance or banks would not give mortgages for a Black or a Jew where there was a covenant in the deed, even if the covenant was more than 100 years old. Homeowner associations would also enforce the covenants which were originally written into all the deeds of the development. 5 years after this was written, President Harry S Truman ordered that protective covenants be challenged as unconstitutional before the Supreme Court. Once the supreme court ruled that restrictive covenants were unconstitutional, no court would enforce any of these lawsuits.

He was speaking for the Bush Administration. He was another regulation-opposed appointee of the George W. Bush Administration. He killed many regulations that had been developed to better regulate the banks and the mortgage industry to stop many of the obvious abuses of the industry. With few regulations in place, despite warnings such as {638024}, what had been greedy and dangerous practices of a minority of the industry became the vast majority when the bubble burst in the Meltdown. Note the rhetorical device of using “regulatory intrusion” rather than “regulation” or “more regulation”. This reflected an extreme conservative view that all regulation is bad – an “intrusion”, while most conservatives want a reasonable degree of regulation and not the elimination of all regulation.

This quotation is classic as it digested the major reasons for the worst financial crises since the Great Depression into one paragraph that captured the essence of the problem. The great dispute has been ever since, who let this happen, who was supposed to stop it from happening, and who did what to correct the problem afterwards so that it would not happen again? In this situation, the Wall Street Houses had paid securities rating firms to give these bonds an AAA rating even though they were backed by very risky mortgages none of which had AAA ratings.