by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Alex Adrianson of the Heritage Foundation’s “Insider Online” blog documents a disturbing story associated with the U.S. Justice Department’s recent mortgage-fraud settlements with the nation’s big banks.
So far, Left wing activist groups have netted $128 billion from so-called mortgage fraud settlements that the Department of Justice is negotiating with the big banks. Investor’s Business Daily reports the details of the racket, including the latest settlement with Bank of America:
Buried in the fine print of the deal, which includes $7 billion in soft-dollar consumer relief, are a raft of political payoffs to Obama constituency groups. In effect, the government has ordered the nation’s largest bank to create a massive slush fund for Democrat special interests.
Besides requiring billions in debt forgiveness payments to delinquent borrowers in Cleveland, Atlanta, Philadelphia, Oakland, Detroit, Chicago and other Democrat strongholds—and up to $500 million to cover personal taxes owed on those checks—the deal requires BofA to make billions in new loans, while also building affordable low-income rental housing in those areas. […]
BofA gets extra credit if it makes at least $100 million in direct donations to IOLTA and housing activist groups approved by HUD.
According to the list provided by Justice, those groups include come of the most radical bank shakedown organizations in the country, including:
• La Raza, which pressures banks to expand their credit box to qualify more low-income Latino immigrants for home loans;
• National Community Reinvestment Coalition, Washington’s most aggressive lobbyist for the disastrous Community Reinvestment Act;
• Neighborhood Assistance Corporation of America, whose director calls himself a “bank terrorist;”
• Operation Hope, a South Central Los Angeles group that’s pressuring banks to make “dignity mortgages” for deadbeats. […]
In effect, lenders are bankrolling the same parasites that bled them for the risky loans that caused the mortgage crisis. With new cash, they can ramp back up their shakedown campaign, repeating the cycle of dangerous political lending that wrecked the economy.