Expert Testifies to Congress that Constitutional Crises looming?: Obama’s ‘Ignoring Laws’ Could Lead to Overthrow of Government (Reader Post)

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michael cannon

The habitual behavior of this administration, circumventing and ignoring the powers and responsibilities set forth in the Constitution, and it’s limitation of the powers of the office of the President could come to a head (as Michael Cannon, Cato Institute’s Director of Health Policy Studies, testified before a Congressional Committee).

During a congressional committee hearing about the constitutional limits imposed on the presidency and the implications of President Barack Obama’s disregard for implementing the Affordable Care Act as written, one expert testified that the consequences of the president’s behavior were potentially grave. He said that the precedent set by Obama could eventually lead to an revolt against the federal government.

On Tuesday, Michael Cannon, Cato Institute’s Director of Health Policy Studies, testified before a congressional committee about the dangers of the president’s legal behavior.

“There is one last thing to which the people can resort if the government does not respect the restrains that the constitution places on the government,” Cannon said. “Abraham Lincoln talked about our right to alter our government or our revolutionary right to overthrow it.”

Aside from Obama’s taking over the legislative powers that the Constitution declares only shall be exercised by Congress by his unilateral changing of the ACA, he has violated finacia law by moving around appropriated set forth for specific spending, to fund his other agenda items for which Congress did not finance. He has also bypassed the legislative branch by having the government agencies under him create law (via rules, regulations and enforcement/unenforcement orders) without these being approved by Congress.

Should the public be forced to resort to the final desperate stage of insurrection, as it’s it’s right to rem0ve a government -that no longer represents but instead rules over The People-, can any doubt that Dictator Obama would immediately declare national martial law and a suspension of the Constitution? With the Constitution suspended, the other two branches of government could then be ignored. This is after all the normal final phase of the Socialist regime playbook that a tyrannical executive branch follows when taking over a nation.

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Glad someone’s pointing that out to Congress…

This bears repeating. Regarding the lawlessness of this administration picking and choosing what laws they deign to enforce or ignore: “What prevents the president from ignoring election laws?” -Trey Gowdy

Related FA “Most Wanted” Article

They keep saying it can’t happen…..

And this one too…
http://tinyurl.com/m2cbeup

I always said The Lightbringer would go down as America’s Salvador Allende. Just as in 1973 the legislative and judicial branches will finally openly call for the ouster of the executive for ignoring the constitution and a soldier will have to do the job.

Obama’s been engaging in a slow-motion Erdogan/Stalin-style purge of the senior officer corps. When push finally comes to shove who will the men with guns obey?

OBAMA IS BUILDING A HOMELAND ARMY, WITH TANKS AND ALL THE TROOP HE NEED TO FIGHT THE PEOPLE, AS A RETIRE MARINE SAID WHEN HE SAW IT, IT DOESN’T MAKE SENSE, IT IS DONE
SO PEOPLE CAN SEE IT AND NOBODY SAY NOTHING,
HE HAS HIRED TROOPS WHO FOUGHT IN IRAQ, AND THIS ARMY COULD PUT IRAQ DOWN IN A WEEK,

DO YOU REMEMBER THE YOUNG WOMAN BEING KILLED IN HER CAR WHILE HER BABY IS IN THE BACK,
IN FRONT OF THE CAPITOL, BY THE CAPITOL POLICE,
THEY DON’T HAVE ANY COMPASSION FOR THE CITIZENS OF AMERICA,
THEY WILL DO ANYTHING TO PROTECT THE CAPITOL, THEY TAKE IT AS AN EXTRA LOCATION WHICH IS NOT AMERICA,
THAT’S WHAT YOU WILL HAVE TO DEAL WITH, IF SOMETHING HAPPEN,
THIS YOUNG WOMAN WAS IN HER CAR TRYING TO GO AWAY, THEY BLOCK HER FROM LEAVING,
THEY JUST COULD HAVE LET HER GO AND ADDRESS HER LATER FOR BUMPING THE POLICE CAR,
BUT THEY SHOT IN THE WINDOW OF HER CAR BREAKING IT AND KILLED HER, SHE WAS UNARMED
AND CONFUSE, NOT A REASON TO KILL HER,
WHAT HAPPEN TO THESE CRAZY CAPITOL POLICE???
THE ELECTED CLAP TO THANK THEM A STANDING OVATION
FOR A DEAD YOUNG WOMAN AND HER MOTHERLESS SON

I have said this before but this nations gov’t can no longer corrected or righted thru the ballot box. Obama knows that which is why he has been purging the leadership of the military…We just need a fair number of regular military on our side and overthrowing government will not be all that difficult as some think.

BOBACHECK
IT WOULD BE MILITARY ON OUR SIDE AGAINST THE ARMY OF OBAMA
THE HOMELAND ARMY ARMED TO THEIR THEETS WITH TANKS AND ALL.
BYE

An attempted overthrow would be a bloodbath that would make the Civil War look like a tea party (forgive the pun). No, we need to fight a modern guerrilla war against the enemy before we have to resort to all out violence. Hackers are the most valuable soldiers in this army. Others can participate in providing confusion and overloading of physical and electronic systems. Coordinated efforts are required. Of course, when Obama hits the internet kill switch, there will be total chaos. That is when the true opportunity will arise. Being a ham radio operator may be extremely useful.

“There is one last thing to which the people can resort if the government does not respect the restrains that the constitution places on the government,” Cannon said. “Abraham Lincoln talked about our right to alter our government or our revolutionary right to overthrow it.”

It seems to have slipped someone’s mind that Abraham Lincoln conducted a successful war to put down armed rebellion that threatened to break the Union.

Michael Cannon’s criticism of Obama reeks of hypocrisy. Cannon has personally conducted an active campaign encouraging state governments to refuse to comply with the very law that he is now criticizing Obama for failing to enforce. The guy isn’t testifying as a constitutional scholar. He’s testifying as a libertarian activist.

His testimony is nothing more than another act in the ongoing dog and pony show Congressional republicans are currently running in lieu of doing anything genuinely useful or constructive.

Should the public be forced to resort to the final desperate stage of insurrection, as it’s it’s right to rem0ve a government -that no longer represents but instead rules over The People-, can any doubt that Dictator Obama would immediately declare national martial law and a suspension of the Constitution?

Maybe wannabe revolutionaries should start publicly advocating that. They could quickly find out just how large a majority of the public thinks they’re bat-shit crazy.

@Greg:

It seems to have slipped someone’s mind that Abraham Lincoln conducted a successful war to put down armed rebellion that threatened to break the Union.

Strange how persons see historic events in the manner that suits them best. Each and every state joined the union, at the time, with a right to withdraw from the union, if they so chose. Lincoln foresaw that when he came out with freeing the slaves, unilaterally, i.e., breaking the law, that the southern states were going to have a problem with it. He then began to direct the military to take military actions against Americans, something HE DID NOT have the right to do. When certain southern states were told to provide troops to act against Americans, they did not stand for it and the civil war began. If Lincoln wanted to do away with slavery, legally, there was a constitutional process, which he completely ignored (much as obam-me is doing now). While Lincoln is generally credited with being a ‘great president’, I credit him with killing more Americans than any other single person, hardly an heroic act. So, successful? hardly. Was the union worth saving if it only ends up resulting in a Communist country controlled by those that only want to benefit themselves.

While the above comment may seem strange to some. Think about it. A major objective of the constitution was to make sure that it was very difficult to make a NEW law. The very basis of America is that we are a free people and should only be encumbered by the laws that are absolutely essential. Lincoln knew that it was going to be ‘impossible’ to pass a constitutional amendment to outlaw slavery, so he decided to take matters into his own hands, violate all the laws he needed to and make it happen. This is the same manner that Obam-me is using to approach ‘everyday’ matters of law that he happens to decide he doesn’t like and will benefit his mission to ‘redistribute’ the wealth (but not his) to those that choose not to work and will vote overwhelmingly to keep the redistribution headed their way. If enough Americans ‘want’ his Obamacare, then the representatives in congress should vote and it will pass. If the budget is one that enough Americans want, then let congress vote to pass it. Using a filibuster is a totally legitimate use of the minority to prevent laws that ‘enough’ Americans ‘don’t’ want to pass.

@Greg:

bat-shit crazy.

A term that really fits Greg.

Redteam
THOSE COMMENT WHERE VERY WELL SAID,
AND those experts did not fool around, they warn both OBAMA AND THE PEOPLE,
THEY WANTED TO TELL OF THE DANGERS, AND THEY SAID IT WITHOUT
COVERING THEIR WORDS,

@Redteam, #14:

I’m not the one suggesting that Americans might need to declare war on their political opponents and overthrow their own government in order to eliminate the excesses of an oppressive dictatorial regime that exists nowhere other than in their imaginations.

Michael Cannon? That’s your rationale of your argument? The Michael Cannon of the Charles Koch funded Cato Institution libertarian think tank? The Micheal Cannon that’s still selling the debunked “Death Panels” lie?

This reminds me of the time you guys used a Heritage Foundation poll as a credible source of people’s opinion of ACA.

In all seriousness, you really don’t take yourself serious do you?

Ronald J. Ward #17

In all seriousness, you really don’t take yourself serious do you?

Why not ask those who under this Administration have (for years), lost their Jobs, Income, Homes…and their credit…. and, now their Health Insurance…just how “Serious” they have become…?

#13

“The very basis of America is that we are a free people and should only be encumbered by the laws that are absolutely essential. “

A very profound statement…too bad it does not resonate with the left…the progressives…the socialists….and the communists…for these people who use ‘force’ and “oppression” upon a people…

…they had to “invent” ‘social justice’ as a way to steal from the competent and redistribute to the incompetent among us….so the “truly ‘poor” get less help from the conservatives…

…instead of instilling ‘freedom’, equal justice … and… equal opportunity-for all who make the conscience choice to embrace it (yes, we have come a long way from the democratic instilled jim crow laws) and other Democratically instilled discrimination…

…for all Americans…

Wake up America!! You are losing your country to tyranny…

Why not ask those who under this Administration have (for years), lost their Jobs, Income, Homes…and their credit…. and, now their Health Insurance…just how “Serious” they have become…?

I’d like to remind you that we didn’t go from a Clinton Administration to an Obama Administration. There’s a significant chunk of history and reality you’re omitting or forgetting in your argument.

@Ronald J. Ward: Another moron jumps up to scream “BLAME BUSH!!!!”

@Ronald J. Ward: Bush was a progressive, albeit one with a sense of honor and a modicum of honesty, things sorely lacking in the previous and subsequent administrations. It is also important to remind people that he also had a completely Democrat-controlled Congress from 2006 to 2008, which certainly must share the blame for the economic disaster that unfolded in October 2008. It is still a mystery how $500 billion suddenly disappeared from money market funds, triggering the plunge. Quite a coincidence that it occurred just before the election, when the McCain/Palin ticket was ahead by several points.

@Ronald J. Ward#20

I’d like to remind you that we didn’t go from a Clinton Administration to an Obama Administration. There’s a significant chunk of history and reality you’re omitting or forgetting in your argument.

Question – is that a Liberal/Far Left/Progressive Reality?

That, instead of the Obama “promise” of cutting an 8 trillion deficit in half…to umm…4 trillion it has been accelerated by him and the Democrats to over 20 Trillion Million dollars and “Growing”?? And once again ‘pressuring’ and trying to intimidate the Republicans into “increasing” (the debt ceiling) even more…

Cause that is the reality Americans TODAY and in OUR FUTURE GENERATIONS are facing…

Explain to me why, if our unemployment situation is currently (per this Government) so fantastic @ a questionable 7.0% ….why are the Democrats now URGING Congress to EXTEND LONG TERM Unemployment Funding??? …. Now, is this ” urgent funding” because we are (once again,) being lied to about the reality of the job “Numbers” ?? That is, in order for thus Administration to once again “con” people like you into believing everything is just “fantastic” ?? – And that once again Nancy Pelosi has stuck her stupid nose in to repeat her stupid rhetoric that once again this unemployment funding will “stimulate” and “grow” the economy? Please, Really Really think about Pelosi’s “logic”….(If you understand it – please do explain it to me).

Oh, and I’d like to remind YOU Clinton got the crisis ball rolling….

Question – is that a Liberal/Far Left/Progressive Reality?

Well, my statement is quite factual and indisputable. There really was a Bush era and we didn’t jump from Clinton to Obama. Seriously. I’m not making that up.

Oh, and I’d like to remind YOU Clinton got the crisis ball rolling….

In what universe? Was it those 23 million jobs created under Clinton? The surpluses? What precisely are you talking about?

If Clinton did indeed “get the crises ball rolling”, what exactly did Bush do the following 8 years (assuming you’ve come to terms with the fact that there was indeed a Bush era)? Your argument doesn’t make a great deal of sense as jobs, home purchases, the auto industry, etc. has continued a slow steady growth under Obama while our deficitt has actually shrunk.

@Angel Artiste: Bush had “a modicum of honesty”?

Once again the lapdogs on the right vindicate the 2006-2008 commander in chief by blaming his abject failures on the Democrats controlling the Legislative Branch. That’s a rather specious argument but if I’m wrong and it contains an iota of credence, perhaps you can name 1, just one piece of legislation passed by the Dems of that era that confirms your argument that they “share the blame for the economic disaster that unfolded in October 2008”. You don’t have to give the exact House or Senate Bill # (but by all means you’re welcome to) but simply throw out a general piece of legislation passed by the Dems which validates your claim. Surely you’re not arguing that their mere presents was the culprit are you (which would likely be better than your present argument)?

And once you’ve found that legislation that points the blame to Dems, maybe you can explain why the hell Bush signed it

@Ronald J. Ward: 24

In what universe? Was it those 23 million jobs created under Clinton?

You do recall that it was Republicans in charge of Congress at that time that ‘forced’ Willy to accomplish that? don’t you?

Ditto,

Please let me refer to Jonathan Turley, a constitutional law scholar who surely cannot be described as “conservative” in most narratives.

“The danger is quite severe. The problem with what the president is doing is that he’s not simply posing a danger to the constitutional system. He’s becoming the very danger the Constitution was designed to avoid. That is the concentration of power in every single branch.

“This Newtonian orbit that the three branches exist in is a delicate one but it is designed to prevent this type of concentration. There [are] two trends going on which should be of equal concern to all members of Congress. One is that we have had the radical expansion of presidential powers under both President Bush and President Obama. We have what many once called an imperial presidency model of largely unchecked authority. And with that trend we also have the continued rise of this fourth branch. We have agencies that are quite large that issue regulations. The Supreme Court said recently that agencies could actually define their own or interpret their own jurisdiction.”

Basically, we have a rather liberal lawyer warning the nation that this President and government in general has become the very thing the Constitution was designed to prevent.

And this from a so called “Constitutional” (I’m referencing Comrade Obama here) expert?

@joetote: See my post #4…

Ronald J. Ward@#24

Oh, my..when I read your reply I almost though you were going to say the 23 million jobs the current administration created….

We are in deep trouble as a Country Mr Ward…to go back 20 years is actually dodging the ‘reality’ that is happening right now – today… this week…

Part of the reason why I initially asked which ‘reality’ ?

@Scott in Oklahoma: Missed that! I was skimming through this in between shifts.
🙂 Good one Scott.

JOETOTE
IT’S SCARY TO WITNESS IT DAY BY DAYS,
WEEK BY WEEKS, YEAR BY YEARS,
AND NOBODY IS SURE OF THE FUTURE NOW,
BYE

@FAITH7: Your original argument Faith, seemed to try to assign blame of the country’s “deep troubles” to the Obama Administration when in fact, Obama has made great efforts in rising above the smoldering ashes of the Bush disaster.

Why not ask those who under this Administration have (for years), lost their Jobs, Income, Homes…and their credit…. and, now their Health Insurance…just how “Serious” they have become…?

Obama inherited an economy in free fall, the housing industry in tatters, the auto industry imploding, jobs dropping at a rate not seen since the great depression, 2 wars, our global reputation in the gutter, an angry and divided electorate, an opposing GOP party with an admission of insuring failure, the aftermath of a GOP 109th congressional “drunken spending spree”, a GOP refusing to make good on paying for that spending spree, and a GOP insistence on continued catering to their top campaign donors.

You then came back with a rather sophomoric and nonsensical jab that Clinton “got the ball rolling” while providing nothing of substance to support that argument.

After dodging the reality that , you now say “to go back 20 years is actually dodging the ‘reality’ “. Typical right wing I’m rubber/you’re glue spin. You would have very likely earn more respect among people of reasonable intellect had you just said the dog ate your homework.

@Ronald J. Ward:

Obama inherited an economy in free fall,

due to

the housing industry in tatters,

which tracks back to Clinton putting the CRA on steroids and Democrats like Barney Frank denying the GSEs were being overburdened and were in trouble.

the auto industry imploding

for the very same reason that Detroit is now in bankruptcy

, jobs dropping at a rate not seen since the great depression

,
due to the housing bust that was caused by the poor decisions of Bill Clinton and Franklin Raines

2 wars,

one which we are still in and still losing American soldiers, the other now turning into a defeat as AQ rebuilds in Iraq

our global reputation in the gutter,

which has now managed to swirl totally down into the sewer

an angry and divided electorate,

and no one angrier that the Democrats as exhibited by Harry Reid, Maxine Waters, Nancy Pelosi, et al

an opposing GOP party with an admission of insuring failure,

but with a Democrat majority in both Houses of Congress

the aftermath of a GOP 109th congressional “drunken spending spree”,

I will agree with you on that if you admit that the 110th Congress made it even worse

a GOP refusing to make good on paying for that spending spree,

and now an administration that is rapidly turning us into the Weimar Republic as it prints more and more money

and a GOP insistence on continued catering to their top campaign donors.

Shall we talk about the many Obama bundlers that have been rewarded for the money they poured into Obama’s campaign coffers? Jeffrey Immelt and Penny Pritzer ring any bells for you? Even the company that was tasked to build the Obamacare web site is headed by an Obama crony.

You really do have tunnel vision.

@retire05:

Even the company that was tasked to build the Obamacare web site is headed by an Obama crony.

but, but,,, retire, they only had a little over $700 million to work with. Two experts (that have built many systems) said on the Hannity show that the Healthcare.gov site could have been started up with less than $10 million. One actually said between 1-5 million, but agreed with the other, certainly less than 10million. The difference was paid to Obam-me’s cronies. Strange that they said that, because I had remarked to my wife a couple weeks ago that there is no doubt in my mind that if I had $10 million I could get it fully operational in less than 6 months.

@Ronald J. Ward:
It’s impossible to argue with an Obamazombie. In their world, all the “facts” are on their side. A liberal stands on his head and tells the world it is upside down. All I can say to them is that progressive Democrats own Detroit, Newark, Chicago, Stockton, Buffalo, St. Louis, Philadelphia, and now Obamacare. They also own The New Deal, The Great Society, and the looting of the funds to support these quasi-socialist entitlements. For that matter, they own anti-abolishionism, the anti-civil rights movement, and the KKK. These comprise the historical evidence of their competence and integrity. They have no appreciation for the free market or capitalism, and the incredible benefits these have provided to advance humanity. They worship socialism, with no understanding of the evil in this political system, which has resulted in the genocide of over one hundred million people. Emotion and feelings guide their thinking. Logic and reason are not their strong suit. In fact, I have not met a leftist that did not lack adult maturity. They are almost always self-centered, whining, vindictive, and infantile. Worse, they project their own inadequacies and immature evil intent on those they disagree with. Have you noticed how they cannot just have a gentlemanly disagreement, but will resort to shouting, screaming, and name-calling when they are losing the argument?

Liberalism/Leftism is truly a mental disorder. Actually, it is a genetic disorder as verified by medical researchers.
http://www.nbcsandiego.com/news/weird/Scientists-May-Have-IDd-Liberal-Gene-105917218.html

Ronald J. Ward
you are trying so hard to spit far enough ,
so to blame the GOPS so to cover your master,
but like the other who keep trying with their lies,
it doesn”t play to the AMERICANS ANYMORE, AFTER THE IRS TRYED TO INTIMIDATE THEM
THEY ARE GETTING BIGGER AND MORE IN THE PUBLIC DEMANDS,
because they are from the people who follow the laws of the FRAMERS,
which are the best laws made for an AMERICA SO TOLERANT AND SURE OF THEIR LAWS OF THE LAND WILL SUSTAIN OVER THE TRAITORS WHO ARE SO ENVIOUS OF AMERICA STANDING,
THAT THEY TOOK POWER TO DESTROY THE LAWS AND THE PEOPLE,
WHICH WILL DESTROY THEM INSTEAD,
and we already entering the phase of the payback from those traiters,
watch it all disentegrate, phase one is on you, AND YOURS.

@Redteam:

but, but,,, retire, they only had a little over $700 million to work with.

Oh, no, Redteam, the cost of the failed Obamacare website is now nearing ONE BILLION DOLLARS OF TAXPAYER MONEY.

This, on top of two revelations this week: a) that a company (probably IBM) offered to build the website for FREE and b) on a Friday news dump (which is standard for this administration) one out of every four that have managed to sign up for Obamacare have not really signed up due to “glitches” in the website. So Americans who are now under the impression that starting Jan. 1 they will be covered, well, one in four won’t be.

Redteam
why did OBAMA used a CANADIAN AIMING AT CHINA AND OTHER INTERNATIONAL COUNTRIES, BUSINESSES,
INSTEAD OF GIVING THAT MONEY TO A GOOD OLD SMART
AMERICAN COMPANY WE HAVE HERE ALL OVER WHO ARE THE ONES WHO TEACH OTHER COUNTRY,
to build a WEBSITE WHERE ALL AMERICAN WILL GIVE THEIR PRIVATE ANSWERD AND IDENTITY, so it could travel all around the WORLD,
WHY OH WHY????
that is his first monstruous error and VERY telling to the people he doesn”t give a dam about their security,
which he did not bother to built one and it needed a good one to make the people believe THIS OBAMACARE WAS OKAY
AND a good idea,
ANOTHER MONSTRUOUS ERROR, WHY OH WHY ?????
HE CANNOT BLAME ANYONE,

Ronald J. Ward
I read of a recipy to eliminate completely a cancer,
it’s well known in SAUDIE ARABIA,
you get 3 cups of fresh urine from a CAMEL mix it with ONE CUP of fresh CAMEL milk,
DRINK IT ALL AND NO MORE CANCER ANYWHERE,

As usual, the leftist posters have tried to change the subject away from the original article.

The Constitutional imposes limits on the presidency. Obama has shown an unprecedented disregard for these limitations and the rule of law. Democrats and Republicans were in the past right to be concerned about the continual transformation of the powers usurped by past presidents. Yet when you have a current Democrat president who openly announces that he will make end runs around Congress, Ignores that the power to declare war belongs to Congress and not himself. And When this imperialistic President has the regulatory agencies under him write thousands of new regulations and laws, in total disrespect that the Constitution only grants that power to the legislative branch, the leftist want to talk about anything else.

If a Republican president was ruling as tyrannically as Obama, you would be rabble-rousing threatening to riot in the streets, and yes, even speaking of impeachment or insurrection. Assuming this nation survives the executive power grabs by Obama, you may find the same despotic tactics used against you should Republicans take power. The question is will Democrats reign in their imperialist president, or will they allow it to go on so long. that they force their political opponents (and those who don’t want to live under a dictatorship,) into using the same ultimate final actions of desperation that this nation’s founders had to resort to fight tyranny.

Think long and hard before you answer, as this is much more serious than the arrogant flippancy of some make it out to be.

#33 – Thank you – Retire you laid it all out so perfectly…and factually… and I see Mr R.J. Ward has not come back to defend the indefensible….as if we didn’t see that coming or….not coming.

I would suggest Mr Ward if he reads this, to refer back to your comment because I say big ‘ditto’…

Redteam
THE COST DID NOT STOP AT 700 MILLIONS,
NOW IT REACH THE BILLIONS FAR IN,

@Ronald J Ward@24-20 – You might want to read this…coming straight from the NY Times perhaps it would be less ‘nonsensical’ for you… and you might want to pay attention to the very last sentence as well… Again who’s reality mr ward?

Oh, and it even lets us know it was under umm… “Pressure from the Clinton Administration” to increase loans to people who could not get “conventional loans” (that should tell you something right there)…. So yes, the “Ball certaintly did get rolling under Clinton”…to lend money to people who were “very risky” (people who in all probability would not be able to pay back even a low low low interest loan – hey, liberal ideology – every one “Needs the American” dream even if they cannot afford it right??) – According to the Liebrals, We can will just throw it back on the shoulders of the TAX PAYERS if it fails…

SOURCE:

Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.

”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.”

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

Under Fannie Mae’s pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 — a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation’s biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

As far as I know President Bush inherited this and spent a lot of years trying to push for better regulations for this out of control lending without immediate consequences….

@ilovebeeswarzone:Bees and Retire05, yes I was only speaking of the original contract, I know it is now at a billion and it still won’t work.

THE COST DID NOT STOP AT 700 MILLIONS,

@retire05, #33:

…and now an administration that is rapidly turning us into the Weimar Republic as it prints more and more money

That would explain the runaway inflation that we’re presently witnessing. (1 percent, for 2013—lower than any year during which George W Bush was president.)

@Greg:

That would explain the runaway inflation

That from someone who obviously doesn’t know the components of inflation. Do you not know that food prices and gasoline prices are way up? interest rates and real estate are way down, kinda knocks each other out, doesn’t it. Interest rates and real estate are the real markers of progress, wouldn’t you say, Greg?

Obviously, Greg’s mom buys his gasoline and cooks his meals. She also pays his utilities (oh yeah, it’s probably her house), buys his clothes and maybe even gives him a meager allowance. Otherwise, he might have noticed the prices of everything on the increase, and has been for a few years now.

@Redteam, #46:

Here’s an article that might be of interest: Is the US government wildly understating the inflation rate? No, it isn’t.

The source is The American Enterprise Institute, which generally isn’t considered to be a left-leaning partisan organization. It tends to be viewed as conservative.

Food and and energy prices aren’t factored into the calculation directly because they tend to fluctuate seasonally and are also subject to volatility over the short term for a variety of reasons. Including them in the core inflation calculation would make the results less accurate for tracking long-term trends, which are what economists are attempting to determine.

Redteam
it did work well DIDN’T IT, TO CALL MITT ROMNEY A RHINO,
HE WOULD HAVE BEEN PRESIDENT AND CREATE JOBS FOR THE PEOPLE,
AS SOON AS HE WOULD HAVE BEEN SWORN IN,
HIS IS NOT A RHINO, BECAUSE YOU CANNOT KNOW, HE HAS NOT BEEN ELECTED,
HE RAN BECAUSE HE WANTED TO SEE JOBS FOR THE PEOPLE, HE KNEW HE COULD BECAUSE HE HAD
THE RIGHT FRIENDS WITH MONEY ,WHO BELIEVE IN HIM, AND WOULD HAVE COME TO ANSWER HIS CALL, AND THE ECONOMY WOULD BE NOW HIGH WIRED,
LOOK WHAT THOSE WHO WANTED A PERFECT PERSON, NOW THEY HAVE THE, WORSE,
NO JOBS, AND THE 20 HRS WORK DAY, IS NOT WHAT MITT ROMNEY WOULD HAVE BEEN SATISFIED WITH THAT MEDIOCRE STYLE,
HOPE NEXT TIME YOU LOOK BETTER AT THE CANDIDATES AND NOT TRY TO DIMINISH THEM,
LET’S GET RAND PAUL THIS TIME, HE ALREADY HAVE A FEW THOUSANDS YOUNG SMART PEOPLE ON HIS SIDE,

@Scott in Oklahoma, #47:

I suppose you might be describing the situation of someone you’re familiar with. I’m living in a home that I paid off myself, and have paid taxes and all of my own bills for well over 40 years.

Over those 40+ years, prices have unarguably gone up. I don’t see much evidence that democrats can be blamed any more than republicans.