A June 12, 2008 press release from Massachusetts Attorney General Martha Coakley ballyhoos the fact that she earned an “A+” from ACORN. Ironically, this perfect grade was awarded for “responding to the foreclosure crisis.” No single non-governmental entity is more responsible for the real estate meltdown than ACORN.
Coakley’s press release goes on to detail various prosecutions of shady subprime operators but, of course, there is not a word about any investigation or prosecution of ACORN.
ACORN’s role in the residential mortgage crisis, much of it driven by subprime lending, is no mystery. Starting in the Seventies, ACORN saw the big banks as shakedown targets. ACORN screamed “racism.” It accused mortgage lenders of “redlining,” or denying credit to borrowers in certain areas. It picketed the homes of bank directors in leafy suburbs.
A way out was offered to the banks. They could make contributions to ACORN and/or they could “invest” in ACORN Housing, which made loans to “underserved” borrowers.
They also could back off from opposition to a law called the Community Reinvestment Act of 1977 that required banks and thrifts to lend more money from areas where they took deposits. It meant more loans to “underserved” communities, and a loosening of lending standards.
Of course, many of ACORN’s “deserving” borrowers were not deserving at all. Increasingly, the banks dumped the loans on Fannie Mae and Freddie Mac, which were under pressure by Congressmen like Barney Frank (D-MA) to make more loans to the “underserved.”
The result was the mortgage meltdown that nearly took down our entire financial system, providing the justification for the massive bailouts of the banks.