Andrew Cuomo is “Mr. Ground Zero” in the sub prime mortgagee mess because as HUD secretary for Bill Clinton, he forced banks to give loans to people who couldn’t afford to pay them back.
To date, the New York media, including Fred Dicker of he New York, hasn’t asked a single question of Andrew Cuomo’s activities?
Why?
Where is the journalistic integrity?
Why is the New York Post write so many attack pieces on Carl Paladino and little if any coverage on Andrew Cuomo?
Finally, one new outlet is asking some questions.
WGRZ TV reports that in 1999, Andrew Cuomo, then secretary of the U.S. Department of Housing and Urban Development, announced an expansion of home-ownership targets, saying "this action will transform the lives of millions of families across our country."
He said the government-sponsored Fannie Mae and Freddie Mac programs would increase their percentage of mortgage loans for low- and moderate-income families from 42 percent to 50 percent, a policy to buy $2.4 trillion in mortgages over 10 years.
Cuomo said in a news release at the time that the goal would "strengthen our economy and create new jobs by stimulating more home construction" and boost affordable housing in the country.
But Cuomo's decision at HUD - under a drive by Congress and the Clinton administration to boost home ownership - continues to be assailed by his critics and Republican gubernatorial candidate Carl Paladino as Cuomo runs as the Democratic nominee for governor.
Paladino has revived charges made by some conservative fiscal analysts that Cuomo's expansion of mortgage loans at HUD fueled the housing crisis a decade later. Last month, Paladino said, "Cuomo lit the fuse of the global financial meltdown as Secretary of Housing and his screw-ups at HUD cost taxpayers $2.4 trillion."
Cuomo, the current attorney general, has refuted the charges on the campaign trail.
"It is devoid of reality," Cuomo said in Long Island earlier this month. "I was HUD secretary. We were promoting home ownership. The administration that came in after the Clinton administration was more aggressive in promoting home ownership."
He added that there "was no evidence of the sub-prime (mortgage) problem for years and years and years after I left HUD."
His backers and some fiscal experts have argued in Cuomo's favor. The problems, they contend, occurred after he left the post of HUD secretary in 2001, when the Bush administration increased the housing targets at an even higher rate, leading to more risky loans for homeowners.
Moreover, some experts said no one in 1999, including Cuomo, could have anticipated the degree of the collapse that would cripple the nation - a complex house of cards that involved Wall Street, the banks and mortgage brokers.
"You're asking that the guy would have had a foresight that nobody else in the world had," said Dwight Jaffee, an economist at the University of California at Berkeley, who wrote a report to Congress earlier this year on the role of Fannie and Freddie in the housing crisis.
Jaffee's report contended that the housing goals set for lower-income household was not a primary factor in the crisis, but more due the increased reliance on high-risk mortgages in future years.
As for Cuomo, Jaffee said, "He did nothing that anybody at the time thought was egregious and it was representing the sense of Congress and the goals of his agency, and I think it's very hard to pin anything on him."
Others are trying to, however. Paladino is expected to make Cuomo's time at HUD - first as assistant secretary from 1993 through 1997, then as secretary from 1997 through 2001 - a campaign issue through Election Day, Nov. 2.
Some economists agree with Paladino's assessment.
Cuomo played "a very, very significant role" in the housing troubles, said Peter Wallison, a conservative scholar at the American Enterprise Institute for Public Policy Research in Washington, D.C.
"He was the one who moved the affordable-housing requirements for Fannie and Freddie up to 50 percent" and promoted other efforts to increase the number of low-income homeowners, Wallison said.
Edward Pinto, a mortgage-finance consultant and chief credit officer at Fannie Mae in the 1980s, said Cuomo's decisions at HUD to not place tighter lending restrictions allowed for the "first huge burst of flexibility" in the mortgage industry, such as the introduction of no-down-payment mortgages.
Howard Glaser, Cuomo's former chief of staff at HUD, has been Cuomo's spokesman to debunk critics. He offers a 43-page presentation that calls many of the charges into question, such as showing that default rates were low and declined under Cuomo, citing Jaffee's findings.
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