ACORN Lending Scandal Allegations Include ACORN Creating 2008 Foreclosure Mess.

ACORN, the Association of Community Organizations for Reform Now, had only been trying to help the less privileged have an easier time getting ahead in the capitalist world but instead became one of the leading causes of the Subprime Mortgage Crisis, which brought down financial corporations and left the same homeowners that they were trying to help out on the street.

There have been numerous ACORN lending scandal allegations because by pushing financial institutions to give loans and mortgages to people with poor credit or low income who would not have ordinarily received those loans, ACORN played a huge part in bringing the subprime mortgage crisis onto the economy.

ACORN was not the only entity pushing for these restrictions to be loosened, the former Secretary of Housing and Urban Development under Bill Clinton, Henry Cisneros, pushed for this as well.

On the flip side, corporate greed on the part of organizations, like Countrywide Financial, played a huge part in creating the crisis and proved to be dangerous when mixed with good intention by activist groups.

Before the ACORN Lending Scandal Allegations

Prior to the ACORN lending scandal allegations, ACORN has, throughout the last thirty years, made it one of their main missions to fight predatory lending, lending in which a company “preys” on less privileged workers who are unlikely to pay off their loans and instead give up collateral, and make the lending rules more equal.

Unfortunately, the economic world simply could not work the same way that equality in other institutions does and the practice led to Americans, who could would not be able to repay their debt, receiving loans with similar terms as others.

In the early part of the decade, ACORN pushed through a class action lawsuit for what they called predatory lending by the HSBC Finance Corporation which settled for a total of $72 million and threw the lending industry into turmoil.

The ACORN Lending Scandal Allegations

Loans began to be given out to just about anyone who wanted them, a practice that did not need to be around for long before bringing collapse onto itself.

Loans were not being paid back by those receiving them as anyone could have predicted and the companies that were giving out these loans were also selling them in bundles to other corporations and insuring those loans, thus putting the insurance industry (i.e. AIG insurance) in jeopardy as well.

While ACORN was hardly the key component in the mess that is the subprime mortgage crisis, in fact, it probably does not come anywhere near to the effect that good old simple corporate greed and “Monopoly money” economy had.

The organization certainly did not help any with its promotion of giving out loans to those who would not ordinarily qualify.

Another scandal surrounding ACORN at this time was the fact that after the lawsuit against HSBC, companies like J.P. Morgan Chase began to donate large sums of money to the organization, $200,000 by Chase Bank alone, in what many claim amounted to nothing short of “hush money.”

Aside from the ACORN Lending Scandal Allegations

The role that ACORN played in the subprime mortgage crisis is, unmistakable but certainly, not the main cause of the crisis which would be one of the leading factors that contributed to the entire economic meltdown that began in 2008.

Others involved in making this happen include government officials and corporations themselves who have not been held responsible for their misdoings at all and instead have been given government money to try to stay afloat.

Alan Greenspan who had constantly pushed for an entirely unregulated economy because it would work out problems like these on its own (apparently Greenspan has never heard of the Great Depression) admitted that he had made a critical mistake in his assessments in front of Congress.

Companies like Countrywide Financial had been the worst offenders of the subprime mortgage giveaway, as a law suit by then New York Attorney General Elliot Spitzer showed that the company had been giving out loans to families with as little as one thousand dollars in the bank.

Knowing that these loans would never be paid off, those same companies would sell the loans to other corporations in bundles.

The head honcho of Countrywide, however, had said on the record that in order to approve the application of minority candidates the company had to stretch the rules which amounted to more than $600 billion in loans that would probably never be paid.