Cisneros was President Clinton’s (#12) first secretary of Housing and Urban Development (HUD). Cisneros would lay the fraudulent economic foundation that Andrew Cuomo (#16) would continue to build the Clinton administration’s economic house of cards upon. Cisneros left no stone unturned to increase homeownership levels – lending standards be damned. Of Cisneros, President Clinton said of him and his role in advancing the strategy – read “central plan” - of increasing homeownership, “And I cannot say enough in terms of my appreciation to Secretary Cisneros, who is a genuine visionary… Since the day I asked Secretary Cisneros to build this strategy, he has done about everything a human being could do.
In January 1994, Cisneros chaired President Clinton’s Fair Housing Council in the hopes of developing strategies to “affirmatively further fair housing.” In September 1994, Cisneros negotiated “best practices” agreements with members of the Mortgage Bankers Association of America. These “agreements” required mortgage banks to adopt many of the same liberal lending practices HUD required of the GSEs – Fannie Mae and Freddie Mac. The first private mortgage bank to sign up to abide by these best practices was the bank that would come to symbolize the considerable excesses of the mortgage market – Countrywide. (Cisneros would later sit on Countrywide’s board of directors along with Kathleen Brown (#7) and a former governor of the Federal Reserve, Lyle Gramley.)
Cisneros’ work enumerated above notwithstanding, the most critical role played by Cisneros in advancing President Clinton’s plan to increase homeownership – and thus lead to an enormous financial crisis - was his fatal meddling with the lending practices of the GSEs, Fannie Mae and Freddie Mac. In 1993 – and before President Clinton’s central plan for housing got off the ground – only 34% of Fannie’s mortgages went to low and moderate income borrowers, while the percentage for Freddie was approximately 30%. As HUD secretary, Cisneros would direct the GSEs to increase the percentage of mortgages going to low and moderate income borrowers to 42% by 1999. In October 2000, Andrew Cuomo would pick up the central planning baton from Cisneros and direct the GSEs to have fully 50% of their mortgages go to low and moderate income borrowers. In doing so, Cuomo would seal the fate of the U.S. economy.
Cisneros’ career after he left HUD provides some of the best evidence of the economic foolishness of the Clinton administration’s plan to increase homeownership levels to all-time highs. In fact, a review of Henry Cisneros’ career as a private citizen will eliminate any doubts any person could possibly have concerning the Clinton administration’s enormous role in causing the financial crisis. As mentioned above, Cisneros served on Countrywide’s board, and in January 2005 was asked to spearhead Countrywide’s goal of lending $1-trillion to low-income borrowers. Of course this entire effort of Cisneros and Countrywide’s was an unmitigated disaster encompassing tens of billions of dollars in mortgages going bad. Even more telling of the insanity latent in President Clinton’s central plan for housing is Cisneros’ role as a housing developer. Cisneros’ signature housing development, “Lago Vista,” in his hometown of San Antonio, TX was such a debacle that even the New York Times was forced to judge it as a collection of “flawed American dreams.” One house in the development had seen so many defaults and divorces that it earned the moniker the “house of broken love.” The foreclosures in Lago Vista were merely the millions of foreclosures in the United States in microcosm.
See Kit Bond (#6) for background into the affordable housing mandate. See Bill Clinton (#12) for the “strategy” – read “central plan” - to increase homeownership levels to all-time highs. See Andrew Cuomo (#16) for his disastrous decision to increase the GSE’s affordable housing mandate to 50%. See Jamie Gorelick (#26) and Franklin Raines (#40) for the role of the GSEs in causing the financial crisis. For the most zealous congressional supporters and defenders of the GSEs see Barney Frank (#21) Gregory Meeks (#35) and Maxine Waters (#47).