Green Room

ACORN: The Roots of a Scandal

posted at 5:15 pm on September 15, 2009 by

From the 2006 ACORN Annual Report

With the passage of the Johanns amendment yesterday intense scrutiny has been placed on ACORN Housing. The amendment, which passed 83-7 in the Senate, seems to be the first step in correcting a problem that began after the passing of the Community Reinvestment Act during the Carter administration. Matthew Vadum expounds on this problem at the American Spectator:

“Financial tomfoolery like including food stamps on loan applications was encouraged by the Carter-era Community Reinvestment Act (CRA), which opened banking to ACORN-style agitation that over time weakened underwriting criteria and helped to alter the culture of financial institutions in the U.S. This 1977 law, whose enactment ACORN lobbied for, punishes lenders for limiting loans to wealthier, more creditworthy markets, a practice called ‘redlining.’ It gives banking regulators discretionary authority to make trouble for banks that fail to lend enough money to ‘underserved’ minority communities.

After the CRA went into effect, Saul Alinsky-inspired groups such as ACORN and the Greenlining Institute used the law to get into the shakedown business.”

According to page 46 of the 2005 ACORN Annual report – found here online- since its inception ACORN Housing Corporation (AHC) has achieved a number of accomplishments:

“AHC’s housing counseling program helped 5,729 families become first-time homebuyers, and refinanced another 772 homeowners into more affordable mortgages…

ACORN Housing’s development projects began development of 600 new units of affordable housing – including 251 units of affordable rentals with new, 20-year project based section 8 contracts in the Lawndale neighborhood of Chicago; 200 units of affordable rentals in Brooklyn and the Bronx, NY; a new 89 home subdivision in Houston; and a new 51 home subdivision in Phoenix.”

From the 2003 ACORN Annual Report

Some may find it disturbing that ACORN Housing is a landlord after watching the videos on the ACORN scandal at but others are not surprised at the recent turn of events given documentary evidence of the roots of the crisis. In an 1998 online article for Shelterforce, former ACORN Political Operations director Zach Polett describes the strategy that would later prove quite effective on the national level:

“Little Rock is just one city in which the New Party is building grassroots political power around an affordable housing and living wage agenda. In Chicago, the Illinois New Party participates actively in the ACORN-led Chicago Jobs & Living Wage Campaign that this summer won Living Wage ordinances in both the City of Chicago and Cook County after an intense three-year community/labor campaign…

The strategy of local community and housing groups and their political expression – the Little Rock New Party – combines issue, policy, and electoral organizing. This fall they’ll use the struggle for adoption of a fair housing ordinance to energize the Pugh and Stewart electoral campaigns and, similarly, use these two city council campaigns to build support for the ordinance.”

As I chronicled before in the four part: ACORN and the Sandlers: A Four part Review of the Housing Crisis, ACORN Housing’s relationship with banks and the government  have contributed to the housing crisis. In a 1993 press release, one can see the seeds of the problems highlighted in the undercover videos:

“WASHINGTON, Feb. 25 /PRNewswire/ — ACORN, the community organization; Federal National Mortgage Association (Fannie Mae) (NYSE: FNM), the nation’s largest source of mortgage funds; and GE Capital Mortgage Insurance Corporation, the nation’s largest mortgage insurer; today announced the one-year test of a $55 million, 11-city, experimental lending plan designed to increase homeownership opportunities for people with lower incomes or non-traditional credit histories.

The pilot, which experiments with lending requirements even more flexible than those of the popular Community Home Buyer’s Program (generally serving families with incomes in the $25,000 to $40,000 range), will reach home buyers with incomes in the $15,000 to $30,000 range. The experiment allows borrowers to contribute as little as 3 percent or $1,000 (whichever is less) of their own funds towards the down payment on mortgages for owner-occupied, single- family homes (and a very limited number of owner-occupied 2- to 3-family homes). A total of 5 percent down payment is required, but the additional funds may come from other sources such as church, employer, nonprofit, or government.

Applicants will first receive in-depth counseling by ACORN on the home-buying process, on credit issues, and on qualifying for a mortgage. … “This ACORN/Fannie Mae pilot is a major blow against the redlining of minority and low- and moderate-income urban neighborhoods,” added Maude Hurd, president of ACORN. “With ACORN counseling the home buyers, with local lenders writing the loans, with Fannie Mae buying the loans from lenders, and with GE Capital insuring the loans, our communities can’t lose.”

… Under the pilot program, Fannie Mae and GE Capital will consider the following exceptions to their underwriting guidelines:

  • Fannie Mae recognizes that non-traditional methods of savings exist in ethnic cultures. Working with ACORN and lenders, Fannie Mae will consider these savings methods as part of the credit history.
  • Income from child support, which is not court ordered, may be considered with acceptable documentation, including canceled checks, money order receipts and bank statements.
  • For home buyers moving from public assistance to employment, Fannie Mae will allow lenders to use flexibility when considering the minimum employment period. Also, Fannie Mae considers public assistance as a source of income…
  • Lower income home buyers without easy access to banks and thrifts will be able to save funds at home if the funds can be documented.
  • Buyers who have had credit problems in the past due to unemployment, illness, or divorce can become eligible for a loan if they have 1) paid off their bank debts or are on payment plans, 2) have at least one year of good credit and 3) have gone through ACORN counseling.”

The bullet points in the above quote are particularly illuminating after watching the ACORN undercover videos. The videos highlight what one report suggests is a pattern of questionable activity dating back decades. The Employment Policies Institute released a scathing report on ACORN that detailed these activities:

“Voter registration and petition fraud is just the latest chapter in ACORN’s long sordid history. The EPI report also reveals:

  • ACORN Involved in Union Embezzlement — In the late 1990s, ACORN’s Project Vote was involved in an $850,000 embezzling scheme, where union funds and kickbacks were used to illegally aid the 1996 re-election bid of then- Teamsters President Ron Carey. A New York federal jury found the Teamsters political director guilty of the conspiracy.
  • ACORN bilks AmeriCorps — In 1996, the Inspector General of the AmeriCorps program stripped a $1 million grant from the ACORN Housing Corporation (AHC). When applying, AHC had denied any connections to ACORN, since the grant was not intended for political advocacy organizations. Evidence later uncovered by the Inspector General found that not only was AHC created by ACORN, engaged in numerous transactions with one another, and sharing staff and office space — but it utilized the AmeriCorps grant to increase ACORN membership, a violation of federal guidelines….

The dots that Congress seems to finally be connecting are significant because of the current economic crisis and the factor the economy played in the 2008 elections. ACORN’s 2003 annual report -available online here – illustrates the need for a review of the actions of banks:

Community Reinvestment Agreements / Bank Partners

  • Developing national and local bank partnerships is a key component of ACORN Housing’s homeownership program. In 2003, ACORN Housing closed $783 million in mortgages with Bank of America, representing 5,644 home mortgage loans. Other major bank partners included Chase, Fleet, US Bank, Citizens Bank, PNC Bank,M&T Bank, Ameriquest, Washington Mutual, and number of smaller lenders in cities around the country…

With ACORN’s connections at the highest level of government it appears that even numerous state actions and sworn testimony were not enough to topple ACORN, but with many members of the House looking to ACORN for help to beat the conservative tide coming in 2010, it will be interesting to see how close the vote goes. More videos are surfacing everyday and the public is outraged, but the questions remains, who’s roots will be exposed when the ACORN tree is chopped down?

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This is very interesting. I knew ACORN was slinking their way into my neck o’ the woods when I saw “voter registration helpers” at every frigging large store in our little town.

I overheard one of these “helpers” tell a guy he “didn’t need his social security number” to register to vote. I wish I’d had the time to stop and ask the “helper” who they were with. But I know they were ACORN. They had to be. No one else in NM gives a damn what we do down here.

And they were bound and determined to keep our country from going for the republican this time. We helped give NM to Bush in 2004 and Richardson has never forgiven us.

I’m glad to see the people of America are finally waking up to find the ACORN has been a rotten nut all along.

Mad Mad Monica on September 15, 2009 at 5:39 PM

Dang. I meant “county” in the sentence “And they were bound and determined to keep our country from going for the republican this time.”

We’re one of the few republican counties in New Mexico and mucho disliked in Santa Fe.

Mad Mad Monica on September 15, 2009 at 5:41 PM

Yah, know….I bet the flow of money (our money) is going to continue unabated regardless of the dog and pony shows occuring now. Acorn has the financial web in place and money is flowing. Checks are being written and cashed. Until I see or hear evidence of the smashing of the financal scams then all the rest is just a distraction. Trust, but verify.

frizzbee on September 15, 2009 at 5:45 PM


you are fearless and were way out in front on this. i hope your efforts and courage will help other earnest ACORN employees to come forth. ACORN probably has their hands full trying to survive — the dam has burst!

casel21 on September 15, 2009 at 8:53 PM

“National and local bank partnerships“????


These are shakedowns, pure and simple. Banks pay ACORN, and ACORN agrees not to send busloads of folks from the ‘hood to protatest at the CEO’s house and follow his kids to school. Sometimes there is a little window dressing by the bank to set aside a certain number of loans for ACORN counseling clients, to make it look like an actual partnership.

Banks have been on to ACORN’s racket for over 20 years.

rockmom on September 16, 2009 at 4:45 PM

Bravo, Anita! Keep up the good work.

inmypajamas on September 19, 2009 at 8:28 AM

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