"There's never been a better time in America to become a homeowner."
-- Henry Cisneros, 2003
SAN ANTONIO -- A grandson of Mexican immigrants and this city's first Hispanic mayor of the 20th century, Henry Cisneros has spent years trying to make the dream of home ownership come true for low-income U.S. families.
As the top housing official in the mid-1990s in President Bill Clinton's administration, Cisneros loosened mortgage restrictions so first-time buyers could qualify for loans they could never get before.
Then, capitalizing on a housing expansion he helped unleash, he joined the boards of a major builder, KB Home, and the largest mortgage lender in the nation, Countrywide Financial - two companies that rode the housing boom, drawing criticism along the way for abusive business practices.
And Cisneros became a developer himself. The Lago Vista development here in his hometown once stood as a testament to his life's work.
Joining with KB, he built 428 homes for low-income buyers in what was a neglected, industrial neighborhood. He often made the trip from downtown to ask residents if they were happy.
"People bought here because of Cisneros," said Celia Morales, a Lago Vista resident. "There was a feeling of, 'He's got our back.'"
But Cisneros rarely comes around anymore. Lago Vista, like many communities born in the housing boom, is now under stress. Scores of homes have been foreclosed, including one in five over the past six years on the community's longest street, Sunbend Falls, according to property records.
While Cisneros says he remains proud of his work, he has misgivings over what his passion has wrought. He insists that the worst problems developed only after "bad actors" hijacked his good intentions, but acknowledges that "people came to home ownership who should not have been homeowners."
They were lured by "unscrupulous participants -- bankers, brokers, secondary market people," he said. "The country is paying for that, and families are hurt because we as a society did not draw a line."
The causes of the housing implosion are many: lax regulation, financial innovation gone awry, excessive debt, raw greed. The players are also varied: bankers, borrowers, developers, politicians and bureaucrats.
Cisneros, 61, had a foot in a number of those worlds. Despite his qualms, he encouraged the unprepared to buy homes, part of a broad national trend with dire economic consequences.
He reflects often on his role in the debacle, he says, which has changed home ownership from something that secured a place in the middle class to something that is ejecting people from it.
"I've been waiting for someone to put all the blame at my doorstep," he said lightly, but with a bit of worry, too.
After a sex scandal destroyed his promising political career and he left Washington, he eventually reinvented himself as a well- regarded advocate and builder of urban, working-class homes. He has financed the construction of more than 7,000 houses.
For the three years he was a director at KB Home, Cisneros received at least $70,000 in pay and more than $100,000 worth of stock. He also received $1.14 million in directors' fees and stock grants during the six years he was a director at Countrywide. He made more than $5 million from Countrywide stock options, money he says he plowed into his company.
He says his development work provides an annual income of "several hundred thousand" dollars. All told, his paydays are modest relative to the windfalls some executives netted in the boom. Indeed, Cisneros says his mistake was not the greed that afflicted many of his counterparts in banking and housing; it was unwavering belief.
http://www.hispanicbusiness.com/news/2008/10/20/cisneros_housing_lending_policies_come_under.htm
Oct. 20, 2008 
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