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The CRA Scam and its Defenders
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Rudy Canoza
Jan 6, 2014, 12:08:57 PM1/6/14
to
CRA wasn't the only factor in the Democrat-induced destruction of the
housing market and the economy, but it was a big one.
"The CRA Scam and its Defenders"
by Thomas J. DiLorenzo
"Liberal" economists are overjoyed by the bursting of the housing
bubble, for it provides them with what they believe is another "market
failure" story. "Most analysts see the sub-prime crisis as a market
failure," Robert Gordon gleefully declared in the April 7 online edition
of The American Prospect magazine, edited by Robert Kuttner.
Gordon does not define what an "analyst" is, and does not cite any
survey to support his claim. One suspects that his opinion is based on
an informal survey of his like-minded, left-wing friends.
Gordon is a defender of the federal government's 1977 Community
Reinvestment Act (CRA) under which the Fed and other financial
regulators have pressured/extorted banks into making more loans to
less-than-creditworthy borrowers than they would normally be willing to
risk. As such, Gordon believes in the following propositions:
1. runaway greed ("market failure") on the part of lenders is the
cause of the subprime crisis;
2. these same greedy lenders routinely ignore billions of dollars in
potential profits in lower-income communities because of their
systemic racism, stupidity, or both � hence the need for the
CRA; and
3. no government agency, especially not the Fed, had anything to do
with either the creation or bursting of the housing market bubble
and the subprime crisis.
(If you think I'm establishing a straw-man argument, read Gordon's
article for yourself.
http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis)
The first two propositions flatly contradict each other, whereas the
third is unequivocally false. Fed policy � which is not even mentioned
by Gordon in an article that is ostensibly about the cause of the
subprime crisis � is the cause of the boom-and-bust cycle that has
caused the housing bubble and its bursting. Not "market failure" but Fed
policy.
Gordon is incensed that a few "analysts," including myself and Professor
Stan Liebowitz of the University of Dallas, have argued that the
bursting of the housing bubble has caused the chickens to come home to
roost, so to speak, after thirty years of government policy pressuring
banks to make tens of billions of dollars in bad loans to people with
low (or nonexistent) credit ratings. Neither Liebowitz nor I have argued
that every last bad loan out there is a CRA loan, but Gordon implies
that we do in a rather feeble attempt to construct a straw-man argument.
Gordon cites Fed bureaucrat Janet Yellen as the source of a "killer
statistic" that absolves the government of all guilt: "Independent
mortgage companies" which are not covered by the CRA made many more
"high-priced loans" to borrowers with bad credit than did CRA-regulated
banks, she says. Well, so what? Even if Yellen is correct, that does not
mean that CRA-regulated loans have not caused tens of billions of
dollars in defaults.
Moreover, Yellen and Gordon don't seem to understand what an
"independent mortgage company" is. Many of these companies are like the
one in which my next-door neighbor is employed: they are middlemen who
arrange mortgage loans for borrowers � including "subprime" borrowers �
with banks, including CRA-regulated banks. Some killer statistic.
By ignoring the role of the Fed in creating the whole housing-market
mess, Gordon's pronouncement that it is entirely a result of "market
failure" is laughable on its face. He also flatly denies that CRA
lending has had anything to do with why so many uncreditworthy borrowers
have defaulted now that the Fed-generated housing bubble has burst.
This, too, is an untenable position.
When the CRA was created during the Carter administration, the
administration also funded with tax dollars numerous "community groups"
that have helped the Fed, the Comptroller of the Currency, and other
federal regulatory agencies to enforce the act. Under the CRA, if a bank
wants to make virtually any change in its business operations � merging,
opening up a new branch, getting into a new line of business � it must
first prove to regulators that it has made "enough" loans to the
government's preferred borrowers. The (partially) tax-funded "community
groups" like ACORN (Association of Community Organizations for Reform
Now) can file petitions with regulators that stop the bank's activities
in their tracks, perhaps defeating them altogether. The banks routinely
buy off ACORN and other "community groups" by giving them millions of
dollars as well as promising to make even more dubious loans.
In order to try to diversify the risk of these loans, the Federal Home
Loan Mortgage Company ("Freddie Mac") pioneered the "securitization" of
bundles of these high-risk loans so that they could be sold on secondary
markets. Such "securitization" exploded during the 1990s as a result of
government regulation. As Fed Chairman Ben Bernanke himself stated in a
March 30, 2007 speech entitled "The Community Reinvestment Act: Its
Evolution and New Challenges" (published online by the Fed),
Securitization of affordable housing loans expanded, as did the
secondary market for these loans, in part reflecting a 1992 law
that required the government-sponsored enterprises, Fannie Mae
and Freddie Mac, to devote a large percentage of their activities
to meeting affordable housing goals. (p. 3)
In 1994 the Riegle-Neal Interstate Banking and Branching Efficiency Act
loosened up the regulatory barriers to bank mergers. Consequently, said
Bernanke, "As public scrutiny of bank merger and acquisition activity
escalated, advocacy groups [like ACORN] increasingly used the public
comment process to protest bank applications on CRA grounds." In other
words, there was a burst of additional legalized extortion perpetrated
by the Fed and its pet "activist organizations" beginning in the
mid-1990s. As a result, says Bernanke, "banks began to devote more
resources to their CRA programs." What an understatement.
Also in 1995, the US Treasury Department created the multibillion-dollar
"Community Development Financial Institutions" fund to "provide banks
with access [i.e., taxpayers' dollars] to new opportunities to finance
community economic development" as "encouraged" by the CRA, said the Fed
chairman.
The government also "streamlined" the regulatory requirements for CRA
loans in 1995, allowing � and indeed pressuring � banks to make such
loans without the benefit of many traditional credit-worthiness
criteria, such as the size of the mortgage payment relative to income,
savings history, and even income verification! Instead, the Fed told
banks that participation in a credit-counseling program, many of which
are federally funded, could be used as "proof" of a low-income
applicant's ability to make his mortgage payments. In other words,
federal bank regulators required banks to make bad loans based on
nonexistent credit standards.
In his April 26 New York Post article on the CRA entitled "The Real
Scandal," Professor Liebowitz explains how the government's Fannie Mae
Foundation singled out one bank in particular as the role model for all
other banks in America in terms of its commitment to CRA lending:
Countrywide, the nation's largest mortgage lender, had committed to $600
billion in low-income or "subprime" loans as of 2003. Today, Countrywide
is essentially bankrupted and has been merged with Bank of America.
The myth that the CRA would not be harmful to bank-industry profits was
hidden for years by the Fed-created housing bubble, which allowed for
easy refinancing of all the bad debt. "[The] CRA increased lending and
homeownership in poor communities without undermining banks'
profitability," Robert Gordon proudly proclaims. But now that the bubble
has burst, all those unqualified borrowers � whom the government calls
"subprime," as though their credit ratings are only a tiny, tiny smidgen
below "prime" borrowers with the very best credit ratings � are
defaulting on their mortgages in droves.
Bank profitability has been extremely "undermined," to put it mildly.
The bursting of the Fed-generated housing bubble is the reason why the
CRA scam was not exposed until now, despite having been in operation for
some thirty years.
http://mises.org/daily/2963
housing market and the economy, but it was a big one.
"The CRA Scam and its Defenders"
by Thomas J. DiLorenzo
"Liberal" economists are overjoyed by the bursting of the housing
bubble, for it provides them with what they believe is another "market
failure" story. "Most analysts see the sub-prime crisis as a market
failure," Robert Gordon gleefully declared in the April 7 online edition
of The American Prospect magazine, edited by Robert Kuttner.
Gordon does not define what an "analyst" is, and does not cite any
survey to support his claim. One suspects that his opinion is based on
an informal survey of his like-minded, left-wing friends.
Gordon is a defender of the federal government's 1977 Community
Reinvestment Act (CRA) under which the Fed and other financial
regulators have pressured/extorted banks into making more loans to
less-than-creditworthy borrowers than they would normally be willing to
risk. As such, Gordon believes in the following propositions:
1. runaway greed ("market failure") on the part of lenders is the
cause of the subprime crisis;
2. these same greedy lenders routinely ignore billions of dollars in
potential profits in lower-income communities because of their
systemic racism, stupidity, or both � hence the need for the
CRA; and
3. no government agency, especially not the Fed, had anything to do
with either the creation or bursting of the housing market bubble
and the subprime crisis.
(If you think I'm establishing a straw-man argument, read Gordon's
article for yourself.
http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis)
The first two propositions flatly contradict each other, whereas the
third is unequivocally false. Fed policy � which is not even mentioned
by Gordon in an article that is ostensibly about the cause of the
subprime crisis � is the cause of the boom-and-bust cycle that has
caused the housing bubble and its bursting. Not "market failure" but Fed
policy.
Gordon is incensed that a few "analysts," including myself and Professor
Stan Liebowitz of the University of Dallas, have argued that the
bursting of the housing bubble has caused the chickens to come home to
roost, so to speak, after thirty years of government policy pressuring
banks to make tens of billions of dollars in bad loans to people with
low (or nonexistent) credit ratings. Neither Liebowitz nor I have argued
that every last bad loan out there is a CRA loan, but Gordon implies
that we do in a rather feeble attempt to construct a straw-man argument.
Gordon cites Fed bureaucrat Janet Yellen as the source of a "killer
statistic" that absolves the government of all guilt: "Independent
mortgage companies" which are not covered by the CRA made many more
"high-priced loans" to borrowers with bad credit than did CRA-regulated
banks, she says. Well, so what? Even if Yellen is correct, that does not
mean that CRA-regulated loans have not caused tens of billions of
dollars in defaults.
Moreover, Yellen and Gordon don't seem to understand what an
"independent mortgage company" is. Many of these companies are like the
one in which my next-door neighbor is employed: they are middlemen who
arrange mortgage loans for borrowers � including "subprime" borrowers �
with banks, including CRA-regulated banks. Some killer statistic.
By ignoring the role of the Fed in creating the whole housing-market
mess, Gordon's pronouncement that it is entirely a result of "market
failure" is laughable on its face. He also flatly denies that CRA
lending has had anything to do with why so many uncreditworthy borrowers
have defaulted now that the Fed-generated housing bubble has burst.
This, too, is an untenable position.
When the CRA was created during the Carter administration, the
administration also funded with tax dollars numerous "community groups"
that have helped the Fed, the Comptroller of the Currency, and other
federal regulatory agencies to enforce the act. Under the CRA, if a bank
wants to make virtually any change in its business operations � merging,
opening up a new branch, getting into a new line of business � it must
first prove to regulators that it has made "enough" loans to the
government's preferred borrowers. The (partially) tax-funded "community
groups" like ACORN (Association of Community Organizations for Reform
Now) can file petitions with regulators that stop the bank's activities
in their tracks, perhaps defeating them altogether. The banks routinely
buy off ACORN and other "community groups" by giving them millions of
dollars as well as promising to make even more dubious loans.
In order to try to diversify the risk of these loans, the Federal Home
Loan Mortgage Company ("Freddie Mac") pioneered the "securitization" of
bundles of these high-risk loans so that they could be sold on secondary
markets. Such "securitization" exploded during the 1990s as a result of
government regulation. As Fed Chairman Ben Bernanke himself stated in a
March 30, 2007 speech entitled "The Community Reinvestment Act: Its
Evolution and New Challenges" (published online by the Fed),
Securitization of affordable housing loans expanded, as did the
secondary market for these loans, in part reflecting a 1992 law
that required the government-sponsored enterprises, Fannie Mae
and Freddie Mac, to devote a large percentage of their activities
to meeting affordable housing goals. (p. 3)
In 1994 the Riegle-Neal Interstate Banking and Branching Efficiency Act
loosened up the regulatory barriers to bank mergers. Consequently, said
Bernanke, "As public scrutiny of bank merger and acquisition activity
escalated, advocacy groups [like ACORN] increasingly used the public
comment process to protest bank applications on CRA grounds." In other
words, there was a burst of additional legalized extortion perpetrated
by the Fed and its pet "activist organizations" beginning in the
mid-1990s. As a result, says Bernanke, "banks began to devote more
resources to their CRA programs." What an understatement.
Also in 1995, the US Treasury Department created the multibillion-dollar
"Community Development Financial Institutions" fund to "provide banks
with access [i.e., taxpayers' dollars] to new opportunities to finance
community economic development" as "encouraged" by the CRA, said the Fed
chairman.
The government also "streamlined" the regulatory requirements for CRA
loans in 1995, allowing � and indeed pressuring � banks to make such
loans without the benefit of many traditional credit-worthiness
criteria, such as the size of the mortgage payment relative to income,
savings history, and even income verification! Instead, the Fed told
banks that participation in a credit-counseling program, many of which
are federally funded, could be used as "proof" of a low-income
applicant's ability to make his mortgage payments. In other words,
federal bank regulators required banks to make bad loans based on
nonexistent credit standards.
In his April 26 New York Post article on the CRA entitled "The Real
Scandal," Professor Liebowitz explains how the government's Fannie Mae
Foundation singled out one bank in particular as the role model for all
other banks in America in terms of its commitment to CRA lending:
Countrywide, the nation's largest mortgage lender, had committed to $600
billion in low-income or "subprime" loans as of 2003. Today, Countrywide
is essentially bankrupted and has been merged with Bank of America.
The myth that the CRA would not be harmful to bank-industry profits was
hidden for years by the Fed-created housing bubble, which allowed for
easy refinancing of all the bad debt. "[The] CRA increased lending and
homeownership in poor communities without undermining banks'
profitability," Robert Gordon proudly proclaims. But now that the bubble
has burst, all those unqualified borrowers � whom the government calls
"subprime," as though their credit ratings are only a tiny, tiny smidgen
below "prime" borrowers with the very best credit ratings � are
defaulting on their mortgages in droves.
Bank profitability has been extremely "undermined," to put it mildly.
The bursting of the Fed-generated housing bubble is the reason why the
CRA scam was not exposed until now, despite having been in operation for
some thirty years.
http://mises.org/daily/2963
Rudy Canoza
Jan 6, 2014, 1:11:36 PM1/6/14
to
[followups vandalism by unethical racist shitbag looter repaired]
On 1/6/2014 9:45 AM, Siri Cruz wrote:
> In article <72ecc$52cae31b$414e828e$54...@EVERESTKC.NET>,
> When you point to forty year old law to end racial discimination
That wasn't the purpose of the law.
> which has neverbeen an important contributor to defaults or high risk loans
CRA was a major cause of the bad loans. It wasn't the only cause, but
it was part of a systematic and comprehensive effort by leftists -
Democrats - to manipulate the mortgage and housing markets to reward
their constituents with house ownership they didn't deserve and couldn't
afford. It led to the collapse. The racist race-obsessed left caused
the collapse.
On 1/6/2014 9:45 AM, Siri Cruz wrote:
> In article <72ecc$52cae31b$414e828e$54...@EVERESTKC.NET>,
That wasn't the purpose of the law.
> which has neverbeen an important contributor to defaults or high risk loans
CRA was a major cause of the bad loans. It wasn't the only cause, but
it was part of a systematic and comprehensive effort by leftists -
Democrats - to manipulate the mortgage and housing markets to reward
their constituents with house ownership they didn't deserve and couldn't
afford. It led to the collapse. The racist race-obsessed left caused
the collapse.
Billy
Jan 7, 2014, 12:58:59 AM1/7/14
to
In article <72ecc$52cae31b$414e828e$54...@EVERESTKC.NET>,
CRud yanoza <LaLaLa...@fingersinears.con> wrote:
You just get nuttier, and nuttier, CRud.
Let's just hit a couple of the high spots, shall we?
> CRA wasn't the only factor in the Democrat-induced destruction of the
> housing market and the economy, but it was a big one.
>
>
> "The CRA Scam and its Defenders"
>
> by Thomas J. DiLorenzo
A real top drawer nut case here.
Thomas J. DiLorenzo resume, includes his 2006 book, "Lincoln Unmasked:
What You're Not Supposed to Know About Dishonest Abe." DiLorenzo
charges that Lincoln was "the first dictator" and a "mass murderer" and
decreed that "Hitler was a Lincolnite." Thomas J. DiLorenzo works for a
Southern nationalist organization, "The League of the South", a
neo-Confederate group that advocates for a second southern secession and
a society dominated by European Americans."
<http://archive.lewrockwell.com/dilorenzo/dilorenzo191.html>
>
>
> "Liberal" economists are overjoyed by the bursting of the housing
> bubble, for it provides them with what they believe is another "market
> failure" story. "Most analysts see the sub-prime crisis as a market
> failure," Robert Gordon gleefully declared in the April 7 online edition
> of The American Prospect magazine, edited by Robert Kuttner.
Greenspan saw it as a market failure too.
http://www.nytimes.com/2008/10/24/business/economy/24panel.html
Greenspan Concedes Error on Regulation
But on Thursday, almost three years after stepping down as chairman of
the Federal Reserve, a humbled Mr. Greenspan admitted that he had put
too much faith in the self-correcting power of free markets and had
failed to anticipate the self-destructive power of wanton mortgage
lending.
ïŋ―Those of us who have looked to the self-interest of lending
institutions to protect shareholdersïŋ― equity, myself included, are in a
state of shocked disbelief,ïŋ― he told the House Committee on Oversight
and Government Reform.
ïŋ―You had the authority to prevent irresponsible lending practices that
led to the subprime mortgage crisis. You were advised to do so by many
others,ïŋ― said Representative Henry A. Waxman of California, chairman of
the committee. ïŋ―Do you feel that your ideology pushed you to make
decisions that you wish you had not made?ïŋ―
Mr. Greenspan conceded: ïŋ―Yes, Iïŋ―ve found a flaw. I donïŋ―t know how
significant or permanent it is. But Iïŋ―ve been very distressed by that
fact.ïŋ―
Community Reinvestment Act of 1977
Sec. 802.
(a) The Congress finds thatïŋ―
(1) regulated financial institutions are required by law to
demonstrate that their deposit facilities serve the convenience and
needs of the communities in which they are chartered to do business;
(2) the convenience and needs of communities include the need for
credit services as well as deposit services; and
(3) regulated financial institutions have continuing and affirmative
obligation to help meet the credit needs of the local communities in
which they are chartered.
(b) It is the purpose of this title to require each appropriate
Federal financial supervisory agency to use its authority when examining
financial institutions, to encourage such institutions to help meet the
credit needs of the local communities in which they are chartered
consistent with the safe and sound operation of such institutions.
-----
I know that you are slow CRud, so let me just emphasize the salient
portion of the CRA, Sec. 802
to encourage such institutions (banks)
to help meet the credit needs of the local communities in which they are
chartered
consistent with the safe and sound operation of such institutions.
-----
Now, CRud, that means that banks can't red line, and if a borrower meets
the banks criteria, they have to loan to them. No special rules, no
underwriting loans, just practices that are consistent with the safe and
sound operation of such institutions.
> As such, Gordon believes in the following propositions:
>
> 1. runaway greed ("market failure") on the part of lenders is the
> cause of the subprime crisis;
Freefall: America, Free Markets, and the Sinking of the World Economy
<http://www.amazon.com/Freefall-America-Markets-Sinking-Economy/dp/B007SR
WER0/ref=sr_1_2?s=books&ie=UTF8&qid=1344042147&sr=1-2&keywords=Freefall>
JOSEPH E. STIGLITZ
an American economist and a professor at Columbia University. He is a
recipient of the Nobel Memorial Prize in Economic Sciences (2001) and
the John Bates Clark Medal (1979). He is also the former Senior Vice
President and Chief Economist of the World Bank
In the long list of culprits, it is natural to begin at the bottom, with
the mortgage originators. Mortgage companies had pushed exotic mortgages
on to millions of people, many of whom did not know what they were
getting into. But the mortgage companies could not have done their
mischief without being aided and abetted by the banks and rating
agencies. The banks bought the mortgages and repackaged them, selling
them on to unwary investors. U.S. banks and financial institutions had
boasted about their clever new investment instruments. They had created
new products which, while touted as instruments for managing ? risk,
were so dangerous that they threatened to bring down the U.S. financial
system. The rating agencies, which should have checked the growth of
these toxic instruments, instead gave them a seal of approval, which
encouraged othersïŋ―including pension funds looking for safe places to put
money that workers had set aside for their retirementïŋ―in
the United States and overseas, to buy them.
In short, America's financial markets had failed to perform their
essential societal functions of managing risk, allocating capital, and
mobilizing savings while keeping transaction costs low. Instead, they
had created risk, misallocated capital, and encouraged excessive
indebtedness while imposing high transaction costs. At their peak in
2007, the bloated financial markets absorbed 41 percent of profits in
the corporate sector.9
> CRA; and
<http://www.housingwire.com/2011/11/17/crl-good-credit-minorities-receive
d-3-times-more-subprime-loans-than-whites>
CRL: Good-credit minorities received 3 times more subprime loans than
whites
Blacks and Hispanics with credit scores higher than 660 received
subprime and option adjustable-rate mortgages three times as often as
white borrowers in similar financial standing between 2004 and 2008,
according to a new study from the Center for Responsible Lending.
>
> 3. no government agency, especially not the Fed, had anything to do
> with either the creation or bursting of the housing market bubble
> and the subprime crisis.
>
<steaming pile of crap snipped>
One of the principal causes of the Wall Street Crash and Depression of
the 1920s and 1930s was irresponsible banking activity.
With a new flood of money coming their way in the early- and mid-1920s,
commercial banks themselves became more speculative, investing heavily
in the stock market, often without adequate reserves, and buying new
issues of capital for resale to the public. Banks would also issue
excess loans, often unsound, to the companies in which they had
invested, and then advise their clients to invest in those same stocks.
The result of this financial shell game, not surprisingly, was the 1929
crash of the entire U.S. and much of the global economy.
Glass-Steagall's purpose was to create a regulatory barrier between the
commercial and investment banking sectors, to assure consumers that
their money was safe (the Federal Deposit Insurance Corporation was also
part of the law), and to prevent bankers from using commercial paper to
speculate wildly on stocks-?in short, to abet Franklin Rooseveltïŋ―s
efforts to save capitalism.
The basic idea isn't hard to follow. You take a dollar and borrow nine
against it; then you take that $10 fund and borrow $90; then you take
your $100 fund and, so long as the public is still lending, borrow and
invest $900. If the last fund in the line starts to lose value, you no
longer have the money to pay back your investors, and everyone gets
massacred.
And that is what happened!
------
<http://voices.washingtonpost.com/livecoverage/2008/10/after_bailout_aig_
executives_h.html>
After Bailout, AIG Executives Head to Resort
Less than a week after the federal government offered an
$85 billion bailout
to insurance giant AIG, the company held a week-long retreat for its
executives at the luxury St. Regis Resort in Monarch Beach, Calif.,
running up a tab of $440,000, Rep. Henry Waxman (D-Calif.) said today at
the the opening of a House committee hearing about the near-failure of
the insurance giant.
Showing a photograph of the resort, Waxman said the executives spent
$200,000 for rooms, $150,000 for meals and $23,000 for the spa.
"Less than a week after the taxpayers rescued AIG, company executives
could be found wining and dining at one of the most exclusive resorts in
the nation," Waxman said. "We will ask whether any of this makes sense. "
-------
<http://www.rollingstone.com/politics/news/the-great-american-bubble-mach
ine-20100405>
The Great American Bubble Machine
From tech stocks to high gas prices, Goldman Sachs has engineered every
major market manipulation since the Great Depression -- and they're
about to do it again
-------
So it wasn't do gooder Liberals who caused the economic crash, CRud, it
was Wall Street's greed.
I realize this is too much for you to understand, CRud, so I'll stop by
from time to time to point out what a giant horses ass you are.
<http://alangraysonemails.tumblr.com/post/64719421164/the-tea-party-no-mo
re-popular-than-the-klan>
<http://www.gallup.com/poll/160373/democrats-racially-diverse-republicans
-mostly-white.aspx>
Democrats Racially Diverse; Republicans Mostly White
Extinction isn't just for Dinosaurs anymore, join the "Guardians of
Privilege" on their Lemming's Run to Oblivion.
Tea,
the new Kool Aid
--
Remember Rachel Corrie
<http://www.rachelcorrie.org/>
Welcome to the New America.
<http://www.youtube.com/watch?v=hA736oK9FPg>
CRud yanoza <LaLaLa...@fingersinears.con> wrote:
You just get nuttier, and nuttier, CRud.
Let's just hit a couple of the high spots, shall we?
> CRA wasn't the only factor in the Democrat-induced destruction of the
> housing market and the economy, but it was a big one.
>
>
> "The CRA Scam and its Defenders"
>
> by Thomas J. DiLorenzo
Thomas J. DiLorenzo resume, includes his 2006 book, "Lincoln Unmasked:
What You're Not Supposed to Know About Dishonest Abe." DiLorenzo
charges that Lincoln was "the first dictator" and a "mass murderer" and
decreed that "Hitler was a Lincolnite." Thomas J. DiLorenzo works for a
Southern nationalist organization, "The League of the South", a
neo-Confederate group that advocates for a second southern secession and
a society dominated by European Americans."
<http://archive.lewrockwell.com/dilorenzo/dilorenzo191.html>
>
>
> "Liberal" economists are overjoyed by the bursting of the housing
> bubble, for it provides them with what they believe is another "market
> failure" story. "Most analysts see the sub-prime crisis as a market
> failure," Robert Gordon gleefully declared in the April 7 online edition
> of The American Prospect magazine, edited by Robert Kuttner.
http://www.nytimes.com/2008/10/24/business/economy/24panel.html
Greenspan Concedes Error on Regulation
But on Thursday, almost three years after stepping down as chairman of
the Federal Reserve, a humbled Mr. Greenspan admitted that he had put
too much faith in the self-correcting power of free markets and had
failed to anticipate the self-destructive power of wanton mortgage
lending.
ïŋ―Those of us who have looked to the self-interest of lending
institutions to protect shareholdersïŋ― equity, myself included, are in a
state of shocked disbelief,ïŋ― he told the House Committee on Oversight
and Government Reform.
ïŋ―You had the authority to prevent irresponsible lending practices that
led to the subprime mortgage crisis. You were advised to do so by many
others,ïŋ― said Representative Henry A. Waxman of California, chairman of
the committee. ïŋ―Do you feel that your ideology pushed you to make
decisions that you wish you had not made?ïŋ―
Mr. Greenspan conceded: ïŋ―Yes, Iïŋ―ve found a flaw. I donïŋ―t know how
significant or permanent it is. But Iïŋ―ve been very distressed by that
fact.ïŋ―
>
> Gordon does not define what an "analyst" is, and does not cite any
> survey to support his claim. One suspects that his opinion is based on
> an informal survey of his like-minded, left-wing friends.
>
> Gordon is a defender of the federal government's 1977 Community
> Reinvestment Act (CRA) under which the Fed and other financial
> regulators have pressured/extorted banks into making more loans to
> less-than-creditworthy borrowers than they would normally be willing to
> risk.
Bull pucky.
> Gordon does not define what an "analyst" is, and does not cite any
> survey to support his claim. One suspects that his opinion is based on
> an informal survey of his like-minded, left-wing friends.
>
> Gordon is a defender of the federal government's 1977 Community
> Reinvestment Act (CRA) under which the Fed and other financial
> regulators have pressured/extorted banks into making more loans to
> less-than-creditworthy borrowers than they would normally be willing to
> risk.
Community Reinvestment Act of 1977
Sec. 802.
(a) The Congress finds thatïŋ―
(1) regulated financial institutions are required by law to
demonstrate that their deposit facilities serve the convenience and
needs of the communities in which they are chartered to do business;
(2) the convenience and needs of communities include the need for
credit services as well as deposit services; and
(3) regulated financial institutions have continuing and affirmative
obligation to help meet the credit needs of the local communities in
which they are chartered.
(b) It is the purpose of this title to require each appropriate
Federal financial supervisory agency to use its authority when examining
financial institutions, to encourage such institutions to help meet the
credit needs of the local communities in which they are chartered
consistent with the safe and sound operation of such institutions.
-----
I know that you are slow CRud, so let me just emphasize the salient
portion of the CRA, Sec. 802
to encourage such institutions (banks)
to help meet the credit needs of the local communities in which they are
chartered
consistent with the safe and sound operation of such institutions.
-----
Now, CRud, that means that banks can't red line, and if a borrower meets
the banks criteria, they have to loan to them. No special rules, no
underwriting loans, just practices that are consistent with the safe and
sound operation of such institutions.
> As such, Gordon believes in the following propositions:
>
> 1. runaway greed ("market failure") on the part of lenders is the
> cause of the subprime crisis;
<http://www.amazon.com/Freefall-America-Markets-Sinking-Economy/dp/B007SR
WER0/ref=sr_1_2?s=books&ie=UTF8&qid=1344042147&sr=1-2&keywords=Freefall>
JOSEPH E. STIGLITZ
an American economist and a professor at Columbia University. He is a
recipient of the Nobel Memorial Prize in Economic Sciences (2001) and
the John Bates Clark Medal (1979). He is also the former Senior Vice
President and Chief Economist of the World Bank
In the long list of culprits, it is natural to begin at the bottom, with
the mortgage originators. Mortgage companies had pushed exotic mortgages
on to millions of people, many of whom did not know what they were
getting into. But the mortgage companies could not have done their
mischief without being aided and abetted by the banks and rating
agencies. The banks bought the mortgages and repackaged them, selling
them on to unwary investors. U.S. banks and financial institutions had
boasted about their clever new investment instruments. They had created
new products which, while touted as instruments for managing ? risk,
were so dangerous that they threatened to bring down the U.S. financial
system. The rating agencies, which should have checked the growth of
these toxic instruments, instead gave them a seal of approval, which
encouraged othersïŋ―including pension funds looking for safe places to put
money that workers had set aside for their retirementïŋ―in
the United States and overseas, to buy them.
In short, America's financial markets had failed to perform their
essential societal functions of managing risk, allocating capital, and
mobilizing savings while keeping transaction costs low. Instead, they
had created risk, misallocated capital, and encouraged excessive
indebtedness while imposing high transaction costs. At their peak in
2007, the bloated financial markets absorbed 41 percent of profits in
the corporate sector.9
>
> 2. these same greedy lenders routinely ignore billions of dollars in
> potential profits in lower-income communities because of their
> systemic racism, stupidity, or both ïŋ― hence the need for the
> 2. these same greedy lenders routinely ignore billions of dollars in
> potential profits in lower-income communities because of their
> CRA; and
<http://www.housingwire.com/2011/11/17/crl-good-credit-minorities-receive
d-3-times-more-subprime-loans-than-whites>
CRL: Good-credit minorities received 3 times more subprime loans than
whites
Blacks and Hispanics with credit scores higher than 660 received
subprime and option adjustable-rate mortgages three times as often as
white borrowers in similar financial standing between 2004 and 2008,
according to a new study from the Center for Responsible Lending.
>
> 3. no government agency, especially not the Fed, had anything to do
> with either the creation or bursting of the housing market bubble
> and the subprime crisis.
>
One of the principal causes of the Wall Street Crash and Depression of
the 1920s and 1930s was irresponsible banking activity.
With a new flood of money coming their way in the early- and mid-1920s,
commercial banks themselves became more speculative, investing heavily
in the stock market, often without adequate reserves, and buying new
issues of capital for resale to the public. Banks would also issue
excess loans, often unsound, to the companies in which they had
invested, and then advise their clients to invest in those same stocks.
The result of this financial shell game, not surprisingly, was the 1929
crash of the entire U.S. and much of the global economy.
Glass-Steagall's purpose was to create a regulatory barrier between the
commercial and investment banking sectors, to assure consumers that
their money was safe (the Federal Deposit Insurance Corporation was also
part of the law), and to prevent bankers from using commercial paper to
speculate wildly on stocks-?in short, to abet Franklin Rooseveltïŋ―s
efforts to save capitalism.
The basic idea isn't hard to follow. You take a dollar and borrow nine
against it; then you take that $10 fund and borrow $90; then you take
your $100 fund and, so long as the public is still lending, borrow and
invest $900. If the last fund in the line starts to lose value, you no
longer have the money to pay back your investors, and everyone gets
massacred.
And that is what happened!
------
<http://voices.washingtonpost.com/livecoverage/2008/10/after_bailout_aig_
executives_h.html>
After Bailout, AIG Executives Head to Resort
Less than a week after the federal government offered an
$85 billion bailout
to insurance giant AIG, the company held a week-long retreat for its
executives at the luxury St. Regis Resort in Monarch Beach, Calif.,
running up a tab of $440,000, Rep. Henry Waxman (D-Calif.) said today at
the the opening of a House committee hearing about the near-failure of
the insurance giant.
Showing a photograph of the resort, Waxman said the executives spent
$200,000 for rooms, $150,000 for meals and $23,000 for the spa.
"Less than a week after the taxpayers rescued AIG, company executives
could be found wining and dining at one of the most exclusive resorts in
the nation," Waxman said. "We will ask whether any of this makes sense. "
-------
<http://www.rollingstone.com/politics/news/the-great-american-bubble-mach
ine-20100405>
The Great American Bubble Machine
From tech stocks to high gas prices, Goldman Sachs has engineered every
major market manipulation since the Great Depression -- and they're
about to do it again
-------
So it wasn't do gooder Liberals who caused the economic crash, CRud, it
was Wall Street's greed.
I realize this is too much for you to understand, CRud, so I'll stop by
from time to time to point out what a giant horses ass you are.
<http://alangraysonemails.tumblr.com/post/64719421164/the-tea-party-no-mo
re-popular-than-the-klan>
<http://www.gallup.com/poll/160373/democrats-racially-diverse-republicans
-mostly-white.aspx>
Democrats Racially Diverse; Republicans Mostly White
Extinction isn't just for Dinosaurs anymore, join the "Guardians of
Privilege" on their Lemming's Run to Oblivion.
Tea,
the new Kool Aid
--
Remember Rachel Corrie
<http://www.rachelcorrie.org/>
Welcome to the New America.
<http://www.youtube.com/watch?v=hA736oK9FPg>
Rudy Canoza
Jan 7, 2014, 10:04:43 AM1/7/14
to
On 1/6/2014 9:58 PM, "billy", impotent squat-to-piss no-fight *shitbag*
bitch, lied:
> In article <72ecc$52cae31b$414e828e$54...@EVERESTKC.NET>,
> Rudy Canoza <LaLaLa...@fingersinears.con> wrote:
>
> You just
Keep kicking your little punk ass and rubbing your little button nose in
the dogshit. Yes, indeedy, "billy" bitch.
>> CRA wasn't the only factor in the Democrat-induced destruction of the
>> housing market and the economy, but it was a big one.
>>
>>
>> "The CRA Scam and its Defenders"
>>
>> by Thomas J. DiLorenzo
>
> A real top drawer nut case here.
We notice you can't refute anything he says.
>>
>> "Liberal" economists are overjoyed by the bursting of the housing
>> bubble, for it provides them with what they believe is another "market
>> failure" story. "Most analysts see the sub-prime crisis as a market
>> failure," Robert Gordon gleefully declared in the April 7 online edition
>> of The American Prospect magazine, edited by Robert Kuttner.
>
> Greenspan saw it as a market failure too.
>
> http://www.nytimes.com/2008/10/24/business/economy/24panel.html
>
> Greenspan Concedes Error on Regulation
Ha ha ha ha ha! So apparently he saw it as a "regulatory" failure, not
a market failure.
It wasn't a market failure. There has never been a market failure.
Markets don't "fail" unless government fucks with them.
>> Gordon does not define what an "analyst" is, and does not cite any
>> survey to support his claim. One suspects that his opinion is based on
>> an informal survey of his like-minded, left-wing friends.
>>
>> Gordon is a defender of the federal government's 1977 Community
>> Reinvestment Act (CRA) under which the Fed and other financial
>> regulators have pressured/extorted banks into making more loans to
>> less-than-creditworthy borrowers than they would normally be willing to
>> risk.
>
> Bull pucky.
No.
>> As such, Gordon believes in the following propositions:
>>
>> 1. runaway greed ("market failure") on the part of lenders is the
>> cause of the subprime crisis;
>
> Freefall:
No. Comment on what Gordon said. Leave your sophomoric shit out of it.
>>
>> 2. these same greedy lenders routinely ignore billions of dollars in
>> potential profits in lower-income communities because of their
>> systemic racism, stupidity, or both � hence the need for the
>> CRA; and
>
> <http://www.housingwire.com
No. Comment on what was written, "billy" bitch. Did "greedy" lenders
leave huge fees and commissions unclaimed because they were "racist"?
You're a fuckwit, "billy" bitch. You concede defeat every time.
>>
>> 3. no government agency, especially not the Fed, had anything to do
>> with either the creation or bursting of the housing market bubble
>> and the subprime crisis.
>>
> <steaming pile of crap snipped>
["billy" bitch's freighter-load of bullshit flushed, and the analysis
restored]
>>
>> The first two propositions flatly contradict each other, whereas the
>> third is unequivocally false. Fed policy � which is not even mentioned
>> by Gordon in an article that is ostensibly about the cause of the
>> subprime crisis � is the cause of the boom-and-bust cycle that has
>> caused the housing bubble and its bursting. Not "market failure" but Fed
>> policy.
>>
"billy" bitch can't answer.
I win again!
bitch, lied:
> In article <72ecc$52cae31b$414e828e$54...@EVERESTKC.NET>,
> Rudy Canoza <LaLaLa...@fingersinears.con> wrote:
>
> You just
Keep kicking your little punk ass and rubbing your little button nose in
the dogshit. Yes, indeedy, "billy" bitch.
>> CRA wasn't the only factor in the Democrat-induced destruction of the
>> housing market and the economy, but it was a big one.
>>
>>
>> "The CRA Scam and its Defenders"
>>
>> by Thomas J. DiLorenzo
>
> A real top drawer nut case here.
>>
>> "Liberal" economists are overjoyed by the bursting of the housing
>> bubble, for it provides them with what they believe is another "market
>> failure" story. "Most analysts see the sub-prime crisis as a market
>> failure," Robert Gordon gleefully declared in the April 7 online edition
>> of The American Prospect magazine, edited by Robert Kuttner.
>
> Greenspan saw it as a market failure too.
>
> http://www.nytimes.com/2008/10/24/business/economy/24panel.html
>
> Greenspan Concedes Error on Regulation
a market failure.
It wasn't a market failure. There has never been a market failure.
Markets don't "fail" unless government fucks with them.
>> Gordon does not define what an "analyst" is, and does not cite any
>> survey to support his claim. One suspects that his opinion is based on
>> an informal survey of his like-minded, left-wing friends.
>>
>> Gordon is a defender of the federal government's 1977 Community
>> Reinvestment Act (CRA) under which the Fed and other financial
>> regulators have pressured/extorted banks into making more loans to
>> less-than-creditworthy borrowers than they would normally be willing to
>> risk.
>
> Bull pucky.
>> As such, Gordon believes in the following propositions:
>>
>> 1. runaway greed ("market failure") on the part of lenders is the
>> cause of the subprime crisis;
>
> Freefall:
>>
>> 2. these same greedy lenders routinely ignore billions of dollars in
>> potential profits in lower-income communities because of their
>> CRA; and
>
> <http://www.housingwire.com
No. Comment on what was written, "billy" bitch. Did "greedy" lenders
leave huge fees and commissions unclaimed because they were "racist"?
You're a fuckwit, "billy" bitch. You concede defeat every time.
>>
>> 3. no government agency, especially not the Fed, had anything to do
>> with either the creation or bursting of the housing market bubble
>> and the subprime crisis.
>>
> <steaming pile of crap snipped>
restored]
>>
>> The first two propositions flatly contradict each other, whereas the
>> third is unequivocally false. Fed policy � which is not even mentioned
>> by Gordon in an article that is ostensibly about the cause of the
>> subprime crisis � is the cause of the boom-and-bust cycle that has
>> caused the housing bubble and its bursting. Not "market failure" but Fed
>> policy.
>>
I win again!
spamthespammers
Jan 7, 2014, 6:39:53 PM1/7/14
to
On 1/6/2014 9:58 PM, Billy wrote:
========================================================
TOPIC HAS NOTHING TO DO WITH THESE NEWSGROUPS - DROP DEAD
========================================================
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Subject: Re: The CRA Scam and its Defenders
Organization: Camp Runamuck
References: <72ecc$52cae31b$414e828e$54...@EVERESTKC.NET>
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========================================================
TOPIC HAS NOTHING TO DO WITH THESE NEWSGROUPS - DROP DEAD
========================================================
Path: not-for-mail
From: Billy <wild...@withouta.net>
Newsgroups:
alt.religion.christian,alt.california,or.politics,alt.politics.democrats,talk.politics.guns,can.politics,rec.crafts.metalworking,rec.bicycles.tech,misc.survivalism,tx.guns
Subject: Re: The CRA Scam and its Defenders
Organization: Camp Runamuck
References: <72ecc$52cae31b$414e828e$54...@EVERESTKC.NET>
User-Agent: MT-NewsWatcher/3.5.2 (Intel Mac OS X)
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Rudy Canoza
Jan 7, 2014, 9:19:06 PM1/7/14
to
On 1/6/2014 9:58 PM, "billy", impotent squat-to-piss no-fight *shitbag*
bitch, lied:
> In article <72ecc$52cae31b$414e828e$54...@EVERESTKC.NET>,
> Rudy Canoza <LaLaLa...@fingersinears.con> wrote:
>
> You
[flush "billy" bitch dribble]
bitch, lied:
> In article <72ecc$52cae31b$414e828e$54...@EVERESTKC.NET>,
> Rudy Canoza <LaLaLa...@fingersinears.con> wrote:
>
> You
More:
In seeking to reverse their falling market share of originations,
the GSEs began to underwrite mortgages that have been
characterized variously as �Alternative A�, �Expanded Approval�
or �A Minus� mortgages. These mortgages were ultimately similar
in credit quality to the older definitions of �sub-prime�
mortgages. The GSEs also began to accept some �low-documentation�
mortgages that had lower loan-to-value ratios than private label
issuance and involved lower loan amounts.
In seeking to maintain mortgage securitization market share, the
GSEs began to concentrate more on their relationships with larger
mortgage originators, assisting in the development of the large
�aggregator� model where underwriting partners, such as
Countrywide Credit and Washington Mutual, provided ever larger
percentages of the originated mortgages. As these large
aggregators turned more to low documentation, alternative A, and
interest-only adjustable rate mortgages (ARMs), the purchase
wherewithal of the GSEs lent support to the growth of these
alternative mortgage markets. The GSEs in turn appreciated the
scale of mortgage operations and servicing capabilities of the
large aggregators.
Starting in 2004, the GSE portfolios of subprime and
Alternative-A loans and securities began to grow rapidly with the
GSEs becoming the largest purchasers of such mortgages between
2004 and 2007. Eventually, the total GSE exposures to Alternative
A and ARM mortgages from direct holdings and mortgage guarantees
came to represent about 40% of the value of these mortgages.
Ultimately, this concentration of loan origination risk and the
loosening of underwriting standards caused sufficient loan loss
write-offs and loss reserve accumulations to render the GSEs
insufficiently capitalized.
http://www.aspiriant.com/library/insight/08q3/article2.html
CRA created the initial big pressure to lend to deadbeats with bad or no
credit. The Clinton corruption of the GSEs strengthened it.
jim
Jan 7, 2014, 10:30:16 PM1/7/14
to
Rudy Canoza wrote:
>
> In seeking to reverse their falling market share of originations,
> the GSEs began to underwrite mortgages that have been
> or “A Minus” mortgages. These mortgages were ultimately similar
> in credit quality to the older definitions of “sub-prime”
> mortgages. The GSEs also began to accept some “low-documentation”
> mortgages that had lower loan-to-value ratios than private label
> issuance and involved lower loan amounts.
The GSEs had the best loan performance record in the entire
> issuance and involved lower loan amounts.
US mortgage industry. GSE backed loans had much lower concentration
of foreclosures and delinquency than loans retained by lenders or
loans financed by private label securities. That outstanding record
of the lowest loan failure rate held for all the years before
and after the financial meltdown.
http://www.fhfa.gov/webfiles/16711/RiskChars9132010.pdf
Despite the overwhelming evidence that GSE lending was
the most prudent (proved by loan performance) Rudy keeps
trying to sell his fairy tale that the GSEs were the ones
buying up bad loans when in fact the evidence shows
they were the only ones staying away from bad loans.
---
This email is free from viruses and malware because avast! Antivirus protection is active.
http://www.avast.com
Rudy Canoza
Jan 7, 2014, 10:52:45 PM1/7/14
to
On 1/7/2014 7:30 PM, jim, front boy for a left-wing disinformation
collective, lied:
> Rudy Canoza wrote:
>> On 1/6/2014 9:58 PM, "billy", impotent squat-to-piss no-fight *shitbag*
>> bitch, lied:
>>
>>> In article <72ecc$52cae31b$414e828e$54...@EVERESTKC.NET>,
>>> Rudy Canoza <LaLaLa...@fingersinears.con> wrote:
>>>
>>> You
>>
>> [flush "billy" bitch dribble]
>>
>>
>> More:
>>
>> in credit quality to the older definitions of �sub-prime�
>> mortgages. The GSEs also began to accept some �low-documentation�
> The GSEs
The GSEs were corrupted by Democrats, contributed massively to the
bubble and then its collapse, and went bankrupt.
You were saying?
collective, lied:
> Rudy Canoza wrote:
>> On 1/6/2014 9:58 PM, "billy", impotent squat-to-piss no-fight *shitbag*
>> bitch, lied:
>>
>>> In article <72ecc$52cae31b$414e828e$54...@EVERESTKC.NET>,
>>> Rudy Canoza <LaLaLa...@fingersinears.con> wrote:
>>>
>>> You
>>
>> [flush "billy" bitch dribble]
>>
>>
>> More:
>>
>> In seeking to reverse their falling market share of originations,
>> the GSEs began to underwrite mortgages that have been
>> the GSEs began to underwrite mortgages that have been
>> characterized variously as �Alternative A�, �Expanded Approval�
>> or �A Minus� mortgages. These mortgages were ultimately similar
>> in credit quality to the older definitions of �sub-prime�
>> mortgages. The GSEs also began to accept some �low-documentation�
>> mortgages that had lower loan-to-value ratios than private label
>> issuance and involved lower loan amounts.
>>
>> issuance and involved lower loan amounts.
>>
The GSEs were corrupted by Democrats, contributed massively to the
bubble and then its collapse, and went bankrupt.
You were saying?
PrecisionmachinisT
Jan 8, 2014, 1:14:10 AM1/8/14
to
"jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
news:nrSdnfSbKrXUW1HP...@bright.net...
> Despite the overwhelming evidence that GSE lending was
> the most prudent (proved by loan performance) Rudy keeps
> trying to sell his fairy tale that the GSEs were the ones
> buying up bad loans when in fact the evidence shows
> they were the only ones staying away from bad loans.
The banks weren't loaning money to fast food workers and street beggars.
-the vast majority of those who lost their homes and jobs probably were
firmly within the middle class; with one or both spouses working in the
building supplies, home construction, or mortgage lending arena.
Rudy Canoza
Jan 8, 2014, 1:29:51 AM1/8/14
to
On 1/7/2014 10:14 PM, PrecisionmachinisT wrote:
> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
> news:nrSdnfSbKrXUW1HP...@bright.net...
>
>> Despite the overwhelming evidence that GSE lending was
>> the most prudent (proved by loan performance) Rudy keeps
>> trying to sell his fairy tale that the GSEs were the ones
>> buying up bad loans when in fact the evidence shows
>> they were the only ones staying away from bad loans.
>
> What bad loans?
>
> The banks weren't loaning money to fast food workers and street beggars.
Actually, they were - because the Democrats demanded it.
> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
> news:nrSdnfSbKrXUW1HP...@bright.net...
>
>> Despite the overwhelming evidence that GSE lending was
>> the most prudent (proved by loan performance) Rudy keeps
>> trying to sell his fairy tale that the GSEs were the ones
>> buying up bad loans when in fact the evidence shows
>> they were the only ones staying away from bad loans.
>
> What bad loans?
>
> The banks weren't loaning money to fast food workers and street beggars.
jim
Jan 8, 2014, 9:33:44 AM1/8/14
to
PrecisionmachinisT wrote:
>
> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
> news:nrSdnfSbKrXUW1HP...@bright.net...
>
> > Despite the overwhelming evidence that GSE lending was
> > the most prudent (proved by loan performance) Rudy keeps
> > trying to sell his fairy tale that the GSEs were the ones
> > buying up bad loans when in fact the evidence shows
> > they were the only ones staying away from bad loans.
>
> What bad loans?
The typical bad loan involved a concerted effort of fraud
between real estate agents, lenders, appraisers and borrowers.
Tons of loans were given to borrowers who did not have the
income, assets, down payment or credit rating that would
justify the loan.
The question is what was the reason for these fraudulent
loans. There is no doubt that the only reason was the
expectation of huge profits. Before the financial meltdown
profits on subprime loans were much higher than profits on
prime loans because subprime loans had high interest rates and
large fees. Subprime lenders were not concerned about
future losses. It wasn't their money that was going to be lost.
http://securitization.weebly.com/private-label-mbs.html
>
> The banks weren't loaning money to fast food workers and street beggars.
not pay, but private mortgage companies were. Also, most bad loans
were being financed by private label securities.
But in some cases fraudulent mortgages were sold to the GSEs.
Fortunately, the GSEs can and have recovered billions of
dollars from some of the worst offenders who sold loans
that were supposed to conform to GSE standards but in fact
the loans did not. Lenders that sell loans to the GSEs that turn
out to not meet GSE standards are contractually obligated to
buy back the defective loans.
http://www.reuters.com/article/2013/10/23/us-bankofamerica-hustle-idUSBRE99M14B20131023
>
> -the vast majority of those who lost their homes and jobs probably were
> firmly within the middle class; with one or both spouses working in the
> building supplies, home construction, or mortgage lending arena.
credit risks when they became long term unemployed.
When the market crashed the failure rates for good
loans jumped from less than one percent to 3%-6%.
The bad loans had nearly 100% failure rate.
Rudy Canoza
Jan 8, 2014, 11:57:54 AM1/8/14
to
On 1/8/2014 6:33 AM, jim, front boy for a left-wing disinformation
there would be.
collective, lied:
>
>
> PrecisionmachinisT wrote:
>>
>> jim, front boy for a left-wing disinformation collective, lied:
>>
>
>
> PrecisionmachinisT wrote:
>>
>> jim, front boy for a left-wing disinformation collective, lied:
>>
>>> Despite the overwhelming evidence that GSE lending was
>>> the most prudent (proved by loan performance) Rudy keeps
>>> trying to sell his fairy tale that the GSEs were the ones
>>> buying up bad loans when in fact the evidence shows
>>> they were the only ones staying away from bad loans.
>>
>> What bad loans?
>
> There is no doubt that there were plenty of bad loans.
CRA and the demolition of underwriting standards at the GSEs guaranteed
>>> the most prudent (proved by loan performance) Rudy keeps
>>> trying to sell his fairy tale that the GSEs were the ones
>>> buying up bad loans when in fact the evidence shows
>>> they were the only ones staying away from bad loans.
>>
>> What bad loans?
>
> There is no doubt that there were plenty of bad loans.
there would be.
prime cut
Jan 8, 2014, 1:06:43 PM1/8/14
to
On 1/7/2014 8:30 PM, jim wrote:
> The GSEs had the best
FUCK OFF LYING LEFTURD:
> The GSEs had the best
http://www.businessinsider.com/three-ways-the-cra-pushed-countrywide-to-lower-lending-standards-2009-6
When we discuss the role of the Community Reinvestment Act and other
fair lending rules in contributing to lax lending standards, people bent
on exonerating the CRA often point out that many of the questionable
loans were made by non-depository mortgage companies not covered by the CRA.
Barry Ritholtz has been a prominent critic of the theory that the CRA
has some culpability for lax lending. He has pointed out that 50% of
subprime loans were made by mortgage service companies not subject
comprehensive federal supervision. �How was this caused by either CRA or
GSEs?� Barry asked.
As much as I respect Barry�s formidable analytical powers, I�m afraid
he�s taken too narrow of the view of the matter. His question is far
easier to answer than he suspects. Regulations often touch those who are
not directly regulated. Indeed, the regulation of one group in a
marketplace will almost always wind up affecting other groups.
More concretely, there are three very specific ways in which the CRA
nudged Countrywide and other mortgage companies to adopt lax lending
standards.
1. The Creation Of Artificial Demand For Low-Income Mortgages. Banks
that were regulated by the CRA often found it difficult to meet their
obligations under the CRA directly. Long standing lending practices by
local loan officers were a big problem. But as banks expanded their
deposit bases and other businesses, they often found that they were at
risk of regulators discovering they had fallen behind in making CRA loans.
One way of addressing this problem was buying the loans in the secondary
market. Mortgage companies like Countrywide began to serve this entirely
artificial demand for CRA loans. Countrywide marketed its loans directly
to banks as a way for them to meet CRA obligations. "The result of these
efforts is an enormous pipeline of mortgages to low- and moderate-income
buyers. With this pipeline, Countrywide Securities Corporation (CSC) can
potentially help you meet your Community Reinvestment Act (CRA) goals by
offering both whole loan and mortgage-backed securities that are
eligible for CRA credit,� a Countrywide advertisement on its website read.
2. The Threat Of Regulation Is Often As Good As Regulation. It is
highly misleading to claim that just because mortgage companies were not
technically under the CRA that they were not required by regulators to
meet similar tests. In fact, regulators threatened that if the mortgage
companies didn�t step up to the plate by relaxing lending standards they
would be brought under the CRA umbrella and required to do so.
Here�s how City Journal explains the dynamic:
To meet their goals, the two mortgage giants enlisted large
lenders�including nonbanks, which weren�t covered by the CRA�into the
effort. Freddie Mac began an �alternative qualifying� program with the
Sears Mortgage Corporation that let a borrower qualify for a loan with a
monthly payment as high as 50 percent of his income, at a time when most
private mortgage companies wouldn�t exceed 33 percent. The program also
allowed borrowers with bad credit to get mortgages if they took
credit-counseling classes administered by Acorn and other nonprofits.
Subsequent research would show that such classes have little impact on
default rates.
Pressuring nonbank lenders to make more loans to poor minorities didn�t
stop with Sears. If it didn�t happen, Clinton officials warned, they�d
seek to extend CRA regulations to all mortgage makers. In Congress,
Representative Maxine Waters called financial firms not covered by the
CRA �among the most egregious redliners.� To rebuff the criticism, the
Mortgage Bankers Association (MBA) shocked the financial world by
signing a 1994 agreement with the Department of Housing and Urban
Development (HUD), pledging to increase lending to minorities and join
in new efforts to rewrite lending standards. The first MBA member to
sign up: Countrywide Financial, the mortgage firm that would be at the
core of the subprime meltdown.
3. The CRA Distorted the Mortgage Market. With banks offering
mortgages with high loan to value, delayed payment schedules and other
enticing features, the mortgage companies would have quickly found
themselves unable to compete if they didn�t offer similar loans. The
requirement to offer risky loans from banks created a situation where
other lenders found they had to offer similar products if they wanted to
expand their business.
Of course, Angelo Mozillo didn't need very much prompting on this score.
He believed exactly what the CRA regulators believed: that these lax
lending practices were the wave of the future, democratizing the glories
of home ownership.
prime cut
Jan 8, 2014, 1:07:04 PM1/8/14
to
On 1/8/2014 7:33 AM, jim wrote:
> Banks generally were not making loans to people
> Banks generally were not making loans to people
BeamMeUpScotty
Jan 8, 2014, 4:35:56 PM1/8/14
to
loss of the ability to sustain their economy.
In Detroit the Progressives were going to bulldoze their failure to hide
it from public view. How have the Progressives hidden it from view on
the National level?
--
If you haven't found the lie in what a Liberal told you, then you
didn't dig deep enough.
PrecisionmachinisT
Jan 8, 2014, 6:48:02 PM1/8/14
to
"jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message news:trSdnf_21LBW_FDP...@bright.net...
>
>
> PrecisionmachinisT wrote:
>>
>> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
>> news:nrSdnfSbKrXUW1HP...@bright.net...
>>
>> > Despite the overwhelming evidence that GSE lending was
>> > the most prudent (proved by loan performance) Rudy keeps
>> > trying to sell his fairy tale that the GSEs were the ones
>> > buying up bad loans when in fact the evidence shows
>> > they were the only ones staying away from bad loans.
>>
>> What bad loans?
>
> There is no doubt that there were plenty of bad loans.
Of course, but there have always been bad loans...
>
> PrecisionmachinisT wrote:
>>
>> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
>> news:nrSdnfSbKrXUW1HP...@bright.net...
>>
>> > Despite the overwhelming evidence that GSE lending was
>> > the most prudent (proved by loan performance) Rudy keeps
>> > trying to sell his fairy tale that the GSEs were the ones
>> > buying up bad loans when in fact the evidence shows
>> > they were the only ones staying away from bad loans.
>>
>> What bad loans?
>
> There is no doubt that there were plenty of bad loans.
What always seems to be lacking is evidence that the number of "bad loans" had substantially increased as a result of legislative changes in the decade or so prior to the collapse.
> The typical bad loan involved a concerted effort of fraud
> between real estate agents, lenders, appraisers and borrowers.
> Tons of loans were given to borrowers who did not have the
> income, assets, down payment or credit rating that would
> justify the loan.
>
> The question is what was the reason for these fraudulent
> loans. There is no doubt that the only reason was the
--thanks for making my point...
> The bad loans had nearly 100% failure rate.
jim
Jan 8, 2014, 8:38:33 PM1/8/14
to
PrecisionmachinisT wrote:
>
> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message news:trSdnf_21LBW_FDP...@bright.net...
> >
> >
> > PrecisionmachinisT wrote:
> >>
> >> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
> >> news:nrSdnfSbKrXUW1HP...@bright.net...
> >>
> >> > Despite the overwhelming evidence that GSE lending was
> >> > the most prudent (proved by loan performance) Rudy keeps
> >> > trying to sell his fairy tale that the GSEs were the ones
> >> > buying up bad loans when in fact the evidence shows
> >> > they were the only ones staying away from bad loans.
> >>
> >> What bad loans?
> >
> > There is no doubt that there were plenty of bad loans.
>
> Of course, but there have always been bad loans...
>
> What always seems to be lacking is evidence that the number of "bad loans" had substantially increased as a result of legislative changes in the decade or so prior to the collapse.
was driven by the huge amount of investment money that wanted to
invest in mortgage backed securities because it was believed that
they were extremely safe investments. The credit rating agencies
created that belief by giving triple A ratings to securities that
were loaded up with bad loans.
no longer flip the house. Most of the loans given to people
who couldn't afford them were adjustable rate mortgage. They
usually had about 2 years of low mortgage payments and then
the payments double. This type of loan were huge money
makers for subprime lenders while house prices were
rising rapidly.
>
> --thanks for making my point...
>
> > The bad loans had nearly 100% failure rate.
>
> Bad loans by definition are ALWAYS unlikely to be paid back.
prices. People with no income could get a loan with
no down payment and if they managed to flip the
house they could walk away with a profit. The lender
made a bundle also because there was always a sizable
prepayment penalty. That's how the lender got the biggest
cut of the realized equity gains.
Rudy Canoza
Jan 8, 2014, 8:47:10 PM1/8/14
to
On 1/8/2014 3:48 PM, PrecisionmachinisT wrote:
>
> "jim", front boy for a left-wing disinformation collective, lied:
>>
>>
>> PrecisionmachinisT wrote:
>>>
>>> "jim", front boy for a left-wing disinformation collective, lied:
underwriting standards got and the more the government beefed up CRA
enforcement, the more bad loans were written.
>
>> The typical bad loan involved a concerted effort of fraud
>> between real estate agents, lenders, appraisers and borrowers.
>> Tons of loans were given to borrowers who did not have the
>> income, assets, down payment or credit rating that would
>> justify the loan.
>>
>> The question is what was the reason for these fraudulent
>> loans. There is no doubt that the only reason was the
>
> Greed.
No, CRA and government *begging* lenders to make them.
>
> "jim", front boy for a left-wing disinformation collective, lied:
>>
>>
>> PrecisionmachinisT wrote:
>>>
>>> "jim", front boy for a left-wing disinformation collective, lied:
>>>
>>>> Despite the overwhelming evidence that GSE lending was
>>>> the most prudent (proved by loan performance) Rudy keeps
>>>> trying to sell his fairy tale that the GSEs were the ones
>>>> buying up bad loans when in fact the evidence shows
>>>> they were the only ones staying away from bad loans.
>>>
>>> What bad loans?
>>
>> There is no doubt that there were plenty of bad loans.
>
> Of course, but there have always been bad loans...
>
> What always seems to be lacking is evidence that the number of "bad loans" had substantially increased as a result of legislative changes in the decade or so prior to the collapse.
That evidence has been presented countless times. The looser the GSE
>>>> Despite the overwhelming evidence that GSE lending was
>>>> the most prudent (proved by loan performance) Rudy keeps
>>>> trying to sell his fairy tale that the GSEs were the ones
>>>> buying up bad loans when in fact the evidence shows
>>>> they were the only ones staying away from bad loans.
>>>
>>> What bad loans?
>>
>> There is no doubt that there were plenty of bad loans.
>
> Of course, but there have always been bad loans...
>
> What always seems to be lacking is evidence that the number of "bad loans" had substantially increased as a result of legislative changes in the decade or so prior to the collapse.
underwriting standards got and the more the government beefed up CRA
enforcement, the more bad loans were written.
>
>> The typical bad loan involved a concerted effort of fraud
>> between real estate agents, lenders, appraisers and borrowers.
>> Tons of loans were given to borrowers who did not have the
>> income, assets, down payment or credit rating that would
>> justify the loan.
>>
>> The question is what was the reason for these fraudulent
>> loans. There is no doubt that the only reason was the
>
> Greed.
Rudy Canoza
Jan 8, 2014, 8:48:34 PM1/8/14
to
On 1/8/2014 5:38 PM, jim, front boy for a left-wing disinformation
underwriting standards, as previously established.
>>> The typical bad loan involved a concerted effort of fraud
>>> between real estate agents, lenders, appraisers and borrowers.
>>> Tons of loans were given to borrowers who did not have the
>>> income, assets, down payment or credit rating that would
>>> justify the loan.
>>>
>>> The question is what was the reason for these fraudulent
>>> loans. There is no doubt that the only reason was the
>>
>> Greed.
No.
collective, lied:
>
>
> PrecisionmachinisT wrote:
>>
>> "jim", front boy for a left-wing disinformation collective, lied:
>>>
>>>
>>> PrecisionmachinisT wrote:
>>>>
>>>> "jim", front boy for a left-wing disinformation collective, lied:
>>>>
>
>
> PrecisionmachinisT wrote:
>>
>> "jim", front boy for a left-wing disinformation collective, lied:
>>>
>>>
>>> PrecisionmachinisT wrote:
>>>>
>>>> "jim", front boy for a left-wing disinformation collective, lied:
>>>>
>>>>> Despite the overwhelming evidence that GSE lending was
>>>>> the most prudent (proved by loan performance) Rudy keeps
>>>>> trying to sell his fairy tale that the GSEs were the ones
>>>>> buying up bad loans when in fact the evidence shows
>>>>> they were the only ones staying away from bad loans.
>>>>
>>>> What bad loans?
>>>
>>> There is no doubt that there were plenty of bad loans.
>>
>> Of course, but there have always been bad loans...
>>
>> What always seems to be lacking is evidence that the number of "bad loans" had substantially increased as a result of legislative changes in the decade or so prior to the collapse.
>
> There is no doubt that bad loans increased.
Yes, in response to increased CRA enforcement and the demolition of GSE
>>>>> the most prudent (proved by loan performance) Rudy keeps
>>>>> trying to sell his fairy tale that the GSEs were the ones
>>>>> buying up bad loans when in fact the evidence shows
>>>>> they were the only ones staying away from bad loans.
>>>>
>>>> What bad loans?
>>>
>>> There is no doubt that there were plenty of bad loans.
>>
>> Of course, but there have always been bad loans...
>>
>> What always seems to be lacking is evidence that the number of "bad loans" had substantially increased as a result of legislative changes in the decade or so prior to the collapse.
>
> There is no doubt that bad loans increased.
underwriting standards, as previously established.
>>> The typical bad loan involved a concerted effort of fraud
>>> between real estate agents, lenders, appraisers and borrowers.
>>> Tons of loans were given to borrowers who did not have the
>>> income, assets, down payment or credit rating that would
>>> justify the loan.
>>>
>>> The question is what was the reason for these fraudulent
>>> loans. There is no doubt that the only reason was the
>>
>> Greed.
Scout
Jan 8, 2014, 9:06:22 PM1/8/14
to
"PrecisionmachinisT" <123mac...@notmail.com> wrote in message
news:h8udnbM_w963dFDP...@scnresearch.com...
>
> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
> news:trSdnf_21LBW_FDP...@bright.net...
>>
>>
>> PrecisionmachinisT wrote:
>>>
>>> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
>>> news:nrSdnfSbKrXUW1HP...@bright.net...
>>>
>>> > Despite the overwhelming evidence that GSE lending was
>>> > the most prudent (proved by loan performance) Rudy keeps
>>> > trying to sell his fairy tale that the GSEs were the ones
>>> > buying up bad loans when in fact the evidence shows
>>> > they were the only ones staying away from bad loans.
>>>
>>> What bad loans?
>>
>> There is no doubt that there were plenty of bad loans.
>
> Of course, but there have always been bad loans...
>
> What always seems to be lacking is evidence that the number of "bad loans"
> had substantially increased as a result of legislative changes in the
> decade or so prior to the collapse.
http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Governmental_policies
> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
> news:trSdnf_21LBW_FDP...@bright.net...
>>
>>
>> PrecisionmachinisT wrote:
>>>
>>> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
>>> news:nrSdnfSbKrXUW1HP...@bright.net...
>>>
>>> > Despite the overwhelming evidence that GSE lending was
>>> > the most prudent (proved by loan performance) Rudy keeps
>>> > trying to sell his fairy tale that the GSEs were the ones
>>> > buying up bad loans when in fact the evidence shows
>>> > they were the only ones staying away from bad loans.
>>>
>>> What bad loans?
>>
>> There is no doubt that there were plenty of bad loans.
>
> Of course, but there have always been bad loans...
>
> What always seems to be lacking is evidence that the number of "bad loans"
> had substantially increased as a result of legislative changes in the
> decade or so prior to the collapse.
jim
Jan 8, 2014, 10:09:46 PM1/8/14
to
Rudy Canoza wrote:
>
> On 1/8/2014 3:48 PM, PrecisionmachinisT wrote:
> >
> > "jim", front boy for a left-wing disinformation collective, lied:
> >>
> >>
> >> PrecisionmachinisT wrote:
> >>>
> >>> "jim", front boy for a left-wing disinformation collective, lied:
> >>>
> >>>> Despite the overwhelming evidence that GSE lending was
> >>>> the most prudent (proved by loan performance) Rudy keeps
> >>>> trying to sell his fairy tale that the GSEs were the ones
> >>>> buying up bad loans when in fact the evidence shows
> >>>> they were the only ones staying away from bad loans.
> >>>
> >>> What bad loans?
> >>
> >> There is no doubt that there were plenty of bad loans.
> >
> > Of course, but there have always been bad loans...
> >
> > What always seems to be lacking is evidence that the number of "bad loans" had substantially increased as a result of legislative changes in the decade or so prior to the collapse.
>
> That evidence has been presented countless times. The looser the GSE
The GSE standards were significantly less loose than
the rest of the mortgage market.
The evidence is in the loan failure rate was much
higher for mortgages not backed by GSE financing.
The GSEs had a much lower concentration of delinquencies
and defaults than non-GSE loans did.
> and the more the government beefed up CRA
> enforcement,
is a made up story.
CRA is a law that requires bank regulators to examine and
grade banks on how good a job they do in lending to
the same geographic area that supplies the bank's
deposits.
Rudy Canoza
Jan 8, 2014, 10:12:23 PM1/8/14
to
On 1/8/2014 7:09 PM, jim, front boy for a left-wing disinformation
collective, lied:
> Rudy Canoza wrote:
>>
>> On 1/8/2014 3:48 PM, PrecisionmachinisT wrote:
>>>
>>> "jim", front boy for a left-wing disinformation collective, lied:
>>>>
>>>>
>>>> PrecisionmachinisT wrote:
>>>>>
>>>>> "jim", front boy for a left-wing disinformation collective, lied:
>>>>>
>>>>>> Despite the overwhelming evidence that GSE lending was
>>>>>> the most prudent (proved by loan performance) Rudy keeps
>>>>>> trying to sell his fairy tale that the GSEs were the ones
>>>>>> buying up bad loans when in fact the evidence shows
>>>>>> they were the only ones staying away from bad loans.
>>>>>
>>>>> What bad loans?
>>>>
>>>> There is no doubt that there were plenty of bad loans.
>>>
>>> Of course, but there have always been bad loans...
>>>
>>> What always seems to be lacking is evidence that the number of "bad loans" had substantially increased as a result of legislative changes in the decade or so prior to the collapse.
>>
>> That evidence has been presented countless times. The looser the GSE
>> underwriting standards got...
>
> The GSE standards were significantly less loose than
The GSE standards were thrown down the toilet by the Clinton regime.
> Rudy Canoza wrote:
>>
>> On 1/8/2014 3:48 PM, PrecisionmachinisT wrote:
>>>
>>> "jim", front boy for a left-wing disinformation collective, lied:
>>>>
>>>>
>>>> PrecisionmachinisT wrote:
>>>>>
>>>>> "jim", front boy for a left-wing disinformation collective, lied:
>>>>>
>>>>>> Despite the overwhelming evidence that GSE lending was
>>>>>> the most prudent (proved by loan performance) Rudy keeps
>>>>>> trying to sell his fairy tale that the GSEs were the ones
>>>>>> buying up bad loans when in fact the evidence shows
>>>>>> they were the only ones staying away from bad loans.
>>>>>
>>>>> What bad loans?
>>>>
>>>> There is no doubt that there were plenty of bad loans.
>>>
>>> Of course, but there have always been bad loans...
>>>
>>> What always seems to be lacking is evidence that the number of "bad loans" had substantially increased as a result of legislative changes in the decade or so prior to the collapse.
>>
>> That evidence has been presented countless times. The looser the GSE
>> underwriting standards got...
>
> The GSE standards were significantly less loose than
jim
Jan 9, 2014, 7:53:39 AM1/9/14
to
doesn't claim the story is valid.
The evidence that the story about lowering GSE standards is
fiction is that the GSE loan portfolios had the lowest
concentration of failed loans. And GSE loan performance is not
just a little bit better it is immensely better. The loan
losses on private label mortgage backed securities was $600 billion
out of $3 trillion loans from 2006-2012. The loan losses for
the GSE in the same period was $60 billion out of $4.8 trillion.
It is evident who was financing the bad loans.
GSE backed loans did not fail as often as non-GSE financed
mortgages because they were given to borrowers who
had better credit scores, employment history and
put up larger down payments. The data shows GSEs excellent record
for being the best at staying away from loans that would fail held
for all the years before the financial meltdown and after.
http://www.ncsha.org/blog/fhfa-report-shows-gse-loans-outperformed-private-label-mbs-loans
The story about lax GSE lending is all based on supposition.
The tellers of the story suppose that because both the
Clinton and Bush administrations publicly advocated lowering GSE
standards, that somehow they must have succeeded. The evidence
shows that story is false. Loan performance data proves GSE
lending standards remained, by far, the highest in the industry
during all of Clinton and Bush admins.
Rudy Canoza
Jan 9, 2014, 9:45:10 AM1/9/14
to
On 1/9/2014 4:53 AM, jim, front boy for a left-wing disinformation
collective, lied:
>
>
collective, lied:
>
>
> Scout wrote:
>>
>> "PrecisionmachinisT" <123mac...@notmail.com> wrote in message
>> news:h8udnbM_w963dFDP...@scnresearch.com...
>>>
>>
>> "PrecisionmachinisT" <123mac...@notmail.com> wrote in message
>> news:h8udnbM_w963dFDP...@scnresearch.com...
>>>
>>> jim, front boy for a left-wing disinformation collective, lied:
>>>>
>>>>
>>>> PrecisionmachinisT wrote:
>>>>>
>>>>> jim, front boy for a left-wing disinformation collective, lied:
>>>>>
>>>>
>>>>
>>>> PrecisionmachinisT wrote:
>>>>>
>>>>> jim, front boy for a left-wing disinformation collective, lied:
>>>>>
>>>>>> Despite the overwhelming evidence that GSE lending was
>>>>>> the most prudent (proved by loan performance) Rudy keeps
>>>>>> trying to sell his fairy tale that the GSEs were the ones
>>>>>> buying up bad loans when in fact the evidence shows
>>>>>> they were the only ones staying away from bad loans.
>>>>>
>>>>> What bad loans?
>>>>
>>>> There is no doubt that there were plenty of bad loans.
>>>
>>> Of course, but there have always been bad loans...
>>>
>>> What always seems to be lacking is evidence that the number of "bad loans"
>>> had substantially increased as a result of legislative changes in the
>>> decade or so prior to the collapse.
>>
>> http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Governmental_policies
>
> Wikipedia only reports that a story is circulating. It
> doesn't claim the
Wikipedia doesn't report and it doesn't claim.
>>>>>> the most prudent (proved by loan performance) Rudy keeps
>>>>>> trying to sell his fairy tale that the GSEs were the ones
>>>>>> buying up bad loans when in fact the evidence shows
>>>>>> they were the only ones staying away from bad loans.
>>>>>
>>>>> What bad loans?
>>>>
>>>> There is no doubt that there were plenty of bad loans.
>>>
>>> Of course, but there have always been bad loans...
>>>
>>> What always seems to be lacking is evidence that the number of "bad loans"
>>> had substantially increased as a result of legislative changes in the
>>> decade or so prior to the collapse.
>>
>> http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Governmental_policies
>
> Wikipedia only reports that a story is circulating. It
> doesn't claim the
prime cut
Jan 9, 2014, 1:03:49 PM1/9/14
to
On 1/8/2014 6:38 PM, jim wrote:
> After the market crashed
> After the market crashed
prime cut
Jan 9, 2014, 1:04:00 PM1/9/14
to
On 1/8/2014 8:09 PM, jim wrote:
> CRA is a law that requires bank
> CRA is a law that requires bank
prime cut
Jan 9, 2014, 1:04:11 PM1/9/14
to
On 1/9/2014 5:53 AM, jim wrote:
> The story about lax GSE lending
> The story about lax GSE lending
Scout
Jan 9, 2014, 5:37:52 PM1/9/14
to
news:sOudncc9LuFLBlPP...@bright.net...
Then show me that the story is invalid.
>
>
> Scout wrote:
>>
>> "PrecisionmachinisT" <123mac...@notmail.com> wrote in message
>> news:h8udnbM_w963dFDP...@scnresearch.com...
>> >
>> > "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
>> > news:trSdnf_21LBW_FDP...@bright.net...
>> >>
>> >>
>> >> PrecisionmachinisT wrote:
>> >>>
>> >>> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
>> >>> news:nrSdnfSbKrXUW1HP...@bright.net...
>> >>>
>> >>> > Despite the overwhelming evidence that GSE lending was
>> >>> > the most prudent (proved by loan performance) Rudy keeps
>> >>> > trying to sell his fairy tale that the GSEs were the ones
>> >>> > buying up bad loans when in fact the evidence shows
>> >>> > they were the only ones staying away from bad loans.
>> >>>
>> >>> What bad loans?
>> >>
>> >> There is no doubt that there were plenty of bad loans.
>> >
>> > Of course, but there have always been bad loans...
>> >
>> > What always seems to be lacking is evidence that the number of "bad
>> > loans"
>> > had substantially increased as a result of legislative changes in the
>> > decade or so prior to the collapse.
>>
>> http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Governmental_policies
>
> Wikipedia only reports that a story is circulating. It
> doesn't claim the story is valid.
Follow the cites given.
>
> Scout wrote:
>>
>> "PrecisionmachinisT" <123mac...@notmail.com> wrote in message
>> news:h8udnbM_w963dFDP...@scnresearch.com...
>> >
>> > "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
>> > news:trSdnf_21LBW_FDP...@bright.net...
>> >>
>> >>
>> >> PrecisionmachinisT wrote:
>> >>>
>> >>> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
>> >>> news:nrSdnfSbKrXUW1HP...@bright.net...
>> >>>
>> >>> > Despite the overwhelming evidence that GSE lending was
>> >>> > the most prudent (proved by loan performance) Rudy keeps
>> >>> > trying to sell his fairy tale that the GSEs were the ones
>> >>> > buying up bad loans when in fact the evidence shows
>> >>> > they were the only ones staying away from bad loans.
>> >>>
>> >>> What bad loans?
>> >>
>> >> There is no doubt that there were plenty of bad loans.
>> >
>> > Of course, but there have always been bad loans...
>> >
>> > What always seems to be lacking is evidence that the number of "bad
>> > loans"
>> > had substantially increased as a result of legislative changes in the
>> > decade or so prior to the collapse.
>>
>> http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Governmental_policies
>
> Wikipedia only reports that a story is circulating. It
> doesn't claim the story is valid.
Then show me that the story is invalid.
jim
Jan 9, 2014, 6:18:26 PM1/9/14
to
Scout wrote:
> >> >
> >> > What always seems to be lacking is evidence that the number of "bad
> >> > loans"
> >> > had substantially increased as a result of legislative changes in the
> >> > decade or so prior to the collapse.
> >>
> >> http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Governmental_policies
> >
> > Wikipedia only reports that a story is circulating. It
> > doesn't claim the story is valid.
>
> Follow the cites given.
>
> Then show me that the story is invalid.
>
It simple enough to determine who was financing the bad loans.
Just look at who ended up holding the highest concentration of
failed loans from 2006-2012. The privately financed loans had a
much higher failure rate. The GSEs had the best loan performance
in the industry. The data on failed loans leaves no doubt about
who was financing the bad loans.
Nobody else is even close to the GSEs in their excellent
loan performance record. Loans that were retained by depository
banks had much worse rate of delinquency and default. And loans
that originated with private mortgage companies were 3 times worse
than the banks. The evidence is undeniable that the GSEs did
the best job of staying away from bad loans.
And that is saying a lot because bad loans were flooding
the market and many loans had fraudulent documentation so
it wasn't easy to stay clear of them.
The reason bad loans became so prevalent was the huge amount
of private money that entered the mortgage market.
There was $5 trillion in private money that flooded into the
mortgage market and created the bubble and created the huge
demand for mortgages without much of any regard to their quality.
Your Wikipedia article shows the growth of this
private money that deluged the mortgage market in this chart.
http://upload.wikimedia.org/wikipedia/commons/3/37/Securitization_Market_Activity.png
Scout
Jan 9, 2014, 7:22:06 PM1/9/14
to
news:S9udnYqCVpbZs1LP...@bright.net...
in place to permit that sort of loan.
Oh, shit, that means I've presented the proof asked for.
>
>
> Scout wrote:
>
>> >> >
>> >> > What always seems to be lacking is evidence that the number of "bad
>> >> > loans"
>> >> > had substantially increased as a result of legislative changes in
>> >> > the
>> >> > decade or so prior to the collapse.
>> >>
>> >> http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Governmental_policies
>> >
>> > Wikipedia only reports that a story is circulating. It
>> > doesn't claim the story is valid.
>>
>> Follow the cites given.
>>
>> Then show me that the story is invalid.
>>
>
> I already showed you, and the Wikipedia sources do also.
>
> It simple enough to determine who was financing the bad loans.
And look at the loans that most commonly failed and WHO put the legislation
>
> Scout wrote:
>
>> >> >
>> >> > What always seems to be lacking is evidence that the number of "bad
>> >> > loans"
>> >> > had substantially increased as a result of legislative changes in
>> >> > the
>> >> > decade or so prior to the collapse.
>> >>
>> >> http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Governmental_policies
>> >
>> > Wikipedia only reports that a story is circulating. It
>> > doesn't claim the story is valid.
>>
>> Follow the cites given.
>>
>> Then show me that the story is invalid.
>>
>
> I already showed you, and the Wikipedia sources do also.
>
> It simple enough to determine who was financing the bad loans.
in place to permit that sort of loan.
Oh, shit, that means I've presented the proof asked for.
prime cut
Jan 9, 2014, 7:41:20 PM1/9/14
to
On 1/9/2014 4:18 PM, jim wrote:
> I already showed you,
http://www.thegatewaypundit.com/2012/12/new-study-finds-democrats-fully-to-blame-for-subprime-mortgage-crisis-that-caused-financial-collapse/
State Sen. Barack Obama and Fr. Michael Pfleger led a protest against
the payday loan industry demanding the State of Illinois to regulate
loan businesses in January 2000. During his time as a community
organizer Barack Obama led several protests against banks to make loans
to high risk individuals. (NBC 5 Week of January 3, 2000)
Here�s something that won�t get any play in the liberal media�
A new study by the respected National Bureau of Economic Research found
that Democrats are to blame for the subprime mortgage crisis.
Investor�s Business Daily reported:
Democrats and the media insist the Community Reinvestment Act, the
anti-redlining law beefed up by President Clinton, had nothing to do
with the subprime mortgage crisis and recession.
But a new study by the respected National Bureau of Economic Research
finds, �Yes, it did. We find that adherence to that act led to riskier
lending by banks.�
Added NBER: �There is a clear pattern of increased defaults for loans
made by these banks in quarters around the (CRA) exam. Moreover, the
effects are larger for loans made within CRA tracts,� or predominantly
low-income and minority areas.
To satisfy CRA examiners, �flexible� lending by large banks rose an
average 5% and those loans defaulted about 15% more often, the 43-page
study found.
The strongest link between CRA lending and defaults took place in the
runup to the crisis � 2004 to 2006 � when banks rapidly sold CRA
mortgages for securitization by Fannie Mae and Freddie Mac and Wall Street.
CRA regulations are at the core of Fannie�s and Freddie�s so-called
affordable housing mission. In the early 1990s, a Democrat Congress gave
HUD the authority to set and enforce (through fines) CRA-grade loan
quotas at Fannie and Freddie.
It passed a law requiring the government-backed agencies to �assist
insured depository institutions to meet their obligations under the
(CRA).� The goal was to help banks meet lending quotas by buying their
CRA loans.
But they had to loosen underwriting standards to do it. And that�s what
they did.
Republicans warned Democrats of the impending doom in 2004.
> I already showed you,
http://www.thegatewaypundit.com/2012/12/new-study-finds-democrats-fully-to-blame-for-subprime-mortgage-crisis-that-caused-financial-collapse/
State Sen. Barack Obama and Fr. Michael Pfleger led a protest against
the payday loan industry demanding the State of Illinois to regulate
loan businesses in January 2000. During his time as a community
organizer Barack Obama led several protests against banks to make loans
to high risk individuals. (NBC 5 Week of January 3, 2000)
Here�s something that won�t get any play in the liberal media�
A new study by the respected National Bureau of Economic Research found
that Democrats are to blame for the subprime mortgage crisis.
Investor�s Business Daily reported:
Democrats and the media insist the Community Reinvestment Act, the
anti-redlining law beefed up by President Clinton, had nothing to do
with the subprime mortgage crisis and recession.
But a new study by the respected National Bureau of Economic Research
finds, �Yes, it did. We find that adherence to that act led to riskier
lending by banks.�
Added NBER: �There is a clear pattern of increased defaults for loans
made by these banks in quarters around the (CRA) exam. Moreover, the
effects are larger for loans made within CRA tracts,� or predominantly
low-income and minority areas.
To satisfy CRA examiners, �flexible� lending by large banks rose an
average 5% and those loans defaulted about 15% more often, the 43-page
study found.
The strongest link between CRA lending and defaults took place in the
runup to the crisis � 2004 to 2006 � when banks rapidly sold CRA
mortgages for securitization by Fannie Mae and Freddie Mac and Wall Street.
CRA regulations are at the core of Fannie�s and Freddie�s so-called
affordable housing mission. In the early 1990s, a Democrat Congress gave
HUD the authority to set and enforce (through fines) CRA-grade loan
quotas at Fannie and Freddie.
It passed a law requiring the government-backed agencies to �assist
insured depository institutions to meet their obligations under the
(CRA).� The goal was to help banks meet lending quotas by buying their
CRA loans.
But they had to loosen underwriting standards to do it. And that�s what
they did.
Republicans warned Democrats of the impending doom in 2004.
jim
Jan 9, 2014, 8:02:52 PM1/9/14
to
snipped, because you apparently couldn't face it...
The loans that most commonly failed were the ones
not backed by GSE financing. The ones that failed the
most were loans that were financed by private label
securities.
http://securitization.weebly.com/private-label-mbs.html
Private label mortgage backed securities were investment vehicles
created to meet the demand of the $5 trillion pool of money that
was eager to invest in subprime mortgages.
>
> Oh, shit, that means I've presented the proof asked for.
Scout
Jan 9, 2014, 8:06:09 PM1/9/14
to
news:Ds2dnQ4rrc0j21LP...@bright.net...
rates.....a type of loan allowed for under legislation passed by the *TaDA*
FEDERAL GOVERNMENT.
Who they are backed by is moot....the loans were allowed by federal
regulation when those regulations where changed by the federal government.
It allowed people to buy over their heads in the hope that their income
would increase by the time the high payments kicked in.....it didn't.
>
>
> Scout wrote:
>>
>> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
>> news:S9udnYqCVpbZs1LP...@bright.net...
>> >
>> >
>> > Scout wrote:
>> >
>> >> >> >
>> >> >> > What always seems to be lacking is evidence that the number of
>> >> >> > "bad
>> >> >> > loans"
>> >> >> > had substantially increased as a result of legislative changes in
>> >> >> > the
>> >> >> > decade or so prior to the collapse.
>> >> >>
>> >> >> http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Governmental_policies
>> >> >
>> >> > Wikipedia only reports that a story is circulating. It
>> >> > doesn't claim the story is valid.
>> >>
>> >> Follow the cites given.
>> >>
>> >> Then show me that the story is invalid.
>> >>
>> >
>> > I already showed you, and the Wikipedia sources do also.
>> >
>> > It simple enough to determine who was financing the bad loans.
>>
>> And look at the loans that most commonly failed and WHO put the
>> legislation
>> in place to permit that sort of loan.
>
> I addressed that in the last post but you
> snipped, because you apparently couldn't face it...
>
> The loans that most commonly failed were the ones
> not backed by GSE financing.
The loans that failed most commonly were those that had adjustable interest
>
> Scout wrote:
>>
>> "jim" <"sjedgingN0Sp"@m...@mwt.net> wrote in message
>> news:S9udnYqCVpbZs1LP...@bright.net...
>> >
>> >
>> > Scout wrote:
>> >
>> >> >> >
>> >> >> > What always seems to be lacking is evidence that the number of
>> >> >> > "bad
>> >> >> > loans"
>> >> >> > had substantially increased as a result of legislative changes in
>> >> >> > the
>> >> >> > decade or so prior to the collapse.
>> >> >>
>> >> >> http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Governmental_policies
>> >> >
>> >> > Wikipedia only reports that a story is circulating. It
>> >> > doesn't claim the story is valid.
>> >>
>> >> Follow the cites given.
>> >>
>> >> Then show me that the story is invalid.
>> >>
>> >
>> > I already showed you, and the Wikipedia sources do also.
>> >
>> > It simple enough to determine who was financing the bad loans.
>>
>> And look at the loans that most commonly failed and WHO put the
>> legislation
>> in place to permit that sort of loan.
>
> I addressed that in the last post but you
> snipped, because you apparently couldn't face it...
>
> The loans that most commonly failed were the ones
> not backed by GSE financing.
rates.....a type of loan allowed for under legislation passed by the *TaDA*
FEDERAL GOVERNMENT.
Who they are backed by is moot....the loans were allowed by federal
regulation when those regulations where changed by the federal government.
It allowed people to buy over their heads in the hope that their income
would increase by the time the high payments kicked in.....it didn't.
jim
Jan 9, 2014, 10:42:27 PM1/9/14
to
free enterprise?
>
> Who they are backed by is moot....
not the GSEs that were backing the bad loans.
> the loans were allowed by federal
> regulation when those regulations where changed by the federal government.
on interest rates. It took about 20 years before
ARMs became the preferred way for private lenders to
make reckless loans.
>
> It allowed people to buy over their heads in the hope that their income
> would increase by the time the high payments kicked in.....it didn't.
>
not let people freely enter into contractual arrangements.
Should only contracts that can't fail be permitted by law?
PrecisionmachinisT
Jan 9, 2014, 10:54:07 PM1/9/14
to
"Scout" <me4...@verizon.removeme.this2.nospam.net> wrote in message
news:lanh2b$olp$1...@dont-email.me...
>
> The loans that failed most commonly were those that had adjustable
> interest rates.....
Hogwash.
> The loans that failed most commonly were those that had adjustable
> interest rates.....
http://s.wsj.net/public/resources/images/MI-AU813_OPTARM_NS_20090129230015.gif
Scout
Jan 10, 2014, 12:49:06 AM1/10/14
to
"PrecisionmachinisT" <precisionm...@notmail.com> wrote in message
news:kvidnU7S66t781LP...@scnresearch.com...
"Approximately 90% of subprime mortgages issued in 2006 were adjustable-rate
mortgages."
Zandi, Mark (2010). Financial Shock. FT Press. ISBN 978-0-13-701663-1.
Most sub prime loans were ARMs.
Please note that ARMs also included their offshoots such as option
adjustable rates, balloon payments, and interest only mortgages.
PrecisionmachinisT
Jan 10, 2014, 1:20:45 AM1/10/14
to
"Scout" <me4...@vcenturylink.removeme.this2.nospam.net> wrote in message
news:lao1ko$v73$1...@dont-email.me...
>
>
> "PrecisionmachinisT" <precisionm...@notmail.com> wrote in message
> news:kvidnU7S66t781LP...@scnresearch.com...
>>
>> "Scout" <me4...@verizon.removeme.this2.nospam.net> wrote in message
>> news:lanh2b$olp$1...@dont-email.me...
>>>
>>> The loans that failed most commonly were those that had adjustable
>>> interest rates.....
>>
>> Hogwash.
>>
>> http://s.wsj.net/public/resources/images/MI-AU813_OPTARM_NS_20090129230015.gif
>
> Go back to the cite I've already provided...
Provde it again, then, I don't see it.
>
> "PrecisionmachinisT" <precisionm...@notmail.com> wrote in message
> news:kvidnU7S66t781LP...@scnresearch.com...
>>
>> "Scout" <me4...@verizon.removeme.this2.nospam.net> wrote in message
>> news:lanh2b$olp$1...@dont-email.me...
>>>
>>> The loans that failed most commonly were those that had adjustable
>>> interest rates.....
>>
>> Hogwash.
>>
>> http://s.wsj.net/public/resources/images/MI-AU813_OPTARM_NS_20090129230015.gif
>
> Go back to the cite I've already provided...
> "Approximately 90% of subprime mortgages issued in 2006 were
> adjustable-rate mortgages."
--how many of them actually failed?
> Zandi, Mark (2010). Financial Shock. FT Press. ISBN 978-0-13-701663-1.
>
> Most sub prime loans were ARMs.
--but even if true, the government wasn't bending anyone's elbow, "forcing
them to make "risky loans""...
No mistake about it, while many "house flippers" indeed profited handily,
it's the banks who REALLY made out like bandits, because their earnings were
compounded at each flip.
> Please note that ARMs also included their offshoots such as option
> adjustable rates, balloon payments, and interest only mortgages.
keep rising.....
PrecisionmachinisT
Jan 10, 2014, 1:29:48 AM1/10/14
to
news:LbGdnWbqIdHYDFLP...@scnresearch.com...
Wiki lays it out pretty well here:
http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Governmental_policies
"Further, U.S. households had become increasingly indebted, with the ratio
of debt to disposable personal income rising from 77% in 1990 to 127% at the
end of 2007, much of this increase mortgage-related."
"When U.S. home prices declined steeply after peaking in mid-2006, it became
more difficult for borrowers to refinance their loans. As adjustable-rate
mortgages began to reset at higher interest rates (causing higher monthly
payments), mortgage delinquencies soared"
--the only part missing above, is the part about how the banks were
salivating in anticipation of having their wet dream about realizing even
higher interest rates actually come to fruition.
http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Governmental_policies
"Further, U.S. households had become increasingly indebted, with the ratio
of debt to disposable personal income rising from 77% in 1990 to 127% at the
end of 2007, much of this increase mortgage-related."
"When U.S. home prices declined steeply after peaking in mid-2006, it became
more difficult for borrowers to refinance their loans. As adjustable-rate
mortgages began to reset at higher interest rates (causing higher monthly
payments), mortgage delinquencies soared"
--the only part missing above, is the part about how the banks were
salivating in anticipation of having their wet dream about realizing even
higher interest rates actually come to fruition.
BeamMeUpScotty
Jan 10, 2014, 2:00:12 AM1/10/14
to
poke when they bought the turd that they took over. BOA is still being
sued.
http://www.forbes.com/sites/halahtouryalai/2012/10/24/bank-of-americas-mortgage-troubles-just-got-1-billion-worse-with-new-fed-suit/
SO how much money did they make selling or making loans to the under
qualified and minorities?
>>
>>> Please note that ARMs also included their offshoots such as option
>>> adjustable rates, balloon payments, and interest only mortgages.
>>
>> Definately not a problem for banks, (or borrowers) so long as house prices
>> keep rising.....
>>
>
> Wiki lays it out pretty well here:
>
> http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Governmental_policies
>
> "Further, U.S. households had become increasingly indebted, with the ratio
> of debt to disposable personal income rising from 77% in 1990 to 127% at the
> end of 2007, much of this increase mortgage-related."
>
> "When U.S. home prices declined steeply after peaking in mid-2006, it became
> more difficult for borrowers to refinance their loans. As adjustable-rate
> mortgages began to reset at higher interest rates (causing higher monthly
> payments), mortgage delinquencies soared"
>
combination was squeezing the homeowners budget..... they couldn't
afford gasoline to get to work and paying the mortgage.
> --the only part missing above, is the part about how the banks were
> salivating in anticipation of having their wet dream about realizing even
> higher interest rates actually come to fruition.
But it was all set in motion by the Progressives and their back door
welfare program that they called Affordable Housing.
PrecisionmachinisT
Jan 10, 2014, 2:15:18 AM1/10/14
to
"BeamMeUpScotty" <ThenDestro...@Blackhole.nebulx.com> wrote in
message news:fxjzu.12329$n31....@en-nntp-08.dc1.easynews.com...
> On 1/8/2014 11:57 AM, Rudy Canoza wrote:
>> On 1/8/2014 6:33 AM, jim, front boy for a left-wing disinformation
>> collective, lied:
>>>
>>>
>>> PrecisionmachinisT wrote:
>>>>
>>>> jim, front boy for a left-wing disinformation collective, lied:
>>>>
>>>>> Despite the overwhelming evidence that GSE lending was
>>>>> the most prudent (proved by loan performance) Rudy keeps
>>>>> trying to sell his fairy tale that the GSEs were the ones
>>>>> buying up bad loans when in fact the evidence shows
>>>>> they were the only ones staying away from bad loans.
>>>>
>>>> What bad loans?
>>>
>>> There is no doubt that there were plenty of bad loans.
>>
>> CRA and the demolition of underwriting standards at the GSEs guaranteed
>> there would be.
>>
>
> Detroit's Progressive policies led to the same housing devastation and
> loss of the ability to sustain their economy.
>
Baloney
>> On 1/8/2014 6:33 AM, jim, front boy for a left-wing disinformation
>> collective, lied:
>>>
>>>
>>> PrecisionmachinisT wrote:
>>>>
>>>> jim, front boy for a left-wing disinformation collective, lied:
>>>>
>>>>> Despite the overwhelming evidence that GSE lending was
>>>>> the most prudent (proved by loan performance) Rudy keeps
>>>>> trying to sell his fairy tale that the GSEs were the ones
>>>>> buying up bad loans when in fact the evidence shows
>>>>> they were the only ones staying away from bad loans.
>>>>
>>>> What bad loans?
>>>
>>> There is no doubt that there were plenty of bad loans.
>>
>> CRA and the demolition of underwriting standards at the GSEs guaranteed
>> there would be.
>>
>
> Detroit's Progressive policies led to the same housing devastation and
> loss of the ability to sustain their economy.
>
Detroit's problems began when the steel companies decided that rather than
to upgrade existing facilities, more profit was to be had in building new
plants overseas.
(changing global matrketplace, not local politics)
> In Detroit the Progressives were going
in the southern states; alas, it was a futile effort.
How would YOU compete with someone who seemingly is always more than happy
to raise his hand and accept lower pay?
> to bulldoze their failure to hide
> it from public view. How have the Progressives hidden it from view on
> the National level?
headway....versus sitting around typing nonsense on usenet all day ....
Except, I don't happen to live in a state that recieves more in federal
dollars than it pay in.
BeamMeUpScotty
Jan 10, 2014, 2:39:47 AM1/10/14
to
job so you can afford ObamaCare..... I love it and it's funny as hell.
You wanted it you got it, now you can pay for it.
I don't want it and I will never pay for it. There is NO way.
Throw me in jail and you still pay for it and in fact you will be
"paying more for it". Get a third job and vote for another money wasting
Liberal. I'll still be here laughing.
Just remember that while you were;
"working my ass off all day and still making little headway."
poor and broke when he was in Chicago.... He's using your hard earned
money to pay for his ROYAL vacations.
I set up my life 5 years ago so I wouldn't be paying a shit load of
Federal Taxes for his vacations or your Health Care. And I feel great
about it. I don't feel over worked or under appreciated.
You create the mess, you pay for it or you fix it.
PrecisionmachinisT
Jan 10, 2014, 3:13:06 AM1/10/14
to
"BeamMeUpScotty" <ThenDestro...@Blackhole.nebulx.com> wrote in
message news:5UMzu.30228$vG7....@en-nntp-03.dc1.easynews.com...
> Countrywide is bust and BOA bought a pig in a
> poke when they bought the turd that they took over. BOA is still being
> sued.
>
> http://www.forbes.com/sites/halahtouryalai/2012/10/24/bank-of-americas-mortgage-troubles-just-got-1-billion-worse-with-new-fed-suit/
>
>
> SO how much money did they make selling or making loans to the under
> qualified and minorities?
>
>
>>>
>>>> Please note that ARMs also included their offshoots such as option
>>>> adjustable rates, balloon payments, and interest only mortgages.
>>>
>>> Definately not a problem for banks, (or borrowers) so long as house
>>> prices
>>> keep rising.....
>>>
>>
>> Wiki lays it out pretty well here:
>>
>> http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Governmental_policies
>>
>> "Further, U.S. households had become increasingly indebted, with the
>> ratio
>> of debt to disposable personal income rising from 77% in 1990 to 127% at
>> the
>> end of 2007, much of this increase mortgage-related."
>>
>> "When U.S. home prices declined steeply after peaking in mid-2006, it
>> became
>> more difficult for borrowers to refinance their loans. As adjustable-rate
>> mortgages began to reset at higher interest rates (causing higher monthly
>> payments), mortgage delinquencies soared"
>>
>
> And at the "SAME TIME" gasoline prices were going higher
> and the
> combination was squeezing the homeowners budget..... they couldn't
> afford gasoline to get to work and paying the mortgage.
really haven't done that very well.
>> --the only part missing above, is the part about how the banks were
>> salivating in anticipation of having their wet dream about realizing even
>> higher interest rates actually come to fruition.
>
> They were making "no money down" loans also.....
compounded in the bank's favor....
--from a banker standpoint, any down amount of down payment will ultimately
erode his profit realization, all other factors being equal.
> But it was all set in motion by the Progressives and their back door
> welfare program that they called Affordable Housing.
For who, exactly?
PrecisionmachinisT
Jan 10, 2014, 3:22:01 AM1/10/14
to
"BeamMeUpScotty" <ThenDestro...@Blackhole.nebulx.com> wrote in
message news:btNzu.169508$as5....@en-nntp-14.dc1.easynews.com...
> job so you can afford ObamaCare..... I love it and it's funny as hell.
> You wanted it you got it, now you can pay for it.
> I don't want it and I will never pay for it. There is NO way.
> Throw me in jail and you still pay for it and in fact you will be
> "paying more for it". Get a third job and vote for another money wasting
> Liberal. I'll still be here laughing.
> Just remember that while you were;
>
> "working my ass off all day and still making little headway."
>
> Obama was off on another 14 million dollar vacation to Hawaii and he was
Maybe you should run for office...
FREE VACATIONS
> poor and broke when he was in Chicago.... He's using your hard earned
> money to pay for his ROYAL vacations.
> I set up my life 5 years ago so I wouldn't be paying a shit load of
> Federal Taxes for his vacations or your Health Care. And I feel great
> about it. I don't feel over worked or under appreciated.
>
> You create the mess, you pay for it or you fix it.
jim
Jan 10, 2014, 7:46:16 AM1/10/14
to
is a subset of all ARM loans. The option part of option-ARM was
that the borrower got to choose how much (how little) to pay on the
loan (for a couple years). The loan had a very low minimum
payment before the interest adjustment kicked in. These loans
were also called "negative amortization loans" because the
amount owed grew over time if the borrower paid only the minimum.
Option-ARMs could never be financed by the GSEs. Regulation
prevented that.
Most option-ARM loans were also refinance loans. The housing
bubble was not about "affordable loans" and it was not about
expanding home ownership. Millions who owned homes before
the housing bubble lost their homes because of unaffordable
refinance loans like option-ARMs. 3/4 of all subprime loans
were designed to reduce home ownership. Home owner were
enticed into refinance loans that were designed purely to
milk the home owners of their equity. This is why the
home ownership rate peaked in 2003 and has been declining
for the last 10 years.
jim
Jan 10, 2014, 10:54:43 AM1/10/14
to
BeamMeUpScotty wrote:
>
> They were making "no money down" loans also.....
>
Freddie and Fannie never financed zero down payment loans.
The Bush administration tried to get The GSEs to finance
zero down payment loans but Congress wouldn't go along:
http://isteve.blogspot.com/2008/11/january-19-2004-press-release.html
prime cut
Jan 10, 2014, 1:24:57 PM1/10/14
to
On 1/9/2014 6:02 PM, jim wrote:
> It proved you
> It proved you
prime cut
Jan 10, 2014, 1:25:10 PM1/10/14
to
On 1/9/2014 8:42 PM, jim wrote:
> Sounds like you are saying the govt should be
> Sounds like you are saying the govt should be
http://www.businessinsider.com/three-ways-the-cra-pushed-countrywide-to-lower-lending-standards-2009-6
When we discuss the role of the Community Reinvestment Act and other
fair lending rules in contributing to lax lending standards, people bent
on exonerating the CRA often point out that many of the questionable
loans were made by non-depository mortgage companies not covered by the CRA.
Barry Ritholtz has been a prominent critic of the theory that the CRA
has some culpability for lax lending. He has pointed out that 50% of
subprime loans were made by mortgage service companies not subject
comprehensive federal supervision. “How was this caused by either CRA or
When we discuss the role of the Community Reinvestment Act and other
fair lending rules in contributing to lax lending standards, people bent
on exonerating the CRA often point out that many of the questionable
loans were made by non-depository mortgage companies not covered by the CRA.
Barry Ritholtz has been a prominent critic of the theory that the CRA
has some culpability for lax lending. He has pointed out that 50% of
subprime loans were made by mortgage service companies not subject
GSEs?” Barry asked.
As much as I respect Barry’s formidable analytical powers, I’m afraid
he’s taken too narrow of the view of the matter. His question is far
easier to answer than he suspects. Regulations often touch those who are
not directly regulated. Indeed, the regulation of one group in a
marketplace will almost always wind up affecting other groups.
More concretely, there are three very specific ways in which the CRA
nudged Countrywide and other mortgage companies to adopt lax lending
standards.
1. The Creation Of Artificial Demand For Low-Income Mortgages. Banks
that were regulated by the CRA often found it difficult to meet their
obligations under the CRA directly. Long standing lending practices by
local loan officers were a big problem. But as banks expanded their
deposit bases and other businesses, they often found that they were at
risk of regulators discovering they had fallen behind in making CRA loans.
One way of addressing this problem was buying the loans in the secondary
market. Mortgage companies like Countrywide began to serve this entirely
artificial demand for CRA loans. Countrywide marketed its loans directly
to banks as a way for them to meet CRA obligations. "The result of these
efforts is an enormous pipeline of mortgages to low- and moderate-income
buyers. With this pipeline, Countrywide Securities Corporation (CSC) can
potentially help you meet your Community Reinvestment Act (CRA) goals by
offering both whole loan and mortgage-backed securities that are
eligible for CRA credit,” a Countrywide advertisement on its website read.
not directly regulated. Indeed, the regulation of one group in a
marketplace will almost always wind up affecting other groups.
More concretely, there are three very specific ways in which the CRA
nudged Countrywide and other mortgage companies to adopt lax lending
standards.
1. The Creation Of Artificial Demand For Low-Income Mortgages. Banks
that were regulated by the CRA often found it difficult to meet their
obligations under the CRA directly. Long standing lending practices by
local loan officers were a big problem. But as banks expanded their
deposit bases and other businesses, they often found that they were at
risk of regulators discovering they had fallen behind in making CRA loans.
One way of addressing this problem was buying the loans in the secondary
market. Mortgage companies like Countrywide began to serve this entirely
artificial demand for CRA loans. Countrywide marketed its loans directly
to banks as a way for them to meet CRA obligations. "The result of these
efforts is an enormous pipeline of mortgages to low- and moderate-income
buyers. With this pipeline, Countrywide Securities Corporation (CSC) can
potentially help you meet your Community Reinvestment Act (CRA) goals by
offering both whole loan and mortgage-backed securities that are
2. The Threat Of Regulation Is Often As Good As Regulation. It is
highly misleading to claim that just because mortgage companies were not
technically under the CRA that they were not required by regulators to
meet similar tests. In fact, regulators threatened that if the mortgage
would be brought under the CRA umbrella and required to do so.
Here’s how City Journal explains the dynamic:
To meet their goals, the two mortgage giants enlisted large
effort. Freddie Mac began an “alternative qualifying” program with the
Sears Mortgage Corporation that let a borrower qualify for a loan with a
monthly payment as high as 50 percent of his income, at a time when most
private mortgage companies wouldn’t exceed 33 percent. The program also
monthly payment as high as 50 percent of his income, at a time when most
allowed borrowers with bad credit to get mortgages if they took
credit-counseling classes administered by Acorn and other nonprofits.
Subsequent research would show that such classes have little impact on
default rates.
Pressuring nonbank lenders to make more loans to poor minorities didn’t
credit-counseling classes administered by Acorn and other nonprofits.
Subsequent research would show that such classes have little impact on
default rates.
stop with Sears. If it didn’t happen, Clinton officials warned, they’d
seek to extend CRA regulations to all mortgage makers. In Congress,
Representative Maxine Waters called financial firms not covered by the
CRA “among the most egregious redliners.” To rebuff the criticism, the
Representative Maxine Waters called financial firms not covered by the
Mortgage Bankers Association (MBA) shocked the financial world by
signing a 1994 agreement with the Department of Housing and Urban
Development (HUD), pledging to increase lending to minorities and join
in new efforts to rewrite lending standards. The first MBA member to
sign up: Countrywide Financial, the mortgage firm that would be at the
core of the subprime meltdown.
3. The CRA Distorted the Mortgage Market. With banks offering
mortgages with high loan to value, delayed payment schedules and other
enticing features, the mortgage companies would have quickly found
themselves unable to compete if they didn’t offer similar loans. The
signing a 1994 agreement with the Department of Housing and Urban
Development (HUD), pledging to increase lending to minorities and join
in new efforts to rewrite lending standards. The first MBA member to
sign up: Countrywide Financial, the mortgage firm that would be at the
core of the subprime meltdown.
3. The CRA Distorted the Mortgage Market. With banks offering
mortgages with high loan to value, delayed payment schedules and other
enticing features, the mortgage companies would have quickly found
prime cut
Jan 10, 2014, 1:25:22 PM1/10/14
to
On 1/10/2014 5:46 AM, jim wrote:
> Option-ARMs could never be financed
> Option-ARMs could never be financed
http://www.businessinsider.com/three-ways-the-cra-pushed-countrywide-to-lower-lending-standards-2009-6
When we discuss the role of the Community Reinvestment Act and other
fair lending rules in contributing to lax lending standards, people bent
on exonerating the CRA often point out that many of the questionable
loans were made by non-depository mortgage companies not covered by the CRA.
Barry Ritholtz has been a prominent critic of the theory that the CRA
has some culpability for lax lending. He has pointed out that 50% of
subprime loans were made by mortgage service companies not subject
When we discuss the role of the Community Reinvestment Act and other
fair lending rules in contributing to lax lending standards, people bent
on exonerating the CRA often point out that many of the questionable
loans were made by non-depository mortgage companies not covered by the CRA.
Barry Ritholtz has been a prominent critic of the theory that the CRA
has some culpability for lax lending. He has pointed out that 50% of
subprime loans were made by mortgage service companies not subject
comprehensive federal supervision. �How was this caused by either CRA or
GSEs?� Barry asked.
As much as I respect Barry�s formidable analytical powers, I�m afraid
he�s taken too narrow of the view of the matter. His question is far
GSEs?� Barry asked.
As much as I respect Barry�s formidable analytical powers, I�m afraid
easier to answer than he suspects. Regulations often touch those who are
not directly regulated. Indeed, the regulation of one group in a
marketplace will almost always wind up affecting other groups.
More concretely, there are three very specific ways in which the CRA
nudged Countrywide and other mortgage companies to adopt lax lending
standards.
1. The Creation Of Artificial Demand For Low-Income Mortgages. Banks
that were regulated by the CRA often found it difficult to meet their
obligations under the CRA directly. Long standing lending practices by
local loan officers were a big problem. But as banks expanded their
deposit bases and other businesses, they often found that they were at
risk of regulators discovering they had fallen behind in making CRA loans.
One way of addressing this problem was buying the loans in the secondary
market. Mortgage companies like Countrywide began to serve this entirely
artificial demand for CRA loans. Countrywide marketed its loans directly
to banks as a way for them to meet CRA obligations. "The result of these
efforts is an enormous pipeline of mortgages to low- and moderate-income
buyers. With this pipeline, Countrywide Securities Corporation (CSC) can
potentially help you meet your Community Reinvestment Act (CRA) goals by
offering both whole loan and mortgage-backed securities that are
eligible for CRA credit,� a Countrywide advertisement on its website read.
not directly regulated. Indeed, the regulation of one group in a
marketplace will almost always wind up affecting other groups.
More concretely, there are three very specific ways in which the CRA
nudged Countrywide and other mortgage companies to adopt lax lending
standards.
1. The Creation Of Artificial Demand For Low-Income Mortgages. Banks
that were regulated by the CRA often found it difficult to meet their
obligations under the CRA directly. Long standing lending practices by
local loan officers were a big problem. But as banks expanded their
deposit bases and other businesses, they often found that they were at
risk of regulators discovering they had fallen behind in making CRA loans.
One way of addressing this problem was buying the loans in the secondary
market. Mortgage companies like Countrywide began to serve this entirely
artificial demand for CRA loans. Countrywide marketed its loans directly
to banks as a way for them to meet CRA obligations. "The result of these
efforts is an enormous pipeline of mortgages to low- and moderate-income
buyers. With this pipeline, Countrywide Securities Corporation (CSC) can
potentially help you meet your Community Reinvestment Act (CRA) goals by
offering both whole loan and mortgage-backed securities that are
2. The Threat Of Regulation Is Often As Good As Regulation. It is
highly misleading to claim that just because mortgage companies were not
technically under the CRA that they were not required by regulators to
meet similar tests. In fact, regulators threatened that if the mortgage
would be brought under the CRA umbrella and required to do so.
Here�s how City Journal explains the dynamic:
To meet their goals, the two mortgage giants enlisted large
effort. Freddie Mac began an �alternative qualifying� program with the
Sears Mortgage Corporation that let a borrower qualify for a loan with a
monthly payment as high as 50 percent of his income, at a time when most
private mortgage companies wouldn�t exceed 33 percent. The program also
monthly payment as high as 50 percent of his income, at a time when most
allowed borrowers with bad credit to get mortgages if they took
credit-counseling classes administered by Acorn and other nonprofits.
Subsequent research would show that such classes have little impact on
default rates.
Pressuring nonbank lenders to make more loans to poor minorities didn�t
credit-counseling classes administered by Acorn and other nonprofits.
Subsequent research would show that such classes have little impact on
default rates.
stop with Sears. If it didn�t happen, Clinton officials warned, they�d
seek to extend CRA regulations to all mortgage makers. In Congress,
Representative Maxine Waters called financial firms not covered by the
CRA �among the most egregious redliners.� To rebuff the criticism, the
Representative Maxine Waters called financial firms not covered by the
Mortgage Bankers Association (MBA) shocked the financial world by
signing a 1994 agreement with the Department of Housing and Urban
Development (HUD), pledging to increase lending to minorities and join
in new efforts to rewrite lending standards. The first MBA member to
sign up: Countrywide Financial, the mortgage firm that would be at the
core of the subprime meltdown.
3. The CRA Distorted the Mortgage Market. With banks offering
mortgages with high loan to value, delayed payment schedules and other
enticing features, the mortgage companies would have quickly found
themselves unable to compete if they didn�t offer similar loans. The
signing a 1994 agreement with the Department of Housing and Urban
Development (HUD), pledging to increase lending to minorities and join
in new efforts to rewrite lending standards. The first MBA member to
sign up: Countrywide Financial, the mortgage firm that would be at the
core of the subprime meltdown.
3. The CRA Distorted the Mortgage Market. With banks offering
mortgages with high loan to value, delayed payment schedules and other
enticing features, the mortgage companies would have quickly found
prime cut
Jan 10, 2014, 1:25:45 PM1/10/14
to
On 1/10/2014 8:54 AM, jim wrote:
> Private lenders were making zero
> Private lenders were making zero
Scout
Jan 10, 2014, 7:34:40 PM1/10/14
to
news:zIOdnVoJt-K78VLP...@bright.net...
Attempt to change the subject noted.
<snip>
Come back when you can stay on topic.
<snip>
Come back when you can stay on topic.
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