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November 3, 2011 at 1:38 am #738036
Kootch… obviously you hate our form of government, want more tax cuts for the 1%… but your BLATANT lies makes it hard to take ANY argument you make, legitimate or not, worth of any substance.
Make an argument, but don’t lie about it. simple.November 3, 2011 at 1:59 am #738037
84.3 percent of subprime loans in 2006 were made by financial institutions not governed by the CRA.November 3, 2011 at 3:32 pm #738038
it wasn’t all those loans to those nefarious scamming poor people that did us in?
didn’t think soNovember 6, 2011 at 8:33 am #738039
You are again false. CRA was the law of the land. Obama filed suit, and settled out of court when BofA folded. Janet Reno also filed suit against Fannie and Freddie… to underwrite more “low income loans” and lowered the debt the equity ratio. Again you are wrong, community banks with rare exception sell those loans as instruments to raise capital reserve requirements..to Fannie and Freddie… because the loan scope was becoming to large, Clinton authorized the Banking Modernization act… you miss the entire scope of the fiasco … the government gave a market for bundled loans….have you even looked at how much of the total loan portfolio is owned by Fannie and Freddie? BTY I could sue B of A under the CRA…the CRA is a law… not a governing body. You seem to know not a damn thing about the relationships … you don’t even know NO bank is administered by CRA … it’s not even an agency.November 6, 2011 at 8:42 am #738040
jamminJ … a few for ya so you can get outraged AND know facts.
This is good one.. let me know if you need it one sentence at a time or if the words are too big for you. It’s a wee bit longer than “Yes We Can” or “Tax the Rich”…
“Under the Clinton administration, federal regulators began using the act to combat “red-lining,” a practice by which banks loaned money to some communities but not to others, based on economic status. “No loan is exempt, no bank is immune,” warned then-Attorney General Janet Reno. “For those who thumb their nose at us, I promise vigorous enforcement.”
The Clinton-Reno threat of “vigorous enforcement” pushed banks to make the now infamous loans that many blame for the current meltdown, Richman said. “Banks, in order to not get in trouble with the regulators, had to make loans to people who shouldn’t have been getting mortgage loans.”
This threat combined with the government backing of Fannie and Freddie set the stage for the current uncertainty, because the “banks could just sell the loans off to Fannie or Freddie,” who could buy them with little regard for negative financial outcomes, Richman said”
See how that works? Make shit loans.. then sell them to the taxpayer…. god don’t hold them! They are too toxic. Cheap, risk free, money, the train ran buck naked wild. Same thing we are now doing with student loans.
See Repeal of Glass Steagall Act… put in place after the great Depression.
“With this bill,” Treasury Secretary Lawrence H. Summers said, “the American financial system takes a major step forward toward the 21st Century — one that will benefit American consumers, business and the national economy.” Opponents said it would have the opposite effect, creating behemoths that will raise fees, violate customers’ privacy by sharing and selling their personal data, and put the stability of the financial system at risk
They gave banks the market they needed to sell junk… IT WAS the federal government…without them.. none of it could have happened.November 6, 2011 at 9:20 am #738041
“84.3 percent of subprime loans in 2006 were made by financial institutions not governed by the CRA.”
You are asking the wrong question IMO.. who did they sell them to? Who was the second biggest loan originator? For gods sake it was Quicken!!! Know how long they held my mortgages? Less than 30 days… once they got their origination fees… they got sold off. Not one mortgage out of 3 is with the orginating bank.
From them to Citi, to CitiInvestments/ Goldman Sachs to FH/foreign banks, 401k plans/Pension Fund Managers… etc… and then they bought risk insurance from AIG … it was all a paper push. BTY CRA only applied to banks that were FDIC insured.November 6, 2011 at 3:17 pm #738042
you can read can’t you…
“84.3 percent of subprime loans in 2006 were MADE by financial institutions not governed by the CRA”
Made by refers to origination point, not where those loans ended up.
“BTY CRA only applied to banks that were FDIC insured”
Yup.. it did.
That made them originate in actual banks who were more likely to hold onto the loans they made than the mortgage institutions who bundled and sold them as quickly as they could.
There is no question that Janet Reno prosecuted banks that red-lined entire communities regardless of the borrower’s income and/or credit history.
but the assumption that applying the law led to credit failures is erroneous.
If you take a really good look at who defaults on loans you will find that the stats fly in the face of popular assumptions.
that is why micro lending is so successful. There is an incredibly small default rate.
it seems that those who have little to lose are careful not to lose it.November 6, 2011 at 4:07 pm #738043
kootch: tell me with a straight face that wall street doesn’t love this model and the returns it provided:November 6, 2011 at 4:52 pm #738044
we don’t have to rewrite history. let’s just check the archives, shall we?
ahh! here we go. from NYT, 1999. yep, there’s the evil clinton administration and that bully, fannie mae, at the root of the whole thing:
Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.
oops. i guess the free market does screw up from time to time, huh, kootch?November 6, 2011 at 5:14 pm #738045November 6, 2011 at 6:30 pm #738046
Every time Kootch posts in defense of his oligarchical massas, and ALL the financial shenanigans they perpetrated on our World, I can’t help but get a vision of Cleavon Little in my head:
I can virtually hear them say the same words Cleavon says at the end of the scene: oh baby, you are soooo good; and those people are sooooo dumb.November 7, 2011 at 7:16 am #738047
i will make a loan to anyone… collect 4-10 grand in fees and points.. and then dump them into the lap of the FHA.. for about 20 minutes of paperwork. Yea.. no shit Quicken and the like were not FDIC insured. But the sure knew where to sell the paper didn’t they. And in the end… they were right. It was risk free… if the federal government did not give the “banks” a place and a market to sell the crap…it would have never happened. Sorry JoB … but if you suggest selling mortgages to those that can’t afford the payments that’s crazy liberal talk. ONE of the criteria is the property is located in a secure enough market area where the real property is not likely to deteriorate to the point where it is not collateral. Would you loan with 0 down, 110 per cent loan to equity in Camden, or Newark? DOJ thought it was a great investment. Politicians are not businesspersons and should stop pretending they are. They get outsmarted, or hustled, take your pick, everytime. BTY.. lest you think all that dough went to “new” homeowners.. over 60% of new mortgages in the last decade were… refinances… where the middle class took equity out of homes, got eyeballs deeper in debt and pretty much went on a spending spree. When it all blew up in their faces.. and the speculation bubble burst…they blame Wall Street… sure. I listened to the Home Depot chief economist gloating over the glut of refinance money in the market and how they were so well positioned to take advantage of it. Indeed.November 7, 2011 at 1:30 pm #738048
wow, kootch. you sure know how to dance.
why did americans borrow so much?
because there was a flood of cheap foreign capital, and banks pushed that money off onto american consumers aggressively.
this whole economy – all of it – was created by the “free” market and republican deregulation. not the government.
and you know what? this is what you’re advocating happens again in order to get us out of trouble.
amazing.November 7, 2011 at 1:48 pm #738049
Because they are basically consumerist with a “I want mine now” mentality.? Dude.. the republicans? You better read up a bit more. The repeal of Glass Stegall came from Clinton. Umm where did all this cheap foreign capital come from that went direct to consumers? This i one I gott read!November 7, 2011 at 2:01 pm #738050
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers.
NO.. they wanted Fannie and Freddie to buy the crap loans that CRA compliance would cost. And why would Freddie and Fannie do it? You got the equation ass backwards.. as soon as Fannie and Freddie said “let er rip” they did. In fact… Fannie and Freddie started the whole business of mortgage backed securities. As soon as Clinton authorized credit default swaps and allowed both sides, investment and retail banking house went hog wild. Wanna see the tapes again? Maxine, Shumer, Clinton, Dodd, Rangel.. etc.. ALL of them refusing to audit FHA saying in fact .. LEND MORE? The Democraticaly controlled senate blocked any attempts at audit. You quoted my source exactly right
Right you are “Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits”
Wanna see Obama saying it was a cool idea to bury the crap mortgages with the good ones? Trouble is.. tas it would later ne apparent… there were more crap loans than good ones… but you are correct .. the Dems wanted more shit loans.. see your buddy Franklin Raines… that will help ya understand how horridly FHA managed oversight.November 7, 2011 at 2:48 pm #738051
Jamminj: We’ve learned over the past few weeks that Kootch won’t answer questions directly. When he doesn’t have an answer to a question like, what country’s government should we try to emulate, he just spouts right wing propoganda.
He’s been quoted major portions of the Community Reinvestment Act in past posts that specifically state that banks don’t have to make risky loans and he still blames Janet Reno for forcing banks to stop discriminating. Says that’s the primary reason for the recession.
He’s been told that some of us on the Blog actually had been employed by Banks that refused to make sub-prime loans during those mortgage fast and loose years and those banks took a lot of flak from the Washington Mutual types, but are now strong and doing well. He didn’t respond.
He’s been told about default credit swaps which were some of the major instruments of chaos triggering the recession and he just spouts more nonsense about the Obama administration.
His only answer is to blame government and call for a flat tax, while informing many of us that we don’t know anything about anything, and our research and references are bogus. Apparently electing a Republican and having a flat tax are the only options available to save the country and maybe the world. Good to know that all our problems can be solved with such simple solutions.November 7, 2011 at 3:38 pm #738052
the DOJ didn’t back loaning “0 down, 110 per cent loan to equity in Camden, or Newark”.
It took greedy mortgage brokers to do that.November 7, 2011 at 3:39 pm #738053
You could emulate the one we had twenty five years ago. It’s not discrimination to loand to those who are nto credit worthy. What good did it do? Ruined credit ratings of hundred of thousands. Just cause it sounds good, feels good, has a salving effect on progressive.. if it doesn’t work it doesn’t work. I said very specifically and you don’t seem to read either…TDe.. if you review the Financial Services Modernization Act you will find credit default swaps were approved by Clinton. To deny otherwise is simply not true. I have posted multiple sources…some from the right and some from the left. Hey, I won’t let you be a heart surgeon either…that’s nto discrimination, that’s not qualified. Our country is being wrung dry by whining liberals who don’t hitch up their panties and get to work doing something. Funny thing, if you read the front page of the Seattle Times… generational wealth gap… we keep imposing more and more burdens on the young fo fulfill progressive fantasy dreams. None of us paid as many taxes, fees that we are demanding our children do. Include Obamacare in that. Every cost you lay on producers of good and services… it gets passed along with a margin of profit (rents, utilties, tuition increases) so that they are being screwed to the floor. We are passing all that debt , all those increased costs on to a generation that is so crippling they will never joint the middle class, IF you read my posts…I also nodded to some institutions that did in fact make healthy home loans and kept them as part of their portfolio.. KeyBank factored very few home loans as I posted. You want the URL TDe on credit default swaps that Clinton ushered in? Again?November 7, 2011 at 3:40 pm #738054
so homeowners tapping into the equity in their homes were bad
but the mortgage brokers who sold and wrote the deals were good
because THEY were making a buck?
that’s an argument i can understand
not one i agree with at all
but at least one i can understand.November 7, 2011 at 3:42 pm #738055
again.. assumptions get in your way.
if you assume that creditors were refusing to loan only to those whose credit histories didn’t merit loans.. then you have an argument.
of course, your assumption is wrong.
but i wouldn’t let that stop you.November 7, 2011 at 3:47 pm #738056
Yea, they tapped into their equity and converted their financial base into consumer spending. That is exactly what happened. Savings rates plummeted during the spending spree, so there was no cushion. For heavens sake look at the debt load carried by both consumes and their government. If TDe asserts all these loans were good … well, 40% of all homes in this country are underwater..like I said… and will say, having a market to sell to is essential … and the feds gave it. And the moronic that more spending is going to solve this is unfathomable.November 7, 2011 at 7:34 pm #738057
there is another way to look at that tapped equity you know.
if it hadn’t been for the packaged toxic mortgages sold as top rated bonds..
the mortgage industry wouldn’t have tanked
the economy wouldn’t have tanked
people wouldn’t have lost their jobs
and housing prices wouldn’t have fallen so far.
people would still be paying their mortgages
and you would have nothing to blame on them.
as for all that spending
when the balance of income moves from manufacturing to retail and services
spending is what keeps it afloat :(
Remember when Bush Jr sold spending as the patriotic thing to do?November 9, 2011 at 5:33 am #738058
lol. i provide you with a 12-year-old quote from NYT, written as the banks were pushing fannie to lower their underwriting standards so they could expand their market. they covered it as it was happening. and you counter with…
i’m sorry. what were you saying?
and i’ve told you before that clinton was a republican when it came to economics. so don’t try to tar me with the same brush as the guy who threw organized labor under the bus. repeatedly.
larry somers? greenspan? seriously?
to his credit, though, he raised the top marginal rate to 39%. and he made republicans like it.November 9, 2011 at 7:05 am #738059
No market for the securities… no bundling. I see Fannie and Freddie are looking for another 8 billion (and milion dollar bonuses) for their toxic loan portfolio. There was the market for the junk bundles… ya think the largest residential mortgage holder in the world should have taken a wee peek at what they were buying? No? They sent the signal out… “you bundle em’ we’ll buy em”. How many hundreds of billions will it yet cost? Some of you want sooo desperately to blame the banks… of course they knew there was a lotta crap.. that’s why they dumped them in our lap. Fannie was supposed to be the non partisan regulator… not the cheerleader. redblack… the audits? Fannie Mae audits? Defeated in the Senate by one Mr. Dodd who wouldn’t bring it out of committee…
“I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.”
redblack?November 9, 2011 at 9:55 am #738060
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