Discussion in 'U.S. Politics' started by Mr. Shaman, Oct 8, 2008.
No prob. You can always modify your truths, down-the-road...when necessary.
Show 'em how-it's-done, Sean!
You are simply wrong. Yes banks made the loans, and then sold them to Fannie/Freddie types, who packaged them and resold them to investors.
To assume it is not connected shows a lack of understanding of the actual situation.
Absolutely....that's why I'll defer to THE PROS, on the issue.
I will agree with you on this one. I am in the loan industry and Iknow for a fact that the CRA had nothing to do with this. In fact, FANNIE AND FREDDIE had little to do with this. The problem with Fannie is that it was mis managed by Raines.
What brought the rest of the companies down was the greedy companies like Bearn and sterns, who decided to make stupid loans.
Everybody talks about sub prime loans for everything. In reality, sub prime were only a very small portion of the loans in the market.
Sub prime Were loans made to people with crappy credit. This was only 5% of the total loans originated in the nation. Rates were much higher and people understood that these were band aid loans. Get your credit fixed and in 2 years so you can get a better rate.
NINA LOANS no income, no assett. You basically didn't verify anything, other than the credit and as long as they had the 5 or 10% for downpayment then they could buy a house.
Bear and sterns Twisted the guidelines even more, by allowing NINA loans with zero down payment and starting @ 1% interest rate. This was only a teaser rate to get people into homes. This rate adjusts every month. People were over their heads buying homes for $450.00, when they only qualify for $150,000.
Everyone is guilty of this crap, including Realtors. They sure didn't complain when they were getting $ 20,000 commissions on every deal....
.....ALL of it due to DEREGULATION!!!!!!!
Which McCain saw the writing on the wall and tried to stop it back in 05.
As much as I hate to admit it, because Clinton is my man. It was due to his reform to HUD and FHA that a LOT OF THIS crap happened... I'm in the biz. I know what happened....
If you recall, Back in 96, Clinton asked Henry Cisneros, his appointed HUD secretary to come up with new ways to help people get into new homes....
Unfortunately, a good idea should had been modified at some point...
Shaman, let me know when you know something to rebuddle instead of copying and pasting stuff from the media....
This is the most dimwitted of the lib disinformation techniques:
"Shiit isn't shiit, it's ice cream."
From that hotbed of conservative thought, the Washington Post:
GOSH .......... LOOKS LIKE YOU'RE WRONNNNNNNNNNNNGGGGGG!!!!!!!!!!
Your article hardly takes any blame off of a bank for giving a bad loan.... In fact it seems to demonstrate that they (the investment houses) were simply selling a product that the market demanded to counter act the risky investments that banks (local banks) were required to give out.
I will agree with Calidem in his above postings on some points, but the roots of the idea of giving people with no business getting a loan can be generally traced back to the CRA. While I agree it was not a huge problem, until it was made stricter in later years, then added to the fact with changes in FED policy to create a massive bubble.
A lot of people (not democrats) saw the writing the wall and tried to stop it.
Shaman never thinks for himself. He just started posting again, but this is his main M.O. He finds someone saying something he already has determined to be the truth (pre-judging), then without fact checking or doing any outside research (self-thought), spams the link with MULTI-COLORED CAPS BOLD UNDERLINED WRITING, plus a bunch of !!!!!!!! for good measure, as if doing so makes his assumed correct hearsay more valid. But beyond this, rarely defends his assertions or actually engages in debate. I don't think he could if he wanted to. He has the hallmark of a blind sheep follower. Very similar to a cultist religious nut.
That said, I have a question!
My understanding is as follows.
There were two forms of 'deregulation'. One was a ban on various companies merging. This legislation did not cause the problem, because the companies that this legislation would have affected are not doing poorly.
The other was actually more of a government mandate to allow bad loans so people who should not be borrowing money could, to get a home.
Further, by Fannie and Freddie now accepting these loans, the government, through these GSEs, effectively told the industry they could make these high risk loans safely.
The suggestion is, if Fannie and Freddie would not have been willing to purchase these loans (because they were not economically sound), then likely the rest of the industry would not have either.
You seem to be suggesting that the entire industry would have made horribly risky loans without prompting through GSEs and government policy? At this level?
Fannie Mae and Freddiemac actually made decent loans. Most of those loans required to be full documentation disclosed. Which means that anyone applying for those loans needed to bring their last 2 years tax returns, w2s and bank statements.
I think the big issue comes from other financial institutions who used their own money to invest in what was called Portfolio loans. These types of loans did not conform to FANNIE and Freddie guidelines. Appraisal guidelines were more lose and qualifying guidelines were even easier. These created the Real Estate market to increase up to 25% in value each year in some markets.
The non qualifier loans created a crazy market. Everybody could qualify for a home. There was joke in our business that said: If you can put a mirror under their nose and it gets fogged, then he can qualify for a loan...
As I said before; some of those loans had a teaser rate. Once those rates matured, those people were unable to make a payment. This was a dominoe effect that started last year.
oNCE PROPERTY VALUES BEGAN TO DROP, others who adquired a FANNIE loan refused to pay for a house that is not worth the same value as when they bought it...
Countrywide was also a huge originator for FANNIE. They created a loan program called FAST AND EASY. This was a true non qualifier. They would package the loan and would sell it back to FANNIE as a full doc loan. All of these loan have had a huge default rate...
This is what I think created this whole mess that we're in....
Perplexing. What change in rules allowed Fannie and Freddie to purchase bundled loans, that they would not make themselves? That is what you are saying, right? They purchased loans from banks or lenders, that they themselves would not have made?
So you are suggesting that Fannie Mae loans were peachy, but because of the sub-prime burst, which cause home values to drop, people with legit loans with Fannie Mae simply refused to pay because their homes were not worth as much as the original loan?
I find it odd this is the first time I've heard this, regardless of source.
I'm confused by this. You are claiming that Countrywide made thousands of "Non qualifier" loans, and then I guess fabricated all the paper work to then sell the loan to Fannie Mae as a full doc? If the original loan was 'non-qualifier' and through Fannie Mae, how would Fannie Mae be convinced it was full doc?
What don't you understand? I'm not here to give you a class on mortgages...
Perhaps it would be helpful if you did. There are a lot of people who don't understand how mortgages really work, how they're bundled and sold, why they're sold, etc., and as they are a major part of the current economic heartburn we're all dealing with, your expertise could help all of us understand this small part of the equation.
OK, I understand what you're saying, but the fact remains that Fannie and Freddie did in fact buy the loans, thereby assuming the risks associated with them, and that is the crux of the problem.
Separate names with a comma.