A Government-Mandated Housing Bubble

[eleison]

Originally posted by: Vic
Almost none. CRA's perform better than average, even better than Fannie/Freddie prime in many cases, mostly because of the strict underwriting criteria and oversight around them. For example, there were NO stated income (aka liar loan) CRA loans.

I doubt, eleison, that you even know what a CRA mortgage really is, or why the program exists in the first place.

Every CRA proponent seems to takes this on faith. When it comes to actually providing solid data: number of CRA related foreclosures to other foreclosures... there is a stunned silence. This simple data would unequivocally show how well or how bad CRA's really performed. Actually, IMHO, if the CRA's did perform better I'm sure someone would shout it from the tallest buildings... but only silence or double speak.

 

[Vic]

Originally posted by: eleison

Originally posted by: Vic
Almost none. CRA's perform better than average, even better than Fannie/Freddie prime in many cases, mostly because of the strict underwriting criteria and oversight around them. For example, there were NO stated income (aka liar loan) CRA loans.

I doubt, eleison, that you even know what a CRA mortgage really is, or why the program exists in the first place.

Every CRA proponent seems to takes this on faith. When it comes to actually providing solid data: number of CRA related foreclosures to other foreclosures... there is a stunned silence. This simple data would unequivocally show how well or how bad CRA's really performed. Actually, IMHO, if the CRA's did perform better I'm sure someone would shout it from the tallest buildings... but only silence or double speak.

Take what on faith? As I posted earlier in this thread, there have been threads on this in the past, including some of my own where I have linked and/or posted the relevant data to support this. Demanding that I repost the same things I've already posted a dozen times over here and claiming that it's taking something on 'faith' when I don't solely for your benefit to get out of searching is either entitlement mentality on your part or trolling at its most ignorant.
In other words, sir, fuck off.

 

[eleison]

Originally posted by: Vic

Originally posted by: eleison

Originally posted by: Vic
Almost none. CRA's perform better than average, even better than Fannie/Freddie prime in many cases, mostly because of the strict underwriting criteria and oversight around them. For example, there were NO stated income (aka liar loan) CRA loans.

I doubt, eleison, that you even know what a CRA mortgage really is, or why the program exists in the first place.

Every CRA proponent seems to takes this on faith. When it comes to actually providing solid data: number of CRA related foreclosures to other foreclosures... there is a stunned silence. This simple data would unequivocally show how well or how bad CRA's really performed. Actually, IMHO, if the CRA's did perform better I'm sure someone would shout it from the tallest buildings... but only silence or double speak.

Take what on faith? As I posted earlier in this thread, there have been threads on this in the past, including some of my own where I have linked and/or posted the relevant data to support this. Demanding that I repost the same things I've already posted a dozen times over here and claiming that it's taking something on 'faith' when I don't solely for your benefit to get out of searching is either entitlement mentality on your part or trolling at its most ignorant.
In other words, sir, fuck off.

Yea... your right man: the data's "out there somewhere".. :thumbsup: I think there really isn't anymore more to say about the subject.. thanks for playing though..

 

[charrison]

Originally posted by: Vic

Where did I say they played a trivial part? And it was President Bush who was pushing subprime though his America's Homeownership Challenge program. This subprime, however, was unrelated to the CRA and Fannie/Freddie (who, once again, were private entities during the boom, government-sponsored only means that they were subject to oversight and that the govt would step in and nationalize them if they failed, which did happen). Stop using straw men, educate yourself on the facts instead of the rhetoric, and get a clue. :roll:

I think I have done a pretty job of educating myself on this. And the government is responsible for a big chunk of this problem. The government has been encouraging home ownership via one mechanism or another for a very long time.

CRA played a role in encouraging home ownership.
FAnnie and freddie played a big role. They were the willing buyer of sub prime mortgage. The government was the reason they were the willing buyer. Government wanted then to make loans and would bail them out if there was a problem. There was no moral hazard for fannie and freddie as they had the fed to bail them out. There was no mortgage too risky. Even when it became obvious there were problems with fannie and freddie, the Congressional oversight said there was no problem and continued on as usual.


There were other factors involved, but this was largely created by our government.

 

[Phokus]

Sorry Charrison, you don't know what you're talking about: http://forums.anandtech.com/me...=2279130&enterthread=y

 

[charrison]

Originally posted by: Phokus
Sorry Charrison, you don't know what you're talking about: http://forums.anandtech.com/me...=2279130&enterthread=y

I dont?

From 1994 to 2003, Fannie and Freddie's purchases of mortgages, as a percentage of all mortgage originations, increased from 37% to an all-time high of 57%, effectively cornering the conventional conforming market. With leverage ratios that averaged 75-to-1, and funds raised with implicit government backing, the GSEs were pouring money into the housing market. This in itself would have driven the housing bubble.

...

For example, in each of the years 2000 and 2001, the first years for which data are available, 18% of Fannie's originations--totaling $157 billion--were loans with FICO scores of less than 660 (the federal regulators' cut-off point for defining subprime loans). There is no equivalent data available for Freddie, but it is likely that its purchases were proportionately the same, amounting to an estimated $120 billion.

...

Data for Alt-A loans before 2005 are unavailable, but the fact that that Fannie and Freddie now hold 60% of all outstanding Alt-A loans provides a strong indication of the purchases they were making for many earlier years.

...

Even when they were not the purchasers, the GSEs were Wall Street's biggest customers, often buying the AAA tranches of subprime and Alt-A pools that Wall Street put together. By 2007 they held $227 billion (one in six loans) in these nonprime pools, and approximately $1.6 trillion in low-quality loans altogether.

Yeah there was no problem here...

The private sector may have been giving the loans, but fannie and freddie were buying them.

 

[Phokus]

Originally posted by: charrison

Originally posted by: Phokus
Sorry Charrison, you don't know what you're talking about: http://forums.anandtech.com/me...=2279130&enterthread=y

I dont?

From 1994 to 2003, Fannie and Freddie's purchases of mortgages, as a percentage of all mortgage originations, increased from 37% to an all-time high of 57%, effectively cornering the conventional conforming market. With leverage ratios that averaged 75-to-1, and funds raised with implicit government backing, the GSEs were pouring money into the housing market. This in itself would have driven the housing bubble.

...

For example, in each of the years 2000 and 2001, the first years for which data are available, 18% of Fannie's originations--totaling $157 billion--were loans with FICO scores of less than 660 (the federal regulators' cut-off point for defining subprime loans). There is no equivalent data available for Freddie, but it is likely that its purchases were proportionately the same, amounting to an estimated $120 billion.

...

Data for Alt-A loans before 2005 are unavailable, but the fact that that Fannie and Freddie now hold 60% of all outstanding Alt-A loans provides a strong indication of the purchases they were making for many earlier years.

...

Even when they were not the purchasers, the GSEs were Wall Street's biggest customers, often buying the AAA tranches of subprime and Alt-A pools that Wall Street put together. By 2007 they held $227 billion (one in six loans) in these nonprime pools, and approximately $1.6 trillion in low-quality loans altogether.

Yeah there was no problem here...

The private sector may have been giving the loans, but fannie and freddie were buying them.

Look at the years you're citing: 1994-2003, irrelevant.

Now look at the data from my article (where it provides data from more relevant years where subprime mortgages were exploding). Thanks to tougher regulation, fannie and freddie held a much smaller share of the subprime mess that it COULD have owned. The private sector owned the vast majority of subprime loans.

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks ? not Fannie and Freddie ? dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.

 

[charrison]

Originally posted by: Phokus

Look at the years you're citing: 1994-2003, irrelevant.

Now look at the data from my article (where it provides data from more relevant years where subprime mortgages were exploding). Thanks to tougher regulation, fannie and freddie held a much smaller share of the subprime mess that it COULD have owned. The private sector owned the vast majority of subprime loans.

[/quote]

And they those in charge still insisted everything was ok at fannie and freddie, when in fact they were quite over leveraged. And how do you think private companies acted when they saw how fannie and freddie were doing loans. We can do that too. The government is largely responsible for the housing mess.

 

[sandorski]

Originally posted by: charrison

Originally posted by: Phokus

Look at the years you're citing: 1994-2003, irrelevant.

Now look at the data from my article (where it provides data from more relevant years where subprime mortgages were exploding). Thanks to tougher regulation, fannie and freddie held a much smaller share of the subprime mess that it COULD have owned. The private sector owned the vast majority of subprime loans.

And they those in charge still insisted everything was ok at fannie and freddie, when in fact they were quite over leveraged. And how do you think private companies acted when they saw how fannie and freddie were doing loans. We can do that too. The government is largely responsible for the housing mess.

[/quote]

bs

 

[JACKDRUID]

Originally posted by: Vic

And like I said, if Obama fscks up, that's to be judged by the future. Bush did fsck up, and that's being judged now.

Totally agree Bush fsck up. If I was Obama I would have exit out of election... this is not a great time to run for president.