Fannie and Freddie make riskier loans

[werepossum]

None all of this talking is explaining to me how I can make money this time around. Please leave detailed instructions.

Step 1: Be "too big to fail". Note that this is measured in political favors and contributions as much as in jobs.

 

[Jhhnn]

Lol!

He has a point though. The GSEs' behavior started this crash, but the mortgage companies and banks turned it from a manageable isolated crash to a systemic crash. Had lenders honestly made the loans requested and no others, and treated the bundled loans as they deserved, then we would only have had to bail out the GSEs. Instead they recruited tame appraisers to inflate values, which meant that those loans which did default were way upside down. And they continued to make many more such loans than the GSEs could buy, then bundled them as comparable to traditional mortgages made under those "outdated metrics" such as credit score and employment/income verification. And to top it off, Congress and Clinton had obliterated the last sad vestiges of Glass-Steagall, which meant that all banks could buy the junks bonds, and nearly all did.

The GSE's didn't start this crash. What really put the GSE's in the corner is when they bought bundled securities furnished by lenders. Those are what turned out to be toxic assets subject to clawbacks under the Obama Admin.

The GSE's were merely the first to be bailed out. The bailout & FRB action took care of incestuous lenders each using over valued paper as reserves in fractional reserve banking methods, leveraged at up to 30:1.

They had to keep selling more MBS paper to keep that going, so they kept getting more "innovative". When investors wised up, quit buying, they were left holding the (empty) bag.

The smartest among them changed course early, bet heavily against MBS in the synthetic derivatives market, buying protection from outfits like AIG. First, take a cut off the top in creating bogus securities, then bet against them, knowing the other guys were pulling the same shit you were.

Anybody who thinks there weren't any winners, really big winners, really has shit fer brains.

 

[nickqt]

The GSE's didn't start this crash. What really put the GSE's in the corner is when they bought bundled securities furnished by lenders. Those are what turned out to be toxic assets subject to clawbacks under the Obama Admin.

The GSE's were merely the first to be bailed out. The bailout & FRB action took care of incestuous lenders each using over valued paper as reserves in fractional reserve banking methods, leveraged at up to 30:1.

They had to keep selling more MBS paper to keep that going, so they kept getting more "innovative". When investors wised up, quit buying, they were left holding the (empty) bag.

The smartest among them changed course early, bet heavily against MBS in the synthetic derivatives market, buying protection from outfits like AIG. First, take a cut off the top in creating bogus securities, then bet against them, knowing the other guys were pulling the same shit you were.

Anybody who thinks there weren't any winners, really big winners, really has shit fer brains.

Pay no attention to the trillions of dollars of wealth made.

Instead, look at that poor!

Ew, gross, a poor! Let's go kick the shit out of 'em!

 

[DCal430]

Some of the GSE MBS that focused on lower income borrowers with little down payment, similar to the CRA ones had extremely high foreclosure rates. Some were close to 50% if not more. Though I don't think their was enough of them to cause the crash it self.

 

[Jhhnn]

Some of the GSE MBS that focused on lower income borrowers with little down payment, similar to the CRA ones had extremely high foreclosure rates. Some were close to 50% if not more. Though I don't think their was enough of them to cause the crash it self.

If you're claiming that CRA loans had extremely high foreclosure rates, you'll need sources to back it up. I don't think you'll find any that are credible. The vast majority of "innovative" loans did not originate from CRA lenders-

http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html

If you really want to understand the demise of the ownership society flimflam, you need to understand Repo-

http://repowatch.org/about-repo/

 

[DCal430]

If you're claiming that CRA loans had extremely high foreclosure rates, you'll need sources to back it up. I don't think you'll find any that are credible. The vast majority of "innovative" loans did not originate from CRA lenders-

http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html

If you really want to understand the demise of the ownership society flimflam, you need to understand Repo-

http://repowatch.org/about-repo/

We own FNMA MBS that have had nearly half the loans foreclosed or shortsaled, and most of the other half modified. I assume our FNMA MBS look similar to some of the CRA ones, but I can't say if they are identical in performance.

We tried to help people with low income get homes with special DPA, IOP loans, and in the end the crash really hurt these people and many foreclosed. The crash didn't happen because these people couldn't pay. These people couldn't pay because of the crash.

 

[LegendKiller]

We own FNMA MBS that have had nearly half the loans foreclosed or shortsaled, and most of the other half modified. I assume our FNMA MBS look similar to some of the CRA ones, but I can't say if they are identical in performance.

We tried to help people with low income get homes with special DPA, IOP loans, and in the end the crash really hurt these people and many foreclosed. The crash didn't happen because these people couldn't pay. These people couldn't pay because of the crash.

I am going to call bullshit on this. Major. Fucking. Bullshit. Post the series and I will look at them on BBG and check out the paystrings.

There is *NO* way that a FNMA pool hit 50%. Even the *WORST* timeshare loan pool hit 30% CGLs on a static pool basis and that is assuming 0% recoveries.

Do you know what hits 50% CGLs, deep subprime auto. That's it.

I am one of the few people here that can call you on this and I call right now. Post it up.

 

[DCal430]

I am going to call bullshit on this. Major. Fucking. Bullshit. Post the series and I will look at them on BBG and check out the paystrings.

There is *NO* way that a FNMA pool hit 50%. Even the *WORST* timeshare loan pool hit 30% CGLs on a static pool basis and that is assuming 0% recoveries.

Do you know what hits 50% CGLs, deep subprime auto. That's it.

I am one of the few people here that can call you on this and I call right now. Post it up.

I can give you the pool number of PM if you want.

These are IOP MBS with a median FICO of under 700 and median LTV of 100%.