I have full faith in the United States Government and that they will not lead us into any more housing problems...

[Vic]

Yet the overwhelming majority of subprime loans made during the boom, and by far the most egregious in their combination of aggressive terms and lax underwriting standards, were made by independent mortgage lenders, financed almost entirely by Wall Street, with no govt affiliations, mandates, or CRA requirements whatsoever.

edit: BTW, it's interesting that you already know that the CRA only applies to FDIC-insured banks, and can even admit to it in an offhanded way, and yet don't think that undermines your point. Oh wait, that's because you didn't make a point, you just posted a single paragraph out of a single opinion piece.

 

[charrison]

Originally posted by: Vic
Yet the overwhelming majority of subprime loans made during the boom, and by far the most egregious in their combination of aggressive terms and lax underwriting standards, were made by independent mortgage lenders, financed almost entirely by Wall Street, with no govt affiliations, mandates, or CRA requirements whatsoever.

edit: BTW, it's interesting that you already know that the CRA only applies to FDIC-insured banks, and can even admit to it in an offhanded way, and yet don't think that undermines your point. Oh wait, that's because you didn't make a point, you just posted a single paragraph out of a single opinion piece.

Vic, so why is the fed holding the bag on the 2/3s of the bad notes if it was all the fault of private enterprise? The govt was an eager buyer of bad loans, there is no way to argue otherwise.

 

[Vic]

Originally posted by: charrison
Vic, so why is the fed holding the bag on the 2/3s of the bad notes if it was all the fault of private enterprise? The govt was an eager buyer of bad loans, there is no way to argue otherwise.

Link to this 2/3rd's figure? Oh, and please enlighten us as to what defines a 'bad note?' Seriously, do you apply this label based on terms or on performance? If terms, what terms makes a good note turn bad? Is it an aggressive adjustable rate? Or loose underwriting standards like stated income documentation? Or both? If performance, do you also include as 'bad' those which were made with sound underwriting standards at origination but then later went into default due to borrower-based factors like loss of income, illness, marital problems, or just plain ol' intentional default due to a busted housing bubble leaving the borrower underwater? (edit: and don't argue a 20% down requirement to prevent the last, the toughest hit markets have seen price declines of 50% and more, meaning even those who put 20% down could be 30% underwater).

BTW, I'm not arguing that the govt didn't buy any bad loans, nor have I ever said that it was all the fault of private enterprise, but nice straw men :roll:

Clearly you can't discuss here without resorting to absolutes and insisting that I conform to some ideological extreme for the sake of mirroring your own ideological extreme.

My advice to you is that just because you read it on the internet, and it jives with your ideological views, doesn't mean it's true, or that your copying and pasting it elsewhere on the internet makes you a expert.

 

[charrison]

Originally posted by: Vic

Originally posted by: charrison
Vic, so why is the fed holding the bag on the 2/3s of the bad notes if it was all the fault of private enterprise? The govt was an eager buyer of bad loans, there is no way to argue otherwise.

Link to this 2/3rd's figure?

Link above, important text quoted. Do I need to link it again?

Oh, and please enlighten us as to what defines a 'bad note?' Seriously, do you apply this label based on terms or on performance? If terms, what terms makes a good note turn bad? Is it an aggressive adjustable rate? Or loose underwriting standards like stated income documentation? Or both? If performance, do you also include as 'bad' those which were made with sound underwriting standards at origination but then later went into default due to borrower-based factors like loss of income, illness, marital problems, or just plain ol' intentional default due to a busted housing bubble leaving the borrower underwater? (edit: and don't argue a 20% down requirement to prevent the last, the toughest hit markets have seen price declines of 50% and more, meaning even those who put 20% down could be 30% underwater).

And given that the fed had to bail out freddie and fannie, I think it is pretty obvious they were holding a crapload of toxic mortgages. And it appears FHA is needing a bailout as well now.

BTW, I'm not arguing that the govt didn't buy any bad loans, nor have I ever said that it was all the fault of private enterprise, but nice straw men :roll:

In your previous post yous tated the overwhelming majority of bad loans were made by the private sector, yet the govt(freddie, fanni,..) is holding 2/3s of then. Both statements cannot be true.

Clearly you can't discuss here without resorting to absolutes and insisting that I conform to some ideological extreme for the sake of mirroring your own ideological extreme.

Where did I say that only the govt was at fault. Govt regulation pushing home ownership, low interest from the fed, consumers getting caught up in the bubble all played a part. But as far as absolutes go, you pretty much argue that the govt regulation had little to do with this bubble. On that we will have to disagree

My advice to you is that just because you read it on the internet, and it jives with your ideological views, doesn't mean it's true, or that your copying and pasting it elsewhere on the internet makes you a expert.

I never said I was an expert, but facts are facts. The govt is holding the bag on alot of loans it was eager to purchase in order to drive up home ownership. Did other things help cause it, yes, but this is large enough to not ignore and it makes little sense to attempt to re inflate the bubble.

 

[Zstream]

Originally posted by: Vic

Originally posted by: Zstream

Originally posted by: Vic

Originally posted by: Patranus
I love how the Democrats in congress and the white house are also trying to expand the community reinvestment act.

Only morons still believe in Limbaugh's myth that the CRA had anything to do with the housing bubble.

The OP is a troll. In fact, the article itself is pretty shameful in its complete and utter ignorance of lending practices. From the other links on it, it looks like it has a pretty strong anti-FHA bias.

So you believe that CRA had nothing to do with Predatory lending and the fact they could use CRA as a loophole?

Please tell us exactly which 'predatory lenders' used CRA as a loophole. Name names and describe how they did it. I'll await your reply.

There are plenty of sources, little lazy to provide more.

In a 2002 study exploring the relationship between the CRA and lending looked at as predatory, Kathleen C. Engel and Patricia A. McCoy noted that banks could receive CRA credit by lending or brokering loans in lower-income areas that would be considered a risk for ordinary lending practices. CRA regulated banks may also inadvertently facilitate these lending practices by financing lenders. They also noted that CRA regulations, as then administered and carried out by Fannie Mae and Freddie MAC, did not penalize banks that engaged in these lending practices. They recommended that the federal agencies use the CRA to sanction behavior that either directly or indirectly increased predatory lending practices by lowering the CRA rating of any bank that facilitated in these lending practices.[95]

The FDIC has tried to address this issue by "stopping abusive practices through the examination process and supervisory actions; encouraging banks to serve all members and areas of their communities fairly; and providing information and financial education to help consumers make informed choices". FDIC policy currently states that "predatory lending can have a negative effect on a bank's CRA performance

 

[Vic]

Originally posted by: charrison
Link above, important text quoted. Do I need to link it again?

As I already pointed out, that's an opinion piece. It doesn't even cite its own sources, and its bias is almost silly.

And given that the fed had to bail out freddie and fannie, I think it is pretty obvious they were holding a crapload of toxic mortgages. And it appears FHA is needing a bailout as well now.

Nice duh-version.

In your previous post yous tated the overwhelming majority of bad loans were made by the private sector, yet the govt(freddie, fanni,..) is holding 2/3s of then. Both statements cannot be true.

And they're not. Your posted article is bullshit, as it defines a "subprime and other weak loan" solely on the fact that it was originated by a mortgage broker. I think you missed that fact even though you posted it here. Read it again. What you posted said that 2/3rds of the loans originated by mortgage brokers were sold to GSEs. It then uses the amazing logic that because all loans made by mortgage brokers were subprime and other weak loans, and that 2/3rds of those loans made by mortgage brokers, therefore the GSEs funded and are holding 2/3rds of all the bad loans out there. As mortgage brokers also make prime and other solid loans, and GSEs bought more or less 100% of those, that argument falls to shit.

When I referred to subprime loans, I was referring to actual subprime loans, defined by terms and underwriting practices, typically defined as loans with above market APRs and loose income, credit, and appraisal standards. Of those, the vast majority were financed by Wall Street. And yet even during the boom heyday, subprime (aka 'non-conforming' loans because the GSEs would not buy them) never made up even 30% of the mortgage market. But when a buyer could easily use one to buy more home than they could afford, subprime loans had a significant effect in propping up housing prices.

Where did I say that only the govt was at fault. Govt regulation pushing home ownership, low interest from the fed, consumers getting caught up in the bubble all played a part. But as far as absolutes go, you pretty much argue that the govt regulation had little to do with this bubble. On that we will have to disagree

Except we don't disagree on that. Govt and private industry are both complicit in what happened. As are the other participants in the market, like those giddy buyers and sellers.
Blaming the CRA though, it just way wide of the mark. Other govt regs were considerably more at fault.

I never said I was an expert, but facts are facts. The govt is holding the bag on alot of loans it was eager to purchase in order to drive up home ownership. Did other things help cause it, yes, but this is large enough to not ignore and it makes little sense to attempt to re inflate the bubble.

Your facts are not facts, just distortions. Your assessment of the present scenario, however, is more or less accurate, you just don't seem to remember or understand how we got here.

 

[charrison]

Originally posted by: Vic

Originally posted by: charrison
Link above, important text quoted. Do I need to link it again?

As I already pointed out, that's an opinion piece. It doesn't even cite its own sources, and its bias is almost silly.

Well you right a source is not sighted, but lets face it is not a stretch either. The govt was encouraging homeownership and is now holding a crapload of bad debt.

And given that the fed had to bail out freddie and fannie, I think it is pretty obvious they were holding a crapload of toxic mortgages. And it appears FHA is needing a bailout as well now.

Nice duh-version.

But still the truth.

In your previous post yous tated the overwhelming majority of bad loans were made by the private sector, yet the govt(freddie, fanni,..) is holding 2/3s of then. Both statements cannot be true.

And they're not. Your posted article is bullshit, as it defines a "subprime and other weak loan" solely on the fact that it was originated by a mortgage broker. I think you missed that fact even though you posted it here. Read it again. What you posted said that 2/3rds of the loans originated by mortgage brokers were sold to GSEs. It then uses the amazing logic that because all loans made by mortgage brokers were subprime and other weak loans, and that 2/3rds of those loans made by mortgage brokers, therefore the GSEs funded and are holding 2/3rds of all the bad loans out there. As mortgage brokers also make prime and other solid loans, and GSEs bought more or less 100% of those, that argument falls to shit.

When I referred to subprime loans, I was referring to actual subprime loans, defined by terms and underwriting practices, typically defined as loans with above market APRs and loose income, credit, and appraisal standards. Of those, the vast majority were financed by Wall Street. And yet even during the boom heyday, subprime (aka 'non-conforming' loans because the GSEs would not buy them) never made up even 30% of the mortgage market. But when a buyer could easily use one to buy more home than they could afford, subprime loans had a significant effect in propping up housing prices.

Where did I say that only the govt was at fault. Govt regulation pushing home ownership, low interest from the fed, consumers getting caught up in the bubble all played a part. But as far as absolutes go, you pretty much argue that the govt regulation had little to do with this bubble. On that we will have to disagree

Except we don't disagree on that. Govt and private industry are both complicit in what happened. As are the other participants in the market, like those giddy buyers and sellers.
Blaming the CRA though, it just way wide of the mark. Other govt regs were considerably more at fault.

I never said I was an expert, but facts are facts. The govt is holding the bag on alot of loans it was eager to purchase in order to drive up home ownership. Did other things help cause it, yes, but this is large enough to not ignore and it makes little sense to attempt to re inflate the bubble.

Your facts are not facts, just distortions. Your assessment of the present scenario, however, is more or less accurate, you just don't seem to remember or understand how we got here.

I fully understand how we got here. Govt tried to encourage home ownership and yes CRAiIs one piece of that(call it an unintended consequence) and I really dont think it is a good idea to expand that to cover other financial institutions.