Reply With QuoteThat lenders weren't forced to lend.
Neither of them ever said otherwise.
That lenders weren't forced to lend.
When will the world learn that a million men are of no importance compared with one man? [Henry David Thoreau]
They didn't force lenders to lend. They enforced statutes forbidding redlining. Moreover, the majority of subprime loans were made by non-bank lenders like Countrywide Financial that don't fall under their jurisdiction.
Chachma v'Oz (06-05-2012), GuerillaGorilla (06-05-2012)
The DOJ threatening and suing banks, ACORN busting in on board meetings and picketing banks? All based on charges of racism that may or may not be true. Seems like forced lending to me. Enforcing those statutes lead to widespread subprime lending whether it was CRA related or not.
When will the world learn that a million men are of no importance compared with one man? [Henry David Thoreau]
Can you provide examples of the DOJ suing banks? I'm not denying that it happened, I just couldn't find any examples save for 2 where the banks were not refusing lending, but charging higher rates based on race. I'm curious to see examples of this happening.Originally Posted by Freedom&Liberty
And why is what ACORN does reflect in any way on the government, regardless of the party in power?
Finally, why are you so selective as to which parts of my posts you decide to respond?
Howard Cosell: “What's right isn't always popular. What's popular isn't always right.”
James Madison: “In Republics, the great danger is, that the majority may not sufficiently respect the rights of the minority”
Abraham Lincoln: “If by the mere force of numbers a majority should deprive a minority of any clearly written constitutional right, it might, in a moral point of view, justify revolution”
The DOJ sued banks for redlining, not subprime lending. The Feds did not force lenders to make billions in commodity-based mortgage profits, credit default swaps, etc.
Subprime began to take off 1995. It became widespread by 2005..
Democrats provide Fannie and Freddie to remove the risk. Every loan F&F bought, freed up money that could be lent again. Wash, rinse and repeat enough times and you make a nice profit from loan originations.How did the government provide incentive to profit? The profitability came from the fallacious notion that housing prices would never correct, and therefore defaulting subprime loans would never be an issue as they could just refinance or foreclose. The profit was always there, what became ignored was the risk inherent with it. The risk was ignored because of the provisions that allowed lenders to sell off all of the risk once the mortgages closed.
That's because it came after the fact. If the loans weren't made, CDO's, CDS's, etc., never would have been an issue.As I've said before in this thread - the largest component of the crisis was not solely the bad lending practices, but the ability for investment banks to then collateralize this debt and resell it in a cloaked form. This came from the opportunity that existed to profit as a result. You seem to skip over that component of every one of my posts.
Of course not.I've already agreed with you on this point - but you ignored the actual meat of my comment: does the government have any more place in providing farming loans or veterans loans?
Clinton started the train, Bush yelled as it went by. No doubt Bush should have done more.So it's not Bush's fault because he didn't stop the train, but it IS Clinton's fault because he didn't create legislation to prohibit these types of mortgages? Which one is it?
Government should be involved as little as possible. Let the banks take the risk.And should governments be creating legislation to prohibit types of mortgages, or should they not be involved in real estate lending markets?
Like I said earlier, all the banks did was take advantage of the environment they were given. That's historically what banks do. It's not like Bush didn't try - http://sweetness-light.com/archive/b...-times-in-2008Once again - I've never disagreed that the Democrats wear a good amount of blame in creating legislation - or removing legislation - that ultimately contributed to 2008. But the Republicans - and yes the banks and Big Business - are equally guilty, whether it be for not making efforts to correct the issue when problems started to show themselves, or for taking advantage of the lack of adequate legislation and oversight to maximize profitability, all at the cost of the average American.
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ‘‘The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.
http://www.sodahead.com/united-state...es/blog-29077/I'm interested in the root cause. For me, the CRA was the catalyst that started the explosion. As I said earlier 90% Democrat, 10% Republican.I respect the fact that you've kept this conversation civil - something that is very challenging to find on a forum. I understand from where your viewpoints originate, but I believe both parties are more worried about pointing the finger than they are just accepting that a problem existed (exists?) and trying to fix it.
Last edited by Freedom&Liberty; 06-05-2012 at 06:11 PM.
When will the world learn that a million men are of no importance compared with one man? [Henry David Thoreau]
This is from a speech given by Janet Reno. In it she explains what the DOJ has been up to.We want to see equal credit being offered by banks because it is the right thing to do, because the law requires it, because it is good business, because people accept it.
You've noted that since the inception of our fair lending initiative in 1992 the Department has filed and settled 13 major fair lending lawsuits. We are going to continue these efforts under the Acting Assistant Attorney General Bill Lann Lee in every way that we possibly can. We will continue to focus on discrimination in underwriting, the process of evaluating the qualifications of credit applicants. This was the issue in our suits against Shawmut in Boston, Northern Trust Company in Chicago, and First National Bank of Donna Anna in New Mexico.
We have also focused on the problem of redlining by lenders and insurance companies. This past August we reached an agreement with Allbank of New York. We alleged that the bank had carved out and refused to make loans in urban minority enclaves within the bank's lending areas in Connecticut and Westchester County, New York. The settlement with Allbank requires it to make $55 million in loans at below-market rate in the areas previously redlined.Pricing discrimination has also been a problem. Minorities have been charged higher interest rates and fees for loans. Several of the Department of Justice minorities have been charged higher interest rates and fees for loans. Several of the Department of Justices have involved this type of discrimination.
But the most recent pricing case was brought by a state financial agency. Last month the New York State Banking Department settled a fair lending case that required a Long Island bank and its mortgage subsidiary to pay $3 million in damages to over 500 victims of discriminatory mortgage loan pricing. This is the first time a state enforcement agency has taken such an action.
We worked closely with the New York Banking Department in its handling of this case. We applaud the State of New York for the job done on this case and we hope that other states will follow their example. We want to take the successes that we have had and the lessons learned in home mortgage lending and apply them to business lending. Just as the availability of credit to purchase, refinance, and improve our homes is critical to the wellbeing of local communities, so is the availability of credit for small businesses.
http://www.justice.gov/archive/ag/sp...0320_agcom.htmACORN learned how to file CRA complaints in the late 80's. They became much better at it a few years later. ACORN was also involved in revising the criteria of Fannie and Freddie. ACORN not only tried to intimidate banks, they also sued banks. -And why is what ACORN does reflect in any way on the government, regardless of the party in power?
http://trustreagan.com/2008/10/10/ba...eral-sav-bank/
Because I don't find parts of what you post to be relevant.Finally, why are you so selective as to which parts of my posts you decide to respond?
Last edited by Freedom&Liberty; 06-05-2012 at 07:03 PM.
When will the world learn that a million men are of no importance compared with one man? [Henry David Thoreau]
That's sig worthy. Sadly, Romney already bought this realestate.
I went through this with him in detail years ago. He wants, very badly, to believe it was the evul librul's fault, so no amount of explaining it will help. He wants to misunderstand it.
"All that stuff I was taught about evolution, embryology, Big Bang theory, all that is lies straight from the pit of hell [the bible] teaches us how to run all our public policy and everything in society." Rep. Paul Broun (R)
"I hope I live to see the day when, as in the early days of our country, we won't have any public schools. The churches will have taken them over again and Christians will be running them. What a happy day that will be!" -- Jerry Falwell
Malcolm Wright (06-06-2012)
He's just a liar.
I should close down my browser right now: I won't read a truer statement today.
M
Thanks for your kindness.
!st government never gets rid of one regulation with replacing it with three more.
2nd government through the Fed created the housing bubble with rediculously low interest rates.
3rd you lose money on foreclosures you do not make it.
Annoy a leftist: Think logically.
It's not at all surprising that liberals can't accept that the facts behind the economic crisis point directly at their flawed ideology. Unlike others here, who think facts amount to finger pointing and yelling Bush, GG's appraisal has been honest and straight forward.
When will the world learn that a million men are of no importance compared with one man? [Henry David Thoreau]
GuerillaGorilla (06-06-2012)
That's a pretty broad statement. Care to narrow it down?
I've written this response 3 times now, but my damned computer sucks. Here we go again.
Subprime started in the 1980's and really started to grow in the mid 1990's. And 1995 and onwards, the dollar values of subprime mortgages definitely did substantially increase - but so did the entire mortgage market. In fact between 1997 (shortly after the passage of GLBA) and 2003 (the first time Bush failed to enact legislation). The subprime market share declined by nearly half - from 14.5% to about 8.8%.
Fannie was created in the 1930's as a response to banks' unwillingness to lend in the shadow of the Great Depression. Freddie was created in 1970 (under Richard Nixon), to create competition for Fannie. It was also under Nixon that legislation was passed that allowed F&F to buy private mortgages in the first place. Additionally, in 1992, Bush Sr. passed legislation that 'encouraged' F&F to facilitate the financing of affordable housing for low- and moderate-income families.Democrats provide Fannie and Freddie to remove the risk. Every loan F&F bought, freed up money that could be lent again. Wash, rinse and repeat enough times and you make a nice profit from loan originations.
That's because it came after the fact. If the loans weren't made, CDO's, CDS's, etc., never would have been an issue.
Fair enough.Of course not.
More accurately, Clinton took the reins of an already rolling train and stepped on the gas. When Bush took the engine, he ignored all of the spectators yelling warnings about the bend in the track up ahead.Clinton started the train, Bush yelled as it went by. No doubt Bush should have done more.
I agree, which takes us back to F&F. As you stated above, by allowing banks to sell off all the risk, they were willing to continue to loan beyond the capacity of the market.Government should be involved as little as possible. Let the banks take the risk.
I can't speak for all countries - but in Canada, one reason we avoided the worst of the catastrophe was because there is legislation in place that prevents the banks from selling off the risk.
Bush didn't try very hard. For half of his run as President he had a supportive House AND Senate.Like I said earlier, all the banks did was take advantage of the environment they were given. That's historically what banks do. It's not like Bush didn't try - http://sweetness-light.com/archive/b...-times-in-2008
The Democrats definitely hold some of the blame. But I think it weighs much closer to 50/50.I'm interested in the root cause. For me, the CRA was the catalyst that started the explosion. As I said earlier 90% Democrat, 10% Republican.
I recognize that law suits were happening - I dispute that they were due to banks not lending to poor borrowers. The only two actual case summaries I could find both specifically referenced that the banks were being sued due to charging minorities higher rates, even though they met all of the qualification criteria that white borrowers had to meet.
What a independent organization does has little reflection on any party. Should efforts pursued by the KKK reflect on the GOP?ACORN learned how to file CRA complaints in the late 80's. They became much better at it a few years later. ACORN was also involved in revising the criteria of Fannie and Freddie. ACORN not only tried to intimidate banks, they also sued banks. -
http://trustreagan.com/2008/10/10/ba...eral-sav-bank/
So you make an argument, I respond, and suddenly it's not relevant? Thanks.Because I don't find parts of what you post to be relevant.
Howard Cosell: “What's right isn't always popular. What's popular isn't always right.”
James Madison: “In Republics, the great danger is, that the majority may not sufficiently respect the rights of the minority”
Abraham Lincoln: “If by the mere force of numbers a majority should deprive a minority of any clearly written constitutional right, it might, in a moral point of view, justify revolution”
Been there, done that. Sometimes it helps to use Word or notepad.
I agree, which takes us back to F&F. As you stated above, by allowing banks to sell off all the risk, they were willing to continue to loan beyond the capacity of the market.
I can't speak for all countries - but in Canada, one reason we avoided the worst of the catastrophe was because there is legislation in place that prevents the banks from selling off the risk.I can't argue with that.Bush didn't try very hard. For half of his run as President he had a supportive House AND Senate.
I disagree with your ratio. The only thing I see Republicans guilty of is not putting the brakes on Fannie and Freddie. Other than that, it was pretty much a Democrat fiasco.The Democrats definitely hold some of the blame. But I think it weighs much closer to 50/50.
Many of the suits claimed that borrowers were denied loans due to redlining, which is what the CRA was all about. It's difficult for a bank to prove that it's not racist and they certainly don't want the publicity that a DOJ or ACORN lawsuit could bring, so most cases were settled out of court.I recognize that law suits were happening - I dispute that they were due to banks not lending to poor borrowers. The only two actual case summaries I could find both specifically referenced that the banks were being sued due to charging minorities higher rates, even though they met all of the qualification criteria that white borrowers had to meet.
I'm not sure how much you know about ACORN, but they've been known to have voter registration drives that only sign up democrats. I don't think there's any way that ACORN can be thought of as independent. Obama has deep ties to ACORN.What a independent organization does has little reflection on any party. Should efforts pursued by the KKK reflect on the GOP?
It's likely that I just agree with you. Why post it again?So you make an argument, I respond, and suddenly it's not relevant? Thanks.
Last edited by Freedom&Liberty; 06-06-2012 at 04:07 PM.
When will the world learn that a million men are of no importance compared with one man? [Henry David Thoreau]
Ok I'll budge - I'll give you 51% Dem, 49% GOP.
GOP allowed F&F to buy public loans in the first place, and GOP obliged them to cover the low- and mid-income homes that we are debating under the CRA.
Fair observation - I'm bringing my interpretation in here, which I will fully admit may be incorrect - but, redlining was an effort of just not lending to an entire geography due to it's demographics. As I said, the 2 examples I could find clearly stated higher interest rates for minorities, despite the fact that they met the same credit criteria of non-minority borrowers. But it is an assumption on my part that that was the case for all lawsuits.Many of the suits claimed that borrowers were denied loans due to redlining, which is what the CRA was all about. It's difficult for a bank to prove that it's not racist and they certainly don't want the publicity that a DOJ or ACORN lawsuit could bring, so most cases were settled out of court.
I only know what was in the news shortly after Obama's election. But with what I've read briefly during this conversation, my understanding is that they are strong supporters of the Democratic Party, but nothing further. They are not funded or sponsored in any way by the Democratic Party, hence "independent". But please prove me wrong - I'm more than happy to secede this point if I am.I'm not sure how much you know about ACORN, but they've been known to have voter registration drives that only sign up democrats. I don't think there's any way that ACORN can be thought of as independent. Obama has deep ties to ACORN.
Fair enough - apparently I'm too used to people being obtuse on sites like this.It's likely that I just agree with you. Why post it again?
Howard Cosell: “What's right isn't always popular. What's popular isn't always right.”
James Madison: “In Republics, the great danger is, that the majority may not sufficiently respect the rights of the minority”
Abraham Lincoln: “If by the mere force of numbers a majority should deprive a minority of any clearly written constitutional right, it might, in a moral point of view, justify revolution”
I don't believe that. F&F were overseen by the House Finacial Services Committee, not congress.
Very informative read, if you have the time.From 1993-1999, the Clinton Administration replaced many of Fannie Mae’s key executives, including the CEO, the CEO’s number two, and nearly half the board of directiors. As a government sponsored enterprise (GSE), the President had the authority to make those appointments. The board, which increasingly consisted of Presidential appointments, then worked with the new CEO to change Fannie Mae executives’ salary structures in order to incentivize them to reach higher mortgage targets. More specifically, the board promised senior executive millions in bonuses each year as long as Fannie reported certain earnings figures.
........
The only way to change the structure put in place in before 2000 would have been to forcibly replace the board of directors and senior management…but for that, the President would need hard evidence that justified cause. As far as Washington insiders publicly knew, all Fannie Mae was doing was helping poor people buy homes and, in the process, boosting economic activity. Who could argue with that? Certainly not any nationally-elected politician.
That evidence finally came in 2004, despite fierce Democrat party efforts to prevent it and their systematic attacks on people who tried to bring it to light. Even after the evidence was in clear public view, Democrats continued to resist any changes to the regulatory structure that would have slowed GSEs mortgage lending activity.
http://tjhancock.wordpress.com/housi...ve-assessment/
Possibly. We do know that the ACORN case against CitiBank was based on race and rejection.Fair observation - I'm bringing my interpretation in here, which I will fully admit may be incorrect - but, redlining was an effort of just not lending to an entire geography due to it's demographics. As I said, the 2 examples I could find clearly stated higher interest rates for minorities, despite the fact that they met the same credit criteria of non-minority borrowers. But it is an assumption on my part that that was the case for all lawsuits.Redlining refers to an old practice of drawing a line on a map around undesirable neighborhoods with a red marker. It's difficult to find information on lawsuits, especially when they are settled out of court.Plaintiffs alleged that the Defendant-bank rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories.
ACORN is no longer in existence but I have no doubt that they will surface under a new name, if they haven't already. Obama had very strong ties to ACORN even before he was elected. It's a very fishy relationship.I only know what was in the news shortly after Obama's election. But with what I've read briefly during this conversation, my understanding is that they are strong supporters of the Democratic Party, but nothing further. They are not funded or sponsored in any way by the Democratic Party, hence "independent". But please prove me wrong - I'm more than happy to secede this point if I am.
This is a republican campaign ad that points Obama's relationship with ACORN..
Do you still think ACORN is independent?
Last edited by Freedom&Liberty; 06-06-2012 at 08:29 PM.
When will the world learn that a million men are of no importance compared with one man? [Henry David Thoreau]
Not necessarily.
That's absurd. Interest rates were kept low for the simple reason that inflation was low, and Greenspan didn't wish to induce a recession.2nd government through the Fed created the housing bubble with rediculously low interest rates.
BS. Banks don't want your crappy 3.8% interest. They want to foreclose and sell your property at a profit at auction, with your equity as gravy.3rd you lose money on foreclosures you do not make it.
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
Bookmarks