27% of Homes Underwater on Mortgages

[boedicca]

Indeed. The two of them are at ground zero of the financial crisis.

 

[Care4all]

The mortgage crisis from late 2007

Following their mission to meet federal Housing and Urban Development (HUD) housing goals, GSEs such as Fannie Mae, Freddie Mac and the Federal Home Loan Banks (FHLBanks) have strived to improve home ownership of low and middle income families, underserved areas, and generally through special affordable methods such as "the ability to obtain a 30-year fixed-rate mortgage with a low down payment... and the continuous availability of mortgage credit under a wide range of economic conditions." (HUD 2002 Annual Housing Activities Report) Then in 2003-2004 , the subprime mortgage crisis began.[36] The market shifted away from regulated GSEs and radically toward Mortgage Backed Securities (MBS) issued by unregulated private-label securitization conduits, typically operated by investment banks. The shift occurred as financial institutions sought to maintain earnings levels that had been elevated during 2001-2003 by an unprecedented refinancing boom due to historically low interest rates. Earnings depended on volume, so maintaining elevated earnings levels necessitated expanding the borrower pool using lower underwriting standards and new products that the GSEs would not securitize. Thus, the shift away from GSE securitization to private-label securitization (PLS) also corresponded with a shift in mortgage product type, from traditional, amortizing, fixed-rate mortgages (FRMs) to nontraditional, structurally riskier, nonamortizing, adjustable-rate mortgages (ARMs), and in the start of a sharp deterioration in mortgage underwriting standards.[36] The growth of PLS, however, forced the GSEs to lower their underwriting standards in an attempt to reclaim lost market share in order to please their private shareholders. Shareholder pressure pushed the GSEs into competition with PLS for market share, and the GSEs loosened their guarantee business underwriting standards in order to compete. In contrast, the wholly public FHA/Ginnie Mae maintained their underwriting standards and instead ceded market share.[36]

Fannie Mae - Wikipedia, the free encyclopedia

fannie and freddie DID NOT cause or begin this mess.....no matter what you all say, they DID NOT.

They did get pulled in to it LATER ON....

 

[NYcarbineer]

Interesting that during 2 wars that weren't paid for, among other things that weren't paid for, because Bush and the GOP thought that running up debt was a worthy by-product of putting more spending money in the hands of the American people,

the American people took their borrowed 'riches' and went out and ran up housing prices through the roof, wildly overpaying for homes, leading to a massive overvaluation of real estate.

The 2 wars had NOTHING whatsoever to do with the bubble bursting! The damaging effects were in place with the Clinton Presidency (the main culprit)!

Cutting taxes gave more people more disposable income.

 

[NYcarbineer]

If the lending industry had no way to package off the bad loans and sell them there would have been no way for them to make money off the bad loans.

It was a lack of regulatory laws that caused this mess plain and simple.


Anyone who pretends it was anything else is a fool.

Absolutely, LACK OF REGULATION is what caused this. It was caused by REPUBLICANS and Democrats acting like REPUBLICANS.

 

[NYcarbineer]

Let's all ignore the pressure from Government and 'community' groups put on the banks to lend to people who could not afford to pay their loans. Let's pretend that didn't happen. Blame the banks.... that's the easy answer. It's not the right answer but it is the easy one.

No banks were forced to make unsound loans,

and the meltdown in real estate was not a 'poor people' phenomenon.

 

[NYcarbineer]

Cause and effect.

The speculation was ENABLED BY THE GOVERNMENT by using tax payer money to derisk no doc / no down payment loans. Without such loans, speculators would not have been able to bid up prices without ponying up some of their own money.

And the Native American nonsense is not even worthy of a response.

Taxpayer money was not used to de-risk no doc/no downpayment loans. That was entirely the creation of the private sector mortgage industry.

in fact, no doc/ no downpayment loans weren't conforming and could not be sold to the GSE's.

You are sorely misinformed.

Fannie Mae and Freddie Mac gobbled up a great many of these loans, and have received billions and billions of taxpayer dollars as the loans have gone bad.

Which more REGULATION could have prevented.

 

[NYcarbineer]

Once we had laws in place that kept this from happening.

They worked.

Then they ended them.

Then the market ate our shorts.

No. Once we had reasonable lending standards in which banks were responsible for their losses.

Then the government told banks, after much lobbying by community organizers, to change their lending standards to be "subjective" ones so that people who were not financially qualified could get the houses to which they were "entitled".

The banks then demanded and received "insurance" from the government to protect them from losing money on these loans; Fannie Mae and Freddie Mac gobbled them up with the backing of taxpayer dollars.

Once the standards were loosened for some, they were loosened for all, and a speculative housing bubble formed. And then it burst.

The dishonest people made money or got to live in houses for free. The honest ones lost money and are now paying for the bail out.

And all of this is the natural, logical result of Big Government Cronyism interference and manipulation of a market place for the benefit of the Cronies.

You admit at was a lack of regulation. That's some progress.

 

[NYcarbineer]

You are sorely misinformed.

No, I'm not. You've been proven wrong about this many times in the past.

Fannie Mae and Freddie Mac gobbled up a great many of these loans, and have received billions and billions of taxpayer dollars as the loans have gone bad.

Fannie and Freddie:

A. Only bought conforming loans. Most loans in the most over-heated markets were out of reach, as were the most toxic no doc / no downpayment loans. Those million-dollar condos being flipped in Florida? the GSE's couldn't play that game.

B. Lost share of the subprime market as it expanded. They both lost significant market share between about 2002 and 2007. You know why? Because they weren't allowed to participate in the most toxic repurchase agreements. You know who they lost that market share to? Asset-backed securities dealers, a wholly unregulated industry.

Excellent point.

 

[Intense]

If the lending industry had no way to package off the bad loans and sell them there would have been no way for them to make money off the bad loans.

It was a lack of regulatory laws that caused this mess plain and simple.


Anyone who pretends it was anything else is a fool.

Absolutely, LACK OF REGULATION is what caused this. It was caused by REPUBLICANS and Democrats acting like REPUBLICANS.

I view it more as Incompetents screwing up and Predators taking advantage of the vulnerability. Who owns the Lions share of Mortgages? Who profits when Housing Values go up? Who benefits from the Property Taxes? From th Loan Interest? Seems like the controlling Authorities were knee deep in schemes to make things appear better than they were. Who got bailed out? Who is related to who here, and who was invested in what here? Why are we now repeating the cycle? Why are we blaming each other?

 

[Provocateur]

Let's all ignore the pressure from Government and 'community' groups put on the banks to lend to people who could not afford to pay their loans. Let's pretend that didn't happen. Blame the banks.... that's the easy answer. It's not the right answer but it is the easy one.

No banks were forced to make unsound loans,

and the meltdown in real estate was not a 'poor people' phenomenon.

Partisan denial.

 

[uscitizen]

What strikes me is that what should have been obvious to economists was not even on their radar.

the offshoring of jobs, the consumer driven economy, rise in imported finished goods, globalization, NAFTA, free trade, etc led me to one inescapable conclusion, we would go down living standards wise. The only question was how soon and how far we will drop.
How soon was a bit difficult to say exactly since we are a massive economy and mass takes time to decelerate and with many bogus bookkeeping methods and such to flasely prop things up....
The other guy in the vid was the type that could not even see a glimmer of all of this.

We will learn to live with less, the only question remaining is how much less.

 

[boedicca]

The mortgage crisis from late 2007

Following their mission to meet federal Housing and Urban Development (HUD) housing goals, GSEs such as Fannie Mae, Freddie Mac and the Federal Home Loan Banks (FHLBanks) have strived to improve home ownership of low and middle income families, underserved areas, and generally through special affordable methods such as "the ability to obtain a 30-year fixed-rate mortgage with a low down payment... and the continuous availability of mortgage credit under a wide range of economic conditions." (HUD 2002 Annual Housing Activities Report) Then in 2003-2004 , the subprime mortgage crisis began.[36] The market shifted away from regulated GSEs and radically toward Mortgage Backed Securities (MBS) issued by unregulated private-label securitization conduits, typically operated by investment banks. The shift occurred as financial institutions sought to maintain earnings levels that had been elevated during 2001-2003 by an unprecedented refinancing boom due to historically low interest rates. Earnings depended on volume, so maintaining elevated earnings levels necessitated expanding the borrower pool using lower underwriting standards and new products that the GSEs would not securitize. Thus, the shift away from GSE securitization to private-label securitization (PLS) also corresponded with a shift in mortgage product type, from traditional, amortizing, fixed-rate mortgages (FRMs) to nontraditional, structurally riskier, nonamortizing, adjustable-rate mortgages (ARMs), and in the start of a sharp deterioration in mortgage underwriting standards.[36] The growth of PLS, however, forced the GSEs to lower their underwriting standards in an attempt to reclaim lost market share in order to please their private shareholders. Shareholder pressure pushed the GSEs into competition with PLS for market share, and the GSEs loosened their guarantee business underwriting standards in order to compete. In contrast, the wholly public FHA/Ginnie Mae maintained their underwriting standards and instead ceded market share.[36]

Fannie Mae - Wikipedia, the free encyclopedia

fannie and freddie DID NOT cause or begin this mess.....no matter what you all say, they DID NOT.

They did get pulled in to it LATER ON....

Who said they caused or began it? They were part of the equation to derisk financial institutions at the expense of taxpayers, which is continuing to this day.

 

[boedicca]

If the lending industry had no way to package off the bad loans and sell them there would have been no way for them to make money off the bad loans.

It was a lack of regulatory laws that caused this mess plain and simple.


Anyone who pretends it was anything else is a fool.

Absolutely, LACK OF REGULATION is what caused this. It was caused by REPUBLICANS and Democrats acting like REPUBLICANS.

Idiot.

That isn't what caused it.

 

[uscitizen]

Inadequate regulations on certain types of bundled securities did contribute to it.
There was not any one cause, but several mistakes piled on top of other mistakes.

 

[Soggy in NOLA]

If the lending industry had no way to package off the bad loans and sell them there would have been no way for them to make money off the bad loans.

It was a lack of regulatory laws that caused this mess plain and simple.


Anyone who pretends it was anything else is a fool.

Absolutely, LACK OF REGULATION is what caused this. It was caused by REPUBLICANS and Democrats acting like REPUBLICANS.

Wrongo Nancy.. it was caused by Progressive fucksticks who think everyone's problems were going to be solved by selling people houses and financing them with NINA mortgages and making the American taxpayer the backer.

 

[Soggy in NOLA]

If the lending industry had no way to package off the bad loans and sell them there would have been no way for them to make money off the bad loans.

It was a lack of regulatory laws that caused this mess plain and simple.


Anyone who pretends it was anything else is a fool.

Absolutely, LACK OF REGULATION is what caused this. It was caused by REPUBLICANS and Democrats acting like REPUBLICANS.

Idiot.

That isn't what caused it.

Typical simp response from the Carbonated One.

 

[boedicca]

He does deserve 10 Points For Consistency.

 

[Soggy in NOLA]

Indeed... truth is.. I really don't think he's that dumb.

 

[uscitizen]

he is not that dumb.

Just does not see enough of the big picture.

 

[boedicca]

Indeed... truth is.. I really don't think he's that dumb.

People can be smart at some things while completely lacking true wisdom (and experience). He's one of those.