40 Years of Class Warfare in One Chart.

[Andylusion]

And yet where did the crash happen? In regulated mortgage backed securities.

Actually, they were "regulated," but not really regulated.

They were regulated, period.

 

[georgephillip]

The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence.

The Two Documents Everyone Should Read to Better Understand the Crisis William K. Black

Bill Black is currently an Associate Professor of Economics and Law who was litigation director for the Federal Home Loan Bank Board from '84-'86. The tile of his best known book says it all: The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry.
"The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence. To understand the crisis we have to focus on how the mortgage fraud epidemic produced widespread accounting fraud..."

"Fraud is the principal credit risk of nonprime mortgage lending. It is impossible to detect fraud without reviewing a sample of the loan files. Paper loan files are bulky, so they are photographed and the images are stored on computer tapes. Unfortunately, 'most investors' (the large commercial and investment banks that purchased nonprime loans and pooled them to create financial derivatives) did not review the loan files before purchasing nonprime loans and did not even require the lender to provide loan tapes."

Of course, politicians put a gun to the bankers' heads and forced them to engage in fraud, as all 'good conservatives" allege.

 

[Dad2three]

And yet where did the crash happen? In regulated mortgage backed securities.

Actually, they were "regulated," but not really regulated.

They were regulated, period.

Examining the big lie: How the facts of the economic crisis stack up

The boom and bust was global. Proponents of the Big Lie ignore the worldwide nature of the housing boom and bust.


Nonbank mortgage underwriting exploded from 2001 to 2007, along with the private label securitization market, which eclipsed Fannie and Freddie during the boom. Check the mortgage origination data: The vast majority of subprime mortgages — the loans at the heart of the global crisis — were underwritten by unregulated private firms. These were lenders who sold the bulk of their mortgages to Wall Street, not to Fannie or Freddie. Indeed, these firms had no deposits, so they were not under the jurisdiction of the Federal Deposit Insurance Corp or the Office of Thrift Supervision. The relative market share of Fannie Mae and Freddie Mac dropped from a high of 57 percent of all new mortgage originations in 2003, down to 37 percent as the bubble was developing in 2005-06.

•Private lenders not subject to congressional regulations collapsed lending standards.

Examining the big lie How the facts of the economic crisis stack up - The Washington Post


60 per cent of all mortgage origination between 2005 and 2007 had “reckless or toxic features”````


Nouriel Roubini of New York University’s Stern School of Business,

http://www.ft.com/intl/cms/s/0/1dc47bb6-df56-11dc-91d4-0000779fd2ac.html#axzz33mcOIjQz


November 27, 2007

A Snapshot of the Subprime Market

Dollar amount of subprime loans outstanding:

2007 $1.3 trillion

Dollar amount of subprime loans outstanding in 2003: $332 billion

Percentage increase from 2003: 292%

 

[georgephillip]

I'm not even sure what the point of this post is. No one has denied any of this, yet clearly it didn't cause the 2008 crash.

The epidemic of mortgage fraud (80% of which was initiated by lenders) that the FBI warned about in 2004 "clearly didn't cause the 2008 crash?" Is that your claim?

 

[Andylusion]

I'm not even sure what the point of this post is. No one has denied any of this, yet clearly it didn't cause the 2008 crash.

The epidemic of mortgage fraud (80% of which was initiated by lenders) that the FBI warned about in 2004 "clearly didn't cause the 2008 crash?" Is that your claim?

Yes. That is exactly my claim. Clear fraudulent mortgages were a fraction of the mortgages that failed. Most were simply sub-prime mortgages, that should have never been made, but were pushed by the Federal government.

 

[Dad2three]

I'm not even sure what the point of this post is. No one has denied any of this, yet clearly it didn't cause the 2008 crash.

The epidemic of mortgage fraud (80% of which was initiated by lenders) that the FBI warned about in 2004 "clearly didn't cause the 2008 crash?" Is that your claim?

Yes. That is exactly my claim. Clear fraudulent mortgages were a fraction of the mortgages that failed. Most were simply sub-prime mortgages, that should have never been made, but were pushed by the Federal government.

lol, More conservative BS

This shockingly high “failure rate” stems directly from the shockingly imprudent lending practices of the late-stage housing boom.

A few years ago, as home prices began escalating sharply, mortgage lenders devised ever-more-creative – and dangerous – ways for home buyers to purchase homes they could not genuinely afford. Hence, exotic loans evolved from 5-year adjustable-rate mortgages (ARMs), to one-year ARMs, to interest-only loans, to no-equity loans, to pay-option loans etc. – each variation more dangerous than the predecessor. All of these “flexible” loans provided some version of low initial payments, followed by much larger payments “down the road.”


The Housing Crash of 2008 - Free Market Caf



"Another form of easing facilitated the rapid rise of mortgages that didn't require borrowers to fully document their incomes. In 2006, these low- or no-doc loans comprised 81 percent of near-prime, 55 percent of jumbo, 50 percent of subprime and 36 percent of prime securitized mortgages."

https://www.dallasfed.org/assets/documents/research/eclett/2007/el0711.pdf

Q HOLY JESUS! DID YOU JUST PROVE THAT OVER 50% OF ALL MORTGAGES IN 2006 DIDN'T REQUIRE BORROWERS TO DOCUMENT THEIR INCOME?!?!?!?

A Yes.

(PLEASE THE LAW OR REGULATOR WHO REQUIRED THIS???)




Q WHO THE HELL LOANS HUNDREDS OF THOUSANDS OF DOLLARS TO PEOPLE WITHOUT CHECKING THEIR INCOMES?!?!?

A Banks.

Q WHY??!?!!!?!

A Two reasons, greed and Bush's regulators let them.

FACTS on Dubya s great recession US Message Board - Political Discussion Forum

 

[georgephillip]

Yes. That is exactly my claim. Clear fraudulent mortgages were a fraction of the mortgages that failed. Most were simply sub-prime mortgages, that should have never been made, but were pushed by the Federal government.

What percentage of all mortgage origination between 2005 had "reckless or toxic" features?
http://www.ft.com/cms/s/0/4d19518c-df0d-11dc-91d4-0000779fd2ac.html#axzz3X75DZJRh

 

[georgephillip]

Most were simply sub-prime mortgages, that should have never been made, but were pushed by the Federal government.

Let's assume you are correct about the Federal government pushing sub-prime mortgages. Was it the richest 1% of Americans pushing Republicans AND Democrats to engage in this behavior, or was it the millions of productive Americans who lost their homes, businesses, and retirements as a consequence of Wall Street's influence on government?

 

[Andylusion]

Yes. That is exactly my claim. Clear fraudulent mortgages were a fraction of the mortgages that failed. Most were simply sub-prime mortgages, that should have never been made, but were pushed by the Federal government.

What percentage of all mortgage origination between 2005 had "reckless or toxic" features?
http://www.ft.com/cms/s/0/4d19518c-df0d-11dc-91d4-0000779fd2ac.html#axzz3X75DZJRh

Two different things.

Fraudulent loans, were loans made with fabricated documentation. Sub-prime loans, which were reckless and toxic, were openly pushed by government. The fact the borrowers were not qualified for a conventional mortgage was well known and accepted.



Andrew Cuomo openly said that they were pushing loans to people who absolutely did not qualify, and that they would have a higher default rate.

It was exactly these loans, that later were categorized as "toxic".

 

[SwimExpert]

And yet where did the crash happen? In regulated mortgage backed securities.

Actually, they were "regulated," but not really regulated.

They were regulated, period.

You are a moron, period.

 

[Andylusion]

Most were simply sub-prime mortgages, that should have never been made, but were pushed by the Federal government.

Let's assume you are correct about the Federal government pushing sub-prime mortgages. Was it the richest 1% of Americans pushing Republicans AND Democrats to engage in this behavior, or was it the millions of productive Americans who lost their homes, businesses, and retirements as a consequence of Wall Street's influence on government?

If you mean that people like Buffet and Turner, and Soros were pushing it? Maybe.

I'm a bit confused how you can lose your home, business, retirement over this. I had money in the stock market, and I made more money during the 2007 to 2010 time frame, than I have since. Similarly, if the bank fails, that doesn't stop you from paying your mortgage. What stops you from paying your mortgage, borrowing too much money, and you can't pay it back. Businesses don't fail because the bank changes hands. Businesses fail because you are not putting out a good product, or you are mishandling the business.

Now is there some influence from the banks? Sure. Is it bad? Yes. Government should never bail out any business, including banks.

But I do not think the government was pushing sub-prime loans, because the banks wanted them to. Remember, the government was literally suing banks to force them to make these loans in the late 90s. If the banks *wanted* to make those loans to begin with, they wouldn't have spent millions on lawyers to argue against being forced to make those loans in court.

So that is not a logical position.

 

[Andylusion]

And yet where did the crash happen? In regulated mortgage backed securities.

Actually, they were "regulated," but not really regulated.

They were regulated, period.

You are a moron, period.

As expected. My expectations of you were low, and you managed to meet them directly.

 

[SwimExpert]

And yet where did the crash happen? In regulated mortgage backed securities.

Actually, they were "regulated," but not really regulated.

They were regulated, period.

You are a moron, period.

As expected. My expectations of you were low, and you managed to meet them directly.

That's what happens when you're gripped with delusions.

 

[Andylusion]

And yet where did the crash happen? In regulated mortgage backed securities.

Actually, they were "regulated," but not really regulated.

They were regulated, period.

You are a moron, period.

As expected. My expectations of you were low, and you managed to meet them directly.

That's what happens when you're gripped with delusions.

Indeed.

 

[Dad2three]

Yes. That is exactly my claim. Clear fraudulent mortgages were a fraction of the mortgages that failed. Most were simply sub-prime mortgages, that should have never been made, but were pushed by the Federal government.

What percentage of all mortgage origination between 2005 had "reckless or toxic" features?
http://www.ft.com/cms/s/0/4d19518c-df0d-11dc-91d4-0000779fd2ac.html#axzz3X75DZJRh

Two different things.

Fraudulent loans, were loans made with fabricated documentation. Sub-prime loans, which were reckless and toxic, were openly pushed by government. The fact the borrowers were not qualified for a conventional mortgage was well known and accepted.



Andrew Cuomo openly said that they were pushing loans to people who absolutely did not qualify, and that they would have a higher default rate.

It was exactly these loans, that later were categorized as "toxic".

You mean the $4 BILLION total program started under Clinton? lol

Fannie, Freddie and the Right Wing Myth of a "Mortgage Meltdown"

"At the end of the day what really matters is losses," said Mark Zandi of Moody's Analytics. "Where are the losses?"

, "Where are the losses?" As of year-end 2013, approximately $1 trillion in credit losses on pre-crisis loans had been realized. But the realized loss rate among different sectors varied considerably. Best in class were Fannie and Freddie, with a realized loss rate of 3%. Then came depository institutions, like banks, which had a realized loss rate of 6%. The strong outlier was private label mortgage securities, with a realized loss rate of 23%, seven times that of the GSEs.

These numbers are in line with Laurie Goodman's 2010 projections, which showed a 24% overall loss rate on private 1st lien securities. And Zandi's 2013 numbers are consistent with his year-end 2012 numbers, which showed private label losses as 51% of the grand total, and GSE losses as 14% of the nationwide total.

These lopsided disparities are confirmed over and over from data going back two decades. By any standard"--"delinquencies, defaults, loss severity"--"GSE mortgages perform exponentially better than the rest of the market, whereas private label mortgages perform exponentially worse. To state otherwise is to lie.

Article Fannie Freddie and the Right Wing Myth of a Mortgage Meltdown OpEdNews

 

[georgephillip]

Fraudulent loans, were loans made with fabricated documentation

How is fraud determined without reviewing a sample of loan files BEFORE giving AAA ratings to non-prime mortgage financial derivatives? Do you blame the FBI for revealing the epidemic of mortgage fraud in 2004 or the corporate rating agencies who assigned AAA ratings WITHOUT reviewing loan file tapes on the underlying securities?

 

[boedicca]

Yes, it's really a shame that the Big Government Class and its Banking, Corporate, Academic, Media, and Union Cronies decided to conduct a war on average Americans who just want to be left alone.

 

[georgephillip]

I'm a bit confused how you can lose your home, business, retirement over this. I had money in the stock market, and I made more money during the 2007 to 2010 time frame, than I have since. Similarly, if the bank fails, that doesn't stop you from paying your mortgage. What stops you from paying your mortgage, borrowing too much money, and you can't pay it back. Businesses don't fail because the bank changes hands. Businesses fail because you are not putting out a good product, or you are mishandling the business.

You are confused.
"Last month, the Federal Reserve Bank of Dallas published a staff paper estimating the costs of the 2007-2009 financial crisis. The conservative estimate came out at 40 to 90 per cent of 2007 output, roughly US$6 to US$14 trillion..."
How did Wall Street fare during this time frame?
"How much did the financial business sector lose? Its net worth rose US$1.6 trillion in 2008, lost US$0.7 trillion in 2009 and US$0.5 trillion in 2010, and was in the black again by 2011. In sum, almost everyone lost during the financial crisis, with households losing most, but Wall Street lost least. The reason is that its losses were covered by capital injection by the corporate and household sector, and there was huge government support."
What Was the Real Cost of the Great Recession The Institute for New Economic Thinking
Can you provide a link for the number of banks that were sued by the government for not aggressively pushing sub-prime loans in the late '90s?

 

[EdwardBaiamonte]

, but Wall Street lost least.

of course thats absurd. Many of the major companies went bankrupt.

 

[EdwardBaiamonte]

-"GSE mortgages perform exponentially better than the rest of the market,

Of course they would since they had govt backing and thus lower rates to attract all the best customers while the private sector was stuck the leftovers.