CRA had little or nothing to do with financial meltdown

[Quantum Windbag]

Get the Report : Financial Crisis Inquiry Commission

Try some facts over the talking heads.

The report is not facts. The report is a collection of opinions of various experts, AKA talking heads. The dissenters in the report actually point out roughly the same thing I do, that the CRA, and the continued efforts to expand it to all banks, contributed to the problem by encouraging banks to make loans to sub prime borrowers in an public affairs effort to undermine the effort to expand the CRA.

Which set of "facts" should I pay attention to?

Show me ANY OTHER report ANYWHERE that is as comprehensive as this report.
Something, anything, someplace, SOMEWHERE. Where is it?
Sure it contributed to the problem.
CONTRIBUTED TO THE PROBLEM.
It was NOT THE PROBLEM.
You know it wasn't so admit it and move on.
Anyone that believes CRA, a stupid law that affected less than 10% OF ALL DOLLARS LOANED, caused the financial meltdown is a dumb ass.
I don't believe YOU believe it caused it. You are an ideologue first and this report does not match your ideology. So you ignore it.
And listen to your own set of talking heads that are not trained in the financial sector.
Rush and Sean are ENTERTAINER talking heads.
And QW, how about the FACT that CRA loans WERE ONE HALF as likely to fail in low income areas as A REGULAR LOAN?
Guess why that has to be fact? Take a long long look at the facts QW. Take off the blinders and put on a real helmet (preferably a red one with a G), tighten that chin strap and answer that question.
Answer: CRA loans were LESS THAN 10% OF THE MARKET DOLLAR WISE.
And you claim small loans caused the meltdown?
CONTRIBUTED yes, BUT WERE NOT THE PROBLEM.
Personal accountability. People NOT PAYING THEIR PROMISES caused it. Banks loaning speculative real estate-you know? THE OTHER 90% which were high end loans.
Conservatives never blame others when they do not pay their bills. That is a liberal trait.

Am I supposed to be insulted because you do not like the fact that I point out the dissent to the report you are so eager to cite makes the very points that destroy your argument? It is not a liberal trait to insist that all of the facts and opinions be considered, that is the trait of a critical thinker. You getting your back up, and insisting that the only view that matters is the one you agree with, is a partisan trait.

Deal with the dissent, which is part of the report, or ignore the whole report. Make your choice and get back to me when you can admit that, just because you like something, it does not make you, or it, automatically right.

 

[8537]

The report is not facts. The report is a collection of opinions of various experts, AKA talking heads. The dissenters in the report actually point out roughly the same thing I do, that the CRA, and the continued efforts to expand it to all banks, contributed to the problem by encouraging banks to make loans to sub prime borrowers in an public affairs effort to undermine the effort to expand the CRA.

Which set of "facts" should I pay attention to?

Where in the dissenting opinion's 20 pages or so do they place blame on the CRA?

I had to read it to find it, why should I make your life easier? Why do youngsters expect other people do all the work for them.

By the way, if you download the PDF and search it, the way I did, it will not even take very long to find it.

I've read it....

And I'm probably old enough to be your dad.

 

[8537]

Just to be obvious here, foreclosures are never caused by loans, they are caused when people fail to pay loans. Are you trying to claim that only rich people defaulted on their loans, and that all the poor people are still making their payments?

No, people of all stripes defaulted on their loans. The largest defaulters were speculators in wealthy areas like Bradenton Beach and Naples - not exactly hotbeds of poor minority folks.

As for Fannie and Freddie only buying conforming loans, it seems history disagrees with you.

No, that's just silly. FM and FM only buy conforming loans. Bush relaxed conforming standards, but they were still statutorily prevented from buying the most toxic loans.

Funny thing, I provided a link to a 2007 article where they were buying sub prime loans as part of a policy to help expand the availability of them, and you insist that what they really did was reclassify those loans as conforming, and then purchased them.

Exactly what makes you think that you are making some type of point here?

No, the point is that even upon expanding their definition of conforming, they were not able to buy no-income, no-job no-doc loans - nor could they buy any loans over about 740K.

The private sector bought those most toxic loans -and did so in bunches.

 

[8537]

Fannie and Freddie, by your own admission, helped fuel that securities market by re rating the loans they were buying and selling. Like I keep saying, there is plenty of blame to go around.

FM and FM don't rate loans. This is what makes it difficult to have an adult conversation on the topic - people don't even know the most basic of facts like who rated loan traunches and what loans were available to which firms.

 

[Toro]

Fannie and Freddie, by your own admission, helped fuel that securities market by re rating the loans they were buying and selling. Like I keep saying, there is plenty of blame to go around.

FM and FM don't rate loans. This is what makes it difficult to have an adult conversation on the topic - people don't even know the most basic of facts like who rated loan traunches and what loans were available to which firms.

But the GSEs were definitely part of it. If they had equity to capital ratios of 8% instead of 2%, there would not have been as much credit to fuel the bubble. You can't be as big as the GSEs and not have had some effect.

 

[GWV5903]

in the housing market.
Been telling you this for years now.
The Financial Crisis Inquiry Commission report stated correctly, Community Reinvestment Act had little or nothing to do with the meltdown in the housing market.
That does not go well with Rush and Sean because they are facts and not ideology.
Lack of financial regulation, excessive risk and borrowing in high end loans, no corporate governance and a lcak of ethics in the financial market caused 90%+.
Commisssion was heavily Republican with Keith Hennessy, former chief economic adviser to The Bush Administration.
Personal responsiblity, NOT SOME GOVERNMENT PROGRAM OR LAW, was the cause.
Imagine that.
DUH.

Your wrong, yes the banks are culpable, so is Freddie & Fannie, they new all to well the instruments they where buying were weak links. Funny how everyone defending CRA forgets that the Sub Prime market would have gone no where had Fannie & Freddie not purchased the loans.....

To sit here and use a government commission as the holy grail is hilarious to say the least. I really do not care what Limbaugh or Hannity opine with this, I have lived it every day for the last 18 years.....

Furthermore, the Clinton Administration knew dam good and well sellers / lenders where in a catch 22 with the EHA, everybody knew these loans were crap, but the Feds did nothing to change it from 1993 to 2007....

CRA created a culture in mortgage lending that had never existed before, debate that will you, I will be interested in what you find to counter this.....

I have a challenge for the CRA Defense Fund (pun intended), lets get rid of the law altogether, no more zero down loans of any kind (btw they exist today, right now) and see what happens to the housing market....

Here is the most accurate piece to date.....

RealClearMarkets - How Did Paul Krugman Get It So Wrong?

Detailed performance data for single-family CRA lending is rarely published. In a search of the top 25 banks by single family mortgage holdings, only Third Federal Savings & Loan reported on its CRA loans.

- Third Federal Savings & Loan reported that its "Home Today" community development program constituted just 3.2% of its owned mortgage loan portfolio ($299.3 million), yet these loans represented 32% of its 90+ delinquencies. Its Home Today delinquency rate is 33% vs. 2% on its non-Home Today portfolio.

Other "sightings" of CRA loan performance include:

- Bank of America, one of the nation's largest CRA lenders, noted on its Q3:08 earnings call with equity analysts that while its CRA loans constituted 7% or $18 billion of its owned residential mortgage portfolio, they represented 29% of net losses, with an annualized loss rate of 1.26%.

 

[8537]

Fannie and Freddie, by your own admission, helped fuel that securities market by re rating the loans they were buying and selling. Like I keep saying, there is plenty of blame to go around.

FM and FM don't rate loans. This is what makes it difficult to have an adult conversation on the topic - people don't even know the most basic of facts like who rated loan traunches and what loans were available to which firms.

But the GSEs were definitely part of it. If they had equity to capital ratios of 8% instead of 2%, there would not have been as much credit to fuel the bubble. You can't be as big as the GSEs and not have had some effect.

Oh, I have no doubt the GSE's played a role. They got sucked into the game just like every other investment firm and they competed for profits.

They were also held to a very minimal standard in buying loans thanks to conforming regulations, though that certainly didn't prevent them from trying to buy up the repackaged derivatives later...Just like all the other profit seeking firms.

...None of which had anything to do with the CRA, of course.

 

[Soggy in NOLA]

http://ezinearticles.com/?How-Did-We-Get-Into-This-Housing-Mess,-and-Are-We-Out-Yet?&id=5294658


I beg to differ...

Can you show me where that article talks about that 80% of the bad subprime mortgages did not come from CRA-regulated banks?

or is it just trying to blame poor black people...again?

I re-read his post.. twice. poor black people?

Stop with the moronic race baiting you asshat.

 

[8537]

http://ezinearticles.com/?How-Did-We-Get-Into-This-Housing-Mess,-and-Are-We-Out-Yet?&id=5294658


I beg to differ...

Can you show me where that article talks about that 80% of the bad subprime mortgages did not come from CRA-regulated banks?

or is it just trying to blame poor black people...again?

I re-read his post.. twice. poor black people?

Stop with the moronic race baiting you asshat.

Then perhaps you need to read a third time, this time without the expletives:

compel banks to make mortgage loans to borrowers in the low-to-moderate income categories, [that's french for poor] and especially in areas where there was a large concentration of minorities. Over the next 20 years more and more pressure was exerted on banks to make loans to this segment of the population.

Other than that, the linked article is actually kind of interesting. Now if only depository institutions were the source of the problem....

 

[Quantum Windbag]

Where in the dissenting opinion's 20 pages or so do they place blame on the CRA?

I had to read it to find it, why should I make your life easier? Why do youngsters expect other people do all the work for them.

By the way, if you download the PDF and search it, the way I did, it will not even take very long to find it.

I've read it....

And I'm probably old enough to be your dad.

If you read it why ask me what is in it?

 

[Quantum Windbag]

No, people of all stripes defaulted on their loans. The largest defaulters were speculators in wealthy areas like Bradenton Beach and Naples - not exactly hotbeds of poor minority folks.

No, that's just silly. FM and FM only buy conforming loans. Bush relaxed conforming standards, but they were still statutorily prevented from buying the most toxic loans.

Funny thing, I provided a link to a 2007 article where they were buying sub prime loans as part of a policy to help expand the availability of them, and you insist that what they really did was reclassify those loans as conforming, and then purchased them.

Exactly what makes you think that you are making some type of point here?

No, the point is that even upon expanding their definition of conforming, they were not able to buy no-income, no-job no-doc loans - nor could they buy any loans over about 740K.

The private sector bought those most toxic loans -and did so in bunches.

Fannie and Freddie both bought sub prime, AKA non conforming, loans. You twisting it around and changing definitions to meet your flexible standards will not change those facts.

 

[Quantum Windbag]

Fannie and Freddie, by your own admission, helped fuel that securities market by re rating the loans they were buying and selling. Like I keep saying, there is plenty of blame to go around.

FM and FM don't rate loans. This is what makes it difficult to have an adult conversation on the topic - people don't even know the most basic of facts like who rated loan traunches and what loans were available to which firms.

Let me see if I understand how this works.

I point out the fallacies in your position, and you ignore them. You then proceed to take a single mistake I make and use it to insinuate that I am incapable of adult conversation.

 

[Richard-H]

If the CRA were the primary cause of the mortgage defaults, then the real estate market collapse would have affected only the low to mid cost housing since that was the market that was made available through the CRA.

Instead we're seeing a real estate market collapse across all levels. That's because moderate and wealthy people - those that would never qualify under the CRA - were the primary people to take out sub-prime mortgages.

 

[Quantum Windbag]

Fannie and Freddie, by your own admission, helped fuel that securities market by re rating the loans they were buying and selling. Like I keep saying, there is plenty of blame to go around.

FM and FM don't rate loans. This is what makes it difficult to have an adult conversation on the topic - people don't even know the most basic of facts like who rated loan traunches and what loans were available to which firms.

But the GSEs were definitely part of it. If they had equity to capital ratios of 8% instead of 2%, there would not have been as much credit to fuel the bubble. You can't be as big as the GSEs and not have had some effect.

That is part of what I am trying to say. People are running all over the place attempting to place the blame on anyone else, and ignoring the truth that everyone has some responsibility for the meltdown. there were members of both parties that spoke up about the dangers, for different reasons, and everyone preferred to ignore them. Now we are paying the price, and still refusing to deal with the underlying problem that helped fuel the crisis. That, in my experience, will only make things worse later.

 

[gautama]

in the housing market.
Been telling you this for years now.
The Financial Crisis Inquiry Commission report stated correctly, Community Reinvestment Act had little or nothing to do with the meltdown in the housing market.
That does not go well with Rush and Sean because they are facts and not ideology.
Lack of financial regulation, excessive risk and borrowing in high end loans, no corporate governance and a lcak of ethics in the financial market caused 90%+.
Commisssion was heavily Republican with Keith Hennessy, former chief economic adviser to The Bush Administration.
Personal responsiblity, NOT SOME GOVERNMENT PROGRAM OR LAW, was the cause.
Imagine that.
DUH.

The Obamarrhoidal LibTURDS were yowling and howling 24/7 how Bush was responsible for Fannie & Freddie, and CRA.....but now that the Fannie & Freddie Congressional Committee Hearing Videos clearly expose the Dems, especially the Insane LlibTURD Maxine Waters, and Racist idiots from the Congressional black Caucus such as Meeks, Davis, etc., insulting and yelling at the Bush representatives who were REPEATEDLY warning of an impending financial disaster, and Bwarnery Fwanks REPEATEDLY reasssuring that everything with F&F was honky-dory ( although later....much later.....Bwarney made a !80 degree about face and did a few startling disclaimers).

BTW, there were the same F&F Congressional Committee Hearings ON VIDEO where a dozen, or so Republican Senators, in most vociferous statements predicted F&F Financial ruin and need for much needed further regulation.


So....


What do the Obamarrhoidal LibTURDs do now ?????

Predictably.....SUDDENLY the fucking HYPOCRITICAL LIbTURDS are doing the familiar 180 degree about face......and NOW that their asinine handling of the F&F Debacle is exposed in the videos.....these HYPOCRITICAL OBAMARRHOIDAL LibTURDS are claiming that F&F had nothing....or very little to do with the Financial Debacle !!!!

C'MON LibTURDS .....ENOUGH IS ENOUGH YOU FUCKING PATHOLOGICAL LIARS !!!

At this stage of the game, practically EVERYONE knows you arseholes for what you are !!!

 

[Quantum Windbag]

If the CRA were the primary cause of the mortgage defaults, then the real estate market collapse would have affected only the low to mid cost housing since that was the market that was made available through the CRA.

Instead we're seeing a real estate market collapse across all levels. That's because moderate and wealthy people - those that would never qualify under the CRA - were the primary people to take out sub-prime mortgages.

If I were arguing that the CRA was the primary cause of this you might have a point. As it is, it is only part of the picture, and the many revisions to it, the efforts of some banks not to fall under its expanding regulatory umbrella, and the efforst of various advocacy groups to put everyone into a home, all contributed. Since, as we discovered, housing prices are all interconnected, the drop in prices due to the sub prime crisis was magnified up the market, and many real estate speculators were wiped out.

Personally, I do not care about the speculators and flippers, they took a chance and lost. Nor am I particularly sympathetic to those who took out loans they could not afford because politicians were trying to buy their votes. The housing bubble had to burst sooner or later, any competent person could see that.

This whole thing is complicated, interrelated, and impossible to understand if you insist on accepting a pet theory that one group or another is not responsible for the actions they took that led to the problem. Now, we have a new government that is going merrily on its way to do the same thing again, and it will only be worse the next time, whenever that is.

 

[8537]

Funny thing, I provided a link to a 2007 article where they were buying sub prime loans as part of a policy to help expand the availability of them, and you insist that what they really did was reclassify those loans as conforming, and then purchased them.

Exactly what makes you think that you are making some type of point here?

No, the point is that even upon expanding their definition of conforming, they were not able to buy no-income, no-job no-doc loans - nor could they buy any loans over about 740K.

The private sector bought those most toxic loans -and did so in bunches.

Fannie and Freddie both bought sub prime, AKA non conforming, loans.

No, that's not true. FM and FM don't buy nonconforming loans. Period. End of story.

 

[Toro]

No, the point is that even upon expanding their definition of conforming, they were not able to buy no-income, no-job no-doc loans - nor could they buy any loans over about 740K.

The private sector bought those most toxic loans -and did so in bunches.

Fannie and Freddie both bought sub prime, AKA non conforming, loans.

No, that's not true. FM and FM don't buy nonconforming loans. Period. End of story.

Correct. Freddie and Fannie do not buy non-conforming loans.

 

[Quantum Windbag]

No, the point is that even upon expanding their definition of conforming, they were not able to buy no-income, no-job no-doc loans - nor could they buy any loans over about 740K.

The private sector bought those most toxic loans -and did so in bunches.

Fannie and Freddie both bought sub prime, AKA non conforming, loans.

No, that's not true. FM and FM don't buy nonconforming loans. Period. End of story.

Keep believing that.

 

[Quantum Windbag]

Fannie and Freddie both bought sub prime, AKA non conforming, loans.

No, that's not true. FM and FM don't buy nonconforming loans. Period. End of story.

Correct. Freddie and Fannie do not buy non-conforming loans.

Is that because they changed the definition of what a conforming loan is, or is it because you do not want to admit that you might not know all the facts?

Fannie Mae aimed to benefit from subprime loans and expand the market for them -- and hoped to pass much of the risk on to others, documents show. Along with subprime loans, which were typically issued to borrowers with blemished credit, the company targeted so-called Alt-A loans, which were often made with no verification of the borrower's income.
"By entering new markets -- especially Alt-A and subprime -- and guaranteeing more of our customers' products at market prices, we met our goal of increasing market share from 22 to 25 percent," Mudd wrote in a 2006 year-end report to the Fannie Mae board dated Jan. 3, 2007.
In other internal documents, there was a common refrain: One of Fannie Mae's objectives for 2006 was to "increase our penetration into subprime."
In an interview, Fannie Mae Executive Vice President Thomas A. Lund said the company pursued the purchase of subprime loans in 2006 and 2007 at the request of lenders, who wanted Fannie Mae to take the loans off their books. He said Fannie Mae hoped to bring higher standards to the market, and he added that the loans helped the company in its struggle to meet goals the government had set for Fannie Mae's advancement of affordable housing.

Fannie's Perilous Pursuit of Subprime Loans - washingtonpost.com

Funny thing, most people would define both subprime and Alt-A loans as non conforming.