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"most people" don't define "conforming". In this case, The Bush administration and Congress changed the standards of what conforms. No one ever claimed that no subprimes were conforming - many were. But the most toxic were not, nor were the highest valued. Those loans were still sold only in the private market.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.
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.
Conforming loans are recognized by many characteristics including size, term, borrower profile and property type. The guidelines for conforming loans are dynamic, meaning they change from time to time as conditions warrant. For example, in the 1980's the loan limits, meaning the largest dollar value of individual mortgages that Fannie Mae and Freddie Mac would purchase more than doubled from the low $30,000's to the high $60,000's. In the later part of the twentieth century that limit broke through $300,000 and continues to increase in response to increases in the cost of housing.
Commisssion was heavily Republican with Keith Hennessy, former chief economic adviser to The Bush Administration.
"Philip Nicholas "Phil" Angelides (pronounced /ˌændʒɨˈliːdɨs/ AN-jə-LEE-dees), born June 12, 1953 in Sacramento, California), is an American politician who was California State Treasurer and the unsuccessful Democratic nominee for Governor of California in the 2006 elections. Angelides currently serves as the Chair of the Apollo Alliance and of the Financial Crisis Inquiry Commission."
"William A. 'Bill' Thomas, Jr. is a Republican member of the Alaska House of Representatives, representing the 5th District since 2004.[1] He is currently serving as Vice-Chair of the Finance Committee and is a member of the Legislative Budget & Audit Committee. He also chairs the Administration and the Fish & Game Finance Subcommittee, for the 26th Legislature.[2] Bill Thomas is also a commercial fisherman by trade.[3]"
"Brooksley E. Born is an American attorney and former public official who, from August 26, 1996, to June 1, 1999, was chairperson of the Commodity Futures Trading Commission (CFTC), the federal agency which oversees the futures and commodity options markets. During her tenure on the CFTC, Born lobbied Congress and the President to give the CFTC oversight of off-exchange markets for derivatives in addition to its role with respect to exchange-traded derivatives,[3] but her warnings were opposed by other regulators.[4]"
"Douglas J. "Doug" Holtz-Eakin (born Douglas J. Eakin on February 3, 1958 in Pittsburgh, Pennsylvania) is an American economist, professor, former Director of the Congressional Budget Office and former chief economic policy adviser to U.S. Senator John McCain's 2008 presidential campaign."
"Byron Stephen Georgiou is a financial lawyer, and an investor. In 2009, Georgiou was appointed by United States Senate Majority Leader Harry Reid to the Financial Crisis Inquiry Commission (FCIC).
Georgiou is currently president of Georgiou Enterprises, which has wide ranging interests including partnerships in several private equity firms; a portfolio of carbon emission reduction projects in China that generate carbon credits under the Kyoto protocol; environmental cleanup of deep coal mining sites; residential and commercial real estate and golf course management and development; and the provision of customer services at regional shopping centers throughout America.[1]"
Heather Murren was the cofounder, chairman and CEO for Nevada Cancer Institute (NVCI) from its founding until June 2009, and remains a member of its board of directors. On July 15, 2009, United States Senate Majority Leader Harry Reid (D-NV) appointed Murren to the congressional Financial Crisis Inquiry Commission.
Daniel Robert "Bob" Graham (born November 9, 1936) is an American politician. He was the 38th Governor of Florida from 1979 to 1987 and a United States Senator from that state from 1987 to 2005. Following a failed bid for the Democratic Party nomination in the 2004 presidential race, Graham was considered a possible running mate for John Kerry.
Graham dropped out of the race for the Democratic presidential nomination on October 6, 2003 and announced his retirement from the Senate on November 3, 2003.
Graham is now concentrating his efforts on the newly established Bob Graham Center for Public Service at his undergraduate alma mater, the University of Florida. He also serves as Chairman of the Commission on the Prevention of WMD proliferation and terrorism and advocates for the recommendations in the Commission report, World at Risk.
John W. Thompson (born April 24, 1949) is a former vice-president at IBM and the former Chief Executive Officer (CEO) of Symantec Corporation. He is presently the Chairman of the Board of Directors of Symantec Corporation and CEO of Virtual Instruments. During his tenure as CEO of Symantec, he was the only African American leading a major technology company.[1]
Keith Hennessey is the former Assistant to the U.S. President for Economic Policy and Director of the U.S. National Economic Council. He was appointed to the position in November 2007 by President George W. Bush, and served until the end of Bush's second term in office. Mr. Hennessey served in the White House since August 2002, when he was appointed to his previous position of Deputy Assistant to the U.S. President for Economic Policy and Deputy Director of the U.S. National Economic Council.
Peter J. Wallison (born June 6, 1941, in New York City) is a lawyer and the Arthur F. Burns Fellow in Financial Policy Studies at the American Enterprise Institute. He specializes in financial markets deregulation. He was White House Counsel during the Tower Commission's inquiry into the Iran Contra Affair.[1] He was a frequent commentator in the mass media on the Federal takeover of Fannie Mae and Freddie Mac, Financial crisis of 20072008, and related matters.
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's Perilous Pursuit of Subprime Loans - washingtonpost.com
Funny thing, most people would define both subprime and Alt-A loans as non conforming.
First of all, "most people" are irrelevant. The terms "conforming" and "non-conforming" have very definitive meanings for the GSEs. GSEs cannot buy nor can they guarantee non-conforming loans. Full-stop. Here the guidelines.
About Fannie Mae: Loan Limits
Conforming loan - Wikipedia, the free encyclopedia
And did they change their definition? Of course they did. They have throughout their existence.
Conforming and Non-Conforming LoansConforming loans are recognized by many characteristics including size, term, borrower profile and property type. The guidelines for conforming loans are dynamic, meaning they change from time to time as conditions warrant. For example, in the 1980's the loan limits, meaning the largest dollar value of individual mortgages that Fannie Mae and Freddie Mac would purchase more than doubled from the low $30,000's to the high $60,000's. In the later part of the twentieth century that limit broke through $300,000 and continues to increase in response to increases in the cost of housing.
Subprime and Alt-A loans can be conforming. The GSEs were involved in these markets before the housing crisis. In fact, they lost share during the past decade, except in 2006. Several years earlier, nearly half of all non-traditional loans were subprime and Alt-A. That's because the credit quality of GSE loans were higher than non-conforming loans.
ok, so can we STOP blaming CRA poor people for crashing the housing market or not?
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.
Commisssion was heavily Republican with Keith Hennessy, former chief economic adviser to The Bush Administration.
Let's take a look at that commission shall we?
"Philip Nicholas "Phil" Angelides (pronounced /ˌændʒɨˈliːdɨs/ AN-jə-LEE-dees), born June 12, 1953 in Sacramento, California), is an American politician who was California State Treasurer and the unsuccessful Democratic nominee for Governor of California in the 2006 elections. Angelides currently serves as the Chair of the Apollo Alliance and of the Financial Crisis Inquiry Commission."
Apollo Alliance, radical left wing group associated with ACORN among others. This puts him way way WAY out in left field.
Republican, not necessarily conservative.
Democrat.
Member of the conservative American Action Forum.
Was appointed to the FCIC by Harry Reid, and strange, he has given over $115k to democrat politicians in 2008, with more than $50k to DNC Senatorial candidates.
Another Reid Dem appointee from Las Vegas.
Strong supporter of P-BO, and was considered for Commerce Secretary. Pelosi appointed him to the FCIC.
Keith Hennessey is the former Assistant to the U.S. President for Economic Policy and Director of the U.S. National Economic Council. He was appointed to the position in November 2007 by President George W. Bush, and served until the end of Bush's second term in office. Mr. Hennessey served in the White House since August 2002, when he was appointed to his previous position of Deputy Assistant to the U.S. President for Economic Policy and Deputy Director of the U.S. National Economic Council.
Wow, a third non-democrat or liberal.
Peter J. Wallison (born June 6, 1941, in New York City) is a lawyer and the Arthur F. Burns Fellow in Financial Policy Studies at the American Enterprise Institute. He specializes in financial markets deregulation. He was White House Counsel during the Tower Commission's inquiry into the Iran Contra Affair.[1] He was a frequent commentator in the mass media on the Federal takeover of Fannie Mae and Freddie Mac, Financial crisis of 20072008, and related matters.
Wow, a solid republican, potentially conservative.
So there we have it. 4 of 10, headed by a RADICAL leftwing kook. Yeah, I'd be taking their word as gospel. uh huh. And even some of the republicans I was wondering about their bona fides.
GaDawg looks to be spreading disinformation... potentially like the FCIC is covering up gubmint's hand in all this.
Sooooo Wikipedia is completely effective for showing your assertions that this is not a left leaning whitewash committee filled by political appointees who essentially bought their seat on a cushy gubmint blue ribbon panel, radical leftwing nutjobs a potential RINO or two and one or two conservative sops.Commisssion was heavily Republican with Keith Hennessy, former chief economic adviser to The Bush Administration.
Let's take a look at that commission shall we?
Apollo Alliance, radical left wing group associated with ACORN among others. This puts him way way WAY out in left field.
Republican, not necessarily conservative.
Democrat.
Member of the conservative American Action Forum.
Was appointed to the FCIC by Harry Reid, and strange, he has given over $115k to democrat politicians in 2008, with more than $50k to DNC Senatorial candidates.
Another Reid Dem appointee from Las Vegas.
Strong supporter of P-BO, and was considered for Commerce Secretary. Pelosi appointed him to the FCIC.
Wow, a third non-democrat or liberal.
Peter J. Wallison (born June 6, 1941, in New York City) is a lawyer and the Arthur F. Burns Fellow in Financial Policy Studies at the American Enterprise Institute. He specializes in financial markets deregulation. He was White House Counsel during the Tower Commission's inquiry into the Iran Contra Affair.[1] He was a frequent commentator in the mass media on the Federal takeover of Fannie Mae and Freddie Mac, Financial crisis of 20072008, and related matters.
Wow, a solid republican, potentially conservative.
So there we have it. 4 of 10, headed by a RADICAL leftwing kook. Yeah, I'd be taking their word as gospel. uh huh. And even some of the republicans I was wondering about their bona fides.
GaDawg looks to be spreading disinformation... potentially like the FCIC is covering up gubmint's hand in all this.
Great cut and paste from wikipedia.
And you claim I am spreading "disinformation"
Congratulations.
Sooooo Wikipedia is completely effective for showing your assertions that this is not a left leaning whitewash committee filled by political appointees who essentially bought their seat on a cushy gubmint blue ribbon panel, radical leftwing nutjobs a potential RINO or two and one or two conservative sops.Let's take a look at that commission shall we?
Apollo Alliance, radical left wing group associated with ACORN among others. This puts him way way WAY out in left field.
Republican, not necessarily conservative.
Democrat.
Member of the conservative American Action Forum.
Was appointed to the FCIC by Harry Reid, and strange, he has given over $115k to democrat politicians in 2008, with more than $50k to DNC Senatorial candidates.
Another Reid Dem appointee from Las Vegas.
Strong supporter of P-BO, and was considered for Commerce Secretary. Pelosi appointed him to the FCIC.
Wow, a third non-democrat or liberal.
Wow, a solid republican, potentially conservative.
So there we have it. 4 of 10, headed by a RADICAL leftwing kook. Yeah, I'd be taking their word as gospel. uh huh. And even some of the republicans I was wondering about their bona fides.
GaDawg looks to be spreading disinformation... potentially like the FCIC is covering up gubmint's hand in all this.
Great cut and paste from wikipedia.
And you claim I am spreading "disinformation"
Congratulations.
Says more about you than me if I can do this damage with just a quick Wikipedia search.
But, nice Alinskyite tactic to try and distract by attacking while ignoring the sudden invalidity of your source.
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.
Good post.
However, it is the right wing that puts their PET THEORY on show and blames ONE GROUP-GOVERNMENT for the entire mess.
And that argument has zero merit. CRA had little or nothing to do with it as I originally stated.
And I have seen you accept that pet theory over and over and over and over and never challenge it.
Why is that?
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.
Good post.
However, it is the right wing that puts their PET THEORY on show and blames ONE GROUP-GOVERNMENT for the entire mess.
And that argument has zero merit. CRA had little or nothing to do with it as I originally stated.
And I have seen you accept that pet theory over and over and over and over and never challenge it.
Why is that?
You insisted something, and then ignored the dissenting part of the report you linked to that disagreed with you. I do not have a pet theory, unless you think that me insisting that everyone shares responsibility in this is a pet theory. I find myself wondering why my insistence that I am partially at fault comes across to you as blaming the government, but that might be because I am blinded by my pet theory.
Then again, it might be because you are actually the one with a pet theory. Just a thought.
Good post.
However, it is the right wing that puts their PET THEORY on show and blames ONE GROUP-GOVERNMENT for the entire mess.
And that argument has zero merit. CRA had little or nothing to do with it as I originally stated.
And I have seen you accept that pet theory over and over and over and over and never challenge it.
Why is that?
You insisted something, and then ignored the dissenting part of the report you linked to that disagreed with you. I do not have a pet theory, unless you think that me insisting that everyone shares responsibility in this is a pet theory. I find myself wondering why my insistence that I am partially at fault comes across to you as blaming the government, but that might be because I am blinded by my pet theory.
Then again, it might be because you are actually the one with a pet theory. Just a thought.
No, I always like dissent.
How many dissenting opinions were made public, much less written as part of an official record, during the Bush administration?
Dissent is as American as apple pie.
Dissent is OBJECTIVITY and this report reflects that. Sorry that you don't see that.
As bi-partisaon commision as I have ever seen and you know it.
Read the report and as smart as you are, you will soon come around.
As bi-partisaon commision as I have ever seen and you know it.
No I don't. I know you claim it but that doesn't make it so.
Read the report and as smart as you are, you will soon come around.
Come around to what, pray tell? That the gubmint is innocent and in no way caused this fiasco through wrongheaded and fiscally irresponsible legislation for 40 years?
Pffft... not hardly.
TBH
I don't put much stock in the Financial Commission's report. It was bound to be political no matter what.
Plus, I don't think they even mentioned the Fed's low interest rate policy, which is absolutely staggering.
You insisted something, and then ignored the dissenting part of the report you linked to that disagreed with you. I do not have a pet theory, unless you think that me insisting that everyone shares responsibility in this is a pet theory. I find myself wondering why my insistence that I am partially at fault comes across to you as blaming the government, but that might be because I am blinded by my pet theory.
Then again, it might be because you are actually the one with a pet theory. Just a thought.
No, I always like dissent.
How many dissenting opinions were made public, much less written as part of an official record, during the Bush administration?
Dissent is as American as apple pie.
Dissent is OBJECTIVITY and this report reflects that. Sorry that you don't see that.
Excuse me? How am I supposed to know how many dissents there were during the Bush administration? Do you expect me to defend Bush for some obscure reason? Why even mention him at all?
I notice that you still have not actually answered my original question to you, so let me rephrase it and ask again.
Given the fact that the report you linked to contains a dissenting opinion that places a significant portion of the blame on the Community Reinvestment Act, which "set of facts" am I supposed to use as a guide?
Your mistake is that you are pointing to the conclusions of a panel of experts and claiming they are facts. What they actually are well informed opinions.
TBH
I don't put much stock in the Financial Commission's report. It was bound to be political no matter what.
Plus, I don't think they even mentioned the Fed's low interest rate policy, which is absolutely staggering.
It's in the dissenting opinion.
Try reading it.
