Frank pushes for punishment for crisis

[WillowTree]

borrowed.....

even so, are not even the tip of the iceburg...they did not buy subprime, adjustable loans, their charter does not permit such, their charter only permists conventional 30 year mortgages for the most part....they did go in to buy some mortgaged backed securities several years after the other banks had been packaging and selling them off to the world... that did have some risky loans as a part of them, but these were RATED AAA, so they were not suppose to be risky, this was not their fault, but the fault of the banks that paid these agencies to rate them....and the fault of their private owners pushing them to get in on all of this easy money that all the other banks were making off of this business, so that did lead to buying some conventional mortgages that did not have money down for them, but again, this was later in the game and after the mortgage companies and banks had been funding this upswing.

Just so you know, none of these other banks and mortgage companies had a charter to sell to the poor or any kind of requirement to do such and fannie and freddie is not who was buying their loans that were risky in the first place...they were putting them in to securities and selling them off ot others...NOT FANNIE and freddie....

These banks kept trying to beat their previous years sales so each year they became more creative and more and more laxed in their mortgage standards and the mortgages they bought from these fly by night mortgage companies...the banks GREED and/ or stupidity due to greed is what drove this risky business, and NOTHING ELSE.


Care

so fannie and freddie are guiltless, they gave mortgages only to those who could repay them, did not sell off toxic paper nor buy toxic paper, everything at fannie and freddie were on the up and up,, and nothing at all was amiss? do I read you right??? then why did we have to bail said fannie and freddie out to the tune of 400 billion dollars doyathink... ????? HUH? hello,, you got your head so far up your ass I bet you can do a flouoscopy on yer tonsils!

I didn't say they were guiltless...they probably would have jumped on board earlier, if they could have, they were so jealous of the market share that these other banks were capturing of the mortgage market....

BUT THEY WERE BEING INVESTIGATED in 2003 for other crimes and wrong doings and were being watched like a hawk and being scrutinized for other bad decisions of thiers, SO THEY COULDN'T.

Plain out unadulterated partisan bullshit!

 

[Care4all]

so fannie and freddie are guiltless, they gave mortgages only to those who could repay them, did not sell off toxic paper nor buy toxic paper, everything at fannie and freddie were on the up and up,, and nothing at all was amiss? do I read you right??? then why did we have to bail said fannie and freddie out to the tune of 400 billion dollars doyathink... ????? HUH? hello,, you got your head so far up your ass I bet you can do a flouoscopy on yer tonsils!

I didn't say they were guiltless...they probably would have jumped on board earlier, if they could have, they were so jealous of the market share that these other banks were capturing of the mortgage market....

BUT THEY WERE BEING INVESTIGATED in 2003 for other crimes and wrong doings and were being watched like a hawk and being scrutinized for other bad decisions of thiers, SO THEY COULDN'T.

Plain out unadulterated partisan bullshit!

it really isn't!

Fannie and Freddie, after growing rapidly in the 1990s, largely faded from the scene during the height of the housing bubble.


Partly that's because regulators, responding to accounting scandals at the companies, placed temporary restraints on both Fannie and Freddie that curtailed their lending just as housing prices were really taking off. Also, they didn't do any subprime lending, because they can't: the definition of a subprime loan is precisely a loan that doesn't meet the requirement, imposed by law, that Fannie and Freddie buy only mortgages issued to borrowers who made substantial down payments and carefully documented their income.

 

[WillowTree]

I didn't say they were guiltless...they probably would have jumped on board earlier, if they could have, they were so jealous of the market share that these other banks were capturing of the mortgage market....

BUT THEY WERE BEING INVESTIGATED in 2003 for other crimes and wrong doings and were being watched like a hawk and being scrutinized for other bad decisions of thiers, SO THEY COULDN'T.

Plain out unadulterated partisan bullshit!

it really isn't!

Fannie and Freddie, after growing rapidly in the 1990s, largely faded from the scene during the height of the housing bubble.


Partly that's because regulators, responding to accounting scandals at the companies, placed temporary restraints on both Fannie and Freddie that curtailed their lending just as housing prices were really taking off. Also, they didn't do any subprime lending, because they can't: the definition of a subprime loan is precisely a loan that doesn't meet the requirement, imposed by law, that Fannie and Freddie buy only mortgages issued to borrowers who made substantial down payments and carefully documented their income.

this is why we have no confidence that your party and the newly elected ACORN lawyer can do jack shit about fixing problems you have (supposedly) zero knowledge of...

 

[FactFinder]

Someone asked about dericatives earlier.

It's the Derivatives, Stupid! Why Fannie, Freddie, AIG had to be Bailed Out

Credit default swaps (CDS) are the most widely traded form of credit derivative. CDS are bets between two parties on whether or not a company will default on its bonds. In a typical default swap, the "protection buyer" gets a large payoff from the "protection seller" if the company defaults within a certain period of time, while the "protection seller" collects periodic payments from the "protection buyer" for assuming the risk of default. CDS thus resemble insurance policies, but there is no requirement to actually hold any asset or suffer any loss, so CDS are widely used just to increase profits by gambling on market changes. In one blogger’s example, a hedge fund could sit back and collect $320,000 a year in premiums just for selling "protection" on a risky BBB junk bond. The premiums are "free" money – free until the bond actually goes into default, when the hedge fund could be on the hook for $100 million in claims.

And there’s the catch: what if the hedge fund doesn’t have the $100 million? The fund’s corporate shell or limited partnership is put into bankruptcy; but both parties are claiming the derivative as an asset on their books, which they now have to write down. Players who have "hedged their bets" by betting both ways cannot collect on their winning bets; and that means they cannot afford to pay their losing bets, causing other players to also default on their bets.

The dominos go down in a cascade of cross-defaults that infects the whole banking industry and jeopardizes the global pyramid scheme. The potential for this sort of nuclear reaction was what prompted billionaire investor Warren Buffett to call derivatives "weapons of financial mass destruction." It is also why the banking system cannot let a major derivatives player go down, and it is the banking system that calls the shots. The Federal Reserve is literally owned by a conglomerate of banks; and Hank Paulson, who heads the U.S. Treasury, entered that position through the revolving door of investment bank Goldman Sachs, where he was formerly CEO.

 

[Toro]

Nobody is saying that Freddie and Fannie didn't have a role, because they did. And their role, as you correctly pointed out, was because they were too highly levered, not because of bad loans to poor people.

However, Freddie and Fannie were no different than every other financial company that had too much leverage and collapsed.

 

[Bern80]

Remind me again who forced the banks to spread all of these mortgages throughout the market?

The same PEOPLE that forced thm to loan the money. Banks are in the business to MAKE money, they were forded to make bad loans and then given a means to offload those bad loans..... Sounds like the bad loans were and remain the problem. Loans forced by Liberals, loans forced by Liberal lawyers threats to sue. Obama being a BIG player in that.

You claim 50 and 50 when the fact is Liberals created the mess and then refused to allow anyone to fix it until to late. Frank was claiming as late as spring 2008 the Housing loan market was solvent and JUST FINE. In fact he blamed Republicans for suggesting otherwise. He and Dodd blocked 3 attempts to regulate the mess.

Banks are in the business to make money, force them to make bad loans and then provide them the means to offload those bad loans and they will do it. It makes sound business sense. The banks are not to blame, the liberals are for forcing the problem on them and then providing them the means to spread the problem around.

Bullshit.

Those banks were falling all over themselves to lend money to unqaulified buyers.

Why?

Because they knew they wouldn't be holding the paper.

You people who are buying into this ACORN explaination are either very stupid or choosing to believe a lie.

Let's be clear on what you're calling bullshit on.

Did frank not say there was no problem with Fannie and Freddie?

Did he and the dems not successfully stop a republican measure that would have added regulation to the industry?

Hell, did Carter not pass the CRA?

This is not rocket science. Why would an institution who's purpose is to make money, put themselves in a position to lend money to people for the purpose of making money on that loan, if they knew there were decent odds that the lendee was not going to pay off the loan? The answer is simple. They would either have to be forced to (which the CRA kinda did) or there would have to know that regardless of of the lendees ability to pay they weren't gonna lose any money, which is what the government told them.

 

[editec]

The same PEOPLE that forced thm to loan the money. Banks are in the business to MAKE money, they were forded to make bad loans and then given a means to offload those bad loans..... Sounds like the bad loans were and remain the problem. Loans forced by Liberals, loans forced by Liberal lawyers threats to sue. Obama being a BIG player in that.

You claim 50 and 50 when the fact is Liberals created the mess and then refused to allow anyone to fix it until to late. Frank was claiming as late as spring 2008 the Housing loan market was solvent and JUST FINE. In fact he blamed Republicans for suggesting otherwise. He and Dodd blocked 3 attempts to regulate the mess.

Banks are in the business to make money, force them to make bad loans and then provide them the means to offload those bad loans and they will do it. It makes sound business sense. The banks are not to blame, the liberals are for forcing the problem on them and then providing them the means to spread the problem around.

Bullshit.

Those banks were falling all over themselves to lend money to unqaulified buyers.

Why?

Because they knew they wouldn't be holding the paper.

You people who are buying into this ACORN explaination are either very stupid or choosing to believe a lie.

Wrong again.. As usual. That is exactly why I have zero faith in you and your boy king to solve the problem you cannot solve a problem when you fail by sheer stupidity to recognize the root cause of said problem.. I mock you

Show me the lawsuits you believe forced banks to make these loans.

Should be very easy to do if its the truth.

I'll wait.

 

[WillowTree]

Bullshit.

Those banks were falling all over themselves to lend money to unqaulified buyers.

Why?

Because they knew they wouldn't be holding the paper.

You people who are buying into this ACORN explaination are either very stupid or choosing to believe a lie.

Wrong again.. As usual. That is exactly why I have zero faith in you and your boy king to solve the problem you cannot solve a problem when you fail by sheer stupidity to recognize the root cause of said problem.. I mock you

Show me the lawsuits you believe forced banks to make these loans.

Should be very easy to do if its the truth.

I'll wait.

I think my charge was intimidation and threats.. correct?

 

[DiveCon]

So Frank will be placing his own balls in a sling?

I wouldn't go that far ... I'm sure he's planning on covering his own ass.

dont they always
we need a constitional amendment that keeps them from exempting themselves from the laws they make

 

[mash107]

Nobody is saying that Freddie and Fannie didn't have a role, because they did. And their role, as you correctly pointed out, was because they were too highly levered, not because of bad loans to poor people.

However, Freddie and Fannie were no different than every other financial company that had too much leverage and collapsed.

They still introduced moral hazards, and who knows if other financial companies would've followed suit had those hazards not existed. Regardless, it's a moot point. No bank should ever be allowed to leverage beyond the amount of savings they have on hand. It's what helps create these bubbles that inevitably have to crash.

 

[DiveCon]

If it stopped there it wouldn't have been so bad but the banks then bundled those risky mortgages and then spread them about everywhere like cancer.

It made the situation exponentially worse, no?

But wait, let's not let the horse outta the barn,, there would have been no rishy mortgages to bundle if the banks had not been intimidated in the first place. In other words politicians and politcal action groups such as ACORN started this avalanche into bandruptcy. Barney Fwank need to sit down and stfu about punishing banks.

But they still did it. They knew better and they still did it.

they did it because they didnt want to face litigation

 

[FreeChristian]

Freddie and Fannae were 'PC-mortgage' projects that pulled the entire housing market down. We definitely can't do that again.

 

[DiveCon]

Remind me again who forced the banks to spread all of these mortgages throughout the market?

The same PEOPLE that forced thm to loan the money. Banks are in the business to MAKE money, they were forded to make bad loans and then given a means to offload those bad loans..... Sounds like the bad loans were and remain the problem. Loans forced by Liberals, loans forced by Liberal lawyers threats to sue. Obama being a BIG player in that.

You claim 50 and 50 when the fact is Liberals created the mess and then refused to allow anyone to fix it until to late. Frank was claiming as late as spring 2008 the Housing loan market was solvent and JUST FINE. In fact he blamed Republicans for suggesting otherwise. He and Dodd blocked 3 attempts to regulate the mess.

Banks are in the business to make money, force them to make bad loans and then provide them the means to offload those bad loans and they will do it. It makes sound business sense. The banks are not to blame, the liberals are for forcing the problem on them and then providing them the means to spread the problem around.

Bullshit.

Those banks were falling all over themselves to lend money to unqaulified buyers.

Why?

Because they knew they wouldn't be holding the paper.

You people who are buying into this ACORN explaination are either very stupid or choosing to believe a lie.

wow, how ironic
i say it is you guys that are choosing to believe the lie

 

[Care4all]

But wait, let's not let the horse outta the barn,, there would have been no rishy mortgages to bundle if the banks had not been intimidated in the first place. In other words politicians and politcal action groups such as ACORN started this avalanche into bandruptcy. Barney Fwank need to sit down and stfu about punishing banks.

But they still did it. They knew better and they still did it.

they did it because they didnt want to face litigation

Simply not true...

ASK THEM.....ask the banks if this was the reason they didn't take precautions,,,,

NONE, ABSOLUTELY NONE of the banks have given your scenario of being afraid of being sued....or being FORCED in to loaning to unqualified people... it's bullshit dive, TIME you read up on it....find me one bank that gave your reason as the reason they did it...just ONE!!!!!!!!

care

 

[mash107]

But they still did it. They knew better and they still did it.

they did it because they didnt want to face litigation

Simply not true...

ASK THEM.....ask the banks if this was the reason they didn't take precautions,,,,

NONE, ABSOLUTELY NONE of the banks have given your scenario of being afraid of being sued....or being FORCED in to loaning to unqualified people... it's bullshit dive, TIME you read up on it....find me one bank that gave your reason as the reason they did it...just ONE!!!!!!!!

care

They were rated, and these ratings were publicized. And corporations, who cared about their PR, only borrowed money from banks whose ratings were good. Hence, banks were "forced" into giving bad loans to not deal with a backlash of bad publicity.

Your Bank's Overall CRA Rating

I don't honestly understand why some people feel government can do no wrong, when history has shown they can do no right.

 

[DiveCon]

But they still did it. They knew better and they still did it.

they did it because they didnt want to face litigation

Simply not true...

ASK THEM.....ask the banks if this was the reason they didn't take precautions,,,,

NONE, ABSOLUTELY NONE of the banks have given your scenario of being afraid of being sued....or being FORCED in to loaning to unqualified people... it's bullshit dive, TIME you read up on it....find me one bank that gave your reason as the reason they did it...just ONE!!!!!!!!

care

strop giving this crap your support
its NOT true
the CRA effected how ALL banks did business whether they were forced under it or not

 

[oreo]

House Financial Services Chairman Barney Frank (D-Mass.) is pressing state and federal authorities to seek criminal and civil penalties on financial actors that helped cause the current crisis.

"Rules don't work if people have no fear of them," Frank said at a press conference Thursday.

He announced a hearing March 20 with Attorney General Eric Holder, bank regulators and the Securities and Exchange Commission as witnesses to discover what their plans are to prosecute irresponsible and in some cases criminal behaviors.

He isn't looking for names, Frank said, but "I do want all the people with enforcement power, state and federal, in that room."


Frank pushes for punishment for crisis - Victoria McGrane - POLITICO.com

Does he have any plans for turning himself in--along with Criss Dodd who got a sweatheart deal from Country Wide on his home mortgage?

He might be digging his own hole here. I don't think to many bankers, brokers or others are going to head to jail without taking 3/4's of congress with them.

Our government was the initial enablers of this mess. "New York Times" date Sept. 30, 1999--"Fannie reduces credit requirements to aid mortgage lending." Read it & pay close attention to the warning at the bottom portion. It's unbelievable.

Barney Frank ignored every single warning from auditors about this on-coming train wreck & in fact fought tooth & nail to not change any of the very loose banking standards.

 

[oreo]

House Financial Services Chairman Barney Frank (D-Mass.) is pressing state and federal authorities to seek criminal and civil penalties on financial actors that helped cause the current crisis.

"Rules don't work if people have no fear of them," Frank said at a press conference Thursday.

He announced a hearing March 20 with Attorney General Eric Holder, bank regulators and the Securities and Exchange Commission as witnesses to discover what their plans are to prosecute irresponsible and in some cases criminal behaviors.

He isn't looking for names, Frank said, but "I do want all the people with enforcement power, state and federal, in that room."


Frank pushes for punishment for crisis - Victoria McGrane - POLITICO.com

NEW YORK TIMES:
date: September 30, 1999
Titled: Fannie reduces credit to aid mortgage lending.

Educate yourselves on this mess--so it never happens again. Read the article & pay very close attention to the warnings listed in this article. It's unbelievable.

 

[garyd]

It's pretty obvious really. We have too many people getting up every morning thinking their ought to be a law. So we get a lot of rules and regulations like those regarding red lining where in enforcement is a civil procedure rather than a Criminal procdure because there is more money for trial lawyers in civil procedures and the Democrats almost all of whom are lawyers and who get 90% of the trial lawyers campaign donations wanted to make sure that their favorite people had plenty of money to give...

 

[Care4all]

House Financial Services Chairman Barney Frank (D-Mass.) is pressing state and federal authorities to seek criminal and civil penalties on financial actors that helped cause the current crisis.

"Rules don't work if people have no fear of them," Frank said at a press conference Thursday.

He announced a hearing March 20 with Attorney General Eric Holder, bank regulators and the Securities and Exchange Commission as witnesses to discover what their plans are to prosecute irresponsible and in some cases criminal behaviors.

He isn't looking for names, Frank said, but "I do want all the people with enforcement power, state and federal, in that room."


Frank pushes for punishment for crisis - Victoria McGrane - POLITICO.com

NEW YORK TIMES:
date: September 30, 1999
Titled: Fannie reduces credit to aid mortgage lending.

Educate yourselves on this mess--so it never happens again. Read the article & pay very close attention to the warnings listed in this article. It's unbelievable.

educate yourself oreo, under every president, reagan, bush1, clinton and BUSH2 fannie has lowered their credit to aid mortgage lending....

Bush2 reduced it AGAIN and even more so, for his housing incentive to put 5.6 million more poor and disabled people in to homes....

DO YOU BLAME President Bush for this crisis because he had fannie lower their credit standards?

I don't! iT IS A good intitiative that ALL presidents have had....

AND it has nothing to do with the mortgage brokers that created these subprime risky mortgages nor the banks that bought them and hid their risks by bundling them in to MBS's and selling those securities off to foreign countries and investors, and selling them off to our pension funds, mutual funds, and State retirement funds, and Global Charities....

THEY were selling them off to others for the most part, not to fannie/freddie...there was no jurisdiction that required these banks to give nortgages to poor people....there was NO REGULATION RULLING them on this........they gave mortgages for any amount to ANYONE that wanted one....they refinanced homes for any amount with no proof of a job, or assets...

this risky subprime mania, has NOTHING AT ALL to do with Red liining or the community reinvestment act, cra....Fannie may try to use that excuse, but the majority of these banks did not deal with fannie or CRA....which requires a CONVENTIONAL MORTGAGE, a 30 year fixed loan, BY CHARTER.

this has to do with stupid and poor business practice on their own part and their own greed that blinded them....

so oreo, you need to further educate yourself on how this began....

care