House Flippers Inflated the Housing Bubble

[auditor0007]

House Flippers Inflated the Housing Bubble, Report Says

LAS VEGAS -- A new federal report shows that speculative real estate investors played a larger role than originally thought in driving the housing bubble that led to record foreclosures and sent economies plummeting in Nevada, California, Arizona, Florida and other states.

Researchers with the Federal Reserve Bank of New York found that investors who used low-down-payment, subprime credit to purchase multiple residential properties helped inflate home prices and are largely to blame for the recession. The researchers said their findings focused on an "undocumented" dimension of the housing market crisis that had been previously overlooked as officials focused on how to contain the financial crisis, not what caused it.

More than a third of all U.S. home mortgages granted in 2006 went to people who already owned at least one house, according to the report. In Arizona, California, Florida and Nevada, where average home prices more than doubled from 2000 to 2006, investors made up nearly half of all mortgage-backed purchases during the housing bubble. Buyers owning three or more properties represented the fastest-growing segment of homeowners during that time.

House Flippers Inflated the Housing Bubble, Report Says | AOL Real Estate

They're just figuring this out now? I read an article a few years ago that stated that 75% of all new homes purchased in 06 and 07 were sold to speculators.

 

[editec]

Cheap money, and a stupid LACK of sensible lending regulations caused the real estate meltdown,

RE specualtors merely played by the rules of the moment.

They FLIPPED houses, remember? Meaning they bought them and then SOLD them to people who presumably wanted to LIVE in them.

 

[expat_panama]

...House Flippers Inflated the Housing Bubble, Report Says | AOL Real Estate They're just figuring this out now? I read an article a few years ago that stated that 75% of all new homes purchased in 06 and 07 were sold to speculators.

No, that old leftist spin's completely used up and nobody wants more state control of the 'evil rich capitalists'.

Markets work because we know we make money when we buy at a low price and sell at a high price. Fools who bubbled the peak by buying high got the huge losses they deserved. The way markets don't work is gov't demands for a sales quota to groups that the markets couldn't serve. We don't need articles from party-line media pundits because by now we can all see the historical home prices--

--and the buying spree beginning with the '90's' left-wing war on the "evil bankers" that forced them to sell where they knew they shouldn't.

Trying now to blame a stupid policy failure on the evil rich isn't going to get anywhere.

 

[auditor0007]

Cheap money, and a stupid LACK of sensible lending regulations caused the real estate meltdown,

RE specualtors merely played by the rules of the moment.

They FLIPPED houses, remember? Meaning they bought them and then SOLD them to people who presumably wanted to LIVE in them.

All true, but the net effect of so much flipping was that we built too many homes, period. All of a sudden there wasn't anyone to buy because there were too many homes. The only people buying were those trying to flip them. Once it was realized that there was a glut of homes on the market, it all came crashing down.

 

[iamwhatiseem]

Cheap money, and a stupid LACK of sensible lending regulations caused the real estate meltdown,

RE specualtors merely played by the rules of the moment.

They FLIPPED houses, remember? Meaning they bought them and then SOLD them to people who presumably wanted to LIVE in them.

All true, but the net effect of so much flipping was that we built too many homes, period. All of a sudden there wasn't anyone to buy because there were too many homes. The only people buying were those trying to flip them. Once it was realized that there was a glut of homes on the market, it all came crashing down.

uhhnn....what?

 

[iamwhatiseem]

This guy must be one of the OWS.

 

[expat_panama]

This guy must be one of the OWS.

That makes sense; explains the 'blame capitalism' bit.

 

[iamwhatiseem]

This guy must be one of the OWS.

That makes sense; explains the 'blame capitalism' bit.

I like how Peter Schiff put it - "Wall Street simply drank the alcohol that the government made for them"
It's like blaming cancer on convenient stores and giving RJ Reynolds and the smokers themselves a pass.

 

[Nosmo King]

...House Flippers Inflated the Housing Bubble, Report Says | AOL Real Estate They're just figuring this out now? I read an article a few years ago that stated that 75% of all new homes purchased in 06 and 07 were sold to speculators.

No, that old leftist spin's completely used up and nobody wants more state control of the 'evil rich capitalists'.

Markets work because we know we make money when we buy at a low price and sell at a high price. Fools who bubbled the peak by buying high got the huge losses they deserved. The way markets don't work is gov't demands for a sales quota to groups that the markets couldn't serve. We don't need articles from party-line media pundits because by now we can all see the historical home prices--

--and the buying spree beginning with the '90's' left-wing war on the "evil bankers" that forced them to sell where they knew they shouldn't.

Trying now to blame a stupid policy failure on the evil rich isn't going to get anywhere.

Do you really think banks have no culpability in the real estate crash? Really? Robo-signing, fictitious numbers on loan applications, mortgage backed derivatives, lack of over sight. Do you really think banks are above reproach?

 

[iamwhatiseem]

...House Flippers Inflated the Housing Bubble, Report Says | AOL Real Estate They're just figuring this out now? I read an article a few years ago that stated that 75% of all new homes purchased in 06 and 07 were sold to speculators.

No, that old leftist spin's completely used up and nobody wants more state control of the 'evil rich capitalists'.

Markets work because we know we make money when we buy at a low price and sell at a high price. Fools who bubbled the peak by buying high got the huge losses they deserved. The way markets don't work is gov't demands for a sales quota to groups that the markets couldn't serve. We don't need articles from party-line media pundits because by now we can all see the historical home prices--

--and the buying spree beginning with the '90's' left-wing war on the "evil bankers" that forced them to sell where they knew they shouldn't.

Trying now to blame a stupid policy failure on the evil rich isn't going to get anywhere.

Do you really think banks have no culpability in the real estate crash? Really? Robo-signing, fictitious numbers on loan applications, mortgage backed derivatives, lack of over sight. Do you really think banks are above reproach?

Not to speak for him...but I don't think anyone is saying that.

Who is most at fault...

A) The banks and the financial system in entirety that took advantage of the situation provided to "get while the gettin's good".
B) The amazingly gullible and foolhardy consumers who signed loans that they positively could not afford.
C) The government that 100% designed the whole apparatus, forced banks to sign loans that they never would have done without that coercion and provided the guarantees on obviously resulting bad loans by a self created sudo government agency using taxpayer funds.

You tell us.

 

[The Rabbi]

...House Flippers Inflated the Housing Bubble, Report Says | AOL Real Estate They're just figuring this out now? I read an article a few years ago that stated that 75% of all new homes purchased in 06 and 07 were sold to speculators.

No, that old leftist spin's completely used up and nobody wants more state control of the 'evil rich capitalists'.

Markets work because we know we make money when we buy at a low price and sell at a high price. Fools who bubbled the peak by buying high got the huge losses they deserved. The way markets don't work is gov't demands for a sales quota to groups that the markets couldn't serve. We don't need articles from party-line media pundits because by now we can all see the historical home prices--

--and the buying spree beginning with the '90's' left-wing war on the "evil bankers" that forced them to sell where they knew they shouldn't.

Trying now to blame a stupid policy failure on the evil rich isn't going to get anywhere.

Do you really think banks have no culpability in the real estate crash? Really? Robo-signing, fictitious numbers on loan applications, mortgage backed derivatives, lack of over sight. Do you really think banks are above reproach?

Why are you not doing something you are qualified for, like looking at commodes?
You really think "robo-signing" is responsible for the real estate crash? Really? Mortgage backed derivatives? Really? Lack of oversight? Mortgages are one of the most tightly regulated areas of the economy. What oversight would have prevented investors from thinking they could make a killing on rising home prices?
Banks did what every business does: they entered an area where they thought they could earn large profits. And they did. Until they didn't. With low interest rates, easy availability of funding and rising home prices it was a safe bet. Blame the Fed for keeping rates artificially low, if anyone is to blame.

 

[Nosmo King]

No, that old leftist spin's completely used up and nobody wants more state control of the 'evil rich capitalists'.

Markets work because we know we make money when we buy at a low price and sell at a high price. Fools who bubbled the peak by buying high got the huge losses they deserved. The way markets don't work is gov't demands for a sales quota to groups that the markets couldn't serve. We don't need articles from party-line media pundits because by now we can all see the historical home prices--

--and the buying spree beginning with the '90's' left-wing war on the "evil bankers" that forced them to sell where they knew they shouldn't.

Trying now to blame a stupid policy failure on the evil rich isn't going to get anywhere.

Do you really think banks have no culpability in the real estate crash? Really? Robo-signing, fictitious numbers on loan applications, mortgage backed derivatives, lack of over sight. Do you really think banks are above reproach?

Why are you not doing something you are qualified for, like looking at commodes?
You really think "robo-signing" is responsible for the real estate crash? Really? Mortgage backed derivatives? Really? Lack of oversight? Mortgages are one of the most tightly regulated areas of the economy. What oversight would have prevented investors from thinking they could make a killing on rising home prices?
Banks did what every business does: they entered an area where they thought they could earn large profits. And they did. Until they didn't. With low interest rates, easy availability of funding and rising home prices it was a safe bet. Blame the Fed for keeping rates artificially low, if anyone is to blame.

Just as a point of departure, could you tell us how the business practices of just one lender demonstrates the responsibility and due diligence that has been abandoned in the rush to bigger profit? And that lender is Countrywide.

I know it runs counter to the ideology that clouds your personal thinking to actually consider that business can be inept at best, evil and predatory at worst. But Countrywide serves as a paradigm for the culpability of the banking sector in this current crisis.

 

[iamwhatiseem]

No, that old leftist spin's completely used up and nobody wants more state control of the 'evil rich capitalists'.

Markets work because we know we make money when we buy at a low price and sell at a high price. Fools who bubbled the peak by buying high got the huge losses they deserved. The way markets don't work is gov't demands for a sales quota to groups that the markets couldn't serve. We don't need articles from party-line media pundits because by now we can all see the historical home prices--

--and the buying spree beginning with the '90's' left-wing war on the "evil bankers" that forced them to sell where they knew they shouldn't.

Trying now to blame a stupid policy failure on the evil rich isn't going to get anywhere.

Do you really think banks have no culpability in the real estate crash? Really? Robo-signing, fictitious numbers on loan applications, mortgage backed derivatives, lack of over sight. Do you really think banks are above reproach?

Why are you not doing something you are qualified for, like looking at commodes?
You really think "robo-signing" is responsible for the real estate crash? Really? Mortgage backed derivatives? Really? Lack of oversight? Mortgages are one of the most tightly regulated areas of the economy. What oversight would have prevented investors from thinking they could make a killing on rising home prices?
Banks did what every business does: they entered an area where they thought they could earn large profits. And they did. Until they didn't. With low interest rates, easy availability of funding and rising home prices it was a safe bet. Blame the Fed for keeping rates artificially low, if anyone is to blame.

Amazing isn't it?
They just don't get it.
Right before our eyes the government is repeating the exact same process via subsidized student loans. Just like the mortgage bubble - the education bubble is teetering at it's summit that has driven the cost of a degree by fantastic percentages in comparison to inflation.
They just don't get...and they keep voting in people who are responsible for carrying out these insane policies over and over and buy the horeshit they are fed on MSNBC and Huffington Post that tells them the evil capitalist are to blame.

 

[iamwhatiseem]

Do you really think banks have no culpability in the real estate crash? Really? Robo-signing, fictitious numbers on loan applications, mortgage backed derivatives, lack of over sight. Do you really think banks are above reproach?

Why are you not doing something you are qualified for, like looking at commodes?
You really think "robo-signing" is responsible for the real estate crash? Really? Mortgage backed derivatives? Really? Lack of oversight? Mortgages are one of the most tightly regulated areas of the economy. What oversight would have prevented investors from thinking they could make a killing on rising home prices?
Banks did what every business does: they entered an area where they thought they could earn large profits. And they did. Until they didn't. With low interest rates, easy availability of funding and rising home prices it was a safe bet. Blame the Fed for keeping rates artificially low, if anyone is to blame.

Just as a point of departure...

Well color me surprised...

 

[The Rabbi]

Do you really think banks have no culpability in the real estate crash? Really? Robo-signing, fictitious numbers on loan applications, mortgage backed derivatives, lack of over sight. Do you really think banks are above reproach?

Why are you not doing something you are qualified for, like looking at commodes?
You really think "robo-signing" is responsible for the real estate crash? Really? Mortgage backed derivatives? Really? Lack of oversight? Mortgages are one of the most tightly regulated areas of the economy. What oversight would have prevented investors from thinking they could make a killing on rising home prices?
Banks did what every business does: they entered an area where they thought they could earn large profits. And they did. Until they didn't. With low interest rates, easy availability of funding and rising home prices it was a safe bet. Blame the Fed for keeping rates artificially low, if anyone is to blame.

Just as a point of departure, could you tell us how the business practices of just one lender demonstrates the responsibility and due diligence that has been abandoned in the rush to bigger profit? And that lender is Countrywide.

I know it runs counter to the ideology that clouds your personal thinking to actually consider that business can be inept at best, evil and predatory at worst. But Countrywide serves as a paradigm for the culpability of the banking sector in this current crisis.

Couldn't answer a single question, eh?
Did individuals screw up? Yes. Did appraisers over-value houses? Yes. Did customers falsify docs or lie on the app? Yes.
But none of those things caused the bubble nor the crash. They were symptoms of it. When gold crashes you will hear about dishonest business practices etc etc. That is always the case in a mania. The dot com boom was another example. Some bad practices thrive. But they are not responsible for the basic scenario.

 

[expat_panama]

...House Flippers Inflated the Housing Bubble...

...we buy at a low price and sell at a high price. Fools who bubbled the peak by buying high got the huge losses they deserved. The way markets don't work is gov't demands for a sales quota to groups that the markets couldn't serve...

Do you really think banks have no culpability in the real estate crash? ...

The topic is whether housing bubble was caused by real estate traders. I said that the bubble was caused by the federal government forcing banks to make bad mortgages. Everyone agrees the banks did wrong from a business standpoint, especially the banks that lost big money on all the stupid loans that they never wanted to make in the first place.

It sounds like you're trying (and not quite succeeding) to say you think what the banks did was morally wrong. Some might say the question belongs on a religion forum but banks are run by people and people are morally good, so morality and banking can't be separated. We ask if banks should obey a law even when they think obedience would cause suffering they feel is morally wrong. Scripture applies:

"For rulers are not a terror to good works, but to the evil. Wilt thou then not be afraid of the power? do that which is good, and thou shalt have praise of the same."

 

[Nosmo King]

...we buy at a low price and sell at a high price. Fools who bubbled the peak by buying high got the huge losses they deserved. The way markets don't work is gov't demands for a sales quota to groups that the markets couldn't serve...

Do you really think banks have no culpability in the real estate crash? ...

The topic is whether housing bubble was caused by real estate traders. I said that the bubble was caused by the federal government forcing banks to make bad mortgages. Everyone agrees the banks did wrong from a business standpoint, especially the banks that lost big money on all the stupid loans that they never wanted to make in the first place.

It sounds like you're trying (and not quite succeeding) to say you think what the banks did was morally wrong. Some might say the question belongs on a religion forum but banks are run by people and people are morally good, so morality and banking can't be separated. We ask if banks should obey a law even when they think obedience would cause suffering they feel is morally wrong. Scripture applies:

"For rulers are not a terror to good works, but to the evil. Wilt thou then not be afraid of the power? do that which is good, and thou shalt have praise of the same."

Morality is down on the list somewhere behind criminality, ethically repugnant and fraudulent. People lost homes, self esteem, life savings and a very few enjoyed both a bail out and a golden parachute.

Whoopie for the fucking banks! Poor duped, benevolent banker forced by a Socialist state to run his business into the ground.

The blame, dear Brutus, is in our stars. In our bankers who were out for themselves not because of their utter lack of morality, but because of their criminal behavior at the ruin of so many private fortunes.

 

[whitehall]

So what? People who buy houses to renovate (house flippers) weren't the problem. The lost value was caused by the democrat party forcing banks to make bad loans or risk civil rights litigation. Fannie Mae was worse than an organized crime network with no-show jobs awarded to political hacks and CEO's cooking the books to show fake profits tied to their bonus money. The federal oversight was a joke and when the doo-doo finally hit the fan Democrat chair(person) of the powerful banking committee, Barney Frank looked Americans in the eye and lied through his teeth when he said Fannie Mae was solvent when it was in desperate trouble.

 

[expat_panama]

...The blame, dear Brutus, is in our stars. In our bankers who were out for themselves not because of their utter lack of morality...

What we're saying here is that poor minorities are always good victims, that governments are always good when they control markets, and bankers are always bad. This means--

--that before the '90's bankers were wrong to not loan money to poor minorities.
--government was good to force banks to make the loans to poor minorities
--People who could never repay were good to take out the loans.
--Governments are good to make banks foreclose on bad loans.
--Now that the borrowers can't pay back the loans just as the bankers warned, the bankers are evil for foreclosing as required by law.​

That's sick.

 

[Douger]

Here it is folks.Plain and simple.
[ame=http://www.youtube.com/watch?v=kNqQx7sjoS8]Home Ownership and President Bush - YouTube[/ame]