Housing Bubble... Redux

[Lumpy 1]

Just my opinion..

Carter's Community Redevelopment Act caused Fannie and Freddie to start underwriting bad mortgages. Clinton and Bush both pushed it, then Bush tried to rein in Freddie and Fannie in but alas the leadership of Chris Dodd and Barney Frank in the Senate and House were being paid off to do otherwise.

Pelosi and Reid controlled both Houses of Congress but failed in their oversight responsibilities, they were more concerned, it seems, with undermining Bush with repeated investigations and winning the 2006 election at any cost.....(Okay sure showing some bias here)..

Wall Street/Bankers knew it was a bad situation but packaged bad mortgages as high risk investments and played it for as long as the profits rolled in.

Buyers of these high risk investments should have been far more diligent but weren't.

and the American people got screwed over...

 

[tinydancer]

I've watched the various "bubbles" for eons. Quite strange. Individuals with no equity allowed to buy homes priced outrageously.

 

[JoeB131]

Just my opinion..

Carter's Community Redevelopment Act caused Fannie and Freddie to start underwriting bad mortgages. Clinton and Bush both pushed it, then Bush tried to rein in Freddie and Fannie in but alas the leadership of Chris Dodd and Barney Frank in the Senate and House were being paid off to do otherwise.

Pelosi and Reid controlled both Houses of Congress but failed in their oversight responsibilities, they were more concerned, it seems, with undermining Bush with repeated investigations and winning the 2006 election at any cost.....(Okay sure showing some bias here)..

Wall Street/Bankers knew it was a bad situation but packaged bad mortgages as high risk investments and played it for as long as the profits rolled in.

Buyers of these high risk investments should have been far more diligent but weren't.

and the American people got screwed over...

So this is the revisionist history you are going with?

Even teh Banking Industry has not claimed the CRA was resposible for the Housing Bubble. It wasn't poor folks buying a bungalo, it was middle class folks buying McMansions hoping to flip them in a few years.

From that ultimate left wing rag, Business Week.

Community Reinvestment Act had nothing to do with subprime crisis - BusinessWeek

Fresh off the false and politicized attack on Fannie Mae and Freddie Mac, today we’re hearing the know-nothings blame the subprime crisis on the Community Reinvestment Act — a 30-year-old law that was actually weakened by the Bush administration just as the worst lending wave began. This is even more ridiculous than blaming Freddie and Fannie.

Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley (PDF file here).

Finally, keep in mind that the Bush administration has been weakening CRA enforcement and the law’s reach since the day it took office. The CRA was at its strongest in the 1990s, under the Clinton administration, a period when subprime loans performed quite well. It was only after the Bush administration cut back on CRA enforcement that problems arose, a timing issue which should stop those blaming the law dead in their tracks. The Federal Reserve, too, did nothing but encourage the wild west of lending in recent years. It wasn’t until the middle of 2007 that the Fed decided it was time to crack down on abusive pratices in the subprime lending market. Oops.

 

[Lumpy 1]

What's interesting to me is that most American knew a housing bubble burst was inevitable but Congress pointed fingers and plead surprise. It just doesn't add up..

and who ended up in jail....or kicked out of Congress...

 

[JoeB131]

What's interesting to me is that most American knew a housing bubble burst was inevitable but Congress pointed fingers and plead surprise. It just doesn't add up..

and who ended up in jail....or kicked out of Congress...

Most Americans knew a burst was inevitable, but they kept buying and trying to flip houses. And the bankers knew it was inevitable, but they didn't try to put any curbs on the loans or trying to find suckers they could hook on a mortgage they couldn't pay off.

So it was a hypocrisy all of us engaged in, really. People bought high because they wanted to have a house right now. They didn't wait until prices dropped a bit.

 

[Lumpy 1]

Just my opinion..

Carter's Community Redevelopment Act caused Fannie and Freddie to start underwriting bad mortgages. Clinton and Bush both pushed it, then Bush tried to rein in Freddie and Fannie in but alas the leadership of Chris Dodd and Barney Frank in the Senate and House were being paid off to do otherwise.

Pelosi and Reid controlled both Houses of Congress but failed in their oversight responsibilities, they were more concerned, it seems, with undermining Bush with repeated investigations and winning the 2006 election at any cost.....(Okay sure showing some bias here)..

Wall Street/Bankers knew it was a bad situation but packaged bad mortgages as high risk investments and played it for as long as the profits rolled in.

Buyers of these high risk investments should have been far more diligent but weren't.

and the American people got screwed over...

So this is the revisionist history you are going with?
Even teh Banking Industry has not claimed the CRA was resposible for the Housing Bubble. It wasn't poor folks buying a bungalo, it was middle class folks buying McMansions hoping to flip them in a few years.

From that ultimate left wing rag, Business Week.

Community Reinvestment Act had nothing to do with subprime crisis - BusinessWeek

Fresh off the false and politicized attack on Fannie Mae and Freddie Mac, today we’re hearing the know-nothings blame the subprime crisis on the Community Reinvestment Act — a 30-year-old law that was actually weakened by the Bush administration just as the worst lending wave began. This is even more ridiculous than blaming Freddie and Fannie.

Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley (PDF file here).

Finally, keep in mind that the Bush administration has been weakening CRA enforcement and the law’s reach since the day it took office. The CRA was at its strongest in the 1990s, under the Clinton administration, a period when subprime loans performed quite well. It was only after the Bush administration cut back on CRA enforcement that problems arose, a timing issue which should stop those blaming the law dead in their tracks. The Federal Reserve, too, did nothing but encourage the wild west of lending in recent years. It wasn’t until the middle of 2007 that the Fed decided it was time to crack down on abusive pratices in the subprime lending market. Oops.

Eh, just giving my opinion, getting the ball rolling.

I'm always open to respectfully presented points of view.

I'll read over your post and see if you measure up...

 

[tinydancer]

What's interesting to me is that most American knew a housing bubble burst was inevitable but Congress pointed fingers and plead surprise. It just doesn't add up..

and who ended up in jail....or kicked out of Congress...

Most Americans knew a burst was inevitable, but they kept buying and trying to flip houses. And the bankers knew it was inevitable, but they didn't try to put any curbs on the loans or trying to find suckers they could hook on a mortgage they couldn't pay off.

So it was a hypocrisy all of us engaged in, really. People bought high because they wanted to have a house right now. They didn't wait until prices dropped a bit.

Dropped a bit, a tad, a smidge?

Most who invest in real estate on the low end are losers personified. They believe that no matter what they do, the price must go up.

Most fools are now stuck with shot gun shacks priced in 6 figures that they will never be able to dump. Everyone went for the ride.

I blame Joe Q Public for being freaking morons as much as I blame the powers that be.

 

[Toro]

http://www.usmessageboard.com/economy/70006-cra-not-to-blame-for-housing-debacle.html

 

[Lumpy 1]

http://www.usmessageboard.com/economy/70006-cra-not-to-blame-for-housing-debacle.html

Wow .. a thread within a thread, kinda cool...

 

[TakeAStepBack]

None of the malinvestment would have been possible without the credit expansion pushed by Greenspan and congress. After that, the GSEs , CRA and the dream act all played their part in making sure that additional credit went into housing.

 

[zeke]

It was DEFINITELY the poorer persons fault. (Everything is, isn't it).

Here is one situation that would happen all the time. Loan officers would receive lists of mortgage holders with interest rates on the note higher than current rates. SO you make a call, (tele marketing)get a hold of the home owner and start selling.
You need a new roof, I can help. Need to buy a car, I can help. Want a vacation, I can help. And on and on. Poor people with no financial knowledge were easy. And they got laid away. And they were targeted because their ignorance was a pathway to making a lot of money.

Anybody else originate loans in the 80ties, 90ties and 2000's besides me?

 

[zeke]

Another situation that happened ALL the time, especially after the really JUNK loans were so "popular".

A Realtor would bring in a borrower to be pre approved for a conforming loan. The borrower wouldn't qualify based on credit, income whatever. So the Realtor would find a sub prime loan that would enable these dead beats to buy a home, knowing they would more than likely default.

It was SWEET. The realtor could sell a more expensive house (bigger commission) and the non conforming loan officer would make a big commission and all the risk would be passed on to an un suspecting MBS buyer.

It was really easy to make real good money back them. Of course the borrowers got screwed but hey, that's why they set up the system they did. To make a lot of money. Buyer beware.

 

[TakeAStepBack]

They were targeted because no one else needed zero money down variable rate mortgages they could not afford in the first place. The American Dream act, GSE federal backing (meaning no real loss to face) is what caused the malinvestment.

No one with actual savings and good income needed these shit govt. programs. Thats why low income people were targeted.

Thank the federal reserve and congress for the housing bubble. Krugman even clamored for a housing bubble coming out of the dotcom bubble to "stimulate" growth. It was an engineered bubble.

 

[bigrebnc1775]

Just my opinion..

Carter's Community Redevelopment Act caused Fannie and Freddie to start underwriting bad mortgages. Clinton and Bush both pushed it, then Bush tried to rein in Freddie and Fannie in but alas the leadership of Chris Dodd and Barney Frank in the Senate and House were being paid off to do otherwise.

Pelosi and Reid controlled both Houses of Congress but failed in their oversight responsibilities, they were more concerned, it seems, with undermining Bush with repeated investigations and winning the 2006 election at any cost.....(Okay sure showing some bias here)..

Wall Street/Bankers knew it was a bad situation but packaged bad mortgages as high risk investments and played it for as long as the profits rolled in.

Buyers of these high risk investments should have been far more diligent but weren't.

and the American people got screwed over...

Lumpy old buddy don't you know fredy and fanny and the CRA had nothing too do with the fall of the economy. Just ask any democrat they will tell you so.

 

[editec]

It took bad mortgage origination, false bond risk assessment, AND a completely UNREGULATED dereivatives market to create the real estate bubble.

And who is responsible for every one of those things?

The BANKSTERS and their lapdogs POLS, that's who.

They colletively set out to rip off this nation and they did a might fine job of it.

And they're laughing at the Ds and R partisans who are stupid enough to think that the problem is all on one party or the other, too.

AFter all, they OWN the DEM and the GOP leadership.

 

[bigrebnc1775]

Just my opinion..

Carter's Community Redevelopment Act caused Fannie and Freddie to start underwriting bad mortgages. Clinton and Bush both pushed it, then Bush tried to rein in Freddie and Fannie in but alas the leadership of Chris Dodd and Barney Frank in the Senate and House were being paid off to do otherwise.

Pelosi and Reid controlled both Houses of Congress but failed in their oversight responsibilities, they were more concerned, it seems, with undermining Bush with repeated investigations and winning the 2006 election at any cost.....(Okay sure showing some bias here)..

Wall Street/Bankers knew it was a bad situation but packaged bad mortgages as high risk investments and played it for as long as the profits rolled in.

Buyers of these high risk investments should have been far more diligent but weren't.

and the American people got screwed over...

So this is the revisionist history you are going with?

Even teh Banking Industry has not claimed the CRA was resposible for the Housing Bubble. It wasn't poor folks buying a bungalo, it was middle class folks buying McMansions hoping to flip them in a few years.

From that ultimate left wing rag, Business Week.

Community Reinvestment Act had nothing to do with subprime crisis - BusinessWeek

Fresh off the false and politicized attack on Fannie Mae and Freddie Mac, today we’re hearing the know-nothings blame the subprime crisis on the Community Reinvestment Act — a 30-year-old law that was actually weakened by the Bush administration just as the worst lending wave began. This is even more ridiculous than blaming Freddie and Fannie.

Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley (PDF file here).

Finally, keep in mind that the Bush administration has been weakening CRA enforcement and the law’s reach since the day it took office. The CRA was at its strongest in the 1990s, under the Clinton administration, a period when subprime loans performed quite well. It was only after the Bush administration cut back on CRA enforcement that problems arose, a timing issue which should stop those blaming the law dead in their tracks. The Federal Reserve, too, did nothing but encourage the wild west of lending in recent years. It wasn’t until the middle of 2007 that the Fed decided it was time to crack down on abusive pratices in the subprime lending market. Oops.

So claims the one who says he's a republican. You and jake starkey have a lot in common.

 

[Douger]

The easiest way to make money is by taking advantage of murkas greed and ignorance.
China is proof of that, as is BK,McD, Walmart, Starbucks, Disney, HBO, and all of the rest of the nonsense murkins flock to.

 

[TakeAStepBack]

So we went from a dotcom bubble, replaced it with a housing bubble and now we're creating a government spending bubble that will shatter the dollar. Keynesian economics will not go until it destroys all the wealth of the nation. Lets at least TRY to not repeat the economic falsehoods after that, please.

 

[Papageorgio]

What's interesting to me is that most American knew a housing bubble burst was inevitable but Congress pointed fingers and plead surprise. It just doesn't add up..

and who ended up in jail....or kicked out of Congress...

Most Americans knew a burst was inevitable, but they kept buying and trying to flip houses. And the bankers knew it was inevitable, but they didn't try to put any curbs on the loans or trying to find suckers they could hook on a mortgage they couldn't pay off.

So it was a hypocrisy all of us engaged in, really. People bought high because they wanted to have a house right now. They didn't wait until prices dropped a bit.

BS! Flipping was the cause? How about racking up debts, then going to refinance at 125% of the appraised value, then after making your 5 year car loan rapped into your 33 year mortgage, going and recharging your credit cards an buying new vehicles? We as a nation were so over extended in credit, you had appraisers getting get backs, you had people with bad credit getting loans for houses that were over priced. Businesses over wrought credit and very little cash. I was surprised it was sustained past 9/11, in fact it could be bad we just didn't let it go instead of doubling down. But government still thinks it needs to continue to spend to get us out, which is stupid. We need to tighten spending, cut spending, cut taxes and reset the system before going forward. It will hurt and it will be tough but better than throwing it down to the next Congress, the next President, the next generation.

To say flipping was the cause? Laughable, the problem went on a hell of a lot longer than that.

 

[SniperFire]

Even teh Banking Industry has not claimed the CRA was resposible for the Housing Bubble. It wasn't poor folks buying a bungalo, it was middle class folks buying McMansions hoping to flip them in a few years.

Everyone was buying homes they could not afford, of course.

But the 'middle class' does not build a new house until a 'poor folk' can buy their old bungalow. from them.

I thought you Leftist freaks liked trickle up?