Regulation of the financial industry

Discussion in 'Economy' started by Supposn, Apr 1, 2010.

  1. Supposn
    Offline

    Supposn Senior Member

    Joined:
    Jul 26, 2009
    Messages:
    863
    Thanks Received:
    27
    Trophy Points:
    51
    Ratings:
    +31
    Regulation of the financial industry should be an issue of Obama’s first term in office.

    USA’s last financial fiasco wasn’t due to the “business cycle” but was induced a climate to deregulation, and dependence upon self control and governments reluctasnce to police. In many cases the foxes were left to guard the hen houses.

    Who chooses the collateral assessors of federally insured loans? Do they work for the financial institutions or the federal government?

    Collateral assessors for federally insured loans should be federal employees or licensed contractors acting as federal agents. The assessment cost should be imbedded within the costs of applying for a government insured loan. Such assessors should be subject to criminal penalties for fraud or loss of license for failure to act with due prudence. We cannot afford to risk public funds upon determinations of assessors that are primarily agents of banks or mortgage companies. It is not the institutions money that is primarily at risk.

    We should consider prohibiting a government insured loan from being divided, then bundled and resold. The law could specify that such division is prohibited for 10 years, or it could be prohibited the entire life of the loan. We learned the hard way of the problem due to loans being divided and bundled for resale. If there’s a problem further on, no one owns the original loan. If it is financially feasible and advantageous to renegotiate the loan, no one has the legal right to do so.

    I’m opposed to Government Supported Entities, (GSEs) purchasing or selling non government insured loans. That’s the function of an investment bank. I’m also opposed to federally insured banks acting as investment banks.

    I’m not opposed to our limits of federally insured loan amounts per individuals and their dependents or per individual buildings and/or land or real-estate. I advocate federally insured home loans limits should be modified to reflect the purchasing power of the U.S. dollar in the year the loan is made.

    I would not be opposed to federally insuring a portion of the full purchase price if that portion of the loan was a first mortgage and had other superior rights to all other loans and claims upon the property.

    Respectfully, Supposn
     
  2. rr1
    Offline

    rr1 Member

    Joined:
    Apr 19, 2009
    Messages:
    88
    Thanks Received:
    17
    Trophy Points:
    21
    Ratings:
    +18
    Most bank assessors or appraisers are not actively involved in guaranteed loans until the loan dumps. The idea being that the loan officers are considered packagers of the loan. SBA usually issues a loan guaranty for 90 days. This should be sufficient for any Bank to assess the loan application. If the loan does not qualify for Federal Loan Guaranty status, the Borrower should be notified within that ninety day period and be allowed to exercise their right of refusal concerning the loan. Such is not the case.

    The Banks are allowed to deceive the Borrower to secure the loan and collect the servicing fee and origination points. SBA can then concur with the Bank after a Loan Modification and the Borrower is tossed. The Bank collects the fee for the loan, the Borrowers assets are auctioned off to the highest bidder and the courts issues a Judgment against the Borrower. Within 12 months of the Judgment the Bank then issues a 1099 to the Borrower and writes the whole mess of. Standard banking operating procedure. Hang the whole mess on the Borrower who never knew that they never had a Federal Loan Guaranty and that the Bank in question had no previous experience in loaning funds for the type of business involved.

    The Bank's appraiser or Assessor becomes involved when the loan is passed to the Loan Support Team. The Borrower is allowed to believe that Loan Support is there to help with a Workout or to sustain the entity when in fact the Borrower is going to be sold out by the Bank that misrepresented the loan to them in the first place.
     
  3. The Rabbi
    Offline

    The Rabbi Diamond Member

    Joined:
    Sep 16, 2009
    Messages:
    67,619
    Thanks Received:
    7,821
    Trophy Points:
    1,840
    Location:
    Nashville
    Ratings:
    +18,214
    You ought to consider moving to North Korea where every industry is heavily regulated and they don't have boom and bust business cycles. Just the same ole depressed state every day with people starving to death in the streets. No problems with those nasty excessive imports either.
    Respectfully.
     
  4. rr1
    Offline

    rr1 Member

    Joined:
    Apr 19, 2009
    Messages:
    88
    Thanks Received:
    17
    Trophy Points:
    21
    Ratings:
    +18
    You ought to consider putting some of the bankers on a chain. SBA is nothing more than a dumping ground for a lot of these banks.
     
  5. The Rabbi
    Offline

    The Rabbi Diamond Member

    Joined:
    Sep 16, 2009
    Messages:
    67,619
    Thanks Received:
    7,821
    Trophy Points:
    1,840
    Location:
    Nashville
    Ratings:
    +18,214
    You ought to consider upping the dose on your meds as your post is incoherent.
     
  6. rr1
    Offline

    rr1 Member

    Joined:
    Apr 19, 2009
    Messages:
    88
    Thanks Received:
    17
    Trophy Points:
    21
    Ratings:
    +18
    What is it you don't understand?
     
    • Thank You! Thank You! x 1
  7. editec
    Offline

    editec Mr. Forgot-it-All

    Joined:
    Jun 5, 2008
    Messages:
    41,427
    Thanks Received:
    5,598
    Trophy Points:
    48
    Location:
    Maine
    Ratings:
    +5,617
    I think Bernake is right.

    Tighter regulations would have prevented this meltdown.

    And if Moody's and Standard and Poor properly evaluated the risk of bonds, this meltdown would not have happened.

    And let me go out on a limb and say that if we had sensible trade policies, instead of this destructive FREE TRADE, we would not have had this meltdown, either.

    This economic meltdown took a perfect storm of mistaken policies, lies by CEOS and deregulation of the financial industry to manifest.
     
    • Thank You! Thank You! x 1
    Last edited: Apr 1, 2010
  8. Truthmatters
    Offline

    Truthmatters BANNED

    Joined:
    May 10, 2007
    Messages:
    80,182
    Thanks Received:
    2,223
    Trophy Points:
    0
    Ratings:
    +2,233
    Regulations would have prevented it but the cost would have been a slow economy. Bush did not want the numbers to slow so instead we got this Great Recession.

    Would have been a depression without the stimulus.
     
  9. CrusaderFrank
    Offline

    CrusaderFrank Diamond Member

    Joined:
    May 20, 2009
    Messages:
    81,150
    Thanks Received:
    14,897
    Trophy Points:
    2,210
    Ratings:
    +36,864
    What exactly was "deregulated"? Is this an April Fools Financial Parody?
     
  10. The Rabbi
    Offline

    The Rabbi Diamond Member

    Joined:
    Sep 16, 2009
    Messages:
    67,619
    Thanks Received:
    7,821
    Trophy Points:
    1,840
    Location:
    Nashville
    Ratings:
    +18,214
    I think you're an idiot.
    Actually I know so.
    Securities is one of the most highly regulated industries in this country. THe issue is that loose interest rate policies encouraged mortgage lending by making it easy money. With house prices rising constantly lenders had more and more security. It all made sense at the time.
    Free trade has been one of the few areas that has contributed to economic strength. I'd suggest a book on economics for your nest birthday present.
     

Share This Page