The massive tax cut like the one in the Bush years didn’t benefit workers for a very simple reason

[Flash]

The Democrats wanted to put pressure on the lending institutions to give credit to minorities and low income people that could not otherwise qualify and who neither had the means nor the inclination to pay back the money. You know, for social justice reasons.

That was BUSH, you know for reelection reasons, and we lived through what went wrong.

USATODAY.com - Bush seeks to increase minority homeownership

By Thomas A. Fogarty, USA TODAY

In a bid to boost minority homeownership, President Bush will ask Congress for authority to eliminate the down-payment requirement for Federal Housing Administration loans.

In announcing the plan Monday at a home builders show in Las Vegas, Federal Housing Commissioner John Weicher called the proposal the "most significant FHA initiative in more than a decade." It would lead to 150,000 first-time owners annually, he said.

Nothing-down options are available on the private mortgage market, but, in general, they require the borrower to have pristine credit. Bush's proposed change would extend the nothing-down option to borrowers with blemished credit.

No you moron. The CRA was a Democrat program started under Carter and enhanced under Clinton.

When things started to go south it was that 2006 elected Democrat Congress with shitheads like Barney Queerboy that didn't do a damn thing to stop it.

You pussy Moon Bats need to start taking responsibility for the damage you do to this country with your idiotic social justice brain farts. This shit about blaming Bush for all the damage that the Democrats have done is getting old.

Bush warned the Democrats of the potential damage but the fuckers were trying to get the Negroes to be their vassals with the promise of unlimited credit and it almost destroyed our economy.

 

[Toddsterpatriot]

And can you believe it, Clinton forced them to buy crappy mortgages

You can believe it ONLY if you are a FOOL!

Clinton didn't force the GSEs to buy crappy mortgages? Are you sure?

Yes, that was BUSH!
But you knew that already!

Clinton ordered the GSEs to buy half their mortgages from the subprime end of the pool.

You didn't know that?

They were NOT bad mortgages simply because they were subprime, that is a typical Right-wing lie by overgeneralization. Subprime loans are any loans not at the prime rate. The Clinton CRA loans were to QUALIFIED borrowers at a max of 97% of the value of the home and required a down payment for a fixed rate of 2% above prime, but if the borrower made their payments on time for two years the loan reverted to prime.

Bush's loans were ARMs to borrowers with bad credit with no money down and for more than the house was worth and who earned 20% less than the average income of the neighborhood they were buying into.
BIG difference!!!!!

The Clinton CRA loans were to QUALIFIED borrowers at a max of 97% of the value of the home and required a down payment for a fixed rate of 2% above prime, but if the borrower made their payments on time for two years the loan reverted to prime.


I don't believe you. Link?

And what does that fantasy have to do with Clinton forcing the GSEs to buy 50% subprime loans?

 

[healthmyths]

Right and here are the FACTS to back you UP!
Receipts dropped due to the reasons outlined and with the tax cuts ACTUALLY increased.
And as far as the housing bubble-caused recession... Here is what the LEADING democrat during GWB said was the cause!
But one huge exception to this rule is Democrat Barney Frank, chairman of the House Financial Services Committee.
For years, Frank was a staunch supporter of Fannie Mae and Freddie Mac, the giant government housing agencies that played such an enormous role in the financial meltdown that thrust the economy into the Great Recession.
But in a recent CNBC interview, Frank told me that he was ready to say goodbye to Fannie and Freddie.
"I hope by next year we'll have abolished Fannie and Freddie," he said. Remarkable. And he went on to say that "it was a great mistake to push lower-income people into housing they couldn't afford and couldn't really handle once they had it." He then added, "I had been too sanguine about Fannie and Freddie."
Barney Frank admits truth about Fannie


View attachment 202249

Three-quarters of the bailouts were for private lending institutions, cronies and Pals of the corrupt GOP, that the GOP allowed to screw up the whole Market totally. Fannie and Freddie got in late. They lost about 70% of the market in 2003 and 2004 when the damage was done super dupe.

Where are your facts? Your proof other than your wild ass speculation. Who the hell are you that anyone should believe what YOU write?

My facts are everywhere outside your GOP bubble of total BS, super dupe.
Fannie Freddie data - The New York Times
The New York Times › blogs › krugman › ...
Nov 17, 2008 · Isn't the most likely story that, in response to lost market share, Fannie & Freddie began lowering their own lending ...
Fannie Mae, Freddie Mac And The Credit Crisis Of 2008 - Investopedia
Investopedia › articles › economics › fan...
Mar 19, 2018 · When the housing bubble of 2001-2007 burst, it caused a mortgage ... For most of the twentieth century, mortgage lending took place mostly at banks, thrifts, credit ...


Wall Street, Not Fannie and Freddie, Led Mortgage Meltdown - The Daily Beast
The Daily Beast › wall-street-not-fannie-a...
Jan 17, 2011 · Ask many Americans who's to blame for the nation's .... Fannie and Freddie lost market share to Wall Street during the ...

Very good! Now explain to me how GWB was at fault for the Fannie&Freddie Credit Crisis of 2008?

You said it yourself quoting Investopedia.... lost share Fannie & Freddie lowered their standards.

And guess who warned about Fannie & Freddie

President Bush publicly called for GSE reform at least 17 times in 2008 alone before Congress acted.

Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.
Setting the Record Straight: The Three Most Egregious Claims In The New York Times Article On The Housing Crisis

Many prominent Democrats, including House Finance Chairman Barney Frank, opposed any legislation correcting the risks posed by GSEs.
* House Financial Services Committee Chairman Barney Frank (D-MA) criticized
the President's warning saying:
"these two entities - Fannie Mae and Freddie Mac - are not facing any kind of financial crisis .
The more people exaggerate these problems,
the more pressure there is on these companies, the less we will see in terms of affordable
housing."...
(Stephen Labaton, "New Agency Proposed To Oversee Freddie Mac And Fannie Mae,"
New York Times, 9/11/03)
* Senate Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd also
ignored the President's warnings and called on him to "immediately reconsider his ill-advised"
position. Eric Dash, "Fannie Mae's Offer To Help Ease Credit Squeeze
Is Rejected, As Critics Complain Of Opportunism," New York Times, 8/11/07)
http://www.usnews.com/opinion/blogs/sam-dealey/2008/09/10/barney-franks-fannie-and-freddie-muddle

And remember Barney Frank ADMITTED that was the case!
Barney Frank Comes Home to the Facts By Larry Kudlow August 21, 2010

But one huge exception to this rule is Democrat Barney Frank, chairman of the House Financial Services Committee.
For years, Frank was a staunch supporter of Fannie Mae and Freddie Mac, the giant government housing agencies that played such an enormous role in the financial meltdown that thrust the economy into the Great Recession.
But in a recent CNBC interview, Frank told me that he was ready to say goodbye to Fannie and Freddie.
"I hope by next year we'll have abolished Fannie and Freddie," he said. Remarkable. And he went on to say that "it was a great mistake to push lower-income people into housing they couldn't afford and couldn't really handle once they had it." He then added, "I had been too sanguine about Fannie and Freddie."

Barney Frank admits truth about Fannie

And remember Congress was controlled by Democrats in 2007 and 2008!

Fannie and Freddie were never the problem, brainwashed functional jackass. But the GOP hates Fannie and always try to destroy it with lies like that...

Fannie & Freddie WAS NOT the sole cause.
Everyone with any smarts agree with that.

But Fannie & Freddie contributed as the following "jackasses" lamented:
Fannie and Freddie made things worse by their use of derivatives to hedge the interest-rate risk of their portfolios.
But as private sector companies with shareholders to please, they were doing this to remain competitive with other banks. They were all doing the same thing.
Fannie Mae's loan acquisitions were:

• 62% negative amortization
• 84% interest only
• 58% subprime
• 62% required less than 10% downpayment.

Freddie Mac's loans were even more risky, consisting of:

• 72% negative amortization
• 97% interest only
• 67% subprime
• 68% required less than 10% downpayment.

These exotic and subprime mortgages made Fannie and Freddie's loan acquisitions toxic.
Did Fannie and Freddie Cause the Mortgage Crisis? No, Here's What Did

Further "JACKASSES" findings:

In 2010, Edward Pinto, a resident fellow at the American Enterprise Institute who has served as chief credit officer at Fannie Mae, issued a memorandum on the number of subprime and other high-risk mortgages in the financial system immediately before the financial crisis. In that memorandum, Pinto recorded that he had found over 25 million subprime mortgages (his later work showed that there were approximately 27 million).
Since there are about 55 million total mortgages in the United States, it means that as the financial crisis began, half of all U.S. mortgages were of inferior quality and liable to default when housing prices stopped rising, as you can see in the chart below.

Fannie and Freddie bought 25.2% of the record $272.81 billion in subprime MBS [mortgage-backed securities] sold in the first half of 2006, according to Inside Mortgage Finance Publications, a Bethesda, MD-based publisher that covers the home loan industry.
In 2005, Fannie and Freddie purchased 35.3% of all subprime MBS, the publication estimated. The year before, the two purchased almost 44% of all subprime MBS sold.

The bottom line is that while Fannie and Freddie weren’t the only factor leading to the financial crisis, they played an important role in pushing up the demand for housing at the low end of the market, especially between 1998 and 2003.
That in turn made subprime loans increasingly attractive to other financial institutions as housing prices rose steadily.
The Truth About Fannie and Freddie’s Role in the Housing Crisis

 

[mudwhistle]

Corporations are already wealthier than ever before. There is no incentive for these corporations to invest in labor when it is just easier to save money on tax cuts. Meanwhile, the deficit explodes and only executives benefit.

Even if corporate profits weren’t at an all time high, there is still a fiduciary responsibility to maximize profit. How, in part, do you maximize profit? By not investing in labor and accepting the economy as is. Right now, higher wage jobs are extremely competitive among workers while lower income jobs fill quite easily.

Lower wage workers are at the mercy of the economy. While it may be easy for republicans to call them lazy, it ignores the complexity of what creates poverty. Low wage workers do not have the time or money to spend on education that would make them qualified for skilled jobs. Of course, let’s pretend ALL workers did this. Who would be left behind to fill those entry level jobs that keep any business afloat?

It’s benefited me just fine so far. You do realize you actually have to have a job in order to pay lower taxes right?

Not if you're collecting Social Security.

 

[healthmyths]

You can believe it ONLY if you are a FOOL!

Clinton didn't force the GSEs to buy crappy mortgages? Are you sure?

Yes, that was BUSH!
But you knew that already!

Clinton ordered the GSEs to buy half their mortgages from the subprime end of the pool.

You didn't know that?

They were NOT bad mortgages simply because they were subprime, that is a typical Right-wing lie by overgeneralization. Subprime loans are any loans not at the prime rate. The Clinton CRA loans were to QUALIFIED borrowers at a max of 97% of the value of the home and required a down payment for a fixed rate of 2% above prime, but if the borrower made their payments on time for two years the loan reverted to prime.

Bush's loans were ARMs to borrowers with bad credit with no money down and for more than the house was worth and who earned 20% less than the average income of the neighborhood they were buying into.
BIG difference!!!!!

The Clinton CRA loans were to QUALIFIED borrowers at a max of 97% of the value of the home and required a down payment for a fixed rate of 2% above prime, but if the borrower made their payments on time for two years the loan reverted to prime.


I don't believe you. Link?

And what does that fantasy have to do with Clinton forcing the GSEs to buy 50% subprime loans?

Check out the following LINKS!


Fannie & Freddie WAS NOT the sole cause.
Everyone with any smarts agree with that.

But Fannie & Freddie contributed as the following "jackasses" lamented:
Fannie and Freddie made things worse by their use of derivatives to hedge the interest-rate risk of their portfolios.
But as private sector companies with shareholders to please, they were doing this to remain competitive with other banks. They were all doing the same thing.

Fannie Mae's loan acquisitions were:

• 62% negative amortization
• 84% interest only
• 58% subprime
• 62% required less than 10% downpayment.

Freddie Mac's loans were even more risky, consisting of:

• 72% negative amortization
• 97% interest only
• 67% subprime
• 68% required less than 10% downpayment.

These exotic and subprime mortgages made Fannie and Freddie's loan acquisitions toxic.
Did Fannie and Freddie Cause the Mortgage Crisis? No, Here's What Did

Further "JACKASSES" findings:

In 2010, Edward Pinto, a resident fellow at the American Enterprise Institute who has served as chief credit officer at Fannie Mae, issued a memorandum on the number of subprime and other high-risk mortgages in the financial system immediately before the financial crisis. In that memorandum, Pinto recorded that he had found over 25 million subprime mortgages (his later work showed that there were approximately 27 million).
Since there are about 55 million total mortgages in the United States, it means that as the financial crisis began, half of all U.S. mortgages were of inferior quality and liable to default when housing prices stopped rising, as you can see in the chart below.

Fannie and Freddie bought 25.2% of the record $272.81 billion in subprime MBS [mortgage-backed securities] sold in the first half of 2006, according to Inside Mortgage Finance Publications, a Bethesda, MD-based publisher that covers the home loan industry.
In 2005, Fannie and Freddie purchased 35.3% of all subprime MBS, the publication estimated. The year before, the two purchased almost 44% of all subprime MBS sold.

The bottom line is that while Fannie and Freddie weren’t the only factor leading to the financial crisis, they played an important role in pushing up the demand for housing at the low end of the market, especially between 1998 and 2003.
That in turn made subprime loans increasingly attractive to other financial institutions as housing prices rose steadily.
The Truth About Fannie and Freddie’s Role in the Housing Crisis

 

[edthecynic]

The CRA was a Democrat program started under Carter and enhanced under Clinton.

When things started to go south it was that 2006 elected Democrat Congress with shitheads like Barney Queerboy that didn't do a damn thing to stop it.

First of all, the subprime ARMs went out of control in 2004 with the GOP controlling every branch of the government and blocking every reform bill they pretended to support. When the Dems took over in 2007 they actually passed a reform bill that was signed into law in 2008.

And second, CRA loans were not ARMs, while they were subprime in the beginning, they were fixed rate loans at 2% above prime and if the borrower made their payments on time for 2 years they reverted to prime.

 

[edthecynic]

Fannie and Freddie bought 25.2% of the record $272.81 billion in subprime MBS [mortgage-backed securities] sold in the first half of 2006, according to Inside Mortgage Finance Publications, a Bethesda, MD-based publisher that covers the home loan industry.
In 2005, Fannie and Freddie purchased 35.3% of all subprime MBS, the publication estimated.

2005 and 2006, with Bush appointees at the helm, you left out!

 

[healthmyths]

Fannie and Freddie bought 25.2% of the record $272.81 billion in subprime MBS [mortgage-backed securities] sold in the first half of 2006, according to Inside Mortgage Finance Publications, a Bethesda, MD-based publisher that covers the home loan industry.
In 2005, Fannie and Freddie purchased 35.3% of all subprime MBS, the publication estimated.

2005 and 2006, with Bush appointees at the helm, you left out!

YES they were at the helm and WERE the ones asking for more monitoring and greater controls over Fannie/Freddie ....AFTER

AFTER these crooks left Fannie/Freddie with:
Jamie Gorelick, a former Clinton administration official who reportedly has made the Obama administration's short list to become the next director of the Federal Bureau of Investigation (FBI), was paid more than $26 million in total compensation as a top executive at Fannie Mae--before taxpayers had to bail out the mortgage giant.

Gorelick, who left the Clinton Justice Department in 1997 to work for Fannie Mae CEO Franklin Raines, was paid $26,466,834 in salary, bonuses, performance pay and stock options from 1998 to 2003, according to the Report of the Special Examination of Fannie Mae (2006), conducted by the Office of Federal Housing Enterprise Oversight.
In 2001, Gorelick announced that Fannie was buying subprime loans encouraged by the Community Reinvestment Act (CRA) and bundling them as securitized financial instruments. Securities made from bundles of guaranteed mortgages were to contribute to the banking crisis later in the decade.
Former Clinton Official Paid $26 Million by Fannie Mae Before Taxpayer Bailout Now on Obama Shortlist to Run FBI

 

[edthecynic]

You can believe it ONLY if you are a FOOL!

Clinton didn't force the GSEs to buy crappy mortgages? Are you sure?

Yes, that was BUSH!
But you knew that already!

Clinton ordered the GSEs to buy half their mortgages from the subprime end of the pool.

You didn't know that?

They were NOT bad mortgages simply because they were subprime, that is a typical Right-wing lie by overgeneralization. Subprime loans are any loans not at the prime rate. The Clinton CRA loans were to QUALIFIED borrowers at a max of 97% of the value of the home and required a down payment for a fixed rate of 2% above prime, but if the borrower made their payments on time for two years the loan reverted to prime.

Bush's loans were ARMs to borrowers with bad credit with no money down and for more than the house was worth and who earned 20% less than the average income of the neighborhood they were buying into.
BIG difference!!!!!

The Clinton CRA loans were to QUALIFIED borrowers at a max of 97% of the value of the home and required a down payment for a fixed rate of 2% above prime, but if the borrower made their payments on time for two years the loan reverted to prime.


I don't believe you. Link?

You are right, it was 1% above prime, I stand corrected.
And the point was that it was the subprime ARMs that were the risky loans, not the FIXED RATE CRA, Fannie Mae loans.

Fannie Mae Eases Credit To Aid Mortgage Lending

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

 

[edthecynic]

YES they were at the helm and WERE the ones asking for more monitoring and greater controls over Fannie/Freddie

Asking, yes, doing something NO. Again while the GOP controlled everything all they did was TALK about reform, but blocked EVERY reform bill. Talk is cheap!!!

 

[Toddsterpatriot]

The CRA was a Democrat program started under Carter and enhanced under Clinton.

When things started to go south it was that 2006 elected Democrat Congress with shitheads like Barney Queerboy that didn't do a damn thing to stop it.

First of all, the subprime ARMs went out of control in 2004 with the GOP controlling every branch of the government and blocking every reform bill they pretended to support. When the Dems took over in 2007 they actually passed a reform bill that was signed into law in 2008.

And second, CRA loans were not ARMs, while they were subprime in the beginning, they were fixed rate loans at 2% above prime and if the borrower made their payments on time for 2 years they reverted to prime.

And second, CRA loans were not ARMs, while they were subprime in the beginning, they were fixed rate loans at 2% above prime and if the borrower made their payments on time for 2 years they reverted to prime.

And you're basing your claim on the "pilot program" you found?

Subprime does not refer to the "prime rate" you see in the Wall Street Journal.
The Prime Rate is the rate banks charge their most creditworthy clients.
The Prime is a short term rate, it's not used to make 30 year loans.
Especially to subprime (potential borrowers with poor credit scores) borrowers.

30-Year Fixed Rate Mortgage Average in the United States

 

[edthecynic]

And you're basing your claim on the "pilot program" you found?

It was the program being used during the time period in question. The fact remains, the CRA, Fannie, Freddie fixed rate loans were NOT the ARMs that caused the Bush housing crash.

 

[Toddsterpatriot]

Clinton didn't force the GSEs to buy crappy mortgages? Are you sure?

Yes, that was BUSH!
But you knew that already!

Clinton ordered the GSEs to buy half their mortgages from the subprime end of the pool.

You didn't know that?

They were NOT bad mortgages simply because they were subprime, that is a typical Right-wing lie by overgeneralization. Subprime loans are any loans not at the prime rate. The Clinton CRA loans were to QUALIFIED borrowers at a max of 97% of the value of the home and required a down payment for a fixed rate of 2% above prime, but if the borrower made their payments on time for two years the loan reverted to prime.

Bush's loans were ARMs to borrowers with bad credit with no money down and for more than the house was worth and who earned 20% less than the average income of the neighborhood they were buying into.
BIG difference!!!!!

The Clinton CRA loans were to QUALIFIED borrowers at a max of 97% of the value of the home and required a down payment for a fixed rate of 2% above prime, but if the borrower made their payments on time for two years the loan reverted to prime.


I don't believe you. Link?

You are right, it was 1% above prime, I stand corrected.
And the point was that it was the subprime ARMs that were the risky loans, not the FIXED RATE CRA, Fannie Mae loans.

Fannie Mae Eases Credit To Aid Mortgage Lending

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

You are right, it was 1% above prime, I stand corrected.

And now you'll stand corrected again.

consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage

See the difference between the Prime Rate and the rate on a 30 year conventional mortgage?
It's in post #171.

And the point was that it was the subprime ARMs that were the risky loans, not the FIXED RATE CRA, Fannie Mae loans.

The point was that all the loans to subprime borrowers were risky.
That's why Fannie and Freddie never used to buy them. They were limited to conforming loans.

 

[bendog]

Corporations are already wealthier than ever before. There is no incentive for these corporations to invest in labor when it is just easier to save money on tax cuts. Meanwhile, the deficit explodes and only executives benefit.

Even if corporate profits weren’t at an all time high, there is still a fiduciary responsibility to maximize profit. How, in part, do you maximize profit? By not investing in labor and accepting the economy as is. Right now, higher wage jobs are extremely competitive among workers while lower income jobs fill quite easily.

Lower wage workers are at the mercy of the economy. While it may be easy for republicans to call them lazy, it ignores the complexity of what creates poverty. Low wage workers do not have the time or money to spend on education that would make them qualified for skilled jobs. Of course, let’s pretend ALL workers did this. Who would be left behind to fill those entry level jobs that keep any business afloat?

There are actually two taxcuts at work here. I really doubt W could have gotten Mitch the Turtle's econ agenda through the Senate.

 

[Toddsterpatriot]

And you're basing your claim on the "pilot program" you found?

It was the program being used during the time period in question. The fact remains, the CRA, Fannie, Freddie fixed rate loans were NOT the ARMs that caused the Bush housing crash.

The fact remains, the CRA, Fannie, Freddie fixed rate loans were NOT the ARMs that caused the Bush housing crash.

Plenty of fixed rate subprime loans, many purchased by Fannie and Freddie, also failed.

 

[edthecynic]

Yes, that was BUSH!
But you knew that already!

Clinton ordered the GSEs to buy half their mortgages from the subprime end of the pool.

You didn't know that?

They were NOT bad mortgages simply because they were subprime, that is a typical Right-wing lie by overgeneralization. Subprime loans are any loans not at the prime rate. The Clinton CRA loans were to QUALIFIED borrowers at a max of 97% of the value of the home and required a down payment for a fixed rate of 2% above prime, but if the borrower made their payments on time for two years the loan reverted to prime.

Bush's loans were ARMs to borrowers with bad credit with no money down and for more than the house was worth and who earned 20% less than the average income of the neighborhood they were buying into.
BIG difference!!!!!

The Clinton CRA loans were to QUALIFIED borrowers at a max of 97% of the value of the home and required a down payment for a fixed rate of 2% above prime, but if the borrower made their payments on time for two years the loan reverted to prime.


I don't believe you. Link?

You are right, it was 1% above prime, I stand corrected.
And the point was that it was the subprime ARMs that were the risky loans, not the FIXED RATE CRA, Fannie Mae loans.

Fannie Mae Eases Credit To Aid Mortgage Lending

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

You are right, it was 1% above prime, I stand corrected.

And now you'll stand corrected again.

consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage

See the difference between the Prime Rate and the rate on a 30 year conventional mortgage?
It's in post #171.

And the point was that it was the subprime ARMs that were the risky loans, not the FIXED RATE CRA, Fannie Mae loans.

The point was that all the loans to subprime borrowers were risky.
That's why Fannie and Freddie never used to buy them. They were limited to conforming loans.

ALL loans are risky, even conforming loans, the difference is the degree of risk, and there is a world of difference between Bush's ARM loans and Clinton's fixed rate loans. Bush still owns the Bush Housing Crash.

 

[edthecynic]

And you're basing your claim on the "pilot program" you found?

It was the program being used during the time period in question. The fact remains, the CRA, Fannie, Freddie fixed rate loans were NOT the ARMs that caused the Bush housing crash.

The fact remains, the CRA, Fannie, Freddie fixed rate loans were NOT the ARMs that caused the Bush housing crash.

Plenty of fixed rate subprime loans, many purchased by Fannie and Freddie, also failed.

If by "plenty" you mean relatively few, then you would be correct.

 

[Toddsterpatriot]

Clinton ordered the GSEs to buy half their mortgages from the subprime end of the pool.

You didn't know that?

They were NOT bad mortgages simply because they were subprime, that is a typical Right-wing lie by overgeneralization. Subprime loans are any loans not at the prime rate. The Clinton CRA loans were to QUALIFIED borrowers at a max of 97% of the value of the home and required a down payment for a fixed rate of 2% above prime, but if the borrower made their payments on time for two years the loan reverted to prime.

Bush's loans were ARMs to borrowers with bad credit with no money down and for more than the house was worth and who earned 20% less than the average income of the neighborhood they were buying into.
BIG difference!!!!!

The Clinton CRA loans were to QUALIFIED borrowers at a max of 97% of the value of the home and required a down payment for a fixed rate of 2% above prime, but if the borrower made their payments on time for two years the loan reverted to prime.


I don't believe you. Link?

You are right, it was 1% above prime, I stand corrected.
And the point was that it was the subprime ARMs that were the risky loans, not the FIXED RATE CRA, Fannie Mae loans.

Fannie Mae Eases Credit To Aid Mortgage Lending

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

You are right, it was 1% above prime, I stand corrected.

And now you'll stand corrected again.

consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage

See the difference between the Prime Rate and the rate on a 30 year conventional mortgage?
It's in post #171.

And the point was that it was the subprime ARMs that were the risky loans, not the FIXED RATE CRA, Fannie Mae loans.

The point was that all the loans to subprime borrowers were risky.
That's why Fannie and Freddie never used to buy them. They were limited to conforming loans.

ALL loans are risky, even conforming loans, the difference is the degree of risk, and there is a world of difference between Bush's ARM loans and Clinton's fixed rate loans. Bush still owns the Bush Housing Crash.

ALL loans are risky, even conforming loans, the difference is the degree of risk

Exactly. And that's why Clinton forcing Fannie and Freddie to make 50% of their mortgage purchases subprime mortgages was a stupid idea. And Bush making them buy 55% subprime was even worse.

 

[Toddsterpatriot]

And you're basing your claim on the "pilot program" you found?

It was the program being used during the time period in question. The fact remains, the CRA, Fannie, Freddie fixed rate loans were NOT the ARMs that caused the Bush housing crash.

The fact remains, the CRA, Fannie, Freddie fixed rate loans were NOT the ARMs that caused the Bush housing crash.

Plenty of fixed rate subprime loans, many purchased by Fannie and Freddie, also failed.

If by "plenty" you mean relatively few, then you would be correct.

Look at how few Prime Fixed (the ones Fannie and Freddie used to buy exclusively) got foreclosed.
They really goosed the bubble by purchasing more than $1.2 trillion (with a T!!!) of the subprime crap.

 

[edthecynic]

They were NOT bad mortgages simply because they were subprime, that is a typical Right-wing lie by overgeneralization. Subprime loans are any loans not at the prime rate. The Clinton CRA loans were to QUALIFIED borrowers at a max of 97% of the value of the home and required a down payment for a fixed rate of 2% above prime, but if the borrower made their payments on time for two years the loan reverted to prime.

Bush's loans were ARMs to borrowers with bad credit with no money down and for more than the house was worth and who earned 20% less than the average income of the neighborhood they were buying into.
BIG difference!!!!!

The Clinton CRA loans were to QUALIFIED borrowers at a max of 97% of the value of the home and required a down payment for a fixed rate of 2% above prime, but if the borrower made their payments on time for two years the loan reverted to prime.


I don't believe you. Link?

You are right, it was 1% above prime, I stand corrected.
And the point was that it was the subprime ARMs that were the risky loans, not the FIXED RATE CRA, Fannie Mae loans.

Fannie Mae Eases Credit To Aid Mortgage Lending

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

You are right, it was 1% above prime, I stand corrected.

And now you'll stand corrected again.

consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage

See the difference between the Prime Rate and the rate on a 30 year conventional mortgage?
It's in post #171.

And the point was that it was the subprime ARMs that were the risky loans, not the FIXED RATE CRA, Fannie Mae loans.

The point was that all the loans to subprime borrowers were risky.
That's why Fannie and Freddie never used to buy them. They were limited to conforming loans.

ALL loans are risky, even conforming loans, the difference is the degree of risk, and there is a world of difference between Bush's ARM loans and Clinton's fixed rate loans. Bush still owns the Bush Housing Crash.

ALL loans are risky, even conforming loans, the difference is the degree of risk

Exactly. And that's why Clinton forcing Fannie and Freddie to make 50% of their mortgage purchases subprime mortgages was a stupid idea. And Bush making them buy 55% subprime was even worse.

Government housing loans had a very low foreclosure rate, Bush's subprime ARMs top the chart.