TIME to kill the ALL Fannie's and Freddie's fault rumor!

Discussion in 'Current Events' started by Care4all, Sep 29, 2008.

  1. Care4all
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    Care4all Warrior Princess Supporting Member

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    just heard on cnn that over the last 5 years, 3/4's of ALL of the subprime loans for homeowners were made by companies that were not covered by CrA rules on REDLINING the poor, with a goal to service more of the poor...

    so all of this stuff about it being this 1977 act that forced lenders to servicing the poor and fannie set this off stuff, doesn't hold water....imo.
     
    Last edited: Sep 29, 2008
  2. WillowTree
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    WillowTree Diamond Member

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    I think, if you had cared to listen is that what we said was that was the origin of the problem that snowballed into what you see today.
     
  3. Alpha1
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    Alpha1 NAVY

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    A 30 year old Act wasn't the direct problem ....
    The banks were not REQUIRED to follow CRA guidelines directly...but were threatened to be labeled as racist banks if they didn't follow them voluntarily...that was a real threat....just being labeled as racist could kill their business....but you're right in saying they couldn't be forced to follow these guidelines

    and,,,

    In 2005 Barney Frank got a bill passed affecting FHA loans...so that the they could give loans at 125%...what did that mean in a practical sense..
    Full cost of house is borrowed
    Downpayment is borrowed
    Closing cost is borrowed
    Lawyers fees, etc. is borrowed....

    So that a property could be purchased with absolutely no personal money being at risk...this along with non-existent borrower financial assets being required is problematic, no ?
     
    Last edited: Sep 29, 2008
  4. WestCoastTruth
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    WestCoastTruth Rookie

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    There is more than enough blame for everyone. Including those of us that took out bigger loans than we could comfortably afford, the banks, Wall Street and both parties.

    The CRA however had a large part in creating the conditions that got us here.

    Go to you tube and search in video for Burning Down The House: What Caused Our Economic Crisis V2

    Or google The CRA Scam and its Defenders - Thomas J. DiLorenzo - Mises Institute
     
  5. dilloduck
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    dilloduck Diamond Member

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    Doesn't much matter--if I wanted to get elected ( :ack-1: ) I would be busy providing a solution--a REAL solution. Trying to treat Americans like idiots isn't working so well.
     
  6. Chris
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    Chris Gold Member

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    The problem was that the mortgage companies could make bad loans with no risk, because they would sell the loan on the day after closing. That and the derivatives that allowed loaning out more money than you had, were the problem.
     
  7. Ravi
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    Ravi Diamond Member

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    No, of course it doesn't hold water. But that doesn't matter to people that want it to hold water. A lot of people in the country don't want to know the real reasons this happened and are quite happy to blame minorities.
     
  8. Care4all
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    Care4all Warrior Princess Supporting Member

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    alpha, NONE of the subprime loans issued WERE FHA mortgages....let that sink in for a bit....

    NONE.

    FHA Mortgages are NOT Subprime loans.....

    your argument FALLS just on that point alone imo.

    care
     
  9. Care4all
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    Care4all Warrior Princess Supporting Member

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    alpha....fyi

    FHA Loan Qualifying Summary
    ...............................................................................
    FHA loans are the easiest type of real estate mortgage loan to qualify for. The FHA guidelines for loan qualification are the most flexible of all mortgage loans that require less than 5% down payment.

    Following is the basic FHA loan qualification guidelines.

    Two Years of steady employment, preferably with same employer.

    Last two years Income should be the same or increasing.

    Credit report should typically have less than two thirty day lates in last two years.

    Bankruptcy's must be at least two years old, with good credit since.

    Foreclosure's must be at least three years old, with good credit since.

    Your new mortgage payment should be approximately 30% of your gross income.

    These are some of the most basic of FHA guidelines for qualifying for a FHA loan. If you have answered yes to most of these statements, you probably qualify for a FHA mortgage loan.



    fha loans ARE NOT subprime loans....
     
  10. HoleInTheVoid
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    HoleInTheVoid Active Member

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    Serious question: All fingers from the beginning of the melt seem to point to Fannie and Freddie and the tranches they were selling.

    How did they end up in the middle of all this?
     

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