CRA Not to Blame for Housing Debacle

[bigrebnc1775]

thank you so much for taking the time to explain that Toro! It makes perfect sense.

Really it made sense to you? How can some who does not support the CRA argue for it? That doesn't make any sense at all.

seriously big reb?

he is NOT arguing FOR the CRA for goodness sakes! He is simply stating the facts....that CRA did not CAUSE the real estate/financial boom/bust. He gave SOLID reasoning and FACTS that supports this as well....

YOU my dear, need to read his post again....especially regarding where the booms took place.....which were NOT Community Reinvestment Act. CRA areas.....

Toro is a Canadian citizen, he is NOT a Democrat, he is NOT a Republican....

supporting or not supporting the CRA's cause, is irrelevant, regarding the housing boom/financial boom in subprime loans/MBS's and their bust....

Countrywide has been mentioned in this discussion and that the CRA did not affect Finacal groups like them But I say BULL.
Three Ways The CRA Pushed Countrywide To Lower Lending Standards

1. The Creation Of Artificial Demand For Low-Income Mortgages

2. The Threat Of Regulation Is Often As Good As Regulation

3. The CRA Distorted the Mortgage Market.
Read more: Three Ways The CRA Pushed Countrywide To Lower Lending Standards[/QUOTE]

 

[finebead]

I'm going to be straight up with you. When you used that source you failed. It showed you will go to any extent to lie. No matter what else you used.Your first attempt was a failure. Pete Yost is a democratic hack. He's a democratic team player. He's not a news reporter. He's an agenda pusher. He's an unethical hack

And you have hard information that substantiates this, other than an unknown internet blogger who calls himself Frank Warner on his blog?

Do you have any info to refute the facts in the article? Don't you think if the article was false you could find an article where the repubs attacked the article? I can't find a republican refutation. Can you?

Just look at the BS you posted He's a political hack period.

find an article where the repubs attacked the article?

Some people aren't as fast contecting the dots as I am. It's the small stuff that I look at. Yost is a poklitcal hack the story is a fail. Unless you have proof from some other source supporting yost propaganda.

Your boy Warner doesn't even call him a hack, you are making stuff up. You have failed to answer my questions, who is Warner, what does he do, why does he have any credibility? You are clinging to this thread because it is what you found and you have no other thread to cling to. What is the proof warner offers that Yost is a dem? NONE. He just indicates he sort of believes it. If his reason is based on the fact that Yost is bursting his repub myth of right, I have shown 2 articles where the dems attack Yost for attacking them, so proof is on my side that Yost is objective and he criticizes BOTH PARTIES. Show me mr. warners objectivity, but I know you can't because mr. warner is an unknown. That's pathetic, its not proof.

This story was widely carried nationally, even by Fox News:
Freddie Mac Tried to Kill Republican Regulatory Bill in 2005 - Politics | Republican Party | Democratic Party | Political Spectrum - FOXNews.com

Fox is not in the habit of carrying "democrat hack jobs".

This story was WIDELY carried nationally. There are hundreds of articles on the net. There is NO REPUBLICAN REBUTTAL, NONE!

If the repubs had the votes, there were 54 repub senators at the time, and the only thing stopping this was a dem filibuster threat, they would have brought the bill to the floor for a vote, forced the dems to filibuster and put them on the record opposing regulation of fannie/freddie, and they could have really blamed some of the financial crisis on the dems. They didn't bring the bill to the floor for a vote, because they could see by the lack of signatures on Hagel's letter asking for the vote, they would have been embarrassed by the failure of repub support to regulate freddie.

1. There is NO proof that Yost is a dem or a hack.
2. Warner is a total unknown.
3. The AP story was widely reported, including of Fox News, and it has never been rebutted by anyone. That is because Yost has insider testimony and documentation in Freddie budgets.

All the credibility is on my side, and you have NONE.

 

[bigrebnc1775]

And you have hard information that substantiates this, other than an unknown internet blogger who calls himself Frank Warner on his blog?

Do you have any info to refute the facts in the article? Don't you think if the article was false you could find an article where the repubs attacked the article? I can't find a republican refutation. Can you?

Just look at the BS you posted He's a political hack period.

find an article where the repubs attacked the article?

Some people aren't as fast contecting the dots as I am. It's the small stuff that I look at. Yost is a poklitcal hack the story is a fail. Unless you have proof from some other source supporting yost propaganda.

Your boy Warner doesn't even call him a hack, you are making stuff up. You have failed to answer my questions, who is Warner, what does he do, why does he have any credibility? You are clinging to this thread because it is what you found and you have no other thread to cling to. What is the proof warner offers that Yost is a dem? NONE. He just indicates he sort of believes it. If his reason is based on the fact that Yost is bursting his repub myth of right, I have shown 2 articles where the dems attack Yost for attacking them, so proof is on my side that Yost is objective and he criticizes BOTH PARTIES. Show me mr. warners objectivity, but I know you can't because mr. warner is an unknown. That's pathetic, its not proof.

This story was widely carried nationally, even by Fox News:
Freddie Mac Tried to Kill Republican Regulatory Bill in 2005 - Politics | Republican Party | Democratic Party | Political Spectrum - FOXNews.com

Fox is not in the habit of carrying "democrat hack jobs".

This story was WIDELY carried nationally. There are hundreds of articles on the net. There is NO REPUBLICAN REBUTTAL, NONE!

If the repubs had the votes, there were 54 repub senators at the time, and the only thing stopping this was a dem filibuster threat, they would have brought the bill to the floor for a vote, forced the dems to filibuster and put them on the record opposing regulation of fannie/freddie, and they could have really blamed some of the financial crisis on the dems. They didn't bring the bill to the floor for a vote, because they could see by the lack of signatures on Hagel's letter asking for the vote, they would have been embarrassed by the failure of repub support to regulate freddie.

1. There is NO proof that Yost is a dem or a hack.
2. Warner is a total unknown.
3. The AP story was widely reported, including of Fox News, and it has never been rebutted by anyone. That is because Yost has insider testimony and documentation in Freddie budgets.

All the credibility is on my side, and you have NONE.

Well you got me there everybody knows fox is a news source. Even obama said that. Just goes to show both party's screwed the American people. But of course you're going to say no not the democrats, of course not.

Which brings us back to your other defense for the CRA

Countrywide has been mentioned in this discussion and that the CRA did not affect Finacal groups like them But I say BULL.
Three Ways The CRA Pushed Countrywide To Lower Lending Standards

1. The Creation Of Artificial Demand For Low-Income Mortgages

2. The Threat Of Regulation Is Often As Good As Regulation

3. The CRA Distorted the Mortgage Market.
Three Ways The CRA Pushed Countrywide To Lower Lending Standards

 

[finebead]

Well you got me there everybody knows fox is a news source. Even obama said that. Just goes to show both party's screwed the American people. But of course you're going to say no not the democrats, of course not.

Finally some sanity.

Yes, both parties screwed the american people.

Clearly there were many dem idiotic statements, include those ridiculous youtube videos from barney frank and maxine waters.

Clearly fannie and freddie needed reform, appraisers failed to provide valid valuations of houses, rating agencies lied to the american people and to the world, the wall st banks packaged up garbage bonds and foisted them on the public.

But I refuse to accept this was primarily on the dems. This blew up in 2004-2006, and the repubs held majorities in both branches of congress plus the white house. they were given the mantel of leadership, and they led us into financial crisis, the worst since the great depression. The repubs would talk fannie reform, but there were enough of them that wanted the party to go on, with rich fat cat CEO's getting rich while selling garbage to the public. Those repubs failed the nation, and I won't forgive them for it. They knew what was happening and did not act to prevent it. The dems were not helpful, but they weren't the majority either.

 

[bigrebnc1775]

Well you got me there everybody knows fox is a news source. Even obama said that. Just goes to show both party's screwed the American people. But of course you're going to say no not the democrats, of course not.

Finally some sanity.

Yes, both parties screwed the american people.

Clearly there were many dem idiotic statements, include those ridiculous youtube videos from barney frank and maxine waters.

Clearly fannie and freddie needed reform, appraisers failed to provide valid valuations of houses, rating agencies lied to the american people and to the world, the wall st banks packaged up garbage bonds and foisted them on the public.

But I refuse to accept this was primarily on the dems. This blew up in 2004-2006, and the repubs held majorities in both branches of congress plus the white house. they were given the mantel of leadership, and they led us into financial crisis, the worst since the great depression. The repubs would talk fannie reform, but there were enough of them that wanted the party to go on, with rich fat cat CEO's getting rich while selling garbage to the public. Those repubs failed the nation, and I won't forgive them for it. They knew what was happening and did not act to prevent it. The dems were not helpful, but they weren't the majority either.

But I refuse to accept this was primarily on the dems.

You refuse to give blame full blame to the democrats
but yet you want to give all the blame to the republicans?

Those repubs failed the nation, and I won't forgive them for it.

Who's calling card is attached to Freddy and Fanny?

Without the help of the democrats there would not be a freddy and Fanny withoiut freddy and Fanny we would not have a failed economy.

Who was sleeping with Fannie Mae executive Herb Moses?

Well what about the 74 democrsats in the house who voted aginst the bill

http://www.govtrack.us/congress/vote.xpd?vote=h2005-547&sort=party

 

[finebead]

Well you got me there everybody knows fox is a news source. Even obama said that. Just goes to show both party's screwed the American people. But of course you're going to say no not the democrats, of course not.

Finally some sanity.

Yes, both parties screwed the american people.

Clearly there were many dem idiotic statements, include those ridiculous youtube videos from barney frank and maxine waters.

Clearly fannie and freddie needed reform, appraisers failed to provide valid valuations of houses, rating agencies lied to the american people and to the world, the wall st banks packaged up garbage bonds and foisted them on the public.

But I refuse to accept this was primarily on the dems. This blew up in 2004-2006, and the repubs held majorities in both branches of congress plus the white house. they were given the mantel of leadership, and they led us into financial crisis, the worst since the great depression. The repubs would talk fannie reform, but there were enough of them that wanted the party to go on, with rich fat cat CEO's getting rich while selling garbage to the public. Those repubs failed the nation, and I won't forgive them for it. They knew what was happening and did not act to prevent it. The dems were not helpful, but they weren't the majority either.

But I refuse to accept this was primarily on the dems.

You refuse to give blame full blame to the democrats
but yet you want to give all the blame to the republicans?

Those repubs failed the nation, and I won't forgive them for it.

Who's calling card is attached to Freddy and Fanny?

Without the help of the democrats there would not be a freddy and Fanny withoiut freddy and Fanny we would not have a failed economy.

Who was sleeping with Fannie Mae executive Herb Moses?

Well what about the 74 democrsats in the house who voted aginst the bill

GovTrack: House Vote On Passage: H.R. 1461 [109th]: Federal Housing Finance Reform Act of 2005

You don't read very well sometimes.

You refuse to give blame full blame to the democrats
but yet you want to give all the blame to the republicans?

When I say "I agree both parties screwed the american people", what does that mean to you? HINT: It does NOT mean I give all blame to the repubs... Please read what I actually say, OK.

 

[bigrebnc1775]

Finally some sanity.

Yes, both parties screwed the american people.

Clearly there were many dem idiotic statements, include those ridiculous youtube videos from barney frank and maxine waters.

Clearly fannie and freddie needed reform, appraisers failed to provide valid valuations of houses, rating agencies lied to the american people and to the world, the wall st banks packaged up garbage bonds and foisted them on the public.

But I refuse to accept this was primarily on the dems. This blew up in 2004-2006, and the repubs held majorities in both branches of congress plus the white house. they were given the mantel of leadership, and they led us into financial crisis, the worst since the great depression. The repubs would talk fannie reform, but there were enough of them that wanted the party to go on, with rich fat cat CEO's getting rich while selling garbage to the public. Those repubs failed the nation, and I won't forgive them for it. They knew what was happening and did not act to prevent it. The dems were not helpful, but they weren't the majority either.

You refuse to give blame full blame to the democrats
but yet you want to give all the blame to the republicans?


Who's calling card is attached to Freddy and Fanny?

Without the help of the democrats there would not be a freddy and Fanny withoiut freddy and Fanny we would not have a failed economy.


Who was sleeping with Fannie Mae executive Herb Moses?

Well what about the 74 democrsats in the house who voted aginst the bill

GovTrack: House Vote On Passage: H.R. 1461 [109th]: Federal Housing Finance Reform Act of 2005

You don't read very well sometimes.

You refuse to give blame full blame to the democrats
but yet you want to give all the blame to the republicans?

When I say "I agree both parties screwed the american people", what does that mean to you? HINT: It does NOT mean I give all blame to the repubs... Please read what I actually say, OK.

And it seems you have a short term memory
First you said this:

But I refuse to accept this was primarily on the dems.

Then you said this

Those repubs failed the nation, and I won't forgive them for it.

That isn't exactly blaming both party's just one.

 

[finebead]

You refuse to give blame full blame to the democrats
but yet you want to give all the blame to the republicans?


Who's calling card is attached to Freddy and Fanny?

Without the help of the democrats there would not be a freddy and Fanny withoiut freddy and Fanny we would not have a failed economy.


Who was sleeping with Fannie Mae executive Herb Moses?

Well what about the 74 democrsats in the house who voted aginst the bill

GovTrack: House Vote On Passage: H.R. 1461 [109th]: Federal Housing Finance Reform Act of 2005

You don't read very well sometimes.



When I say "I agree both parties screwed the american people", what does that mean to you? HINT: It does NOT mean I give all blame to the repubs... Please read what I actually say, OK.

And it seems you have a short term memory
First you said this:

But I refuse to accept this was primarily on the dems.

Then you said this

Those repubs failed the nation, and I won't forgive them for it.

That isn't exactly blaming both party's just one.

Because I do not accept that the economic crisis was primarily on the dems does not imply that they bear no culpability. They could have done a better job recognizing the problem and speaking correctly about it from their minority position in both branches of congress. They did not do that, and they bear some blame for it. They don't bear most of the blame, because the repubs held majority in BOTH houses of congress from 1994-2006.

The explosion in subprime lending that sunk the economy occurred mainly in 2004-2006, when the percentage of subprime loans out of total loans issued rocketed up from 7% to 21% in just a couple of years, from 2002 to 2004. That is where the problem was, and that is totally on the repub watch, controlling the house, senate, and white house.

The SEC did not have to relax the net capital rule in 2003 for the 5 investment banks and allow them to extend their leverage from 15:1 to 45:1, but they did. The SEC was supposed to monitor those banks, but they didn't, which directly led to the failure of Lehman Bros, and the fire sale of Merrill and Bear Stearns.

Greenspan did not have to drive short term rates down to 1% in 2003 and 2004 (but he did in order to get Bush re-elected, at the long term expense of a sound economy). The treasury under the repubs didn't have to expand the money supply twice as fast as GDP growth during that period, but they did; it's inflationary and that is why we saw 15% annual inflation in home prices that helped lead to the crash.

Greenspan could have tightened regulations on the mortgage companies, he had the authority, but he didn't. He let them abuse their clients without lifting a finger.

I agree with you, both parties screwed the nation, the dems bear part of the responsibility, but since the repubs were the leadership party with the majorities in the house and senate from 94 - 06, and including the white house from 01-08, most of the responsibility rests with the repubs. Clinton turned over a balanced budget and a sound economy in a mild dot com bust recession. The repubs irresponsibly over stimulated the housing market while under regulating the banks and created a near economic collapse. The repubs did a poor job managing the economy from 01-06.

 

[PoliticalChic]

You don't read very well sometimes.



When I say "I agree both parties screwed the american people", what does that mean to you? HINT: It does NOT mean I give all blame to the repubs... Please read what I actually say, OK.

And it seems you have a short term memory
First you said this:


Then you said this

Those repubs failed the nation, and I won't forgive them for it.

That isn't exactly blaming both party's just one.

Because I do not accept that the economic crisis was primarily on the dems does not imply that they bear no culpability. They could have done a better job recognizing the problem and speaking correctly about it from their minority position in both branches of congress. They did not do that, and they bear some blame for it. They don't bear most of the blame, because the repubs held majority in BOTH houses of congress from 1994-2006.

The explosion in subprime lending that sunk the economy occurred mainly in 2004-2006, when the percentage of subprime loans out of total loans issued rocketed up from 7% to 21% in just a couple of years, from 2002 to 2004. That is where the problem was, and that is totally on the repub watch, controlling the house, senate, and white house.

The SEC did not have to relax the net capital rule in 2003 for the 5 investment banks and allow them to extend their leverage from 15:1 to 45:1, but they did. The SEC was supposed to monitor those banks, but they didn't, which directly led to the failure of Lehman Bros, and the fire sale of Merrill and Bear Stearns.

Greenspan did not have to drive short term rates down to 1% in 2003 and 2004 (but he did in order to get Bush re-elected, at the long term expense of a sound economy). The treasury under the repubs didn't have to expand the money supply twice as fast as GDP growth during that period, but they did; it's inflationary and that is why we saw 15% annual inflation in home prices that helped lead to the crash.

Greenspan could have tightened regulations on the mortgage companies, he had the authority, but he didn't. He let them abuse their clients without lifting a finger.

I agree with you, both parties screwed the nation, the dems bear part of the responsibility, but since the repubs were the leadership party with the majorities in the house and senate from 94 - 06, and including the white house from 01-08, most of the responsibility rests with the repubs. Clinton turned over a balanced budget and a sound economy in a mild dot com bust recession. The repubs irresponsibly over stimulated the housing market while under regulating the banks and created a near economic collapse. The repubs did a poor job managing the economy from 01-06.

Beady, do you believe that government has a role in determining who should own a home?

Once that question is answered in the positive, it is fairly simple to document the Democrat Party responsibility for the crisis.

 

[Care4all]

And it seems you have a short term memory
First you said this:


Then you said this


That isn't exactly blaming both party's just one.

Because I do not accept that the economic crisis was primarily on the dems does not imply that they bear no culpability. They could have done a better job recognizing the problem and speaking correctly about it from their minority position in both branches of congress. They did not do that, and they bear some blame for it. They don't bear most of the blame, because the repubs held majority in BOTH houses of congress from 1994-2006.

The explosion in subprime lending that sunk the economy occurred mainly in 2004-2006, when the percentage of subprime loans out of total loans issued rocketed up from 7% to 21% in just a couple of years, from 2002 to 2004. That is where the problem was, and that is totally on the repub watch, controlling the house, senate, and white house.

The SEC did not have to relax the net capital rule in 2003 for the 5 investment banks and allow them to extend their leverage from 15:1 to 45:1, but they did. The SEC was supposed to monitor those banks, but they didn't, which directly led to the failure of Lehman Bros, and the fire sale of Merrill and Bear Stearns.

Greenspan did not have to drive short term rates down to 1% in 2003 and 2004 (but he did in order to get Bush re-elected, at the long term expense of a sound economy). The treasury under the repubs didn't have to expand the money supply twice as fast as GDP growth during that period, but they did; it's inflationary and that is why we saw 15% annual inflation in home prices that helped lead to the crash.

Greenspan could have tightened regulations on the mortgage companies, he had the authority, but he didn't. He let them abuse their clients without lifting a finger.

I agree with you, both parties screwed the nation, the dems bear part of the responsibility, but since the repubs were the leadership party with the majorities in the house and senate from 94 - 06, and including the white house from 01-08, most of the responsibility rests with the repubs. Clinton turned over a balanced budget and a sound economy in a mild dot com bust recession. The repubs irresponsibly over stimulated the housing market while under regulating the banks and created a near economic collapse. The repubs did a poor job managing the economy from 01-06.

Beady, do you believe that government has a role in determining who should own a home?

Once that question is answered in the positive, it is fairly simple to document the Democrat Party responsibility for the crisis.

sorry dear...utter bullcrud.

you miss the factual, that has been presented PC.... the crash was not mainly due to the Community Reinvestment Act.....the housing boom did NOT occur in CRA areas, the subprime boom did NOT occur due to CRA areas.

you can try to blame the poor all you want, but they are not even a smidgen of the problem.

CRA has been around for decades, WHY OH WHY did this boom and bust occur under President bush 2 and not under Bush 1 or Reagan or Clinton or whomever, when they expanded it?

BECAUSE this boom and crash has NOTHING to do with the CRA itself......

we don't have enough poor people in the world to get all of those subprime loans/ put in Mortgage Backed Securities, that were created.

Yes, that is an exageration on the poor people in the world, but you SHOULD be able to get the gist of the argument that supports Toro's stance....IF you allow yourself.

 

[Toro]

BIS working paper

Contrary to some media commentary, there is no evidence that the Community Reinvestment Act was responsible for encouraging the subprime lending boom and subsequent housing bust. This Act only applies to depositories, and did not cover most of the important subprime lenders. Depositories showed a lesser tendency to write subprime loans than lenders not subject to the Act

http://www.bis.org/publ/work259.pdf?noframes=1

 

[Toro]

Subprime loans in CRA areas were made a lower rate than subprime loans outside of CRA areas.

The Community Reinvestment Act (CRA) encourages banks to expand mortgage lending in the communities in which they have branch offices, subject to maintaining overall levels of financial safety and soundness. Some have argued that this regulation forced banks to lower their credit standards and engage in riskier mortgage products in order to extend credit to lower-income individuals, who perhaps should not have received such loans. However, data provided by the Home Mortgage Disclosure Act (HMDA) reveal that loans covered by the CRA accounted for only a fraction of mortgage lending to lower-income borrowers and neighborhoods. This is especially true of higher-priced, or subprime, mortgages.1 CRA assessment-area lending accounted for only nine percent of higher-priced loans to lower-income borrowers and neighborhoods, while independent mortgage companies accounted for the majority. Further, the subprime share of assessment-area loans made to lower-income borrowers and lower-income neighborhoods was lower than the subprime share for all loans made between 2004 and 2006. ...

In 1980, seventy-one percent of all one-to-four family home mortgages were originated by a deposit-taking bank or thrift. However, over the last several decades, innovations in capital markets enabled companies to raise capital by selling mortgage-backed securities into the secondary market. Without deposits, the CRA did not have the jurisdiction to regulate the new independent mortgage companies. ...

There are many causes to the collapse of the housing market and the recent financial turmoil, but the contribution of the CRA appears marginal. While banks did engage in subprime lending in their assessment areas, they did so at a lower rate than the market in general and accounted for only a small fraction of subprime loans to lower-income borrowers and lower income neighborhoods. The data suggest that far from being forced into risky corners of the market, the institutions under the scrutiny of the CRA were crowded out by unregulated lenders.

http://www.jchs.harvard.edu/publications/governmentprograms/n08-2_park.pdf

 

[Toro]

About a year ago, Paul Krugman noted that over half of all commercial real estate loans were underwater. Of course, the CRA has no jurisdiction over CRE loans.

But reading this scary piece about commercial real estate, I realized that CRE offers yet another debunking. After all, there was no federal act driving banks to lend money for office parks and shopping malls; Fannie and Freddie weren’t in the CRE loan business; yet 55 percent — 55 percent! — of commercial mortgages that will come due before 2014 are underwater.

CRE and the CRA - NYTimes.com

 

[Toro]

Most subprime loans had nothing to do with the CRA. In fact, most subprime loans were made in an area of the market that is more deregulated than the regular banking market.

The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”

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.

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

 

[PoliticalChic]

Because I do not accept that the economic crisis was primarily on the dems does not imply that they bear no culpability. They could have done a better job recognizing the problem and speaking correctly about it from their minority position in both branches of congress. They did not do that, and they bear some blame for it. They don't bear most of the blame, because the repubs held majority in BOTH houses of congress from 1994-2006.

The explosion in subprime lending that sunk the economy occurred mainly in 2004-2006, when the percentage of subprime loans out of total loans issued rocketed up from 7% to 21% in just a couple of years, from 2002 to 2004. That is where the problem was, and that is totally on the repub watch, controlling the house, senate, and white house.

The SEC did not have to relax the net capital rule in 2003 for the 5 investment banks and allow them to extend their leverage from 15:1 to 45:1, but they did. The SEC was supposed to monitor those banks, but they didn't, which directly led to the failure of Lehman Bros, and the fire sale of Merrill and Bear Stearns.

Greenspan did not have to drive short term rates down to 1% in 2003 and 2004 (but he did in order to get Bush re-elected, at the long term expense of a sound economy). The treasury under the repubs didn't have to expand the money supply twice as fast as GDP growth during that period, but they did; it's inflationary and that is why we saw 15% annual inflation in home prices that helped lead to the crash.

Greenspan could have tightened regulations on the mortgage companies, he had the authority, but he didn't. He let them abuse their clients without lifting a finger.

I agree with you, both parties screwed the nation, the dems bear part of the responsibility, but since the repubs were the leadership party with the majorities in the house and senate from 94 - 06, and including the white house from 01-08, most of the responsibility rests with the repubs. Clinton turned over a balanced budget and a sound economy in a mild dot com bust recession. The repubs irresponsibly over stimulated the housing market while under regulating the banks and created a near economic collapse. The repubs did a poor job managing the economy from 01-06.

Beady, do you believe that government has a role in determining who should own a home?

Once that question is answered in the positive, it is fairly simple to document the Democrat Party responsibility for the crisis.

sorry dear...utter bullcrud.

you miss the factual, that has been presented PC.... the crash was not mainly due to the Community Reinvestment Act.....the housing boom did NOT occur in CRA areas, the subprime boom did NOT occur due to CRA areas.

you can try to blame the poor all you want, but they are not even a smidgen of the problem.

CRA has been around for decades, WHY OH WHY did this boom and bust occur under President bush 2 and not under Bush 1 or Reagan or Clinton or whomever, when they expanded it?

BECAUSE this boom and crash has NOTHING to do with the CRA itself......

we don't have enough poor people in the world to get all of those subprime loans/ put in Mortgage Backed Securities, that were created.

Yes, that is an exageration on the poor people in the world, but you SHOULD be able to get the gist of the argument that supports Toro's stance....IF you allow yourself.

There must be a simple reason why you ignored the question..."do you believe that government has a role in determining who should own a home?"


I'm going to assume that you do...but that you would rather pretend that Freddie, Fannie, the CRA, the Clinton HUD, Barney Frank and Chris Dodd are not of the Democrat persuasion.

Can I toss ACORN in there as well?

Must be a coincidence, huh?

 

[Toro]

Most analysts see the sub-prime crisis as a market failure. Believing the bubble would never pop, lenders approved risky adjustable-rate mortgages, often without considering whether borrowers could afford them; families took on those loans; investors bought them in securitized form; and, all the while, regulators sat on their hands. ...

It's telling that, amid all the recent recriminations, even lenders have not fingered CRA. That's because CRA didn't bring about the reckless lending at the heart of the crisis. Just as sub-prime lending was exploding, CRA was losing force and relevance. And the worst offenders, the independent mortgage companies, were never subject to CRA -- or any federal regulator. Law didn't make them lend. The profit motive did.

Did Liberals Cause the Sub-Prime Crisis? | The American Prospect

 

[Ravi]

Liberals ate my homework.

 

[finebead]

And it seems you have a short term memory
First you said this:


Then you said this


That isn't exactly blaming both party's just one.

Because I do not accept that the economic crisis was primarily on the dems does not imply that they bear no culpability. They could have done a better job recognizing the problem and speaking correctly about it from their minority position in both branches of congress. They did not do that, and they bear some blame for it. They don't bear most of the blame, because the repubs held majority in BOTH houses of congress from 1994-2006.

The explosion in subprime lending that sunk the economy occurred mainly in 2004-2006, when the percentage of subprime loans out of total loans issued rocketed up from 7% to 21% in just a couple of years, from 2002 to 2004. That is where the problem was, and that is totally on the repub watch, controlling the house, senate, and white house.

The SEC did not have to relax the net capital rule in 2003 for the 5 investment banks and allow them to extend their leverage from 15:1 to 45:1, but they did. The SEC was supposed to monitor those banks, but they didn't, which directly led to the failure of Lehman Bros, and the fire sale of Merrill and Bear Stearns.

Greenspan did not have to drive short term rates down to 1% in 2003 and 2004 (but he did in order to get Bush re-elected, at the long term expense of a sound economy). The treasury under the repubs didn't have to expand the money supply twice as fast as GDP growth during that period, but they did; it's inflationary and that is why we saw 15% annual inflation in home prices that helped lead to the crash.

Greenspan could have tightened regulations on the mortgage companies, he had the authority, but he didn't. He let them abuse their clients without lifting a finger.

I agree with you, both parties screwed the nation, the dems bear part of the responsibility, but since the repubs were the leadership party with the majorities in the house and senate from 94 - 06, and including the white house from 01-08, most of the responsibility rests with the repubs. Clinton turned over a balanced budget and a sound economy in a mild dot com bust recession. The repubs irresponsibly over stimulated the housing market while under regulating the banks and created a near economic collapse. The repubs did a poor job managing the economy from 01-06.

Beady, do you believe that government has a role in determining who should own a home?

Once that question is answered in the positive, it is fairly simple to document the Democrat Party responsibility for the crisis.

I believe the govt. has a role to play in ensuring that all americans have access to loans on a fair basis, which is what CRA was designed to do. It was designed to end the evil bank practice of "redlining" or refusing to loan in certain area, despite the fact that you operate a bank there and gather assets there. That would and did result in blighted areas.

The CRA attempted to correct that by saying that if you operate in an area, you have to provide loans to individuals in that area to a guidelines specified percentage. If you don't want to do that, you should sell your bank to someone who will collect assets and make loans in that area. If you don't want to sell the bank and you don't operate the bank according to the CRA guidelines, then you can't open any more banks in that state. That is what CRA did.

In later years like the 90's, a bank may have a lending standard that called for a credit score of 720 to qualify for a loan. Under that internal bank standard, maybe nobody in an area qualifies for a loan. CRA says you need to look deeper, and maybe you give a loan to a person with a credit score of 680, who has been at the same job for 10 years, maybe he skipped a couple of car payments but he caught up and paid off the car eventually. That is what CRA forced the banks to do, look a little deeper and make the loan determination the way banks used to, based on some personal knowledge of the situation. The CRA never forced a bank to make a loan to individuals who could not pay the money back.

As stated previously, the CRA regulated banks found they could conduct their business in those areas PROFITABLY.

So no, I don't see CRA as a driving force in the mortgage backed security crisis.

 

[PoliticalChic]

Because I do not accept that the economic crisis was primarily on the dems does not imply that they bear no culpability. They could have done a better job recognizing the problem and speaking correctly about it from their minority position in both branches of congress. They did not do that, and they bear some blame for it. They don't bear most of the blame, because the repubs held majority in BOTH houses of congress from 1994-2006.

The explosion in subprime lending that sunk the economy occurred mainly in 2004-2006, when the percentage of subprime loans out of total loans issued rocketed up from 7% to 21% in just a couple of years, from 2002 to 2004. That is where the problem was, and that is totally on the repub watch, controlling the house, senate, and white house.

The SEC did not have to relax the net capital rule in 2003 for the 5 investment banks and allow them to extend their leverage from 15:1 to 45:1, but they did. The SEC was supposed to monitor those banks, but they didn't, which directly led to the failure of Lehman Bros, and the fire sale of Merrill and Bear Stearns.

Greenspan did not have to drive short term rates down to 1% in 2003 and 2004 (but he did in order to get Bush re-elected, at the long term expense of a sound economy). The treasury under the repubs didn't have to expand the money supply twice as fast as GDP growth during that period, but they did; it's inflationary and that is why we saw 15% annual inflation in home prices that helped lead to the crash.

Greenspan could have tightened regulations on the mortgage companies, he had the authority, but he didn't. He let them abuse their clients without lifting a finger.

I agree with you, both parties screwed the nation, the dems bear part of the responsibility, but since the repubs were the leadership party with the majorities in the house and senate from 94 - 06, and including the white house from 01-08, most of the responsibility rests with the repubs. Clinton turned over a balanced budget and a sound economy in a mild dot com bust recession. The repubs irresponsibly over stimulated the housing market while under regulating the banks and created a near economic collapse. The repubs did a poor job managing the economy from 01-06.

Beady, do you believe that government has a role in determining who should own a home?

Once that question is answered in the positive, it is fairly simple to document the Democrat Party responsibility for the crisis.

I believe the govt. has a role to play in ensuring that all americans have access to loans on a fair basis, which is what CRA was designed to do. It was designed to end the evil bank practice of "redlining" or refusing to loan in certain area, despite the fact that you operate a bank there and gather assets there. That would and did result in blighted areas.

The CRA attempted to correct that by saying that if you operate in an area, you have to provide loans to individuals in that area to a guidelines specified percentage. If you don't want to do that, you should sell your bank to someone who will collect assets and make loans in that area. If you don't want to sell the bank and you don't operate the bank according to the CRA guidelines, then you can't open any more banks in that state. That is what CRA did.

In later years like the 90's, a bank may have a lending standard that called for a credit score of 720 to qualify for a loan. Under that internal bank standard, maybe nobody in an area qualifies for a loan. CRA says you need to look deeper, and maybe you give a loan to a person with a credit score of 680, who has been at the same job for 10 years, maybe he skipped a couple of car payments but he caught up and paid off the car eventually. That is what CRA forced the banks to do, look a little deeper and make the loan determination the way banks used to, based on some personal knowledge of the situation. The CRA never forced a bank to make a loan to individuals who could not pay the money back.

As stated previously, the CRA regulated banks found they could conduct their business in those areas PROFITABLY.

So no, I don't see CRA as a driving force in the mortgage backed security crisis.

You're dodging...

The question the left seems unwilling to answer is whether the government should have a role in seeing to it that folks own their own home...

Why?

Here's why. The founding of this nation guaranteed no such thing. On the other hand, President Roosevelt, did.
This, from his 'Second Bill of Rights:'
The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

Do you see all of the guarantees inherent?
Now, where do you see the source of the revenue to pay for same?

So, if you belive the above, you do not believe that capitalism- modified capitalism, such as the system we live with today- is the best system for prosperity of the people of the United States.

 

[edthecynic]

Beady, do you believe that government has a role in determining who should own a home?

Once that question is answered in the positive, it is fairly simple to document the Democrat Party responsibility for the crisis.

sorry dear...utter bullcrud.

you miss the factual, that has been presented PC.... the crash was not mainly due to the Community Reinvestment Act.....the housing boom did NOT occur in CRA areas, the subprime boom did NOT occur due to CRA areas.

you can try to blame the poor all you want, but they are not even a smidgen of the problem.

CRA has been around for decades, WHY OH WHY did this boom and bust occur under President bush 2 and not under Bush 1 or Reagan or Clinton or whomever, when they expanded it?

BECAUSE this boom and crash has NOTHING to do with the CRA itself......

we don't have enough poor people in the world to get all of those subprime loans/ put in Mortgage Backed Securities, that were created.

Yes, that is an exageration on the poor people in the world, but you SHOULD be able to get the gist of the argument that supports Toro's stance....IF you allow yourself.

There must be a simple reason why you ignored the question..."do you believe that government has a role in determining who should own a home?"


I'm going to assume that you do...but that you would rather pretend that Freddie, Fannie, the CRA, the Clinton HUD, Barney Frank and Chris Dodd are not of the Democrat persuasion.

Can I toss ACORN in there as well?

Must be a coincidence, huh?

You would rather pretend that Bush is not a CON$ervative and his pet legislation, the ADDI, which changed the law to allow no downpayment loans for more than the house was worth to people with bad credit who could not keep up with the payments and who were at least 20% below the standard for the neighborhood never happened.

Must be a coincidence, huh?