FACTS on Dubya's great recession

[Dad2three]

Maybe you find the facts on the Dear wonderful leader Obambam great recession

http://www.usmessageboard.com/economy/361483-headed-for-a-recession.html#post9326126

"We crashed the economy but we don't like the way you tried to fix it." - GOP.

Reagan GDP dipped 5 times in 3 years. AND?

 

[Rshermr]

Maybe you find the facts on the Dear wonderful leader Obambam great recession

http://www.usmessageboard.com/economy/361483-headed-for-a-recession.html#post9326126

"We crashed the economy but we don't like the way you tried to fix it." - GOP.

Reagan GDP dipped 5 times in 3 years. AND?

Politics is about power. The GOP is simply owned by corporate america. The Dems are MOSTLY owned by corporate america. Simple enough. Problem is money in politics. And the fact that the cons have the machine. Look around this board and see the tools that push the agenda for the wealthy.
It would seem stupid to believe that any rational person could support a political party responsible over time for the two biggest recessions in the economic history of this country- the great republican depression of 1929 and the great republican recession of 2008. But there they are. All over this board. Because they, too, are bought and owned by the wealthy. And there is NOTHING rational about political agenda.

 

[Dad2three]

Maybe you find the facts on the Dear wonderful leader Obambam great recession

http://www.usmessageboard.com/economy/361483-headed-for-a-recession.html#post9326126

Sure, WHEN have right wingers EVER been correct? Did Obama gut regulators after they warned him of EPIDEMIC of fraud like Dubya did?

 

[Dad2three]

Maybe you find the facts on the Dear wonderful leader Obambam great recession

http://www.usmessageboard.com/economy/361483-headed-for-a-recession.html#post9326126

"We crashed the economy but we don't like the way you tried to fix it." - GOP.

Reagan GDP dipped 5 times in 3 years. AND?

Politics is about power. The GOP is simply owned by corporate america. The Dems are MOSTLY owned by corporate america. Simple enough. Problem is money in politics. And the fact that the cons have the machine. Look around this board and see the tools that push the agenda for the wealthy.
It would seem stupid to believe that any rational person could support a political party responsible over time for the two biggest recessions in the economic history of this country- the great republican depression of 1929 and the great republican recession of 2008. But there they are. All over this board. Because they, too, are bought and owned by the wealthy. And there is NOTHING rational about political agenda.

Yep, and the closest thing to laizze affair crap they want to happen to US post 1929 GOP/Harding/Coolidge great depression, was Reagan ignoring Mr Gray's warnings in 1984 about the problems with the S&L deregulation (could have stopped 90% of the crisis) And then Dubya's subprime crisis where he not only ignored the regulators, he gutted them!

Weird, we elect those to Gov't that don't 'believe in' Gov't or regulations/regulators, then are shocked when the economies collapse BECAUSE of their ideology!

 

[EdwardBaiamonte]

And then Dubya's subprime crisis where he not only ignored the regulators, he gutted them!

of course Bush did not gut the Fed which printed all the money needed to buy and bid up the prices of all those homes nor did he gut Fan/Fred who bought most of the mortgages and guaranteed the rest. Read "Reckless Endangerment" if you want to understand.

 

[Shanty]

Q When did the Bush Mortgage Bubble start?

A The general timeframe is it started late 2004.

From Bush’s President’s Working Group on Financial Markets October 2008

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”



Q Did the Community Reinvestment Act under Carter/Clinton caused it?


A "Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "

http://www.federalreserve.gov/newsevents/speech/20081203_analysis.pdf


Q Why is it commonly called the “subprime bubble” ?

A Because the Bush Mortgage Bubble coincided with the explosive growth of Subprime mortgage and politics. Also the subprime MBS market was the first to collapse in late 2006. In 2003, 10 % of all mortgages were subprime. In 2006, 40 % were subprime. This is a 300 % increase in subprime lending. (and notice it coincides with the dates of the Bush Mortgage bubble that Bush and the Fed said)

“Some 80 percent of outstanding U.S. mortgages are prime, while 14 percent are subprime and 6 percent fall into the near-prime category. These numbers, however, mask the explosive growth of nonprime mortgages. Subprime and near-prime loans shot up from 9 percent of newly originated securitized mortgages in 2001 to 40 percent in 2006

https://www.dallasfed.org/assets/documents/research/eclett/2007/el0711.pdf



Q. Er uh, didn’t you notice your link said the explosive growth of subprime mortgages started in 2001?

A. It did kinda say that didn’t it? However, the link below clearly states subprime was 10 % in 2003. 9% in 2001 to 10% in 2003 is only a 1% increase. A 1 % increase over 3 years is flat not explosive. 10 % in 2003 to 40% in 2006 is explosive. So the explosive growth started in 2004 which lines up pretty good but not exactly with the timeframe of the Bush Mortgage Bubble.


“In dollar terms, nonprime mortgages represented 32 percent of all mortgage originations in 2005, more than triple their 10 percent share only two years earlier


FRB: Finance and Economics Discussion Series: Screen Reader Version - 200899

My problem with this is that Dean Baker identified it in 2002. He was the first person to do so using economic modeling.

But, while there is blame to be thrown at Clinton and the majority of Democrats for going along with the deregulation of banking and finance, Bush and the GOP had almost 5 years to head the bubble off, or at least mitigate it, starting from Baker's prediction until the problems started showing.

 

[Shanty]

What did Bush OR Obama have to do with the Federal Reserves Zero Interest Rate Policy (ZIRP)?

Oh yeah, nothing. Because it's Privately Owned Bank.

Not having that much to do with the housing bubble...

 

[Shanty]

And then Dubya's subprime crisis where he not only ignored the regulators, he gutted them!

of course Bush did not gut the Fed which printed all the money needed to buy and bid up the prices of all those homes nor did he gut Fan/Fred who bought most of the mortgages and guaranteed the rest. Read "Reckless Endangerment" if you want to understand.

Reckless Endangerment has lowered the knowledge level of more than a few people.

Economist's View: Reckless Endangerment of the Truth

 

[EdwardBaiamonte]

And then Dubya's subprime crisis where he not only ignored the regulators, he gutted them!

of course Bush did not gut the Fed which printed all the money needed to buy and bid up the prices of all those homes nor did he gut Fan/Fred who bought most of the mortgages and guaranteed the rest. Read "Reckless Endangerment" if you want to understand.

Reckless Endangerment has lowered the knowledge level of more than a few people.

Economist's View: Reckless Endangerment of the Truth

you mean massive liberal intervention from Fed Fan Fred were not the proximate cause of the housing crisis?? Can you explain?

 

[Dad2three]

And then Dubya's subprime crisis where he not only ignored the regulators, he gutted them!

of course Bush did not gut the Fed which printed all the money needed to buy and bid up the prices of all those homes nor did he gut Fan/Fred who bought most of the mortgages and guaranteed the rest. Read "Reckless Endangerment" if you want to understand.

"Reckless Endangerment"

lol, Hack job, AEI talking points is all...... Stops BEFORE Dubya created the mess Weird about that right?



"The sub-prime loans would not made if there were not consumers willing to sign on the dotted line."



Q When did the Bush Mortgage Bubble start?

A The general timeframe is it started late 2004.

From Bush’s President’s Working Group on Financial Markets October 2008

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”


DUBYA FOUGHT ALL 50 STATE AG'S IN 2003, INVOKING A CIVIL WAR ERA RULE SAYING FEDS RULE ON "PREDATORY" LENDERS!

Predatory lending was widely understood to present a looming national crisis.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge?

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye


Eliot Spitzer - Predatory Lenders' Partner in Crime


"The sub-prime loans would not have been made if there were not buyers and sellers for them on secondary markets via MBS's.

The MBS's would not have existed if regulators had taken a look at them, realized pretty much no one knew what the hell they were, and acted accordingly.

There would not have been buyers for the MBS's if the ratings agencies had given them appropriate ratings, such as S&P's CCC, about where they should have been.

Those selling the MBS's would not have been able to move risk off their books if someone not been willing to sell them CDS's."


WHO WAS IN CHARGE IN THIS PERIOD? WHO HAD THE SEC, FBI, GSE'S, ETC AS PART OF THEIR EXECUTIVE BRANCH OVERSIGHT?


"The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence." William K. Black Sr. regulator during S&L debacle



“When regulators don’t believe in regulation and don’t get what is going on at the companies they oversee, there can be no major white-collar crime prosecutions,”...“If they don’t understand what we call collective embezzlement, where people are literally looting their own firms, then it’s impossible to bring cases.”


http://www.nytimes.com/2011/04/14/business/14prosecute.html?pagewanted=all&_r=0



Dubya was warned by the FBI of an "epidemic" of mortgage fraud in 2004. He gave them less resources.


FBI saw threat of loan crisis - Los Angeles Times



Shockingly, the FBI clearly makes the case for the need to combat mortgage fraud in 2005, the height of the housing crisis:

Financial Crimes Report to the Public 2005

FBI ? Financial Crimes Report 2005


The Bush Rubber Stamp Congress ignored the obvious and extremely detailed and well reported crime spree by the FBI.

THE BUSH ADMINISTRATION and GOP CONGRESS stripped the White Collar Crime divisions of money and manpower.



"Those selling the CDS's would not have been able to sell them if they had been required by regulators to maintain standard insurance reserves."


2004 Dubya allowed the leverage rules to go from 12-1 to 35-1 which flooded the market with cheap money!

The SEC Rule That Broke Wall Street

The SEC Rule That Broke Wall Street


BUSH REGULATORS ON WALL STREET IN 2004 WITH A CHAINSAW 'CUTTING' REGULATIONS

“We certainly don't want there to be a fine print preventing people from owning their home,” the President(DUBYA) said in a 2002 speech. “We can change the print, and we've got to.”




12/19/2006

The Center for Responsible Lending has released a new report: Losing Ground: Foreclosures in the Subprime Market and Their Cost to Homeowners.


Report: 2.2 Million Subprime Borrowers Face Foreclosure

Calculated Risk: Report: 2.2 Million Subprime Borrowers Face Foreclosure



Losing Ground: Foreclosures in the Subprime Market and Their Cost to Homeowners


Losing Ground: Foreclosures in the Subprime Market and Their Cost to Homeowners




November 27, 2007

A Snapshot of the Subprime Market



Dollar amount of subprime loans outstanding:

2007 $1.3 trillion

Dollar amount of subprime loans outstanding in 2003: $332 billion

Percentage increase from 2003: 292%


Number of subprime mortgages made in 2005-2006 projected to end in foreclosure:

1 in 5



Proportion of subprime mortgages made from 2004 to 2006 that come with "exploding" adjustable interest rates: 89-93%


Proportion approved without fully documented income: 43-50%


Proportion with no escrow for taxes and insurance: 75%



Proportion of completed foreclosures attributable to adjustable rate loans out of all loans made in 2006 and bundled in subprime mortgage backed securities: 93%


Subprime share of all mortgage originations in 2006: 28%


Subprime share of all mortgage origination in 2003: 8%

 

[Dad2three]

of course Bush did not gut the Fed which printed all the money needed to buy and bid up the prices of all those homes nor did he gut Fan/Fred who bought most of the mortgages and guaranteed the rest. Read "Reckless Endangerment" if you want to understand.

Reckless Endangerment has lowered the knowledge level of more than a few people.

Economist's View: Reckless Endangerment of the Truth

you mean massive liberal intervention from Fed Fan Fred were not the proximate cause of the housing crisis?? Can you explain?

No, the GSEs Did Not Cause the Financial Meltdown (but thats just according to the data)



1. Private markets caused the shady mortgage boom: The first thing to point out is that the both the subprime mortgage boom and the subsequent crash are very much concentrated in the private market, especially the private label securitization channel (PLS) market. The Government-Sponsored Entities (GSEs, or Fannie and Freddie) were not behind them. The fly-by-night lending boom, slicing and dicing mortgage bonds, derivatives and CDOs, and all the other shadiness of the mortgage market in the 2000s were Wall Street creations, and they drove all those risky mortgages.

Here’s some data to back that up: “More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions… Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.”



2. The government’s affordability mission didn’t cause the crisis




3. There is a lot of research to back this up and little against it




4. Conservatives sang a different tune before the crash: Conservative think tanks spent the 2000s saying the exact opposite of what they are saying now and the opposite of what Bloomberg said above. They argued that the CRA and the GSEs were getting in the way of getting risky subprime mortgages to risky subprime borrowers.


MY FAV, ED PINTO'S PARTNER IN CRIME (AEI, RECKLESS ENDANGERMENT CRAP)


Peter Wallison in 2004: “In recent years, study after study has shown that Fannie Mae and Freddie Mac are failing to do even as much as banks and S&Ls in providing financing for affordable housing, including minority and low income housing.”

Hey Mayor Bloomberg! No, the GSEs Did Not Cause the Financial Meltdown (but thats just according to the data) | The Big Picture


WORLD WIDE CREDIT BUBBLE AND BUST



Examining the big lie: How the facts of the economic crisis stack up



Here are key things we know based on data. Together, they present a series of tough hurdles for the big lie proponents.

•The boom and bust was global. Proponents of the Big Lie ignore the worldwide nature of the housing boom and bust.

Nonbank mortgage underwriting exploded from 2001 to 2007, along with the private label securitization market, which eclipsed Fannie and Freddie during the boom.




•Private lenders not subject to congressional regulations collapsed lending standards.


Examining the big lie: How the facts of the economic crisis stack up | The Big Picture

 

[Dad2three]

Q When did the Bush Mortgage Bubble start?

A The general timeframe is it started late 2004.

From Bush’s President’s Working Group on Financial Markets October 2008

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”



Q Did the Community Reinvestment Act under Carter/Clinton caused it?


A "Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "

http://www.federalreserve.gov/newsevents/speech/20081203_analysis.pdf


Q Why is it commonly called the “subprime bubble” ?

A Because the Bush Mortgage Bubble coincided with the explosive growth of Subprime mortgage and politics. Also the subprime MBS market was the first to collapse in late 2006. In 2003, 10 % of all mortgages were subprime. In 2006, 40 % were subprime. This is a 300 % increase in subprime lending. (and notice it coincides with the dates of the Bush Mortgage bubble that Bush and the Fed said)

“Some 80 percent of outstanding U.S. mortgages are prime, while 14 percent are subprime and 6 percent fall into the near-prime category. These numbers, however, mask the explosive growth of nonprime mortgages. Subprime and near-prime loans shot up from 9 percent of newly originated securitized mortgages in 2001 to 40 percent in 2006

https://www.dallasfed.org/assets/documents/research/eclett/2007/el0711.pdf



Q. Er uh, didn’t you notice your link said the explosive growth of subprime mortgages started in 2001?

A. It did kinda say that didn’t it? However, the link below clearly states subprime was 10 % in 2003. 9% in 2001 to 10% in 2003 is only a 1% increase. A 1 % increase over 3 years is flat not explosive. 10 % in 2003 to 40% in 2006 is explosive. So the explosive growth started in 2004 which lines up pretty good but not exactly with the timeframe of the Bush Mortgage Bubble.


“In dollar terms, nonprime mortgages represented 32 percent of all mortgage originations in 2005, more than triple their 10 percent share only two years earlier


FRB: Finance and Economics Discussion Series: Screen Reader Version - 200899

My problem with this is that Dean Baker identified it in 2002. He was the first person to do so using economic modeling.

But, while there is blame to be thrown at Clinton and the majority of Democrats for going along with the deregulation of banking and finance, Bush and the GOP had almost 5 years to head the bubble off, or at least mitigate it, starting from Baker's prediction until the problems started showing.

He identified a HOUSING bubble had happened, NOT Dubya's great subprime crisis



November 27, 2007

A Snapshot of the Subprime Market

Dollar amount of subprime loans outstanding:

2007 $1.3 trillion

Dollar amount of subprime loans outstanding in 2003: $332 billion

Percentage increase from 2003: 292%


Number of subprime mortgages made in 2005-2006 projected to end in foreclosure:

1 in 5



Proportion of subprime mortgages made from 2004 to 2006 that come with "exploding" adjustable interest rates: 89-93%


Proportion approved without fully documented income: 43-50%


Proportion with no escrow for taxes and insurance: 75%



Proportion of completed foreclosures attributable to adjustable rate loans out of all loans made in 2006 and bundled in subprime mortgage backed securities: 93%


Subprime share of all mortgage originations in 2006: 28%


Subprime share of all mortgage origination in 2003: 8%



Subprime share of all home loans outstanding:
14%


Subprime share of foreclosure filings in the 12 months ending June 30, 2007: 64%


The negative effects of subprime foreclosures are spreading.

Nearly 45 million homes NOT facing foreclosure will decline in value by an estimated $233 billion with most of the decline hitting in 2008 and 2009 as subprime foreclosures lower the prices of surrounding homes


Subprime foreclosures will rise even higher



A Snapshot of the Subprime Market





2/20/2008

Subprime loans defaulting even before resets



Many of these loans are defaulting well before their rates increase.

Defaults for subprime loans issued in 2007 - none of which have reset yet - hit 11.2 percent in November. That represents perhaps 300,000 households, and is twice the default rate that 2006 loans had 10 months after being issued, according to Friedman, Billings Ramsey analyst Michael Youngblood.

Defaults are spiking well before resets come into play thanks to the lax lending environment of the past few years. Many borrowers were approved for mortgages that they had little chance of affording, even at the low-interest teaser rates .

"I was rather shocked by the characteristics of the 2007 loans," said Youngblood.



For instance, in both 2006 and 2007, well over 40 percent of subprime borrowers were awarded mortgages with either little or no documentation of their ability to pay. With these so-called "liar loans," borrowers did not have to show proof of either earnings or assets.


The Residential Real Estate Crash Index | Stock Discussion Forums





In 2000, securitization vehicles (entities classified as asset
-backed security issuers and finance companies by the Federal Reserve) financed $572 billion in residential mortgages, equal to nearly 12% of all household mortgage debt outstanding. By the end of 2006, the volume of outstanding mortgages financed by PLS had grown to over $2.6 trillion, or more than 27% of all residential mortgage debt. The most explosive growth occurred in 2004 and 2005 when the outstanding mortgage debt financed by PLS increased by 49% and 44% respectively.


It is important to note that these growth rates reflect net annual changes in total mortgage debt; when refinancings of existing PLS - funded mortgages are included, the growth rates on gross PLS issuance during these years exceed 90%



http://business.gwu.edu/creua/research-papers/files/fannie-freddie.pdf




From 2001 to 2005, the dollar volume of subprime mortgages increased from $100 billion to $600 billion, while Alt - A mortgages grew from $25 billion to $400 billion over roughly the same period

 

[jillian]

Why is it so difficult for Liberals to live in the present?

because those failures are the gift that keeps on giving and the radical right keeps trying to blame this president for their screw ups while, at the same time, blocking every effort to fix them.

that's why.

 

[Mr. H.]

Why is it so difficult for Liberals to live in the present?

because those failures are the gift that keeps on giving and the radical right keeps trying to blame this president for their screw ups while, at the same time, blocking every effort to fix them.

that's why.

Oh shush.

 

[Shanty]

of course Bush did not gut the Fed which printed all the money needed to buy and bid up the prices of all those homes nor did he gut Fan/Fred who bought most of the mortgages and guaranteed the rest. Read "Reckless Endangerment" if you want to understand.

Reckless Endangerment has lowered the knowledge level of more than a few people.

Economist's View: Reckless Endangerment of the Truth

you mean massive liberal intervention from Fed Fan Fred were not the proximate cause of the housing crisis?? Can you explain?

No, they weren't the prime causes.
Economist's View: Did the Fed Cause the housing Bubble?

Economist's View: It Wasn't Fannie, Freddie, or the CRA

When you give banksters free reign, they always overextend. It's why the Federal Reserve and banking/finance regs were so effective at keeping that from happening for nearly 50 years until Reagan's S&L scandals, then the Great Recession.

 

[Shanty]

Q When did the Bush Mortgage Bubble start?

A The general timeframe is it started late 2004.

From Bush’s President’s Working Group on Financial Markets October 2008

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”



Q Did the Community Reinvestment Act under Carter/Clinton caused it?


A "Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "

http://www.federalreserve.gov/newsevents/speech/20081203_analysis.pdf


Q Why is it commonly called the “subprime bubble” ?

A Because the Bush Mortgage Bubble coincided with the explosive growth of Subprime mortgage and politics. Also the subprime MBS market was the first to collapse in late 2006. In 2003, 10 % of all mortgages were subprime. In 2006, 40 % were subprime. This is a 300 % increase in subprime lending. (and notice it coincides with the dates of the Bush Mortgage bubble that Bush and the Fed said)

“Some 80 percent of outstanding U.S. mortgages are prime, while 14 percent are subprime and 6 percent fall into the near-prime category. These numbers, however, mask the explosive growth of nonprime mortgages. Subprime and near-prime loans shot up from 9 percent of newly originated securitized mortgages in 2001 to 40 percent in 2006

https://www.dallasfed.org/assets/documents/research/eclett/2007/el0711.pdf



Q. Er uh, didn’t you notice your link said the explosive growth of subprime mortgages started in 2001?

A. It did kinda say that didn’t it? However, the link below clearly states subprime was 10 % in 2003. 9% in 2001 to 10% in 2003 is only a 1% increase. A 1 % increase over 3 years is flat not explosive. 10 % in 2003 to 40% in 2006 is explosive. So the explosive growth started in 2004 which lines up pretty good but not exactly with the timeframe of the Bush Mortgage Bubble.


“In dollar terms, nonprime mortgages represented 32 percent of all mortgage originations in 2005, more than triple their 10 percent share only two years earlier


FRB: Finance and Economics Discussion Series: Screen Reader Version - 200899

My problem with this is that Dean Baker identified it in 2002. He was the first person to do so using economic modeling.

But, while there is blame to be thrown at Clinton and the majority of Democrats for going along with the deregulation of banking and finance, Bush and the GOP had almost 5 years to head the bubble off, or at least mitigate it, starting from Baker's prediction until the problems started showing.

He identified a HOUSING bubble had happened, NOT Dubya's great subprime crisis



November 27, 2007

A Snapshot of the Subprime Market

Dollar amount of subprime loans outstanding:

2007 $1.3 trillion

Dollar amount of subprime loans outstanding in 2003: $332 billion

Percentage increase from 2003: 292%


Number of subprime mortgages made in 2005-2006 projected to end in foreclosure:

1 in 5



Proportion of subprime mortgages made from 2004 to 2006 that come with "exploding" adjustable interest rates: 89-93%


Proportion approved without fully documented income: 43-50%


Proportion with no escrow for taxes and insurance: 75%



Proportion of completed foreclosures attributable to adjustable rate loans out of all loans made in 2006 and bundled in subprime mortgage backed securities: 93%


Subprime share of all mortgage originations in 2006: 28%


Subprime share of all mortgage origination in 2003: 8%



Subprime share of all home loans outstanding:
14%


Subprime share of foreclosure filings in the 12 months ending June 30, 2007: 64%


The negative effects of subprime foreclosures are spreading.

Nearly 45 million homes NOT facing foreclosure will decline in value by an estimated $233 billion with most of the decline hitting in 2008 and 2009 as subprime foreclosures lower the prices of surrounding homes


Subprime foreclosures will rise even higher



A Snapshot of the Subprime Market





2/20/2008

Subprime loans defaulting even before resets



Many of these loans are defaulting well before their rates increase.

Defaults for subprime loans issued in 2007 - none of which have reset yet - hit 11.2 percent in November. That represents perhaps 300,000 households, and is twice the default rate that 2006 loans had 10 months after being issued, according to Friedman, Billings Ramsey analyst Michael Youngblood.

Defaults are spiking well before resets come into play thanks to the lax lending environment of the past few years. Many borrowers were approved for mortgages that they had little chance of affording, even at the low-interest teaser rates .

"I was rather shocked by the characteristics of the 2007 loans," said Youngblood.



For instance, in both 2006 and 2007, well over 40 percent of subprime borrowers were awarded mortgages with either little or no documentation of their ability to pay. With these so-called "liar loans," borrowers did not have to show proof of either earnings or assets.


The Residential Real Estate Crash Index | Stock Discussion Forums





In 2000, securitization vehicles (entities classified as asset
-backed security issuers and finance companies by the Federal Reserve) financed $572 billion in residential mortgages, equal to nearly 12% of all household mortgage debt outstanding. By the end of 2006, the volume of outstanding mortgages financed by PLS had grown to over $2.6 trillion, or more than 27% of all residential mortgage debt. The most explosive growth occurred in 2004 and 2005 when the outstanding mortgage debt financed by PLS increased by 49% and 44% respectively.


It is important to note that these growth rates reflect net annual changes in total mortgage debt; when refinancings of existing PLS - funded mortgages are included, the growth rates on gross PLS issuance during these years exceed 90%



http://business.gwu.edu/creua/research-papers/files/fannie-freddie.pdf




From 2001 to 2005, the dollar volume of subprime mortgages increased from $100 billion to $600 billion, while Alt - A mortgages grew from $25 billion to $400 billion over roughly the same period

Fair enough. Thanks for clarifying. And Bush's actions certainly did inflate the bubble further and faster.

 

[EdwardBaiamonte]

My problem with this is that Dean Baker identified it in 2002. He was the first person to do so using economic modeling.

But, while there is blame to be thrown at Clinton and the majority of Democrats for going along with the deregulation of banking and finance, Bush and the GOP had almost 5 years to head the bubble off, or at least mitigate it, starting from Baker's prediction until the problems started showing.

He identified a HOUSING bubble had happened, NOT Dubya's great subprime crisis



November 27, 2007

A Snapshot of the Subprime Market

Dollar amount of subprime loans outstanding:

2007 $1.3 trillion

Dollar amount of subprime loans outstanding in 2003: $332 billion

Percentage increase from 2003: 292%


Number of subprime mortgages made in 2005-2006 projected to end in foreclosure:

1 in 5



Proportion of subprime mortgages made from 2004 to 2006 that come with "exploding" adjustable interest rates: 89-93%


Proportion approved without fully documented income: 43-50%


Proportion with no escrow for taxes and insurance: 75%



Proportion of completed foreclosures attributable to adjustable rate loans out of all loans made in 2006 and bundled in subprime mortgage backed securities: 93%


Subprime share of all mortgage originations in 2006: 28%


Subprime share of all mortgage origination in 2003: 8%



Subprime share of all home loans outstanding:
14%


Subprime share of foreclosure filings in the 12 months ending June 30, 2007: 64%


The negative effects of subprime foreclosures are spreading.

Nearly 45 million homes NOT facing foreclosure will decline in value by an estimated $233 billion with most of the decline hitting in 2008 and 2009 as subprime foreclosures lower the prices of surrounding homes


Subprime foreclosures will rise even higher



A Snapshot of the Subprime Market





2/20/2008

Subprime loans defaulting even before resets



Many of these loans are defaulting well before their rates increase.

Defaults for subprime loans issued in 2007 - none of which have reset yet - hit 11.2 percent in November. That represents perhaps 300,000 households, and is twice the default rate that 2006 loans had 10 months after being issued, according to Friedman, Billings Ramsey analyst Michael Youngblood.

Defaults are spiking well before resets come into play thanks to the lax lending environment of the past few years. Many borrowers were approved for mortgages that they had little chance of affording, even at the low-interest teaser rates .

"I was rather shocked by the characteristics of the 2007 loans," said Youngblood.



For instance, in both 2006 and 2007, well over 40 percent of subprime borrowers were awarded mortgages with either little or no documentation of their ability to pay. With these so-called "liar loans," borrowers did not have to show proof of either earnings or assets.


The Residential Real Estate Crash Index | Stock Discussion Forums





In 2000, securitization vehicles (entities classified as asset
-backed security issuers and finance companies by the Federal Reserve) financed $572 billion in residential mortgages, equal to nearly 12% of all household mortgage debt outstanding. By the end of 2006, the volume of outstanding mortgages financed by PLS had grown to over $2.6 trillion, or more than 27% of all residential mortgage debt. The most explosive growth occurred in 2004 and 2005 when the outstanding mortgage debt financed by PLS increased by 49% and 44% respectively.


It is important to note that these growth rates reflect net annual changes in total mortgage debt; when refinancings of existing PLS - funded mortgages are included, the growth rates on gross PLS issuance during these years exceed 90%



http://business.gwu.edu/creua/research-papers/files/fannie-freddie.pdf




From 2001 to 2005, the dollar volume of subprime mortgages increased from $100 billion to $600 billion, while Alt - A mortgages grew from $25 billion to $400 billion over roughly the same period

Fair enough. Thanks for clarifying. And Bush's actions certainly did inflate the bubble further and faster.

Bush's actions?? Which ones exactly??

 

[Dad2three]

He identified a HOUSING bubble had happened, NOT Dubya's great subprime crisis



November 27, 2007

A Snapshot of the Subprime Market

Dollar amount of subprime loans outstanding:

2007 $1.3 trillion

Dollar amount of subprime loans outstanding in 2003: $332 billion

Percentage increase from 2003: 292%


Number of subprime mortgages made in 2005-2006 projected to end in foreclosure:

1 in 5



Proportion of subprime mortgages made from 2004 to 2006 that come with "exploding" adjustable interest rates: 89-93%


Proportion approved without fully documented income: 43-50%


Proportion with no escrow for taxes and insurance: 75%



Proportion of completed foreclosures attributable to adjustable rate loans out of all loans made in 2006 and bundled in subprime mortgage backed securities: 93%


Subprime share of all mortgage originations in 2006: 28%


Subprime share of all mortgage origination in 2003: 8%



Subprime share of all home loans outstanding:
14%


Subprime share of foreclosure filings in the 12 months ending June 30, 2007: 64%


The negative effects of subprime foreclosures are spreading.

Nearly 45 million homes NOT facing foreclosure will decline in value by an estimated $233 billion with most of the decline hitting in 2008 and 2009 as subprime foreclosures lower the prices of surrounding homes


Subprime foreclosures will rise even higher



A Snapshot of the Subprime Market





2/20/2008

Subprime loans defaulting even before resets



Many of these loans are defaulting well before their rates increase.

Defaults for subprime loans issued in 2007 - none of which have reset yet - hit 11.2 percent in November. That represents perhaps 300,000 households, and is twice the default rate that 2006 loans had 10 months after being issued, according to Friedman, Billings Ramsey analyst Michael Youngblood.

Defaults are spiking well before resets come into play thanks to the lax lending environment of the past few years. Many borrowers were approved for mortgages that they had little chance of affording, even at the low-interest teaser rates .

"I was rather shocked by the characteristics of the 2007 loans," said Youngblood.



For instance, in both 2006 and 2007, well over 40 percent of subprime borrowers were awarded mortgages with either little or no documentation of their ability to pay. With these so-called "liar loans," borrowers did not have to show proof of either earnings or assets.


The Residential Real Estate Crash Index | Stock Discussion Forums





In 2000, securitization vehicles (entities classified as asset
-backed security issuers and finance companies by the Federal Reserve) financed $572 billion in residential mortgages, equal to nearly 12% of all household mortgage debt outstanding. By the end of 2006, the volume of outstanding mortgages financed by PLS had grown to over $2.6 trillion, or more than 27% of all residential mortgage debt. The most explosive growth occurred in 2004 and 2005 when the outstanding mortgage debt financed by PLS increased by 49% and 44% respectively.


It is important to note that these growth rates reflect net annual changes in total mortgage debt; when refinancings of existing PLS - funded mortgages are included, the growth rates on gross PLS issuance during these years exceed 90%



http://business.gwu.edu/creua/research-papers/files/fannie-freddie.pdf




From 2001 to 2005, the dollar volume of subprime mortgages increased from $100 billion to $600 billion, while Alt - A mortgages grew from $25 billion to $400 billion over roughly the same period

Fair enough. Thanks for clarifying. And Bush's actions certainly did inflate the bubble further and faster.

Bush's actions?? Which ones exactly??

START here

http://www.usmessageboard.com/economy/362889-facts-on-dubya-s-great-recession.html#post9373464

 

[Toro]

It started in 1998 when the Fed cut interest rates to bail out Long-Term Capital Management. It probably started a few years before that when the Fed turned a blind eye to the Tech Bubble.

 

[Dad2three]

It started in 1998 when the Fed cut interest rates to bail out Long-Term Capital Management. It probably started a few years before that when the Fed turned a blind eye to the Tech Bubble.

Q When did the Bush Mortgage Bubble start?

A The general timeframe is it started late 2004.

From Bush’s President’s Working Group on Financial Markets October 2008

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”


A McKinsey Global Institute report noted “from 2000 through 2007, a remarkable run-up in global home prices occurred.”

November 27, 2007

A Snapshot of the Subprime Market



Dollar amount of subprime loans outstanding:

2007 $1.3 trillion

Dollar amount of subprime loans outstanding in 2003: $332 billion

Percentage increase from 2003: 292%



Proportion of subprime mortgages made from 2004 to 2006 that come with "exploding" adjustable interest rates: 89-93%




Subprime share of all mortgage originations in 2006: 28%


Subprime share of all mortgage origination in 2003: 8%