Failed Stimulus financial architect has "no idea" what happened to $1.2B

[Jarhead]

Question: Why would any bank intentionally loan money to somebody they know could never pay the money back?

Answer: CRA

There is an answer number 2.

Greed.

Most banks were aware that they would be able to sell the loans using Fannie and Freddie as clearinghouses.

 

[edthecynic]

Question: Why would any bank intentionally loan money to somebody they know could never pay the money back?

Answer: CRA

BULLSHIT!!!

CRA loans were to QUALIFIED minorities, it was Bush's ADDI that had as a requirement that the no down payment loan for more than the house was worth could be made to people with bad credit and who were buying into neighborhood that was at least 20% beyond their financial means!!!!!

American Dream Downpayment Initiative - Affordable Housing - CPD - HUD

Eligible Customers

To be eligible for ADDI assistance, individuals must be first-time homebuyers interested in purchasing single family housing. A first-time homebuyer is defined as an individual and his or her spouse who have not owned a home during the three-year period prior to the purchase of a home with ADDI assistance. ADDI funds may be used to purchase one- to four- family housing, condominium unit, cooperative unit, or manufactured housing. Additionally, individuals who qualify for ADDI assistance must have incomes not exceeding 80% of area median income.

 

[Soggy in NOLA]

Question: Why would any bank intentionally loan money to somebody they know could never pay the money back?

Answer: CRA

There is an answer number 2.

Greed.

Most banks were aware that they would be able to sell the loans using Fannie and Freddie as clearinghouses.

Yes, that is true.... my point is though, some seem to think that banks just couldn't wait to make interest only, $250,000 loans to people on a Stated Income/Stated Asset basis.

The fix was in thanks to provisions of the CRA, and the government had their backs via Freddie and Fannie.

 

[Truthmatters]

can you believe some fools are still saying the banks did no fraud?

 

[Jarhead]

can you believe some fools are still saying the banks did no fraud?

On the most part, the banks did not commit fraud. Sure, there are a few private lenders that may have KNOWINGLY sold loans that were bad...

But most of them may have questioned to themselves how all those loans could be good, but none intentionally sold bad loans.

Who committed the most amount of fraud?

The ones who signed 4 times per loan affidavits swearing to the accuracy and truthfulness of the information they offered...the borrowers.

 

[driveby]

Then why did none of the Bank CEOs have to go to jail when they cheated people in the mortgage fraud cases?

Why didn't Franklin Raines go to jail ?......

 

[Jarhead]

Then why did none of the Bank CEOs have to go to jail when they cheated people in the mortgage fraud cases?

Why didn't Franklin Raines go to jail ?......

10 to 1 she does not respond to that question.

 

[Soggy in NOLA]

can you believe some fools are still saying the banks did no fraud?

How is it fraud to loan somebody money when you spell out the details in a 10 page mortgage document that the borrower then signed?

 

[Claudette]

can you believe some fools are still saying the banks did no fraud?

How is it fraud to loan somebody money when you spell out the details in a 10 page mortgage document that the borrower then signed?

TDM never lets facts get in the way of her take on the evil money grubbing banks.

In her mind none of the folks who lied on their mortgage applications are to blame. Just the evil money grubbing banks for extending the loans.

Oh the CEO's of those banks are money grubbers as well.

They should all be in jail.

 

[8537]

Question: Why would any bank intentionally loan money to somebody they know could never pay the money back?

Answer: CRA

Wrong.

Answer: Because they could sell the loan immediately and pocket the commission.

CRA - regulated institutions originated less than 25% of subprimes.

 

[8537]

So you answered TM's question.

So should we also go after those that lied on the applications? (I say no...)

yes! We should also go after the people who encouraged people to sign false statements, the lenders who knowingly accepted false documents etc, the companies that robo-signed loans (Just because everyone else did it doesn't make it legal, despite Mozilo and others skating on such claims)

would you allow someone to enocurage you to lie on an affidavit.....4 times?

If a man goes up to another man and says..."go rob that bank...it is easy and and it will make you financially secure".....and the man robs the bank.....

Who is guilty of what?

No one robo signed loans......that is illegal.

No, seriously - banks have admitted to robo-signing.

http://www.usatoday.com/money/economy/housing/story/2011-12-07/Robo-signing-legal-Maine/51701460/1

(That's now called Ally) It's not illegal because all the banks were doing it. I'm only being 1/2 sarcastic - that was pretty much the finding.

 

[Mad Scientist]

Then why did none of the Bank CEOs have to go to jail when they cheated people in the mortgage fraud cases?

Because that would have indicted the politicians, and so they bailed the banks out.

Obama had a choice:

1. Bail out the Home Owners
2. Bail out the Banks

What he did is a matter of record.

No one robo signed loans......that is illegal.

Oh Lordy!