O....M....G....DJIA Hits 50,000 Another huge win for Trump

[markef]

Can you explain why big banks paid over $100+ BILLION in fines for what they did in the subprime bubble? Wouldn't they have fought in court IF they were forced to loan money to minorities?


The Republican-led Congress didn't pass a single bill with oversight of the GSE's between 2003 and 2006?


"(In 2000, CLINTON ) HUD restricted Freddie and Fannie, saying it would not credit them for loans they purchased that had abusively high costs or that were granted without regard to the borrower's ability to repay."

How HUD Mortgage Policy Fed The Crisis

"In 2004 (BUSH), the 2000 rules were dropped and high risk loans were again counted toward affordable housing goal

https://fcic-static.law.stanford.edu/cdn_media/fcic-docs/2008-06-10%20Washington%20Post%20How%20HUD%20Policy.pdf

Start with the most basic fact of all: virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie


That's right most subprime mortgages did not meet Fannie or Freddie's strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower's income or employment history?

All made in the private sector, without any support from Fannie and Freddie.

https://www.bloomberg.com/news/articles/2008-09-25/fannie-mae-and-freddie-mac-were-victims-not-culprits

No paywall from Bloomberg above

Fannie Mae and Freddie Mac were victims, not culprits​

https://archive.ph/ck3zM#selection-1171.0-1192.0

The Myth of Fannie Mae, Freddie Mac, Barney Frank, the Housing Bubble and the Recession​

The Myth of Fannie Mae, Freddie Mac, Barney Frank, the Housing Bubble and the Recession

Jeff Dunetz at Big Government must have passed the right-wing media journalism test. He follows in the same hollowed ethical standards as Andrew Breitbart himself, James O’Keefe and Kevin Pez…

thelonggoodbye.wordpress.com

The idea that they were leading this charge is just absurd said Guy Cecala, publisher of Inside Mortgage Finance, an authoritative trade publication. Fannie and Freddie have always had the tightest underwriting on earth They were opposite of subprime.

FactWatch: Fannie and Freddie were followers, not leaders, in mortgage frenzy – Center for Public Integrity

Ask many Americans who’s to blame for the nation’s economic mess, and two names come to mind: Fannie and Freddie. They see Fannie Mae and Freddie Mac as the villains of the financial crisis. GOP.gov, the official website for Republicans in the House of Representatives, says flatly: “Fannie Mae...

publicintegrity.org

In an op-ed piece in the Wall Street Journal, Lawrence B. Lindsey, a former economic adviser to President George W. Bush, wrote that Frank "is the only politician I know who has argued that we needed tighter rules that intentionally produce fewer homeowners and more renters."

SO IT TOOK 70 YEARS FOR 'LIB' INTERFERENCE TO CRASH THE GSE';s huh? lol

Private lenders not subject to congressional regulations collapsed lending standards.

....A 2008 analysis found that the nonbank underwriters made more than 12 million subprime mortgages with a value of nearly $2 trillion. The lenders who made these were exempt from federal regulations

https://www.mlive.com/opinion/muskegon/2011/11/guest_commentary_dissecting_th.html

Franklin Raines was one of the biggest beneficiaries of financial wrongdoing at Fannie Mae and yet he kept over $100 million in ill-gotten gains and the US government ended up forking over tens of millions more defending him and his co-conspirators in court.

https://www.nytimes.com/2009/09/06/business/economy/06gret.html

That year, the government sued Mr. Raines, Mr. Howard and Leanne Spencer, Fannie’s former controller, seeking $100 million in fines and $115 million in restitution from bonuses the government contended were not earned. Without admitting wrongdoing, Mr. Raines, Mr. Howard and Ms. Spencer paid $31.4 million in 2008 to settle the litigation.

When these top executives left Fannie, the company was obligated to cover the legal costs associated with shareholder suits brought against them in the wake of the accounting scandal.

Now those costs are ours. Between Sept. 6, 2008, and July 21, we taxpayers spent $2.43 million to defend Mr. Raines, $1.35 million for Mr. Howard, and $2.52 million to defend Ms. Spencer.

“I cannot see the justification of people who led these organizations into insolvency getting a free ride,” Mr. Grayson said. “It goes right to the heart of what people find most disturbing in this situation the absolute lack of justice.”

Lawyers for the three executives did not returns calls seeking comment.

An additional $16.8 million was paid in the period to cover legal expenses of workers at the Office of Federal Housing Enterprise Oversight, Fannie’s former regulator. These costs are associated with defending the regulator in litigation against former Fannie executives.

This tally of taxpayer legal costs took several months for Mr. Grayson to extract. On June 4, after Congressional hearings on the current and future status of Fannie and Freddie, he requested the information from the Federal Housing Finance Agency, now their regulator. He got its response on Aug. 26.

A spokeswoman for the agency said it would not comment for this article.

THE lawyers’ billable hours, meanwhile, keep piling up. As the F.H.F.A. explained to Mr. Grayson, the $6.3 million in costs generated by 10 months of legal defense work for Mr. Raines, Mr. Howard and Ms. Spencer includes not a single deposition for any of them. Instead, those bills covered 33 depositions of “other parties” relating to the shareholder suits and requiring the presence of the three executives’ counsel.

One of Mr. Grayson’s questions about these payments remains unanswered whether placing Fannie Mae into receivership, rather than conservatorship, would have negated the agreement to cover the former executives’ legal costs. Choosing conservatorship allowed Fannie to stabilize and meant that it was going to continue to operate, not wind down immediately.

But, Mr. Grayson pointed out: “If these companies had gone into receivership instead of conservatorship, the trustee in bankruptcy or the receiver would have been free, legally, to reject these contracts that called for indemnification. Raines, Howard and Spencer would have had to pay their own fees.”

When asked about this, Fannie’s regulator, the F.H.F.A., waffled. “Whether these costs could have been avoided would depend on the facts and circumstances surrounding any receivership,” it said. “It is possible that receiverships could have reduced the costs of the litigation, but by no means certain.”
Advertisement

 

[JonKoch]

Franklin Raines was one of the biggest beneficiaries of financial wrongdoing at Fannie Mae and yet he kept over $100 million in ill-gotten gains and the US government ended up forking over tens of millions more defending him and his co-conspirators in court.

https://www.nytimes.com/2009/09/06/business/economy/06gret.html

That year, the government sued Mr. Raines, Mr. Howard and Leanne Spencer, Fannie’s former controller, seeking $100 million in fines and $115 million in restitution from bonuses the government contended were not earned. Without admitting wrongdoing, Mr. Raines, Mr. Howard and Ms. Spencer paid $31.4 million in 2008 to settle the litigation.

When these top executives left Fannie, the company was obligated to cover the legal costs associated with shareholder suits brought against them in the wake of the accounting scandal.

Now those costs are ours. Between Sept. 6, 2008, and July 21, we taxpayers spent $2.43 million to defend Mr. Raines, $1.35 million for Mr. Howard, and $2.52 million to defend Ms. Spencer.

“I cannot see the justification of people who led these organizations into insolvency getting a free ride,” Mr. Grayson said. “It goes right to the heart of what people find most disturbing in this situation the absolute lack of justice.”

Lawyers for the three executives did not returns calls seeking comment.

An additional $16.8 million was paid in the period to cover legal expenses of workers at the Office of Federal Housing Enterprise Oversight, Fannie’s former regulator. These costs are associated with defending the regulator in litigation against former Fannie executives.

This tally of taxpayer legal costs took several months for Mr. Grayson to extract. On June 4, after Congressional hearings on the current and future status of Fannie and Freddie, he requested the information from the Federal Housing Finance Agency, now their regulator. He got its response on Aug. 26.

A spokeswoman for the agency said it would not comment for this article.

THE lawyers’ billable hours, meanwhile, keep piling up. As the F.H.F.A. explained to Mr. Grayson, the $6.3 million in costs generated by 10 months of legal defense work for Mr. Raines, Mr. Howard and Ms. Spencer includes not a single deposition for any of them. Instead, those bills covered 33 depositions of “other parties” relating to the shareholder suits and requiring the presence of the three executives’ counsel.

One of Mr. Grayson’s questions about these payments remains unanswered whether placing Fannie Mae into receivership, rather than conservatorship, would have negated the agreement to cover the former executives’ legal costs. Choosing conservatorship allowed Fannie to stabilize and meant that it was going to continue to operate, not wind down immediately.

But, Mr. Grayson pointed out: “If these companies had gone into receivership instead of conservatorship, the trustee in bankruptcy or the receiver would have been free, legally, to reject these contracts that called for indemnification. Raines, Howard and Spencer would have had to pay their own fees.”

When asked about this, Fannie’s regulator, the F.H.F.A., waffled. “Whether these costs could have been avoided would depend on the facts and circumstances surrounding any receivership,” it said. “It is possible that receiverships could have reduced the costs of the litigation, but by no means certain.”
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So NO you can't refute F/F and CRA had NOTHING to do with Dubya's cheering on the Banksters subprime bubble. That Barney Frank, minority member of the GOP majority House 1995-Jan 2007 couldn't stop a single GOP bill if he was nekkid and on fire.

But yes, Dubya FORCING F/F to buy $440 BILLION in MBS's to meet his "housing goals" and F/F chasing the private sector who was the primary driver of Dubya's bubble, to a race to the bottom.

NEXT

 

[JonKoch]

Franklin Raines was one of the biggest beneficiaries of financial wrongdoing at Fannie Mae and yet he kept over $100 million in ill-gotten gains and the US government ended up forking over tens of millions more defending him and his co-conspirators in court.

https://www.nytimes.com/2009/09/06/business/economy/06gret.html

That year, the government sued Mr. Raines, Mr. Howard and Leanne Spencer, Fannie’s former controller, seeking $100 million in fines and $115 million in restitution from bonuses the government contended were not earned. Without admitting wrongdoing, Mr. Raines, Mr. Howard and Ms. Spencer paid $31.4 million in 2008 to settle the litigation.

When these top executives left Fannie, the company was obligated to cover the legal costs associated with shareholder suits brought against them in the wake of the accounting scandal.

Now those costs are ours. Between Sept. 6, 2008, and July 21, we taxpayers spent $2.43 million to defend Mr. Raines, $1.35 million for Mr. Howard, and $2.52 million to defend Ms. Spencer.

“I cannot see the justification of people who led these organizations into insolvency getting a free ride,” Mr. Grayson said. “It goes right to the heart of what people find most disturbing in this situation the absolute lack of justice.”

Lawyers for the three executives did not returns calls seeking comment.

An additional $16.8 million was paid in the period to cover legal expenses of workers at the Office of Federal Housing Enterprise Oversight, Fannie’s former regulator. These costs are associated with defending the regulator in litigation against former Fannie executives.

This tally of taxpayer legal costs took several months for Mr. Grayson to extract. On June 4, after Congressional hearings on the current and future status of Fannie and Freddie, he requested the information from the Federal Housing Finance Agency, now their regulator. He got its response on Aug. 26.

A spokeswoman for the agency said it would not comment for this article.

THE lawyers’ billable hours, meanwhile, keep piling up. As the F.H.F.A. explained to Mr. Grayson, the $6.3 million in costs generated by 10 months of legal defense work for Mr. Raines, Mr. Howard and Ms. Spencer includes not a single deposition for any of them. Instead, those bills covered 33 depositions of “other parties” relating to the shareholder suits and requiring the presence of the three executives’ counsel.

One of Mr. Grayson’s questions about these payments remains unanswered whether placing Fannie Mae into receivership, rather than conservatorship, would have negated the agreement to cover the former executives’ legal costs. Choosing conservatorship allowed Fannie to stabilize and meant that it was going to continue to operate, not wind down immediately.

But, Mr. Grayson pointed out: “If these companies had gone into receivership instead of conservatorship, the trustee in bankruptcy or the receiver would have been free, legally, to reject these contracts that called for indemnification. Raines, Howard and Spencer would have had to pay their own fees.”

When asked about this, Fannie’s regulator, the F.H.F.A., waffled. “Whether these costs could have been avoided would depend on the facts and circumstances surrounding any receivership,” it said. “It is possible that receiverships could have reduced the costs of the litigation, but by no means certain.”
Advertisement

The evidence indicates Fannie and Freddie contributed to the mortgage meltdown, but they played a secondary role to Wall Street. Wall Street firms and the mortgage lenders they bankrolled led the growth of the market for subprime loans and other risky mortgages.

Government data shows Fannie and Freddie didn’t take the same risks that Wall Street’s mortgage-backed securities machine did. Mortgages financed by Wall Street from 2001 to 2008 were 4½ times more likely to be seriously delinquent than mortgages backed by Fannie and Freddie
Some 6 percent of Fannie and Freddie-sponsored loans made during that span were 90 days late at some point in their history, according to Fannie and Freddie’s regulator, the Federal Housing Finance Agency. By contrast, the FHFA says, roughly 27 percent of loans that Wall Street folded into mortgage-backed investments were at least 90 days late at some point.



“The idea that they were leading this charge is just absurd,” says Guy Cecala, publisher of Inside Mortgage Finance, an authoritative trade publication. “Fannie and Freddie have always had the tightest underwriting on earth. … They were opposite of subprime.”

FactWatch: Fannie and Freddie were followers, not leaders, in mortgage frenzy – Center for Public Integrity

Ask many Americans who’s to blame for the nation’s economic mess, and two names come to mind: Fannie and Freddie. They see Fannie Mae and Freddie Mac as the villains of the financial crisis. GOP.gov, the official website for Republicans in the House of Representatives, says flatly: “Fannie Mae...

publicintegrity.org

 

[markef]

READ YOUR DAMN LINKS, HE DOESN'T APOLOGIZE, YOUR LINK

"Frank says such people are the victims, not the cause."

You are right. While admitting he made mistakes he never took any responsibility for lobbying Congress to turn a blind eye to what was going on at Fannie Mae.

Barney Frank’s Corruption Scandals Caught Up To Him - Judicial Watch

While much of the mainstream media seems to blame conservatives in Congress for driving liberal Democrat Barney Frank—a two-time Judicial Watch Most Wanted Corrupt Politician—out of office, the truth is that a number of corruption scandals have probably caught up with the veteran Massachusetts...

www.judicialwatch.org

The reality is that Frank, the powerful chairman of the House Financial Services Committee, has been embroiled in two of the largest financial scandals in recent history. The first is the collapse of government-sponsored Fannie Mae and Freddie Mack, which triggered the nation’s financial crisis. Judicial Watch obtained internal government documents proving that members of Congress, including — and perhaps especially — Frank, were well aware that Fannie and Freddie were in deep trouble due to corruption and incompetence and yet they did nothing to stop it.

 

[markef]

So no you can't read OR critically think? Hint


ONE MORE TIME

In the rest of the world? TRY TO THINK. I've posted several times

WORLD WIDE CREDIT BUBBLE AND BUST. Housing prices in Spain, Germany, Russia, China, etc EXPLODED because of this new thing called CDO'S AND MBS (not so new) they bundled and sold as AAA rated. Housing prices doubled in the world in 7 years. CONGRESS? LOL

CONGRESS MANDATED HOUSING PRICES DOUBLING IN 7 YEARS IN CHINA, RUSSIA, IRELAND, SPAIN, ETC? lol

Banks all over the world suffered the same fate as US banks because they bought MBS securities that ended up practically worthless due to the stupidity of the mortgage lending schemes opened up in 1999 and 2000 by Bill Clinton and the democrats.

 

[JonKoch]

Franklin Raines was one of the biggest beneficiaries of financial wrongdoing at Fannie Mae and yet he kept over $100 million in ill-gotten gains and the US government ended up forking over tens of millions more defending him and his co-conspirators in court.

https://www.nytimes.com/2009/09/06/business/economy/06gret.html

That year, the government sued Mr. Raines, Mr. Howard and Leanne Spencer, Fannie’s former controller, seeking $100 million in fines and $115 million in restitution from bonuses the government contended were not earned. Without admitting wrongdoing, Mr. Raines, Mr. Howard and Ms. Spencer paid $31.4 million in 2008 to settle the litigation.

When these top executives left Fannie, the company was obligated to cover the legal costs associated with shareholder suits brought against them in the wake of the accounting scandal.

Now those costs are ours. Between Sept. 6, 2008, and July 21, we taxpayers spent $2.43 million to defend Mr. Raines, $1.35 million for Mr. Howard, and $2.52 million to defend Ms. Spencer.

“I cannot see the justification of people who led these organizations into insolvency getting a free ride,” Mr. Grayson said. “It goes right to the heart of what people find most disturbing in this situation the absolute lack of justice.”

Lawyers for the three executives did not returns calls seeking comment.

An additional $16.8 million was paid in the period to cover legal expenses of workers at the Office of Federal Housing Enterprise Oversight, Fannie’s former regulator. These costs are associated with defending the regulator in litigation against former Fannie executives.

This tally of taxpayer legal costs took several months for Mr. Grayson to extract. On June 4, after Congressional hearings on the current and future status of Fannie and Freddie, he requested the information from the Federal Housing Finance Agency, now their regulator. He got its response on Aug. 26.

A spokeswoman for the agency said it would not comment for this article.

THE lawyers’ billable hours, meanwhile, keep piling up. As the F.H.F.A. explained to Mr. Grayson, the $6.3 million in costs generated by 10 months of legal defense work for Mr. Raines, Mr. Howard and Ms. Spencer includes not a single deposition for any of them. Instead, those bills covered 33 depositions of “other parties” relating to the shareholder suits and requiring the presence of the three executives’ counsel.

One of Mr. Grayson’s questions about these payments remains unanswered whether placing Fannie Mae into receivership, rather than conservatorship, would have negated the agreement to cover the former executives’ legal costs. Choosing conservatorship allowed Fannie to stabilize and meant that it was going to continue to operate, not wind down immediately.

But, Mr. Grayson pointed out: “If these companies had gone into receivership instead of conservatorship, the trustee in bankruptcy or the receiver would have been free, legally, to reject these contracts that called for indemnification. Raines, Howard and Spencer would have had to pay their own fees.”

When asked about this, Fannie’s regulator, the F.H.F.A., waffled. “Whether these costs could have been avoided would depend on the facts and circumstances surrounding any receivership,” it said. “It is possible that receiverships could have reduced the costs of the litigation, but by no means certain.”
Advertisement

Look at the numbers. While the credit bubble was peaking from 2003 to 2006, the amount of loans originated by Fannie and Freddie dropped from $2.7 trillion to $1 trillion. Meanwhile, in the private sector, the amount of subprime loans originated jumped to $600 billion from $335 billion and Alt-A loans hit $400 billion from $85 billion in 2003. Fannie and Freddie, which wouldn’t accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity.

https://archive.ph/ck3zM#selection-1485.0-1485.507

 

[JonKoch]

Banks all over the world suffered the same fate as US banks because they bought MBS securities that ended up practically worthless due to the stupidity of the mortgage lending schemes opened up in 1999 and 2000 by Bill Clinton and the democrats.

Got it, you are to dumb to critically THINK. Hint I said nothing about them BUYING CDO's or MBS's BUT THE PRICES OF THEIR HOMES DOUBLING IN 7 YEARS, WORLD WIDE? Clinton? Congress? lmaorog

 

[JonKoch]

You are right. While admitting he made mistakes he never took any responsibility for lobbying Congress to turn a blind eye to what was going on at Fannie Mae.

Barney Frank’s Corruption Scandals Caught Up To Him - Judicial Watch

While much of the mainstream media seems to blame conservatives in Congress for driving liberal Democrat Barney Frank—a two-time Judicial Watch Most Wanted Corrupt Politician—out of office, the truth is that a number of corruption scandals have probably caught up with the veteran Massachusetts...

www.judicialwatch.org

The reality is that Frank, the powerful chairman of the House Financial Services Committee, has been embroiled in two of the largest financial scandals in recent history. The first is the collapse of government-sponsored Fannie Mae and Freddie Mack, which triggered the nation’s financial crisis. Judicial Watch obtained internal government documents proving that members of Congress, including — and perhaps especially — Frank, were well aware that Fannie and Freddie were in deep trouble due to corruption and incompetence and yet they did nothing to stop it.

Yep, he took that over in Jan 2007 AFTER Dubya had cheered on the Banksters world wide credit bubble, lol

Get a brain

 

[markef]

So the $100 BILLION banks paid in fines? Nothing? They just step up and give Gov't money after Gov't FORCED them to loan to people without proof of income, no credit checks, no jobs, etc?

It is clear to me that since the democrats protected Franklin Raines, one of their own and one of the dirtiest bankers participating in the failed banking schemes that brought down Wall Street in 2008, their denials of responsibility for the collapse was a lie.

 

[markef]

So NO you can't refute F/F and CRA had NOTHING to do with Dubya's cheering on the Banksters subprime bubble. That Barney Frank, minority member of the GOP majority House 1995-Jan 2007 couldn't stop a single GOP bill if he was nekkid and on fire.

But yes, Dubya FORCING F/F to buy $440 BILLION in MBS's to meet his "housing goals" and F/F chasing the private sector who was the primary driver of Dubya's bubble, to a race to the bottom.

NEXT

It is foolish to claim individual transactions under the seriously damaged new mortgage banking rules were responsible for the collapse while denying the very bad newly modified lending rules were themselves responsible for the inevitable collapse.

 

[markef]

The evidence indicates Fannie and Freddie contributed to the mortgage meltdown, but they played a secondary role to Wall Street. Wall Street firms and the mortgage lenders they bankrolled led the growth of the market for subprime loans and other risky mortgages.

Government data shows Fannie and Freddie didn’t take the same risks that Wall Street’s mortgage-backed securities machine did. Mortgages financed by Wall Street from 2001 to 2008 were 4½ times more likely to be seriously delinquent than mortgages backed by Fannie and Freddie
Some 6 percent of Fannie and Freddie-sponsored loans made during that span were 90 days late at some point in their history, according to Fannie and Freddie’s regulator, the Federal Housing Finance Agency. By contrast, the FHFA says, roughly 27 percent of loans that Wall Street folded into mortgage-backed investments were at least 90 days late at some point.



“The idea that they were leading this charge is just absurd,” says Guy Cecala, publisher of Inside Mortgage Finance, an authoritative trade publication. “Fannie and Freddie have always had the tightest underwriting on earth. … They were opposite of subprime.”

FactWatch: Fannie and Freddie were followers, not leaders, in mortgage frenzy – Center for Public Integrity

Ask many Americans who’s to blame for the nation’s economic mess, and two names come to mind: Fannie and Freddie. They see Fannie Mae and Freddie Mac as the villains of the financial crisis. GOP.gov, the official website for Republicans in the House of Representatives, says flatly: “Fannie Mae...

publicintegrity.org

You mentioned that most bankers involved in the collapse were forced to pay back billions of dollars gained in the risky transactions but ignored the fact that for some reason Franklin Raines had to pay back very little. Raines was even given legal representation and tens of millions of dollars for legal costs to fight the charges against him for cooking the books at Fannie Mae that generated for him tens of millions of dollars. He was allowed to keep his ill-gotten gaines and avoid prison because of Obama's backing.

 

[markef]

Look at the numbers. While the credit bubble was peaking from 2003 to 2006, the amount of loans originated by Fannie and Freddie dropped from $2.7 trillion to $1 trillion. Meanwhile, in the private sector, the amount of subprime loans originated jumped to $600 billion from $335 billion and Alt-A loans hit $400 billion from $85 billion in 2003. Fannie and Freddie, which wouldn’t accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity.

https://archive.ph/ck3zM#selection-1485.0-1485.507

Banking experts were misled by the government's promise that Fannie and Freddie would back risky loans and that encouraged banks to continue making loans that they knew were in great danger of failing in large numbers. When the MBS's went bad the government reneged on providing the help the bankers had assumed would be given.

 

[JonKoch]

It is clear to me that since the democrats protected Franklin Raines, one of their own and one of the dirtiest bankers participating in the failed banking schemes that brought down Wall Street in 2008, their denials of responsibility for the collapse was a lie.

Major Subprime and Mortgage-Related Fines



Bank of America has paid over $56 billion in various settlements, most notably a record $16.65 billion deal in 2014 with the U.S. Department of Justice to resolve toxic mortgage-backed securities fraud.



JPMorgan Chase has paid over $38 billion in fines for various regulatory violations since 2000, with over $27 billion specifically tied to misconduct related to the 2008 financial crisis, including toxic mortgage-backed securities. Major settlements included a record $13 billion deal in 2013, with ongoing penalties for subsequent trading misconduct.



SO THE GOV'T FORCED THEM, AND THEY JUST PAY BILLIONS IN FINES VS GOING TO COURT? LMAOROG

 

[JonKoch]

It is foolish to claim individual transactions under the seriously damaged new mortgage banking rules were responsible for the collapse while denying the very bad newly modified lending rules were themselves responsible for the inevitable collapse.

Nah, you need to go back to school Cupcake

The Gov't didn't force BANKS (mainly mortgage companies actually did like 90% of the subprime then, NOT required to use CRA or other type). DUBYA however, FORCED F/F to buy $440 BILLION IN MBS'S to meet HIS new housing goals, removing Clinton's 2000 RULE that didn't allow subprime mortgages to count towards the goals. SEE THE DIFFERENCE? Probably not

 

[JonKoch]

Banking experts were misled by the government's promise that Fannie and Freddie would back risky loans and that encouraged banks to continue making loans that they knew were in great danger of failing in large numbers. When the MBS's went bad the government reneged on providing the help the bankers had assumed would be given.

"Banking experts were misled by the government's promise that Fannie and Freddie would back risky loans"


LMAOROG. Gawd right wingers are stoopid

Look at the numbers. While the credit bubble was peaking from 2003 to 2006, the amount of loans originated by Fannie and Freddie dropped from $2.7 trillion to $1 trillion.


Meanwhile, in the private sector, the amount of subprime loans originated jumped to $600 billion from $335 billion and Alt-A loans hit $400 billion from $85 billion in 2003. Fannie and Freddie, which wouldn’t accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity.


There’s a must-read study by staff members of the Federal Reserve Bank of New York analyzing the roots of the subprime crisis that came out in March. I don’t think it got much attention then as the conclusions seemed uncontroversial at the time. But now that Washington politicians are trying to rewrite history, it should be mandatory reading for every American interested in knowing how we got here.

The study identifies five causes of the subprime meltdown:

-Convoluted loan products that consumers didn’t understand.

-Credit ratings that didn’t do a good job highlighting the risks contained in subprime-backed securities.

-Lack of incentives for institutional investors to do their own research (they just relied on the credit ratings).

-Predatory lending and borrowing (which I think means fraud perpetrated by borrowers).


-Significant errors in the models used by credit rating agencies to assess subprime-backed securities.


You’ll note in the Fed’s five causes that there’s some culpability for lenders, borrowers, investors and credit raters. There’s no blame for Freddie Mac or Fannie Mae which had little or nothing to do with the entire situation.
It’s certainly fair to criticize Fannie and Freddie over real issues that contributed to their downfall.

https://archive.ph/ck3zM#selection-1507.0-1507.105

 

[markef]

Got it, you are to dumb to critically THINK. Hint I said nothing about them BUYING CDO's or MBS's BUT THE PRICES OF THEIR HOMES DOUBLING IN 7 YEARS, WORLD WIDE? Clinton? Congress? lmaorog

When the floodgate opened as a result of the 2000 banking deregulation bills people with low or no credit could buy a home with little down and deferred or graduated interest payments. That drove millions of new home buyers into the real estate market and that rise in numbers of buyers drove home prices up significantly. Later when the economy staggered and the interest on the homeowners' payments began to rise the new home owners began defaulting on their mortgages in massive numbers, which precipitated the collapse.

The problem was not that the prices of homes went up on existing mortgages but that the pre-arranged interest payments on existing mortgages went up and that resulted in floods of repossessed homes which drove property values down. When property values fell borrowers found they were making payments on homes that were far below the original loan value of their mortgages, so they simply quit making payments. Hundreds of mortgage-backed securities with tens of thousands of worthless mortgages plunged the world banks into disaster.

 

[JonKoch]

You mentioned that most bankers involved in the collapse were forced to pay back billions of dollars gained in the risky transactions but ignored the fact that for some reason Franklin Raines had to pay back very little. Raines was even given legal representation and tens of millions of dollars for legal costs to fight the charges against him for cooking the books at Fannie Mae that generated for him tens of millions of dollars. He was allowed to keep his ill-gotten gaines and avoid prison because of Obama's backing.

Just more right wing noise. I'm shocked


Conservatives sang a different tune before the crash: Conservative think tanks spent the 2000s saying the exact opposite of what they are saying now



My personal favorite is Cato's

"Should CRA Stand for Community Redundancy Act? from 2000 (here's a write-up by James Kwak), which argues a position amplified in its 2003 Handbook for Congress financial deregulation chapter: "by increasing the costs to banks of doing business in distressed communities, the CRA makes banks likely to deny credit to marginal borrowers that would qualify for credit if costs were not so high."





Bill Black went through what AEI said about the GSEs during the 2000s and it is the same thing that they were blocking subprime loans from being made. In the words of Peter Wallison (AEI CON) 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."


THAT'S THE SAME WALLISON THAT WAS THE ONLY GOP MEMBER OF THE FINANCIAL CRISIS COMMITTEE, THAT BLAMED GOV'T FOR FORCING BANKS TO LOAN TO THE MINORITIES, LOL

 

[markef]

Yep, he took that over in Jan 2007 AFTER Dubya had cheered on the Banksters world wide credit bubble, lol

Get a brain

You claim but do not prove that Bush cheered on evil bankers to do what they had already been doing for years as a result of the banking deregulations under Clinton.

 

[markef]

Major Subprime and Mortgage-Related Fines



Bank of America has paid over $56 billion in various settlements, most notably a record $16.65 billion deal in 2014 with the U.S. Department of Justice to resolve toxic mortgage-backed securities fraud.



JPMorgan Chase has paid over $38 billion in fines for various regulatory violations since 2000, with over $27 billion specifically tied to misconduct related to the 2008 financial crisis, including toxic mortgage-backed securities. Major settlements included a record $13 billion deal in 2013, with ongoing penalties for subsequent trading misconduct.



SO THE GOV'T FORCED THEM, AND THEY JUST PAY BILLIONS IN FINES VS GOING TO COURT? LMAOROG

And yet Franklin Raines kept over $100 million he made cooking the books at Fannie Mae. I see a huge disparity between what he was not required to do compared to what so many others were required to do. Can we assume that it may have had something to do with the fact that Raines was black and the others were white under the Obama Justice Department?

 

[JonKoch]

When the floodgate opened as a result of the 2000 banking deregulation bills people with low or no credit could buy a home with little down and deferred or graduated interest payments. That drove millions of new home buyers into the real estate market and that rise in numbers of buyers drove home prices up significantly. Later when the economy staggered and the interest on the homeowners' payments began to rise the new home owners began defaulting on their mortgages in massive numbers, which precipitated the collapse.

The problem was not that the prices of homes went up on existing mortgages but that the pre-arranged interest payments on existing mortgages went up and that resulted in floods of repossessed homes which drove property values down. When property values fell borrowers found they were making payments on homes that were far below the original loan value of their mortgages, so they simply quit making payments. Hundreds of mortgage-backed securities with tens of thousands of worthless mortgages plunged the world banks into disaster.

Gawd how stoopid are you righties?




"Jun 16, 2005

According to estimates by The Economist, the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries' combined GDPs"


But YES, Dubya took a $1 trillion a year mortgage market at THE END OF 2000 AND PUSHED IT TO $4 TRILLION A YEAR BY 2004!

The real surge in the mortgage market began in 2001 (the year of the stock market crash). From 2000 -2004, residential originations the U.S. climbed from about $1trillion to almost $4 trillion.

About 70% of this rise was accounted for by people refinancing their conventional mortgages at lower interest rates
http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf



HOUSEHOLD DEBT DOUBLED IN DUBYA'S FIRST 7 YEARS ALSO!!!!

Thread 'FACTS on Dubya's great recession'

Jul 2, 2014

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...

• Dad2three
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• Forum: Economy

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