The Real Causes Of The Great Recession

[LogikAndReazon]

We can thank progressives for that lightening fast "recovery"....

Stimulus, spending and massive debt, for growth ! Lol

 

[Wry Catcher]

Sorry, that's no excuse. Bush was The President and we need to evaluate any president on what they did or did not do, not on what they say.

Dem's in congress block Bush repeated efforts to deal with the problem and you blame Bush? That sounds about typical for dishonest Democrats.

Wall Street wanted to limit the GSE's portfolios so it could get more market share. Bush, acting as Wall Street's *****, tried to get the GSEs portfolios capped. The Democrats stopped this plan.

No one was acting out of pure motives.

No one.

I blame everyone for the housing bubble, Rep's, Dem's, and the foolish citizens who purchased more home than they could afford, took out 2nd mortgages and spent like there's no tomorrow. What I have a problem with is lying scum Democrats in congress who acted like they had nothing to do with the whole mess. I have never seen such a group of snakes as Democrats.

Can you name a single politician that has accepted responsibility for any of the problems our nation experiences?

The real victims of the housing bubble? The banks. Yes, the banks. They were threatened by the government if they did not show "equality" in lending and were forced to write loans to those that would likely default....

And then, of course, there were the ARM loans...people loved the idea of refinancing, taking a mess of cash out, and having their payments LOWERED for 5 years....and they all believed they would be able to refinance when the ARM expired....so they spent the cash out, had a field day....and then their LTV's changed for the worse, and they couldn't refinance...their rates shot up to prime plus whatever, and they couldn't afford it.

But they lived the high life for 5 years.....and now they are...dare I say.....VICTIMS of their own greed.

It does not take rocket science to understand what really took place.

No it doesn't. Sales (and that is what the banks engaged in) is to get someone to buy to benefit the seller, rarely the buyer. Telling someone who is not familiar with the process the broker/banker tandem convinced the unsophisticated buyer that the home they want is really affordable. Simply sign here, and here and here and here (as anyone who has ever secured a loan understands, even when they don't really understand what they are signing) and come back in five years and we'll refinance the loan, or you can sell the home and make a huge profit.

Hell, the banker had nice suit and a great smile, and the broker drove a new and shiny SUV when they looked at the home that could be theirs. They were assured the price of the home they looked at would continue to more expensive if they didn't act now, and in the future they could use the rising value to fund their retirement or even buy that vacation home in the mountains.

 

[BluesLegend]

Sorry, that's no excuse. Bush was The President and we need to evaluate any president on what they did or did not do, not on what they say.

Dem's in congress block Bush repeated efforts to deal with the problem and you blame Bush? That sounds about typical for dishonest Democrats.

Wall Street wanted to limit the GSE's portfolios so it could get more market share. Bush, acting as Wall Street's *****, tried to get the GSEs portfolios capped. The Democrats stopped this plan.

No one was acting out of pure motives.

No one.

I blame everyone for the housing bubble, Rep's, Dem's, and the foolish citizens who purchased more home than they could afford, took out 2nd mortgages and spent like there's no tomorrow. What I have a problem with is lying scum Democrats in congress who acted like they had nothing to do with the whole mess. I have never seen such a group of snakes as Democrats.

Can you name a single politician that has accepted responsibility for any of the problems our nation experiences?

The real victims of the housing bubble? The banks. Yes, the banks. They were threatened by the government if they did not show "equality" in lending and were forced to write loans to those that would likely default....

And then, of course, there were the ARM loans...people loved the idea of refinancing, taking a mess of cash out, and having their payments LOWERED for 5 years....and they all believed they would be able to refinance when the ARM expired....so they spent the cash out, had a field day....and then their LTV's changed for the worse, and they couldn't refinance...their rates shot up to prime plus whatever, and they couldn't afford it.

But they lived the high life for 5 years.....and now they are...dare I say.....VICTIMS of their own greed.

It does not take rocket science to understand what really took place.

As soon as government took the risk out of sub-prime loans many banks piled on to cash in running non-stop ads, its not like they were dragged into this kicking and screaming.

 

[BluesLegend]

Sorry, that's no excuse. Bush was The President and we need to evaluate any president on what they did or did not do, not on what they say.

Dem's in congress block Bush repeated efforts to deal with the problem and you blame Bush? That sounds about typical for dishonest Democrats.

What repeated efforts?

Was a bill drafted and never put to an up or down vote?

Did President Bush stand before The Congress during a State of the Union Address and let the American People and their members of Congress know that the state of our economy was at risk?

Did President Bush send out his Sect. of the Treasury and other economic advisers to warn the American people to beware (with a similar warning of mushroom clouds in boardrooms)?

Did President Bush raise taxes to pay for the war on terror (Homeland Security and the invasion and occupation of Iraq)?

Did he ask the Attorney General to investigate potential abuses of the CRA (or was the AG too busy vetting the religious bent of possible US Attorney's with the help of Monica Goodling

LMAO...

Did bush make congress do their job"?

No. I guess he could have done better at that.

But as a result, it sure as hell aint congresses fault.

Hey sparky...congress was not a bunch of children. They were a bunch of well paid well educated adults who promised to do a good job if they were elected.

But hey...its not their fault.....Big Daddy did not make them do their job.

Do you not see how your obsession with the failures of Bush has clouded your judgment?

Nothing is as simple as Democrats want it to be, lets also remember the Democratic controlled congress was holding funding for the wars over Bush head to get what they wanted.

 

[candycorn]

Yes I think we are all well aware of your Bush obsession. lol

The bubble and the crash happened on his watch.

The OP is a pathetic attempt to retroactively blame the crash on Obama, which is as insanely laughable as it gets.

The OP is pointing out government's responsibility for enabling the mess in the first place. This stretches back to the Clinton administration and yes Bush has some responsibility as well. Obviously this mess wasn't Obama's fault as president, he has some responsibility as a participant in enabling the mess that's what the OP has documented, but so do millions of Americans. What I have a problem with is Democrats acting like they are clean as a fresh winter snow when they were hip deep in this mess.

An uncontrollable carom into the truth.

 

[Jarhead]

Sorry, that's no excuse. Bush was The President and we need to evaluate any president on what they did or did not do, not on what they say.

Dem's in congress block Bush repeated efforts to deal with the problem and you blame Bush? That sounds about typical for dishonest Democrats.

Wall Street wanted to limit the GSE's portfolios so it could get more market share. Bush, acting as Wall Street's *****, tried to get the GSEs portfolios capped. The Democrats stopped this plan.

No one was acting out of pure motives.

No one.

I blame everyone for the housing bubble, Rep's, Dem's, and the foolish citizens who purchased more home than they could afford, took out 2nd mortgages and spent like there's no tomorrow. What I have a problem with is lying scum Democrats in congress who acted like they had nothing to do with the whole mess. I have never seen such a group of snakes as Democrats.

Can you name a single politician that has accepted responsibility for any of the problems our nation experiences?

The real victims of the housing bubble? The banks. Yes, the banks. They were threatened by the government if they did not show "equality" in lending and were forced to write loans to those that would likely default....

And then, of course, there were the ARM loans...people loved the idea of refinancing, taking a mess of cash out, and having their payments LOWERED for 5 years....and they all believed they would be able to refinance when the ARM expired....so they spent the cash out, had a field day....and then their LTV's changed for the worse, and they couldn't refinance...their rates shot up to prime plus whatever, and they couldn't afford it.

But they lived the high life for 5 years.....and now they are...dare I say.....VICTIMS of their own greed.

It does not take rocket science to understand what really took place.

No it doesn't. Sales (and that is what the banks engaged in) is to get someone to buy to benefit the seller, rarely the buyer. Telling someone who is not familiar with the process the broker/banker tandem convinced the unsophisticated buyer that the home they want is really affordable. Simply sign here, and here and here and here (as anyone who has ever secured a loan understands, even when they don't really understand what they are signing) and come back in five years and we'll refinance the loan, or you can sell the home and make a huge profit.

Hell, the banker had nice suit and a great smile, and the broker drove a new and shiny SUV when they looked at the home that could be theirs. They were assured the price of the home they looked at would continue to more expensive if they didn't act now, and in the future they could use the rising value to fund their retirement or even buy that vacation home in the mountains.

In a nutshell, people signed without knowing what they are signing. I have attended thousands of closings.....whereas it is rare that an attorney is present at a refinance closing, I don't EVER recall an attorney not being involved in a purchase.....an attorney drafts the contract, goes back and forth with the opposing attorney as it pertains to minor particulars; reviews the settlement statement (HUD) prior to the closing, and then explains the documents to the client as they sign.

You are making it something it never was...it was not a broker/banker versus an uneducated victim.

The uneducated "victim" had the advantage of legal counsel.

 

[Dad2three]

I guess Bush should have used the same dictatorial power that Obama has used and done it all on his lonesome. Silly him for trying to follow the COTUS.

"Another form of easing facilitated the rapid rise of mortgages that didn't require borrowers to fully document their incomes. In 2006, these low- or no-doc loans comprised 81 percent of near-prime, 55 percent of jumbo, 50 percent of subprime and 36 percent of prime securitized mortgages."

Q HOLY JESUS! DID YOU JUST PROVE THAT OVER 50 % OF ALL MORTGAGES IN 2006 DIDN'T REQUIRE BORROWERS TO DOCUMENT THEIR INCOME?!?!?!?

A Yes.




Q WHO THE HELL LOANS HUNDREDS OF THOUSANDS OF DOLLARS TO PEOPLE WITHOUT CHECKING THEIR INCOMES?!?!?

A Banks.

Q WHY??!?!!!?!

A Two reasons, greed and Bush's regulators let them.


Bush's documented policies and statements in timeframe leading up to the start of the Bush Mortgage Bubble include (but not limited to)

Wanting 5.5 million more minority homeowners
Tells congress there is nothing wrong with GSEs
Pledging to use federal policy to increase home ownership
Routinely taking credit for the housing market
Forcing GSEs to buy more low income home loans by raising their Housing Goals
Lowering Invesntment banks capital requirements, Net Capital rule
Reversing the Clinton rule that restricted GSEs purchases of subprime loans
Lowering down payment requirements to 0%
Forcing GSEs to spend an additional $440 billion in the secondary markets
Giving away 40,000 free down payments
PREEMPTING ALL STATE LAWS AGAINST PREDATORY LENDING


But the biggest policy was regulators not enforcing lending standards.

FACTS on Dubya s great recession US Message Board - Political Discussion Forum

 

[bendog]

I agree, but even Slick has acknowledged that he should not have gone along with repeal of Glass Segal,

Right there it is. When I wrote loans, all the LO's I worked with were wanting Slick to veto that bit of legislation.
But he didn't and the door was opened and greed ruled the day. The rest is history. Revisionist history in some cases.

I believe slick was looking to appease the Republicans pushing this repeal because Clinton knew he needed some slack for his actions and he bought that by signing that bill.

yeah, I think the evidence is clear that Slick was more than willing to repeal Glass Steagall. It's true that he got the CRA language, which the faux conservative latch onto as a bogus Reichstag reason for the entire thing (yes, the poor really did bring down Lehman Bros, of course the did Scarlett), but the dems were raising more money from Wall St than the gop. Rubin was the spear carrier for the repeal folks.

And Hill isn't gonna support Liz Warren.

 

[mudwhistle]

Yes I think we are all well aware of your Bush obsession. lol

The bubble and the crash happened on his watch.

The OP is a pathetic attempt to retroactively blame the crash on Obama, which is as insanely laughable as it gets.

The OP is pointing out government's responsibility for enabling the mess in the first place. This stretches back to the Clinton administration and yes Bush has some responsibility as well. Obviously this mess wasn't Obama's fault as president, he has some responsibility as a participant in enabling the mess that's what the OP has documented, but so do millions of Americans. What I have a problem with is Democrats acting like they are clean as a fresh winter snow when they were hip deep in this mess.

Obama's ties to ACORN gives him culpability.

 

[Dad2three]

Sorry, that's no excuse. Bush was The President and we need to evaluate any president on what they did or did not do, not on what they say.

Dem's in congress block Bush repeated efforts to deal with the problem and you blame Bush? That sounds about typical for dishonest Democrats.

What repeated efforts?

Was a bill drafted and never put to an up or down vote?

Did President Bush stand before The Congress during a State of the Union Address and let the American People and their members of Congress know that the state of our economy was at risk?

Did President Bush send out his Sect. of the Treasury and other economic advisers to warn the American people to beware (with a similar warning of mushroom clouds in boardrooms)?

Did President Bush raise taxes to pay for the war on terror (Homeland Security and the invasion and occupation of Iraq)?

Did he ask the Attorney General to investigate potential abuses of the CRA (or was the AG too busy vetting the religious bent of possible US Attorney's with the help of Monica Goodling

LMAO...

Did bush make congress do their job"?

No. I guess he could have done better at that.

But as a result, it sure as hell aint congresses fault.

Hey sparky...congress was not a bunch of children. They were a bunch of well paid well educated adults who promised to do a good job if they were elected.

But hey...its not their fault.....Big Daddy did not make them do their job.

Do you not see how your obsession with the failures of Bush has clouded your judgment?

The onset of the recent financial crisis in late 2007 created an intellectual crisis for conservatives, who had been touting for decades the benefits of a hands-off approach to financial market regulation. As the crisis quickly spiraled out of control, it quickly became apparent that the massive credit bubble of the mid-2000s, followed by the inevitable bust that culminated with the financial markets freeze in the fall of 2008, occurred predominantly among those parts of the financial system that were least regulated, or where regulations existed but were largely unenforced.

Predictably, many conservatives sought to blame the bogeymen they always blamed.

Politics Most Blatant Center for American Progress

 

[Dad2three]

Dem's in congress block Bush repeated efforts to deal with the problem and you blame Bush? That sounds about typical for dishonest Democrats.

Wall Street wanted to limit the GSE's portfolios so it could get more market share. Bush, acting as Wall Street's *****, tried to get the GSEs portfolios capped. The Democrats stopped this plan.

No one was acting out of pure motives.

No one.

I blame everyone for the housing bubble, Rep's, Dem's, and the foolish citizens who purchased more home than they could afford, took out 2nd mortgages and spent like there's no tomorrow. What I have a problem with is lying scum Democrats in congress who acted like they had nothing to do with the whole mess. I have never seen such a group of snakes as Democrats.

Can you name a single politician that has accepted responsibility for any of the problems our nation experiences?

The real victims of the housing bubble? The banks. Yes, the banks. They were threatened by the government if they did not show "equality" in lending and were forced to write loans to those that would likely default....

And then, of course, there were the ARM loans...people loved the idea of refinancing, taking a mess of cash out, and having their payments LOWERED for 5 years....and they all believed they would be able to refinance when the ARM expired....so they spent the cash out, had a field day....and then their LTV's changed for the worse, and they couldn't refinance...their rates shot up to prime plus whatever, and they couldn't afford it.

But they lived the high life for 5 years.....and now they are...dare I say.....VICTIMS of their own greed.

It does not take rocket science to understand what really took place.

No it doesn't. Sales (and that is what the banks engaged in) is to get someone to buy to benefit the seller, rarely the buyer. Telling someone who is not familiar with the process the broker/banker tandem convinced the unsophisticated buyer that the home they want is really affordable. Simply sign here, and here and here and here (as anyone who has ever secured a loan understands, even when they don't really understand what they are signing) and come back in five years and we'll refinance the loan, or you can sell the home and make a huge profit.

Hell, the banker had nice suit and a great smile, and the broker drove a new and shiny SUV when they looked at the home that could be theirs. They were assured the price of the home they looked at would continue to more expensive if they didn't act now, and in the future they could use the rising value to fund their retirement or even buy that vacation home in the mountains.

In a nutshell, people signed without knowing what they are signing. I have attended thousands of closings.....whereas it is rare that an attorney is present at a refinance closing, I don't EVER recall an attorney not being involved in a purchase.....an attorney drafts the contract, goes back and forth with the opposing attorney as it pertains to minor particulars; reviews the settlement statement (HUD) prior to the closing, and then explains the documents to the client as they sign.

You are making it something it never was...it was not a broker/banker versus an uneducated victim.

The uneducated "victim" had the advantage of legal counsel.

Right-wingers Want To Erase How George Bush's "Homeowner Society" Helped Cause The Economic Collapse


2004 Republican Convention:

Another priority for a new term is to build an ownership society, because ownership brings security and dignity and independence.
...

Thanks to our policies, home ownership in America is at an all- time high.

(APPLAUSE)

Tonight we set a new goal: 7 million more affordable homes in the next 10 years, so more American families will be able to open the door and say, "Welcome to my home."







Predatory Lenders' Partner in Crime

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

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative


Eliot Spitzer - Predatory Lenders' Partner in Crime

FACTS on Dubya s great recession US Message Board - Political Discussion Forum

 

[g5000]

I want you to imagine the payments borrowers make on their debt as a stream of money. A "revenue stream". Visualize an actual stream of water to represent all this cash flowing back and forth.

A Collateralized Debt Obligation (CDO) was a new invention which allowed investors to buy a cup to dip into that stream. An investor could choose which size cup to buy.

The smallest cups (senior tranches) got to dip into the stream first. The largest cups (equity tranches) dipped into the stream last.

The smallest cups cost the most while the biggest cups cost the least.

As long as every borrower was making their payments, everyone got to dip their cups in the stream and those who bought the biggest cups made out like bandits. They recovered their investment the quickest, and everything after that was pure profit. Those who bought the small cups recovered their investments the slowest, but they always got to dip their cups first, and so they had the lowest risk.

The first CDOs were golden. They were made of bundled loans which had been made to blue chip companies, and they were extremely safe.

Investors fell in love with them. They had $70 trillion to invest. After the 2001 recession caused by the tech bubble bursting and 9/11, the only business sector that was performing well was the housing sector. As a result, investor money began pouring into that sector.

Broker-dealers were happy to construct more CDOs because, as middle men, they received lots of fees for connecting borrowers to investors.

But when you are talking about a ridiculous amount of money like $70 trillion, there just aren't enough blue chip companies or individuals out there. So the middle men began lowering their standards. They threw the underwriting laws of the Universe out the window. Laws which had been learned over centuries. With the advent of the CDO, they were stupid enough to believe the old laws no longer applied. Their equations were telling them they had eliminated risk.

Thus began a new age gold rush. Brokers began making loans to people who had bad credit. One of the driving forces behind this phenomenon was the thinking that "if we don't do it, someone else will". And they were right. The competition for borrowers was intense. Everyone wanted those investor fees and there was a mad scramble to find borrowers so all that investor money could be put to work.

Brokers began going into inner city churches and preaching the gospel of Housing to the ignorant poor. When a banker is standing next to your preacher, it conveys a sense of righteousness and integrity to the congregation.

But by far the biggest suckers were the middle class. This is because of a basic economic fact. The more income a person has, the more money you can lend them. And the biggest economic class in America is the middle class, so they got the bulk of the pressure put on them.

That's why you saw your neighbor Biff biting off a bigger house than he could chew. Not only that, he was told by the bank he had instant equity ("housing prices never go down!"), and so he took out a Home Equity Line Of Credit (HELOC) and bought himself an SUV and a boat and a trip to Disney World.

This is why I mock those idiots who think this all had something to do with the CRA. When all those white middle class suburban borrowers went bust, did these gullible Fox News rubes say, "I had no idea Biff was a negro!"

The rubes can't see the evidence right in front of their faces! It was their own neighbors who went along with this scheme.

Remember all those TV shows which showed how to flip a house? Are you seriously going to continue to believe this had something to do with negroes? Really?

And how about Ireland? Was that Obama, too? How about Iceland? Was that ACORN, too? How about Britain and RBS? Was that Jesse Jackson, too?

Give me a ******* break.

What happened is that the revenue streams began drying up after the first few small cups dipped into them. There was no water left for the middle and large cups. The large cups didn't even recover a tenth of their initial investment.

Hell, some CDOs were so toxic that even the small cups didn't get to fill up once!

You see, back in 2003, the refinancing industry really sucked. Then Wall Street realized they could revitalize that part of the financial food chain with ARMs.

ARMs were invented to serve upper middle class people. They were not intended for every schmuck out there.

But ARMs revitalized the refinancing industry. Get a schmuck into a three year low-interest loan, then when it blew up on him three years later, get him to refinance into another ARM! Or into a fixed 30-year rate. Since housing prices would go up forever, he would easily qualify for refinancing, right?

Nope. Because you had what was called "Pick-A-Pay" loans. I still remember the moment I saw some internal memos from a major banking institution regarding Pick-A-Pay loans. I felt a horrifying chill. The next day, I contacted a reporter I knew. I explained to her what was going on, and I told her what was going to happen. If she had listened to me, she would have had a jump by two years on everyone else.

But, unfortunately, she didn't get the significance of what I was telling her.

The bank whose memos I read had made Pick-A-Pay their primary business and they were bragging about how the had increased such loans by 30 percent in the past year. This bank later collapsed in spectacular fashion. They were murdered in broad daylight by Goldman Sachs and some other banks, with the full cooperation of the SEC in their murder. Those of us who understood what was happening were shocked as we watched that murder happen in real time.


Anyway, a Pick-A-Pay loan allows a borrower to choose their monthly payment. The lowest payment is a negative amortization loan. The second lowest payment pays only the interest on the loan. The third lowest payment would pay off the loan in 30 years. The highest payment would pay off the loan in 15 years.

Here's the kicker: 80 percent of all Pick-A-Pay borrowers were making the lowest payment.

Let that sink in.

What that means is that 80 percent of borrowers were in a negative amortization spiral. They were making a payment that didn't even cover the interest, and so that shortage was added to the principal. Each month, the amount they owed the bank was going up. And this was compounding.

Yeah.

So when their loans reset, they had to refinance for many tens of thousands of dollars more than they had originally borrowed. This mean their monthly payment suddenly went up by more than two times. In some cases, by more than five times what they had been paying each month up to that point.

So they defaulted. And the revenue stream went dry overnight.


BOOM!

 

[Dad2three]

Yes I think we are all well aware of your Bush obsession. lol

The bubble and the crash happened on his watch.

The OP is a pathetic attempt to retroactively blame the crash on Obama, which is as insanely laughable as it gets.

The OP is pointing out government's responsibility for enabling the mess in the first place. This stretches back to the Clinton administration and yes Bush has some responsibility as well. Obviously this mess wasn't Obama's fault as president, he has some responsibility as a participant in enabling the mess that's what the OP has documented, but so do millions of Americans. What I have a problem with is Democrats acting like they are clean as a fresh winter snow when they were hip deep in this mess.

Obama's ties to ACORN gives him culpability.

ACORN? lol

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.

A McKinsey Global Institute report noted “from 2000 through 2007, a remarkable run-up in global home prices occurred.” It is highly unlikely that a simultaneous boom and bust everywhere else in the world was caused by one set of factors (ultra-low rates, securitized AAA-rated subprime, derivatives) but had a different set of causes in the United States. Indeed, this might be the biggest obstacle to pushing the false narrative


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

 

[LogikAndReazon]

If youre too stupid to understand a mortgage, youre too stupid to own a home.....

 

[Jarhead]

Sorry, that's no excuse. Bush was The President and we need to evaluate any president on what they did or did not do, not on what they say.

Dem's in congress block Bush repeated efforts to deal with the problem and you blame Bush? That sounds about typical for dishonest Democrats.

Wall Street wanted to limit the GSE's portfolios so it could get more market share. Bush, acting as Wall Street's *****, tried to get the GSEs portfolios capped. The Democrats stopped this plan.

No one was acting out of pure motives.

No one.

I blame everyone for the housing bubble, Rep's, Dem's, and the foolish citizens who purchased more home than they could afford, took out 2nd mortgages and spent like there's no tomorrow. What I have a problem with is lying scum Democrats in congress who acted like they had nothing to do with the whole mess. I have never seen such a group of snakes as Democrats.

Can you name a single politician that has accepted responsibility for any of the problems our nation experiences?

The real victims of the housing bubble? The banks. Yes, the banks. They were threatened by the government if they did not show "equality" in lending and were forced to write loans to those that would likely default....

And then, of course, there were the ARM loans...people loved the idea of refinancing, taking a mess of cash out, and having their payments LOWERED for 5 years....and they all believed they would be able to refinance when the ARM expired....so they spent the cash out, had a field day....and then their LTV's changed for the worse, and they couldn't refinance...their rates shot up to prime plus whatever, and they couldn't afford it.

But they lived the high life for 5 years.....and now they are...dare I say.....VICTIMS of their own greed.

It does not take rocket science to understand what really took place.

As soon as government took the risk out of sub-prime loans many banks piled on to cash in running non-stop ads, its not like they were dragged into this kicking and screaming.

True....but they also knew that those loans were worthless if FM did not find them as having value....so to them, it was worth the risk. Don't get me wrong, they should never have been bailed out.....but FM (for all intents and purposes, run by the government) failed them miserably.

 

[Siete]

in 2002 , 43 called on F&F to make 5 million new loans available to minority home buyers (yeah, its on tape) ... no Clinton, no Obama, just 43, Republicans had a MAJORITY Congress in 2002, no Clinton, No Obama...

2015 ... revert back to Clinton, fast forward to Obama. 2000 - 2008 Republicans never existed.

RW magic.

 

[Jarhead]

If youre too stupid to understand a mortgage, youre too stupid to own a home.....

if you are too stupid to ask your attorney what you are signing, you are too stupid to own a home.

And the next we will hear is "not everyone can afford an attorney"....well, if you cant afford $2,000 to ensure you are doing the right thing in a $200,000 transaction, you should not engage in the $200,000 transaction.

 

[Dad2three]

Adjustable-Rate Mortgages Fuel Foreclosure Crisis NPR

Adjustable-Rate Mortgages Fuel Foreclosure Crisis
New foreclosure filings hit an all-time high this spring. And that was before the latest turmoil in the mortgage market.


Defaults are heavily concentrated in seven states, according to the Mortgage Bankers Association. Three of those — Michigan, Indiana and Ohio — have been hit with heavy job losses. But the other four — California, Arizona, Nevada and Florida — have a different problem.


"What's going on in these four states is, first of all, they tend to have very high levels of adjustable-rate mortgages," says Doug Duncan, chief economist for the association.


When those mortgages adjust upward, some people are unable to make the payments, and the problem is likely to continue for at least another year.

The "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," the President's Working Group on Financial Markets OCT 2008

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]

If youre too stupid to understand a mortgage, youre too stupid to own a home.....

if you are too stupid to ask your attorney what you are signing, you are too stupid to own a home.

And the next we will hear is "not everyone can afford an attorney"....well, if you cant afford $2,000 to ensure you are doing the right thing in a $200,000 transaction, you should not engage in the $200,000 transaction.

OR we could have REGULATORS on the beat looking out for US? Nah, instead we elect Reagan (S&L) and Dubya who BOTH ignored regulator warnings early on!!!


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

 

[Dad2three]

If youre too stupid to understand a mortgage, youre too stupid to own a home.....

And I thought BANKSTERS wrote the checks??? lol

Banks used cheap capital to create a bubble. Their lending strategies fueled and fed off the housing bubble, and they did so using mortgage products whose performance was premised on continued growth of that bubble.


After 2004, the financial industry coalesced around high -risk mortgage lending as their primary cash crop. Subprime mortgages, which had been an effective if sometimes shady means of extending credit availability to under-served borrowers, suddenly became a foundation of 21st century financial capitalism. The complete collapse of the financial system and resulting recession have shown the folly of that strategy. What has saved the financial sector is the government takeover of the GSEs and the bailout of the rest of the banking system

Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf