Page 14 of 29 FirstFirst ... 4121314151624 ... LastLast
Results 131 to 140 of 289

Thread: U.S. sues S&P over subprime ratings

  1. #131
    Banned
    Join Date
    Jan 2010
    Location
    Canada, Costa Rica
    Last Seen
    05-16-16 @ 09:45 AM
    Gender
    Lean
    Independent
    Posts
    31,645

    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by Hard Truth View Post
    As I quoted in post #85, at least three posters on this thread claimed that the CRA forced banks to give loans to unqualified borrowers.

    I'm not asking about court cases, and their results. I want to see the proof that the CRA forced banks to give loans to unqualified borrowers.

    No one can show us the actual legislation or regulation that requires banks to give out loans to unqualified borrowers, yet they can find the time to post long posts with irrelevant assertions.
    I'm done explaining. Believe what you want.

  2. #132
    Banned
    Join Date
    Jan 2010
    Location
    Canada, Costa Rica
    Last Seen
    05-16-16 @ 09:45 AM
    Gender
    Lean
    Independent
    Posts
    31,645

    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by finebead View Post
    I agree with you, the righties in this thread post no facts with backup, they just state erroneous opinions.

    I read the CRA from 1996 and I will tell you what I think it says. If anyone disagrees, come back with your proof.

    The problem dating back to the CRA original passage in 1977 was that banks set up in low income areas, took their deposits, but would not give them loans, so the inner city continued to decay. Banks used a process called red lining to exclude minorities by zip code. The 1977 bill disallowed red lining.

    Then banks went to credit scores that nobody in the inner city could qualify for, and still no loans in the inner city and still it decayed.

    In 1996, Clinton passed a new set of rules that said:
    - if you have a bank in the inner city, the ratio of loans you grant should match the demographics of the area you serve, so if 80% of the residents are black, then 80% of the loans should go to black families. They said do banking the old way, get to know your customers and give loans to the ones with steady jobs and character you trust.
    - if you don't meet the requirement, you can sell the bank, or you will not be allowed to open another bank in that state.

    Technically, you did not HAVE to grant a loan to anyone, especially if you were ok with the consequences. For a local bank, say a family bank, there were NO consequences, assuming you didn't want to expand.
    LOL!!

    And that law didn't have any consequences on the banks? Later Bill Clinton actually boasted about this!!

  3. #133
    Banned
    Join Date
    Jan 2010
    Location
    Canada, Costa Rica
    Last Seen
    05-16-16 @ 09:45 AM
    Gender
    Lean
    Independent
    Posts
    31,645

    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by StringBean View Post
    So the government forced banks to "alter" lending standards to comply with demographic quotas, a decade and a half later the economy crashes due to large-scale default on mortgages, and the two are completely unrelated. And I'm a racist for implying a connection.

    I've learned much in this thread.
    It's truly amazing!! They even quote the cases and still understand the connection to the aftermath.

  4. #134
    Professor
    Join Date
    Feb 2013
    Last Seen
    10-08-13 @ 08:19 PM
    Gender
    Lean
    Undisclosed
    Posts
    1,482

    Re: U.S. sues S&P over subprime ratings

    It's always heartwarming to see someone joyed the same DOJ who walked guns into Mexico that ended up killing hundreds, who has sued a number of states because they were enforcing federal laws and who fails to act when the black panthers are offering bounties on fellow citizens, sues S & P for a downgrade. Yep! Tells me all is well!

  5. #135
    Professor
    finebead's Avatar
    Join Date
    Dec 2009
    Location
    Houston
    Last Seen
    12-14-17 @ 12:29 AM
    Gender
    Lean
    Independent
    Posts
    1,558

    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by Fenton View Post
    AIG sold CDSs that were a regulatory requirement for collateralizing those mortgage backed securities as they were purchased, and then bunldled up ( good with bad ) by the GSEs to be pushed out into the market as derivitives.

    Interesting your "evil bank" scenario ignores who allowed these sub-prime loans to be securitized in the first place.

    Without the securitization of those MBSs mixed up and sold by the GSEs to make their value practically impossible to access there would have been no secondary market in the first place.

    No sub-prime collapse. How on earth do you think the GSEs financed this disaster ?

    When it was all said and done the GSEs and other Govt Financial Entities wound up with the lions share of that debt on their books. Over 80%.

    But you want to focus on the issue at the mid way point or towards the end , blame the banks when my focus has always been whos responsible for implementing and then perpetuating the policies and programs that allowed this to happen.

    No private lending institution had the regulatory power or endless cash reserves to start and then finance this disaster. Regulations that lowered the underwriting standards and then put the GSEs on a quota system were NOT issued by banks, they were issued by Democrats in the early 90s.

    CRA regulations were the driving force to the change banking systems long held and strict standards for lending. The banks were given ultimatums which essentially would have forced them into bankruptcy had the GSEs not been forced to acquire the majority of the sub-prime debt.

    To blame the banks is making the claim that private institutions had the power to alter Govt regulations and force policy that was essentially detrimental and counter to their bussiness practices that had prevented this for the last hundred years.

    Fannies been around since the thirties with originations of less than 10% of Alt-a loans on their books just prior to the 90s.

    What policies forced their participation to the 60+% of sub-prime debt by 2008 ?

    You want to blame Greenspan ? Plueeeze. Most of the GSEs sub-prime trash were ARMs and from 1995 to 2008 Countriy Wides involvment added up to a staggering 5% of total sub-prime involvment.

    No, a disaster this huge had to have real backing. Institutionalized buying up under HUD regulatory enforcment of sub-prime debt so it could be hidden in derivitives and sold to investors.

    But you blame the banks. Unreal. Not ONE GSE representitve or politician was held responsible.
    I have never heard CDS were a regulatory requirement for collateralizing MBS, you need to prove that with a link.

    Here is a little article on CDS, no mention of them being a regulatory requirement, didn't come up when I googled it.

    Swaps also became something traded in and of themselves, as a form of speculation. That kind of trading also landed investment banks in multiple and seemingly conflicted roles, as when Goldman Sachs helped sell bundles of mortgage-backed securities and then used swaps to bet that they would go belly up.
    Credit Default Swaps - The New York Times

    It is CLEAR here that Goldman bought the CDS NOT AS A REGULATORY REQUIREMENT, rather they bought the CDS because they thought the instrument they just sold, the MBS, would go bad and they wanted to profit from its failure.

    Then you have no proof that CRA was a main driver in the financial crisis, while I have posted several creditable studies that state CRA was NOT a main driver in the financial crisis, accounting for only 25% of the subprime loans written, and with a substantially smaller default rate. I have shown the main problem issuer of subprime debt were Countrywide, New Century, Option One, etc. which were independent mortgage issuers that were not regulated by CRA.

    You have no proof so it appears you want to forget your statement about CRA which I have refuted with supported posts, and change the subject and wave your hands about the GSE's.

    Admit it, you have conceded this point and lost, or show your proof.
    Last edited by finebead; 02-10-13 at 04:49 PM.

  6. #136
    Professor
    finebead's Avatar
    Join Date
    Dec 2009
    Location
    Houston
    Last Seen
    12-14-17 @ 12:29 AM
    Gender
    Lean
    Independent
    Posts
    1,558

    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by Grant View Post
    LOL!!

    And that law didn't have any consequences on the banks? Later Bill Clinton actually boasted about this!!
    The banks chose to accept the consequences and conducted business profitably under the CRA in the vast majority of cases, I have posted links to proof of this. So, what's your point.

    Do you think banks should be allowed to go into areas, pick up their deposits and then not give loans to anyone in the area, i.e. red line them. That is damaging to the area, they can't improve themselves.

    In the south we used to have "separate but equal schools" which were not equal, this was deemed unfair, and the schools down here were integrated by force. That was the right thing to do. It was worth paying a price to correct this institutionalized mistake. Same with banks opening, siphoning out deposits and refusing to grant loans. The social cost to the area was too high, and the price the banks had to pay to fix it was, well they didn't pay anything since the vast majority of CRA loans were profitable.

    So, what's your point?

    Your freedom to swing your arm stops before you hit my face. Freedom is not unlimited.

  7. #137
    Guru

    Join Date
    Sep 2012
    Location
    Columbus, OH
    Last Seen
    Today @ 01:58 PM
    Gender
    Lean
    Liberal
    Posts
    4,488

    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by Fenton View Post
    But you blame the banks. Unreal.
    There wouldn't have been anything to securitize without lenders engaging in unregulated and predatory lending.

    Quote Originally Posted by Fenton View Post
    Not ONE GSE representitve or politician was held responsible.
    Nor should they be. Fannie and Freddie had a mandate from their shareholders to buy and sell those securities. You can't throw politicians in the slammer for the machinations of an unregulated lending market.

  8. #138
    Sage
    OpportunityCost's Avatar
    Join Date
    Jan 2011
    Last Seen
    Today @ 05:15 PM
    Gender
    Lean
    Conservative
    Posts
    16,791

    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by finebead View Post
    The banks chose to accept the consequences and conducted business profitably under the CRA in the vast majority of cases, I have posted links to proof of this. So, what's your point.

    Do you think banks should be allowed to go into areas, pick up their deposits and then not give loans to anyone in the area, i.e. red line them. That is damaging to the area, they can't improve themselves.

    In the south we used to have "separate but equal schools" which were not equal, this was deemed unfair, and the schools down here were integrated by force. That was the right thing to do. It was worth paying a price to correct this institutionalized mistake. Same with banks opening, siphoning out deposits and refusing to grant loans. The social cost to the area was too high, and the price the banks had to pay to fix it was, well they didn't pay anything since the vast majority of CRA loans were profitable.

    So, what's your point?

    Your freedom to swing your arm stops before you hit my face. Freedom is not unlimited.
    If bolded is less than 90%, it is not profitable. Vast majority doesnt make it. Thats exactly why relaxed lending standards are not good.

  9. #139
    Banned
    Join Date
    Jan 2010
    Location
    Canada, Costa Rica
    Last Seen
    05-16-16 @ 09:45 AM
    Gender
    Lean
    Independent
    Posts
    31,645

    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by finebead View Post

    Do you think banks should be allowed to go into areas, pick up their deposits and then not give loans to anyone in the area, i.e. red line them.
    Of course. It cannot be any other way. Only those who are very well qualified should be allowed loans, and then at the banks discretion.

  10. #140
    Professor
    finebead's Avatar
    Join Date
    Dec 2009
    Location
    Houston
    Last Seen
    12-14-17 @ 12:29 AM
    Gender
    Lean
    Independent
    Posts
    1,558

    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by OpportunityCost View Post
    If bolded is less than 90%, it is not profitable. Vast majority doesnt make it. Thats exactly why relaxed lending standards are not good.
    That is a separate argument. The argument proferred here is that CRA was a major factor in the financial crisis, and I have shown it was NOT.

    Whether you like it at the individual bank level is another manner, but it was not a major factor in the financial crisis, unless you have some facts that show different results than the ones I've already posted.

Page 14 of 29 FirstFirst ... 4121314151624 ... LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •