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

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

    Quote Originally Posted by OpportunityCost View Post
    Look at their pro-bono work. Covington & Burling LLP | Publications

    About halfway down. Bleeding heart liberals through and through, I wouldnt trust their judgement in anything but to wring billable hours out of it. You pick a DC law firm out of thin air or did google do it for you?
    Thank you for admitting that causes like the ones listed below are considered "liberal" by conservatives. Which means one can infer that conservatives don't care about helping refugees, children, the poor and powerless. (this is not exactly late breaking news, but its nice to see a conservative come out and admit it in public)


    "...asylum for a prominent Iranian journalist, Ms. S. In 2005, an Iranian court had sentenced Mr. S to death for his outspoken support of press freedom and women's rights....

    a nonprofit organization working to end child labor in the carpet industry in South Asia.

    reforms to a North Carolina school system designed to prevent abusive treatment of special needs students.

    children who arrived in the United States unaccompanied from Guatemala....after receiving death threats from Guatemalan gangs against the children.

    [Iraqi] refugees. Often fleeing from death threats by armed groups, many escaped to neighboring countries such as Syria, where they have tried to navigate the United States Citizenship and Immigration Services (USCIS) refugee and resettlement process without access to counsel.

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

    Quote Originally Posted by OpportunityCost View Post
    So WaMu.....
    Huge bailouts of AIG and BofA.
    Its worth noting that among industry leaders WaMu and BofA had very high CRA compliance ratings. So I guess thats just cioncidence and not causality.

    How about this?
    Background & Purpose

    The CRA requires that each insured depository institution's record in helping meet the credit needs of its entire community be evaluated periodically. That record is taken into account in considering an institution's application for deposit facilities, including mergers and acquisitions. (See CRA Ratings) CRA examinations (see Exam Schedules) are conducted by the federal agencies that are responsible for supervising depository institutions: the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision (OTS).
    I guess Im just blowing smoke.....
    I'll give you credit for trying, but that does not say anything about lowering lending standards. It is about preventing redlining and racial discrimination.
    Last edited by Hard Truth; 02-10-13 at 09:34 PM.

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

    Quote Originally Posted by Grant View Post
    I'm done explaining. Believe what you want.
    I don't believe anything without evidence. There is no evidence that the CRA required loans to unqualified borrowers, so I don't believe that claim.

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

    Quote Originally Posted by Hard Truth View Post
    No one on this thread has proven that the law required lenders to lower their standards.
    "The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (the GSE Act) and HUD’s 1995 National Homeownership Strategy launched a classic race to the bottom based on credit flexibilities. HUD assured broad compliance by drafting virtually the entire mortgage industry. Most significant was the policy to largely eliminate downpayments for targeted borrowers. As the government demanded more and more such lending, particularly those with incomes below 80 percent of median and special target groups, virtually the entire industry responded by moving further and further down the demand curve and out the risk curve. FHA, Fannie, Freddie, banks, subprime lenders, Alt-A lenders, first-time buyers, repeat buyers, and cash-out refinance borrowers all became much more highly leveraged. Moral hazard became rampant as downpayments and initial equity disappeared throughout much of the housing finance system. "
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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by finebead View Post
    The article sites 1) a Federal Reserve study, 2) Janet Yelin, president of the San Francisco fed, and 3) Traiger & Hinckley LLP, a law firm that counsels financial institutions on CRA compliance.

    Every one an expert.

    You have shown NOTHING, where is your proof???
    LOL !!! A law firm that "councils" banks on CRA compliance ?

    Why not just post a link to MSNBC or some other Lib site that ignorantly blames Bush for a crisis that took the Govt 13 years to complete. OBJECTIVE evidence would be great.

    Look up HUD's 1995 Home Ownership Strategy, or hell, here's a statement from HUD in 2010...
    HUD in 2010:

    … the sharp rise in mortgage delinquencies and foreclosures is fundamentally the result of rapid growth in loans with a high risk of default—due both to the terms of these loans and to loosening underwriting controls and standards. Mortgage industry participants appear to have been drawn to encourage borrowers to take on these riskier loans due to the high profits associated with originating these loans and packaging them for sale to investors. While systematic information on borrowers’ motivations in obtaining these loans is not available, existing evidence suggests that some borrowers did not understand the true costs and risks of these loans while others were willing to take on these risks to tap accumulated home equity or to obtain larger homes.


    Loose underwriting standards ?? Who has that kind of regulatory power ? To systematically lower standards for lending institutions ? For GSE's purchases ? Goldman Sachs ? Wells Fargo ?

    Nope, as it turns out certain Govt agencies were given regulatory power in the early and mid 90s that had catastrophic effects on our housing market. All of your rhetoric aside, you have to ask yourself, how long are you going to let your love for a bankrupt ideology, for a failing President distort your ability to be objective ?
    Last edited by Fenton; 02-10-13 at 10:18 PM.
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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by Fenton View Post
    LOL !!! A law firm that "councils" banks on CRA compliance ?

    Why not just post a link to MSNBC or some other Lib site that ignorantly blames Bush for a crisis that took the Govt 13 years to complete. OBJECTIVE evidence would be great.

    Look up HUD's 1995 Home Ownership Strategy, or hell, here's a statement from HUD in 2010...
    HUD in 2010:

    … the sharp rise in mortgage delinquencies and foreclosures is fundamentally the result of rapid growth in loans with a high risk of default—due both to the terms of these loans and to loosening underwriting controls and standards. Mortgage industry participants appear to have been drawn to encourage borrowers to take on these riskier loans due to the high profits associated with originating these loans and packaging them for sale to investors. While systematic information on borrowers’ motivations in obtaining these loans is not available, existing evidence suggests that some borrowers did not understand the true costs and risks of these loans while others were willing to take on these risks to tap accumulated home equity or to obtain larger homes.


    Loose underwriting standards ?? Who has that kind of regulatory power ? To systematically lower standards for lending institutions ? For GSE's purchases ? Goldman Sachs ? Wells Fargo ?

    Nope, as it turns out certain Govt agencies were given regulatory power in the early and mid 90s that had catastrophic effects on our housing market. All of your rhetoric aside, you have to ask yourself, how long are you going to let your love for a bankrupt ideology, for a failing President distort your ability to be objective ?
    Blah Blah Blah, you offer nothing, no facts.

    I have shown Pres. Bush policy to put 5.5 million minority families in homes and they went after it. Repub SEC under Chris Cox relexed net capital rule and allowed the biggest banks to 3X their leverage increasing their instability and directly leading to the failure of all of them except Morgan Stanley which converted to a regular bank. And Bill Frist and the repubs in the Senate killed the last chance to reform the GSE's in 2005, increasing the size of the financial crisis considerably, in secret while repubs said they were for reform, what hypocrits!

    And you post no facts, no supporting opinions from any experts. Pfffftttt. You got nothing. What kills me is the delusional nature of the right, even when presented with the facts of how the repubs drove us over the cliff with THEIR hands on the wheel. But you can't fool all the people all the time, and the public has dealt with the repubs, as they should.

    Here we see the problem EXPLODED in 2004, the year the SEC allowed the investment banks to triple their leverage. That was the problem, it allowed the biggest banks to take on huge amounts of new mortgages, get S&P to rate them AAA and sell them all over the world. And you want to say CRA passed in 1996 did that, no way. Something else happened in 2003/2004 while the repubs ran the show. That is all on the repubs!


    http://en.wikipedia.org/wiki/Subprime_mortgage_crisis
    Last edited by finebead; 02-10-13 at 10:36 PM.

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

    Quote Originally Posted by Hard Truth View Post
    People are claiming that the CRA forces banks to give loans to unqualified borrowers.
    Then debate with those people. I've already supplied links and given timelines.

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

    Quote Originally Posted by finebead View Post
    Blah Blah Blah, you offer nothing, no facts.

    I have shown Pres. Bush policy to put 5.5 million minority families in homes and they went after it. Repub SEC under Chris Cox relexed net capital rule and allowed the biggest banks to 3X their leverage increasing their instability and directly leading to the failure of all of them except Morgan Stanley which converted to a regular bank. And Bill Frist and the repubs in the Senate killed the last chance to reform the GSE's in 2005, increasing the size of the financial crisis considerably, in secret while repubs said they were for reform, what hypocrits!

    And you post no facts, no supporting opinions from any experts. Pfffftttt. You got nothing. What kills me is the delusional nature of the right, even when presented with the facts of how the repubs drove us over the cliff with THEIR hands on the wheel. But you can't fool all the people all the time, and the public has dealt with the repubs, as they should.

    Here we see the problem EXPLODED in 2004, the year the SEC allowed the investment banks to triple their leverage. That was the problem, it allowed the biggest banks to take on huge amounts of new mortgages, get S&P to rate them AAA and sell them all over the world. And you want to say CRA passed in 1996 did that, no way. Something else happened in 2003/2004 while the repubs ran the show. That is all on the repubs!


    Subprime mortgage crisis - Wikipedia, the free encyclopedia
    WIKI ? Are you that desperate for slanted opinions ?

    How about actual Historical events ?

    1992: Congress passes the inaptly named “Federal Housing Enterprises Financial Safety and
    Soundness Act” (GSE Act). Instead of requiring safe and sound operations, ACORN and other
    groups successfully lobby for affordable housing mandates.

    As a result, Fannie and Freddie are
    forced to progressively loosen their underwriting standards and, for the first time, become
    competitors with FHA and traditional subprime lenders."


    1995: President Clinton and HUD announce the “National Homeownership Strategy”
    (Homeownership Strategy):

    Clinton...
    "[Having] forged a nationwide partnership that will draw on the resources and creativity of
    lenders, builders, real estate professionals, community-based nonprofit organizations,
    consumer groups, State and local governments and housing finance agencies, and many
    others in a cooperative, multifaceted campaign to create ownership opportunities and
    reduce the barriers facing underserved populations and communities."

    1994: “Fannie Mae Chairman Commits Company to 'Transforming the Housing Finance
    System;' Vows Company Will Provide $1 Trillion in Targeted Lending"

    1999: “Fannie Mae Eases Credit to Aid Mortgage Lending:”

    "In a move that could help increase home ownership rates among minorities and low income consumers, the Fannie Mae Corporation is easing the credit requirements on
    loans that it will purchase from banks and other lenders. . . .

    "Fannie Mae has expanded home ownership for millions of families in the 1990's by
    reducing down payment requirements,‟ said Franklin D. Raines, Fannie Mae's chairman
    and chief executive officer. „Yet there remain too many borrowers whose credit is just a
    notch below what our underwriting has required who have been relegated to paying
    significantly higher mortgage rates in the so-called subprime market.‟ . . .
    In moving, even tentatively, into this new area of lending, Fannie Mae is taking on
    significantly more risk, which may not pose any difficulties during flush economic times.
    But the government-subsidized corporation may run into trouble in an economic
    downturn, prompting a government rescue similar to that of the savings and loan industry
    in the 1980's."

    1991: A community organizer tells the U.S. Senate Committee on Banking, Housing, and Urban
    Affairs:
    “It is becoming increasingly clear that [Fannie and Freddie had] been a hidden loan officer
    at the loan origination table.”

    1991: HUD‟s Advisory Commission on Regulatory Barriers to Affordable Housing reports:
    “The market influence of Fannie Mae and Freddie Mac extends well beyond the number
    of loans they buy or securitize; their underwriting standards for primary loans are widely
    adopted and amount to national underwriting standards for a substantial fraction of all
    mortgage credit.”

    "Fannie Mae‟s and Freddie Mac‟s underwriting standards are oriented towards „plain
    vanilla‟ mortgages."

    1991: Testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs:

    "'Lenders will respond to the most conservative standards unless [Fannie Mae and
    Freddie Mac] are aggressive and convincing in their efforts to expand historically narrow
    underwriting.‟ This point was reinforced over and over again by other [community
    advocacy] witnesses."

    These groups were successful in convincing Congress to impose affordable housing (AH)
    mandates on Fannie and Freddie. This set in motion 14 years of ever looser loan standards:


    "Because the GSEs have a funding advantage over other market participants, they have the
    ability to under price their competitors and increase their market share. This advantage, as
    has been the case in the prime market, could allow the GSEs to eventually play a
    significant role in the subprime market. As the GSEs become more comfortable with
    subprime lending, the line between what today is considered a subprime loan versus
    a prime loan will likely deteriorate, making expansion by the GSEs look more like an
    increase in the prime market. "

    "After the warm and fuzzy glow of „flexible underwriting standards‟ has worn off; we
    may discover that they are nothing more than standards that led to bad loans. Certainly, a
    careful investigation of these underwriting standards is in order. If the „traditional‟ bank
    lending processes were rational, we are likely to find, with the adoption of flexible
    underwriting standards, that we are merely encouraging banks to make unsound loans. If
    this is the case, current policy will not have helped its intended beneficiaries if in future
    years they are dispossessed from their homes due to an inability to make their mortgage
    payments. It will be ironic and unfortunate if minority applicants wind up paying a very
    heavy price for a misguided policy based on badly mangled data.

    “Over the past ten years, there has been a "revolution in affordable lending‟ that has
    extended home-ownership opportunities to historically undeserved households. Fannie
    Mae and Freddie Mac have been a substantial part of this „revolution in affordable
    lending.' During the mid-to-late 1990s, they added flexibility to their underwriting
    guidelines, introduced new low-down payment products, and worked to expand the use of
    automated underwriting in evaluating the creditworthiness of loan applicants. HMDA
    data suggest that the industry and GSE initiatives are increasing the flow of credit to
    undeserved borrowers. Between 1993 and 2003, conventional loans to low income and
    minority families increased at much faster rates than loans to upper-income and non-minority families.”

    The National Homeownership Strategy resulted in the substantial elimination of down-payments.


    I could continue to post evidence to your hackery and partisan nonsense that shows the GSE's and Govt programs were the primary cause and perpetuating factor to the sub-prime collapse and not your simplistic one dimensional accusation that our last President was even remotely involved but you've got your head firmly planted and it's apparently a waste of time.

    You cant cure....well you know.
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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by Grant View Post

    No matter the truth??? Is the truth not important to you?



    No one has to 'alter reality'. The reality is there for all to see.


    This is all silliness. Whenever you see a website offering unattributed quotes, or statements unrelated to the facts at hand, then you should just quickly move on.


    Right. And were you able to discover how much money Obama and the other lawyers received for their efforts and how much their clients received? You can see by that the the Snopes link you sent how it meanders from the facts.

    Truth is quite important to me but as with this post quote-mining my earlier quote and with outright misrepresentation of the facts, we can once again see that some folks allow their hatred to blind them to reality.

    The source of the quotes is given on the Snopes page. As a junior lawyer in the law firm that filed the case, Barack Obama probably received a salary and not a portion of the awarded sum to the plaintiffs. Do I know that for a fact, no - but it is far more probable than the claims originally made about the case.
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    Re: U.S. sues S&P over subprime ratings

    Quote Originally Posted by Fenton View Post
    WIKI ? Are you that desperate for slanted opinions ?

    How about actual Historical events ?

    1992: Congress passes the inaptly named “Federal Housing Enterprises Financial Safety and
    Soundness Act” (GSE Act). Instead of requiring safe and sound operations, ACORN and other
    groups successfully lobby for affordable housing mandates.

    As a result, Fannie and Freddie are
    forced to progressively loosen their underwriting standards and, for the first time, become
    competitors with FHA and traditional subprime lenders."


    1995: President Clinton and HUD announce the “National Homeownership Strategy”
    (Homeownership Strategy):

    Clinton...
    "[Having] forged a nationwide partnership that will draw on the resources and creativity of
    lenders, builders, real estate professionals, community-based nonprofit organizations,
    consumer groups, State and local governments and housing finance agencies, and many
    others in a cooperative, multifaceted campaign to create ownership opportunities and
    reduce the barriers facing underserved populations and communities."

    1994: “Fannie Mae Chairman Commits Company to 'Transforming the Housing Finance
    System;' Vows Company Will Provide $1 Trillion in Targeted Lending"

    1999: “Fannie Mae Eases Credit to Aid Mortgage Lending:”

    "In a move that could help increase home ownership rates among minorities and low income consumers, the Fannie Mae Corporation is easing the credit requirements on
    loans that it will purchase from banks and other lenders. . . .

    "Fannie Mae has expanded home ownership for millions of families in the 1990's by
    reducing down payment requirements,‟ said Franklin D. Raines, Fannie Mae's chairman
    and chief executive officer. „Yet there remain too many borrowers whose credit is just a
    notch below what our underwriting has required who have been relegated to paying
    significantly higher mortgage rates in the so-called subprime market.‟ . . .
    In moving, even tentatively, into this new area of lending, Fannie Mae is taking on
    significantly more risk, which may not pose any difficulties during flush economic times.
    But the government-subsidized corporation may run into trouble in an economic
    downturn, prompting a government rescue similar to that of the savings and loan industry
    in the 1980's."

    1991: A community organizer tells the U.S. Senate Committee on Banking, Housing, and Urban
    Affairs:
    “It is becoming increasingly clear that [Fannie and Freddie had] been a hidden loan officer
    at the loan origination table.”

    1991: HUD‟s Advisory Commission on Regulatory Barriers to Affordable Housing reports:
    “The market influence of Fannie Mae and Freddie Mac extends well beyond the number
    of loans they buy or securitize; their underwriting standards for primary loans are widely
    adopted and amount to national underwriting standards for a substantial fraction of all
    mortgage credit.”

    "Fannie Mae‟s and Freddie Mac‟s underwriting standards are oriented towards „plain
    vanilla‟ mortgages."

    1991: Testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs:

    "'Lenders will respond to the most conservative standards unless [Fannie Mae and
    Freddie Mac] are aggressive and convincing in their efforts to expand historically narrow
    underwriting.‟ This point was reinforced over and over again by other [community
    advocacy] witnesses."

    These groups were successful in convincing Congress to impose affordable housing (AH)
    mandates on Fannie and Freddie. This set in motion 14 years of ever looser loan standards:


    "Because the GSEs have a funding advantage over other market participants, they have the
    ability to under price their competitors and increase their market share. This advantage, as
    has been the case in the prime market, could allow the GSEs to eventually play a
    significant role in the subprime market. As the GSEs become more comfortable with
    subprime lending, the line between what today is considered a subprime loan versus
    a prime loan will likely deteriorate, making expansion by the GSEs look more like an
    increase in the prime market. "

    "After the warm and fuzzy glow of „flexible underwriting standards‟ has worn off; we
    may discover that they are nothing more than standards that led to bad loans. Certainly, a
    careful investigation of these underwriting standards is in order. If the „traditional‟ bank
    lending processes were rational, we are likely to find, with the adoption of flexible
    underwriting standards, that we are merely encouraging banks to make unsound loans. If
    this is the case, current policy will not have helped its intended beneficiaries if in future
    years they are dispossessed from their homes due to an inability to make their mortgage
    payments. It will be ironic and unfortunate if minority applicants wind up paying a very
    heavy price for a misguided policy based on badly mangled data.

    “Over the past ten years, there has been a "revolution in affordable lending‟ that has
    extended home-ownership opportunities to historically undeserved households. Fannie
    Mae and Freddie Mac have been a substantial part of this „revolution in affordable
    lending.' During the mid-to-late 1990s, they added flexibility to their underwriting
    guidelines, introduced new low-down payment products, and worked to expand the use of
    automated underwriting in evaluating the creditworthiness of loan applicants. HMDA
    data suggest that the industry and GSE initiatives are increasing the flow of credit to
    undeserved borrowers. Between 1993 and 2003, conventional loans to low income and
    minority families increased at much faster rates than loans to upper-income and non-minority families.”

    The National Homeownership Strategy resulted in the substantial elimination of down-payments.


    I could continue to post evidence to your hackery and partisan nonsense that shows the GSE's and Govt programs were the primary cause and perpetuating factor to the sub-prime collapse and not your simplistic one dimensional accusation that our last President was even remotely involved but you've got your head firmly planted and it's apparently a waste of time.

    You cant cure....well you know.
    I did not post an opinion from Wiki, just the fact of what of the percentage of subprime mortgages was annually from 1997 to 2007, and it more than doubled from 2003 to 2004, and tripled from 2003 to 2006. That is not an opinion, that is a fact.

    Your long winded post does NOTHING to explain what caused the percentage of subprime mortgages issued to more than double in one year, from 2003 to 2004. You can't show why a bill passed in 1996 caused that extreme spike in 2004. Everything I have documented explains it, Bush's program to put 5.5 million minorities in houses during his terms, The SEC allowing the biggest banks to triple their leverage in 2004, and Bill Frist and the senate repubs getting bought by Freddie Mac's Hollis McLaughlin, through repub lobby company DCI, so they could not pass a bill to reign in Fannie and Freddie.

    None of your post relates to the spike in subprime lending 2004-2006. Explain that, with proof to back it up. You have not explained it, and you don't back anything up.

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