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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 upsideguy View Post
    Still no cite.... I'll settle for an independent cite that has CRA as even a significant
    factor.... not that it changes the truth, but at least I would like to see a credible argument. You are free to continue with your unsubstantiated posts, but you are out of bounds in admonishing others on this issue when you can't even substantiate your own point lest you have merely proven your original assertion that its amazing how many people on this board have no understanding of this issue.
    No cite ? I post 99% of the time from a droid phone. Its difficult to post links so take the information I laid out in specifics( which is more than you have to offer ) and Google your damn self.

    Yea your'e right, allot of people have no idea what actually transpired and your one of them.

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

    Quote Originally Posted by Kushinator View Post
    Ratings agencies rated them highly because they simply did not understand the products they were insuring. Blaming the motivations for risk management failure on F&F is a cop out.
    Everyone thought and "knew" if F&F were involved in the mortgages that they would back them or be bailed out by the US government, that is in fact why they were rated so highly. It wasnt misunderstanding, it was belief that the US was the final backed of the instruments. Like I said, in the end, they were.

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

    I would like to see a quote of the specific CRA/HUD regulations that require lenders to give loans to unqualified applicants. An independent study showing that these regulations contributed to the home mortgage meltdown would also help make the case. I'm no expert on these issues but everything I have read indicates that derivatives and fraud caused the meltdown. I suspect that those who blame the CRA are racists and/or philosophically opposed to anti-discrimination laws.

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

    Quote Originally Posted by upsideguy View Post
    Still no cite.... I'll settle for an independent cite that has CRA as even a significant factor.... not that it changes the truth, but at least I would like to see a credible argument. You are free to continue with your unsubstantiated posts, but you are out of bounds in admonishing others on this issue when you can't even substantiate your own point lest you have merely proven your original assertion that its amazing how many people on this board have no understanding of this issue.
    http://cei.org/sites/default/files/M...0FINAL_WEB.pdf
    • Increased Risk. While both CRA- and non-CRA lenders have increased the number of loans to low-income borrowers, the financial soundness of CRA covered institutions decreases the better they conform to the CRA. Gunther compares certain institutions’ CRA ratings to their CAMELS rating—a formula used by bank regulators to assign safety and soundness ratings that takes into account capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risks. He found that the better a lender was rated by CRA standards, the worse was its CAMELS rating.

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

    Quote Originally Posted by Hard Truth View Post
    I would like to see a quote of the specific CRA/HUD regulations that require lenders to give loans to unqualified applicants. An independent study showing that these regulations contributed to the home mortgage meltdown would also help make the case. I'm no expert on these issues but everything I have read indicates that derivatives and fraud caused the meltdown. I suspect that those who blame the CRA are racists and/or philosophically opposed to anti-discrimination laws.
    Any aquisition, merger or increase in fed rated money lending (loans direct from the fed at highly decreased interest rates) has to be met with satisfactory ratings from CRA inspections. If they dont have it, they dont get it.

    In addition, here are the reporting criteria:
    2013 Reporting Criteria


    ■All institutions regulated by the Office of the Comptroller of the Currency, Federal Reserve System, and the Federal Deposit Insurance Corporation that meet the asset size threshold are subject to data collection and reporting requirements. The asset size threshold that triggers data collection and reporting for all agencies is $1.186 billion as of December 31 of each of the prior two calendar years.

    ■All institutions that are subject to the data collection and reporting requirements must report the data for a calendar year by March 1 of the subsequent year.
    The bigger you are the more likely you are to have to report your loan information to the CRA inspectors.

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

    Quote Originally Posted by upsideguy View Post
    You are right.... sorry, hate to lose the form argument, especially when I own the substance. All links plus one:

    Three Causes of the Subprime Mortgage Crisis - ForensisGroup.com
    Gives some causes, does not name all the culprits. Absence of something is not proof it didnt contribute.
    Lest We Forget: Why We Had A Financial Crisis - Forbes
    The reason that people can say that is because it is true. The $200 billion was a mere drop in the ocean of derivatives which in 2007 amounted to three times the size of the entire global economy.
    Money quote, problem: F&F werent in for 200 billion, they were in for 7.5 trillion. Blasts the argument to shreds.
    http://www.business.cch.com/bankingf...ime_WP_rev.pdf
    They dont discuss CRA at all in the entire paper. Doesnt pass the smell test.

    Community Reinvestment Act had nothing to do with subprime crisis - BusinessWeek Really? AN opinion blog? Hes getting torn to shreds in his own comments section.

    ,,,and yes, the thread to which I reference...

    http://www.debatepolitics.com/govern...-218-a-17.html
    We dont have a silver bullet to fix all the problems that happened in 2007 so Im going to posit that we dont have a real root cause, but a series of causes to what really occurred. There are contributing factors---I feel the CRA was a large one. You feel differently. Oh well.

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

    Quote Originally Posted by Hard Truth View Post
    I would like to see a quote of the specific CRA/HUD regulations that require lenders to give loans to unqualified applicants. An independent study showing that these regulations contributed to the home mortgage meltdown would also help make the case. I'm no expert on these issues but everything I have read indicates that derivatives and fraud caused the meltdown. I suspect that those who blame the CRA are racists and/or philosophically opposed to anti-discrimination laws.
    If you've read the link sent to you you will see that the Democrats were taking credit for it until it failed, and despite being warned by Alan Greenspan John McCain, and George Bush. Now they are, incredibly it seems, intending to do the same thing again.

    The American Spectator : And You Thought the Housing Crisis Was Over!

    Someone seems keen on destroying the American economy.

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

    Quote Originally Posted by OpportunityCost View Post
    Everyone thought and "knew" if F&F were involved in the mortgages that they would back them or be bailed out by the US government
    Credit risk is assessed based on its intrinsic risk, not on the perceived risk appetite of its purchasers and their backing by the U.S. Treasury.

    that is in fact why they were rated so highly. It wasn't misunderstanding, it was belief that the US was the final backed of the instruments. Like I said, in the end, they were.
    Your point is irrelevant.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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

    Quote Originally Posted by Kushinator View Post
    Credit risk is assessed based on its intrinsic risk, not on the perceived risk appetite of its purchasers and their backing by the U.S. Treasury.



    Your point is irrelevant.
    Cmon Kush, you and I both know everyone from the homeowners to the raters to the lenders to the agencies that the GSEs and the loans they underwrote were backed by the US government. The raters certainly did and when push comes to shove they will testify to that; because it was a criteria in their rating.

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