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U.S. sues S&P over subprime ratings

Grant said:
Which facts are in dispute?

The facts have been out there for a long while yet its clear you have no idea what went on. Believe whatever you want and good luck.
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Trials have no luck, just facts. :wink:
 
Hard Truth said:
Prove that the legislation "contributed to all these risky mortgages" with an excerpt from the part of the legislation that forces banks to loan to unqualified borrowers, otherwise you are just repeating a conservative talking point. I bet no one will because such a requirement doesn't exist in the CRA. The opposition to the CRA is not based on facts.
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Prove my opposition to it is racially motivated.
 
Napoleon said:
:lamo

That assessment is an obtuse piece of
flotsam. First of all, the Community Reinvestment Act was passed in 1977 and it was the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (read GEORGE H.W. BUSH) which required Fannie Mae and Freddie Mac to greatly expand their securitization of subprime loans. You are also intentionally skewing the data. 80% of subprime loans were issued by institutions which did NOT fall under the jurisdiction of the CRA. The vast majority of subprime loans did NOT originate from GSEs. The debt obligations were purchased. In fact, most of the toxic securities didn't even contain CRA loans. These facts are well documented and aptly pointed out in Michel Barr's testimony to Congress. Your entire statement is just know-nothing partisan hackery.
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Lol ! You people are obsessed with Bush. Put down your George Bush doll and focus.

I'm specifically addredsing issues that you seem to be ignoring. Debt obligations "purchased by the GSEs were purchased by .....the tax payer. We took the bath on that debt and that was mandated not by Bush but by slimey politicians in the 90s.

The GSEs purchased **** loads of bad debt ? You think ? I think even the libs in Congress knew their policies were threatening to sink private lending institutions.

Quotas for sub-prime debt purchased or otherwise still became part of a out of control Govt experiment that was mandated by DEMOCRATS. Quotas that were put in place and doubled down on by DEMOCRATS.

CRA loans aren't the issue really.
CRA given regulatory control in the early 90s over lending institutions in an effort to lower lending standards is the issue. HUD given regulatory control to force a quota system on the GSEs is the issue.

Clinton allowing these loans to be securitized is the issue and if your going to talk about true origins then be objective and start at the begining.

You get me ? I'm specifically speaking about who's respondible, who put the policies and regulations in place that started and perpetuated this mess.

And its ALL on the Democrats.

Whos policies allowed for the underwriting standards to be lowered ?

If you say HUD didn't impose a quaota system on the GSEs then you would be lying.p

If you say the GSEs didn't hold a majority of sub-prime debt when the inevitable happened you would be lying. Or Govt finacial institutions institutions in general you would be lying.

If you say Barney Frank didn't advocate for the lowering of underwriting standards and then empower agencies like CRA and HUD to actually force the lowering of those standards then you would be lying.

Libs always do this. Jump in to the debate at or around 2002 to pathetically blame Bush when Conservatives are trying to enlighten you guys and every one else on the ROOT CAUSE of the collapse.

Hey, can you go get one of them GSE loans for no money down financed at 105% with an ARM now. ? Why not ?

Did they do something about that ? Reinstate the standards that were institutionally driven down by politicians in the 90s.

Yup.
 
With out the lowering of underwriter standards for mortgages there would have been no "sub-prime" collapse period.
 
Without the institutionalizing of sub-prime debt by the GSEs who were put on a quota system in 1992 that started at 30% and stopped at 55% there would not have been a sub-prime collapse.
 
Fenton said:
Lol ! You people are obsessed with Bush. Put down your George Bush doll and focus.

I'm specifically addredsing issues that you seem to be ignoring. Debt obligations "purchased by the GSEs were purchased by .....the tax payer. We took the bath on that debt and that was mandated not by Bush but by slimey politicians in the 90s.

The GSEs purchased **** loads of bad debt ? You think ? I think even the libs in Congress knew their policies were threatening to sink private lending institutions.

Quotas for sub-prime debt purchased or otherwise still became part of a out of control Govt experiment that was mandated by DEMOCRATS. Quotas that were put in place and doubled down on by DEMOCRATS.

CRA loans aren't the issue really.
CRA given regulatory control in the early 90s over lending institutions in an effort to lower lending standards is the issue. HUD given regulatory control to force a quota system on the GSEs is the issue.

Clinton allowing these loans to be securitized is the issue and if your going to talk about true origins then be objective and start at the begining.

You get me ? I'm specifically speaking about who's respondible, who put the policies and regulations in place that started and perpetuated this mess.

And its ALL on the Democrats.

Whos policies allowed for the underwriting standards to be lowered ?

If you say HUD didn't impose a quaota system on the GSEs then you would be lying.p

If you say the GSEs didn't hold a majority of sub-prime debt when the inevitable happened you would be lying. Or Govt finacial institutions institutions in general you would be lying.

If you say Barney Frank didn't advocate for the lowering of underwriting standards and then empower agencies like CRA and HUD to actually force the lowering of those standards then you would be lying.

Libs always do this. Jump in to the debate at or around 2002 to pathetically blame Bush when Conservatives are trying to enlighten you guys and every one else on the ROOT CAUSE of the collapse.

Hey, can you go get one of them GSE loans for no money down financed at 105% with an ARM now. ? Why not ?

Did they do something about that ? Reinstate the standards that were institutionally driven down by politicians in the 90s.

Yup.
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First of all, the beginning doesn't start with Bill Clinton; it starts in 1977 when the Community Reinvestment Act was passed and signed by Jimmy Carter. Second, get your Presidents straight. It was George H.W. Bush who signed the Financial Institutions Reform, Recovery and Enforcement Act of 1989. It was this law which established regulatory evaluation requirements for CRA loans. It was George H.W. Bush who also signed the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 which required Fannie Mae and Freddie Mac to purchase these subprime mortgage backed securities as a percentage of their activity. So, your Clinton hate fest ends here. The fact that the GSEs eventually came into possession of the securities is irrelevant because if Fannie Mae and Freddie Mac weren't holding the bag then someone else would have been. Its not like these securities were created by them out of whole cloth. What matters is how they originated and they did not originate under CRA regulations. To say that this was a wholly Democratic fault is just more partisan balderdash.
 
Without the seciritization of these sub prime loans which Clinton initiated there would have not been a sub prime collapse.

Ask a liberal about the sub prime collapse and he'll blame Bush and the banks.

Ask a Conservative and he'll explain how NOT to have another one.
 
OpportunityCost said:
Ratings agencies rated them highly because they expected GSEs to be backed by the full faith and credit of the US and in the end, they were
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That sounds like saying that a car is safe just because it is insured.
 
Fenton said:
Without the seciritization of these sub prime loans which Clinton initiated there would have not been a sub prime collapse.
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The purchase of securitized subprime loans by Freddie Mae and Fannie Mac was required by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, signed by George H.W. Bush. Of course, these were already being bought and sold in the market before then. You can't hide from those facts. His son didn't seem too sad about it either while he was boasting about home ownership on national television. There are two differences between you and I on this issue; 1. I know what I'm talking about. 2. I don't blame Presidents for irresponsible borrowing on the part of consumers and fraud on the part of firms like Goldman Sachs. The crisis was not as bad as it was because Freddie and Fannie bought subprime mortgage backed securities. It was a catastrophe because firms like Goldman Sachs were marketing subprime mortgage backed securities they knew beyond any doubt were toxic to their clients as good investments; and people believed them. They spread the damage over a wide area by deliberately setting their own clients up for failure and smugly pointed out it wasn't illegal. That is why the "conservative" so-called solution of limited regulation is a steaming pile of horse manure.
 
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Rocketman: "It is true, CRA forced many bankers to lend money to people that normally would have been turned away."



Fenton: "The CRA was given regulatory power in the early 90s to stop "redlining".

Redling is actually what banks have been doing for the last 100 years or so to guarantee they don't crash and burn lending bums money.

Its making sure the loan recipient had collateral, credit and a down payment.

Discrimination" was checking to see if you had a down payment, good credit, good work history as everyone of those long held standards that the banks had been using for over a hundred years were tossed to the wayside during the sub-prime debacle.

The people that cried discrimination called those standards "redlining". So liberal politicians forced banks and the GSE's to lower their standards, credit was free and easy and what happens when you lend money to someone with bad credit, a poor work history or low income happened,

CRA in conjunction with HUD regulations that mandated quotas on the GSEs are actually the primary cause of the sub-prime debacle."

Fenton again (later): "CRA loans aren't the issue really."



Gathomas88: "They [CRA or HUD]enforced risky lending among the major players until it became a profitable trend and then encouraged everyone else to get in on the action afterwords in order to try and inflate the housing and credit bubbles."



All these claims that the CRA caused the mortgage crisis by forcing banks to give loans to unqualified borrowers, but no one can point to the particular language in the legislation or regulations that says that banks must give loans to unqualified borrowers. No one has even cited a case where the law forced a bank to give a loan to an unqualified borrower. I say its bull**** motivated by racism and/or hatred of regulation, especially towards anti-discrimination laws.
 
Napoleon said:
First of all, the beginning doesn't start with
Bill Clinton; it starts in 1977 when the Community Reinvestment Act was passed and signed by Jimmy Carter. Second, get your Presidents straight. It was George H.W. Bush who signed the Financial Institutions Reform, Recovery and Enforcement Act of 1989. It was this law which established regulatory evaluation requirements for CRA loans. It was George H.W. Bush who also signed the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 which required Fannie Mae and Freddie Mac to purchase these subprime mortgage backed securities as a percentage of their activity. So, your Clinton hate fest ends here. The fact that the GSEs eventually came into possession of the securities is irrelevant because if Fannie Mae and Freddie Mac weren't holding the bag then someone else would have been. Its not like these securities were created by them out of whole cloth. What matters is how they originated and they did not originate under CRA regulations. To say that this was a wholly Democratic fault is just more partisan balderdash.
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Irrelevent ? Of course its irrelevent to you because it damning evidence. Someone else would have "held the bag " ?

How ridiculous. No private entity on gods green earth would have taken on over a trillion dollars in bad debt. No group of private entities would have taken on that massive amount of debt.

Only a Govt institution under mandate with access to trillions in tax payer funds could do something that stupid. Some one holding the bag ? Thats hillarious. Your'e Mr "Finacial" but you have to rely on make believe could have beens, would have beens to make your point.

I'm talking about things that actually transpired. Do try to keep up.

As for the mandates who pushed for those quotas ? Was it a Conservative ? A group of Conservatives ? Was that Politician allowed to exit Congress by writing a bill to reinforce his complete and total lack of integrity by blaming the banks with new regulations ? AKA Frank Dodd new banking regulations

Quotas signed by any President to force the GSEs into more sub-prime debt is a bad deal but someone doubled down on that stupidity, increased those quotas.



Under what administration were those quotas upped from 30% to 40 ? And 50 %

Under who's administration were the securitization of that bad debt allowed ?

Yea Clinton enabled the collapse big time, institutionalized it even.

So enough with your Bush bashing who in fact in 2003 tried to reign in the GSEs.
 
Hard Truth said:
Rocketman: "It is true, CRA forced many bankers to
lend money to people that normally would have been turned away."



Fenton: "The CRA was given regulatory power in the early 90s to stop "redlining".

Redling is actually what banks have been doing for the last 100 years or so to guarantee they don't crash and burn lending bums money.

Its making sure the loan recipient had collateral, credit and a down payment.

Discrimination" was checking to see if you had a down payment, good credit, good work history as everyone of those long held standards that the banks had been using for over a hundred years were tossed to the wayside during the sub-prime debacle.

The people that cried discrimination called those standards "redlining". So liberal politicians forced banks and the GSE's to lower their standards, credit was free and easy and what happens when you lend money to someone with bad credit, a poor work history or low income happened,

CRA in conjunction with HUD regulations that mandated quotas on the GSEs are actually the primary cause of the sub-prime debacle."

Fenton again (later): "CRA loans aren't the issue really."



Gathomas88: "They [CRA or HUD]enforced risky lending among the major players until it became a profitable trend and then encouraged everyone else to get in on the action afterwords in order to try and inflate the housing and credit bubbles."



All these claims that the CRA caused the mortgage crisis by forcing banks to give loans to unqualified borrowers, but no one can point to the particular language in the legislation or regulations that says that banks must give loans to unqualified borrowers. No one has even cited a case where the law forced a bank to give a loan to an unqualified borrower. I say its bull**** motivated by racism and/or hatred of regulation, especially towards anti-discrimination laws.
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No dude, CRA "loans" were NOT the issue. AGAIN, CRA having regulatory control over banks to force the lowering of underwriting standards WAS the issue.

Keep your race baiting to your self ok. No one mentioned the color of your skin, made derogatory racist statements towards you or anyone else.

Accusations of redlining initiated the policies and the regulatory control that caused the lowering of standards.

Don't blame the messenger, blame the politicians that took advantage of those regulations and used those standards to nearly collapse the economy.

Lending institutions prior to the nonsense made loans for almost a hundred years without tanking our economy.

They did that by sticking to standards.
 
Fenton said:
Irrelevent ? Of course its irrelevent to you because it damning evidence. Someone else would have "held the bag " ? How ridiculous. No private entity on gods green earth would have taken on over a trillion dollars in bad debt. No group of private entities would have taken on that massive amount of debt.
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Take off the partisan glasses for a minute. Sub-prime mortgage backed securities were not a bad investment before the real estate bubble burst which is why hundreds of billions of dollars worth were privately being bought and sold in the market for decades. There are no make believes or could have beens. That is just reality. Fannie and Freddie were left with the lion's share because most firms saw the writing on the wall when home values started depreciating and started dumping the securities on their clients but it wasn't their loss which had the biggest impact. It was the failure of firms like Lehmann Brothers and Bear Stearns and the ruin of thousands of private individuals who had invested in these securities.

Fenton said:
As for the mandates who pushed for those quotas ? Was it a Conservative ? A group of Conservatives ? Was that Politician allowed to exit Congress by writing a bill to reinforce his complete and total lack of integrity by blaming the banks with new regulations ? AKA Frank Dodd new banking regulations.
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One Senator can't make a bill into a law. On the Republican side, only John McCain actively fought against it and his proposals were shot down by Republican controlled committee. The Republicans get zero absolution. And give it up with Clinton. Bush II was out there stumping for subprime loans and boasting about home ownership and his father is the one who required Fannie and Freddie to purchase those securities in the first place.

Fenton said:
No dude, CRA "loans" were NOT the issue. AGAIN, CRA having regulatory control over banks to force the lowering of underwriting standards WAS the issue.
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Thats a ridiculous thing to say. How can you condemn the lowering of lending requirements while saying that its result was not the issue? Besides, 80% of sub-prime loans were issued by institutions over which CRA regulation didn't apply and it was those loans which were the predominant backer of the toxic securities. Those loans were a gravy train for lenders for a long time. The problem was never too much regulation; it was a lack of regulation of the mortgage companies engaging in predatory lending and firms engaging in unethical trading coupled with stupid consumers who bought things they couldn't afford.
 
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Napoleon said:
The purchase of securitized subprime loans by Freddie Mae and Fannie Mac
was required by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, signed by George H.W. Bush. Of course, these were already being bought and sold in the market before then. You can't hide from those facts. His son didn't seem too sad about it either while he was boasting about home ownership on national television. There are two differences between you and I on this issue; 1. I know what I'm talking about. 2. I don't blame Presidents for irresponsible borrowing on the part of consumers and fraud on the part of firms like Goldman Sachs. The crisis was not as bad as it was because Freddie and Fannie bought subprime mortgage backed securities. It was a catastrophe because firms like Goldman Sachs were marketing subprime mortgage backed securities they knew beyond any doubt were toxic to their clients as good investments; and people believed them. They spread the damage over a wide area by deliberately setting their own clients up for failure and smugly pointed out it wasn't illegal. That is why the "conservative" so-called solution of limited regulation is a steaming pile of horse manure.
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Your focus on an investment bank when the GSEs bought and sold these same securities to and from Goldman and Sachs is a pile of horse manure.

More mitigation and selective ignorance form you. Yea G and S wanted to bankrupt themselves.

Investment banks TRADE securities. Throughput as they make commisions on trades win or lose.

The trading of MBSs, Govt backed MBS, bundled with good loans and bad loans so their value could never be assesed finanaced the secondary market.

What private investment bank had the abillity to bundle Govt backed securities anyway ?

The GSEs bundled billions in MBS to sell off into the market and Investment banks were the one caught holding the worthless securities.

Hell, the GSEs created the MBS. But you ignore that ok. Because it counters your nonsense.
 
rathi said:
S&P made fraudulent claims when they gave crap mortgages AAA ratings and they should be brought to justice for it. I am not unaware that the motivations for the lawsuit may be corrupt, but that doesn't make the case invalid. Its extremely common for the government to do the right thing for the wrong reason.
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I disagree. I'd rather the Government actually do the right thing. Going after S&P this single time for corrupt reasons does not solve the problem at all. It's possible S&P will not even get prosecuted if backroom deals are made, and even if they ARE brought in, so what? The system is still screwed.

I'm fairly neutral on this act, because it does absolutely nothing to address the real problem.
 
Fenton said:
More mitigation and selective ignorance form you. Yea G and S wanted to bankrupt themselves.
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What is it that you don't comprehend about the fact that subprime mortgage-backed securities were profitable before the housing bubble burst? Why do you think firms like Goldman Sachs and private investors bought them in the first place? Even Fannie Mae and Freddie Mac's own stockholders were pressuring them to buy more in the late 90s.

Fenton said:
Hell, the GSEs created the MBS.
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Who cares? There was a huge market for them and they'd been in play for 40 years before the financial collapse.
 
Fenton said:
No dude, CRA "loans" were NOT the issue. AGAIN, CRA having regulatory control over banks to force the lowering of underwriting standards WAS the issue.
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CRA was not the problem with the financial crisis, it was created by the republicans.

Here is a good article about the impact of CRA, and it was marginal impact on the financial crisis.

Role of CRA Community Reinvestment Act 2

The Community Reinvestment Act (CRA) encourages banks to expand mortgage lending in the communities in which they have branch offices, subject to maintaining overall levels of financial safety and soundness. Some have argued that this regulation forced banks to lower their credit standards and engage in riskier mortgage products in order to extend credit to lower-income individuals, who perhaps should not have received such loans. However, data provided by the Home Mortgage Disclosure Act (HMDA) reveal that loans covered by the CRA accounted for only a fraction of mortgage lending to lower-income borrowers and neighborhoods. This is especially true of higher-priced, or subprime, mortgages.1 CRA assessment-area lending
accounted for only nine percent of higher-priced loans to lower-income borrowers and neighborhoods, while independent mortgage companies accounted for the majority. Further, the subprime share of assessment-area loans made to lower-income borrowers and lower-income neighborhoods was lower than the subprime share for all loans made between 2004 and 2006.

The Vast Majority of Subprime Lending to Lower-Income Borrowers and
Neighborhoods Was Outside the Requirements and Scrutiny of the CRA

<snip>

There are many causes to the collapse of the housing market and the recent financial turmoil, but the contribution of the CRA appears marginal. While banks did engage in subprime lending in their assessment areas, they did so at a lower rate than the market in general and accounted for only a small fraction of subprime loans to lower-income borrowers and lowerincome
neighborhoods. The data suggest that far from being forced into risky corners of the market, the institutions under the scrutiny of the CRA were crowded out by unregulated lenders.
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http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/n08-2_park.pdf

This is the first paper I read at the Harvard Joint Center for Housing Studies, and it says about the same thing that the Fed governors said, CRA was not a primary cause of the housing debacle of financial collapses of the banks. The majority was caused by private industry.

If you want to make the case that CRA played a major role in the crisis, first explain HOW it MADE the banks MAKE loans to people who did not deserve them. I know the CRA bill, and I don't believe it.
 
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Napoleon said:
What is it that you don't comprehend about the fact that subprime mortgage-
backed securities were profitable before the housing bubble burst? Why do you think firms like Goldman Sachs and private investors bought them in the first place? Even Fannie Mae and Freddie Mac's own stockholders were pressuring them to buy more in the late 90s.


Who cares? There was a huge market for them and they'd been in play for 40 years before the financial collapse.
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Wow your corrupted. Youv'e gone from denying to justifying.

WHY were they profitable ?? Why ?

Was there a massive housing bubble mandated by cheap and easy credit ?

Was there GSEs who were commited to buying up massive amounts of debt ?
Offering up loans to any one and everybody with a heartbeat will tend to create a massive bubble and falsley inflate the value of said securities associated with that bubble.

But you know this right ? Your in the "financial sector "

You still don't get it. Your willing to cherry pick symptoms but refuse to or are unable to "comprehend" the crisis in its entirety.

That the institutionalizing of sub-prime mortgages by Govt and the mandated lowering of standards under the false premise of " combatting racism or bigotry " nearly caused the failure of our finanacial system.

Blame the banks...how simple. The banks didn't have the abillity to bundle those mortgages with good ones to sell off to investors who lost billions when it crashed.

But as you and your ilk call for punishment of the manufactured "evil bank guy " you fail to grasp where the real crime was commmited.

Holders suing who ? Why didn't one politician have to answer for this ?

Ill tell you why. Because there are enough people out there like you and Hard Truth who bought the BS, hook line and sinker.

Sure MBS use to be a good investment, when their value wasn't hidden and corrupted with sub-prime trash.
 
Napoleon said:
Take off the partisan glasses for a minute. Sub-prime mortgage backed securities were not a bad investment before the real estate bubble burst which is why hundreds of billions of dollars worth were privately being bought and sold in the market for decades. There are no make believes or could have beens. That is just reality. Fannie and Freddie were left with the lion's share because most firms saw the writing on the wall when home values started depreciating and started dumping the securities on their clients but it wasn't their loss which had the biggest impact. It was the failure of firms like Lehmann Brothers and Bear Stearns and the ruin of thousands of private individuals who had invested in these securities.
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You literally can't be using this as an argument?

Sub-prime mortgages weren't issued as MBSs without alt-a and prime loans attached. So as long as 90% of them paid off, it looked like a good investment. Fannie and Freddie were stuck holding them because they kept buying them. They didn't stop in 2006 or 2007 when the writing was on the wall. They actually expanded their holdings. They bet wrong just like everyone who was hold the crap securities.

Also note.. every investment looks good until it falls apart. Tulips were a really good investment from Nov 12th 1636 to Feb 3rd 1637. But we now call that Tulip mania.
 
Fenton said:
Wow your corrupted. Youv'e gone from denying to justifying.

WHY were they profitable ?? Why ?

Was there a massive housing bubble mandated by cheap and easy credit ?

Was there GSEs who were commited to buying up massive amounts of debt ?
Offering up loans to any one and everybody with a heartbeat will tend to create a massive bubble and falsley inflate the value of said securities associated with that bubble.

But you know this right ? Your in the "financial sector "

You still don't get it. Your willing to cherry pick symptoms but refuse to or are unable to "comprehend" the crisis in its entirety.

That the institutionalizing of sub-prime mortgages by Govt and the mandated lowering of standards under the false premise of " combatting racism or bigotry " nearly caused the failure of our finanacial system.

Blame the banks...how simple. The banks didn't have the abillity to bundle those mortgages with good ones to sell off to investors who lost billions when it crashed.

But as you and your ilk call for punishment of the manufactured "evil bank guy " you fail to grasp where the real crime was commmited.

Holders suing who ? Why didn't one politician have to answer for this ?

Ill tell you why. Because there are enough people out there like you and Hard Truth who bought the BS, hook line and sinker.

Sure MBS use to be a good investment, when their value wasn't hidden and corrupted with sub-prime trash.
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And you still don't get it. 80% of subprime loans were issued free of CRA regulation so your remarks about CRA regulation being responsible are total bunk as every expert on the subject has pointed out. Private companies and investors were buying and selling mortgage backed securities for 40 years and, in fact, starting 10 years before the CRA had even been conceived. Financial institutions get the blame for two reasons: 1. They issued subprime loans with obscene rates, penalties, and fees that their clients could not possibly afford by the truckload and completely free of regulation. It was these loans which made up the bulk of toxic securities. and 2. Investment firms like Goldman Sachs lied to their own clients, what they refer to as "muppets", and marketed securities to them they knew to be toxic as good investments. Unfortunately, you're too full of partisan bile to accept those facts but that doesn't mean they'll ever go away.
 
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Napoleon said:
And you still don't get it. 80% of subprime loans were issued free of CRA
regulation so your remarks about CRA regulation being responsible are total bunk as every expert on the subject has pointed out. Private companies and investors were buying and selling mortgage backed securities for 40 years and, in fact, starting 10 years before the CRA had even been conceived. Financial institutions get the blame for two reasons: 1. They issued subprime loans with obscene rates, penalties, and fees that their clients could not possibly afford by the truckload and completely free of regulation. It was these loans which made up the bulk of toxic securities. and 2. Investment firms like Goldman Sachs lied to their own clients, what they refer to as "muppets", and marketed securities to them they knew to be toxic as good investments. Unfortunately, you're too full of partisan bile to accept those facts but that doesn't mean they'll ever go away.
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What caused the lowering of lending underwriting standards for that "80%" ?
 
OpportunityCost said:
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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You are essentially making my point: there was a systemic breakdown in the risk assessment industry between 2002 and 2006. To such a degree that the worlds largest banks (not just GSE's) were heavily composed of BBB paper that was rated AAA.
 
Napoleon said:
The lenders themselves.
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It seems people cannot accept the fact that CRA loans (even sub prime CRA loans) performed better than their counterparts at equal risk levels.
 
Napoleon said:
The lenders themselves.
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LOL !!! So much for your week attempt at trying to remain objective.

You went off the deep end and took the bait.

The lenders had no more abillity or power to lower underwriting standards of Govt backed sub-prime mortgages than donald duck.

Your'e so partisan you have to marginalize your argument and continue to push the manufactured narrative of the left.


Those "eeebil banks". How simplistic could you be ?

Your in the "financial industry" ? Without the fundamental abillity to remain objective ? Do you work for the Govt ?
 
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