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U.S. sues S&P over subprime ratings

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.
 
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.
 
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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.
 
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. "
 
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 ?
 
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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!

350px-U.S._Home_Ownership_and_Subprime_Origination_Share.png

http://en.wikipedia.org/wiki/Subprime_mortgage_crisis
 
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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!

350px-U.S._Home_Ownership_and_Subprime_Origination_Share.png

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.
 
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.
 
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.
 
And it was Bill Frist and the repubs who let GSE reform die on the vine in 2005, the last opportunity to do any good. See proof below:

Now I'm going to show you how the republicans fixed it so Fannie and Freddie could not be regulated, when regulation was needed.


Freddie Mac Tried to Kill Republican Regulatory Bill in 2005 | Fox News

Bill Frist (R-Tenn) did not bring the bill up for a vote because there was not adequate repub support to regulate Fannie, and since they were in the majority in the senate, that ended the effort. It turns out you don't have to buy the whole senate, you just have to get enough votes on the margin to deny the majority their majority, and DCI did that. But you will notice this did not come to light until 2008. For the republicans, you can be for regulation and against regulation at the same time.

Heck, by my count, that's 25 repubs in the senate in favor of reform, and 29 against, out of a total of 54 repub senators. The repubs couldn't even get a majority in their own caucus. This was not on Barney Frank, this could never have passed the senate because the republicans would have killed it if it came to a vote. Frist was just too smart to show the public the real story. Then you can talk about reform and blame its failure on someone else, since the hypocrits weren't on the record.

Which ignores the partisan reality that the dems were for it even more than the republicans. The DC establishment was for it. Which brings me back to you having partisan blinders in your viewpoint of this entire mess.
 
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.

Religious freedom, FOIA cases, gun control issues, states rights cases, HHS mandates, on and on. I cant find any evidence of them working on those sorts of cases. What Im saying is they are only pushing issues on one side of the political spectrum. Immigration issues, child labor in foreign countries, Syrian/Iraqi national issues, etc.

I see you excluded the appeal of a death sentence and a few others. Dont cherry pick data, its revealing of the weakness of your argument.

Bolded: strawman, inflammatory and just plain dickish.
 
Religious freedom, FOIA cases, gun control issues, states rights cases, HHS mandates, on and on. I cant find any evidence of them working on those sorts of cases. What Im saying is they are only pushing issues on one side of the political spectrum. Immigration issues, child labor in foreign countries, Syrian/Iraqi national issues, etc.

I see you excluded the appeal of a death sentence and a few others. Dont cherry pick data, its revealing of the weakness of your argument.

Bolded: strawman, inflammatory and just plain dickish.

Maybe the different points have become too wedded to either side and so you rarely see crossovers about certain points.....................
 
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.

Ok. Since the logic seems to escaping you.

Bank in an area is not lending much money because the area is high risk via their lending standards. CRA comes along in the 90s and informs the bank that they HAVE to lend money in their area of they wish to maintain prime lending rates, expand, aquire another bank or merge with another bank. Further, area community groups would be consulted to see what sort of lending practices occur in the local area.

Bank starts lending in the local area.

Why do you think that is?

Lets take it one step past the bank. Once the loan occurs and a bunch of others, the bank bundles those mortgages out with a rating, which they insure against default and also possibly sell portions of the risk and profit--bundling and CDSs. FnF at some point or another will aquire a portion of the risk, if not outright ownership because they own a significant portion of the home lending market by 2007, just under HALF.

A bank seeing that the government is taking up the risk is going to do what? A bank that is being telegraphed that lending standards are of no consequence so long as their CRA compliance is solid---further that they will recieve rosy reports from inspectors for more funds, aquisitions ratings, etc---all the while their CAMELS rating was dropping. Im not providing you with proof, Im asking that you use your brain and follow the steps of what occurred.
 
Which ignores the partisan reality that the dems were for it even more than the republicans. The DC establishment was for it. Which brings me back to you having partisan blinders in your viewpoint of this entire mess.

Here's the concession. The republicans were for it also. You can no longer deny Bush's drive to put 5.5 mil. minorities in houses, the SEC passing a rule to let the biggest banks triple their leverage, and Frist and the senate repubs tanking FnF reform in 2005 after being lobbied by DCI.

Were the dems for expanding home ownership? Sure, many were. Barney Frank and Maxine Waters said many stupid things about govt. support for housing. But at the end of the day, repubs hand was on the wheel and they enacted the dumbest rules (and in the case of lifelong repub Greenspan, he FAILED to enact smart regulations that could have prevented this).

But if you look at HR 1464, the house companion bill for FnF reform, it passed the house in 2005 by a vote of 330 to 90, it passed with a majority from BOTH PARTIES! There were enough dem votes for responsibility, and that vote proved it. Only Frist and the repubs fumbled the ball on FnF reform in 2005.

And this describes Greenspans failure:

This post is the last installment in a three-part series harvesting the recent Financial Crisis Inquiry Report (FCIC Report) to debunk the top-ten urban myths about the Financial Crisis. To read about myths 1 – 5, click here.
Myth 6: The Financial Crisis was caused by too much government regulation.
Reality 6: No. Deregulation and regulatory forbearance contributed to the Crisis. Stronger, not weaker oversight is now needed.

  • The Report states: “[D]eregulation and reliance on self-regulation by financial institutions, championed by former Federal Reserve chairman Alan Greenspan and others, supported by successive administrations and Congresses, and actively pushed by the powerful financial industry at every turn, had stripped away key safeguards, which could have helped avoid catastrophe. This approach had opened up gaps in oversight of critical areas with trillions of dollars at risk, such as the shadow banking system and over-the-counter derivatives markets. In addition, the government permitted financial firms to pick their preferred regulators in what became a race to the weakest supervisor.”
For example, housing advocates began “meeting with Greenspan at least once a year starting in 1999, each time highlighting to him the growth of predatory lending practices and discussing with him the social and economic problems they were creating.” Greenspan refused to use its authority under the Home Ownership and Equity Protection Act (HOEPA), which permitted the Fed to ban bad underwriting practices at both banks and “nonbank” institutions.

“This was a missed opportunity, says FDIC Chairman Sheila Bair, who described the ‘one bullet’ that might have prevented the financial crisis: ‘I absolutely would have been over at the Fed writing rules, prescribing mortgage lending standards across the board for everybody, bank and nonbank, that you cannot make a mortgage unless you have documented income that the borrower can repay the loan.’” (emphasis added).

Instead of a such a rule, in 2006, the Fed adopted non-binding “guidance” for the mortgage industry which “directed lenders to consider a borrower’s ability to make the loan payment when rates adjusted, rather than a lower starting rate. It warned lenders that low-documentation loans should be ‘used with caution.’” In response, the American Bankers Association was “up in arms,” complaining that the guidance “overstated the risk of non-traditional mortgages” and, not surprisingly, the industry ignored it.
mythbusters: telling the truth about the financial crisis, part iii | theParetoCommons

Greenspan had the authority to regulate both bank and non-bank operators and he did NOTHING. Greenspan the repub helped it blow up much more than the dems, who had no voting majority while this was blowing up.
 
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Here's the concession. The republicans were for it also. You can no longer deny Bush's drive to put 5.5 mil. minorities in houses, the SEC passing a rule to let the biggest banks triple their leverage, and Frist and the senate repubs tanking FnF reform in 2005 after being lobbied by DCI.

Were the dems for expanding home ownership? Sure, many were. Barney Frank and Maxine Waters said many stupid things about govt. support for housing. But at the end of the day, repubs hand was on the wheel and they enacted the dumbest rules (and in the case of lifelong repub Greenspan, he FAILED to enact smart regulations that could have prevented this).

But if you look at HR 1464, the house companion bill for FnF reform, it passed the house in 2005 by a vote of 330 to 90, it passed with a majority from BOTH PARTIES! There were enough dem votes for responsibility, and that vote proved it. Only Frist and the repubs fumbled the ball on FnF reform in 2005.

And this describes Greenspans failure:


mythbusters: telling the truth about the financial crisis, part iii | theParetoCommons

Youre a broke god damned record, Ive said all along BOTH parties held culpability. You have been playing blame Bush the entire damn time. This was an establishment DC driven issue and crisis. They enabled and legislated every bit of what made it possible.

The Congressional Black Caucus had the race card out and ready to throw it over CRA regulation. You seem to have this stupid ****ing problem where you want to make sure the GOP holds more responsibility....I dont give a flying ****. I know both parties were neck deep in this. I know about Gramm/Leach/Bliley and CDS regs and derivative regulation being eased to the point of basically not existing.

Know what my problem is?

We are still doing it. We are still bailing this **** out. We are still doing subprime lending with GSE backing. Its just damned stupid. The more you use borrowed money to prop up the housing industry the harder it will be for it to fully recover.

Banks didnt magically find a profit fairy in low income loans, they found a way to socialize the loss and keep the profit. Fix THAT and we will have a healthy mortgage market again.
 
Ok. Since the logic seems to escaping you.

Bank in an area is not lending much money because the area is high risk via their lending standards. CRA comes along in the 90s and informs the bank that they HAVE to lend money in their area of they wish to maintain prime lending rates, expand, aquire another bank or merge with another bank. Further, area community groups would be consulted to see what sort of lending practices occur in the local area.

Bank starts lending in the local area.

Why do you think that is?

Lets take it one step past the bank. Once the loan occurs and a bunch of others, the bank bundles those mortgages out with a rating, which they insure against default and also possibly sell portions of the risk and profit--bundling and CDSs. FnF at some point or another will aquire a portion of the risk, if not outright ownership because they own a significant portion of the home lending market by 2007, just under HALF.

A bank seeing that the government is taking up the risk is going to do what? A bank that is being telegraphed that lending standards are of no consequence so long as their CRA compliance is solid---further that they will recieve rosy reports from inspectors for more funds, aquisitions ratings, etc---all the while their CAMELS rating was dropping. Im not providing you with proof, Im asking that you use your brain and follow the steps of what occurred.

This makes no sense at all.

Let's see, I'm in private industry, and I see the govt. lowering lending standards, so I think, gee, this is a smart business model, let me go make some loans to people who probably can't pay them back. Since when has private industry decided govt. was good businessmen and decided to emulate what they do? Never.

That was the Countrywide model. Countrywide CEO made a fortune by selling the bad debt to Goldman, Bear Stearns, Merrill Lynch who rolled them into CMO's and sold them. When the repo agreements kicked in, Countrywide would sell itself off or declare bankruptcy and Angelo would be rich which is what happened (sold to BofA). The only way to prevent this was with up front regulation, and Greenspan had the authority to do it, but he failed to use it and he facilitated the greatest financial crisis in the US since the Depression.
 
This makes no sense at all.

Let's see, I'm in private industry, and I see the govt. lowering lending standards, so I think, gee, this is a smart business model, let me go make some loans to people who probably can't pay them back. Since when has private industry decided govt. was good businessmen and decided to emulate what they do? Never.

That was the Countrywide model. Countrywide CEO made a fortune by selling the bad debt to Goldman, Bear Stearns, Merrill Lynch who rolled them into CMO's and sold them. When the repo agreements kicked in, Countrywide would sell itself off or declare bankruptcy and Angelo would be rich which is what happened (sold to BofA). The only way to prevent this was with up front regulation, and Greenspan had the authority to do it, but he failed to use it and he facilitated the greatest financial crisis in the US since the Depression.

You missed the part where FnF picked up more than a little of the paper and where AIG insured it. You almost have it but you dont want to admit the GSEs wound up holding nearly half of the entire US mortgage market once this was all said and done. That tears up this obsessive BOOOOOOOOOSSSSSSHHHH issue you have. Ignore who was in charge, you act like Obama or Clinton would have done ANYTHING differently. They wouldnt have. Thats part of the point.
 
Youre a broke god damned record, Ive said all along BOTH parties held culpability. You have been playing blame Bush the entire damn time. This was an establishment DC driven issue and crisis. They enabled and legislated every bit of what made it possible.

The Congressional Black Caucus had the race card out and ready to throw it over CRA regulation. You seem to have this stupid ****ing problem where you want to make sure the GOP holds more responsibility....I dont give a flying ****. I know both parties were neck deep in this. I know about Gramm/Leach/Bliley and CDS regs and derivative regulation being eased to the point of basically not existing.

Know what my problem is?

We are still doing it. We are still bailing this **** out. We are still doing subprime lending with GSE backing. Its just damned stupid. The more you use borrowed money to prop up the housing industry the harder it will be for it to fully recover.

Banks didnt magically find a profit fairy in low income loans, they found a way to socialize the loss and keep the profit. Fix THAT and we will have a healthy mortgage market again.

You are right about me. I want to be sure everyone knows what the repubs did during Bush's failed presidency. The right doesn't want to talk about the repub failing, they would rather talk about a law in 1996 that had little to do with the spike in subprime in 2004, and act like it was all CRA. It was not, the repub hands were on the wheel, and I know what they DID, or in Greenspans case failed to do, that directly made this into a crisis. It didn't have to be that way, but the repub hands were on the wheel, and they did the deeds. The dems were not helpful to the nation at the time this was going on, but the repubs were driving the bus, over a cliff.
 
You missed the part where FnF picked up more than a little of the paper and where AIG insured it. You almost have it but you dont want to admit the GSEs wound up holding nearly half of the entire US mortgage market once this was all said and done. That tears up this obsessive BOOOOOOOOOSSSSSSHHHH issue you have. Ignore who was in charge, you act like Obama or Clinton would have done ANYTHING differently. They wouldnt have. Thats part of the point.

You can't make that point. Clinton had his run, and the economy purred on his watch.
 
You are right about me. I want to be sure everyone knows what the repubs did during Bush's failed presidency. The right doesn't want to talk about the repub failing, they would rather talk about a law in 1996 that had little to do with the spike in subprime in 2004, and act like it was all CRA. It was not, the repub hands were on the wheel, and I know what they DID, or in Greenspans case failed to do, that directly made this into a crisis. It didn't have to be that way, but the repub hands were on the wheel, and they did the deeds. The dems were not helpful to the nation at the time this was going on, but the repubs were driving the bus, over a cliff.

Youre playing the fool. This was an establishment DC issue. BOTH sides wanted it, BOTH sides voted for it, BOTH sides would have been for it until it crashed and burned.

You dont give a wet fart about the truth, you are one of those partisans that just wants to hang it around the other sides neck. Thanks for this post it reveals to everyone that you have no interest in anything other than partisan bull**** about this debate. Be a fraud somewhere else, Im interested in someone that can be honest about things.
 
You can't make that point. Clinton had his run, and the economy purred on his watch.

Gramm Leach Bliley and CDS legalization were passed on his watch along with tearing down the retail bank commercial bank separation. How deep is the hole going to get before you realize how stupid blind partisanship makes you look?
 
Youre playing the fool. This was an establishment DC issue. BOTH sides wanted it, BOTH sides voted for it, BOTH sides would have been for it until it crashed and burned.

You dont give a wet fart about the truth, you are one of those partisans that just wants to hang it around the other sides neck. Thanks for this post it reveals to everyone that you have no interest in anything other than partisan bull**** about this debate. Be a fraud somewhere else, Im interested in someone that can be honest about things.

I'm interested in debate with folks who can post responsible support for their position and you have not done that in this thread.
 
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.

Yes, but these were loans were not below the prime rate of interest. Only those who were large clients got money below the prime rate.They were regular mortgages and, historically, a good conservative investment until the government stepped in and made lending money a social responsibility.
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.

Why would any lending institution do this? Why did they break from traditional banking customs?
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.

I'm not surprised. Lending institutions were forced by the government to lend money to high risk people, such as those in Barack Obama's class action suit. They knew they would fail but they had no alternative but to lend the money anyway.
 
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.

With all that empirical data I posted, a fraction of what exist to prove the sub-prime collapse was mandated by Democrat policies that "loosened underwriting standards " ( HUDs own words) and forced the GSEs to buy up massive amounts of bad debt, bundle it up with good mortgages and then sell it your still focused on George Bush.

That mixture of quotes in my previous thread were from HUD and the GSEs own documents released during and after the collapse.

I think that Liberals suffer from a type of pathology similar to toxoplasmosis. Its like a turrets affliction that forces them to scream out "its Bush's fault"

My points have always been about who was responsible for changing the fundamental laws and/or regulatuons that prevented a mess like this in the last 100 years or so.

Clinton allowed for the securitization of these loans and HUD gave out mandates and quotas to the GSEs and CRA regulations forced the lowering of standards for private and public entities.

Your concerned about 2004 - 2006 ? Well who bought up all of that massive debt ? Follow the money and then look to who required those institutions to increase their market share. It wasn't a Republican.

Whats worse is after the collapse America elected the least qualified and competent replacement in our nations History to clean up his parties mess.

What did Obama do ? Focused on a health care law and gave hundreds of billions to corrupt and bankrupt green energy companies and public sector unions.

Stupid stupid stupid

.Our future and the future of our children is being determined by idiots. Low information voters.

After four years and massive unprecedented inflationary action by the Fed with unprecedented low interest rates its getting worse. The next bubble ?

Bonds. We wont climb out of that unscathed as yields on short term bonds shoot straight up. Sains shot up to over 7%.

You think we can handle an extra trillion a year just in debt service expenditures ?
 
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