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Home price drops exceed Great Depression: Zillow

Councilman said:
Until Obama starts to show same basic understanding of the facts about what is needed the economy will continue to suck.

So far nothing he or any of his disciples have come up with has really worked and until he learns that his amateurs need to be replaced by people with some real business management talent and experience a mind set that contributes so much to the problem with despair will continue.

Until people feel better about the direction we are going in economically they are not going to be spending and job numbers will continue to suffer for it.
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Obama? Wasn't it the last administration that put the economy on the brink of total collapse?
How soon they forget.....
 
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Dirty Harry said:
Obama? Wasn't it the last administration that put the economy on the brink of total collapse?
How soon they forget.....
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This housing debacle got its start with Bill Clinton, like it or not.
 
MaggieD said:
This housing debacle got its start with Bill Clinton, like it or not.
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The housing bubble could have never happened without Bush's push to get everyone to own their own home(ownership society) and Greenspans interest rate cuts. There was a recession in 2001, No bubble before that. It all happened after the '01 recession. New home construction almost doubled between '01 and '06. That is a fact. That was the bubble.

newhomesales527.png
 
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justabubba said:
show us your cite for this analysis ...

the exposure for fannie mae and freddie mac was due to their purchase of bundled mortgage securities ... often the liar loans ... which the fannie mae/freddie mac regulations would NOT allow them to underwrite
with privatization of those GSEs - which occurred during the nixon regime - profits of the GSEs were distributed to the shareholders while we can today see that the losses were distributed to the taxpayers. the fannie mae/freddie mac principals were trying to maximize profits by buying the high risk/high return packaged mortgages. again, the kind they were prohibited - by regulation - from underwriting. those weak loans they "invested" in were non-conforming loans. those loans were the ones hardest hit by the meltdown - NOT the fannie mae/freddie mac "conforming" loans. the definition of a 'conforming" loan is one which could be purchased by fannie mae/freddie mac on the secondary market


yep, dicknbush deregulated. regulation was seized upon as something bad, leading to the imprudent efforts to deregulate
a very stupid, very republican action


i agree. very stupid
glad you agree

now to the article by sowell in a reich wing rag. how "honest" of him to place frank's responses in quotes, but to fail to offer up the questions posed, in order to place frank's remarks in context
goebbels would be proud that his techniques were adopted by an apologist of the republican party
i see that you parroted the misinformation presented here:
there was nothing which required lenders to make loans to those without the means to pay
demand for high return packaged mortgages fueled the risk taking by mortgage lenders. they could - and did - write weak loans and earn a profit on each one. because those mortgages were snapped up to be packaged by a hungry investor market seeking rates above those low yields on safe government securities, those mortgage underwriters sustained no risk. they passed it forward to the investors - while retaining their share of the profits
that activity was NOT facilitated by CRA
it was aided by the absence of regulators in a deregulated economy, courtesy of the republican regime
your boys
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So you totally disregard the efforts of the Clinton economic tem of Rubin,Summers and Greenspan from any accountability? It might fit your partisan narrative but they killed regulation of the derivative market. That in turn allows banks to "offload" the risk and thus capital requirements for these lousy loans. It is interesting that Summers and Geithner who was an undersecretary for Rubin then found their way into the next deomocratic administration.
 
Lord Tammerlain said:
And who is Barney Frank?
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he's the former chair of house financial services who, responsible for oversight of the floundering f's, assured america they were "fundamentally sound"

What They Said About Fan and Fred - WSJ.com

of course, bawney's not alone

meanwhile, friday:

My Way News - Home sales hit 13-year low; slow recovery ahead

still no basement in sight

moody's forecasts 5% fewer sales in 2011

republicans are gonna air fannie and fred in hearings

republicans are then gonna put forth their reform

remember, obama's reg bill EXEMPTS the failed f's, why?

Democrats block reform of corrupt mortgage giants; Fannie Mae and Freddie Mac to get billions more - Washington DC SCOTUS | Examiner.com

instead, the white house keeps injecting billions more into the upside down and drowning lenders

republicans will NOT exempt fannie and fred

stay up
 
MaggieD said:
This housing debacle got its start with Bill Clinton, like it or not.
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ha, this started way before bill clinton. he certainly made it worse, most notably by dropping glass-steaggall. but it was started way before him. he was just one more link in a very very long chain.
 
BmanMcfly said:
Well, that was the scam...
In 1991, the Glass–Steagall Act was repealed, originally, the crimes that the Glass-Stiegall act prevented were acts that the founding fathers would have considered an act of the same magnitude as treason... but the most important part is that this allows for 'derivatives investments'... where the 'value' derives from the value of something else.

Since then big banks have formed, and they make mortgages they KNOW people can't pay back so that they get MASSIVE volume of loans, and creates an artificial bubble because most of these people should at best be renting. That's the setup... and this is the only area where there's individual fraud on top of corporate fraud.

Here's where it gets fun... because each bank might be holding hundreds of thousands or millions of these mortgages, they create a 'pool' on which people can invest in these 'mortgage backed securities'. They convince the regulators that these are all AAA investments when the reality is that they are only as good, but they are a mix of good and bad. Overtime, the banks learn the good from the bad, and sell the good to their friends and the bad to anyone else... and split them off and since more people are invested the regulators effectively get bought off to continue rating these at AAA.

So, when a person defaults on the mortgage, well, they are not defaulting on a 100 000 $ house... they are killing that investment holding that mortgage... and since these are leveraged at 100:1 (I'm told, correct me if wrong) that 1 house kills off a 10 million dollar share of the overall stock.

So, your '5.2 trillion' COULD actually be the base on which exist this leveraged investments... MEANING... that 5.2 trillion is 0.5 QUADRILLION. This is all bank debts for creating this ponzi scheme...

Here's the final nail :
Bailout of these derivatives. Put that on tax payer heads, and it doesn't matter what the interest is, there's not that much that can be produced on earth through which you can pay that debt...
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Hopefully you know who had this repealed.
 
BmanMcfly said:
It was Clinton... and I was wrong, it was in 1999...
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let's examine the name of the bill up close [emphasis below added bby bubba]:
... In 1999, Bill Clinton signed the Gramm-Leach-Bliley Act, a bank deregulation bill that swept away a Depression-era law known as Glass-Steagall. The new law had such a chorus of bipartisan support that it passed the Senate 90-8. One of the few who raised a cry against it was Byron Dorgan. “I think we will look back in 10 years’ time and say we should not have done this, but we did because we forgot the lessons of the past,” said Dorgan, a populist North Dakota Democratic senator, “and that that which is true in the 1930s is true in 2010.” ...
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90-8 ... anybody really think a veto would have been effective?
http://www.nytimes.com/2008/09/28/magazine/28wwln-reconsider.html

btw: Sen. Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia)

search for phil gramm's wife in this article ... dare you: The Subprime Mess and Phil Gramm: An Experiment in Deregulation | InjuryBoard Los Angeles
 
justabubba said:
let's examine the name of the bill up close [emphasis below added bby bubba]:
90-8 ... anybody really think a veto would have been effective?
http://www.nytimes.com/2008/09/28/magazine/28wwln-reconsider.html

btw: Sen. Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia)

search for phil gramm's wife in this article ... dare you: The Subprime Mess and Phil Gramm: An Experiment in Deregulation | InjuryBoard Los Angeles
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Also check the role of Rubin,Summers,Greenspan in stifling deregulation of deriviatives. Also note that Geithner was an undersecretary of Treasury working for Rubin.
 
DontDoIt said:
With the help of Larry Summers, and a couple of Obama's other advisors who I can't think of off the top of my head.
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justabubba said:
let's examine the name of the bill up close [emphasis below added bby bubba]:
90-8 ... anybody really think a veto would have been effective?
http://www.nytimes.com/2008/09/28/magazine/28wwln-reconsider.html

btw: Sen. Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia)

search for phil gramm's wife in this article ... dare you: The Subprime Mess and Phil Gramm: An Experiment in Deregulation | InjuryBoard Los Angeles
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washunut said:
Also check the role of Rubin,Summers,Greenspan in stifling deregulation of deriviatives. Also note that Geithner was an undersecretary of Treasury working for Rubin.
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Here's the catch :

You are ALL CORRECT!!

BIPARTISAN support, there were only 8 people that said no... This wasn't 'deregulation' this was anarchy... a wild wild west of white collar crime, ponzi schemes of unimaginable scope... I don't even blame people for calling this a 'conspiracy theory' for so long.
 
ricksfolly said:
Only ten percent in my city. Where do these prophets of doom come from, and who benefits from their lies?

ricksfolly
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Your city is down only 10% from the peak in 2006? Do you have a link for that or is that a guess?

26% from the peak nationwide is about right.
 
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Dirty Harry said:
The housing bubble could have never happened without Bush's push to get everyone to own their own home(ownership society) and Greenspans interest rate cuts. There was a recession in 2001, No bubble before that. It all happened after the '01 recession. New home construction almost doubled between '01 and '06. That is a fact. That was the bubble.

newhomesales527.png
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I actually agree with you. Bush sealed the deal. You'll get no argument from me. However, Bill Clinton championed the Community Reinvestment Act, and that was more than just the camel's nose under the tent. Low interest rates (like we're seeing now in spades) caused this bubble -- Clinton and Bush encouraged (arm-twisted) banks into loosening their lending standards so that people who couldn't buy lunch could buy homes. Clinton + Bush.
 
MaggieD said:
I actually agree with you. Bush sealed the deal. You'll get no argument from me. However, Bill Clinton championed the Community Reinvestment Act, and that was more than just the camel's nose under the tent. Low interest rates (like we're seeing now in spades) caused this bubble -- Clinton and Bush encouraged (arm-twisted) banks into loosening their lending standards so that people who couldn't buy lunch could buy homes. Clinton + Bush.
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The CRA really had nothing to do with the home construction and refinancing boom and resulting housing bubble that began after the recession of '01. Home sales were flat until Greenspan lowered interest to record levels and Bush pushed home ownership and set policies so everyone could own their own home.

According to a study by the Federal Reserve, 94% of high-cost loans originated during the housing boom had nothing to do with Community Reinvestment Act goals. Lending to poor didn't spur crisis -Fed's Kroszner

The Comptroller of the Currency. John C. Dugan, agrees: "CRA [the Community Reinvestment Act] is not the culprit behind the subprime mortgage lending abuses, or the broader credit quality issues in the marketplace. Indeed, the lenders most prominently associated with subprime mortgage lending abuses and high rates of foreclosure are lenders not subject to CRA. A recent study of 2006 Home Mortgage Disclosure Act data showed that banks subject to CRA and their affiliates originated or purchased only six percent of the reported high cost loans made to lower-income borrowers within their CRA assessment areas."**
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Dirty Harry said:
The CRA really had nothing to do with the home construction and refinancing boom and resulting housing bubble that began after the recession of '01. Home sales were flat until Greenspan lowered interest to record levels and Bush pushed home ownership and set policies so everyone could own their own home.
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I wont' argue with you, Harry. As a Realtor, I was dumbfounded that people were able to buy homes with no money down, "state their income" instead of proving it, buy homes two months out of bankruptcy, negative amortization loans. I am willing to cast plenty of blame on Barney, though.
 
MaggieD said:
I wont' argue with you, Harry. As a Realtor, I was dumbfounded that people were able to buy homes with no money down, "state their income" instead of proving it, buy homes two months out of bankruptcy, negative amortization loans. I am willing to cast plenty of blame on Barney, though.
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It was a feeding frenzy with all the artificially created demand for homes. They couldn't build them fast enough. But Fannie and Freddie didn't cause the Bubble either:
Fannie Mae and Freddie Mac were victims, not culprits

Posted by: Aaron Pressman on September 26, 2008
There’s a dangerous — and misleading — argument making the rounds about the causes of our current credit crisis. It’s emanating from Washington where politicians are engaging in the usual blame game but this time the stakes are so high that we can’t afford to fall victim to political doublespeak. In this fact-free zone, government sponsored mortgage giants Fannie Mae and Freddie Mac caused the real estate bubble and subprime meltdown. It’s completely false. Fannie Mae and Freddie Mac were victims of the credit crisis, not culprits.

Start with the most basic fact of all: virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. That’s right — most subprime mortgages did not meet Fannie or Freddie’s strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower’s income or employment history? All made in the private sector, without any support from Fannie and Freddie.

Look at the numbers. While the credit bubble was peaking from 2003 to 2006, the amount of loans originated by Fannie and Freddie dropped from $2.7 trillion to $1 trillion. Meanwhile, in the private sector, the amount of subprime loans originated jumped to $600 billion from $335 billion and Alt-A loans hit $400 billion from $85 billion in 2003. Fannie and Freddie, which wouldn’t accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity.

There’s a must-read study by staff members of the Federal Reserve Bank of New York analyzing the roots of the subprime crisis that came out in March. I don’t think it got much attention then as the conclusions seemed uncontroversial at the time. But now that Washington politicians are trying to rewrite history, it should be mandatory reading for every American interested in knowing how we got here.

The study identifies five causes of the subprime meltdown:
-Convoluted loan products that consumers didn’t understand.
-Credit ratings that didn’t do a good job highlighting the risks contained in subprime-backed securities.
-Lack of incentives for institutional investors to do their own research (they just relied on the credit ratings).
-Predatory lending and borrowing (which I think means fraud perpetrated by borrowers).
-Significant errors in the models used by credit rating agencies to assess subprime-backed securities.
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Dirty Harry said:
It was a feeding frenzy with all the artificially created demand for homes. They couldn't build them fast enough. But Fannie and Freddie didn't cause the Bubble either:
Fannie Mae and Freddie Mac were victims, not culprits

Posted by: Aaron Pressman on September 26, 2008
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I humbly admit to being righteously educated. Great post. Thank you, Dirty Harry. I cannot disagree one iota with the five causes listed. Makes absolutely perfect sense to me. I'm marking this as a favorite. Nice job.
 
MaggieD said:
I humbly admit to being righteously educated. Great post. Thank you, Dirty Harry. I cannot disagree one iota with the five causes listed. Makes absolutely perfect sense to me. I'm marking this as a favorite. Nice job.
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It was a major blame game. The data and evidence tells the real story.
 
Dirty Harry said:
It was a feeding frenzy with all the artificially created demand for homes. They couldn't build them fast enough. But Fannie and Freddie didn't cause the Bubble either:
Fannie Mae and Freddie Mac were victims, not culprits

Posted by: Aaron Pressman on September 26, 2008
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I consider the assessment a half truth. While Fannie / Freddie didn't write "sub prime" loans. They do plenty of Alt-A (alternative documentation) loans that lower borrowing standards and also require less documentation, including income verification. According to Wiki they own 350 billion in these alt-a loans in 2008. So this program is plenty culpable.
 
Actually at this point I think it's an out and out lie. Fannie / Freddie do (did?) buy subprime.
 
Phoenix said:
I consider the assessment a half truth. While Fannie / Freddie didn't write "sub prime" loans. They do plenty of Alt-A (alternative documentation) loans that lower borrowing standards and also require less documentation, including income verification. According to Wiki they own 350 billion in these alt-a loans in 2008. So this program is plenty culpable.
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Here's my question : Is that 350 billion of straight loans, or is it 350 billion of those loans packaged and sold of as derivatives???

If it's the latter, then this 350 billion ACTUALLY represents a potential 'bailout debt' of 35 TRILLION because of the typical derivatives leveraging around 100:1.

This hasn't happened yet, but the house and senate, as well as the president haven't seen a bailout of an industry that they ddn't love, so when fannie /freddie say they need another bailout, 35 trillion could be the number they are asking for, and would mean a near instantaneous doubling + of the national debt...
 
BmanMcfly said:
Home price drops exceed Great Depression: Zillow | Reuters



Oh wait a second, I thought the recession was over in 2009...
CBC News - Money - Recession declared officially over

Yet home prices have fallen for 53 consecutive months... that's more then 4 years of straight decline.

So, how long before these prices bottom out and start to stabilize again?? How much more is your mortgage then the value of your house?? How low will the bottom be??

How long before people stop trusting the experts that keep saying 'don't worry, the worst is over'???

What's been the solution? THey are on 'QE2', and there are already rumors of a QE3... which is essentially printing money to cover the day to day expenses. That's about as effective as maxing out both your credit cards, so you get a third card so you can balance the debt with a higher limit... and then having rumors circulating of your plans to get a fourth credit card in the near future.... except worse because it's going out as 'taxpayer covered'...

Does this concern anyone else as it does me?
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It doesnt bother me...Im actually glad it is happening. In fact it HAS to happen. The market is finally being allowed to correct itself. It should have been left alone back in 06.

Yes...its going to sting a bit..especially those that WAY overspent on houses. Price we pay. (and yes...Ive got a few investment properties that are at the barely break even point...thank goodness for not attaching anything to my primary residence!)
 
Dirty Harry said:
It was a feeding frenzy with all the artificially created demand for homes. They couldn't build them fast enough. But Fannie and Freddie didn't cause the Bubble either:
Fannie Mae and Freddie Mac were victims, not culprits

Posted by: Aaron Pressman on September 26, 2008
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EVERYONE shares some guilt here. Banks made stupid loans and their investors should pay the price. People made stupid home purchases and they should pay the price. The government responded poorly. One of the biggest scourges is the get rich quick home flipping industry. Granted...they (ok...we) were just taking advantage of the existing market. Doesnt mean it didnt aid in driving prices through the roof.

People that made those foolish out of reach ARM loans should have rengotiated with their bank by now. If they tighten their belts and ride things out, 5-10 years from now their property values SHOULD climb back up to an appropriate market value.
 
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