"It's not going to end Well "

ludin said:

Can you please explain to me what any of that nonsense has to do with the thread and why you can't address what is being discussed.

I don't have to entertain that nonsense and I won't.
You post was a red herring and a dodge.

Go back and address what was discussed or don't bother.

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ludin said:

I believe it was Chris dodd and Barney frank that refused to get fannie and freddie under control
https://www.usnews.com/opinion/blog...rats-were-wrong-on-fannie-mae-and-freddie-mac

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Fenton said:

There had been numerous warnings about the GSEs and their potential to cause a systemic financial crisis. Bush warned of that very thing back on 2001

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Fenton said:

Fannie and Freddies very substantial and centralized role in the subprime fiasco is no theory. Without the GSEs , there wouldnt have been a 2008 Subprime meltdown.

Prior to 1995, the GSEs purchased primarily prime mortgages. After securitizing them as agency MBS, those securitizies would be sold off with a '" AAA " rating
GSEs debt was for years considered as safe as US Treasuries and thats because the GSEs had very high standards when it came to the type of loans they purchased

That all changed when Bill Clinton lowered those standards through his 1995 National Homeowners strategy. Clinton gave them affordable lending " goals " which included quotas for the purchase of subprime loans that strated at 46 percent.

That is 46 percent of loans the GSEs purchased had to be subprime. By 1999, just Fannie mae under the leadership of Franklin Raines was celebrating 1 Trillion dollars in " affordable lending " purchases.

In 2000, Andrew Cuomo, then head of HUD commited the GSEs to 2.4 Trillion dollars in Subprime purchases and by the time the GSEs were decalred insolvent in 2008, they held over 5 Trillion dollars in debt, and had distrubted Trillions of dollars in agency MBSs that were backed by subprime loans

The GSE were exempt from not only paying local and state taxes, they were up to 2004 exempt from SEC oversight and reporting requirements. They also had a 4 Billion dollar line of credit straight from the US Treasury

After being fined in 2004 for 400 million dollars for corrupt accounting techniques, the GSEs agreed to submit to the same SEC reporting requirements all publicly traded companies have to submit to.
In 2011, the SEC published its findings on its investigation into Fannie and Freddie an found both agencies ommitted hundreds billions of dollars in Subprime debt EACH year from 2004-2008 from their SEC quartlery reports

It was unprcedented securities fraud and a expose of just how mismanaged and corrupted the GSEs had become.

There had been numerous warnings about the GSEs and their potential to cause a systemic financial crisis. Bush warned of that very thing back on 2001

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trblmkr said:

Nothing you have posted take s the heat off of the flippers.

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Fenton said:

It was meant to correct your assertion that Fannie and Freddie played some minimal role in the Subprime meltdown.

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Kushinator said:

Fannie and Freddie did play a minimal role.

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Fenton said:

Your charts are from 2010, Kush.

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That would have been a year before the 2011 SEC investigation and before the SEC discovered that both Fannie and Freddie had been ommiting from teir quarterly reporrs hundreds of billions of dollars in risky loans EACH year from 2004 to 2008

https://www.npr.org/2011/12/17/143877335/sec-ex-fannie-and-freddie-ceos-mislead-investors

Kind of hard to argue they played a minimal role when you consider the lack of financial discolsure that occured at both agencies, and when you consider the following....

By 1999, Fannie Mae had already hit their 1 Trillion dollar affordable lending goal. A year later Andrew Cuomo commited them to 2.4 trillion dollars in new purchases.

https://www.prnewswire.com/news-rel...gaps-and-strengthen-communities-73104592.html

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trblmkr said:

Nothing you have posted take s the heat off of the flippers.

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Vern said:

Oh look, fenton found a phrase or sentence fragment that allows him to ignore the facts and cling to his narrative. shocking. Fenton, the Obama Presidency ended quite well. You predicted the opposite. shocking again.

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•The boom and bust was global. Proponents of the Big Lie ignore the worldwide nature of the housing boom and bust.

•Nonbank mortgage underwriting exploded from 2001 to 2007, along with the private label securitization market, which eclipsed Fannie and Freddie during the boom.
•Private lenders not subject to congressional regulations collapsed lending standards.

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Vern said:

er uh Ludin, fenton brought up the Bush Mortgage Bubble and you obediently posted a lying conservative narrative. You even posted an "editorial" to back up your point. so its kinda odd you ask what it has to do with the thread. Whats not odd is that you want me to "address what was discussed" when I did address what was discussed and proved your "editorial" was lying. the reason its not odd is because its just typical conservative dishonesty. remember, I asked you to read what I posted as many times as necessary to understand it. See how you still don't understand?

In case you're still confused (not odd, typical), you posted this



I cut and pasted a lie from the editorial and explained to you why it was a lie in post 190. In post 191, you pretended to not understand and dishonestly accused me of "dodging" then you posted another lying editorial. I asked you to address your original lying narrative and lying editorial. so let me type this for you again. Try to read it this time

Republicans controlled congress. Dowd and Frank stopped no magical bill. Bush stopped your magical bill.

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Fenton said:

Your charts are from 2010, Kush.

That would have been a year before the 2011 SEC investigation and before the SEC discovered that both Fannie and Freddie had been ommiting from teir quarterly reporrs hundreds of billions of dollars in risky loans EACH year from 2004 to 2008

https://www.npr.org/2011/12/17/143877335/sec-ex-fannie-and-freddie-ceos-mislead-investors

Kind of hard to argue they played a minimal role when you consider the lack of financial discolsure that occured at both agencies, and when you consider the following....

By 1999, Fannie Mae had already hit their 1 Trillion dollar affordable lending goal. A year later Andrew Cuomo commited them to 2.4 trillion dollars in new purchases.

https://www.prnewswire.com/news-rel...gaps-and-strengthen-communities-73104592.html

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Vern said:

the role of the flippers is not as solid as they make it out. The article you've referenced in your previous post "discovered" that it wasn't poor people buying houses they couldn't afford.

Mounting evidence suggests that the notion that the 2007 crash happened because people with shoddy credit borrowed to buy houses they couldn’t afford is just plain wrong.

https://finance.yahoo.com/news/house-flippers-triggered-us-housing-175705459.html

They discovered "subprime mortgage" does not mean poor. Not being poor doesn't mean they could afford their mortgage. Default rates started going up in 2005 before the price peak. Flippers are not defaulting while house prices are still increasing. Yes, flippers walked away from underwater mortgages as did qualified buyers after the bubble popped. What made that easy to do was not having to put down any money. Also having “multiple” mortgages doesn't necessarily equals “flippers”. I own multiple houses and I’m not a flipper. I’m an investor.

“Historically, mortgages that are underwritten well are unlikely to default in the first year of origination. Thus, the reports at the end of 2006 from lenders such as Ownit, New Century, and Novastar that an unusually high share of their loans were becoming delinquent almost immediately were a cause for alarm. This surge in early payment defaults is evident in our data. On average, 1.5 percent of subprime loans in the 2000-2004 vintages were in default after 12 months, and the situation was just a bit worse for the 2005 vintage (Figure 2).3 However, 2 percent of outstanding loans in the 2007 vintage were in default within six months of origination, and 8 percent were in default after 12 months.”

View attachment 67226852

FRB: Finance and Economics Discussion Series: Screen Reader Version - 200899

Defaults not only started shooting up in 2005 but the number of subprime loans was shooting up also. Subprime went from 10% of loans in 2003 to 40% in 2006. So while the % of loans in default almost doubles in 2005 then actually doubles in 2006 its even worse because there are double the number of subprime loans. And those default rates are for the whole country. Bad actors like the ones listed had worse numbers. That started the panic. New Century was the 2nd largest subprime lender and they started getting "push backs" in 2005.

"In 2005 and 2006, the number of mortgages sent back to New Century skyrocketed as some borrowers became delinquent in payments as early as the first few months after taking out a loan, indicating shoddy lending practices, according to the report."

A Lender Failed. Did Its Auditor? - The New York Times

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Moderate Right said:

Please provide a link where economists call it the Bush Mortgage Bubble.

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Vern said:

Oh MR, thanks for the laughs. I call it the Bush Mortgage Bubble because it started on his watch because of his policies. As a conservative, "started on his watch" meets your standards. Hey, if you're concerned, why don't you tell Ludin that republicans controlled congress. He doesn't want to acknowledge the facts that shred his narrative. But that brings up an interesting point, you could call it the Republican Mortgage Bubble. That too meets your your standards. Doesn't meet mine though.

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Moderate Right said:

Oh, I see. YOU call it the Bush Mortgage Bubble because you are partisan. .

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Vern said:

I still see alot of misconceptions about the Bush Mortgage Bubble and the Bush policies that encouraged, funde and protected it so I thought I would start an FAQ section. Since the resulting destruction of the housing and financial sector are still a drag on the economy today, it seems relevent

Q When did the Bush Mortgage Bubble start?

A The general timeframe is it started late 2004.

From Bush’s President’s Working Group on Financial Markets October 2008

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”
http://www.treasury.gov/resource-center/fin-mkts/Documents/q4progress update.pdf

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Vern said:

MR, I explained quite clearly that I called it the Bush Mortgage Bubble because it happened on his watch because of his policies. "on his watch" is all that is needed to meet conservative standards. Anyhoo, see how you posted about me instead of what I posted. That has to be the first thing they teach conservatives: Cowardly Dodges 101. Here's some homework for your class. Dodge Bush telling you it started on his watch.

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trblmkr said:

There was a study published a few months ago. I heard the story on NPR. This study concluded that the vast majority of foreclosures were not of homeowners who couldn't afford their mortgage, although those did make up a small percentage, they were by light weight developers and flippers who got over extended and walked away. It was like 80% of them. I'll have to find that and post it. Kind of blows holes in a lot of theories about fannie and freddie.

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