W:1083,1531:2983:3137]******Bush Mortgage Bubble FAQs

[Conservative]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

oh eohrn, I said when you grow up feel free to respond. I didn’t say “feel free to cowardly scurry away from the facts yet again and try to deflect about me”. He made the claim that “bush tried to stop it”. I’ve proven beyond all doubt that Bush in no way tried to stop it. And the funny thing you don’t even make that claim anymore. How childish is it that you just want to get back at me and pretend he’s right. Please eohrn, tell us how bush tried to stop it. try to do it without EFR and use actual facts.

Vern, you have a serious case of BDS and cannot seem to get beyond that. You are looking foolish and continue to ignore reality. Bush alone didn't cause the problem we experienced and here we are almost 6 years after he left office and you still are spouting the same anti Bush rhetoric. Get over that hatred and try to figure out how we get out of the Obama mess.

 

[eohrnberger]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

oh eohrn, I said when you grow up feel free to respond. I didn’t say “feel free to cowardly scurry away from the facts yet again and try to deflect about me”. He made the claim that “bush tried to stop it”. I’ve proven beyond all doubt that Bush in no way tried to stop it. And the funny thing you don’t even make that claim anymore. How childish is it that you just want to get back at me and pretend he’s right. Please eohrn, tell us how bush tried to stop it. try to do it without EFR and use actual facts.

I take issue with your assertion that "I’ve proven beyond all doubt that Bush in no way tried to stop it." sir.

Ignoring:

• April 2002, Bush administration states that the size of Fannie Mae and Freddie Mac in the mortgage market is a "potential problem". Setting the Record Straight: Six Years of Unheeded Warnings for GSE Reform
• May 2002: The Office of Management and Budget (OMB) calls for the disclosure and corporate governance principles contained in the President's 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02) Setting the Record Straight: Six Years of Unheeded Warnings for GSE Reform
• Jully 2003: President Bush proposes a new oversight committee to clean up Fannie Mae, but Democrats derail the effort This is true. The New York Times web site still has the article on line at: New Agency Proposed to Oversee Freddie Mac and Fannie Mae - NYTimes.com
• July 2003: George Bush's administration sends a bill to the congress asking them to deal with the Fanny Mae and Freddie Mac crisis, and the committee said no. New Agency Proposed to Oversee Freddie Mac and Fannie Mae - NYTimes.com
• September 2003: Then-Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact
  "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.
  Setting the Record Straight: Six Years of Unheeded Warnings for GSE Reform
• February 2004: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required
  capital and calls for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore ... should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83) Setting the Record Straight: Six Years of Unheeded Warnings for GSE Reform
• June 2004: Then-Treasury Deputy Secretary Samuel Bodman spotlights the risk posed by the GSEs and calls for reform, saying "We do not have a
  world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04) Setting the Record Straight: Six Years of Unheeded Warnings for GSE Reform
• April 2005: Then-Secretary Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in
  2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America ... Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05) Setting the Record Straight: Six Years of Unheeded Warnings for GSE Reform
• August 2007: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, the White House, 8/9/07) Setting the Record Straight: Six Years of Unheeded Warnings for GSE Reform
• February 2008: Assistant Treasury Secretary David Nason reiterates the urgency of reforms, saying "A new regulatory structure for the housing
  GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08) Setting the Record Straight: Six Years of Unheeded Warnings for GSE Reform

I don't believe that characterizing this sequence of highlighted events as "Bush in no way tried to stop it." qualifies as an honest assessment of these actions and these events.

 

[Vern]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

I don't believe that characterizing this sequence of highlighted events as "Bush in no way tried to stop it." qualifies as an honest assessment of these actions and these events.

Congratulation on attempting to post like a grownup. Lets see how long it will last. Eohrn, of course you don't characterize the select quotes as "bush no way tried to stop it". You characterized Bush as president in 2000 because it helped your narrative. So lets continue with your latest post. The problem with your quotes is

A you ignore Bush and Snow's other quotes
B you ignore Bush's policies
C you are assuming Freddie or Fannie caused the crisis
D you are assuming regulation of Freddie or Fannie would have in any way prevented the Bush Mortgage Bubble

As a con, you quickly accept a hazy unsubstantiated republican narrative as fact. So how did Freddie and Fannie cause the crisis and what in the regulation would have prevented it? (remember, grownups explain what point they are trying to make)

 

[eohrnberger]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

Congratulation on attempting to post like a grownup. Lets see how long it will last. Eohrn, of course you don't characterize the select quotes as "bush no way tried to stop it".

You characterized Bush as president in 2000 because it helped your narrative.

Vern, has nothing to do with my narrative. Has everything to do with facts. Your assertion stated that "bush no way tried to stop it". Clearly that's not the case. The facts clearly show that Bush did in fact do something to try and stop it. Your assertion is factually incorrect.

So lets continue with your latest post. The problem with your quotes is

A you ignore Bush and Snow's other quotes
B you ignore Bush's policies
C you are assuming Freddie or Fannie caused the crisis
D you are assuming regulation of Freddie or Fannie would have in any way prevented the Bush Mortgage Bubble

• you ignore all the other people and entities involved in and engaged in expanding the bubble
• you ignore that the start of the policy positions emanated from the Clinton administration under threat of multiple and continuous federal regulatory investigations
• you ignore that Freddie or Fannie had a hand in enabling the crisis while being led by Democratically appointed corrupt leaders, while being spurred on to taking greater risks by Democratic congressional leadership
• you ignore that proposed Bush regulatory reforms were thwarted, not only by some congressional Republicans, but always by congressional Democrats

As a con, you quickly accept a hazy unsubstantiated republican narrative as fact. So how did Freddie and Fannie cause the crisis and what in the regulation would have prevented it? (remember, grownups explain what point they are trying to make)

F & F's actions over the years in question shows continued expansion in the size and scope of toxic mortgages purchased from the market and underwriting, does it not?

During these years, what's the rhetoric from Congressional Democrats? In general it's 'there's no problem' and 'I think F&F can take on more risk'.

Recalling the value chain of mortgages from origination, through several sales, F&F guaranteeing / underwriting, to the other end, as MBS hawked by investment banks across the world, had not F&F continued to expand their position in the toxic mortgage market to the size and scope that it had, would not the mortgage bubble have been smaller?

No, I don't pretend that regulating F&F would have prevented the bubble, just that regulating F&F would have made it smaller.

 

[Vern]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

Vern, has nothing to do with my narrative. Has everything to do with facts. Your assertion stated that "bush no way tried to stop it". Clearly that's not the case. The facts clearly show that Bush did in fact do something to try and stop it. Your assertion is factually incorrect.

good job proving Bush and company talked about reform. But who denied he said it? Now where did you prove bush tried to stop anything or anything showing that the GSEs made the Bush Mortgage Bubble worse. And what in the reform addressed that? I see you posted more empty factless rhetoric.. And you continue to post things you made up and know is false. So the only thing you’ve proven is that you are getting more comfortable posting falsehoods and ignoring the facts.

[*]you ignore that the start of the policy positions emanated from the Clinton administration under threat of multiple and continuous federal regulatory investigations

Still with that lie eohrn? There were no threats let alone threats to give loans to unqualified borrowers. So your “chilling ultimatum” was neither an ultimatum nor chilling. Here’s a crazy idea, instead of obediently accepting an “editorial” telling you “chilling ultimatum” cut and paste the “chilling ultimatum” and then explain the connection to banks lowering their lending standards “dramatically” in late 2004. Try to do it without empty factless rhetoric.

[*]you ignore that Freddie or Fannie had a hand in enabling the crisis while being led by Democratically appointed corrupt leaders, while being spurred on to taking greater risks by Democratic congressional leadership

You’ve yet to demonstrate what ‘hand” F&F had in banks lowering their lending standards in late 2004 and Bush’s regulators letting them. and the “spurred on” is completely made up and you posted that lying rhetoric before. It just gets easier and easier for you.

[*]you ignore that proposed Bush regulatory reforms were thwarted, not only by some congressional Republicans, but always by congressional Democrats

EFR You seem to have some special definition of “thwarted”. As Barney Frank said if he had this magic power to derail F&F regulation, he would have used it to stop the invasion of Iraq or impeaching Clinton

F & F's actions over the years in question shows continued expansion in the size and scope of toxic mortgages purchased from the market and underwriting, does it not?

the answer is no. You seem to be referring to “toxic mortgages” as if it’s a category investors buy. So you obviously have some false analogy that allows you to believe F&F willfully bought toxic mortgages. Something tells me you are trying to equate “toxic mortgage” with “subprime”. Fenton does that too.

During these years, what's the rhetoric from Congressional Democrats? In general it's 'there's no problem' and 'I think F&F can take on more risk'.

Yes, some dems said “there’s no problem”. Again, they were repeating what Bush told them. And feel free to back up a dem saying “I think F&F can take on more risk”. I guess this is just your rephrasing your “dems spurred on the GSEs” lie.

No, I don't pretend that regulating F&F would have prevented the bubble, just that regulating F&F would have made it smaller.

of course you believe that eohrn but you believe a lot of things without bothering to prove it. Remember when you believed Bush was president in 2000. You were so adamant he was president you even mocked me for telling you he wasn’t. Again eorhn, you really need to stop trusting your own assessment of reality. If anything eohrn, reform would have made it worse. Oh yea, that’s right, you don’t know anything about the GSE reform do you. Your lying editorials leave out the facts.

so you have some action items to follow up
Back up “chilling ultimatum”
Back up “dems spurred on GSEs”
Back up “dems said GSEs could take on more risk”
explain your special definition of “thwarted”

 

[Vern]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

Now eorhn, I responded to you empty factless and sometimes lying rhetoric. don’t forget your action items. While we wait for you to not back up anything you posted, watch how I back up every point I make. Nobody denies Bush said over and over “we need to regulate F&F”. But your delusional narrative requires you to think that regulation had something to do with “toxic mortgages”. Well it didn’t. Bush already had the ability to regulate Freddie and Fannies purchases of subprime loans. And guess what he did?

In 2004, the 2000 rules were dropped and high risk loans were again counted toward affordable housing goals

http://www.prmia.org/sites/default/files/references/Fannie_Mae_and_Freddie_Mac_090911_v2.pdf

High risk? is that what you are calling “toxic mortgages” now don’t forget again that Clinton was president in 2000 .so if reform wasn’t about “toxic mortgages” what was it about? this is what Sec Martinez says:

Currently, safety and soundness regulation is divided, with new program approvals at HUD and financial oversight at OFHEO. It is the position of the Administration that both elements of safety and soundness regulation need to be consolidated in a
single regulator

- THE TREASURY DEPARTMENT'S VIEWS ON THE REGULATION OF GOVERNMENT SPONSORED ENTERPRISES

yawn, maybe that’s more important than it sounds. Mmmm, what else was it about it?

Therefore, to strengthen HUD's housing goal authority, the Administration considers it appropriate to:
Number one, create a new GSE housing office within HUD,
independently funded by the GSEs to establish, maintain and
enforce the housing goals;
Number two, grant HUD new administrative authority to
enforce its housing goals;
Thirdly, to institute enhanced civil penalties for failure
to meet the housing goals. Explicitly provide that the GSEs act
to increase homeownership; and expand authority to set housing
goals and subgoals beyond the three currently established for
moderate-income, geographic area, and special affordable
housing.

that’s odd, it seems to be mostly about enforcing the housing goals. You remember your “aha” moment when Cuomo increased the housing goals. You had some vague notion that Cuomo raising the housing goals in 2000 was a factor in banks lowering their lending standards in late 2004. Here’s more from Sec Martinez

numerous HUD studies and independent analyses have shown that the GSEs have historically lagged the primary market, instead of led it, with respect to funding mortgages loans for low-income and minority
households.

mmmm, seems like Sec martinez doesn’t think the goals did enough. With your logic, I could even “characterize” him as saying “the GSEs haven’t bought enough “toxic mortgages”. Seriously him, Snow and Oxley go on and on about enforcing the low income goals for the GSEs. Maybe that explains why Bush raised the goals even more in 2004 (and yes Bush was president in 2004). and what about dems saying there was no problem with the GSEs.? again, they were simply repeating what they were told.

Mr. Frank: ...Are we in a crisis now with these entities?

Secretary Snow. No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it.

and what happened to the 2003 regulation anyway?

Despite what appeared to be a broad consensus on GSE regulatory reform, efforts quickly stalled. A legislative markup scheduled for October 8, 2003, in the House of Representatives was halted because the Bush administration withdrew its support for the bill,

http://www.frbatlanta.org/filelegacydocs/er04_framewhite.pdf

Oh that’s right, Bush stopped it. I guess you could post some empty factless rhetoric that it was the mean ole dems but REPUBLICANS CONTROLLED CONGRESS. And there was “broad consensus” In retrospect, 2003 reform may have made the Bush Mortgage Bubble worse, enforcing housing goals and all. But if you insist on saying that the lack of regulation made the Bush Mortgage Bubble worse then shouldn’t you say Bush made it worse afterall, he stopped the bill. and eohrn, you’ve seen these facts before.

 

[eohrnberger]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

good job proving Bush and company talked about reform. But who denied he said it? Now where did you prove bush tried to stop anything or anything showing that the GSEs made the Bush Mortgage Bubble worse. And what in the reform addressed that? I see you posted more empty factless rhetoric.. And you continue to post things you made up and know is false. So the only thing you’ve proven is that you are getting more comfortable posting falsehoods and ignoring the facts.



Still with that lie eohrn? There were no threats let alone threats to give loans to unqualified borrowers. So your “chilling ultimatum” was neither an ultimatum nor chilling. Here’s a crazy idea, instead of obediently accepting an “editorial” telling you “chilling ultimatum” cut and paste the “chilling ultimatum” and then explain the connection to banks lowering their lending standards “dramatically” in late 2004. Try to do it without empty factless rhetoric.


You’ve yet to demonstrate what ‘hand” F&F had in banks lowering their lending standards in late 2004 and Bush’s regulators letting them. and the “spurred on” is completely made up and you posted that lying rhetoric before. It just gets easier and easier for you.


EFR You seem to have some special definition of “thwarted”. As Barney Frank said if he had this magic power to derail F&F regulation, he would have used it to stop the invasion of Iraq or impeaching Clinton



the answer is no. You seem to be referring to “toxic mortgages” as if it’s a category investors buy. So you obviously have some false analogy that allows you to believe F&F willfully bought toxic mortgages. Something tells me you are trying to equate “toxic mortgage” with “subprime”. Fenton does that too.



Yes, some dems said “there’s no problem”. Again, they were repeating what Bush told them. And feel free to back up a dem saying “I think F&F can take on more risk”. I guess this is just your rephrasing your “dems spurred on the GSEs” lie.



of course you believe that eohrn but you believe a lot of things without bothering to prove it. Remember when you believed Bush was president in 2000. You were so adamant he was president you even mocked me for telling you he wasn’t. Again eorhn, you really need to stop trusting your own assessment of reality. If anything eohrn, reform would have made it worse. Oh yea, that’s right, you don’t know anything about the GSE reform do you. Your lying editorials leave out the facts.

This is all looping back on itself. All of these things were posted previously in this thread, by others, so I feel no compelling need to individually dig up the posts for you. I'll leave you to do that.

so you have some action items to follow up

I don't feel overly obligated to accept action items from you. Not unless you are the one that paying me for my time.

Back up “chilling ultimatum”

Chilling in 'Clinton's WH thought it was discrimination, while bankers thought it was good lending practices', and the chilling ultimatum was from the HW.

At President Clinton’s direction, no fewer than 10 federal agencies issued a chilling ultimatum to banks and mortgage lenders to ease credit for lower-income minorities or face investigations for lending discrimination and suffer the related adverse publicity. They also were threatened with denial of access to the all-important secondary mortgage market and stiff fines, along with other penalties.

The threat was codified in a 20-page “Policy Statement on Discrimination in Lending” and entered into the Federal Register on April 15, 1994, by the Interagency Task Force on Fair Lending. Clinton set up the little-known body to coordinate an unprecedented crackdown on alleged bank redlining.

The edict — completely overlooked by the Financial Crisis Inquiry Commission and the mainstream media — was signed by then-HUD Secretary Henry Cisneros, Attorney General Janet Reno, Comptroller of the Currency Eugene Ludwig and Federal Reserve Chairman Alan Greenspan, along with the heads of six other financial regulatory agencies. …

The unusual full-court press was predicated on a Boston Fed study showing mortgage lenders rejecting blacks and Hispanics in greater proportion than whites. The author of the 1992 study, hired by the Clinton White House, claimed it was racial “discrimination.” But it was simply good underwriting.

Bloomberg to OWS: Congress caused the mortgage crisis, not the banks « Hot Air

I can see how some of the bankers originating mortgages at the time were intimidated. Can you imagine how painful and how expensive it would be to deal with 9 federal agencies investigating your bank? Might as well just close up shop. They key phrase / sentence in this is:

"The author of the 1992 study, hired by the Clinton White House, claimed it was racial “discrimination.” But it was simply good underwriting."

Definitely a difference in perception. So no clean hands here either. Even if not from the encouraging toxic mortgages, maybe, maybe not, certainly set the precedence of government meddling in underwriting for political gain, and that's most certainly a bad precedent to set.

Back up “dems spurred on GSEs”
Back up “dems said GSEs could take on more risk”

"I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . ."
Rep. Barney Frank (D., Mass.)
House Financial Services Committee hearing, Sept. 25, 2003 What They Said About Fan and Fred - WSJ

For those who are reading comprehension compared:

explain your special definition of “thwarted”

Not special. Common use. Here's a sentence for you. "Congressional Democrats thwarted some Republican efforts to regulate Fannie Mae and Freddie Mac's risk exposure to the mortgage bubble".

July: Then-Minority Leader Harry Reid rejects legislation reforming GSEs, "while I favor improving oversight by our federal housing regulators to ensure safety and soundness, we cannot pass legislation that could limit Americans from owning homes and potentially harm our economy in the process." ("Dems Rip New Fannie Mae Regulatory Measure," United Press International, 7/28/05)

Setting the Record Straight: Six Years of Unheeded Warnings for GSE Reform

Still, all in all, there really isn't a clean hand in many of the government people involved (as cited), and especially in the investment financial and mortgage originator industries.

 

[Vern]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

This is all looping back on itself. All of these things were posted previously in this thread, by others, so I feel no compelling need to individually dig up the posts for you. I'll leave you to do that.

what an incredibly cowardly dodge but not the least surprising. Yea, I knew you trying to act like a grownup wouldn’t last long. You’ve ignored the actual facts I’ve posted. You’ve repeated your empty factless and lying rhetoric and then you posted the incredibly childish “I don’t have to back up what I post”. Eohrn, this is a debate forum not a chat room or a kindergarten. You make a claim, you back it up.

And eohrn, thank you for reposting the lying “chilling ultimatum” editorial. I didn’t ask you to repost it. I asked you to prove the “ultimatum” part and explain the connection to dramatically lower lending standards 10 years later. But guess what, you cant so you simply repost the lying editorial. How mature. Again, enforcing discrimination laws is not “forcing banks to give out toxic loans” no matter what the lying conservative editorial tells you. . And the stable rate of mortgage defaults from 1979 to 2004 proves its just another lying conservative editorial. In case you still don’t get it (and you don’t) the facts disprove your lying “chilling ultimatum” editorial. Which brings up another interesting point. You mindlessly and obediently parrot lying conservative editorials and cant discern fact from fiction but you actually accused me of it.

As a lib, you've never been able to discern fact from fiction. You just parrot from the far left web sites, as you are told.

What "far left web sites" have I posted? Is Bush's Working Group or the Federal Reserve a "far left web site"? you're too funny eohrn.

I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . ."
Rep. Barney Frank (D., Mass.)

Oh look, you actually found a comment that you can pretend to show someone other than Bush encouraging the GSEs to take on more risk. Oh eohrn you were so close but Barney pushed for more rental assistance and less “home ownership.” Yea, subsidizied housing is rental assistance. And rental assistance was Barney’s thing. Here, let a republican tell you

"Larry Lindsey, an economic advisor to Ronald Reagan, George H.W. Bush and George W. Bush later wrote in an article for the Wall Street Journal:

In fact, Rep. Barney Frank (D., Mass.) is the only politician I know who has argued that we needed tighter rules that intentionally produce fewer homeowners and more renters. Politicians usually believe that homeownership rates should – must – go ever higher. The rarity of Mr. Frank's contrarian thinking is a reminder that when markets are committing excesses, we certainly should not expect Washington to act as a check on them.
http://www.thelindseygroup.com/wp-content/uploads/TheKISSRuleforMarkets-WSJ040208.pdf

Oh and Barney was quite critical of Bush’s policies to push Freddie and Fannie into "toxic mortgages".

“Fannie, Freddie to Suffer Under New Rule, Frank Says"

Fannie Mae and Freddie Mac would suffer financially under a Bush administration requirement that they channel more mortgage financing to people with low incomes, said the senior Democrat on a congressional panel that sets regulations for the companies. "

http://democrats.financialservices....s/112/06-17-04-new-Fannie-goals-Bloomberg.pdf

Barney didn’t like his preemption policy either.
"
which held that preemption under the National Bank Act (NBA) extends not only to national banks, but also to “operating subsidiaries” of such banks, brought new focus on the issue. Chairman Frank criticized the decision at the time, stating that the OCC “succeeded in reducing and eliminating a lot of state consumer laws without putting anything in their place.” Earlier this year, Chairman Frank pointedly criticized the Bush administration’s exercise of Federal preemptive powers, saying that preemption was used “to cancel virtually all state regulation in the consumer area.”
"
http://aporter.net/resources/documents/CA_WhatsComingForFinancialInstitutions_030209.pdf

So do you want to talk about Bush killing GSE reform, Barney wanting more rental assistance instead of more homeowners or Barney correctly calling out Bush’s toxic mortgage policies. This requires a grownup to decide. Is there one at your house you can ask?

 

[eohrnberger]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

(Pointless snide remarks and personal attacks removed due to post size limitations)

And eohrn, thank you for reposting the lying “chilling ultimatum” editorial. I didn’t ask you to repost it. I asked you to prove the “ultimatum” part and explain the connection to dramatically lower lending standards 10 years later. But guess what, you cant so you simply repost the lying editorial.

If you want to point to an event in time where lending standards were watered down by government intervention, that would have to be it's inception. Even if you can't agree that it was watering down of lending standards, you certainly can't argue that it wasn't a case of the government intervening in the mortgage underwriting standards by the banks. The banks were saying it was smart underwriting. The politicians were claiming redlining and discrimination. I would think that the bankers would know their banking business, rates of default and characteristics of those who default far better than the politicians, who are always politically motivated rather than smart business motivated.

(Pointless snide remarks and personal attacks removed due to post size limitations)

And the stable rate of mortgage defaults from 1979 to 2004 proves its just another lying conservative editorial. In case you still don’t get it (and you don’t) the facts disprove your lying “chilling ultimatum” editorial.

It would be logical to conclude that mortgages originated would come have a spectrum of default risk associated with them. It would also be logical to conclude that the riskiest mortgages may initially not default until economic stress, in the form of a recession job loss, etc., would case greater rates of default. So it logically follows that risky mortgages may initially hold stable until the event of a recession.

We know that there is an inevitable delay between a borrower taking on a subprime mortgage and their default on that mortgage. People aren't willing to loose their house and all the payments they've made on the mortgage as the first thing when facing financial difficulties. Here's an example.

"Patient zero" bought a house in Stockton, California, in 2003 after getting a subprime mortgage. He defaulted on that mortgage 39 months later.

Most economists blame the collapse of the credit markets which began the recession on a drop in US housing prices and devaluing of subprime mortgage-backed securities. The Wall St. experts who created these financial instruments failed to predict how quickly low-quality mortgages would default to some extent because the national value of housing had gone up for decades. But, as defaults did rise, the value of these derivatives cascaded and the banks and other institutions which held them were required to take massive losses. At Davos, Russian and Chinese leaders attacked the U.S. for the "failure" of regulators which allowed the spread of toxic derivatives.

Finding the Man Who Started the Global Recession - TIME

3 1/4 years from taking the mortgage to defaulting on it. An example of a time delay between taking out a subprime mortgage and defaulting on it. Its logical to conclude that different borrowers would have different lengths of delays, as it is logical to assume those that borrowed too much than they should have, not having the financial reserves to weather the economic stress, would be the first and more frequent defaulters.

You are looking for a direct causal-effect relationship between subprime mortgages, default rates, and the mortgage bubble. The connection is illustrated above, however, it's far down the value chain from the mortgage borrower. When the MBS's values dropped, perhaps everyone found out what high risk garbage investments they really were, seizing up the credit markets, which cause the cascade effect of causing ever more defaults. This would induce yet more time delay between taking a high risk mortgage and defaulting on that mortgage, would it not?

(Pointless snide remarks and personal attacks removed)
What "far left web sites" have I posted? Is Bush's Working Group or the Federal Reserve a "far left web site"? you're too funny eohrn.

Bush's Working Group pointed to the root cause, but didn't assign blame to anyone, yet you keep pretending that Bush's own working group blames him. I submit that this isn't supported by the facts.

Oh look, you actually found a comment that you can pretend to show someone other than Bush encouraging the GSEs to take on more risk. Oh eohrn you were so close but Barney pushed for more rental assistance and less “home ownership.” Yea, subsidizied housing is rental assistance. And rental assistance was Barney’s thing. Here, let a republican tell you

"Larry Lindsey, an economic advisor to Ronald Reagan, George H.W. Bush and George W. Bush later wrote in an article for the Wall Street Journal:

In fact, Rep. Barney Frank (D., Mass.) is the only politician I know who has argued that we needed tighter rules that intentionally produce fewer homeowners and more renters. Politicians usually believe that homeownership rates should – must – go ever higher. The rarity of Mr. Frank's contrarian thinking is a reminder that when markets are committing excesses, we certainly should not expect Washington to act as a check on them.
http://www.thelindseygroup.com/wp-content/uploads/TheKISSRuleforMarkets-WSJ040208.pdf

Oh and Barney was quite critical of Bush’s policies to push Freddie and Fannie into "toxic mortgages".

“Fannie, Freddie to Suffer Under New Rule, Frank Says"

Fannie Mae and Freddie Mac would suffer financially under a Bush administration requirement that they channel more mortgage financing to people with low incomes, said the senior Democrat on a congressional panel that sets regulations for the companies. "

http://democrats.financialservices....s/112/06-17-04-new-Fannie-goals-Bloomberg.pdf

Barney didn’t like his preemption policy either.
"
which held that preemption under the National Bank Act (NBA) extends not only to national banks, but also to “operating subsidiaries” of such banks, brought new focus on the issue. Chairman Frank criticized the decision at the time, stating that the OCC “succeeded in reducing and eliminating a lot of state consumer laws without putting anything in their place.” Earlier this year, Chairman Frank pointedly criticized the Bush administration’s exercise of Federal preemptive powers, saying that preemption was used “to cancel virtually all state regulation in the consumer area.”
"
http://aporter.net/resources/documents/CA_WhatsComingForFinancialInstitutions_030209.pdf

So do you want to talk about Bush killing GSE reform, Barney wanting more rental assistance instead of more homeowners or Barney correctly calling out Bush’s toxic mortgage policies. This requires a grownup to decide. Is there one at your house you can ask?

How exactly is Frank and other Democrats calling for GSE's to take on more risky mortgages, as demonstrated in video in committee hearings by their own words as 'calling out Bush’s toxic mortgage policies'?

Even Bill Clinton himself admits that Democrats resisted reigning in the GSEs by the Republicans.

On Democrats' repsonsibility for mortgage crisis: "I think the responsibility the Democrats do have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac." – Former President Bill Clinton (D-AR), September 25, 2008

 

[eohrnberger]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

Now, Vern, you'd often criticized the notion that many people have their hands dirtied by their involvement in creating and expanding the mortgage bubble.

I've posted from Time magazine article a list of whom they thought were the cause of the mortgage bubble. I'll give you another citation to the same effect.

So who is to blame? There’s plenty of blame to go around, and it doesn’t fasten only on one party or even mainly on what Washington did or didn’t do. As The Economist magazine noted recently, the problem is one of "layered irresponsibility … with hard-working homeowners and billionaire villains each playing a role." Here’s a partial list of those alleged to be at fault:​

• The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.
• Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.
• Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.
• Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.
• The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.
• Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.
• Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.
• Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.
• The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.
• An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.
• Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.

The U.S. economy is enormously complicated. Screwing it up takes a great deal of cooperation. Claiming that a single piece of legislation was responsible for (or could have averted) the crisis is just political grandstanding. We have no advice to offer on how best to solve the financial crisis. But these sorts of partisan caricatures can only make the task more difficult.
–by Joe Miller and Brooks Jackson

October 1, 2008, Who Caused the Economic Crisis?

And I emphasis: "Claiming that a single piece of legislation was responsible for (or could have averted) the crisis is just political grandstanding. . . . But these sorts of partisan caricatures can only make the task more difficult."

And I respectfully submit that the same is for blaming Bush for the entirity of the mortgage bubble. It's a "partisan caricatures can only make the task more difficult."

 

[polgara]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

If you want to point to an event in time where lending standards were watered down by government intervention, that would have to be it's inception. Even if you can't agree that it was watering down of lending standards, you certainly can't argue that it wasn't a case of the government intervening in the mortgage underwriting standards by the banks. The banks were saying it was smart underwriting. The politicians were claiming redlining and discrimination. I would think that the bankers would know their banking business, rates of default and characteristics of those who default far better than the politicians, who are always politically motivated rather than smart business motivated.



It would be logical to conclude that mortgages originated would come have a spectrum of default risk associated with them. It would also be logical to conclude that the riskiest mortgages may initially not default until economic stress, in the form of a recession job loss, etc., would case greater rates of default. So it logically follows that risky mortgages may initially hold stable until the event of a recession.

We know that there is an inevitable delay between a borrower taking on a subprime mortgage and their default on that mortgage. People aren't willing to loose their house and all the payments they've made on the mortgage as the first thing when facing financial difficulties. Here's an example.

Finding the Man Who Started the Global Recession - TIME

3 1/4 years from taking the mortgage to defaulting on it. An example of a time delay between taking out a subprime mortgage and defaulting on it. Its logical to conclude that different borrowers would have different lengths of delays, as it is logical to assume those that borrowed too much than they should have, not having the financial reserves to weather the economic stress, would be the first and more frequent defaulters.

You are looking for a direct causal-effect relationship between subprime mortgages, default rates, and the mortgage bubble. The connection is illustrated above, however, it's far down the value chain from the mortgage borrower. When the MBS's values dropped, perhaps everyone found out what high risk garbage investments they really were, seizing up the credit markets, which cause the cascade effect of causing ever more defaults. This would induce yet more time delay between taking a high risk mortgage and defaulting on that mortgage, would it not?



Bush's Working Group pointed to the root cause, but didn't assign blame to anyone, yet you keep pretending that Bush's own working group blames him. I submit that this isn't supported by the facts.



How exactly is Frank and other Democrats calling for GSE's to take on more risky mortgages, as demonstrated in video in committee hearings by their own words as 'calling out Bush’s toxic mortgage policies'?

Even Bill Clinton himself admits that Democrats resisted reigning in the GSEs by the Republicans.

If I remember correctly, little or no verification of income was required - some didn't even need to prove they had a job! :thumbdown: When we bought our first house many years ago, I would not have been surprised to find that our firstborn might be used as a guarantee of payment each and every month! :lol: Bankers scared the H*** out of us! Things sure changed later, as time went on.....

 

[eohrnberger]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

If I remember correctly, little or no verification of income was required - some didn't even need to prove they had a job! :thumbdown: When we bought our first house many years ago, I would not have been surprised to find that our firstborn might be used as a guarantee of payment each and every month! :lol: Bankers scared the H*** out of us! Things sure changed later, as time went on.....

I believe that this is where the term NINJA mortgage came from (No Income, No Job or Assets). That'd be a high risk subprime mortgage.
One for a borrower who would be sure to default at the first economic challenge encountered, if they were even serious about fulfilling the mortgage terms at all. A lot of flippers were engaged in this type of 'balloon' payment mortgage as well.

 

[MAGAnificent]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

The bubbles, not just housing but other things as well, began in the late 80s and early 90s. By the late 90s, those of us who were watching were already seeing the first signs that the bubbles were going to burst. There was a dramatic downturn in many markets in 99 and 2000... before Bush even took office.

The fact is there is a LOT of blame to spread around for the economic disasters we've experienced over the past decade-plus... including at least three presidents, innumerable Senators and Reps, and a lot of Wall Street types.


Laying it all at Dubya's feet is just hyper-partisanship.

Especially when the cause of the bubble was the "Community Re-investment Act" signed into law by Jimmy Carter.

 

[eohrnberger]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

Another instance where a Democrat has come clean about preventing Republican / Bush led F&F regulatory reforms.

“Like a lot of my Democratic colleagues I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourage affordable homeownership when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit when it comes to Fannie and Freddie, we were wrong.” – Congressman Artur Davis (D-AL) , September 30, 2008

Rep. Artur Davis Admits Democrats Were 'Too Slow' to Recognize Fannie, Freddie Recklessness | Fox News

While even these reforms would not have prevented the mortgage bubble, it seems a reasonable conclusion that they would have reduced the size, scope and severity of that bubble bursting.

 

[Vern]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

If you want to point to an event in time where lending standards were watered down by government intervention, that would have to be it's inception.

Yes eohrn, that time was early 2004 when Bush enacted his toxic mortgage policies. Its why the timeframe of the Bush mortgage bubble is so easily pinpointed.

Even if you can't agree that it was watering down of lending standards, you certainly can't argue that it wasn't a case of the government intervening in the mortgage underwriting standards by the banks.

and what con could post without the false analogy? actually none. I cerntainly can argue that regulators doing their jobs enforcing existing discrimination laws is not "intervening". Thats just another "magic" fact you create to save your silly narratives. See how your brain creates these facts to make your narratives work. Remember when you thought bush was president in 2000. Boy did you argue with me on that. And remember when you falsely claimed "dems said GSEs could take on more risk". look, you continue to do it. You just cant help yourself

How exactly is Frank and other Democrats calling for GSE's to take on more risky mortgages, as demonstrated in video in committee hearings by their own words as 'calling out Bush’s toxic mortgage policies'?

again eohrn, see how you don’t want to have an honest and intelligent discussion of GSE reform. I posted Barney Frank criticizing Bush pushing the GSEs into risky mortgages. Of course you want to “allude” to some magical GSE reform that could have lessened the severity of the Bush Mortgage bubble but don’t want to discuss that Bush killed reform and reform had nothing to do with toxic mortgages. Just let me know when you find something other than Bush’s policies and regulation that is in any way related to banks dramatically lowering their lending standards in late 2004.

 

[Vern]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

If I remember correctly, little or no verification of income was required - some didn't even need to prove they had a job! :thumbdown: When we bought our first house many years ago, I would not have been surprised to find that our firstborn might be used as a guarantee of payment each and every month! :lol: Bankers scared the H*** out of us! Things sure changed later, as time went on.....

Actually you do remember correctly. Selling someone a house they cant afford can only be done with a No Doc loan. In 2004, 4.3% of all mortgages were No Docs. Check out 2006:

“Another form of easing facilitated the rapid rise of mortgages that didn't require borrowers to fully document their incomes. In 2006, these low- or no-doc loans comprised 81 percent of near-prime, 55 percent of jumbo, 50 percent of subprime and 36 percent of prime securitized mortgages."

http://www.dallasfed.org/assets/documents/research/eclett/2007/el0711.pdf

That works out to about half of all mortgages. And because this trend started late 2004 as explained by Bush’s Working Group and the Federal Reserve, all mortgage defaults started increasing mid 2005. Of course the defaults for subprime were worse but it was a trend for all mortgages.

 

[eohrnberger]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

Yawwwnnn. Someone say something?

 

[Vern]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

Yawwwnnn. Someone say something?

just me posting facts, you can go back to sleep.

 

[eohrnberger]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

just me posting facts, you can go back to sleep.

Yes, I know. Narrowly, carefully, scoped facts that only lead to the conclusion you wish, rather than a greater understanding of the larger picture.

 

[Vern]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

Yes, I know. Narrowly, carefully, scoped facts that only lead to the conclusion you wish, rather than a greater understanding of the larger picture.

Oh eohrn, you're just being silly again. I've posted dozens of links detailing the timeframe and cause of the Bush Mortgage Bubble. You posted lying editorials and fantastical statements. Tell us again how "loans to qualified minorities leads to toxic mortgages." I guess if you can make up whatever you want to believe and post it as fact, actual facts are "narrowly, carefully scoped".

 

[eohrnberger]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

Oh eohrn, you're just being silly again. I've posted dozens of links detailing the timeframe and cause of the Bush Mortgage Bubble. You posted lying editorials and fantastical statements. Tell us again how "loans to qualified minorities leads to toxic mortgages." I guess if you can make up whatever you want to believe and post it as fact, actual facts are "narrowly, carefully scoped".

:yawn:

Your song remains the same. The same 'my sources are right, your sources are wrong'.

The same 'I won't listen or think about a single thing you say'.

:yawn:

It amounts to a boring conversation.

 

[Vern]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

:yawn:

Your song remains the same. The same 'my sources are right, your sources are wrong'.

The same 'I won't listen or think about a single thing you say'.

:yawn:

It amounts to a boring conversation.

oh eorhn, I posted solid factual links. you posted "editorials" that were easily discredited (and discredited is being nice) by the actual facts. Case in point, you posted a lying editorial that claims "Clinton issued a chilling ultimatum in 1994." Not only did we not see the "chilling ultimatum" (your "editorial" only assured us of its existence) but didnt explain why it took 10 years. rememember, I've documented the time frame of the Bush Mortgage Bubble. and thats what proves your lying "editorial" is lying. It, like you and every other conservative, refuses to address the actual facts.

Hey eorhn, just for laughs, tell us again that "loans to qualified minorities leads to toxic mortgages".

 

[eohrnberger]

re: Bush Mortgage Bubble FAQs[W:1083,1531]

oh eorhn, I posted solid factual links. you posted "editorials" that were easily discredited (and discredited is being nice) by the actual facts. Case in point, you posted a lying editorial that claims "Clinton issued a chilling ultimatum in 1994." Not only did we not see the "chilling ultimatum" (your "editorial" only assured us of its existence) but didnt explain why it took 10 years. rememember, I've documented the time frame of the Bush Mortgage Bubble. and thats what proves your lying "editorial" is lying. It, like you and every other conservative, refuses to address the actual facts.

Hey eorhn, just for laughs, tell us again that "loans to qualified minorities leads to toxic mortgages".

Have you already forgotten that this ground was well trod already? If your failing memory is so, I'd recommend that you'd re-read the thread. Perhaps on the second reading, some of it may actually sink in.

 

[Vern]

Why did republicans try to “protect” us from Obamacare?

they didn’t try to protect us from the country sliding into the Great Bush Depression. The economy cratering at depression levels and losing 600,000 jobs a month didn’t concern them.

they didn’t try to protect us from a collapse of the auto industry. The loss of 2 million jobs and a continuation of the Great Bush Recession if not slipping into the Great Bush Depression didn’t concern them.

Some were clearly not protecting us from the devastating effects of defaulting on the debt. In fact they were encouraging it.

They did manage to protect us from a jobs bill that would have lowered UE faster. the millions who lost their jobs due to the Great Bush Recession didn’t concern them.

they weren’t protecting us from a possible double dip recession when they threatened to let the Bush tax cuts expire for everybody instead of President Obama’s plan of letting the Bush tax cuts expire for just the top 2%. ( Isn’t “not raising taxes” their thing?)

Republicans have proven they are quite happy to let Americans suffer if they think it will help them politically. So for republicans to fight something so vehemently and dishonestly under the guise of trying to protect Americans from some sort of hardship just doesn’t sound like something they would do. Oh I know why they wanted to protect us from Obamacare. Because it’s working as intended increasing healthcare access, affordability and quality while decreasing the deficit. At some point, even conservatives have to realize that there has been a consistent trend in republican policy: Republicans are simply not working in the best interests of America.

 

[Kal'Stang]

Re: Why did republicans try to “protect” us from Obamacare?

I stopped reading at the words "Great Bush Depression". Anyone that thinks it was solely his fault to the point that they name it such doesn't know jack about what actually caused it. Which includes decades of messed up policy by both republicans and democrats.