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CBWx2

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« : March 24, 2011, 12:53:32 PM »

that more than half of the Sub Prime mortgages that cause the global financial crisis were from homeowners that would have qualified for normal loans, but were pushed into sub-prime loans by greedy lenders?

http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinvestment_act_had_nothing_to_do_with_subprime_crisis.html


bucpimpin

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« #1 : March 24, 2011, 12:56:32 PM »

You are responsible for what you sign, and have to live with it.


CBWx2

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« #2 : March 24, 2011, 01:35:36 PM »

You are responsible for what you sign, and have to live with it.

To a degree, I agree with you. but how were these things represented to the buyer? If a person that would have qualified for a normal loan ends up in a sub-prime loan you can pretty much be certain that it wasn't their idea. But that aside, the point I'm making here is that while some choose to blame the govt. and poor people, maybe...just maybe, the private sector holds more blame than any of them, as shocking a thought as that might be for some.


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« #3 : March 24, 2011, 01:55:01 PM »

If that was the case, how come they weren't to refinance before the loan "reset?"

Edit: I just read the article; twice; and it says nothing of the sort. In fact, it does not even broach that subject matter.
« : March 24, 2011, 02:01:06 PM spartan »

Biggs3535

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« #4 : March 24, 2011, 03:00:03 PM »

that more than half of the Sub Prime mortgages that cause the global financial crisis were from homeowners that would have qualified for normal loans, but were pushed into sub-prime loans by greedy lenders?

http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinvestment_act_had_nothing_to_do_with_subprime_crisis.html

Should I post the countless other articles talking about CRA being one of the biggest reasons for the fallout?  Or should I just see your two-year old article with another:

http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html


Mr. Pressman's view on Fannie and Freddie...

Quote
Fresh off the false and politicized attack on Fannie Mae and Freddie Mac, today we’re hearing the know-nothings blame the subprime crisis on the Community Reinvestment Act — a 30-year-old law that was actually weakened by the Bush administration just as the worst lending wave began. This is even more ridiculous than blaming Freddie and Fannie.

Also this entire article: http://www.businessweek.com/investing/insights/blog/archives/2008/09/fannie_mae_and.html

...should give you an idea of how utterly clueless the author is on this issue.  http://money.cnn.com/2011/02/11/news/companies/fannie_freddie_losses/index.htm



You are responsible for what you sign, and have to live with it.

What is this personal responsibility B/S?  Clearly the greedy banks put guns to every homeowner's head to get them to sign their sub-prime mortgage.



I just read the article; twice; and it says nothing of the sort. In fact, it does not even broach that subject matter.

I don't think that's ever stopped CBWx2 from making up his own reality.


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« #5 : March 24, 2011, 03:09:57 PM »

The guy who bought the house next to my sister worked at the Burger King drive through.   No way he should have gotten that loan, and he lost the house.


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« #6 : March 24, 2011, 04:10:06 PM »

The guy who bought the house next to my sister worked at the Burger King drive through.   No way he should have gotten that loan, and he lost the house.

Yep. And its all his fault, right? It's not the bank's fault at all? I mean the bank gives a guy what....a $300,000 loan and he works at a Burger King drive-thru. Im sorry but this is bank's fault. The loan should have never been approved. What moron lends $300,000 to a Burger King cashier? Just like the old saying, "a fool and his money are soon parted."

What is it that in this country where if the rich lose money, it is someone elses fault? Just like with the NFL lockout, most of the stupid fans are trashing the players even though it's the owners that caused this mess. They agreed to the 2006 CBA by a 30-2 vote. But it's the player's fault that was a bad deal for the owners.

Give me a break. This country is turning into a joke. Companies default on loans ALL THE TIME! They foreclose all the time. No one seems to care when a company fails to pay its financial obligations. Yet when someone walks away from their mortgage people act like its the worst crime in the world.

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« #7 : March 24, 2011, 06:43:45 PM »

The bank is foolish to allow such a mortgage, the young man is stupid as ask for such a loan, and the enabling parties up the line to the Federal Government were stupid to encourage such practices.  It is dumb - it is ridiculous.  Whether it is a poor man or a poor company it is their failure, the same with the rich man or company.  And for those who want to use tax dollars to fund such nonsense is pretty much outside what this country has stood for until the last 40 or so years.  Regardless of which element of the mess you look at - there were simply unacceptable decisions being made.  Not letting those who made the decisions fail - well we will see how that works out.  But don't give anyone in that process a break and excuse them because someone else should have known better.  Every damned step of the way someone was taking advantage of our tax dollars, or investment income - and they all knew better.  From the borrower to those who packaged derivatives, every damned one. 

As for the NFL - both are at fault, the owners are as dumb and the players.  9.7 billion dollars on the table and 2000 people can't find a deal - please.

Walking away from a mortgage it the right of the person, accepting all that goes with it is the penalty.  That isn't the worst crime in the world.  The worst crime is when smart folks ignore what they know is right, because a system is enabling bad decisions to be profitable.

just my .02

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John Galt?

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« #8 : March 24, 2011, 07:14:11 PM »

The guy who bought the house next to my sister worked at the Burger King drive through.   No way he should have gotten that loan, and he lost the house.

Yep. And its all his fault, right? It's not the bank's fault at all? I mean the bank gives a guy what....a $300,000 loan and he works at a Burger King drive-thru. Im sorry but this is bank's fault. The loan should have never been approved. What moron lends $300,000 to a Burger King cashier? Just like the old saying, "a fool and his money are soon parted."

What is it that in this country where if the rich lose money, it is someone elses fault? Just like with the NFL lockout, most of the stupid fans are trashing the players even though it's the owners that caused this mess. They agreed to the 2006 CBA by a 30-2 vote. But it's the player's fault that was a bad deal for the owners.

Give me a break. This country is turning into a joke. Companies default on loans ALL THE TIME! They foreclose all the time. No one seems to care when a company fails to pay its financial obligations. Yet when someone walks away from their mortgage people act like its the worst crime in the world.


Who said a "bank" gave him the loan? Most of the subprime loans were NOT issued by banks, but by subprime lenders like Countryside and HHF and HFC (which was acquired by HSBC, an actual bank).


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« #9 : March 24, 2011, 07:19:35 PM »

The bank is foolish to allow such a mortgage, the young man is stupid as ask for such a loan, and the enabling parties up the line to the Federal Government were stupid to encourage such practices.  It is dumb - it is ridiculous.  Whether it is a poor man or a poor company it is their failure, the same with the rich man or company.  And for those who want to use tax dollars to fund such nonsense is pretty much outside what this country has stood for until the last 40 or so years.  Regardless of which element of the mess you look at - there were simply unacceptable decisions being made.  Not letting those who made the decisions fail - well we will see how that works out.  But don't give anyone in that process a break and excuse them because someone else should have known better.  Every damned step of the way someone was taking advantage of our tax dollars, or investment income - and they all knew better.  From the borrower to those who packaged derivatives, every damned one. 

Walking away from a mortgage it the right of the person, accepting all that goes with it is the penalty.  That isn't the worst crime in the world.  The worst crime is when smart folks ignore what they know is right, because a system is enabling bad decisions to be profitable.

just my .02

Well said.


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« #10 : March 24, 2011, 07:59:25 PM »

The guy who bought the house next to my sister worked at the Burger King drive through.   No way he should have gotten that loan, and he lost the house.

Yep. And its all his fault, right? It's not the bank's fault at all? I mean the bank gives a guy what....a $300,000 loan and he works at a Burger King drive-thru. Im sorry but this is bank's fault. The loan should have never been approved. What moron lends $300,000 to a Burger King cashier? Just like the old saying, "a fool and his money are soon parted."

What is it that in this country where if the rich lose money, it is someone elses fault? Just like with the NFL lockout, most of the stupid fans are trashing the players even though it's the owners that caused this mess. They agreed to the 2006 CBA by a 30-2 vote. But it's the player's fault that was a bad deal for the owners.

Give me a break. This country is turning into a joke. Companies default on loans ALL THE TIME! They foreclose all the time. No one seems to care when a company fails to pay its financial obligations. Yet when someone walks away from their mortgage people act like its the worst crime in the world.


Who said a "bank" gave him the loan? Most of the subprime loans were NOT issued by banks, but by subprime lenders like Countryside and HHF and HFC (which was acquired by HSBC, an actual bank).
Feel free to substitute lender in place of bank - which I suspect you knew.  I used bank as it was offered in the prior post.  Lender works just fine

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CBWx2

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« #11 : March 24, 2011, 09:01:22 PM »

While Michael Hudson isn't a Libertarian (which is apparently the only source material Biggs uses to support his arguments. Step outside of the bubble, buddy), he is an economists who has written several cover stories for Harpers Magazine, Lapham's Quarterly, the New York Times and the Financial Times. Here's the transcripts from a radio interview he did last October:

http://www.thomhartmann.com/blog/2010/12/transcript-thom-hartmann-asks-michael-hudson-who-killed-economy-25-oct-10

Thom Hartmann: So who killed the American economy? Is the conservative storyline right? That it was Chris Dodd and Barney Frank and Bill Clinton?

Michael Hudson: Well, there’s a lot of suspects, and there’s a lot of blame to go around, and I think even Bill Clinton has admitted that he did some things in the late ‘90s in terms of deregulating, deregulating the banks…

Thom Hartmann: You’re talking about Gramm-Leach-Bliley and the Commodity Futures Modernization Act, but those are Republican sponsored bills.

Michael Hudson: Exactly. Absolutely but he played a role in it.

Thom Hartmann: Yes he did, he signed them enthusiastically.

Michael Hudson: And he’s acknowledged that he regrets it now.

Thom Hartmann: Yeah.

Michael Hudson: But this idea that the government more or less forced banks to go out and make sub prime loans just isn’t true, the facts just don’t support that. The truth is that most of the lenders that were making sub prime loans were not covered by the Community Reinvestment Act. And the reason that big banks and other lenders were making these kind of risky abusive loans, was because they could make lots and lots of money from them and because Wall Street was bank-rolling the whole thing. As long as the pipeline of money was flowing from the big Wall Street firms, everybody wanted to get in on the game.

Thom Hartmann: Tell us about Ameriquest Mortgage.

Michael Hudson: Ameriquest Mortgage was really the biggest and most aggressive of the sub prime lenders. It in some ways created the market, or at least it was the leader. Everybody else, Ameriquest and a few other of these Orange County based sub prime lenders, really got the ball rolling and then it was later that folks like Wells Fargo, Countrywide, and to some degree even Fannie and Freddie got involved. But they weren’t, Fannie and Freddie weren’t the ones who were in the driver’s seat, they were actually responding to what was going on in the market. And most, you know government certainly deserves a lot of blame for what happened, but again it’s not so much a thing of action, of forcing people to do something, but it was actually more a matter of inaction.

Thom Hartmann: Yeah to use a football metaphor, it’s like the referees were ignoring fouls or bad plays or whatever.

Michael Hudson: And it was even worse than that. Because not only did the federal regulators especially during the Bush era, not do anything to crack down on bad practices, but they went after the states when state regulators and state attorneys general tried to go after big banks that were doing, doing bars wrong, the federal government would intervene with law suits and edix and say sorry these are federally regulated institutions, hands off, we’ll take care of it. Of course the problem was…

Thom Hartmann: If my memory serves me right, Michael Hudson, author of “The Monster,” the and it’s published by McMillan, US.McMillan.com/themonster. If my memory serves me right, when Elliott Spitzer tried to go after mortgage companies in New York state that were doing ninja loans and say this is wrong what you’re doing, it’s a violation of state law, and it was, that the Bush administration came in and invoked an, my recollection is an 1864 law, literally from the Civil War era that had never been used for this purpose to say sorry Mr. Spitzer you cannot intervene with the banks, we have priority. Do I, can you correct my memory on this because it’s been a few years.

Michael Hudson: No I think you’re right. I mean it was, they were invoking the power of federal preemption. And basically saying you know we control everything. You know and it didn’t happen just in New York state but in Washington state, all over, whenever a state agency tried to investigate a lender, it was either a federally chartered bank or had some connection to a federally chartered bank, the bank would go to the federal regulators and get a letter saying sorry, you know, hands off, and they would come back in awesome force, the state to back off.

Thom Hartmann: Now a lot of this was, I was going to say funded by the Fed but that would be the wrong way to put it. The Fed was encouraging these easy money practices. Alan Greenspan you know famously before Congress said “I made a mistake, I was wrong.” But there was…

Michael Hudson: A flaw in his logic, yeah.

Thom Hartmann: Yeah. But there, a flaw in his logic, right. But there was, I mean there was a large peanut gallery cheering on these bubbles, this being the most recent, this housing bubble, and calling it, this is, saying this is the free market, Ayn Rand was right, see, now you know we can have things the way that they’re supposed to be, the market knows best, etc. What happened to that line of thinking? Where did it come from and where has it gone now?

Michael Hudson: Well you know I think it’s still there, all this sort of bubblicious behavior was predicated on the idea that if you just completely free up the market then we’ll have this sort of unlimited growth and things will just get bigger and bigger. And you know, that was, there was sort of a Ponzi-like element of the mortgage boom in that as long as housing values kept going up, you could reduce your lending standards and make more loans. And as you kept reducing the lending standards, housing values would go up because the more loans you were making the more people were buying houses, and the more they were willing to pay for more and more money.

Thom Hartmann: It increased demand.

Michael Hudson: Right. And lenders would sort of hide the fact that they were making bad loans. Think about it. If you’re a borrower, you make a loan. And what would happen is a borrower would take out a sub prime loan, six months or a year in when the adjustable rates started zooming upwards they would realize they couldn’t afford it, so their only option in most cases was to do a refinancing. So they would do another refinancing. Pay off the old loan, go into a new one, the same pattern would happen. They may know at this point that they’ve been kind of taken in but they can’t get out of it. They’re in this cycle. And so you often had people who would have say five loans in a period of five years and eventually at the end of this, say on the 5th loan, each one sort of staving off the inevitable and on the 5th loan they would collapse under the weight of all the fees and interest rates. But what would be interesting…

Thom Hartmann: And they’d have no more equity left.

Michael Hudson: Right. And but what would be interesting is these will go down on the books, right, as four “successful” loans. Because they didn’t’ go into default, they were paid off, so they were successful, and then one failed loan. But the truth was that all 5 were failed loans, they were all loans that had been made that were doomed to fail and the idea was just to keep people trapped in this cycle.

Thom Hartmann: We’re talking with Michael Hudson, his new book is titled, “The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America—and Spawned a Global Crisis.” Michael, we have a little less than a minute left. Weren’t many of these loans actually designed to force people to refi within a year or two, wasn’t that the whole theory behind this?

Michael Hudson: Absolutely, Ameriquest was a big example of this. They had these loans, the 227 and 327 loans, they would be a fixed rate for two years or three years and then for the rest of the loan. And once they adjusted, you know sometimes people would understand they were getting an adjustable rate, but they would be told oh well the rates could go down. But the truth was that these loans were designed so they were unidirectional. Once the teaser rate was over, they would always go up.

Thom Hartmann: Yeah, just like the discount rates the cable company offers you. Hey only 35 dollars a month. Yeah right. Michael Hudson, staff writer for the Center for Public Integrity, former reporter for the Wall Street Journal, and author of a new book, “The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America—and Spawned a Global Crisis.” Michael, thank you for your great work and for dropping by our program.

Michael Hudson: Thanks Thom I appreciate it.

Thom Hartmann: Good talking with you.
« : March 24, 2011, 09:09:06 PM CBWx2 »


dbucfan

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« #12 : March 24, 2011, 09:59:20 PM »

A long explanation of housing market problems - from Wharton - didn't get a date - would guess 2010




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« #13 : March 24, 2011, 10:22:41 PM »

While Michael Hudson isn't a Libertarian (which is apparently the only source material Biggs uses to support his arguments. Step outside of the bubble, buddy

CNN money is "Libertarian source material"?  That's a new one...


But this idea that the government more or less forced banks to go out and make sub prime loans just isn’t true, the facts just don’t support that.

What does Mr. Hudson think the point of the CRA was?



The truth is that most of the lenders that were making sub prime loans were not covered by the Community Reinvestment Act. And the reason that big banks and other lenders were making these kind of risky abusive loans, was because they could make lots and lots of money from them and because Wall Street was bank-rolling the whole thing. As long as the pipeline of money was flowing from the big Wall Street firms, everybody wanted to get in on the game.

If this was true, why did the banks wait for Congress to require them to lend to risky individuals to start offering subprime loans?  Why weren't they doing it all along?

What a strange coincidence that risky lending practices coinciding with legislation that forced risky lending...


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« #14 : March 24, 2011, 10:28:39 PM »

If you check in at 14 minutes or so - Gyourko will explain...

\"A Great Coach has to have a Patient Wife, A Loyal Dog, and a Great Quarterback. . . . but not necessarily in that order\" ~ Coach Bud Grant
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