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I think it's clear now to everyone but those dealing with the sour grapes that Bush and his administration read like a Who's Who of Creature Features. "Frighteningly ignorant" Bush was described as. You put him there...TWICE.
What is obvious is that Republicans/Regressives/Neocons/Conservatives/Clueless need to quit FURTHER making a fool of themselves by giving the impression that they know what's good for this country. You Regressives had 8 years to show what you could do, and your entire ideology belongs on Cartoon Network.
You Regressives also showed very plainly that your political and policy instincts are to be ignored. Obama is way over your head. Be quiet and learn.
OK. One more time with feeling. If a mortgage lender knows the government will buy up loans, both good and bad, he'll write them. If he knows there's a chance he'll be sued by the government if he denies too many poor black loans, he'll write them. Take away the government "regulators" and the mortgage broker goes back to issuing loans with prudence.
The private sector was largely behind the sub-prime lending spree, in fact the GSE's market share was off dramatically during this period from a high close to 70% to somewhere around 34%.
"Federal housing data reveal that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.
Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.
Federal Reserve Board data show that:
More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.
The "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," the President's Working Group on Financial Markets reported Friday.
Conservative critics claim that the Clinton administration pushed Fannie Mae and Freddie Mac to make home ownership more available to riskier borrowers with little concern for their ability to pay the mortgages.
"I don't remember a clarion call that said Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster," said Neil Cavuto of Fox News.
Fannie, the Federal National Mortgage Association, and Freddie, the Federal Home Loan Mortgage Corp., don't lend money, to minorities or anyone else, however. They purchase loans from the private lenders who actually underwrite the loans.
It's a process called securitization, and by passing on the loans, banks have more capital on hand so they can lend even more." Source
Investors provide the underwriting guidelines which allow individuals to qualify for loans. Loan products insured by FHA, did not suffer from many of the sub-prime problems (foreclosure) because the folks being blamed could not qualify for FHA insured products - which is why they went to the brokers who used products from banks with uw standards written by investors (lenders) with sub-prime and other exotic mortgage products - who consequently bought the loans, bundled them and sold them. Fannie and Freddie are not the only package/bundler's, they just had the implied Government guarantee, and were probably much more attractive/stable in the game of risk v. reward. When one considers the leverage that was asserted the issue becomes clearer.
Robert Samuelson offers some insight
"Finally, investment banks rely heavily on borrowed money, called "leverage" in financial lingo. Lehman was typical. In late 2007, it held almost $700 billion in stocks, bonds and other securities. Meanwhile, its shareholders' investment (equity) was about $23 billion. All the rest was supported by borrowings. The "leverage ratio" was 30 to 1.
Leverage can create huge windfalls. Suppose you buy a stock for $100. It goes to $110. You made 10 percent, a decent return. Now suppose you borrowed $90 of the $100. If the price rises to $101, you've made 10 percent on your $10 investment. (Technically, the price has to exceed $101 slightly to cover interest payments.) If it goes to $110, you've doubled your money. Wow.
Once assembled, these components created a manic machine for gambling. Traders and money managers had huge incentives to do whatever would increase short-term profits. Dubious mortgages were packaged into bonds, sold and traded. Investment houses had huge incentives to increase leverage. While the boom continued, government remained aloof. Congress resisted tougher regulation for Fannie and Freddie and permitted them to run leverage ratios that, by plausible calculations, exceeded 60 to 1.
It wasn't that Wall Street's leaders deceived customers or lenders into taking risks that were known to be hazardous. Instead, they concluded that risks were low or nonexistent. They fooled themselves, because the short-term rewards blinded them to the long-term dangers. Inevitably, these surfaced. Mortgages went bad. The powerful logic of high leverage went into reverse. Losses eroded firms' tiny capital bases, raising doubts about their survival. This year, Lehman lost nearly $8 billion in "principal transactions." Otherwise, it was profitable."
Consider the following Statement -
The four biggest problem areas for housing (by price decreases) are: Phoenix, Arizona; Las Vegas, Nevada; Miami, Florida, and San Diego, California.
I am. Here is the link to another thread on this board with some very interesting video of W speaking at a black church on May 17, 2002, while the country was distracted by the aftermath of 9/11, committing 440 Billion dollars through FM & FM to make loans to people who don't deserve them. The second post is video of W on September 24, 2008, telling the world he is getting ready to throw good money after bad.
Here is an excerpt of the speech and the link to the thread. And thanks again, justNancy and DrJoey for posting the links to the video.
Take a look and tell us all what you think.
"Now, we've got a problem here in America that we have to address. Too many American families, too many minorities do not own a home. There is a home ownership gap in America. The difference between Anglo America and African American and Hispanic home ownership is too big. (Applause.) And we've got to focus the attention on this nation to address this.
And it starts with setting a goal. And so by the year 2010, we must increase minority home owners by at least 5.5 million. In order to close the homeownership gap, we've got to set a big goal for America, and focus our attention and resources on that goal. (Applause.)...
I want to thank Franklin Raines, of Fannie Mae and Leland Brendsel of Freddie Mac. Thank you all for coming. (Applause.)...
Three-quarters of white America owns their homes. Less than 50 percent of African Americans are part of the homeownership in America. And less than 50 percent of the Hispanics who live here in this country own their home. And that has got to change for the good of the country. It just does. (Applause.) And so here are some of the ways to address the issue. First, the single greatest barrier to first time homeownership is a high down payment. It is really hard for many, many, low income families to make the high down payment. ...
And let me talk about some of the progress which we have made to date, as an example for others to follow. First of all, government sponsored corporations that help create our mortgage system -- I introduced two of the leaders here today -- they call those people Fannie Mae and Freddie Mac, as well as the federal home loan banks, will increase their commitment to minority markets by more than $440 billion. (Applause.)
I want to thank Leland and Franklin for that commitment. It's a commitment that conforms to their charters, as well, and also conforms to their hearts.
This means they will purchase more loans made by banks after Americans, Hispanics and other minorities, which will encourage homeownership. Freddie Mac will launch 25 initiatives to eliminate homeownership barriers. Under one of these, consumers with poor credit will be able to get a mortgage with an interest rate that automatically goes down after a period of consistent payments. (Applause.)
Fannie Mae will establish 100 partnerships with faith-based organizations that will provide home buyer education and help increase homeownership for their congregations. I love the partnership. (Applause.)"
Looks like Bush figured out in the next year or so Fannie Mae was a fraud. In 2003 he tried to get the Treasure to oversee Fannie because Fannie was "broken". Democrats, as usual, opposed the plan and all subsequent attempts to rein in their personal piggy bank.
More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.
This is hoodoo. I addressed this very same leftwing talking point earlier in this or another thread. Just because a private lender issues a loan doesn't mean Fannie doesn't buy it. What the hell is a "public" lender, anyway? They're all private as far as I know, unless you're talking about the very few loans HUD issues directly as in HUD-repossessed properties.
Looks like Bush figured out in the next year or so Fannie Mae was a fraud. In 2003 he tried to get the Treasure to oversee Fannie because Fannie was "broken". Democrats, as usual, opposed the plan and all subsequent attempts to rein in their personal piggy bank.
Somebody tell us what these bastards Dodd and Frank aren't doing time.
You tell yourself whatever you need to to keep yourself going until you can wrap your mind around the concept of Comrade Bush presiding over the destruction of the economy. If you watched the vids you saw him in action and heard him with your own ears.
You tell yourself whatever you need to to keep yourself going until you can wrap your mind around the concept of Comrade Bush presiding over the destruction of the economy. If you watched the vids you saw him in action and heard him with your own ears.
Bush got the DOW up over 14,000 in 2007. Didn't take long for the Democrat Congress to cut it by more than half.
This is hoodoo. I addressed this very same leftwing talking point earlier in this or another thread. Just because a private lender issues a loan doesn't mean Fannie doesn't buy it. What the hell is a "public" lender, anyway? They're all private as far as I know, unless you're talking about the very few loans HUD issues directly as in HUD-repossessed properties.
A HUD Home, is a one-to-four unit residence acquired as a result of a foreclosure on an FHA-insured mortgage. Perhaps we can have further discussions when you can differentiate between private and public lenders and categorize appropriately the aforementioned institutions and their roles.
Bush got the DOW up over 14,000 in 2007. Didn't take long for the Democrat Congress to cut it by more than half.
Ok, I'll bite.
Exactly how did they accomplish this great feat and why?
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Clarity
