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[quote=Taratova;26193860]In any given neighborhood in Florida that was built in the building boom, 90% of homes went into foreclosure in the past 5 years.
Who cares? It was a bubble.
And you got together with the scuzzy mortgage lenders and sold houses to people that couldn't afford them. The scuzzy bankers sold those mortgages as securities to investors left holding the bag.
Everybody made out like a bandit except for those stupid enough to buy those securities.
And you turn around and want to blame Obama and brown people for a scheme you gladly took part in.
In any given neighborhood in Florida that was built in the building boom, 90% of homes went into foreclosure in the past 5 years.
Who cares? It was a bubble.
And you got together with the scuzzy mortgage lenders and sold houses to people that couldn't afford them. The scuzzy bankers sold those mortgages as securities to investors left holding the bag.
Everybody made out like a bandit except for those stupid enough to buy those securities.
And you turn around and want to blame Obama and brown people for a scheme you gladly took part in.
What you don't realize the banks were backed by the government leaving no risk. Fannie and Freddie grew huge and 40 % of the mortgages were given to the poor because of the faulty legislation letting all poor buy a home and with NO money down.
That is no improvement... the foreclosures were very high all these years and because they were so very many some improvement is no improvement.
The article indicated a percentage change (15% decrease in foreclosures).
If original totals were SMALL then what you said is correct. However, you state that the original totals were very high which would indicate a percentage change that represents a large number.
So, some improvement is some improvement.
Last edited by geofra; 09-21-2012 at 02:50 PM..
Reason: Clarification
The article indicated a percentage change (15% decrease in foreclosures).
If original totals were SMALL then what you said is correct. However, you state that the original totals were very high which would indicate a percentage change that represents a large number.
So, some improvement is some improvement.
After 5 years and they still have large numbers! Reason , unemployment... Obama has not provided jobs through his lousy decisions. The keystone pipe line could create jobs for many Americans.. plus the companies making the materials for the pipe line, the work to install and many jobs lost because of Obama... he should be booted out of office not voted out!
Many of the wealthier middle class people hung on for a longer time. They lost their jobs and couldn't find another. Their savings ran out.
The homes that are being lost are now those who bought a home they could afford but without a job, they cannot find the money to keep it.
I do agree that it's a different scenario now that it was a couple of years ago. Still, there was a huge amount of loans going to people where the slightest little bump in life caused a meltdown. I lived through financial meltdowns and always managed to keep my mortgage current. Absolutely believe me when I say if I could do it, anybody should be able to. I had to adjust both my lifestyle and my attitude. Immediately.
After 5 years and they still have large numbers! Reason , unemployment... Obama has not provided jobs through his lousy decisions. The keystone pipe line could create jobs for many Americans.. plus the companies making the materials for the pipe line, the work to install and many jobs lost because of Obama... he should be booted out of office not voted out!
It's like you said, there were a lot of foreclosures. It took three years, a Herculean feat of untangling their paperwork mess, and a $25 billion settlement from the banking industry to get any kind of movement on foreclosures.
A lack of jobs didn't help this foreclosure disaster, but a lack of responsibility and accountability was the major factor.
They were sold on the open market to other banks overseas, precipitating or at least contributing to the meltdown in Europe, among other economies, for which they are getting bailout funds from more secure economies such as Germany and France.
So; no, not all who bought those worthless assets took a beating. Some got bailout funds that they're still sitting on now, hedging their bets with public money.
Kinda neat eh? A stupid decision by morons in the U.S. results in some bank in Greece getting bailed out by France; a country you love to hate for being too socialistic while you so-called capitalistic numbnuts gave mortgages to people who couldn't afford to make the payments. Oxymoronic or what?
Last edited by CaseyB; 09-21-2012 at 05:59 PM..
Reason: response to deleted post
You are a serial spreader of right wing lies. Community Reinvestment Act only applied to banks that did their own mortgage lending. A small sliver of loans which HAD LOWER RATES OF FORECLOSURE than the mortgage lending industry. Congress held hearing on this and no lenders testified low interest loans to poor people where the cause,....despite your right wing politicians trying to goad them into saying that.
You like the idea because you can blame minorities for the housing bubble that developed in Florida that you helped create.
Nobel laureate Paul Krugman[108] noted in November 2009 that 55% of commercial real estate loans were currently underwater, despite being completely unaffected by the CRA.[109] According to Federal Reserve Governor Randall Kroszner, the claim that "the law pushed banking institutions to undertake high-risk mortgage lending" was contrary to their experience, and that no empirical evidence had been presented to support the claim.[110] In a Bank for International Settlements (BIS) working paper, economist Luci Ellis concluded that "there is no evidence that the Community Reinvestment Act was responsible for encouraging the subprime lending boom and subsequent housing bust", relying partly on evidence that the housing bust has been a largely exurban event.[111] Others have also concluded that the CRA did not contribute to the financial crisis, notably, FDIC Chairman Sheila Bair,[112] Comptroller of the Currency John C. Dugan,[113] Tim Westrich of the Center for American Progress,[114] Robert Gordon of the American Prospect,[115] Ellen Seidman of the New America Foundation,[116] Daniel Gross of Slate,[117] and Aaron Pressman from BusinessWeek.[118]
Legal and financial experts have noted that CRA-regulated loans tend to be safe and profitable, and that subprime excesses came mainly from institutions not regulated by the CRA. In the February 2008 House hearing, law professor Michael S. Barr, a Treasury Department official under President Clinton,[63][119] stated that a Federal Reserve survey showed that affected institutions considered CRA loans profitable and not overly risky. He noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates. Barr noted that institutions fully regulated by CRA made "perhaps one in four" sub-prime loans, and that "the worst and most widespread abuses occurred in the institutions with the least federal oversight".[120] According to Janet L. Yellen, President of the Federal Reserve Bank of San Francisco, independent mortgage companies made risky "high-priced loans" at more than twice the rate of the banks and thrifts; most CRA loans were responsibly made, and were not the higher-priced loans that have contributed to the current crisis.[121] A 2008 study by Traiger & Hinckley LLP, a law firm that counsels financial institutions on CRA compliance, found that CRA regulated institutions were less likely to make subprime loans, and when they did the interest rates were lower. CRA banks were also half as likely to resell the loans.[122] Emre Ergungor of the Federal Reserve Bank of Cleveland found that there was no statistical difference in foreclosure rates between regulated and less-regulated banks, although a local bank presence resulted in fewer foreclosures.[123]
During a 2008 House Committee on Oversight and Government Reform hearing on the role of Fannie Mae and Freddie Mac in the financial crisis, including in relation to the Community Reinvestment Act, asked if the CRA provided the "fuel" for increasing subprime loans, former Fannie Mae CEO Franklin Raines said it might have been a catalyst encouraging bad behavior, but it was difficult to know. Raines also cited information that only a small percentage of risky loans originated as a result of the CRA.[citation needed]
Consider the low lending standards that were a significant component of the mortgage crisis. Lenders made millions of loans to borrowers who, under normal market conditions, weren't able to pay them off. These decisions have cost lenders, especially leading financial institutions, tens of billions of dollars.
It is popular to take low lending standards as proof that the free market has failed, that the system that is supposed to reward productive behavior and punish unproductive behavior has failed to do so. Yet this claim ignores that for years irrational lending standards have been forced on lenders by the federal Community Reinvestment Act (CRA) and rewarded (at taxpayers' expense) by multiple government bodies.
The CRA forces banks to make loans in poor communities, loans that banks may otherwise reject as financially unsound. Under the CRA, banks must convince a set of bureaucracies that they are not engaging in discrimination, a charge that the act encourages any CRA-recognized community group to bring forward. Otherwise, any merger or expansion the banks attempt will likely be denied. But what counts as discrimination?
According to one enforcement agency, "discrimination exists when a lender's underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants." Note that these "arbitrary or outdated criteria" include most of the essentials of responsible lending: income level, income verification, credit history and savings history--the very factors lenders are now being criticized for ignoring.
The government has promoted bad loans not just through the stick of the CRA but through the carrot of Fannie Mae and Freddie Mac, which purchase, securitize and guarantee loans made by lenders and whose debt is itself implicitly guaranteed by the federal government. This setup created an easy, artificial profit opportunity for lenders to wrap up bundles of subprime loans and sell them to a government-backed buyer whose primary mandate was to "promote homeownership," not to apply sound lending standards.
Of course, lenders not only sold billions of dollars in suspect loans to Fannie Mae and Freddie Mac, contributing to their present debacle, they also retained some subprime loans themselves and sold others to Wall Street--leading to the huge banking losses we have been witnessing for months. Is this, then, a free market failure? Again, no.
In a free market, lending large amounts of money to low-income, low-credit borrowers with no down payment would quickly prove disastrous. But the Federal Reserve Board's inflationary policy of artificially low interest rates made investing in subprime loans extraordinarily profitable. Subprime borrowers who would normally not be able to pay off their expensive houses could do so, thanks to payments that plummeted along with Fed rates. And the inflationary housing boom meant homeowners rarely defaulted; so long as housing prices went up, even the worst-credit borrowers could always sell or refinance.
Thus, Fed policy turned dubious investments into fabulous successes. Bankers who made the deals lured investors and were showered with bonuses.
Further promoting a sense of security, every major financial institution in America--both commercial banks and investment banks--was implicitly protected by the quasi-official policy of "too big to fail." The "too big to fail" doctrine holds that, when they risk insolvency, large financial institutions (like Countrywide or Bear Stearns) must be bailed out through a network of government bodies including the Federal Deposit Insurance Corporation, the Federal Home Loan Banks and the Federal Reserve.
All of these government factors contributed to creating a situation in which millions of people were buying homes they could not afford, in which the participants experienced the illusion of prosperity, in which billions upon billions of dollars were going into bad investments. Eventually the bubble burst; the rest is history.
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