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Old 06-06-2016, 05:22 AM
 
66,239 posts, read 30,145,317 times
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Quote:
Originally Posted by dv1033 View Post
It also didn't mean that they had to create NINJA loans.....
Actually, it did. Those were GSE Affordable Lending program loans:
Quote:
"...Countrywide tends to follow the most flexible underwriting criteria permitted under GSE and FHA guidelines. Because Fannie Mae and Freddie Mac tend to give their best lenders access to the most flexible underwriting criteria, Countrywide benefits from its status as one of the largest originators of mortgage loans and one of the largest participants in the GSE [Affordable Lending] programs. When necessary—in cases where applicants have no established credit history, for example—Countrywide uses nontraditional credit, a practice accepted by the GSEs."
Published by Fannie Mae Foundation in 2000:
http://fcic-static.law.stanford.edu/cdn_media/fcic-docs/2000-00-00%20Fannie%20Mae%20Foundation%20Making%20New%20Ma rkets.pdf

Most flexible underwriting criteria. For example, no established credit history, among other issues that would normally get a loan rejected as too high-risk.

Recognize the problem, yet?

Furthermore, the GSEs themselves created the "automated underwriting" systems implemented by loan originators in the mid-1990s to speed up the underwriting process. These systems set underwriting standards for the mortgage industry (whether or not the loans were purchased by the GSEs) way too low, and greatly relaxed the underwriting approval process. An independent study of about 1,000 loans found that the same loans were 65% more likely to be approved by the automated processes versus the manual underwriting process.

Exhibit 3, here: http://urbanpolicy.berkeley.edu/pdf/zorn.pdf

Had loan originators NOT used the GSEs' automated underwriting system and continued to use manual underwriting instead, that extra 65% of high-risk loans wouldn't have been made.

It's easy to see where the problem started when you answer the question... Which of the following did the Federal Reserve create $2 trillion of QE to buy? Wall Street-issued MBS? Or GSE MBS?
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Old 06-06-2016, 05:26 AM
 
66,239 posts, read 30,145,317 times
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Quote:
Originally Posted by dv1033 View Post
LOL. The pooled assists are the debt obligations that serve as collateral.
Do you mean pooled assets?

Collateralized Debt Obligation (CDO) Definition | Investopedia

Such as mortgages.
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Old 06-06-2016, 05:30 AM
 
66,239 posts, read 30,145,317 times
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Quote:
Originally Posted by pknopp View Post
It was explained to you.
No. An assertion was made that doesn't match actual history. I already posted the links to Fannie Mae and the analysis of the GSEs' automated underwriting system.

Selling a Government Sponsored Enterprise what they want to buy while using a Government-created product to assess risk and underwrite a loan isn't "giving bad advice." The fault lies with the Government.
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Old 06-06-2016, 06:27 AM
 
77,900 posts, read 33,233,798 times
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Quote:
Originally Posted by InformedConsent View Post
No.
Yes.
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Old 06-06-2016, 06:36 AM
 
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Quote:
Originally Posted by pknopp View Post
Yes.
I post facts, with corroborating links. You post your "opinion." People see through you.
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Old 06-06-2016, 06:40 AM
 
77,900 posts, read 33,233,798 times
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Quote:
Originally Posted by InformedConsent View Post
I post facts, with corroborating links. You post your "opinion." People see through you.
You don't read facts presented so there really is no need. You will note, you are the only one trying to defend the actions of the banks by ignoring reality.
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Old 06-06-2016, 06:49 AM
 
66,239 posts, read 30,145,317 times
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Quote:
Originally Posted by pknopp View Post
You don't read facts presented so there really is no need.
Give it a shot... Post anything that proves the GSEs weren't operating "Affordable Lending" programs with loan originators that let loan originators approve loans to those with compromised credit and other issues that would normally get those loans rejected because they were too high-risk. Prove that the GSEs' own underwriting systems weren't approving 65% too many loans, loans that manual underwriting would have rejected for being too high-risk.
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Old 06-06-2016, 06:59 AM
 
77,900 posts, read 33,233,798 times
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Quote:
Originally Posted by InformedConsent View Post
Give it a shot... Post anything that proves the GSEs weren't operating "Affordable Lending" programs with loan originators that let loan originators approve loans to those with compromised credit and other issues that would normally get those loans rejected because they were too high-risk. Prove that the GSEs' own underwriting systems weren't approving 65% too many loans, loans that manual underwriting would have rejected for being too high-risk.
Your strawmen don't interest me.
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Old 06-06-2016, 07:02 AM
 
66,239 posts, read 30,145,317 times
Reputation: 8606
Quote:
Originally Posted by pknopp View Post
Your strawmen don't interest me.
They're not strawmen. And you won't respond because you can't factually rebut the points I've made.

The facts prove exactly what I've said.
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Old 06-06-2016, 07:08 AM
 
77,900 posts, read 33,233,798 times
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Quote:
Originally Posted by InformedConsent View Post
They're not strawmen.
They are.
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