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It's not "deflecting" to point out that you're wrong and you've been wrong repeatedly and you don't even understand why you're wrong. I've addressed your point, I've just pointed out repeatedly you were incorrect and worse- don't really understand the topic as well as you think you do. It's not "making things up" tp point out facts that in invalidate your preconceived
narrative.
For someone so obsessed with claiming others are "deflecting" you still haven't addressed the fact that in 2006, 24 of the 25 top subprime lenders were non-bank lenders not bound by the government regulations you're referencing. So please don't "deflect" here and address this fact. 96% of the top subprime lenders in 2006 were not subject to the regulation you claim caused the entire 08 crisis. You repeatedly ignore the role of the shadow banking system mostly b/c I think you have no idea what the term even refers to let alone the role it played; same with the derivative and non-agency parts.
You've been shown the unregulated derivative market (CDO, CDS, synthetic CDO), CDO/private label securitization explosions (including non-agency loans- not subject to your regulations), unwavering appetite for increased returns, securitization, and the shadow banking system all played a role in causing the 08 crisis, however you seem unable to grasp this to even the slightest degree.
There never would have been an out of control derivative market if those horrible anti free market, rarely made loans, weren't government forced so they became common place. What you described is a symptom. After the fact.
Again
One more time for everyone to see. Watch how this poster deflects and never addresses what I've posted.
Congress forced lenders to lower standards and make loans they rarely made in the past. In 1989 1 in 240 loans was 3 percent down or less because they werent a good risk. Lenders knew this from experieince. In 2007 those loans were common place as now 1 in 3 or 80 in 240 were 3 percent down or less. Basic economic premise when you lower standards, quality and efficiency suffer.
Quit running and directly respond to what I've posted. Don't make things up like no one forced lenders to make those loans when in fact it's been pointed out several times how they actually did it.
there free market- i.e banks not subject to your precious regulation, make up 96% of the top subprime lenders in 06 (to make it even easier for you- lenders who made the loans of thrown free will- not b/c Andre Cuomo or Congress made them do it). They sought and needed higher coupons on their securitization, only way to do that was to make riskier loans for higher coupons- aka subprime loans. This is what caused the explosion of the subprime market- along with the mistaken believe that they could manage the risk the subprime paper posed. Nobody would make subprime loans if there wasn't;t a secondary market for it (someone to buy the loan from the originator). Keep showing you don't really understand the issue or the forces that were at play.
Banks are subject to regulation by the FDIC. Guess which banks are NOT FDIC?
The CRA was a factor in lowering lending standards. Basic economic premise that you amatuers ignore. When you lower standards, quality and efficiency suffer
96% hahahaha
Many of these companies are are middlemen who arrange mortgage loans for borrowers — including "subprime" borrowers — with banks, including CRA-regulated banks.
Bernake said in 2007 "Securitization of affordable housing loans expanded, as did the secondary market for these loans, in part reflecting a 1992 law that required the government-sponsored enterprises, Fannie Mae and Freddie Mac, to devote a large percentage of their activities to meeting affordable housing goals."
in 1995, the US Treasury Department created the multibillion-dollar "Community Development Financial Institutions" fund to "provide banks with access [i.e., taxpayers' dollars] to new opportunities to finance community economic development" as "encouraged" by the CRA, said the Fed chairman
Red Bolded to expose garbage
"Fannie Mae Foundation singled out one bank in particular as the role model for all other banks in America in terms of its commitment to CRA lending: Countrywide, the nation's largest mortgage lender, had committed to $600 billion in low-income or "subprime" loans as of 2003. Today, Countrywide is essentially bankrupted and has been merged with Bank of America."
Two loans with the exact same qualifications and terms. One is in neighborhood A means its a CRA specific loan. One is in neighborhood B meaning the terms are the same as a CRA loan but it's not CRA specific.
It's about the horrible loans that should never have been made. Government used force and coercion. "We'll lower interest rates to you if you make bad loans"
Last edited by Loveshiscountry; 05-28-2018 at 06:30 PM..
Banks are subject to regulation by the FDIC. Guess which banks are NOT FDIC?
The CRA was a factor in lowering lending standards. Basic economic premise that you amatuers ignore. When you lower standards, quality and efficiency suffer
96% hahahaha
Many of these companies are are middlemen who arrange mortgage loans for borrowers — including "subprime" borrowers — with banks, including CRA-regulated banks.
Bernake said in 2007 "Securitization of affordable housing loans expanded, as did the secondary market for these loans, in part reflecting a 1992 law that required the government-sponsored enterprises, Fannie Mae and Freddie Mac, to devote a large percentage of their activities to meeting affordable housing goals."
in 1995, the US Treasury Department created the multibillion-dollar "Community Development Financial Institutions" fund to "provide banks with access [i.e., taxpayers' dollars] to new opportunities to finance community economic development" as "encouraged" by the CRA, said the Fed chairman
Red Bolded to expose garbage
"Fannie Mae Foundation singled out one bank in particular as the role model for all other banks in America in terms of its commitment to CRA lending: Countrywide, the nation's largest mortgage lender, had committed to $600 billion in low-income or "subprime" loans as of 2003. Today, Countrywide is essentially bankrupted and has been merged with Bank of America."
Two loans with the exact same qualifications and terms. One is in neighborhood A means its a CRA specific loan. One is in neighborhood B meaning the terms are the same as a CRA loan but it's not CRA specific.
It's about the horrible loans that should never have been made. Government used force and coercion. "We'll lower interest rates to you if you make bad loans"
96% of top subprime lenders were not bound by regulations you reference no natter how many times you claim the law was the cause. Please explain that? Pointing out Angelo Mozilla as an exception does not negate this fact.
There never would have been an out of control derivative market if those horrible anti free market, rarely made loans, weren't government forced so they became common place. What you described is a symptom. After the fact.
Again
One more time for everyone to see. Watch how this poster deflects and never addresses what I've posted.
Congress forced lenders to lower standards and make loans they rarely made in the past. In 1989 1 in 240 loans was 3 percent down or less because they werent a good risk. Lenders knew this from experieince. In 2007 those loans were common place as now 1 in 3 or 80 in 240 were 3 percent down or less. Basic economic premise when you lower standards, quality and efficiency suffer.
Quit running and directly respond to what I've posted. Don't make things up like no one forced lenders to make those loans when in fact it's been pointed out several times how they actually did it.
My god man, do you not get it or can you not admit when you’re wrong. You keep claiming it was a it anti free market policies that drove appetite when in fact it was the banks themselves that drove the market seeking increased returns on investments driven by the higher coupons, aka the free market. What about this has not sunk in? 96% of top subprime lenders in 06 were not subject to the regulation you claim caused the crisis so please explain how they were forced to do so? Just because you can’t refute it or don’t get it doesn’t mean it’s made up.
HOW does the 95 standard change have nothing to do with bad loans, which were packaged up into bad packages???
it IS the initial cause, the initial infection
Its not an "infection" if its the desired result, which it was in the 2000s. Subprime loans came with higher income streams. Higher income streams made for better CDOs. Better CDOs resulted in more profits for the investment banks.
Which is why the number of subprime mortgages exploded in the 2000s and dwarfed the prior governmental attempts to expand those eligible for loans. It was intentional.
Here is an article from 2007. Note they would pay the originator more for the no income verification loan than the full documentation loan.
For his part, Mr. Dallas acknowledges that standards were lowered, but he placed the blame at the feet of investors and Wall Street, saying they encouraged Ownit and other subprime lenders to make riskier loans to keep the pipeline of mortgage securities well supplied. “The market is paying me to do a no-income-verification loan more than it is paying me to do the full documentation loans,” he said. “What would you do?”
The subprime loans should never have been made and they rarely were in the past when the mortgage industry was left to the free market and not forced to make bad loans to satisfy non free market rules set by government.
You have made this assertion over and over. Just because you believe it doesn't make it so. In fact there is plenty of documentation to show that it is not true. The free market found a use for subprime loans which is why they favored subprime loans. "rarely in the past" as in before the free market found a use for subprime loans. The vast majority of subprime loans in the 2000s were being originated and bought by companies that were not under a government mandate or edict.
Do you have any documentation that shows the investment banks were not the ones securitizing the majority of subprime loans in the 2000s?
Of course it's after the fact. Quit ignoring these facts and respond to them. Don't deflect.
Fact Government forced lenders to lower standards and make loans they rarely made in the past.
Proof of that fact - In 1989 1 in 240 loans was 3 percent down or less because they werent a good risk. Lenders knew this from experience. In 2007 those loans were common place as now 1 in 3 or 80 in 240 were 3 percent down or less.
All that shows is that there were more subprime loans in the 2000s than in the 90s. The reason why there were more subprime is that investment banks wanted subprime loans for CDOs.
Quote:
Originally Posted by Loveshiscountry
Basic economic premise when you lower standards, quality and efficiency suffer.
Explain to everyone here why those horrible loans were rarely made in the past while in 2007 they were common place. Are you going to say, "well that's the free market"?????????
I have done so plenty of times in this thread. The Free Market found a use for subprime loans. The growth in subprime loans corresponds directly with the growth in CDOs which needed a supply of subprime loans. Its that simple. The free market shot itself in the foot.
Quote:
Originally Posted by Loveshiscountry
Fact - If government didn't force and coerce lenders to make those horrible loans which were rarely made in the past we don't have a crash. Those loans, as a whole, we know for a fact they were doomed to fail because history has taught us that. Everything you mentioned is after the that. That cannot be denied by reasonable people.
Please explain to everyone here how we could have a crash if those horrible loans are never made in the first place? Do you actually think a crash happens if we don't make all those horrible loans. Please answer that and don't deflect.
Its not an "infection" if its the desired result, which it was in the 2000s. Subprime loans came with higher income streams. Higher income streams made for better CDOs. Better CDOs resulted in more profits for the investment banks.
Which is why the number of subprime mortgages exploded in the 2000s and dwarfed the prior governmental attempts to expand those eligible for loans. It was intentional.
Here is an article from 2007. Note they would pay the originator more for the no income verification loan than the full documentation loan.
For his part, Mr. Dallas acknowledges that standards were lowered, but he placed the blame at the feet of investors and Wall Street, saying they encouraged Ownit and other subprime lenders to make riskier loans to keep the pipeline of mortgage securities well supplied. “The market is paying me to do a no-income-verification loan more than it is paying me to do the full documentation loans,” he said. “What would you do?”
I bought my first house in 1986, sold it with a PCS (perm change of station) on the high in 89 (there was a small housing crash in90) as I was military
bought my second house in 90 in Panama (still have it, paid off)
bought my 3rd house here in Long Island in 1994...paid 125k....paid off...still own it..will sell it in less than 3 years for proably 3/4 mil
bought the next door neighbors house in 97, as a handyman special, for just under 120k...sold it in 05 for 450k
bought another house near Fort Bragg in the early 00's....150k... a 4000sf w/igp on a full acre....still own it.....worth about 350k (would be 1.5mil+ here in LI)
I was trading/investing/flipping real estate (sub prime) in the 90's
why do you guys ACT like it only just started in 04????
I bought my first house in 1986, sold it with a PCS (perm change of station) on the high in 89 (there was a small housing crash in90) as I was military
bought my second house in 90 in Panama (still have it, paid off)
bought my 3rd house here in Long Island in 1994...paid 125k....paid off...still own it..will sell it in less than 3 years for proably 3/4 mil
bought the next door neighbors house in 97, as a handyman special, for just under 120k...sold it in 05 for 450k
bought another house near Fort Bragg in the early 00's....150k... a 4000sf w/igp on a full acre....still own it.....worth about 350k (would be 1.5mil+ here in LI)
I was trading/investing/flipping real estate (sub prime) in the 90's
why do you guys ACT like it only just started in 04????
Unless your credit score was 600 you’re not subprime. Did you take out a NINJA loan or a pick a pay loan? We’re you approved for a loan 8 tomes your salary? Nobody said subprime didn’t exist prior, only the appetite exploded due to certain reasons that were not 100% government making banks give poor people loans.
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