Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
All FDIC insured banks are forced to maintain and adhere to anti-discriminatory policies under the authority of the CRA, but are not forced to give out unprofitable (or any) loans.
You basically just proved my point..It's the interpretation of CRA language that ambiguously states "safe and sound" lending practices, that led to Clinton Administration to run with mandates on loaning money based on an anti discriminatory practices. It's called Redlining btw..That fueled the mandates to relax bank underwriting practices. This is what drove, loans to be written to people that would not have qualified under traditional standards. You are simply misinformed..EVERY Bank which accepts FDIC insurance falls under the jurisdiction of the CRA, not sure why you think some do and some don't. It's a common Govt practice btw..You want to qualify for the Govt. stamp of approval you comply with their regulations.
Again, they were forced to RELAX their underwriting practices to adress " the underserved population"..Do yourself a favor, look it up.. Janet Reno threatened lawsuits, HUD formed metrics around this mantra, and quotas for banks to meet. CRA is the over-arching regulation passed in 1977, which is/has been subject to interpretation from admin to admin, interpretation that Frank and Dodd took to a whole new level.
And you have yet to provide one example of 'relaxed' regulations being the cause. It's actually amazing to me that some people are such Government Sheep. They want to be taken care of, believe regulation is necessary because Govt tells them business and profit is sooooooo bad...I admit it's an attractive political platform to run but it's fundamentally wrong and not what the principles of this country were founded upon. If the founding fathers saw what we turned this place into they would not be happy.
The Govt wants you to believe it was relaxed regulations that got us here, their finger-wagging highly televised meetings with Wall Street execs proved that loud and clear. But honestly, if that is the explanation your comfortable with by all means live with it. It's NOT the facts..Bottom line, banks know how to lend better than a Politician like it or not. Whether you agree with the fact the some black or hispanic fella doesn't qualify under their standards based on their own history is not the banks problem. Its not like they're racist..Seriously think about it..Do you honestly think a bank doesn't want to loan to a minority? Do you think they would send their check back to them if they tried to pay for a loan? Lots of people just don't qualify, and I am ok with that.. Banks aren't charity organizations, as Dodd and Frank would have you believe, they're in business to make money, a system that has worked well in this country since the early 1900s.
Well, as bad as Obama has been, There is no way I can vote for the anti-science party. Anyone that either believes in creationism or says so in order to motivate a base will never get my vote.
When it comes to regulation you might be trading some financial regulation for moral regulation. Take your pick.
You basically just proved my point..It's the interpretation of CRA language that ambiguously states "safe and sound" lending practices, that led to Clinton Administration to run with mandates on loaning money based on an anti discriminatory practices. It's called Redlining btw..That fueled the mandates to relax bank underwriting practices. This is what drove, loans to be written to people that would not have qualified under traditional standards. You are simply misinformed..EVERY Bank which accepts FDIC insurance falls under the jurisdiction of the CRA, not sure why you think some do and some don't. It's a common Govt practice btw..You want to qualify for the Govt. stamp of approval you comply with their regulations.
Again, they were forced to RELAX their underwriting practices to adress " the underserved population"..Do yourself a favor, look it up.. Janet Reno threatened lawsuits, HUD formed metrics around this mantra, and quotas for banks to meet. CRA is the over-arching regulation passed in 1977, which is/has been subject to interpretation from admin to admin, interpretation that Frank and Dodd took to a whole new level.
And you have yet to provide one example of 'relaxed' regulations being the cause. It's actually amazing to me that some people are such Government Sheep. They want to be taken care of, believe regulation is necessary because Govt tells them business and profit is sooooooo bad...I admit it's an attractive political platform to run but it's fundamentally wrong and not what the principles of this country were founded upon. If the founding fathers saw what we turned this place into they would not be happy.
The Govt wants you to believe it was relaxed regulations that got us here, their finger-wagging highly televised meetings with Wall Street execs proved that loud and clear. But honestly, if that is the explanation your comfortable with by all means live with it. It's NOT the facts..Bottom line, banks know how to lend better than a Politician like it or not. Whether you agree with the fact the some black or hispanic fella doesn't qualify under their standards based on their own history is not the banks problem. Its not like they're racist..Seriously think about it..Do you honestly think a bank doesn't want to loan to a minority? Do you think they would send their check back to them if they tried to pay for a loan? Lots of people just don't qualify, and I am ok with that.. Banks aren't charity organizations, as Dodd and Frank would have you believe, they're in business to make money, a system that has worked well in this country since the early 1900s.
There are zero mandates forcing any bank to loan money. If they do not want to lend to high risk applicants they do not have to as long as they do not discriminate. Discrimination is not an allowed bank underwriting practice under for all banks under the CRA. No bank was forced to issue any loan ever, nor were they told how to underwite or interpret their own due dilligence.
Banks can qualify for incentives to loan to disadvantaged populaces, but that is voluntary, and these loans were a very small percentage of the subprime loans issued. That incentive did not cause this mess, as very few loans were issued in this manner. These loans are the ones I refer to as CRA loans as the case can be made that the government interfered in the market on behalf of the recipients of these loans. Despite what you want to believe, by far most subprime loans (94%) had absolutely nothing to do with any underserved population government incentives.
And then you type so much about how you believe relaxing bank regulations led to the housing bubble, then claim there are no examples of relaxing regulations causing anything.
Your only mistake is believing that minorities somehow took advantage of the relaxed regulations, when it was the banks lending to anyone and everyone no questions asked and selling it up the road making it the taxpayer's problem to clean up the mess while they counted their profits.
Just like it's the hispanics fault that they come here and somehow force a business to hire them illegally displacing jobs from our citizens. Our glorious business owners hands are tied and they simply cannot follow the laws (which are too restrictive as it is!).
There are zero mandates forcing any bank to loan money. If they do not want to lend to high risk applicants they do not have to as long as they do not discriminate. Discrimination is not an allowed bank underwriting practice under for all banks under the CRA. No bank was forced to issue any loan ever, nor were they told how to underwite or interpret their own due dilligence.
Banks can qualify for incentives to loan to disadvantaged populaces, but that is voluntary, and these loans were a very small percentage of the subprime loans issued. That incentive did not cause this mess, as very few loans were issued in this manner. These loans are the ones I refer to as CRA loans as the case can be made that the government interfered in the market on behalf of the recipients of these loans. Despite what you want to believe, by far most subprime loans (94%) had absolutely nothing to do with any underserved population government incentives.
And then you type so much about how you believe relaxing bank regulations led to the housing bubble, then claim there are no examples of relaxing regulations causing anything.
You're missing the point altogether and I am not sure where you are getting this information, really. The new and risky methods of financing a home that rose to dominance in the past say 10 years, could NOT have replaced more traditional rules for granting mortgages unless those who regulated the banks had agreed to such changes. Sorry, your logic is flawed in thinking the banks did this on their own.
What drove this was the thought process from Congress with pressure on federal regualtory agencies to press banks to lower mortgage requirements. Do you need me to pull tape of Dodd or Frank on this crusade? Presidents of BOTH parties pushed pushed the idea that a higher rate of homeownership was a good thing. In 1999 for example the NY time reported:
" In a move that could help increase homeownership rates among minorities and low-income consumers, the Fannie Mae Corp is easing it's requirements on loans that it will purchase from banks and other lenders..."
Article goes on to say how Fannie Mae at the time was under increasing pressure from the Clinton administration expand mortgage loans among low and moderate income people and how Fannie felt pressure from stockholders (as B4 life mentioned earlier) to maintain it's phenomenal growth in profit.
As the US Commision of Civil rights recounted history:
Prior to 1992 Fed law only required that a "reasonable portion" of Fannie and Freddie's mortgage purchases advance the goal of providing affordable housing. HUD required 30% be devoted to a) low and moderate income and b) housing locating in central cities..The goal was later changed with the adoption of FHEFSSA that same year.
For some perspective, by 1996 the goal established by HUD was raised to 40%, and a decade later was 53%. An actual HUD publication urged "creativity" to overcome "financial barriers to homeownership".
This is a clear example, supported by data, not just nebulous commentary, and one of the ways our Government (not the banks on their own) not just promoted lower lending standards, but required it. The part of your puzzle that is missing is the full complete historical view of this..I am happy to continue completing it for you if you like.
Your only mistake is believing that minorities somehow took advantage of the relaxed regulations, when it was the banks lending to anyone and everyone no questions asked and selling it up the road making it the taxpayer's problem to clean up the mess while they counted their profits.
Just like it's the hispanics fault that they come here and somehow force a business to hire them illegally displacing jobs from our citizens. Our glorious business owners hands are tied and they simply cannot follow the laws (which are too restrictive as it is!).
I am not blaming minorities! And you kind of made my point again, which is ultimately, like imagration lack of approriate, or too much regulation at the core of the problem. This entire time, I am blaming the Govt! You just made this about race, I could care less about that...Banks don't really care if a hispanic or a black or a white mails them a check to pay their mortgage either, the GOVERNMENT does. Banks just want applicants they know will qualify to pay it back under THEIR standards.
My point in regard to who got the loans is sound..Vast majority went to people in high priced areas where pricing was out of control (due to land use restrictions from REGULATION) and to people (be them black yellow or white) who should NEVER have qualified in the first place based on income and home price. Minorities may in fact, when it comes to bank underwriting principles, be nothing more than victims of their own behaviors which are pretty clear when a bank qualifies them for a loan.
I think we agree that banks were pretty creative, and prices were out of control, some loans went to people that shouldn't have qualified, this isn't JUST about minorities. What I am saying to you is there was an impetus to all that you are choosing to ignore.
I will agree the government plays a role in this mess, but ultimately it was the banks who acted in their own best interest with no regard for the consequences. That is an unacceptable use of the power granted to them. And certainly less regulation is not the answer, as you point out over and over.
And don't forget about the historical impetus that supersedes all of this- the systematic discrimination by the financial institutions themselves.
Regardless, the number of subprime mortgages and why is really just misdirection compared to the far larger securitization and subsequent insurance games played that truly came crashing down. The only way you can blame the government for that is for listening to the banks when they claimed (as always) that they needed deregulation.
Yup, this is actually correct. Texas learned it's lesson in the 1980's during the S&L Crisis when the real estate market tanked and banks were failing every day. Because of that, the state has more regulation which is what has helped us weather the last few years relatively unscathed. Well that, plus seemingly unlimited land to develop.
Ron Paul was great - AGAIN- the other night (well, great considering his limited talk time since the msm has already narrowed our field down to Romney & Perry.....)
Anyone who is for defending the Constitution and letting it be the guiding principle of law-making (not lobbyists/special interests or corporations), less government intervention, bringing troops home, not sending billions of dollars we DON'T have to every other country on earth, balancing the budget and reducing deficit, knowing what the candidate actually stands for & believes (a 30-year consistent voting record vs Obama's senatorial votes of "present" and Perry's party changes), and living in a country we can be proud of again should take a hard look at Ron Paul.
Paul is energizing & resonating with the same young voters who got Obama elected- those who are sick & tired of the status who and want real change (which we can all clearly see now that Obama is not). He's raising money like crazy and running an admirable digital campaign.
Ron Paul was great - AGAIN- the other night (well, great considering his limited talk time since the msm has already narrowed our field down to Romney & Perry.....)
Anyone who is for defending the Constitution and letting it be the guiding principle of law-making (not lobbyists/special interests or corporations), less government intervention, bringing troops home, not sending billions of dollars we DON'T have to every other country on earth, balancing the budget and reducing deficit, knowing what the candidate actually stands for & believes (a 30-year consistent voting record vs Obama's senatorial votes of "present" and Perry's party changes), and living in a country we can be proud of again should take a hard look at Ron Paul.
Paul is energizing & resonating with the same young voters who got Obama elected- those who are sick & tired of the status who and want real change (which we can all clearly see now that Obama is not). He's raising money like crazy and running an admirable digital campaign.
Although I liked him best when he didn't conceal the fact he is a Libertarian. ; )
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
