[RCCCB]

Originally Posted by tony soprano

RCCCB, there are a number of bipartisan studies that dispel the myth that policy driven, low-income lending (i.e., CRA mandated) played a significant part in the subprime meltdown. A smallish contributor perhaps, a driver no. CRA lending was a very small percentage of the total subprime market. As well, CRA loans generally outperformed non-CRA subprime loans.

The CRA and Subprime Lending: Discerning the Difference - Banking and Community Perspectives, Issue 2, 2008 - FRB Dallas

You don't know me from Adam so you'll have to take my word that I'm a huge advocate of free-market capitalism. That said, the housing debacle is much more a byproduct of greed and hubris than any policy mandated lending requirements.

PS. it was also made legal to have no-look background loans made if you paid .025 percent more on the interest rates.
I knew one lady who was listening to the "Rich Dad Poor Dad" book guy and had bought like 12 homes with almost nothing down somehow.
How is it possible that laws were released to allow that to happen?
Of course it wasn't a bad thing if they lost it all since they hoped to take a risk and gain everything, but somewhere along the lines the government needs to simply make it always the law that you have to check credit and so forth and make loans based on history and prior asset accumulation.

Again, just my opinion.

PS #2, when loans were 1-3%, people qualified for higher priced homes. States loved higher property taxes, decided it was a great time to spend lots of money and that also artificially created a housing bubble which destroyed a lot of the market, lives and left states with far less income than they wish.

[tony soprano]

Originally Posted by RCCCB

PS. it was also made legal to have no-look background loans made if you paid .025 percent more on the interest rates.
I knew one lady who was listening to the "Rich Dad Poor Dad" book guy and had bought like 12 homes with almost nothing down somehow.
How is it possible that laws were released to allow that to happen?
Of course it wasn't a bad thing if they lost it all since they hoped to take a risk and gain everything, but somewhere along the lines the government needs to simply make it always the law that you have to check credit and so forth and make loans based on history and prior asset accumulation.

Again, just my opinion.

PS #2, when loans were 1-3%, people qualified for higher priced homes. States loved higher property taxes, decided it was a great time to spend lots of money and that also artificially created a housing bubble which destroyed a lot of the market, lives and left states with far less income than they wish.

Make no mistake about it, I'm not questioning the fact that lending practices were absurd. I whole heartedly agree with that premise. What I'm suggesting is that it was driven more by profit motive than any govt. policy to lend to the "underserved". The numbers bear that fact out. The securitization model emboldened risk taking. Who cares about the quality of the loans you're originating when you intend to bundle it and sell it to investors asap? Lenders wrote crappy paper because it was very profitable...until the music stopped.

[olecapt]

Originally Posted by tony soprano

Make no mistake about it, I'm not questioning the fact that lending practices were absurd. I whole heartedly agree with that premise. What I'm suggesting is that it was driven more by profit motive than any govt. policy to lend to the "underserved". The numbers bear that fact out. The securitization model emboldened risk taking. Who cares about the quality of the loans you're originating when you intend to bundle it and sell it to investors asap? Lenders wrote crappy paper because it was very profitable...until the music stopped.

The entire finanancial system had been on a libertarian course for 50 years. There was almost complete belief across the leadership of the treasury and the fed that de-regulation was its own reward...that the financial markets would do the right thing long term in enlightened self interest.

Of course it turned out that they were hopelessly incorrect and the financial world would do virtually anything to maximize quarterly profits.

Maybe what we needed was moderate compensation with stupendous bonuses for 20 year proformance...

It still appears the capitalist way is the superior one for an economic system. But it appears that it needs to be a well regulated one.

[gtbguy]

I heard from my agent that the Vegas market should start seeing more homes after the end of September. Didn't we hear this malarky once before? I personally think we won't see any decent inventories until the banks get out of paying defaulted mortgages with the stimulus money.

Tony or Olecap, any news to report regarding additional inventories?

[airics]

the people that put no money down had to have pmi, correct? so what happened with that?

[olecapt]

Originally Posted by airics

the people that put no money down had to have pmi, correct? so what happened with that?

Nope. Virtually nobody in the high years had PMI.

A game was played using an 80 first and a 20 second...so no PMI.

[tony soprano]

Originally Posted by airics

the people that put no money down had to have pmi, correct? so what happened with that?

The shorthand answer is that the mortgage insurers have taken a shellacking. I'm sure they were hedged to some extent with CDOs and other credit derivatives but as a group, they've been bludgeoned. Take a look at a two year chart for PMI, MTG, RDN, MBI, etc.

[olecapt]

August data out. Medians down Averages up. A decrease in volume...though still at close to record levels. REO pricing appears to have stabilized. REO share is now just above 2/3 rds of the marketplace. Shorts up to 13.4%

[tony soprano]

Originally Posted by olecapt

August data out. Medians down Averages up. A decrease in volume...though still at close to record levels. REO pricing appears to have stabilized. REO share is now just above 2/3 rds of the marketplace. Shorts up to 13.4%

I'm more surprised by the extent of the sales volume reduction than the fall in median price. I'm interested in seeing what happens next month as we move out of what is typically the home buying season.

[RCCCB]

U.S. Foreclosure Filings Top 300,000 for Sixth Straight Month - Bloomberg.com

Nevada Leads
Nevada had the highest foreclosure rate in August, with one in every 62 households receiving a filing, even with an 8.4 percent decrease in foreclosures from July, RealtyTrac said. August filings were up 53 percent from a year earlier, with 17,902 Nevada properties receiving a foreclosure filing.