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These factors were associated with the share of mortgages financed by the GSEs falling from 52% at the end of 2002 to 44% at the end of 2006
Are you trying to say that the government agencies financing 44% of the risky loans is a GOOD thing???
When in fact they have no authority to fund any of them... and funding such risky loans is a BAD business decision, leading to huge losses, no matter who funds them?
Are you trying to say that the government agencies financing 44% of the risky loans is a GOOD thing???
When in fact they have no authority to fund any of them... and funding such risky loans is a BAD business decision, leading to huge losses, no matter who funds them?
The reason the GSEs lost 30% of the total market is that they had stricter standards than the non-GSE entities. It was the non-GSE entities, which were under no government mandate, that were the primary agents expanding the marketplace for sub-prime loans.
Where was the Republican (or Democrat for that matter) legislation that addressed the business practices of non-GSE entities that nearly led to the total collapse of the U.S banking system?
There was none, because the Republicans had (and still have) a philosophical objection to the government regulating the derivative market.
Of course, what you're trying to get at is that Clinton signed the bill, which he did, along with most of the Republicans in Congress and some Democrats. That and his support of NAFTA and GATT are the part of Clinton's makeup that had him be referred to as a moderate or even Conservative Democrat at other points in his career, despite what Limbaugh told you every day during his presidency. He pandered to big business along the same lines as Reagan and the Bush's, and signed policies that set forth the real estate bubble and offshoring. The only reason more of the middle class had success during his Presidency was the tech boom.
Of course, selling off American jobs to lower labor costs and allowing Wall St to run wild are traditional Republican positions a la Reagan, but I digress.
Phil Graham? Far from it. Why throw a name out there like that.
Bill Clinton Signed NAFTA, the 2000 China free trade act, and to do that he had to rid the nation of Glass-Stegall.
Look what Reagan inherited from Carter!
Look what Harding and Coolidge inherited from Wilson.
By 2003, Fannie Mae and Freddie Mac accounted for 52.3% of all residential mortgage loans outstanding (Federal Reserve and Monthly Funding Summaries). The following year, GSE market share of newly originated mortgages fell precipitously and remained low for the next three years: during 2001-2003, the GSEs funded nearly 70% of all mortgages originated; from 2004-2006, the GSE share of new mortgages was 47%, 41%, and 40%, respectively
.... From 2003 to 2007, the growth of outstanding mortgage debt accelerated to 11.9% per year but the volume of outstanding mortgages financed by the GSEs rose by just 7.6% per year. On a cumulative basis, the overall mortgage market grew 31% faster than the volume of mortgages funded by the GSEs over this period. This shift involved two related developments: (1) the share of total outstanding mortgage debt financed by the issuance of “nonagency” or “private label” asset-backed securities (PLS) grew by 219% over this period; and (2) the origination of non-traditional mortgage products, like subprime (generally poor credit history and other negative attributes like low downpayments and less than full documentation) and Alt-A loans (seemingly prime but with a flaw, typically low documentations) that would not normally meet GSE underwriting criteria also grew exponentially. These factors were associated with the share of mortgages financed by the GSEs falling from 52% at the end of 2002 to 44% at the end of 2006
Thx for the info
Why are the numbers in red so different from yours?
sub prime share of all mortgages in 2003 8%
sub prime share of all mortgages in 2006 28%
Aren't the sub prime loans the same thing as what the GSEs underwrote?
From 2003 to 2007, the growth of outstanding mortgage debt accelerated to 11.9% per year but the volume of outstanding mortgages financed by the GSEs rose by just 7.6% per year.
Does this mean the debt rose faster than the number of mortgages because of the rising cost of housing?
I think I may be grouping all sub prime loans??? I do know that banks had to meet a criteria and make a certain amount of sub prime loans so maybe I'm counting that as a "government made loan".
Banks have been placed in a Catch 22 situation by the CRA: If they comply, they know they will have to suffer from more loan defaults. If they don't comply, they face financial penalties and, worse yet, their business plans for mergers, branch expansions, etc. can be blocked by CRA protesters, which can cost a large corporation like Bank of America billions of dollars. Like most businesses, they have largely buckled under and have surrendered to their bureaucratic masters."
The court finding the bank guilty of "failing" to make as many loans to risky borrowers, as to relatively reliable borrowers... coupled with the government program to buy risky loans from banks and other lenders, thus absolving them of the risks... is what cause the "bubble" that eventually broke in 2008, causing the recession and slowdown we've been in ever since.
The court finding the bank guilty of "failing" to make as many loans to risky borrowers, as to relatively reliable borrowers... coupled with the government program to buy risky loans from banks and other lenders, thus absolving them of the risks... is what cause the "bubble" that eventually broke in 2008, causing the recession and slowdown we've been in ever since.
So in other words, bypassing the free market and regulating the industry by changing the rules.
We were dealing with over a decade of massive spending, massive debt and rising unemployment caused by Reagan and Bush, their "give everything to the rich" trickle down economics was a monumental failure.
What creates strong economies is fairly simple. Fair tax rates, controlled spending, and a focus on supporting those that are the real job creators, small business.
Because of this, is what gave Clinton one of the most booming economies in history.
While the middle class and poor and hurting right now, the rich are doing extremely well. Letting the failed W tax cuts to the rich expire, will help get the economy turned around very quickly.
Yea, right on. Taxing all those rich guys will run the Obama Administration about, umm let's see here,
6 days. Besides all that, Who's going to "control spending" ? Prince Harry & Haglosi ? ROLMAO
If I remember right, your idol, B J Clinton, handed out welfare & food stamps with mandatory job
training. Now that was a smart move.
Why are lefties so afraid to place blame where it actually belongs? Do you really NOT want to learn from the mistake and therefore be doomed to repeating it again?
Exactly. Then they wouldn't be able to wait till people have forgotten what they did in the past and what a disaster it caused, and then do it again once voters have forgotten.
Which, oddly enough, is exactly what they are starting to do now.
I guess they had to wait a day, so normal people wouldn't (understandably) think it was an April Fool's joke.
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