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Students are nowhere near as high of a risk as the banks are. Did students almost crash the economy?
The problem wasn't the banks. It was HUD and their unrealistic and ultimately unsustainable Affordable Lending goals that nearly crashed the economy, worldwide.
Not really. Banks and lenders originated the loans the GSEs, which had specific affordable lending goals dictated by HUD, needed to buy.
They knew but didn't care because of the implicit gaurantee that if things went bad the government would take care of it and that is exactly what happened.
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What went wrong was that the GSEs misrepresented trillions of dollars worth of loans in the MBS they sold to Wall Street and worldwide investors as "prime" instead of the compromised and much higher-risk loans they actually were due to HUD's Affordable Lending goals. As Government Sponsored Entities, the perception was that GSE-issued MBS were guaranteed by the U.S. Government. When they started underperforming (they were high-risk loans, remember?) en masse, the sh*t hit the fan.
That would have been illegal under Sarbanes/Oxley (and I'm sure other laws) wouldn't it? Who has been charged? No one. Why?
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Note of interest: Countrywide was the first lender to sign an Affordable Lending agreement with HUD, in 1994. Guess what happened to Countrywide? Now you know why Mozilo faced nearly no penalty for his role in the financial crisis. He and Countrywide were merely cooperating with their signed HUD agreement.
That is what I said.....it was a quid pro quo. The companies made the loans the government wanted made and the government agreed to look the other way how they got done and guaranteed that if they went bad they would cover them.
That's why Mozilo walked. The government wasn't going to charge him for something they had agreed to.
The problem wasn't the banks. It was HUD and their unrealistic and ultimately unsustainable Affordable Lending goals that nearly crashed the economy, worldwide.
This pisses this middle class parent off. First we scrimped and paid off our mortgage, then we scrimped and sent out kid to college, no loans, and now after bailing our irresponsible people that bought homes above their means they are now talking about bailing out student loans. What’s the point of teaching kids to live within their means if the government not only doesn’t, but rewards those that don’t!
Exactly. Moral hazard. There's FAR too much of that enabled by the government.
They knew but didn't care because of the implicit gaurantee that if things went bad the government would take care of it and that is exactly what happened.
The GSEs bought the substandard loans (dictated by HUD requirements) from the originators who were cooperating with HUD Affordable Lending goal agreements, repackaged them as GSE-issued MBS, and misrepresented those products as prime when they were not.
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That would have been illegal under Sarbanes/Oxley (and I'm sure other laws) wouldn't it? Who has been charged? No one. Why?
Because the federal government itself is complicit. They will neither police nor prosecute themselves.
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That is what I said.....it was a quid pro quo. The companies made the loans the government wanted made and the government agreed to look the other way how they got done and guaranteed that if they went bad they would cover them.
That's why Mozilo walked. The government wasn't going to charge him for something they had agreed to.
The government didn't only "agree to" Mozilo's and Countrywide's acts, it dictated them via HUD's Affordable Lending agreement.
Good right wing fanatical spin on the matter.
In actuality, the taxpayers would not be paying anything. The taxpayer would just get a lower return on their investment to "THEIR CHILDREN!". What she's proposing is to lower the interest rate on the student loans from 8% to 3.2%.
Why is that so horrible? Why should the federal government get a high interest windfall return from educating our children?
My opinion is that if the hard line republicans come out loudly against this it will be easy for the public to see the hypocrisy and slap them down. Go ahead and rail against affordable student loans. It will just be one more nail in the conservative republican coffin.
What about all the people who don't have children? Why should their taxes be raised to pay for everyone else's bad choices?
And yet when Wall Street wants profits they want tax payers to finance it with things like the QE programs.
If you want to blast the banks..start a new thread. This is about student loans.
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