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Securitizing mortgages by the Investment Banks did not require the repeal of Glass Steagall. The actions of Bear Streans, Goldman Sachs, Lehman Brothers, Merrill Lynch were all possible before Glass Steagall was repealed.
Are you suggesting that Greenspan didn't follow what happened?
Certainly repeal of Glass Steagall allowed Commercial Banks to take actions that made them more vulnerable during a downturn.
The Act separated the commercial from the investments. Once that was repealed, the banks got toxic loans and sold them as securities. The reason Glass Stegall was enacted was because these actions were a large factor in causing the Great Depression.
While the act was in place, banks would be allowed to take deposits and make loans. Brokers would be allowed to underwrite and sell securities. Both could not be done by the same entity.
The Act separated the commercial from the investments. Once that was repealed, the banks got toxic loans and sold them as securities. The reason Glass Stegall was enacted was because these actions were a large factor in causing the Great Depression.
While the act was in place, banks would be allowed to take deposits and make loans. Brokers would be allowed to underwrite and sell securities. Both could not be done by the same entity.
The leading private securitizers were Investment Banks that had always been Investment Banks; they hadn't combined with commercial banks. The leading Investment Banks weren't operating as commercial banks.
The Investment Banks that caused the crash were not covered by the CRA.
Investment banks? No. It was Fannie and Freddie, initiators of the high LTV mortgages and severely reduced lending standards to meet ridiculously ill-advised HUD "affordable lending" mandates, that needed a multi-hundred billion dollar bailout.
Investment banks? No. It was Fannie and Freddie, initiators of the high LTV mortgages and severely reduced lending standards to meet ridiculously ill-advised HUD "affordable lending" mandates, that needed a multi-hundred billion dollar bailout.
Stated income, stated asset loans, no doc loans, option arm loans had very little to do with "affordable lending mandates", Fannie or Freddie
Stated income, stated asset loans, no doc loans, option arm loans had very little to do with "affordable lending mandates", Fannie or Freddie
The GSEs specifically sought to buy loans made to those who had no credit history whatsoever from Countrywide and their other best lenders." I already posted the Fannie Mae document.
The GSEs specifically sought to buy loans made to those who had no credit history whatsoever from Countrywide and their other best lenders." I already posted the Fannie Mae document.
Those with no credit have nothing to do with stating someone's income, giving them a no income check loan or an option arm (negative amortization loan)
Those with no credit have nothing to do with stating someone's income, giving them a no income check loan or an option arm (negative amortization loan)
What documentation was used? We already know there was no documentation of a credit history.
Investment banks? No. It was Fannie and Freddie, initiators of the high LTV mortgages and severely reduced lending standards to meet ridiculously ill-advised HUD "affordable lending" mandates, that needed a multi-hundred billion dollar bailout.
lol
Quote:
The Commission concludes the CRA was not a significant factor in subprime lending
or the crisis. Many subprime lenders were not subject to the CRA. Research indicates
only 6% of high-cost loans—a proxy for subprime loans—had any connection to
the law. Loans made by CRA-regulated lenders in the neighborhoods in which they
were required to lend were half as likely to default as similar loans made in the same
neighborhoods by independent mortgage originators not subject to the law.
While the act was in place, banks would be allowed to take deposits and make loans. Brokers would be allowed to underwrite and sell securities. Both could not be done by the same entity.
Banks and brokerages had been operating under the same roof since the mid-1980's. Citibank merged with Travelers in open and direct defiance of Glass-Steagall, and the Greenspan-led Fed simply handed them an exemption for it. The act was de facto undone -- GLB merely brought the law up to date with what had already become the status quo.
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