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Banks were pressured on racial basis to give mortgage loans to minorities - even if they were not qualified for the loan. What does Dodd-Frank have to do with bad lending practices?
pressured to give a small percentage of loans to low income folks..
banks ran wild with it.
If I tell you that you have to give 5% of your loans to low income and you give it to 75% of folks because the lax requirements makes it easy for you to give out loans that isn't my fault. I only said 5%. You got greedy.
pressured to give a small percentage of loans to low income folks..
banks ran wild with it.
If I tell you that you have to give 5% of your loans to low income and you give it to 75% of folks because the lax requirements makes it easy for you to give out loans that isn't my fault. I only said 5%. You got greedy.
Doesn't actually work like that. If a bank is told it must give loans to consumers that don't meet their ordinary lending guidelines, are they supposed to randomly choose some of those unqualified consumers and make loans to them? No, of course not. What they are told is that they must change their guidelines to something less restrictive, so that more people could afford to borrow money. Then they had to lend to anyone who qualified under those new, lower, riskier guidelines.
Big picture: The data is consistent with roughly 3.5% domestic demand growth, economists said, and adds to a sense that the slowdown in gross domestic product in the first quarter was simply a pause. Business optimism is at three-year high. Service firms said they were under pressure to hire additional staff.
Well, here come the no down payment mortgages, the short term boom for housing speculators and the inevitable collapse. trump is not a fan of history...short term instant gratification is his thing. Just ask Stormy.
Quote:
Minority Leader Nancy Pelosi also criticized it, arguing Tuesday that it "would open the doors to banks once again discriminating in how they lend to home buyers."
They need to be allowed to be discriminating. If someone cannot afford the home, don't lend to them, and I say that as someone with a sister who got a loan for a house that was far more than they could afford after banks were essentially told to lend to everyone. Guess what? Didn't take too long before they foreclosed on their house because....they couldn't afford it. The bank should never have loaned them a dime. With the way my sister spends money that she doesn't even have, I'm not in the least bit surprised that they lost their home. And this sounds harsh, but they deserved to lose it, not have everyone else pay for it. Smaller banks are harder to get loans from than larger banks. Smaller banks have more to lose. If these smaller banks are allowed to be "discriminatory" (meaning not lend to every Tom, Dick, and Harry just because they asked), it will prevent future collapse.
They need to be allowed to be discriminating. If someone cannot afford the home, don't lend to them, and I say that as someone with a sister who got a loan for a house that was far more than they could afford after banks were essentially told to lend to everyone. Guess what? Didn't take too long before they foreclosed on their house because....they couldn't afford it. The bank should never have loaned them a dime. With the way my sister spends money that she doesn't even have, I'm not in the least bit surprised that they lost their home. And this sounds harsh, but they deserved to lose it, not have everyone else pay for it. Smaller banks are harder to get loans from than larger banks. Smaller banks have more to lose. If these smaller banks are allowed to be "discriminatory" (meaning not lend to every Tom, Dick, and Harry just because they asked), it will prevent future collapse.
so by rolling back regulations to limit over-leverage, counterparty risk, off balance sheet shenanigans and to require banks to bulk up capital reserves or even have an accurate accounting of their positions and risk they will prevent this from happening again?
The funny thing is I don't disagree- banks should not be pressured to alter underwriting standards however if you think that was the only cause of the 07/08 collapse you have no clue what your talking about.
The Fact is you could have created a product called "built to fail foreclosure loan" and banks still would have lent on it for the vig they were making on offloading the paper to CDO factories levered 30 to 1 who took their warehouses and offloaded these crap loans to institutional investors drunk on the higher coupons these "borrowers" brought, b/c hey- housing never goes down....(hint banks got stuck and hurt b/c they kept super senior tranches since coupon was too small to offload to anyone). This is exactly the stuff Dodd Frank goes after. But by all means keep blaming it all on one small piece that fits your predetermined political narrative. IT's not like Golden West, IndyMac and other banks you've never heard of lost investors billions of dollars esp since savvy investors can take out CDS contracts for notionals of many multiples the market cap of these lenders either. Nope, it's so easy...
THANK YOU! For some reason the lefties can't get their heads around this, despite so many having supported it. Dodd-Frank was literally written by the lobbyists for the big banks & passed by corrupt politicians. They did it in such a way that compliance with the oversight would be impossible for banks not having immense compliance departments. That meant small banks, community banks and credit unions would not be able to comply, only the mega-banks. The results speak for themselves as the mega-banks have increased in size at precisely the same rate that community banks and credit unions have been forced to close their doors.
What we need is Dodd-Frank repealed and GLASS-STEAGALL reinstated. Glass-Steagall forced banks to use their own money to bankroll risky investments, because it stated FDIC insurance only applied to customer deposits, not to customer deposits being used to fund high risk banking ventures.
Who repealed Glass-Steagall? Bill Clinton. Who toured the country building support for the repeal? Hillary Clinton. In the campaign 2016, who wanted to reinstate Glass-Steagall? Donald Trump, Bernie Sanders, Elizabeth Warren & Jill Stein. Who vowed to not even consider it? Hillary Clinton & the NeoCon R's.
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