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Would it serve any purpose to point out that there is a distinction between low moderate income lending and sub-prime mortgages?
Would it serve any purpose that studies have shown that income is not a predictor of loan defaults and that low income borrowers are not statistically different from upper income borrowers when it comes to rates of default?
Would it serve any purpose to point out that there is a distinction between low moderate income lending and sub-prime mortgages?
Would it serve any purpose that studies have shown that income is not a predictor of loan defaults and that low income borrowers are not statistically different from upper income borrowers when it comes to rates of default?
Well, these loans were pushed to people who would not otherwise qualify, and it is these very people who are now defaulting their loans.
Would it serve any purpose to point out that there is a distinction between low moderate income lending and sub-prime mortgages?
Would it serve any purpose that studies have shown that income is not a predictor of loan defaults and that low income borrowers are not statistically different from upper income borrowers when it comes to rates of default?
I beg to differ. Before Clinton deregulated Glass Steagall and stated that he would veto if they did not rewrite it to say :
When people can get into homes with little to no down they don't have as much invested as people that have more money who tend to put big downs on the homes they purchase!
So it does make a difference as to what ones income is and yes there are exceptions.
When people can get into homes with little to no down they don't have as much invested as people that have more money who tend to put big downs on the homes they purchase!
So it does make a difference as to what ones income is and yes there are exceptions.
Current crisis could have been avoided if that freemarket economy bs ideology would have been abandoned sooner.
One does a disservice when one seeks to blame only one side for something sanctioned by both. It's convenient to point fingers and blame, we've all done it. Yet I find it utterly surprising that the RIGHT is the one side that always resorts to this. Why? Because they scream so loudly about personal responsibility yet gloss over such trivial matters when their party/ideology is in charge. With their mindset, Bush was responsible for nothing.
Both "sides" are to blame. Shoot, look in the mirror...we ALL are to blame for allowing ourselves to get in this predicament. We are being used. Don't even bother finding the source of this abuse because a) you won't be successful, b) it won't help matters, c) it detracts from the energy that should be devoted to creating something better to replace it.
"the RIGHT is the one side that always resorts to this."
It's their own words coming out of their own mouths. Dodd, Frank, Obama, Waters, the CBC, they've all got their fingers in this and yet they don't take responsiblity for what they did. No, they blame Republicans for deregulating the banking industry. The Republicans didn't create the CRA. Carter did that.
"Bernanke notes that at least in some instances, "the CRA has served as a catalyst, inducing banks to enter underserved markets that they might otherwise have ignored".
The CRA forced banks to loan to people who were less credit worthy. No chance of that back-firing.
Over time, community groups and nonprofit organizations established "more-formalized and more-productive partnerships with banks."
Groups like ACORN staged "act-up" style protests at banks and bankers homes along with lawsuits to put pressure on otherwise responsible bankers to make risky loans.
"According to Bernanke, a surge in bank merger and acquisition activities followed the passing of the act, and advocacy groups increasingly used the public comment process to protest bank applications on CRA grounds."
"On signing the Gramm-Leach-Bliley Act, President Clinton said that it, "establishes the principles that, as we expand the powers of banks, we will expand the reach of the [Community Reinvestment] Act".
Banks not making these risky loans had their ability to grow their business severly limited.
Economist Stan Liebowitz wrote in the New York Post that a strengthening of the CRA in the 1990s encouraged a loosening of lending standards throughout the banking industry. He also charges the Federal Reserve with ignoring the negative impact of the CRA.[51] In a commentary for CNN, Congressman Ron Paul, who serves on the United States House Committee on Financial Services, charged the CRA with "forcing banks to lend to people who normally would be rejected as bad credit risks."[58] In a Wall Street Journal opinion piece, Austrian school economist Russell Roberts wrote that the CRA subsidized low-income housing by pressuring banks to serve poor borrowers and poor regions of the country.[59] Jeffrey A. Miron, a senior lecturer in economics at Harvard University, in an opinion piece for CNN, calls for “getting rid” of Fannie Mae and Freddie Mac, as well as policies like the Community Reinvestment Act that “pressure banks into subprime lending."
It describes the fraudulent character of the securities that were constructed and marketed by Wall Street, especially Bear Stearns, to institutional investors around the world and that were backed by home mortgages, many of which were taken out under fraudulent circumstances. The fact that Wall Street was making beaucoup bucks from these instruments led to a massive DEMAND on Wall Street for new mortgage paper from companies like Countrywide. (Remember that CW failed when they could no longer resell the crap mortgages they had approved to Wall Street investment banks.) This alone is responsible for the lion's share of the great loosening of credit requirements (zero down payments, etc.) for home mortgages.
Well i for one am happy to see this information finally getting out to a broader section! After Nancy pelosi had her temper tantrum in the House about how this is all to blame on Republicans derugulating when i had already seen the videos of the Dems fighting tooth and nail to stop more regulation prior to the first tarp vote!
I wish i had saved this article but i didnt so sorry but a NY Times article covering Freddie and Fannie right after the debates shown in the above videos reported that Freddie and Fannie went on a massive lobbying effort costin millions to prevent this regulation.
Their is your blame on the Republicans! They got paid off because all talk of this went away till it exploded! Before you Dems get to happy with this remember you were on the wrong side to begin with and by looking at the money your reps. received it means you were paid off in advance.
Conclusion: we have all been sold out by those that used to represent the people but no only exist to get re-elected!
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