From Clinton to Obongo

[Headholio]

but lenders lend based on guidelines. Someone else will buy that loan based on it being written by their guidelines. It ain't those smaller lenders making the loans either. The loans get sold off quick as they're made.

You tell me to go lend money to people based on a set of guidelines that you write and you will pay me xx% to do so and I will go get you what you asked for. Now it's my fault?

The guidelines you talk about are guidelines created by the banks, not the government. The community reinvestment act has guidelines, but only 6% of the subprime loans had anything to do with the CRA, and only a small portion of those failed. In other words, the CRA had nothing to do with the housing melt down. It also had a better track record than non-CRA loans during the same time period.

Lending abuse and irresponsible decision making were the result of greedy bankers. The idea that the government forced banks to do these things is false, plain and simple. I documented it pretty well in this thread already.

 

[75th]

HUD became Frannie and Freddie's regulator in '92. In '95, HUD allowed Frannie and Freddie to loosen their guidelines and allow subprime loans to be written. The market really took off in around 200-2001. Clinton allowed it all to happen. A ton of other things happened that made it snowball out of control, but it started with him.

HUD did indeed allow it, but again youre overstating the contribution that Fannie/Freddie played.

There is clear evidence that Fannie and Freddie started purchasing lower quality loans at the peak of the housing market. However, it is also evident that they did so to regain market share from less-regulated private-label security issuers and finance companies. Housing goals do not appear to have played a significant role because Fannie and Freddie remained less concentrated in low-income market segments compared to the private market. Still, the high LTV, low FICO score, and alternative documentation loans that Fannie and Freddie purchased are performing significantly better than private subprime loans, suggesting the enterprises retained stronger risk management procedures than private financial companies.

Ultimately, profit not policy was what motivated Fannie and Freddie and loan products not borrowers were what caused their collapse. These facts have important implications for reform of the housing system, including countercyclical liquidity and how to approach low-income homeownership in the future.

That's settled.

You're right about Clinton's role though. However, the GLBA and CFMA are where we should hold him and the government accountable.

 

[75th]

Yeah, I'm old fashioned that way.

If an organization invented it, I tend to give them credit for "getting the ball rolling".

Ok, so you realize your comment didnt make any sense and you have no data to support it. Thanks - kudos on the strawman attempt, though.

 

[Headholio]

HUD became Frannie and Freddie's regulator in '92. In '95, HUD allowed Frannie and Freddie to loosen their guidelines and allow subprime loans to be written. The market really took off in around 200-2001. Clinton allowed it all to happen. A ton of other things happened that made it snowball out of control, but it started with him.

You are making a strong case for more government regulation.

 

[jnevin]

The CRA definitely helped getting the ball rolling.

The CRA was basically put in place to avoid redlining. Equal opportunity for home buyers. Fannie and Freddie had a number of SISA and no doc loans that are really responsible for the inflation in home values and a ton of foreclosures. A lot of sub prime borrowers used the loans as band aids and refi'd into FHA loans. FHA loans don (or didn't) have a minimum credit score. You just had to be current on your loan or rental history, your debt ratios had to be in check, and there were BK seasoning requirements. Thing is, DU, DO, and LP would assess all of the information put into an application and would allow exceptions. So you'd get FHA borrowers that usually had unstable employment, low income, and shaky credit history into gov't backed loans.

 

[jnevin]

HUD did indeed allow it, but again youre overstating the contribution that Fannie/Freddie played.



That's settled.

You're right about Clinton's role though. However, the GLBA and CFMA are where we should hold him and the government accountable.

Right, but what's the amount of conventional conforming loans that went into default compared to subprime vs the percentage of them that did?

 

[jnevin]

You are making a strong case for more government regulation.

Nice job redsam. You went down a path that nobody was on, threw out a statement that had nothing to do with what was being talked about, and used a dumb fucking smiley to act like you proved some sort of point.

 

[jnevin]

I'd also like to add

http://25.media.tumblr.com/tumblr_m6mmf3TOhQ1rt43gto1_1280.jpg

 

[jeremyng25]

I'd also like to add

http://25.media.tumblr.com/tumblr_m6mmf3TOhQ1rt43gto1_1280.jpg

Wow that chick is filthy

Sent from my VS910 4G using EliteFitness

 

[75th]

Right, but what's the amount of conventional conforming loans that went into default compared to subprime vs the percentage of them that did?

Not sure off the top of my head (would be interesting to know), however wasnt one of the significant problems was lenders pushing folks that didnt need conforming loans (eg folks with good employment/credit) into these types of loans due to incentives?

That sort of supports the theory that greed was the primary driver of the crisis.

Subprime Debacle Traps Even Very Credit-Worthy - WSJ.com