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Old December 23rd, 2017, 06:18 PM   #51
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Originally Posted by Sabcat View Post
There in lies the reality of the issue. Why should the federal government be expected to repair infrastructure?

This is where the leftists truely show their stripes.
Yes stripes on a soviet jacket. The big central government takes all the money and decides what areas get the new teachers and which area gets the new sewers. Each gives according to their ability to pay and each takes according to their needs. The central government will decide who is who.

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Old December 23rd, 2017, 06:29 PM   #52
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Private mortgage originators, who were not subject to any provision of the CRA, made the majority of the bad loans that drove the subprime mortgage crisis. Originators were writing mortgages on a signature and claimed income.

Many of the failed mortgages resulted from the refinancing boom, people sucking all the equity out of their mortgages, people who then could not get out of their mortgages when prices crashed.

Then of course predatory lending was rampant, luring people into ARMs.

Moreover, household and credit card debt went off chart.

Short-term profit overrode long-term stability.

And the explosion of financial derivatives built upon inflated real estate prices also contributed to the Great Recession: mortgage-backed securities (MBS), collateralized debt obligations (CDO) and credit default swaps(CDS).

It was a house of cards with a variety of villains.

Here is what actually went down.


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Mortgage brokers had to be able to sell their mortgages to someone. They could only produce what those above them in the distribution chain wanted to buy. In other words, they could only respond to demand, not create it themselves. Who wanted these dicey loans? The data shows that the principal buyers were insured banks, government sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac, and the FHA—all government agencies or private companies forced to comply with government mandates about mortgage lending.

When Fannie and Freddie were finally taken over by the government in 2008, more than 10 million subprime and other weak loans were either on their books or were in mortgage-backed securities they had guaranteed.

An additional 4.5 million were guaranteed by the FHA and sold through Ginnie Mae before 2008, and a further 2.5 million loans were made under the rubric of the Community Reinvestment Act (CRA), which required insured banks to provide mortgage credit to home buyers who were at or below 80% of median income. Thus, almost two-thirds of all the bad mortgages in our financial system, many of which are now defaulting at unprecedented rates, were bought by government agencies or required by government regulations.

The role of the FHA is particularly difficult to fit into the narrative that the left has been selling. While it might be argued that Fannie and Freddie and insured banks were profit-seekers because they were shareholder-owned, what can explain the fact that the FHA—a government agency—was guaranteeing the same bad mortgages that the unregulated mortgage brokers were supposedly creating through predatory lending?

The answer, of course, is that it was government policy for these poor quality loans to be made. Since the early 1990s, the government has been attempting to expand home ownership in full disregard of the prudent lending principles that had previously governed the U.S. mortgage market. Now the motives of the GSEs fall into place. Fannie and Freddie were subject to "affordable housing" regulations, issued by the Department of Housing and Urban Development (HUD), which required them to buy mortgages made to home buyers who were at or below the median income. This quota began at 30% of all purchases in the early 1990s, and was gradually ratcheted up until it called for 55% of all mortgage purchases to be "affordable" in 2007, including 25% that had to be made to low-income home buyers.
How The Government Caused The Mortgage Crisis - Business Insider

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Old December 23rd, 2017, 06:30 PM   #53
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The Community Reinvestment Act and its many reforms require banks to make a certain % of loans in red lined areas.
And let me explain exactly what redlining was.

I bought my first house in 1987. We'll just say southern Alabama. Once I received my initial approval they walked me into a room with a large map of the city on one wall. They asked me to show them WHERE the house was. Once I pointed to the block, they pulled down a clear plastic sheet that quite literally had sections blocked off in red ink. They laid the plastic over the map and made sure my house wasn't in one of the blocked out areas. It had NOTHING, absolutely NOTHING, to do with an applicants qualification to purchase the home. You could have prefect credit, a six figure income and be buying a $50K fixer upper, but they were NOT going to make any loans in certain neighborhoods. Period, end of story.

If you want to blame Clinton for something, blame him for signing the God damned Graham Leach Bliliey Act, AKA the Banking Modernization Act of 1999. Keep in mind however that Mr's Graham, Leach and Bliley were ALL REPUBLICANS, and the REPUBLICANS CONTROLLED BOTH HOUSES OF CONGRESS at the time. And if you REALLY want to know who's to blames, it all started with CitiBank and Travelers insurance !!!
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Old December 23rd, 2017, 06:32 PM   #54
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Originally Posted by justoneman View Post
Yes stripes on a soviet jacket. The big central government all the money and decides what areas get the new teachers and which area gets the new sewers. Each gives according to their ability to pay and each takes according to their needs. The central government will decide who is who.
More than a few people in Kentucky live on the side of a mountain without a sewer or septic tank. Strict regulations for outhouse use. Women poop and pee inside the outhouse and men are allowed to poop inside the outhouse but have to pee behind the outhouse. Water is drawn in buckets from a fast moving mountain stream for cooking which is a woman's job. Men have to dig a new hole and move the outhouse when it fills up and use the dirt to fill up the old hole from the new hole.

edit: Tear pages out of a Montgomery Ward Catalogue for toilet paper. If you don't have a Monkey Ward then use Sears and Roebuck.

Last edited by Twisted Sister; December 23rd, 2017 at 07:08 PM.
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Old December 23rd, 2017, 07:13 PM   #55
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There's some truth there. But the REAL issue, which your quote barely mentions was DEREGULATION of the banking and mortgage industry.

When they passed the Banking Modernization Act in 1999, they created a system in which the institutions making the initial loans were COMPLETELY DIVORCED from the institutions that would eventually try to collect those loans.

I saw this first hand. I finally told my mortgage broker that if he continued to suggest that I "could afford" a much larger house, I would seek a new broker. Every conversation we had included a pitch by him hoping to shove me into a larger house and of course a larger loan. At the time I had just gotten divorced and the house needed work. I could either make a large down payment, or have cash to fix the house. I chose to keep my cash and bought the house with an almost 100% loan.

When we finally closed the house one of the papers I signed was a notice that my loan would be resold within 90 days. I made exactly ONE payment to the original loan initiator. I did a refi a couple years later and went thru the same shit again. They were pushing 125% adjustable rate loan. They seemed almost angry when I insisted on a 30 year fixed and only took about $5,000 cash.

That time I didn't even make the first payment before being notified it had been resold. Then a couple years later it was resold again.

BUT, here's why the refi at the two year mark. And here is a HUGE part of the housing melt down.

My first loan was an ARM. Which contained an early pay off penalty for the first two years, but also locked the interest rate for those two years. Now, over the next two years the prime rate had FALLEN by TWO FULL POINTS. SO, when my first rate adjustment came up at the two year mark I fully expected the rate to fall. NOPE !!!!!! THEY JACKED MY INTEREST RATE THREE FULL POINTS !!!! They were basically FORCING me to refinance.

Now luckily I had bought small, well within my means, and had no trouble with a refi. But this is what caused MILLIONS of home owners to default. Their lenders pushed them into loans they could barely afford, then two to three years later those lenders did the same thing, they JACKED the interest rates trying to force people into to refinancing.

The problem was, many people could barely afford their current loan payments, much less a new payments that were in many cases HUNDREDS OF DOLLARS HIGHER. There was NO REASON to raise the rates. By the time the housing market crashed mortgage rates were at or very near historic lows. The loan companies had made their money in the first two years and were looking to roll that money over and use it for the same thing again. Not a bad plan except SO many banks had made SO MANY marginal loans that when they ALL tried to raise rates at the same time, they shot themselves in the foot. Basically the lenders did it to themselves !!!

The rest of the story is, many institutions HAD NO IDEA whose loans they had bought. They have all been sold, repackaged and sold again, some times several times over. It took some banks, or the government agencies that wound up with the loans 4 years to sort out who owed them money and where the houses were actually located. My country house was a repo. Sat empty for 4 years. Three years because it took Fannie that long to figure out who had originated the loan, how many times it had been resold and whether or not there were any additional loans outstanding.

There's a movie out (a couple of years ago) called The Big Short. Now yes it's Hollywood, so they make a good story out of it, but it really does show just how arrogant the banking industry had become AND how WILLFULLY BLIND to what was happening. Definitely worth a watch. The WORST perpetrators were the ratings agencies !!!!! They kept slapping AAA ratings on toxic laon packages because if they didn't the banks selling the junk would simply go to a different agency.

A whole lot of supposedly very smart, highly educated and extremely well paid people made a whole lot of really, really, really stupid, totally counter intuitive, and completely lacking in common sense or logic decisions.

Sadly, a couple of years ago I was in a meeting, and one of our finance people was telling us about the hottest new thing in the banking industry, SUB-PRIME AUTOMOBILE LOANS !!!!!!!!!!! Hopefully the fact that these loans aren't adjustable rate and payments won't fluctuate will keep the default rate down. But all I could do was sit there and shake my head at the shear stupidity if the idea.
Thanks from Camelot

Last edited by BubbaJones; December 23rd, 2017 at 07:20 PM.
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Old December 23rd, 2017, 07:19 PM   #56
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Originally Posted by BubbaJones View Post
And let me explain exactly what redlining was.

I bought my first house in 1987. We'll just say southern Alabama. Once I received my initial approval they walked me into a room with a large map of the city on one wall. They asked me to show them WHERE the house was. Once I pointed to the block, they pulled down a clear plastic sheet that quite literally had sections blocked off in red ink. They laid the plastic over the map and made sure my house wasn't in one of the blocked out areas. It had NOTHING, absolutely NOTHING, to do with an applicants qualification to purchase the home. You could have prefect credit, a six figure income and be buying a $50K fixer upper, but they were NOT going to make any loans in certain neighborhoods. Period, end of story.

If you want to blame Clinton for something, blame him for signing the God damned Graham Leach Bliliey Act, AKA the Banking Modernization Act of 1999. Keep in mind however that Mr's Graham, Leach and Bliley were ALL REPUBLICANS, and the REPUBLICANS CONTROLLED BOTH HOUSES OF CONGRESS at the time. And if you REALLY want to know who's to blames, it all started with CitiBank and Travelers insurance !!!
what year did you buy this first house?
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Old December 23rd, 2017, 07:46 PM   #57
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More than a few people in Kentucky live on the side of a mountain without a sewer or septic tank. Strict regulations for outhouse use. Women poop and pee inside the outhouse and men are allowed to poop inside the outhouse but have to pee behind the outhouse. Water is drawn in buckets from a fast moving mountain stream for cooking which is a woman's job. Men have to dig a new hole and move the outhouse when it fills up and use the dirt to fill up the old hole from the new hole.

edit: Tear pages out of a Montgomery Ward Catalogue for toilet paper. If you don't have a Monkey Ward then use Sears and Roebuck.
I was never more disturbed than when I read where this trillion dollars went. (yes we all know it was less than a trillion) All socialist boondoggles. It was almost exactly like the soviet Union. Instead of controlling the profits directly of the business and controlling directly what people get paid instead of that they tax the crap out of people and put the rest on a giant credit card that saps people just the same as taxing them. Taking federal tax money to pay teachers salaries. How infuriating that is.
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Old December 23rd, 2017, 07:48 PM   #58
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There's some truth there. ...


This:

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Thus, almost two-thirds of all the bad mortgages in our financial system, many of which are now defaulting at unprecedented rates, were bought by government agencies or required by government regulations.
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Old December 23rd, 2017, 07:50 PM   #59
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Originally Posted by justoneman View Post
What difference is it to you what the exact amount spent was? You are nit picking.
Questioning your $1 trillion claim is not nitpicking.

Please source your $1 trillion claim.
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Old December 23rd, 2017, 07:52 PM   #60
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Thanks for the opinion. As you are aware, opinions vary.
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