Obama ecconomics

[cipher6]

What I said was, the government had nothing to do with the banks willingness to forgoe income verification.

Yes the government and HUD DID play a role in that.

In the early 2000s, Fannie Mae aggressively bought Alt-A securities, where these loans may require little or no documentation of a borrower’s finances. In the early 1990s Fannie Mae had abandoned Alt-A products because of their high risk of default. As of November 2007 Fannie Mae held a total of $55.9 billion of subprime securities and $324.7 billion of Alt-A securities in their portfolio.[45] As of the 2008Q2 Freddie Mac had $190 billion in Alt-A mortgages. Together they have over $500 billion in Alt-A mortgages

With the government gobbling up Alt-A securities banks were only too happy to write them. If HUD had been stricter in its requirements for F&F, keeping them away from things like Alt-A banks wouldn't have been so quick to write so many Alt-A mortgages.

Within the U.S. mortgage industry, different mortgage products are generally defined by how they differ from the types of "conforming" or "agency" mortgages, ones guaranteed by the Government-Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac.

On everyone. Yes the government holds the most, and not hud. Yes holds some, but they are not the only ones in gov that do.

Ok, I mostly agree with that except "and not hud." Why are you working so hard to defend HUD? They are the agency that regulated and set the lending requirements for F&F. If your mad at the banks, you have to also be mad at HUD, because private banking practices are influenced by the policies and regulations HUD places on F&F.

The rest of government gets blame because they did nothing to fix the situation for about 2 decades, even when problems were brought to their attention and fixes were proposed, like moving regulation from HUD to the Treasury Department.

I just was pointing out, the banks took that ball, ran with it, and threw it off a cliff. That is their tole in it.

Yes, with F&F gobbling up bad loans, banks had no problem writing bad loans. Banks could have done the right thing, keep to tight lending standards, even as HUD forced F&F to relax lending standards, but they didn't.

You keep saying, everyone's to blame, but then try to minimize HUDs role... and I can't figure out why. Maybe you just feel silly for initially saying they had no role whatsoever to play, and anyone who thought otherwise wasn't worth debating.

 

[nlsme]

I should have said, "and not JUST hud". Yes, I do kinda feel silly for saying bud had nothing to do with the meltdown. But I stand by my statement that hud had nothing to do with my neighbor being forced into a sp when he would easily qualify for a conventional. Ill also stand by my statement that banks were willing to forgo income verification. I have seen more then one loan given without income verification. Where hud wasnt involved. Yes, some are because of hud. But, there are many instances where this happened, where hud/f&f werent involved. See what Im getting at. Just because in instance A-D was because of hud, doesnt mean instance E-Z were. They did this accross the board. Willingly. Even when F&F werent involved.

 

[nlsme]

Sub primes are not the only reason we got in trouble.

 

[cipher6]

But I stand by my statement that hud had nothing to do with my neighbor being forced into a sp when he would easily qualify for a conventional.

Well, I'd say your neighbor wasn't "forced" into anything. He may have been tricked by an unscrupulous mortgage broker, but wasn't "forced" to buy anything. You shop around for houses, you should shop around for your mortgage too.

Ill also stand by my statement that banks were willing to forgo income verification.

Yes, they were, thats called an Alt-A mortgage. Its called that based on how it differs from the requierments for government backed loans,

Within the U.S. mortgage industry, different mortgage products are generally defined by how they differ from the types of "conforming" or "agency" mortgages, ones guaranteed by the Government-Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac.

F&F are so big, mortgage products are defined by how they differ from or conform to the requirements set by HUD.

I have seen more then one loan given without income verification. Where hud wasnt involved.

You've seen 0 Alt-A mortgages get written by F&F. You can't get an FHA loan with that level of documentation. F&F didn't generate any Alt-A loans, they all came from private companies.

But, that didn't stop F&F from buying up these Alt-A loans, because part of their mandate set by HUD was to have x % of their portfolio in "affordable housing," things like sub-prime and Alt-A. So, F&F started gobbling them up, to the tune of 500 billion dollars.

If private mortgage companies didn't have such a willing buyer of the Alt-A mortgage backed securities I don't think they would have written as many... THATS how HUD did effect the generation of Alt-A loans.

Just because in instance A-D was because of hud, doesnt mean instance E-Z were. They did this accross the board. Willingly. Even when F&F werent involved.

Yes, while F&F didn't generate Alt-A loans, their willingness to purchase them from companies that did, lead to more getting written. F&F created an increased demand for Alt-A (and sub-prime) mortgage backed securities, based on HUD requirements. While they may not have been directly involved in the generation of instance E-Z, their policies set the tone for the industry (they define products based on its conformance to HUD standards) and their willingness to purchase help fuel instance E-Z.

Which brings me back to its silly to try and say this or that entity had more or less blame... at any point, HUD, private banks and consumers... if any one of those entities did a better job the whole mess could have been avoided.

Sub primes are not the only reason we got in trouble.

No, they were just what set off the domino effect that lead to the liquidity crisis.

 

[byteware]

I never denied clintons role in getting the ball rolling. I just was pointing out, the banks took that ball, ran with it, and threw it off a cliff. That is their tole in it. But again, go ahead and let the banks off the hook. I will keep saying the blame lies at eveveryones feet. Ohh, Im probably older then your daddy. I was already a homeowner before clinton.

You mean... the banks took the ball they were legally required to, and ran with it as they were legally required to?

I'm not sure that anyone here would argue with you on that point.

 

[nlsme]

They ran a lot further than "they were required to". But go ahead, continue letting the banks of the hook for THEIR role.

 

[cipher6]

You mean... the banks took the ball they were legally required to, and ran with it as they were legally required to?

I'm not sure that anyone here would argue with you on that point.

I agree with him on that point. HUD doesn't regulate all banks, they only set lending requirements for government backed mortgagees. A private bank can write any loan to anyone they want. F&F were legally required to comply with HUD standards, but not private banks. Private banks could have held a higher lending standard if they wanted to.

 

[nlsme]

I have seen conventional mortgages, not bought by ff were there was no income verification. My own house, under citimrtgage, required no income verification. It is still under citi. It was a conventional mortgage. As for my neighbor, he wasnt "forced", but he was pressured. By the bank, not a broker, to take the sp. Thats taking the ball and running with it. Im not a low income minority. And, Im not the only case. So far, you have put all the blame on the government. But earlier, you said it is silly to put all the blame on one group. And, Im the one who is inconsistent? Do you disagree the blame lies at everyones feet? Or do you think the government is the ones at fault like byteware does?

 

[cipher6]

I have seen conventional mortgages, not bought by ff were there was no income verification.

You wouldn't know if the mortgage eventually got bought by F&F unless you keep an eye on it for the life of the mortgage.

My own house, under citimrtgage, required no income verification. It is still under citi. It was a conventional mortgage.

A conventional mortgage means it meets the requirements set by HUD (now set by Federal Housing Finance Agency.) All mortgages purchased or backed by F&F have to meet these requirements. If you got a conventional mortgage with no income verification, that means the HUD allowed all of that... even if they didn't sell it to F&F (they might have even if you still make payments to citi) by fitting the definition of "conventional" that means it fit in with HUD regulations, and F&F could have bought it.

As for my neighbor, he wasnt "forced", but he was pressured. By the bank, not a broker, to take the sp. Thats taking the ball and running with it.

I agree, but like I said, anyone could have stopped that chain of events. Your neighbor could have backed out, or done some more research, talked to a different bank to see what competing rates were out there etc. If more consumers had done this we wouldn't be in this situation. I researched and shopped around for months, when I bought my home. I saw dozens of homes, and talked to dozens of banks and lenders looking for the best rates.

And yes, the banks could have prevented it to by having better lending practices, and the Gov could have stopped it by tightening up government regulated lending practices.

So far, you have put all the blame on the government. But earlier, you said it is silly to put all the blame on one group.

No, so far I've been mostly just challenging your claims about HUD having, "nothing," "little," "less" to do with it.

I challenge byteware when he minimizes private banks role in the matter as well.

Do you disagree the blame lies at everyones feet? Or do you think the government is the ones at fault like byteware does?

Again, blame lies at everyone EQUALLY. Because at any point, any of the players could have prevented the meltdown. Again, its like a chain, one link breaks the chain breaks... and everyone was a link in the chain.

trying to say one link in the chain is more important than the other doesn't make sense. Its like saying your great grandmother had a greater role in you being here today than your great great great grandmother. If either of them didn't exist, the entire chain to your existence is broken and you don't exist.

If any point in the chain of events of the meltdown was broken, ie. private banks held higher lending standards, government regulators forced higher standards, customers did more research etc etc, none of this would have happened.

People that try to say this or that group has more or less responsibility in the situation are usually doing it to keep with a preconceived ideology. Either, government is the problem and free markets fix everything, or capitalism is evil and we need government to fix everything.... both ideologies are wrong, and warping your understanding of things to fit with wrong ideologies is really stupid.

 

[byteware]

I agree with him on that point. HUD doesn't regulate all banks, they only set lending requirements for government backed mortgagees. A private bank can write any loan to anyone they want. F&F were legally required to comply with HUD standards, but not private banks. Private banks could have held a higher lending standard if they wanted to.

I think he's lumping mortgage brokers into "banks". Mortgage brokers were VERY unscrupulous during this time frame. They falsified documents, they pushed people into loans that were the most profitable to them, and then sold them off to the banks with falsified documentation.

Banks for the most part, weren't as evil as he seems to think they were.

I know he has said he has personal experience otherwise, but I find his statements hard to believe.

I've got a good number of friends, and most of us own homes, even some of my single friends.

However, I can't ever remember sitting down and anyone talking about how the bank made us feel during the application process. Or who bought our loans THIS time...

It just seems way too convenient to me.

 

[batgeek]

And if any body thinks hhud had anything to do with the bubble, or the burst, they are not worth the time debating against.

qouted for posterity.

 

[batgeek]

Yes, hud had a role, and yes they share some of the blame.

quoted for posterity.

 

[ionekoa]

That's something that I really wonder. What would the US be like right now if McCain/Palin were in office? What would they have accomplished with the Democrats controlling both houses before the midterm elections? I believe that if we insert McCain with Obama... we would still have the same result.

so.. if the administration we WOULD have had would have gotten the same result having the senate and house cock-blocking them at every move that the current administration got with reps ramrodding every whim through, it makes me think we are in a bad way with the current admin. but then again, if mccain and palin were in office there probably wouldnt be any dems in DC, they seemed to developed a run and hide mentality when they don't think they will get their way.