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[QUOTE=jcb;505025]My wife was a mortgage loan underwriter for a large bank in Lexington during the housing boom. She came home one day and told me that the feds had visited the bank's management and slapped them around for not making what they considered to be an acceptable number of mortgage loans to low-income and minority borrowers. They threatened all sorts of dire implications unless the bank relaxed its lending guidelines. The rest is history.[/QUOTE]
Nothing like first hand proof.
Any comments from the left?
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[QUOTE=Devils Horse;505024]Wrong as usual.
Barney Frank and affirmative action were huge factors. Read the whole article. Mr. Frank insisted Fannie and Freddie were in groovy shape back when the Bush admin was trying for tighter regulations.
[URL="http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/28/franks_fingerprints_are_all_over_the_financial_fiasco/"]Frank's fingerprints are all over the financial fiasco - The Boston Globe[/URL][/QUOTE]
For every OP/ED article that points to the Community reinvestment act of 1977 as the source of the subprime leanding crisis there are two that point to banking decisions for the collapse. The 1977 act only required banks from declining loans based soly on geographic location of property.
Much of the evidence supporting the 1977 Reinvestment act only had a minimal impact on the housing collapse is that the overal forclosure rate in areas that were onced redlined properties were no higher than the general forclosure rate. The subprime mortgage collapse was widedspread and involved most all types of loans, from $1,000,000.00 properties to $35,000.00 starter homes.
The fact that Fannie Mae and Freddy Mac purchased these subprime loans and there by encouraged making these loans is true. However, much of the risks were not disclosed by the institutions making these loans. Inaccurate appraisals, undocumented finacial statements at origination and ARM mortgages that would be unmanigable based on maximum rates.
Banks and large mortgage brokers saw an opportunity to make big $$$ in origination fees and points and simply wrote as many loans as they could with as little effort as possible. Over 90% of subprime loans were sold as securities. The Mortgage brokers made their money in the origination fees.
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[QUOTE=Devils Horse;505024]Wrong as usual.
Barney Frank and affirmative action were huge factors. Read the whole article. Mr. Frank insisted Fannie and Freddie were in groovy shape back when the Bush admin was trying for tighter regulations.
[URL="http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/28/franks_fingerprints_are_all_over_the_financial_fiasco/"]Frank's fingerprints are all over the financial fiasco - The Boston Globe[/URL][/QUOTE]
Just in today! Bank of America to spend 10 Billion $$$$ to settle mortgage claims steming from their purchase of Countrywide Mortgage Co. They will purchase back loans they sold to the government that did not meet standards at the time of origination (in otherwords risky loans not properly written).
How is this wrong as usual??
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[QUOTE=kydonky;505028]For every OP/ED article that points to the Community reinvestment act of 1977 as the source of the subprime leanding crisis there are two that point to banking decisions for the collapse. The 1977 act only required banks from declining loans based soly on geographic location of property.
Much of the evidence supporting the 1977 Reinvestment act only had a minimal impact on the housing collapse is that the overal forclosure rate in areas that were onced redlined properties were no higher than the general forclosure rate. The subprime mortgage collapse was widedspread and involved most all types of loans, from $1,000,000.00 properties to $35,000.00 starter homes.
The fact that Fannie Mae and Freddy Mac purchased these subprime loans and there by encouraged making these loans is true. However, much of the risks were not disclosed by the institutions making these loans. Inaccurate appraisals, undocumented finacial statements at origination and ARM mortgages that would be unmanigable based on maximum rates.
Banks and large mortgage brokers saw an opportunity to make big $$$ in origination fees and points and simply wrote as many loans as they could with as little effort as possible. Over 90% of subprime loans were sold as securities. The Mortgage brokers made their money in the origination fees.[/QUOTE]
You know........you throw out facts about million dollar houses being foreclosed....that is TRUE....but the cold hard fact is the average price of a foreclosed house in KY in 100k. In Indiana, it is 103k.
The FACTS are this........the CRA allowed folks who should never purchase a house to PURCHASE a house.
the CRA was and IS bad legislation. Simple. Fannie and Freddie are bad ideas....SIMPLE.
Getting a loan for a house should be hard......SIMPLE.
Later,
Geo
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[QUOTE=kydonky;505364]Just in today! Bank of America to spend 10 Billion $$$$ to settle mortgage claims steming from their purchase of Countrywide Mortgage Co. They will purchase back loans they sold to the government that did not meet standards at the time of origination (in otherwords risky loans not properly written).
How is this wrong as usual??[/QUOTE]
BOA bought Countrywide, a huge player in the mortgage business who also known for 'risky' loan practices. They were applauded by DC politicians at the time. Fannie and Freddy which everyone knows is controlled by DC politicians bought these risky loans en masse from Countrywide/BOA and resold them as investments.
You really believe they innocently purchased a trillion in loans without knowing the score?
Then the collapse, after which fannie and freddie became government complete entities for intents and purposes. US attorneys then sued BOA.
The 10 billion is government shark repellent money for BOA, their stock has actually gone up since the settlement.
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[QUOTE=Devils Horse;505386]BOA bought Countrywide, a huge player in the mortgage business who also known for 'risky' loan practices. They were applauded by DC politicians at the time. Fannie and Freddy which everyone knows is controlled by DC politicians bought these risky loans en masse from Countrywide/BOA and resold them as investments.
You really believe they innocently purchased a trillion in loans without knowing the score?
Then the collapse, after which fannie and freddie became government complete entities for intents and purposes. US attorneys then sued BOA.
The 10 billion is government shark repellent money for BOA, their stock has actually gone up since the settlement.[/QUOTE]
You have to read the whole article.
The mortgage settlements just keep coming. On Monday morning, Bank of America said it [URL="http://www.businessweek.com/news/2013-01-07/bofa-to-pay-fannie-mae-3-dot-6-billion-in-mortgage-deal"]reached an agreement[/URL] to resolve virtually all existing and future claims that it (and mortgage lender Countrywide, which BofA bought in 2008) misrepresented the quality of home loans it sold to Fannie Mae from 2000 through 2008. In the deal, Bank of America is paying $3.6 billion in cash and is also repurchasing about 30,000 mortgages for $6.75 billion. That money all goes to Fannie Mae.
The reference to poloticians applauding them at the time stems from the idea that BOA would be taking one of the "Bad Actors" out of the business. Countrywide was notorious for writing sloppy loans. Bank of America got a raw deal in that it's purchase of Contrywide has cost it $$$$$$$$$$$$ and more $$$$$$$$$ if fines a penalties assessed to the Countrywide portion of their business. Still in spite of the fines and penalties they have been able to make profit.
The artcle and settlement speaks for itself, loans were misrepresented and sold to Fannie Mae. There was no mandate to write bad loans, that is all urban legand, pure Bull Carp. If there was a mandate by law they followed the law and would not be fined. They were fined for writting and selling loans with misrepresentation.
The equal rights act only required that loans could not be denied based on race and the Community reinvestment act only prevented loans being denied based on geographic location.
If you give these Banks a pass for their behavior then you should not complain for bailing them out.
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[QUOTE=kydonky;505395]You have to read the whole article.
The mortgage settlements just keep coming. On Monday morning, Bank of America said it [URL="http://www.businessweek.com/news/2013-01-07/bofa-to-pay-fannie-mae-3-dot-6-billion-in-mortgage-deal"]reached an agreement[/URL] to resolve virtually all existing and future claims that it (and mortgage lender Countrywide, which BofA bought in 2008) misrepresented the quality of home loans it sold to Fannie Mae from 2000 through 2008. In the deal, Bank of America is paying $3.6 billion in cash and is also repurchasing about 30,000 mortgages for $6.75 billion. That money all goes to Fannie Mae.
The reference to poloticians applauding them at the time stems from the idea that BOA would be taking one of the "Bad Actors" out of the business. Countrywide was notorious for writing sloppy loans. Bank of America got a raw deal in that it's purchase of Contrywide has cost it $$$$$$$$$$$$ and more $$$$$$$$$ if fines a penalties assessed to the Countrywide portion of their business. Still in spite of the fines and penalties they have been able to make profit.
The artcle and settlement speaks for itself, loans were misrepresented and sold to Fannie Mae. There was no mandate to write bad loans, that is all urban legand, pure Bull Carp. If there was a mandate by law they followed the law and would not be fined. They were fined for writting and selling loans with misrepresentation.
The equal rights act only required that loans could not be denied based on race and the Community reinvestment act only prevented loans being denied based on geographic location.
If you give these Banks a pass for their behavior then you should not complain for bailing them out.[/QUOTE]
AND most of those bad loans were because the GUBMENT made them write them due to the CRA.
What do you not get about this?
Banks have been evil since the dawn of time, but in decades past, the GUBMENT hasn't told them that they must load money to bad risks......then comes along the Democratic sponsored and supported CRA....
Now we have a silly mess all created by nosy gubment.......
Later,
Geo
