Trump Polling
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KCFlyer
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delldude said:
About how much of the $700 billion that Bush gave to the banks for the bad loans went to poor blacks, since Acorn pretty much represented them. How much of those losses were due to Acorn pressure? I only ask because the population of my area is only about 12% Black, but we still had a lot of foreclosures in subdivisions with houses costing $400K or more. Did Acorn do that?
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KCFlyer said:
12% black......you saying only blacks have bad credit histories?
Acorn was a part of it, the gov't was the bigger part.
Banks were putting people in homes they knew on paper was way over their income levels.....Threats of costly audits do wonders for a bankers attitude.
KCFlyer
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delldude said:
I am saying that the typical conservative argument has been that the housing collapse is due to making loans to "people who should never have them". I read that as "poor blacks". Now...maybe I'm assuming too much here - but did ACORN represent predominantly white people? You seem to be laying much of the blame at the feet of Obama, Saul Alinksky and ACORN.
Could you cite the non ACORN related events that "forced" banks to make these loans? Wait...it wasn't banks, it was "mortgage brokers" such as Countrywide....where is the government verbiage the forced these entities to make no doc loans or allowed borrowers to flat out lie on loan applications? BAnks just got the idea of bundling this stuff up and selling it as investment grade. Outside of deregulating the finance industry, where did the government programs "force" this kind of behaviour?
eolesen
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Hate to confuse a good narrative with facts... Blacks and Hispanics were disproportionately affected by the sub-prime crash.delldude said:
http://www.responsiblelending.org/mortgage-lending/research-analysis/foreclosures-by-race-and-ethnicity.pdf
The main driver of that disproportionate impact in the black and Hispanic demographics seems to be a combination of job losses and savings, and less ability to withstand a sudden loss of income.
In the higher value properties, job loss is still a contributor, but the bigger issue in that sector was the drop of housing values. When properties are underwater by >$100,000 in value, foreclosure becomes a strategy, not a necessity.
There were even realtors and "specialists" pushing that in some markets.
Sub-primes kicked off the problems at the higher end properties as well as the low end.
Had sub-primes not been allowed to proliferate to as many low- and no-income's, you wouldn't have had strippers buying multiple $300K rental properties... and you wouldn't have had millions of toxic mortgages going into CDO's where the fragility of those loans was masked.
All that crashed housing values across the country, which then launched off all the underwater mortgages that became strategic foreclosures...
Watch the movie "The Big Short" and you'll see how a lot of that panned out. Better yet, read the book.
KCFlyer
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eolesen said:
There is no doubt about that...my point is that IMHO MORE of the subprime crisis was due to organizations like Countrywide that would fund a mortgage loan to a senile dog and sell the loan to a bank....NEITHER of which they were "forced" to do by the government. The government "forced" banks to stop redlining.areas. NOWHERE did any of the federal regulations "force" a bank to make a loan to someone who couldn't afford it...the only thing they were "forced" to do was to consider loans in "redlined" areas. Prior to that, even people who COULD afford a loan would be denied because of the area...not because of their ability to pay.
I might be mistaken, but I'd really like to see the verbiage of the programs that "forced" a bank to make a loan to a person who did not have adequate income to repay the loan.
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KCFlyer said:
Blacks and Hispanics were the original impetus for this socialist venture gone bad.
The unintended consequences of this CRA program, which was so poor people who wished they could have a $200,000 home much like a Yale educated lawyer, was banks were forced under the CRA to provide these loans, I don't think there was any income ceiling and others took advantage of the loose credit requirement program and there is how the snowball started rolling.
Don't you remember how banks avoided giving loans to areas where income was less than healthy in their view?
The CRA forces banks to make loans in poor communities, loans that banks may otherwise reject as financially unsound. Under the CRA, banks must convince a set of bureaucracies that they are not engaging in discrimination, a charge that the act encourages any CRA-recognized community group to bring forward. Otherwise, any merger or expansion the banks attempt will likely be denied. But what counts as discrimination?
According to one enforcement agency, “discrimination exists when a lender’s underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants.” Note that these “arbitrary or outdated criteria” include most of the essentials of responsible lending: income level, income verification, credit history and savings history–the very factors lenders are now being criticized for ignoring.
The government has promoted bad loans not just through the stick of the CRA but through the carrot of Fannie Mae and Freddie Mac, which purchase, securitize and guarantee loans made by lenders and whose debt is itself implicitly guaranteed by the federal government. This setup created an easy, artificial profit opportunity for lenders to wrap up bundles of subprime loans and sell them to a government-backed buyer whose primary mandate was to “promote homeownership,” not to apply sound lending standards.
http://www.forbes.com/2008/07/18/fannie-freddie-regulation-oped-cx_yb_0718brook.html
Reddit:
The Community Reinvestment Act (or CRA, Pub.L. 95-128, title VIII, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law that requires banks and savings and loan associations to offer credit throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services, a practice known as "redlining." The purpose of the CRA is to provide credit, including home ownership opportunities to underserved populations and commercial loans to small businesses. It has been subjected to important regulatory revisions.
The CRA was passed into law by the 95th United States Congress in 1977 as a result of national grassroots pressure for affordable housing, and despite considerable opposition from the mainstream banking community. The CRA mandates that each banking institution be evaluated to determine if it has met the credit needs of its entire community. That record is taken into account when the federal government considers an institution's application for deposit facilities, including mergers and acquisitions.
The bill encouraged the Federal National Mortgage Association, commonly known as Fannie Mae, to enable mortgage companies, savings and loans, commercial banks, credit unions, and state and local housing finance agencies to lend to home buyers. It also encouraged the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, to buy mortgages on the secondary market and sell them as mortgage-backed securities on the open market.
Enter Bill Clinton
In 1995, as a result of interest from President Bill Clinton's administration, the implementing regulations for the CRA were strengthened by focusing the financial regulators' attention on institutions' performance in helping to meet community credit needs.
These revisions with an effective starting date of January 31, 1995 were credited with substantially increasing the number and aggregate amount of loans to small businesses and to low- and moderate-income borrowers for home loans. These changes were very controversial and as a result, the regulators agreed to revisit the rule after it had been fully implemented for seven years. Thus in 2002, the regulators opened up the regulation for review and potential revision.
Part of the increase in home loans was due to increased efficiency and the genesis of lenders, like Countrywide, that do not mitigate loan risk with savings deposits as do traditional banks using the new subprime authorization. This is known as the secondary market for mortgage loans. The revisions allowed the securitization of CRA loans containing subprime mortgages. The first public securitization of CRA loans started in 1997 by Bear Stearns. The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.
Other rule changes gave Fannie and Freddie extraordinary leverage, allowing them to hold just 2.5% of capital to back their investments, vs. 10% for banks. By 2007, Fannie and Freddie owned or guaranteed nearly half of the $12 trillion U.S. mortgage market. Thus leading us to the problems of today.
Just like all other administrations, the effect of a presidency often isn't felt until after he leaves office. Clinton reaped the benefits of the Reagan/Bush era, and George W. Bush, is having to deal with the problems created by his predecessor and are now coming to fruition.
Looks like another government fairy tale gone wry.....
KCFlyer
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delldude said:
Are there many $200k homes in the redlined areas? When the CRA was passed, it wasn't uneducated blacks and hispanics wanting to by a $200k home like a Yale lawyer...they couldn't get a loan in their neighborhood, even if they could put 50% down...the banks wouldn't loan because of their location. Again...you seem to know a lot about the CRA - could you point me to the verbiage of the law that forced a bank to make a loan without checking the borrowers ability to repay it? There is a helluva difference between not loaning because your zipcode was in a "bad" area and making a loan because you claimed your dog earned $50k for fetching the morning paper.
And I live in what is called the "golden ghetto"...can't begin to tell you about the number of ads back in the early 2000's that were urging people to "put your largest asset to work for you" and for banks to routinely offer home equity loans for 125% of the homes value. My ex is a realtor and the number of clients (mostly white) took an 80/20 mortgage because they wanted a McMansion like a Harvard lawyer but didn't have enough to make the down payment. The government didn't force this on anybody. The good old "we can regulate ourselves because the market knows best" folks did that.
As to your last comment....yep...that's redlining. And since black folks couldn't get a loan in "their" part of town, the ended up in white suburbia....ever hear the phrase "There goes the neighborhood"?
Glenn Quagmire
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How is the Trump polling? Didn't we decide all the above back in 2007/2008?
KCFlyer
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Glenn Quagmire said:
Sorry....just trying to find out where they will stand on a deficit with Trumps tax cuts, and trying to get them to understand that the debt doesn't reset to zero...so Trump will be dealing with the debt Obama left...just as Obama dealt with the debt left by Bush (but that is ignored by the right)
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