Obama pushes banks to make home loans to people with weaker credit

[Billy the Great Khan]

Were the banks unaware of the laws regarding bankruptcy and default when they decided to massively expand their subprime portfolio in the 2000's, and, in particular, push risky adjustable rate mortgages on these unsophisticated borrowers? If so, tough shit, study the law better. If not, then clearly they should've been aware that they shared some responsibility in this. When a bank gives out a shitload of money which has a low chance of being paid back, and, lo and behold, doesn't get paid back, shaking your finger at the defaulter and blaming him isn't suddenly going to make the money reappear. The rules of the game clearly stated that you are not guaranteed to be repaid if the debtor can't realistically pay you back, nor can you reduce them to slavery like in the good old days. To counter this risk, which is an inherent part of the banking business, it was part of your job to judge the credibility of those you shoveled out money to.

Now, why did these banks shove out so many risky adjustable rate loans to people of little means? Because they were operating under the assumption that real estate prices never fall (I'm serious, there was an influential paper that made this case, and the banking industry bought it). The adjustable rate mortgages therefore, seemed like a good idea, as they allowed for low rates that these borrowers were capable of paying, low rates enabled by the real estate boom. And since real estate prices never fall, nothing could go wrong. Until 2006, when they did, and the low rates suddenly became a lot higher, high enough that a great deal of people found themselves unable to pay. It was, all and all, a really dumb idea, and I don't think I'm unjustified in finding fault with the people who came up with it. The people who accepted them were unsophisticated. And they paid for it, all that was legally required of them, and had their credit totally destroyed. But the fact is that these deals shouldn't have ever been offered in the first place, they seriously misjudged the credibility of their borrowers. And they should pay for that.

And when it comes to moral blame, I blame them, because they should've known better. This didn't happen just because a bunch of random debtors decided to default all at once, it happened because the bank offered loans it was stupid to offer.

And then they got bailed out, which to ME is the equivalent of saying "hey, I know you made a literally CATASTROPHIC mistake, but it's cool. We'll even let you do it again without any punishment".

 

[canceled.2021.1]

Funny thing. Canada did not have this problem.

But hey the negro deserves to live in a house he can't afford dammit. You know that "redlining" that goes on

 

[NOVA]

the broker rules are in place now.

unlike for 8 long years when the Bush SEC held them back so the banks could order their employees to do their bidding instead of what was legal

If the banks didn't make the loans to people without sufficient down payments or shaky jobs they were publicly called "racist banks" and castigated by Clinton
in those good days.....

Typically, lefties blame everyone but the folks that cause the trouble.....its always some one else's fault.

Now Obama is at it again and no doubt, the Republicans or someone other than them will get blamed when the shit hits the fan.

 

[FUCK THE POLICE]

And then they got bailed out, which to ME is the equivalent of saying "hey, I know you made a literally CATASTROPHIC mistake, but it's cool. We'll even let you do it again without any punishment".

Yeah, the people who got foreclosed on and such got the penalty the law prescribed. They actually paid their price. The banks, on the other hand, did not. Not even a few token head rolls. But those damn debtors, they're apparently bad people who should be ashamed for deciding that continuing the mortgage as is was worse than simply taking the penalties the law, the mortgage contract, and credit rating agencies prescribed for discharging a loan. That's cheating! You are not allowed to use all available legal means as you decide would be to your benefit, you have a responsibility to be nice to the bank.

These financial wizards had a great idea, after all: make massive amounts of huge loans (say, 20% of all mortages) that must be paid off over a period of decades affordable to poor people with bad credit by relying on rising house prices to give them really low rates. So, basically gamble everything on the idea that the housing bubble will keep on for the next few decades. Theoretically, if housing prices ever fell, you'd be faced with a massive number of defaults and foreclosures all at once as you cranked up rates, and all you'd have to show in return would be a shitload of empty houses that are now worth dramatically less than what you paid for them. It'd especially suck if the housing bubble only lasted a few years, and you barely even got repaid at all. But that is pointless chatter, because housing prices never fall.

 

[Timshel]

Yeah, the people who got foreclosed on and such got the penalty the law prescribed. They actually paid their price. The banks, on the other hand, did not. Not even a few token head rolls. But those damn debtors, they're apparently bad people who should be ashamed for deciding that continuing the mortgage as is was worse than simply taking the penalties the law, the mortgage contract, and credit rating agencies prescribed for discharging a loan. That's cheating! You are not allowed to use all available legal means as you decide would be to your benefit, you have a responsibility to be nice to the bank.

These financial wizards had a great idea, after all: make massive amounts of huge loans (say, 20% of all mortages) that must be paid off over a period of decades affordable to poor people with bad credit by relying on rising house prices to give them really low rates. So, basically gamble everything on the idea that the housing bubble will keep on for the next few decades. Theoretically, if housing prices ever fell, you'd be faced with a massive number of defaults and foreclosures all at once as you cranked up rates, and all you'd have to show in return would be a shitload of empty houses that are now worth dramatically less than what you paid for them. It'd especially suck if the housing bubble only lasted a few years, and you barely even got repaid at all. But that is pointless chatter, because housing prices never fall.

Nonsense, those unfortunate bankers were taken advantage of by the financially illiterate poor people who could not manage their own credit. They would have called them names if they did not give them loans. Everyone knows bankers are thin skinned and unaccustomed to being vilified.

 

[Timshel]

Nonsense, those unfortunate bankers were taken advantage of by the financially illiterate poor people who could not manage their own credit. They would have called them names if they did not give them loans. Everyone knows bankers are thin skinned and unaccustomed to being vilified.

And they have no political influence either. At least not like those with bad credit who have all power.

 

[SJJRSJJS]

You really do live in a bubble

The collapse was the housing market and the hundreds of billions that taxpayers had to cough off to cover the loses of Fannie and Freddie

Remember Barney frank and the Dems saying there was no problem in 2002 and R's were racist because they did not want minorities to own a home?

When home prices fell it took a massive part of the US economy with it

Now Obama wants to repeat another Democrat failure by trying to make owning a home something you do not have to waor and EARN

Obama is a "dollar short and a day late", this is all Bull Sheet for the next Congressional Election, he is trying to look good, after looking pretty bad for a long time. The bias Main Stream media/press like NY Times Inc, CNN, MSNBC, ABC, NBC, ABC are all "shills" for Obama. These Libs on here have all been brainwashed for too many years by first their Teachers, their Hippy Parents, the Press, The Newspapers, The TV. The likes of Rush Limbaugh, Sean Hannity, Michelle Malkin and the internet have saved this Country from this Cabal(Cabalistas). In my opinion, The Libs orchestrated the Housing Bust and yes Barney Franks was right in the middle of it, along with WallStreet stock manipulator George Soros, who I believe is at the top of the Lib conniver's dung heap. The Cabalistas wanted this Country on her knees, so they could change it to Socialism or worse. You seem to have it all well stated in about every post of yours that I have read, so keep up the good "work", and don't let the Bastards "Grind" you down, no pun intended.

 

[NOVA]

justin how old are you?

something tells me your too young to be here

Something tells me you're senile and don't or WON'T remember the FACTS hes telling you in his post.....its the absolute truth.
If you want the videos as proof, let me know...I'll be only too happy to repost them for the 1 millionth time.

 

[NOVA]

Even the VA requires a minimum credit score of 620. Every other program requires credit worthiness. What caused the housing crisis wasn't these types of loans, it was greedy brokers and banks pushing more expensive homes with adjustable rate or interest only homes to people who couldn't afford them.

it was greedy brokers and banks pushing more expensive homes with adjustable rate or interest only homes to people who couldn't afford them

It was Democrats pushing banks to give loans to people who couldn't afford them so they bought even more expensive homes thinking
they could dump them in six months or a year at an even higher price.......now Obama is trying to do it again....
Adj. rates or mortgage rates are irrelevant......the SEC is irrelevant....brokering securities is irrelevant.....
Fanny and Freddie bought up the mortgages and the tax payers took a beating ....... ALL because of liberal social engineering stupidity....

 

[Justin Time]

Even the VA requires a minimum credit score of 620. Every other program requires credit worthiness. What caused the housing crisis wasn't these types of loans, it was greedy brokers and banks pushing more expensive homes with adjustable rate or interest only homes to people who couldn't afford them.

620 is a lousy credit score and shows the borrower has an issue paying back money he/she has borrowed. Which makes that borrower a perfect candidate for an Obama Mortgage loan

Here is where the entire mess started

The NY Times loved the idea and please notice the date of the article

Fannie Mae Eases Credit To Aid Mortgage Lending

By STEVEN A. HOLMES
Published: September 30, 1999


In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html

 

[Justin Time]

it was greedy brokers and banks pushing more expensive homes with adjustable rate or interest only homes to people who couldn't afford them

It was Democrats pushing banks to give loans to people who couldn't afford them so they bought even more expensive homes thinking
they could dump them in six months or a year at an even higher price.......now Obama is trying to do it again....
Adj. rates or mortgage rates are irrelevant......the SEC is irrelevant....brokering securities is irrelevant.....
Fanny and Freddie bought up the mortgages and the tax payers took a beating ....... ALL because of liberal social engineering stupidity....

The Obama pushed for loan modifications and portrayed the banks and mortgage servicers as the bad guy, millions of loan were modified

More than half went back into default

 

[canceled.2021.1]

Everyone knows those poor negras couldn't read the paperwork they were signing let alone understand it.

I sure hope the banks aren't asking for ID when providing these loans cuz dats racist

 

[Justin Time]

There is an internet letter borrowers can send in claiming they do not "remember" taking out the loan or they "dispute" the amount they owe

It is a waste of time for the banks, and it does nothing to try and set up a workout plan for the borrower

It is simply and act of desperation

http://www.ovlg.com/letters/debt-verification-letter.html

 

[Althea]

it was greedy brokers and banks pushing more expensive homes with adjustable rate or interest only homes to people who couldn't afford them

It was Democrats pushing banks to give loans to people who couldn't afford them so they bought even more expensive homes thinking
they could dump them in six months or a year at an even higher price.......now Obama is trying to do it again....
Adj. rates or mortgage rates are irrelevant......the SEC is irrelevant....brokering securities is irrelevant.....
Fanny and Freddie bought up the mortgages and the tax payers took a beating ....... ALL because of liberal social engineering stupidity....

Got any data to back up this nonsense? Of course you don't

 

[Justin Time]

Got any data to back up this nonsense? Of course you don't

Obama was one of the lawyers who sued CitiMortgage and Citibank for NOT giving loans to people with bad credit

Taxpayers have had had over hundreds of billions to Fannie and Freddie to cover their losses from deadbeats who defaulted on their mortgages. The loans would be written to comply with the government to make loans to people who do not pay their bills, and were then sold to Fannie and Freddie.

They were off the hook and taxpayers were put on the hook

 

[Althea]

Obama was one of the lawyers who sued CitiMortgage and Citibank for NOT giving loans to people with bad credit

Taxpayers have had had over hundreds of billions to Fannie and Freddie to cover their losses from deadbeats who defaulted on their mortgages. The loans would be written to comply with the government to make loans to people who do not pay their bills, and were then sold to Fannie and Freddie.

They were off the hook and taxpayers were put on the hook

You aren't even in the right zip code. But then, you rarely are. So let's have links to your data.

 

[Justin Time]

You aren't even in the right zip code. But then, you rarely are. So let's have links to your data.

Try going back and reading the thread. The links are there including the NY Times

Or you can be like most Obama backers and keep your head stuck in the sand

The choice is yours

 

[Althea]

Try going back and reading the thread. The links are there including the NY Times

Or you can be like most Obama backers and keep your head stuck in the sand

The choice is yours

Well...no. I know the difference between lenders that are subject to CRA requirements, and those who aren't. Once you educate yourself, you won't look like such a fool who relies on talk radio for his source of information.

 

[Justin Time]

Well...no. I know the difference between lenders that are subject to CRA requirements, and those who aren't. Once you educate yourself, you won't look like such a fool who relies on talk radio for his source of information.

Once again, a loyal Obama foot solider ignores reality and talks down to those who offer facts in a discussion

 

[Althea]

Once again, a loyal Obama foot solider ignores reality and talks down to those who offer facts in a discussion

But you still haven't drawn the line between the CRA, and those who crashed the economy. Sometimes children have to be scolded. This happens to be one of those times.