This sums it up pretty well

Damocles said:
Yeah, it always starts with a benevolent meaning. What do you think the truism comes from?

The path to Hell is paved with good intentions.

What they wanted was for "more people" to qualify for homes. What they got was a nice fat housing bubble that seems to be popping as we type. They stuck their tongue in and got the air a-flowing. Then it was extended, then again. Now it is this ugly nasty bubble ready to pop and get all over in our hair.
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Good intentions ? How is greed good intentions ?
 
Desh said:
It was a policy set to help more people quailfy to buy a home. It did not seem to hurt the companies who were effected.

This overuse was not forced on them in the least by this law. It seems to me they used the Idea when it suited those running the industry when they saw a way to quick profit.

This law did nothing towards FORCING them to give these loans now did it?

This is why blaming this law as if it forced anything on the companies if just ludicrous.
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Nor did it do a damn thing to FORCE people to borrow more than they could afford. I KNOW I cannot afford a million dollar home if interest rates go up from 3% to 6% But I could have qualified to get an ARM on a million dollar home when ARMs were that low. Especially with the teaser rates.

The problem is many people went ahead and did it because they wanted the bigger home. Others took equity out of their home to buy the new car they couldn't afford or the new flat screen they wanted.

No one FORCED them to do any of the above. I seriously doubt there are very many people out there dumb enough to believe any investment will go up continuously every single year.
 
Superfreak said:
Nor did it do a damn thing to FORCE people to borrow more than they could afford. I KNOW I cannot afford a million dollar home if interest rates go up from 3% to 6% But I could have qualified to get an ARM on a million dollar home when ARMs were that low. Especially with the teaser rates.

The problem is many people went ahead and did it because they wanted the bigger home. Others took equity out of their home to buy the new car they couldn't afford or the new flat screen they wanted.

No one FORCED them to do any of the above. I seriously doubt there are very many people out there dumb enough to believe any investment will go up continuously every single year.
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Really, you seriously doubt that?

When was the last time home values dropped SF?
 
Superfreak said:
Nor did it do a damn thing to FORCE people to borrow more than they could afford. I KNOW I cannot afford a million dollar home if interest rates go up from 3% to 6% But I could have qualified to get an ARM on a million dollar home when ARMs were that low. Especially with the teaser rates.

The problem is many people went ahead and did it because they wanted the bigger home. Others took equity out of their home to buy the new car they couldn't afford or the new flat screen they wanted.

No one FORCED them to do any of the above. I seriously doubt there are very many people out there dumb enough to believe any investment will go up continuously every single year.
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topper is.
 
Superfreak said:
By the way desh... those packaged loans began long before Bush came to office. It was the interest rate environment that caused it to come to a head and blow up. But again, in your fantasy world the borrowers are simply far too ignorant to understand simple math. The problem just magically appeared after Bush took office. Right Desh?

Tell me desh.... what new lending practice took place after 2000? ARMs have been around for a very long time. Even the ARMs with teaser rates and jumbo payments.
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It was the amount of subprime being written that causes the problem.

So you guys were claiming it was the fault of the law which reguired some to be written to get people into homes. The Law never mandated that the industry had to write the majority of their loans this way. Yes they were packaged into blocks that were bought for years but never in these numbers which made the blocks bad investments. This is why the it was likely the 1999 law which effected the situation too. It allowed more consolidation in the lending field.

The consumer was led to believe these were safer than they really were and even Greenspan talked them up.
 
Desh said:
So he doesnt agree with you?

You see not all have to agree with you.

Fire depts, police depts, schools, DOT and other sytem work better than freemarket.

There are certain asspects of society that its just a fact. You accept them as well as the vast majority of Americans who now also want to have our healthcare changed because the free market system we have is raping us and giving us sub standard care.


He agrees with the vast majority does that make his economic credentials disapear?
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1) yes, some things should be run by the government. Fire & police departments, the military, the postal service. They should be government run.

2) Tell me desh... if healthcare is truly freemarket.... why can't I participate in an insurance plan in NJ if I live in Colorado?

3) If healthcare really was a free market endeavor right now.... Why have we had HMOs for the past 35+ years?
 
Your right the isurance companies and Pharma co have it all in the bag which leaves us with the most expensive in the world and the worst amoung the top nations.
 
Desh said:
It was the amount of subprime being written that causes the problem.

So you guys were claiming it was the fault of the law which reguired some to be written to get people into homes. The Law never mandated that the industry had to write the majority of their loans this way. Yes they were packaged into blocks that were bought for years but never in these numbers which made the blocks bad investments. This is why the it was likely the 1999 law which effected the situation too. It allowed more consolidation in the lending field.

The consumer was led to believe these were safer than they really were and even Greenspan talked them up.
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No, it is not the amount of subprime that is the problem. It is the fact that the government interfered and encouraged these loans at all that is the problem.

Secondly, the vast majority of loans were NOT written this way. It is a minority. It is simply that the minority is large enough to hammer our economy that is the problem. It is the fact that the borrowers and lenders were irresponsible that is the problem.

Thirdly, yes, the change in 1999 compounded the problem.... which again was caused by BOTH the Reps in Congress and the DEM in the White House. The Reps did not possess a veto proof majority. The Dems enabled this bill to pass and Clinton signed it. He could have vetoed it and the Dems in Congress could have killed it by not providing the veto proof majority.
 
Desh said:
It was the amount of subprime being written that causes the problem.

So you guys were claiming it was the fault of the law which reguired some to be written to get people into homes. The Law never mandated that the industry had to write the majority of their loans this way. Yes they were packaged into blocks that were bought for years but never in these numbers which made the blocks bad investments. This is why the it was likely the 1999 law which effected the situation too. It allowed more consolidation in the lending field.

The consumer was led to believe these were safer than they really were and even Greenspan talked them up.
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I specifically stated it BEGAN there, that some lenders got all excited and attempted to take advantage of it. They, in short began playing that same game.

We'll call it hot potato here. They attempted to throw that thing around and hoped that they would be gone from the position of power when it stopped.

You deliberately misinterpret what I write because it lays some of the blame with those who began the process and you don't want to believe any of it lies there.

It is because you desperately want believe that Ds cannot make bad policy in the name of "more people in houses". You want to desperately believe that all bad things stem from Rs. I'll give you the advice my mother did when I was a kid. Want in one hand and s*it in the other and see which one gets full faster.

It isn't so, we have shown how the law effected the actions of the lenders and how the politicians all attempted to take advantage of the "More <insert group here> own homes than ever before!" train. It is preposterous to say that forcing them to give loans that they would not have normally given because of the default rate was "good policy" one year, but not the next. It was always bad policy, there was a reason that their risk level was set where it was.

It is not "free market" to force such action. It was bad policy that grew into the housing bubble that we know and "love" today.
 
Darla said:
Really, you seriously doubt that?

When was the last time home values dropped SF?
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It depends on the individual market places desh. You of all people should know that.

But bottom line, the fact that you know there was a time in the past that national home values declined indicates that you know it CAN happen. Real estate does TEND to go up annually, but like anything, if the supply begins to outweigh demand, values WILL go down.
 
Superfreak said:
It depends on the individual market places desh. You of all people should know that.

But bottom line, the fact that you know there was a time in the past that national home values declined indicates that you know it CAN happen. Real estate does TEND to go up annually, but like anything, if the supply begins to outweigh demand, values WILL go down.
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Right and the last time it happened was in the early 90's right?

And the lenders were telling the buyers about this risk right? or, were they saying that only geders think home values are going to fall, but that in fact they are going up up up, and you don't want to be the one fool who misses this boat?
 
Damocles said:
I specifically stated it BEGAN there, that some lenders got all excited and attempted to take advantage of it. They, in short began playing that same game.

We'll call it hot potato here. They attempted to throw that thing around and hoped that they would be gone from the position of power when it stopped.

You deliberately misinterpret what I write because it lays some of the blame with those who began the process and you don't want to believe any of it lies there.

It is because you desperately want believe that Ds cannot make bad policy in the name of "more people in houses". You want to desperately believe that all bad things stem from Rs. I'll give you the advice my mother did when I was a kid. Want in one hand and s*it in the other and see which one gets full faster.

It isn't so, we have shown how the law effected the actions of the lenders and how the politicians all attempted to take advantage of the "More <insert group here> own homes than ever before!" train. It is preposterous to say that forcing them to give loans that they would not have normally given because of the default rate was "good policy" one year, but not the next. It was always bad policy, there was a reason that their risk level was set where it was.

It is not "free market" to force such action. It was bad policy that grew into the housing bubble that we know and "love" today.
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Damo I really dont think Im trying to avoid laying blame at the dems feet here. I think the sub prime took off in teh way it did because of the 1999 law which freed up the consolidation of the different aspects of the lending process. They were able to package more of these types of loans in the blocks they were selling without the buyer beeing tipped off to their content which meant they could keep selling more because they could bury it and dump it quickly.
 
http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act


The Gramm-Leach-Bliley Act, also known as the Gramm-Leach-Bliley Financial Services Modernization Act, Pub. L. No. 106-102, 113 Stat. 1338 (November 12, 1999), is an Act of the United States Congress which repealed the Glass-Steagall Act, opening up competition among banks, securities companies and insurance companies. The Glass-Steagall Act prohibited a bank from offering investment, commercial banking, and insurance services.

The Gramm-Leach-Bliley Act (GLBA) allowed commercial and investment banks to consolidate. For example, Citibank merged with Travelers Group, an insurance company, and in 1997 formed the conglomerate Citigroup, a corporation combining banking and insurance underwriting services. Other major mergers in the financial sector had already taken place such as the Smith-Barney, Shearson, Primerica and Travelers Insurance Corporation combination in the mid-1990's. This combination, announced in 1993 and finalized in 1994, would have violated the Glass-Steagall Act and the Bank Holding Acts by combining insurance and securities companies, if not for a temporary waiver process [[1]]. The law was passed to legalize these mergers on a permanent basis. Historically, the combined industry has been known as the financial services industry.
 
Darla said:
Right and the last time it happened was in the early 90's right?

And the lenders were telling the buyers about this risk right? or, were they saying that only geders think home values are going to fall, but that in fact they are going up up up, and you don't want to be the one fool who misses this boat?
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Again, it depends on the part of the country as to when the last time was. You above many on this board understand the local nature of the real estate environment. You have played it well according to your previous posting.

You can try to paint all lenders as crooked or sneaky blah blah blah. Bottom line, it is the responsibility of the borrower to understand the loan they are taking and whether they are capable of repaying the loan they take out. Many people bought more home than they could afford and they knew it going in. Many people took equity out of their home to buy new cars. Yet YOU continue to act like they were all tricked into it.

Similar to how Dems act like Bush (whom they continuosly call stupid/ignorant etc...) tricked them on Iraq and then again on Iran.
 
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