clinton caused mortgage mess

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http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

http://www.wfu.edu/~palmitar/Courses/Se ... agall.html

should be interesting to watch the hate bush cult members try and spin this one

Yes, Clinton was such an evil genius. First, he tricked 3 Republicans (Gramm-Leach-Bliley) to write the bill. Then he tricked the Republican Congress to pass it. Then, when he signed it, he attached secret provisions that would stop the next president from recognizing bubbles, or from exerting any leadership if there was a problem. Evil Clinton. Bad-Bad-Bad.

who was it that added the Community Reinvestment part to the bill which turned into the subprime mess, it wasn't the republicans



so the poverty pimps AKA as democrats got what they wanted added onto the bill and suddenly people with bad credit and no down payment could buy houses, what was Bush supposed to do, say no to the poor, they can't have what Billy promised them and get a big home loan, the press would have hammered him. He was busy cleaning up countless other democrat messed left to him anyways.

the poverty pimps at Acorn fueled the fire
http://www.acorn.org/

can't have unfair access to credit
http://www.acorn.org/index.php?id=2644& ... %2Fiwec%2F

even if people have a history of not paying their bills ontime

The Hate Bush Cult is funny as hell, even when presented with something like on this date clinton did this and here is what happened, they still can't accept the fact when it's plain as day.

DOT.CON crash is all clintons doing along with the SUV craze and clinton lovers still think he did a good job.

Ooh, Clinton Derangement Syndrome! Always fun to watch.

Johnnie, this is a chess game where We are thinking 7 moves in advance, and you are thinking 2 moves in the past. Bill Clinton's ability to trick the Republicans into sponsoring and voting for his bill to reduce government regulation of business is proof of that. Bill was with the Republicans on Nafta, reducing welfare dependency, limiting the size of government, and many other issues. You don't see what is really going on.

Things are quickly moving to our complete control. Our evil powers are so advanced that when We tell you to hit yourself in the head, you will. Your look of confusion will be followed by you adjusting to the situation - you will convince yourself that we told you not to hit yourself, and that you willingly did so to prove that you were in control of your actions.

-- the CRA provisions were geared towards credit unions, rural banks, and special urban reinvestment areas. These were not the driving force behind the subprime mess. It was the large mortgage lenders and the investment banking companies that created a situation where the people giving out the loans didn't care if anyone could pay them back. They made the loans, collected their fees, bundled them, and sold them to the investment bankers, who sold them to various investors. The problems were passed on. The credit unions and farm banks were more prudent on the whole, as they often planned on holding on to the loans for the duration.

Johnnie, this is a chess game where We are thinking 7 moves into the future, and you are thinking 2 moves into the past. Bill Clinton's ability to trick the Republicans into sponsoring and voting for his bill to reduce government regulation of business is proof of that. Bill was with the Republicans on Nafta, reducing welfare dependency, limiting the size of government, and many other issues. You don't see what is really going on.

Things are quickly moving to our complete control. Our evil powers are so advanced that when We tell you to hit yourself in the head, you will. Your look of confusion will be followed by you adjusting to the situation - you will convince yourself that we told you not to hit yourself, and that you willingly did so to prove that you were in control of your actions.

-- the CRA provisions were geared towards credit unions, rural banks, and special urban reinvestment areas. These were not the driving force behind the subprime mess. It was the large mortgage lenders and the investment banking companies that created a situation where the people giving out the loans didn't care if anyone could pay them back. They made the loans, collected their fees, bundled them, and sold them to the investment bankers, who sold them to various investors. The problems were passed on. The credit unions and farm banks were more prudent on the whole, as they often planned on holding on to the loans for the duration. But believe what you will.

Last edited by monty on 21 Dec 2007, 5:52 pm, edited 1 time in total.

The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods. It was enacted by the Congress in 1977
http://www.federalreserve.gov/dcca/cra/

what part of if they have branches in ghetto's they have to loan money in ghetto's is confusing ?

you might want to ignore what started the fire and blame the fire on what was in the building, but the match that lit the fire was struck by the poverty pimps increasing the number of people who would be eligable to get mortgages and once the fire got going every swindler, oppertunist and scam artist and sucker got involved in throwing wood and gas on the fire.

it's basic supply and demand, increase the demand by making more people eligable to get loans and prices go up, once the fire got going it was fanned by greed.

I lived in a burb next to a city and saw it happen, sudden jump of apartment dwellers from the city buying houses in the burbs. It didn't happen in one day, it got started in 2000 and by 2002 the stampeed was under way. I bought a house in 2002 and saw it happening. The fire was just getting going and kept growing.

Loaning money to the poor is not necessarily a bad thing - the microcredit movement in the third world has a very low default rate.

Look at the companies that took heavy hits from the subprime mess - private mortgage companies and Wall Street brokerages that bundled the loans to create SIVs. The neighborhood banks, credit unions and rural banks tended not to trick people into adjustable rate mortgages where the payments double after a few years of misleadingly low rates. And the reason is simple - the banks that planned to hold on to mortgages for the life of the loan knew that would be trouble. The banks that planned to keep the loans themselves did not issue loans without verifying income. The rational banks used standard guidelines for determining ability to pay, and they said no when people wanted champagne houses on a beer budget.

You can try to blame everything on Clinton, but you will have to argue with the current president, who seems to take credit for the dramatic expansion in home ownership by the poor and minorities:

No criticism for all the brokers that were setting people up to fail by telling them one thing and having them sign paperwork that said something else. No approbation for the lenders that ignored their own rules on giving loans. Your Great and Mighty President Bush provided no leadership while this crisis developed.

http://www.iht.com/articles/ap/2007/09/ ... p#end_main

so in your opinion a news release pushed under the presidents nose who has his hands full of more pending matters is some sort of proof he played a roll in the mess ? Some staff member pops in the door, hey george it's national home ownership month and according to statistics ownership is up, yadda,yadda,yadda yeah whatever and they both move onto something that matters after feeding some piece of paper to the press like george gives a crap if some dude in detroit rents or owns a house.

Now back in 1999 congress and the president had ample time to think out what the implications of their actions might result in and as usual the poverty pimps jumped in and added garbage to the banking bill and the nation ended up with subprime even though Mr Gramm opposed it.



http://www.americandreamdownpaymentassi ... _grant.cfm

now what does a well regulated program run by the FHA with all sorts of strings attached to qualify for the program have to do with subprime scam artists ?



The feeding frenzy was already well in the making by the end of 2003, so it would be well into 2004 before anyone got the first grant, so it wasn't the match that lit the fire by any means and probably had no effect at all on the demand for housing.



so citi bank and the rest where required to make subprime loans because of actions of the poverty pimps and the white house.

The county I live in has somewhat more than 600,000 people in it. Five years ago, there was one high-rise on the river with expensive condos. Right now, there are 5 more of these under construction. Prices start around $400,000 and go up to well over a million. The units that weren't presold a year ago aren't selling. The people responsible for these buildings are sweating bullets trying to figure out how to keep from going under. Please explain how the CRA caused this.

We have a bubble. Rates were low because there was plenty of money to lend. Brokers and deal makers didn't care if people had the ability to pay. As long as the loan closed, they got a commission.

im so tired of hearing about this. people have made this there problem not anybody else
cant afford a house? dont buy it
being tricked into a low rate? dont buy it

the answer is simple, if you cant afford it, dont buy it

I grew up and than bought a house in 1950's style subdivisions, 1/4 acre lot and small 2 or 3 bedroom houses with one bathroom and maybe a 1 car garage. Commonly know today as a starter home. from the 40's to late 50's they got built by the thousands and than the building stopped once the demand was met and projects already under way ground to a halt, developers went broke back then also.

Anything built much after that period is larger, 4 bedrooms 2 baths, 2 car garage. So the supply of starter homes in the county I used to live in was pretty much fixed along with the people who could afford a starter home. Than the poverty pimps come along to help people get into their own homes and demand bankers don't be such hard asses about peoples past record of paying for things and nearly overnight all sorts of people can get home loans, so they desend on entery level housing. People see the prices going up in their neighborhood and some minorities moving in and the white flight starts, they panic as soon as one family of housing project trash moves into their neighborhood even though prior minorities moving in didn't bother them because they where people who busted their butts to get ahead.Stable middle class people.

Word gets around the projects and slums that the benkers are loaning money for housing to people with poor credit and lots of people start to apply and get approved creating a sudden demand for entery level housing and prices go up. The ones turned down by conventonial lenders seek out and find swindlers as they try and keep up with the Jones. They wouldn't have gone looking to find the swindler if it wasn't for some of their friends,relatives & neighbors moving on up because of the poverty pimps program.

At the sametime the inflow of slum dwellers into those neighborhoods makes people in them think it would be a good idea to sell out and take on more debt, so they sell for $200,000 and buy another one for $300,000. Their old mortgage was a joke anyways because they bought for like $75,000 and had most of it paid off, so their new 30 years mortgage on a bigger house is no big deal and in their mind it's an investment. the people in the $300,000 houses say damn blue collar people are moving in, neighborhood is losing it's snob factor and they sell and buy into a $500,000 house because they also have been home owners for many years and had paid off a good chunk of their old mortgage, kids where grown and they where in their peek earning years, so saw no problem with investing in a really fancy house figuring they could sell it for even more in 10 or 15 years when they retire and move down south or someplace.

The sudden increased demand for entery level housing rippled all through the housing market.

Than add in the swindlers and clueless investors and demand further takes off.

Government caused the housing boom in the 50's that went bust through the GI Bill.The morals hadn't deteriorated in the business world yet, so there was no large scale problem with swindlers, the baby boomer swindlers where still in diapers. Biff hadn't learned how to sign his name yet.

Government caused the savings & loan mess by raising interest rates to 20% around 1980 and shutting down constuction because of the cost of money was too high. Demand for housing was high because the baby boomers where in their 20's looking to get established in life and once interest rates where lowered, people went crazy trying to feed off the sudden demand for housing and once again the criminal types got in on the action and cooked up all sorts of scams.

All looked good a few years ago until the number of deadbeats not paying their mortgages started piling up and than panic set in. The news media had a feeding frenzy over it and finds all sorts of worst case examples to splatter all over the even news to make people think the problem was 100% caused by swindlers finding total morons. real story is the forclosures are spread through out the housing market, from Biff & Muffy who upgraded into a bigger house and one of them got sick or lost a job or they got divorced, to the rising property taxes squeezing out entery level people. But the media wants everyone to believe it's all do to swindlers pushing bad paper through the system.

So the effect at the bottom end of falling demand rippled all the way up into $400,00 condo's being built. When more people can get home loans, demand goes up, when suddenly massive numbers of people are turned away, demand tanks overnight.

7 million exsisting home sales a year and 1 million new units built a year isn't a lot considering there is like 100 million housing units in the counrty, remove a few hundred thousand shoppers from the system by cutting off loans to the least desirable shoppers and unsold inventory quickly piles up when the scare factor is added in. Lots of people wanting to buy who can afford to buy don't want to buy in at the top and watch their down payment vanish as the equity of the houses they just signed for drops in value.

It's evident the 1999 bill started the mess, than the swindlers moved in and the suckers thought they could make easy money added more fuel to the fire.

the falling interest rate where offset by rising prices, can't really blame that for suddenly pushing more people into the housing market.

It's not evident at all. Most economists cite cheap money (historically low mortgage rates) as the driving force behind the bubble. Bubbles are a common occurrence in market economies. People have a herd mentality - when they see the price of houses (or dot-com stocks, or tulips) going up week after week, year after year, they think things will continue that way and they want to get in on the economic escalator and ride to heaven.

The CRA bill does not explain the fact that the problems are only occurring now. The invention of new types of loans, the conversion of those loans to transferable investments, and their aggressive marketing to people who couldn't afford it does explain the big pattern.

there ya go.
i hate agreeing with you richard, yet there it is.

whys that. im a good guy with a pretty even vocabulary, wouldnt you say?

The problem is as you've described, but with the added factor of the currency being a fiat currency rather than one based on anything material. In other words, dollars are made-up fantasyland ideas, arbitrary units of wealth measurement whose dimensions change on a constant basis.

Bubbles are a common occurrence in market economies with a fiat currency.

The dollars, when created by the Fed, have a higher value than all the ones that are created after it. The first people to get those dollars, who buy large hunks of T-bills, are the big banks. They use those dollars to buy real, material things or pay off debts, and the rest they lend out to ret*ds, as those dollars decrease in value as more and more are printed. The people that took those loans out not only have to pay back the loans, but cover the gap in worth created by the inflation of the currency.

So, while some borrowed $10,000 in, say, 2000, and had to pay it back with interest at 15,000 by 2005, if you factor in any inflation rate the actual cost to the borrower is much higher.

And again, I agree that people aren't innocent victims here; if people would think for two goddamn seconds about what they're doing, this wouldn't happen. They're thinking, "heh heh heh, cheap loan, that bank's such an a**hole!"

You can't cheat an honest man.