The banks were going to get their money regardless. Either the people who took the mortgage were going to pay it back or the government would bail them out, which they did.
Well, that was the end result. But not every bank got money and that was certainly not their intention. And it was nothing close to the amount they lost from bad mortgages. Remember, they make their money on the interest. They don't see interest obey unless the note is getting paid so they have a strong vested interest in making sure they lend money to the right folks AND it gets paid back.
Quote:
Originally Posted by wickedsolo
What was the point of forcing banks to give out mortgages to folks who couldn't afford it? Who's bright idea was that bill?
The perceived issue was that lesser qualified folks, typically minorities, were being discriminated on by the banks by not approving their applications. The idea was to help minorities get mortgages and it was well-intended enough. It was a bipartisan bill passed back in 1977 and, at first, didn't have the element of enforcement to it (meaning, banks were not getting fined) That was not added to the bill until the late 1990's.
So, to answer your question, it was the federal governments bright idea.
04-09-2012, 05:52 PM
wickedsolo
Re: This really erked me this weekend...
Quote:
Originally Posted by HoustonRaven
The perceived issue was that lesser qualified folks, typically minorities, were being discriminated on by the banks by not approving their applications. The idea was to help minorities get mortgages and it was well-intended enough. It was a bipartisan bill passed back in 1977 and, at first, didn't have the element of enforcement to it (meaning, banks were not getting fined) That was not added to the bill until the late 1990's.
So, to answer your question, it was the federal governments bright idea.
Brilliant.
The government are such ninnies about some things.
04-09-2012, 08:13 PM
AirFlacco
Re: This really erked me this weekend...
Yea, I heard a speaker say it just wasn't the poor people trying to get the American dream.
There were people that upgraded their homes from $600G to $1M and what not. There were
escalating interest rates and the dummies figured them out for the first year but not the
4th or 5th year so when it ballooned, they were screwed.
We've said many times that it started with Clinton wanting each American to have the American dream and he got the Fannies and Freddies to make that happen and they gave loans w/o
background checks. Then the gov't got the banks to do it.
When OBY issued the tarp $$ a condition was attached that they loan it out to the people
but they didn't. They weren't getting screwed again so they hoarded the money. BOA
paid their $59B loan back in 7 months and CitiCorp and the others by 9 months.
During that time they got interest on those billions. Now figure 3 or 5% or whatever on
$59B for 7 or 8 months and you can see how they paid the Fed off. They even said they
did it with cash on hand.
That's how they got the cash. I posted a link that it will take 10 years to occupy all
those vancant homes but I just read where people with money are starting to buy
property again because they know it is going up.
The house across the street will be worth $150,000 more in 10 years.
04-09-2012, 10:49 PM
4G63
Re: This really erked me this weekend...
Quote:
Originally Posted by wickedsolo
What was the point of forcing banks to give out mortgages to folks who couldn't afford it? Who's bright idea was that bill?
That's alot of what happened, and quite frankly, still happens to a certain extent.
Financial institutions making loans only look at what you're currently in debt for and your employment to determine if you're eligible.
They don't take into account everyday expenses like how much you need to spend on groceries, gas for your cars, insurance payments, clothes, etc.
All they look at is whether or not there is enough money left over in your check to cover the mortgage payment or car payment once the payments you're already obligated to pay are taken out.
It's up to the individual to consider everything else in life when making a decision to finance something.
I could have bought a much bigger house then I live in now at the time I bought this house.
Hell, the banks even tried to push me further because my credit is so good and the numbers showed I could afford much more then I was willing to spends per month.
I just re-financed this place (3.875% :thumbup:) trying to cut the payment down some because shit is getting tight with everything else in this world going out of control.
IMO, this mess is both the banks fault and the individuals fault for not looking at the whole picture when taking out a loan.
Somebody on here mentioned in another thread about needing schools to have classes and courses about the basic skills needed to survive life, handle credit, etc.
This situation is a perfect example of that notion.
04-10-2012, 09:39 AM
NCRAVEN
Re: This really erked me this weekend...
Quote:
Originally Posted by The Fanatic
Somebody on here mentioned in another thread about needing schools to have classes and courses about the basic skills needed to survive life, handle credit, etc.
This situation is a perfect example of that notion.
Maybe we could also have our elected officials attend this course as well...?
04-10-2012, 10:34 AM
JStruds
Re: This really erked me this weekend...
Quote:
Originally Posted by NCRAVEN
Maybe we could also have our elected officials attend this course as well...?
And the politicians say
More taxes will solve everything
And the band played on...
The Temptations, Ball of Confusion sometime around 1970? And nothing has changed.
04-10-2012, 10:38 AM
JStruds
Re: This really erked me this weekend...
Quote:
Originally Posted by The Fanatic
Anybody ever heard the term "House Poor"?
IMO, this mess is both the banks fault and the individuals fault for not looking at the whole picture when taking out a loan.
Somebody on here mentioned in another thread about needing schools to have classes and courses about the basic skills needed to survive life, handle credit, etc.
This situation is a perfect example of that notion.
I also include the real estate industry that facilitated the artificially high housing prices of a decade ago.
Individuals were clearly at fault for signing loans they really didn't understand, but if you accept that trust is part of human nature, you've got to blame those who led the individuals to believe signing was in their best interest somewhat more than the individuals themselves.
04-10-2012, 11:46 AM
AirFlacco
Re: This really erked me this weekend...
FANATIC - The first time I heard that term HOUSE POOR was back in the 70s. My friend's
dad was a builder and he worked with him. His dad used that term all the time.
He said people were buying these huge houses but were eating macaroni for supper
every night. They couldn't afford to do anything else.
04-10-2012, 12:03 PM
HoustonRaven
I have a friend back in Baltimore who did a 30 year ARM right toward the end of the bubble. Her rate tripled after the housing bubble blew up and the bank was not willing to refinance to a fixed rate mortgage. It was cheaper for her to do a planned buy back than it was for her to go through bankruptcy. She actually ended up renting the house from the bank once the bank took the house over.
She'd be the first to tell you it was her fault she got into that mess.
Wicked -- since you were in the Navy, you need to take advantage of the VA loans you can get once you decide to buy. All but one of my houses were done via the VA and I have a low rate fixed rate of 3.45% on my current home.
04-10-2012, 12:59 PM
The Fanatic
Re: This really erked me this weekend...
Quote:
Originally Posted by HoustonRaven
I have a friend back in Baltimore who did a 30 year ARM right toward the end of the bubble.
I've never understood why anybody would do an ARM on anything.
It's like gambling with your life.
I guess the appeal is the very low interest rate to suck you in, but to think that the rate won't change because the current (at the time) economic climate is so good is insane to me.
I've always been someone that wanted to know exactly or pretty damn close to what my payment was going to be for the duration of a loan I have taken out.
I don't like surprises at all!!
Even with a fixed rate loan there are still fluctuations due to taxes, insurances. etc. that cause increases due to escrow (sp?) shortages, etc., but nothing that is devastating the way a lot of those loans were that got so many people in trouble.
I'm no economic guru, but I have enough common sense and basic math skills to understand that "fixed" means it ain't changing, and "adjustable" means it can change at anytime.
Problem is/was a lot of people I suppose didn't understand that.
Stuff like this is the type of skill that I'm referring to when I and somebody else in another thread spoke about classes or courses being required in high school of basic skills and understanding of how to function in life.
04-10-2012, 01:06 PM
JStruds
Re: This really erked me this weekend...
Quote:
Originally Posted by The Fanatic
I've never understood why anybody would do an ARM on anything.
It's like gambling with your life.
I guess the appeal is the very low interest rate to suck you in, but to think that the rate won't change because the current (at the time) economic climate is so good is insane to me.
I've always been someone that wanted to know exactly or pretty damn close to what my payment was going to be for the duration of a loan I have taken out.
I don't like surprises at all!!
Even with a fixed rate loan there are still fluctuations due to taxes, insurances. etc. that cause increases due to escrow (sp?) shortages, etc., but nothing that is devastating the way a lot of those loans were that got so many people in trouble.
I'm no economic guru, but I have enough common sense and basic math skills to understand that "fixed" means it ain't changing, and "adjustable" means it can change at anytime.
Problem is/was a lot of people I suppose didn't understand that.
Stuff like this is the type of skill that I'm referring to when I and somebody else in another thread spoke about classes or courses being required in high school of basic skills and understanding of how to function in life.
ARMs were beneficial to house flippers and speculators to whom housing was an investment, not a home. Then, greed took over and the initial low interest rate was used as a selling tactic aimed at the more gullible among us.
04-10-2012, 09:52 PM
Galen Sevinne
Re: This really erked me this weekend...
The review of the housing problem in this thread is typical "blame the minorities" coded racist innuedo, conservative bluster. It is no different than the previous threads that blame Democrats for poverty in this country because they stick up for the poor. Meanwhile statistics show the extreme wealthy getting richer and everyone from middle class - down becoming poorer; yet, its the democrats enabling the poor by restributing the wealth? huh? One has to say.
It is easy to debunk the bluster in this thread that allowing and even encouring people other than whites to buy houses was a huge mistake. Of course, no on this thread will admit that this is really beneath their language but as soon as they start blaming the government and using words like "minorities" the point is expresed.
The CRA was in 1977 opening up more lending to minorities because previous to 1977, certain area in cities, known as "redlining", were off-limits to lending for houses. Areas that fell within the "redlines" were predominately black so banks wouldn't loan money for houses to be purchased in these areas. Clearly this policy was racist in intent. In 1977, CRA denied this practice. Did the housing bubble occur as soon as blacks started buyiing houses? Nope.
The housing bubble began around 2000 NOT 1977. So what happened in 2000? Well, in 1999 three Republican Senators co-sponsored authored the Gramm-Leach-Bliley Act which repealed part of the Glass–Steagall Act of 1933. Glass Steagall limited commercial bank securities activities and affiliations between commercial banks and securities firms. In other words, Glass-Steagall prevented banks and securities firms from bundling mortgages which would disperse the risk asssociated with bad loans away from banks. The passing of the Republican Gramm-Leach-Bliley Act now opened up a "handshake" between lending banks and Wall Street. As a result, banks had less skin in the game while security firms passed bundled loans around making millions off the transactions. The Gramm-Leachy-Bliley Act was passed by a Republican House and a Republican Senate as well as signed off by Bill Clinton.
The housing crash has little to do with lending to minorities or else this crash would have occurred shortly after 1977. It has everyhting to do with the repeal of Glass-Steagall. Bill Clinton has a hand in it as well as the Republican controlled congress of 1999. Fannie and Freddie had their role as well but none of this woulf have occurred with the repeal of Glass-Steagall and it has nothing to do with the Community Reinvestment Act of 1977.
The ensuing bubble encouraged greedy Americans to buy more house than they could afford. It encouraged greedy Americans to refinace and pull unprecedented amount of money out their newly found "equity" and buy shit they don't need which ultimately led to them being unable to afford their upside down homes.
Now that I am back in town, I need to go through and correct all the misinformation that is running rampant. :kewl:
04-10-2012, 10:27 PM
AirFlacco
Re: This really erked me this weekend...
Misinformation?
Hey Galen, you just repeated what I said above about Clinton and the Fannies and Freddies.
No one mentioned OBYs baby. Acorn, planting the seeds to disaster.
Hey Galen, you just repeated what I said above about Clinton and the Fannies and Freddies.
No one mentioned Acorn which made bad loans to all those minorities.
Acorn didn't make loans. Acorn was a community advocacy group(s) that stood up for low-income families. This is why O'Keefe went after them and why O"Keefe is an activist hero to middle-class white conservative bigots.
I worked a lot along side of ACORN in New Orleans after Katrina when the insurance companies were royaly screwing black families that had lived in the same home sometimes for 7 generations. The lower 9th Ward was literally torn apart and its residents were bussed all over the country tearing apart what was once a very tight knit community. Outside of the federal agency that employed me to go down there and some compassionate National Guard, ACORN was the only group working down there to preserve this community while its residents were spread out all over the eastern half of the country.
According to WIKI:
ACORN members across the country, particularly in the Gulf region, have organized fund-raising and organizing drives to ensure that victims of Hurricane Katrina will receive assistance and will be able to return to affected areas. ACORN's home clean-out demonstration program has gutted and rebuilt over 1,850 homes with the help of volunteers. The ACORN Katrina Survivors Association formed in the aftermath of the storm is the first nationwide organization for Katrina survivors and has been working for equitable treatment for victims. Displaced citizens were bused into the city for the New Orleans primary and general elections. ACORN says its Housing Services have helped more than 2,000 homeowners affected by the storm and is an official planner working with the city on reconstruction.
As far as O'Keefe's antics:
Also from WIKI (since it is midnight but also accurate)
On December 7, 2009, the former Massachusetts Attorney General, after an independent internal investigation of ACORN, found the videos that had been released appeared to have been edited, "in some cases substantially". He found no evidence of criminal conduct by ACORN employees, but concluded that ACORN had poor management practices that contributed to unprofessional actions by a number of its low-level employees.[97][98][99][100] On March 1, 2010, the District Attorney's office for Brooklyn determined that the videos were "heavily edited"[101] and concluded that there was no criminal wrongdoing by the ACORN staff in the videos from the Brooklyn ACORN office.[102][103] On April, 1, 2010, an investigation by the California Attorney General found the videos from Los Angeles, San Diego and San Bernardino to be "heavily edited,"[9] and the investigation did not find evidence of criminal conduct on the part of ACORN employees.[9][89] On June 14, 2010, the U.S. Government Accountability Office (GAO) released its findings which showed that ACORN evidenced no sign that it, or any of its related organizations, mishandled any federal money they had received
Yet the conservative low information crowd love O'Keefe.
04-11-2012, 06:17 AM
AirFlacco
Re: This really erked me this weekend...
Still playing the race card, heh Galen. We're not talking Katrina here. It's contributions to the housing bust.
So where do you think all these hundreds of millions of dollars in loans and contributions from America's
financial institutions went.
In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America’s financial institutions.
Over the last seven years, Congress gave earmarked grants worth millions of dollars to ACORN, explicitly for their assistance in low-income housing. The original Dodd proposal for the bailout would have made millions more available to ACORN through the Housing Trust Fund, a slush fund Democrats established this year to support even more “community organizing” along these lines.
_________________________________________________
So, were you working with ACORN when the FBI
raided their offices for voter fraud like registering names like Mickey Mouse and members
of the Dallas Cowboys in 22 states.
I guess you'll say the AP did a hatchet job on this piece too.
