Check out this chart on Housing - crazy

[Soul Crusher]

Wow! 

[Straw Man]

Wow! 

you forgot to blame Obama

[Soul Crusher]

you forgot to blame Obama

Obama supported every single policy that led to the housing bubble and took more money from Fanny and /freddy in terms of campaign donations than anyone else.   

[Straw Man]

Obama supported every single policy that led to the housing bubble and took more money from Fanny and /freddy in terms of campaign donations than anyone else.   

notice how that chart started going straight up in 2000 (right about the time Lehman introduced the concep of Alt A which included/expanded No Ratio and No Doc loans)

what was Obama doing at that time?

[Soul Crusher]

notice how that chart started going straight up in 2000 (right about the time Lehman introduced the concep of Alt A which included/expanded No Ratio and No Doc loans)

what was Obama doing at that time?

False - it started going up in the mid late 90's.   During that time - Obama was shaking down banks to give out more money to unqualified borrowers.   

[Straw Man]

False - it started going up in the mid late 90's   During that time - Obama was shaking down banks to give out more money to unqualified borrowers. .  

late 90s or 2000

same diff - the asset bubble started with ALT A loans (i.e. giving money to unqualified borrowers)

how was Obama shaking down banks in the late 1990's

he only became a state senator in 1997 please do tell us what you "believe" he did at that time

[Soul Crusher]

late 90s or 2000

same diff - the asset bubble started with ALT A loans (i.e. giving money to unqualified borrowers)

how was Obama shaking down banks in the late 1990's

he only became a state senator in 1997 please do tell us what you "believe" he did at that time

Do you not even know about the past of your messiah?   

[Soul Crusher]

4:30 on moron.   

Obama was knee deep in this shit from Day 1.     

[Soul Crusher]

[Straw Man]

We've been over this a hundred times

Alt A (subprime loans were a subset of Alt A) were the primary driver in the asset bubble

The only reason they existed was because of fraud on the bond rating companies who (who were paid by the banks) who rated securities tied to pools of loans as Triple A when many of those loans were much more risky.  Without that rating those bonds could never have been sold to pension funds, municipalities, conservative mutual fund, etc.. and the entire AltA market would not have existed.   

Fannie/Freddie lost market share to Alt A lenders and they tried to play catch up by altering their credit policies and also by buying the aforementioned crappy securities

When the housing bubble inevitably burst it effected everyone's value whether they got a subprime, Alt-A or full doc A Paper loan.

Fannie/Freddie got caught up in it just like everyone else in the country but the driving factor was the Alt A product class (and these started out requiring a 30 or 40% down payment to get a No Doc loan and just got looser as time went on).

If you look at the stats (and I don't have time this morning to find links and charts that you won't even bother to read) you'll see that Fannie/Freddie lost market share to the non-traditional lenders

[headhuntersix]

late 90s or 2000

same diff - the asset bubble started with ALT A loans (i.e. giving money to unqualified borrowers)

how was Obama shaking down banks in the late 1990's

he only became a state senator in 1997 please do tell us what you "believe" he did at that time

Dude,

What was ACORN doing then..who forced passage of the community reinvestment act. I'm sure 3 will find an entire thread here on this. He is very much to blame...community organizers playing the race card to force banks to give to minorities who could not otherwise afford houses. 

[Straw Man]

Dude,

What was ACORN doing then..who forced passage of the community reinvestment act. I'm sure 3 will find an entire thread here on this. He is very much to blame...community organizers playing the race card to force banks to give to minorities who could not otherwise afford houses. 

I was wondering when someone was going to bring up CRA loans

CRA was passed in 1997

CRA loans were full documentation, had debt ratio requirements and had mortgage insurance.
CRA volume actually dropped as those buyers found that it was easier to get an AltA type loan (again - something that could never have existed without the compliant bond rating companies)


CRA loans continue to perform better than most other types of mortgage and were in no way responsible for the asset bubble.

[Soul Crusher]

I was wondering when someone was going to bring up CRA loans

CRA was passed in 1997

CRA loans were full documentation, had debt ratio requirements and had mortgage insurance.
CRA volume actually dropped as those buyers found that it was easier to get an AltA type loan (again - something that could never have existed without the compliant bond rating companies)


CRA loans continue to perform better than most other types of mortgage and were in no way responsible for the asset bubble.

Gretchen Morgenson from the NYT explodes your lies.   

[Straw Man]

Gretchen Morgenson from the NYT explodes your lies.   

which one of my statements do you think is false?

[headhuntersix]

Nobody made loans "under the CRA program" CRA is not a loan program. It sets numerical targets for lending by location, race, and ethnicity. CRA often required lending to uncreditworthy persons to get a satisfactory CRA rating, and it did indeed cause Freddie and Fannie to take on huge amounts of dreck. "The chief executive of Countrywide Financial, the nation's largest mortgage lender, is said to have 'bragged' that in order to approve minority applications, 'lenders have had to stretch the rules a bit.'"There never were laws that would prevent lenders from making bad loans. Nothing was deregulated by the Bush Administration in that regard. Lenders did their best to not make bad loans.

Then the Clinton Administration rewrote the CRA to REQUIRE loans be made to low credit quality borrowers. And engaged FNMA and FRE to buy these loans.

In order to make loans and homes more affordable for lower income borrowers the unusual loan products were developed. Interest only, Option ARM, and the low teaser rate products were answers to helping people who did not otherwise qualify get a home, as REQUIRED by CRA. These low standards for qualification were applied to everyone who wanted a mortgage.


This is not even close to my thing...

[Straw Man]

Nobody made loans "under the CRA program" CRA is not a loan program. It sets numerical targets for lending by location, race, and ethnicity. CRA often required lending to uncreditworthy persons to get a satisfactory CRA rating, and it did indeed cause Freddie and Fannie to take on huge amounts of dreck. "The chief executive of Countrywide Financial, the nation's largest mortgage lender, is said to have 'bragged' that in order to approve minority applications, 'lenders have had to stretch the rules a bit.'"There never were laws that would prevent lenders from making bad loans. Nothing was deregulated by the Bush Administration in that regard. Lenders did their best to not make bad loans.

Then the Clinton Administration rewrote the CRA to REQUIRE loans be made to low credit quality borrowers. And engaged FNMA and FRE to buy these loans.

In order to make loans and homes more affordable for lower income borrowers the unusual loan products were developed. Interest only, Option ARM, and the low teaser rate products were answers to helping people who did not otherwise qualify get a home, as REQUIRED by CRA. These low standards for qualification were applied to everyone who wanted a mortgage.


This is not even close to my thing...

where did you copy this from?

to the best of my knowledge there is no race/ethnicity mandate (i.e there were not different standard for different races or ethnicities)  The only mandate is based on income and/or location of the property.   In order to be eligible for a CRA loan you have to either live or be buying in an indentified low to moderate income census tract or be below some threshold of the median income for that county
 
Sometimes these borrowers don't have credit (not uncommon for people with low income) so alternative sources of credit were allowed but it had to be good payment history

[howardroark]

CRA, Fannie & Freddie, and all of these other housing programs/subsidies don't explain the bubble. They only explain why the bubble was channeled to the housing market but not as much elsewhere. What created the bubble was SOLELY the credit expansion taking place at the Federal Reserve.