Thread: Are you "Furious".

Originally Posted by Crotalus

Clinton IS responsible for the Housing Bubble. I told you to research the Community Reinvestment Act, but as usual you didn't bother to check any facts.

The CRA was started by Carter, expanded by Clinton and is directly responsible for the housing bubble, and the Derivative mess. It FORCED the banks to make bad loans to people that could not afford them.

Originally Posted by gugi

Oh, that's a really good one , FORCED!!!
I can tell you're not a banker, nor have you ever played one on TV Keep up the good work, though, the banks need you!

Actually having been in the Mortgage business, he might have used the word "forced" strongly but he is kinda right here.. The mortgage guidelines were relaxed and banks that wanted Fed backing did have to write a percentage of loans that would never have been approved by the more stringent underwriting guidelines..

You might not remember the huge advertising campaigns for getting everyone into home ownership, and the Clinton administration taking the credit for this, but it did happen..

Underpriveledged Home ownwership was a point of pride during the Clinton years, that fact that the homes were over-appraised and the Loans were mostly Balloons and ARM's was what caused so many problems.

Now not to only blame Clinton you also had way to much Spec buying and selling going on too, because of the relaxed guidelines, basically anyone with a job could buy a home and in some markets could leverage the home at 125% with zero out of pocket costs... Or the best form of creative financing was to make a 80% conforming loan by writing a second mortgage for the downpayment using that 125% available

Oh yes there was some fun stuff going on back then

Originally Posted by gssixgun

Actually having been in the Mortgage business, he might have used the word "forced" strongly but he is kinda right here.. The mortgage guidelines were relaxed and banks that wanted Fed backing did have to write a percentage of loans that would never have been approved by the more stringent underwriting guidelines..

But that's not what caused the crisis, not even close. Those bad loans 'forced' by the government are really a drop in the bucket - get the numbers and see for yourself.

You've certainly noticed that when the banks get forced to do something they don't like, those who are trying to force them face really good and really well financed challengers for the next election. Along with substantial losses of campaign contributions. On related note it's a lot of fun to watch 'senate hearings' when the subjects are the largest contributors to the senators' campaigns .
For extra fun don't you ever skip a chance to drink with lobbyists

Originally Posted by gugi

But that's not what caused the crisis, not even close. Those bad loans 'forced' by the government are really a drop in the bucket - get the numbers and see for yourself.

That is not what I said, please re-read the post...

Actually having been in the Mortgage business, he might have used the word "forced" strongly but he is kinda right here.. The mortgage guidelines were relaxed and banks that wanted Fed backing did have to write a percentage of loans that would never have been approved by the more stringent underwriting guidelines..

You might not remember the huge advertising campaigns for getting everyone into home ownership, and the Clinton administration taking the credit for this, but it did happen..

Underpriveledged Home ownwership was a point of pride during the Clinton years, that fact that the homes were over-appraised and the Loans were mostly Balloons and ARM's was what caused so many problems.
Now not to only blame Clinton you also had way to much Spec buying and selling going on too, because of the relaxed guidelines, basically anyone with a job could buy a home and in some markets could leverage the home at 125% with zero out of pocket costs... Or the best form of creative financing was to make a 80% conforming loan by writing a second mortgage for the downpayment using that 125% available



The relaxed guidelines were the first step, then when that started the money flowing more and more guidleines were set aside, throw in some greed and then at the end of the line you have the crisis..

The very first step in this was the change from 80% max LTV it was the proverbial "Frog in the Pot" scenario, I was actually a Loan Originator when that changed and we went to 95% quickly followed by what we called "Creative Financing"..

Originally Posted by gssixgun

That is not what I said, please re-read the post...
...
The relaxed guidelines were the first step, then when that started the money flowing more and more guidleines were set aside, throw in some greed and then at the end of the line you have the crisis..

You can start at the relaxed guidelines as a first step, or you can start at any other point in the chain of events contributing to it (you can find a whole number of them at Causes of the United States housing bubble - Wikipedia, the free encyclopedia). If you believe in cause and effect you can track it down all the way to the Big Bang.

Yet the original statement:

Originally Posted by Crotalus

Clinton IS responsible for the Housing Bubble.

is just as wrong.