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Discussion Starter #1
I read a few weeks ago, but doing this from memory:

A few yrs ago, GA looked at sub-prime (& interest-only) mtges and decided they weren't safe for any involved. GA determined to stop the resale of these, which would - as I understand it - effectively curtail if not stop these dealings.

NJ and a few other states noticed and joined with GA in passing laws to fix this.

Two things occured: First, the Fed Gov't said the states couldn't supercede Fed law. So, these 5 - 6 states told the Fed to fix this themselves.

Fed, as is this horrible adminstration wont, refused. Of course.

Also, the states were putting the banks based in their states at a marketing disadvantage, as out-of-state banks could continue to offer these foolish deals.


Follow the $$$:

According to the WSJ, (http://reclaimdemocracy.org/articles/2007/corporate_donations_subprime.php)

One of the largest offenders, Countrywide (aka Country-wipe) had contributed over $2,000,0000 and spent $6,700,000 lobbying in these few years.

Ameriquest,from 2002-2006 spent $20,500,000 from 2002 - 2006. HUGE contributions to Bush involved.

Then, Ameriquest's founder was named ambassador to The Netherlands. I'm sure he speaks perfect Netherlandese.

What then, do we learn from this? This is the WORST administration and president in our history. These guys see NOTHING coming, do they?

And, belief in "market discipline" almost never works. Capitalism must be tempered with some whiff of morality, as Adam Smith and others have said.

I don't undertand much about economics or the law, but is there any chance of legal action and/or prosecution in all this. I've heard that some states are doing this, but don't know which laws were broken and if anything is going on @ the Federal level. Anyone know anything here?

PS: Meanwhile, the much-investigated head of HUD has finally resigned. Under his "leadership," the Gulf area still languishes and the mortgage crises continues unabated.

Experts are saying they've never seen HUD so inefficient. "Never" is their word, not mine

Please keep all this in mind as the next election nears....about which I'll write more later, much to the dismay of many.


PPS: I can't find the photo-op of Fed officials taking axes and chainsaws to piles of financial regulations, but there is one.
 

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It seems that no action is needed by the government because the economy can correct itself. But that is just me liking a free economy.

Sorry, I don't mean to be harsh. I agree with you that Bush is a pretty crappy leader but I don't think that everything is his or the administration's fault.

Before I was to blame a politician I would look at the consumers who perpetrated the monstrous crimes and the companies who allowed them.

This isn't really an election issue.

What would you like to happen? Should the government take over underwriting for loans?

Everything is always Bush's fault.

I think the government should be held responsible for every bad thing that happens. Including rampant debt management problems in our society. Why don't they just fix all the problems with our country? I could do a much better job then those morons. (sarcasm)

P.S. If you don't understand much about law or economics (and probably not government either) you probably shouldn't comment on them. There is usually a large gap between what you read and see and what actually happens. If you don't have the education to fill in those gaps for some rare knowledge your comments are nothing more than a political rant.
 

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your comments are nothing more than a political rant.
this is where you hit the nail on the head. though your entire post was very well stated.
we have 2 guys on this website that seem to get this place confused with moveon.org.

now to address the issue, calling it a "housing CRISIS" is perfect for the doom and gloom crowd. it even sounds scary..........oooooooooooooooohhhh.

houses are not being destroyed and torn down, and disapearing are they, or maybe spontanuosly combusting due to global warming perhaps?:rolleyes::rolleyes::rolleyes::rolleyes:


its more like an adjustment for people who were stupid and bought more than they could afford to buy.
sorry, but if i decide to buy a few more racecars, and then realize i cannot afford them, should the govt bail me out.
I hope not.
people should live within their means.
its more of an opportunity for people to buy houses that others cannot afford to own, but that doesnt sound so scary, so it really doent fit some peoples agendas.

the only people being effected by this are those who are either buying or selling.

let the free markets adjust themsleves.

Clinton and obama will make it better by raising all of our taxes so that nobody can afford a house, unless of course the govt. will now give everyone a "free" house along with the "free" health care.
 

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its more like an adjustment for people who were stupid and bought more than they could afford to buy.
sorry, but if i decide to buy a few more racecars, and then realize i cannot afford them, should the govt bail me out.
I hope not.
people should live within their means.
+1

I'm sick of the daily sob stories about people having to cut corners or people having to move to smaller homes or trailer parks. That's what you get for being a moron. Deal with it.
 

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greed, and speculation feed by mortgage companies who did not follow rules and or have ethics and winked at their client ( you will not have to make a payment just flip), realtors who went from making 30k a year to 150k and thought that they knew all of Donald Trumps secrets, and a bunch of sheep that do not know what ROI means little alone debt service or what an actual networth is. Blame ambac or mbia., mortgage brokers, realtor, and bank regulators ( who) guy who regularly look at bank balancesheets. This is a combined FU all due to greed and stupidity.
 

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Everything is always Bush's fault.
So I guess all presidents are bad, and it's just that the Bush administration always gets caught holding the bag on:
  • Vietnam II (quagmire, anyone?)
  • Cronyism putting horseshow guy in charge of FEMA that ignores one of the biggest disasters in this country? (Perhaps compare to Northridge earthquake?)
  • $3.00 / gallon gasoline
  • $2.00 / gallon gasoline (This one is on his watch, too.)
  • The return of inflation (isn't that supposed to be caused by democrats?) (Much of this has been fuel price induced. Isn't he an oilman? Should this not have been his area of expertise?)
  • The Ethanol hoax
  • Aforementioned loosening of banking regs. (How did the 80/20 piggyback loan become legal? It should plainly require PMI. The eventual collapse was obvious from over 4 years ago when these lending practices became commonplace. It's a Lemming thing. We presume regulations are in place to protect us.)
  • 9/11 did happen on his watch as well (9 months in), although ironically, the level of freedom we enjoyed in this country was really to blame. Political Correctness' greatest real cost was 9/11. Stereotypes are valuable.
But taxes were lowered. (yay!) and at least he did not enjoy a free blowjob at our expense. (Feel free to list Clinton's legacy for comparison.)

Mission Accomplished!:rolleyes:
 

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When each individual puts at least some of his self interest aside, we will live in better communities. That is what is lacking in most American communities.
 

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It seems that no action is needed by the government because the economy can correct itself. But that is just me liking a free economy.


We do not have a free market economy this is double speak.


Sorry, I don't mean to be harsh. I agree with you that Bush is a pretty crappy leader but I don't think that everything is his or the administration's fault.

The buck stops here, right ? otherwise why have a leader.
This is exactly why the president is not in control, corporations run the show by remote control.




Before I was to blame a politician I would look at the consumers who perpetrated the monstrous crimes and the companies who allowed them.

True we are all raised to consume more than we can eat from birth.
Why not let the tax payers eat the losses of hedge funds, when you speak of a bail out that is who is on the receiving end, not some poor stupid first time home buyer who was scammed into a zero down, interest only loan.


This isn't really an election issue.

All issues that pertain to the economic health of the country should be discussed.

What would you like to happen? Should the government take over underwriting for loans?

They already do. Have you heard of HUD or FHA

P.S Headlines from today: HUD Secretary Jackson Resigns Amid Federal Probe.



Everything is always Bush's fault.

Again he is the man in charge, but so many of his staff have bailed,
I guess he wants to stay the course but all the other people who have left don't.
They have taken the taxpayers money and trust and in return got themselves hired back into the private sector.




I think the government should be held responsible for every bad thing that happens. Including rampant debt management problems in our society. Why don't they just fix all the problems with our country? I could do a much better job then those morons. (sarcasm)

P.S. If you don't understand much about law or economics (and probably not government either) you probably shouldn't comment on them. There is usually a large gap between what you read and see and what actually happens. If you don't have the education to fill in those gaps for some rare knowledge your comments are nothing more than a political rant.


Gaps, yeah we got gaps
 

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greed, and speculation feed by mortgage companies who did not follow rules and or have ethics and winked at their client ( you will not have to make a payment just flip), realtors who went from making 30k a year to 150k and thought that they knew all of Donald Trumps secrets, and a bunch of sheep that do not know what ROI means little alone debt service or what an actual networth is. Blame ambac or mbia., mortgage brokers, realtor, and bank regulators ( who) guy who regularly look at bank balancesheets. This is a combined FU all due to greed and stupidity.
True enough, but...

Don't forget the greed of borrowers who put no money down on a house and thought they actually owned something. Or those that repeatedly cashed out their equity to spend on "stuff" and now don't own anything either. Or those that falsified their pay stubs or appraisals or other docs and are now complaining they can't afford their monthly payments.
 

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Discussion Starter #14
Sorry, I don't mean to be harsh. I agree with you that Bush is a pretty crappy leader but I don't think that everything is his or the administration's fault.
OK, have you seen the many papers written by top economists warning of this mess? Is it not a fault to ignore warning after warning, even those from a group of states?

Before I was to blame a politician I would look at the consumers who perpetrated the monstrous crimes and the companies who allowed them.
I agree mostly. That's why I asked if any actions were being taken against these companies and their agents. But, as i don't think people should be hoodwinked into bad deals, I have to ask if the govt had taken the correct(ive) action, many fewer people would have been hurt.

How we can tell r/e speculators from normal folk, I don't know, but it would be good to ensure the former get no help.

I am reminded that many consumers saw their mtge brokers as their agent, mistakenly of course. Certainly HONEST & full disclosure would have helped. And, that will be (poorly) regulated.

I don't want our $ to go to helping many - if any - of these people. But, people were sold subprimes who had good credit. It pays to shop around.

This isn't really an election issue.
Sure it is. You don't want to know how each candidate will handle this? You haven't noticed how scandal-ridden that party is? 50 scandals wouldn't affect your decision?

What would you like to happen? Should the government take over underwriting for loans?
No, but you've noticed they've bailed out the uninsured BearStearns? The companies holding this paper should be forced to negotiate reasonable mtges.

I also like Obama's suggestion that in bankruptcy court first homes' mtges can be adjusted. Currently, this is true only with 2nd homes...which makes 0 sense to me.

Everything is always Bush's fault.
Well....you've finally got it! Instead, tho, of mentally throwing up your hands, how about looking at the facts of this mess? You probably don't want a debate about bush faults and scandals.

I think the government should be held responsible for every bad thing that happens. Including rampant debt management problems in our society. Why don't they just fix all the problems with our country? I could do a much better job then those morons. (sarcasm)
Normally, I agre that ppl should pay for their own stupidity, but not when they were systematically and corporately taken advantage of (dangling participle?).

P.S. If you don't understand much about law or economics (and probably not government either) you probably shouldn't comment on them. There is usually a large gap between what you read and see and what actually happens. If you don't have the education to fill in those gaps for some rare knowledge your comments are nothing more than a political rant.
You are being gratuitously snide. I don't appreciate it. So, you don't want to be harsh, but are willing to be nasty? I know a bit about politics (read my threads here if you like) (& likely more than you) and less about aspects of the economy. I am smart enough to be aware of what I don't know.

Your "between the lines" excuse/issue goes nowhere. Must we all be experts to have any salient knowledge? What are you expert in, wherein you can comment but I shouldn't?

Are you willing to ignore the disturbing facts I pointed out because I am not a fan of Bush? Apparently so.

Lets compare political acumen: I voted for Gore and Kerry. Care to share with us who your choice was? How did that work out?
 

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Discussion Starter #15
You've certainly proven that. But nothing else.
This made me smile. Funny, but as an argument against what I said, lame.

But, funny. Really.
 

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Discussion Starter #16
This is a combined FU all due to greed and stupidity.
When each individual puts at least some of his self interest aside, we will live in better communities. That is what is lacking in most American communities.
These are two of the smartest, most accurate statements I've read in a long time. Thank you both.
 

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Discussion Starter #17
True enough, but...

Don't forget the greed of borrowers who put no money down on a house and thought they actually owned something. Or those that repeatedly cashed out their equity to spend on "stuff" and now don't own anything either. Or those that falsified their pay stubs or appraisals or other docs and are now complaining they can't afford their monthly payments.
The is no overestimating our nat'l stupidity. You're right.

But, we also had "no doc" loans. Wow, huh?

Though, this would have easily regulated. Lots of laws are passed to protect us from ourselves. Sometimes, this is good, sometimes bad.

This was coming and we knew it would be bad for our country....
 

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Discussion Starter #18

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Discussion Starter #19
I liked this: Some comedian said that you can tell just from the name that sub-prime mortgages were a bad idea.

After all, you wouldn't get on a sub-prime airplane, would you?
 

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This made me smile. Funny, but as an argument against what I said, lame.

But, funny. Really.
Couldn't resist the straight line, sorry.

The is no overestimating our nat'l stupidity. You're right.

But, we also had "no doc" loans. Wow, huh?

Though, this would have easily regulated. Lots of laws are passed to protect us from ourselves. Sometimes, this is good, sometimes bad.

This was coming and we knew it would be bad for our country....
I've worked in the securities industry for the past 17 years; some of it at an investment bank, some at various LLC's, some as an independent consultant. Almost all of it has been related to mortgage backed securities. I've written valuation models for CMO's, CDO's, and various mortgage structures including some of the more ridiculous types commonly used in sub-prime mortgages.

It was always very clear what this was all about. Each new twist on the home mortgage structure was designed to enable people to qualify for bigger mortgages than they would otherwise be able to. Sometimes the structure made it more difficult for the borrower to understand their risk, sometimes it made it more difficult for the lender to understand their risk, many times both.

The CDO structures were even worse; almost impossible to run a true cash flow simulation on a typical deal... I won't get into the details, but they were designed that way. As a result, investors (including the rating agencies) fell back on simple and incomplete models to determine the value of the securities. Big mistake. The investment banks (and mortgage brokers, and other originators) were making so much money originating this paper that they started to drink their own Kool-Aid and take positions in the paper themselves.

Many of the sub-prime mortgages never made a single monthly payment... they would simply refi into a larger sub-prime mortgage once the servicer got on them... and this was possible as long as home prices continued to appreciate above approx. 5%/year (which was easily done for quite a while). Once home appreciation dropped, refi's were no longer possible, and the fact that many borrowers had never made an actual monthly payment became unavoidable. The music stopped, and everyone ran for the few chairs available.
 
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