patrick.net

Nomograph says

Bap33 says

It reads like an anti-lib campaign. lol

You forgot a line:
To pay my own way and not take government housing welfare
It reads like an anti-conservative campaign. lol

Oops, but BAP33 is planning on taking out a FHA loan with that 8K tax credit he is getting on his house. He is not a conservative, we dont accept welfare checks because we get out and work for what we believe in.

northernvirginiarenter says

Hey all, long time since I’ve checked in a note a few old timers still here. Interesting to me how the conversation has evolved to it’s current state. I wonder if there are any folks here whose actually get paid to post here and influence the “community”. Some dubious and supicious posting going on.
Hope this finds you all well.
Cheers!

What you do mean by that?

holly crap .... someone put up something that 4X didn't know everything about!!??!! I am flabbergasted.
To be fair to 4X, understanding what is wrote is tuff for him, as it would appear his extreem hate effects his reading comprehention, or he has spots and stains on his monitor that obscure key words in the posts of others. 4X needs pity and understanding, or some Windex, so please be kind to 4X.
Cheers!

LOL...nice! I know you have been waiting for that one since I got so close to your heart with the 8K tax welfare and FHA loan you are preparing to accept. Just dont mention it at the Republican convention, we will look at you very funny if you do.

Democrats like yourself have to go on the attack to prove a point, I was simply saying that you dont need the tax credit to buy a house.

elvis says

And finally this: BAP took advantage of a government program that shouldn’t even exist. He didn’t create it, but he took advantage of it. I sure don’t hear you criticizing the tens of millions of actual government dependents milking the system on a daily basis…and constantly demanding more. Could this be a bit of hypocrisy on your part?

No, I am not for the tax credit because it only works to temporarily put off the inevitable. I am against anyone taking advantage of the program. Consevatives need to put their money where their mouth is, stop taking funds from programs if you dont need it as a last resort. If we cannot do that, then we should stop downtalking the liberal policies and preaching about what liberals represent as if we wont take the money ourselves. Joe the plumber, even though Obama program saved him tens of thousands in tax breaks this year, still wont vote for the man that put money in his pockets. He would rather vote for the man who put us into a endless war based on conservative principles that are no longer followed by the Republican party.

In regards to the tens of millions you refer to I am for dropping them from the system completely if they have not worked in the past 3 years. If a person is mentally ill enough to not want to work to sustain themselves then they deserve to be dropped with no reason given to them.

The letter should read;

"Get back to work, relocate your family to another area of the country, take up another trade, because we are no longer enabling you to sit at home waiting for your industry, community to bounce back from the blowback of NAFTA, WTO and GATT."

The blowback being the lost of manufacturing jobs to countries with wages 40 times less than here in the US. Now, how can I compete with a slave worker in China making 1 dollar a day.

Bap33 says

holly crap …. someone put up something that 4X didn’t know everything about!!??!! I am flabbergasted.
Cheers!

I know, I also hate it when someone is more articulate than me...I get flabbergasted too. Republicans were flabbergasted when they realized that putting Mccain up against Obama was a mis-match in intellect, wit and good looks. It wasnt a fair match, especially when obama came with the MLK, JFK speachisms of HOPE, CHANGE and PROGRESS that won over the hearts of many voters. Unfortunately, he has not transformed his articulate rhetoric into a call to action for our citizens...he is too busy manipulating numbers on how well tax credits, economic recovery spending is working to help our citizens. He is too busy working with congress to write up the next economic recovery act so he cant focus on the blowback of NAFTA, WTO and GATT.

So, I make this point because I dont want you to be too impressed with my articulation of the English language nor my intellect because my actual policies might run our country into the ground. But then again, I do what I say ....so if you are in support of the 10 points above you should vote for me in 2012 and continue to be impressed with my good wit.

"You wont be left with shit, without my good wit" will be my campaign slogan.

I like you BAP, I just want you to put your money where your mouth is....into conservative programs like savings accounts, IRA, conventional loans. Remember those program?

elvis says

4 X - I couldn’t help but notice that your response to ABE left out any reference to the 3 different ways our countries economy could end. I’d like to know your thoughts on this.
You didn’t address the statement that “repeating incorrect cures of the past won’t solve today’s problems.
You didn’t comment on the statement “if spending and debt caused the problem, how could more spending and more debt be the solution?”

I have been reading on Japans 15 year downturn and what they have done to turn things around, none of the policies included allowing jobs to go offshore, tax credits, or economic recovery plans. They increased regulation and decrease building standards to allow builders to construct taller buildings.

My point to Abe was that we are not experts, I agree with his points but that doesnt mean that I would be successful at pulling us out of this downturn.

My policies are too extreme, best used when shoved down the citizens throat with a baseball bat. Read them again so that you can see that Obama's slow, methodical and cerebral approach might be the more sensible option:

1. Cut off welfare recipients after 18 mos
2. Place a DMZ around Iraq and Afghanistan, then pull out
3. Allow to large to fail banks to reorganize into smaller units and/or fail, no more bailouts
4. Allow home prices to plummet until the prices match the wages, no more 50K annual salary buying 300-400k homes. Limit the services of Fannie, Freddie and FHA to hope those banks start to lend monies out, which they probably wont which is not always good for the economy....no need for taxpayers to lend money to high risk borrowers, right?
5. Provide tax incentives for businesses to keep jobs local, rework NAFTA, WTO agreements to prevent any jobs from going offshore unless for foreign production. Require any goods coming in form local companies be produced by Americans. Match each and every country on their tariffs on foreign imports, play their game the same way.
6. Legalize drugs, and tax its usage heavily. Keep workplace limits on drug use in effect, we cannot have a bunch of dopers on the job. The effects of drugs are too heavy in comparison to alchohol.
7. Drill, Drill, Drill...then use the profits to find another source of energy so we are no longer dependent on the middle east.
8. Require parents to participate weekly in their childs education with onsite homework assignments, shut down no child left behind.
7. Mortgages cannot be sold or securitized, meaning banks could not loan you money then turn around and sell it to FANNIE MAE and FREDDIE MAC
9. Require fluent english for entry into our country, stop printing pamplets in 2 languages. Deport anyone found here illegally, next day air. Lock up second time offenders for life.
10. Lock up gang members for life, if one committs a crime charge the whole gang as a unit. Build more prisons for the people who just dont get it: We dont want to live around your stupidity!

All of these are policies that I have developed, dialoguing with BAP and yourself on what it will take to bring America back to prominence. These are cost cutting measures that would help the middle class, raise our standards of living, and keep the riff-raff away.

4X, you know I agree on your points ... especially the one under your hat.

I add stuff about borders, and I do not advocate any dependant behavior. I also like dead murderers and alive babies, but we can get to that.

I want weapons training offered as an elective in HS ... and auto-shop, wood-shop, and metal-shop should be there too.
Computers should be reduced to elective only.

If you care for the details, I do not "need" the tax credit to make the purchase. I do not "need" FHA either. But, I am FORCED to supply the funds to support the programs, so I "need" to do what is best for me. Me avoiding the FHA loan on principle is alot like the green freaky libs that bought Prius .. they made ZERO difference, and only hurt themselves trying to prove a point. I am not as stupid as a lib w/Prius when it comes to proving a point.

Cheers

elvis says

4X - I LOVE your 10 “Commandments” above. It looks like you are a right wing conservative after all. Those changes would go a long way in healing our economy and bringing back some sanity to our ailing country. Well done.

Of course you love them, you wrote #7 in another post...I am using this site as a learning tool. The dialogue and banter we engage in only serves to open my eyes to different views.

Bap33 says

4X, you know I agree on your points … especially the one under your hat.
I add stuff about borders, and I do not advocate any dependant behavior. I also like dead murderers and alive babies, but we can get to that.
I want weapons training offered as an elective in HS … and auto-shop, wood-shop, and metal-shop should be there too.
Computers should be reduced to elective only.
If you care for the details, I do not “need” the tax credit to make the purchase. I do not “need” FHA either. But, I am FORCED to supply the funds to support the programs, so I “need” to do what is best for me. Me avoiding the FHA loan on principle is alot like the green freaky libs that bought Prius .. they made ZERO difference, and only hurt themselves trying to prove a point. I am not as stupid as a lib w/Prius when it comes to proving a point.
Cheers

To be honest, if I were buying right now I would accept the tax credits also. Its your tax money being returned to encourage first time buyers and slow the decrease in home prices. I have taken out FHA, SALLIE MAE so its not that I dont think the programs are effective it is that they are being used to sucker people into buying at a time when housing prices are continuing to fall.

The parachute has been pulled, however prices are still falling...just more slowly now.

Bap33 says

Me avoiding the FHA loan on principle is alot like the green freaky libs that bought Prius .. they made ZERO difference, and only hurt themselves trying to prove a point. I am not as stupid as a lib w/Prius when it comes to proving a point.
Cheers

That is funny, LOL.....plus I hear it causes more harm to our environment to ship batteries all over the nation for hybrids than it would if everyone bought 8 cylinder vehicles.

CRA caused the housing crash, with the help of Congress.

CONGRESS - none of us is as dumb as all of us.

If you can't read...run for Congress !

I am John Galt.

The CRA was an insignificant factor in the housing bubble.

It was the Fed's artificially low interest rates (2002-2005) that fueled the bubble blaze.

With such strong interest rate incentives, the usual market cycle greed was on steroids.

It was a stampede for easy profits. Lenders ignored the risk in their rush to capitalize on the interest rate margins. And buyers were caught up in an exuberant mania that drove housing prices to unsustainable levels.

Like all bubbles, it was the greedy excesses of the individual and collective participants that set the stage for the financial panic and collapse. But it was the Fed's excessively low interest rate policy that fueled the bubble beyond the typical cycle magnitude, making it worse than prior cycles.

um .. negative. Lending standards were reduced, buyers pool was increased, stupid people got access to money, homes artificially inflated, other stupid people pulled out fake-equity, bubble popped, the end. The rates on those loans made no difference to the idiots getting the loan, they were just playing Monopoly anyways. Heck, they made very few payments anyways.

BAP, I'm going to recommend the kindergarden version of Econ 101 for our economically illiterate friends here on Patrick.net, what do you think...too advanced for them? Abe.

This just in from Reuters, [the Venezuelan version of the Community Reinvestment Act, CRA].

Venezuelan President Hugo Chavez said "if banks don't want to extend credit to the poor, and comply with the law (CRA ?), he could nationalize them." Gee, that sounds kinda what like what happened here...and Chavez is a Socialist, isn't he?

The same news release said "funds for insurance should go directly to the people"...(national health care?), and Chavez is a Socialist, isn't he?

And for the kazillionth time, the CRA had no requirements on income or wealth. It was only targeted at geographic locations. If a millionaire wanted to rehab an apartment building and make it into condos in a CRA designated location, the loan would qualify under CRA guidelines.

does anyone know why/how/by what law the lending standards were reduced from 20% down to the crud we seen in 1998 -2007? That may help remove the target from the CRA and place it on the correct entity. Was is due to the actions of ACORN? B.Frank? Can anyone pin point what allowed the lenders to engage in irresponsible lending?

Bap33 says

WHere does Fanny / Freddy and ACORN and B. Frank come into this?

Wait--where do Glen Beck and Rush Limbaugh fit in? And Michael Savage?

I didn't mean it like that. lol. Besides, those guys don't play any role in policey. Mine was a serious question, not a leading question (but I do understand your reason for such a response). I'm sure you have an intelligent answer. Give me it. I was (intentionally) not taking a hard-line conservative role in my question. I would imagine your answer will show that you are not simply thinking politically either. Or, maybe you are. Either way, mine was just a question. Where do they fall into this mess?

tatupu70 says

Bap33 says
Can anyone pin point what allowed the lenders to engage in irresponsible lending?
There is not now, nor has there ever been a law against being stupid. Banks are free to set lending standards as they see fit. As long as they aren’t predatory. Or discriminative. If they want to make a $500K loan to a guy making $10/hr at Mickey D’s, it’s none of the governments business. As long as they still meet capital requirements, of course.

that sure does expose depositers in a way I doubt most realize ... or, did it just expose the FDIC and the tax-payers that saved AIG et al ? I am pretty sure there are rules as to how banks can play with deposites ... so maybe these games were played with some odd type of non-cash-assett?? weird.

elvis says

Tatpu, why do you even bother to reply? Could this be too advanced for your capabilities?

Good one. So, when you have no response, you resort to flaming? A little juvenile, don't you think?

@BAP

I guess my input would be that it's well written and somewhat persuasive. But, it's really a collection of innuendo and 2nd hand quotes. And, as has been posted here ad nauseum, it just doesn't jibe with the facts.

CRA loans actually defaulted at a lower rate than non-CRA loans.

That's a fact. How can you make a case that it caused the bubble and crash, knowing this?

Ok, that makes sense.

Well .... I think I see something now .... CRA was not about "buyers", it was about "locations" ... so, in the crappy locations where nobody really went crazy during the bubble, and where none of the newly-made-qualified buyers wanted to buy, there was not as many defaults tied to the CRA. I can see how that could be a point of view. Do you have any "percentage" breakdowns, instead of "total numbers"?

I think the choice of vocabulary is not by accident.
"lower number of toxic loans wrote vs non-CRA banks". Well ... duh. It appears that in the past, nobody wanted to write a note for the laundry mat / crack house on MLK BVD, so someone wrote a law to force/allow/pesuade more lending in the "red-line" areas.

IS IT WRONG TO THINK: Once this new easier lending was available, who would want to buy in Crap-ville? So, maybe loans got easier and poor buyers avoided Crap-ville too. So, Clinton got serious with the banks and adjusted the CRA to force more help into Crap-ville. But, when the bubble popped, only purchases in Crap-ville, wrote through the specific CRA guidlines (?) would be a CRA note .... right? I see your point now. Do you see mine? It is my opinion that the mentality that agreed with the CRA is what lowered the lending standards and not any market force. If the standards were lowered by Bush, Clinton, Washington, or Ceaser -- I really do'nt care ... it's just that removing of standards that is killing me .. lol

So, please share your opinion as to ACORN and B. Frank?
Thank you.

Please share your opinion on ACORN and B. Frank & Co. with regards to the bubble.
Thank you.

Bap33 says

It is my opinion that the mentality that agreed with the CRA is what lowered the lending standards and not any market force.

Bap--I urge you to read the St. Louis article again. It talks about how the subprime really took off with the deregulation in 1980 and 1982 because it allowed banks to charge higher fees and higher rates based on credit worthiness. With the shackles off, so to speak, they jumped in headfirst. It's not so much that someone or some thing forced them into the subprime market, it's more that they never wanted to get in it before because they couldn't charge enough fees or high enough rates to justify entering that market. After 1980/82 that changed... Does that make sense?

Interesting Comments...

OPED from Wall Street Journal.
http://bx.businessweek.com/apple/view?url=http%3A%2F%2Fc.moreover.com%2Fclick%2Fhere.pl%3Fr2330745813%26f%3D9791

Testimony to Congress see page 3-4.
http://www.house.gov/apps/list/hearing/financialsvcs_dem/pinto_testimony.pdf

"Ninety percent of CRA lending was not classified as high-rate subprime, even though much of it had subprime and other high credit risk characteristics: This is because CRA lenders generally, along with Fannie and Freddie (the GSEs), did not classify CRA and affordable housing loans that had high risk characteristics (i.e. low FICOs, high LTVs, or high debt ratios) as subprime so long as they did not contain other features such as higher fees or higher rates, interest only or negative amortization, or low initial payment features with adjustable interest rates. Under this narrow and misleading definition, only an estimated 10% of CRA lending ended up being classified as subprime. Ironically, the reason that these were not high-rate loans was that the big banks and the GSEs were subsidizing the rates, as recent events have painfully demonstrated;"

"For a glimpse as to possible overall CRA performance consider the following: o Third Federal Savings and Loan’s (Cleveland) has a 35% delinquency rate
on its “Home Today” loans versus a rate of 2% on its non-Home Today portfolio. Home Today is Third Federal’s CRA lending program, which targeted low- and moderate-income home buyers who prior to March 27, 2009 (the date it suspended the program’s innovative and flexible underwriting requirements due to poor performance) would not otherwise qualify for its loan products, generally because of low credit scores and high LTVs. For the reasons noted earlier it did not classify its Home Today loans as subprime lending, however, it noted that the credit profiles of Home Today borrowers “might be described as sub-prime”1;

tatupu70 says

elvis says

Tatpu, why do you even bother to reply? Could this be too advanced for your capabilities?

Good one. So, when you have no response, you resort to flaming? A little juvenile, don’t you think?

When you cant outfact or outthink your opponent throw rocks at his family to get him off topic.

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=513131

@nosf41,
Great link, and thank you.

NOSF, watch out. The liberal progressives are going to attack you. They'll say your facts don't count because they have facts that say other-wise. And on top of that they'll say CRA loans had far fewer defaults.

Oh, I get it... LOWERING the standards, accepting poor credit risks and accepting borrowers with little if any cash INCREASES the loan repayment results...hahaha. What, because government shadow statistics says so? RIIIIGHT.

nosf41 says

For banks, simply proving that they were looking for qualified buyers wasn’t enough. Banks now had to show that they had actually made a requisite number of loans to low- and moderate-income (LMI) borrowers. The new regulations also required the use of “innovative or flexible” lending practices to address credit needs of LMI borrowers and neighborhoods…”

OK--let's think about this. Your theory is that the government "pressured" or "forced" the banks to make a "requisite number of loans to low- and moderate-income borrowers", right? So, you're saying that the Banks didn't want to make these loans, right? They were pressured, or forced.

So, wouldn't they make the bare minimum to satisfy the government then? Only the "requisite", and no more? After all, they didn't want to make these loans.

Given this--how could it have caused the mess? Surely, the government didn't require that there be that level of low-and moderate-income loans...

Nevermind that the VAST majority of foreclosures are in non-CRA areas. Which completely blows a hole in that theory anyway.....

Any objective look at the facts cannot come to the conclusion that the CRA had anything to do with the housing bubble and subsequent crash.

Some more interesting stuff...
http://www.forbes.com/2009/10/03/community-reinvestment-act-mortgages-housing-opinions-contributors-peter-schweizer.html

President Obama has been a staunch supporter of the CRA throughout his public life. And his recently announced financial reforms would make the law even more onerous and guarantee an explosion in irresponsible lending. Obama wants to take enforcement of the CRA away from the Federal Reserve, the FDIC and other financial regulators who at least try to weigh bank safety and soundness when enforcing the law, and turn it over to a newly created Consumer Financial Protection Agency (CFPA). This agency's core concerns would not be safety and soundness but, in the words of the Obama administration, "promoting access to financial services," which is really code for forcing banks to lend to those who would not ordinarily qualify. Compliance would no longer be done by bank examiners but by what the administration calls "a group of examiners specially trained and certified in community development" (otherwise called community activists). The administration says, in its literature about the reforms, that "rigorous application of the Community Reinvestment should be a core function of the CFPA."

For good measure, Obama's plan also calls for the CFPA to work closely with the Department of Justice to combat perceived discrimination in lending.

Obama's battle against banks has a long history. In 1994, freshly out of Harvard Law School, he joined two other attorneys in filing a lawsuit against Citibank, the giant mortgage lender. In Selma S. Buycks-Roberson v. Citibank, the plaintiffs claimed that although they had ostensibly been denied home loans "because of delinquent credit obligations and adverse credit," the real culprit was institutional racism. The suit alleged that Citibank had violated the Equal Credit Opportunity Act, the Fair Housing Act and, for good measure, the 13th Constitutional Amendment, which abolished slavery. The bank denied the charge, but after four years of legal wrangling and mounting legal bills, elected to settle. According to court documents, the three plaintiffs received a total of $60,000. Their lawyers received $950,000.

The CRA is not about community development; it is, essentially, affirmative action in lending. Trillions in loans are now to be made not on the basis of whether they can be paid back but to meet CRA goals. This is precisely what we need to get away from. Drinking this potent cocktail would be dangerous to our financial health.

a real kicker from the article...

" According to the National Community Reinvestment Coalition, in the first 20 years of the act, up to 1997, commitments totaled approximately $200 billion. But from 1997 to 2007, commitments exploded to more than $4.2 trillion. "

Are they even worth $4.2Trillion.

BBC is probably the closest you will come to a somewhat, but far from totally, objective source of news. Fox and MSM are equally garbage. Agenda's, half truths, selective reporting, ignoring any dissenting information, or outright lying is what passes for reporting in both worlds. You have to accept both as entertainment only.

Of course for the people who want their news to prop up their preconceived agenda without any of that inconvenient objective thinking stuff both sources represent manna. Just out of curiosity do public (or for that matter private) high schools teach philosophy and objective analysis any more??

Labels anybody?

Just out of curiosity do public (or for that matter private) high schools teach philosophy and objective analysis any more??

Quality private schools, as a matter of course. As for public ed, If the curriculum can't be tested on a scantron, it's not covered. The NCLB mindset is that we need defensive education (enough to run a cash register), not mind-expanding stuff.

I do not blame the CRA as the sole cause for the housing mess.

I do blame the people - that dream up programs - that make buyers out of liars, for most of the mess.

So, it would be fair to say that the politics behind such things as the CRA are where most of "the blame" lands in my view. But the law itself is more of an effect than a cause, I guess.