Build Wall or Shut Down the Border

[Reagan]

1 hour ago, UT alum said:

I don’t know. Ask a postal worker.

You do realize that the Postal Service operates at a deficit of billions and billions of dollars every year?  Does this not bother you?  Private companies do a much better job.  If it was eliminated, then postal workers can go to work for the private companies.  You know, deal with the real world for a change.

[stevenash]

40 minutes ago, UT alum said:

That’s the best example of how irresponsible the banking system became during the frenzy. 

at the behest of the fed and the guidelines they instituted 

The expansion in risky mortgages to underqualified borrowers was encouraged by the federal government. The growth of "creative" nonprime lending followed Congress's strengthening of the Community Reinvestment Act, the Federal Housing Administration's loosening of down-payment standards, and the Department of Housing and Urban Development's pressuring of lenders to extend mortgages to borrowers who previously would not have qualified.

Meanwhile, the government-supported mortgage lenders, Freddie Mac and Fannie Mae, grew to own or guarantee about half of the United States' $12 trillion mortgage market. Congressional leaders pointedly refused to moderate the distortions created by the government's implicit guarantee that the firms would not be allowed to fail, which was the catalyst for their rapid expansion. Instead, Congress pushed them to promote "affordable housing" through expanded purchases of nonprime loans to low-income applicants.

[stevenash]

28 minutes ago, Reagan said:

You do realize that the Postal Service operates at a deficit of billions and billions of dollars every year?  Does this not bother you?  Private companies do a much better job.  If it was eliminated, then postal workers can go to work for the private companies.  You know, deal with he real world for a change.

Postal service has been effectively bankrupt for years and continues only because uncle sam can write a check to cover a check.  Just think how many of these situations we would have if the government had more involvement in business.  By the way, in Norway, the govt is the largest shareholder in the 10 largest industries in the country.  Wouldn't it be great if Nancy Pelosi and/or Pocahontas had more say in what went on in the business world?  Please, give me a break.

[UT alum]

14 minutes ago, stevenash said:

at the behest of the fed and the guidelines they instituted 

The expansion in risky mortgages to underqualified borrowers was encouraged by the federal government. The growth of "creative" nonprime lending followed Congress's strengthening of the Community Reinvestment Act, the Federal Housing Administration's loosening of down-payment standards, and the Department of Housing and Urban Development's pressuring of lenders to extend mortgages to borrowers who previously would not have qualified.

Meanwhile, the government-supported mortgage lenders, Freddie Mac and Fannie Mae, grew to own or guarantee about half of the United States' $12 trillion mortgage market. Congressional leaders pointedly refused to moderate the distortions created by the government's implicit guarantee that the firms would not be allowed to fail, which was the catalyst for their rapid expansion. Instead, Congress pushed them to promote "affordable housing" through expanded purchases of nonprime loans to low-income applicants.

That’s one point of view. 

[stevenash]

10 minutes ago, UT alum said:

That’s one point of view. 

It is precisely what happened.   

[UT alum]

43 minutes ago, Reagan said:

You do realize that the Postal Service operates at a deficit of billions and billions of dollars every year?  Does this not bother you?  Private companies do a much better job.  If it was eliminated, then postal workers can go to work for the private companies.  You know, deal with he real world for a change.

That’s real easy to say when you’re talking about someone else’s job.

[UT alum]

14 minutes ago, stevenash said:

It is precisely what happened.   

So the feds put a gun to the mortgage lenders’ heads and made them follow unsound business practices?

[WOSdrummer99]

34 minutes ago, UT alum said:

So the feds put a gun to the mortgage lenders’ heads and made them follow unsound business practices?

My coworker was a credit analyst for one of the largest lending companies in Houston during that time. He says they lied on documents and knew people couldn't afford it. But the government was throwing so much money to get these people hooked in. That it was crazy not to take advantage of the situation. 

[UT alum]

18 minutes ago, WOSdrummer99 said:

My coworker was a credit analyst for one of the largest lending companies in Houston during that time. He says they lied on documents and knew people couldn't afford it. But the government was throwing so much money to get these people hooked in. That it was crazy not to take advantage of the situation. 

Of thee top 300 mortgage lenders who crashed, none participated in the CRA program. The vast majority of foreclosures occurred in geographic areas not eligible for CRA participation. I think that the derivatives market and the rise of credit default swaps which arose in an unregulated financial environment brought in a lot more capital ( money) to throw aroundthan the fed government did. That’s another point of view.

[stevenash]

Please point me toward an article regarding your 300 mortgage lenders who crashed.  Even before I look into it, I am strongly convinced that many of those lenders made those loans based on FHA guarantees.

1 hour ago, UT alum said:

So the feds put a gun to the mortgage lenders’ heads and made them follow unsound business practices?

The expansion in risky mortgages to underqualified borrowers was encouraged by the federal government. The growth of "creative" nonprime lending followed Congress's strengthening of the Community Reinvestment Act, the Federal Housing Administration's loosening of down-payment standards, and the Department of Housing and Urban Development's pressuring of lenders to extend mortgages to borrowers who previously would not have qualified   Please do me a favor and read " Hidden in Plain Sight" by Peter Wallison.  Fannie Mae and Freddie mac owned 76% of ALL SUBPRIME debt.  And, by the way, the Community Reinvestment Act was a federal law, not a program.

[stevenash]

UT Alum- in regard to  your question about unsound business practices and  elected "responsible" representatives-  Is the US Postal service being operated responsibly?  Was Solyndra a sound business practice?  Is paying for the sex change of prisoners a prudent financial decision?  Was it sound business practice when GM defaulted to its bondholders and , shortly thereafter, the Unions were given 17.5% of all GM  common stock, and $6.5 billion of preferred stock as part of the reorganization?

[baddog]

They were lending money on $500,000 houses to people who worked at McDonald's. What is the incentive for any lending institution to make such foolish loans? Guess that's all the more reason to up the minimum wage...NOT!

[UT alum]

27 minutes ago, stevenash said:

Please point me toward an article regarding your 300 mortgage lenders who crashed.  Even before I look into it, I am strongly convinced that many of those lenders made those loans based on FHA guarantees.

The expansion in risky mortgages to underqualified borrowers was encouraged by the federal government. The growth of "creative" nonprime lending followed Congress's strengthening of the Community Reinvestment Act, the Federal Housing Administration's loosening of down-payment standards, and the Department of Housing and Urban Development's pressuring of lenders to extend mortgages to borrowers who previously would not have qualified   Please do me a favor and read " Hidden in Plain Sight" by Peter Wallison.  Fannie Mae and Freddie mac owned 76% of ALL SUBPRIME debt

Sloan School of Management at MIT. 

The reduced down payments and other incentives by the fed applied only to properties in the community reinvestment zones - a small percentage of total foreclosures.  The derivatives market provided the prime vehicle to fuel the greed.

[stevenash]

20 minutes ago, UT alum said:

Sloan School of Management at MIT. 

The reduced down payments and other incentives by the fed applied only to properties in the community reinvestment zones - a small percentage of total foreclosures.  The derivatives market provided the prime vehicle to fuel the greed.

 

[stevenash]

Defaults on the loans are what caused the investment vehicles to not perform, be it the actual loan itself or the derivative created in relation to the loan.  Derivatives DID NOT, under ANY CIRCUMSTANCE, cause the borrowers not to make mortgage payments.

[PhatMack19]

23 minutes ago, UT alum said:

Sloan School of Management at MIT. 

The reduced down payments and other incentives by the fed applied only to properties in the community reinvestment zones - a small percentage of total foreclosures.  The derivatives market provided the prime vehicle to fuel the greed.

Reduced down payments and lessening qualifications are not the same.  The banks should have been responsible, but the Democratic govt policies allowed it to happen.  

[stevenash]

7 minutes ago, PhatMack19 said:

Reduced down payments and lessening qualifications are not the same.  The banks should have been responsible, but the Democratic govt policies allowed it to happen.  

And I want to know how the derivatives caused the mortgagees to not honor their obligations?

[UT alum]

44 minutes ago, stevenash said:

And I want to know how the derivatives caused the mortgagees to not honor their obligations?

 

44 minutes ago, stevenash said:

And I want to know how the derivatives caused the mortgagees to not honor their obligations?

Securitization of mortgages through derivative devices fueled a bubble that wound up driving housing prices to unsustainable levels.  Add the Great Recession and voila.  What I don't like is way that the role Community Reinvestment Act was distorted.  That only gives conservative pundits I've heard their "cred" to blame the poor - their favorite targets. As for "Hidden in Plain Sight", I would prefer something a little more objective than what a shill for the American Enterprise Institute writes.

[stevenash]

I happen to have access to a leading economist and I sent him an email enclosing a copy/paste of this comment by you: 

-  Sloan School of Management- The reduced down payments and other incentives by the fed applied only to properties in the community reinvestment zones.- a small percentage of total foreclosures.  The derivatives market provide the prime vehicle to fuel the greed. 

 

this individual speaks  on CNBC multiple times each month and is a member of the Academic Advisory Council to the Federal Reserve.  Upon reading the copy/paste statement regarding your Sloan School of Business claim, he responded as follows.

 

"Totally disagree.  It’s a long answer and it would be great if the individual read Wallison’s book.  He was on the Crisis investigation committee.   Can’t remember the actual name of it, but it was put together by the government.  I haven’t seen the Sloan piece.  "

 

I suspect he "hasn't seen the Sloan piece because there probably is no piece but rather a comment from someone affiliated with Sloan that you cherry picked.  Am I right?  If not, please send me the link and I will forward to him.

 

I will say once more that securitization of mortgages through derivative devices is not what caused people to default on their loans .  If the loans performed, the associated securities performed.

 

I have also emailed a close personal friend who has been a business professor at Stern School of Business at NYU for over 40 years and will pass on his response if an when I receive it.

 

 

 

 

 

[UT alum]

1 hour ago, stevenash said:

I happen to have access to a leading economist and I sent him an email enclosing a copy/paste of this comment by you: 

-  Sloan School of Management- The reduced down payments and other incentives by the fed applied only to properties in the community reinvestment zones.- a small percentage of total foreclosures.  The derivatives market provide the prime vehicle to fuel the greed. 

 

this individual speaks  on CNBC multiple times each month and is a member of the Academic Advisory Council to the Federal Reserve.  Upon reading the copy/paste statement regarding your Sloan School of Business claim, he responded as follows.

 

"Totally disagree.  It’s a long answer and it would be great if the individual read Wallison’s book.  He was on the Crisis investigation committee.   Can’t remember the actual name of it, but it was put together by the government.  I haven’t seen the Sloan piece.  "

 

I suspect he "hasn't seen the Sloan piece because there probably is no piece but rather a comment from someone affiliated with Sloan that you cherry picked.  Am I right?  If not, please send me the link and I will forward to him.

 

I will say once more that securitization of mortgages through derivative devices is not what caused people to default on their loans .  If the loans performed, the associated securities performed.

 

I have also emailed a close personal friend who has been a business professor at Stern School of Business at NYU for over 40 years and will pass on his response if an when I receive it.

 

 

 

 

 

Wow. Didn't know I was going to be held up to scholarly evaluation.  Paul Krugman is a Nobel winning economist, and I'll bet you wouldn't agree to much of anything he had to say about economics. So, expert schmexpert.

I couldn't find reference to the 300 lender statement other than by quote.  If you want to read the research piece by the MIT school of management, however, it's right here:

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[UT alum]

1 hour ago, stevenash said:

I happen to have access to a leading economist and I sent him an email enclosing a copy/paste of this comment by you: 

-  Sloan School of Management- The reduced down payments and other incentives by the fed applied only to properties in the community reinvestment zones.- a small percentage of total foreclosures.  The derivatives market provide the prime vehicle to fuel the greed. 

 

this individual speaks  on CNBC multiple times each month and is a member of the Academic Advisory Council to the Federal Reserve.  Upon reading the copy/paste statement regarding your Sloan School of Business claim, he responded as follows.

 

"Totally disagree.  It’s a long answer and it would be great if the individual read Wallison’s book.  He was on the Crisis investigation committee.   Can’t remember the actual name of it, but it was put together by the government.  I haven’t seen the Sloan piece.  "

 

I suspect he "hasn't seen the Sloan piece because there probably is no piece but rather a comment from someone affiliated with Sloan that you cherry picked.  Am I right?  If not, please send me the link and I will forward to him.

 

I will say once more that securitization of mortgages through derivative devices is not what caused people to default on their loans .  If the loans performed, the associated securities performed.

 

I have also emailed a close personal friend who has been a business professor at Stern School of Business at NYU for over 40 years and will pass on his response if an when I receive it.

 

 

 

 

 

It doesn't address down payment and lessening of regs, but it does make a convincing argument that the upper and middle class earners drove the default crisis, not the lower income people whom the Community Reinvestment Act was meant to help.

[Reagan]

[stevenash]

1 hour ago, UT alum said:

Wow. Didn't know I was going to be held up to scholarly evaluation.  Paul Krugman is a Nobel winning economist, and I'll bet you wouldn't agree to much of anything he had to say about economics. So, expert schmexpert.

I couldn't find reference to the 300 lender statement other than by quote.  If you want to read the research piece by the MIT school of management, however, it's right here:

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I am very familiar with Krugman.  I guess this is where you would say "that's one point of view".  I also know that Obama won the Nobel Peace Prize but we can discuss that another day.  Please go back to your scholarly efforts and explain to me, in laymans terms, how a bank/.mortgage company gives a loan to someone with insufficient income and down payment, the customer later defaults, and then we blame that on someone or something other than the FACT that the borrower did not live up to his contract.  I would also like to know why you would accept the words of a group of academics over the words of a man who was a member of the crisis committee?  Is it safe to assume that you  have declared the economist with whom I was in contact, to be unworthy of consideration along with Peter Wallison  and, on the other side of the coin, Mr. Krugman is fully credible and beyond question?  Does the FACT that he is a columnist for the New York Times impact his credibility?

[stevenash]

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[UT alum]

1 hour ago, stevenash said:

I am very familiar with Krugman.  I guess this is where you would say "that's one point of view".  I also know that Obama won the Nobel Peace Prize but we can discuss that another day.  Please go back to your scholarly efforts and explain to me, in laymans terms, how a bank/.mortgage company gives a loan to someone with insufficient income and down payment, the customer later defaults, and then we blame that on someone or something other than the FACT that the borrower did not live up to his contract.  I would also like to know why you would accept the words of a group of academics over the words of a man who was a member of the crisis committee?  Is it safe to assume that you  have declared the economist with whom I was in contact, to be unworthy of consideration along with Peter Wallison  and, on the other side of the coin, Mr. Krugman is fully credible and beyond question?  Does the FACT that he is a columnist for the New York Times impact his credibility?

first off, I make no claims to be a scholar, just an average Joe who tries his best to make sense of the world around me.  As for the defaults, predatory lending practices are one way people are enticed (it does take a bit of a sense of greed on the borrower, as well).  When the money people push the value over the edge of what's reasonable and the market crashes, what are people to do? Unemployment at 13%, house worth half what you paid, what you think's gonna happen.  That does not absolve the mortgagee of their responsibilities.  I reckon many a good credit score was ruined.  The main point I wanted to make was, don't blame it all on government policy or poor people trying to game the system to live beyond their means.  Middle and upper income groups amassed most of that foreclosure debt, greed being a motivator there as there were people buying and flipping like crazy riding that wave.

A for my opinion of economists, I look to them for sources of information, opinions, and ideas. I might just look up Mr. Wallison's book and give it a go.