For UT Alum regarding the housing crisis of 08

[stevenash]

Peter Wallison ( author of Hidden in Plain sight) holds the Arthur F. Burns Chair in Financial Policy and is co-director of the American Enterprise Institute's program  on Financial Policy Studies.  From June 81 to Jan 85, he was General Counsel of the United States Treasury Dept.  where he had a significant role in developing the Reagan administration's proposals for deregulating financial services.   In 86-87, he was White House counsel to the President.  He testifies frequently before congressional committees and is a frequent contributor to the op-ed pages of the Wall St. Journal and other publications.  He was a member of the congressionally authorized Financial Crisis Inquiry Commission from 2009-2011 and dissented from the Commission's 2011 report.     I am going to quote him from the preface of his book,  "Hidden In Plain Sight",  which was published in the last couple of years.

 

" The data and argument in this book support the  position that the financial crisis was caused by government's housing policies--particularly the affordable housing goals IMPOSED on the two government-sponsored enterprises( Fannie Mae and Freddie Mac)   The goals REQUIRED those entities to meet a quota ESTABLISHED BY THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT for each year.  ( in the book, a chart shows the increase in the goals between 96 and 2008)   The increases in the goals FORCED the GSEs(fannie and Freddie) which were the DOMINANT  players in the housing finance market to reduce their mortgage underwriting standards.  This reduced underwriting standards THROUGHOUT the mortgage market.   By 2008, more than half of all mortgages in the U.S.-31 ,million loans- were subprime or otherwise risky: of these 76% were on the books of government agencies, primarily Fannie and Freddie.  These numbers showed, beyond question, that the government CREATED THE DEMAND for these loans.  When mortgages began to default in unprecedented numbers in 2007, financial firms were seriously weakened, bring on the financial crisis."

[UT alum]

17 hours ago, stevenash said:

Peter Wallison ( author of Hidden in Plain sight) holds the Arthur F. Burns Chair in Financial Policy and is co-director of the American Enterprise Institute's program  on Financial Policy Studies.  From June 81 to Jan 85, he was General Counsel of the United States Treasury Dept.  where he had a significant role in developing the Reagan administration's proposals for deregulating financial services.   In 86-87, he was White House counsel to the President.  He testifies frequently before congressional committees and is a frequent contributor to the op-ed pages of the Wall St. Journal and other publications.  He was a member of the congressionally authorized Financial Crisis Inquiry Commission from 2009-2011 and dissented from the Commission's 2011 report.     I am going to quote him from the preface of his book,  "Hidden In Plain Sight",  which was published in the last couple of years.

 

" The data and argument in this book support the  position that the financial crisis was caused by government's housing policies--particularly the affordable housing goals IMPOSED on the two government-sponsored enterprises( Fannie Mae and Freddie Mac)   The goals REQUIRED those entities to meet a quota ESTABLISHED BY THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT for each year.  ( in the book, a chart shows the increase in the goals between 96 and 2008)   The increases in the goals FORCED the GSEs(fannie and Freddie) which were the DOMINANT  players in the housing finance market to reduce their mortgage underwriting standards.  This reduced underwriting standards THROUGHOUT the mortgage market.   By 2008, more than half of all mortgages in the U.S.-31 ,million loans- were subprime or otherwise risky: of these 76% were on the books of government agencies, primarily Fannie and Freddie.  These numbers showed, beyond question, that the government CREATED THE DEMAND for these loans.  When mortgages began to default in unprecedented numbers in 2007, financial firms were seriously weakened, bring on the financial crisis."

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Here’s another point of view. I don’t buy the tripe peddled by Koch Brothers (AEI main backers) any more than you do Soros.

[stevenash]

The problem began when loans defaulted in large numbers.  Whose fault is that?

[PhatMack19]

Maxine is going after the banks

 

Waters has it in for banks. She blames them for the 2 million loans to low-income borrowers that went sour more than a decade ago, causing widespread foreclosures and the 2008 financial meltdown.

“I have not forgotten,” she warned bankers as she prepared for her powerful new role, that “you foreclosed on our houses . . . had us sign on the line for junk and for mess that we could not afford.” She added: “I’m going to do to you what you did to us.”

That’s Waters’ distorted interpretation of what happened. In fact, throughout the 1980s and ’90s, Congress used the Community Reinvestment Act and anti-discrimination laws to coerce banks into making mortgage loans to low-income borrowers with lousy credit ratings and, in some cases, no down payment.

The idea was to promote minority home ownership. But when the borrowers couldn’t pay, lawmakers turned on the banks, accusing them of predatory lending. Waters is poised to repeat that failed experiment.

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[LumRaiderFan]

2 hours ago, UT alum said:

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Here’s another point of view. I don’t buy the tripe peddled by Koch Brothers (AEI main backers) any more than you do Soros.

americanprogress...really?

Just click on the Trump administration tab and check out the headlines on the articles.

Fake news

[stevenash]

Well, UTAlum, do you applaud the efforts of Ms. Waters?

[LumRaiderFan]

14 minutes ago, PhatMack19 said:

Maxine is going after the banks

 

Waters has it in for banks. She blames them for the 2 million loans to low-income borrowers that went sour more than a decade ago, causing widespread foreclosures and the 2008 financial meltdown.

“I have not forgotten,” she warned bankers as she prepared for her powerful new role, that “you foreclosed on our houses . . . had us sign on the line for junk and for mess that we could not afford.” She added: “I’m going to do to you what you did to us.”

That’s Waters’ distorted interpretation of what happened. In fact, throughout the 1980s and ’90s, Congress used the Community Reinvestment Act and anti-discrimination laws to coerce banks into making mortgage loans to low-income borrowers with lousy credit ratings and, in some cases, no down payment.

The idea was to promote minority home ownership. But when the borrowers couldn’t pay, lawmakers turned on the banks, accusing them of predatory lending. Waters is poised to repeat that failed experiment.

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This is who we have in charge of the House Financial Services Committee...from the article:

 

Waters has it in for banks. She blames them for the 2 million loans to low-income borrowers that went sour more than a decade ago, causing widespread foreclosures and the 2008 financial meltdown.

“I have not forgotten,” she warned bankers as she prepared for her powerful new role, that “you foreclosed on our houses . . . had us sign on the line for junk and for mess that we could not afford.” She added: “I’m going to do to you what you did to us.”

[Hagar]

Maxine & Ocasio-Cortez are prime examples of our failed educational system.  Neither one could pass a Civics or Economics class in a 1960 High School.

[UT alum]

6 hours ago, LumRaiderFan said:

americanprogress...really?

Just click on the Trump administration tab and check out the headlines on the articles.

Fake news

I think maybe you got my message.

[LumRaiderFan]

8 minutes ago, UT alum said:

I think maybe you got my message.

No, I didn't.

You posted a lame article rather than answering Nash's ACCURATE post about the cause of the housing crisis.

Do you dispute the cause of the crash as posted and if so, give us your reasons with links.

 

[Tigers2010]

7 minutes ago, LumRaiderFan said:

No, I didn't.

You posted a lame article rather than answering Nash's ACCURATE post about the cause of the housing crisis.

Do you dispute the cause of the crash as posted and if so, give us your reasons with links.

 

Careful. You will "lose credibility"

[LumRaiderFan]

5 minutes ago, Tigers2010 said:

Careful. You will "lose credibility"

Bummer

[UT alum]

14 hours ago, LumRaiderFan said:

No, I didn't.

You posted a lame article rather than answering Nash's ACCURATE post about the cause of the housing crisis.

Do you dispute the cause of the crash as posted and if so, give us your reasons with links.

 

No, you didn’t get my point. American Enterprise Institute is biased to the right, American Progress to the left. My guess is that the answer is somewhere in the middle. That’s the point of representative democracy. Competing ideas are aired in public and debate and compromise create policy reflected in laws. Ugly names and insults are not conducive to progress in this form of governance.

[stevenash]

Translation=   One guy says to drink arsenic   Another guy says to drink water instead.  Is the solution to have half of each?  And I still have never heard you explain how "greed" made people default on the very mortgage loans for which they applied for and agreed to.

[UT alum]

17 hours ago, LumRaiderFan said:

No, I didn't.

You posted a lame article rather than answering Nash's ACCURATE post about the cause of the housing crisis.

Do you dispute the cause of the crash as posted and if so, give us your reasons with links.

 

[UT alum]

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Enough links in this article for you?  BTW, the “failing” New York Times published Wallison’s article disputed by the Columbia Journalism Review. Doesn’t that make it fake news just by the fact that the greatest source of “fake news” cited by Trump is NYT? Talk about cherry picking.

[stevenash]

Instead of coming up with a third article/author to bolster my viewpoint, PLEASE answer the question I have asked you multiple times to which you have NEVER responded.   It is very very SIMPLE( and it appears you do not want to ruin your narrative with a response)  None of this would have come about if so many mortgages had gone into default.  Who/what caused the borrowers not to pay their mortgages as agreed?

[UT alum]

1 hour ago, stevenash said:

Instead of coming up with a third article/author to bolster my viewpoint, PLEASE answer the question I have asked you multiple times to which you have NEVER responded.   It is very very SIMPLE( and it appears you do not want to ruin your narrative with a response)  None of this would have come about if so many mortgages had gone into default.  Who/what caused the borrowers not to pay their mortgages as agreed?

Ultimately the buyer is responsible, and their credit rating takes the hit. But, 13% unemployment and plummeting home values because of artificially created demand put buyers in positions that help mitigate the judgement of them as being merely fiscally irresponsible. 

[LumRaiderFan]

15 minutes ago, UT alum said:

Ultimately the buyer is responsible, and their credit rating takes the hit. But, 13% unemployment and plummeting home values because of artificially created demand put buyers in positions that help mitigate the judgement of them as being merely fiscally irresponsible. 

Ultimately the buyer is responsible...period.

If you can’t afford something, don’t buy it.

 

[stevenash]

33 minutes ago, UT alum said:

Ultimately the buyer is responsible, and their credit rating takes the hit. But, 13% unemployment and plummeting home values because of artificially created demand put buyers in positions that help mitigate the judgement of them as being merely fiscally irresponsible. 

How was the artificial demand created?   Incidentally, 13% unemployment and plummeting home values were a RESULT rather than a CAUSE.  Neither was present when the loans were made.

[UT alum]

45 minutes ago, LumRaiderFan said:

Ultimately the buyer is responsible...period.

If you can’t afford something, don’t buy it.

 

Too simplistic for macro economic discussion. Makes it easier to let the predators off when you make the “irresponsible buyer”, the “low income idiots” you resent supporting, the straw man. 

I guess the people who got wiped out by Enron were at fault for buying from a crook. Should have known better. Poor old Ken Lay was victimized by overzealous  prosecutors seeking to demonize the rich.

[UT alum]

43 minutes ago, stevenash said:

How was the artificial demand created?   Incidentally, 13% unemployment and plummeting home values were a RESULT rather than a CAUSE.  Neither was present when the loans were made.

Right. Bubbles usually aren’t fully recognized until they burst. 

When you give loans at zero down with no credit checks, you think demand isn’t going to rise?

[LumRaiderFan]

7 minutes ago, UT alum said:

Too simplistic for macro economic discussion. Makes it easier to let the predators off when you make the “irresponsible buyer”, the “low income idiots” you resent supporting, the straw man. 

I guess the people who got wiped out by Enron were at fault for buying from a crook. Should have known better. Poor old Ken Lay was victimized by overzealous  prosecutors seeking to demonize the rich.

Poor argument...Enron folks were the victim of a crime.

So if I meet a slick Rolls Royce salesman and he convinces me to buy one, who is responsible for the loan when I realize I can’t afford it? 

We need to stop making excuses for adults making bad decisions by blaming others.

Too simplistic for a macroeconomic discussion...really?

It’s very simple...buy within your means.  No one “deserves” a house...you earn it.

These are the rules that many of us live by.

[stevenash]

1 hour ago, UT alum said:

Right. Bubbles usually aren’t fully recognized until they burst. 

When you give loans at zero down with no credit checks, you think demand isn’t going to rise?

Precisely-  How did those zero down loans with no credit checks come about?

 

On ‎1‎/‎22‎/‎2019 at 11:59 AM, stevenash said:

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[stevenash]

come on, UT Alum, you don't need a link from liberal academia to answer my last question.