DebateGate
General Category => 3DHS => Topic started by: sirs on April 03, 2013, 04:25:02 PM
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Just when you thought this President's judgement couldn't be any worse.......
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Got bad credit? Want to buy a home? You're in luck! President Obama is ramping up the country for housing bubble 2.0 as he urges banks to loan to people with poor credit so they can purchase a home. What could go wrong? Oh just about everything. And don't worry, the government is going to promise banks everything will be just fine.
The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.
President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.
In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.
Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.
Shorter version: President Obama's crappy economy has caused people's credit to decline and even though the economy isn't much better (and neither is their credit) he wants them to buy a home with money and credit they don't have. Fantastic. (http://townhall.com/tipsheet/katiepavlich/2013/04/03/obama-pushes-for-housing-bubble-20-n1556894)
As a reminder, the housing market crashed after the government forced banks to lend to people who
1) shouldn't have been applying for a housing loan in the first place
2) had no way to pay a housing loan back
3) never intended to pay back the housing loan in the first place.
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SIRS...you are correct!
Another "bubble" is coming.
A very big BUBBLE!
http://armstrongeconomics.com/2013/03/25/sovereign-debt-crisis-conference-2/ (http://armstrongeconomics.com/2013/03/25/sovereign-debt-crisis-conference-2/)
http://armstrongeconomics.com/2013/03/27/are-we-head-to-a-mad-max-scenario/ (http://armstrongeconomics.com/2013/03/27/are-we-head-to-a-mad-max-scenario/)
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Our Greece-like train just keeps picking up speed
Oh, and on a related piss-poor judgement note, remember all the leftist blather of how Obama was to be this new diplomatic & sensitive president, compared to that "cowboy" Bush, as it relates to foreign engagement. Notice how worse we're now seen by foreign countries, especially the middle east, and now we have all this potentially imminent conflict with North Korea? Yea, There's that "uniter' Obama, doing his thing
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There is always some loon saying the sky is falling.
I am surprised that you have not quoted Porter Stansbury.
There is not going to be another housing bubble.
Check out the ETF called SPDR S&P Homebuilders (XHB), up over 10% in the last four months.
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As a reminder, the housing market crashed after the government forced banks to lend to people who
1) shouldn't have been applying for a housing loan in the first place
2) had no way to pay a housing loan back
3) never intended to pay back the housing loan in the first place
If that's what Obama's pushing, this will just speed up our Greece-like departure. Bush was wrong when he did it, and Obama's economic conditions make it exponentially worse
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Not gonna happen.
President Obama is doing the VERY BEST job that he can do. That is why he was reelected.
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Not only IS it going to happen, but happen even faster now, thanks to the piss poor Judgement known as Democrat think and Obama in particular
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There is always some loon saying the sky is falling.
The President was in that role recently , using a lot of hyperbole to describe the sequester consequences , as if he were not the author of the thing himself!
I am not too worried , when I was newly in the Civil service President Reagan did something similar, only with less drama.
Reguarding the origional post, I consider this another proof that the Obama administration can talk a good game without actually having any members that understand what is going on.
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I think they know well what is going on. This is just more rightwing 'bagger crap.
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I think they know well what is going on. This is just more rightwing 'bagger crap.
Thank you very much.
Now if you want me to think that you know something about this subject , .... perhaps you couold point out what they are doing diffrently that can prevent unrecoverable loans from piling up?
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Tell me why they are telling anyone to make bogus loans in the first place.
The default ratio on loans made since the last reforms is extremely low. Bogus loans are NOT being made.
It is just typical 'bagger horseshit. I reject the premise.
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Tell me why they are telling anyone to make bogus loans in the first place.
I almost didn't try to answer , this is a very tough question.
I think that people like Congressman Frank are trying to lower the standard for approval of loans so that more poor people can live in a decent house and use the real estate investment to improve their wealth.
However sincere this urge may be , when indulged with no study of consequence it tended to produce taxpayer backing for loans that had little colateral and little repayment strength.
They were trying to prevent "greenlining" and trying to make loans as accessable as possible , but when the taxpayer is really garunteeing the loan why should the bank that makes the loan care about the borrowers strength?
When a loan was made to someone who does not really understand the loan , has little downpayment , has insuficient income or no really dependable employment , why should the bank worry about the quality of the loan? As soon as possible the loan will be bundled with a dozen or an hundred other simular such loans and sold to Fannie May, whether it lasts through the repayment period or not has no bering therefore on the profit made by the origionating bank.
Banks that required a big downpayment , or required a lot of proof of income , or tryed to keep as many loans as possible in their own house were outgrown by banks that churned through a huge number of loans , harvesting early profit and fees , then reinvesting in more loans in the same way.
This can't happen now?
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Precisely
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http://en.wikipedia.org/wiki/Community_Reinvestment_Act (http://en.wikipedia.org/wiki/Community_Reinvestment_Act)
I would have guessed that one would need to be a lawyer to understand this stuff.
But...
It seems evident that Lawyers are not understanding it either.
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Fannie Mar is making record profits now, because there are so very FEW defaults.
This is bogus nonsense,
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That's precisely because the banks are NOT granting loans to those folks who are financially incapable of paying back such a huge commitment. Co-worker of mine, who had multiple real estate investments, literally could not get the bank to approve any loan, after the crash. Only those who have a serious ability are the ones getting approved. Now Obama wants to take us into Housing Bubble 2.0, ignoring exactly that which sent us into a recession, 1st go around
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Fannie Mar is making record profits now, because there are so very FEW defaults.
This is bogus nonsense,
I seem to remember when they made grand profits before.
What is diffrent now?
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Here in Miami, the housing bubble was caused by house flippers who were following the directions of several preachers and other types who passed themselves off as experts. They got left holding the loan on houses they could not pay for or rent at a high enough price to cover the loans. Many of the loans were balloon payment things as well, and when the balloon payment was due, they could not refinance.
This will not happen again, because neither the banks nor Sally Mae or Freddie Mac will loan without around 15% down. .
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(http://media.townhall.com/Townhall/Car/b/holb_c10838120130405120100.jpg)
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Here in Miami, the housing bubble was caused by house flippers who were following the directions of several preachers and other types who passed themselves off as experts. They got left holding the loan on houses they could not pay for or rent at a high enough price to cover the loans. Many of the loans were balloon payment things as well, and when the balloon payment was due, they could not refinance.
This will not happen again, because neither the banks nor Sally Mae or Freddie Mac will loan without around 15% down. .
"flipping "
Not the root of the problem!
Easy to get loans were.
Prudent banks would not have enabled house"flipping" , but it didn't pay to be prudent in an environment where the real money was in "flipping " the new loans.
I have taken out several mortgagues, most of them were quickly sold to larger banks , or federally managed institutions.
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Easy to get loans for house flippers were most certainly the cause of the problem.
Every house in foreclosure in my neighborhood was bought by some damn stupid houseflipper pretending that they were going to actually live in the home.
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Suffice to say the VAST majority of homes that went under were not being flipped
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It does NOT suffice it to say this at all.
It was idiotic house flippers and fools who used their homes as bank accounts combined that caused the problem.
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Your claim, YOU BACK IT UP. You 99% wrong say so means pretty much squat. Show these reports or data, that a majority of homes that went under here in America, were do to flippers. I'll make it even easier, and show us how it was a majority of Florida homes
Good luck with that
(and you can dispense with the knee jerk effort to claim nothing you post I'll believe. This has nothing to do with me, and everything to do with you, supporting your own, currently meritless, claims. If you're unable, it'll have nothing to do with what I would or wouldn't believe)
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Go fuck yourself., moron. You know nothing about this subject.
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Your ignorance of what I do and don't know on any given subject, matches that you have about guns, and their defensive use in this country. As I said, this has nothing to do with me, and everything to do with you, supporting your own, currently meritless, claims. If you're unable, it'll have nothing to do with what I would or wouldn't believe, nor my supposed ignorance on this subject
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I think house flippers exploited easy loan terms, house flippers did not cause easy loan terms.
The loans were too easy, the Congress caused that.
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The BANKS have the absolute power to refuse to grant a loan, period.
They did not do so, because they knew that they would be able to sell the loans, which were absolutely obviously bogus, to someone else and not suffer any consequences.
Banks and loan peddlers were far more responsible than Congress.
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The BANKS have the absolute power to refuse to grant a loan, period.
They did not do so, because they knew that they would be able to sell the loans, which were absolutely obviously bogus, to someone else and not suffer any consequences.
Banks and loan peddlers were far more responsible than Congress.
I agree that Congress was highly irresponsible.
Do you see where you say that lenders were confident that they could sell their poorly concieved loans and not be stuck with them?
That is where the government was coming in.
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(http://freefall.purrsia.com/ff300/fv00253.gif)http://freefall.purrsia.com/ff300/fv00253.htm (http://freefall.purrsia.com/ff300/fv00253.htm)
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The BANKS have the absolute power to refuse to grant a loan, period.
NOT when you have the power of the Federal Government telling banks you best loan to folks you may otherwise not loan to, otherwise you may "see" some repercussions in your immediate future,...audits, sanctions, any number of functions the Fed has at their disposal. Sure the bank could say no, but with what the Fed could do, if they didn't play along, is what steered us into the meltdown that was the housing bubble collapse. I realize that runs counter to your predisposed ideology Xo, but that's the reality, and it was BOTH Republicans & Democrats at fault.
CONGRESS was behind the housing meltdown, with their policies and agenda that more people be "homeowners". The banks went along, knowing that "well......DC says so, and they say they can back it up....one way or another". MOST rationally minded economists and folks that actually DO know something about this, have come to that conclusion.....outside of the hard core coolaide drinking leftists that can't ever see Obama or the Government be wrong
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No bank can be FORCED to give a loan to a person with no income or job. That is just stupid.
If you believe this, so are you.
The banks acted out of greed, they were not forced.
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No bank can be FORCED to give a loan to a person with no income or job. That is just stupid.
If you believe this, so are you.
The banks acted out of greed, they were not forced.
It is like fertilising half of your garden.
Some banks did remain conservative in lending policys , you do not hear much about them because they remained small and some were snapped up by aquisition of larger banks.
Playing the game as the government set it up allowed bigger profits and faster growth, so the banks that would outgrew the banks that would not.
I think the banks that rolled a lot of loans were playing just as the Congress intended and the risk was being transferred to taxpayers , you don't think that the banks were behind transfering the risk to taxpayers do you?
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BINGO.....at least some are working with a rational mind, minus the strawman of trying to make this only about people with no income and no job, since no one said that ::)
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BINGO.....at least some are working with a rational mind, minus the strawman of trying to make this only about people with no income and no job, since no one said that ::)
Don't be down on XO, he is manfully working to hold up his end of an argument. I appreaciate this.
Strawmen are a tactic , and this is the real world .
Or something like it.
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I'm never "down" on Xo, Plane. It's just frequently easy to demonstrate where & when he's wrong on an issue. Many time the reason he's so often wrong is his marriage to leftist ideology, for better or worse, Government in general, and Obama in particular can do no wrong.
So, on this issue, if the mind is made up, despite all facts to the contrary, that Obama and the Government can't be wrong, then it has to be greedy bankers and Florida flippers.......it just has to be. Can't back it up at all, but its just "obvious". Minus the insults, I just enjoy highlighting when folks are wrong & using deflective strawman tactics, but yea, Xo's doing what he can to hold up the liberal dogma. Others I can only guess found it just too hard in the face of so much reality that would refute their predisposed made up minds
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The banks that sold the bogus loans probably knew that they were screwing the people that were buying the loans, some of whom were government agencies.
It was just like a burger joint selling groundhog, rat and squirrel instead of beef. They did not care. The bankers were the con men here. The rating agencies and the intermediaries were accomplices. Congress was wrong to have lifted the regulations.
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They're not screwing the Government, when it was the Government that was pushing the Banks to push the loans in the 1st place.
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Xo is right but forgot to mention the banks action was not within the minimum the government require them to loan the money and the fact they exceeded it shifts blame to them as predatory.
This topic is funny to me because one time folks tried to put the blames squarely on the minorities only.
The question is how much more relax is the lending policy for2.0??
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Sorry to say Kimba, but Xo is not right on this issue. It started under Clinton, with the CRA. Bush, and Republicans pushed it even more. And when Democrats took control of the house, despite the red flags that were going up, Democrats were all too giddy to advocate more home ownership, via Fannie/Freddie's "support", despite the risk being placed on the taxpayers. Banks were between a rock and a hard place, with what the Fed could do if they didn't play along. And since they were still making money, why the hell not........until it all came crashing down.......thanks to DC policies of pushing banks to ok loans for folks that really were not financially stable or capable of taking on such a huge monetary burden.
Without DC's intervention, there would have been no housing collapse, as the banking industry in general would not have been making such risky loans. Sure, you would have had a few outliers, who were really into profit, but those would have been singled out, and not have caused a crash of the entire housing market
And I have no idea who you are referring to that would be "blaming minorities". Lending institutions took advantage of them, but that doesn't put the blame on them.
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Whoa
I said the banks exceeded what the government required of them in lending . The subprime was what fuel the lending to encourage default to the premise the rising markets will lways make it profitable.
What you stated is true all advocated more home loans but none of them required this volume .
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The volume was merely a natural result at the behest of Government pushing for more home ownership. Much like what the rest of what Government is pushing, it simply became unsustainable
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Selling bogus loans to anyone, even the government, is screwing the buyer. The banks are responsible for approving loans to unemployed people with no income.
If the government declared that rape was no longer illegal, then if someone was raped, you still could not call the government a rapist. Your logic is flawed, sirs.
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Not when the Government pushed Banks to approve them, and "protected" them via the power of the taxpayers, i.e Fannie & Freddie
And no, this has squat to do with approving them to unemployed no-income folks, so you can drop with that strawman. It has to do with approving them to folks whose income was no where near the level necessary to take on home mortgage payments, much less their downpayment
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Banks are the final arbitrators of whom they lend money to.
They have always had the final say about this.
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No one claimed they didn't. But, like I said (http://debategate.com/new3dhs/3dhs/housing-bubble-2-0/msg152832/#msg152832), when the Fed tells you do do something, or else, you generally do it. Your inability to back up your own meritless claims is indeed appreciated, as is the dropping of the never referenced unemployed no-income folks
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Banks are the final arbitrators of whom they lend money to.
They have always had the final say about this.
You know that isn't right.
The legalitys involved make the government the final word on who can't be loaned to.
Regulations must be studyed by anyone who works as a loan arranger.
And if the government encourages risk taking so much that it actually transfers all risk away from the loan arranger, the government has mandated this behavior.
Banks that were more strict than the official rules were not growing as fast as banks that followed the rules that provided for lots of loan rolling.
So banks with conservative lending policys were not attractive to investors, fell behind the curve with earnings and became takover targets for banks with lotsa cash.
It isn't as if the rules on rape were relaxed, it is more like locking up all the guys that didn't want to be rapists.
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Banks cannot be taken over if their stock is not offered on the exchange, or if there is a sufficient amount of stock in the hands of those who refuse to sell, which is quite common as well. There are many ways to prevent a hostile takeover.
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Banks cannot be taken over if their stock is not offered on the exchange, or if there is a sufficient amount of stock in the hands of those who refuse to sell, which is quite common as well. There are many ways to prevent a hostile takeover.
Not if your bank is publicly traded.
Or why even Hostile?
Banks using the government plan for flipping loans had plenty of cash for tempting smaller banks to sell out, good plan for the less successfull bankers to get away from the business.
And some of the banks were less successfull because they were not flipping loans and tossing all of the risk onto the taxpayer.
I think all of the big ones participated more or less, not going along with loan flipping was a way to aviod being a big and profitable bank.
Suppose I offered to buy from you every useless knicknack you could give me at inflated prices, would you go down to the pawn shop and act just as indiscriminate as I was willing to finance?
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*golf clap* 8)
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Those big and profitable banks did not profit from this. Only a few hucksters of derivatives made big money on this.
Many,many banks had nothing to do with it.
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Those big and profitable banks did not profit from this. Only a few hucksters of derivatives made big money on this.
Many,many banks had nothing to do with it.
Nope, almost all of the big ones , plus Fannie and Freddie were the producers of these derivatives.