Did FNMA begin offering NO down payment loans in the early part of this century (like 2000 or 2001)?
Just 3 years ago...
- Thread starter imprimis
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[QUOTE="syskatine, post: 661173, member: 2984]I remember Rush screaming economic collapse was imminent when Clinton was elected. [/QUOTE]
Link?
Link?
Was that so hard?
1. Freddie and Fannie underwriting was more conservative than average. In fact it was private securitizer that relaxed standards.
2. Freddie and Fannie's non performing loan rate was half that of the market writ large. Again the private securitizers were the ones underwriting loans that failed most frequently.
3. The housing bubble inflated as Freddie and Fannie's market share was declining. The bubble was blown by private securitization rather than affordable housing policies.
4. There is no Freddie and Fannie for commercial real estate, yet there was a commercial real estate bubble that coincided with the residential bubble.
5. The creation of CDOs was basically the markets begging for more exposure to mortgages. There weren't enough loans being originated so they started creating derivatives.
6. Bubble are inflated and popped pretty regularly. We are experiencing it with shale oil bonds right now. Defaults only bring down the global economy when the bubbles are big and the leverage is high. Fannie and Freddie were not big enough, and they definitely did not cause Lehman and Bear Stearns to leverage up to 30:1.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1924831
Given that the GSE loan portfolios performed better than the market, I don't see how they can be ones responsible for dragging down the underwriting standards.
And given that Freddie and Fannie going under isn't what caused the financial collapse, you are still missing step 2 and step 3.
I don't know about that, but in 2004 they relaxed their underwriting standards In response to losing market share to lenders who had already gone down that path.
The way the burden of proof works is if squeak makes an assertion with no warrant, I am free to say he is wrong with no warrant.
Squeak, this political debate isn't going well for you. Sucks when liberals stray from right wing talking points.
I never missed a damn mortgage payment and I'm not house poor and have bad ass crib. What else do Republicans need to learn about colored folk outside their echo chamber? And y'all wonder how libs can easily brainwash people. You might wanna not paint with a broad brush.
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Compare the GDP per capita of Honduras vs Somalia. Hondurans don't treat their woman like cattle also.
You don't know what you're taking about. 62% of all so-prime mortgages were GSE backed.
In the 90s Fannie and Freddie were forced to increase their purchases of mortgages for low-income and middle-income borrowers. Bank regulators required banks to serve their low-income communities, Fannie bought more loans with low down payments and high mortgage payments relative to the borrower's income, and the ball started rolling downhill.
Here, this black Harvard grad can probably explain it better than me (from Huffpost).
http://m.huffpost.com/us/entry/a-history-of-the-clintons_b_9339886.html
I'm not a republican. I think you are misinterpreting what I'm saying, or maybe I should have been clearer. There was an effort by the Clinton administration to get more minorities to own homes. To the extent its efforts were to ensure fair lending, I'm all for it. When you're enabling people to borrow when they can't afford it, I think that's wrong.
I agree. Fair lending. Which includes good credit and steady job. I had that and if the people didn't, they shouldn't have gotten a house loan. But I get sick of the whole narrative that minorities blew up the housing market. That's some bullshit. My parents, many of my relatives live in neighborhoods now that ain't another colored in the whole damn addition, me included. When this country allowed us to work hard and be able to leave the ghetto, some of us did and are doing very well. I'm not a trust fund baby and have earned every damn thing I have. So I find your earlier comments insulting.
The federal government certainly played their role by conditioning the approval of bank mergers on the CRA, repeal of Glass-Steagall, overriding state anti-predatory lending laws, loosening the capital requirements for the big Wall Street banks, interest rate management, Fannie Mae and Freddie Mac chasing profits and losing some sight of risk after losing market share (thank you Countrywide for your shitty lending), and propping up Bear Stearn but allowing Lehman Brothers to fail.
All that said, the majority of subprime loans were done by the private market. None of the strange products that the mortgage lenders cooked up like interest only, negative amortization, and piggy bank mortgages were conforming. Fannie and Freddie couldn't have put that hot garbage on the books if they sold both testicles.
All that said, the majority of subprime loans were done by the private market. None of the strange products that the mortgage lenders cooked up like interest only, negative amortization, and piggy bank mortgages were conforming. Fannie and Freddie couldn't have put that hot garbage on the books if they sold both testicles.
I don't know if it was "lust for money" exactly,but they definitely played a part.
Again if Fannie and freddie were to blame, why there loans better performing than the market writ large?
If Freddie and Fannie are to blame, why did their market share decrease as the bubble inflated? If freddie and Fannie are to blame was the real estate bubble in commercial real estate and global real estate, markets they dont participate in. How to you explain the advent of CDOs if only freddie and Fannie thought that those loans were worth holding. Finally, how does lax underwriting cause Lehman Bros and Bear Stearns to fail?
Maybe you don't like Mcclatchy, but I did previously provide a white paper with the same info. And any source is better than your ass where the 62 came from.
Maybe not, but none of them did much in the way of homework when giving mortgage backed securities bloated with subprime loans their AAA ratings.
http://www.theatlantic.com/business...vernment-did-cause-the-housing-crisis/249903/
As a reminder, your position is that government policies cues played NO role as a root cause.
There's plenty of blame to go around. I said what I thought the root cause was. You've added other factors.
A little reading comprehension goes a long way.
"Of the 19.2 million subprime and low quality loans that were on the books of government agencies in 2008, 12 million (about 62%) were held or guaranteed by Fannie and Freddie."
62% of subprime loans on the Government's books were held by Fannie and Freddie. That is not market share. "You don't know what you're taking about."
No my position is that "The root cause was the "good" intentions of the government to put poor people and minorities in homes they couldn't afford." is completely false.
So far you and squeak have managed to establish that the government indeed had good intentions and that Freddie and Fannie are not fictional entities. You have provided no evidence of any of that causing the financial collapse.
1. Freddie and Fannie underwriting was more conservative than average. In fact it was private securitizer that relaxed standards.
2. Freddie and Fannie's non performing loan rate was half that of the market writ large. Again the private securitizers were the ones underwriting loans that failed most frequently.
3. The housing bubble inflated as Freddie and Fannie's market share was declining. The bubble was blown by private securitization rather than affordable housing policies.
4. There is no Freddie and Fannie for commercial real estate, yet there was a commercial real estate bubble that coincided with the residential bubble.
5. The creation of CDOs was basically the markets begging for more exposure to mortgages. There weren't enough loans being originated so they started creating derivatives.
6. Bubble are inflated and popped pretty regularly. We are experiencing it with shale oil bonds right now. Defaults only bring down the global economy when the bubbles are big and the leverage is high. Fannie and Freddie were not big enough, and they definitely did not cause Lehman and Bear Stearns to leverage up to 30:1.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1924831
Of those examples, which of them were about giving poor people and minorities more house than they could afford?
Any insinuation that their are unintended consequences of efforts to make lives better for minorities is racist. Got it.
No. It is racist when the masters of the universe on Wall Street through over leverage and incompetent risk management cause the financial collapse, but you blame it on minorities and poor people getting things they don't deserve, like houses.
