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Why loan companies and financial institutions are really failing
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BrainSmashR Send message Joined: 7 Apr 02 Posts: 1772 Credit: 384,573 RAC: 0 |
Before the Democrats' affirmative action lending policies became an embarrassment, the Los Angeles Times reported that, starting in 1992, a majority-Democratic Congress "mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains." Under Clinton, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton's secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low- to moderate-income borrowers by the year 2001. Instead of looking at "outdated criteria," such as the mortgage applicant's credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named "Caylee." Threatening lawsuits, Clinton's Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn't a joke -- it's a fact. When Democrats controlled both the executive and legislative branches, political correctness was given a veto over sound business practices. In 1999, liberals were bragging about extending affirmative action to the financial sector. Los Angeles Times reporter Ron Brownstein hailed the Clinton administration's affirmative action lending policies as one of the "hidden success stories" of the Clinton administration, saying that "black and Latino homeownership has surged to the highest level ever recorded." Meanwhile, economists were screaming from the rooftops that the Democrats were forcing mortgage lenders to issue loans that would fail the moment the housing market slowed and deadbeat borrowers couldn't get out of their loans by selling their houses. A decade later, the housing bubble burst and, as predicted, food-stamp-backed mortgages collapsed. Democrats set an affirmative action time-bomb and now it's gone off. In Bush's first year in office, the White House chief economist, N. Gregory Mankiw, warned that the government's "implicit subsidy" of Fannie Mae and Freddie Mac, combined with loans to unqualified borrowers, was creating a huge risk for the entire financial system. Rep. Barney Frank denounced Mankiw, saying he had no "concern about housing." How dare you oppose suicidal loans to people who can't repay them! The New York Times reported that Fannie Mae and Freddie Mac were "under heavy assault by the Republicans," but these entities still had "important political allies" in the Democrats. Now, at a cost of hundreds of billions of dollars, middle-class taxpayers are going to be forced to bail out the Democrats' two most important constituent groups: rich Wall Street bankers and welfare recipients. Political correctness had already ruined education, sports, science and entertainment. But it took a Democratic president with a Democratic congress for political correctness to wreck the financial industry. In other words, you cannot force unsound business practices on a company then bitch and moan when they can't make ends meet. ...well you can, but you might have noticed that those of us "in the know", don't seem to care... |
peanut Send message Joined: 1 Feb 07 Posts: 372 Credit: 1,951,576 RAC: 0 |
Yea, blame the Dems for all the worlds problems. All I will say is that the Republicans had congress under Clinton's 2nd term and for most of Bush's Presidency. They share the blame too. Bush could have declared War on Wall Street to correct the mess, but he didn't. He sent us further into debt with the War on Terror. The whole system is corrupt. I say let it fall. Call it a Market Correction. Quote -- "In other words, you cannot force unsound business practices on a company then bitch and moan when they can't make ends meet." But we can say you got yourself into the mess and you suffer the consequences. We do not want to bail your butt out. |
Robert Waite Send message Joined: 23 Oct 07 Posts: 2417 Credit: 18,192,122 RAC: 59 |
I wouldn't dirty my monitor by going there, but this rant seems like something from the Rush Limbaugh site. I have just listened to audio of your president talking about deregulation and how he has made it possible for people with bad credit and people who are first time home buyers to own homes. Not just little box houses, but real nice homes. Stop blaming the Democrats for all of your Republican policy shortcomings. Your boy has been there for so many horrific events these past 7 years and every one of them has been blamed on past administrations. (Sept11-oil prices-fiscal meltdown...) Is that the Republican way? Everyone outside the party is to blame and everyone inside is unaccountable. |
Robert Waite Send message Joined: 23 Oct 07 Posts: 2417 Credit: 18,192,122 RAC: 59 |
http://www.dailykos.com/storyonly/2008/9/21/9322/74248/245/602838 Just in case you missed it. Note the list of high powered Rebulican leaders, operatives, advisers and corporate pigs all in a daisy chain of greed and corruption. Reading your little piece of fiction has caused me to regurj into the back of my throat, so I must sign off now to get a glass of milk. |
Jeffrey Send message Joined: 21 Nov 03 Posts: 4793 Credit: 26,029 RAC: 0 |
James Bond's wealthy nemesis may have had an obsession with gold, but he judged, quite correctly, that if people keep putting your plans awry, that was likely their intent. I seem to have the same problem with my nemesis, 'the bane of my life'... ;) It may not be 1984 but George Orwell sure did see the future . . . |
BrainSmashR Send message Joined: 7 Apr 02 Posts: 1772 Credit: 384,573 RAC: 0 |
Yea, blame the Dems for all the worlds problems. All I will say is that the Republicans had congress under Clinton's 2nd term and for most of Bush's Presidency. They share the blame too. Bush could have declared War on Wall Street to correct the mess, but he didn't. He sent us further into debt with the War on Terror. Apparently you didn't read the article. They didn't get THEMSELVES into this mess, it was FORCED upon them under threat of legal action....and I quote (again): "Threatening lawsuits, Clinton's Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn't a joke -- it's a fact." |
BrainSmashR Send message Joined: 7 Apr 02 Posts: 1772 Credit: 384,573 RAC: 0 |
I wouldn't dirty my monitor by going there, but this rant seems like something from the Rush Limbaugh site. Are you somehow under the impression that you are NOT placing blame? The difference is I know that personal blogs don't count as evidence...a concept liberals can't seem to grasp. |
peanut Send message Joined: 1 Feb 07 Posts: 372 Credit: 1,951,576 RAC: 0 |
Well, welfare and unemployment are income. I see no problem there. They even tax unemployment. Where Clinton may have screwed up is that he should have also required the banks to give lower income or "riskier" people the same rates and terms as most others. Giving a risky person a high interest rate and/or adjustable rates that go sky high is unethical and is just asking for a loan default in my opinion. I blame lenders for that (not Dems or GOPs). I am with the Muslims on the subject of interest on loans. It should be against the law. But then I am also for pay as you go instead of borrowing now and paying latter. Many of the financial houses that are in trouble are holding securities that no one seems to understand. I don't think you can blame that on bad mortgages. That is just that they got snookered by some con man to buy worthless junk. Yet I hear nothing of finding and lynching those con men in the bailout plans. A few people defaulting on their home loans would not cause this much of a problem. |
Aristoteles Doukas Send message Joined: 11 Apr 08 Posts: 1091 Credit: 2,140,913 RAC: 0 |
it was republican congress and senate at that time |
BrainSmashR Send message Joined: 7 Apr 02 Posts: 1772 Credit: 384,573 RAC: 0 |
High risk loan...and let's be realistic, the guy pulling in 100k a year isn't the one defaulting on their loan.
Excuse me, but it's not the job of the bank to do YOUR homework. If you don't know by now that variable interests rates are trouble, that's YOUR fault. Furthermore, the bank WANTS you to take the fixed interest because it's generally double that of a variable rate. I specifically requested a fixed rate (set at 7.5) because I KNEW what was going to happen to that variable 3% rate....WHY? because I did my homework BEFORE making a multi-thousand dollar decision. The end result? I'm shopping around for a second home so I can place a renter in the first...all by myself, on less than 25K a year. Simply put, you don't have to be rich to get ahead in this country, just smart.
I understand that you are a liberal and want to be treated equally even though it appears that you are not...Why don't you try one of those Muslim countries, they won't care that you're an American, right?
You're the one saying let them fail, I'm the one saying let them seize the collateral put up for the loan. If said person ends up on the street, we'll give him YOUR address so you can feed and clothe him....interest free, of course, there should be no incentive for you to do this other than a warm fuzzy feeling, right? |
BrainSmashR Send message Joined: 7 Apr 02 Posts: 1772 Credit: 384,573 RAC: 0 |
Where Clinton may have screwed up is that he should have also required the banks to give lower income or "riskier" people the same rates and terms as most others. Giving a risky person a high interest rate and/or adjustable rates that go sky high is unethical and is just asking for a loan default in my opinion. I blame lenders for that (not Dems or GOPs). Anyone know the difference between a loan shark and a fly by night credit union? Me either...but I DO know that no credit is worse than slightly bad. Simply put, there's NO evidence that you repay your loans (at that time at least) |
Jeffrey Send message Joined: 21 Nov 03 Posts: 4793 Credit: 26,029 RAC: 0 |
Why don't you try one of those Muslim countries, they won't care that you're an American, right? I'm guessing they would welcome me and deport you... Can you guess why? ;) (We're both american, right?) It may not be 1984 but George Orwell sure did see the future . . . |
BrainSmashR Send message Joined: 7 Apr 02 Posts: 1772 Credit: 384,573 RAC: 0 |
Why don't you try one of those Muslim countries, they won't care that you're an American, right? LOL... I can't be deported from a country I refuse to visit... Besides, when I want to see a bunch of foreigners in the desert, I'll just go to west Texas. |
BrainSmashR Send message Joined: 7 Apr 02 Posts: 1772 Credit: 384,573 RAC: 0 |
What I meant by loan shark is someone who provides loans with incredibly high interest rates to anyone, regardless of their credit history. The example said 23%...that's high!! So I am assuming you did not qualify for anything better (PLEASE tell me you shopped around). One of those factors was mostly likely your credit history, or depending on the time frame, the LACK of a credit history. As far as a credit history goes. It's just what it is, slightly bad credit is better than no credit at all because your report will also record attempts you may have made at getting yourself out of default status on said loan. A loan officer sees $1000 a month was to much for you but that $500 a month is within your means and thus may qualify you for a smaller loan or a longer term with smaller monthly payments...no credit history gives him no information. |
Jeffrey Send message Joined: 21 Nov 03 Posts: 4793 Credit: 26,029 RAC: 0 |
no credit history gives him no information. It tells me that they managed their money well enough to not need extra credit... ;) (But then again, I'm capable of thought outside the realm of documentation.) It may not be 1984 but George Orwell sure did see the future . . . |
BrainSmashR Send message Joined: 7 Apr 02 Posts: 1772 Credit: 384,573 RAC: 0 |
no credit history gives him no information. Likewise, never having a bullet penetrate my skin means I am bullet proof, right? Or is your example, like mine, totally devoid of rational thought? |
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