The CRA started this the same way every journey begins with the first step. Bottomline-There is enough blame to go around and we need to hold our elected representative accountable–Call them, write them, go see them.

Maybe its time for term limits

the point you are missing is that this financial mortgage meltdown has also occured in europe. no, i do not mean the countries that bought these mortgage backed securities, but i am referring to the deregulation of banking in england, iceland, ireland,italy, germany. do you mean to tell me that all these countries had implemented the CRA. I doubt it.
In addition, my brother who makes 100,000 per year is losing his house because he paid 400,000 with an ARM that began with rate of 2.0% and when the loan came due it was readjusted to 5.25% which tripled his monthly payment. His 2 best friends make more than he does and are also losing their homes because of the adjustable rate mortgages given knowing that once the rate adjusted from an extremly low rate, the borrower would not be able to make those payments. All three of these guys who are losing their homes are not in the category of minorties nor are they low income. MY house was worth about 500,000 after 2 years of purchasing it and on my street we have over 6 forclosed homes. I live in an upscale neighborhood in sonoma county california and the people that bought these homes were making over 75,000 per year not including spousal income. These were very educated people with great careers but once again the interest rate adjusted after 5 years and the new rate was not bearable to the homeowners. So please don’t blame clinton since bush has been in power for 8 years and lets not forget that when bill clinton adjusted the CRA, repubs were in the majority and they voted for it to pass!!!! How long have republicans been in the majority? so blame it on the other party instead of yourselves. In the early 1990′s sweden also had an enormous financial meltdown and it was cause by deregulation of the banks. Read all the newspapers that you want and this is the cause that is given. Look at all the tainted food and toys from china, why? not regulated, how about planes almost colliding in the sky or at takeoff, why? deregualtion of air traffic control I c an go on and on about how your stupid free maket ideology is a joke. In fact Senator Shelby of Alabama and Senator Bunning of Kentucky(both republicans) during Banking committee hearings also stated that this was cause by deregulation of banks. Watch CSPAN to confirm this. If the bush administration was serious about regulation then why are all the contractors in iraq stealing, embezzling, money from taxpayers. that is not my opinion, that is a report from the inspector general of iraq stewart bowen. Bush and cronies are corrupt and i do not care for clinton policies either. Repubs and dem’s have passed free trade policies which have caused the collapse of economies in michigan, illinios, ohio and many other manufactoring states. repubs passed a bill to give tax breaks to corp. that ship jobs overseas, so we americans can buy shit from china and make them rich while our trade deficit runs an enormous debt. So please do not go there because i can give you many more facts!!!!!!

I suspect (and, yes, this is speculation) that the CRA got the ball rolling down the hill and picked up all the accretions mentioned above to create the massive financial problem we face today. This CRA stone picked up a lot of moss on it way down. I would guess that the CRA is responsible for about a third of the damage, but the whole problem would not have started without its passage in 1977.

Look, this is a big crisis, and I’m not one to blame it completely on the CRA. Greed and stupidity certainly played a part, but it certainly seems as though the CRA paved the way for greed and stupidity, and that is why the CRA is a “major” part of the problem.

See: http://www.traigerlaw.com/publications/traiger_hinckley_llp_cra_foreclosure_study_1-7-08.pdf –

Peace

In 2004, the republicans had control of the house, the senate and the White House. It’s hard to imagine how stupid someone has to be to recognize that the democrats couldn’t really block anything that the good ole boys wanted. Face it, your boys sat on their thumbs and did absolutely nothing.

Have a nice day.

The video from 2004 CS. 2004. When the Fannie Mae regulator was saying the whole thing was a clusterfuck waiting to happen. Frank and his cohorts on the committee basically told the guy he was crazy and just a political hack gunning for Raines.

I predicted this would happen. You didn’t.

Normally, I don’t do instant messaging shortcuts when writing comments but ROFLMAO!! I literally did burst out laughing when I read that. First of all, how do we know you predicted anything? Second of all, how do you know what I predicted or didn’t?

Did you watch that video, Jay? Paulson was the one that said they were fine, not Frank. You actually took the time to look up evidence to use against me, and the evidence you found did the opposite of what you said.

Jay, you don’t know what you are talking about. Your problems are so fundamental, I don’t even know where to begin to correct them.

Me: “I took economics in university”
Jay”: “You should ask for your money back.”

I predicted this would happen. You didn’t.
Therefore, I’m smarter than you, at least on this subject.
Mock me if you want, but that fact will always remain.

Quaker in a Basement: “That doesn’t sound like ‘Everything is OK’ to me.”

Paulson was the one who said everything was okay.

That doesn’t sound like “Everything is OK” to me.

He can’t answer that question, because he doesn’t understand the current crisis. He can only repeat talking points given by other right-wingers, most of whom also don’t understand the current crisis.

I’m not blaming people trying to buy a home. You’re making that up if you’re accusing me of doing so.

People thought that flipping homes was an easy way to make a quick buck, and banks played along because they made their money setting up the loan and then selling it to another sucker. THIS IS THE KEY Before Phil Gramm came along, banks had to keep their mortgages, which gave them incentives to make sure the people they were lending to could pay it back. Now, because they could package and sell the mortgages, they could lend people more than they could pay back, and just sell the bad debts to others.

Dude, what the hell are you talking about? Banks had to keep their loans before Phil Gramm came along? Why do you think Fannie Mae and Freddie Mac were created? They were created specifically to buy mortgages on the secondary market, pool them and sell them as mortgage backed securities on the open market to investors. And the debts didn’t become ‘bad’ until people started to miss mortgage payments. The problem is, far too many of these loans came out of the sub-prime market, where more people are likely to default (whether they can’t afford to pay or whether or not it was somebody that bought a house they couldn’t flip).

Wow.

On a side note, we saw this coming years ago, but the people who warned about the upcoming problems were attacked as leftist Bush haters.

Bullshit. Your “we” acted as if nothing was wrong when regulators and the Bush administration were arguing that the house of cards was going to fall. Watch that video CS. Are you seriously going to pass off this notion that Democrats say this coming years ago when they’re sitting their lauding the work of Frank Raines and talking about wonderfully Freddie Mac and Fannie Mae were doing? Give me a break.

On a side note, people on the right said this could never happen. They were wrong. As usual.

Uh huh. The right has been saying for the last 5-6 years that changes needed to be made. It was Democrats who sat on their hands pretending everything was fine. Cripes, the video below shows Barney Frank in JULY saying that everything was ok (he’s about 1:15 in):

http://www.youtube.com/watch?v=w_-pxrZdSKQ

I took economics in university

You should ask for your money back.

Jay, people tying to buy a home didn’t cause this crisis. To say otherwise shows you have no idea what caused this crisis.

This collapse was the latest Tulip Bulb story. People thought that flipping homes was an easy way to make a quick buck, and banks played along because they made their money setting up the loan and then selling it to another sucker. THIS IS THE KEY Before Phil Gramm came along, banks had to keep their mortgages, which gave them incentives to make sure the people they were lending to could pay it back. Now, because they could package and sell the mortgages, they could lend people more than they could pay back, and just sell the bad debts to others.

This drive up the prices, while greatly increasing the amount of debt, without increasing the amount of assets backing up that debt. When people realized, ‘Hey, it’s just a Tulip Bulb.’ the market started to correct.

On a side note, we saw this coming years ago, but the people who warned about the upcoming problems were attacked as leftist Bush haters.

When the prices started to correct, that house that was holding up three mortgages was suddenly worth less than the debt still owing.

On a side note, people on the right said this could never happen. They were wrong. As usual.

Here’s the problem with this debate…

I took economics in university, and you are regurgitating right-wing talking points. Yet you will never admit you don’t know what you are talking about. You will never learn. You will continue to make the same mistakes again, and again, and again.

If you didn’t vote, it would be funny.

Actually you haven’t, Jay. My summary of your “explanation” stands:

The CRA insisted that some banks stop redlining minority neighborhoods. Then something, something, mumble, mumble, mumble. And then a whole bunch of other lenders made some incredibly stupid loans because they knew they could grab their profit off the top and sell the remaining risk to someone else.

You have yet to provide any sort of answer that explains how the CRA played “a major role” in the current crisis. You have yet to provide any sort of answer on how CRA loans have performed versus non-CRA loans.

Instead, you have pulled your standard dodge: avoid giving any answer, then pretend that your avoidance is an answer.

Bah! to you.

You’re drifting a bit there, Jay. Banks operate in the primary mortgage market. The GSEs operate in the secondary market. The GSEs guarantee “qualifying” loans so they can be sold to investors, freeing up capital for lenders to issue more loans.

Generally, you’re on point, though. Now we can return to the original question: How did loans issued under the CRA perform? Did they contribute more or less than other loans to the problems at Fannie Mae and Freddie Mac?

You got the goods or not?

And who guaranteed those loans? Oh that’s right, it was two GOVERNMENT sponsored entities, Fannie Mae and Freddie Mac. Two organizations that didn’t operate under the same restrictions as banks (paid lower rates, 2.5% in capital reserves as opposed to 10% for banks). Of course, we now have enough evidence to show that people wanted them more strictly regulated, but it was Democrats who said, “Crisis? What crisis?” with regard to these entities.

Anybody watch the Youtube video of Democrats going off on Armando Falcon, the Fannie Mae regulator who was pushing for changes because he saw the problems that were on the horizon? The video is here and shows Democrats attempting to completely undermine the regulator. Here are some quotes as well:

Maxine Waters: Through nearly a dozen hearings, we were frankly trying to fix something that wasn’t broke. Mr. Chairman, we do not have a crisis at Freddie Mac, and particularly at Fannie Mae, under the outstanding leadership of Franklin Raines.

Gregory Meeks: … I’m just pissed off at OFHEO [the regulators trying to warn Congress of insolvency at the GSEs], because if it wasn’t for you, I don’t think we’d be here in the first place. … There’s been nothing that indicated that’s wrong with Fannie Mae, Freddie Mac has come up on its own … The question that then comes up is the competence that your agency has with reference to deciding and regulating these GSEs.

Lacy Clay: This hearing is about the political lynching of Franklin Raines.

Barney Frank: I don’t see anything in this report that raises safety and soundness problems.

http://www.youtube.com/watch?v=_MGT_cSi7Rs

Oh no, the CRA definitely has bearing on the subject. It’s just that, if you look at my earlier posts, the CRA probably helped DELAY the burst from happening.

To argue that the CRA has no bearing on this subject is either the height of intellectual dishonesty or ignorance. Take your pick.