Foreclosure rates surge, biggest jump in 5 years!

[Michigan Girl]

Nothing will change until public policy moves away from the assumptions that homeownership is a right

Forget just home ownership... nothing will change until public policy moves away from telling everybody that every commodity is a right. That's why we have all the people who think they should be entitled to something for nothing today in all facets of life.

Absolutely!! Do you have to be Republican to know this ...I'm not?!?!

And WTF ...are we not allowed to talk if we don't have a source ..I'm speaking from personal experience
in the industry not as a Dem or Rep!!

[Ehwmatt]

Nothing will change until public policy moves away from the assumptions that homeownership is a right

Forget just home ownership... nothing will change until public policy moves away from telling everybody that every commodity is a right. That's why we have all the people who think they should be entitled to something for nothing today in all facets of life.

Absolutely!! Do you have to be Republican to know this ...I'm not?!?!

And WTF ...are we not allowed to talk if we don't have a source ..I'm speaking from personal experience
in the industry not as a Dem or Rep!!

No... as someone who actually has practical experience in the field, you don't know anything. Shame on you and your arrogance for thinking otherwise.

You should definitely defer to some blueblooded legacy admitted Ivy League ivory tower political science major scumbag crook who purports to know about such matters when in reality he is just lining his own pockets, expanding his network of cronies, and adding to his own power. Failing that, you should defer to someone who votes Democrat, because they are so smart. .. and can't pay their utility bills

[RedWingFan]

And WTF ...are we not allowed to talk if we don't have a source ..I'm speaking from personal experience in the industry not as a Dem or Rep!!

Michigan Girl....you could always be like 7 and use a source, but don't link it, quote it or it's true author. Plagiarize it baby!

[Michigan Girl]

Right now I'm trying to bridge the gap between the rich and poor ...

[The_Noble_Cause]

Just the other day at Hearings...

Greenspan says Congress pushed Fed on housing boom

WASHINGTON, April 7 (Reuters) - Former Federal Reserve Chairman Alan Greenspan chastised critics on Wednesday by pointing out that Congress pushed the U.S. central bank to make sure lending to poorer Americans kept rising in the 2000s.

Well, I guess that settles it. We oughta simply take ole Alan at his word. It's not like he was the chief regulator, or had any responsibility or anything.
Must've been all Barney Frank's doing, right?

The Fed, in its regulatory role, is not supposed to be swayed by external political pressure (tho it always is). This quote only strengthens the case against Greenspan.
Other economists, as well as just plain political junkies, were sounding the alarm about high subprime deliquency rates long before the bubble finally burst.

[Ehwmatt]

Just the other day at Hearings...

Greenspan says Congress pushed Fed on housing boom

WASHINGTON, April 7 (Reuters) - Former Federal Reserve Chairman Alan Greenspan chastised critics on Wednesday by pointing out that Congress pushed the U.S. central bank to make sure lending to poorer Americans kept rising in the 2000s.

Well, I guess that settles it. We oughta simply take Alan at his word. It's not like he was the chief regulator, or had any responsibility or anything.
Must've been all Barney Frank's doing, right?
The Fed, in its regulatory role, is not supposed to be swayed by external political pressure (tho it always is). This quote only strengthens the case against Greenspan.

Other economists, as well as just plain political junkies, were sounding the alarm about high subprime deliquency rates, as well as housing prices outpacing inflation, long before the bubble finally burst.

This is an imperfect analogy, but it's just like people, including judges themselves, who believe that there is a strict constructionist-activist dichotomy between judges depending on their ideology. They're all activists at one point or another. There's nothing simple or dichotomous about it. One man's regulation may be another's deregulation.

[7 Wishes]

An ubiased source next time, please, MG.

lol, says the guy who routinely quotes and links Huff Post. You're too much dude. Thanks for the Friday laugh

Way to read the article, jackass. It's hardly complimentary of Obama and is written by a moderate Republican. Good for you, though, for making an assumption without the data.

[7 Wishes]

"...quote it or it's..."

Grammatical error #4,225, HimmlerFan. You would need to use the correct form, "its" - as opposed to "it's," which means "it is".

[7 Wishes]

In this case, LiePoster, the regulation was in place in order to prevent banks from practicing predatory and high-risk lending. Get it straight.

[slucero]

The vote to repeal Glass-Steagal doesn't look so one-sided.. when you look at the actual votes....

The banking industry had been seeking the repeal of the 1933 Glass-Steagall Act since the 1980s, if not earlier. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.

Respective versions of the legislation were introduced in the U.S. Senate by Phil Gramm (Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa). The third lawmaker associated with the bill was Rep. Thomas J. Bliley, Jr. (R-Virginia), Chairman of the House Commerce Committee from 1995 to 2001.

The House passed its version of the Financial Services Act of 1999 on 1 July 1999 by a bipartisan vote of 343-86 (|Republicans 205–16; Democrats 138–69; Independent/Socialist 0–1), two months after the Senate had already passed its version of the bill on May 6th by a much-narrower 54–44 vote along basically-partisan lines (53 Republicans and one Democrat in favor; 44 Democrats opposed).

When the two chambers could not agree on a joint version of the bill, the House voted on July 30th by a vote of 241-132 (R 58-131; D 182-1; Ind. 1–0) to instruct its negotiators to work for a law which ensured that consumers enjoyed medical and financial privacy as well as "robust competition and equal and non-discriminatory access to financial services and economic opportunities in their communities" (i.e., protection against exclusionary redlining).

The bill then moved to a joint conference committee to work out the differences between the Senate and House versions.

Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act and address certain privacy concerns; the conference committee then finished its work by the beginning of November. On November 4th, the final bill resolving the differences was passed by the Senate 90-8, and by the House 362-57. This legislation was signed into law by Democratic President Bill Clinton on November 12, 1999.

[The_Noble_Cause]

Thank you very much.
A de-regulated bank would not have made those loans, and in fact they were not. Hence red-lining.
Once regulated, banks did.
Then came the easy money when they sold it off to Freddie/Fannie,( see me and you). Because of the easy money supply (see Govt/welfare), predatory lending started.
When you give things away don't be surprised when a line forms outside your door. Grand Social Experiments (see GSE's) almost never work.
I think we can safely say that this one failed as well.

My, what a simplistic free market fairy tale. If only the biggest financial crisis in nearly a century could be reduced into such black and white terms.
FF, you clearly have not looked into the crisis very deeply, or, once again, you simply don’t mind feeding your fellow MR posters a line of cornfed shit.

Fannie and Freddie gambled with subprime mortgages to be sure. And they paid the price.
However, to imply that they were the reason for the ensuing multi-billion Tarp / AIG bailout, along with the global credit markets freezing is nothing short of laughable.

Over half of the subprime mortgages originated in the private sector – that is, unregulated lenders that weren’t bound by the Carter-era Community Reinvestment Act (see links below). Neither the CRA, nor ANY regulation for that matter, caused the too-big-to-fail investment banks to then buy up these subprime mortgages, bundle them into complex derivatives, and give them false Triple A ratings, or force AIG to start insuring those toxic subprime mortgages. Nobody forced investment banks like Bear-Stearns and Lehman to do anything – and of course, it was these giant firms that drove the secondary subprime market, which eventually jeopardized the global financial system, and capitalism, itself.

As for Greenspan...we’re talking about a man who was referred to as the “oracle” and literally, could move financial mountains based upon what he said (“irrational exuberance” anyone?). With the markets hanging on his every word, he had a responsibility to warn the people. By 2004, the FBI thought the subprime crisis was serious enough to launch an investigation. Later, so too did several states (who were overruled by the comptroller of currency). Meanwhile, Greenspan at the Fed, whose primary responsibility was to oversee the stability of the financial system and prevent crashes, swears he saw and heard nothing. Riiiiight.
He was also warned about credit default swaps and the very derivatives gambling (a.k.a. financial weapons of mass destruction) that helped bring us to where we are at, and he chose to ignore it. Other posters already mentioned the extended period of low interest rates

As I’ve stressed repeatedly, nobody from either party walks away with clean hands, but not everyone in this farce is equal. As a regulator of first resort, Greenspan fucked up.

http://blogs.wsj.com/economics/2008/12/ ... b/article/
http://blogs.wsj.com/economics/2008/12/ ... he-sequel/
http://www.businessweek.com/investing/i ... reinv.html
http://www.mcclatchydc.com/2008/10/12/5 ... annie.html
http://www.dallasfed.org/ca/bcp/2009/bcp0901.cfm#12

[Michigan Girl]

http://www.city-journal.org/2008/eon1030hh.html ...

The once-obscure Community Reinvestment Act, passed during the Carter administration, has recently—in part because of my reporting—become a bogeyman for Republicans, some of whom have proposed its repeal. Liberal Democrats have defended it as unrelated to the meltdown. The truth lies somewhere in between. While it’s a long way from the late-seventies world of the original Act to the twenty-first century’s housing crisis, the CRA’s role was important.

But the CRA advocates, including the New York Times, continue to claim that CRA-qualified loans made by regulated financial institutions performed well and shouldn’t be implicated in our current troubles. They point to the results of an evaluation of CRA loans by North Carolina’s Center for Community Capital, which found that such loans performed more poorly than conventional mortgages but better than subprime loans overall. What they don’t mention is that the study evaluated only 9,000 mortgages, a drop in the bucket compared to the $4.5 trillion in CRA-eligible loans that the pro-CRA National Community Reinvestment Coalition estimates have been made since passage of the Act

It seems clear that we have, as a matter of national policy, pushed too many households toward homeownership. Both political parties are guilty. Democrats were largely responsible for the Fannie and Freddie affordable-housing goals, but the Bush administration promoted the idea of letting holders of Section 8 rental-housing vouchers—very poor households—use their housing subsidy as a down payment on a mortgage.

Aaaaaand then we have Greenspan, crooked brokers and people who want what they can't afford ...

[RocknRoll]

This year it's not just subprime mortgages causing the foreclosures. A lot of people are now losing their homes because they remain unemployed..


Now where is that damned soapbox emoticon?!!

[RedWingFan]

"...quote it or it's..."

Grammatical error #4,225, HimmlerFan. You would need to use the correct form, "its" - as opposed to "it's," which means "it is".

I'll gladly accept responsibility for my missing apostrophe. It's better than repeatedly plagiarizing in a sad attempt to sound smart! You're like the bastard child of Professor Jones and Jason Blair!

[slucero]

This year it's not just subprime mortgages causing the foreclosures. A lot of people are now losing their homes because they remain unemployed..


Now where is that damned soapbox emoticon?!!

We're right in the peak of the reset cycle... which in concert with this wonderful economy ( ), should make 2011 a great year...

[squirt1]

Look up the 2 Clinton appointees Jim Jones & Franklin Raines in charge of Fannie & Freddie. They are up to the elbows in this. Why Bush kept them I will never understand. When they amscrad they left with millions in bonuses . The one guy took $15 million.

[SherriBerry]

An ubiased source next time, please, MG.

What Democratic sight would you suggest, 7 ?!?!

Here is a video containing several sources that explains the collapse - and like MG stated, it did begin with the Community Reinvestment Act. It makes sense - why would the Republicans have a vested interest in securing home ownership for low-income workers, many of whom are minorities? That's what it began as, not what it became. Doesn't that sound like a cause of the Democrats and not the Republicans? The CRA was written with good intentions, but when you have the foxes on Wall Street running the Chicken Coop, it seems evident now that deregulation cannot be considered as an option. The people on Wall Street today make Gordon Gekko (anyone remember Michael Douglas in 'Wall Street'?) look like a philanthropist.

Burning Down the House: http://www.youtube.com/watch?v=1RZVw3no2A4&annotation_id=annotation_918789&feature=iv

[The_Noble_Cause]

Here is a video containing several sources that explains the collapse - and like MG stated, it did begin with the Community Reinvestment Act. It makes sense - why would the Republicans have a vested interest in securing home ownership for low-income workers, many of whom are minorities?

The push for home ownership was expanded under presidents of both parties. If you can't even agree on this basic, and widely-documented fact, you are simply not credible.

Doesn't that sound like a cause of the Democrats and not the Republicans?

Does nation building in Iraq, creating a new Medicare entitlement, and expanding the size of government sound like a cause of a Republican? Does ratcheting up a war in Afghanistan and drilling for offshore oil sound like the cause of a Democrat?
As recent history proves, personal perceptions are not facts. Both parties had a vested stake in expanding home ownership simply because both parties want the votes of low income Americans - and still do.

The CRA was written with good intentions, but when you have the foxes on Wall Street running the Chicken Coop, it seems evident now that deregulation cannot be considered as an option. The people on Wall Street today make Gordon Gekko (anyone remember Michael Douglas in 'Wall Street'?) look like a philanthropist.

First, not all the defaulted subprime loans were CRA anti-redlining loans.
Second, nowhere did the CRA mandate that banks and lenders move their risk by passing subprime loans to Wall Street firms/Freddie and Fannie, have them bundled into securities and sell them to investors the world round. That's casino capitalism a-go-go, not the over-regulatory nanny state. You are confusing two separate things. In the words of George W. Bush, "Wall Street Got Drunk."

[Saint John]

I blame the people. When you sign your name on that dotted line you should be diligent in your number one investment in life ... your home. Instead, people passed on savings in favor of every new gadget available, new cars and other ways of wasteful spending. Hey, it's fine if you can afford it, but the vast majority obviously couldn't. I also blame the "entitlement" mindset put forth by democrats forcing banks to cave and accept 1, 3 or 5% down, rather than the traditional 20%.

[Michigan Girl]

I blame the people. When you sign your name on that dotted line you should be diligent in your number one investment in life ... your home. Instead, people passed on savings in favor of every new gadget available, new cars and other ways of wasteful spending. Hey, it's fine if you can afford it, but the vast majority obviously couldn't. I also blame the "entitlement" mindset put forth by democrats forcing banks to cave and accept 1, 3 or 5% down, rather than the traditional 20%.

lol ...there are other factors, sure, but I so agree with you here. Whether one is purchasing a pack a gum or buying a house,
consumer decisions are assumed to be based upon simple economics. You have a nickel in your pocket and you
want a pack of gum priced at .25 ...you see other americans chewing gum, but you know it is not necessary for your
survival. You could take out a loan, but repayment would be difficult, at best. It is a very simple concept...
you do not NEED the gum, folks. Work a little harder, save some money and then revisit your financial status
...but for now, step away from the gum before it destroys America!!

[Michigan Girl]

An ubiased source next time, please, MG.

What Democratic sight would you suggest, 7 ?!?!

Here is a video containing several sources that explains the collapse - and like MG stated, it did begin with the Community Reinvestment Act. It makes sense - why would the Republicans have a vested interest in securing home ownership for low-income workers, many of whom are minorities? That's what it began as, not what it became. Doesn't that sound like a cause of the Democrats and not the Republicans? The CRA was written with good intentions, but when you have the foxes on Wall Street running the Chicken Coop, it seems evident now that deregulation cannot be considered as an option. The people on Wall Street today make Gordon Gekko (anyone remember Michael Douglas in 'Wall Street'?) look like a philanthropist.

Burning Down the House: http://www.youtube.com/watch?v=1RZVw3no2A4&annotation_id=annotation_918789&feature=iv

Wow, interesting!! This is very one~sided, but it does contain factual inf.
I'll have to study this a little further when I have more time.

[SherriBerry]

Here is a video containing several sources that explains the collapse - and like MG stated, it did begin with the Community Reinvestment Act. It makes sense - why would the Republicans have a vested interest in securing home ownership for low-income workers, many of whom are minorities?

The push for home ownership was expanded under presidents of both parties. If you can't even agree on this basic, and widely-documented fact, you are simply not credible.

I said it began with the CRA Act, not that it was the sole cause. If you can't understand that basic statement, don't bother to comment. Both the Democrats and Republicans have primary demographics they appeal to; it is no surprise that moderates in both parties may support causes they need to get them elected, but that doesn't change their primary philosophies or agendas and causes of the poor and underpriviledged are not the primary concern of the Republican Party. As I stated, the CRA was not the sole cause of the collapse - it is common sense, however, that as soon as there is deregulation in any part of the financial sector, there are sharks looking for every opportunity to work the system and make money, consequences be damned.

[The_Noble_Cause]

I said it began with the CRA Act, not that it was the sole cause. If you can't understand that basic statement, don't bother to comment. Both the Democrats and Republicans have primary demographics they appeal to; it is no surprise that moderates in both parties may support causes they need to get them elected, but that doesn't change their primary philosophies or agendas and causes of the poor and underpriviledged are not the primary concern of the Republican Party.

The past two standard bearers of the Republican Party, Bush I and Bush II, both strengthened the CRA.
Now, whether they we're acting uncharacteristic of their party, as you suggest, is up for debate.
Given that there hasn’t been a real small government conservative since Calvin Coolidge, I’d argue that they were acting like typical Republicans.

As I stated, the CRA was not the sole cause of the collapse - it is common sense, however, that as soon as there is deregulation in any part of the financial sector, there are sharks looking for every opportunity to work the system and make money, consequences be damned.

This is true, but the CRA and the Wall Street deregulation are two separate things.

[Michigan Girl]

Here is a video containing several sources that explains the collapse - and like MG stated, it did begin with the Community Reinvestment Act. It makes sense - why would the Republicans have a vested interest in securing home ownership for low-income workers, many of whom are minorities?

The push for home ownership was expanded under presidents of both parties. If you can't even agree on this basic, and widely-documented fact, you are simply not credible.

I said it began with the CRA Act, not that it was the sole cause. If you can't understand that basic statement, don't bother to comment. Both the Democrats and Republicans have primary demographics they appeal to; it is no surprise that moderates in both parties may support causes they need to get them elected, but that doesn't change their primary philosophies or agendas and causes of the poor and underpriviledged are not the primary concern of the Republican Party. As I stated, the CRA was not the sole cause of the collapse - it is common sense, however, that as soon as there is deregulation in any part of the financial sector, there are sharks looking for every opportunity to work the system and make money, consequences be damned.

Nicely stated, SB!!!

[7 Wishes]

Yeah, OK! I mean, who gives a shit if it's actually true or not. If you can blame it on the Democrats, it's fair game!

The GOP never lets the truth interfere with a good smear. Dirty politics really started under Reagan, and the GOP has run the gamut since then.

[Ehwmatt]

Yeah, OK! I mean, who gives a shit if it's actually true or not. If you can blame it on the Democrats, it's fair game!

The GOP never lets the truth interfere with a good smear. Dirty politics really started under Reagan, and the GOP has run the gamut since then.

Dirty and politics have gone together like chocolate and peanut butter since the time of the civilized society, lol. Please.

[7 Wishes]

I was referring to the television / mass media age. The kind of bullshit the GOP has pulled just wasn't done before that economic growth-killing talking head Reagan and his cronies.

[Ehwmatt]

I was referring to the television / mass media age. The kind of bullshit the GOP has pulled just wasn't done before that economic growth-killing talking head Reagan and his cronies.

Who cares who started it? The end result is both parties are in the same crooked pockets of certain interests and both parties are totally ruining this country. It might already be beyond repair.

Sure, there's some independent loony causes on both sides, but if you could really get to the bottom of the BIG corruption, I'll bet you'd be surprised at how much BOTH parties get greased by the same wealthy interests.

Even if that little hypothesis isn't accurate, there's no doubt that best case scenario, the average politician is a bumbling buffoon and worst case scenario he is a conniving, greedy crook.

We need to stop letting overprivileged, blueblooded dicks who get into Ivy League college on the coattails of their family name and wealth or affirmative action and who later trudge their way to a JD while never working an honest day in their lives run our country. Lawyers, even great ones, are not necessarily great businesspeople. And a country is a business no matter which way you slice it.

We need practical, honest people who are in touch with the real people on both sides. People that will consider the long term consequences of their political jockeying through absurd policymaking... ah fuck it, nevermind, we're never gonna get those kinda people. We reap what we sow in this country. I mean seriously, if Obama and McCain were the two best choices we had in 2008... we need serious fucking help. Neither of those clowns is fit to run Mexico

[SherriBerry]

Here is a video containing several sources that explains the collapse - and like MG stated, it did begin with the Community Reinvestment Act. It makes sense - why would the Republicans have a vested interest in securing home ownership for low-income workers, many of whom are minorities?

The push for home ownership was expanded under presidents of both parties. If you can't even agree on this basic, and widely-documented fact, you are simply not credible.

I said it began with the CRA Act, not that it was the sole cause. If you can't understand that basic statement, don't bother to comment. Both the Democrats and Republicans have primary demographics they appeal to; it is no surprise that moderates in both parties may support causes they need to get them elected, but that doesn't change their primary philosophies or agendas and causes of the poor and underpriviledged are not the primary concern of the Republican Party. As I stated, the CRA was not the sole cause of the collapse - it is common sense, however, that as soon as there is deregulation in any part of the financial sector, there are sharks looking for every opportunity to work the system and make money, consequences be damned.

Nicely stated, SB!!!

Thanks MG.

[SherriBerry]

As I stated, the CRA was not the sole cause of the collapse - it is common sense, however, that as soon as there is deregulation in any part of the financial sector, there are sharks looking for every opportunity to work the system and make money, consequences be damned.

This is true, but the CRA and the Wall Street deregulation are two separate things.

But they are interrelated in terms of the impact they had on the economy. The CRA allowed for the creation of these crappy mortgages taken out with little or no money down by people who could not afford them. It was the investment banks on Wall Street who took the crappy mortgages and created securites using them as collateral. They sold these CDOs to investors and were supposed to pay them back as the mortgages were paid back, expecting only some of them to fail.

As it was explained to me, the CDOs were comprised of 3 traunches we'll call - the "Good, the "Bad" and the "Ugly". If some mortgages failed, the investment banks promised to pay those with the "Good" traunch first, the "Bad" second, and so on. The higher the risk on the traunches, the higher the interest rate paid out. Then the investment banks bought bond insurance - the "Good" traunch was rated AAA-A and the "Bad" was rated BBB-B for higher risk - the "Ugly" was not insured due to its high risk. And the result was AAA and BBB securities, created out of crappy, risky mortgage loans, which were sold to insurance companies, banks, small towns, pension funds, and any other entities trying to invest in high quality, insured, safe investments. The investment banks that created these securities kept the "Ugly" piece and payed themselves a nice high interest rate.

Remember that all of these securites only had those very risky mortgages as collateral and the rules of accounting allowed the investment banks on Wall Street to create shell companies to take ownership of those mortgages which went on their balance sheets and not the bank's. WTF? It's called a "Special Purpose Vehicle". When the mortgages backing these CDOs began to fail, there was no money to pay investors who had believed they were invested in safe, insured AAA investments. Which means the agencies giving the AAA ratings also screwed up by giving out these ratings in the first place. These investments were insured, but the insurance companies did not have the money set aside to cover such a massive loss. Another screw up. And the people who had pension funds and life savings invested watched those investments in "safe" mutual funds tank in value as the housing bubble burst and the market nose dived.

The CRA was the baby of the Democrats (representing the interests of the poor), but I believe that much of the deregulation of Wall Street and the rules of accounting that allowed them to pull this off was the baby of the Republicans (representing the interests of the rich), so there is blame on both sides of this disaster. However, if it were not for the creation of the CRA in the first place, there would not have been the risky mortgage loans. The worst was seeing billions of dollars paid to those banks and the crooks who should be looking at prison terms given huge bonuses for their "good work" while millions of people lost their jobs and homes.