Google Traiger Hinckley Community Reinvestment Act Foreclosure Study

Rich,

What point did you want discussed. I thought I hit them all–or is it I didn’t answer them the way you wanted so they must be wrong?

And its amazing that *I*, who has only voted for a Republican presidential candidate once in my life (in 1988), now has a Republican patron saint.

I’ll have to tell St. George he’s out of a job.

Community Reinvestment Act Banks were significantly less likely than other lenders to make a high cost loan–and high cost loans are a primary driver of the foreclosure crisis, as borrowers who are unable to afford their mortgage payments default on their loans.

ROTFL. Citation and data, please. Loans don’t fail as a function of the amount lended. They fail as a function of the borrower’s inability to re-pay.

So, if you can show me that the CRI loans DIDN’T result in more loans granted to people with less money down and lower income, then you can persuade me. If not, I’ll assume that either you have no clue what you’re talking about or are full of crap, or both.

Fact is, the combination of a lack of Freddie-Fannie oversight and extended cheap credit led directly to the big market for mortgage-based securities. And hardly anyone from either side of the aisle bitched about it. Here’s a blog post about Richard Baker, one of the few who did.

I’m a centrist, and I’m VERY tired of the democrats “failed Bush financial policies” tag line. Democrats deserve plenty of blame on this, just like the GOP.

Nancy Pelosi? She wouldn’t know a sound fiscal policy if it fell from the sky and crushed her partisan pin-sized brain. She’d do well to keep her mouth shut about blaming the GOP. Or is she does open it, she better describe a specific Bush admin policy that she opposed which led to this situation. Or else I’ll KNOW she’s full of crap.

The dems control congress, and so they have the power to pass whatever bill they do or don’t want. Becaue we know Bush will sign it. Right now it really doesn’t matter whose fault this is, we need someone to take responsibility for fixing it, and only the congressional majority has the power to do that. So if they decide they need the ass-coverage that a bipartisan bill would provide, they have to make concessions. That’s how it works.

Shame on them.

As far as “sophistry” for explaining how the Bush deficit spending impacts the credit crisis, if you think that the interconnectedness of the economy is sohistry then you probably don’t belong in a discussion about the economy.

I cannot even believe I am having this conversation with a conservative, whose patron saint was Ronald Reagan who said the biggest evils facing the nation were communism and federal spending–and not in that order (of course, this before he ran up the biggest deficit in history up until Bush took over)

Here it is, simple as I can make it.

For almost the entire history of this country, deficits were bad, but somewhere after Reagan took office, the argument became, “Deficits don’t matter.”

Really, though, it wasn’t that deficits didn’t matter, it was that maybe something else mattered more–or to put it another way: When the government spends more than it takes in and borrows the difference, this has two potential effects. The borrowing reduces the amount of capital available for private investment, raises interest rates, and makes us poorer. But the extra spending or lower taxes stimulate economic activity and make us richer. The question is: Which effect is bigger?

The Bushies have been arguing for the last 8 years that the extra spending AND lower taxes stimulates the economy more, so screw deficits.

Well, here we are.

A government borrows money rather than living within its means. At a certain point, the amount of money borrowed becomes so substantial that is begins to gobble up all the available money, so others cannot borrow it.

Furthermore, the more money government has to borrow to pay its bills, the more money government has to pay lenders to borrow it. Federal debt is reaching a point where the interest alone is so great it’s difficult to pay.

Meanwhile, as the supply of money shrinks, demand grows, and borrowers pay more for borrowing. This drives up borrowing costs not just for government, but everyone.

Normally, that would have meant higher interest rates, but rather than following good policy, the Fed has desperately tried to keep the economy running by keeping rates artificially low.

Something has to break.

If interest rates cannot rise, as debt grows, the willingness of lenders to lend diminishes not just to the earlier borrower, but also to everyone else. The low interest rates don’t make the risk of lending worthwhile. It’s too risky to lend now.

Liquidity shrinks.

Wait, there is more.

As indebtedness deepens, the dollar weakens, as it is weakening now and has been since Bush came into office and began borrowing like a drunk sailer in a strip club. That means more dollars buy less (a big reason for the rising price of oil, is speculation followed by the weakening dollar).

As the dollar weakens because government is less credit worthy (and a big hunk of our debt is owned by countries who don’t like US much anyhow), either interest rates rise, or if there is no money to load, credit dries up.

Is that enough sophistry for you?

Republicans have been running around since Reagan saying, “Deficits don’t matter, Reagan proved that,” but the problem is they do matter.

Today’s GOP doesn’t want to admit it because they think its sophistry. It’s high faluting liberal ideas!

The problem is, real conservatives know better, they’ve just been drowned out by the idiots who are more consumed with power and politics than principle. Perhaps you know a few?

And you think Pelosi’s speech agrees/comports with your statement how exactly?

Who is insulting whose intelligence here?

And where is your sophistry explaining how Bush budget deficits caused the credit crisis? (YES, thats what Pelosi said…and YES that is what this thread is about.)

Hunting, digging, twisting anything you can into a reason to blame the Dems for a problem that was largely–but not solely–brought about by deregulation, failed free market policies, and yes, huge deficits.

It’s so sad.

I honestly cannot tell if you really believe this nonsense or if you are so politically coarse that you just feel compelled to spread it to fool those who don’t know any better.
In particular is this Republican lie that keeps getting bandied about with everyone pointing back to the Community Reinvestment Act or a reluctance on the part of Democrats to move oversight of Fannie and Freddie from congress to the Treasury Department.

Let’s take a look at those, briefly, as I am sick of hearing this.

Community Reinvestment Act Banks were significantly less likely than other lenders to make a high cost loan–and high cost loans are a primary driver of the foreclosure crisis, as borrowers who are unable to afford their mortgage payments default on their loans.

Furthermore, when Community Reinvestment Act Banks did originate high cost loans, the average APR was appreciably lower than the average APR on high cost loans originated by other lenders. Overall, the average high cost loan made by CRA Banks was priced 68 basis points lower than the average high cost loan originated by other lenders.

Additionally, when high cost loans were made to lower middle income borrowers were priced 74 basis points lower than high cost loans originated to low and moderate borrowers by other lenders.

Finally, CRA Banks were more than twice as likely as other lenders to retain originated loans in their portfolio–so the bad mortgages that were repackaged and sold and are now at the heart of the credit crunch have very little to do with the CRA.

Now, the reluctance of Democrats to allow George W. Bush to create a new agency to oversee Fannie and Freddie, but before I get into that, I want to make it clear the Dems are equally as culpable for Fannie and Freddie as the Republicans, because congress did have the oversight, but no more so.

Now, let’s back up to 2003 and when the Bush Administration proposed, according to the New York Times, “the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.”

Under the plan a new agency would have been created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have had the authority to set one of the two capital-reserve requirements for the companies. It would have exercised authority over any new lines of business. And it would have determined whether the two are adequately managing the risks of their ballooning portfolios.

Here’s the problem with that proposal that revisionist Republicans want people to think were going to create more oversight.

The biggest supporters of the proposal were Fannie Mae and Freddie Mac executives! They wanted to get out from under the thumb of congress and get under the umbrella of an anti-regulation Bush Administration. Do you really think Fannie and Freddie execs were anxious to get into a system that would mean more oversight?

Please, don’t insult our intelligence

#1. Claiming the present crisis was caused by Bush budget deficits. (at 1:09 mark)

#2 Claim of an “anything goes economic policy” (whatever the hell that is supposed to mean) (at 1:39 mark)

#3 Claim there is “no relgulation” in he economy is too stupid to have been uttered by someone supposedly “in the know”. (at 1:48 mark)

#4 “You will have a golden parachute” Uh, thats Bush’s fault how exactly? “And you will be bailed out” Uh, excuse me lady, but aren’t YOU the one pushing the bailout? (1:58 mark)

#5 The basic diatribe against “free markets” as having “caused” the crisis (she rambles on about 15-20 seconds starting around 2:10 mark.)

#6 Claim that she only heard about the financial crises ten days ago. (!!!!!!!!!!!!!!!!!!!) (at 2:48 mark)

#7 Monty Python moment (at 3:40) moment where she states “I don’t know what was so ‘great’ about the depression.” (”The ‘terrible” Saga” “Uh…its not THAT ‘terrible’” “I meant ‘terrible’ as in ‘terribly violent’” “Oh YEAH”)

#8 “It snuck up on us on little cats feet…” (at 4:07 mark) Yeah, absolutely no one noticed that housing bubble. Who would have thought mortgages could be in trouble when that burst.

#9 And worst of all: Democrats, who mandated by law the issuing of risky sub-prime mortgages, according to Pelosi, had NOTHING to do with the crises.

I’d be pissed off too.

Robert Wagner and those reverse mortgage crooks over at the The Senior Lending Network. You know it’s a scam!!

:p

Agnostick
agnostick@excite.com