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Blake
| | Posted on Tuesday, September 06, 2011 - 05:41 pm: | 
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More...
http://www.mediacircus.com/2008/10/obama-sued-citi bank-under-cra-to-force-it-to-make-bad-loans/
See Obama's name on list of plaintifs' lawyers.
More...
http://www.nypost.com/f/print/news/opinion/opedcol umnists/item_cvq7rDCHftKwJyLaecfPQK
(Click "cancel" when it asks for a printer.) |
Fahren
| | Posted on Tuesday, September 06, 2011 - 05:47 pm: |
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And on the other hand, look HERE,
HERE, HERE, and HERE, among many other sources readily available, to refute the claims.
(Message edited by fahren on September 06, 2011) |
Davegess
| | Posted on Tuesday, September 06, 2011 - 06:12 pm: |
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Quote me the section and paragraph of the law.
I am not saying that Fannie and Freddie along with, Congress and several Presidents, don't have some of the blame for the housing mess BUT the Banks, investment houses and rating agencies are as much to blame as them.
F/F should not have repurchased a lot of what they did BUT a lot of other investors were quick to buy much of what F?F didn't buy.
Countrywide, which I think was the largest originator of these lousy loans and I don't think it was not even covered by the CRA.
Banks were indeed "pushed" but they quickly figured out that crappy loans could be incredibly profitable and this quest of profits drove over the cliff; the CRA was a push but the banks stepped on the gas. |
Sifo
| | Posted on Tuesday, September 06, 2011 - 06:15 pm: |
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I want to see it in black and white where the CRA required companies like Countrywide to make bad loads?
You won't find anything like that anywhere. The weren't considered to be bad loans when they were made. First off this conversation has been about conforming mortgages. I've defined that earlier. These are loan contracts that are written by Freddie Mac/Fannie Mae. Frankly, if the applicant qualifies, the bank doesn't care if it's a good or bad loan. They will sell the loan to F/F before the first payment is due. That's the way the system is set up. The bank is happy because they make money in origination fees, and F/F is happy because they make money servicing the loan.
Where a bank IS forced into making a loan is when an applicant walks in and fills out an application and qualifies under the qualification criteria that has been established in writing. It doesn't matter if the bank has established the criteria, or if F/F has established the criteria, then can not simply say that they feel you are a bad risk despite otherwise qualifying for a loan. If you want to find this in writing, simply go apply for a loan. You will be asked to sign a piece of paper that states this. Or you can read up on redlining practices. This is one of the things that the CRA meant to address.
For the record, Countrywide did a lot of non-conforming loans that were riskier than most of the F/F loans. These wouldn't be part of this lawsuit though, because F/F only purchases conforming loans.
So once again... F/F is suing banks for conforming loans that were made by various banks. Being conforming loans, the terms were defined by F/F, not the bank. If the applicant qualifies under the terms of the loan, then no, the bank has no choice but to originate the loan. Of course at the time they weren't considered to be "bad" loans. That's where it becomes impossible to meet your silly criteria. It wasn't a "bad" loan until after it defaulted. Now in hindsight the government wants to sue the banks for their own stupidity. |
Sifo
| | Posted on Tuesday, September 06, 2011 - 06:26 pm: |
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Fahren,
I hate to say it but I think you are getting confused by the term "subprime". Frankly the term surprises me when talking about F/F loans. These are typically not considered the subprime market in the mortgage industry by a long shot. The lenders that specialize in the subprime market do so outside of F/F channels. They are without a doubt higer risk loans, and the higher interest rates on them reflect that fact. Ask anyone in the mortgage industry about subprime loan products though and you will not hear about F/F products. Subprime typically is a term reserved for loans that you can qualify for 12 to 24 months out of a bankruptcy. |
Sifo
| | Posted on Tuesday, September 06, 2011 - 06:46 pm: |
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Here's about as close as you get to forcing banks to make "bad" loans...
http://www.austinhomeloan.com/regulations/regb.htm l
quote:Extension of Credit:
A lender may not refuse to grant an individual account to a creditworthy applicant on the basis of sex, marital status or any other prohibited basis.
So as a lender I can only disqualify an applicant for non-prohibited reasons. In other words if they qualify for the loan, I have to give it to them. In the case of this lawsuit, F/F set the qualification criteria. They actually had a very nice computer program when I was doing this where you would type in the application information, select the loan product and it would either deem the applicant qualified - pending verification of information, or give a list of criteria that disqualifies the applicant for that loan product. We then had a product matrix that we could look at that gave us other product options that may work for them based on the criteria that bounced them from that loan. If there was another F/F product (conforming loan) that might work for them, then we simply had to change the product code and submit the loan again. Non-conforming loans are a lot more work unless you are dealing with a bank that has a similar computer system.
The bottom line is that regardless of the label you put on the loans ("bad", "subprime"), the qualification criteria was defined by F/F. The bank had nothing to do with that area of the loan process for these loans. If the F/F software says they qualify, then all that's left to do is verification of the information taken on the application. |
Sifo
| | Posted on Tuesday, September 06, 2011 - 06:59 pm: |
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Fahren,
Just a quick look at your first link has me seriously questioning what this guy is talking about. He states "Indeed, the lenders most prominently associated with subprime mortgage lending abuses and high rates of foreclosure are lenders not subject to CRA,". I've never heard of a mortgage bank not being subject to federal laws. Even the worst of the subprime lenders are subject to federal laws. Some may not have done a good job following the laws, but they are certainly subject to them. |
Sifo
| | Posted on Tuesday, September 06, 2011 - 07:17 pm: |
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Reading some of the other links, specifically the one of the speech by Randall S. Kroszner which seems to be the foundation for the other opinion pieces is kind of interesting. He seems to be trying to parse specific loans as either being subject to the CRA or not based on the price of the loan (I assume he is referring to the rate). This is a gross characterization of the CRA. CRA doesn't only apply to subprime loans as Kroszner seems to imply. It applies to the entire mortgage industry and all loan products. If that weren't the case you could take an applicant that qualifies for a prime mortgage and disqualify him/her based on criteria such as race, marital status, age, etc., but that just isn't the case. CRA still applies to the prime market too. Kroszner simply ignores this fact to cut the "CRA loans" down to a percentage that sounds good in a speech. I'm not even going to waste my time on the rest of it. He is engaged in providing obviously false information and isn't worthy of consideration.
If you have specifics that you want me to address, ask about specifics. The loans that Kroszner defines as CRA loans don't even belong in this conversation. We are talking about the conforming mortgage market. |
Blake
| | Posted on Tuesday, September 06, 2011 - 07:19 pm: |
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Dave,
With all the other problems going on, there is one thing that would have prevented the total meltdown, proper regulation of FM&FM, meaning requiring them to maintain a reasonable level of capital to back up their loan guarantees. They didn't. The Dems in congress were outraged at the suggestion that they should and commenced personally insulting and berating those who proposed improved regulations.
Then they lied about it.
If not for the govn't backed social engineering project, none of it would have happened.
For me, that is the bottom line.
Gov't meddling in the free market to push some kind of so-called "social justice" nonsense ALWAYS results in more harm than good. |
Aesquire
| | Posted on Tuesday, September 06, 2011 - 09:34 pm: |
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Are the Banks responsible? Sure. Yes.
FM/FM? You betcha.
Congress? Certainly, and NOT for the CRA as an idea. But for defending criminals at FM/FM that gave the same Congressmen that were responsible for protecting the thieves at FM massive and probably illegal campaign contributions.
Heck, I even bought into the IDEA of the CRA which is simply that 'hoods where people own homes are better than 'hoods full of renters. ( and renters doesn't mean jobs ) It's pretty obvious. Just look. I bet you you can guess what kind of 'hood you are in at a glance.
I didn't have to guess. I've walked from house to house in every 'hood in the city. I knew who rented and who owned. I can SEE that race has nothing at all to do with responsibility. Every week.
What I didn't think of is that the home owner 'hoods are better because the people are responsible enough to get a house, not the fact that they owned one.
Congress is responsible because they blocked efforts to fix the problems. I don't know if they COULD be fixed, honestly, since the flaw, unfortunately, was in the idea in the first place. But it certainly NEVER WAS fixed, because Congress was making too much on bribe money to give it up.
Also there was the whole extortion part of the CRA that folk, including Obama, took advantage of to gain money and personal power.
Countrywide made a killing on crappy loans. Mostly because they didn't create the loan, but got paid to do the paperwork. They got a cut on every buck they collected and split up to bank, county, etc. They also made a bundle on sub-primes.
While they were at it they made an even bigger fortune loaning money to yuppie scum who watched "Flip This House" or got the tapes on how to buy with no money and make a killing. Lots of those loans were the kind that back load the payments so you could buy that 300k house, give it a coat of paint, and sell for 400k in 8 months, pay off the loan and do it again. Without a big mortgage payment while you did the flipping. Whee!
( I think you'll find it wasnt' the 40k poor people loans that brought down the scam. It was the 400k flipper wannabes )
Oddly enough some of the same Congressmen who defended the thieves at FM got really good deals from Countrywide. Not the kind of loan YOU could get, but one for the "select". ( on the right committee only mind you )
And the FM/FM guys gave scads to Congress, lied about their own books to get bonuses they didn't deserve. And YOU paid them those unearned millions. ( as did I )
Not everyone at FM/FM is, or was dirty. It was only the elite appointed to high office by Congress.........
Then, of course, the bottom fell out.
Suddenly Tulips were not increasing in value each day...and .... oops, wrong bubble.  |
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