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(NPR)   Turns out that whole "Freddie Mac helped cause the housing crisis" bit is about as true as any other piece of conservative economic wisdom   (npr.org) divider line 168
    More: Obvious, Freddie Mac, Federal Housing Finance Agency, ProPublica, investment strategy, conflict of interest  
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2492 clicks; posted to Politics » on 27 Sep 2012 at 2:51 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-09-27 08:11:00 AM
According to my Teabagger brother, who has great sources like Sean Hannity and Glenn Beck, it was Barney Frank who brought down the housing market all by himself.
 
2012-09-27 08:21:14 AM

clancifer: According to my Teabagger brother


You've got one of those? I've got a teabagger brother in law... which is worse.

Acorn infiltrated Freddie Mac don't you know.
 
2012-09-27 08:37:50 AM
Yes, Freddie did have a role in causing the housing crisis. What they did or didn't do in 2010 has absolutely nothing to do with that.
 
2012-09-27 09:16:32 AM
 
2012-09-27 09:49:56 AM

kmmontandon: rumpelstiltskin: Yes, Freddie did have a role in causing the housing crisis.

Hardly:

Private sector loans, not Fannie or Freddie, triggered crisis

Reckless Endangerment of the Truth

Some Lies About the Economic Crisis


So you're claiming that an NGO which securitized a full quarter of sub-prime mortgages in its lean years (and almost half in its good years) had no role whatsoever in the bubble?
That's absurd. They didn't cause the bubble by themselves, but the private market couldn't have done it without their help.
 
2012-09-27 10:51:33 AM

rumpelstiltskin:
So you're claiming that an NGO which securitized a full quarter of sub-prime mortgages in its lean years (and almost half in its good years) had no role whatsoever in the bubble?
That's absurd. They didn't cause the bubble by themselves, but the private market couldn't have done it without their help.


Fannie and Freddie were followers, not leaders. You seem to be missing that.

You also seem to be under the bizarre impression that the sub-prime bubble popping was the only thing that occurred to create the financial crisis.
 
2012-09-27 11:12:01 AM

kmmontandon: rumpelstiltskin:
So you're claiming that an NGO which securitized a full quarter of sub-prime mortgages in its lean years (and almost half in its good years) had no role whatsoever in the bubble?
That's absurd. They didn't cause the bubble by themselves, but the private market couldn't have done it without their help.

Fannie and Freddie were followers, not leaders. You seem to be missing that.

You also seem to be under the bizarre impression that the sub-prime bubble popping was the only thing that occurred to create the financial crisis.


You seem to be under the bizarre impression that I'm claiming they were the primary cause of it. Where have I said that? I said they had a role in it. Are you disupting that they had a role in it? Are you claiming that the 25-50% of subprime mortgages that they securitized didn't have any impact on the crisis?
 
2012-09-27 11:46:17 AM

rumpelstiltskin: You seem to be under the bizarre impression that I'm claiming they were the primary cause of it. Where have I said that? I said they had a role in it. Are you disupting that they had a role in it? Are you claiming that the 25-50% of subprime mortgages that they securitized didn't have any impact on the crisis?



Simple:

1.) Take away Freddie and Fannie in 2002. Does the bubble still happen? Yes.

2.) Take away the entire private sub-prime mortgage market (and concomitant securities market) in 2002. Does the bubble still happen? No.
 
2012-09-27 11:58:28 AM

kmmontandon: rumpelstiltskin: You seem to be under the bizarre impression that I'm claiming they were the primary cause of it. Where have I said that? I said they had a role in it. Are you disupting that they had a role in it? Are you claiming that the 25-50% of subprime mortgages that they securitized didn't have any impact on the crisis?


Simple:

1.) Take away Freddie and Fannie in 2002. Does the bubble still happen? Yes.

2.) Take away the entire private sub-prime mortgage market (and concomitant securities market) in 2002. Does the bubble still happen? No.


You're wrong. Take away Freddie and Fannie in 2002, and real estate craters in 2002, and it's a much smaller crash.
 
2012-09-27 12:38:10 PM

rumpelstiltskin: So you're claiming that an NGO which securitized a full quarter of sub-prime mortgages in its lean years (and almost half in its good years) had no role whatsoever in the bubble?
That's absurd. They didn't cause the bubble by themselves, but the private market couldn't have done it without their help.


Yet they did.

growlersoftware.com

growlersoftware.com

growlersoftware.com
 
2012-09-27 12:47:13 PM
Sheila Blair did a great interview on NPR yesterday about how bad it was. She cam into the FDIC in 2006 and left in 2011. She was there through it all. She blamed both Dems and Repubs for allowing deregulation. The SEC and the FDIC were weakened to the point they could not do their jobs. She is a Republican and she firmly believes that the markets need rules that must be followed and enforced. She mentioned at some point that people 'forgot' how important regulations were. I was in disbelief that they conveniently forgot.

I don't recall hearing anything about Fannie or Freddie but the banks were all engaging in the whole house market mess. Chase was the worst, she noted, at something like leverage rates of 35 to 1 when most everyone else was 12 to 1. A healthy bank is 3 to 1 (or so she said).

Click on the first link to listen.

Oh, she has a book on the crisis.
 
2012-09-27 12:47:52 PM
Link 

feed://www.npr.org/rss/podcast.php?id=510071

(fark won't let me link it)
 
2012-09-27 12:48:23 PM

rumpelstiltskin: You seem to be under the bizarre impression that I'm claiming they were the primary cause of it. Where have I said that? I said they had a role in it. Are you disupting that they had a role in it? Are you claiming that the 25-50% of subprime mortgages that they securitized didn't have any impact on the crisis?


growlersoftware.com

taken from a Lehman Brothers analyst report published in August 2005, shows predicted losses for a pool of subprime loans originated in the second half of 2005 under different assumptions for U.S. house prices (Mago and Shu 2005). The top three house price scenarios, which range from "base" to "aggressive," predict losses of between 1 and 6 percent. Such losses had been typical of previous subprime deals and implied that investments even in lower-rated tranches of subprime deals would be profitable

The first source of error is that we have assumed that each investor has a 3% chance of defaulting. How do we know that? It must be from historical data.

In fact, the default probability in the US has quadrupled from the 3% as assumed in the model to 12% since 2007, making it four times riskier.


Link
Link

That wasn't FAM/FRE's fault.
 
2012-09-27 12:51:30 PM
If only there wasnt this cult like party break, where you could have a discussion of issues. Unless supply side Jesus comes down from on high and states it after landing on a US carrier deck, is the Beck crowd going to listen?
 
2012-09-27 12:55:22 PM

Nadie_AZ: but the banks were all engaging in the whole house market mess. Chase was the worst, she noted, at something like leverage rates of 35 to 1 when most everyone else was 12 to 1. A healthy bank is 3 to 1 (or so she said).


Which brings us to the credit markets freezing in 2008 - the thing that caused companies to go bankrupt, and the stock market to crash.


Since 2008, many commentators on the financial crisis of 2007-2009 have identified the 2004 rule change as an important cause of the crisis on the basis it permitted certain large investment banks (i.e., Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley) to increase dramatically their leverage (i.e., the ratio of their debt or assets to their equity).[7] Financial reports filed by those companies show an increase in their leverage ratios from 2004 through 2007 (and into 2008),
Net capital rule

Regulate themselves they say...
 
2012-09-27 12:59:57 PM

Party Boy: If only there wasnt this cult like party break, where you could have a discussion of issues. Unless supply side Jesus comes down from on high and states it after landing on a US carrier deck, is the Beck crowd going to listen?


Republican Party Platform 2012:
Fannie Mae and Freddie Mac were a primary cause of the housing crisis because their implicit government guarantee allowed them to avoid market discipline and make risky investments. Their favored political status enriched their politically connected executives and their shareholders at the expense of the nation. 

This is why we can't have nice things.
 
2012-09-27 01:19:36 PM

impaler: Party Boy: If only there wasnt this cult like party break, where you could have a discussion of issues. Unless supply side Jesus comes down from on high and states it after landing on a US carrier deck, is the Beck crowd going to listen?

Republican Party Platform 2012:
Fannie Mae and Freddie Mac were a primary cause of the housing crisis because their implicit government guarantee allowed them to avoid market discipline and make risky investments. Their favored political status enriched their politically connected executives and their shareholders at the expense of the nation. 

This is why we can't have nice things.


Yeah, they keep using this taking point. Without it, there would be a need to reevaluate an entire pillar of the current platform.
 
2012-09-27 01:30:12 PM

rumpelstiltskin: You seem to be under the bizarre impression that I'm claiming they were the primary cause of it. Where have I said that?


to be fair it did seem like you were saying that here:

They didn't cause the bubble by themselves, but the private market couldn't have done it without their help.
 
2012-09-27 01:59:46 PM

impaler: rumpelstiltskin: You seem to be under the bizarre impression that I'm claiming they were the primary cause of it. Where have I said that? I said they had a role in it. Are you disupting that they had a role in it? Are you claiming that the 25-50% of subprime mortgages that they securitized didn't have any impact on the crisis?

[growlersoftware.com image 473x279]

taken from a Lehman Brothers analyst report published in August 2005, shows predicted losses for a pool of subprime loans originated in the second half of 2005 under different assumptions for U.S. house prices (Mago and Shu 2005). The top three house price scenarios, which range from "base" to "aggressive," predict losses of between 1 and 6 percent. Such losses had been typical of previous subprime deals and implied that investments even in lower-rated tranches of subprime deals would be profitable

The first source of error is that we have assumed that each investor has a 3% chance of defaulting. How do we know that? It must be from historical data.

In fact, the default probability in the US has quadrupled from the 3% as assumed in the model to 12% since 2007, making it four times riskier.

Link
Link

That wasn't FAM/FRE's fault.


You're taking a Lehman projection from 2005 and using it to claim Freddie wasn't involved? And then you point out the projection was wrong? Why did you even post that nonsense?
You can't just take out 25-50% of the securitization and say the market would be the same. No market works like that. It's a ridiculuous, political position.
 
2012-09-27 02:41:47 PM
Anyone who was paying attention even at the time was aware of this.
 
2012-09-27 02:44:35 PM
Sigh.

Look: the housing bubble, like all bubbles, was caused by greed. Greedy commission-based agents working for companies like Countrywide (who should have known better) gave wildly inappropriate "liars' loans" to greedy unqualified home owners (who should have known better). These loans were backed by greedy subprime lenders (who should have known better) who then sliced these and other loans up into tranches to sell as securities. Those securities were rated AAA by ratings agencies (who DAMN sure should have known better), so they were bought by, well...everyone. Who actually *shouldn't* have known better, because of the ratings and they way they were sold.

It wasn't caused by any one person or agency, or even any one small group of people or agencies. It was caused by a pervasive culture of greed, a disturbing lack of oversight or protection (internal or external, public or private), and because it came from everyone, it burned everyone.

But instead of saying 'gee...we ALL screwed up, and we ALL need to take steps to keep that greed reigned in in the future', we're looking for scapegoats instead, and scapegoats that align neatly with partisan ideology at that.

And in the meantime...greed is infecting the student loan industry. And everyone is cashing in on it. And no one on either the left OR the right is trying to reign it in or provide oversight...

/the definition of insanity is doing the same thing over and over but expecting a different outcome
 
2012-09-27 02:52:55 PM

rumpelstiltskin: You're taking a Lehman projection from 2005 and using it to claim Freddie wasn't involved? And then you point out the projection was wrong? Why did you even post that nonsense?


Sorry, I assumed you knew what I was talking about.

The way bundled mortgage securities work is that the risk of a default is spread across the whole bundle (sort of like how car insurance spreads the risk of an accident over many customers). The people bundling the mortgages in 2005 figured a default rate of around 3% average - i.e. a default rate around 3% would produce a profitable security. This was based on historical averages.

Many banks were wrong, and the failure rate went up to 12% in 2007.

FAM/FRE's failure rate was still around historical averages rather than the massive 12%+ failure rates of private subprime bundles. They didn't trigger the credit default swaps.
 
2012-09-27 02:56:09 PM
Shhh. It's always poor people's fault. Everything is poor people's fault.
 
2012-09-27 02:58:00 PM

rumpelstiltskin: kmmontandon: rumpelstiltskin: Yes, Freddie did have a role in causing the housing crisis.

Hardly:

Private sector loans, not Fannie or Freddie, triggered crisis

Reckless Endangerment of the Truth

Some Lies About the Economic Crisis

So you're claiming that an NeGrO which securitized a full quarter of sub-prime mortgages in its lean years (and almost half in its good years) had no role whatsoever in the bubble?

 

i45.photobucket.com

Sorry, couldn't resist.
 
2012-09-27 02:58:48 PM
I work for a quality control company where Freddie and Fannie are our major clients so in getting a kick out of the replies...
 
2012-09-27 02:59:08 PM

whistleridge: And in the meantime...greed is infecting the student loan industry. And everyone is cashing in on it. And no one on either the left OR the right is trying to reign it in or provide oversight...


Senate Hears Testimony On For-Profit College Rules
 
2012-09-27 02:59:19 PM
So, not at all?
 
2012-09-27 03:01:00 PM
I know no one reads the articles but damn, subbies should at least
 
2012-09-27 03:04:39 PM
Do the neocons still get to slit it up for massive personal profit?
 
2012-09-27 03:05:45 PM
This looks like one of those headlines where the "obvious" tag just isn't emphatic enough.
 
2012-09-27 03:09:32 PM
Had a REALLY long debate with a right winger about this very thing recently.

He swore up and down that it was CLINTON who caused the whole thing because of the low income lending stipulation in the GBL repeal that FORCED all those poor, besotten lending institutions to give loans to people they know couldn't afford them.

THEN..I pointed out how Wall Street had been gambling with mortgage securities since the mid 1990's and almost had a major meltdown in 1998 saved only by a huge influx of cash. Then, I went on about how all these poor widdle lenders would fudge numbers to get people loans who didn't qualify for them so they could boost the value of their mortgage backed securities they were fencing off; how ordinary people suddenly thought they could get rich by "house flipping" and got suckered into "interest only" loans that ultimately blew up in their faces; how Wall Street artificially inflated home values AND started roping people into high interest home equity loans that ultimately collapsed as well; how not every home buyer during that time were "high risk" and that regular people with jobs and good credit got hornswaggled because they paid more than their house was worth because of the artificially inflated property values created to fence off the securities.

Nope, none of that mattered because it was CLINTON who started the whole process....

/like talking to a wall..
 
2012-09-27 03:09:37 PM
Uh, Fannie and Freddie don't issue mortgages. They buy them. Then they pool them. Then they sell them.

The banks job was to assess the risks and issue mortgages to creditworthy people who could afford them at an interest rate that reflected their risk. The credit agencies' job was to rate the securitized mortgages based on their default and delinquency rates (How likely the instrument was to meet its "obligations"). Fannie Mae and Freddie mac's job was to buy mortgages, securitize them, and sell them on the market as investment instruments by spreading the risk of default and delinquency across the instruments. The whole point was to help banks get the mortgages off their books so that they could make more loans and more people could buy homes.

Fannie and Freddie did their jobs. The banks didn't. The ratings agencies didn't.

But its totally cool to blame Fannie and Freddie cuz RAWR GOVERNMENT BAD

So we get rid of them. Big deal. Someone else will securitize the mortgages. The problem is the two contrbutors who actually caused the problem get off scott free cuz LOOK AT THE SILLY MONKEY!
 
2012-09-27 03:09:54 PM

Nadie_AZ: I don't recall hearing anything about Fannie or Freddie but the banks were all engaging in the whole house market mess. Chase was the worst, she noted, at something like leverage rates of 35 to 1 when most everyone else was 12 to 1. A healthy bank is 3 to 1 (or so she said).


I forget if it was Boesky or Milken (I'm thinking Milken) who said that what banks were doing - severely overleveraging themselves, legally and with the government's blessing - was so far beyond what he had done (I think he said eyebrows were raised when he went 5- or 7-to-1), it's insane to think that just 15 years after Boesky and Milken brought down an economy, the same methods were being used that would again bring down economies. Only this time, exacerbated by the magnitudes of difference between his overleveraging and Chase/Lehman/Bear's.
 
2012-09-27 03:11:17 PM
Continuing from my above post..

This same right winger, when confronted with the reality of the FRAUD Wall Street committed in inflating the housing values, he said that it was perfectly justified given the horrible burdens enforced upon them by the CLINTON administration that they had to do something to offset their losses. B

Unbelievable..
 
2012-09-27 03:12:34 PM
The inspector general's examination, which relied on the word of the Freddie employees it interviewed, found no evidence


Might as well ask Zimmerman if he murdered Trayvon in cold blood.
 
2012-09-27 03:12:46 PM

zappaisfrank: He swore up and down that it was CLINTON who caused the whole thing because of the low income lending stipulation in the GBL repeal that FORCED all those poor, besotten lending institutions to give loans to people they know couldn't afford them.


GBL passed with an overwhelming majority, and would have survived a veto.
 
2012-09-27 03:12:48 PM
It was Bush's fault.
 
2012-09-27 03:13:43 PM

Nadie_AZ: She is a Republican and she firmly believes that the markets need rules that must be followed and enforced.



Then she's not a Republican. Sorry.
 
2012-09-27 03:15:44 PM

CPennypacker: Uh, Fannie and Freddie don't issue mortgages. They buy them. Then they pool them. Then they sell them.


exactly. Buying mortgages from banks allowing them to make more questionable loans which they then also buy allowing them to make more questionable loans knowing. Hell, if I knew I'd get an institution (which is wink wink nod nod not explicitly backed by the US government) to buy a loan I made, I might even lend money to you :)
 
2012-09-27 03:15:51 PM
I'm here to laugh at subby for failing reading comprehension.
 
2012-09-27 03:15:52 PM
i.imgur.com

RIP Freddie.
 
2012-09-27 03:16:29 PM

whistleridge: But instead of saying 'gee...we ALL screwed up, and we ALL need to take steps to keep that greed reigned in in the future', we're looking for scapegoats instead, and scapegoats that align neatly with partisan ideology at that.



No, "we all" didn't screw up. Bad loans make up less than 5% of all the loans on the books. It was the lenders forging documents and the investment firms packaging them into securities and getting the rating agencies to rate them all triple A.

When you assign blame you make it easier to figure out ways to make sure it doesn't happen again.

Stop trying to play the both sides are bad game, otherwise you end up like this idiot in life:

badaboom: It was Bush's fault.

 
2012-09-27 03:17:13 PM

skullkrusher: CPennypacker: Uh, Fannie and Freddie don't issue mortgages. They buy them. Then they pool them. Then they sell them.

exactly. Buying mortgages from banks allowing them to make more questionable loans which they then also buy allowing them to make more questionable loans knowing. Hell, if I knew I'd get an institution (which is wink wink nod nod not explicitly backed by the US government) to buy a loan I made, I might even lend money to you :)


Bullshiat. You would never lend me money.
 
2012-09-27 03:18:12 PM
 
2012-09-27 03:18:21 PM

impaler: whistleridge: And in the meantime...greed is infecting the student loan industry. And everyone is cashing in on it. And no one on either the left OR the right is trying to reign it in or provide oversight...

Senate Hears Testimony On For-Profit College Rules


Yeah. I've heard that one before:

The US Senate held hearings on the housing bubble in 2006.

The student loan bubble is just like the housing bubble. Everyone knows it's there. Everyone knows it's going to be a HUGE problem. But the money is just. too. good. right now, so no one actually wants to take the action needed to head things off. If it's allowed to bust like the housing bubble did in 08, instead of a generation being unable to get a mortgage, it will be a generation unable to get a student loan.
 
2012-09-27 03:19:13 PM

CPennypacker: skullkrusher: CPennypacker: Uh, Fannie and Freddie don't issue mortgages. They buy them. Then they pool them. Then they sell them.

exactly. Buying mortgages from banks allowing them to make more questionable loans which they then also buy allowing them to make more questionable loans knowing. Hell, if I knew I'd get an institution (which is wink wink nod nod not explicitly backed by the US government) to buy a loan I made, I might even lend money to you :)

Bullshiat. You would never lend me money.


yeah you;re right. You libby lib libs aren't good at managing finances. You'd probably spend it on birkenstocks and patchouli or something
 
2012-09-27 03:19:42 PM
nothing political about this report.
 
2012-09-27 03:20:25 PM

whistleridge: impaler: whistleridge: And in the meantime...greed is infecting the student loan industry. And everyone is cashing in on it. And no one on either the left OR the right is trying to reign it in or provide oversight...

Senate Hears Testimony On For-Profit College Rules

Yeah. I've heard that one before:

The US Senate held hearings on the housing bubble in 2006.

The student loan bubble is just like the housing bubble. Everyone knows it's there. Everyone knows it's going to be a HUGE problem. But the money is just. too. good. right now, so no one actually wants to take the action needed to head things off. If it's allowed to bust like the housing bubble did in 08, instead of a generation being unable to get a mortgage, it will be a generation unable to get a student loan.


Well we do need more infrastructure improvements....and we would need alot more people swinging a pick axe or using a shovel then experts on pre elizabtehan lesbian poetry to get that done.
 
2012-09-27 03:21:08 PM

Dafatone: zappaisfrank: He swore up and down that it was CLINTON who caused the whole thing because of the low income lending stipulation in the GBL repeal that FORCED all those poor, besotten lending institutions to give loans to people they know couldn't afford them.

GBL passed with an overwhelming majority, and would have survived a veto.


Doesn't matter..this guy hates Clinton with the heat of a thousand suns. Supposedly one of the Clinton's "free trade" agreements cost him his big money IT job because his company outsourced to India for it. Never mind that his company did it to save a few bucks because that's what they do...Nope, Clinton's fault! He blames Clinton for a rainy day. It's kinda sad, really.
 
2012-09-27 03:22:32 PM

rumpelstiltskin: kmmontandon: rumpelstiltskin:
So you're claiming that an NGO which securitized a full quarter of sub-prime mortgages in its lean years (and almost half in its good years) had no role whatsoever in the bubble?
That's absurd. They didn't cause the bubble by themselves, but the private market couldn't have done it without their help.

Fannie and Freddie were followers, not leaders. You seem to be missing that.

You also seem to be under the bizarre impression that the sub-prime bubble popping was the only thing that occurred to create the financial crisis.

You seem to be under the bizarre impression that I'm claiming they were the primary cause of it. Where have I said that? I said they had a role in it. Are you disupting that they had a role in it? Are you claiming that the 25-50% of subprime mortgages that they securitized didn't have any impact on the crisis?


They had a role in it as much as any other banking institution.

What this article is saying is that they did not engage in the predatory lending schemes that WERE the proximate cause of the housing bubble collapse. And that in fact Freddy Mac did what it could to discourage predatory lending--in it's own institutions. They were not and could not be responsible for similar practices in other banks and mortgage companies, or the loans they purchased from them.
 
2012-09-27 03:28:21 PM

colon_pow: nothing political about this report.



CRY MOAR
 
2012-09-27 03:28:50 PM
Come on man, it has to be a queer giving my tax money to minorities.
That's the story I want to believe, it fits my world view perfectly and my friends at fox will support my right to be right.
 
2012-09-27 03:30:10 PM
Inverse floaters? WTF is that, a type of turd?
 
2012-09-27 03:30:24 PM

skullkrusher: CPennypacker: skullkrusher: CPennypacker: Uh, Fannie and Freddie don't issue mortgages. They buy them. Then they pool them. Then they sell them.

exactly. Buying mortgages from banks allowing them to make more questionable loans which they then also buy allowing them to make more questionable loans knowing. Hell, if I knew I'd get an institution (which is wink wink nod nod not explicitly backed by the US government) to buy a loan I made, I might even lend money to you :)

Bullshiat. You would never lend me money.

yeah you;re right. You libby lib libs aren't good at managing finances. You'd probably spend it on birkenstocks and patchouli or something


A hemp spinning machine. Made of Hemp. And I bought it with Hemp.
 
2012-09-27 03:33:07 PM

Giltric: whistleridge: impaler: whistleridge: And in the meantime...greed is infecting the student loan industry. And everyone is cashing in on it. And no one on either the left OR the right is trying to reign it in or provide oversight...

Senate Hears Testimony On For-Profit College Rules

Yeah. I've heard that one before:

The US Senate held hearings on the housing bubble in 2006.

The student loan bubble is just like the housing bubble. Everyone knows it's there. Everyone knows it's going to be a HUGE problem. But the money is just. too. good. right now, so no one actually wants to take the action needed to head things off. If it's allowed to bust like the housing bubble did in 08, instead of a generation being unable to get a mortgage, it will be a generation unable to get a student loan.

Well we do need more infrastructure improvements....and we would need alot more people swinging a pick axe or using a shovel then experts on pre elizabtehan lesbian poetry to get that done.


Except that's not what make up the most common degrees. We already have a massive shortage of nurses and EMTs, as well as teachers, engineers, etc.

Also, a HUGE chunk of the student loan bubble is coming off of just a few companies milking the ever-living shiat out of GI Bill benefits. Call me a skeptic, but I doubt most veterans are majoring in fluff degrees like you described.
 
2012-09-27 03:33:10 PM

Gyrfalcon: What this article is saying is that they did not engage in the predatory lending schemes that WERE the proximate cause of the housing bubble collapse


This article is about things they did in 2010 and 2011, so I'm not sure how it could do what you say it does.
 
2012-09-27 03:34:20 PM

Cataholic: Gyrfalcon: What this article is saying is that they did not engage in the predatory lending schemes that WERE the proximate cause of the housing bubble collapse

This article is about things they did in 2010 and 2011, so I'm not sure how it could do what you say it does.


subby claims something the article doesn't mention and that's good enough for me, dammit
 
2012-09-27 03:38:06 PM

clancifer: According to my Teabagger brother, who has great sources like Sean Hannity and Glenn Beck, it was Barney Frank who brought down the housing market all by himself.


That's the most common one I hear.

Funny how they can blame it on one Democrat when Republicans controlled the Presidency, House and Senate.
 
2012-09-27 03:42:24 PM

clancifer: According to my Teabagger brother, who has great sources like Sean Hannity and Glenn Beck, it was Barney Frank who brought down the housing market all by himself.


msnbcmedia.msn.com

THE MOST POWERFUL POLITICIAN IN WASHINGTON!!

He realizes how ONE CONGRESSMAN completely controls all of Washington.
 
2012-09-27 03:44:24 PM

whistleridge: impaler: whistleridge: And in the meantime...greed is infecting the student loan industry. And everyone is cashing in on it. And no one on either the left OR the right is trying to reign it in or provide oversight...

Senate Hears Testimony On For-Profit College Rules

Yeah. I've heard that one before:

The US Senate held hearings on the housing bubble in 2006.

The student loan bubble is just like the housing bubble. Everyone knows it's there. Everyone knows it's going to be a HUGE problem. But the money is just. too. good. right now, so no one actually wants to take the action needed to head things off. If it's allowed to bust like the housing bubble did in 08, instead of a generation being unable to get a mortgage, it will be a generation unable to get a student loan.


I am interested in how the student load bubble is going to pop. You currently cannot walk away from the debt via bankruptcy and the loans are govt subsidized...... Some of the social ramifications are just delicious.
 
2012-09-27 03:44:34 PM
Jimmy Carter created Freddie Mac to hand out free houses to lazy blah people. Obama is a Kenyan Muslim. Mitt Romney will keep gubbmint hands off your Medicare. Republicans will cut spending. College graduates are by definition snobs. Forty-seven percent of the nation's people are entitled whiners. Planned Parenthood exists to abort babies. Gay marriage threatens your marriage. Global warming is a myth. Evolution is a laughable myth. Russia/Iraq/China/Russia/China/Iran is truly the greatest threat in our history, truly. This is a Christian country (and if you don't like it you can get out.) Rape, forcible rape, legitimate rape. I just take a wide stance. They're coming for our guns. They're coming for our Christmas. They want to kill grandma. They want to implement sharia. They want to let the UN rule the US.
 
2012-09-27 03:44:37 PM

intelligent comment below: No, "we all" didn't screw up. Bad loans make up less than 5% of all the loans on the books. It was the lenders forging documents and the investment firms packaging them into securities and getting the rating agencies to rate them all triple A.


True. But those bad loans actually cut across the entire socio-economic spectrum. Remember the McMansions? And all those second homes in FL and NV? It wasn't just broke-ass ghetto folks taking out those loans. People from all walks of life wanted a piece of the pie, and trying to isolate it to just one group is dishonest, racist, and incorrect.

When you assign blame you make it easier to figure out ways to make sure it doesn't happen again.

No...failure analysis is about identifying the fault in a system and correcting it, not about assigning blame. That's the mindset that leads to useless partisan finger-pointing and nothing getting fixed.

Stop trying to play the both sides are bad game, otherwise you end up like this idiot in life:

badaboom: It was Bush's fault.


Both sides are bad. Stop playing 'my side is Good And Pure And Truth And Light, and the other guy is THE DEBIL'. *That's* how you wind up like that guy.

People from all parts of the political spectrum got rich off of this. People from all parts lost big too. And people from all parts need to fix it.
 
2012-09-27 03:45:25 PM

Cataholic: Gyrfalcon: What this article is saying is that they did not engage in the predatory lending schemes that WERE the proximate cause of the housing bubble collapse

This article is about things they did in 2010 and 2011, so I'm not sure how it could do what you say it does.


You seem to be under the impression that "the housing market collapse" was a discrete event that occurred over a very short period of time in 2008. Sub-prime lending continued long after 2008, and mortgage and bank failures were beginning much earlier.

Economic cycles are very large and extend over many years or decades. Saying the "housing bubble burst in 2008" is a little like saying "The Apollo program shut down in 1969" simply because that was when all the aerospace jobs were chopped. The housing crisis became acute in 2008, true, but it had been evident for many years prior, and the root causes continued for some time after. There was no day in 2008 when suddenly all banks and mortgage companies collapsed.
 
2012-09-27 03:46:37 PM

youmightberight: Ny Times: Fannie-Mae eases credit to aid subprime mortgages in 1999


From that link:

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

That is what caused the crisis. These guys weren't using Fannie Mae because the loans were too risky and Fannie Mae wouldn't have a part of it.
 
2012-09-27 03:48:56 PM

skullkrusher: Buying mortgages from banks allowing them to make more questionable loans which they then also buy allowing them to make more questionable loans knowing. Hell, if I knew I'd get an institution (which is wink wink nod nod not explicitly backed by the US government) to buy a loan I made, I might even lend money to you :)


What if that government institution would only buy qualified good loans?

Would you issue bad subprime?
 
2012-09-27 03:52:52 PM

impaler: skullkrusher: Buying mortgages from banks allowing them to make more questionable loans which they then also buy allowing them to make more questionable loans knowing. Hell, if I knew I'd get an institution (which is wink wink nod nod not explicitly backed by the US government) to buy a loan I made, I might even lend money to you :)

What if that government institution would only buy qualified good loans?

Would you issue bad subprime?


probably if there was money to be made it it. Point is that by buying ANY loans from the banks, you are freeing up that money for the banks to make more loans - good and bad. To be unable to see how this expansion of credit contributes to housing bubbles is astonishing, frankly.
 
2012-09-27 03:54:02 PM

zappaisfrank: Had a REALLY long debate with a right winger about this very thing recently.


I had this come up in conversation with a "tea party member" recently. I told him that it has been four years since the crash and multiple books about it had been written about it by experts in the field and if he didn't know what happened then a 15 minute conversation wasn't going to make a difference. He got all offended and claimed that I was calling him stupid but I told him to go read a book written by someone who didn't have a radio or tv show and we'd talk. I'm not holding my breath waiting for that phone call.
 
2012-09-27 03:54:06 PM

youmightberight: Ny Times: Fannie-Mae eases credit to aid subprime mortgages in 1999


What's your point? That was 1999.

Bush's HUD also eased their requirements again in 2004.

Yet they still managed to back mortgages while maintaining a failure rate close to historical average. They also avoided the double-digit failure rate from private issued securities.
 
2012-09-27 03:55:01 PM

Saiga410: I am interested in how the student load bubble is going to pop


[BRAZZERS]
 
2012-09-27 03:55:15 PM

Bashar and Asma's Infinite Playlist: RIP Freddie.


Wait - Freddie dead?
 
2012-09-27 03:55:21 PM

skullkrusher: impaler: skullkrusher: Buying mortgages from banks allowing them to make more questionable loans which they then also buy allowing them to make more questionable loans knowing. Hell, if I knew I'd get an institution (which is wink wink nod nod not explicitly backed by the US government) to buy a loan I made, I might even lend money to you :)

What if that government institution would only buy qualified good loans?

Would you issue bad subprime?

probably if there was money to be made it it. Point is that by buying ANY loans from the banks, you are freeing up that money for the banks to make more loans - good and bad. To be unable to see how this expansion of credit contributes to housing bubbles is astonishing, frankly.


Its not just Fannie and Freddie that do this. There's a spread. If we don't do it it really tightens up credit, too. We just have to make sure credit is actually being checked and the loans are being issued responsibly.
 
2012-09-27 03:55:26 PM

whistleridge: The student loan bubble is just like the housing bubble. Everyone knows it's there. Everyone knows it's going to be a HUGE problem. But the money is just. too. good. right now, so no one actually wants to take the action needed to head things off. If it's allowed to bust like the housing bubble did in 08, instead of a generation being unable to get a mortgage, it will be a generation unable to get a student loan.


How about they take over the entire loaning procedure from the private institutions that lend to students?
 
2012-09-27 03:56:57 PM
It just astounds me that left wingers can try to say, with a straight face, that these ginormous credit providers, on which taxpayers will lose hundreds of billions of dollars, didn't contribute to the housing bubble.

It's like they have live in an anti-reality protection bubble.

/oh, and agree with all those who called subby a dope. Headline has nothing to do with TFA.
 
2012-09-27 03:57:03 PM

zappaisfrank: Supposedly one of the Clinton's "free trade" agreements cost him his big money IT job because his company outsourced to India for it.


I'm betting it was NAFTA.

Not that NAFTA actually did that, but rather your buddy thinks it did.
 
2012-09-27 03:57:15 PM

CPennypacker: Its not just Fannie and Freddie that do this. There's a spread. If we don't do it it really tightens up credit, too. We just have to make sure credit is actually being checked and the loans are being issued responsibly.


certainly isn't limited to them. They are the 800 lb gorillas in the space though
 
2012-09-27 03:57:38 PM

whistleridge: Both sides are bad. Stop playing 'my side is Good And Pure And Truth And Light, and the other guy is THE DEBIL'. *That's* how you wind up like that guy.

People from all parts of the political spectrum got rich off of this. People from all parts lost big too. And people from all parts need to fix it.



Your apologist nonsense is horrible and you should feel bad.

All those laxer laws on financial institutions were Democrats giving in to Republican demands so they can pass some legislation they want. Like when Democrats voted on the Bush tax cuts for the rich so they could get tax cuts for the middle class and poor.

You're the idiot trying to play both sides are bad games so you can excuse the action of the one corrupt responsible party.
 
2012-09-27 03:57:42 PM

Saiga410: whistleridge: impaler: whistleridge: And in the meantime...greed is infecting the student loan industry. And everyone is cashing in on it. And no one on either the left OR the right is trying to reign it in or provide oversight...

Senate Hears Testimony On For-Profit College Rules

Yeah. I've heard that one before:

The US Senate held hearings on the housing bubble in 2006.

The student loan bubble is just like the housing bubble. Everyone knows it's there. Everyone knows it's going to be a HUGE problem. But the money is just. too. good. right now, so no one actually wants to take the action needed to head things off. If it's allowed to bust like the housing bubble did in 08, instead of a generation being unable to get a mortgage, it will be a generation unable to get a student loan.

I am interested in how the student load bubble is going to pop. You currently cannot walk away from the debt via bankruptcy and the loans are govt subsidized...... Some of the social ramifications are just delicious.


Lots of possibilities. The two easiest to imagine are either:

1. Eligibility and availability get severely reduced or restricted. This would dry it up in one way.
2. Bankruptcy is once more allowed, triggering a massive wave of strategic defaults.

But you're right: none of them look very fun or short-term. The law of unintended consequences will have a field day with this one, when whatever is going to happen finally does.
 
2012-09-27 03:58:11 PM

Debeo Summa Credo: It just astounds me that left wingers can try to say, with a straight face, that these ginormous credit providers, on which taxpayers will lose hundreds of billions of dollars, didn't contribute to the housing bubble.


I pissed in the ocean once. I don't think it moved the high tide line.
 
2012-09-27 03:58:42 PM

Debeo Summa Credo: It just astounds me that left wingers can try to say, with a straight face, that these ginormous credit providers, on which taxpayers will lose hundreds of billions of dollars, didn't contribute to the housing bubble.

It's like they have live in an anti-reality protection bubble.

/oh, and agree with all those who called subby a dope. Headline has nothing to do with TFA.



It's always amusing to watch you walk in pretending you have any knowledge on a topic like this and just write bullshiat not based on fact and reality.
 
2012-09-27 03:58:50 PM

whistleridge: Both sides are bad.


I wonder who I should vote for...
 
2012-09-27 04:00:41 PM

CPennypacker: The ratings agencies didn't.


A++++ Would THIS again.

In the phrasing of Jon Stewart, this is the core of Bullshiat Mountain. The bubble collapsed *because* of people failing on their mortgages. The collapse had EXTREME consequences *because* of the shenanigans ratings agencies and banks were pulling. The responsibility was so diffuse that nobody noticed until demand dried up that flipping houses wasn't sustainable. Most of that value was fictional, and all of it was bundled and assessed *well below* it's real risk threshold. The left hand didn't know what the right hand was doing, and nobody bothered to ask because everyone involved was making money hand over fist.

The bottom fell out of that particular market, and instead of it just depressing property values, it did that, AND dried up people's 401ks, AND froze lending. All in the space of like... 48 hours.

/Damn you freddie mac!
 
2012-09-27 04:02:26 PM

skullkrusher: CPennypacker: Its not just Fannie and Freddie that do this. There's a spread. If we don't do it it really tightens up credit, too. We just have to make sure credit is actually being checked and the loans are being issued responsibly.

certainly isn't limited to them. They are the 800 lb gorillas in the space though


Right but my point is that if we get rid of Fannie and Freddie, someone else will just come do it for more money and it won't fix the problem because there's a market for the securitization.
 
2012-09-27 04:04:00 PM

Monkeyhouse Zendo: Debeo Summa Credo: It just astounds me that left wingers can try to say, with a straight face, that these ginormous credit providers, on which taxpayers will lose hundreds of billions of dollars, didn't contribute to the housing bubble.

I pissed in the ocean once. I don't think it moved the high tide line.


was the volume of your piss equal to 40% of that of the ocean? You got a huge bladder, dawg
 
2012-09-27 04:04:19 PM

intelligent comment below: whistleridge: Both sides are bad. Stop playing 'my side is Good And Pure And Truth And Light, and the other guy is THE DEBIL'. *That's* how you wind up like that guy.

People from all parts of the political spectrum got rich off of this. People from all parts lost big too. And people from all parts need to fix it.


Your apologist nonsense is horrible and you should feel bad.


And yet, strangely, all I feel is amusement. An ad hominem attack is the first mark of a weak argument, you know.

All those laxer laws on financial institutions were Democrats giving in to Republican demands so they can pass some legislation they want. Like when Democrats voted on the Bush tax cuts for the rich so they could get tax cuts for the middle class and poor.


Wow. Are you honestly saying that both parties taking action via compromise is actually only the fault of one party? Interesting.

You're the idiot trying to play both sides are bad games so you can excuse the action of the one corrupt responsible party.


No...I'm the one saying both sides were complicit in the housing bubble. Foaming rhetoric won't change that. Look at the history of it:

CRA was written (as a much more limited tool for cutting down on redlining) under Carter and passed by a Democratic Congress.

But Bush 41 passed a big upgrade in 89. Clinton signed the (veto proof) deregulation sent to him by a Republican Congress in 99

Then Bush 43 and a GOP Congress did nothing to try and cool things down or contain them in the mid and late 00's.

So, for those of us keeping score at home, that's a broad spectrum of borrowers, a broad spectrum of lenders, and a broad spectrum of legislators, all contributing to the problem.
 
2012-09-27 04:05:11 PM

CPennypacker: skullkrusher: CPennypacker: Its not just Fannie and Freddie that do this. There's a spread. If we don't do it it really tightens up credit, too. We just have to make sure credit is actually being checked and the loans are being issued responsibly.

certainly isn't limited to them. They are the 800 lb gorillas in the space though

Right but my point is that if we get rid of Fannie and Freddie, someone else will just come do it for more money and it won't fix the problem because there's a market for the securitization.


ah gotcha - sure, it is quite possible. Perhaps no more mortgage securitization is the answer.
 
2012-09-27 04:05:51 PM

Monkeyhouse Zendo: Debeo Summa Credo: It just astounds me that left wingers can try to say, with a straight face, that these ginormous credit providers, on which taxpayers will lose hundreds of billions of dollars, didn't contribute to the housing bubble.

I pissed in the ocean once. I don't think it moved the high tide line.


Wow. The GSE share of mortgage issuance during the bubble run up was 'pissing into the ocean'? That was quite an expensive tinkle I have to say.
 
2012-09-27 04:06:46 PM

kmmontandon: rumpelstiltskin: You seem to be under the bizarre impression that I'm claiming they were the primary cause of it. Where have I said that? I said they had a role in it. Are you disupting that they had a role in it? Are you claiming that the 25-50% of subprime mortgages that they securitized didn't have any impact on the crisis?


Simple:

1.) Take away Freddie and Fannie in 2002. Does the bubble still happen? Yes.

2.) Take away the entire private sub-prime mortgage market (and concomitant securities market) in 2002. Does the bubble still happen? No.


Man, I don't know why you good folks even try. They are inpossible to talk to because THEY KNOW EVERYTHING ABOUT EVERYTHING. And I know that Fannie and Freddie allowed me to but a decent home for a good price, so fark the GOP and it's ignorant as shiat supporters..
 
2012-09-27 04:06:52 PM

Monkeyhouse Zendo: whistleridge: Both sides are bad.

I wonder who I should vote for...


Well...if you have to have sex, but you have the choice of a girl with herpes and a girl with HIV, which do you go for?
 
2012-09-27 04:06:53 PM

skullkrusher: CPennypacker: skullkrusher: CPennypacker: Its not just Fannie and Freddie that do this. There's a spread. If we don't do it it really tightens up credit, too. We just have to make sure credit is actually being checked and the loans are being issued responsibly.

certainly isn't limited to them. They are the 800 lb gorillas in the space though

Right but my point is that if we get rid of Fannie and Freddie, someone else will just come do it for more money and it won't fix the problem because there's a market for the securitization.

ah gotcha - sure, it is quite possible. Perhaps no more mortgage securitization is the answer.


Either that or prosecuting the banks and ratings agencies for fraud
 
2012-09-27 04:08:45 PM

CPennypacker: skullkrusher: CPennypacker: skullkrusher: CPennypacker: Its not just Fannie and Freddie that do this. There's a spread. If we don't do it it really tightens up credit, too. We just have to make sure credit is actually being checked and the loans are being issued responsibly.

certainly isn't limited to them. They are the 800 lb gorillas in the space though

Right but my point is that if we get rid of Fannie and Freddie, someone else will just come do it for more money and it won't fix the problem because there's a market for the securitization.

ah gotcha - sure, it is quite possible. Perhaps no more mortgage securitization is the answer.

Either that or prosecuting the banks and ratings agencies for fraud


that's probably pretty darn hard to prove. You know offhand how much of the MBS market is the creation of non-GSE entities? My google fu is failing me
 
2012-09-27 04:09:20 PM

whistleridge: Monkeyhouse Zendo: whistleridge: Both sides are bad.

I wonder who I should vote for...

Well...if you have to have sex, but you have the choice of a girl with herpes and a girl with HIV, which do you go for?


the one with the bigger tits
 
2012-09-27 04:12:04 PM

skullkrusher: CPennypacker: skullkrusher: CPennypacker: skullkrusher: CPennypacker: Its not just Fannie and Freddie that do this. There's a spread. If we don't do it it really tightens up credit, too. We just have to make sure credit is actually being checked and the loans are being issued responsibly.

certainly isn't limited to them. They are the 800 lb gorillas in the space though

Right but my point is that if we get rid of Fannie and Freddie, someone else will just come do it for more money and it won't fix the problem because there's a market for the securitization.

ah gotcha - sure, it is quite possible. Perhaps no more mortgage securitization is the answer.

Either that or prosecuting the banks and ratings agencies for fraud

that's probably pretty darn hard to prove. You know offhand how much of the MBS market is the creation of non-GSE entities? My google fu is failing me


GSE entities are a very high percentage right now, like 90+%. It went up after the crisis because all of the foreclosures. Most of the subprime loans were not on the GSE's books.
 
2012-09-27 04:12:26 PM

whistleridge: No...I'm the one saying both sides were complicit in the housing bubble. Foaming rhetoric won't change that. Look at the history of it:

CRA was written (as a much more limited tool for cutting down on redlining) under Carter and passed by a Democratic Congress.


Wow.

"both sides were complicit in the housing bubble"

The housing bubble was caused by the private market - PERIOD.

If the government has any culpability, it's from their failure to regulate that market - PERIOD.

Only ONE "side" has any interest whatsoever in performing regulation - PERIOD.


As for your CRA derp, the bad loans (sub-prime) weren't issued by CRA banks.

growlersoftware.com

But both sides are bad!
 
2012-09-27 04:14:33 PM

Debeo Summa Credo: Wow. The GSE share of mortgage issuance during the bubble run up was 'pissing into the ocean'? That was quite an expensive tinkle I have to say.


subprime took off in 2004:
growlersoftware.com

Right when FAM/FRE's market share of bundled securities dropped:
growlersoftware.com
 
2012-09-27 04:16:46 PM

CPennypacker: skullkrusher: CPennypacker: skullkrusher: CPennypacker: Its not just Fannie and Freddie that do this. There's a spread. If we don't do it it really tightens up credit, too. We just have to make sure credit is actually being checked and the loans are being issued responsibly.

certainly isn't limited to them. They are the 800 lb gorillas in the space though

Right but my point is that if we get rid of Fannie and Freddie, someone else will just come do it for more money and it won't fix the problem because there's a market for the securitization.

ah gotcha - sure, it is quite possible. Perhaps no more mortgage securitization is the answer.

Either that or prosecuting the banks and ratings agencies for fraud


Or just let the lenders crumble under this own incompetence/greed instead of bailing them out.
 
2012-09-27 04:17:58 PM

Saiga410: Or just let the lenders crumble under this own incompetence/greed instead of bailing them out.


Need to separate commercial and investment banks first.
 
2012-09-27 04:20:31 PM

impaler: whistleridge: No...I'm the one saying both sides were complicit in the housing bubble. Foaming rhetoric won't change that. Look at the history of it:

CRA was written (as a much more limited tool for cutting down on redlining) under Carter and passed by a Democratic Congress.

Wow.

"both sides were complicit in the housing bubble"

The housing bubble was caused by the private market - PERIOD.


You're aware that the private market is made up of individuals, right? And that these individuals also entertain political opinions? And that while those opinions wouldn't normally be germane to the discussion, in this instance there has been a lot of accusations tossed out about ACORN and all the bad borrowers being Democratic, etc?

And that I pointed out just below that statement that there were 3 broad sets of participants: the lenders, the borrowers, and the regulators?

If the government has any culpability, it's from their failure to regulate that market - PERIOD.


So...they have no culpability for writing the initial laws?

Only ONE "side" has any interest whatsoever in performing regulation - PERIOD.

As for your CRA derp, the bad loans (sub-prime) weren't issued by CRA banks.

[growlersoftware.com image 586x443]

But both sides are bad!


I'm really not sure what you're trying to say here. I'm just pointing out that an initially good law was allowed to serve over time as the basis for an argument that the entire housing bubble is due to poor Democrats milking CRA. That's not true. You seem to agree. But you're so intent on flaming that I'm not even 100% clear of what your argument is. You obviously want to blame someone, but whom?

I've made a case. I've present evidence. You've said NO WRONG STOOPID!!!, but you haven't offered a countercase or offered any evidence. Do you have anything meaningful to contribute?
 
2012-09-27 04:23:40 PM

CPennypacker: GSE entities are a very high percentage right now, like 90+%. It went up after the crisis because all of the foreclosures. Most of the subprime loans were not on the GSE's books.


yeah, the GSEs had a low % of subprime relative to their total portfolios. Was still enough to fook them royally though
 
2012-09-27 04:24:50 PM

skullkrusher: CPennypacker: skullkrusher: CPennypacker: Its not just Fannie and Freddie that do this. There's a spread. If we don't do it it really tightens up credit, too. We just have to make sure credit is actually being checked and the loans are being issued responsibly.

certainly isn't limited to them. They are the 800 lb gorillas in the space though

Right but my point is that if we get rid of Fannie and Freddie, someone else will just come do it for more money and it won't fix the problem because there's a market for the securitization.

ah gotcha - sure, it is quite possible. Perhaps no more mortgage securitization is the answer.


What? No. Securitization lowers financing costs for everybody. There is nothing inherently wrong with securitization. It spreads risk and increases the available pool of capital. If you goal is to kick the legs out of the market to keep prices low, then I suppose it'd make sense to ban securitization. But then you could go further if that was your goal, perhaps requiring 30% down or minimum fico score of 700 for a mortgage, or ban mortgages altogether. But there's nothing wrong, IMO, with securitization.

What happened was a collective failure of risk management and buying into a bubble.

Who here KNEW it was a bubble in 2005? Everybody might say they thought it could be a bubble, and many will claim to have known at that time. But if that view was truly reflected at the time among as many people who now claim to have known it was a bubble, there wouldn't have been a bubble.

Who missed the bubble?
Greenspan missed it, kept rates too low too long.
The rating agencies missed it, their models couldn't even consider a 30-35% nationwide drop in home prices.
Global banks missed it - that's why Wachovia, WaMu, National City, Northern Rock, Dexia, etc. failed or got bought out, and why Citi and BoA needed TARP.
Fannie and Freddie missed it- kept lending into the bubble to the extent that they had to be taken into conservatorship and cost taxpayers over $100b (whereas the rest of financial TARP is likely to break even).
AIG and the financial guarantors missed it- wrapped mortgage related securities that sunk them.
Investors missed it - kept buying mortgage backed securities even in the face of rising house prices.
Global homebuyers missed it. Bought houses in 2005 and 2006 for 2 or 3x what they were worth in 2000, not only in the US but in Spain, Ireland, Australia, etc.

/wow, that went way the fark off on a tangent
 
2012-09-27 04:27:50 PM

impaler: If the government has any culpability, it's from their failure to regulate that market - PERIOD.


and the implicit backing of the GSEs and this

www.bankrate.com
 
2012-09-27 04:29:41 PM

Gyrfalcon: Cataholic: Gyrfalcon: What this article is saying is that they did not engage in the predatory lending schemes that WERE the proximate cause of the housing bubble collapse

This article is about things they did in 2010 and 2011, so I'm not sure how it could do what you say it does.

You seem to be under the impression that "the housing market collapse" was a discrete event that occurred over a very short period of time in 2008. Sub-prime lending continued long after 2008, and mortgage and bank failures were beginning much earlier.

Economic cycles are very large and extend over many years or decades. Saying the "housing bubble burst in 2008" is a little like saying "The Apollo program shut down in 1969" simply because that was when all the aerospace jobs were chopped. The housing crisis became acute in 2008, true, but it had been evident for many years prior, and the root causes continued for some time after. There was no day in 2008 when suddenly all banks and mortgage companies collapsed.


You are correct. It was actually a couple of weeks in September of 2008. The subprime market has been almost nothing since then.
 
2012-09-27 04:31:04 PM

skullkrusher: CPennypacker: GSE entities are a very high percentage right now, like 90+%. It went up after the crisis because all of the foreclosures. Most of the subprime loans were not on the GSE's books.

yeah, the GSEs had a low % of subprime relative to their total portfolios. Was still enough to fook them royally though


Well, yeah it fooked everybody royally
 
2012-09-27 04:34:16 PM
This is a repeat from 2009, 2010, 2011..

Oh yea [thatsthejoke.jpg]
 
2012-09-27 04:36:41 PM

intelligent comment below: Debeo Summa Credo: It just astounds me that left wingers can try to say, with a straight face, that these ginormous credit providers, on which taxpayers will lose hundreds of billions of dollars, didn't contribute to the housing bubble.

It's like they have live in an anti-reality protection bubble.

/oh, and agree with all those who called subby a dope. Headline has nothing to do with TFA.


It's always amusing to watch you walk in pretending you have any knowledge on a topic like this and just write bullshiat not based on fact and reality.


Yeah, you're right. I should give up on this accounting and finance stuff that have been the basis of my career. I'm going to switch to IT. I figure about 6 weeks of reading manuals will put me at the top of the field. Maybe 5 weeks because I already know all about BASIC programming. Check out this program I wrote:

10 PRINT "YOU'RE A JACKASS"
20 GOTO 10
 
2012-09-27 04:36:57 PM

whistleridge: I've made a case. I've present evidence. You've said NO WRONG STOOPID!!!, but you haven't offered a countercase or offered any evidence. Do you have anything meaningful to contribute?


You've made no case other than "ah shucks, both sides are bad."

You've stated no evidence

See all the graphs and figures and facts in this thread?

Those are mine. (with one graph going to skullcrusher, and kmmontandon throwing in some links as well)
 
2012-09-27 04:39:19 PM

CPennypacker: skullkrusher: CPennypacker: GSE entities are a very high percentage right now, like 90+%. It went up after the crisis because all of the foreclosures. Most of the subprime loans were not on the GSE's books.

yeah, the GSEs had a low % of subprime relative to their total portfolios. Was still enough to fook them royally though

Well, yeah it fooked everybody royally


so did your mom
 
2012-09-27 04:40:26 PM

skullkrusher: CPennypacker: skullkrusher: CPennypacker: GSE entities are a very high percentage right now, like 90+%. It went up after the crisis because all of the foreclosures. Most of the subprime loans were not on the GSE's books.

yeah, the GSEs had a low % of subprime relative to their total portfolios. Was still enough to fook them royally though

Well, yeah it fooked everybody royally

so did your mom


Now you've gone too far. My mom is not royalty.
 
2012-09-27 04:42:36 PM

Debeo Summa Credo: Who here KNEW it was a bubble in 2005?


I don't know about 05 but when I started seeing the interest only and set your payment loan adds, I was thinking "ruhroh this is insane". I expect most people on this site would be in the same boat.

/most farkers are fairly intelligent. Your opinions are dumb in that they differ from mine but intelligent nonetheless.
 
2012-09-27 04:42:48 PM

Debeo Summa Credo: Who here KNEW it was a bubble in 2005?


It seemed like it to me well before then. Houses were becoming way overpriced and doing so quickly, so it was kind of obvious.

I never said to myself, this is going to pop any day now, but I was wondering when it would stop and how it would stop.
 
2012-09-27 04:49:43 PM

CPennypacker: But its totally cool to blame Fannie and Freddie cuz RAWR GOVERNMENT BAD


Yes, because without government buying and securitizing mortgages, banks would never in their right mind make the loans that they made. It is easy to make a garbage loan when you can get it off your books in 45-90 days, put in the backs of the federal government. The more junk loans banks got off their books, the more they could unload on other banks or fannie/freddy.

Loan rules relaxed, prices rise, bubble bursts.
 
2012-09-27 04:50:58 PM

CPennypacker: skullkrusher: CPennypacker: skullkrusher: CPennypacker: GSE entities are a very high percentage right now, like 90+%. It went up after the crisis because all of the foreclosures. Most of the subprime loans were not on the GSE's books.

yeah, the GSEs had a low % of subprime relative to their total portfolios. Was still enough to fook them royally though

Well, yeah it fooked everybody royally

so did your mom

Now you've gone too far. My mom is not royalty.


perhaps no but her son sure is a queen!
hey-oooooooh!

/NTTAWTT
 
2012-09-27 04:51:11 PM

Debeo Summa Credo: Who here KNEW it was a bubble in 2005?


Paul Krugman

Warren Buffet
 
2012-09-27 04:52:07 PM

impaler: whistleridge: I've made a case. I've present evidence. You've said NO WRONG STOOPID!!!, but you haven't offered a countercase or offered any evidence. Do you have anything meaningful to contribute?

You've made no case other than "ah shucks, both sides are bad."

You've stated no evidence

See all the graphs and figures and facts in this thread?

Those are mine. (with one graph going to skullcrusher, and kmmontandon throwing in some links as well)


Fact: the housing bubble burst in September 2008.
Fact: prior to that burst, nobody on either side of the aisle did anything substantive to try and prevent it. Hell, it was a running joke on Fark for years prior to that.
Fact: since then, there has been a lot of finger-pointing in both directions.
Fact: Neither side has been able to make a conclusive case. Your pretty graphs established respectively that: 1) the bubble expanded and burst primarily between 04-08 2) that Fannie and Freddie didn't cause all of it 3) that CRA wasn't entirely to blame. All 3 facts are things I haven't disagreed with. Nor are they earth-shattering or profound; they're just common knowledge.
Fact: none of that proves that one side only is to blame.

Until and unless you can show me that Fannie, Freddie, & CRA didn't contribute at ALL (or even just a statistically meaningless percentage), I'm going to stick by my assertion that greed got us here, and greed is universal. They did in fact contribute a minority but significant percentage to the problem, as your charts themselves show.

Before your head explodes, a few more facts:

Fact: I didn't say CRA caused it, or that Fannie or Freddie caused it. Just that they contributed to it.
Fact: 'contribute' means 'any participation', not necessarily 'majority participation'.

Opinion: calm down. This is just a debate on a meaningless internet chat room, and I've been nothing but civil to you.
 
2012-09-27 04:55:14 PM

Debeo Summa Credo: It's always amusing to watch you walk in pretending you have any knowledge on a topic like this and just write bullshiat not based on fact and reality.

Yeah, you're right. I should give up on this accounting and finance stuff that have been the basis of my career. I'm going to switch to IT.


All you ever do is apologize for corporate greed while willingly carrying water for the 1%. IT would be a step down. You'd have to actually fix stuff.
 
2012-09-27 04:57:02 PM

Philip Francis Queeg: Debeo Summa Credo: Who here KNEW it was a bubble in 2005?

Paul Krugman

Warren Buffet


So did Ron Paul

And Peter Schiff
 
2012-09-27 04:58:09 PM

o5iiawah: The more junk loans banks got off their books, the more they could unload on other banks or fannie/freddy.

Loan rules relaxed, prices rise, bubble bursts.


JESUS FUKING CHRIST!

It wasn't fannie/freddy buying up the shat loans.


Pay some damn attention for once. How many damn times does this fact need to be rammed down your throat before you comprehend it?


growlersoftware.com
growlersoftware.com
growlersoftware.com
 
2012-09-27 04:58:27 PM

o5iiawah: So did Ron Paul


Of course he did. I forget he's considered infallible like some sort of pope or something.
 
2012-09-27 04:58:29 PM

o5iiawah: Philip Francis Queeg: Debeo Summa Credo: Who here KNEW it was a bubble in 2005?

Paul Krugman

Warren Buffet

So did Ron Paul

And Peter Schiff


all of whom are presumably not on Fark at the moment
 
2012-09-27 04:59:45 PM

Philip Francis Queeg: Debeo Summa Credo: Who here KNEW it was a bubble in 2005?

Paul Krugman

Warren Buffet


Fark. The Headlines were a common joke:

9/28/07 Reuters (interesting): Dot com bubble, housing bubble, corn bubble?

04/12/04 MSNBC (obvious): Is the housing market bubble about to burst as badly as the Internet bubble?

08/08/06 Boston Globe (obvious): The Fed lets the housing bubble live for another day

To point out just 3 of literally dozens of examples, spanning from 02 - 08
 
2012-09-27 05:02:04 PM

whistleridge: Fact: the housing bubble burst in September 2008.


BZZZZZZZZZZZZZZZZ!!!!!

The CREDIT market burst in September of 2008.


Housing peaked 2 years earlier.
research.stlouisfed.org
research.stlouisfed.org
 
2012-09-27 05:02:42 PM

skullkrusher: o5iiawah: Philip Francis Queeg: Debeo Summa Credo: Who here KNEW it was a bubble in 2005?

Paul Krugman

Warren Buffet

So did Ron Paul

And Peter Schiff

all of whom are presumably not on Fark at the moment


You expect us to believe you are NOT Ron Paul?
 
2012-09-27 05:08:07 PM
 
2012-09-27 05:08:34 PM

Philip Francis Queeg: skullkrusher: o5iiawah: Philip Francis Queeg: Debeo Summa Credo: Who here KNEW it was a bubble in 2005?

Paul Krugman

Warren Buffet

So did Ron Paul

And Peter Schiff

all of whom are presumably not on Fark at the moment

You expect us to believe you are NOT Ron Paul?


I don't have to sit on a phone book to reach my keyboard
 
2012-09-27 05:15:12 PM

rumpelstiltskin: Yes, Freddie did have a role in causing the housing crisis. What they did or didn't do in 2010 has absolutely nothing to do with that.


Sure they did. Their "role" was getting wiped out like very other over-leverage investor bank that went scrambling for capital to starve off defaulting. F&F we told by congress to buy up huge positions of MBS debt to forfill their HRA obligations, instead of originating the loans themselves. Those MBS's crashed and burned, and killed em.

Gotta go to congress and ask them why a GSE charged with lending was buying up securitized debt. They aren't a bank, and they weren't in the banking industry, and if they didn't have that directive, they would have been solvent.
 
2012-09-27 05:16:58 PM

whistleridge: Philip Francis Queeg: Debeo Summa Credo: Who here KNEW it was a bubble in 2005?

Paul Krugman

Warren Buffet

Fark. The Headlines were a common joke:

9/28/07 Reuters (interesting): Dot com bubble, housing bubble, corn bubble?

04/12/04 MSNBC (obvious): Is the housing market bubble about to burst as badly as the Internet bubble?

08/08/06 Boston Globe (obvious): The Fed lets the housing bubble live for another day

To point out just 3 of literally dozens of examples, spanning from 02 - 08


First off, 2008? That's a little late for bubble predictions, no? Do I get credit right now for predicting that the Red Sox will have a lousy season this year =)?

Secondly, do you think no farkers bought homes from 2003-2006, as the bubble was inflating? There may have been people discussing whether there was a bubble in 2005, but few people acted on it, and in fact many many more in society acted in the opposite direction, buying homes (and lending on homes) despite the huge price rise in previous years.

Hell, I remember looking at prices in 2005 saying "wow, this is crazy, it has to come down sometime", and hoping that it would drop so I could buy. Panicking that maybe bulls were right and that prices would continue increasing until I was priced out forever. But it kept going up for another year. I'd like to pat myself on the back for not buying in 2004 or 2005 or 2006, but I have to admit that other circumstances (lack of capital for down payment for buying what I wanted) might have saved me from what would have been a shiatty decision in hindsight.

I guess my point is, collectively, we kept buying into the bubble. Maybe if we had, collectively, listened to Paul Krugman and Warren Buffett and Ron Paul and Peter Schiff and a few farkers who got greentlights back in 2003, we wouldn't have had as significant a bubble/crash. But society didnt, the bubble continued until 2006. Then it popped, which caused the financial crisis and the recession.
 
2012-09-27 05:17:10 PM

zappaisfrank: Had a REALLY long debate with a right winger about this very thing recently.

He swore up and down that it was CLINTON who caused the whole thing because of the low income lending stipulation in the GBL repeal that FORCED all those poor, besotten lending institutions to give loans to people they know couldn't afford them.

THEN..I pointed out how Wall Street had been gambling with mortgage securities since the mid 1990's and almost had a major meltdown in 1998 saved only by a huge influx of cash. Then, I went on about how all these poor widdle lenders would fudge numbers to get people loans who didn't qualify for them so they could boost the value of their mortgage backed securities they were fencing off; how ordinary people suddenly thought they could get rich by "house flipping" and got suckered into "interest only" loans that ultimately blew up in their faces; how Wall Street artificially inflated home values AND started roping people into high interest home equity loans that ultimately collapsed as well; how not every home buyer during that time were "high risk" and that regular people with jobs and good credit got hornswaggled because they paid more than their house was worth because of the artificially inflated property values created to fence off the securities.

Nope, none of that mattered because it was CLINTON who started the whole process....

/like talking to a wall..


I've had that argument with a family member, several family members in fact, about how the whole crash was Clinton's fault for signing the CRA Act. Funny how they did not know that the CRA act has been around since the mid 70's, and that, it has functioned very well over the years. In fact, as post-mortems on the financial crisis have shown, CRA loans were less likely to fail than free markety sub-prime loans generated outside federal regulation. In fact, it's less than a quarter of CRA loans that contributed to the crisis. Still, the family likes to believe it was poor brown people conning their way into suburbia that caused the whole mess, damn the facts. Reality stops here!
 
2012-09-27 05:20:11 PM
There was some government involvement.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

Link
 
2012-09-27 05:20:24 PM

Debeo Summa Credo: Secondly, do you think no farkers bought homes from 2003-2006, as the bubble was inflating?


So you've flipped it from "No one knew" to "not everyone knew".
 
2012-09-27 05:20:24 PM

TyrantII: rumpelstiltskin: Yes, Freddie did have a role in causing the housing crisis. What they did or didn't do in 2010 has absolutely nothing to do with that.

Sure they did. Their "role" was getting wiped out like very other over-leverage investor bank that went scrambling for capital to starve off defaulting. F&F we told by congress to buy up huge positions of MBS debt to forfill their HRA obligations, instead of originating the loans themselves. Those MBS's crashed and burned, and killed em.

Gotta go to congress and ask them why a GSE charged with lending was buying up securitized debt. They aren't a bank, and they weren't in the banking industry, and if they didn't have that directive, they would have been solvent.


F&F never originated loans. There entire business model was buying mortgages originated by others. So yeah, if you beleive that the entire premise of F&F was wrong, then okay. But beware you're agreeing completely with what the WSJ op-ed page has been saying since the 1990s.
 
2012-09-27 05:20:53 PM

whistleridge: impaler: whistleridge: I've made a case. I've present evidence. You've said NO WRONG STOOPID!!!, but you haven't offered a countercase or offered any evidence. Do you have anything meaningful to contribute?

You've made no case other than "ah shucks, both sides are bad."

You've stated no evidence

See all the graphs and figures and facts in this thread?

Those are mine. (with one graph going to skullcrusher, and kmmontandon throwing in some links as well)

Fact: the housing bubble burst in September 2008.
Fact: prior to that burst, nobody on either side of the aisle did anything substantive to try and prevent it. Hell, it was a running joke on Fark for years prior to that.
Fact: since then, there has been a lot of finger-pointing in both directions.
Fact: Neither side has been able to make a conclusive case. Your pretty graphs established respectively that: 1) the bubble expanded and burst primarily between 04-08 2) that Fannie and Freddie didn't cause all of it 3) that CRA wasn't entirely to blame. All 3 facts are things I haven't disagreed with. Nor are they earth-shattering or profound; they're just common knowledge.
Fact: none of that proves that one side only is to blame.

Until and unless you can show me that Fannie, Freddie, & CRA didn't contribute at ALL (or even just a statistically meaningless percentage)


What's with people's hard-ons about the CRA? Hasn't it been shown repeatedly that loans subject to the CRA have a fraction of the default rate as those that were not subject to the CRA?
 
2012-09-27 05:24:20 PM

Moopy Mac: What's with people's hard-ons about the CRA? Hasn't it been shown repeatedly that loans subject to the CRA have a fraction of the default rate as those that were not subject to the CRA?


CRA benefits "ethnic" people.
 
2012-09-27 05:32:41 PM

Philip Francis Queeg: Debeo Summa Credo: Secondly, do you think no farkers bought homes from 2003-2006, as the bubble was inflating?

So you've flipped it from "No one knew" to "not everyone knew".


Yeah, I guess. My original question was intended to highlight that there was a bubble and if everyone had known it was a bubble there wouldn't have been a bubble in the first place.

Clearly in any pool of people there are a difference of opinions. Yeah, Peter Schiff was right. John Paulson and the guys featured in the Big Short were right. If there had been more like them, and earlier, the bubble wouldn't have gotten so inflated. If banks and investors and rating agencies had realized there was a bubble, it wouldn't have gotten so inflated. If the homebuying public had recognized, collectively, that prices were unsustainable, the bubble wouldn't have been inflated. And lastly, if Fannie and Freddie had curtailed lending as the bubble inflated, or not existed, the bubble wouldn't have been as bad as it was.
 
2012-09-27 05:34:33 PM

Philip Francis Queeg: Debeo Summa Credo: Secondly, do you think no farkers bought homes from 2003-2006, as the bubble was inflating?

So you've flipped it from "No one knew" to "not everyone knew".


Honestly, I really get sick of having to skip over walls of grey text that's going to ultimately end up doing the same thing:

1. Apologizing for out and out greed
2. Attempting to stick it to the middle class
 
2012-09-27 05:40:11 PM

rumpelstiltskin: You're wrong. Take away Freddie and Fannie in 2002, and real estate craters in 2002, and it's a much smaller crash.


Actually, subprime crashed in the late 90's, but the effect was small due to the relatively small size of the market. But having seen how the process worked, Wall Street went into overdrive for the second round. They wanted to do an end-around on the GSE's so that they could keep the profits for themselves and the GSE's began speculating in subprime to keep up. Cities like Cleveland tried to reign in predatory spending but were blocked first by the regulators and then by the Supreme Court. By the time the market started to tank in 2007, the mortgage industry was so locked in that they couldn't get out of the market without destroying themselves, so they doubled down and tried to grab as much as they could before the bubble burst. A few groups in the know like Goldman-Sachs and Magnitar used credit default swaps and synthetic CDO's to profit from the downturn while simultaneously destroying their competition, with the side effect that they amplified the bubble far beyond was was possible if using only asset-backed securities.

So yes, the GSE's had a role, but they were only one player in a massive orgy of greed and fraud.
 
2012-09-27 05:44:06 PM

Debeo Summa Credo: Philip Francis Queeg: Debeo Summa Credo: Secondly, do you think no farkers bought homes from 2003-2006, as the bubble was inflating?

So you've flipped it from "No one knew" to "not everyone knew".

Yeah, I guess. My original question was intended to highlight that there was a bubble and if everyone had known it was a bubble there wouldn't have been a bubble in the first place.

Clearly in any pool of people there are a difference of opinions. Yeah, Peter Schiff was right. John Paulson and the guys featured in the Big Short were right. If there had been more like them, and earlier, the bubble wouldn't have gotten so inflated. If banks and investors and rating agencies had realized there was a bubble, it wouldn't have gotten so inflated. If the homebuying public had recognized, collectively, that prices were unsustainable, the bubble wouldn't have been inflated. And lastly, if Fannie and Freddie had curtailed lending as the bubble inflated, or not existed, the bubble wouldn't have been as bad as it was.


A lot of the banks and investors knew there was a bubble and continues to participate in that market to reap short term profits. Pumping up the quarterly bottom line was the priority, not sustainability.
 
2012-09-27 05:44:11 PM
My favorite still is the "CRA caused the housing market to collapse" talking point because of the fact that it essentially blames minorities for the housing collapse.

Can't beat good old fashioned racism.
 
2012-09-27 06:09:41 PM
What the hell.....There was an intelligent, reasoned, and rational discussion, well documented with facts and citations? In my Fark?


/reported
 
2012-09-27 06:11:59 PM
So the IG interviewed employees and none of them said that the fact that they farked homeowners was deliberately in order to make money. Note, they didn't deny farking the homeowners. Or that Freddie wsa making money off the farking. The denial is only that the farking was done deliberately so that Freddie would make money.

Carry on with all your "this had nothing to do with the housing crisis talk." Because clearly, this IG report is a silver bullet.

Fools.
 
2012-09-27 06:13:02 PM

Mrtraveler01: Can't beat good old fashioned racism.


Karma Curmudgeon: There was an intelligent, reasoned, and rational discussion, well documented with facts and citations?


???
 
2012-09-27 06:19:07 PM

Philip Francis Queeg: A lot of the banks and investors knew there was a bubble and continues to participate in that market to reap short term profits. Pumping up the quarterly bottom line was the priority, not sustainability.


Yep. Their business model was based on the idea that at worst, house prices would plateau. By 2006 however, the pool of first time buyers had been pretty much tapped out. Most of the sub-prime mortgages after that were refinancing or second and third homes for house flippers. The mortgage companies at that point were literally giving houses to illegal immigrants and people who defaulted on their first payment. But their model required them to keep pushing out new mortgages. Most of those companies were in a damned if you do damned if you don't scenario. A few like Goldman Sachs tried to get out and profit on the downside, but most simply doubled down and tried to grab as much cash as they could before it all fell apart.
 
2012-09-27 06:19:28 PM

Garet Garrett: So the IG interviewed employees and none of them said that the fact that they farked homeowners was deliberately in order to make money. Note, they didn't deny farking the homeowners. Or that Freddie wsa making money off the farking. The denial is only that the farking was done deliberately so that Freddie would make money.

Carry on with all your "this had nothing to do with the housing crisis talk." Because clearly, this IG report is a silver bullet.

Fools.


Wow, that's an impressive response time. I'll note that on the customer survey. Nice job.
 
2012-09-27 06:21:01 PM

Garet Garrett: So the IG interviewed employees and none of them said that the fact that they farked homeowners was deliberately in order to make money. Note, they didn't deny farking the homeowners. Or that Freddie wsa making money off the farking. The denial is only that the farking was done deliberately so that Freddie would make money.

Carry on with all your "this had nothing to do with the housing crisis talk." Because clearly, this IG report is a silver bullet.

Fools.


No one is saying that, fool. But the conservative attempt to place the blame on everyone except the banks is demonstrably false. The GSE's most definitely played a role, but much of that role was defensive as they were trying to keep up with Wall Street banks that wanted to cut the GSE's out of the market entirely.
 
2012-09-27 06:22:01 PM

Mentat: Philip Francis Queeg: A lot of the banks and investors knew there was a bubble and continues to participate in that market to reap short term profits. Pumping up the quarterly bottom line was the priority, not sustainability.

Yep. Their business model was based on the idea that at worst, house prices would plateau. By 2006 however, the pool of first time buyers had been pretty much tapped out. Most of the sub-prime mortgages after that were refinancing or second and third homes for house flippers. The mortgage companies at that point were literally giving houses to illegal immigrants and people who defaulted on their first payment. But their model required them to keep pushing out new mortgages. Most of those companies were in a damned if you do damned if you don't scenario. A few like Goldman Sachs tried to get out and profit on the downside, but most simply doubled down and tried to grab as much cash as they could before it all fell apart.


And the bank employees making the decisions didn't care what happened in the long run. They were pulling down raises and bonuses. When the wheels came off the cart they knew they weren't going to get left holding the bag.
 
2012-09-27 06:24:25 PM

Garet Garrett: Mrtraveler01: Can't beat good old fashioned racism.

Karma Curmudgeon: There was an intelligent, reasoned, and rational discussion, well documented with facts and citations?

???


Yeah because the observation that racism was involved is just so far-fetched. How dare he bring that up?
 
2012-09-27 06:38:10 PM

whidbey: Garet Garrett: Mrtraveler01: Can't beat good old fashioned racism.

Karma Curmudgeon: There was an intelligent, reasoned, and rational discussion, well documented with facts and citations?

???

Yeah because the observation that racism was involved is just so far-fetched. How dare he bring that up?


What's funny to me is that before 2008 the only people that ever talked about the CRA were bankers in their glossy RFP's to let everyone know how farking swell they all were and how much Financial Behemoth, NA cared about your community. Watching it turn from a plum feather in the the P/R cap to evil socialist conspiracy was one of the delicious little ironies when everything was coming apart. And seeing how it was used in talking points was handy guide for separating wheat from chaff. Still is.
 
2012-09-27 06:41:53 PM

whidbey: Yeah because the observation that racism was involved is just so far-fetched. How dare he bring that up?


Bank of America would like to have a word with you

Link
 
2012-09-27 06:44:51 PM

X-boxershorts: whidbey: Yeah because the observation that racism was involved is just so far-fetched. How dare he bring that up?

Bank of America would like to have a word with you

Link


I have no doubt racism was a factor. Garet Garrett should read your link, though.
 
2012-09-27 07:30:43 PM

zappaisfrank: Had a REALLY long debate with a right winger about this very thing recently.

He swore up and down that it was CLINTON who caused the whole thing because of the low income lending stipulation in the GBL repeal that FORCED all those poor, besotten lending institutions to give loans to people they know couldn't afford them.

THEN..I pointed out how Wall Street had been gambling with mortgage securities since the mid 1990's and almost had a major meltdown in 1998 saved only by a huge influx of cash. Then, I went on about how all these poor widdle lenders would fudge numbers to get people loans who didn't qualify for them so they could boost the value of their mortgage backed securities they were fencing off; how ordinary people suddenly thought they could get rich by "house flipping" and got suckered into "interest only" loans that ultimately blew up in their faces; how Wall Street artificially inflated home values AND started roping people into high interest home equity loans that ultimately collapsed as well; how not every home buyer during that time were "high risk" and that regular people with jobs and good credit got hornswaggled because they paid more than their house was worth because of the artificially inflated property values created to fence off the securities.



I have a slightly different idea, and I have identified a particular person to Tar and Feather for being the first Moron to start the IndianaJones massive boulder rolling - Richard C. Davis

You remember, *this* moron.

www.karakurcz.com

The one who sold A&E TV the idea of "Flip This House

The program that convince cable-watching weasels that they could buy a house heavily leveraged, clean it up in a week or 2, and sell it for twice the price.

\will swerve toward him if I ever see him on the street
\\seriously
 
2012-09-27 07:59:34 PM
Wait, Wait, may favorite is the Mexican Gardners trying to by a 250K house while making 20K a year!

It totally had nothing to do with real estate Flippers buying houses on margin.
 
2012-09-27 09:00:23 PM

rumpelstiltskin: kmmontandon: rumpelstiltskin: You seem to be under the bizarre impression that I'm claiming they were the primary cause of it. Where have I said that? I said they had a role in it. Are you disupting that they had a role in it? Are you claiming that the 25-50% of subprime mortgages that they securitized didn't have any impact on the crisis?


Simple:

1.) Take away Freddie and Fannie in 2002. Does the bubble still happen? Yes.

2.) Take away the entire private sub-prime mortgage market (and concomitant securities market) in 2002. Does the bubble still happen? No.

You're wrong. Take away Freddie and Fannie in 2002, and real estate craters in 2002, and it's a much smaller crash.


not even vaguely correct, the mortgage crash was just getting started in 2002 and the GSE's had nothing to do with it. The primary cause was a sudden burst of prosperity in India and China creating a huge bubble of liquidity looking for a safe place to park itself. Since the US stock market was seeing the tech bubble burst, and Treasury bonds were in short supply because of the surplus, US real estate became the go-to investment, and the bond traders realized they could sell all the RMBS's they could whip together and they told the Mortgage underwriters they would buy anything they wrote, standards be damned.
 
2012-09-27 09:23:52 PM

Magorn: rumpelstiltskin: kmmontandon: rumpelstiltskin: You seem to be under the bizarre impression that I'm claiming they were the primary cause of it. Where have I said that? I said they had a role in it. Are you disupting that they had a role in it? Are you claiming that the 25-50% of subprime mortgages that they securitized didn't have any impact on the crisis?


Simple:

1.) Take away Freddie and Fannie in 2002. Does the bubble still happen? Yes.

2.) Take away the entire private sub-prime mortgage market (and concomitant securities market) in 2002. Does the bubble still happen? No.

You're wrong. Take away Freddie and Fannie in 2002, and real estate craters in 2002, and it's a much smaller crash.

not even vaguely correct, the mortgage crash was just getting started in 2002 and the GSE's had nothing to do with it. The primary cause was a sudden burst of prosperity in India and China creating a huge bubble of liquidity looking for a safe place to park itself. Since the US stock market was seeing the tech bubble burst, and Treasury bonds were in short supply because of the surplus, US real estate became the go-to investment, and the bond traders realized they could sell all the RMBS's they could whip together and they told the Mortgage underwriters they would buy anything they wrote, standards be damned.


Laughably silly. "treasury bonds in short supply because of the surplus". So farking funny.

Rumplestiltskin is correct, by the way, in that absent Fannie and Freddie and their huge share of the market, the bubble would have gotten nowhere near as far as it did. You deny this undeniable fact due to your extreme partisanship.
 
2012-09-27 09:26:53 PM
No shiat, Sherlock.

George W. Bush, Dick Cheney, Mitchell McConnell, John Boehner and Paul Ryan and their Wall Street Pals Bankrupted America and Mitt Romney Promises Even More of the Same

*The "Great" recession
*SEC fiasco (Madoff, et al)
*costly blunder known as Medicare part D
*massive tax cuts for the ultra rich without spending cuts
*numerous unfunded mandates imposed on the states
*effort to privatize Social Security by Bush then Ryan
*not one veto of a spending bill by Bush in 6 years (and Ryan voted for all of it)
*massive Wall Street bailout (Ryan voted for it)
*LIBOR scandal
*allowed HSBC to evade sanctions against Iran and to launder Mexican drug cartel money
*outright corruption and criminality

Paul Ryan voted FOR Bush's TARP (Wall Street bailout). He voted for everything Bush the budget buster wanted and added $5 trillion to the deficit. He became a budget hawk only in 2009.
http://www.newyorker.com/reporting/2012/08/06/120806fa_fact_lizza?cur r entPage=all

Paul Ryan created plan to privatize Social Security in 2005: "The Social Security Personal Savings Guarantee and Prosperity Act of 2005" which even George W. Bush thought was "irresponsible"
http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/11/paul-rya n -isnt-a-deficit-hawk-hes-a-conservative-reformer/
http://thomas.loc.gov/cgi-bin/bdquery/z?d109:h.r.01776

Romeny hired Bush's economic advisors
http://www.salon.com/2012/05/01/the_romney_bush_mind_meld/
http://current.com/community/93772940_large-number-of-bush-advisers-f l ocking-to-romneys-campaign-team.htm
http://www.washingtontimes.com/news/2012/may/10/romneys-team-starts-t o -look-like-bushs/
http://online.wsj.com/article/SB1000142405297020477860457724158315245 0 486.html

Romney on the budget: increase defense budget, cut taxes for the ultra rich and no plan to pay for it
http://www.thenation.com/blog/167416/romneys-bad-math
http://news.yahoo.com/romney%E2%80%99s-budget-plan-shouldn%E2%80%99t- b e-a-secret-saved-for-wealthy-donors.html
http://www.denverpost.com/nationworld/ci_20457404/romney-plans-big-cu t s-u-s-budget-but
http://www.usnews.com/news/articles/2012/05/24/experts-skeptical-of-r o mneys-defense-budget-plans

Bush Administration worst fiscal disaster in US history
http://www.foreignaffairs.com/articles/66778/roger-c-altman-and-richa r d-n-haass/american-profligacy-and-american-power
Economic Damage Caused by Bush and the GOP
http://www.theatlantic.com/politics/archive/2009/09/closing-the-book- o n-the-bush-legacy/26402

8 Years of Failure
http://www.time.com/time/specials/packages/article/0,28804,1872229_18 7 2230_1872231,00.html

Bush/Boehner/McConnell/Ryan $700 billion bank bailout
http://www.cnn.com/2008/POLITICS/09/24/bush.bailout/index.html

Bush/Boehner/McConnell/Ryan bank bailout rewards the cheaters
http://www.denverpost.com/business/ci_7655582

On September 18, 2008, Congressman Boehner attended a closed meeting with congressional leaders, then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, and was urged to craft legislation to help financially troubled banks. That same day (trade effective the next day), Congressman Boehner cashed out of an equity mutual fund.[31]
Ryan also profited on inside information during the banking crisis
http://www.guardian.co.uk/world/2012/aug/13/paul-ryan-sold-shares-ban k ing-crisis?CMP=EMCNEWEML1355

What Bush Learned From Enron: How to hide an $87 billion debt by pretending it's off the books.
http://slate.msn.com/id/2088318/

Is Bush a socialist? He's spending like one
http://www.timesonline.co.uk/tol/news/article570387.ece

Bush pleads with China and Japan to save him from his economic failures.
http://www.usatoday.com/news/washington/2003-10-19-bush-china-japan_x . htm

Bush White House Philosophy Stoked Mortgage Bonfire
http://www.nytimes.com/2008/12/21/business/21admin.html?_r=1&em=&page w anted=all
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR200 8 021302783.html
http://www.whitehouse.gov/news/releases/2002/06/20020617-2.html
http://www.whitehouse.gov/news/releases/2002/10/20021015-7.html
http://www.whitehouse.gov/news/releases/2003/12/20031216-9.html
http://georgewbush-whitehouse.archives.gov/news/releases/2004/08/2004 0 809-9.html

Bush's Minority Homeownership Plan Rests Heavily on Fannie and Freddie (2006)
http://realtytimes.com/rtpages/20020624_bushplan.htm
http://www.allbusiness.com/government/government-bodies-offices-heads / 5944494-1.html
http://www.usatoday.com/money/perfi/housing/2004-01-20-fha_x.htm

Community Reinvestment Act not to blame for Bush's crisis
http://www.prospect.org/cs/articles?article=did_liberals_cause_the_su b prime_crisis
http://www.slate.com/id/2201641/pagenum/all/%23page_start
http://www.businessweek.com/investing/insights/blog/archives/2008/09/ c ommunity_reinvestment_act_had_nothing_to_do_with_subprime_crisis.html
http://blogs.wsj.com/economics/2008/12/03/feds-kroszner-defends-commu n ity-reinvestment-act/

The $10 trillion hangover: paying the price for 8 years of Bush
http://harpers.org/archive/2009/01/0082337
http://www.autoblog.com/2009/06/09/cheney-bush-left-gm-bankruptcy-for - the-next-guy/

Bush Administration waste and fraud
http://seattlepi.nwsource.com/national/1152ap_wartime_spending_oversi g ht.html?source=mypi

In June 1995, Boehner distributed campaign contributions from tobacco industry lobbyists on the House floor as House members were weighing how to vote on tobacco subsidies.[19] In a 1996 documentary by PBS called The People and the Power Game, Boehner said "They asked me to give out a half dozen checks quickly before we got to the end of the month and I complied. And I did it on the House floor."
 
2012-09-27 09:31:53 PM

Bucky Katt: Paul Ryan voted FOR Bush's TARP (Wall Street bailout).


Really? Well, then fark him I'm voting for the guy who voted against TARP. Which one is that again?
 
2012-09-27 11:06:46 PM

Debeo Summa Credo: Rumplestiltskin is correct, by the way, in that absent Fannie and Freddie and their huge share of the market, the bubble would have gotten nowhere near as far as it did. You deny this undeniable fact due to your extreme partisanship.


The only way this argument is remotely true, is if you realize that FAM/FRE allowed people to get affordable mortgages, so since only half the people that could normally buy house could buy houses, there is no bubble. You are right there, if no one could get a reasonable mortgage, there would have been no housing bubble.

As for the parts that actually caused the real meltdown - shatty high-priced loans, and the hidden risk of those shatty mortgages bundled in securities, they had nothing to do with.

We're to believe 60 year-old agencies, doing what they've always done, caused the problem? My arse.
 
2012-09-28 12:08:00 AM

zappaisfrank: He swore up and down that it was CLINTON who caused the whole thing because of herpa derpa doo

THEN..I pointed out a shiatload of actual facts that contradict herpa derpa doo

Nope, none of that mattered because he is a mindless authoritarian follower.


So much editing that strikethrough and bold would have been ridiculous. BNut this is the more accurate portrayal of your situation
 
2012-09-28 12:46:29 AM

Debeo Summa Credo: Laughably silly. "treasury bonds in short supply because of the surplus". So farking funny.


Wrong. The Asian Stock Market Crash coupled with the collapse of the Russian ruble sent capital flooding into America which fueled the credit bubble and helped fund the surplus through increased tax revenue. There was so much capital flowing in that no one knew what to do with it. Mortgage backed securities were ideal in that they represented an investment vehicle that permitted transfer of capital from high capital low demand housing markets (Rust Belt) to low capital high demand areas such as the Southwest and Florida. Moreover, collateralized debt obligations provided a vehicle for direct investment in the housing market depending on the desired risk strategy of the investor. There was nothing wrong with any of that and in fact it represented a neat mechanism for increasing the efficiency of capital flow through the markets. The problem was that the flood of cheap credit sent everyone from homeowners to banks to mortgage lenders into an irrational debt binge that ended up blowing the fark out of everything.
 
2012-09-28 02:48:47 AM

Debeo Summa Credo: Bucky Katt: Paul Ryan voted FOR Bush's TARP (Wall Street bailout).

Really? Well, then fark him I'm voting for the guy who voted against TARP. Which one is that again?


Bush's bank bail out.
 
2012-09-28 05:51:04 AM
In other words... Completely.

Liberals used to wait at least a decade or more before they started trying to lie about history. Now they're barely waiting until people are not talking about a story anymore.
 
2012-09-28 07:26:11 AM

randomjsa: In other words... Completely.

Liberals used to wait at least a decade or more before they started trying to lie about history. Now they're barely waiting until people are not talking about a story anymore.


Wasn't it the Heritage Foundation that came out in 2008 and immediately pointed the finger at Fannie and Freddie? (Barney Frank and Chris Dodd too!)

Heh...liberal indeed.

Pointing the finger of blame at 2 institutions that don't even write mortgages. Ignoring the fact that as late as early 2005, they were prevented by law from accepting anything less than prime for securitization purposes.

Also...no one was FORCED to write bad loans. But the 2003 Bush administration's home ownership program sure incentivized the sub-prime flood by removing the underwriting standards that the CRA program followed as late as 2001 when the program's loan portfolio was audited by the OCC and found to be performing JUST AS WELL as traditional mortgages.
 
2012-09-28 07:31:46 AM
Meanwhile, all these excuse makers ignore the fact that Commercial Real Estate suffered from the same poor underwriting and loose securitization standards that collapsed the Residential Real Estate Market.

If you're blaming Fannie and Freddie, and ignoring the simultaneous collapse of the Commercial Real Estate Bubble too,

well then....

www.blogcdn.com
 
2012-09-28 07:44:48 AM

Bucky Katt: Debeo Summa Credo: Bucky Katt: Paul Ryan voted FOR Bush's TARP (Wall Street bailout).

Really? Well, then fark him I'm voting for the guy who voted against TARP. Which one is that again?

Bush's bank bail out.


Yeah, I know. Which of the prez or vp candidates voted against Bush's bank bailout in 2008?
 
2012-09-28 09:02:57 AM

Saiga410: Debeo Summa Credo: Who here KNEW it was a bubble in 2005?

I don't know about 05 but when I started seeing the interest only and set your payment loan adds, I was thinking "ruhroh this is insane". I expect most people on this site would be in the same boat.

/most farkers are fairly intelligent. Your opinions are dumb in that they differ from mine but intelligent nonetheless.


Between that and the House Flipping Tee Vee shows on TLC... yeah. I think people who weren't completely batshiat insane or blinded by greed saw that something was gonna pop. How or what, I don't claim to have seen, but yeah... you can buy houses at 50k and in a month or two they are worth 150k. You can't expect that to work if it becomes a national past time, though. Eventually demand dries up, *at least*.

/For posterity, I think Tuition is the next bubble, but it will work strangely because of the nature of investment in education and the loan guarantees.
 
2012-09-28 09:39:01 AM

Debeo Summa Credo: Magorn: rumpelstiltskin: kmmontandon: rumpelstiltskin: You seem to be under the bizarre impression that I'm claiming they were the primary cause of it. Where have I said that? I said they had a role in it. Are you disupting that they had a role in it? Are you claiming that the 25-50% of subprime mortgages that they securitized didn't have any impact on the crisis?


Simple:

1.) Take away Freddie and Fannie in 2002. Does the bubble still happen? Yes.

2.) Take away the entire private sub-prime mortgage market (and concomitant securities market) in 2002. Does the bubble still happen? No.

You're wrong. Take away Freddie and Fannie in 2002, and real estate craters in 2002, and it's a much smaller crash.

not even vaguely correct, the mortgage crash was just getting started in 2002 and the GSE's had nothing to do with it. The primary cause was a sudden burst of prosperity in India and China creating a huge bubble of liquidity looking for a safe place to park itself. Since the US stock market was seeing the tech bubble burst, and Treasury bonds were in short supply because of the surplus, US real estate became the go-to investment, and the bond traders realized they could sell all the RMBS's they could whip together and they told the Mortgage underwriters they would buy anything they wrote, standards be damned.

Laughably silly. "treasury bonds in short supply because of the surplus". So farking funny.

Rumplestiltskin is correct, by the way, in that absent Fannie and Freddie and their huge share of the market, the bubble would have gotten nowhere near as far as it did. You deny this undeniable fact due to your extreme partisanship.


No, I deny this because, among other things , my legal work put me in a position where I had to read nearly every single email sent to or from a Treasury official, from Hank Paulson on down (the US Dept of Treasury takes a REMARKABLY pro-disclosure stance towards FOIA requests) for the six months prior to the decision to take over Fannie and Freddie. Now, either you are right, and all of the top economists and market watchers at the US Dept of Treasury are wrong, or maybe, just maybe, you have no actual clue what you are talking about.

If you want to read what I read I'd be happy to give the address of Finacial Stability's FOIA office. Since they've already processed the request once, you should be able to get your own copy quickly and at almost no charge.
 
2012-09-28 10:20:41 AM

Debeo Summa Credo: Who here KNEW it was a bubble in 2005? Everybody might say they thought it could be a bubble, and many will claim to have known at that time. But if that view was truly reflected at the time among as many people who now claim to have known it was a bubble, there wouldn't have been a bubble.


Grand Theft Auto: San Andreas was making fun of the entire industry in 2004. If video game designers saw it, a lot of other people did to. Detecting bubbles is easy. Betting on them is what's hard.
 
2012-09-28 11:01:00 AM

Debeo Summa Credo:

F&F never originated loans. There entire business model was buying mortgages originated by others. So yeah, if you beleive that the entire premise of F&F was wrong, then okay. But beware you're agreeing completely with what the WSJ op-ed page has been saying since the 1990s.


This isn't true at all. They both originated loans and also bought loans to package them into MBSs'. They didn't have the go ahead to buy MBSs' themselves until the GWB years. There is a difference, especially when the private market was not rating their products correctly.
 
2012-09-28 11:59:33 AM

Magorn: Debeo Summa Credo: Magorn: rumpelstiltskin: kmmontandon: rumpelstiltskin: You seem to be under the bizarre impression that I'm claiming they were the primary cause of it. Where have I said that? I said they had a role in it. Are you disupting that they had a role in it? Are you claiming that the 25-50% of subprime mortgages that they securitized didn't have any impact on the crisis?


Simple:

1.) Take away Freddie and Fannie in 2002. Does the bubble still happen? Yes.

2.) Take away the entire private sub-prime mortgage market (and concomitant securities market) in 2002. Does the bubble still happen? No.

You're wrong. Take away Freddie and Fannie in 2002, and real estate craters in 2002, and it's a much smaller crash.

not even vaguely correct, the mortgage crash was just getting started in 2002 and the GSE's had nothing to do with it. The primary cause was a sudden burst of prosperity in India and China creating a huge bubble of liquidity looking for a safe place to park itself. Since the US stock market was seeing the tech bubble burst, and Treasury bonds were in short supply because of the surplus, US real estate became the go-to investment, and the bond traders realized they could sell all the RMBS's they could whip together and they told the Mortgage underwriters they would buy anything they wrote, standards be damned.

Laughably silly. "treasury bonds in short supply because of the surplus". So farking funny.

Rumplestiltskin is correct, by the way, in that absent Fannie and Freddie and their huge share of the market, the bubble would have gotten nowhere near as far as it did. You deny this undeniable fact due to your extreme partisanship.

No, I deny this because, among other things , my legal work put me in a position where I had to read nearly every single email sent to or from a Treasury official, from Hank Paulson on down (the US Dept of Treasury takes a REMARKABLY pro-disclosure stance towards FOIA requests) for the six months prior to the decision to take over Fannie and Freddie. Now, either you are right, and all of the top economists and market watchers at the US Dept of Treasury are wrong, or maybe, just maybe, you have no actual clue what you are talking about.

If you want to read what I read I'd be happy to give the address of Finacial Stability's FOIA office. Since they've already processed the request once, you should be able to get your own copy quickly and at almost no charge.


Copy of what? I can see in impalers emails that even at the absolute height of the bubble, Fannie and Freddie held 40% of the rapidly growing market.

Perhaps you should file an FOIA request for an economics textbook to understand whether a lender providing 40% (at a minimum) of the liquidity to the market for a particular asset has an impact on the price of that asset.
 
2012-09-28 12:08:23 PM

TyrantII: Debeo Summa Credo:

F&F never originated loans. There entire business model was buying mortgages originated by others. So yeah, if you beleive that the entire premise of F&F was wrong, then okay. But beware you're agreeing completely with what the WSJ op-ed page has been saying since the 1990s.

This isn't true at all. They both originated loans and also bought loans to package them into MBSs'. They didn't have the go ahead to buy MBSs' themselves until the GWB years. There is a difference, especially when the private market was not rating their products correctly.


I'd be happy to see any links that say Fannie and Freddie ever originated loans. Everywhere I look says they've only bought loans originated by others. Fdr set fannie up to buy loans from banks.
 
2012-09-28 01:59:09 PM

TyrantII: This isn't true at all. They both originated loans and also bought loans to package them into MBSs'. They didn't have the go ahead to buy MBSs' themselves until the GWB years. There is a difference, especially when the private market was not rating their products correctly.


FAM/FRE have never originated a single loan. They buy loans to bundle in the secondary mortgage market. I'm unaware of them buying MSBs.
 
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