Taking the chance on the loans, one by one, isn't particularly dangerous. Bundling all of that into obscured financial instruments, well, that's another thing.

Arguing "just don't make the loans" isn't really getting at the problem.

Dancin_In_Anson: Some people are better off renters.

Such as you?

Oh, it's this argument again.

Please, everyone, let's just agree that it was those dastardly poors who ruined everything for the rest of us.  If there were only some sort of solution, a final one preferably, for the problem of poor people's existence.

oh FFS

Skleenar: Oh, it's this argument again.

Please, everyone, let's just agree that it was those dastardly poors who ruined everything for the rest of us.  If there were only some sort of solution, a final one preferably, for the problem of poor people's existence.

I would be interested in hearing a modest proposal or two on the subject

Funny thing that CRA loans were a lower default rate than the national average. Maybe background checking and reasonable terms do matter?

Skleenar: Oh, it's this argument again.

Please, everyone, let's just agree that it was those dastardly poors who ruined everything for the rest of us.  If there were only some sort of solution, a final one preferably, for the problem of poor people's existence.

Since you're arguing against one extreme end of the issue, I'll assume that you support the opposite extreme

HOME LOANS FOR EVERYONE!

Rev.K: Shostie: Kind of, like, if we had stricter lending standards they wouldn't have been able to pull this off.

I don't know. It sounds like you guys are angry about the lenders for very similar, but slightly different reasons.

Maybe.

Not really.  It wasn't the borrowers who were the predators in this fiasco.  That was, unquestionably, the lenders.  Sure, someone can probably find examples of individual borrowers fraudulently working the system for their gain, but the vast majority of that sort of shennanigan was played by lenders.

Once again, this just points to the problem that poors are bad and ruin stuff for everyone.

Rev.K: Read up on the subprime crisis and get back to us, subby.

People with weak credit don't pump up toxic funds as AA+ investments.

Toxic loans were not "pumped up." they were bundled into derivative packages with other loans of less toxicity, which were then sold - and resold and resold - many times being re-bundled along the way into even less recognizable packages. A game of musical chairs, and the last investment houses holding the bundles when the music stopped found themselves with assets overvalued by several thousand percent.

But it's all good; they eventually got bailed out with taxpayer money.

I have slightly more confidence in this economic team than the Bush-Republican economic team.

Frank N Stein: Since you're arguing against one extreme end of the issue, I'll assume that you support the opposite extreme

I see you are unfamiliar with satirical intent.

Skleenar: Frank N Stein: Since you're arguing against one extreme end of the issue, I'll assume that you support the opposite extreme

I see you are unfamiliar with satirical intent.

Are you calling him a goat man? That is offensive.

We should also deregulate the banks, because corporations, as people, are all about making the right choices without having Big Brother on your back.

vpb: Subby would have a good point if it wasn't for the fact that banks are only lending to people with excellent credit.  Lending to people with merely good credit isn't a sub-prime loan.

Exactly... It's not that Obama is asking them to necessarily loan to deadbeats, but they aren't keeping up their end of the bargain from the bailout. If you don't have extra-super-duper good credit, you can't get shiat.

If the loans exist I don't see how anyone can stop them from being bundled with better loans and sold as securities. There's just no way. It would take a tracking system that no country in the world has right now. Unless you just don't bundle loans into securities and we all know that's not going to happen.

Gulper Eel: Rev.K: People with weak credit don't pump up toxic funds as AA+ investments.

And if you don't make loans to them in the first place, there's no toxic fund to pump up.


this sounds an awful lot like, "If they wouldn't wear those short skirts, they wouldn't have gotten themselves raped."

New home purchase mortgage payments will typically be lower than rent payments in today's market. Also lending criteria are way tougher than they used to be. Context, how does it work??

kronicfeld: This is utterly anecdotal, but my experience has been that the pendulum has swung too far the other way, with real property appraisers aiming too low in their valuations and banks setting the credit bar too high on lending. Saying that banks can be a little looser and more subjective in looking at their applicants is not the same as saying that they should be giving half-million-dollar loans to unemployed college students.

Just wanted to second your anecdotal observation; when I refinanced last year, the hoops they made me jump through were absurd and the assessment was obviously too low.

The refinance process also uncovered some flagrant misconduct by the original lender back in 2002; it still amazes me that all of these people got off scot-free. My lawyer said I could sue and win, but doubted it would be worth the effort.

Dancin_In_Anson: cameroncrazy1984: Such as you?

Sometimes I wish...when it comes to repair and maintenance...but on the upside I'm less than 4 years to being paid off so, no,  another swing and miss.

Oh, it's cool, I'm on my way to making a million dollars this year too!

DarwiOdrade: I'm looking for a house to buy right now and I'm finding the problem isn't getting a loan. It's speculators buying up all the homes in my price range, and inflating home prices with their bidding wars. I get notified of a new home for sale and by the time I contact my realtor there are already half a dozen bids well above the asking price.

Same thing happened to us. We ended up in near-instant bidding wars on two properties, each of which sold for over asking. It was kind of nuts.

We finally found one in a different neighborhood, and this time it worked out. In fact, going for the inspection today. The first few times were wacky though.

"New home purchase mortgage payments will typically be lower than rent payments in today's market.  " Isn't true in the Chicago market. Can't comment on any other market. Unless you want to live way on the West Side and dodge bullets.

After reading the headline I was like WTF?!

Then after reading the article I was like "meh".

FTFA: "In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs - including those offered by the Federal Housing Administration - that insure home loans against default."

This is not a repeat of 2000-2007

csb:
I bought my first house in 2002 with less than 10% down payment.  The bank, mortgage broker and real estate agent were falling over themselves to creatively make sure I didn't have to pay the mortage insurance.  They also incuraged me to borrow more than I thought I could afford (I didn't).  The banks then of course sold and resold my mortgage as a premium, low risk security and made alot of money changers tons of money.

Fast forward to 2010, I have a higher paying job, better credit, 20% down payment and buying a cheaper house.  I had to go through hoops to buy a house, they bank scrutinized everything and tried to get me to put in more down payment.  Kinda like they use to do before the houseing boom.

LasersHurt: Taking the chance on the loans, one by one, isn't particularly dangerous. Bundling all of that into obscured financial instruments, well, that's another thing.

Arguing "just don't make the loans" isn't really getting at the problem.

This.  Making risky loans is fine, because you know it's risky and you account for it.  The problem is that people were taking individually risky things, bundling them together, and calling them safe.  So people were buying risky things without being told the true risk.

The bundlers bear all the blame.

Arkanaut: Seems to me the problem wasn't so much that banks were lending to high-risk borrowers, but that banks were pushing high-risk nontraditional mortgages (adjustable-rate mortgages, bubble mortgages, etc) onto high-risk borrowers, and then selling the risk off onto outside investors.

Wow.  Do different fonts make for pithier observations?  My data set of [1] seems to indicate so.

DarwiOdrade: I'm looking for a house to buy right now and I'm finding the problem isn't getting a loan. It's speculators buying up all the homes in my price range, and inflating home prices with their bidding wars. I get notified of a new home for sale and by the time I contact my realtor there are already half a dozen bids well above the asking price.

What do you know about those other bids? There should be no way you can get any information about the source of those bids, so what is making you think they are 'speculators'?

Skleenar: Oh, it's this argument again.

Please, everyone, let's just agree that it was those dastardly poors who ruined everything for the rest of us.  If there were only some sort of solution, a final one preferably, for the problem of poor people's existence.

I gotta say, I have to admire you. Your clever use of old and busted memes in the above post prompted me to look at your profile. Really! I have to say that I have seldom to never (not sure about that; they're so forgettable) seen any profile, anywhere on Fark, with a more mindless slavish worshipful adherence to talking points, stereotypes, and internet meme. Masterful! Seriously, you should apply for a paid staff writer position on, say, HuffPoo or perhaps whatever rag the Dem Underground or Daily KOS publishes. Congratulations, and keep up the good work!