Posted on 08/05/2012 3:49:57 PM PDT by tselatysr
The banks made BILLIONS of those loans, BILLIONS and BILLIONS.
“The Community Reinvestment Act destroyed the banking industry by turning our banks into proxy welfare offices. As the banks drowned in the bad debt, they began to flail. These flailings have been mischaracterized by the anti-free marketers among us as dishonesty and greed.
This wreck was caused by do-gooders in D.C., not by the nation’s bankers who ran their industry honestly and faithfully for over two centuries before the CRA. “
Exactly! When I was selling Real Estate, during the Catarrh administration, “Red Lining” still existed. And for a good reason. Back then, you had to have a 20% down payment. Banks in Cleveland wouldn’t give loans in areas like Hough, because they knew most of them would never be paid off. The in stepped Catarrh, and Clinton upped the ante. And Obama, in Chicago, threatened to sue banks who “Red Lined,” Banks got screwed! What were they going to do with all these useless loans? Lose tons of money? No. They bundled them up and sold them to anyone dumb enough to buy them.
Lotsa other crap was involved though.
This article is BS. As a Tea party member I reject this article.It is convenient to blame the banks, but look at the laws that forced them to make bad loans. Look at the mandates forced by democrats on FNMA and FRMAC to make bad loans and then loon at the democrats that were running them and looting them. Look at the morons who refinanced 4 and 5 times sucking the equity out of their homes to go on vacation.There is a lot of guilt to go around but you should start with the community reinvestment act. Remember Bush tried to stop it and was thwarted by DEMOCRATS.
“The banks made BILLIONS of those loans, BILLIONS and BILLIONS.”
Correct, in a $15 trillion/year economy. I wouldn’t expect any less.
Stick your ‘empathy’ where the sun don’t shine...
“I just remember the S&Ls - not exactly honesty and faithfulness from the banking sector there.”
From http://www.econlib.org/library/Enc/SavingsandLoanCrisis.html
“The bankruptcy of the FSLIC did not occur overnight; the FSLIC was a disaster waiting to happen for many years. Numerous public policies, some dating back to the 1930s, created the disaster. Some policies were well intended but misguided. Others had lost whatever historical justification they might once have had. Yet others were desperate attempts to postpone addressing a rapidly worsening situation. All of these policies, however, greatly compounded the S&L problem and made its eventual resolution more difficult and much more expensive. When disaster finally hit the S&L industry in 1980, the federal government managed it very badly.”
I highly recommend you read the article - it lists the 15 causes of the S&L crisis. Please avoid Wikipedia’s hatchet job.
“I highly recommend you read the article - it lists the 15 causes of the S&L crisis. Please avoid Wikipedia’s hatchet job.”
Regardless, a lot of bankers (and others) went to jail. I’m sure at least some of them were guilty.
“Let’s keep our eyes on the real target here and the real source of this problem”
The big banks are deeply intertwined with govt officials. They own stock in the banks, sit on the boards, family members work for the banks, bankers go to work in the govt.
Its really one and the same.
Neither party was an innocent, and bankers lending into the bubble knew that the risk from many of the loans was higher than other more traditional loans. They just wanted to get clear before the bubble burst, like the developers, speculators, and buyers. But bubbles pop, and when they do a lot of money is lost. Derivative transactions, including those by Fannie Mae and Freddie Mac added to the losses.
If the government wasn't up to their ears in the real estate and credit markets, the taxpayers wouldn't have ended up on the hook for the bad loans. And if banks with Federally insured deposits had to pay insurance fees proportional to the real risk they would not have been speculating in risky credit instruments.
The economic mess we are all dealing with can't be blamed on the deadbeat borrowers, as much as the government and the banking industry would like to. The blame must lie also with the lenders who took the opposite side of the deal with the borrowers. Put another way - if you lend a million dollars to a hairdresser in Chicago who has a $20,000 a year income so they can buy a bunch of apartment buildings and then resell those loans as AAA grade securities, aren't you trying to "get something for nothing?"
creditor = debtor
Gotta agree with you, the banks didn’t owe those homeowners loan modifications.
No wonder no homeowners were helped. What can you do with two dollars and seventy cents?
Bad news for you: a LOT of people caught in this mess are highly responsible, hard-working, credit-worthy conservatives who did not think they were getting something for nothing. They bought houses they could easily afford long before the recession started and paid their mortgages faithfully.
This wreck was caused by do-gooders in D.C., not by the nation’s bankers who ran their industry honestly and faithfully for over two centuries before the CRA.
Most of those bankers are dead. The people running things now aren’t cut from the same cloth.
Great. So why do you include them as 'caught in this mess'?
If they are still paying their mortgages, there should be no problem, even though the value may be less that the mortgage.
My paid-for home is worth less now...so do you include me 'in this mess'?
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