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Subprime crisis: mixed messages
Waterbury Republican-American ^ | November 18, 2007 | Editorial

Posted on 11/18/2007 2:11:51 PM PST by Graybeard58

In 1998, the U.S. Conference of Mayors blamed "redlining" for the "homeownership gap" in major cities. Though never documented, that was a common complaint for decades. In reality, the gap had less to do with discrimination than low demand for urban housing and banks' reluctance to lend money to people who can't repay.

Still, it wasn't long before lenders cowed by political correctness began lowering their underwriting standards and issuing variable-rate mortgages to high-risk borrowers. The Department of Treasury says 21 percent of all mortgages written from 2004-06 were so-called subprime, up from 9 percent from 1996-2004. And naturally, it wasn't long before rising interest rates hung subprime borrowers out to dry.

At their annual meeting this year, the mayors absolutely savaged the mortgage industry for doing precisely what they demanded nine years ago and called on the government to end predatory lending schemes. Then as now, the conference's criticisms ignored personal responsibility, specifically borrowers' obligation to understand the terms of their loan before signing. Not surprisingly, that angle also was absent from nearly two-thirds of the nightly news coverage on the "subprime crisis" in the 10 months ending Aug. 31, a new Media Research Center report reveals.

And personal responsibility was absent again last week when Gov. M. Jodi Rell authorized a $50 million bailout of Connecticut's subprime lenders and borrowers, and when the preliminary findings of a gubernatorial task force blamed rising foreclosures on lenders while essentially calling on them to redline borrowers.

Gov. Rell says the state has an "obligation to protect and secure" homeownership. Why? Because it's compassionate; it certainly isn't economically sound.

Banks have been foreclosing on houses for centuries, yet Gov. Rell inexplicably waits until now to reward some of the most irresponsible borrowers and lenders in state history with fixed, below-market refinancing terms unavailable to homeowners with good credit histories. And she does it without ever inquiring whether the borrowers' financial troubles are rooted less in rising interest rates than in their own irresponsible spending habits.

Gov. Rell should have left it to the borrowers and lenders to negotiate refinancing terms and then let the market shake out those who as yet are unable to afford the price of admission to the American dream.


TOPICS: Business/Economy; Editorial
KEYWORDS: credit; mortgage; rell; subprime

1 posted on 11/18/2007 2:11:52 PM PST by Graybeard58
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To: Veeram; Gabz; fire and forget; oswegodeee; woollyone; Squat; SICSEMPERTYRANNUS; ECM; cardinal4; ...

Ping to a Republican-American Editorial.

If you want on or off this list, let me know.


2 posted on 11/18/2007 2:12:21 PM PST by Graybeard58 ( Remember and pray for SSgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
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To: Graybeard58
And personal responsibility was absent again last week when Gov. M. Jodi Rell authorized a $50 million bailout of Connecticut's subprime lenders and borrowers

Hey, I live in CT. What do I GET for buying a house within my means & paying my mortgage on time?

3 posted on 11/18/2007 2:33:39 PM PST by Puppage (You may disagree with what I have to say, but I shall defend to your death my right to say it)
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To: Puppage
What do I GET for buying a house within my means & paying my mortgage on time?

You get to watch all this with a degree of disinterest.

4 posted on 11/18/2007 2:34:54 PM PST by RightWhale (anti-razors are pro-life)
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To: Puppage
What do I GET for buying a house within my means & paying my mortgage on time?

You get to keep paying for your own and now you get to help others pay theirs, through your taxes.

I live in central Illinois and support Chicago's entitlement population while they continue to set the rules through their massive voting numbers and vote fraud.

5 posted on 11/18/2007 2:39:12 PM PST by Graybeard58 ( Remember and pray for SSgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
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To: Graybeard58
Gov. Rell says the state has an "obligation to protect and secure" homeownership. Why? Because it's compassionate; it certainly isn't economically sound.

None of this would have been necessary had the Fed stopped jacking up rates to the point of inverting the yield curve.

6 posted on 11/18/2007 3:00:34 PM PST by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: Puppage; All; Graybeard58
"What do I GET for buying a house within my means & paying my mortgage on time?"

You get "Sucker" tattooed across your forehead with the rest of us who are fiscally responsible. And as an added bonus, you get to watch your property value go DOWN while your taxes go UP to pay for this nation-wide Ponzi Scheme. :(

7 posted on 11/18/2007 3:26:55 PM PST by Diana in Wisconsin (Save The Earth. It's The Only Planet With Chocolate.)
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To: Diana in Wisconsin
while your taxes go UP

You ain't kid'n!!

Go Pack!!!

8 posted on 11/18/2007 3:34:29 PM PST by Puppage (You may disagree with what I have to say, but I shall defend to your death my right to say it)
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To: Puppage

[What do I GET for buying a house within my means & paying my mortgage on time?]

Self-respect, knowing your behavior was honorable?


9 posted on 11/18/2007 4:01:09 PM PST by VxH (One if by Land, Two if by Sea, and Three if by Wire Transfer)
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To: VxH
Self-respect, knowing your behavior was honorable?

Well, I suppose it could be worse, hmm?

10 posted on 11/19/2007 5:08:28 AM PST by Puppage (You may disagree with what I have to say, but I shall defend to your death my right to say it)
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To: Puppage

...and a good night’s sleep!


11 posted on 11/19/2007 6:20:03 AM PST by woollyone (entropy extirpates evolution and conservation confirms the Creator blessed forever.)
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To: Diana in Wisconsin; Calpernia; cbkaty; Nervous Tick; ex-Texan; RockinRight; NVDave; Neidermeyer; ...

Economy/Credit/Housing Issues Ping List

If you want on or off this list let me know.


12 posted on 11/19/2007 6:27:15 AM PST by Hydroshock ("The Constitution should be taken like mountain whiskey -- undiluted and untaxed." - Sam Ervin)
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To: Graybeard58
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

~~Ludwig von Mises

13 posted on 11/19/2007 6:47:22 AM PST by Travis McGee (---www.EnemiesForeignAndDomestic.com---)
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To: Hydroshock; Graybeard
Only get the Sunday trib for the sale papers - but this one from yesterday...
http://www.chicagotribune.com/classified/realestate/financing/chi-melia_re_11-18nov18,0,4987825.story

There’s no one reason for subprime debacle

By Marilyn Kennedy Melia | Special to the Tribune
November 18, 2007

What were they thinking?

Experts are asking that as they pick through the foreclosure mess. Preventing future fiascoes depends on discovering how so many consumers took loans that proved impossibly expensive.

A couple of surveys provide some insight. In a poll of 1,004 mortgage holders commissioned by Bankrate.com, 34 percent didn’t know whether their mortgage had an adjustable rate or not. And in a survey of 500 owners with adjustable rate mortgages commissioned by the AFL-CIO, 49 percent say they don’t know the terms.

excerpted

14 posted on 11/19/2007 7:11:26 AM PST by Esther Ruth
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To: Puppage
Hey, I live in CT. What do I GET for buying a house within my means & paying my mortgage on time?

You get nothing. Just keep paying that note until you're done, keep paying your taxes on time, and be thankful you're not Kelo'd. ;)

15 posted on 11/19/2007 7:25:57 AM PST by PGalt
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To: Esther Ruth
>>AFL-CIO

Ya know, there’s just no pleasing some people.

The AFL-CIO wailed because their constituents couldn’t qualify for mortgages due to poor credit; and now they gnash their teeth when credit standards were lowered in order to give them what they asked for.

The djin gives what is asked for, AFL-CIO, not what is desired. Remember that the next time you feel like rubbing the lamp and asking for a gift.

16 posted on 11/19/2007 7:41:50 AM PST by VxH (One if by Land, Two if by Sea, and Three if by Wire Transfer)
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To: Puppage

The shaft.


17 posted on 11/19/2007 7:53:13 PM PST by Freedom_Is_Not_Free
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