Subprime Suspects

My wife is a Colombian, but she is not rich. Does that mean you would still consider her a minority, unlike "rich Venezuelans and Colombians?" I wasn't aware that minority status was based on how much money you have. Thanks for clearing that up!

CHRIST!.... So the same people that helped free the slaves (republicans) and pass laws in favor of the "minorities" in this country (republicans) are NOW blaming financial problems on them????? GIMME A BREAK! Black, white, purple or green, I don't care what color you are! I am a white male, and I signed my first mortgage in 1998. I did so after the finance was wrangled over for weeks! I had no money down, so they played the paper! Stupid move on MY part! Banks are NOT NORMALLY going to go out and lend money to those that are OBVIOUSLY not going to pay it back.
JUST like this bail out. Now that the money is there to help businesses, rather than let them fail and get consumed by others, the government whips out this safety net that they usually reserve for the airline industry and POOF, everything is supposed to slowly get better??
The government was never intended to bail out businesses that make bad decisions. Those businesses were MEANT to fail. Of course government was never intended to get involved in business any more than they were meant to get involved in education (which they messed up as well) nor making sure they took care of us with OUR money when we got old, instead of our families doing that like they used to. (they messed this up too)
Obama has it wrong... it IS about us keeping our own money. EVEN the companies making money hand over fist! God bless them and thanks for giving me a job! Lets quit the BS class warfare! It NOT about making ends meet! If I make as much money as Ed McMahon and end up losing my house.... perhaps I am attempting to make ends meet the wrong way! My income MAY NOT grow to meet my out-go. GROW UP America! Stop living like the government! You DON'T GET to print your own money!

CHRIST!.... So the same people that helped free the slaves (republicans) and pass laws in favor of the "minorities" in this country (republicans) are NOW blaming financial problems on them????? GIMME A BREAK! Black, white, purple or green, I don't care what color you are! I am a white male, and I signed my first mortgage in 1998. I did so after the finance was wrangled over for weeks! I had no money down, so they played the paper! Stupid move on MY part! Banks are NOT NORMALLY going to go out and lend money to those that are OBVIOUSLY not going to pay it back.
JUST like this bail out. Now that the money is there to help businesses, rather than let them fail and get consumed by others, the government whips out this safety net that they usually reserve for the airline industry and POOF, everything is supposed to slowly get better??
The government was never intended to bail out businesses that make bad decisions. Those businesses were MEANT to fail. Of course government was never intended to get involved in business any more than they were meant to get involved in education (which they messed up as well) nor making sure they took care of us with OUR money when we got old, instead of our families doing that like they used to. (they messed this up too)
Obama has it wrong... it IS about us keeping our own money. EVEN the companies making money hand over fist! God bless them and thanks for giving me a job! Lets quit the BS class warfare! It NOT about making ends meet! If I make as much money as Ed McMahon and end up losing my house.... perhaps I am attempting to make ends meet the wrong way! My income MAY NOT grow to meet my out-go. GROW UP America! Stop living like the government! You DON'T GET to print your own money!

Wow! How misleading can you get. The true facts are in the fine print of the rules President Clinton enacted in 1999 through Andrew Cuomo. One must understand that banks have a desire to grow. The government has all the power in the world to stop growth if they so desire. What the reformatted CRA rules under Andrew Cuomo have created is a situation where banks are given a CRA score. This CRA score is used in determing whether a company is worthy of passage to growth. We're talking about expansion whether by mergier or opening offices in other states. The government can block all of this and will if your CRA score is too low. Under CRA rules banks were given strict numerical codes based on race. This is a non-negotiable item. Banks then are faced with making decisions. They could offer the same fixed rates regardless of income or credit score or they could offer the only type of mortgages that took into consideration all. That gave us the adjustable rate sub-prime mortgage. President Clinton, while in office, expanded the ability of Fannie and Freddie to buy these mortgages. The mortgage companies knew they would sell most to Fan/Fred anyway, and they would still get paid. Fannie and freddie have been subject to reform and oversight for 10 years but were blocked at every round by congressmen. Specifically, they were blocked by the Democratic party. But don't take my word for it. Watch the Senatorial and congressional hearings from years past. Read articles from 1999 and 2003 from the New York times, before this all blew up. They are incredibly quiet now. Just don't be a moron and believe without your own research, anything anyone or the media tells you or even me. This is a serious matter for who is on your side.

Who signed the piece of paper that claimed they had x income and y assets (prudently) necessary to purchase the house for z dollars? Let AIG file for Chap. 11 and let the state insurance commissioners deal with the fall-out. Investors in Bear Stearns and Lehman elected the boards that hired the CEOs and negotiated their contracts. Let the repercussions fall on the shareholders (former shareholders?) of those companies. If those companies need government help to stabilize financial markets, the price of that help should be born by the shareholders and managements--wipe out the shareholders and prosecute the managements. However, Congress set goals, basically in terms of percentage of loans to uncreditworthy obligors, for Fannie and Freddie. Congress also extorted banks, through the CRA, to use imprudent underwriting standards in order to open branches. This was before Fannie and Freddie hit maximum dysfunctionality. There was fraud up and down the line--from the obligor who either did not read the paper s/he signed or deliberately falsified it, to the originator who lied to the applicant or falsified the papers the obligor signed or solicited an inflated appraisal of the collateral, to the appraiser who inflated the collateral, to the credit rating agencies which helped to structure and then rated the toxic packaged mortgages, to the bankers who peddled this junk, to the investors who did not do their homework in buying it. Hang them all out.

Who signed the piece of paper that claimed they had x income and y assets (prudently) necessary to purchase the house for z dollars? Let AIG file for Chap. 11 and let the state insurance commissioners deal with the fall-out. Investors in Bear Stearns and Lehman elected the boards that hired the CEOs and negotiated their contracts. Let the repercussions fall on the shareholders (former shareholders?) of those companies. If those companies need government help to stabilize financial markets, the price of that help should be born by the shareholders and managements--wipe out the shareholders and prosecute the managements. However, Congress set goals, basically in terms of percentage of loans to uncreditworthy obligors, for Fannie and Freddie. Congress also extorted banks, through the CRA, to use imprudent underwriting standards in order to open branches. This was before Fannie and Freddie hit maximum dysfunctionality. There was fraud up and down the line--from the obligor who either did not read the paper s/he signed or deliberately falsified it, to the originator who lied to the applicant or falsified the papers the obligor signed or solicited an inflated appraisal of the collateral, to the appraiser who inflated the collateral, to the credit rating agencies which helped to structure and then rated the toxic packaged mortgages, to the bankers who peddled this junk, to the investors who did not do their homework in buying it. Hang them all out.

GOOD ON YOU!!! PERFECTLY WRITTEN!! This mess we are in is NOT of fault of the working "poor" - of which I am one. I have worked all my life, since the age of 14. I put myself thru college. I am a programmer/analyst with a major telecommunications company, who makes a good salary, and I am seeing my future and my children's future melt away because of the bad decisions of rich white men who just "want theirs", and to hell with the common folk who actually DO THE WORK that keep things going.

Doesn't matter how smart you are, or how many fancy degrees you have - at the end of the day, it all comes down to what my grandma taught me - you PAY YOUR DEBTS. If you can't afford something YOU DON"T BUY IT. You NEVER, NEVER stiff someone that your owe.

It is naive to think that either political party, together with its so-called leaders, have any worthwhile ideas
about the collapse of our financial institutions or how to stop the bleeding. Meanwhile our retirement funds
are melting away. I am certain that the big players i.e. millionaires have protected their funds while
plundering our small nest eggs. When starving, let them eat cake! say the CEO's as they parachute.

It is a well known fact that the current financial meltdown in US and the world of free market is caused by the so call subprime mortgage failures involving improper loans to low income minority as well as real estate spectators. The conditions of failure are the recent downturn of housing prices, higher fuel and food prices, shortage of money as well as lack of government regulation. Now we know that the subprime mortgage failure is very lethal, much more than playing Russian roullete . The subprime failure of five million houses of four hundred thousand dollars each means a loss of two trillion dollars, a figure high enough to cause the financial institution to collapse.

Obama is getting a bump out of this because people are not being reminded of the whole history where the economy is concerned, and who did what when. Call it bias by omission. The media simply says that the economy is Obamas strong issue, but never discusses the facts in detail. Further, who had a majority when is rarely relevant. If the simplistic Party In Power model were true, then the Democrats would not have needed the House Republicans when they tried to pass the bailout bill, as Democrats have the majority in both houses and there is no threat of a veto. In theory, they do not need the Republicans to vote at all. In fact, something like twelve (12) Democrats from Barney Franks own banking committee voted against the bill. Obviously, it is not so simple and the media does the voter a disservice by doing little more than reinforcing the error. A similar argument would be to say that the economy appeared to be doing fine until the Democrats took over control of Congress and the power of the purse, then it tanked. As an aside, the media also misleads regarding the Clinton economy when they fail to mention that it also ended in a recession, requiring the first round of Bush stimulus checks immediately after he took office..


Do Obama and the Democrats deserve a lift in the polls as a result of the financial and mortgage problems? The answer from history is a clear NO. Here's the lead of a New York Times story on September 30, 1999:

"Fannie Mae Eases Credit To Aid Mortgage Lending" [link below]. That's 1999 folks. Clinton Administration, I believe.

Here's the lead of a New York Times story on Sept. 11, 2003:

"The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. "[see link below] The Democrats killed the reforms.

McCain said in co-sponsoring the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190:

"If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole. The Democrats killed the Bill.

What was Barney Frank and fellow Democrats saying at the time of these attempted reforms? According to reports, Representative Barney Frank(D-MA) claimed of the thrifts :

"These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

Representative Mel Watt (D-NC) added of the reforms "I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing." [ See Community Reinvestment Act, link bel

This article is a piece of left/liberal misdirection. No one's blaming "loaning to minorities" - despite what the author thinks banks have been lending to minorities for decades. The problem is loaning to people who can't afford the loan - in this case, ethnic revenge was some of the justification for the practice, class struggle most of it. The microloans work because they're economically realistic.

This is clearly a very skewed opinion, not in anyway honest about who is responsible. To say that the CRA had nothing to do with it is absurd. Do something novel and be honest, it's not a right wing or left wing, nor is it rich vs. the poor. It is accoutability and Americans wanting immediate gratification.

i am a minority and we bought a house which we could afford. we did not fall for those 0 down, no interest or arm packages. instead we took out a 5% fixed mortgage. we pay our credit cards on time, which we barely use. we have savings that can cover our expenses for the next three years. we came from a poor country and thus we take much care of the opportunity we have in the US, working hard and not spending beyond our means. its so much easy to obtain a credit here and thus its easy to be burdened with it.

i am a minority and we bought a house which we can afford. we did not fall for those no down zero interest or arm packages but instead took out a fixed 5% mortgage. we have savings which would cover our expenses for the next three years, we pay our credit cards on time and we do not borrow from our credit line. we came from a poor country and we know the value of working hard and not spending more that we could afford. credit in the US is so much easy to obtain and thus, anyone could be easily burdened with so much debt.

This is a much needed response. Many CRA advocates have long been criticizing predators that peddle high risk financial products in poor and minority communities that have been historically unfairly denied good credit and investment products. The purpose of subprime loans, payday loans, and the like has always been to make money in fees and in the financial markets, not about helping people build wealth.