Subprime Suspects

wow. he cannot connect dots at all, can he?

first, the CRA required banks to lend in minority and low - income areas. i saw for nearly 20 years. your CRA ratings were the determining factor whether you could open or close branches, merge, etc. additionally, these mortgages were exempt when regulators did their examinations.

the problem worsened in 1993. congress directed fannie and freddie to allot up to half of their mortgage guarantees to low income and minority borrowers. it was determined, by fannie's ceo then, that down payment requirements, credit scores, etc that the rest of us had to meet, were racist tools meant to keep minorities and low income people out of owning their own homes. see maxine waters' clip on c-span.

by 2001, over $1 trillion of these subprime mortgages had been guaranteed by fannie and freddie, again, under the direction of frank, dodd, etc. these are the 2 people primarily responsible for blocking all attempts in 2001,.2003, and 2005 to strengthen oversight of the gse's. see clips on c-span.

mortgage bankers like fleet, and countrywide got in the act, not because they were required to under CRA, but rather a market share decision. if the government was going to guarantee these mortgages, they might as well write them also.

Look at WAMU's loss writedown.

Ou of $176 billion in bad loans.

$60 million to equity lines
$50 million to prime credit holders
$50 million in prime alt-A
and get this ONLY $16 billion in sub prime.

What SUB PRIME PROBLEM? Its a GREEN PROBLEM IN CANF. California, Arizona, Nevada and Florida.

Look around, don't saddle the poor with your baggage.

This is a nothing but mud in the water. The fact that John McCain and the republicans have continually resisted the regulation of hedge funds and investment banks is where this turns bad. It was these institutions that encouraged subprime loans. The nature of Freddie and Fannie is to give in implicit guarantee to loans made to low income people. Not to actually set the terms.....they certainly did not create "ARM" mortgages, which is the real culprit of this. Because of the lack of transparency hedge funds and investment banks like Bear Sterns (leveraged 33:1) were able to operate because of deregulation. The ratings agencies Ambak Financial and MBIA had the investment banks rated at top levels without having seen their books - based solely on reputation. When the number of homes on the market hit 11 months the bubble burst, and the house of cards came down. Fannie and Freddies complicity is that they were backing up ARM mortgages by investment banks without being able to look into their books. They were wrong and sloppy, but the Greed of Wall Street combined with the deregulation of the republicans allowed Wall Street to consume itself with it's inflated valuations while strangling the goose that laid the golden egg - homeowners pursuing the American dream.

Again, this is a Greed problem. Fannie and Freddie were tools that were mismanaged. Furthermore, they did not originate exotic loans anyway. They were not a problem. The understood government backing was the problem. It was a free get out of jail card for raucous inverstors, and everyone knew it. GSE's, that's Government Sponsored Entities have a distinct problem. They are government sponsored, which means if they fail, the government failed. Yes, sounds crazy. But, this cause and effect association is EXACTLY why everyone knew Fannie and Freddie would socialize their losses. We can't let the perception of a massive US economic vehicle failing, further hamper the markets. But saving that vehicle, in itself was a perception of a massive economic vehicle failing. We can't win. Lies built on lies.

Cut the crap, all of the defaulted and foreclosed homes can be paid off in full for 100 billion. Minorities are not to blame for anything. This is not about home mortgages at all. It's about the fraud and crookedness of these companies in America that are doing anything for profits. Anything meaning elevating the value of their paper, and shipping jobs overseas. The biggest problem Americans face it the H!-B visa. 10 million jobs have been shipped overseas by greasing the palms of congress and corporate CIO's and CEO's

Wow Mr. Gross I do not know how you can be more wrong.

The reason why there are not many defaults in community housing projects is that they are in fact paid by taxpayers. People get to live there through assisted housing programs for $299 a month. The rest of the tab is picked up by the taxpayer. With welfare payments sometimes topping off at $2000 a month I think it is pretty easy to afford $199 a month for a HUD assisted house.

ACORN and other activist groups made a push to drive minorities out of housing projects into nearby suburbs to increase the minority voting block thereby influencing elections. In order to get them into the nearby suburbs they needed programs to get them into houses that they could not afford.

Using scare tactics ACORN and other groups effectively forced banks to loan to low income minorities. A huge push was made after the 2004 election to take over the state of Ohio and deliver it to the next democratic candidate.

In my suburb of Cleveland the ammount of minorities that moved into the neighborhood increased to a rate not seen since the late 1970s and early '80s. It ammounted to a full takeover and the city is not better off because of it. Now the city is experiencing one of the highest forclosure rates in the nation. Crime has increased and a fine suburb is in complete disaray.

For community housing advocates I am sure they were just trying to make it through the election year. Once that happnned they could care less about the defaults. The minorites would just go back to the projects and the objective would have been accomplished.

This is the reason why ACORN wants to allow people who have forclosed to vote in the precinct where they once lived. They were kicked out before they could acomplish thier mission.

Now they're blaming Carter & Clinton? Excuse me......didn't I hear Gov. Sarah Palin say just last week -- that was looking back at the past ---- it's behind us.....move on forward? Or do they only want us not to look at the past if it's a Republican sitting in the White House?

THE MARKET IS NOT "SELF CORRECTING", IT IS MADE UP OF PEOPLE, AND PEOPLE HAVE VARIABLE EMOTIONS.....THE REPUBLICAN ECONOMIC THEORY THAT TRYS TO EXCLUDE HUMAN EMOTIONS FROM THE MARKET IS FALSE. THE PEOPLE ARE THE MARKET AND THE MARKET IS THE PEOPLE.
PEOPLE ARE PRONE TO IRRATIONAL BEHAVIOR.

What does it say about our society that we need the governement to "babysit" our financial decisions to save us from self destruction? Whether a person is white or a minority, earn $20K, $200K or $2M the people who lived outside their means have created this issue. We are a society of enjoy today and worry about tomorrow never....unfortunately "never" is here.

peapod123 You need to spend some of the 2 million you have and invest in spell check. No one is coming for your money.