If you want jobs, elect a Democrat

Good points, but during that time, no-document loans, liar loans, no down payment loans, etc. were also being pushed. The lack of regulation to which I refer was primarily the lack of regulation of the derivatives and other instruments created at that time.

Something the Dog Said wrote: Good points, but during that time, no-document loans, liar loans, no down payment loans, etc. were also being pushed. The lack of regulation to which I refer was primarily the lack of regulation of the derivatives and other instruments created at that time.

Very true. There was some truly devious stuff mortgage companies were trying to get past their customers and the companies they later bundled up the loans for.

One of my high school buddies used to be a mortgage broker but now is an athletic trainer, he says the money isn't nearly as good, but he sleeps a lot better at night.

RenegadeCJ wrote:

Something the Dog Said wrote:

Nobody that matters wrote: Lies, Damn lies, and statistics.

Feel free to provide evidence that actually rebuts the stats, or just keep spinning.

I didn't say a democrat can't create jobs, just that Obama has proven he can't create jobs.

If Hillary ran, she would likely win, and she understands how to create jobs....Obama just is clueless. He has an agenda to "recreate America" in some image he wants, instead of buckling down, being a leader, and making it happen, regardless of political ramifications.

So...RenegadeCJ is Nobody that matters?

Something the Dog Said wrote: Good points, but during that time, no-document loans, liar loans, no down payment loans, etc. were also being pushed. The lack of regulation to which I refer was primarily the lack of regulation of the derivatives and other instruments created at that time.

The federal GSEs were clamoring for as many loans as they could get their hands on. Lower interest rates in the wake of 9/11 (a Federal Reserve policy) a single product to comply with the terms of their federal charter (buying mortgages on the secondary market and then bundling and selling them as securities - read assets), a mandate from Congress that 60% of their business had to be done inside of very specific thresholds and an implicit guarantee backed by the full faith and credit of the United States taxpayer is what created the demand for the no-doc loans, low or no down payment loans and others of that stripe. The loan originators had a buyer begging to take whatever mortgages they could write off of their hands in order to generate the volume needed to meet or beat the return their stockholders expected.

Derivatives and other instruments? Doesn't matter how many slices you turn a solid gold bar into, each slice is still solid gold - or at least that is what the federal GSEs were peddling as assets - only they turned out to be a low gold content alloy - not the solid gold bars that the financial institutions were told they were purchasing from those federal GSEs as assets for their balance sheets. Once it became apparent that the solid gold was actually 14K or less, who did the financial institutions turn to to make good on what they bought? To the entity which had implicitly guaranteed the product billed as solid gold that they had purchased - the federal government - that's who. The United States had to either pony up or selectively default on their implicit guarantee. The first option was bad, the second would have truly been disastrous.

Gee, big surprise that you are throwing out even more distortions to spin away from the true problems. Dodd Frank did require that Fannie Mae and Freddie Mac to acquire a percentage of housing loans that were "affordable". This percentage rose to about 55 percent by 2007, certainly not the sixty percent that you claim. The data shows that in fact those loans by the GSEs performed better than the subprime loans by private entities. In regard to those GSE loans, it was the Bush administration move to shift the power from the securitizors to the loan originators that lead to the rush into the subprime market and into competition for the subprime market, not the Dodd Frank legislation. The loan originators were the ones who used faulty appraisals and defective mortgages, not the GSEs. Citibank found that 80% of their mortgages were "defective", meaning that they did not meet with sound standards for underwriting.

My opinion is that speculators, i.e., hedge fund, investment fund, Romney types, were responsible for this mess. As interest rates continued to fall during the last decade, speculators sought to find higher returns for their vast sums of money. This led investment firms and banks to create new devices to enhance returns, i.e., "collaterization debt securities" and "mortgage backed securities" as well as derivatives in order to attract that money. These were unregulated and complex leading to unsupervised activity. The fees generated by these devices to the investment banks was enormous. Once the traditional mortgage market had been exhausted by these devices, more mortgages were needed to continue these devices and attract the speculator money. Thus a demand for subprime mortgages was created and quickly pushed in order for the investment banks to continue to collect these enormous fees. This lead to the collapse of the underwriting standards for mortgages and thus the collapse of the housing bubble. Citi found that 80% of their mortgages failed those standards.

GSEs on the other hand held up their underwriting standards and their subprime loans actually held up much better. It is only a conservative myth that the GSEs and Dodd Frank were responsible, with no supporting facts.

Fred, what Dog doesn't understand is that the public is just as responsible for the economy..but in his eyes, anyone who buys more than they can afford must have been pressured to do so. I never heard one peep from the left about making sure these were good loans, just more "lets make it easier because everyone deserves to own a home". At some point, we need to get back to personal responsibility and maybe even force our public schools to focus more on personal finance and less on ethnic diversity.

If you want jobs, elect a Democrat

rofllol

CritiKalbILL wrote: Fred, what Dog doesn't understand is that the public is just as responsible for the economy..but in his eyes, anyone who buys more than they can afford must have been pressured to do so. I never heard one peep from the left about making sure these were good loans, just more "lets make it easier because everyone deserves to own a home". At some point, we need to get back to personal responsibility and maybe even force our public schools to focus more on personal finance and less on ethnic diversity.

While the poor are a convenient scapegoat, it just simply isn't the case. The biggest "toxic loan" problems came from jumbo loans...loans over the FNMA and FHLMC conforming loan limits...which were bundled into securities that were NOT backed by the government, then sold to investors worldwide. These securities do not allow for any modifications to the terms of the loans, or it disrupts the promised returns to the investors. Wall St brokers sold these bundled loan "insecurities" to investors, then turned around and took huge insurance policies against them, knowing they'd fail. The problem had far less to do with "lefties" who wanted to "make it easier because everyone deserves to own a home", and far more to do with pushing the notion that everyone needs to have MORE house...or like Mitt's attitude that everyone should have a million dollar McMansion with a golf course. I didn't hear any successful white collar investors complaining while they were reaping huge profits refinancing the invisible equity out of their homes. Now those very same upscale home owners are the ones demanding the banks decrease their interest rate to 2%, waive principal balance and allow them to live in million dollar homes for $1500 a month.

The blame for the mess lies on everyone who participated. It's easy to blame the poor...but it's delusional as well. You ever take a cash out refi on your place?...then you'd be part of the problem too.

Joe wrote: If you want jobs, elect a Democrat

rofllol

Sure, all you have to do is look at the current unemployment numbers. More so, consider the types of jobs that are being created, are McJobs that pay minimum wage and are not long term careers a part of the "increasing" number of jobs? You know they are. Spin and spin some more! :Koolaid:

Something the Dog Said wrote: Gee, big surprise that you are throwing out even more distortions to spin away from the true problems. Dodd Frank did require that Fannie Mae and Freddie Mac to acquire a percentage of housing loans that were "affordable". This percentage rose to about 55 percent by 2007, certainly not the sixty percent that you claim. The data shows that in fact those loans by the GSEs performed better than the subprime loans by private entities. In regard to those GSE loans, it was the Bush administration move to shift the power from the securitizors to the loan originators that lead to the rush into the subprime market and into competition for the subprime market, not the Dodd Frank legislation. The loan originators were the ones who used faulty appraisals and defective mortgages, not the GSEs. Citibank found that 80% of their mortgages were "defective", meaning that they did not meet with sound standards for underwriting.

My opinion is that speculators, i.e., hedge fund, investment fund, Romney types, were responsible for this mess. As interest rates continued to fall during the last decade, speculators sought to find higher returns for their vast sums of money. This led investment firms and banks to create new devices to enhance returns, i.e., "collaterization debt securities" and "mortgage backed securities" as well as derivatives in order to attract that money. These were unregulated and complex leading to unsupervised activity. The fees generated by these devices to the investment banks was enormous. Once the traditional mortgage market had been exhausted by these devices, more mortgages were needed to continue these devices and attract the speculator money. Thus a demand for subprime mortgages was created and quickly pushed in order for the investment banks to continue to collect these enormous fees. This lead to the collapse of the underwriting standards for mortgages and thus the collapse of the housing bubble. Citi found that 80% of their mortgages failed those standards.

GSEs on the other hand held up their underwriting standards and their subprime loans actually held up much better. It is only a conservative myth that the GSEs and Dodd Frank were responsible, with no supporting facts.

VERY well said.