From American Dream to American Nightmare

[DogtorEvil]

http://hotair.com/archives/2008/10/1...-andrew-cuomo/

Andrew Cuomo, then Bill Clinton’s HUD Secretary, held a press conference on April 6, 1998, explaining a settlement reached with a major bank on a lending discrimination case based presumably on the CRA. Cuomo brags about how “this administration will enforce the law”, but he also makes a very telling admission about the $2.1 billion in subprime loans that the bank would offer as a result of the settlement:

http://www.youtube.com/watch?v=ivmL-...layer_embedded

"They would not have qualifed but for the affirmative action on the part of the bank, yes."

He then admits that there would be “higher risk”, and a higher default rate, on the loans the Clinton administration forced this bank to make. He also admits that the action forced this bank to lower its standards on loan qualification as a remedy to supposed discriminatory action in the past by relying on income and equity requirements. Cuomo describes everything wrong with subprime lending and reveals the government’s efforts to distort private lending markets to force “fairness” in outcomes.

[FriscoDog]

I don't agree that the government EVER force banks to make mortgages to low income people who could not meet the minimum loan under writing standards that the banks applied to prime customers.

Sure they did.. maybe not FORCE, but strongly suggest and reward those who did make loans to low income families, because the government said, we got your back on these loans if they go bad.

[saltydawg]

http://hotair.com/archives/2008/10/1...-andrew-cuomo/

Andrew Cuomo, then Bill Clinton’s HUD Secretary, held a press conference on April 6, 1998, explaining a settlement reached with a major bank on a lending discrimination case based presumably on the CRA. Cuomo brags about how “this administration will enforce the law”, but he also makes a very telling admission about the $2.1 billion in subprime loans that the bank would offer as a result of the settlement:

http://www.youtube.com/watch?v=ivmL-...layer_embedded

"They would not have qualifed but for the affirmative action on the part of the bank, yes."

He then admits that there would be “higher risk”, and a higher default rate, on the loans the Clinton administration forced this bank to make. He also admits that the action forced this bank to lower its standards on loan qualification as a remedy to supposed discriminatory action in the past by relying on income and equity requirements. Cuomo describes everything wrong with subprime lending and reveals the government’s efforts to distort private lending markets to force “fairness” in outcomes.

From hot air: "The financial world did not collapse because of 15,000 loans from this one settlement, but this case did not exist in isolation."

The reality is that all the subprime loans made until 2002 did not have a higher than usual default rate for that segment. Certainly , you are not suggesting that the Bush & Co forced banks to make subprime loans starting in 2002 that caused the meltdown a few years later. Bush & Co could care less about Clinton's agenda, which in the case of subprime mortgages was limited and well managed by the banks. It was ONLY under Bush & Co that the wholesale fraud of subprime mortgages started, and I sincerely doubt that you will find any evidence that shows that Bush & Co forced banks to make massive numbers of poorly documented mortgages to subprime borrowers . What you will find is a total disregard for regulating the behavior of these banks.

[saltydawg]

Would you be surprised if I told the government ENABLED businesses to pass the buck via this Ponzi scheme?

http://en.wikipedia.org/wiki/Commodi...on_Act_of_2000

"Although hailed by the PWG on the day of congressional passage as “important legislation” to allow “the United States to maintain its competitive position in the over-the-counter derivative markets”, by 2001 the collapse of Enron brought public attention to the CFMA’s treatment of energy derivatives in the “Enron Loophole.” Following the Federal Reserve’s emergency loans to “rescue” American International Group (“AIG”) in September, 2008, the CFMA has received even more widespread criticism for its treatment of credit default swaps and other over-the-counter derivatives (“OTC derivatives”)."

It was certainly a large piece of the problem that made things worst but I don't think banks needed any special authorization to bundle packages of mortgages together and then sell them as securities.

[TYLERTECHSAS]

Remember when Tyler used to brag about economic growth during the GWB years?

http://www.oregonlive.com/business/i...from_ame.html?

.

I never said that Salty. However, I did say that I didn't believe we were in a true, as defined, recession yet at various times. But you are just making things up as usual. BTW, way to come up with a source from the most liberal area of the country (Oregon).

[saltydawg]

Anyway, I'm not interested in researching very old posts about 4% growth.

The reason I posted the article was not to re-hash the old conversations about the subprime (and prime) mortgage disaster but to turn our discussion to the couple in the article. Yes, they are from the Left Coast. Comments about their lifestyle and debt load and any insight into whether this assumption of risk occurs in Louisiana or Texas?

Brand new $500k house and 3 new cars and $500k in business debt?

[Guisslapp]

Anyway, I'm not interested in researching very old posts about 4% growth.

The reason I posted the article was not to re-hash the old conversations about the subprime (and prime) mortgage disaster but to turn our discussion to the couple in the article. Yes, they are from the Left Coast. Comments about their lifestyle and debt load and any insight into whether this assumption of risk occurs in Louisiana or Texas?

Brand new $500k house and 3 new cars and $500k in business debt?

That couple was irresponsible. It is hard for me to feel sorry for them.

[hoppinmad]

Anyway, I'm not interested in researching very old posts about 4% growth.

The reason I posted the article was not to re-hash the old conversations about the subprime (and prime) mortgage disaster but to turn our discussion to the couple in the article. Yes, they are from the Left Coast. Comments about their lifestyle and debt load and any insight into whether this assumption of risk occurs in Louisiana or Texas?

Brand new $500k house and 3 new cars and $500k in business debt?

TX, LA, AR & MS have never been immune. I've see many fold up in less than five years... they started with brand new trucks, equip. and all the other bells and whistles before they built a reputation and the cash flow to support it. Whatever happened to the idea of getting out and staying out of debt as soon as possible? I guess it's old school. Maybe that thinking will return one day. Looks like a nice couple too, hopefully they learned something out of this.

[JuBru]

Whatever happened to the idea of getting out and staying out of debt as soon as possible?

The idea is still in some of us. Just hard to with some things, no matter how much you "sacrifice".

[FriscoDog]

Anyway, I'm not interested in researching very old posts about 4% growth.

The reason I posted the article was not to re-hash the old conversations about the subprime (and prime) mortgage disaster but to turn our discussion to the couple in the article. Yes, they are from the Left Coast. Comments about their lifestyle and debt load and any insight into whether this assumption of risk occurs in Louisiana or Texas?

Brand new $500k house and 3 new cars and $500k in business debt?

I was always amazed when I watched those HGTV shows like "flip this house" where a yng 20's something couple making a combined salary of 60K a year purchase a 500K home in California, plan to put 100K worth of upgrades in it and then try to flip it for 750K could even afford to qualify for the original loan in the first place. I make a good salary, but even then with no debt whatsoever, I couldn't afford or qualify for a 500-600K loan.

[TYLERTECHSAS]

I was always amazed when I watched those HGTV shows like "flip this house" where a yng 20's something couple making a combined salary of 60K a year purchase a 500K home in California, plan to put 100K worth of upgrades in it and then try to flip it for 750K could even afford to qualify for the original loan in the first place. I make a good salary, but even then with no debt whatsoever, I couldn't afford or qualify for a 500-600K loan.

Dems and Barney Frank.