Good Ole President Clinton,,..lets see how the Dems spin this

[DTorrchia]

Originally Posted by F-Sharp

So are you now back to blaming Clinton and CRA loans, or are you just still desperately trying to prove me wrong?

"But to the extent that the federal government is to blame, the main fed culprits are the beefed up Community Reinvestment Act and the run-amok Fannie Mae and Freddie Mac. All played a key role in loosening lending standards."

Yeah, yeah. This is coming from the same so-called economist genius who just this week is running around telling everyone that buying American is a bad idea, and that sending jobs overseas is a good idea. Don't you ever do background checks on the folks you seem to place so much faith in? The sky is not blue, and up is actually down. What role, when?

"We find statistical evidence to indicate that policies at the Government Sponsored Enterprises, monetary policy and the Community Reinvestment Act all compromised large bank performance for the 1999 through 2008 period."

Again, what statistical evidence where? All the unbiased, non-partisan statistics I've found and posted clearly point otherwise.

"The empirical results of this article suggest that the extent to which large commercial banks were making and buying CRA loans significantly hurt their performance."

Yeah, yeah. We already talked about the buy-up of CRA loans by predatory lenders a few posts back. That has nothing to do with CRA loans themselves.

Now try again. This time use the same information, just add more underlines and move them around a bit more. Maybe you can really dilute your regurgitation of shit you don't actually read, much less comprehend with REALLY BIG LETTERS, or really obnoxious colors.

LOL......You can always tell when someone's loosing a debate by their distortion of the facts and their need to resort to personal attacks.
Lucky for me, I've already established beyond a shadow of a doubt your cowardice, so all this internet tough talk from you just makes me laugh, repeatedly, often and hard. I thank you for that.

You accuse me of not reading what I post? Apparently you didn't bother to read or you wouldn't be asking stupid questions like:
"Again, what statistical evidence where?"
Are you incapable of checking the footnotes to the report that DETAIL every source?
So here it is again....try following your own advice and actually READING the Journal of Banking Regulation Report.
www.palgrave-journals.com/jbr/journal/v12/n3/full/jbr20113a.html#bib7http://www.palgrave-journals.com/jbr/journal/v12/n3/full/jbr20113a.html#bib7

Let's be honest here, there's no way YOU read the report in the time period since I posted and provided the above link. Take a good long look in the mirror before you throw your BS around accusing others of not reading or understanding what they post.

No colors, no big letters just the facts.

Now let's address your eloquent: "regurgitation of shit"

You quote data from 2008.....I provide data published in 2011 that makes it clear that the Fed study you pull your numbers from is flawed and subsequent data published in the above report proves that it's flawed and you want to accuse me of "regurgitation of shit"?

Sure thing F-Sharp.....Your intellect, as usual, is shining bright for all the world to see.

[F-Sharp]

Originally Posted by DTorrchia

You accuse me of not reading what I post? Apparently you didn't bother to read or you wouldn't be asking stupid questions like:
"Again, what statistical evidence where?"

From your link:

"The literature review outlines what may be considered a rather compelling narrative on the cause of the recent financial crisis. However, these works do not offer any empirical evidence in support of their position. The purpose of this article is to test these theories empirically with regard to the origins of the crisis."

"Capturing the impact of the CRA on bank performance is not straightforward because there are virtually no data on the performance of CRA loans. Avery et al indicate that survey data from the Board of Governors in 2000 may lend some insight, but the survey fails to ask which loans were made as a result of the CRA.24 As a proxy for the impact of the CRA, this article relies on each banks’ participation in purchasing MBSs. Recall that one way a bank can improve its CRA rating is by investing in MBS, which contain a significant amount of subprime mortgages."

So, you mentioned something about "stupid questions" and my questioned my intellect? You'll just have to pardon my questioning of information that doesn't actually come with any empirical data or facts. If this is what you consider to be stupid questions, I am seriously worried about you.

Using mortgage backed securities as some measure of how the CRA impacted the housing crisis? Give me a fucking break. Is this really your theory? That banks were buying MBS's loaded with subprime loans in order to improve their CRA ratings, and this was really the ultimate cause of the meltdown? That it really had nothing to do with the subprime loan defaults themselves, or the credit default swaps they were betting on these derivatives, but rather the fact that they were just trying to improve their CRA ratings? I'm pretty sure that just might be the stupidest thing I've heard all day. Isn't there some bankers or mortgage brokers on this board that can chime in (ie. laugh) here? This is just getting pathetic now.

[DTorrchia]

Originally Posted by F-Sharp

From your link:

"The literature review outlines what may be considered a rather compelling narrative on the cause of the recent financial crisis. However, these works do not offer any empirical evidence in support of their position. The purpose of this article is to test these theories empirically with regard to the origins of the crisis."

Now, try again numbnuts.

I see you modified your above....just as well.

With all your knowledge I'm surprised you're not a banker or mortgage lender.....oh wait...you also started out screaming how no sub-prime mortgages were tied to CRA, guess you're not that well versed in banking and mortgage practices after all (of course YOU, Mr.."I'll be the first to admit when I'm wrong", then conveniently blame your "reliable source" for being wrong without ever naming the source, lol).....when I point out BOA's 29% loss with CRA assumed mortgages you scoff that it's irrelevant and now in the post above you're asking for help from bankers and mortgage lenders? LOL......Priceless!

CONCLUSIONThe stakes are high in the debate about what caused the most recent financial crisis. On 21 July 2010, banking regulation, which many consider to be the most sweeping and far-reaching financial regulation in over 80 years, became law. If the regulatory response is not an accurate reflection of the casual factors, it is bound to fail. Indeed, Ely35 and others argue that many reform proposals, including many aspects of the recent legislation, are likely to contain the seeds for the next crisis if they fail to address the regulatory and public policy issues identified in this work as statistically important in understanding the poor performance at large commercial banks. That is, this work finds statistical evidence that the policies at the GSEs, which promoted homeownership, were an important source of instability for large commercial banks. At the same time, the Federal Reserve's policy of historically low interest rates was also an important element in understanding the weak performance of many large banks. Finally, this work also finds empirical support for the perspective that the CRA may have unintentionally encouraged banks to take on high-risk mortgage loans and to invest in MBSs backed by high-risk mortgages. If these policies and regulation are sources of instability at large commercial banks, it is imperative that they be addressed to avoid similar crisis in the future.


Keep reaching F-Sharp. I'm sure if you call people numbnuts, stupid, etc long enough you'll prove your point eventually. No need for facts. Just keep shouting: "None, I repeat None! of the sub-prime loans were tied to CRA"......


When that's proven to be BS then just yell....."where, where is the evidence?" (Hint: Right above Genius!)


That approach seems to have worked very well for you so far!

[F-Sharp]

"Finally, this work also finds empirical support for the perspective that the CRA may have unintentionally encouraged banks to take on high-risk mortgage loans and to invest in MBSs backed by high-risk mortgages."

Empirical support for the perspective that the CRA may have? That's an oxymoron if I ever heard one. Honestly, where do you find this shit?

"when I point out BOA's 29% loss with CRA assumed mortgages you scoff that it's irrelevant"

Em, you didn't point out anything. Your liberal-bashing friend with an agenda Mr. Schweizer made that statement and I can find no evidence to support his claim, nor did he actually present any.

You honestly don't find any of this to be a stretch? You honestly don't see that any of this nonsense you've presented is some pathetic attempt to divert attention away from the real cause of the housing bust? You honestly can't even consider the possibility that those presenting this completely unsupported data might just have an agenda?

As for your continued childish gloating over my comment that no sub-prime loans were issued under CRA, you need to understand that institutions fully complying with CRA guidelines are/were heavily regulated. If in fact "sub-prime" loans were issued under the cover of CRA, they were not considered high risk (they simply couldn't have been due to the requirements) and were issued by institutions not fully governed by CRA guidelines. Technically, I am still correct in saying no sub-prime loans were issued by institutions fully governed by CRA guidelines. It was my assumption that if these institutions were not fully compliant they were not able to issue loans under CRA. I was clearly wrong about that. However, the fact remains that it doesn't matter whether or not a small percentage of sub-prime loans were snuck through the cracks by institutions not fully regulated, it's completely and totally irrelevant to this discussion. I think these were my original sources for that information. I try not to post things that are not statistically backed, and you know how I feel about opinion, commentary and blogs.

http://www.businessweek.com/investin...ity_reinv.html

http://www.traigerlaw.com/publicatio...udy_1-7-08.pdf

Now stop acting like a child numbnuts and prove your case, or shut up about it. This is seriously getting old.

[DTorrchia]

Originally Posted by F-Sharp

"Finally, this work also finds empirical support for the perspective that the CRA may have unintentionally encouraged banks to take on high-risk mortgage loans and to invest in MBSs backed by high-risk mortgages."

Empirical support for the perspective that the CRA may have? That's an oxymoron if I ever heard one. Honestly, where do you find this shit?

"when I point out BOA's 29% loss with CRA assumed mortgages you scoff that it's irrelevant"

Em, you didn't point out anything. Your liberal-bashing friend with an agenda Mr. Schweizer made that statement and I can find no evidence to support his claim, nor did he actually present any.

Are you stuck on stupid or just grinding on it in low gear? Almost every single internet story that has commented on BOA's 29% loss in regards to the CRA assumed loans names their source. It's BOA's quarterly report issued in October of 2008.
So now you're saying BOA is making that up??!! Or is Schweizer? SOMEBODY has to be making those numbers up because F-Sharp can't be wrong. Is that it?


You honestly don't find any of this to be a stretch? You honestly don't see that any of this nonsense you've presented is some pathetic attempt to divert attention away from the real cause of the housing bust? You honestly can't even consider the possibility that those presenting this completely unsupported data might just have an agenda?
An agenda? You mean perhaps like the Government not wanting to risk the wrath of those who've benefited from the CRA loans and the powerful lobbies that support them? An agenda perhaps like not wanting to admit that though the CRA was probably a well intentioned act, like so many other things in our Government, it morphed into something that turned it into the opposite of what it was intended to accomplish? Yes, I've considered it and after reading the many attempts to defend it by the liberal left, I've come to the conclusion that you're right. They DO have an agenda.
How's this for an idea? People that have poor credit and low income should not be placed into high dollar mortgages that they can't afford, irregardless of their race or what part of town they happen to live in.

As for your continued childish gloating over my comment that no sub-prime loans were issued under CRA, you need to understand that institutions fully complying with CRA guidelines are/were heavily regulated. If in fact "sub-prime" loans were issued under the cover of CRA, they were not considered high risk (they simply couldn't have been due to the requirements) and were issued by institutions not fully governed by CRA guidelines.

Gloating sounds so......harsh. Let's call it.....me being amused.
Please read Mr. Pinto's facts which I've included in the link at the end. You'll see that it appears that YOU are the one that's misinformed in regards to the CRA loans and how risk free they are.

Oh but wait....I probably haven't "vetted" Mr. Pinto before listing him here right? Well actually.....

Biography
An executive vice president and chief credit officer for Fannie Mae until the late 1980s, Edward Pinto has done groundbreaking research on the role of government housing policies in the lead-up to the financial crisis. In particular, his data have revealed striking facts about the contributions of housing policy to the mortgage crisis. Two of his major research papers have been submitted to the Financial Crisis Inquiry Commission: "Government Housing Policies in the Lead-up to the Financial Crisis: A Forensic Study" and "Triggers of the Financial Crisis." At AEI Mr. Pinto is continuing his work on the role of housing policies in the financial crisis and researching policy considerations and options for rebuilding our housing-finance sector.

Experience

• President and CEO, Courtesy Settlement Services LLC, 1994-present
• Consultant to the Housing-Finance Industry, 1989-present
• President and CEO, ICBA (Independent Community Bankers of America) SmartLender LLC, 2004-2010
• Executive Vice President and Chief Credit Officer, 1987-89; Senior Vice President, Marketing and Product Management, 1985-87; Vice President, Negotiated Transactions, 1984-85, Fannie Mae
• Capital-Markets Program Manager, 1984; Senior Legal Counsel, 1982-83, Mortgage Guaranty Insurance Corporation
• General Counsel, 1977-82; Staff Attorney, 1974-77, Michigan State Housing Development Authority

Education
J.D., Indiana University School of Law
B.A., University of Illinois

Now I'm just throwing this out as "food for thought" F-Sharp. Maybe, just maybe the executive vice president and chief credit officer for Fannie Mae until the late 1980s knows a little bit MORE than YOU about CRA's and their part in the housing crisis?
By the way....does he qualify as a banker/mortgage lender that you were asking to chime in???




Technically, I am still correct in saying no sub-prime loans were issued by institutions fully governed by CRA guidelines. It was my assumption that if these institutions were not fully compliant they were not able to issue loans under CRA. I was clearly wrong about that.

Clearly wrong. Well that's a start. I commend you for your Honesty and I mean that sincerely.


However, the fact remains that it doesn't matter whether or not a small percentage of sub-prime loans were snuck through the cracks by institutions not fully regulated, it's completely and totally irrelevant to this discussion. I think these were my original sources for that information. I try not to post things that are not statistically backed, and you know how I feel about opinion, commentary and blogs.

http://www.businessweek.com/investin...ity_reinv.html

http://www.traigerlaw.com/publicatio...udy_1-7-08.pdf

Isn't there some bankers or mortgage brokers on this board that can chime in here?
Well since none seem to have come to your aid...can I suggest you ask Barney Frank, Timothy Geithner or Obama himself for assistance? Maybe they can help you win this argument since the facts apparently aren't on your side on this one. However in an effort to help you out, I've provided the Executive Vice President and Chief Credit Officer for Fannie Mae during the 1980's, Mr. Edward J. Pinto. Does he count?

Now stop acting like a child numbnuts and prove your case, or shut up about it. This is seriously getting old.

Tell you what....so I won't be acting like a child....I'll simply post Edward J. Pinto's presentation to the CATO institute. Then let's see you dispute his presentation with FACTS and SOURCES that show he's wrong.

http://www.scribd.com/doc/22776568/E...nancial-Crisis

All of it is informative but pay special attention to pages 14-21
It's got everything a guy like you needs to understand the subject matter at hand. Graphs, slides all in an easy to understand presentation. I don't see how anyone can read that presentation and NOT see the writing on the wall when it comes to CRA's and the role they have played in the Housing crisis.


And with that slam dunk I conclude this 48 hour lesson plan on CRA's and their contribution to the Housing crisis.

I now yield the floor to my esteemed and learned fellow monger F-Sharp, who despite the fact that he admitted being "clearly wrong" will now no doubt have some insightful last words about why he's smarter than the Executive Vice President and Chief Credit Officer of Fannie Mae (during the 80's not during the predatory lending practices of the 90's and beyond).
Fire away Mr. F-Sharp and dazzle us with your brilliance which no doubt will be based on unimpeachable facts and trustworthy sources. The floor and the rest of this thread are yours!

[budman33]

You both seem to be blaming the wrong people.

$175 million in lobbying fees the companies spent over 10 years, in part to counter attempts at stronger oversight.

http://www.nytimes.com/2008/12/10/bu...uN8ZKwrQs10VKQ

Once again Lobbyists fuck us not the President. I am voting against every incumbent next year, except for Potus as he can't do as much damage as Lobbyists do in the Congress and Senate. I'd vote for Huntsman, but he won't get the nod.

I fully support Lobbyists being added to the UE numbers.

[F-Sharp]

Originally Posted by DTorrchia

Tell you what....so I won't be acting like a child....I'll simply post Edward J. Pinto's presentation to the CATO institute. Then let's see you dispute his presentation with FACTS and SOURCES that show he's wrong.

http://www.scribd.com/doc/22776568/E...nancial-Crisis

Fair enough.

"Myth # 1: “[t]he CRA could [not] suddenly have caused an explosion in bad subprime loans more than 25 years after its enactment.”

Pinto suggests that the sheer amount of increases in CRA lending over a specific time period is answer enough, and I quote, "Might a 680 times increase in volume for the 1992-2008 period over 1977- 1991 period be the beginning of an answer to the President’s question?"

What this dumbass Pinto fails to mention here is that it was the dramatic reduction in interest rates that peaked at about 1985 at a whopping 21% that spurred such an increase. I don't know about here in Texas, but between the mid-eighties through the early nineties you couldn't give houses away if they were free in California. No one was buying them. A large percentage of my family happened to be in real estate, escrow, and brokerage and ALL of them had to find work elsewhere during that time period. Here's a graph....

"Myth 2: The White Paper states that self-denominated subprime was the cause of the Financial Crisis"

This idiot Pinto is using examples from Shiller's book as his logic and doesn't even offer any information. "Well Shiller said this, so it must be true!" I won't even comment on such childish logic. If you want my opinion, it was fear that dominated. Again, coming from California I watched first hand as housing went through the roof at it's epicenter. Along with the housing boom came an apartment boom. There wasn't many for rent, and the ones that were became VERY expensive. Most people I knew bought houses because a. it was stupid to be paying $1800 -$2000 a month in rent for a shitty apartment when you could purchase and b. people became fearful that if they waited any longer the rising cost of housing would make it prohibitive. "Over-promotion of home ownership" is bullshit, fear was the driving the factor. That is unless you consider fear and exorbitant rental rates as "promoting home ownership".

"Myth 3: CRA loans did not have the “predatory” characteristics that self-denominated subprime loans had, so they must be “good” loans"

Doens't matter genius. If only 6% of CRA loans were issued as sub-prime, what the fuck difference does it make? Sub-prime loans fueled this fire and no one can claim otherwise. There's simply too much fact out there to back that up.

"Subprime and near-prime loans shot up from 9 percent of newly originated securitized mortgages in 2001 to 40 percent in 2006.[1]"

http://dallasfed.org/research/eclett/2007/el0711.html

Now, I have some shit to do today, I'll come back and tear up the rest of Pinto's ridiculous assumptions and unsupported arguments later.

[F-Sharp]

"Myth 4: “Innovative or flexible underwriting standards”
are standardsMyth 4: “Innovative or flexible underwriting standards” are standards"

I don't have a clue what point he's trying to make here. It's common knowlege that loan-to-value ratio is a risk factor, I just don't see what that has to do with CRA. Someone with good credit can put down as little as 3.5% today, and LTV is one risk factor among many. I can only respond with...So?

"Myth 5: Originators of CRA loans did not need to retain loan risk"

Again, I don't have a clue what point he's trying to make here. If anything, he's providing support for my argument. We already talked about how many CRA loans were packaged up as securities and sold off to other lenders or refinanced as sub-primes. He presents some statistics...

"An estimated 80% of CRA lending was able to be securitized or sold, with an estimated 2/3 of all CRA loans going to the GSEs and FHA/Ginnie Mae. Another 10-15% was placed in subprime PMBS. These executions left the seller with little or no responsibility for loan performance. The risk was transferred to the “low risk” and as a result, highly leveragable agency and PMBS securities."

It's my contention that it was PMBS that was the issue, not the CRA loans themselves, but we'll get to that in a bit. If you ask me, blaming CRA loans after they were sold off is kinda like blaming Walmart for selling Loughner ammo. How the fuck would they know he was going to go shoot a U.S. Repesentative with it?