Originally Posted By SingleParkPassholder "Oooo! YouTube videos! Well, I'll just shuddup now, cause I'm totally convinced!" Careful. Our periodic visitor will eventually get all huffy and claim he doesn't know why he bothers to come back to WE, despite the fact he wasn't forced to and can't understand why there would be blowback to his posts.
Originally Posted By Dabob2 Selectively edited youtube videos, at that. Tom, you've got to stop drinking the koolaid. Fannie and Freddie made some missteps, and their leadership has been tone-deaf, no question. And the one thing you've posted lately that is quite true, is that there is an inherent conflict in their being quasi-public yet quasi-private. In the past decade they've acted much more like their private self, being more concerned with their execs' well being than the country's (which puts them more in league with the big banks). But remember that they initiated almost none of those bad loans. Neither the ones poor families took out for houses they couldn't afford, or the FAR more numerous ones middle class families took out for houses THEY couldn't afford - i.e. families who might have afforded a $200,000 home being sold a $400,000 or $500,000 home and being told not to worry about it because "real estate only appreciates. Trust us." And yet, though they initiated almost none of those loans, due to their charter, they had to back them. That put them on the hook for a problem mostly not of their making. The main causes of the housing crisis were a). the de-regulation of banking/finance, mostly pushed through by Republicans, which brought about several things: bringing down the walls between commercial and investment banks, allowing for exotic "products" like credit default swaps which divorced the original lenders from any risk, and the further deregulation that allowed banks to leverage themselves to levels previously unallowed; and b). the willingness of the big private institutions to commit what amounts to fraud (but which they have NOT been prosecuted for); selling junk that they knew to be junk and then betting against it in the markets. They made out like bandits; the rest of us got stuck with the bill. Fannie and Freddie were a relatively minor player in all this, which came about mostly due to Republican policies. But Republicans can't accept this, and need to blame the Democrats. Fannie and Freddie have typically been supported by Democrats. Voila - the noise machine pushes the idea that Fannie and Freddie were the primary architects of the mess, and their acolytes lap it up. But any objective analysis - and there have been several excellent books on the topic, written by non-partisan observers with no particular axe to grind - shows the major culprits and reasons to be the ones I listed.
Originally Posted By DDMAN26 That's all fine and dandy, my point is it's still a screwed up organziation that is poorly run and if their executives just received bonuses then they shouldn't be asking for additional taxpayer. That's arrogance beyond belief. Which you have addressed Dabob. Which to be fia
Originally Posted By HongKongFoooy ###The main causes of the housing crisis were### you left out the biggest reason, why? you did not mention unwise buyers. why did you leave out the consumer when their greed was at an all time high. they knew how much money they made every month and they knew how much their mortgage payment was but they bought anyway. as for the 2-5% who didn't know that they could afford the monthly payment then maybe they should have been renters since homeownership with a loan was too complicated for them.
Originally Posted By HongKongFoooy what i mean is you talked about deregulation and fraud but failed to talk about buyer personal responsibility. why? wild spending and refinancing homes and tapping their home's equity and then defaulting caused this meltdown also.
Originally Posted By Dabob2 I'm not letting them off the hook entirely, but millions of people were essentially conned. Yes, they may have been greedy (some of them anyway), hoping to make lots of money on the house, but con men count on greed. They were sold on the idea: "don't worry. In another year the house will be worth thousands more, and you can re-finance and pocket the difference! Real estate never comes down!" When someone is conned - yes you can say they were greedy, or dumb, or should have known better. But doesn't the greater blame still go on the con man? And shouldn't he be prosecuted?
Originally Posted By skinnerbox <<That's all fine and dandy, my point is it's still a screwed up organziation that is poorly run and if their executives just received bonuses then they shouldn't be asking for additional taxpayer. That's arrogance beyond belief.>> What about other corporations that receive major tax breaks and even subsidies in light of record profits, like the oil industry? Why not scream and yell about the unfairness of those situations? Your focus on Freddie/Fannie ills seems misplaced. There are other bigger problems to tackle.
Originally Posted By Kar2oonMan Sure, some homeowners were greedy. Since pensions have gone the way of the dodo, many hoped that a home would increase in value and provide for a comfortable retirement some day. How dare people hope to own a home and have something at the end of their working years. Let's not forget that banks weren't just loaning money to be nice. They didn't care much if someone couldn't pay, because they could simply foreclose and sell the property at a profit in short order. This was an era where people had to line up to put in offers, and bidding wars were common. As long as things were going up, up, up, banks had little to fear, and wouldn't think twice about foreclosing. This is what you get when regulation and oversight gets thrown out the window in the name of sky's-the-limit profiteering.
Originally Posted By mawnck >>you did not mention unwise buyers. why did you leave out the consumer when their greed was at an all time high. they knew how much money they made every month and they knew how much their mortgage payment was but they bought anyway. as for the 2-5% who didn't know that they could afford the monthly payment then maybe they should have been renters since homeownership with a loan was too complicated for them.<< THE BUYERS ARE NOT ACCOUNTANTS. The vast majority of these "unwise" buyers were told that they were credit-worthy, that they could afford the payments (which they could, at first, most of these being some form of balloon loan), and that if the payments got out of hand, they could refinance. The bankers have the fiduciary and ETHICAL duty to not screw over their customers. Again, I maintain that people should not get to stay in a house they can't afford. But you need to get over this Gop fairy tale. That Joe Sixpack knows enough about home loans to realize that he's taking an unwise risk, when his bankster is sitting right there telling him he'll be fine. And regardless of who you wish to pin the blame on, you still have banks making stupid loans. Banks that make stupid loans must eat those loans. Capitalism 101.
Originally Posted By DDMAN26 <<What about other corporations that receive major tax breaks and even subsidies in light of record profits, like the oil industry? Why not scream and yell about the unfairness of those situations?>> Because we're talking about this particular situation. And to be honest the oil companies haven't asked the taxpayers to bail them out.
Originally Posted By HongKongFoooy ###THE BUYERS ARE NOT ACCOUNTANTS.### i know you aren't being literal with the accountant stuff but your message is that defaulted buyers lacked enough information to make an informed decision on getting into a house and i think you're wrong. And let's also remember that the the meltdown came from a few different streams and not from just the 5 newly arrived immigrants obligated on the same loan sharing a house in california's central valley. Yes there were some of those but most of the defaulting came from professionals like realtors with second homes, the family that moved up to a higher priced home, the refinanciers who wanted a new hummer 2 in the driveway or those who did not want to pay on their homes anymore even though they could afford to. or better yet the ones who used stated income and basically lied or inflated their ability to pay. there were more stated income defaulters than the fresh off the boat 5 signatures on the same loan fraud victims. It's easy to say that predatory lending against immigrants caused it but numerically it just doesn't wash. house loan papers have monthly payment terms on them and these buyers either knew or should have known. now as far as the fraud stuff well that is way not right and i hope the exploiters will see justice some day. so the meltdown was caused by greed from banks and buyers in an underregulated backdrop. how's that?
Originally Posted By Dabob2 I don't think anyone mention immigrants until you, just now. <###THE BUYERS ARE NOT ACCOUNTANTS.### i know you aren't being literal with the accountant stuff but your message is that defaulted buyers lacked enough information to make an informed decision on getting into a house and i think you're wrong. And let's also remember that the the meltdown came from a few different streams and not from just the 5 newly arrived immigrants obligated on the same loan sharing a house in california's central valley. Yes there were some of those but most of the defaulting came from professionals like realtors with second homes, the family that moved up to a higher priced home, the refinanciers who wanted a new hummer 2 in the driveway or those who did not want to pay on their homes anymore even though they could afford to. or better yet the ones who used stated income and basically lied or inflated their ability to pay. there were more stated income defaulters than the fresh off the boat 5 signatures on the same loan fraud victims. It's easy to say that predatory lending against immigrants caused it but numerically it just doesn't wash. house loan papers have monthly payment terms on them and these buyers either knew or should have known. now as far as the fraud stuff well that is way not right and i hope the exploiters will see justice some day. <so the meltdown was caused by greed from banks and buyers in an underregulated backdrop. how's that?> From banks pretty much all the time in this period. From buyers some of the time. Some were simply trying to buy a house and were sold a bill of goods.
Originally Posted By gadzuux >> Banks that make stupid loans must eat those loans. Capitalism 101. << Except that's not what happened. The originator of the loans bundled them and sold them off, leaving them with no repercussions when the loans go belly up. No risk - all gain. That's GOP policy for you.
Originally Posted By Dabob2 Privatize the profits, socialize the losses. I first heard that in reference to the S&L scandals of the 80's. Amazing that we not only allowed it to repeat, but on a far larger scale.
Originally Posted By DDMAN26 <a href="http://finance.yahoo.com/news/fannie-freddie-executives-score-100m-105300790.html" target="_blank">http://finance.yahoo.com/news/...790.html</a> And this is why they don't deserve another bailout.
Originally Posted By mawnck >>And this is why they don't deserve another bailout.<< I don't think that's why. They say that they'd lose all their "top talent" if they didn't pay the bonuses. And they're right. Until we say to everybody "No, you are NOT going to be permitted to make and keep THAT much money," nothing will change. That was the whole reason for the 90% tax bracket. It didn't stop companies from paying obscene salaries and bonuses, but it did make it essentially pointless to do so, freeing up wasted capital for investment and jobs. It's not revenue enhancement, it's another form of regulation. If you consider that unfair, too bad. Your version of "fair" doesn't work with actual humans. They don't deserve another bailout because bailouts are anti-capitalism.
