Barney Frank

[Lue C Fur]

Again, not facts, but opinion from the CATO institute. Mis truths and spin.

There you go talking about yourself again...too funny.

 

[av8torntn]

Again, not facts, but opinion from the CATO institute. Mis truths and spin.

Peace.

epic fail on your part

 

[av8torntn]

Easy to say, now show me the money.

peace.

What the 79% increase adjusted for inflation in money spent on regulators under Bush?

 

[av8torntn]

Can you support that or is it just your opinion?

Well there were 72,844 pages of regulation under Carter and 75,526 under W. but there were 54,335 under Reagan.

There is a Federal registry of regulations.

edit to add: I am fully aware that is a crude and inaccurate measure I was just having a little fun.

Also if you looked at the full picture with an unbiased view it would be very difficult to blame the alleged deregulation of the mortgage industry. It would also be impossible to honestly claim that the government was just a cheerleader when they required by law under the community reinvestment act that banks make loans to high risk individuals. When you want to worship the state you will find a reason.

 

[av8torntn]

Rep. Barney Frank (D-MA) defended the status quo arrangement on the grounds that it enabled Fannie and Freddie to lower mortgage interest rates for borrowers:
Fannie Mae and Freddie Mac have played a very useful role in helping make housing more affordable, both in general through leveraging the mortgage market, and in particular, they have a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing, and that is what I am concerned about here. I believe that we as the Federal Government, have probably done too little rather than too much to push them to meet the goals of affordable housing and to set reasonable goals. … The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see … the more pressure there is there, then the less I think we see in terms of affordable housing.[SUP]13[/SUP]
In the very same statement Representative Frank denied that the GSE’s debt had any federal backing:
But there is no guarantee, there is no explicit guarantee, there is no implicit guarantee, there is no wink-and-nod guarantee. Invest, and you are on your own.[SUP]14[/SUP]
Of course, Frank was thinking wishfully and ignoring the obvious. The very “arrangements which are of some benefit to them,” that is, the arrangements that enabled Fannie Mae and Freddie Mac to borrow at low rates (in exchange for which privileges they were willing to accept affordable-housing mandates), were nothing other than the implicit federal guarantees of their debt.


LINK

 

[moreluck]

How do these people still have their jobs????

Don't Regulate Fannie Mae or Freddy Mac - YouTube

 

[moreluck]

In '02 Bush admin. raised red flags about friend.M & friend.M and wanted stricter rules for them....BUT Braney Frank in '03, poo-poo'ed it all and said they were both solid!!

Democrats were WARNED of Financial crisis and did NOTHING - YouTube

 

[moreluck]

A bit of repeat, but shows Chucky Shumer being confident and saying FM & FM are OK...............Idiot

Origins of Financial Mess - YouTube

 

[moreluck]

Frank's sneering insults won't be missed :: Jeff Jacoby

 

[Jones]

Well there were 72,844 pages of regulation under Carter and 75,526 under W. but there were 54,335 under Reagan.

There is a Federal registry of regulations.

edit to add: I am fully aware that is a crude and inaccurate measure I was just having a little fun.

Also if you looked at the full picture with an unbiased view it would be very difficult to blame the alleged deregulation of the mortgage industry. It would also be impossible to honestly claim that the government was just a cheerleader when they required by law under the community reinvestment act that banks make loans to high risk individuals. When you want to worship the state you will find a reason.

The CRA never "required by law" that banks make loans to high risk individuals, that's a misconception. In fact there is no empirical evidence that CRA contributed in any significant way to the subprime crisis, the notion that it did is more of a political talking point that has been debunked by both Sheila Bair, (republican) chairman of the FDIC and Randall Kroszner, (republican appointed) Governor of the Federal Reserve.
Kroszner's assessment is particularly interesting because his staff did such an in depth analysis. Here's an excerpt:

Evidence on CRA and the Subprime Crisis
Over the years, the Federal Reserve has prepared two reports for the Congress that provide information on the performance of lending to lower-income borrowers or neighborhoods--populations that are the focus of the CRA.[SUP]3[/SUP] These studies found that lending to lower-income individuals and communities has been nearly as profitable and performed similarly to other types of lending done by CRA-covered institutions. Thus, the long-term evidence shows that the CRA has not pushed banks into extending loans that perform out of line with their traditional businesses. Rather, the law has encouraged banks to be aware of lending opportunities in all segments of their local communities as well as to learn how to undertake such lending in a safe and sound manner.
Recently, Federal Reserve staff has undertaken more specific analysis focusing on the potential relationship between the CRA and the current subprime crisis. This analysis was performed for the purpose of assessing claims that the CRA was a principal cause of the current mortgage market difficulties. For this analysis, the staff examined lending activity covering the period that corresponds to the height of the subprime boom.[SUP]4[/SUP]
The research focused on two basic questions. First, we asked what share of originations for subprime loans is related to the CRA. The potential role of the CRA in the subprime crisis could either be large or small, depending on the answer to this question. We found that the loans that are the focus of the CRA represent a very small portion of the subprime lending market, casting considerable doubt on the potential contribution that the law could have made to the subprime mortgage crisis.
Second, we asked how CRA-related subprime loans performed relative to other loans. Once again, the potential role of the CRA could be large or small, depending on the answer to this question. We found that delinquency rates were high in all neighborhood income groups, and that CRA-related subprime loans performed in a comparable manner to other subprime loans; as such, differences in performance between CRA-related subprime lending and other subprime lending cannot lie at the root of recent market turmoil.
In analyzing the available data, we focused on two distinct metrics: loan origination activity and loan performance. With respect to the first question concerning loan originations, we wanted to know which types of lending institutions made higher-priced loans, to whom those loans were made, and in what types of neighborhoods the loans were extended.[SUP]5[/SUP] This analysis allowed us to determine what fraction of subprime lending could be related to the CRA.
Our analysis of the loan data found that about 60 percent of higher-priced loan originations went to middle- or higher-income borrowers or neighborhoods. Such borrowers are not the populations targeted by the CRA. In addition, more than 20 percent of the higher-priced loans were extended to lower-income borrowers or borrowers in lower-income areas by independent nonbank institutions--that is, institutions not covered by the CRA.[SUP]6[/SUP]
Putting together these facts provides a striking result: Only 6 percent of all the higher-priced loans were extended by CRA-covered lenders to lower-income borrowers or neighborhoods in their CRA assessment areas, the local geographies that are the primary focus for CRA evaluation purposes. This result undermines the assertion by critics of the potential for a substantial role for the CRA in the subprime crisis. In other words, the very small share of all higher-priced loan originations that can reasonably be attributed to the CRA makes it hard to imagine how this law could have contributed in any meaningful way to the current subprime crisis.

Sheila Bair's take is here.

 

[av8torntn]

The CRA never "required by law" that banks make loans to high risk individuals, that's a misconception. .

The CRA required by regulation which in my mind is equal to required by law. Banks had to comply with CRA goals to meet regulatory requirements. That's not misconception that is fact. If a bank wanted to do anything that required regulatory requirement they had to prove they were making risky loans.


" In 1995, how-ever, the rules were tightened, so that banks had to show that theyhad actually made the required loans, not that they were simply try-ing to do so. The change had a profound effect. Under the initialrule, banks could turn down applicants who did not have the neces-sary credit resources—such as a significant downpayment or a job—but under the new regulations the onus was put on the banks to finda way to make the loan, even if it did not meet their lending stan-dards. The phrase in the CRA regulations was that banks had to be“flexible or innovative” in their underwriting. From the point of viewof the banks, their lending standards had to be loosened. They hadto show that the mortgages were being made. "

Link


Edit to add: CRA loans were not the same as subprime loans but they did default at about the same rate so I find it difficult that you can blame subprime but not CRA. My take .

 

[Jones]

The CRA required by regulation which in my mind is equal to required by law. Banks had to comply with CRA goals to meet regulatory requirements. That's not misconception that is fact. If a bank wanted to do anything that required regulatory requirement they had to prove they were making risky loans.


" In 1995, how-ever, the rules were tightened, so that banks had to show that theyhad actually made the required loans, not that they were simply try-ing to do so. The change had a profound effect. Under the initialrule, banks could turn down applicants who did not have the neces-sary credit resources—such as a significant downpayment or a job—but under the new regulations the onus was put on the banks to finda way to make the loan, even if it did not meet their lending stan-dards. The phrase in the CRA regulations was that banks had to be“flexible or innovative” in their underwriting. From the point of viewof the banks, their lending standards had to be loosened. They hadto show that the mortgages were being made. "

Link

The CRA did not require either by law or by regulation that banks make loans to high risk individuals. That article from CATO claims that they did but it doesn't support that claim with any evidence. If the CRA actually said that it should be pretty easy point it out yet no one seems to be able to.

Edit to add: CRA loans were not the same as subprime loans but they did default at about the same rate so I find it difficult that you can blame subprime but not CRA. My take .

CRA loans were not all subprimes nor did they default at the same rates as subprimes. CRA loans that were subprimes did default at the same rate as subprimes extended by private lenders (non-CRA), but that's the point. Regardless what class of loan they were CRA loans defaulted at the same rates as non CRA loans of the same type. If they were in fact higher risk you would expect them to default at higher rates but that didn't happen.

 

[The Other Side]

NO matter what. It all came down to greed. BUSH needed to spark the economy whether falsely or not, and greed took over from there. From the lenders to the realtors, greed took over for common sense. With all the backstops "effectively" removed by BUSH and his advisors in the form of "encouragement", a ginormous disaster was born and we all participated in it.

How many people do you know, that bought homes that couldnt afford them? I know hundreds. Its called my delivery area. People with jobs who could swing an interest only loan for 3 years thinking they were going to flip the house for big bucks and get a bigger house. From 2002 to 2007 some did, after that, those that bought took it up the rear end.

The blame really falls on americans for being such suckers.

Peace.

 

[wkmac]

The CRA required by regulation which in my mind is equal to required by law. Banks had to comply with CRA goals to meet regulatory requirements. That's not misconception that is fact. If a bank wanted to do anything that required regulatory requirement they had to prove they were making risky loans.


" In 1995, how-ever, the rules were tightened, so that banks had to show that theyhad actually made the required loans, not that they were simply try-ing to do so. The change had a profound effect. Under the initialrule, banks could turn down applicants who did not have the neces-sary credit resources—such as a significant downpayment or a job—but under the new regulations the onus was put on the banks to finda way to make the loan, even if it did not meet their lending stan-dards. The phrase in the CRA regulations was that banks had to be“flexible or innovative” in their underwriting. From the point of viewof the banks, their lending standards had to be loosened. They hadto show that the mortgages were being made. "

Link


Edit to add: CRA loans were not the same as subprime loans but they did default at about the same rate so I find it difficult that you can blame subprime but not CRA. My take .

Thinking back to 1995', I guess my question at this point would be, "with a Congress in solid control by the republicans, why did they not act in 1995' to change this?"

You could argue Clinton and the executive branch used executive orders but under the Administrative Procedures Act in Title 5, all such Executive Orders to have such standing to effect regulatory law must be posted in the Federal Register and for a period of 30 days, Congress can object and this moves the issue from an executive branch action to an action of Congress and they must act to the order before it has the effect of law under the guidelines of Title 5. So again, why did the republican Congress not object and act? If they did not, blaming Barney Frank exclusively would be incorrect not that he's worth a damn to begin with!

You might say Barney was following the lead of someone else in this mess.
[video=youtube;0voHN20ZNeY]http://www.youtube.com/watch?v=0voHN20ZNeY[/video]

Everyone had their hand in that cookie jar!

 

[av8torntn]

The CRA did not require either by law or by regulation that banks make loans to high risk individuals. That article from CATO claims that they did but it doesn't support that claim with any evidence.

If you would have read it they did point to the regulations enacted that required banks to comply with the CRA in order to be approved for regulatory activity. Someone posted a video on this thread of Clinton speaking about these regulations. I'd suggest if you were interested in the truth to read up on those regulations before you take on Cato.

CRA loans by definition are subprime loans. That is the point. When you start forcing banks through regulation to not require things like creditworthiness or a 20% downpayment or even to make loans in risky areas they default at higher rates. When the government offers a guarantee on a loan that is no different than the government making that loan.

 

[av8torntn]

Thinking back to 1995', I guess my question at this point would be, "with a Congress in solid control by the republicans, why did they not act in 1995' to change this?"

As you are well aware certain members in Congress did try. The structure of Congress at the time allowed for a even divide on the committees and Frank(among others) worked to block any reform or reduction in regulation. As has been stated previously every modern president worked to increase home ownership through government force.

 

[trplnkl]

NO matter what. It all came down to greed. BUSH needed to spark the economy whether falsely or not, and greed took over from there. From the lenders to the realtors, greed took over for common sense. With all the backstops "effectively" removed by BUSH and his advisors in the form of "encouragement", a ginormous disaster was born and we all participated in it.

How many people do you know, that bought homes that couldnt afford them? I know hundreds. Its called my delivery area. People with jobs who could swing an interest only loan for 3 years thinking they were going to flip the house for big bucks and get a bigger house. From 2002 to 2007 some did, after that, those that bought took it up the rear end.

The blame really falls on americans for being such suckers.

Peace.

By this, so you mean people buying homes they knew they could not pay for?

 

[moreluck]

 

[The Other Side]

By this, so you mean people buying homes they knew they could not pay for?

TRP,

I think we can agree that MILLIONS of people bought homes that they couldnt pay for. It was really easy. You get a realtor with a buddy in the mortage writing business, an appraiser who will give whatever price is asked, a lender who wont check anything and presto..... a new homeowner.

Here is so cal, i deliver to a very affluent neighborhood. At one time in 2007, homes were at 1 million dollars. They were selling faster than they could be built. It was easy, just take a 10 year interest only loan at 3500 a month and before the tenth year, you could sell it for 1.8 to 2.0 million.

That was the selling points of the realtors. APPRECIATION RATES. They were double digits for 5 years. How could they lose?

Like any investment, there are risks, but when it came to the housing bubble, everyone from the realtor to congress ignored the warning signs. BUSH called for more homes, more buyers, lower standards.

When it was that easy, why would people NOT buy?

Everyone gambled. Everyone took advantage instead of looking forward. GREED took hold. Nobody was exempt from greed.

I see people all day long who are moving out with the Marshall standing there. Its a sad site, but the system made it that easy.

The real problem today isnt how it got started, but how to fix it? As I said, the worst isnt over yet. There is plenty more hurt to come. I heard Romney recently talking about the housing crisis and his idea of fixing it was to give people jobs.

Thats ridiculous. That isnt the problem. Giving people jobs isnt going to make a mortgage that went from 2500 a month to 5000 a month.

What is needed, is to rewrite all loans to their current values and adjust interest rates. Those people with jobs who bought a home at 979K and now the home is worth 500K will make payments on that home if its lowered from the ridiculous price that it was valued at when purchased.

Everyone knew the homes were overpriced from the jump, but nobody cared as long as all the pockets were getting greased.

Peace

 

[wkmac]

So it's all the govt's fault and the so-called poor big business is just innocent victims? Then explain this?


GE officials in gov't

Monsanto officials in gov't

And let's not forget Goldman Sachs

Woodrow Wilson was right but then TR told us that big business really needed that to get big to begin with.

I'm not that naive to accept that the big banking institutions weren't in the room when the whole mortgage mess got it's start and I bet if we dig we'll learn the congressional aids who wrote the legislation were doing the bidding of their real masters and were all nicely rewarded with cush banking jobs when the damage had been done!

Besides, when it was all over with, who is picking up the tab to pay for it all? With no risk involved, why wouldn't they play losee goosee with mortgage lending?