Barney Frank asking Fannie/Freddie to loosen lending standards on condos

[.40-.45]

Originally Posted by billbrasky

you cant sell greed with out a greedy buying public.

You refuse to admit millions of middle class folks made a fortune and flipped houses for astronomical profits for the better part of ten years.

millions?

[thelongone13]

Yes, millions. I just got back from a forclosed home that sold at auction (off site) today. Yesterday, one property in perfect condition (well, the grass needed mowing...) sold for $89,000 and is worth over $150,000 in this market. So the guy that bought it will make roughly $60,000 minus the cost of the gas in his mower. It happens all over the place, every day.

[ForTehNguyen]

good let prices fall naturally, then people who couldnt afford 150k houses before get them for 75k, why not?

[.40-.45]

wow if its that easy why didnt you buy it?

[Etta Place]

Originally Posted by ForTehNguyen

the primary culprit is the federal reserve, it would not be possible for this to happen if they didnt have super easy credit and low interest rates. Wall Street can be "greedy" all they want but if they don't have the credit to implement it, it means nothing.

Very true. In fact, easy credit and low interest rates fueled the artificial housing boom.

[nickb]

Originally Posted by Etta Place

Your first paragraph is wrong. You can read any knowledgeable summary of the crash of the financial sector, and Barney Frank and Chris Dodd are a just a part of the problem. They weren't even the chairmen of their committees from 1994 to 2006.

Your second paragraph, by implying that Barney Frank has not learned anything from the whole debacle, has an element of truth to it.

They don't have to chair anything to call for action or bring legistlation.

Dodd was in Countrywides pocket and I heard Barney with my own ears telling the committee how unfair it was that not everyone could buy a house. He pushed hard to lower the lending standards that started the entire mess.

[Etta Place]

Originally Posted by nickb

They don't have to chair anything to call for action or bring legistlation.

Dodd was in Countrywides pocket and I heard Barney with my own ears telling the committee how unfair it was that not everyone could buy a house. He pushed hard to lower the lending standards that started the entire mess.

You're focusing on just one or two people's roles in this huge and complicated economic phenomenon. There are MANY politicians in the pockets of MANY financial institutions, defense contractors, farmers, you name it.

[nickb]

1997 - 1999: Clinton, bypassing Republicans in Congress, enlisted Andrew Cuomo, then Secretary of Housing and Urban Dev elopement, allowing Freddie and Fannie to get into the sub-prime market in a BIG way. Led by Rep. Barney Frank and Sen. Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5% of capital to back their investments vs. 10% for banks. Since they could borrow at lower rates than banks their enterprises boomed.


With incentives in place, banks poured billions in loans into poor communities, often "no doc", "no income", requiring no money down and no verification of income. Worse still was the cronyism: Fannie and Freddie became home to out-of work-politicians, mostly Clinton Democrats. 384 politicians got big campaign donations from Fannie and Freddie. Over $200 million had been spent on lobbying and political activities. During the 1990's Fannie and Freddie enjoyed a subsidy of as much as $182 Billion, most of it going to principals and shareholders, not poor borrowers as claimed.

Did it work? Minorities made up 49% of the 12.5 million new homeowners but many of those loans have gone bad and the minority homeownership rates are shrinking fast.

2001: Republicans try repeatedly to bring fiscal sanity to Fannie and Freddie but Democrats blocked any attempt at reform; especially Rep. Barney Frank and Sen.Chris Dodd who now run key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants.

From Thinking Objectively: What Caused the Loan Crisis

[nickb]

Originally Posted by Etta Place

You're focusing on just one or two people's roles in this huge and complicated economic phenomenon. There are MANY politicians in the pockets of MANY financial institutions, defense contractors, farmers, you name it.

You have heard of the pied piper right? Lot's of rats can be led by one or two people. Obviously this can work for both sides, but in the case of the loan crisis it's clear who was blowing the fife.

[Etta Place]

Originally Posted by nickb

1997 - 1999: Clinton, bypassing Republicans in Congress, enlisted Andrew Cuomo, then Secretary of Housing and Urban Dev elopement, allowing Freddie and Fannie to get into the sub-prime market in a BIG way. Led by Rep. Barney Frank and Sen. Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5% of capital to back their investments vs. 10% for banks. Since they could borrow at lower rates than banks their enterprises boomed.


With incentives in place, banks poured billions in loans into poor communities, often "no doc", "no income", requiring no money down and no verification of income. Worse still was the cronyism: Fannie and Freddie became home to out-of work-politicians, mostly Clinton Democrats. 384 politicians got big campaign donations from Fannie and Freddie. Over $200 million had been spent on lobbying and political activities. During the 1990's Fannie and Freddie enjoyed a subsidy of as much as $182 Billion, most of it going to principals and shareholders, not poor borrowers as claimed.

Did it work? Minorities made up 49% of the 12.5 million new homeowners but many of those loans have gone bad and the minority homeownership rates are shrinking fast.

2001: Republicans try repeatedly to bring fiscal sanity to Fannie and Freddie but Democrats blocked any attempt at reform; especially Rep. Barney Frank and Sen.Chris Dodd who now run key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants.

From Thinking Objectively: What Caused the Loan Crisis

This is ridiculous. Are you joking? No Republicans are responsible? No Wall Street Bankers? No sleazy mortgage brokers? No banks? No people wanting to flip houses for a profit? No Phil Gramm or Jim Leach?