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I watched just enough to know it's bull crap. The CRA was intended to help a portion - not a large portion - of society move from paying rent to paying the same dollars in mortgage payments. To imply that the CRA forced commercial banks and investment banks to "create" a new type of security backed by billions of dollars of high risk credits secured by mortgages on homes appraised at inflated values is an insult to the intelligence of reasonable people. The entire financial industry voluntarily moved away from the fundamental elements of credit extension and mortgage lending. Why? Because there were billions of dollars of profits to be made at all levels of the food chain. To imply that the CRA was the cause is pure unadulterated bull crap. That video emphasizes the flaw in the we vs. they thinking that permeates both ends of the political spectrum.
Sid, actually unless I saw this wrong the video did not say the original concept was wrong but that it took a wrong turn during the Clinton years. I think I cannot agree with your analysis and think the government had more than a little to do with the current problems.
Bill, I went back and watched it from beginning to end, and I now see your point. Actually, I've agreed with you from the beginning that government had a huge hand in this crisis, but I originally thought the video was another example of liberal bashing. I stand corrected. The bashing is in the context of a presidential campaign and therefore fair game IMO. I still believe that the CRA was a very small player in the crisis and that the real momentum came from the Wall Street players who engineered the instruments that created the bubble. They might have used the CRA as the scapegoat, but it was far, far from the cause. I also believe that a major element of the housing boom was the economic explosion of the 90s.....the huge incomes, the dramatic rise in the stock market. the general feeling of prosperity........all of these elements combined to create an unprecedented demand for "things" including newer and bigger homes, new cars, new toys, etc., from people who had good incomes and were not subprime borrowers. Many of these people also lost jobs when the economic bubble burst and as a result also lost their homes. One more thing that I believe.....This financial crisis will pass even if there is no bailout. Alas, it looks like my opinon here is a moot point.
Thanks for reading it again Sid and for your thoughts. No doubt this mess has a multitude of reasons and yours are right at the front. However another thing that has bothered me is that Bush and McCain both tried to make some moves with Freddie and Fanny but were blocked by the Democrats with Chris Dodd and Barney Frank leading the charge. Then Pelosi has the audacity to say this was all caused by Bush. But thanks for your thoughts.
Me too with Pelosi Sid. Hey here's an article about the bailout plan. One thing that I really wanted was the money that the Dems had put in to go to ACORN removed. It was and that would not have happened if McCain had not come to town and the house Republicans held out to get changes. Actually they won quite a few points. An item that I like that was left in is that once the government takes over the mortgage they can negotiate new terms with the owner. It makes sense to me to sell the house back to the existing owner at a lower price if they can handle the mortgage rather than foreclosing then auctioning it off for a similar price to someone else. Some of these homes are worth only about half of what the mortgages are. I don't really want to know right now what my house here in the mountains is worth, I just want to make my payments and stay here. New Bailout Bill
Convert all ARMs to Fixed rate vehicles at current rates. Do NOT forgive the principal. Reduce all high interest credit cards from the current loan shark rates of 18-33% down to 10% fixed. Keep monthly payment the same thereby creating a rapid deceleration in actaul money owed versus the interest portion. As balance reduces, payment goes down as well. Lower the credit ceiling on card at least 50% to prevent replay of current issues. This would creat cash flow and get the econonmy moving. At least that's my idea. And do it now!
I have a question George, you say convert to conventional rates but don't forgive the principal. Right now values are way down in housing. Let's say someone has a $300,000 mortgage on a property that is now worth only $180,000. Why would they want a $300,000 mortgage at any rate? If the house is repossessed and then sold again it's going to cost money to do the repossession then the house will sell for $180,000. So why would it not be the easiest and quickest thing to do to redo the mortgage at existing rates and for $180,000 to the existing homeowner if they are able to make the payments? That's all the house would bring on the open market anyway. I'm not being a smart a$$, for a change anyway , but think while it's not perfect it is a way to keep people in their houses, get the $$$ flowing and make the mortgage marketable.
So if a guy speculated and bought a $300,000 house for nothing down and low interest payments for a fixed period of time... He has nothing invested in that house...he has put nothing into it...he bought it on speculation. And you are going to give him $120,000.
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Sid, I remember years ago, you and a few others could not understand my downright hatred of California Democrats. I tried explaining at the time (and this has been years and years ago..maybe *P days?).. but JOCO and I tried to relay to people the sheer horror of all things related to Pelosi, Fienstein and Boxer...and how, amazingly, these P.O.S's keep rising in power...I feared them them and I feared what would happen to this country if these people gained power on a truly national stage... They are there, and I fear for this country. Living away from CA, I learned that there are lots of good Democrats. Interesting, people in NY and LA don't understand why 'conservatives' in their area vote alongside the Bible Belters of the Midwest and South.. Much the same way, from my travelling perspective... I cannot understand how Democrats in the rest of the United States see kinship with the Democrats of NYC, Boston and LA/San Francisco.
.....from my perspective, I find it helpful to recall that at the core of the issue is that there are approx 4.7 million US households owing in excess of $600 billion dollars in mortgage debt who are substantially delinquent in their payments on obligations for which they legally contracted......let the debate rage.
Here is where you and I differ on this kind of topic BT. You say let the buyer beware and if he is not astute enough to recognize a shaky deal when he is being courted by predatory lenders then by all means let the buyer be taken to the cleaners. I say stop predatory practices and the greed that goes along with it. I never agree that a very few greedy SOBs backed by government approval are morally and legally right when they engage in predatory lending practices. That goes for mortgages and it goes for credit cards. Loan sharking used to be a federal crime. You guys want to blame this mess on something Clinton signed 15 years ago but you want to completely dismiss the fact that there was a Republican majority in Congress from 1994 thru 2006 and a GOP President from 2001 thru 2006 who also had a Republican Congress to work with and yet all of this lack of leadership and misguided ineptitude fueled by greed is mostly to blame on Clinton's action 15 years ago. You really think I'll buy that?
MCG, I don't expect you would ever buy any scenario that wouldn't lay all the troubles of the world at Bush's doorstep. For the rest of you the video above was removed but here's another one. <object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/_MGT_cSi7Rs&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><embed src="http://www.youtube.com/v/_MGT_cSi7Rs&hl=en&fs=1" type="application/x-shockwave-flash" allowfullscreen="true" width="425" height="344"></embed></object>
What happened to UF on Saturday vs. was no more due to something Spurrier did 15 years ago than the economic crisis can be laid at Clinton's doorstep from something he did 15 years ago. Meyer is and has been the king of the castle with his own soldiers for 4 years now and likewise Bush has been king of his domain for the last 8 years. Not blaming Bush specifically as you infer but I am certainly not holding Clinton chiefly responsible either as you are proposing.
What do you say about predatory organizations like ACORN who threatened and bullied banks (along with ACORN's "community organizers") with penalties and lawsuits if they didn't issue enough low interest loans to low income folks?.
Fannie Mae and Freddie Mac were ordered to pressure banks to make those loans...ACORN staged sit-ins and threatened lawsuits...Obama was a community orgnizer and legal representative for ACORN...Fannie Mae's executives were given a cut...not salaried but rather bonused by how many of these loans were given out...the CEO of Fannie Mae met with the Congressional Black Caucus and praised them as being "the heart and soul of Fannie Mae"...2 former heads of Fannie Mae are cruising towards being on Obama's cabinet...one of them made $90 million out of this racket. Yeah, let's throw all the blame on wall street fat cats and Republicans.
Stu, you don't seem to get it It's all Bush's fault! Has to be after all Nancy Pelosi said so in here wonderful speech yesterday. Besides anything that happened before Bush's election automatically becomes his fault. Just like anything that goes wrong if Obama gets elected will still be Bush's fault. I'm amazed you don't grasp this concept. Oh wait, you think for yourself don't you! Now I understand.