I feel like I need to debunk this conservative argument

Quote from jonbig04:

Whew, it would be tough to know. I don't pretend to understand the real complexities of the leveraged, bought and insured CDO's versus how much money was lent out and, God knows, how much of it is actually secured by something real.
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No problem. I was just thinking that if all the subprimes were handled the old-fashioned way where the lending bank held them, and they all defaulted, it doesn't sound like it would add up to the "X" Trillions number some keep throwing around.

So even if a lot of subprime lending was "forced" to be done - it wouldn't have left as big a hole except for the engineering that happened to the loans afterward.

Doesn't excuse the deadbeats of course, but the problem was ballooned-up by others.
 
Gosh, I just..I guess I'm not very smart :(. I just don't see any of the following questions being answered...

1.Explain to me how FNMA, with a market share of less than 10% of subprime loans, can be responsible for the 350% increase in subprime loans originated from 2002-2006

2.Explain to me how the FNMA (conforming loans) which were subject to tighter underwriting guidelines than the other 90% of subprime loans would somehow be more likely to default.

3.Explain how there is NO evidence of minorities or low income neighborhoods having a much higher foreclosure rate than they have historically. And also how there is no evidence (and actually there is evidence to the contrary in Vegas, Pheonix, Florida etc) that low income/ minority neighborhoods began foreclosing first.


Bitch and whine all you want. Or you can sit there and hope the thread will go away. Until you can construct a sound, point by point rebuttal, the argument stands. And knowing how likely THAT is to happen, it looks like I win. Gosh, and I'm not even liberal :)
 
Hey Genius, what part of it don't you understand?

The democrats absolutely pushed mortgage companies to make loans that they shouldn't have made. Thats not to say that republicans did not do a lot of screwed up things and deserve their fair share of the blame, but this entire thread is based on you trying to debunk the argument and you fail miserably.

"Add President Clinton to the long list of people who deserve a share of the blame for the housing bubble and bust. A recently re-exposed document shows that his administration went to ridiculous lengths to increase the national homeownership rate. It promoted paper-thin downpayments and pushed for ways to get lenders to give mortgage loans to first-time buyers with shaky financing and incomes. It’s clear now that the erosion of lending standards pushed prices up by increasing demand, and later led to waves of defaults by people who never should have bought a home in the first place. "









http://www.businessweek.com/the_thread/hotproperty/archives/2008/02/clintons_drive.html
 
Quote from drjekyllus:

Hey Genius, what part of it don't you understand?

The democrats absolutely pushed mortgage companies to make loans that they shouldn't have made. Thats not to say that republicans did not do a lot of screwed up things and deserve their fair share of the blame, but this entire thread is based on you trying to debunk the argument and you fail miserably.

"Add President Clinton to the long list of people who deserve a share of the blame for the housing bubble and bust. A recently re-exposed document shows that his administration went to ridiculous lengths to increase the national homeownership rate. It promoted paper-thin downpayments and pushed for ways to get lenders to give mortgage loans to first-time buyers with shaky financing and incomes. It�s clear now that the erosion of lending standards pushed prices up by increasing demand, and later led to waves of defaults by people who never should have bought a home in the first place. "
http://www.businessweek.com/the_thread/hotproperty/archives/2008/02/clintons_drive.html
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I fail miserably? You didn't address a single one of my points.

However I will address yours.

The democrats absolutely pushed mortgage companies to make loans that they shouldn't have made.

I never said they didn't. I have never excused them. I have never advocated the CRA or excused FNMA's actions.

A recently re-exposed document shows that his administration went to ridiculous lengths to increase the national homeownership rate. It promoted paper-thin downpayments and pushed for ways to get lenders to give mortgage loans to first-time buyers with shaky financing and incomes. It�s clear now that the erosion of lending standards pushed prices up by increasing demand, and later led to waves of defaults by people who never should have bought a home in the first place"[/b]

I don't doubt it! Have I ever said that this DIDN"T happen?. I'm sure it did, to an extent. I'm sure some minorities, because of the CRA, got loans they probably shouldn't have. I'm sure that contributed to the problem.

What does that have to do with my points? I am speaking in the context of the proliferation of the entire subprime mortgage market. Did the above play its part? I'm sure it did! But if we are going to say that subprime loans started all this, and that is what we are saying, then we cannot simply look at FNMA's 10% and ignore the other 90%. If we are interested in the subprime market, than obviously we should pay more attention to the 90% that WEREN'T conforming, than the 10% that were. That doesn't mean the 10% weren't part of the problem as well, but what it does mean is that they are in no way mostly, or solely responsible. Like I've said a million times, READ AND RESPOND TO MY POINTS.
 
Quote from jonbig04:

I fail miserably? You didn't address a single one of my points.

However I will address yours.

The democrats absolutely pushed mortgage companies to make loans that they shouldn't have made.

I never said they didn't. I have never excused them. I have never advocated the CRA or excused FNMA's actions.

A recently re-exposed document shows that his administration went to ridiculous lengths to increase the national homeownership rate. It promoted paper-thin downpayments and pushed for ways to get lenders to give mortgage loans to first-time buyers with shaky financing and incomes. It�s clear now that the erosion of lending standards pushed prices up by increasing demand, and later led to waves of defaults by people who never should have bought a home in the first place"

I don't doubt it! Have I ever said that this DIDN"T happen?. I'm sure it did, to an extent. I'm sure some minorities, because of the CRA, got loans they probably shouldn't have. I'm sure that contributed to the problem.

What does that have to do with my points? I am speaking in the context of the proliferation of the entire subprime mortgage market. Did the above play its part? I'm sure it did! But if we are going to say that subprime loans started all this, and that is what we are saying, then we cannot simply look at FNMA's 10% and ignore the other 90%. If we are interested in the subprime market, than obviously we should pay more attention to the 90% that WEREN'T conforming, than the 10% that were. That doesn't mean the 10% weren't part of the problem as well, but what it does mean is that they are in no way mostly, or solely responsible. Like I've said a million times, READ AND RESPOND TO MY POINTS. [/B]
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The whole argument that you are trying to debunk is this

Basically the idea that the subprime crisis was caused by democrats who urged companies like fannie mae to lend to low income families and minorities.
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I pointed out that Clinton absolutely pushed very hard for mortgage companies to loosen lending standards. Then you agreed.

You agreed with the same argument that you are trying to debunk. :confused:
 
The whole argument that you are trying to debunk is this

Basically the idea that the subprime crisis was caused by democrats who urged companies like fannie mae to lend to low income families and minorities.

I pointed out that Clinton absolutely pushed very hard for mortgage companies to loosen lending standards. Then you agreed.

You agreed with the same argument that you are trying to debunk.

haha well at least you are trying.

That Clinton, Bush, the CRA, FNMA and whoever else was involved in tax payers subsidizing housing caused the subprime crisis. That is the argument I'm debunking. Why? Because though they probably played a part, and certainly didn't help IT'S A TINY FRACTION COMPARED TO WHAT THE REST OF FINANCIAL COMPANIES DID.

The problem is the proliferation of subprime loans. Agreed? The amount of subprime loans originated went up 350% in just a few years, agreed? (ok go look it up).

Now if we are trying to figure out who is responsible perhaps we should look at where 90% of the loans go. Where 90% of them are bought and sold. Could you argue that clinton/ cra caused it? sure, technically they played their part, but thats like turning the faucet on full, plugging the drain and just before it overflows you drop a teaspoon of water in it, then blame the over-flow on the teaspoon of water while ignoring the raging faucet.
 
Quote from jonbig04:



The problem is the proliferation of subprime loans. Agreed? The amount of subprime loans originated went up 350% in just a few years, agreed? (ok go look it up).
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Yes, the fact that these loans were made in the first place was the problem. So why would it go up 350% in just a few years? Did all lenders just decide, in a complete vacuum, to decrease their lending standards? It sounds like something systematic was occuring to me.


As pointed out, the Clinton administration absolutely applied pressure so that mortgage companies would originate loans to people who were not financially strong enough to get the loans on their own. The standard was applied by Clinton and followed by Bush so get over it.

As a result of all this, the guy who is responsible and pays his bills is getting screwed. The new American Dream is to do zero work, consume as much as possible, hose a bunch of people along the way, and make the poor stiff who actually has a job foot the bill.
 
Quote from drjekyllus:

Yes, the fact that these loans were made in the first place was the problem. So why would it go up 350% in just a few years? Did all lenders just decide, in a complete vacuum, to decrease their lending standards? It sounds like something systematic was occuring to me.

Which is why I think its no coincidence that at the same time the number of subprime loans originated were exploding, the CDS market was also. It rose almost 1000%. The reason (IMO) so many loans were done is because demand for high-yield risky debt soared in the secondary market because buyers could use CDS to ostensible hedge themselves, and pocket the gains risk free.

Also, this isn't a real argument but as someone who worked in the mortgage industry, the idea that these banks were being forced into closing these loans is laughable. I was practically getting my door beat down by lenders wanting to fund subprime loans.


As pointed out, the Clinton administration absolutely applied pressure so that mortgage companies would originate loans to people who were not financially strong enough to get the loans on their own. The standard was applied by Clinton and followed by Bush so get over it.

Ok, I'm over it. I don't blame either, but both.

As a result of all this, the guy who is responsible and pays his bills is getting screwed. The new American Dream is to do zero work, consume as much as possible, hose a bunch of people along the way, and make the poor stiff who actually has a job foot the bill.

That may be true too, but really is off topic as I'm not advocating clinton, the cra, or even government involvement in minority housing subsidies. I'm talking about the main cause of subprime proliferation.
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Quote from jonbig04:





Also, this isn't a real argument but as someone who worked in the mortgage industry, the idea that these banks were being forced into closing these loans is laughable. I was practically getting my door beat down by lenders wanting to fund subprime loans.
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So you were getting deadbeats loans and then selling them to others at a profit, all the while knowing these things were toxic. It sounds like you, personally, were part of the problem.
 
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