what could go wrong

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes in fact very good times. The only problem was the Democrats getting control of the house and ruining the housing industry. My only problem with Bush is that he caved during the last few months and he should have stuck to his principles and let the free market work. Now we have government attempting to run everything which is a disaster.

Oh yeah. Let's look at the timeline:

2006 Housing prices start to decline.
January 2007 the Democrats regain the House
April 2007 New Century Financial Corp (major subprime lender) files Chapter 11
June 2007 Moody's downgrades companies with subprime exposure
July 2007 Countrywide and Bear Stearns start their death spiral
August 2007 American Home Mortgage Files Chapter 11
October 2007, S&P 500 begins its decline.
By October of 2007, 16% of mortgages are 90 days past due or in foreclosure.
January 2008 Countrywide gets merged into B of A.

So either Nancy Pelosi is the fastest working person in the history of Congress, or the housing bust was in the works long before the Democrats retook the house.

Man, that Nancy Pelosi is efficient!

[Anonymous]

Actually, I believe that BOTH Congressional Democrats and Republicans were heavily invested in programs that advanced home ownership, particularly among minorities and single parent households, as the single biggest hope to increase their family wealth. It was a noble concept, but like many noble concepts it is unworkable in the face of reality.

Time to more realistically assess the role of govt. in advancing social goals - I prefer encouragement for education, and especially higher education and the trades, than the encouragement of home ownership as a means to get out of poverty.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes in fact very good times. The only problem was the Democrats getting control of the house and ruining the housing industry. My only problem with Bush is that he caved during the last few months and he should have stuck to his principles and let the free market work. Now we have government attempting to run everything which is a disaster.

Oh yeah. Let's look at the timeline:

2006 Housing prices start to decline.
January 2007 the Democrats regain the House
April 2007 New Century Financial Corp (major subprime lender) files Chapter 11
June 2007 Moody's downgrades companies with subprime exposure
July 2007 Countrywide and Bear Stearns start their death spiral
August 2007 American Home Mortgage Files Chapter 11
October 2007, S&P 500 begins its decline.
By October of 2007, 16% of mortgages are 90 days past due or in foreclosure.
January 2008 Countrywide gets merged into B of A.

So either Nancy Pelosi is the fastest working person in the history of Congress, or the housing bust was in the works long before the Democrats retook the house.

You are not looking back far enough. These disasters do not happen overnight, does history teach you nothing, directly from a NYT article from 1999:

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

Read here for the full article, it is all very simple how we got into this mess:

http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html

This is no propaganda, this was written in 1999.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes in fact very good times. The only problem was the Democrats getting control of the house and ruining the housing industry. My only problem with Bush is that he caved during the last few months and he should have stuck to his principles and let the free market work. Now we have government attempting to run everything which is a disaster.

Oh yeah. Let's look at the timeline:

2006 Housing prices start to decline.
January 2007 the Democrats regain the House
April 2007 New Century Financial Corp (major subprime lender) files Chapter 11
June 2007 Moody's downgrades companies with subprime exposure
July 2007 Countrywide and Bear Stearns start their death spiral
August 2007 American Home Mortgage Files Chapter 11
October 2007, S&P 500 begins its decline.
By October of 2007, 16% of mortgages are 90 days past due or in foreclosure.
January 2008 Countrywide gets merged into B of A.

So either Nancy Pelosi is the fastest working person in the history of Congress, or the housing bust was in the works long before the Democrats retook the house.

You are not looking back far enough. These disasters do not happen overnight, does history teach you nothing, directly from a NYT article from 1999:

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

Read here for the full article, it is all very simple how we got into this mess:

http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html

This is no propaganda, this was written in 1999.

OK, I have no problem with an intelligent debate about the causes of the crisis. I respect your point and I could bring my own ammo from the 80's. There are even people who want to blame Carter, although I think they are smoking the wacky weed. In reality, both parties are responsible for the changes to the banking system that led to the meltdown.

But I was responding to the fool who said the problem was the Democrats taking the house in 2007. Totally moronic.

[Anonymous]

00:01 here. I should add that this is what I wrote last year on the subject.

http://www.dcurbanmom.com/jforum/posts/list/30971.page#197263

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes in fact very good times. The only problem was the Democrats getting control of the house and ruining the housing industry. My only problem with Bush is that he caved during the last few months and he should have stuck to his principles and let the free market work. Now we have government attempting to run everything which is a disaster.

Oh yeah. Let's look at the timeline:

2006 Housing prices start to decline.
January 2007 the Democrats regain the House
April 2007 New Century Financial Corp (major subprime lender) files Chapter 11
June 2007 Moody's downgrades companies with subprime exposure
July 2007 Countrywide and Bear Stearns start their death spiral
August 2007 American Home Mortgage Files Chapter 11
October 2007, S&P 500 begins its decline.
By October of 2007, 16% of mortgages are 90 days past due or in foreclosure.
January 2008 Countrywide gets merged into B of A.

So either Nancy Pelosi is the fastest working person in the history of Congress, or the housing bust was in the works long before the Democrats retook the house.

You are not looking back far enough. These disasters do not happen overnight, does history teach you nothing, directly from a NYT article from 1999:

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

Read here for the full article, it is all very simple how we got into this mess:

http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html

This is no propaganda, this was written in 1999.

OK, I have no problem with an intelligent debate about the causes of the crisis. I respect your point and I could bring my own ammo from the 80's. There are even people who want to blame Carter, although I think they are smoking the wacky weed. In reality, both parties are responsible for the changes to the banking system that led to the meltdown.

But I was responding to the fool who said the problem was the Democrats taking the house in 2007. Totally moronic.

it is not moronic, but they are not seeing the whole picture. Back in 1999, lending standards were cut in the name of "fairness" and "equality" which heated up the market with buyers who had no business owning homes, could not afford to own homes, should never have owned a home, but the loans kept comming, opening up the flood gates, until the market was white hot. This started as a slow simmer, started to boil over and has now exploded. This was bad policy. There is no such thing as something for nothing, but unfortunatly I don't think we've learned the lesson. FHA is still backing back loans and it is common knowledge, among those who understand how the mortgage industry works, that FHA backed loans are the new sub-prime and are just going to continue the misery...as it seems forever. I can only hope for high interest rates, so homeownership becomes unaffordable except to those with lots of cash, who clearly know how to manage their money.

[Anonymous]

The radio show, This American Life, has an excellent episode showing how every level of the financial system was involved in the whole mortgage meltdown and among the major players were the people who bundled different "layers" of mortgages with different levels of risk and sold them as get-rich-quick investments. They must be included among those people who couldn't manage their own money and who sold us all down the river to finance their own greed.

[Anonymous]

If you're arguing that regulations from one party or another caused the housing crisis, then you have to say which regulations you are talking about. Blaming a particular party, without any specifics, isn't arguing.

As PPs have pointed out, lots of people got loans who shouldn't have received them. Some people should have known better and borrowed more than they could afford. But in the end, the banks shouldn't have lent to these people. And brokers pushed other people into the wrong loans, because brokers got (a) incentives called yield spread premiums for doing exactly this, and (b) didn't have a stake in the viability of the loan. In fact, most mortgage originators didn't have a stake in whether the loan made sense for the house buyer, because so much of it was securitized (i.e. bundled up into an instrument sort of like a mutual fund, and then sold to other people).

And who was regulating the housing industry while all this was going on? The Fed, let by Alan Greenspan, had a lot of authority but stated publicly numerous times during the early 2000s that they didn't intend to use it. Then the banking regulators were clearly over their heads and they were led by, now wait, which administration was that?