What was it that caused the mortgage crisis again? - Page 2 - Mercedes-Benz Forum

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post #11 of 20 (permalink) Old 09-26-2008, 05:15 PM
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Originally Posted by GermanStar View Post
Can't we all just agree that baby-boomers represent the most pathetic miscreant-riddled generation of piss-ant pork jello losers who have ever graced our great nation, and just move on?
Fuck. An. A. Right.
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post #12 of 20 (permalink) Old 09-26-2008, 05:29 PM
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post #13 of 20 (permalink) Old 09-26-2008, 05:51 PM
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The video covered 20% of the issue. Got the other 80% ready?

McBear,
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Being smart is knowing the difference, in a sticky situation between a well delivered anecdote and a well delivered antidote - bear.
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post #14 of 20 (permalink) Old 09-26-2008, 05:55 PM
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Originally Posted by Fast55 View Post
Those laws are exactly where the problem started. It was a dumbass way to help the poor. Everything in the video can be verified. I don't put all the blame on Democrats nor Obama, but I have a hard time swallowing all the bullshit posted in BWOT that blames NO ONE but G.B. and the republican party. By admitting that EVERYONE involved for the last 10-15 years has had a hand in this, you've earned your gold star for the day. Congratulations dear graduate.
NO, they are PART. Deregulation was much more as it allowed high risk debt load to increase in the market.

Nobody has ever said that Bush was the only problem. He was just the only one that was RESPONSIBLE for the past eight years to GOVERN the Financial Sector through the Commerce and Treasury Departments. And there is where he Failed.

So you can't say "Those laws are exactly where the problem started" any more than you can say "Allowing drinking at 21 is exactly where the problem started" when talking about rampant substance abuse. It is only an element, not a cause.

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post #15 of 20 (permalink) Old 09-26-2008, 10:27 PM
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post #16 of 20 (permalink) Old 09-27-2008, 02:38 AM
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Tried to watch the video but every time they bleeped out "faggot" I thought I was losing my hearing selectively. I got a few mortgage loans on investment properties with a fuckin' handshake, no questions asked back in the day. The bankers didn't care because in a month or so my loan would be sold to some entity in China or Russia or South Africa. Those fucking predators are the guilty ones, not the average Joe who just wants to own his own house and it is presented to him on a platter.

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post #17 of 20 (permalink) Old 09-27-2008, 08:16 AM
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"Alex Blumberg: The thing that got me interested in all this was something called a
NINA loan. Back when the housing crisis was still a housing bubble. A guy on the
phone told me that a NINA loan stands for No Income, No Asset, as in, someone will
lend you a bunch of money without first checking if you have any income or any
assets. And it was an official, loan product. Like, you could walk into a mortgage
broker’s office and they would say, well, we can give you a 30 year fixed rate, or we
could put you in a NINA. He said there were lots of loans like this, where the bank
didn’t actually check your income, which I found confusing. It turns out even the
people who got them found them confusing. For example, a guy I met named
Clarence Nathan. He worked 3 part time, not very steady jobs, and made a total of
roughly 45 thousand dollars a year roughly. He got himself into trouble and needed
money, so he took out a loan against his house. A big one.

Clarence Nathan: Call it 540 for round figures
Alex Blumberg: And you basically borrowed that from the bank and they
didn’t check your income?
Clarence Nathan: Right. It’s a no-income verification loan. They don't do
that. It's almost like you pass a guy in the street and say: lend me 540,000
dollars? He says, what do you do? (and you say) Hey, I got a job. OK. It seems that casual
even though there are a lot of papers that get filled out and stuff flies all over with the faxed and emails.
Essentially, that's ... that the process.
Alex Blumberg: Would you have loaned you the money?
Clarence Nathan: I wouldn't have loaned me the money. And nobody that I
know would have loaned me the money. I know guys who are criminals who
wouldn't loan me that and they break your knee-caps. I don’t know why the
bank did it. I’m serious ... 540 thousand dollars to a person w/bad credit.

Alex Blumberg: As it turns out, Clarence's friends, acquaintances and shadowy
criminal contacts would have been right not to lend him money. At the time I talked
to him, Clarence hadn’t made a payment in almost a year, and his house was in the
process of foreclosure.
Stories like this have been in the news for months. They often feature an innocent
homeowner who was duped by a lying, greedy mortgage banker. Or, if you’re more
of a Wall Street Journal editorial page type, an innocent mortgage banker who was
duped by lying, greedy homeowner. No doubt, both categories exist, but Clarence's
case is more nuanced...and much more common:

Clarence Nathan: Nobody came and told me a lie: just close your eyes and
the problem will go away. That's wasn’t the situation. I needed the money.
I'm not trying to absolve myself of anything. I thought I could do this and get
out of it within 6 to 9 months. The 6 to 9 month plan didn’t work so I’m stuck.
If somebody had told me I couldn’t borrow the money I probably would’ve
had to do something else more drastic and dramatic and not be in this
situation now. The bank made an imprudent loan. I made an imprudent loan.
We’re partners in this.

Alex Blumberg: This imprudent partnership is new, and is at the heart the current
housing crisis. For most of the history of banking, bankers wouldn’t have loaned
Clarence their money either. They didn’t let people like Clarence near their money, in
fact, people with part-time employment, and unpaid debts in their past. And then,
suddenly, in the early 2000’s, everything changed, banking turned on its head and
went out looking for partnerships with people like Clarence...loaning him half a
million dollars without even checking to see if he had a job. What happened?"

...

"...Individual mortgages are too big a hassle for the global pool of
money. They don't wanna get mixed up with actual people and their catastrophic
health problems or debilitating divorces, and all the reasons which might stop them
from paying their mortgages.
So what Mike and his peers on Wall Street did, was to figure out how to give the
global pool of money all the benefits of a mortgage – basically higher yield - without
the hassle or the risk.
So picture the whole chain. You have Clarence. He gets a mortgage from a broker.
The broker sells the mortgage to a small bank, the small bank sells the mortgage to
a guy like Mike at a big investment firm on Wall Street.
Then Mike takes a few thousand mortgages he’s bought this way, he puts them in
one big pile. Now he’s got thousands of mortgage checks coming to him every
month. It’s a huge monthly stream of money, which is expected to come in for the
next thirty years, the life of a mortgage.
And he then sells shares of that monthly income to investors. Those shares are
called mortgage backed securities. And the 70 trillion dollar global pool of money
loved them.
Mike Francis: it was unbelievable. We almost couldn’t produce enough to
keep the appetite of the investors happy. More people wanted bonds than we
could actually produce. That was our difficult task, was trying to produce
enough. They would call and ask “Do you have any more fixed rate? What
have you got? What’s coming?” From our standpoint it's like, there's a guy
out there with a lot of money. We gotta find a way to be his sole provider of
bonds to fill his appetite. And his appetite’s massive.
Alex Blumberg: The problem was, to make a mortgage backed security, you
needed mortgages, lots of them. So for Mike Francis to satisfy his demand, and take
his quite hefty fee from the global pool of money, he needed to buy up as many
mortgage pools as possible."

-Marty


"...pour out of one vessel into another; and as those old Romans robbed all the cities in the world, we skim the cream of other men's wits, pick the choice flowers of their tilled gardens to set our own sterile plots."
-a Richard Burton
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post #18 of 20 (permalink) Old 09-27-2008, 03:52 PM
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post #19 of 20 (permalink) Old 09-27-2008, 04:19 PM
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Great video!

And now they will try and blame the Gramm-Leach-Bliley act.

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post #20 of 20 (permalink) Old 09-27-2008, 04:44 PM
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Quote:
Originally Posted by mcbear View Post
NO, they are PART. Deregulation was much more as it allowed high risk debt load to increase in the market.

Nobody has ever said that Bush was the only problem. He was just the only one that was RESPONSIBLE for the past eight years to GOVERN the Financial Sector through the Commerce and Treasury Departments. And there is where he Failed.
So you can't say "Those laws are exactly where the problem started" any more than you can say "Allowing drinking at 21 is exactly where the problem started" when talking about rampant substance abuse. It is only an element, not a cause.
Here is a good opportunity to see the liberal "spin" and talking points.

NO President "governs" the financial sector, but, of course, liberals prefer to think that government regulation makes everyone safer from human nature.

The public laws that are being discussed, unless there is a designated separate oversight agency, are enforced by attorneys general (see Eliot Spitzer). The typical method of oversight is the "site visit", to check compliance with regulations. IRS is one of the few who will literally camp in the company office and monitor transactions; maybe SEC does this as well.

However, no credible statement has yet emerged that any financial institution has done anything illegal or violated any regulations. It's looking like just bad business judgment. And if that's the case, the Bush haters may have to go fish.

See my thread on "mark to market"

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--Hillary Rodham Clinton
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