Thanks for helping in this failure...

[Guest Len]

Not quite. You can't blame the CRA for bad decisions by banks or by potential homeowners to buy more than could afford. Republicans like to talk personal responsibility, but then blame a government policy when people misbehave. Am I missing something?

(Note: Some of the banking policies that led to the current fiasco went above and beyond anything the CRA called for.)

As for the whole bailout. Question: Can anyone convince me doing NOTHING would be better than the bailout or would cost less? (Remember, the govt will get its 700 billion back with interest/dividends/stock appreication assuming the economy does not totally collapse into a Mad Max kind of scenario.)

+1 c.a.s! This whole thing is the baby of the liberal policies of the Carter administration and the little thing called the Community Reinvestment Act or CRA for short. CRA was further pushed and deregulated by Slick Willy in the 1990's.

This act compels banks to make loans to low income borrowers, and what its supporters call "communities of color". Thanks to the CRA, these loans are made, even if an individuals finances do not fall within the "guide lines" or "rules" of a home mortgage.

[Guest db99wj]

Actually it is not a loan, but a purchase of assets. We could either sell them back to the lender or hold them for 5-7 yrs and when values go back up, sell them off. Most of thee companies, like AIG, are not broke, their problem is they have no liquidity. These are the same companies that offer the short range, 1 day to 30 day loans to corporations who use it for emergency procurement or wages. This is why it is so dangerous, w/o that short term capital the economy comes to a huge grinding halt.

You are very correct about AIG. Their mortage division is what sucks it. Their insurance division is doing fine.

The whole problems goes back to Real Estate, the rest of the market is doing ok, but because of Real Estate being a major part of the foundation of our economy, things are not good. Bad loans, bad underwriting, bad pricing, bad decisions, bad policy. The housing market needed to fall. Home prices have balooned over the past 10-15 years and needed to come back down. A starter home should not cost 300K. Many areas of the country this is true. Once this is over, the real estate market will be at a level that is realistic. Because we learn from our past mistakes, usually, there will be new policies in place, yes there will be governmental policies, but also new policies in the private sector. Banks, mortgage companies, multidivisional national/international companies (AIG for example) will have new policies and new practices in place to hopefully not get into this situation again. The economy is a cycle. There are periods of good times, there are period of not so good times, this happenes to be a really really not so good time. Who's to blame, Republicans, Democrats, private enterprise, the consumer, life? Yes. I think it is going to get worse, then it will start to recover. I do think our system is fundamentally sound as McCain has said, I do think there are many things that need to be fixed with it like others have said, it is not perfect, thank God I live in a country that can and is willing to fix the problems, and is attempting to safe guard the people as much as they can.

Just my , my opinion, rant over.

[Tim Nunan]

BTW 95 Dems in the House voted against the measure. Guess even new era socialism is distasteful to some on that side of the aisle. Nearly 70% of the Reps. voted for this bill, to them I say happy campaigning.

If only 10 of those 95 Dems had voted for the bill it would have passed. Having the majority in the House the Dems should be able to pass whatever bill they like.

[fury2neon]

Where were you guys in the other thread about this!?????

Was I not in the other thread too!?!?! I must have missed it...

[fury2neon]

Not quite. You can't blame the CRA for bad decisions by banks or by potential homeowners to buy more than could afford.

When the Clinton Administration threatened banks with prosecution if they did not make the initial risky loans, it became the governments fault. Businesses that want to stay in business would not have made those type loans without the threat of government force.

Edited October 1, 2008 by fury2neon

[Guest m4coyote]

Staff from the US Senate Banking Committee has admitted that by 1997, $100 billion in these types of loans had been made. By the present day, it is estimated that over $1 trillion in CRA loans have been made.

"Community" groups like ultra honest ACORN benefited from a process that seems like legalized extortion. The law is set up so that bank mergers, branch expansions, or even a new branch can be stopped in its tracks if a CRA "protest" is issued by a "community group". They use this to extort millions from lending institutions, and as icing on the cake, they force the banks to accept a certain amount of known dud loans within the community.

This information comes from an article from LewRockwell.com entitled "The Government- Created Subprime Mortgage Meltdown" @ http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

[Guest anvil]

Vote out every incumbent in November. from both parties. If you don't want to do that then quit crying about how bad these guys are.

+1

[Guest m4coyote]

jackdog & anvil,

Voting against every incumbent is precisely my agenda, but I refuse to vote for anyone on the socialist liberal ticket.

[Guest Major Pain]

I also think our fundamental system is sound but its hope and change toward socialism that bothers me.--MP

[Guest Honest AK]

"+1 c.a.s! This whole thing is the baby of the liberal policies of the Carter administration and the little thing called the Community Reinvestment Act or CRA for short. CRA was further pushed and deregulated by Slick Willy in the 1990's.

This act compels banks to make loans to low income borrowers, and what its supporters call "communities of color". Thanks to the CRA, these loans are made, even if an individuals finances do not fall within the "guide lines" or "rules" of a home mortgage."

"When the Clinton Administration threatened banks with prosecution if they did not make the initial risky loans, it became the governments fault. Businesses that want to stay in business would not have made those type loans without the threat of government force."

Staff from the US Senate Banking Committee has admitted that by 1997, $100 billion in these types of loans had been made. By the present day, it is estimated that over $1 trillion in CRA loans have been made.

"Community" groups like ultra honest ACORN benefited from a process that seems like legalized extortion. The law is set up so that bank mergers, branch expansions, or even a new branch can be stopped in its tracks if a CRA "protest" is issued by a "community group". They use this to extort millions from lending institutions, and as icing on the cake, they force the banks to accept a certain amount of known dud loans within the community.

This information comes from an article from LewRockwell.com entitled "The Government- Created Subprime Mortgage Meltdown" @ http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

I want to make sure I understand what y'all are saying.

If we had just kept poor people and minorities from getting loans, we wouldn't be in this mess?

There were enough of these no good poor people defaulting on CRA loans to stall the most powerful economic engine in the world all by themselves?

[Guest m4coyote]

No, loans to minorities and poor people were not the entire cause of of the problem. There is absolutely nothing wrong with minorities or poor people getting loans, or living in a decent home - so long as they intend to actually make the monthly payments. Many of these loans were made to people who never made the first mortgage payment, and consequently destroyed the home before being forced out by the courts after a foreclosure.

When banks are forced by socialist laws to make home loans to people who obviously can't repay them, or have no intention to repay them, the hot potato starts getting passed around. This snowball really started to roll during the Clinton administration, and has resulted in the avalanche we see today.

As an example, if we take a dud loan for $100,000 that a bank was strong armed into making, and then sell off this loan as a triple A mortgage backed security for $3.00 to to as much as $100.00 for every dollar on that loan amount, then the result is obvious. To stay in business, banks & lending institutions sell the home loans they generate. The companies that purchase these mortgages and securities hold on to them and make profits from the interest payed by the homeowners. An over inflated home market coupled with greed (from banks, lending institutions, and home buyers), fueled this fire, but the CRA played a large part in fanning the flames.

[Guest Honest AK]

I thought a large number of these failed subprime loans were through finance companies, like Countrywide, that weren't obligated to give loans based on the CRA.

Lenders like these are not FDIC insured so they aren't "forced" to do anything by the CRA.

Do you have a link that proves many of these CRA loans ended with the customer never paying on the loan and destroying the property?

What percentage of these failed loans that threaten to collapse the economy were CRA loans?

[Smith]

I want to make sure I understand what y'all are saying.

If we had just kept poor people and minorities from getting loans, we wouldn't be in this mess?

There were enough of these no good poor people defaulting on CRA loans to stall the most powerful economic engine in the world all by themselves?

Yes, Socialism has broken almost every nations economy that has tried it. The only counter example is China and that is only because they moved economically towards an open market.