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Please name the regulation that said that any bank had to give a loan to someone with No Income, No Job, No Assets? Please name the laws that are (you claim) s

by olefoo 18y ago

Please name the regulation that said that any bank had to give a loan to someone with No Income, No Job, No Assets? Please name the laws that are (you claim) still forcing banks to make loans to unqualified borrowers. Now I would agree that there were many failures of regulation in the mortgage industry; but if you are trying to claim that things like http://www.usdoj.gov/crt/housing/title8.php http://www.usdoj.gov/crt/housing/title8.php forced banks into making bad loans you are full of shit. Racist shit, that doesn't even make sense. But since you can't even name the "laws that forced banks to give out loans to those people." I'm guessing that you or your fellows will try to nail me on the use of profanity rather than addressing the facts.

opticksversi 18y ago
Racist shit To what, specifically, in his comment are you referring?
- olefoo 18y ago
  """There are, in fact, laws that forced banks to give out loans to those people. Laws which have not been repealed. Entire non-profit groups making sure those laws were enforced, and who have not learned anything from what happened.""" Oddly enough, the original commenter does not actually name the laws that allow "those people" to get loans to the detriment of us all.
mynameishere 18y ago
“We can put light where there’s darkness, and hope where there’s despondency in this country. And part of it is working together as a nation to encourage folks to own their own home.” http://www.nytimes.com/2008/12/21/business/21admin.html?hp http://www.nytimes.com/2008/12/21/business/21admin.html?hp But it's more complicated than that. The government subsidized housing speculation through tax cuts, subsidized mortgage security speculation through Fannie Mae/Freddie Mac's implicit guarantee, created artificial liquidity through the Fed that allowed the stock/commodity/housing bubble that just popped. “Tonight, I propose a new tax cut for homeownership that says to every middle-income working family in this country, if you sell your home, you will not have to pay a capital gains tax on it ever — not ever.” http://www.nytimes.com/2008/12/19/business/19tax.html http://www.nytimes.com/2008/12/19/business/19tax.html The one regulation that they removed (and shouldn't have) dealt with leveraging requirements.
mhartl 18y ago
The Federal Fair Housing Act (which you linked to) isn't meant to force bad loans, but that is an inevitable consequence. Briefly, the Act has provisions such as the following (http://www.hud.gov/offices/fheo/lending/index.cfm http://www.hud.gov/offices/fheo/lending/index.cfm): The Fair Housing Act makes it unlawful to engage in the following practices based on race, color, national origin, religion, sex, familial status or handicap (disability): - Refuse to make a mortgage loan - Refuse to provide information regarding loans - Impose different terms or conditions on a loan, such as different interest rates, points, or fees - Discriminate in appraising property - Refuse to purchase a loan or set different terms or conditions for purchasing a loan The problem is that creditworthiness is correlated with some of the forbidden factors. For example, a bank denying loans to applicants with low incomes will, as a side-effect, disproportionately deny loans to African-American applicants, simply because African Americans have lower incomes on average than other ethnic groups. In order to avoid penalties for discrimination, banks must therefore lend to people whose credit doesn't justify the loan. (Of course, this was never the intent of the Act, but it's called the Law of Unintended Consequences for a reason.)

by olefoo 18y ago

opticksversi 18y ago

Racist shit To what, specifically, in his comment are you referring?

olefoo 18y ago
"""There are, in fact, laws that forced banks to give out loans to those people. Laws which have not been repealed. Entire non-profit groups making sure those laws were enforced, and who have not learned anything from what happened.""" Oddly enough, the original commenter does not actually name the laws that allow "those people" to get loans to the detriment of us all.

mynameishere 18y ago

“We can put light where there’s darkness, and hope where there’s despondency in this country. And part of it is working together as a nation to encourage folks to own their own home.” http://www.nytimes.com/2008/12/21/business/21admin.html?hp http://www.nytimes.com/2008/12/21/business/21admin.html?hp But it's more complicated than that. The government subsidized housing speculation through tax cuts, subsidized mortgage security speculation through Fannie Mae/Freddie Mac's implicit guarantee, created artificial liquidity through the Fed that allowed the stock/commodity/housing bubble that just popped. “Tonight, I propose a new tax cut for homeownership that says to every middle-income working family in this country, if you sell your home, you will not have to pay a capital gains tax on it ever — not ever.” http://www.nytimes.com/2008/12/19/business/19tax.html http://www.nytimes.com/2008/12/19/business/19tax.html The one regulation that they removed (and shouldn't have) dealt with leveraging requirements.

mhartl 18y ago

The Federal Fair Housing Act (which you linked to) isn't meant to force bad loans, but that is an inevitable consequence. Briefly, the Act has provisions such as the following (http://www.hud.gov/offices/fheo/lending/index.cfm http://www.hud.gov/offices/fheo/lending/index.cfm): The Fair Housing Act makes it unlawful to engage in the following practices based on race, color, national origin, religion, sex, familial status or handicap (disability): - Refuse to make a mortgage loan - Refuse to provide information regarding loans - Impose different terms or conditions on a loan, such as different interest rates, points, or fees - Discriminate in appraising property - Refuse to purchase a loan or set different terms or conditions for purchasing a loan The problem is that creditworthiness is correlated with some of the forbidden factors. For example, a bank denying loans to applicants with low incomes will, as a side-effect, disproportionately deny loans to African-American applicants, simply because African Americans have lower incomes on average than other ethnic groups. In order to avoid penalties for discrimination, banks must therefore lend to people whose credit doesn't justify the loan. (Of course, this was never the intent of the Act, but it's called the Law of Unintended Consequences for a reason.)