The Last Mystery of the Financial Crisis

[Edgetho]

How quickly the TOPIC DRIFT has destroyed the thread.

This thread is about RATING AGENCIES not Freddie or Fanny or the private banks that created bonds.

This thread asks WHY only three rating agencies and why did they get it SO WRONG?

.

Gee, I dunno edit.

I'll have to ask Mr Brainiac....... (Cue Jeopardy music)

Can I guess?

BECAUSE FANNIE AND FREDDIE FUCKING LIED TO THEM?!!??!!

Because Fannie and Freddie were wrapping CRA and sup-prime bullshit loans in with Class A Home Loans and selling them as all Class A risks???

Now you may thank me. Because you are no longer as stupid as were before you read this post.

 

[zeke]

Link(s)?

Sure, I understand, it is just like the unemployment situation...

"People are not on unemployment for 2 years because there are no jobs. There are no jobs because people are on unemployment for 2 years."
The Rabbi

Proving your inability to learn, once again.

Translation...Link(s)...

Rabbi: NO

Did he (Rabi) really say that about the unemployment situation?

 

[The Rabbi]

Proving your inability to learn, once again.

Translation...Link(s)...

Rabbi: NO

Did he (Rabi) really say that about the unemployment situation?

Yes. I also supplied links to articles by leading economists saying the same thing. That's why idiots like yu and BigFurkingRetard are morons. You don't learn.

As for the mortgage crisis, I was a mortgage lender in B/C paper for 9 years prior to the crisis. I think my understanding of the situation far exceeds yours. Not that it would take much.

 

[zeke]

How quickly the TOPIC DRIFT has destroyed the thread.

This thread is about RATING AGENCIES not Freddie or Fanny or the private banks that created bonds.

This thread asks WHY only three rating agencies and why did they get it SO WRONG?

.

Gee, I dunno edit.

I'll have to ask Mr Brainiac....... (Cue Jeopardy music)

Can I guess?

BECAUSE FANNIE AND FREDDIE FUCKING LIED TO THEM?!!??!!

Because Fannie and Freddie were wrapping CRA and sup-prime bullshit loans in with Class A Home Loans and selling them as all Class A risks???

Now you may thank me. Because you are no longer as stupid as were before you read this post.

Your stupidity is showing. The rating agencies were supposed to audit (look it up if you don't know what an "audit" is.) loan files for quality assurance and complaince. They didn't. Or if they did, they looked the other way so as to keep their good business relationship going.

Kinda like what lenders did with appraisers. The ole "if you can't bring the house value in at X dollars, I know an appraiser who can and will." That happened all the time. Amazing how all a sudden those values were right in line with the purchase price.

You have any concept as to what "greed" can accomplish. If you are making enough money on something, you can believe anything.

You even know what the initials CRA mean? Without Google.

Fannie and Freddie went wrong. They got greedy. They did not start the housing mess. They were late comers actually. Franklin Raines should have gone to jail. Why didn't anyone go to jail for the fraud committed?

 

[CrusaderFrank]

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.

Read more here: Private sector loans, not Fannie or Freddie, triggered crisis | McClatchy

You think the subprime crack up was only three years in the making?

Wow

Fannie and Freddie set the standard for AAA and they're the once who gave subprime paper an AAA Rating.

No income? No Asset? Why sure you're AAA!

 

[The Rabbi]

Zeke, I am constantly amazed at how much you know. And how consistently what you know is wrong.

 

[zeke]

Translation...Link(s)...

Rabbi: NO

Did he (Rabi) really say that about the unemployment situation?

Yes. I also supplied links to articles by leading economists saying the same thing. That's why idiots like yu and BigFurkingRetard are morons. You don't learn.

As for the mortgage crisis, I was a mortgage lender in B/C paper for 9 years prior to the crisis. I think my understanding of the situation far exceeds yours. Not that it would take much.

Gee dude. I wrote mortgage loans for 18 years. 1988 through 2006. All through the housing collapse. From A paper to subprime. Fleet Mortgage, Wells Fargo, Savings of America and Countrywide. Fuk your idea that somehow you know more of the mortgage loan business than I do.

Actually, the idea that you wrote sub prime loans and are still so stupid as to what happened is weird.
Or you are lying.

 

[zeke]

Zeke, I am constantly amazed at how much you know. And how consistently what you know is wrong.

That's all you got? Well ain't that special. Care to prove what you think I am wrong about. Or is this just another of your "opinions" you like to present as "fact"?

 

[Edgetho]

Did he (Rabi) really say that about the unemployment situation?

Yes. I also supplied links to articles by leading economists saying the same thing. That's why idiots like yu and BigFurkingRetard are morons. You don't learn.

As for the mortgage crisis, I was a mortgage lender in B/C paper for 9 years prior to the crisis. I think my understanding of the situation far exceeds yours. Not that it would take much.

Gee dude. I wrote mortgage loans for 18 years. 1988 through 2006. All through the housing collapse. From A paper to subprime. Fleet Mortgage, Wells Fargo, Savings of America and Countrywide. Fuk your idea that somehow you know more of the mortgage loan business than I do.

Actually, the idea that you wrote sub prime loans and are still so stupid as to what happened is weird.
Or you are lying.

Nobody knows more about anything than a libtard that just read an article in Rolling Stoned.

Or Mother Jones.

Being wrong is Human. I'm married, so I'm wrong all the time.

But libtards? The reason they're so stupid is because they never admit to being wrong -- About anything -- Ever.

And when you're never wrong, you never rid yourself of bad ideas.

And you become a libtard. Dumb as a box of fukking rocks. All of them

 

[zeke]

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.

Read more here: Private sector loans, not Fannie or Freddie, triggered crisis | McClatchy

You think the subprime crack up was only three years in the making?

Wow

Fannie and Freddie set the standard for AAA and they're the once who gave subprime paper an AAA Rating.

No income? No Asset? Why sure you're AAA!

Frank. You are in over your head. The credit rating agencies are who rates portfolios of loans. Fannie and Freddie both wrote guidelines for A paper loans Frank. Never heard or wrote a loan that had the guidelines showing as a AAA loan.

What are those guidelines for AAA paper Frank? Paying cash?

 

[zeke]

Yes. I also supplied links to articles by leading economists saying the same thing. That's why idiots like yu and BigFurkingRetard are morons. You don't learn.

As for the mortgage crisis, I was a mortgage lender in B/C paper for 9 years prior to the crisis. I think my understanding of the situation far exceeds yours. Not that it would take much.

Gee dude. I wrote mortgage loans for 18 years. 1988 through 2006. All through the housing collapse. From A paper to subprime. Fleet Mortgage, Wells Fargo, Savings of America and Countrywide. Fuk your idea that somehow you know more of the mortgage loan business than I do.

Actually, the idea that you wrote sub prime loans and are still so stupid as to what happened is weird.
Or you are lying.

Nobody knows more about anything than a libtard that just read an article in Rolling Stoned.

Or Mother Jones.

Being wrong is Human. I'm married, so I'm wrong all the time.

But libtards? The reason they're so stupid is because they never admit to being wrong -- About anything -- Ever.

And when you're never wrong, you never rid yourself of bad ideas.

And you become a libtard. Dumb as a box of fukking rocks. All of them

You've been sucking on that bottle to long. It has made you slow. Read the part where I wrote loans for 18 years again. Before and during the housing collapse.

You know what CRA means without Google? Hell no. You would have answered if you did.

 

[Oddball]

Stupid article from one of the stupidest sources out there.

It was known Moodys and other ratings agencies had been overrating certain companies a mere few weeks after the collapse.

What's a mystery is how Rolling Stone still even has credibility in the music/entertainment scene.

 

[Edgetho]

Gee dude. I wrote mortgage loans for 18 years. 1988 through 2006. All through the housing collapse. From A paper to subprime. Fleet Mortgage, Wells Fargo, Savings of America and Countrywide. Fuk your idea that somehow you know more of the mortgage loan business than I do.

Actually, the idea that you wrote sub prime loans and are still so stupid as to what happened is weird.
Or you are lying.

Nobody knows more about anything than a libtard that just read an article in Rolling Stoned.

Or Mother Jones.

Being wrong is Human. I'm married, so I'm wrong all the time.

But libtards? The reason they're so stupid is because they never admit to being wrong -- About anything -- Ever.

And when you're never wrong, you never rid yourself of bad ideas.

And you become a libtard. Dumb as a box of fukking rocks. All of them

You've been sucking on that bottle to long. It has made you slow. Read the part where I wrote loans for 18 years again. Before and during the housing collapse.

You know what CRA means without Google? Hell no. You would have answered if you did.

I didn't write loans for thieves. I didn't work with thieves and liars.

I had a Series 7 NASD License.

So I know just a little bit about Finances. Quite a little bit.

You?

You sat in a fukking Office and entered shit on a Computer and the Computer either accepted it or rejected it. You didn't know shit from applebutter about what was going on in the world of finances. All you knew is what you were told. What some higher up told.

You never noticed the changes in Executives where you worked? How an Executive that had been there for years, doing a fairly good job, was shown the door for no good reason. Then some hot-shot came in and started kicking ass to get underlings like you to sell,sell, sell?

Did you not notice how the 'standards' were lowered to the point of non-existence?

You had to, but you didn't care. All you knew is that you making money hand over fist.

Me?

The people that listened to me didn't get hurt nearly as bad as the people that listened to you.

You? You were part of the problem. You were the guy sitting behind the desk lying his ass off to an unsuspecting public, raking in the dough.

I was the one trying to tell people not to listen to lying dirtbags like you.

Some did, far too many didn't.

I'm retired now. With a clear conscience. I didn't have to cheat anybody to make my money.

You?

You were part of the problem

 

[Bfgrn]

Proving your inability to learn, once again.

Translation...Link(s)...

Rabbi: NO

Did he (Rabi) really say that about the unemployment situation?

A direct quote. I copied, pasted and saved it. It tells you all you need to know about Rabbi.

 

[The Rabbi]

Did he (Rabi) really say that about the unemployment situation?

Yes. I also supplied links to articles by leading economists saying the same thing. That's why idiots like yu and BigFurkingRetard are morons. You don't learn.

As for the mortgage crisis, I was a mortgage lender in B/C paper for 9 years prior to the crisis. I think my understanding of the situation far exceeds yours. Not that it would take much.

Gee dude. I wrote mortgage loans for 18 years. 1988 through 2006. All through the housing collapse. From A paper to subprime. Fleet Mortgage, Wells Fargo, Savings of America and Countrywide. Fuk your idea that somehow you know more of the mortgage loan business than I do.

Actually, the idea that you wrote sub prime loans and are still so stupid as to what happened is weird.
Or you are lying.

You wrote mortgage loans for 18 years? BWAHAHAHA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! What a load of crap! Your posts here indicate you've never paid a mortgage, much less wrote one.

 

[The Rabbi]

Translation...Link(s)...

Rabbi: NO

Did he (Rabi) really say that about the unemployment situation?

A direct quote. I copied, pasted and saved it. It tells you all you need to know about Rabbi.

That I'm smarter than both of you put together. Then again, Tila Tequila's left nipple is smarter than both of you put together.

 

[Oddball]

How quickly the TOPIC DRIFT has destroyed the thread.

This thread is about RATING AGENCIES not Freddie or Fanny or the private banks that created bonds.

This thread asks WHY only three rating agencies and why did they get it SO WRONG?

.

Because the entire mess was one big incestuous racket from top to bottom.

Even money there was some payola involved.

 

[Bfgrn]

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.

Read more here: Private sector loans, not Fannie or Freddie, triggered crisis | McClatchy

You think the subprime crack up was only three years in the making?

Wow

Fannie and Freddie set the standard for AAA and they're the once who gave subprime paper an AAA Rating.

No income? No Asset? Why sure you're AAA!

Fannie, Freddie and the Foreclosure Crisis

Fannie and Freddie purchased risky loan products. As pressure mounted on their market share, Fannie and Freddie increased their purchases of nontraditional, higher risk mortgages, including investments in Alt-A loans and in private-label securities. Alt-A mortgages are loans to borrowers with good credit but using nontraditional underwriting standards. For example, Alt-A loans often use no or limited documents of income and assets. Originally, this practice was implemented to accommodate self-employed borrowers, but it could also be abused. A Federal Reserve review states that 50% to 60% of Alt-A loans generally involves low documentation, but that share increased to 78% by the end of 2006.

Fannie Mae’s 2008 Credit Supplement documents the weakened underwriting standards for loans purchased in 2005 and 2006 compared to earlier vintages. For example, Alt-A loans represented just 7.1% of mortgages from 2004 and earlier, but increased to 18.9% in 2005 to 2006. The prevalence of interest-only and negative amortization loans increased from 2.3% to 14.6%. Adjustable-rate loans increased from 8.5% to 14.9%.

Fannie and Freddie also started purchasing private-label mortgage-backed securities, inverting the process that had been in place for three decades whereby the agencies bought whole loans to securitize and sell to investors. According to FHFA’s Annual Report to Congress, Fannie and Freddie purchased $5.7 billion in private-label securities in 1997, or about 4.8% of new issuance. The volume continued to grow in the 2000s, peaking at $221.3 billion in 2005. However, Fannie and Freddie never accounted for more than a quarter of private-label security purchases in a given year and that share was falling as yield spreads on private-label securities declined and real estate prices approached their peak.

Alt-A loans and mortgage-backed securities are investments that seemed low risk at the time, by virtue of high borrower credit scores or credit rating agency determinations. For example, the average FICO score on an Alt-A mortgage originated between 2005 and 2007 held by Fannie Mae is 715, a reasonably strong score. Similarly, while built on risky mortgages, Fannie and Freddie generally limited themselves to theoretically lower risk senior tranches of mortgage-backed securities. Fannie Mae’s 2006 SEC filing states that over 90% of its private-label mortgage-backed securities as of June 30, 2007 were rated AAA by Standard & Poor’s and Moody’s.

- See more at: Center for Community Capital



A Closer Look at Fannie Mae and Freddie Mac:
What We Know, What We Think We Know and What We Don’t Know

Jason Thomas
Department of Finance
George Washington University

Robert Van Order
Oliver Carr Chair in Finance and Real Estate
George Washington University

March 2011

We explore the role of housing policy in the collapse of Fannie Mae and Freddie Mac, the role of Fannie and Freddie in subprime markets and the sources of their default losses. We do not find evidence that their crash was due much to government housing policy or that they had an essential role in the development of the subprime mortgage-backed securities market, which occurred outside of the normal mortgage origination channels and which was funded by non agency or “private label” securities (PLS). They did build a large portfolio of AAA-rated PLS, probably in response to affordable housing goals, but such investments were unlikely to have had much of an impact on subprime mortgage origination volume because the AAA pieces of PLS deals were not key to their completion. Nor were PLS a major part of their losses. Rather than brewing for a long time, their downfall was quick, primarily due to mortgage originated in 2006 and 2007. It had little to do with their much-criticized portfolios, and was mostly associated with purchases of risky-but-not-subprime mortgages and insufficient capital to cover the decline in property values.

 

[CrusaderFrank]

Once more for the hard of thinking, F/F were the Federal government setting the AAA Standard, everyone worked back from there. So when F/F said NINA loans were AAA the industry did a Frank Pentangeli and said, "Yeah! Sure!"

 

[The Rabbi]

Once more for the hard of thinking, F/F were the Federal government setting the AAA Standard, everyone worked back from there. So when F/F said NINA loans were AAA the industry did a Frank Pentangeli and said, "Yeah! Sure!"

Yes. The actual volume of loans bought by Fn/Fr doesn't matter. All the loans originated were underwritten to their standards,barring the small sub prime market. As their standards were watered down to increase the potential lending pool their risk increased. And we saw the result.