The Real Causes Of The Great Recession

[zeke]

Actually the full name is "Uniform Residential Loan Application". Fannie Mae form number 1003. Freddie Mac form number 65.
Want me to fax you one to look at? LMAO.

 

[Jarhead]

Actually the full name is "Uniform Residential Loan Application". Fannie Mae form number 1003. Freddie Mac form number 65.
Want me to fax you one to look at? LMAO.

you win Zeke.
I was out of line with you.

 

[zeke]

Remember asshole. You picked this shit calling me a liar about my time in the mortgage loan business. I really hate it when that happens.

Zeke doesn't like me...I get it...but he knows dam well I am correct

 

[zeke]

Accepted.

 

[g5000]

20% down , good credit, income verification and employment check.
No exceptions. Problem solved.

Not if you work at Goldman Sachs. That list is a big problem. That list is a huge obstacle between you and your fees.

 

[g5000]

And we haven't even touched on interest rate swaps.

 

[Jarhead]

Accepted.

Thanks. I put it in my signature...but still had to add a little dig for good old fashioned fun.

 

[Jarhead]

Actually the full name is "Uniform Residential Loan Application". Fannie Mae form number 1003. Freddie Mac form number 65.
Want me to fax you one to look at? LMAO.

and correct me if I am wrong....was there a special one for the NINA'S and the NINJA'S?

 

[LogikAndReazon]

Unfair to banks, "discriminatory" to certain borrowers. As loans should be.

 

[zeke]

Actually the full name is "Uniform Residential Loan Application". Fannie Mae form number 1003. Freddie Mac form number 65.
Want me to fax you one to look at? LMAO.

and correct me if I am wrong....was there a special one for the NINA'S and the NINJA'S?

Every Underwriter or Underwriting system that I worked with wanted to see information presented on a 1004.

 

[Jarhead]

Actually the full name is "Uniform Residential Loan Application". Fannie Mae form number 1003. Freddie Mac form number 65.
Want me to fax you one to look at? LMAO.

and correct me if I am wrong....was there a special one for the NINA'S and the NINJA'S?

Every Underwriter or Underwriting system that I worked with wanted to see information presented on a 1004.

lol.....

And how many times have you had a loan have to go BACK to underwriting when a small adjustment...sometimes a matter of a few dollars....is made?

 

[Jarhead]

Unfair to banks, "discriminatory" to certain borrowers. As loans should be.

That whole idea seems to have gone over the heads of many.....

The banks were told to show "fair lending" practices and offer more loans to minorities.....

It was not the banks' fault that the minorities had lower incomes and lower credit ratings....that was/is a social issue. THAT issue should have first been addressed.

But any politician that brought that up was labeled a racist.

 

[LogikAndReazon]

Different lending standards are needed for social justice.
The politicians that advocate for that should be imprisoned.

 

[bendog]

Unfair to banks, "discriminatory" to certain borrowers. As loans should be.

That whole idea seems to have gone over the heads of many.....

The banks were told to show "fair lending" practices and offer more loans to minorities.....

It was not the banks' fault that the minorities had lower incomes and lower credit ratings....that was/is a social issue. THAT issue should have first been addressed.

But any politician that brought that up was labeled a racist.

yes, but even with CRA would there have been an implosion with Glass Stegall? Imo, obviously not. And CRA did not require banks to issue subprime or ninja loans to people flipping property.

 

[zeke]

The banks were told to show "fair lending" practices and offer more loans to minorities.....

It was not the banks' fault that the minorities had lower incomes and lower credit ratings....that was/is a social issue. THAT issue should have first been addressed.

Hummm different banks, different markets I guess. The banks I wrote for had the same guideline for underwriting minority loans as they did non minority loans. Something about not being able to discriminate. If I had a black client turned down, I would subtly play the race card. Did not help.

I used to complain that on the bottom of the 1004 you have to check race and sex. I wanted to leave that out because underwriting didn't KNOW what minority or not minority they were underwriting.

Now in the sub prime market. Different ballgame. Why you think so many poor borrowers in questionable neighborhoods ended up with sub prime loans? Because the sub prime lender didn't care who they lent to. Though blacks in particular got knocked in the head on up front fees and back end points. Hell the sub prime guy was the only loan in town. What they gonna do?

You know what an "up sell" on the rate is? Over par pricing? How about "points" "origination fees"? Neither did the borrower. But they was a real big money maker. So you take a borrower who don't know shit from shinola about mortgage lending and offer to make a loan to them. Push the appraisal. Get them some cash in hand. You can
k i l l it on commission. That's discrimination. I never saw a white borrower get laid away like I saw some blacks.
True story.

Different banks different markets I guess. But I think I got a pretty good look at how the entire process went down. I worked for enough banks. I had already been in the business 10 years when the deregs went into effect. And I was writing business in Dayton Oh which, early on, led the nation in foreclosures for some time.

 

[Dad2three]

All false. But, hey, thanks for reinforcing the fact that conservatives are racist and hate the poor.

He's delusional to try to link ACORN into Bush and Cheney's Great Recession. If ACORN had that kind of ability, THEY would be the one passing out bonus checks today and NOT JPMorgan Chase, Citibank, Goldman Sachs, et al.

Whistle is so full of.... mud ..

Do you not see how foolish your statement is?

Nah....you probably don't.

What's false? That POLICY created and cheered under Dubya ISN'T responsible for the great recession, but Obama INHERITING a shitstorm and not getting US out of the ditch faster, as the GOP refused to help push, is the actual problem in right wing world???

You can't blame the GOP, N*ggerbama did not / does not want to create jobs.
Tell us about that JOB PARTICIPATION rate under this current administration.

8 YEARS OF DUBYA/GOP 'JOB CREATOR' POLICIES THE US LOST 1+ MILLION PRIVATE SECTOR JOBS. Even stopping end of 2007 it's only 4 million PRIVATE sector jobs. Since Obamacares was passed Feb 2010, ELEVEN MILLION PRIVATE SECTOR JOBS HAVE BEEN CREATED A net of 7+ million in less than 6 years


Bureau of Labor Statistics Data



Participation rate? lol


Retirement Among Baby Boomers Contributing To Shrinking Labor Force. According to The Washington Post, many economists agree the shrinking labor force participation rate is largely explained by a demographic shift, wherein "baby boomers are starting to retire en masse":

Demographics have always played a big role in the rise and fall of the labor force. Between 1960 and 2000, the labor force in the United States surged from 59 percent to a peak of 67.3 percent. That was largely due to the fact that more women were entering the labor force while improvements in health and information technology allowed Americans to work more years.

But since 2000, the labor force rate has been steadily declining as the baby-boom generation has been retiring. Because of this, the Federal Reserve Bank of Chicago expects the labor force participation rate to be lower in 2020 than it is today, regardless of how well the economy does.


The incredible shrinking labor force - The Washington Post


http:

 

[zeke]

CRA did not require banks to issue subprime

You are correct.

Banks never at any point in time "issued" sub prime loans to anybody.

Bank were not in the "sub prime" business. Not real honest to goodness banks.

Investment "banks" yes. But they aren't really banks.

And the CRA requirements applied to real honest to God banks. Where they have branches around town and cash checks and take deposits and make car and mortgage loan banks. Where you have a checking and savings account. CRA means Community Reinvestment Act. Where if you (the bank) were gonna accept deposits from a particular area, the bank ALSO had to make loan products available. And whether the bank did or not was monitored by the Feds. I attended enough training session on CRA.

Those "banks" did not "issue" sub prime mortgage loans.

Now all that aside. Banks DID buy mortgage broker operations and run them as sub prime shops. They would have separate sources of funding sub prime loans Different conduits to sell into.The bank itself did not want to be to closely aligned with the sub prime operations. Didn't fit the profile of a responsible bank.

National City out of Cleveland bought a Dayton/Cinci based broker and did sub prime business that way. I think they got bail out money to.

 

[Dad2three]

What did the Democrats want, and what impact did the alleged "funds" entail?

why is that relevant?

Or is it that you highly doubt such "antics" goes on in politics?

Imo, the pertinent question is why do the Banks so want to get rid of the Volker rule?

I get it that they don't care for Obama vilifying them, and the dems have lost Wall St as a major funding source .... although Hill may well change that back to where it was before Obama. But, why is it worth hundreds of millions for Wall St to bankroll the gop on this? It's not like Wall St is suffering from overregulation stifling profits.

I can only offer you my opinion as I am not on the board of one of the major banks.....and not privy to their thinking...

I believe they were very much taken aback by the way the President and democratic congress put the entire blame squarely on the banks. The banks knew that the President and congress was well aware of what took place during the collapse...so they saw Volker as one who was assigned to the task to simply come up with a reason that blames the banks...be it true or not...and any solution would be supporting a fallacy.

Again, just my opinion.

The banks were responsible, NINJA loans were standard fare, they stuck a mirror in front of your mouth and as long as you fogged it up you got the loan.
Most of the problems were with gullible buyers and ruthless banks.

I believe you are not aware of what NINJA loans were.....so I will explain it to you.

They were no income, no employment verification loans....BUT...

The applications were STILL reviewed by an independent underwriter for approval based on what was on the application....in other words the following still had to be met..

1) The income asserted by the applicant must meet the requirements for the loan
2) Current employment/assets must meet the criteria
3) The LTV must make sense

So the only way a NINJA loan contributed to the problem was if, in fact the applicant LIED on the application about income and job status.

So it is the banks fault if the applicant lied?

Are you aware that the application has 4 places to sign and all signatures have the affidavit wording below them?

FBI SAID 80% OF MORTGAGE FRAUD WAS MORTGAGE INSIDERS (NINJA LOANS!!!)

FBI mdash Financial Crimes Report 2007

"Another form of easing facilitated the rapid rise of mortgages that didn't require borrowers to fully document their incomes. In 2006, these low- or no-doc loans comprised 81 percent of near-prime, 55 percent of jumbo, 50 percent of subprime and 36 percent of prime securitized mortgages."

Q HOLY JESUS! DID YOU JUST PROVE THAT OVER 50 % OF ALL MORTGAGES IN 2006 DIDN'T REQUIRE BORROWERS TO DOCUMENT THEIR INCOME?!?!?!?

A Yes.




Q WHO THE HELL LOANS HUNDREDS OF THOUSANDS OF DOLLARS TO PEOPLE WITHOUT CHECKING THEIR INCOMES?!?!?

A Banks.

Q WHY??!?!!!?!

A Two reasons, greed and Bush's regulators let them.

FACTS on Dubya s great recession US Message Board - Political Discussion Forum




WHO WAS IN CHARGE IN THIS PERIOD? WHO HAD THE SEC, FBI, GSE'S, ETC AS PART OF THEIR EXECUTIVE BRANCH OVERSIGHT?


"The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence." William K. Black Sr. regulator during S&L debacle



“When regulators don’t believe in regulation and don’t get what is going on at the companies they oversee, there can be no major white-collar crime prosecutions,”...“If they don’t understand what we call collective embezzlement, where people are literally looting their own firms, then it’s impossible to bring cases.”


http://www.nytimes.com/2011/04/14/business/14prosecute.html?pagewanted=all&_r=0



Dubya was warned by the FBI of an "epidemic" of mortgage fraud in 2004. He gave them less resources.


FBI saw threat of loan crisis - Los Angeles Times



Shockingly, the FBI clearly makes the case for the need to combat mortgage fraud in 2005, the height of the housing crisis:

Financial Crimes Report to the Public 2005

FBI ? Financial Crimes Report 2005


The Bush Rubber Stamp Congress ignored the obvious and extremely detailed and well reported crime spree by the FBI.

THE BUSH ADMINISTRATION and GOP CONGRESS stripped the White Collar Crime divisions of money and manpower.



"Those selling the CDS's would not have been able to sell them if they had been required by regulators to maintain standard insurance reserves."


2004 Dubya allowed the leverage rules to go from 12-1 to 35-1 which flooded the market with cheap money!

The SEC Rule That Broke Wall Street

The SEC Rule That Broke Wall Street

 

[Dad2three]

Imo, the pertinent question is why do the Banks so want to get rid of the Volker rule?

I get it that they don't care for Obama vilifying them, and the dems have lost Wall St as a major funding source .... although Hill may well change that back to where it was before Obama. But, why is it worth hundreds of millions for Wall St to bankroll the gop on this? It's not like Wall St is suffering from overregulation stifling profits.

I can only offer you my opinion as I am not on the board of one of the major banks.....and not privy to their thinking...

I believe they were very much taken aback by the way the President and democratic congress put the entire blame squarely on the banks. The banks knew that the President and congress was well aware of what took place during the collapse...so they saw Volker as one who was assigned to the task to simply come up with a reason that blames the banks...be it true or not...and any solution would be supporting a fallacy.

Again, just my opinion.

The banks were responsible, NINJA loans were standard fare, they stuck a mirror in front of your mouth and as long as you fogged it up you got the loan.
Most of the problems were with gullible buyers and ruthless banks.

I believe you are not aware of what NINJA loans were.....so I will explain it to you.

They were no income, no employment verification loans....BUT...

The applications were STILL reviewed by an independent underwriter for approval based on what was on the application....in other words the following still had to be met..

1) The income asserted by the applicant must meet the requirements for the loan
2) Current employment/assets must meet the criteria
3) The LTV must make sense

So the only way a NINJA loan contributed to the problem was if, in fact the applicant LIED on the application about income and job status.

So it is the banks fault if the applicant lied?

Are you aware that the application has 4 places to sign and all signatures have the affidavit wording below them?

False NINJA laons were :

No Income ...............
No Jobs or Assets ..............

They wrere just exactly that and met those particular qualifications, hence the name!!

You are incorrect.....they were loans where income, assets and employment status the applicant listed on the application were not subject to verification.

But the applications ABSOLUTELY asked for income, assets and employment status...and the 4 places one would sign asserted under oath that the information was accurate to the best of their knowledge.

Just wanted to make sure you understood....those "victims" of the banks lied to get the loan.

BANKS (ACTUALLY MOST OF THIS WAS WALLS STREET BUBBA, THROUGH MORTGAGE BROKERS) CARED/ lol

A large portion of the the riskiest loans were taken out by speculators looking to cash in on the bubble. It wasn't just the underprivileged, financially illiterate primary residence seekers who were being pressured to sign the papers in same the way a car dealership pressures its customers. Had investors been informed that the securities they were buying were backed by speculative loans, it's unlikely that the bubble would've been as bad as it was.




Don't ask; don't tell: book profits, "earn" bonuses and closet your losses

The first document everyone should read is by S&P, the largest of the rating agencies. The context of the document is that a professional credit rater has told his superiors that he needs to examine the mortgage loan files to evaluate the risk of a complex financial derivative whose risk and market value depend on the credit quality of the nonprime mortgages "underlying" the derivative. A senior manager sends a blistering reply with this forceful punctuation:

Any request for loan level tapes is TOTALLY UNREASONABLE!!! Most investors don't have it and can't provide it. [W]e MUST produce a credit estimate. It is your responsibility to provide those credit estimates and your responsibility to devise some method for doing so.

The Two Documents Everyone Should Read to Better Understand the Crisis William K. Black

 

[bendog]

CRA did not require banks to issue subprime

You are correct.

Banks never at any point in time "issued" sub prime loans to anybody.

Bank were not in the "sub prime" business. Not real honest to goodness banks.

Investment "banks" yes. But they aren't really banks.

And the CRA requirements applied to real honest to God banks. Where they have branches around town and cash checks and take deposits and make car and mortgage loan banks. Where you have a checking and savings account. CRA means Community Reinvestment Act. Where if you (the bank) were gonna accept deposits from a particular area, the bank ALSO had to make loan products available. And whether the bank did or not was monitored by the Feds. I attended enough training session on CRA.

Those "banks" did not "issue" sub prime mortgage loans.

Now all that aside. Banks DID buy mortgage broker operations and run them as sub prime shops. They would have separate sources of funding sub prime loans Different conduits to sell into.The bank itself did not want to be to closely aligned with the sub prime operations. Didn't fit the profile of a responsible bank.

National City out of Cleveland bought a Dayton/Cinci based broker and did sub prime business that way. I think they got bail out money to.

I think the CRA thing was at best bogus, as it was a regulation not based upon making a market more transparent. But, the notion that the Fed lacked the power to tighten regulations on the mortgage industry was short sighted as well.

Of course the recession was largely on the bundling and selling of mortgages, mostly residential but some commercial. But, with institutions that sell private investors and govts securities, allowing them to buy and sell for themselves is really the heart of the matter. Insanity is repeating the same action to get a different result.