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Facts leading up to the housing bubble that broke our economy; "Just the facts ma'am just the facts"
Topic Started: Dec 21 2013, 04:04 AM (1,983 Views)
Berton
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Mountainrivers
Dec 21 2013, 06:50 AM
Berton
Dec 21 2013, 06:48 AM
Mountainrivers
Dec 21 2013, 06:47 AM
Berton
Dec 21 2013, 06:44 AM
Who applied for the loan? The borrower or the lender?

The borrower, based on the information he was given by the salesman.

The lender was not the salesman though was he?

The lender sets the terms of the loan. If the lender didn't think the buyer could pay back the loan, he shouldn't have made it.

http://www.capitalnewyork.com/article/politics/2011/11/3971362/bloomberg-plain-and-simple-congress-caused-mortgage-crisis-not-bank

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Mountainrivers
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Berton
Dec 21 2013, 06:52 AM
Mountainrivers
Dec 21 2013, 06:50 AM
Berton
Dec 21 2013, 06:48 AM
Mountainrivers
Dec 21 2013, 06:47 AM
Berton
Dec 21 2013, 06:44 AM
Who applied for the loan? The borrower or the lender?

The borrower, based on the information he was given by the salesman.

The lender was not the salesman though was he?

The lender sets the terms of the loan. If the lender didn't think the buyer could pay back the loan, he shouldn't have made it.

http://www.capitalnewyork.com/article/politics/2011/11/3971362/bloomberg-plain-and-simple-congress-caused-mortgage-crisis-not-bank

I disagree and have to go to a party so I can't continue with this argument, but you can't show where the government ever told banks to make bad loans and I repeat, "The lender sets the terms of the loan. If the lender didn't think the buyer could pay back the loan, he shouldn't have made it."
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Berton
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They didn't have to say that. All they had to do harass them into doing it.

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Mountainrivers
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Berton
Dec 21 2013, 07:09 AM
They didn't have to say that. All they had to do harass them into doing it.

Then show where they did that.
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Neutral
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The gov't did tell the bankers to make bad loans and it has been proven on this thread. The bankers didn't give a crap as those loans were guaranteed.
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Mountainrivers
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Neutral
Dec 21 2013, 08:40 AM
The gov't did tell the bankers to make bad loans and it has been proven on this thread. The bankers didn't give a crap as those loans were guaranteed.
The government did not tell the bankers to make bad loans and you can't show that they did. You are a liar. The loans were not guaranteed, although the government bailed them out anyway.
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ngc1514
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Berton
Dec 21 2013, 06:44 AM
Who applied for the loan? The borrower or the lender?

Anyone can apply for a loan. The lender has the fiscal responsibility to those providing the resources for the loan to be sure the borrower can pay it back. The NINJA loans were a complete failure to that responsibility.
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tomdrobin
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Dec 21 2013, 08:40 AM
The gov't did tell the bankers to make bad loans and it has been proven on this thread. The bankers didn't give a crap as those loans were guaranteed.
They weren't guaranteed. The government just bailed out the banks and AIG to keep the crisis from being even worse. This is about deregulation. Specifically the repeal of Glass-Steagall during the Clinton administration under pressure from the GOP legislature.
http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Legislation

Also, some in the government voiced concerns about the non regulation of dirivatives (ie; Brooksley Born), but were stifled by the Bush administration.
http://www.pbs.org/wgbh/pages/frontline/warning/view/
Greenspan believed the markets could self regulate, which he know says was a mistake. Everyone was looking for quick and easy money. Ratings agencies were rating the subprime securities AAA.

After the great depression safeguards were put in place. But, the GOP pushed to have them dismantled. Bad idea, just like supply side economics.
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Pat
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In your back and forth arguments you guys ignored an important point. The lenders were packaging the loans and selling them to larger bankers who were in turn packaging them and selling them as A rated investments backed by property. There was not interest in the loan originator as to whether the loan would be solid or default, they in many cases had already sold the loans in the secondary market before the buyer took possession of the homes. The loan officers, appraisers, and loan sale force wanted to churn as many loans as possible and extract a much commission as possible.
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Neutral
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Fannie and Freddie were government backed, it's amazing how some either did not know what went on or refuse to admit the facts. The Bush admin warned them several times about the housing bubble and they would do nothing.
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