"No, Marco Rubio, government did not cause the housing crisis"

[soulflower]

And just who was it that "deregulated" the market? Why, the government, of course.

Who lobbied the government to deregulate the market? Wall Street.

So the problem was the lack of government intervention in the market, not "too much government" intervention...

P.S. The cited blog is guilty of pulling a strawman at the outset, but we'll let that one slide.

I thought the Daily Kos post was amusing but I posted the link to the Washington Post article as well...

[BiggSeth]

Well, one of 2 things here. Either you weren't alive back then, or you flunked history/current events. Either one explains a lot. BTW - folks didn't have cell phones with built-in video back in the day (when this crap started).

what is this CRAP with the "cell phone" line of diverson today?

the gubment was in bed with the banks, each got what they wanted:

Banks

• more suckers to get on the hook for more $$$ than they could ever hope to repay
• a blank check to gamble on bad loans
• repayment for the losses they generated with shoddy loans

politicians

• points with the racebait, inc. crowd for getting loosened criteria on mortgages
• points with the handout society, as they all got a new house and cash back at closin! for that new T.V.!
• kickbacks and sweetheart mortgages for themselves from said banks

what do the facts have to do with video cellphones?

[soulflower]

Banks

• more suckers to get on the hook for more $$$ than they could ever hope to repay
• a blank check to gamble on bad loans
• repayment for the losses they generated with shoddy loans

politicians

• points with the racebait, inc. crowd for getting loosened criteria on mortgages
• points with the handout society, as they all got a new house and cash back at closin! for that new T.V.!
• kickbacks and sweetheart mortgages for themselves from said banks

what do the facts have to do with video cellphones?

The government wanted to end institutional discrimination, which has zero to do with the Subprime mortgage mess.

The banks thought it would be a good idea to lend to people who couldn't prove they had the means to pay back the loans. Nobody from either party questioned what these lenders were doing until the economy tanked.

[Chesapeake Spirit]

what is this CRAP with the "cell phone" line of diverson today?

the gubment was in bed with the banks, each got what they wanted:

Banks

• more suckers to get on the hook for more $$$ than they could ever hope to repay
• a blank check to gamble on bad loans
• repayment for the losses they generated with shoddy loans

politicians

• points with the racebait, inc. crowd for getting loosened criteria on mortgages
• points with the handout society, as they all got a new house and cash back at closin! for that new T.V.!
• kickbacks and sweetheart mortgages for themselves from said banks

what do the facts have to do with video cellphones?

No intentional line of diversion, I misread your statement about politicians strutting in front of the cameras (speed reading has its drawbacks). It's a minor point really. The major point is that you are claiming that there was no racial discrimination when it came to lending back in the 60's and 70's. I'm not saying that bankers and politicians don't exploit the opportunities presented in these scenarios, but discrimination existed and affected folks that could qualify for loans. To say otherwise is blatant denial.

[Chesapeake Spirit]

The government wanted to end institutional discrimination, which has zero to do with the Subprime mortgage mess.

The banks thought it would be a good idea to lend to people who couldn't prove they had the means to pay back the loans. Nobody from either party questioned what these lenders were doing until the economy tanked.

I wouldn't say that it had nothing to do with the Subprime mess, but not as much as some would have you believe.

[soulflower]

I wouldn't say that it had nothing to do with the Subprime mess, but not as much as some would have you believe.

It's a stretch at best.

Subprime lenders were not subject to the CRA or any other similar regulations against discrimination...

[flyboy56]

We had a housing bubble created by low interest rates, easy loan approval through Alt-A (liar loans), Option ARM ( suicide loans), and adjustable rate loans that started at a low introductory rate and then jumped to the normal rate. Demand was created and supply was available. Housing prices rose faster than incomes. When demand did eventually slow down the housing prices collapsed. The first to suffer were those who had the low introductory adjustable interest rate sub-prime loans. And so one until it started to effect homeowners who had solid fixed rate mortgage loans. Everyone from the government, banks, mortgage companies and the homeowners who believed they could get something for damn near nothing were to blame. The easing of the housing regulations started with George Bush Sr., with further easing by Clinton and ended with George Jr. who did make several attempts to get congress to fix the problem but it was already too late.

[Joy in Mudville]

Yes, Soulflower, Government was the root cause. It pressured banks to provide mortgages to those who would not normally qualify, and Government kept interest rates low when they should have gone up, and Government kept looking the other way when voices spoke up of 'issues' at the Fannies.
The whole housing crises has government induced cluster ef written all over it.

A chain of events that started with Carter.

And you know what the next government induced cluster ef is already in full progress, it is called 0-care.

You are completely and totally wrong on all counts. Government didn't pressure the indendent mortgage companies like Countrywide and American Mortgage to underwrite crappy loans. In actuality, these companies operated outside of federal regulations. The Banks that were regulated and issued loans pursuant to CRA regulations found that their loans had a substantially lower rate of default than the loans issued by the indpendents. Furthermore, government didn't pressure the idiots at WaMu or Bank of American to gobble up these fly by night companies, nor did the government pressure Morgan Stanley or Goldman or Bear Stearns into buying these lousy mortgages by the boat load. Government had nothing to do with credit default swaps or collatalized debt obligations and the government didn't force the idiots at Deutsch Bank into buying them. The government also didn't give them triple A ratings and the government didn't pressure AIG into insuring them.

In other words, you are completely and totally ill-informed about the causes of the financial crisis.

[flyboy56]

There was no need for the government to pressure any lending company. Everyone truly believed the housing market rise in prices due to demand through easy money policies and housing availability would go on forever. The idea that the housing price bubble would go on forever is absolutely laughable considering those who believed this were ivy league economists and financiers, some who are now in high government positions telling us the economy and housing market is making a comeback. If the housing price collapse never took place everyone would be doing just great today.

[SemiAuto]

Who lobbied the government to deregulate the market? Wall Street.

So the problem was the lack of government intervention in the market, not "too much government" intervention...

Not exactly. What the government and Wall St. did was to set up perverse incentives. The result was that profits were privatized and losses were socialized. It takes two to tango in crony social capitalism. On of those players is definitely the government.

I thought the Daily Kos post was amusing but I posted the link to the Washington Post article as well...

This is the problem with extremist progressive sites like the Kos. They agitate for bigger government and then lament the results and blame everyone else. At some point it would be nice for them to see that centralizing wealth and power in Washington is not going to turn out well for them.

[ivanbalt]

Financial crisis in a nutshell:

Greed - Bankers, Realtors, Wall St, Mortgage Companies, etc.

Stupidity - People buying homes that they clearly couldn't afford as well as not understanding how their mortgage actually works.

Incompetence - The government (both parties) who sat by and watched it all happen because "home ownership" was on the rise and their greedy friends/contributors/masters were making lots of money.

[johnpolitics]

I use to work in the industry. Part of the problem was real estate brokers, getting paid on commission and getting people into homes they couldn't afford. The banks also "played" with the loan docs helping people qualify. Many of these people received "bonus" money each month for closed loans.

[soulflower]

I use to work in the industry. Part of the problem was real estate brokers, getting paid on commission and getting people into homes they couldn't afford. The banks also "played" with the loan docs helping people qualify. Many of these people received "bonus" money each month for closed loans.

A lot of existing homeowners refinanced to take advantage of the inflated equity and got stuck with Subprime loans...

[ODENTON]

I guess Rubio didn't learn a thing from Lying Ryans implosion.

[Contumacious]

How Crackpot Egalitarianism Caused the Sub-Prime Mortgage Crisis

by Thomas J. DiLorenzo


"In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing credit requirements on loans that it will purchase . . . [to] encourage . . . banks to extend home mortgages to individuals whose credit is generally not good . . . . Fannie Mae is taking on significantly more risk."

~ New York Times, September 30, 1999

The main cause of the current economic crisis is the boom-and-bust cycle that was caused by the Greenspan Fed. Years of artificially-lowered interest rates caused trillions of dollars in mal-investment in real estate and other industries,...."


.

[Joy in Mudville]

How Crackpot Egalitarianism Caused the Sub-Prime Mortgage Crisis

by Thomas J. DiLorenzo


"In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing credit requirements on loans that it will purchase . . . [to] encourage . . . banks to extend home mortgages to individuals whose credit is generally not good . . . . Fannie Mae is taking on significantly more risk."

~ New York Times, September 30, 1999

The main cause of the current economic crisis is the boom-and-bust cycle that was caused by the Greenspan Fed. Years of artificially-lowered interest rates caused trillions of dollars in mal-investment in real estate and other industries,...."


.

and the game of financial collapse whack a mole continues...

More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions….Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.”

You guys just can't allow yourselves to accept the fact that an unregulated private financial market torpedoed the economy.

[flyboy56]

and the game of financial collapse whack a mole continues...

More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions….Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.”

You guys just can't allow yourselves to accept the fact that an unregulated private financial market torpedoed the economy.

It wasn't the subprime loans that caused the housing market to collapse. It was a housing bubble that all of the experts expected to last forever. When demand slowed down home prices started to collapse and the rest is history. Everyone from the government, banks and mortgage companies, real estate brokers and agents and people who believed they were getting a sure money making deal for little risk all played a roll in the housing market bubble and eventually a collapse. It was George Bush Sr. who actually signed the Housing bill that make it easier for low income families to buy a home. In 2008 George Bush Jr. signed a bill that attempted to put more stringent regulations on Fannie Freddie but it was too little too late. The damage was done.

[Contumacious]

and the game of financial collapse whack a mole continues...

More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions….Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.”

You guys just can't allow yourselves to accept the fact that an unregulated private financial market torpedoed the economy.

Obviously, you do not know the meaning of the word "regulate" - the government supremacists control every aspect of our lives.

The subprime mortgage issue is similar to the gun control. The bastards create "gun free zones" then when something goes wrong they blame firearm owners.

"The thousands of mortgage defaults and foreclosures in the "subprime" housing market (i.e., mortgage holders with poor credit ratings) is the direct result of thirty years of government policy that has forced banks to make bad loans to un-creditworthy borrowers. The policy in question is the 1977 Community Reinvestment Act (CRA), which compels banks to make loans to low-income borrowers and in what the supporters of the Act call "communities of color" that they might not otherwise make based on purely economic criteria. "

.

[Terry K]

and the game of financial collapse whack a mole continues...

More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions….Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.”

You guys just can't allow yourselves to accept the fact that an unregulated private financial market torpedoed the economy.

Read the entire 1999 article from the Wall Street Joutnal predicting the collapse of the mortgage markets due to government intervention

http://query.nytimes.com/gst/fullpag...n=&pagewanted=

Furthermore, recognize that Fannie and Freddie were insuring mortgages generated by questionable mortgage originators without doing proper diligence.

You might also want to investigate Barney Frank, Chris Dodd, Maxine Waters and a few other prominent Dems role in suppressing attempts to provide more regulation and oversight. By the way, Barack Obama received the largest monetary contributions to his Senatorial campaign of any politician from theFederal National Mortgage Association. Check out Franklin Raines.

[grggngll]

The government wanted to end institutional discrimination, which has zero to do with the Subprime mortgage mess.

The banks thought it would be a good idea to lend to people who couldn't prove they had the means to pay back the loans. Nobody from either party questioned what these lenders were doing until the economy tanked.

Let me fill in the blank space in between these paragraphs for you...

government didn't think of the consequences and they started to force banks to provide loans to those who couldn't afford them.