On Tue, 06 Sep 2011 09:17:25 -0400, George
wrote:



And it wasn't the banks in low income areas that were originating the
bulk of the bad mortgages. Thats just the Rush Limbagh fantasy thing so
we can just only blame the government and not the pirates.

No sense arguing with dittoheads.
There are plenty of statistics from government and private sources to
back up what you say.
But common sense always told me the real money is the mortgage market
was never in low income communities.
Anybody knows those houses are often dilapidated and low value on the
market.
Besides, most of us know medium-high income people who took on high
value mortgages or refi's, whether they lost their home or are
underwater.
I see enough $600-800k empty McMansions around here.
Here's some general facts about the subprime "crisis" and housing
bubble. Any percentages used are rough because I'm not about to
memorize this stuff, Anybody can find actual numbers doing a web
search and dispute what I say.

Community Reinvestment Act of 1977 (CRA)
This the law that pushes banks to serve low-income communities.
Gets all the blame from dittoheads for the mortgage crisis
Nobody knows one way or the other if CRA covered mortgages or small
business loans are "profitable."
Banks just don't keep as good records as some people suppose,
especially since they sell off mortgages and loans.
And they don't have to report "proprietary" information.
And the supposed government of "too much regulation" doesn't have a
clue either.
You can't separate banks from government.
Except for a few idealogues with no facts to support them, the
overwhelming opinion from both gov and private experts is that
the CRA had absolutely nothing to do with the "crisis" and bubble.

Fanny and Freddie.
In the 2004-2005 time range their montage portfolio had a high of 48%
and a low of 23% subprime.
They started backing off the subprime in early 2005.
The private mortgage market held the bulk of subprime.
Not to say that Fannie/Freddy aren't corrupt Wall Street
organizations.
It's Wall Street that runs the government.
That's what started the Tea Party.
Now Wall Street has pretty much absorbed them.
Raines pulled $90 million in salary out of Fannie
He was appointed by Clinton.
Pure Wall Street.
Fannie Mae and Freddy Mac became publicly traded long ago.
That's when Wall Street went socialist and the government went Wall
Street.

Subprime.
Many subprime loans were sold to folks whose credit qualified them for
conventional loans. I don't know what "many" means and nobody else
does either, but it's significant enough to note it.
Whether those borrowers were suckers or just financially irresponsible
and wanted the quick money and low initial payments of subprime ARMs
I don't know.

Refis.
About 55% of subprime mortgages leading to the "crisis." were refis.
That still leaves 45% conventional.
Here's the kicker.
90% of all refis were "cash out."
There's eight of the nine yards of the problem right there.

We are all to blame.
Bull****.
I had nothing to do with this.
Refinanced my montage 3 times since 1997 and every time
I lowered my debt by reducing the montage balance with cash from
savings.
Not everybody likes debt.

Could I have redone my kitchen with cash out? Yep.
Could I have put in a jacuzzi, or bought a $40k pickup? Yep.

Debt has its place and uses, but my first rule is avoid it.
No, my name ain't Polonius.

--Vic