"Gray Goat" (The Other White Meat) wrote in message
44.100...

jim wrote in
:

Gray Ghost wrote:

jim wrote in
:

Gunner Asch wrote:


So its the fault of both sides of the asle...but the fact
remains...S&P is simply a reporting agency. They did NOT cause this
cluster ****..they simply reported it.

S&P has a history of reporting wrong
S&P is more to blame for the housing bubble
and subsequent financial meltdown than
anyone in Congress or the White House
The meltdown was a market failure not a government failure
The government has been following behind and cleaning up the debris

Are you stoned?

I suppose you think it was all the governments fault
because they didn't stop the lenders and borrowers
from screwing up all the deals they made?

No you insane baboon. I think it's the government's fault because they
forced lenders to make loans to unqualified persons left they be accused
of
racism.

Really, are you that defective?

It looks like you never got the memo, Goat -- any of several hundred of
them, which analyzed the situation and identified what really happened. HUD
and government loan policy had almost nothing to do with it. It's a myth. In
fact, it was the other way around: Countrywide was pressuring Fannie to take
more subprime loans.

Here's a stripped-down summary from The Sherman Law Firm, which handled some
of the litigation surrounding the subprime crisis:

================================================== ======
II. A Thumbnail Sketch of The Short Reign of Subprime Mania, using
Countrywide and Bear Stearns as Case-studies.

Following the "tech-wreck" (the bursting of the dot.com and
technology-driven stock market bubble) at the beginning of this [last]
decade, the Fed lowered interest rates to historic lows. Money was cheap to
borrow for banks, and that meant that there was more money available for
lending and lower interest rates at which all of that money could be loaned.

Lenders like Countrywide realized early on in this process that rates were
so low that they could now make home loans to people with bad credit, or
with little or no income, or with no money to use as a down payment. In
short, Countrywide and other lenders practically threw cash at Americans who
had no business having access to large sums of money. The interest only
loan, or skip a payment loan, and other similar products became the focal
point of a large segment of the residential mortgage business.

Because the borrowers had bad credit, they felt lucky to be approved and
were more than happy when Countrywide and other mortgage lenders asked them
to pay higher closing fees and a slightly higher interest rate than the rate
offered to borrowers with excellent credit. Almost all subprime mortgages
had an adjustable interest rate feature, which means that the rate can move
up or down with a stated index like LIBOR.

It stretches credibility beyond the breaking point for Countrywide, once the
largest home lender in America, to deny a full and thorough understanding of
the basic principle that a rise in interest rates would have an almost
immediate negative impact on the ability of many subprime borrowers to meet
their loan payment obligations (history proves that interest rates do not
stay very low for very long). Of course, Bear Stearns - then an investment
bank that analyzed the real estate markets as part of its everyday
business - also understood this principle. Similarly, Countrywide and Bear
Stearns each knew (and really must have known from the start of the subprime
boom) that they would eventually face a doomsday scenario if the housing
market became stagnant or fell at a time when interest rates were going up.

But, even as the winds of disaster began to blow, Countrywide's focus
remained fixed on the huge profits that could be made in subprime mortgages
and other mortgages that could not qualify as "A" Paper". Bear Stearns
swimming in cash due to its mortgage-backed securities business. Bear (and
other banks like Lehman and Merrill Lynch) took these same subprime
mortgages and other low quality credit products, bundled them into bonds
(the aforementioned CDO's and other credit derivative investment products),
attached an attractive yield, and very successfully offered the
mortgage-backed bonds to investors.

http://wallstreetlaw.typepad.com/she...and-fraud.html

================================================== =======

--
Ed Huntress