New home sales plunge 33% after tax credit expires

[1bad65]

If this doesn't prove tax cuts stimulate the economy, what does?

"Sales of new homes collapsed in May, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive government tax credits.

The bleak report from the Commerce Department is the first sign of how the end of federal tax credits could weigh on the nation's housing market.

Analysts were startled by the depth of the sales drop.

"We all knew there would be a housing hangover from the expiration of the tax credit," wrote Mike Larson, real estate and interest rate analyst at Weiss Research. "But this decline takes your breath away."

Economists surveyed by Thomson Reuters had expected a May sales pace of 410,000. April's sales pace was revised downward to 446,000.

The government offered an $8,000 credit for first-time buyers. Current homeowners who buy and move into another property could receive up to $6,500.

New-home sales fell nationwide from April's levels. They dropped 53 percent from a month earlier in the West and 33 percent in the Northeast. Sales in the South dropped 25 percent. The Midwest posted a 24 percent decline."

Entire article:
http://news.yahoo.com/s/ap/us_new_home_sales

Of course my favorite part was "Analysts were startled by the depth of the sales drop." I wasn't startled at all. Since the dawn of time it's been shown when you cut taxes on a product, sales of said product go up. And when you raise taxes on a product, sales of that product go down.

[solo1]

Its all Bushes fault. Always.

33% dive, so far its the most impressive number Obama has produced.

[sanjuro_ronin]

In Ontario, effective July 1st, all homes being sold for over 400K will have to pay an addtional 8% in taxes.
Right now you see many homes of that type on say right now, MANY homes.
They are trying to beat the "tax man" because they know that once that 8% tax increase hits in that things will be different.
A buyer of a 425,000 dollar home will have to pay an extra 34K to the government.
Guess where that will come from?

[David Jamieson]

Well, Canada weathered the storm well.
Overall we got screwed out of about 15% of the value of our rrsps.

pretty much the same as anyone else in canada who invests.

the value of my home is up, way up!

and real estate is skyrocketing up here.

Maybe it's because in Canada you can't get a loan without some hurdles that put the onus on you to ensure that you can actually pay it back.

Unlike in teh states where they were giving away mortgages to people who were obvious defaults and then converting those bad mortgages to credit swaps and selling teh bad swaps to all teh other markets.

It didn't actually take that long before it all fell apart.

right after bush allowed for it, it went up and down in his term and all that was left was the huge fire for Obama to put out and take the blame for starting. lol :p

[1bad65]

In Ontario, effective July 1st, all homes being sold for over 400K will have to pay an addtional 8% in taxes.
Right now you see many homes of that type on say right now, MANY homes.
They are trying to beat the "tax man" because they know that once that 8% tax increase hits in that things will be different.

And our capital gains rate is due to jump in January. Anyone want to wager that the stock market has a huge sell-off in December?

The one thing Obama has done well is destroy wealth.

[1bad65]

Unlike in teh states where they were giving away mortgages to people who were obvious defaults...

They were forced by law to do it.

Now I agree they went over the percentage of bad loans the Government forced them to make via the Community Reinvesment Act (signed into law by Carter), but had the Gov't stayed out of the market, I'd bet that they never would have started lending to people who couldn't afford the mortgages in the first place.

Also, the banks had little risk, as the Federal Government actually backed the bad loans via Fannie Mae and Freddie Mac. Had they not backed them, the banks could not have sold the bad mortgages. Had they been stuck with the bad loans, you can be sure the banks wouldn't have made them in the first place. But Government interference allowed them to make the bad loans, and then assisted them in offloading them to others!

[dimethylsea]

It is really simple. Count the bodies.

Count the bodies (American and foreigners) under Bush/Cheney.


If the number is lower under Obama then that's less bad than Bush/Cheney.


We didn't vote for Obama cause we loved him. We voted for him because we hated Bush.

1Bad65 can whine, moan, cast aspersions, call names, criticize etc. till the cows come home...

but in the end in the choice between the lesser of the evils it's really quite simple.

You count the corpses. The guy with a smaller pile of corpses on his watch is preferably to the guy with the bigger pile of corpses.

It's really just that simple.

[Reality_Check]

They were forced by law to do it.

Now I agree they went over the percentage of bad loans the Government forced them to make via the Community Reinvesment Act (signed into law by Carter), but had the Gov't stayed out of the market, I'd bet that they never would have started lending to people who couldn't afford the mortgages in the first place.

Sigh......


Sigh...

http://www.kungfumagazine.com/forum/showpost.php?p=884981&postcount=1154


That has been addressed.



Here is some interesting information: http://www.traigerlaw.com/publicatio...udy_1-7-08.pdf

"Our study concludes that CRA Banks were substantially less likely than other lenders to make the kinds of risky home purchase loans that helped fuel the foreclosure crisis.

Specifically, our analysis shows that:

(1) CRA Banks were significantly less likely than other lenders to make a high cost loan;

(2) The average APR on high cost loans originated by CRA Banks was appreciably lower than the average APR on high cost loans originated by other lenders;

(3) CRA Banks were more than twice as likely as other lenders to retain originated loans in their portfolio; and

(4) Foreclosure rates were lower in MSAs with greater concentrations of bank branches."



"More than half of subprime loans were made by independent mortgage companies not subject to comprehensive federal supervision; another 30 percent of such originations were made by affiliates of banks or thrifts, which are not subject to routine examination or supervision, and the remaining 20 percent were made by banks and thrifts."

I.e., the majority of the subprime loans were made by companies not subject to CRA.

http://www.house.gov/apps/list/heari...barr021308.pdf

Janet Yellin, President of the San Francisco Federal Reserve Board:

"There has been a tendency to conflate the current problems in the subprime market with CRA-motivated lending, or with lending to low-income families in general. I believe it is very important to make a distinction between the two. Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans, and studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households. We should not view the current foreclosure trends as justification to abandon the goal of expanding access to credit among low-income households, since access to credit, and the subsequent ability to buy a home, remains one of the most important mechanisms we have to help low-income families build wealth over the long term."

"According to the 2006 HMDA data, 19 percent of the conventional first lien mortgage loans originated by depository institutions were higher-priced, compared to 23 percent by bank subsidiaries, 38 percent by other bank affiliates, and more than 40 percent by independent mortgage companies. Robert B. Avery, Kenneth P. Brevoort, and Glenn B. Canner, “The 2006 HMDA Data,” Federal Reserve Bulletin, Volume 94 (2007), p. A89."

http://www.frbsf.org/news/speeches/2008/0331.html

As I noted above, independent mortgage companies are not subject to the CRA.

[solo1]

It is really simple. Count the bodies.

Count the bodies (American and foreigners) under Bush/Cheney.


If the number is lower under Obama then that's less bad than Bush/Cheney.


We didn't vote for Obama cause we loved him. We voted for him because we hated Bush.

1Bad65 can whine, moan, cast aspersions, call names, criticize etc. till the cows come home...

but in the end in the choice between the lesser of the evils it's really quite simple.

You count the corpses. The guy with a smaller pile of corpses on his watch is preferably to the guy with the bigger pile of corpses.

It's really just that simple.


Highly disingenuious interpetation of a guys compentancy based on a body count. Harry Truman drops an atominc bomb on Japan, thousands died and the war ended with Japans unconditional surrender Dwight Eisenhower becomes the next POTUS does that make eisenhower a better POTUS based on body counts?

[1bad65]

It is really simple. Count the bodies.

Count the bodies (American and foreigners) under Bush/Cheney.

Stop trying to hijack the thread with your "it's all Bush's fault" BS. We are discussing the economy and housing, not the war. Stay on topic please.


We didn't vote for Obama cause we loved him. We voted for him because we hated Bush.

Ididots like you are how dictators gain power. In hindsight, I'm sure the Cubans would kill to have Batista back. But they didn't look at the alternative to Bastista, they did what you did and didn't support a man based on his policies/ideas etc, they supported a man because of who he wasn't.


1Bad65 can whine, moan, cast aspersions, call names, criticize etc. till the cows come home...

Actually I'm quoting reliable news outlets. Simply because you cannot debate the facts, you try and make light of my legit sources.


but in the end in the choice between the lesser of the evils it's really quite simple.

You count the corpses. The guy with a smaller pile of corpses on his watch is preferably to the guy with the bigger pile of corpses.

It's really just that simple.

So by your logic, FDR was our worst President ever. :confused:

[1bad65]

Sigh......

So are you saying it was good policy for the Federal Government to force banks to make some bad loans?

I just want to be clear on your stance on this.

[Reality_Check]

So are you saying it was good policy for the Federal Government to force banks to make some bad loans?

I just want to be clear on your stance on this.

You keep bringing up the CRA as being the cause of the housing crash. And I repeatedly have shown that not to be the case. The overwhelming majority of sub-prime mortgages were issued by lenders not subject to the act. So, please stop bringing it up as I tire of repeating myself, and have grown bored of your inability or unwillingness to accept reality.

[Hardwork108]

It is really simple. Count the bodies.

Count the bodies (American and foreigners) under Bush/Cheney.


If the number is lower under Obama then that's less bad than Bush/Cheney.


We didn't vote for Obama cause we loved him. We voted for him because we hated Bush.

1Bad65 can whine, moan, cast aspersions, call names, criticize etc. till the cows come home...

but in the end in the choice between the lesser of the evils it's really quite simple.

You count the corpses. The guy with a smaller pile of corpses on his watch is preferably to the guy with the bigger pile of corpses.

It's really just that simple.

Obama's presidency is still relatively young, so he has plenty of time to catch up with Bush's body count. Actually,he has gone back on his promises of pulling out of the war zones.

The fact is that Presidents do not make such decisions. These decisions are made for them!

Presidents and Prime Ministers are just mouthpieces for the elite, so if the elite decide a war with Iran, then it will happen, the same if the target is North Korea. It won't really matter if the President is Obama, Bush or Mickey Mouse.

These "leaders" are just mouthpieces for a long term agenda called the New World Order, which happens to be in its final stages.

In short, it is a dictatorial world government where the elite banking/corporate establishment call the shots and control the wealth, while the rest of the population will serve as nothing more than technologically controlled glorified slaves, stripped of their wealth and dignity.

Just look at what is happening tot he wealth of the middle class, through debt foreclosures, ever increasing taxes and fines and the centralization of political and business power.

We are in for rough times, that is, until enough people wake up and lock up all of the crooks and criminals who have been causing so much misery and human suffering, and throw away the keys.

And guess what, do you think that these criminals will be locked into cells according to their political parties, Republican, Democrats, etc.? Of course not, they will hopefully be squeezed in together, yes,

Al Gore (the "Man made Global Warming" fraudester)

http://www.youtube.com/watch?v=FfHW7KR33IQ

http://www.youtube.com/watch?v=WbLK4RZDdzI&feature=related

http://www.youtube.com/watch?v=G7VUg7nG3lw&feature=related



and Bill Clinton (drug trafficker and fraudester, etc.),
http://video.google.com/videoplay?docid=8438833120507357139#


together with the Bush crime family (three generations of war mongering, war profiteering and drug dealing Nazi criminals!).

http://www.youtube.com/watch?v=hkojpgNZD9I

http://www.youtube.com/watch?v=N0mDszuEKTA&feature=related

http://www.youtube.com/watch?v=3HTf4P2QItQ

There are no real political parties anymore, just psychopathic criminals, waving their cosmetic ideologies, to fool the naive, while employed by the trilionaire banking elites that run our economies and lives! They make all the promises under the sun, but once elected, they turn around and carry on their predecessor's steps, because, just like him, they have the same masters!!!

The facts are there for everyone to see that "Democracy" is a sham and a smoke screen for these criminals to dominate the human race. Of course, some people will take longer to wake up while others have been awake for a long time!

[1bad65]

You keep bringing up the CRA as being the cause of the housing crash. And I repeatedly have shown that not to be the case. The overwhelming majority of sub-prime mortgages were issued by lenders not subject to the act. So, please stop bringing it up as I tire of repeating myself, and have grown bored of your inability or unwillingness to accept reality.

It does matter. I'll explain, and pray you somehow grasp it.

The Government FORCED banks to make some bad loans via the CRA. Now the banks knew there were gonna be alot of defaults on these loans so they had to find a way to negate/limit their losses. They found ways to do this, one way involved bundling the bad debts and selling them, and they found willing buyers of the bad loans because the bad loans were backed by the Government. Once banks saw that this actually worked, it was only a matter of time before SOME banks figured out they could write tons of these bad loans and just sell them in greater numbers. And again, they found buyers of the bad loans because the bad loans were Government backed.

So again, I never blamed the CRA as being the cause of the crash. They were a factor in the crash though. A bigger factor was Fannie Mae and Freddie Mac. And Fannie and Freddie are examples of Government intervention into the private sector. So in effect, Government intervention was the biggest factor in the cause of the crash.

[Reality_Check]

It does matter. I'll explain, and pray you somehow grasp it.

The Government FORCED banks to make some bad loans via the CRA. Now the banks knew there were gonna be alot of defaults on these loans so they had to find a way to negate/limit their losses. They found ways to do this, one way involved bundling the bad debts and selling them, and they found willing buyers of the bad loans because the bad loans were backed by the Government. Once banks saw that this actually worked, it was only a matter of time before SOME banks figured out they could write tons of these bad loans and just sell them in greater numbers. And again, they found buyers of the bad loans because the bad loans were Government backed.

So again, I never blamed the CRA as being the cause of the crash. They were a factor in the crash though. A bigger factor was Fannie Mae and Freddie Mac. And Fannie and Freddie are examples of Government intervention into the private sector. So in effect, Government intervention was the biggest factor in the cause of the crash.

From a speech by Federal Reserve Board Governor Randall S. Kroszner:

http://www.federalreserve.gov/newsevents/speech/kroszner20081203a.htm#f6


Some critics of the CRA contend that by encouraging banking institutions to help meet the credit needs of lower-income borrowers and areas, the law pushed banking institutions to undertake high-risk mortgage lending. We have not yet seen empirical evidence to support these claims, nor has it been our experience in implementing the law over the past 30 years that the CRA has contributed to the erosion of safe and sound lending practices...

The CRA does not stipulate minimum targets or goals for lending, investments, or services. Rather, the law provides incentives for financial institutions to help meet the credit needs of lower-income people and areas, consistent with safe and sound banking practices, and commensurately provides them favorable CRA consideration for those activities. By requiring regulators to make CRA performance ratings and evaluations public and to consider those ratings when reviewing applications for mergers, acquisitions, and branches, the Congress created an unusual set of incentives to promote interaction between lenders and community organizations.

Given the incentives of the CRA, bankers have pursued lines of business that had not been previously tapped by forming partnerships with community organizations and other stakeholders to identify and help meet the credit needs of underserved communities. This experimentation in lending, often combined with financial education and counseling and consideration of nontraditional measures of creditworthiness, expanded the markets for safe lending in underserved communities and demonstrated its viability; as a result, these actions attracted competition from other financial services providers, many of whom were not covered by the CRA. There are many fine examples of community development lending and investment activities designed to address needs in the poorest of areas, including many of those highlighted by the case studies in this report...

Over the years, the Federal Reserve has prepared two reports for the Congress that provide information on the performance of lending to lower-income borrowers or neighborhoods--populations that are the focus of the CRA. These studies found that lending to lower-income individuals and communities has been nearly as profitable and performed similarly to other types of lending done by CRA-covered institutions. Thus, the long-term evidence shows that the CRA has not pushed banks into extending loans that perform out of line with their traditional businesses. Rather, the law has encouraged banks to be aware of lending opportunities in all segments of their local communities as well as to learn how to undertake such lending in a safe and sound manner...

In analyzing the available data, we focused on two distinct metrics: loan origination activity and loan performance. With respect to the first question concerning loan originations, we wanted to know which types of lending institutions made higher-priced loans, to whom those loans were made, and in what types of neighborhoods the loans were extended. This analysis allowed us to determine what fraction of subprime lending could be related to the CRA.

Our analysis of the loan data found that about 60 percent of higher-priced loan originations went to middle- or higher-income borrowers or neighborhoods. Such borrowers are not the populations targeted by the CRA. In addition, more than 20 percent of the higher-priced loans were extended to lower-income borrowers or borrowers in lower-income areas by independent nonbank institutions--that is, institutions not covered by the CRA.

Putting together these facts provides a striking result: Only 6 percent of all the higher-priced loans were extended by CRA-covered lenders to lower-income borrowers or neighborhoods in their CRA assessment areas, the local geographies that are the primary focus for CRA evaluation purposes. This result undermines the assertion by critics of the potential for a substantial role for the CRA in the subprime crisis. In other words, the very small share of all higher-priced loan originations that can reasonably be attributed to the CRA makes it hard to imagine how this law could have contributed in any meaningful way to the current subprime crisis...

The final analysis we undertook to investigate the likely effects of the CRA on the subprime crisis was to examine foreclosure activity across neighborhoods grouped by income. We found that most foreclosure filings have taken place in middle- or higher-income neighborhoods; in fact, foreclosure filings have increased at a faster pace in middle- or higher-income areas than in lower-income areas that are the focus of the CRA.

Two key points emerge from all of our analysis of the available data. First, only a small portion of subprime mortgage originations are related to the CRA. Second, CRA- related loans appear to perform comparably to other types of subprime loans. Taken together, as I stated earlier, we believe that the available evidence runs counter to the contention that the CRA contributed in any substantive way to the current mortgage crisis.

[Reality_Check]

So again, I never blamed the CRA as being the cause of the crash.

Really?

http://ezine.kungfumagazine.com/forum/showpost.php?p=883695&postcount=985


"More than half of subprime loans were made by independent mortgage companies not subject to comprehensive federal supervision; another 30 percent of such originations were made by affiliates of banks or thrifts, which are not subject to routine examination or supervision, and the remaining 20 percent were made by banks and thrifts."

http://ezine.kungfumagazine.com/forum/showpost.php?p=883705&postcount=986


20% of mortgages is not an insignificant number.

http://ezine.kungfumagazine.com/forum/showpost.php?p=883726&postcount=989


Yet it's still less than 80%.

http://ezine.kungfumagazine.com/forum/showpost.php?p=883736&postcount=991


It was enough to cause the whole house of cards to come tumbling down.

You're definitely blaming them in the above quotes.


Quite the opposite. They passed a law FORCING banks to make bad mortgages. Then, shockingly, those people defaulted on them!


“Quite the opposite. They passed a law FORCING banks to make bad mortgages. Then, shockingly, those people defaulted on them! “

Provide proof of these bad loans. This is a right wing talking point and I have yet to find proof of it. The ones making the bad loans also then SOLD the securities multiple times in a very large PONZI scheme. The actions that did this were almost identical to what ENRON did…and ended just


It's called the CRA- The Community Reincestment Act. The proof is all the defaults! People who did not qualify for a house couldn't make the payments. It's not rocket science.

Looks like some additional blaming going on there. Every time the sub-prime mess comes up you bring up the Community Reinvestment Act (interesting Freudian slip with the "Reincestment" above ;)) and only the CRA...without any evidence to back up your (repeated) assertions I might point out. And you expect us to believe that you don't blame the CRA? Please. :rolleyes:

[1bad65]

You're just not going to grasp it. :rolleyes:

The CRA was a factor, not the sole cause.

The biggest cause, BY FAR, was Government intervention via Fannie and Freddie.

Is this simple enough for you to understand now?

[1bad65]

The CRA 'got the ball rolling'. After it's passage, banks had to look for ways to cover bad loans they were FORCED to make. Once they found a way to cover the bad loans called for in the CRA, they figured out they could issue more bad loans and still profit because the bad loans were Gov't insured.

Let me simplify it again:

Do you think the Government should force banks to have to make ANY bad loans?

Do you think it's the Federal Government's job to insure mortgages?

[Reality_Check]

The CRA 'got the ball rolling'. After it's passage, banks had to look for ways to cover bad loans they were FORCED to make. Once they found a way to cover the bad loans called for in the CRA, they figured out they could issue more bad loans and still profit because the bad loans were Gov't insured.

Let me simplify it again:

Do you think the Government should force banks to have to make ANY bad loans?

Do you think it's the Federal Government's job to insure mortgages?

Please provide evidence of those bad loans. You have yet to do so. Also, you clearly did not read my quotes. Please take note of the bolded sections and the underlined sections particularly.


From a speech by Federal Reserve Board Governor Randall S. Kroszner:

http://www.federalreserve.gov/newsevents/speech/kroszner20081203a.htm#f6


Some critics of the CRA contend that by encouraging banking institutions to help meet the credit needs of lower-income borrowers and areas, the law pushed banking institutions to undertake high-risk mortgage lending. We have not yet seen empirical evidence to support these claims, nor has it been our experience in implementing the law over the past 30 years that the CRA has contributed to the erosion of safe and sound lending practices...

The CRA does not stipulate minimum targets or goals for lending, investments, or services. Rather, the law provides incentives for financial institutions to help meet the credit needs of lower-income people and areas, consistent with safe and sound banking practices, and commensurately provides them favorable CRA consideration for those activities. By requiring regulators to make CRA performance ratings and evaluations public and to consider those ratings when reviewing applications for mergers, acquisitions, and branches, the Congress created an unusual set of incentives to promote interaction between lenders and community organizations.

Given the incentives of the CRA, bankers have pursued lines of business that had not been previously tapped by forming partnerships with community organizations and other stakeholders to identify and help meet the credit needs of underserved communities. This experimentation in lending, often combined with financial education and counseling and consideration of nontraditional measures of creditworthiness, expanded the markets for safe lending in underserved communities and demonstrated its viability; as a result, these actions attracted competition from other financial services providers, many of whom were not covered by the CRA. There are many fine examples of community development lending and investment activities designed to address needs in the poorest of areas, including many of those highlighted by the case studies in this report...

Over the years, the Federal Reserve has prepared two reports for the Congress that provide information on the performance of lending to lower-income borrowers or neighborhoods--populations that are the focus of the CRA. These studies found that lending to lower-income individuals and communities has been nearly as profitable and performed similarly to other types of lending done by CRA-covered institutions. Thus, the long-term evidence shows that the CRA has not pushed banks into extending loans that perform out of line with their traditional businesses. Rather, the law has encouraged banks to be aware of lending opportunities in all segments of their local communities as well as to learn how to undertake such lending in a safe and sound manner...

In analyzing the available data, we focused on two distinct metrics: loan origination activity and loan performance. With respect to the first question concerning loan originations, we wanted to know which types of lending institutions made higher-priced loans, to whom those loans were made, and in what types of neighborhoods the loans were extended. This analysis allowed us to determine what fraction of subprime lending could be related to the CRA.

Our analysis of the loan data found that about 60 percent of higher-priced loan originations went to middle- or higher-income borrowers or neighborhoods. Such borrowers are not the populations targeted by the CRA. In addition, more than 20 percent of the higher-priced loans were extended to lower-income borrowers or borrowers in lower-income areas by independent nonbank institutions--that is, institutions not covered by the CRA.

Putting together these facts provides a striking result: Only 6 percent of all the higher-priced loans were extended by CRA-covered lenders to lower-income borrowers or neighborhoods in their CRA assessment areas, the local geographies that are the primary focus for CRA evaluation purposes. This result undermines the assertion by critics of the potential for a substantial role for the CRA in the subprime crisis. In other words, the very small share of all higher-priced loan originations that can reasonably be attributed to the CRA makes it hard to imagine how this law could have contributed in any meaningful way to the current subprime crisis...

The final analysis we undertook to investigate the likely effects of the CRA on the subprime crisis was to examine foreclosure activity across neighborhoods grouped by income. We found that most foreclosure filings have taken place in middle- or higher-income neighborhoods; in fact, foreclosure filings have increased at a faster pace in middle- or higher-income areas than in lower-income areas that are the focus of the CRA.

Two key points emerge from all of our analysis of the available data. First, only a small portion of subprime mortgage originations are related to the CRA. Second, CRA- related loans appear to perform comparably to other types of subprime loans. Taken together, as I stated earlier, we believe that the available evidence runs counter to the contention that the CRA contributed in any substantive way to the current mortgage crisis.

[Reality_Check]

You're just not going to grasp it. :rolleyes:

The CRA was a factor, not the sole cause.

The biggest cause, BY FAR, was Government intervention via Fannie and Freddie.

Is this simple enough for you to understand now?

Yet, you only seem to bring up the CRA repeatedly, only to be refuted (and re-refuted, and re-re-refuted, etc...) by me.

Please show evidence that the CRA was reponsible for forcing the banks to make bad loans.


From a speech by Federal Reserve Board Governor Randall S. Kroszner:

http://www.federalreserve.gov/newsevents/speech/kroszner20081203a.htm#f6


Two key points emerge from all of our analysis of the available data. First, only a small portion of subprime mortgage originations are related to the CRA. Second, CRA- related loans appear to perform comparably to other types of subprime loans. Taken together, as I stated earlier, we believe that the available evidence runs counter to the contention that the CRA contributed in any substantive way to the current mortgage crisis.

[Drake]

The government can't force me to sign off on a bad loan I know I can't pay off.

Then again, what politician in his/her right mind, especially a libertarian one, would have the guts to say that the housing crash is the result of VERY bad financial decisions by the common American? It's so much easier to blame the government because WE SIGNED OFF ON A LOAN WE CAN'T AFFORD.

[Hardwork108]

The government can't force me to sign off on a bad loan I know I can't pay off.

Then again, what politician in his/her right mind, especially a libertarian one, would have the guts to say that the housing crash is the result of VERY bad financial decisions by the common American? It's so much easier to blame the government because WE SIGNED OFF ON A LOAN WE CAN'T AFFORD.

And who is to blame for the trillions of dollars that the government owes? Who is to blame for Obama's mad spending sprees, where he spends money that the government does not have, meaning that he may drag the US down into an economic depression that will make the current one look like a picnic.

Of course, many, including me, believe that Obama's intention is to destroy the US economy so as to fascilitate the NWO agenda....so let's wait and see...

[Drake]

And who is to blame for the trillions of dollars that the government owes? Who is to blame for Obama's mad spending sprees, where he spends money that the government does not have, meaning that he may drag the US down into an economic depression that will make the current one look like a picnic.

Of course, many, including me, believe that Obama's intention is to destroy the US economy so as to fascilitate the NWO agenda....so let's wait and see...

Actually, most of the deficit is due not so much to Fmr Pres Bush, but the war on terror. He just happened to be head honcho when AQ launched their attack.

Fmr Pres Clinton left us with a surplus, but then again, he had nothing of the magnitude of two wars and a housing meltdown to deal with, either.

And what mad spending sprees might you be referring to? And might you do me a favor of comparing his "mad spending sprees" with similar initiatives of past presidents? Like the war on drugs? The cold war? Maybe the cost of the arms race?

One thing about the internet... stupid people can talk as much as they want...

[1bad65]

And what mad spending sprees might you be referring to?

Call me crazy, but giving "free" healthcare to 30 million people isn't going to be cheap.

[KC Elbows]

It cracks me up when people blame the gov for businesses' failures. "The government made them extend those loans." The government did not make anyone then decide to ignore the fact that they couldn't cover their own contracts. No one was complaining until their shenanigans saw the light of day, and suddenly it's someone else's fault.

Where I disagree with Hardwork is not in the idea that there are people with long term agendas based on classist ideas of who should decide for whom, I think he's spot on there, but on that it requires anything more than a brave new world approach to do it, give people things and they will forget they never needed them. The 1984 approach has never and will never work.

No one, in the last thirty years, has in any way challenged the power of plenty to derail our system, and the housing market is the perfect example of this: plenty as the draw, and as soon as that draw seemed illusory, we blame the gov instead of those extending the loans and those accepting them BOTH.

This might be the pinot noir speaking.:D

[1bad65]

Please show evidence that the CRA was reponsible for forcing the banks to make bad loans.

Here ya go:
http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

FYI, Thomas J. DiLorenzo is a professor of economics at Loyola College in Maryland .

[1bad65]

It cracks me up when people blame the gov for businesses' failures. "The government made them extend those loans." The government did not make anyone then decide to ignore the fact that they couldn't cover their own contracts. No one was complaining until their shenanigans saw the light of day, and suddenly it's someone else's fault.

This is true. You are right.

But you did read my posts about how the CRA forced the banks to figure out how to cover the bad loans, right? And once they figured out how to offload the bad loans successfully, with the help of Fannie and Freddie, they were now able to overextend themselves. It's PARTIALLY the bank's fault, and PARTIALLY the Government's fault. But one thing I hope we can all agree on: The banks could not have gotten in over their heads without the Government intervention via Fannie and Freddie insuring the massive amounts of bad loans, right?

[Drake]

Call me crazy, but giving "free" healthcare to 30 million people isn't going to be cheap.

Neither was making enough nukes to overkill the planet over 300 times. Bet the nukes cost more.

[KC Elbows]

This is true. You are right.

But you did read my posts about how the CRA forced the banks to figure out how to cover the bad loans, right? And once they figured out how to offload the bad loans successfully, with the help of Fannie and Freddie, they were now able to overextend themselves. It's PARTIALLY the bank's fault, and PARTIALLY the Government's fault. But one thing I hope we can all agree on: The banks could not have gotten in over their heads without the Government intervention via Fannie and Freddie insuring the massive amounts of bad loans, right?

I didn't realize that Fanny and Freddy were the government. And if they were accepting all this, why? Not as a favor to the government, you can be sure of that. Further, if a business accepts losses that overwhelm it's profits, then that's always their problem, regardless of the whys and wherefores.

As for the courts, our courts favor those who can afford the best lawyers, not justice. Read Rembar's Law of the Land which has recommendations by both Norman Mailer and William F. Buckley, Jr. When the lawyers are for profit, then justice is as well, especially civil justice.

The problem is complex. Free trade, or anything close to it, always results in a moneyed group of free traders using their cash to influence the state. Always. Free trade has never led to more free trade in practice. Contracts with Indians held by the founding fathers would never have been seen as legal if they had been between two different sets of founding fathers, because they used the state to enforce illegal contracts against the natives that they couldn't against each other. So, given that free trade destroys itself, without the state to enforce it, it is just another utopian dream.

[Reality_Check]

Here ya go:
http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

FYI, Thomas J. DiLorenzo is a professor of economics at Loyola College in Maryland .

That is your evidence?:rolleyes: All he made were assertions. He literally quoted no evidence or studies supporting those assertions. Though I do like how he threw ACORN in there using words like "like" and "such as" for the old guilt by association trick. That article is polemic plain and simple. Try again.

1. Provide evidence that the CRA forced the banks subject to it's regulations to make bad loans.

2. Provide evidence as to what percentage of the total CRA loans written were bad.

3. Compare the percentage of defaulted CRA loans to the percentage of defaulted non-CRA loans.

4. Provide evidence of the number of CRA sub-prime/Alt-A loans as compared to the total number of sub-prime/Alt-A loans written.

5. Provide evidence of how many of those CRA sub-prime/Alt-A loans defaulted. Compare that to the total number of CRA sub-prime/Alt-A loans issued. A percentage would be fine.

6. Do the same as #5 for non-CRA loans.

7. Compare the percentage of CRA sub-prime/Alt-A loans that defaulted to the percentage of non-CRA sub-prime/Alt-A loans that defaulted.

I'll be waiting with bated breath. Though I fully expect you'll refuse on the account that I can look it up myself and why should you do the work for me.

[Hardwork108]

Neither was making enough nukes to overkill the planet over 300 times. Bet the nukes cost more.

One can argue that the arms race helped the economy in many ways....Of course, it was not something any society desires, but spending on arms during an arms race is different from a spending spree when the government does not have the money to spend and has to borrow money and further sink the nation (read, the population) into debt.

Yep, I could be wrong, but the plan seems to be to destroy the US economy for the benefit of the NWO agenda.

Lets, wait and see.......

[Hardwork108]

Actually, most of the deficit is due not so much to Fmr Pres Bush, but the war on terror. He just happened to be head honcho when AQ launched their attack.
You are still selling the idea that some multimillionaire businessman, whose family happened to be business partners with Bush business interests, launched the 9-11 attacks, using alcohol drinking (in one case drug taking), strip club frequenting, middle class Arab kids, who seemed to leave copies of the Koran everywhere they happened to go.....??? LOL


Fmr Pres Clinton left us with a surplus, but then again, he had nothing of the magnitude of two wars and a housing meltdown to deal with, either.
You forgot to mention that former President Clinton was (and probably still is) a drug dealing, dishonest fraudester!

http://video.google.com/videoplay?docid=8438833120507357139#


And what mad spending sprees might you be referring to? And might you do me a favor of comparing his "mad spending sprees" with similar initiatives of past presidents? Like the war on drugs?

The War on Drugs was a scam. George Bush senior has been linked to drugs dealings (through the CIA) for years. So they were making money from importing drugs into the US while scamming the US population through taxes to fight the drugs problem....This would be funny, if it was not so tragic and vile!

http://www.youtube.com/watch?v=N0mDszuEKTA&feature=related


The cold war? Maybe the cost of the arms race?
The cold war was used to make money for huge arms companies and the banks (as usual).

The agenda has moved further down the line now....the plan seems to be to destroy the US economy and make it fall in line with plans for a regionalized world government. To do so, the old US will have to be destroyed, while its population are sent into desperate panic, so as to accept any solutions that will be offered to them by the the same people who were behind the economic mayhem (and other "global" problems.).

So, Obama's spending at a time when the US is virtually bankrupt will only result in serious economic problems. Many say that this has been the plan all along and Obama was brought in to carry it out. He is doing things that George W Bush would not have been able to sell to the US public. So a new leadership for "change" was introduced to hoowink the masses for more "screwing", so to speak.


One thing about the internet... stupid people can talk as much as they want...
Not to worry, you can talk all you want as I won't hold it against you.....:D

[Hardwork108]

Where I disagree with Hardwork is not in the idea that there are people with long term agendas based on classist ideas of who should decide for whom, I think he's spot on there, but on that it requires anything more than a brave new world approach to do it, give people things and they will forget they never needed them. The 1984 approach has never and will never work.

You are probably right but the fact is that the powers that be are pushing for a Big Brother society. The constant fear mongering - The war on Terrorism; The War on Drugs; Man Made Global Warming; Threat from pandemics, and so on are used to bring in legislation that control every aspect of our lives. There has been an immense increase in surveillance in the US (and the UK). In some countries government employees are allowed to go through one's garbage to make sure that they have thrown the right stuff in the right bins, and if not then you can be fined, based on a fraudulent "global warming" scam.

So, there are plenty of things to worry about, specially when the level of technology used to further augment the surveillance society, is astounding. Lets not forget that children born into ever less freer society,will see it as the norm, hence they will not complain too much when their own freedoms are eroded even further....

[David Jamieson]

The banks should not have been given the greenlight to lend money to high risk applicants.

The banks should not have had the option of selling those bad buys and having them converted to credit swaps (this is where the shady part took place and really, people should be charged with fraud here).

No one should be able to convert vapour to a commodity that can be bought and sold only to have it discovered 3 buys in that it's a pig in a poke. That is also fraudulent at the core of it.

[SoCo KungFu]

It is really simple. Count the bodies.

Count the bodies (American and foreigners) under Bush/Cheney.


If the number is lower under Obama then that's less bad than Bush/Cheney.


We didn't vote for Obama cause we loved him. We voted for him because we hated Bush.

1Bad65 can whine, moan, cast aspersions, call names, criticize etc. till the cows come home...

but in the end in the choice between the lesser of the evils it's really quite simple.

You count the corpses. The guy with a smaller pile of corpses on his watch is preferably to the guy with the bigger pile of corpses.

It's really just that simple.

Its idiocy like this that's dragging not just our country but our world into oblivion.

[1bad65]

Neither was making enough nukes to overkill the planet over 300 times. Bet the nukes cost more.


One can argue that the arms race helped the economy in many ways....Of course, it was not something any society desires, but spending on arms during an arms race is different from a spending spree when the government does not have the money to spend and has to borrow money and further sink the nation (read, the population) into debt.

And the arms race accomplished it's goals, unlike the War on Poverty which only made poverty worse.

The goal was to cause the USSR's ecomomy to implode, Reagan was very clear on that. And he was 100% correct, and 100% successful. Obama should take note of success, and then emulate it instead of emulting a disaster like Jimmy Carter.

[1bad65]

That is your evidence?:rolleyes: All he made were assertions. He literally quoted no evidence or studies supporting those assertions. Though I do like how he threw ACORN in there using words like "like" and "such as" for the old guilt by association trick. That article is polemic plain and simple. Try again.

No, I won't try again.

I'm sick and tired of being asked for proof and then when it's provided hearing 'Well that doesn't count' over and over. You asked for proof and you were provided it. I'm not going to run around in circles for you. You're like an OJ juror, you have your mind made up and no amount of evidence will sway you. I'm not debating to 'beat' or sway you, I do it so rational people reading this who are 'on the fence' on this can see your argument vs my argument and make their decision.

If you want to continue, we do it different now.

What do YOU say the CRA put into law?

Also, how do YOU think Bush's policies cause the sub-prime mess?

[1bad65]

The banks should not have been given the greenlight to lend money to high risk applicants.

They have every right to CHOOSE to make stupid decisions. But when Gov't backed the bad loans, it took away all the risks for the banks.


The banks should not have had the option of selling those bad buys and having them converted to credit swaps (this is where the shady part took place and really, people should be charged with fraud here).

No one should be able to convert vapour to a commodity that can be bought and sold only to have it discovered 3 buys in that it's a pig in a poke. That is also fraudulent at the core of it.

If anyone is charged with fraud it should be Fannie Mae and Freddie Mac. The banks never lied about the junk they were selling. They had junk and they sold junk. It was only purchased because it was Gov't guaranteed/backed junk.

FYI, I agree with your premise here. But in a pure capitalist society no one would have bought the junk. Once Go'vt intruded and backed the junk, it was now able to be sold. Had the Gov't not interfered in the market, the banks who made the loans would have to deal with the consequences of their actions instead of being able to sell them to someone else.

[1bad65]

I didn't realize that Fanny and Freddy were the government.

They were a government-sponsored enterprise. Their stated purpose is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities, allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on thrifts. On September 7, 2008, James Lockhart, director of the Federal Housing Finance Agency (FHFA), announced that Fannie Mae and Freddie Mac were being placed into conservatorship of the FHFA.

As of 2008, Fannie Mae and the Federal Home Loan Mortgage Corporation (Freddie Mac) owned or guaranteed about half or 56.8% of the U.S.'s $12 trillion mortgage market.


Sources:
http://www.nytimes.com/2008/07/11/business/11ripple.html?ex=1373515200&en=8ad220403fcfdf6e&ei=5124&partner=permalink&exprod=permalink
Fabozzi, Frank J.; Modigliani, Franco (1992), Mortgage and Mortgage-backed Securities Markets, Harvard Business School Press, p. 2

[Reality_Check]

No, I won't try again.

I'm sick and tired of being asked for proof and then when it's provided hearing 'Well that doesn't count' over and over. You asked for proof and you were provided it. I'm not going to run around in circles for you. You're like an OJ juror, you have your mind made up and no amount of evidence will sway you. I'm not debating to 'beat' or sway you, I do it so rational people reading this who are 'on the fence' on this can see your argument vs my argument and make their decision.

If you want to continue, we do it different now.

What do YOU say the CRA put into law?

Also, how do YOU think Bush's policies cause the sub-prime mess?

You have literally provided no proof to back up your assertion that the CRA both forced banks to make bad loans and that is was a cause of the sub-prime meltdown. Whereas I have provided links to studies that back up my remarks, you have linked to polemic opinion pieces. Do you see the disconnect?

Stop playing the victim card and find some solid studies backing up your assertions regarding the Community Reinvestment Act. Or stop making them. It's a fairly simple proposition.

[1bad65]

Stop playing the victim card and find some solid studies backing up your assertions regarding the Community Reinvestment Act. Or stop making them. It's a fairly simple proposition.

I'll keep speaking the truth whether you like it or not.

Care to take a shot at my two questions now, or do you feel I'm the only one in this debate who has to do that?

[Reality_Check]

I'll keep speaking the truth whether you like it or not.

Care to take a shot at my two questions now, or do you feel I'm the only one in this debate who has to do that?

I'll answer your questions as soon as you back up your remarks regarding the CRA. I did "ask" first after all.

[1bad65]

I'll answer your questions as soon as you back up your remarks regarding the CRA. I did "ask" first after all.

Then I'm done with you.

You asked for a source, and you got one. I'm not here to have to keep pulling sources until you get one you are happy with. And one of my questions was simple, I just asked what YOU say the CRA put into law.

But you not even trying to answer my questions speaks volumes. You may not like my answers, but at least I tried.

[Reality_Check]

Then I'm done with you.

So, you're going to take your ball and go home?


You asked for a source, and you got one. I'm not here to have to keep pulling sources until you get one you are happy with. And one of my questions was simple, I just asked what YOU say the CRA put into law.

But you not even trying to answer my questions speaks volumes. You may not like my answers, but at least I tried.

You did not provide a source. You provided an opinion piece. The fact that you can't see the difference says worlds about you...none of it good. I would hardly call that trying.

You have provided literally no evidence that the CRA forced banks to make bad loans or was a cause of the sub-prime meltdown. Which means, you can't find any studies that support your (repeated) baseless assertions. As such, you're going to metaphorically stick your fingers in your ears and close your eyes in the hopes that you won't have to face the fact you are utterly, and demonstrably, wrong.

[1bad65]

So, you're going to take your ball and go home?

You already did that.


You did not provide a source.

I did, and he is a Professor at a friggin law school.

[sanjuro_ronin]

It is really simple. Count the bodies.

Count the bodies (American and foreigners) under Bush/Cheney.


If the number is lower under Obama then that's less bad than Bush/Cheney.


We didn't vote for Obama cause we loved him. We voted for him because we hated Bush.

1Bad65 can whine, moan, cast aspersions, call names, criticize etc. till the cows come home...

but in the end in the choice between the lesser of the evils it's really quite simple.

You count the corpses. The guy with a smaller pile of corpses on his watch is preferably to the guy with the bigger pile of corpses.

It's really just that simple.

The ends NEVER justify the means, on the contrary, it is the MEANS that lend validity to the End.

[Reality_Check]

You already did that.

Ah...the old "I know you are but what am I" maneuver. :rolleyes:


I did, and he is a Professor at a friggin law school.

Appeal to authority fallacy.

Regardless, as I pointed out already, he did not quote, or link to, any studies to support his contention. He did the same as you...made assertions without evidence. Try again.


That is your evidence?:rolleyes: All he made were assertions. He literally quoted no evidence or studies supporting those assertions. Though I do like how he threw ACORN in there using words like "like" and "such as" for the old guilt by association trick. That article is polemic plain and simple. Try again.

1. Provide evidence that the CRA forced the banks subject to it's regulations to make bad loans.

2. Provide evidence as to what percentage of the total CRA loans written were bad.

3. Compare the percentage of defaulted CRA loans to the percentage of defaulted non-CRA loans.

4. Provide evidence of the number of CRA sub-prime/Alt-A loans as compared to the total number of sub-prime/Alt-A loans written.

5. Provide evidence of how many of those CRA sub-prime/Alt-A loans defaulted. Compare that to the total number of CRA sub-prime/Alt-A loans issued. A percentage would be fine.

6. Do the same as #5 for non-CRA loans.

7. Compare the percentage of CRA sub-prime/Alt-A loans that defaulted to the percentage of non-CRA sub-prime/Alt-A loans that defaulted.

I'll be waiting with bated breath. Though I fully expect you'll refuse on the account that I can look it up myself and why should you do the work for me.

[1bad65]

Regardless, as I pointed out already, he did not quote, or link to, any studies to support his contention. He did the same as you...made assertions without evidence. Try again.

So are you saying the law professor just made it up? :rolleyes:

[Reality_Check]

So are you saying the law professor just made it up? :rolleyes:

Appeal to authority fallacy.

I'm saying he, like you, has provided no evidence to support his assertion. Show me actual evidence, as I have already (repeatedly) provided to you.


That is your evidence?:rolleyes: All he made were assertions. He literally quoted no evidence or studies supporting those assertions. Though I do like how he threw ACORN in there using words like "like" and "such as" for the old guilt by association trick. That article is polemic plain and simple. Try again.


Appeal to authority fallacy.

Regardless, as I pointed out already, he did not quote, or link to, any studies to support his contention. He did the same as you...made assertions without evidence. Try again.

FYI, he is an economics professor. You should try reading your links once in a while.

[Reality_Check]

Here is another study supporting my point.

(LMI = low to moderate income)

http://traigerlaw.com/publications/The_community_reinvestment_act_of_1977-not_guilty_1-26-09.pdf


Critics of the CRA claim that the law compels banks to downgrade their credit standards in order to make mortgage loans to unqualified LMI borrowers. We hypothesized that if this was true, lending data from 2007, a time of tightened underwriting standards and regulatory emphasis on safety and soundness, would show significantly diminished lending to LMI borrowers by CRA-subject banks.

Instead, our analysis of 2007 data indicates that the percentage of LMI applications that were originated by CRA-subject banks remained stable even in the climate of heightened scrutiny and wariness that prevailed. This finding contradicts the notion that compliance with the CRA is dependent on imprudent lending. Thus, we conclude that the CRA cannot be rationally blamed for current problems in the mortgage market, much less for the U.S. financial crisis.

That CRA-subject banks continue to make mortgage loans to LMI borrowers while simultaneously strengthening their underwriting standards not only contradicts the claims of critics who blame the CRA for our present crisis, but also suggests that without the 32-year-old law, the home mortgage market might be in even worse condition. This suggestion is reinforced by our 2008 study (http://www.traigerlaw.com/publications/traiger_hinckley_llp_cra_foreclosure_study_1-7-08.pdf), which showed CRA-subject banks were substantially less likely than other lenders to engage in the risky lending practices that helped fuel the foreclosure crisis. Moreover, a recent Federal Reserve Bank of San Francisco review of LMI lending found “the CRA, and particularly its emphasis on loans made within a lender’s assessment area, helped to ensure responsible lending, even during a period of overall declines in underwriting standards.”

[1bad65]

Appeal to authority fallacy.


Appeal to authority fallacy.

Parrott

Of course I'm going to use a professor at a law school to source an argument over a law. Who do you say I should use to buttress my arguments, a car mechanic?

[1bad65]

Here is another study supporting my point.

We hypothesized ...

We are supposed to be dealing in FACTS, not speculation. :rolleyes:

[SanHeChuan]

They actually tested their hypothesis, that's the point. Did your Professor do that? And how are you going to have a study without a hypothesis? :rolleyes: Do you even know what the scientific method is?

[1bad65]

Try this one San. It also shows how the CRA was strengthened in 1995. That's actually something I just recently found out. The law as written pre-1995 was not so bad. Post-1995 it was a huge problem.

http://www.businessinsider.com/the-cra-debate-a-users-guide-2009-6

[Reality_Check]

Parrott

Of course I'm going to use a professor at a law school to source an argument over a law. Who do you say I should use to buttress my arguments, a car mechanic?

LOL...he's an economics professor, as I pointed out already. Perhaps you should not only read your links, but your posts as well.


Here ya go:
http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

FYI, Thomas J. DiLorenzo is a professor of economics at Loyola College in Maryland .

[1bad65]

LOL...he's an economics professor, as I pointed out already. Perhaps you should not only read your links, but your posts as well.

You've still never answered my questions....:rolleyes: