People Power

[BDunnell]

Lenders were for forced by the government to offer mortgages to people regardless of their creditworthiness but because of the Race or Sex.

Proof of this from a reputable source?

[donKey jote]

1 in 3 Greeks with a job work for the Government! So 2 out of ever 3 employed people in Greece were paying the salary of the other one. It is obvious that it is impossible to maintain.

What was impossible to mantain was the debt level of the government. A debt that was well hidden from the EU thanks to -you might have guessed- the likes of your Goldmann Sachses. Long live unrestricted self-regulating free capitalists, until their bubbles burst...
Greek Debt Crisis: How Goldman Sachs Helped Greece to Mask its True Debt - SPIEGEL ONLINE - News - International

[Rollo]

Nope....Actually in the US it was the exact opposite. Lenders were for forced by the government to offer mortgages to people regardless of their creditworthiness but because of the Race or Sex. Combined with over-regulation and High Corporate Taxes, rising energy costs(Helped by over-regulation) and a war and you have a perfect storm.

History proves you wrong.

Fannie Mae announced through HUD that 50% of its business would be dedicated to low and moderate income families in 2000.
Then the Commodity Futures Modernization Act of 2000 redefined over-the-counter derivatives between "sophisticated" parties as not being regulated by the Commodity Exchange Act of 1936. It was the credit-default swaps and hedge trading which caused the crisis leading to an over-inflation of the housing market.

Not "over-regulation" as you put it, but a distinct de-regulation of who would be allowed to borrow money and trade the derivatives of those debt securities.
Not once was anyone "forced" to ever lend money for a mortgage. However in a de-regulated mortgage market, the fiduciary prudence which would have otherwise been employed, wasn't.

[race aficionado]

What was impossible to mantain was the debt level of the government. A debt that was well hidden from the EU thanks to -you might have guessed- the likes of your Goldmann Sachses. Long live unrestricted self-regulating free capitalists, until their bubbles burst...
Greek Debt Crisis: How Goldman Sachs Helped Greece to Mask its True Debt - SPIEGEL ONLINE - News - International

Goldman Sachs is EVIL . . . . and frik'n powerful.

[anthonyvop]

Proof of this from a reputable source?

President Obama says the Occupy Wall Street protests show a “broad-based frustration” among Americans with the financial sector, which continues to kick against regulatory reforms three years after the financial crisis.

“You’re seeing some of the same folks who acted irresponsibly trying to fight efforts to crack down on the abusive practices that got us into this in the first place,” he complained earlier this month.

But what if government encouraged, even invented, those “abusive practices”?

Rewind to 1994. That year, the federal government declared war on an enemy — the racist lender — who officials claimed was to blame for differences in homeownership rate, and launched what would prove the costliest social crusade in U.S. history.

At President Clinton’s direction, no fewer than 10 federal agencies issued a chilling ultimatum to banks and mortgage lenders to ease credit for lower-income minorities or face investigations for lending discrimination and suffer the related adverse publicity. They also were threatened with denial of access to the all-important secondary mortgage market and stiff fines, along with other penalties.

» Smoking-Gun Document Ties Federal Policy To Subprime Mortgage Crisis - Big Government

[BDunnell]

» Smoking-Gun Document Ties Federal Policy To Subprime Mortgage Crisis - Big Government

That is not a reputable source. It is a biased source. Find it in a report in a sensible newspaper, or in online Government documentation, and I will believe it.

[anthonyvop]

History proves you wrong.

Fannie Mae announced through HUD that 50% of its business would be dedicated to low and moderate income families in 2000.
Then the Commodity Futures Modernization Act of 2000 redefined over-the-counter derivatives between "sophisticated" parties as not being regulated by the Commodity Exchange Act of 1936. It was the credit-default swaps and hedge trading which caused the crisis leading to an over-inflation of the housing market.

Not "over-regulation" as you put it, but a distinct de-regulation of who would be allowed to borrow money and trade the derivatives of those debt securities.
Not once was anyone "forced" to ever lend money for a mortgage. However in a de-regulated mortgage market, the fiduciary prudence which would have otherwise been employed, wasn't.

You are so wrong just like the others who love to blame the EVIL Corporations.


Let me ask you a simple question. How can a collapse in the credit default market lead to 100's of thousands of Foreclosures? Are the people losing their homes for failure to make payment because they had invested in CDS's?

To put it simply it was the collapse of the housing bubble(which was so predictable that even I knew it was coming). Combined this with the jump in property taxes and you have an accelerated foreclosure collapse which then killed the Credit Default Swap Market


And yes.....The top lenders were FORCED to lend to less than creditworthy people. That is an undisputed fact. It is what Fannie Mae and Freddie Mac were forced to do.

[anthonyvop]

That is not a reputable source. It is a biased source. Find it in a report in a sensible newspaper, or in online Government documentation, and I will believe it.

Here ya go!

The threat was codified in a 20-page "Policy Statement on Discrimination in Lending" and entered into the Federal Register on April 15, 1994, by the Interagency Task Force on Fair Lending. Clinton set up the little-known body to coordinate an unprecedented crackdown on alleged bank redlining.

The edict — completely overlooked by the Financial Crisis Inquiry Commission and the mainstream media — was signed by then-HUD Secretary Henry Cisneros, Attorney General Janet Reno, Comptroller of the Currency Eugene Ludwig and Federal Reserve Chairman Alan Greenspan, along with the heads of six other financial regulatory agencies.

"The agencies will not tolerate lending discrimination in any form," the document warned financial institutions.

Ludwig at the time stated the ruling would be used by the agen cies as a fair-lending enforcement "tool," and would apply to "all lenders" — including banks and thrifts, credit unions, mortgage brokers and finance companies.

The unusual full-court press was predicated on a Boston Fed study showing mortgage lenders rejecting blacks and Hispanics in greater proportion than whites. The author of the 1992 study, hired by the Clinton White House, claimed it was racial "discrimination." But it was simply good underwriting.

It took private analysts, as well as at least one FDIC economist, little time to determine the Boston Fed study was terminally flawed. In addition to finding embarrassing mistakes in the data, they concluded that more relevant measures of a borrower's credit history — such as past delinquencies and whether the borrower met lenders credit standards — explained the gap in lending between whites and blacks, who on average had poorer credit and higher defaults.

[airshifter]

As much as some of you wish to simply deny anything Anthonyvop states as fact, anyone that had actually looked into the issue much would have found there are quite a number of credible sources that have had this same opinion for quite some time.

My personal opinion is that with the government pressure involved in the sub-prime loans, many of these financial institutions banked on the fact that the government would be somewhat forced to help them out when the bubble burst.

[BDunnell]

Lenders were for forced by the government to offer mortgages to people regardless of their creditworthiness but because of the Race or Sex.

In what sense does any of what you've posted in your last couple of contributions state that, as you say above, lenders were forced to offer mortgages regardless of creditworthiness and because of race or sex? All I can see is that they were obliged not to refuse on discriminatory lines, which is a very different thing.