Obama pushes banks to make home loans to people with weaker credit

J

Justin Time

Verified User
Oh brother here we go again

Seems like with Obama, if at first you do not succeed - just do again, except with more money

and blame the banks when the borrower defaults and sticks taxpayers with the bill


The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.

Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.

Officials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan and are seeking to make it easier for people who owe more than their properties are worth to refinance at today’s low interest rates, among other steps.

Obama pledged in his State of the Union address to do more to make sure more Americans can enjoy the benefits of the housing recovery, but critics say encouraging banks to lend as broadly as the administration hopes will sow the seeds of another housing disaster and endanger taxpayer dollars.

“If that were to come to pass, that would open the floodgates to highly excessive risk and would send us right back on the same path we were just trying to recover from,” said Ed Pinto, a resident fellow at the American Enterprise Institute and former top executive at mortgage giant Fannie Mae.


http://articles.washingtonpost.com/...ing-recovery-housing-market-housing-officials
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the broker rules are in place now.

unlike for 8 long years when the Bush SEC held them back so the banks could order their employees to do their bidding instead of what was legal
 
http://www.sec.gov/news/press/2007/2007-190.htm



SEC Votes for Final Rules Defining How Banks Can Be Securities Brokers
Eight Years After Passage of the Gramm-Leach-Bliley Act, Key Provisions Will Now Be Implemented
FOR IMMEDIATE RELEASE
2007-190
Washington, D.C., Sept. 19, 2007 - Ending eight years of stalled negotiations and impasse, the Commission today voted to adopt, jointly with the Board of Governors of the Federal Reserve System (Board), new rules that will finally implement the bank broker provisions of the Gramm-Leach-Bliley Act of 1999. The Board will consider these final rules at its Sept. 24, 2007 meeting. The Commission and the Board consulted with and sought the concurrence of the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, and Office of Thrift Supervision.
 
evince said:
the broker rules are in place now.

unlike for 8 long years when the Bush SEC held them back so the banks could order their employees to do their bidding instead of what was legal
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Yea, people who do not pay their bills are "entitled" to a home loan. It may be hard to make those payments with the Obama "recovery" putting more and more people out of work

But Obama is consistent

Now we have subprime car loans

Thanks largely to the U.S. Federal Reserve, Jeffrey Nelson was able to put up a shotgun as down payment on a car.

Money was tight last year for the school-bus driver and neighborhood constable in Jasper, Alabama, a beaten-down town of 14,000 people. One car had already been repossessed. Medical bills were piling up.

And still, though Nelson's credit history was an unhappy one, local car dealer Maloy Chrysler Dodge Jeep had no problem arranging a $10,294 loan from Wall Street-backed subprime lender Exeter Finance Corp so Nelson and his wife could buy a charcoal gray 2007 Suzuki Grand Vitara.

All the Nelsons had to do was cover the $1,000 down payment. For most of that amount, Maloy accepted Jeffrey's 12-gauge Mossberg & Sons shotgun, valued at about $700 online.

In the ensuing months, Nelson and his wife divorced, he moved into a mobile home, and, unable to cover mounting debts, he filed for personal bankruptcy. His ex-wife, who assumed responsibility for the $324-a-month car payment, said she will probably file for bankruptcy in a couple of months.

When they got the Exeter loan, Jeffrey, 44 years old, was happy "someone took a chance on us." Now, he sees it as a contributor to his financial downfall. "Was it feasible? No," he said.

http://www.reuters.com/article/2013...rimeauto-special-report-idUSBRE9320ES20130403
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OK...now you are creeping into fucking moron area. The crash in 08 had nothing to do with main street and everything to do with Wall street and the banking industry. Do SOME regular people share the blame? Yes. The house flippers, and a few that knew they were getting in too deep. But the majority of them were victims of predatory lenders. They weren't "forced" to give out loans that people couldn't afford, the realtors weren't "forced" to show people houses they knew people couldn't afford. Those entities chose to do those things, because they could make money hand over fist by doing so.

I know the boys on the radio tell you different, but the truth is that
 
Steelplate said:
OK...now you are creeping into fucking moron area. The crash in 08 had nothing to do with main street and everything to do with Wall street and the banking industry. Do SOME regular people share the blame? Yes. The house flippers, and a few that knew they were getting in too deep. But the majority of them were victims of predatory lenders. They weren't "forced" to give out loans that people couldn't afford, the realtors weren't "forced" to show people houses they knew people couldn't afford. Those entities chose to do those things, because they could make money hand over fist by doing so.

I know the boys on the radio tell you different, but the truth is that
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You really do live in a bubble

The collapse was the housing market and the hundreds of billions that taxpayers had to cough off to cover the loses of Fannie and Freddie

Remember Barney frank and the Dems saying there was no problem in 2002 and R's were racist because they did not want minorities to own a home?

When home prices fell it took a massive part of the US economy with it

Now Obama wants to repeat another Democrat failure by trying to make owning a home something you do not have to waor and EARN
 
Ok Big Boy


tell me why the BusH SEC held back the broker rules in Gramm leach bliely for 8 + years?
 
You see before glass steagal bansk could act as brokers.

then the banks fucked us.

so we came up with glass steagal so they wouldnt fuck us anymore.

then the republicans pushed and pushed on glass steagal until with Gramm Leach bliley act and glass steagal was finnally completely dead.

banks could now act as brokers again.


BUT Bush did not impliment the entire GLBact bill.


It was the parts that placed rules on who could be a broker and how they would be trained.


by holding bakc the broker rules all those years the banks could hire any smuck like you and train them however they wanted to train them.


The brokers could not turn to the bank and say "Im not going to sell securitiess with hidden sub prime I willl lose my license" because they hd no license to lose.
 
Justin Time said:
You really do live in a bubble

The collapse was the housing market and the hundreds of billions that taxpayers had to cough off to cover the loses of Fannie and Freddie

Remember Barney frank and the Dems saying there was no problem in 2002 and R's were racist because they did not want minorities to own a home?

When home prices fell it took a massive part of the US economy with it

Now Obama wants to repeat another Democrat failure by trying to make owning a home something you do not have to waor and EARN
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Oh bullshit. What the REAL issue is, is that your boys sucked all the real jobs out of the country, replaced them with shitty ones and people couldn't afford shit. It's hard to have a consumer driven economy when consumers don't have money to spend. Business doesn't like it when people can't buy.

This is still going on today...except now credit is harder to get.
 
its like they dont know that the banks cheated on the securities market the fucking minute they were allowed to sell them again.

Bush aided their cheating by holding back a very important safe guard to the market.

BROKER RULES
 
evince said:
its like they dont know that the banks cheated on the securities market the fucking minute they were allowed to sell them again.

Bush aided their cheating by holding back a very important safe guard to the market.

BROKER RULES
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Again....not part of the right wing "critical thinking" checklist. If it ain't on the list, it's not thought of.
 
Justin Time said:
Oh brother here we go again

Seems like with Obama, if at first you do not succeed - just do again, except with more money

and blame the banks when the borrower defaults and sticks taxpayers with the bill
Click to expand...

Even the VA requires a minimum credit score of 620. Every other program requires credit worthiness. What caused the housing crisis wasn't these types of loans, it was greedy brokers and banks pushing more expensive homes with adjustable rate or interest only homes to people who couldn't afford them.
 
Justin Time said:
Oh brother here we go again

Seems like with Obama, if at first you do not succeed - just do again, except with more money

and blame the banks when the borrower defaults and sticks taxpayers with the bill
Click to expand...

Were the banks unaware of the laws regarding bankruptcy and default when they decided to massively expand their subprime portfolio in the 2000's, and, in particular, push risky adjustable rate mortgages on these unsophisticated borrowers? If so, tough shit, study the law better. If not, then clearly they should've been aware that they shared some responsibility in this. When a bank gives out a shitload of money which has a low chance of being paid back, and, lo and behold, doesn't get paid back, shaking your finger at the defaulter and blaming him isn't suddenly going to make the money reappear. The rules of the game clearly stated that you are not guaranteed to be repaid if the debtor can't realistically pay you back, nor can you reduce them to slavery like in the good old days. To counter this risk, which is an inherent part of the banking business, it was part of your job to judge the credibility of those you shoveled out money to.

Now, why did these banks shove out so many risky adjustable rate loans to people of little means? Because they were operating under the assumption that real estate prices never fall (I'm serious, there was an influential paper that made this case, and the banking industry bought it). The adjustable rate mortgages therefore, seemed like a good idea, as they allowed for low rates that these borrowers were capable of paying, low rates enabled by the real estate boom. And since real estate prices never fall, nothing could go wrong. Until 2006, when they did, and the low rates suddenly became a lot higher, high enough that a great deal of people found themselves unable to pay. It was, all and all, a really dumb idea, and I don't think I'm unjustified in finding fault with the people who came up with it. The people who accepted them were unsophisticated. And they paid for it, all that was legally required of them, and had their credit totally destroyed. But the fact is that these deals shouldn't have ever been offered in the first place, they seriously misjudged the credibility of their borrowers. And they should pay for that.

And when it comes to moral blame, I blame them, because they should've known better. This didn't happen just because a bunch of random debtors decided to default all at once, it happened because the bank offered loans it was stupid to offer.
 
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