11
   

What Happened in Washington Today

 
 
talk72000
 
  2  
Reply Mon 29 Sep, 2008 10:35 pm
@hawkeye10,
The new president will have that role. At present we have a dishonest lame duck and a divided Congress for three months.
hawkeye10
 
  1  
Reply Mon 29 Sep, 2008 10:42 pm
@talk72000,
we have a capital populated mostly by idiot partisan political hacks, put there by voters who decided long ago that Washington does not matter and thus did not give a **** who our national representatives are. This problem took a generation to get this bad, and will take years and years to fix.

OOPS.
Foxfyre
 
  2  
Reply Mon 29 Sep, 2008 11:20 pm
@hawkeye10,
Yup. The problems started in the 1970's and have gradually exacerbated and started coming to a head in the last half of the 1990's. The last attempt at a fix was in 2003, but those in bed with Fannie Mae and Freddie Mac plus the lobbyists got to the gutless wonders attempting it in Congress, and they chickened out and didn't get it done. Everyone has pretty much kept their eyes shut since during a booming economy until the housing bubble burst and even then they refused to heed those who screamed for Congress to act before it was too late.
hawkeye10
 
  1  
Reply Mon 29 Sep, 2008 11:23 pm
@Foxfyre,
Congress can not act, it is broken. We need smart people who have better things to do than sharpen their ideological axes and and play party politics. Getting competent people into the chairs will take time.
0 Replies
 
Foxfyre
 
  3  
Reply Tue 30 Sep, 2008 12:26 am
JTT's version of what Nancy Pelosi said in advance of the vote today is a really interesting piece of revisionist history.

Here is the screed. Imagine you are a Republican prepared to put your career on the line to vote for this bill and you are listening to this. And then you see the Democrats with 'at risk' seats given permission to vote "no" so they don't have to explain their vote to the folks back home. Listen to her call for investigations of fraud and how the administration provided no oversight. (Never mind that it was Democratically contolled committees who had that oversight for the last two years.) Listen to her extol the great leadership of Barney Frank, the same Barney Frank who went public insisting that Fannie Mae and Freddic Mac were just fine when the alarm bells were first sounded, whose committee was to provide oversight of these entities, and who received large donations from them.

It may not excuse the Republicans defecting. But it sure helps explains it:


InfraBlue
 
  0  
Reply Tue 30 Sep, 2008 01:23 am
@Foxfyre,
Quote:
It may not excuse the Republicans defecting. But it sure helps explains it

The explanation for the Republican defection: the pussies are willing to let the nation go to pot for getting their their feelings hurt by a loud mouthed c*nt.
0 Replies
 
Woiyo9
 
  1  
Reply Tue 30 Sep, 2008 06:06 am
@talk72000,
Way back in 2004, the Bush administration warned about the pending problems and both Barney Frank, Chris Dodd and all the Dems turned a deaf ear.

Nothing could more painfully demonstrate what is wrong with Congress than the current financial crisis.

Among the Congressional "leaders" invited to the White House to devise a bailout "solution" are the very people who have for years created the risks that have now come home to roost.

Five years ago, Barney Frank vouched for the "soundness" of Fannie Mae and Freddie Mac, and said "I do not see" any "possibility of serious financial losses to the treasury."

Moreover, he said that the federal government has "probably done too little rather than too much to push them to meet the goals of affordable housing."

Earlier this year, Senator Christopher Dodd praised Fannie Mae and Freddie Mac for "riding to the rescue" when other financial institutions were cutting back on mortgage loans. He too said that they "need to do more" to help subprime borrowers get better loans.

In other words, Congressman Frank and Senator Dodd wanted the government to push financial institutions to lend to people they would not lend to otherwise, because of the risk of default.

The idea that politicians can assess risks better than people who have spent their whole careers assessing risks should have been so obviously absurd that no one would take it seriously.

But the magic words "affordable housing" and the ugly word "redlining" led to politicians directing where loans and investments should go, with such things as the Community Reinvestment Act and various other coercions and threats.

The roots of this problem go back many years, but since the crisis to which all this led happened on George W. Bush's watch, that is enough for those who think in terms of talking points, without wanting to be confused by the facts.

In reality, President Bush tried unsuccessfully, years ago, to get Congress to create some regulatory agency to oversee Fannie Mae and Freddie Mac.

N. Gregory Mankiw, his Chairman of the Council of Economic Advisers, warned in February 2004 that expecting a government bailout if things go wrong "creates an incentive for a company to take on risk and enjoy the associated increase in return."

http://townhall.com/columnists/ThomasSowell/2008/09/30/bailout_politics&Comments=true
revel
 
  1  
Reply Tue 30 Sep, 2008 06:38 am
@Woiyo9,
What is killing me is that the blame repubilcan hacks are peddling about blaming the minority loans made when in fact it was the securities of loans being traded which caused the downfall. The minority loans had to by law be regulated and the fact is that minority loans didn't default as much as the loans and lending companies made outside government regulation.

True those democrats should have done something about Fanni Mae and Freddie Mac when it became clear they needed reigning in. However, to blame all this on loans to minorities or lower income people is dishonest because it overlooks the role CEO in these other companies played (which the hacks do not mention) and it overlooks the practice of trading loans to other companies played in this.

On subject, the gist of it is apparently republicans who were holed up in that all day sunday looking for a way out of this has taken advantage of the democrats blaming republicans for this situation to not vote for as though that is any kind of excuse at all. Just look at the numbers who voted for this bill on both sides and it tells it own story. Even if republicans did think they were dissed rightly or wrongly they should have done what was in the best interest of the country.

revel
 
  2  
Reply Tue 30 Sep, 2008 06:41 am
@Foxfyre,
Quote:
the same Barney Frank who went public insisting that Fannie Mae and Freddic Mac were just fine when the alarm bells were first sounded, whose committee was to provide oversight of these entities, and who received large donations from them.


Actually when Barney Franks made those comments, republicans were in charge of congress so they were in charge of the committees. They could have passed that bill if they really tried hard enough after all they passed a lot of bills democrats didn't like but enough voted for anyway.
gungasnake
 
  1  
Reply Tue 30 Sep, 2008 06:55 am
One thing we see here is the inherent limitation s of a two party system. A country like Italy with a dozen political parties could easily afford to have one or two of them go rogue; we cannot. If you only have two parties and one goes rogue, it forces the other into unnatural positions. If one panders, the other HAS to pander etc. etc.

Needed is some sort of a voters' bill of rights starting with runoff elections, so that nobody need ever fear to vote his first choice, at least on a first ballot, and nobody could ever hold any public office with less than 50% of the vote. THAT would allow some third party to rise up and replace a major party which had gone brain-dead or rogue. Or BOTH major parties if they both go brain dead or rogue.

That is, if there is still time. The day of divorce might be unavoidable at this point. To my thinking if the dem party cannot be gotten rid of, then the United States probably needs to be split up.


revel
 
  1  
Reply Tue 30 Sep, 2008 07:12 am
@gungasnake,
Quote:
That is, if there is still time. The day of divorce might be unavoidable at this point. To my thinking if the dem party cannot be gotten rid of, then the United States probably needs to be split up.


Rolling Eyes
We are grown ups here dealing with grown up problems and we should act accordingly. Congress and the rest of the country as well, both democrat and republican and anything in between.

0 Replies
 
Woiyo9
 
  1  
Reply Tue 30 Sep, 2008 07:18 am
@revel,
Why are you making excuses for these people?

We all know or we all SHOULD know that both parties had their hands in the "cookie jar" which helped cause the present problems.

Yet, you make excuses for them?
revel
 
  2  
Reply Tue 30 Sep, 2008 07:27 am
@revel,
I was reading more into this Freddi Mac and Fanni Mae thing and I now understand a little more exactly what the institutions are and how they got started. Greed and lack of oversight of loans and the selling of securities of those loans when the private companies became involved with HUD caused the downfall of those companies. I agree the democrats in congress should have done something when the problem first started instead of just saying no because they were worried about republicans wanting to keep low income people from affordable housing. They should have looked at the problems in the system and fixed them but not throw out the baby with the bathwater.

http://www.washingtonpost.com/wp-dyn/content/article/2008/06/09/AR2008060902626_pf.html

Woiyo9
 
  2  
Reply Tue 30 Sep, 2008 07:30 am
@revel,
Part of the problem is the Dems forced Banks to lend money to "low income" people who did not have the ability to repay the loan.

It has nothing to do with "Republicans" wanting to keep low income people from owning homes.

Would you lend money to someone who could not repay it?

Stop making excuses for all politicians!!!
revel
 
  1  
Reply Tue 30 Sep, 2008 07:37 am
@Woiyo9,
Quote:
Why are you making excuses for these people?

We all know or we all SHOULD know that both parties had their hands in the "cookie jar" which helped cause the present problems.

Yet, you make excuses for them?


I have said that the democrats should have done more at the time these problems first came to light. I agree both parties are at fault as well just a general greediness on the part of the whole mortgage industry and those in congress and the political system really. Apparently sub prime loans combined with lower interest rates became a big money making machine that has come back to haunt us and I don't' imagine anyone was in a hurry to stop it while it was still making money which is why it never made it out of committees in the first place until just fairly recently.

0 Replies
 
parados
 
  0  
Reply Tue 30 Sep, 2008 07:38 am
@Woiyo9,
Woiyo9 wrote:

Part of the problem is the Dems forced Banks to lend money to "low income" people who did not have the ability to repay the loan.

It has nothing to do with "Republicans" wanting to keep low income people from owning homes.

Would you lend money to someone who could not repay it?

Stop making excuses for all politicians!!!


Could you please provide the legislation that forced banks to loan money to low income people? I am curious to read it.
Woiyo9
 
  2  
Reply Tue 30 Sep, 2008 07:51 am
@parados,
'THE PRIVATE SECTOR got us into this mess. The government has to get us out of it."

That's Barney Frank's story, and he's sticking to it. As the Massachusetts Democrat has explained it in recent days, the current financial crisis is the spawn of the free market run amok, with the political class guilty only of failing to rein the capitalists in. The Wall Street meltdown was caused by "bad decisions that were made by people in the private sector," Frank said; the country is in dire straits today "thanks to a conservative philosophy that says the market knows best." And that philosophy goes "back to Ronald Reagan, when at his inauguration he said, 'Government is not the answer to our problems; government is the problem.' "

In fact, that isn't what Reagan said. His actual words were: "In this present crisis, government is not the solution to our problem; government is the problem." Were he president today, he would be saying much the same thing.

Because while the mortgage crisis convulsing Wall Street has its share of private-sector culprits -- many of whom have been learning lately just how pitiless the private sector’s discipline can be -- they weren't the ones who "got us into this mess." Barney Frank's talking points notwithstanding, mortgage lenders didn't wake up one fine day deciding to junk long-held standards of creditworthiness in order to make ill-advised loans to unqualified borrowers. It would be closer to the truth to say they woke up to find the government twisting their arms and demanding that they do so - or else.

The roots of this crisis go back to the Carter administration. That was when government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and "redlining" because urban blacks were being denied mortgages at a higher rate than suburban whites.

The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to "meet the credit needs" of "low-income, minority, and distressed neighborhoods." Lenders responded by loosening their underwriting standards and making increasingly shoddy loans. The two government-chartered mortgage finance firms, Fannie Mae and Freddie Mac, encouraged this "subprime" lending by authorizing ever more "flexible" criteria by which high-risk borrowers could be qualified for home loans, and then buying up the questionable mortgages that ensued.

All this was justified as a means of increasing homeownership among minorities and the poor. Affirmative-action policies trumped sound business practices. A manual issued by the Federal Reserve Bank of Boston advised mortgage lenders to disregard financial common sense. "Lack of credit history should not be seen as a negative factor," the Fed's guidelines instructed. Lenders were directed to accept welfare payments and unemployment benefits as "valid income sources" to qualify for a mortgage. Failure to comply could mean a lawsuit.

As long as housing prices kept rising, the illusion that all this was good public policy could be sustained. But it didn't take a financial whiz to recognize that a day of reckoning would come. "What does it mean when Boston banks start making many more loans to minorities?" I asked in this space in 1995. "Most likely, that they are knowingly approving risky loans in order to get the feds and the activists off their backs . . . When the coming wave of foreclosures rolls through the inner city, which of today's self-congratulating bankers, politicians, and regulators plans to take the credit?"

Frank doesn't. But his fingerprints are all over this fiasco. Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, when the Bush administration proposed much tighter regulation of the two companies, Frank was adamant that "these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis." When the White House warned of "systemic risk for our financial system" unless the mortgage giants were curbed, Frank complained that the administration was more concerned about financial safety than about housing.

Now that the bubble has burst and the "systemic risk" is apparent to all, Frank blithely declares: "The private sector got us into this mess." Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train. If Frank is looking for a culprit to blame, he can find one suspect in the nearest mirror.

http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/28/franks_fingerprints_are_all_over_the_financial_fiasco/
parados
 
  2  
Reply Tue 30 Sep, 2008 07:54 am
@parados,
parados wrote:

Woiyo9 wrote:

Part of the problem is the Dems forced Banks to lend money to "low income" people who did not have the ability to repay the loan.

It has nothing to do with "Republicans" wanting to keep low income people from owning homes.

Would you lend money to someone who could not repay it?

Stop making excuses for all politicians!!!


Could you please provide the legislation that forced banks to loan money to low income people? I am curious to read it.
revel
 
  1  
Reply Tue 30 Sep, 2008 07:59 am
@Woiyo9,
Actually the homes on foreclosers are also in higher priced neighborhoods as well. Banks and lending industries made a killing off of swapping the securities of these loans both the affordable housing loans and conventional loans. There is higher interest rates with higher risk loans so they are foreclosing three times faster than the conventi0nal loans but all suffering in this crises. (I was wrong about one point I made earlier about rate of subprime foreclosers) (I keep getting differing information)




Quote:
In 2004, as regulators warned that subprime lenders were saddling borrowers with mortgages they could not afford, the U.S. Department of Housing and Urban Development helped fuel more of that risky lending.

Eager to put more low-income and minority families into their own homes, the agency required that two government-chartered mortgage finance firms purchase far more "affordable" loans made to these borrowers. HUD stuck with an outdated policy that allowed Freddie Mac and Fannie Mae to count billions of dollars they invested in subprime loans as a public good that would foster affordable housing.

Housing experts and some congressional leaders now view those decisions as mistakes that contributed to an escalation of subprime lending that is roiling the U.S. economy.

The agency neglected to examine whether borrowers could make the payments on the loans that Freddie and Fannie classified as affordable. From 2004 to 2006, the two purchased $434 billion in securities backed by subprime loans, creating a market for more such lending. Subprime loans are targeted toward borrowers with poor credit, and they generally carry higher interest rates than conventional loans.

Today, 3 million to 4 million families are expected to lose their homes to foreclosure because they cannot afford their high-interest subprime loans. Lower-income and minority home buyers -- those who were supposed to benefit from HUD's actions -- are falling into default at a rate at least three times that of other borrowers.

"For HUD to be indifferent as to whether these loans were hurting people or helping them is really an abject failure to regulate," said Michael Barr, a University of Michigan law professor who is advising Congress. "It was just irresponsible."

Congress is expected to vote before its Fourth of July recess on legislation that would strip HUD of its regulatory authority over Fannie and Freddie and give it to a stronger regulator.

Fannie and Freddie finance about 40 percent of all U.S. mortgages, with $5.3 trillion in outstanding debt. Owned by private shareholders but chartered by Congress, they are exempt from state and local taxes and receive an estimated $6.5 billion-a-year federal subsidy because they can borrow money more cheaply than other investors. In return, they are expected to serve "public purposes," including helping to make home buying more affordable.

HUD officials dispute allegations that the agency encouraged abusive lending and sloppy underwriting standards that became the hallmark of the subprime industry. Spokesman Brian Sullivan said the agency and Congress wanted to increase homeownership among underserved families and could not have predicted that subprime lending would dominate the market so quickly.

"Congress and HUD policy folks were trying to do a good thing," he said, "and it worked."

Since HUD became their regulator in 1992, Fannie and Freddie each year are supposed to buy a portion of "affordable" mortgages made to underserved borrowers. Every four years, HUD reviews the goals to adapt to market changes.

In 1995, President Bill Clinton's HUD agreed to let Fannie and Freddie get affordable-housing credit for buying subprime securities that included loans to low-income borrowers. The idea was that subprime lending benefited many borrowers who did not qualify for conventional loans. HUD expected that Freddie and Fannie would impose their high lending standards on subprime lenders.

Banks typically back prime loans with customers' deposits. But subprime lenders often rely on money from Wall Street investors , who buy packages of loans as investments called mortgage-backed securities.

In 2000, as HUD revisited its affordable-housing goals, the housing market had shifted. With escalating home prices, subprime loans were more popular. Consumer advocates warned that lenders were trapping borrowers with low "teaser" interest rates and ignoring borrowers' qualifications.

HUD restricted Freddie and Fannie, saying it would not credit them for loans they purchased that had abusively high costs or that were granted without regard to the borrower's ability to repay. Freddie and Fannie adopted policies not to buy some high-cost loans.

That year, Freddie bought $18.6 billion in subprime loans; Fannie did not disclose its number.

In 2001, HUD researchers warned of high foreclosure rates among subprime loans.

"Given the very high concentration of these loans in low-income and African American neighborhoods, the growth in subprime lending and resulting very high levels of foreclosure is a real cause for concern," an agency report said.

But by 2004, when HUD next revised the goals, Freddie and Fannie's purchases of subprime-backed securities had risen tenfold. Foreclosure rates also were rising.

That year, President Bush's HUD ratcheted up the main affordable-housing goal over the next four years, from 50 percent to 56 percent. John C. Weicher, then an assistant HUD secretary, said the institutions lagged behind even the private market and "must do more."

For Wall Street, high profits could be made from securities backed by subprime loans. Fannie and Freddie targeted the least-risky loans. Still, their purchases provided more cash for a larger subprime market.

"That was a huge, huge mistake," said Patricia McCoy, who teaches securities law at the University of Connecticut. "That just pumped more capital into a very unregulated market that has turned out to be a disaster."

In 2003, the two bought $81 billion in subprime securities. In 2004, they purchased $175 billion -- 44 percent of the market. In 2005, they bought $169 billion, or 33 percent. In 2006, they cut back to $90 billion, or 20 percent. Generally, Freddie purchased more than Fannie and relied more heavily on the securities to meet goals.

"The market knew we needed those loans," said Sharon McHale, a spokeswoman for Freddie Mac. The higher goals "forced us to go into that market to serve the targeted populations that HUD wanted us to serve," she said.

But because Fannie and Freddie were buying mortgage-backed securities rather than the actual subprime loans, their involvement came too late to require stiffer standards from lenders.

Fannie and Freddie "made no progress in civilizing the market," said Sandra Fostek, a senior regulator at HUD.

William C. Apgar Jr., who was an assistant HUD secretary under Clinton, said he regrets allowing the companies to count subprime securities as affordable.

"It was a mistake," he said. "In hindsight, I would have done it differently."

Allen Fishbein, who was Apgar's adviser at HUD and is now at the Consumer Federation of America, said the agency failed to use its regulatory power by refusing to credit Fannie and Freddie for loans that were "contrary to good lending practices."

"They chose not to put the brakes on this dangerous lending when they could have," Fishbein said.

Fostek said the agency had no practical way to comb through the tens of millions of individual loans contained in the subprime securities.

She said that Fannie and Freddie did not overwhelmingly rely on securities to meet the goals but added that she would not disclose the amount counted because it is considered proprietary.

Fannie and Freddie spokespeople say their partners had agreed not to sell them loans with several prohibited characteristics, including credit insurance, excessively high costs and prepayment penalties that lasted longer than three years. But experts say the volume of subprime foreclosures proves they were toxic to borrowers.

Judith Kennedy, president of the National Association of Affordable Housing Lenders, said that while Fannie and Freddie nurtured unregulated subprime lenders, an estimated 30 percent of subprime borrowers could have qualified for safe, lower-cost prime loans.

"The damage to homeowners, to neighborhoods, to state and local governments as the tax base erodes, and now to all American taxpayers, is almost incalculable," she said.

Sen. Jack Reed (D-R.I.), a member of the Senate banking committee who brokered some of the regulatory reform in the pending bill, said HUD's homeownership push ignored reality.

"We need to focus on putting families in homes they can truly afford, not just on getting a sale, packaging the loan into a sophisticated financial security and walking away to the next closing," he said. "Today, people are wondering, 'Why weren't the regulators and the industry probing these [loans] more deeply?' "










http://www.washingtonpost.com/wp-dyn/content/article/2008/06/09/AR2008060902626_pf.html

btw when this first started repubicans were in charge of congress though clinton was the president, so it seems that both dem (clinton) and repubilcans started this.
0 Replies
 
Woiyo9
 
  1  
Reply Tue 30 Sep, 2008 08:00 am
@parados,
Rolling Eyes
 

Related Topics

Obama '08? - Discussion by sozobe
Let's get rid of the Electoral College - Discussion by Robert Gentel
McCain's VP: - Discussion by Cycloptichorn
Food Stamp Turkeys - Discussion by H2O MAN
The 2008 Democrat Convention - Discussion by Lash
McCain is blowing his election chances. - Discussion by McGentrix
Snowdon is a dummy - Discussion by cicerone imposter
TEA PARTY TO AMERICA: NOW WHAT?! - Discussion by farmerman
 
Copyright © 2024 MadLab, LLC :: Terms of Service :: Privacy Policy :: Page generated in 0.03 seconds on 10/05/2024 at 09:27:28