No you are incorrect on the side that the mortgages were sold to groups not regulated by the government - most of these were sold to various financial institutions and mutual funds which are all regulated by the SEC.
I'm not incorrect at all. I didn't say the mortgages were sold TO unregulated groups, they were sold BY unregulated groups, to private citizens, under no federal regulations such as the CRA at all. You are getting confused as to what I am talking about.
You are correct that the groups who BOUGHT the mortgage-backed securities were regulated by the SEC, but that hardly matters at all, as the SEC under Bush didn't do ****, and the companies selling the MBS routinely lied to their customers and the credit ratings agencies. Goldman, for example, just settled big-time in a case where they (one of their subsidies, actually, but let's not kid ourselves) were actively found to have been faking documents and lying to investigators and credit agencies, for years.
Please I work in the industry - I have direct knowledge and see these products on a daily basis.
I don't doubt that, but you do seem to have gotten confused as to what I was talking about in my last post.
If I must repeat myself again - Barney Frank was one involved in this - I gave as an example - you are one of those arrogant individuals that enjoy picking one small item some one writes about and pulls it out of context.
Your example wasn't correct. It's an attempt to place the blame somewhere other than where it belongs - and that's with the desperate search for unlimited profits on the part of banks, investment houses and mortgage lenders, all of whom bent the rules and common sense in order to chase these profits - along with outright deception and breaking the law on a regular basis. THIS is what led to the crash - not Barney Frank. Over-simplifying the issue helps nobody understand what went on.
Besides, I disagreed with your entire paragraph describing the problem - it's inaccurate and unsupportable by facts. I know this, because I've had this same discussion about 15 times here on A2K, and the side of the argument you are taking has never been able to produce a factual basis for their argument. Just lots of hand-waving and muttering about 'gov't incentives' and pointing at people like Frank as some sort of boogeyman.
The banks and other mortgage companies cannot offer loans to these individuals because the homes are worth less currently than what they were. So if they get an assessment, the loan will now be higher than what the home is worth and thus due to regulations (ie you need to have x% down to re-finance - they do not qualify).
Only because the banks are fighting cram-down as hard as they can. A certain amount outstanding on these mortgages should simply be lopped right off the top and the banks and mortgage lenders should eat the cost; they created this problem in the first place by finding gov't regulations they could take advantage of and twisting them as far as possible, they furthered the problem by continuing to do so for as long as possible (even when they knew they were putting their companies and our economy at great risk), and they are now fighting as hard as they can to keep from taking responsibility for the errors they have made.