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Friday, October 21, 2016

by Paul Kiel, ProPublica.

Over the past several years, we’ve reported extensively on the big banks’ foreclosure failings. As a result of banks’ disorganization and understaffing — particularly at the peak of the crisis in 2009 and 2010 — homeowners were often forced to run a gauntlet of confusion, delays, and errors when seeking a mortgage modification.

But while evidence of these problems was pervasive, it was always hard to quantify the damage. Just how many more people could have qualified under the administration’s mortgage modification program if the banks had done a better job? In other words, how many people have been pushed toward foreclosure unnecessarily?

A thorough study released last week provides one number, and it’s a big one: about 800,000 homeowners.

The study’s authors — from the Federal Reserve Bank of Chicago, the government’s Office of the Comptroller of the Currency (OCC), Ohio State University, Columbia Business School, and the University of Chicago — arrived at this conclusion by analyzing a vast data set available to the OCC. They wanted to measure the impact of HAMP, the government’s main foreclosure prevention program.

What they found was that certain banks were far better at modifying loans than others. The reasons for the difference, they established, were pretty predictable: The banks that were better at helping homeowners avoid foreclosure had staff who were both more numerous and better trained.

Unfortunately for homeowners, most mortgages are handled by banks that haven’t been properly staffed and thus have modified far fewer loans. If these worse-performing banks had simply modified loans at the same pace as their better performing peers, then HAMP would have produced about 800,000 more modifications. Instead of about 1.2 million modifications by the end of this year, HAMP would have resulted in about 2 million.

That’s still well short of the 3-4 million modifications President Obama promised when he announced the program back in early 2009. But it’s a big difference, and a reasonable, basic benchmark against which to compare the program’s failings.

The report does not identify these poor performing banks, but it’s not hard to ID them. A “few large servicers [have offered] modifications at half the rate of others,” the authors say. The largest mortgage servicers are Bank of America, JPMorgan Chase, Wells Fargo and Citi.

Bank of America in particular (the largest of all the servicers when HAMP launched) has been far slower to modify loans than even the other large servicers, as other analyses we’ve cited have shown.

Rick Simon, a spokesman for Bank of America, said the banks’ “home retention results are significant and in line with our industry peers to date.”

The Home Affordable Modification Program (HAMP) paid subsidies to mortgage servicers on the theory that doing so would convince them to embrace modifications. The authors say that voluntary approach apparently didn’t have much effect with the biggest servicers. They weren’t very good at modifying loans before HAMP was launched and weren’t much better after it launched.

The authors wrote that while they can’t be sure why these banks underperformed, they “may not have responded to the program since doing so would involve changing their business focus from processing and channeling payments to actively renegotiating loans. In addition, this may have involved significantly altering their organizational capabilities, such as building appropriate infrastructure and hiring and training servicing staff.”

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Copyright 2012 The National Memo
  • MM2013

    How could these banks be willing to help homeowners to avoid foreclosures when they are the ones causing all this mess? If there is nothing for them to get out of this, they are not going to move one finger. And as long as they are left unpunished for the world’s worst recession they caused, they are going to do just the same and even worst, even if the entire world goes to hell with them in it.

    • Tom_D44

      Because the banks don’t want to own homes. Taking over properties means they need to maintain them which is an additional cost and aggravation to the banks. They are not in that business. And the properties are already worth less then they were when the loans were made so the asset isn’t as valuable. What the banks really want is the mortgage payments. So there is no intelligent reason for banks to wish forclosures on people. Is there ineffectiveness in their operations and are there people who don’t use good sense when dealing with customers – absolutely. Employees don’t always act the way you might want them to act and they don’t always make the same judgement calls you might want them to make. And sometimes policies that have good intentions, set by management, end up having unintended consequences when they are either exploited by a few bad people or are mis-applied by apathetic individuals – kind of like government policies and the ineffeciency of regulators and administrators. And then you have victims of the process. Its unfortunate for some but most will get through it.

      MM, in order to take your approach you would have to assume that all bankers from the top down are evil people with nothing but bad intentions – when more likely, the truth is that one of these mid level managers implementing policy is a neighbor of yours who would never want to see families put on the streets.

    • ObozoMustGo

      uhhhhh… MM….. how stupid can you be? Wait… don’t answer that… we already know…. VERY!

      The bank does not foreclose unless the homeowner does not pay the loan back according to the agreed upon terms. No one put a gun to a person’s head and forced them to buy a house or sign a loan they could not affortd. This was all done voluntarily buy both parties to the contract. The bank has every legal right to foreclose. Further, they don’t have any legal obligation to renegotiate any loans. If they do, that is their choice. This is the way a free country based on the rule of law operates.

      Anyone that thinks the banks caused the recession is just a plain old fool that doesn’t understand a damn thing about the way the world works. I will explain it to you again…

      The collapse of the Real Estate market and resulting financial markets turmoil was a situation created solely by government regulation and manipulation of the mortgage industry. The Community Reinvestment Act of 1977, signed by the now 2nd worst president in American history, is what gave community organizations and regulators authority over banking practices. Reagan, wisely put the thing on the shelf and did not pursue implementation administratively. Neither did GHWB. But the Clinton Administration did pursue it and brought it alive full force.

      Do you remember (if you are old enough) the term “Red Lining” that was bandied about by the Clinton regulators in the 90’s? Google it if you don’t know. It applies to the practice of a bank drawing a red line around certain neighborhoods or geographies as a way to say that they DO NOT lend to anyone in those areas because they will not get paid back. The Clinton Admin wanted to increase home ownership, and they saw this practice as a barrier to increasing home ownership in poor urban areas. They authorized organizations like ACORN to storm bank branches with protests, many of which turned violent, and threaten the banks that they will put them out of business unless they stop “Red Lining”. Yet another seeming good leftist idea with good intentions, but the devil is always in the details.

      So the banks went to Congress to lobby for their interests. The Congress was able to strike some compromises and agreed to use the Government sponsored FannieMae and FreddieMac as a guarantor of mortgages that were offered to low income people.

      Now, pretend you are a banker. Your business is loaning money. That’s what you do. Your government threatens you and tells you that you must loan money to people who were never able to get loans previously. But to compromise with you, the government also tells you that they will guarantee the loans so you won’t lose money by lending to people that cant pay. Hmmmmm…. A no lose proposition to sell your products (loans)? Hmmmmmmmm… sounds pretty good, doesn’t it? And that is what the banks did. They created loan products that were low up-front costs but became tougher in the out years. They loaned up to 100% or more on the value of the properties because the low income people typically have little to no down payment. The banks, at the urging of the Feds, did everything they could to overcome the problem of making loans to people that could not afford them.

      So looking over the situation now, you as the banker begin to realize that you have made a lot of risky loans, but they are guaranteed by Fannie or Freddie. Your business is loaning money, not servicing mortgages. So you sell your loans at a discounted rate to investors. Those investors believe the loans are guaranteed. The market over a 10 to 12 year period begins to ingest trillions of dollars of these loans. Some of the bankers begin to be worried about those loans in their investments and they create insurance products to hedge their bets (called derivatives).

      In late 2007, it started becoming apparent that as those mortgages matured in years, a higher and higher percentage of them started to default. The market was maturing, supply had met demand, and prices started to level off or come down a little. The first in the line to show trouble was Country Wide (Chris Dodd’s buddy, by the way). Then a couple of smaller ones started to roll over. Then it became obvious that neither Fannie nor Freddie had anywhere near the reserves to pay up on their promises. (Why doesn’t this surprise anyone?) As the house of cards began to crumble, the ripple into the financial system and the loans and derivatives that used them as collateral all came crashing down.

      This is exactly what happened. The government, trying to social engineer home ownership, created a perverse incentive for banks to do what they should not be doing. Then the government tried to insure the banks would not lose money with tax payer promises to cover their losses.

      The entire thing was a scam. And do you think the politicians that created the mess would take the blame? HELLLL NO!!!! They do what they always do. Blame the evil bankers for wanting to make a profit. They would never tell you the truth because they might get thrown out of office and lose their power. That could never happen when they can blame everyone else.

      Then what do they do? The 2 IDIOTS most responsible for the whole mess in Congress come up with a bill called Dodd-Franks that turns getting a regular mortgage into an anal exam of 80 to 100 pages of paperwork for the average American, and millions of worthy payers being turned down or turned off by the process. And you leftist nutjobs ignorantly cheer such nonsense.

      I know you won’t like the truth. Leftist nutjobs rarely do. But this is the way it went down and this is the way in works. If you knew this, instead of watching MSLSD all day, you wouldn’t be a leftist nutjob.

      Have a nice day!

      “Government exists to protect us from each other. Where government has gone beyond its limits is in deciding to protect us from ourselves.” – Ronald Reagan

      • atc333

        No where in Dodd Frank does it require the Bush Administration to suspend all banking regulations, and allow banks to grant up to a 400K mortgage to a borrower based upon only a good credit score. No proof of income. No proof of employment. No references. no requirement the home purchased was to be for the borrowers residence. Nothing was required but a credit score.

        There is nothing wrong with the concept of granting a low down payment mortgage to a borrower who has made his rent payments, and has a good credit score, a job, can verify his income, and has references.

        Unfortunately GWB II and his minions did not see fit to require that of either brokers or banks. Fraud was rampant, Rather than enforce existing regulations which would have slowed the surging Bush Economy, Bush and the regulators turned a blind eye.
        Go back and read the reports of why the economic melt down occurred. A great part of it was failing to enforce existing regulations, or taking steps to slow the rapidly surging economy, which was a deliberate choice of the Bush Administration, as it was repeatedly warned.

        • ObozoMustGo

          atc… you must be a complete idiot! Hey STUPID……[knocking on your head] IS THERE ANYONE IN THERE???? OR ANYTHING?????

          Dodd-Frank was NOT law when Bush was in office. Obozo signed the law in the summer of 2010. Now I know it’s hard for you leftist freaks to understand this, but George Bush has not been President for nearly 4 years. I know you leftist freaks love to blame Bush, and your post makes you just another one of the thousands of useful idiots all repeating the same mantra without having a single clue what the hell you’re talking about. But you are dead wrong.

          The fact is that the banks were following the rules set forth by the government that encouraged them to offer loans to people that could not afford them. And the Fed made sure that money was always plentiful and cheap. The reason they did this was because the politicians had a brilliant idea that home ownership was a great political football. So they decided to skew the market.

          Further, the housing crisis was as much Obozo’s fault as anyone elses. You see, when Clinton came into office in 93, he leveraged the Community Reinvestment Act (CRA) that was signed by the now 2nd worst president in American history, Jimmy “The Fool” Carter in 1977. Clinton empowered the act by utilizing a then little known socialist organization called ACORN to reach into the poor communities and put pressure on banks to lend to them. It is a FACT that Obozo represented ACORN in their lawsuit against Citibank (the first lawsuit of it’s kind) to force Citibank to start lending to people that could not afford it. All in the name of the do-gooders who sought to increase home ownserhip. Citibank capitulated rather than have ACORN thugs camped out in their branches. And the housing crisis bubble began to expand at that moment.

          The horrible economy we have that was generated by the housing bubble actually IS Barak Hussein Obozo’s fault more than it was GWB’s fault. Blame your messiah. It is his fault, and now you know it.

          [click image to enlarge]

          Have a nice day!

          “We have elected some very intelligent people to administer our government… WHY do they (all elected government officials at all levels; National, State, & Local) not understand that we cannot continue to SPEND more than we take in indefinitely without end … … .????? Have we all gone nuts????… ..Eventually, income MUST equal or exceed spending; it’s just plain common sense, not rocket science… … !!!” – Anonymous

          • atc333

            So then, Bush owns the economic meltdown all on his own, just as you have pointed out Nowhere in any legislation or statute you can cite or point to is a mandate that banks have to lend to people who cannot afford to repay the loan, period. No legislation was in effect during the Bush Administration directing or requiring banks to loan ujp to 400k based upon only a credit score, and prohibited banks from checking references, job history, income, assets, yet that is exactly what was done, Bush abandoned practically all regulation to keep the bubble going, even though he was warned, as he did not want to risk slowing the economic expansion which he saw as a good thing..

            Take the time to read my comment, and the point it made as to why the mortgage meltdown and resulting massive losses in home values was much worse than they needed to be because of changes the GOP made to the Bankruptcy code…
            Bottom line is when someone such as yourself are unable to discuss my or other’s comments intelligently, by addressing the points raised one by one, and then rebutting them, they and you automatically revert to calling names.and using personal attacks such as:

            “atc… you must be a complete idiot! Hey STUPID……[knocking on your head] IS THERE ANYONE IN THERE???? OR ANYTHING?????

            Then,as you were unable to offer a response to the points made, how the GOP legislation changing the Bankrupcy Code made things worse,, you go on to create novel and unheard of theories such as Acorn, a voter registration organization, forced banks and Bush to mandate unsound loans to unqualified borrowers? And all this happened during the time Bush was President? How about a little documentation for your claims and startling new theories?

            If you really want to understand what went wrong, take time to read the various reports as to why the economy melted down, the biggest reason being the failure of the Administration to regulate the mortgage, banking and financial sectors. Perhaps you might even remember Bush’s favorite claim, that these sectors” would regulate themselves in their own enlightened self interests”. That theory, just like 3 GOP Administrations application of trickle down economics worked out really well for this nation, but then that is a discussion for another day.

          • ObozoMustGo

            atc… If I call you “stupid”, it’s only because it’s the truth. Should I call someone from New York a “New Yorker”, they should not be insulted because it’s the truth.

            As to your claims…. look up the fact that ACORN was suing banks to stop what they called “red lining” and open up home ownership to poor people. Look up who the ACORN attorney generating the suits was. You’ll find Obozo’s fingerprints all over this housing crisis at it’s source. This was done on Clinton’s watch. As well, you leftist freaks complaign about too little regulation, but don’t have the foggiest clue what you are talking about. But then again, you never do. That’s what makes you a leftist freak. Were you aware that Clinton was the guy that repealed the Glass-Steagall act that permitted investment banks to get into retail banking? Hmmmmm…. probably don’t like to talk about that, do ya?

            And the $400K number that you cite as being the amount that could be loaned with only a credit score? Where did that number come from? Maybe that was the number that the FHA said that they would guarantee up to? Ohhhh… yes it was. So that you know, Mr. Hypocrite yourself, guess what that number is today under BH Obozo? Save yourself the time… it’s $729,750 you stupid fool! Why aren’t you bitching at Obozo? Because you are a hypocrite. That’s why.

            The bankruptcy legislation was perfectly appropriate. Why should a judge be able to abitrarily cram down a loan and screw the lender? If someone cannot pay according to the agreed upon terms, then they should be forclosed on. Plain and simple. Don’t pay, get out! But you leftist freaks love judges screwing everyone else for your percieved inequalities, never realizing that there is another side to that ledger of being screwed. Classic leftist freak thinking.

            And by the way…. self regulation works just fine when the consequence is business failure. When there are bailouts (and I knock Bush just as hard as Obozo for that), there is no consequence to bad decisions, so keep on making them. Socialize the losses, privatize the profits. That’s a major problem with our country right now, and both sides have been guilty of it.

            Have a nice day!

            “Blaming a filmmaker for radical islamic violence is like blaming forks for obesity” – ObozoMustGo

          • atc333

            What did the banks have to fear from Obama’s fingerprints all over Acorn’s suit if the loans were not financially sound. Nothing. No court would have required a bank to enter into a mortgage doomed to failure except for applicants who were fully qualified, but for possession the 10% down payment. That is an excuse you have created , nothing more.

            By removing the cramdown authority, the GOP turned what could have been dealt with by the Courts into something which continued to accelerate, and dragged down the entire economy. No bank today, will loan an applicant $729,750.00 with only a good credit score. That came about only during the Bush II administration. Read the studies as to why the Bush II meltdown occurred. There were many causes, but regulatory indifference, and turning a blind eye was the larger cause.

            Bottom line, and the point of the entire comment was that the losses suffered by this nation would have cut in half, had cramdowns been allowed in bankruptcy. Despite being a rabid member of the Faithful, you obviously do not understand the concept of supply and demand, and the effect of hundreds of thousands of foreclosed homes on the housing market, which numbers could have been cut in half had the borrowers retained the property,and continued making reduced payments . = As far as “leftist judges screwing everybody” , leaving the code alone would have allowed the banks to be better off, the homeowners who could make the reduced payments on their principal home better off, and the housing market better off, and the Nation better off. However, under your” Classic Right Wing Freakish thinking,” it is better that everybody gets screwed, and the Nation suffers much more severely, as a result, so long as Right Wing ideological purity has been preserved.

            Obviously, you have not stopped to consider the consequences of having allowed all of the” too big to fail ” institutions which were in trouble in the financial and manufacturing sectors of this Nation. Their failure was brought about by greed, the result of thinking they could get away with it, the result of Bush’s belief in self regulation, which you also claim “works just fine when the consequence is business failure” . That result would have been a full blown Second Great Depression in the US, and as well the rest of the world. You really wanted that to have occurred simply to retain your concept of Right Wing Ideological purity? Apparently, you have still no concept of just how close to the total collapse of our economic system the GOP and Bush Administration had brought this Nation, with failed trickle down economics and deregulation, which resulted in the Bush Administration being able to snatch an economic meltdown and collapse out of the jaws of a balanced budget and growing economy. 8 years before.


          • ObozoMustGo

            atc… you are stone-cold idiot. No question. You keep going round and round trying to blame Bush but not accepting anything that Obozo or Clinton or Congress did to create the situation. The entire mess was driven by politician’s desires to increase home ownership. Plain and simple. Obozo, Clinton, Greenspan, Bush, Congress, both parties were complicit in the scheme to increase home ownership. They created the incentives and punishments that drove this bubble. No one else did that. DONT FORGET….. THEY ALSO CREATED THE BACKING THROUGH FANNIE AND FREDDIE that told the banks “hey, be stupid… we got your back” so their risks and costs were lowered. This is how things work.

            You seem to completely misunderstand this concept because you obviously either have a very low IQ, or you’re just a committed ideologue and useful idiot for the left. Which one is it?

            >”What did the banks have to fear from Obama’s fingerprints all over Acorn’s suit if the loans were not financially sound.””By removing the cramdown authority, the GOP turned what could have been dealt with by the Courts into something which continued to accelerate, and dragged down the entire economy.”<

            Why the hell should a judge have authority to arbitrarily place a value on a piece of real estate? The contract is simple. Bank loans money, house is security, you dont pay, bank takes house. Then the bank finds out the value on the open market when it sells it. Not because some judge arbitrarily decides value and pushes the losses onto the bank, forcing the bank into the relationship with a proven loser customer. And your belief that cramdowns would have cut losses in half is a reflection of a vast ocean of ignorance on your part. The market sets real estate values, not judges. What do you think would have happened to the banking industry or the real estate market if judges began just arbitrarily assigning new values? No body in their right mind would either enter into a mortgage or grant a mortgage if they foresaw a possibility of a write down through the courts. And this would further depress the real estate market, causing yet again another cycle of judicial cramdowns. All of it arbitrary, and nothing to do with the market value as determined by free people making choices on their own in the market. You leftist freaks do not understand this stuff, do you? The market always wins. You cannot control it. You can only screw it up. And your so stupid to suggest that the problem the government created can be solved by yet more government. Classic leftist fool thinking. This is why I say that liberalism is the disease that presents itself as its own cure.

            Finally, all your fear mongering about the collapse of our economy is nonsense. It's the same bullsheet that Bush and Paulson and all the politicians keep telling us every time there is a crisis, and it's simply not true. Let them go bankgrupt and come out of the process either sold off to stronger businesses, or renewed and able to start over. All this "Chicken Little the sky is falling" crap is just that. We have experience on our side to prove this is true. It's called the great recession of 1920's. Coolidge cut government spending and got the hell out of the way by doing nothing. And what did we get? It's called the roaring 20's for a reason. More Americans got electricity and cars and appliances and the middle class exploded.

            The problem with you leftist freaks is that anytime there's a little bit of pain, you go rushing to papa government with your damned hands out whining for government to "do something, do anything, but do something to help us" like a bunch of babies. Your mindset is automatically formatted to expect government to be the center of your lives, to be the provider of everythingm, and the eraser of all risks and pains. Politicians love idots like you because you will continue to vote for them and grant them access to your purse and take your freedoms all in the name of security. And you're so stupid that you don't even realize the folly of your ways. Papa Government is going to cure all your ills if you just trust them, right? Even if Papa Government is actually dead broke, and so far in debt there is almost no way out. And more spending and pampering of your lazy asses IS NOT going to solve this problem. WTF is wrong with you idiots? How can you be so blind to not realize this. It's all part of the same issue… your dependence upon government and foolish belief that government is somehow smarter than everyone else. That government is smarter than bankers and private industry and business men. Nothing could be further from the truth.

            Your insistence on perpetuating this debate, while admirable, is becoming quite boring. Your constant attempts to keep blaming Bush is more of the same old nonsense and distraction away from Obozo's failed record. I'd blame Bush too if I was Obozo because I sure as hell could not run on my record of failure.

            Have a nice day!

            "Blaming a filmmaker for radical islamic violence is like blaming forks for obesity" – ObozoMustGo

          • atc333

            “What do you think would have happened to the banking industry or the real estate market if judges began just arbitrarily assigning new values? No body in their right mind would either enter into a mortgage or grant a mortgage if they foresaw a possibility of a write down through the courts”.

            Obviously the Banking industry and the real estate markets functioned quite well up until 2005, when Bush and the GOP amended the code. You seem oblivious to that fact.

            As I have said before, You apparently think it is far better to destroy the economy with failed GOP Right Wing economic theory, than take what has worked well in the past and reapply it to rebuild the Nation.

            You do like to call others stupid and other such derogatory names, but it is increasingly obvious that you are unable to grasp the concept behind the post from the very beginning, which was, had the Bankruptcy courts retained the ability to cramdown mortgages for the bankrupt owners who were able to make the payments on the reduced but actual value of the property, the impact of the mortgage meltdown would have been much less severe, as there would have been many less bank foreclosures, and therefore many fewer unoccupied, bank owned homes driving down property values accross the Nation. In other words, instead of seeing of up to 45% losses in the value of homes, the loss of value could have been reduced to up to half of that amount. This would have benefited the owners, the banks, the local government, and the Nation.

            I feel badly for you that you are so hostile to anyone who may have a different opinion than yours, and you feel compelled to to resort to insults and names instead of addressing issues, In addition to that issue , you also appear to be unable to grasp the not very complicated concepts that others may from time to time make the effort to explain to you the a basis for their opinions , and why possibly, you might just be mistaken in your own opinions..

            To recap the point of my first post, had the GOP and GWB not stripped the US Federal Bankruptcy Courts of their power to cramdown a mortgage on a home, to its actual value, instead of leaving it at the full mortgage amount, , conditioned upon the mortgagor in bankruptcy being able to maintain the payments which were reduced as a result of the lower value, then there would be thousands and thousands of fewer foreclosed homes sitting empty,across the nation, and driving down the values of homes of every homeowner. Are you even aware that some banks and or cities are simply tearing the homes down to avoid maintenance costs and taxes? So, how much money has each bank lost on properties such as these?

            To help you grasp the concepts, , assuming you own your home, had the Bankruptcy Courts been allowed to function as was originally legislated within the Bankruptcy Code, this could have resulted in your home, and hundreds of thousands of other homes being worth 10 to 20% more than they are now valued at today. Perhaps, if you put in the perspective of your own wallet, you might understand the point being made.

            If you cannot, you have my sympathies.


          • ObozoMustGo

            act… you still don’t get it, do you? Some points…

            1) A judge does not set market value. Buyers and sellers do. That’s the whole point. Don’t be such a government drone. The market is buyers and sellers, not judges. And if the huge volume of mortages are getting crammed down, that influences what buyers and sellers do. It doesn’t happen in a vacuum like all of you single-step-thinking leftist freaks believe.

            2) You like to keep blaming Bush for bankruptcy laws, but you ignore the reason the problem is there in the first place. GOVERNMENT created the problem. Clearly, I have proven this.

            3) The banking and real estate markets functioned perfectly well for a couple of hundred years until politicians… namely Clinton… sought to manipulate the markets for their political goals of increased home ownership among the poor.

            4) The thug-in-chief Obozo has blood on his hands in this mess for the work he did at ACORN suing banks to force them to offer loan products to poor people. Now you fools call those same banks “predatory lenders.” pfffft! What a bunch of morons you are.

            5) Off topic – Obozo has the blood of 4 Americans on his hands because he ignored the intelligence briefings telling us that the terror attacks on the embassies were planned for 9/11 and they were coming. Then he didn’t have the guts to even answer questions or even give an ounce of a shit to deal with the crisis spreading in the Middle East. OBOZO KNEW IN ADVANCE OF THE ATTACKS AND DID NOTHING!!!

            Have a nice day!

            “The trouble with our Liberal friends is not that they’re ignorant; it’s just that they know so much that isn’t so.” – Ronald Reagan

          • atc333

            Nowhere in the Federal Code, and the specific legislation you consistently cite does it require banks to abandon good, sound banking procedures, including reviewing an applicants income, assets, job history, references, and credit score. Just the opposite, it requires “sound banking principals” The meltdown was not because of that legislation, but because of the Bush Administrations failure to enforce banking regulations, instead, choosing to turn a blind eye to the overheating real estate and mortgage markets, as well as the violations which lead to the collapse. Bush was warned repeatedly of the upcoming crisis, and did nothing to slow the markets down.

            Please cite by copying and pasting a section of the US code which directs banks to loan funds to unqualified borrowers based solely upon a credit score. You cannot.! No such mandate existed in any Federal Statute.

            You are right, prices are determined by the buyer and seller. Before 2005, the Bankruptcy Court would determine, in an hearing the current fair market value of a piece of property though the use of expert testimony. provided by the bank and the debor, and come up with a much more accurate value than you would get from your brother in law broker who spends a half hour looking at your house, and tells you what to ask for it. In the case of a mortgage in excess of that value, it would be reduced to the actual value of the property, and if the mortgagor could prove he could make the payments on the crammed down amount, he was allow to retain the property, subject to the payments.

            Had this process been available to the Bankruptcy Courts over the past 3 year, 22 months, the massive number of empty homes dragging down the value of real property across this nation would have been substantially reduced, property values would have been much higher, and banks individual losses would have been much less.

            Again, you do have my sympathies if you cannot wrap your mind around this concept, or you are so rabid in your “conservative values” you refuse to even attempt understand it..

            As the old farmer once said, “You can lead a horse to water, but you cannot make him drink:”

          • ObozoMustGo

            atc… so by your rationale, the court system (aka the government) could have solved the whole problem just by giving judges the power to determine market value? Is that what you are saying?

            Further, even if the courts have that power, the fact that they must exercise it is only a response to a problem that exists before hand. And that problem that existed before hand was clearly created by the incentive system put in place under Clinton and enforced by goons like Obozo and ACORN. The problem was NOT regulation, per se, but the wrong regulation that created perverse incentives and put taxpayers on the hook for hundreds of billions with Fannie and Freddie.

            And don’t tell me Bush did not try to get a hold on the growing problems. In fact, he did as early as 2003, and Congress even had hearings with the criminal Frank Raines in 2004 on the solvency of Fannie where he actually told the committee that loss reserves of 2% were adequate and the loans were “riskless.” It was Maxine ” this socialist” Waters, Barny “faggot” Frank and Chris “friend of Angelo” Dodd that blocked any attempts to get control over Fannie and Freddie. Even Greenspan warned of the dangers of Fannie and Freddie, and their influences on the markets in 2004.

            It’s all on YouTube for you to see. DemoncRATS blocking Republican efforts for stronger oversight and regulation of Fannie & Freddie.

            www dot youtube dot com/watch?v=EzWrnUezDOU&feature=related

            www dot youtube dot com/watch?v=A_2D4mK95NQ

            There’s hours of footage and evidence that shows the DemonCRATS desires to increase home ownership was at the heart of the housing crisis. And Clinton was the one that lit the fuse with his changes to the CRA in 1995.

            You keep wanting to find some way of blaming Bush as a distraction away from the fact that Obozo has done NOTHING positive for our economy. All he’s done is succeed in playing the class warfare game, pitting groups of Americans at one another’s throats. He is a failure, and he must go.

            Have a nice day!

            “We have elected some very intelligent people to administer our government… ..WHY do they (all elected government officials at all levels; National, State, & Local) not understand that we cannot continue to SPEND more than we take in indefinitely without end … … .????? Have we all gone nuts????… ..Eventually, income MUST equal or exceed spending; it’s just plain common sense, not rocket science… … !!!” – Anonymous

          • atc333

            Ah, the light is beginning to go on! My answer is Yes, to a substantial degree, for your benefit, for the banks benefit overall, and the Nations benefit,, had the Bankruptcy courts had the authority to modify mortgages to the value of the property value following upon the economic meltdown the banks and economy. The the public would have saved money, and many mortgagors, and owners would have retained value in their homes because the number of empty, foreclosed homes on the market would have been substantially reduced, and have been less detrimental to the over all national and local real estate markets.
            You forget, Cramdowns were done for years, including during the Savings and Loan debacle back in the 80s.

            That said, until you can cite me the specific US Code section or sections, or provide me with the specific Federal Banking Regulations directing banks and Regulators to waive all vetting of all borrowers, other than a credit score, much less those borrowers with less than 10%, down, there really is not much more to discuss between us..

            The economy went to heck in a handbag during the Bush Administration’s watch, His policy was “deregulation”. Bush had a majority in congress as I recall, and did have the ability to push reform though regardless of the Democrats, had he wanted to, just as he did when he and the GOP Congress in power amended the bankruptcy code at the request of the banks and credit card companies.

            Still waiting for your citations.

          • ObozoMustGo

            act… your faith in governments’ ability to control markets is both ignorant to historical presidence and, frankly, childish. You actually believe that all we had to do was turn over the real estate market to judges and everything would be fine. You must be a stupid lawyer! hahahahahahahaha…. There is no cure for those who are incapable of more than single step thinking, as if there are no unintended consequences. As if politicians and judges are able to bend the laws of supply and demand to their will. hahahahahahahahaha…. Live on in fantasyland, fool.

            Here’s some reality for you….

            I know you don’t like this, and you probably did not watch the videos I sent you because you don’t like facts, like any leftist freak doesnt. Here is the timeline of the warnings from Bush and McCain of all people.

            www dot youtube dot com/watch?v=cMnSp4qEXNM

            Further, look up “The honorable Janet Reno remarks to the National Community Reinvestment Coalition, Friday, March 20, 1998”. Here you will read her very own words about what changes were made to “turbo charge” the CRA forcing lenders to create loan products to what they call the “under served” people of poor communities. Without government forcing banks to create loan products that poor people can afford, we would not have seen such a slackening of requirements. While the CRA did NOT establish loan terms, (we were still a little bit free to determine our own business), and while it did give the bunk/crap lines of “responsible lending” lip service, what it also did was threaten banks with huge fines and sanctions if they did not meet the government goals of numbers of loans. So in effect, the government forced banks to lower their standards so they could make loans to people that otherwise would never have qualified. It was “lower the standards, or get huge fines.” In fact, the government was the one that was offering gurantees on the mortgages so that first time homebuyers did not have to come up with down payments at all. You know this is true. Dont be a fool.

            For you to say that no one told the banks NOT to require 10% down payment is a strawman argument. Who says 10% down is responsible lending? You? Is 20% down responsible lending? Is 5%? What kind of mastermind are you to tell everyone else what their loan terms must be? You are NOT a mastermind, I can assure of that. Give up that dream, pal, now! And neither are politicians.

            I’ll say it again… While the CRA did not establish loan terms, it absolutely put lenders into a position of being forced to drop standards. Thus the subprime market was born. Fannie and Freddie were the ones offering the backing of the mortgages and then the were selling them to Wall St. as government guarateed securities. The whole mess was created by government. And who do they blame? Not themselves. Despite all of evidence we have that proves it. No, they blame the people they strong armed and suckered into bad deals, then stuck us taxpayers and our grand children yet to be born with the tab. Politicians are NOT masterminds. More often than not, they are more stupid than average guy. You must be a politician.

            Have a nice day!

            As William Voegeli put it in Never Enough: America’s Limitless Welfare State, “Liberals don’t want the government to grow indefinitely. They just want it to be bigger than it is right now. The corollary of this stance is liberals’ refusal even to entertain questions on the dimensions of a welfare state that is exactly the right size.”

          • atc333

            Once again, you avoid the real issue, which was limited to the basic fact that changes to the Bankruptcy Code enhanced the disastrous effects of the Bush Economic Meltdown which could have been greatly reduced had the Bankruptcy Courts retained the authority to cramdown the amount of a mortgage on property to its actual value, provided the mortgagor convinced the Court of his ability to maintain the payments on the reduced amount. That is only what I have stated, and, not your attempts to rewrite or misdirect the conversation. to issues which are not directly relevant to the point being made.

            Your comeback is an attempt to give me a “history lesson” based upon distorted “Fox Opinions” along with your comment: that: ” You actually believe that all we had to do was turn over the real estate market to judges and everything would be fine.” Just like your cannot produce a Federal Regulation, or a section of the Federal Code which sets forth a directive to Banks to disregard sound lending practices, , you cannot produce any statement of mine which even comes close to your claim of”what you think I must believe You obviously are clueless as to what I have attempted to impart to you Instead, you continue to attempt to bring in issues and claims never a part of my original post.

            I will say though that it is strange, if all of those dire warnings about the negative effects of attempting to encourage banks to grant mortgages to lower income minorities, or other low income groups, instead of charging them more interest, or imposing harsher terms simply because of their color, or income level, which was well documented. and the real basis of threatened litigation, why didn’t Bush II, beginning in 2002, and continuing to 2005, when the GOP had a majority in both Houses in 2005, simply legislate changes in the laws you and Faux News deem the ‘real” cause of the meltdown? In fact, as an additional point, can you even document the existence of any legislation which was introduced by the GOP to rescind the legislation you are now so bitterly complaining about and using to excuse Bush’s general incompetence in managing our economy from 2005 to 2008?

            Finally, I also find it strange, you do not understand that name calling and derogatory remarks about others only devalues any legitimate arguments you are attempting to make, as it is generally accepted that those who resort to such tactics are unable to engage in a real debate of the issues. Instead, the real purpose behind those attacks is simply an attempt to enhance your own self concept and sense of worth by tearing down others.

            So, as you like to say,” Have a Nice Day!”

          • ObozoMustGo

            act5… your whole point that allowing judges to cram down mortgages would have averted the real estate bubble, or lessened it’s effects to any nominal degree, is false. You keep pointing to one potential resolution, a tactic, as though that’s the saving grace here. It’s not. Further, it ignores the reality that a massive number of people voluntarily walked away from their mortgages and never claimed bankruptcy. How are judges going to cram down mortgages for people that have no desire to claim bankruptcy? They’re not!

            What’s interesting is that you continue to qualify your point about cram downs as a solution far enough that the real world implication of it’s application, if done, would have virtually no effect on the economy as a whole. By your own definition, one must first claim bankruptcy and then must prove his creditworthyness to the court to pay a lesser amount. You see, only a small number of people claim bankruptcy relative to the economy as a whole, and fewer of those still would be able to claim an ability to pay on a loan unless the court totally destroyed the property value artificially. As well, doesn’t a court cramming down a mortgage value injure the bank’s balance sheet and therefore have the same effect as if they forclosed and sold the property at a loss? Of course it does. What you leftist nutjobs fail to realize in any economic discussion is that the ledger has 2 sides. There’s credit for every debit. Changes to the bankruptcy laws would have had negligible effect on the market and economy as a whole.

            You continue to miss the real point of this discussion. You like debating a particular tactic (cram downs), but assiduously avoid any discussion of where the disease originated…. With Jimmy Carter, the CRA, and the Clinton regime’s strengthening and enforcement of that CRA in order to boost home ownership for people that otherwise would never qualify for loans under normal financial scrutiny. Like I said, while the CRA did not specify loan terms directly, it did enforce the reduction in lending standards needed to give people loans when they would otherwise not qualify under traditional lending standards. THAT is where the problem originated –with politicians attempting to manipulate the market for their own political gain.

            Also, don’t infer from my analysis that I excuse Bush for his shortcomings. I don’t. But you obviously have an axe to grind against a guy that’s been gone for 4 years and seek to place all the blame on him for a single change in bankruptcy code that would have had virtually no effect on the problem as a whole. Yes, Bush and the Repubs that were in congress blew their chance to alter course. But they did not have a supermajority and needed cooperation. Nevertheless, it is clearly a failure on their part for not doing the right thing when it needed to be done, even in the face of opposition.

            You can go to YouTube and watch the committee hearings where Barney and Dodd and Waters and the whole crew of leftist freaks defended Fannie and Freddie and refused to go along with any attempts to gain control with greater oversight of their operations. This is not “Fox News opinions”, it’s FAC T. You can watch them in their own words and you cannot dispute what they said or when they said it.

            Finally! I was waiting for you to throw out the race card. It’s impossible for a leftist freak not to throw out the race card in any discussion of length. It always comes down to the Holy Trinity of the left: Race, Gender, and Class. The world is viewed through that lense for you, isn’t it?

            And here’s where you lose the argument: your suggestion that banks give riskier borrowers favorable terms is utopian, leftist nutjob thinking. The real world doesn’t work like that. Riskier borrowers pay higher interest rates and more difficult terms. What is an interest rate if not a reflection of the risk taken to make a loan? I suppose in your ideal world, the masterminds in government would be telling banks to whom to loan money, how much, and at what terms. Correct?

            To conclude, your belief that the tactic of mortgage cram downs would have had significant effect is patently wrong. But it’s a narrative that you leftists love keep going because it allows you to continue running against Bush and provide cover for the failure that is Obozo. As well, it has been clearly established that politicians’ attempts to manipulate a market/industry for their political gain will always turn out bad. You asked a question about why Bush and the Repubs did not repeal the CRA if they had the chance. Well, the truth is that whether or not a politician is an R or a D, in most cases they share the same effed up views that government control over the economy is a good thing, when in fact, it’s not. But that brings up a more broad debate about the role of the Fed government in America. Later on that one.

            Thanks for the great discussion, atc. I mean that sincerely.

            Have a nice day!

            “No man’s life, liberty, or property is in so much danger as when the legislature is in session.” – Mark Twain

          • atc333

            Strange. You have not been able to cite Federal Regulaitons, Federal Statutes, directing banks to waive good banking practices in vetting their borrowers. You also have been unable to direct me to any bills which where brought by the Republicans in control of the Congress correcting your perceived massive threats to the banks by Acorn, Obama, and other left wing groups which would have driven the US banks to collapse with their frivolous suit compelling them to lend to unqualified borrowers withing vetting them. Those suits would have had as much success as you being sued by a commentor for emotional distress though your name calling. on line.

            There is nothing wrong with the concept of allowing individuals with low income to buy a home with a small down payment, provided that they, in all other respects have good credit. Why should a poor person who met all other criteria, be required to pay 30 to 45% more to rent a home, than to simply buy it, when all that is preventing it is the usual 10 to 20% down payment:

            The Statute laid out economic factors and was an attempt to cure them. Bush and Co chose to ignore theose directives, and created an unregulatted “free enterprize zone for every abusive lending techniqe seen, bait and switch, and outright fraud, and chose to do nothing to stop it.

            My point stands, you can ignore it or deny it if you like. If there were half to a third less vacant homes sitting unsold in the US house market, the losses suffered by the Banks, states, and Nation would have been substantially less.

            You have your opiniion. I have mine. Buy the way, I spoke of economic factors, as did the Statute, You have thrown out the “race card’.

          • ObozoMustGo

            atc… the legislation cited IS the CRA. What part of that is so hard to understand? The CRA and it’s strong arm enforcement by the Clinton regime WAS the origination of the problem. Further, I have referred you to video footage that clearly documents the DemonRATS blocking attempts for more oversight of the GSE’s of Fanny and Freddie. In addition, I have referred you to Janet Reno’s own speech where in she lays out exactly how the government is strong arming the banks into lending to people that cannot afford loans. I suppose you have looked at neither of those pieces of evidence. They are contrary to your belief system.

            Granted, shame on Repubs for not following through, but clearly the DemonRATS blocked those attempts in committee and in the Senate through Chris Dodd and the fillabuster threats. Again, shame on the Repubs for not following through. Clinton and the DemonRATS created the problem and the Repubs were too feckless to deal with it. Bush and Co. created nothing. They only faild to act to stop the train wreck that sound minded people knew was coming.

            Your assertion that cramming down mortgages would have resulted in fewer vacant homes is a pipe dream. The reason the homes were vacant in the first place was because there was no demand for them. And an artificial price valuation by the bank would not have resulted in people magically wanting a home, unless the cram down was so deep as to be sufficient to provide incentive for a new buyer to take the property. In which case, the result of falling values is NOT halted. Only the market sets value, not judges. People making decisions on their own about what to buy and how much to pay.

            You ask why a low income person should not be able to buy a house? That’s a dumb question that presupposes that there is someone who does not want a l0w income person to buy a house. That’s a patently false assumption. The fact is that if they have saved their money and have both the down payment and the income to pay for a house they can afford, there is no one stopping them. In fact, this may come as a surprise to you, but banks actually are in the business of lending money, not holding onto it. It’s the government, though, that forces them to create loan products that allow non-creditworthy borrowers to purchase houses with down payments being financed along with closing costs. It’s government programs that give them down payments they did not earn.

            Interesting statement of yours: “The Statute laid out economic factors and was an attempt to cure them.” — Exactly how do politicians “cure economic factors?” This is precisely the difference between you and I. The very fact that you make such a statement belies your belief that government enforced economic outcomes is somehow a noble or good thing. On the other hand, I recognize that government cannot control economic outcomes without controlling the people, and they almost always have disasterous consequences that were unintended. In fact, the funny thing about you leftists is when you see the calamity that you have caused, you blame it on others and then your solution to that calamity is MORE of the same that created it in the first place. This is why I say that liberalism is the disease that presents itself as it’s own cure. You guys fail to realize that government control over economic outcomes requires controlling the people, and is therefore further reduction in individual liberty. Every new attempt to control is, in fact, a reduction in the liberties of the people.

            I threw out the race card? hahahahaha… typical leftist nutjob….. no such concept came from anything I typed. It was a response to your statement that included this portioin of the sentence in your Friday post at 10:31 pm: “… imposing harsher terms simply because of their color…” YOU typed that, not me.

            Have a nice day!

            “Rule of thumb… never trust what comes from the mouth of a socialist politician. They are only lying so they can spend other people’s money to build up their own power.” – ObozoMustGo

          • ObozoMustGo

            atc… The DemoncRATS have not finished destroying the economy enough. Get ready for another housing bubble. They continue to try to manipulate the lending industry for their political goals. Hat tip Bill Tucker at American Spectator.

            And You Thought the Housing Crisis Was Over!
            By William Tucker on 7.27.12 @ 6:09AM

            The Community Reinvestment Act is back, as if 2008 never happened.

            Do you remember that thing about how the banks wouldn’t lend to blacks and Hispanics because they were racists? And do you remember how they passed the Community Reinvestment Act so that banks were forced to reduce down payments practically to zero and lend to a lot of people they knew were bad credit risks? And do you remember how Wall Street bundled all these risky subprime mortgages and sold them to investors around the world so that when it became clear that those people weren’t going to be able to pay their mortgages banks everywhere were left holding the bag and all five of the Wall Street investment houses either went under or had to be bailed out by the federal government?

            And do you remember how, when it was all over, liberals said it was actually the banks’ fault for “deceiving” all those people into thinking they could afford to buy homes and that the banks should be punished for it and some of those people be allowed to keep their homes anyway? And do you remember how all this cost the government close to a trillion dollars and put the whole economy in a hole that we really haven’t begun to dig ourselves out of yet?

            Well, get ready because the whole thing is about to happen again.

            Yes, believe it or not, the federal government is now starting another initiative to force banks to lend to low-credit-rated blacks and Hispanics — not just anybody but specifically blacks and Hispanics — and is threatening — and already imposing — huge punitive fines if they don’t. Moreover, this time they’re going even further. They’re going to take over the credit rating agencies and force them to change their standards to accommodate blacks and Hispanics so that nobody will have any idea who is a bad credit risk and who is not. In so many words, the government is about impose its will on the whole home-lending market and force another round of bad loans so that the banks are going to be looted once again so that even the federal government may not be able to bail them out this time.

            The principle instrument this time is not the Justice Department, Fannie Mae and Freddie Mac, as it was last time, but the brand-new Consumer Finance Protection Bureau, designed by good old Elizabeth “Nobody-Ever-Made-It-On-Their-Own” Warren, which should really be called the Bureau for Bringing Down the Entire Economy. As reported in last Sunday’s New York Post by Hoover Institution Media Fellow Paul Sperry, the CFPB has just announced that it is adopting a 20-page “Policy Statement on Discrimination in Lending” issues by the Interagency Task force on Fair Lending in 1994 that kicked off Attorney General Janet Reno’s draconic enforcement of the Community Renewal Act. Part of the policy statement reads, “Applying different lending standards or offering different levels of assistance to applicants who are members of a protected [i.e., minority] class is permissible in some circumstances. Providing different treatment to applicants to address past discrimination would be permissible if done in response to a court order.” There are already plenty of court orders sitting around.

            Just two weeks ago Wells Fargo caved to a Justice Department offensive and paid $175 million for alleged past discriminating against minority borrowers. All this occurred even though the bank received an “outstanding” grade in its most recent Community Reinvestment Act exam. The government did not even bother to prove discrimination in a single instance but relied instead on statistics showing lower rates of homeownership in minority neighborhoods. Thomas Perez, the Justice Department honcho who is spearheading this campaign, says banks discriminate “with a smile” and “fine print” and are “every bit as destructive as the cross burned in a neighborhood.” Nice objective evaluation there.

            As in most such cases, Wells Fargo chickened out about going to court and refused to admit any wrongdoing but agreed to all kinds of diversity training and sensitivity counseling. The bank will have to “prominently display” a notice informing minority customers that they cannot be turned down for loans just because they are receiving public assistance such as unemployment benefits, welfare payments or food stamps. (Maybe they can even use food stamps for the down payment.) Wells Fargo must provide minority customers $50 million for down-payment and closing-cost assistance, including “Borrower Assistance Grants” of up to $15,000 per individual. It was also ordered to pay $125 million to as yet unnamed victims of previous discrimination. But get this! If those past victims don’t show up, the money must be handed over to community organizing groups. President Obama, you have a job waiting for you if you lose office this fall.

            Almost a dozen banks are under similar investigation and will be soon falling like dominoes unless one of them musters the courage to stand up to the Justice Department in court.

            But the real destruction is going to be wrought by CFPB, created by Dodd-Frank and just getting started. Last week Richard Cordray, who is serving as a disputed recess appointee without the consent of the Senate, announced that not only will CFPB be going after banks but will also target the credit rating agencies that evaluate people’s creditworthiness based on past performance in paying debts. They too will be vetted for racial discrimination. In May 2011, the non-partisan Policy and Economic Research Council completed what it described as the first evaluation of Equifax, Experian, and TransUnion, the three credit rating agencies. The report concluded that in less than 1 percent of cases was a score changed by more than 25 points after a dispute process and that “consequential inaccuracies are rare.” Moreover, “95 percent of disputing participants were satisfied with the outcomes of their disputes, suggesting widespread satisfaction” with the process. In other words, credit ratings are pretty accurate. Banks rely heavily on them and say that, if anything, the agencies tends to underestimate the rate at which minority buyers will default on mortgages.

            So guess what happens next? Under the pretext of “regulating” the agencies, CFPB will hammer away, forcing them to upgrade the scores of blacks and Hispanics. Standards will be diluted or abandoned entirely and within a few years the banks will be flying blind with no reliable information on who is a good credit risk and who isn’t. Does that sound like the formula for another mortgage meltdown? It sure does to me.

            At this point in my story, it is customary for the journalist to proclaim that he isn’t trying to protect the lenders but is really concerned with those unfortunate minority individuals who will end up with bad loans. Sperry follows this pattern by declaring, “In the end, it will be the minorities Obama and [Eric] Holder are trying to help who will be hurt most.”

            I think I’m going to have to depart from the tradition. I think what we are witnessing is the looting of America on behalf of minorities in a way that better end soon or we are going to bring the whole system down upon our heads.

            With the current administration in power, the perception is growing among minorities that everything in the economy can be had for free and that President Obama and his administration are going to provide it for them. For instance, there is a scam going on around the country right now where con artists call up homeowners and tell them that President Obama has a new program where he is going to pay their electrical bills. All the homeowner has to do is provide his Social Security number and other personal information. The con game started in Michigan among minority populations in depressed cities such as Flint and Grand Rapids. It has now spread as far as far as Florida and Mississippi. More than 2,300 people in Michigan were bilked out of $1 million, another 10,000 have been swindled in New Jersey.

            What is amazing is that all these people actually believe that President Obama is ready to pay their electrical bills. It is symptomatic of a rising tide of dependency and the growing sense that nobody has to be responsible for anything anymore and we can all live off “the rich.” If we don’t get these people out of office soon, there isn’t going to be much left to pick over in the American economy.

            Have a nice day!

          • atc333

            Unfortunately, just as the GOP’s has its failed polices, the Left also goes too far from time to time. It is one thing to require banks to lend to borrowers with otherwise good credit, with their documented monthly income, but little down payment, but in other respects meeting all the standards for “good banking practice”, and another thing entirely to require banks to make loans doomed to failure.
            In the waning years of the Bush Administration, there was an intentional implementation of hands off deregulation through turning a blind ey, despite the mandate “in accordance with good banking standards” Banks abused the customers by first approving an application, and then the day before closing completely altering the terms of the proposed mortgage. This occurred over and over again, greatly enhancing profits, and risk. Combine that with no adherance to good banking standards, and the mortgage meltdown was created.

            This particular issue could have been avoided, had the Bush Administration done its job, just as funding many unqualified or over extended mortgagors should have been ended. Like it or not, the failure to regulate was a material cause of the economic meltdown, just as determined by several investigations into the meltdown.

            What the next Administration does with this economy will depend in a great deal on what the Voting Public decides to do about the current makeup of the House of Representatives. Will it vote them out over the next few years, and allow more moderate legislators to step in, or will it be another 2 years of block and stall? Will the Voting public end the Obama Administration, and put in Mitt with his own version of Bush II economic policies as “solutions”, or move the Nation back to the middle, to more Clinton types of policies, which actually grew the economy and balance the budget, with some GOP help.

          • Obviously, you must have missed this section of the law which you claim forced the Banks into funding loans with no proof of income, residency, job, assets, or ablity to pay it back, much less that many homes were bought for investment purposes, and not to live in, which pretty much defeated the purpose of the act. Go down to section 802 (b) which did not direct banks to ignore sound banking practices, Only greed did that.

            Sec. 802.
            (a) The Congress finds that—
            (1) regulated financial institutions are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business;
            (2) the convenience and needs of communities include the need for credit services as well as deposit services; and
            (3) regulated financial institutions have continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.
            (b) It is the purpose of this title to require each appropriate Federal financial supervisory agency to use its authority when examining financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions.
            Sec. 803.

          • ObozoMustGo

            Ellery… thank you for the cut and paste of the Act. However, what you guys fail to understand is that no bank was following this Act because there was no reason to do so until they started getting sued by Obozo and ACORN, and harrassed and threatened by the Feds under the Clinton regime. You do remember the term “red lining” as it was coming up in the early to mid 1990’s don’t you? This was all done because the Clinton regime wanted to increase home ownership among the lower classes.

            Further, if you’re a banker and the Fed tells you to make loans and that, if you do according to their political wishes, they will make sure the government covers their asses. That’s where Fannie and Freddie come in. In other words, they were told “you make the loans, we’ll guarantee you are profitable. What banker is not going to take that deal? Not many of them. And you know it. Some were smart enough not to get hooked into that scam. But the rest were doing what bankers do…. loaning money at reduced risks.

            Im not saying the banks are are not to blame somewhat here, but I am saying that government created the incentive system for political reasons, and when government screws with the markets, they ALWAYS eff it up!

            Have a nice day!

            “The most terrifying words in the English language are: I’m from the government and I’m here to help.” – Ronald Reagan

  • Our daughter and her family went through hell for almost two and half years, but they finally got it ironed out with Chase. It took a half a dozen resubmissions of the same documents, persistence and a can do attitude to finally get accomplished. I don’t envy anyone having to go through the process. It is frustrating, time consuming and maddening as hell. You have to keep at the banks to do the correct thing…and believe me it ain’t easy.

  • bcarreiro

    We have to work from top down with these banks..the ceo’s, the underwriters, the employees to make the loan modification process more clarifying to the homeowner’s. do the banks believe in circumstance? when homeowners come into trouble and have paid religiously for yrs. they shouldnt lose their home but work with them to adjust a mortgage rate thats more affordable and a plan to repay any shortfall that the bank has taken in a timely manner for the HOMEOWNER to payback. instead these banks would rather write it off then work a little harder to see one stay in a home that they have spent yrs paying for.

  • We need more effective regulation – and regulators – not less, as the GOP proposes.

    • Tom_D44

      Dominick I agree with you on one point and disagree on another. We do need effective regulation but not more regulation. The government needs to figure out how to get good people involved in regulation and how to streamline and put some intelligence into the process. I am not a banker and don’t understand, specifically, that way that industry is regulated but clearly the regulators involved in the gulf oil spill had failed in their roles. The same apathy this article claims of the bank employees is what I see in government employees daily as I deal with them in my industry.

      I can give you another very current example of bad regulation which we are going through right now. I am a contractor and 2 years ago the EPA put into force a law regulating lead paint on older buildings. The EPA has done absolutely nothing to notify contractors about the new requirements or to implement the enforcement to get everyone into compliance. Consequently, 2 years ago some contractors voluntarily got into compliance and most didn’t figuring that they would be notified about the new requirements at the appropriate time. This created a big problem for those in compliance because they were pricing themselves out of the market. Lead based paint has not been used since around 1950 and with the continued re-development of older neighborhoods much of it is going away on it’s own. But if you run into a project that has lead paint the remediation costs and the documentation that is required can cost tens of thousands of dollars on a renovation. By the CDC’s own statistics today, the incidents of lead poisoning is becoming negligible. In the absense of common sense and re-evaluation of the initial problem, the EPA is sending out auditors to implement fines and penalties on contractors over projects completed in the last 2 years since the law went into effect. So in the middle of a recession, when construction is down, and we are facing high levels of unemployment, especially in the construction industry, the EPA is now enforcing a one shoe fits all approach which will make the costs of these projects skyrocket. Many contractors will go out of business overnight just from the fines and penalties that will be imposed. Those that make it will be looking at less available work when homeowners decide not to proceed with projects because of the additional costs added to their projects. Many contractors like myself will choose not to work on homes containing lead based paint just not to have the aggravation of the liability and documentation and consequently, those homes will become less valuable on the market.

      I believe that the intentions of the law were all good, but the negative effects of the timing and the way it has been implemented shows how bad the government is at it’s job. Government is too slow to react to anything. By the time they put together a solution, the problem is either gone or has changed and they end up solving nothing. In the middle of the worst recession we have seen, they are going to crush a remodeling industry over an issue that has been going away on it’s own for years. And these guys are going to be running your healthcare soon. Good luck.

      • ObozoMustGo

        Tom… again… waaaaaayyyyyyy too much common sense in that post. This common sense, real world thinking does not comport with the world view of the leftist freaks.

        Have a nice day

        “No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth!” – Ronald Reagan

        • MM2013

          “Facts are stupid things.” ~ Ronald Reagan
          “Trees cause more pollution than automobiles.” ~ Ronald Reagan
          “I am not worried about the deficit. It is big enough to take care of itself.” ~ Ronald Reagan

  • atc333

    The real failure in the banking, real estate, and mortgage foreclosure debacle is that back in 2005, Bush and the GOP chose to revise the US Bankruptcy Code, one key provision which was removing the power of the Federal Bankruptcy Judges to “cramdown” or reduce the value of a mortgage on property which exceeds the value the actual value of the property. For mortgagors, who could make the payments on the reduced mortgage amount if it were crammed down, since 2005, this is not an option. The result is that banks are not forced into accepting a modificatin of the mortgage, but can play hardball with mortgagors, and simply forelose the mortgage.

    To put it simply, once again, the GOP has compounded the mortgage loan crisis created by the Bush II failure to regulate the mortgage loan and financial sectors, by pandering to the top 2%, and removing this option available to the Federal Bankruptcy Courts.

    Even now, that provision to allow cramdowns, could be restored to the Courts. It has not. Many mortgagors could make the reduced payments on their homes if the mortgages on them was reduced to actual value, less 5%. Much of the past 2 or three years could have been avoided, along with the massive losses to the middle class as property values tumbled because of the shear numbers of empty foreclosed homes.

    Chalk one more disaster, along with American lives destroyed up to the GOP, simply because they decided to pander to the banks and credit card companies, and remove an essential form of relief which had been available to debtors from the Bankruptcy Courts up until 2005..

    • Tom_D44

      So let me understand your point. You want to buy a property, a new home, that will make your life really nice – but you don’t have the money. You go to a bank to get a loan. You select the property, the location, how much you are comfortable paying for that property, you inspect it for condition, and assume all of the specifics with regards to future repairs, upgrades and maintenance, and you hope to keep up with that maintenance – and all of these variables are within your control. The bank gives you the money and you buy the home. Do you really think that the bank should share in the risk of owning this property with respect to it’s continued value or it’s loss of value for whatever reason – be it the market conditions or your inability to maintain the property? Really?

      And so if, for whatever reason, the value of the property goes down you should be able to go to the bank and re-structure your loan to drop the value and place the losses on the one institution that gave you the ability to get the home in the first place? Really? Do you want a banking industry? This is no deal for the banks. I am no fan of the big banks and recognize many of the problems they have created, but the concept you seem to be supporting makes no sense at all.

      • I dont disagree in principle with you,,, however with the banks receiving so much government funding dont u think/feel the banks should eat the difference between what is owed and the new value of the homes,,, isnt that what the money was for in the first place,, what did the banks do with our tax monies when they have not helped the home owners??

      • ObozoMustGo

        Tom…. welcome to this sea of leftist insanity called “The Memo.” You will note that nearly 100% of what they say makes no sense at all. If they were able to make sense, they would first be capable of rational though. And if they were capable of rational thought, by definition, they’d be conservatives. Unfortunately, most of them are consigned to a life of foolishness, jealousy, and envy.

        Keep fighting the good fight.

        Have a nice day!

        “The trouble with our Liberal friends is not that they’re ignorant; it’s just that they know so much that isn’t so.” – Ronald Reagan

        • atc333

          Sounds like you have a very bad case of “Projection”. By the way, Reagan was only ranked at number 5 out of the last 6 presidents for job creation, substantially added to the Federal Deficits which you like to carp about, unless it is Mitt Romney and Ryan adding 5 Trillion to them with their “impossible ” budget,
          Finally, Ronald Reagn would now be drummed out of what now passes for the GOP these days, as he would be considered to be much too “moderate” to now be accepted by you and the Faithful.

      • atc333

        Still waiting for my response to your comment to appear, as it was supposedly being reviewed by the moderator.

        Bottom line is a mortgage cramdown had to be Bankrupty Court approved, and was not freely handed out. The Debtor had to prove he could make the payments on the crammed down amount. Had the GOP allowed this tool to remain with the Court, many of the hundreds and thousands of mortgage forclosures would have been averted, and the banks would have lost about half as much money, as the fiscal effect of those mortgage foreclosures would have been cut in half. In addition, the Banks would not have incurred Court Costs, Attorney’s fees, insurance on the unoccupied home, maintenance, costs, vandalism, as well as taxes on the unsold homes. Finally, instead of losing up to 40% to 45% of the homes value, and and equivalent amount on the properties sale by the bank, they would have had less than 25% of the losses, would have had payments coming in , and would not incurred the substantial above costs of foreclosure and taking back the property. Even from the Banks point of view alone, it should have been a no brainer.
        More importantly, it also would have saved our economy from at least half of the massive losses in the value of real property which occurred as a result of all of the foreclosed, unoccupied homes which were flooding the real estate market and driving property values down, based upon the laws of good old” supply and demand”.

        Basically, the Banks have shafted the US economy twice, once by their actions in creating the mess, by not vetting their borrowers, other to see that they had a good credit score, and were alive. Then, once they were bailed out, they refused to work with borrowers, and as a result, shafted us again, by driving down the real estate market with all the empty homes in their possession. and up for sale.

        Had Bush II and the GOP left the Bankruptcy Courts with the ability to cramdown a mortagors mortgage to its actual value, the severe consequences of the real property/mortgage meltdown could have been greatly reduced. That is my point.

  • howa4x

    I had a BOA mortgage and they rejected my modification 3x. I finally sold the house rather than deal with them again. I will never use that bank for anything ever again

    • ObozoMustGo

      howa… I’m stunned that anyone would give you a mortgage. Did you have to show them your Food Stamp Card as proof that you are living on someone else’s labor?

      Have a nice day!

      “Blaming a filmmaker for radical islamic violence is like blaming forks for obesity” – ObozoMustGo

      • howa4x

        No I worked for 34 yrs and retired. this is what this country is about. No respect for anyone who has worked. We were trying to get a new business off thne ground. they didn’t fourclose, I was so disgusted that I moved, rented and vowed never to take a mortgage again. I also paid off all my credit cards and clipped them up and vowed never to do business with a bank were they can make money off me. How about you? are you born rich or just have a habit of insulting people you don’t agree wit?. Must be that low intelligence people say you tea partiers have

        • ObozoMustGo

          howie… you only worked for 34 years and then retired? You must have been a government worker. Or very successful business owner. Good for you paying off your debts and living responsibly. You’re a good example of self-reliance. But I have some questions:

          How can you live your life conservatively, but support such radical lefitist politicians like Obozo? I don’t get it. You’re not alone. Most leftist freaks live their lives very conservatively, but fail to translate self reliance, and decision making in their own intersests in their private lives into understanding of the world and their expectations of politicians. There’s a huge disconnect there. It’s like you live in one world, but you think the rest of the world is different than yours. It’s like you think that you’re smart enough to get through this world, but everyone else is too stupid and needs the government. It’s like your whole life is centered around what government can do for you. Very puzzling indeed.

          [click image to enlarge]

          Have a nice day!

          “Blaming a filmmaker for radical islamic violence is like blaming forks for obesity” – ObozoMustGo

          • howa4x

            I worked in public health and enviornmental protection. I saw first hand how people polluted the rivers and streams for more profit. I’ve seen illegal dumping of waste and what it does. I designed clinics for the underserved and worked with the hospitals to take people away from the emergency room for primary care, and in turn lower the cost of healthcare. I can tell you easily what my problems are with conservatives. Everyone including me wants less government, and I don’t think that a government can solve everyones problems. On every complaint we recieved the first question we would ask is , did you talk to your neighbor 1st? Sadly none will and want a government official to do it for them.That’s why we have so much government. We have it because we have lost our sense of community.
            Republicans like my father weren’t social conservatives like today. He wasn’t for spoiling the natural enviornment, and was more like another republican Teddy Roosevelt, who created the national park system. Do you realize that it was Nixon who created the EPA because he saw how corportions were spoiling the air and water, and needed regulations to make sure they left a clean enviornment, it wasn’t some leftist fanatic who did that. So my question to you is, how did you let all these crazy religious fanatics hijack your party. Why did you let all these southerners rule you with their racist past. One time your party was for government getting out of peoples lives and now it’s just get out of ours but get in the middle of people we don’t like, or we don’t agree with. A true conservative would not be against gay marriage, or poligimy, or put people in jail for smoking weed. That’s activist and is what everyone accused the Soviet union of, controlling peoples lives. Now you want government inside a woman’s vagina. This has nothing to do with being a conservative or liberal, it’s about violating the constitution that calls for a seperation of church and state, and protects us from allowing religious doctrine to become the law of the land, like your party wants.

            Why are you so big business? You watched them bring down the entire economy, and you oppose even regulations that would prevent it from happening again. You gave them a Tax cut and watched them export 2.9 million jobs overseas. You watched Bush borrow trillions from China to give them that tax cut and start 2 unfunded wars, and pass a medicare drug plan, also unfunded. Why should we as a society allow people to ruin the land that our children could enjoy for more profit for the investor class. T. Roosevelt and Nixon wouldn’t allow that.Why does your party want to allow it now?It is your party that radically changed. You have swung way to far to the right, not everyone else. We stayed more in the middle where compromise works and people are more interested in solving problems than political ideology.

            So you asked me why I don’t want to be a conservative and that was my answer
            Have a nice day!

          • ObozoMustGo

            howie… you confuse many things here. I have one question: Where in the Constitution does it say “separation of church and state?” Please tell me.

            Have a nice day!

            “The trouble with our Liberal friends is not that they’re ignorant; it’s just that they know so much that isn’t so.” – Ronald Reagan

          • howa4x

            Come on my friend. You mean to tell me in all your years on the planet you never heard that there is a seperation between church and state in america? All those local fights between religious groups that wanted to put up religious symbols on public property and the local government, you never read or saw anything on TV about that? How about the fight in Alabama where the ten comandments hangs over the court hose door. Does any of this ring a bell?
            Well time for a history lesson for my educated friend here.
            Our founders saw the wars of religious intolerance in europe and realized that they didn’t want it here, so in drafting the constitution they were clear, and I think it was actually Jefferson that wanted that language in. Basically they wrote there will be no national religion, and no one would be discriminated against for which diety they believed in.
            Didn’t you go to high school? Or were you home schooled by religious folks?

            Funny you write about ignorance that was said by an actor who was fed all his lines.. You on the right love to demonize people, call us childish names. Simply because we believe in different ways to slove problems, and want to protect the enviornment for future generations, or breath clean air or drink water that is pure and not laced with industrial chemicals. Because we believe that people should have health care, we are not tyrannts. When you call people names all the time instead of engaging in healthy debate, it lowers your intellectual standing since thinking people see that as a sign of a lack of a lack of intelligence
            Have a nice day

          • ObozoMustGo

            howie… I will ask again… Where in the Constitution does it say “separation of church and state?” You’re the one who said it’s in the Constitution, not me. Please cite where it says that, and then we can have a discussion once you have educated me.

            Have a nice day!

            “Blaming a filmmaker for radical islamic violence is like blaming forks for obesity” – ObozoMustGo

  • desertdustoff

    “Blame the big banks”…what are you a communist? Of course, the big banks are at fault!!

  • ObozoMustGo

    A new study reveals that people who don’t pay their mortgages and breach their contracts will be foreclosed upon. SURPRISE FACE!!!!!!!!!!!! What the hell are the banks supposed to do? They agreed to loan a person money, and the person agreed to pay it back. Further, the person agreed that if they did not pay if back, the bank could take the house. It’s pretty simple. And fair.

    Have a nice day!

    “The trouble with our Liberal friends is not that they’re ignorant; it’s just that they know so much that isn’t so.” – Ronald Reagan

  • howa4x

    Bill of rights Article 1 states that there shall be no national religion and everybody may worship as they please. That means that the government shall not endorse one religion over another. It in effect creates a speration between church and state

    • ObozoMustGo

      howie… you are dead wrong. It specifically says:

      “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

      It’s very clear. Congress cannot establish a national religion. It means exactly what it says. It may also NOT prohibit the free excecise of religion. No where in the Constitution does it say “separation of church and state”, nor is it implied. The reason this clause is in the Constitution is because they knew what happened in England when the King outlawed Catholicism and formed the Church of England as the national religion. This clause was designed to prevent that at a national level. Interestingly, some states did have their own state religion at the time and remained that way for many years, but they all fizzled away on their own.

      The phrase “separation of church and state” doesn’t even come from anything in law, but was taken from a letter that Jefferson wrote to the Baptists in CT in response to a fan letter they sent him after his election because he supported religious liberties. The Baptists were outnumbered politically by the Congregationalists and the Federalist party dominated CT politics.

      Howie, if you really want a good read on the origin of the concept of “separation of church and state”, you should go to this link: [change the dot to a period]

      www dot heritage dot org/research/reports/2006/06/the-mythical-wall-of-separation-how-a-misused-metaphor-changed-church-state-law-policy-and-discourse?query=The+Mythical+%2522Wall+of+Separation%2522:+How+a+Misused+Metaphor+Changed+Church–State+Law+Policy+and+Discourse

      Now I know your first instinct as a lefty is to criticize the source of the info and NOT read and learn from another perspective, but you should overcome that. After all, I come here to The Memo to read the other perspective and challenge myself. You should do the same.

      Be interested to hear your thoughts on that analysis.

      Have a nice weekend!

      “If liberty means anything at all, it means the right to tell people what they do not want to hear.” ― George Orwell

      • howa4x

        Very interesting response and it shows me that you are far more intelligent than I gave you credit for and I apologize for that.
        As stated I worked in Govt at the county and city level and was always told by lawyers who got this from constitutional lawyers and precedent setting cases that church and state are seperate. I think in how that was implemented was that by having any kind of religious display on govt property would be seen as sactioning that particular religion, so if there is no national religion then govt couldn’t be seen as favoring one over the other and that is how the seperation got interperted. I will look at the site you suggested. I too have an open mind, though I will admit that I’m an agnostic.
        Have a nice weeked

        • ObozoMustGo

          howie… that research report is a fantastic documentation on the history of “separation of church and state” and how it has found it’s way into our lexicon. What is interesting about the phrase in the SCOTUS case, Everson, is that the Justice that used it was a known KKK member and hated Catholics and Jews. That was his motivation for inclusion into his opinion.

          One more point… there’s a reason that the SCOTUS decisions are called “opinions” and not laws. Because they are just that… opinions. And opinions can change. Only the legislature makes laws. Remember that the next time you hear people citing court decisions as laws, just as you did in your work in government.

          I find it odd that someone can make the strange and illogical leap of reasoning that since Congress cannot establish a national religion, this means a local government cannot put up a Christmas tree or manora or the 10 Commandments (which is on the doors to the SCOTUS, but the way). Just absolute sillyness. Did you know that the layout of Washington DC is in the shape of a cross? Google earth it and look at the shape from the Lincoln Memorial to Congress and the White House to the Jefferson Memorial, all centered with the Washington Monument. Should we tear it all down because that is establishing a religion?

          Have a nice day!

          “Don’t let schooling interfere with your education.” – Mark Twain

          • howa4x

            I need to differ on one point. The streets of DC were laid out to prevent a revolution like the one that occured in France where streets were barracaded. Jefferson saw that revolt, and was responsible for the layout of the streets. this is why the main streets in DC are so wide
            He was a deist and didn’t support any religion
            Have a nice day

          • ObozoMustGo

            howie… it’s not the streets layout that I am telling you about. It’s the layout of our monuments, legislative, and executive branches.

            By the way, it was not Jefferson that designed the streets of DC, it was Pierre Charles L’Enfant. Just an FYI.

            Have a great day!

            “The problem is not that people are taxed too little, the problem is that government spends too much.” – Ronald Reagan