Combat Republican claims that homeowners are at-fault for the mortgage crisis >>>>>>

[Roland99]

March 2004

http://www.whitehouse.gov/news/releases/2004/03/20040326-15.html

One other thing I've done, is I've called on private sector mortgage banks and banks to be more aggressive about lending money to first-time home buyers. And the response has been really good. There's a lot of people in this -- our communities around the country that deeply care about the issue of homeownership, and they've been responsive.

And after the sub-prime crisis triggered the collapse of over-leveraged and unregulated investment vehicles:


August 2008

http://www.whitehouse.gov/news/releases/2007/08/20070831-5.html

First, we're going to work to modernize and improve the Federal Housing Administration -- that's known as the FHA. The FHA is a government agency that provides mortgage insurance to borrowers through a network of private sector lenders. Sixteen months ago I sent Congress an FHA modernization bill that would help more homeowners qualify for this insurance by lowering down-payment requirements, by increasing loan limits and providing more flexibility in pricing. These reforms would allow the FHA to reach families that need help, those with low incomes and less-than-perfect credit records or little savings.

That was legislation the Democratic-controlled Congress delayed on....for good reason!



So...Bush, himself, has pushed for aggressive lending even after the crisis was in full gear.

[EFerrari]

1. Who else are they going to blame but the powerless?

Who no doubt showed up in their offices with machine guns and demanded a loan?!

Last time I looked, a bank officer had the power to approve or deny. Maybe that isn't true during an election.

[sandnsea]

2. Securities, Hedge Funds, CDOs

This has much less to do with people making mortgage payments than it does with what happened to the mortgage and real estate market AFTER the mortgages were written.

It was inevitable that the real estate market would pop. The prices were unsustainable. It was all downhill from there.

[Roland99]

6. Exactly. Leveraging at 33:1 instead of 9:1 exacerbated the risk of some bad loans.

[Bluebear]

3. We have that sentiment right here, every day. Always the homeowner's "greed" or "stupidity"

Never the slick predatory lender's fault.

[mrJJ]

4. Republican Roots of the Subprime Crisis

following is an exepert from another du user.. entire article at the link

Republican Roots of the Subprime Crisis

In 2002, Bush issued America’s Homeownership Challenge to increase first-time minority homeowners. The Republican administration modernized FHA by improving its ability to reach underserved homebuyers (aka those who do not normally qualify for loans), such as low- and moderate-income families, individuals with blemished credit, and families who have little savings for a down payment.

The Republican administration directed Fannie Mae and Freddie Mac to more aggressively serve risky markets, and threatened their charter if they did not do so.

December 16, 2003, President Bush signed into law the American Dream Downpayment Act of 2003, which will help families with their down payment and closing costs.

The American Dream Downpayment Act of 2003 followed Bush's admonishment that capital must be made available to "low- and moderate-income families, individuals with blemished credit, and families who have little savings for a down payment."

The Republican administration had HUD offer "zero down payment" mortgages, and risky 3, 5, and 7-year ARMs.

BUSH ADMINISTRATION ANNOUNCES NEW HUD "ZERO DOWN PAYMENT" MORTGAGE Initiative Aimed at Removing Major Barrier to Homeownership LAS VEGAS - As part of President Bush's ongoing effort to help American families achieve the dream of homeownership.

HUD's Fiscal Year 2005 budget request, eliminated the statutory requirement of a minimum three percent down payment for FHA-insured single-family mortgages for first-time homebuyers.

http://iarnuocon.newsvine.com/_news/2008/10/01/1940028-the-republican-roots-of-the-subprime-crisis

[madmax]

5. Right

It's always the poor bastids fault, unless 'they' are the poor bastid.

[OPERATIONMINDCRIME]

7. Well The Homeowners Definitely Share Much Of The Blame, But The Blame Is Far More Than Theirs Alone.

[sandnsea]

9. Ack. No they do not.

Every time they say "help people stay in their homes", that is evidence that people can make their current payments. Many people were sold adjustable rates when they could have just as easily gotten into fixed. The mortgage brokers didn't make as much money selling them. That's the problem. Not the buyers.

[OPERATIONMINDCRIME]

12. Hell Fuckin Yes They Do.

No one held a gun to their fuckin heads to take out those mortgages. Many people simply were greedy and bought bigger homes than they should've because they had the option to do so, and just gambled on the outcome hoping when the term was up they could just game the system and refinance etc. Problem with gambling is sometimes you lose. Problem with risk is sometimes you lose. Many of these people knew EXACTLY what those risks were but opted to buy homes they technically couldn't afford anyway, merely because they had the option to do so. So fuck yeah, they hold some of the blame as it relates to this. It's completely irresponsible and ignorant to ignore that reality.

[sandnsea]

13. Read the article in #10 n/t

[OPERATIONMINDCRIME]

15. Irrelevant Article.

That article is pertaining to the absurd notion that poor minorities are the cause of the problem, almost in entirety. I would never agree with such stupidity.

Homeowner does not equal poor minority. There are many aspects to blame, many of which are referenced within that article. But do people who bought homes that were technically more than they could afford and who gamble only to lose deserve part of the blame? Absofuckinglutely. Ignoring their role and their part of the responsibility is ignorant and reckless.

[sandnsea]

18. You did not even read it

Because it wasn't just about poor minorities. The CRA could be replaced by any excuse to blame the homeowners instead of the mortgage companies and brokers. Nobody made these financial titans create these shoddy mortgages.

"The CRA didn't force mortgage companies to offer loans for no-money down, or to throw underwriting standards out the window, or to encourage mortgage brokers to aggressively seek out new markets. Nor did the CRA force the credit-rating agencies to slap high-grade ratings on subprime debt.

[OPERATIONMINDCRIME]

21. I Read The Entire Thing. It's Irrelevant To Me As It Relates To This Argument.

What you fail to understand is that it is a FACT that many homeowners hold some blame for making poor decisions and taking gambles they shouldn't have. Your narrow opinion cannot overcome that fact. It is absolutely reckless and ignorant to ignore their part of the mortgage nightmare.

You quote that the CRA didn't force mortgage companies to offer loans for no money down. Well guess what: The mortgage companies didn't force the homeowner to take out the risky loans either.

Now granted, there was much bait and switch as well as misleading advertising and borderline scams being shoved in front of many of the homeowners, and I consider those homeowners innocent of blame. But classifying all homeowners in the overall group as being part of that subsection is just absurd.

[sandnsea]

23. Blame the little guy instead of the billionaire financial titan

You're a real piece of work, you really are. You expect some couple who work for the city to know more about mortgages than the people who run the world. WHY?

[OPERATIONMINDCRIME]

26. What A Ridiculous Twisting Of My Sentiment. Not Surprised I Have To Correct You.

I place far more of the blame on the corporations than on the 'little guy'. You must've missed the part where I said there is plenty of more blame to go around to others. See, the black and white side of the argument is yours, not mine. You're the one saying the little guy isn't to blame AT ALL. All or nothing mindset. I have the actual rational and objective mindset that can accurately assign blame to all the parties that deserve it. Not including the homeowner in that set is reckless and ignorant.

You seem to want to imply that no homeowner knew what they were getting themselves into or what the risks were. That's beyond absurd and silly.

Fact: Many of the homeowners also share in the blame, even if to a lesser degree.

[sandnsea]

28. No. There is not "plenty of blame to go around"

Victims of fraud are victims. These homebuyers, especially first time homebuyers who were the target of these scams, er loans, were victims just as surely as if they'd been hoodwinked by Mordecai Jones.

It's okay to stand with the people. It really is. You don't have to stand by the rich to keep your home or your job. You really don't.

[OPERATIONMINDCRIME]

31. You Just Proved My Critique Of Your Black And White Narrow Mentality As Correct.

"Victims of fraud are victims".

Insinuating that every homeowner involved in this was a victim of fraud is completely ignorant, narrow minded, logically flawed and downright silly.

You continue to throw out opinions, each one sillier than the last, while failing to recognize that it is a FACT that many of the homeowners carry their own personal responsibility as it relates to the mortgage mess. No matter how much you spew out or how much you twist concepts, you will not overcome that basic fact. You are entrenched in silliness right now.

[sandnsea]

35. Financial titans created these mortgages

And no matter how much you try to jump on their horses with them, it isn't going to make you rich.

[OPERATIONMINDCRIME]

36. And Many Irresponsible, Greedy And Gambling Homebuyers Signed Onto Them.

Many were innocent and victims of fraudulent practices. Many others weren't. Get a grip.

[sandnsea]

39. Many homebuyers who were given no other options

or told they were smart financial choices or otherwise misguided by the professionals who are licensed to offer good advise. There are a ton of realtors who ought to be losing their licenses too.

[OPERATIONMINDCRIME]

40. Well No Shit. But For The Brazillionth Time, Many WEREN'T In That Group.

Expand your mind a little. You may find it refreshing.

[sandnsea]

41. The vast majority WERE

So you're either on the side of the people or you help bury them and leave everybody with no homeownership programs at all. You go right on ahead and help Republicans blame the people and save the rich. You are the epitomy of not being able to figure out who is hitting you over the head.

[OPERATIONMINDCRIME]

43. No, The Vast Majority Wasn't. And I Laughed At Your Ignorant "You're Either For Us Or Against Us"

argument.

Sillier and sillier.

[Roland99]

14. And those with NoDoc loans. Stating they made 'x' when they really made 'y'

[sandnsea]

16. They wouldn't be able to make the first payment

if it were all about their income. Why can people not THINK.

[OPERATIONMINDCRIME]

22. Ummmmm, Now There's A Black And White Mindset That Carries No Logical Accuracy.

[JeanGrey]

32. Yes. Hell even a friend of mine did it and she works as an

office manager for Remax!! She was renting a home easily for $1100 a month, a nice home, but she wanted a "bigger" house, one that cost close to 300,000. She knew she couldn't afford it and took an adjustable rate mortgage for the first loan and an adjustable for the second. Both payments equaled about what she was paying in rent.

Then, two years went by and guess what happened? Her payment skyrocketed due to her loan agreements and now she can't pay - her second alone went from 300 to 600....... and she was even dumb enough to go to Title Max........

When we were talking about it I asked her why on earth did she do something that dumb? She KNEW what she was doing. And her response? "I wanted the house and couldn't get it any other way".

I rest my case. You are right. MANY homeowners share as much or more of the blame.

[sandnsea]

37. And who told her it was a good idea?

I'd bet you every penny I have that her bosses told her to get into a house any way she could or she would be priced out of the market forever. I have plenty of stories of realtors doing that in my own town. She was probably afraid to admit her own boss got her into this mess.

[JeanGrey]

56. No. She worked for a real estate company and she isn't

stupid. She knew exactly what she was doing and risking and she went ahead ANYWAY. It is her own fault.

[OPERATIONMINDCRIME]

38. Perfect Example Of What I'm Talking About. Thanks.

So many people just want what they want regardless of outcome, risk or consequence. That's why so many are in debt as well. As long as they have the capability, many will forgo intelligent thinking and instead go for greed. Now granted, the companies that enable them are to blame the most; especially when their practices are taken into consideration. But to declare the person taking advantage of such opportunities as blameless is just one of the all time dumbest things I've ever heard.

[JeanGrey]

57. We live in a very modest home - less than 1500 square feet.

It does have a basement. It is paid for and we did without a lot over the years to do it. Some other friends of ours sold a 180,000 home and bought a lot at the lake for 150,000 and spent 450,000 building a house and they are in their middle 50's!! He works as a middle manager for auto parts (no degree) and she's a twenty year postal worker. Can you believe that?? They went in debt 1/2 a million dollars. Now his company is going under - he started an auto parts company and they opened 22 stores the past year (I can't tell you the name) and they now owe more money than they can possibly pay on the business. They are desperately looking for a buyer and he is HOPING he can remain employed with the new owner but he might not........

And what will they do? The house payment is three grand a month. It must be nice to have this huge home (5500 square feet and there are two of them) but now they are in serious trouble. There is no way they can make the payments.

It is scary how people go in debt willy nilly.........and now our economy is collapsing.

[BostonMa]

44. What a handy little story.

[JeanGrey]

58. It happens to be true. I first met her when we were living in our

first subdivision in 1979 after we just got married. There were five of us on that street that became friends and bought houses within a few months of each other. Our first mortgage was 10.85 percent interest! The house was only 39,900 (it was a shitty house, built terrible) but it was our first and we scrapped every penny together to get the 2000.00 five percent down that was required. I had been working six years, husband also so we had credit and work history. It took four weeks for them to decide if they were going to give us the loan and we almost didn't qualify. Just under the wire. And we were going from 110 a month apt rent to a 490.00 a month mortgage. I cried all the way home from closing knowing we'd "never pay that mortgage". But we managed. We had five jobs between us the first two years.

This girl though always was an airhead so I'm not surprised.

[Roland99]

62. I do wonder what % of loans that went bad were like this vs. just people stuck by falling prices.

[JeanGrey]

63. I know a lot of people were suckered in but a lot of them knew

exactly what they were doing.

[daisychains]

54. But don't people have some responsibility to say "Whoa! No thank you! I will only sign for

a mortgage where I know exactly how much money I am shelling out each month.

Also, let's get real: there were people with ARMS who bought houses that could not be supported by their salaries, let alone if one of the couple (and I am sure that many people were counting on paying with two salaries) was laid off. It's just human nature and needs to be copped to or it could happen again if the situation permits itself.

Having said that, there were cases of fraud, where brokers lied to the consumer, who may have had no idea about how it all worked.

[JeanGrey]

59. Yes. Of course. And yes there was fraud and this needs to be

addressed but ultimately a lot of people took loans that were questionable because they couldn't get any other kind of loan, and there is usually a reason for that.

[sandnsea]

10. Read the Newsweek article Mojo just posted n/t

[Mojorabbit]

8. newsweek article from today

http://www.newsweek.com/id/162789 has a good rebuttal

[sandnsea]

11. Finally! Thank you so much for posting

If it isn't an OP, it should be. Like every hour on the hour until everybody understands what really happened.

[4 t 4]

17. Sorry to keep saying this but it was a set up!!!

those "risky" mortgages were a complete set up. What the banks did was inflate the price of the houses so let's say the house is really worth 200,000 they would say it's worth 300,000. So you take out a loan on 300,000 and your already a 100k in the hole. Now ,all the sudden they change the terms of your loan. Well you can't sell the house because No one will pay the price you need to either scratch or profit so you can move on and the bank sure as hell isn't going to buy it, It's not worth int so you are forced to foreclose in the mean time this (insurance) which were those fake fucking credit default swaps just made a ton on the foreclosed home which they knew would probably be foreclosed on because of the change of terms in the mortgage. Think about it who really sets the value of real estate? Appraiser and what banks think the value is and what size loan they will give you on that property. They set the bubble up to burst but in the mean time they made TRILLIONS of dollars. Sorry for being such a wind bag I could go on for hours but I'll stop now.

[sandnsea]

20. They get rich on bubbles

It's what they do. It was obvious to me the first time I heard of one of these loans. It's not homeowners' fault, especially young ones, who don't know they're caught in a whirlwind of the financial titans' making.

[EFerrari]

24. You're right. It was a scam. Poor people, black people, people with no ID

had nothing to do with it except that they were used, too.

[4 t 4]

25. Exactly!!! n/t

[OPERATIONMINDCRIME]

27. No Bank I've Ever Heard Of Would Inflate The Price Of The House.

The market drove the house prices, not the banks.

[sandnsea]

29. Mortgage brokers and appraisers, god it happens all the time n/t

[OPERATIONMINDCRIME]

33. A Mortgage Broker Is A Broker, Not A Bank.

[sandnsea]

42. They do the maneuvering

so all the paperwork is in order for the bank, who doesn't give a shit because they're going to sell it anyway.

[OPERATIONMINDCRIME]

45. What Part Are You Failing To Grasp Here? A Broker Is A Broker, Not A Bank.

I've never heard of a bank inflating the home cost. That's counterintuitive to everything they do as it relates to mortgages.

[4 t 4]

49. How High are you? Really?

[OPERATIONMINDCRIME]

50. And Your Examples Are Where Now?

:shrug:

[4 t 4]

51. What? see # 17

[OPERATIONMINDCRIME]

53. ROFLMAO!!!!! So You're Defense Is Simply "Cause I Say So, Even If I Have No Evidence"?

:rofl:

[Roland99]

19. Nice. thanks!

[sarcasmo]

30. Republi Con's blaming Main St, imagine.

[Darkhawk32]

34. This thread only has 3 rec's... are you shitting me?

This obliterates the right-wing talking point once and for all.

Rec'd with pleasure.

[4 t 4]

46. Really OPERATIONMINDCHRIME

your wrong, you have been wrong about many, many things on this site. I have seen you in so many posts where everyone freaks out because of what you post. Wake up You have been had!!!!!

[OPERATIONMINDCRIME]

61. Cause You Say So Huh?

:rofl: :rofl: :rofl:

I'm 100% right here, as I am with most things I post. You just don't like the fact that I'm smarter than you :P

[FVZA_Colonel]

47. If they are at fault then why does McCain want to spend 300 billion in taxpayer dollars

to bail them out?

[4 t 4]

48. Are you kidding You want me to defend John McCain?

[FVZA_Colonel]

52. What? No.

I was just saying that if Republicans feel that it's all the fault of homeowners, then why is their candidate suddenly trying to argue in favor of bailing out the people who supposedly caused this mess.

[Roland99]

55. Cuz he's a maverick, you betcha!

[JeanGrey]

60. Because he is an idiot.