Thievery in the Mortgage Business

A “Sixty Minutes” piece on World Bank, which is very telling as to how we have gotten into this mess. Funny thing is that I do not hear anyone in this piece talking about the Community Reinvestment Act. What I do hear is a lot of talk about greed leading bankers to make loans and do refinances for unqualified borrowers, and breaking the doors down to do so. Why??? Not because of CRA, but because, as I have said repeatedly, there was money involved in writing mortgages. There was money involved in securitizing these instruments and writing more bad loans. And Republicans were in charge while the banking system was corrupted and bankrupted. Watch this piece and then tell me that greed and outright fraud and theft are not the real root cause of the banking debacle now swallowing our entire economy. The owners of the bank in this piece, sold to Wachovia, can now enjoy the fruits of that sale while the entire banking system collapses because of what they and others like them did. Then people wonder why Americans are cynical about financial bailouts of banks.

http://www.cbs.com/thunder/swf/rcpHolderCbs-prod.swf

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21 Responses to Thievery in the Mortgage Business

  1. Fred Mertz says:

    Mr. Mayor:

    I have a theory: Republicans have set themselves up in a war: a culture war, against Liberals, government, immigrants, unions, what have you.

    Now, what’s the first casualty in any war?

    Truth.

    -FM

    Like

  2. Jules Gordon says:

    Your Honor,
    Greed and corruption were the elements that led to the mortgage crisis and finally to where we are.

    I don’t care what 60 minutes says, this crisis was born of the Liberal party drive to garner votes by lowering mortgage credit standards. A lot of that was fostered by Fanny and Freddie.

    George bush presented legislation to regulate these entities, when your party defeated it.

    The CRA was the fetus that gave birth to the drive to widen the issuance of mortgage among those who should not have had them. That was public greed.

    This one is a gift from the Socialists.

    60 minutes??? Please.

    Jules

    Like

  3. Jules Gordon says:

    Your Honor,

    PS. I failed to say the CRA was to break up red lining and to apply credit to ALL those that deserve it, not to be judged where they live. A worthwhile mechanism. It was the next liberal steps that began this debacle.

    Jules

    Like

  4. Fred Mertz says:

    Mr. Speaker:

    An alternative opinion to dispute this basic Republican talking point:

    Federal Reserve Governor Randall Kroszner, says the CRA isn’t to blame for the subprime mess:

    “First, only a small portion of subprime mortgage originations are related to the CRA. Second, CRA-related loans appear to perform comparably to other types of subprime loans. Taken together… we believe that the available evidence runs counter to the contention that the CRA contributed in any substantive way to the current mortgage crisis.”

    Kroszner added:

    “Only 6% of all the higher-priced loans were extended by CRA-covered lenders to lower-income borrowers or neighborhoods in their CRA assessment areas, the local geographies that are the primary focus for CRA evaluation purposes.”

    FDIC Chairman Sheila Bair also disputes that the CRA was a problem:

    “Let me ask you: where in the CRA does it say: make loans to people who can’t afford to repay? Nowhere! And the fact is, the lending practices that are causing problems today were driven by a desire for market share and revenue growth … pure and simple.”

    -FM

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  5. Bob LeBlanc says:

    Actually Jules, President Bush presided over the greatest dismantling of the regulatory system in history. When it came to Wall Street and the banking/mortgage industry there was virtually NO OVERSIGHT.

    Banks and mortgage companies were allowed to set whatever rates and fees they wanted with no reasonable relationship to either sound business practice or fairness.

    President Bush and the Congressional Republicans who controlled up to 2006 wiped out the traditional usery laws…remember Christ in the Temple with the money changers.

    Credit card interest rates went from a reasonable 7% to up to 30%…so that while more and more people were automatically handed credit cards..who should not have..what happenned is that credit cards maxed out within a year and they have been paying the new Mafia…vigorish..high interest ever since.

    And yes,, the mortgage lenders, real estate brokers and builders saw a good thing and took advantage of it…gee they vote Republican by and large too! Houses which cost $100 per square foot and sold generally for about $150 per foot…now were put on the market for $250 per foot…and that was ok because folks could get a mortgage…even if it was higher than their income could normally bear.

    In all to many cases in Methuen and Lawrence
    folks were getting deals with over 100% financing…many with phony paperwork…much like the auto fraud scams.

    Yet…law enforcement basicly takes a blind eye to charging these predators who have contributed to our financial collapse.

    I know jules you don’t want to hear anything that might challenge your pre-conceived Rush Doctrine determinations, but the truth is that the so called free market..left unchecked and unregulated always trends toward greed and ripping off the average working stiff!

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  6. Bill Manzi says:

    Jules,

    I am puzzled by your knocking of “Sixty Minutes” as it relates to this piece. They did not interject themselves into the CRA issue, but simply showed how corrupt acts impacted one institution, and through a sale helped to bring down Wachovia. Do you think the person interviewed was not credible? You cite CRA, and yet you have acknowledged that greed, and institutional corruption, led us to disaster. Please explain how CRA would have had any influence on the institutional corruption, based on greed, that we saw in the Sixty Minutes piece?

    Bill

    Like

  7. Jules Gordon says:

    Gentlemen,

    I agreed with you that greed and corruption were elements that drove the economy to the edge and over. Put that to bed.

    The greed and corruption was an American event touching every one. It started when the banks began giving out mortgages to people who could not make them sustainable. The main catalyst was the drive by Democrats to make loans easier by getting the banks to reduce the normal level of standards to the point where al you needed was a normal temperature to get a loan.

    You guys have to remember I was there while this occurred. I wondered how loans could be made so casually as I listened to the adds on radio. The great leveler was the implied guaranteeing of loans by Fanny and Freddie.

    I short greed all up and down the line was the harbinger of this fiasco.

    Greed of the loan takers.
    Greed of the Mortgage holders
    Greed of the politicians who pushed for easy loans to garner votes.

    No one gets off free.

    Your Honor, I do not blame this on CRA, just those that took CRA to a new level it was not intended to go.

    Bob, President Bush did submit a bill for regulating Freddie and Fanny and it was defeated by Barney Frank et al.

    Jules

    Jules.

    Like

  8. Fred Mertz says:

    Jules:

    Not that I doubt you, but I cannot find a bill that Mr. Bush had proposed, nor can I find how or why it was defeated. What year did this occur in?

    Can you point to the original news stories?

    -FM

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  9. Bill Manzi says:

    To Clarify,

    I believe that bills to reform Fannie and Freddie have been filed by sponsors from both parties. I do believe President Bush also filed a Fannie/Freddie reform act as well. What is left out is that those bills were rejected for five years by a Republican Congress, and then by a Democratic Congress as well. Sometimes Jules forgets that the Republicans had a majority in both houses for five years. I like to remind him of that every now and then.

    Bill

    Like

  10. Fred Mertz says:

    Yes, Mr. Mayor, I think I asked a similar question in another thread: Pubs had full control for 6, and the Dems did not have a veto proof majority for 2.

    I get confused sometimes how these conspiracy theory things work, so I try to use the wisps of truth to unroll the plot line.

    -FM

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  11. Jules Gordon says:

    Your Honor,
    finally you see that both parties failed to do what the Americans needed. However the last regulation bill was filed by the President. It failed with Barney Frank (and I believe senator Obama)voted against it.

    The rest is history.

    There are innocents here.

    Jules

    Like

  12. Jules Gordon says:

    Bob,

    First the money changers, as well as Jesus, were Jewish. The old testiment has 613 laws, not one about usury except in spesific situation.

    As I understand it, like Fred and Jim, you are socialistic because free enterprise has limitations.

    Is that correct?

    Jules

    Like

  13. Fred Mertz says:

    Jules:

    Let me ask you something I was tempted to ask you on another thread.

    Are you a big fan of Ayn Rand?

    -FM

    Like

  14. Fred Mertz says:

    Bob:

    Don’t let him get you by ad hominem guilt by association … socialism is the new liberalism, as of inauguration day.

    -FM

    Like

  15. Fred Mertz says:

    Jim:

    I didn’t know you were a socialist. When did you convert?

    -FM

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  16. Jules Gordon says:

    Gentlemen,

    I think we ran the string out on this one.

    The socialists have the day. I will let you guys have your time. You can’t make mistakes like the President lying. Oops, to late, that happened.

    Jules

    Like

  17. Jim says:

    Fred,
    My (and every other democrat’s) socialism occurred on or about the time Obama was running for president. Well, at least that’s when I first learned we were socialists from all the pubbie spewed hyperbole, and which apparently makes all democrats guilty by association…

    Now, I could speculate that the pubbies actually practiced what they preached in this regard (i.e. bringing ‘democracy’ to Iraq would be considered socialist as well, no?), but I recognize that I would be misspeaking as we now know from breaking news that they were actually too busy stealing the American taxpayer’s dollar over there….

    Jules,
    As far as making “…mistakes like the president lying”, I’m surmising you were doing a Rip Van Winkle for the preceding eight years…. 😉

    Like

  18. Jules Gordon says:

    Jim,

    Not matter, your man is in charge. So far no difference.

    Jules

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  19. Jules Gordon says:

    Jim,

    Your are absolutely correct, the “Pubs” were in charge for 6 years. They began acting like Socialists when they found it hard to compete against Socialists who were promising everything under the sun to the delight of the crowds. For verification of this see the Obama meeting with the Fort Meirs audience as they begged for everything to be handed to them. No free Americans in that crowd.

    So, Jim, as result of the Republican melt down in their core principles, they were trounced at the poles.

    So now Obama is putting us into the hole for 8 to 9 billion dollars to resuscitate the economy. I guess the stock market wasn’t impressed with initiative.

    We will watch. By the way your war mongering president is sending 17,000 more troops to Afganistan.

    Jules

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  20. Jim says:

    Jules,

    I’ve got to hand it to you, you DO crack me up!!

    When you weren’t garbling facts in your previous post, you were completely misrepresenting them. That one doesn’t even warrant a reply beyond the time I just wasted typing this one…

    Thank you very much for bringing a smile to my face. And in closing, sound on please:

    Like

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