Bail out doesn't pass!

[LuvDuke]

You keep saying this but have offered no examples of how it caused lending standards to weaken in the residential housing market. Or explained why there hasn't been a similar weakening in the standards of the commercial real estate market.

Take the hint.

 

[bsnyder]

They can badger, cajole, threaten, or offer rewards to the members of their caucus, but in the end each person is free to vote as they want. In the end, both set of leaders got it wrong in the end.

That's why they have the position of Whip. Given the fact that this legislation was in fact a negotiated, bipartisan compromise, the first duty of the majority party is to line up its members to support the majority's bill. But the evidence is that the Democrats did no such thing.

Asked about Monday’s vote on the bailout bill, House Majority Whip Jim Clyburn tells reporters: “We haven’t started whipping.”

Asked if he’s going to start whipping, Clyburn says: “The speaker hasn’t told me yet. I do what I’m told.”

 

[bsnyder]

Take the hint.

That you have no examples? That you don't understand the residential housing market, or that the government's role (as a policy maker) is unique compared to other real estate markets? Or that you are covering for the failures of your party's prominent role in this disaster?

That's a lot of hints. Maybe it's all of the above?

 

[rie'smom]

http://wonkroom.thinkprogress.org/2008/09/20/economists-blame-gramm/

http://abcnews.go.com/print?id=5835269

http://worldmeets.us/nachrichten000007.shtml

And I think you're cute too.

So? It was the wrong bill to pass and the wrong for Bill Clinton to sign.

You said it caused the crisis and tried to prove it with your sources.
I asked you to prove it by other means because blogs don't count.

Prove that the intent of the Gramm bill caused the crisis and back it up with legitimate sources, not opinions.

 

[Gary M]

Have you? Because neither of those are CLINTON era issues.

Clinton and Reno dealt with redlining, and every time quotes or spin from those actions are talked about by conservatives they claim he forced banks to lower lending standards. but no links are ever provided.

Link:

http://www.encyclocentral.com/27401..._Clinton_Regime_Lowers_Lending_Standards.html

Community Reinvestment Act 1995 Clinton Regime Lowers Lending Standards

The Community Reinvestment Act or CRA was made during the hard times of the Carter Administration. It was meant to reduce the need to purchase houses. However, in the Clinton regime the lending standards of CRA were lowered further.


In the revised version of the act, the lenders were told that proof of income, source of down payment and credit history of a person would no longer be required for qualifying criteria. Boston Federal Reserve made sure that the banks end up giving loans to people with poor credit records.

The lending institutions were threatened with dire consequences if they refused sanctioning home loans to poor credit holders. ACORN, which is a community activist group, put pressure on lenders to issue loans to unqualified buyers.

Obama was a community activist and lawyer at a time and he sued Fannie Mae to lessen the need for obtaining mortgages. That explains why the lenders were compelled to dish out loans to the high-risk buyers.

To make sure that the lending entities do not get burdened with the bad loans they sold these loans to Freddie Mac and Fannie Mae. Both of them are government-sponsored enterprise, publicly owned. The Urban Development and housing development department encouraged Fanny and Freddie to purchase more loans.

Freddie and Fannie were also insisting lenders to sanction more home loans. The real estate agents, developers and loan officers were too willing to comply as they all laughed their way to the banks at the end.

With the sub-prime market augmenting, the investment banks stepped in to make use of the opportunity. Their weapon was buying the Mortgage Backed Securities. The chain of loan and mortgage backed securities was going on well until the estate market began sliding.

The danger of this money making spree was not unknown to all. Bill Clinton could sense that Fannie and Freddie were going out of control. But the Democrats did not allow him to interrupt. Bush also echoed the same concern during his tenure but the Congress did not cooperate with him on the issue.

The irony lies in the fact while some of the Democrats played a major role in causing this financial debacle they are blaming the Republicans for it. They blocked a legislation in 2005 that could have prevented this slump. Community Reinvestment Act

You want to check this link also. http://en.wikipedia.org/wiki/Community_Reinvestment_Act Look at the section about Clinton.

 

[Anewman]

Prove that the intent of the Gramm bill caused the crisis and back it up with legitimate sources, not opinions.

 

[bsnyder]

double post

 

[bsnyder]

Those three laughing guys are examples of opinions, not facts.

Could you find me even ONE serious example of a Democrat Congressman or Senator proposing specific increased regulation of the residential housing market prior to this crisis?

 

[Charade]

How do you spell P U M A?

C A T

 

[bimshire]

Looks like the credit limit is being reduced for some:

"I just received a shocking call from American Express.

My small business has had an American Express Business Account for the past two years. Our credit limit was around $25,000 and our average bill was approximately $12,000/month.

We have NEVER had a single late payment and, according to Amex's customer service reps, our spotless payment history is considered "perfect." In fact, most of the time, we pay our full bill prior to the date it is due.

So imagine our surprise when Amex called us today to inform us that our new credit limit on the account was $1,800. When pressed for details, the Amex rep made some vague references to a credit report.

However, our credit report is spotless. The only possible factor could be the fact that, since we are a private company, we do not share our financial information with Dun & Bradstreet.

Our company has bank lines worth several millions of dollars. We have been a loyal Amex customer. In an era where defaults are soaring through the roof, we have consistently paid our bill in full and prior to its due date. Doesn't that count for anything anymore?

Maybe not. The Wall Street Journal says:

Credit-card issuers have been decreasing credit limits in the wake of the subprime meltdown. Folks with good credit scores and solid credit histories are now getting caught in the fray.

"Most banks are cutting their credit limits," says Carol Kaplan, spokeswoman for the American Bankers Association. "They're doing it to everyone."

http://consumerist.com/5056487/american-express-randomly-cut-my-credit-limit-from-25000-to-1800

 

[rie'smom]

Are you serious?
An opinion/editorial piece is the same as pointing to the actual legislation where you claim he created the market for "risky" loans.

Yes I know he sued some banks that were discriminating, the person that wrote your opinion for you feels that equals creating the risky loan business.

I understand you agree with that view and will not expect link to actual bill or action with Clinton lowering credit standards

I was using the same criteria you dared me to use earlier. The difference is I was able to back up my post by finding the bill. It's here in the thread if you care to look.
Now, let's see if the LuvDuke can find similar criteria to back up their assertion.

 

[Chicago526]

The majority of the Dems vote for a bill backed by a Republican President and VP, backed by Republican appointed cabinet members, backed by the minority leader of the House (hint, a Republican), and endorsed by the Republican Presidential and VP candidates. It's the Dems fault that more Republicans didn't follow the lead of their own party heads.

Seriously???

I can't say that I was for the bill myself, I honestly don't know what the right move is. To do nothing, to do a little something, to do a great big something? But to blame the failing of this bill on the Dems?

Seriously????

My head hurts...

 

[bsnyder]

I understand you agree with that view and will not expect link to actual bill or action with Clinton lowering credit standards

This New York Times reporter explains, in very stark and simple terms, the whole mortgage crisis before it ever became a crisis:

September 30, 1999
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

For years, government policy distorted the residential housing market beyond all recognition of free-market principles. And those who criticized the policy opened themselves up to charges of bigotry.

 

[What the Heck]

The majority of the Dems vote for a bill backed by a Republican President and VP, backed by Republican appointed cabinet members, backed by the minority leader of the House (hint, a Republican), and endorsed by the Republican Presidential and VP candidates. It's the Dems fault that more Reps didn't follow the lead of their own party heads.

Seriously???

I can't say that I was for the bill myself, I honestly don't know what the right move is. To do nothing, to do a little something, to do a great big something? But to blame the failing of this bill on the Dems?

Seriously????

My head hurts...

No, not to blame it on the Dems, but to blame it on one Dem. The Speaker of the House.

Seriously. Did you see or hear her speech before the vote? Did you hear what the Democratic National Chairman was saying on NPR right before the vote? Both of them were all about how, no matter how they voted on this, it would be used against ALL Republicans come November. This was going to be their "October Surprise".

Did you know that she released 16 junior Congress people to vote no on it to protect themselves come November? Did you know that she released 5 Committee Chairs to vote no so THEY could protect themselves come November? Did you know that for the Democrats this was not what is called a conscious vote (meaning they are not to vote with their consciuos but with their Party)? For a Speaker of the House to get only 2/3 of the vote on a Party Line issue (80% or less of the vote is considered to be a vote of confidence against the Speaker, 90% or better is normal) is below what is considered bad statesmenship.

The crisis was caused by many issues. The failure of this bill was caused by one person.

 

["Got Disney"]

How do you spell P U M A?

Sorry I win...... .....big difference between PUMA and ACORN

 

[Chicago526]

No, not to blame it on the Dems, but to blame it on one Dem. The Speaker of the House.

Seriously. Did you see or hear her speech before the vote? Did you hear what the Democratic National Chairman was saying on NPR right before the vote? Both of them were all about how, no matter how they voted on this, it would be used against ALL Republicans come November. This was going to be their "October Surprise".

Did you know that she released 16 junior Congress people to vote no on it to protect themselves come November? Did you know that she released 5 Committee Chairs to vote no so THEY could protect themselves come November? Did you know that for the Democrats this was not what is called a conscious vote (meaning they are not to vote with their consciuos but with their Party)? For a Speaker of the House to get only 2/3 of the vote on a Party Line issue (80% or less of the vote is considered to be a vote of confidence against the Speaker, 90% or better is normal) is below what is considered bad statesmenship.

The crisis was caused by many issues. The failure of this bill was caused by one person.

I'm not saying her speech wasn't a bone headed move, and this is the first I've heard about her directing members of her own party to vote "no" so I can't comment on it.

But the Republican President and VP, the Republican nominees to be the next President and VP, and the House minority leader all urged House Republicans to vote for it and two thirds didn't. What does that say about the leadership of the Republican party? They can't get the majority of their own party members to vote for a bill that they insist is crucial to the survival of the US economy! Pelosi gave a nasty speech. So what? The Republicans were free to argue after the vote that her speech was uncalled for partisan bickering and call her every name in the book (hmmm, just like they are right now...) AND come out looking like heroes that swallowed their pride and voted for the bill after she tried to blame them for the crisis, all in the best interests of the nation. On top of THAT they could have claimed that it was McCain that helped cooler heads prevail and saved the bill! I'm a Dem and I can see a half dozen upsides to the Reps getting more votes and passing the bill. They still couldn't or wouldn't do it.

 

[brerrabbit]

I had this conversation this afternoon with a friend and to me it is apparent that all politicians be they Democrat or Republican can share the blame for the mess we are facing. I just love the fact that in the face of a major election in a month everyone wants to sit around pointing fingers at each other but doesn't want to step forward with a fix that will work for fear of how it will influence voters in the election. Pelosi made her speech which was not necessary at this time, Republicans voted against it out of spite. Ridiculous!

I said it before in another thread but the true cause for this meltdown is multi faceted and can not be blamed on any one single event. As US citizens we believe that every American has the right to home ownership. Well guess what you don't. Sad but true, there are people who should have never got loans but did. Why? Because to get elected and stay elected politicians had to pander to voters and press lenders to lower standards to get more people in homes. They offered incentives for lenders to go into not so strong markets and give loans. I don't have the link but remember an article that said the city of Baltimore and borrowers in that market had so many foreclosures that they were filing a class action lawsuit against Wells Fargo the largest lender in the market for giving to many loans to unqualified buyers. Excuse me but where is some personal responsibility? If you cannot afford the house, don't buy the house. Mortgage originators would do anything to get you in a home. If your effective interest rate for your loan was 3% or greater above published rates you had to figure, "hey I'm high risk, maybe I can't afford this"

Further blame can be assessed upon the financial markets because they saw a quick buck by rolling these mortgages into packages and selling them in the financial market. These pieces of ____ were touted as great investments but they could'nt even tell you what specific mortgages back each investment instrument. Hmmmm? Do I really want to invest in milk futures when you can't even tell me if there are cows engaged in the production?

Now we are facing a huge crisis. It will only be made worse by the falling stock prices. Investment Banks, Mutual Funds etc. move in and out of stocks every day. They also lend commercial paper (overnight funds) to corporations and businesses to meet cash calls and margins. It's what keeps our financial engines running. Now the lenders of those funds will have their own margin calls and liquidity starts drying up meaning there is less and less money available for lending. This means higher interest rates, and less loans for houses, small businesses, college, etc.

I have lived my whole life in the Houston area and one of the biggest knocks on us has always been there is no zoning in Houston. As a result our real estate market has never grown at the rate of other places in the country. During the 80's when the price of oil fell Houston was hit hard and the bottom fell out of the market. People lost their homes to foreclosure and real estate prices fell hard. It taught me my lesson. Dispite what anyone says or will ever say home prices can and will (as witnessed by our latest mortgage crisis) come down at some point. I bought well below what we could afford and am glad I did because I have real equity in my house and not a zero down deal done with the expectation that my home value would never do anything but go up.

Stop pointing fingers, accept responsibility as a nation and call, write, e-mail, or otherwise contact your elected officials and say get the deal done and get us heading down the right path or I can assure you you will not get elected in November. Democrat or Republican, I don't care, you don't take action and we should send the message and throw the whole lot of them out because a whole new bunch in Washington could not screw things up any worse than things already are.

 

["Got Disney"]

they are ALL a bunch of boneheads....

I can only imagine what my house is worth today and all my other investments.

I will not sell my stocks and do have 10-20 years to recoup....AGAIN,

....It is the people that are of retirement age and are in there 60's and 70's that have been using it for retirement that just lost all there living moneys....that is sad....

it will take a good 6-10 years to get it all back....for those of us that are in our early 50's and younger are okay....as long as you don't sell.

2 things that need to be taken care of before adding anymore moneys into our retirement is pay off debt ASAP and save at least 6 months of Emergency moneys. Hard for many that live from pay check to paycheck but it has to be done.

DH and I started paying off our debt a couple years back because we knew things would not get better but worse. So we decided to pay everything off. WE saw it coming.....we took fiscal responsibility and are better off today for it.

 

[Chicago526]

[QUOTE="Got Disney";27885575]they are ALL a bunch of boneheads....[/QUOTE]

I'm pretty sure we can ALL agree on that!

 

[What the Heck]

I'm not saying her speech wasn't a bone headed move, and this is the first I've heard about her directing members of her own party to vote "no" so I can't comment on it.

But the Republican President and VP, the Republican nominees to be the next President and VP, and the House minority leader all urged House Republicans to vote for it and two thirds didn't. What does that say about the leadership of the Republican party? They can't get the majority of their own party members to vote for a bill that they insist is crucial to the survival of the US economy! Pelosi gave a nasty speech. So what? The Republicans were free to argue after the vote that her speech was uncalled for partisan bickering and call her every name in the book (hmmm, just like they are right now...) AND come out looking like heroes that swallowed their pride and voted for the bill after she tried to blame them for the crisis, all in the best interests of the nation. On top of THAT they could have claimed that it was McCain that helped cooler heads prevail and saved the bill! I'm a Dem and I can see a half dozen upsides to the Reps getting more votes and passing the bill. They still couldn't or wouldn't do it.

The Republicans were told to vote their conscience on this.

As for Pelosi's nasty speech being "so what" - have you worked on a committee before? If you have, have you then worked for a solution to something, worked for hours on it, and then have someone hog all the glory for it - and berate you for the work you "didn't" do?

Put yourself in Congressman John Smith's position. He doesn't believe in the bailout. In fact, he feels it is being forced down his throat by the President and the Democrats in the House. He doesn't believe it will work. The people he works for, by a 10 to 1 margin also don't believe it will work. To even consider voting for it places his job in jeopardy. A very well paid job. But he listens to his leadership. They tell him that he is allowed to vote his conscience, but they would like him to vote for this bill if he can. One of the people asking him is the Presidential candidate from his party. He is ready to vote for the bill against his better judgement.

Now comes the time to vote. On the way in to the House, he hears on NPR the Democratic National Chairman saying how the vote to pass the bailout will be used against all republicans come November. It's all their fault. He gets in the House and hears Speaker Pelosi voicing the same thing. He is being talked down to as a 2nd class citizen accused of causing the problem adn being the problem. And it will be used against all Republicans come November. He then sees, on a party line vote, Democrats who normally vote however they are told voting against the bill - because their districts are close in polling. He then sees Committee Chairs (all Democrats - only the majority holds Committee Chair seats) voting against the bill - other party leaders.

Realistically, if you were him, what would you do?