Housing crisis, the spark that begat the flame.

[BlueStreak]

Barney Frank is to blame for the housing debacle that triggered this rec(depr)ession?

http://www.youtube.com/watch?v=QYvtv...layer_embedded

http://www.youtube.com/watch?v=GkAtU...eature=related

I think not. At least that's not how I remember it. See, the "Ownership Society" was the brainchild of one George W. Bush. Hmmmmm---2002, "flipping", buying a house for a song and selling it for a princes ransom----I did a little of that myself. Now the damn things are too expensive----no one can afford them. Wow! Who'd a thunk that holding down wages whilst jacking up housing prices could lead to disaster?

Aaahhhhh, how the pieces of this puzzle come together. I'm not a religious man, but it would seem to me a sandal wearing hippie from the way back tried to warn us of the evils of unbridled greed.....It aint no good. He said.

Maybe we should've listened?

Dave

[Charles]

Originally Posted by BlueStreak

Barney Frank is to blame for the housing debacle that triggered this rec(depr)ession?

http://www.youtube.com/watch?v=QYvtv...layer_embedded

http://www.youtube.com/watch?v=GkAtU...eature=related

I think not. At least that's not how I remember it. See, the "Ownership Society" was the brainchild of one George W. Bush. Hmmmmm---2002, "flipping", buying a house for a song and selling it for a princes ransom----I did a little of that myself. Now the damn things are too expensive----no one can afford them. Wow! Who'd a thunk that holding down wages whilst jacking up housing prices could lead to disaster?

Aaahhhhh, how the pieces of this puzzle come together. I'm not a religious man, but it would seem to me a sandal wearing hippie from the way back tried to warn us of the evils of unbridled greed.....It aint no good. He said.

Maybe we should've listened?

Dave

It goes back quite a bit further than Shrub. Sadly, both parties were too busy playing politics to address the issue.

Allowing the mortgage brokers to run free offering loans above appraisal with payments below interest had more to do with it than anything. It was a real money making operation provided one got out before the music stopped. I know several who didn't.

And the mortgage brokers are still out there. Their latest scam is luring the aspirants into their offices to apply for a mortgage that they have no hope of qualifying for, and then pocketing their origination fees.

Or so I was told by a couple I do work for. One is an attorney and the other is a CPA, so they understand perfectly how the game is being played.

Chas

[merrylander]

I can just see it all now, old Barney out there with a gun forcing the brokers and bankers to write loans by exaggerating the borrower's qualifications. Then he shows up at Goldman Sachs and forces them to sell phony derivatives to their customers, all the while betting that those same derivatives will fail. Meanwhile the title companies sat back and collected their 80% commission on the title insurance policies. He was so busy one wonders why he did not lose weight.

What I really wonder is why some of those same brokers and bankers are not in jail.

[Charles]

Well, Barney does have a reputation as a gunslinger in "some" circles.

Chas

[whell]

Originally Posted by merrylander

What I really wonder is why some of those same brokers and bankers are not in jail.

Could is be because Eric Holder couldn't prosecute Charles Manson if he had the chance?

Seriously, as Chas suggests, this issue goes back to Carter. It did devolve in the early to mid 2000's for any number of reasons, none of which can be easily wrapped up with a bow and blamed solely on Bush....no matter how hard Dave would like to try.

Besides, I thought Obama fixed all this with the stimulus.

[whell]

Originally Posted by Charles

Well, Barney does have a reputation as a gunslinger in "some" circles.

Chas

Maybe less a gunslinger and more like a pea shooter.

[piece-itpete]

I understand the reluctance of any President to tackle the issue. Who wants to stop a gravey train?

Pete

[Zeke]

At least in words, a lot of this stuff was directly addressed, here:

"SAFE Mortgage Licensing Act of 2008

Title V of P.L. 110-289, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”), was passed on July 30, 2008. The new federal law gave states one year to pass legislation requiring the licensure of mortgage loan originators according to national standards and the participation of state agencies on the Nationwide Mortgage Licensing System and Registry (NMLS). The SAFE Act is designed to enhance consumer protection and reduce fraud through the setting of minimum standards for the licensing and registration of state-licensed mortgage loan. Mortgage loan originators who work for an insured depository or its owned or controlled subsidiary that is regulated by a federal banking agency, or for an institution regulated by the Farm Credit Administration, are registered. All other mortgage loan originators are licensed by the states.

The SAFE Act requires state-licensed MLOs to pass a written qualified test, to complete pre-licensure education courses, and to take annual continuing education courses. The SAFE Act also requires all MLOs to submit fingerprints to the Nationwide Mortgage Licensing System (NMLS) for submission to the FBI for a criminal background check; and state-licensed MLOs to provide authorization for NMLS to obtain an independent credit report."

But only since Obama has been President have a litany of national -- and, hence, state -- standards actually been codified.

In sum (as of March-ish), things like application fees are illegal and, as Mortgage Loan Officers are now required to be registered and act within guidelines to legally operate, any failure to act within SAFE Act guidelines gets you removed from the game.

Amazingly, there never was a system to check this. In the past, a guy could be convicted of fraud in Dallas, TX, and open up shop 24 hours later in Tulsa, OK, with ZERO (beyond fines in the previous state) repercussions.

Now, this stuff is tightly regulated and it has taken me >90 days to receive licensing in MO and KS. Why was there an opening at a prestigious firm in a business that is relatively closed to outsiders?

Let's just say that, as licensing rolled in, a sizable percentage of originators rolled out: being unable to pass a criminal background, credit check, get the necessary score on state/fed examinations, and/or convince their brokerage houses that they were not a potential liability...

Yes, much of the industry used to smell. In my opinion, the SAFE Act is an example of regulation acting in a positive manner (that doesn't always occur).

Now, the potential unintended consequence is that fewer people will be able to afford homes with stricter guidelines for funding.

[BlueStreak]

Originally Posted by piece-itpete

I understand the reluctance of any President to tackle the issue. Who wants to stop a gravey train?

Pete

And, there it is. The answer is none of them. If their constituency is fat, dumb and happy they'll just let it roll.

I will concede that it didn't start with GW. But, it certainly came to a head under his watch. And since we like to make a president "own" whatever fails on his watch these days..............

Dave

[BlueStreak]

Originally Posted by whell

Maybe less a gunslinger and more like a pea shooter.

Yeah, it does get a little disconcerting trying to follow whether liberals are "pussies" or "thugs", the teabaggers keep changing it back and forth on us.

Dave