39 Comments

• 1. Diana Powe  |  March 29th, 2008 at 1:44 pm

  Yes, because Republican Received Truth ™ sez, “Hey, kidz, all regulation is bad.” Of course, the fact that the Bush Administration has been forced into this response because the current situation was caused by a lack of regulation has nothing to do with this. Wait, wait! I know the answer! Cut taxes!

• 2. LiberalForEver  |  March 29th, 2008 at 1:52 pm

  The market is “free” as long as the big banks get my tax dollars for free.

  If they take my tax dollars they are also going to take in hand some new rules.

• 3. Arctic Fox  |  March 29th, 2008 at 2:01 pm

  I agree with Matt to a point. Really it’s not a politically overseen entity that should regulate banks, because if that happens then any kind of regulation can be politically motivated.

  The overseeing entity - and there DOES need to be one because these financial organizations, which have for years successfully lobbied a Republican administration to let them do whatever they wanted - must be independent, not reliant on the government.

  But - and I can’t stress this enough - it must be properly funded by the government! That’s where the UK got it terribly wrong. The government recognized the need for an independent overseer, but - like Right wingers in the US - didn’t think it should be funded by “government handouts”. The result of that was that funding for the banking ombudsman ended up coming… from the banks. Who were very quick to fill the gap left by government funding, in return for the ombudsman viewing any cases of breaches brought by the public in a “favorable” light to the banks.

  But the problem wouldn’t exist in the first place, had that freedom due to ‘donations’ and lobbying to the administration had not been successful. The problem has been created as a result of mismanagement of the financial sector, and now they’re stuck between the proverbial devil and the deep blue sea. More federal reserve powers are unpopular, but we’re already seeing the result of a lack of powers in the credit crunch.

  It’s typical of right wing policies that now we have to treat the problem, where it shouldn’t have been allowed to develop in the first place.

• 4. Kurt Diekelman  |  March 29th, 2008 at 2:02 pm

  I suppose Diana wants every loan to go through the government now.

  As for cutting taxes…HELL YEA!!!!

• 5. Diana Powe  |  March 29th, 2008 at 2:46 pm

  Kurt Diekelman,

  You “suppose” incorrectly. The people who get paid tens of millions of dollars in bonuses even after their gambles on arcane investment vehicles based on bundled sub-prime mortgages melt down and lead the federal government to race to their rescue, need to be regulated. They took your bank deposits and invested them in the housing bubble but they don’t have to scrimp because they get paid even when they make spectacularly and disastrously stupid financial choices. Let me ask you. If you start investing and you make bad decisions about where to put your money and it all goes away, is the government going to come bail you out? I’ll save you the thought process. No, they won’t. However, you don’t have a bunch of lobbyists working Congress on your behalf, either.

• 6. TiredofLibBullShit  |  March 29th, 2008 at 3:30 pm

  We are in this situation because banks stopped behaving like banks.

  Since they were strong armed by the Clinton administration to make loans available to those who could not afford them in the long run, for the simple reason of appearing fair to minorities. All through the 90s, we heard that banks discriminated on race but simply they discriminated on the ability to pay off the loan. Once the banks made loans, they had to continue these loans or be accused of discrimination.

  Loans were made on the basis of ARMs since those were the only ones they could possibly qualify in extreme situations. Normally, banks would not have made the loans to begin with, but the power of the federal government, through the existing regulations, strong-armed the banks into these failed loans.

  But in the long run, the libs were able to feel good about themselves and pat themselves on the back and brag how they forced “big and evil banking” into being fair.

  The libs should be behind Bush on this one. They are always asking the government for solutions even though 90% of the time it is the cause of the problems.

• 7. djp  |  March 29th, 2008 at 3:48 pm

  “Since they were strong armed by the Clinton administration to make loans available to those who could not afford them in the long run.”

  Some much of what conservatives believe is made up of total nonsense. Where/When and how did the “Clinton” administration “strong-arm” anyone into making any loans? It is absoluately true that clinton admin strongarming has ZERO to do with today’s subrprime crisis - most of the loans blowing up today were made years after GWB came into power.

• 8. js  |  March 29th, 2008 at 3:48 pm

  the government needs to quit bailing out poorly managed companies that should be put out of business and get out of the civil market, period

  they dont have the constitutional authority, and really screw things up for honest competition

  the economy has to take its hits, its part of life

• 9. djp  |  March 29th, 2008 at 3:49 pm

  Here is a hint, mortgage companies originate loans because doing so was highly profitable

• 10. noodle  |  March 29th, 2008 at 3:53 pm

  yes yes - Matt - we know you think the cause of all problems is government and the solution to all of them is cut taxes. You know - the world is a bit more complex that very simple minded view.

  So lets see if I can summarize Matt’s economic plan - continue to spend Trillions on the war in Iraq. Cut taxes and solve all our problems. Brilliant - just brilliant economic thinking there…

• 11. Plantation Owner  |  March 29th, 2008 at 4:06 pm

  Oh, excuse me, it was not strong-arming originated by Clinton…

  The Government-Created Subprime Mortgage Meltdown
  by Thomas J. DiLorenzo

  The thousands of mortgage defaults and foreclosures in the “subprime” housing market (i.e., mortgage holders with poor credit ratings) is the direct result of thirty years of government policy that has forced banks to make bad loans to un-creditworthy borrowers. The policy in question is the 1977 Community Reinvestment Act (CRA), which compels banks to make loans to low-income borrowers and in what the supporters of the Act call “communities of color” that they might not otherwise make based on purely economic criteria.

  The original lobbyists for the CRA were the hardcore leftists who supported the Carter administration and were often rewarded for their support with government grants and programs like the CRA that they benefited from. These included various “neighborhood organizations,” as they like to call themselves, such as “ACORN” (Association of Community Organizations for Reform Now). These organizations claim that over $1 trillion in CRA loans have been made, although no one seems to know the magnitude with much certainty. A U.S. Senate Banking Committee staffer told me about ten years ago that at least $100 billion in such loans had been made in the first twenty years of the Act.

  So-called “community groups” like ACORN benefit themselves from the CRA through a process that sounds like legalized extortion. The CRA is enforced by four federal government bureaucracies: the Fed, the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation. The law is set up so that any bank merger, branch expansion, or new branch creation can be postponed or prohibited by any of these four bureaucracies if a CRA “protest” is issued by a “community group.” This can cost banks great sums of money, and the “community groups” understand this perfectly well. It is their leverage. They use this leverage to get the banks to give them millions of dollars as well as promising to make a certain amount of bad loans in their communities.

  A man named Bruce Marks became quite notorious during the last decade for pressuring banks to earmark literally billions of dollars to his organization, the “Neighborhood Assistance Corporation of America.” He once boasted to the New York Times that he had “won” loan commitments totaling $3.8 billion from Bank of America, First Union Corporation, and the Fleet Financial Group. And that is just one “community group” operating in one city – Boston.

  Banks have been placed in a Catch 22 situation by the CRA: If they comply, they know they will have to suffer from more loan defaults. If they don’t comply, they face financial penalties and, worse yet, their business plans for mergers, branch expansions, etc. can be blocked by CRA protesters, which can cost a large corporation like Bank of America billions of dollars. Like most businesses, they have largely buckled under and have surrendered to their bureaucratic masters.

  Consequently, banks in every community in America have been forced to hold a portfolio of bad loans, euphemistically referred to as “subprime” loans. In order to compensate themselves for the added risk of extending these loans, many lenders have increased the lending fees associated with mortgage loans. This is simply an indirect way of doing what banks always do – and what they must do to remain solvent: charging effectively higher rates of interest on riskier loans.

  But this is discriminatory!, complained the “community organizations.” Thus, if one browses the ACORN web site, one can read of their boasts of having “predatory lending laws” passed in numerous states which outlaw such fees, prohibiting banks from protecting themselves from the added risk involved in making forced loans to “subprime” borrowers.

  These are price control laws, and price controls always cause shortages. Normally, banks would respond to such laws by extending fewer riskier loans. But in this case the banks are forced to continue making the marginal loans by their bureaucratic masters at the Fed and the other three federal bureaucracies mentioned above. So-called predatory lending laws therefore force the banks to “eat” the losses. This is undoubtedly a contributing factor to the bankruptcy of dozens of mortgage lenders over the past year.

  Then of course there is the issue of the Fed’s monetary policy having created the housing bubble, characterized by a spectacular escalation of real estate values in every American city over the past decade or so. This created a further problem for the financial institutions that are victimized by the CRA. They are forced to make a certain amount of bad loans, but because of the Fed-created explosion in housing prices, many thousands of subprime borrowers no longer qualified, by a long stretch, for conventional mortgages based on their incomes.

  The only way these borrowers could qualify for their mortgage loans (even ignoring their bad credit ratings) was to take out adjustable rate mortgages, some of which had astonishingly low first-year rates in the 3 percent range, and sometimes lower. This is what has largely fueled the subprime mortgage meltdown – the inability of thousands of subprime borrowers to afford their mortgages now that their rates have adjusted upward. Thus, the combination of the Fed’s enforcement of the CRA (with the help of political pressure groups like ACORN) and its post 9/11 monetary policy in general are the reasons for the bursting real estate bubble and the “subprime” mortgage meltdown.

  Don’t expect to read about this in the “mainstream media,” however, which generally views groups like ACORN as heroic champions of the poor, laws like the CRA as anti-discrimination laws, and places all of the blame for the subprime mortgage meltdown on greedy capitalists, especially mortgage brokers. Encouraged by such reporting, the odious Senator Charles Schumer of New York has promised federal legislation that will reign in these miscreants, while the Bush administration is proposing an indirect bank bailout by having the Federal Housing Administration cover many of the bad “subprime” loans. This will create what economists call a “moral hazard” by encouraging even more bad loans to be extended in the future. Every banker in America will be glad to extend loans (at high rates of interest) to the most uncreditworthy borrowers if he thinks there is no possibility of default with the FHA effectively guaranteeing the loan.

  PROBLEM STILL CAUSED BY GOVERNMENT proposed by DEMOCRATS.

  Banks are still regulated by the feds and can be leaned on through their regulating agencies - period, fact. Who appoints and directs the heads of these agencies??

• 12. jerry  |  March 29th, 2008 at 5:02 pm

  Slaveholder-

  You got your info from Lewrockwell.com. The Lew Rockwell who authored those racsist pamphlets that dogged Ron Paul during his campaign. Why didn’t you link to the page you cut and pasted from?

  Below is a cut and paste from where you got your info. It details Dilorenzo’s books he has written. Like you it seems Tom didn’t think the abolition of slavery was a good reason for fighting the civil war.

  Thomas J. DiLorenzo [send him mail] professor of economics at Loyola College in Maryland and the author of The Real Lincoln: A New Look at Abraham Lincoln, His Agenda, and an Unnecessary War, (Three Rivers Press/Random House). His latest book is Lincoln Unmasked: What You’re Not Supposed To Know about Dishonest Abe (Crown Forum/Random House).

• 13. Magnum Serpentine  |  March 29th, 2008 at 5:06 pm

  Hey Matt,

  I read somewhere that John McCain was going to reverse most of george’s non-security executive orders… Maybe this stupid expansion of the Fed will be one he reverses.

• 14. congressive  |  March 29th, 2008 at 5:47 pm

  This is bad. Very very bad. George’s coup is nearly complete.

  But you didn’t complain when George took away habeas corpus, because you we not a criminal.

  You didn’t complain when George took away your privacy, because you had nothing to hide.

  You didn’t complain when George took away your Congress’ oversight of the Executive because you trusted George.

  Chickens, meet roost.

  McCAIN GURU LINKED TO SUBPRIME CRISIS

  Blame the Dems all you want, but you brought it on YOURSELVES! And are now asking for a second helping with McCain.

  Not “God Bless America,” not “God Damn America,” but “God Help America.”

  I was wondering when you’d snap.

• 15. js  |  March 29th, 2008 at 5:48 pm

  whats a free economy that becomes regulated to the gills by the government?

  new socialist

• 16. js  |  March 29th, 2008 at 5:51 pm

  how can a government that cant keep its own spending in budget supposed to regulate banks?

  explain this to me, can the irresponsible liars teach the irresponsible thieves how to be honest, respectable and responsible?

  hows that work, anyone?

• 17. Arctic Fox  |  March 29th, 2008 at 6:34 pm

  @6: There’s only a single sentence that has any kind of accuracy in your entire condescending post:

  We are in this situation because banks stopped behaving like banks.

  And actually that’s quite true. They HAVE stopped behaving like banks. What do they behave as instead? Big corporate business.

  That’s right. Like insurance companies, banks now run for bottom line profit. This means not lending to bad credit risks. The problem with that is that sometimes, good credit risks are bad for business. Why is that?

  Well, I only hold one credit card. It has a $10,000 limit. I’ve never used even half of that, and consequently I pay off the balance each month. This makes me bad for business, because I’m not making the bank any money. The bread and butter of the system is interest, and its charges. Those who are rich or frugal don’t let their accounts start to charge interest.

  If everyone did this, would it be good for the system? Hell no. In fact, the system would collapse. It NEEDS people to pay interest into the system to work. This means that they have to start taking risks, lending to people who might not be able to pay back the entire capital. The bank doesn’t WANT the entire capital its lent out being repayed, because again, if that happens it’s not earning interest. Say I borrow $5,000 - if I pay that (or however much of it I owe) back, then it’s lost revenue. But if I don’t then that’s free money for the banks each month in interest. That’s what keeps the whole system ticking over, lending to those who CAN’T afford to pay back their $5,000 or whatever, but CAN afford to keep paying a few hundred a month, of which most is interest.

  And it worked. Until the economy took a nose dive.

  Along comes the war in Iraq, disharmony in the middle east, and with that a huge increase in fuel costs. Suddenly people who were on the edge have gone over the edge. They can’t afford to put gas in their cars AND pay the loan back, but if they don’t put gas in their cars they can’t go to work, and if they don’t work they don’t get paid at all. So they default on their credit cards out of necessity, because the other expenses have to be paid to keep the household going.

  Bush recognised this. That’s why he’s giving rebates back. Problem is, people are too far into the hole for them to use these rebates for anything but debt repayment. In fact according to a recent survey (whos link I don’t have in front of me right now) nearly 50% intend to use that money for the debt repayment, with only 22% putting it back into the economy.

  Which leads us to what has to be done about the problem. And that DOES need government to pass rules, even if it delegates enforcement to an independent body. Because banks are out to make a profit nowadays, and they don’t care about treading on people to do that, so that means the law has to MAKE them lend responsibly, has to REGULATE the interest they can charge (remember, Capital One were the first card with a 47% interest rate - who can pay THAT off?) and has to generally do what government is there to do - lead.

  It’s not about how well government can or can’t do that. I happen to think that a banking watchdog that is independent of government control is a very good idea. But as I said previously, the government HAS to fund it. If that’s left to private sector, then the Banks will fund it as they’ve done in the UK, and that will lead to nothing changing.

• 18. TiredofLibBullShit  |  March 29th, 2008 at 6:49 pm

  AF,

  “They HAVE stopped behaving like banks. What do they behave as instead? Big corporate business.”

  Uh, banks have always been a corporate business no matter how big or small. They answer to their share holders no matter what. They have always run on profit, since the beginning of banking in this country.

  They also have to operate within the law - and if the law says “if you want to keep on operating, you must lend make high risky loans to those who may not be able to pay, because we said so.”, well then they are screwed either way. Carter and the special interests force banks through the power of law to make bad loans. High interest rates are the result of bad and risky loans.

  The rest of your post in anti-capitalist jibberish.

• 19. congressive  |  March 29th, 2008 at 6:52 pm

  “whats a free economy that becomes regulated to the gills by the government?

  new socialist”

  Bush and his appointees Paulson et al are now SOCIALIST?

  Welcome to reality.

• 20. Diana Powe  |  March 29th, 2008 at 7:05 pm

  The problem is that in the pursuit of profit, which is necessary for banks to continue, they allowed themselves to be wooed by the sale pitches of those who created ever more elaborate schemes of bundling commercial paper, especially sub-prime mortgages, and convincing banks to invest in these novel and largely unregulated vehicles which are now crashing to the ground. The idea that a bank would “invest” in a group of mortgages, extended to buyers by sellers that the banks had no connection with and thus no way of genuinely knowing what they were “investing” in, is, as we are now learning as the chickens come bustling in to settle down for the night, a really stupid way to handle the deposited money of bank customers.

• 21. Jeremiah  |  March 29th, 2008 at 7:53 pm

  Heavy Regulation will be the end of the markets.

  http://www.iht.com/articles/2008/03/23/business/23credit.php

  Give Deranged Liberals the boot…and keep ‘em out!

  –Jeremiah–

• 22. Plantation Owner  |  March 29th, 2008 at 8:06 pm

  southern moron…..

  Plantation owner is a sarcastic handle I have chose because of another thread in which an individual likened the white population of today to plantation owners of 150 years ago. Another member has a similar response to Obama’s “typical white person” comment - his/her handle became “typical white person”. But then, liberals freely throw “racist” around to anyone for anything, I would expect nothing less from the likes of you.

  1977 Community Reinvestment Act (CRA), already cited, already discussed.

  There was a formula that banking followed for their loans to lessen the event of defaulting on a loan. Higher risk loans translates into higher interest rates - banking 101. Just like safe investments have low rates of return - higher risk has higher rates of return. But I can’t expect you government school educated types to know that.

  Banks were forced to make risky loans to individuals that otherwise could not pay. Nothing racist about it. I myself have been declined loans at one time because of my income status. Nothing to do with my race, just my ability to pay. Same with these individuals in the poor areas you describe.

  Now here comes big brother government man that forces banks to makes loans that were not sound financial transactions plus there other involvement in housing market cause housing values to drop.

  When housing values dropped, those individuals that had ARM loans (because that was the only loan they could qualify for - more risk) their housing values dropped below the amount owed. An ARM qualifies you to pay interest only for the first five years, after that the rate may change PLUS the principle payment kicks in. Thus many could not refinance out of an ARM, because their home value, which is normally collateral, and thus were stuck in paying their ARM - a payment that they now could not afford.

  If banks were behaving like banks then this would not have happened.

  Sorry to burst your big government belief that government is the solution for everything. But, you really need to start facing reality and that big government is the root cause of our problems. I don’t have to blame the fiasco on the left, their own actions speak for themselves only you fools do not see them.

• 23. Diana Powe  |  March 29th, 2008 at 8:16 pm

  Plantation Owner,

  You can keep repeating that bogus claim all you want, but the fact is that the problems now are not even the individual sub-prime loans. If that’s all it was, then the individual mortgage banks would be properly losing their shirts. The problem is that some people, ever anxious to make money out of nothing, decided to buy mortgages in bulk, bundle them and sell those as investment vehicles largely because of the lack of regulation for that kind of flash and sell them to a lot of other people in regular commercial banks and “investment firms” who should have thought, “Hey, what happens if a lot of these loans go bad all at the same time? Our investment won’t be worth anything.” Well, a lot of those loans went south taking all those great investment vehicles with them.

• 24. Diane Tomlinson  |  March 29th, 2008 at 8:18 pm

  25. Plantation Owner | March 29th, 2008 at 8:06 pm

  The CRA could have been ten times as strong against the practice of redlining and it still could not be blamed for the subprime mess or the credit cruch the reason for both debacles is greed meaning people in positions of corporate power saw a chance to make X and it was outside of their grasp and the penalty is a loss of X+Y.

• 25. Canuckguy  |  March 29th, 2008 at 9:05 pm

  It is a fact that in the USA, sub-prime borrowers are individuals with high credit card or other personal debt levels, those earning low incomes, new immigrants, the elderly and the disabled. They tend to be concentrated in low-income, high-default neighbourhoods in urban centers, are less likely to have a post-secondary education and are more likely to be Hispanic or African-American. That adds a political edge to this issue story.

  It is also a fact that a big part of the problem has been a lack of standards and regulation in the U.S. mortgage market.

  The regulation of mortgages is much more stringent in Canada. Up here for example, high-ratio mortgages where less than 20-per-cent down payment is made on a property must be insured by the Canada Mortgage and Housing Corporation.

  Another difference is that only five per cent of the Canadian mortgage market can be classified as sub-prime. And of that five per cent, only about a fifth use a variable interest rate that would leave them susceptible to interest rate hikes.

  There are cases where proper and smart regulation such as what we have for mortages are called for. The poof is in the puddin’.

  You Mercans could take lessons on this from us Canucks. Thus it is “Not a bad Idea”. This could be one of the smarter things Bush is doing, gawd knows that list is sadly short.

• 26. Eric T  |  March 29th, 2008 at 9:27 pm

  The Paulson plan would:

  –designate the Fed as the primary regulator for market stability, greatly expanding its ability to examine any financial institution deemed to pose a risk to the stability of the system.

  I have always been a George W Bush fan. I think he is making a good call, I think the past several years, the stock market has grown with explosive growth, Pension funds, 401k, Ira’s, count on the growth. But in the pursuit of the growth, companies cutting workers wages, outsourcing jobs, banks enslaving people with the bondage of 32% credit card interest, enegry costs sucking every last penny out of your wallet. The American people have lost alot of their buying power. Leaving many folks needing to borrow more to pay taxes, licenses, fees. I think the rebate checks, bailing out banks and keeping the economy cruising along, is important and the right thing to do. Bush could be protecting the country from a disaster, like a Great Depression.

• 27. congressive  |  March 29th, 2008 at 10:21 pm

  Jeremiah - give LIBERALS the boot?!?!?!?

  IT’S BUSH TAKING OVER, NOT “LIBERALS”!!!

  You’re not paying attention! YOU ARE CHEERLEADING YOUR EXECUTIONERS!

  FASCISTS HAVE LANDED, AND YOU ARE GREETING THEM AS LIBERATORS!!!

  When the “Federal Reserve Bank” which is NOT a government entity, but a private corporation, takes over, that’s FASCISM!

  Please, God, read a book or something.

  You thought Ron Paul and his “Feds are taking over” conspiracy was loonie tunes. Who’s laughing now?

• 28. Plantation Owner  |  March 29th, 2008 at 11:28 pm

  southern moron…

  Since you are unwilling to do a simple search….

  From the CRA gov’t website:

  The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound banking operations. It was enacted by the Congress in 1977 (12 U.S.C. 2901) and is implemented by Regulations 12 CFR parts 25, 228, 345, and 563e. (See Regulation).

  The CRA requires that each insured depository institution’s record in helping meet the credit needs of its entire community be evaluated periodically. That record is taken into account in considering an institution’s application for deposit facilities, including mergers and acquisitions. (See CRA Ratings) CRA examinations (see Exam Schedules) are conducted by the federal agencies that are responsible for supervising depository institutions: the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision (OTS).

  The act “encourages” lending instutions to “meet the credit needs of the entire communities in which they operate, including low- and moderate-income neighborhoods”. These credit lending records are then reviewed to evaluate an institution’s application for deposit facilities, including mergers and acquisitions. In other words, if the banks wish to keep their deposit facility status, merging or acquire other banks, they must demonstrate lending practices required in the act. Therefore, the government can strong-arm these banks if the present administration chooses to do so through the regulating agencies of the federal government and others. Banks could lose their depository status, which affects the banks investments of CD and other deposit instruments.

  The 1995 revisions were credited with helping to substantially increase the amount of loans to small businesses and to low- and moderate-income borrowers for home loans. Part of the increase in the latter type of lending was no doubt due to increased efficiency in the secondary market for mortgage loans. The revisions allowed the securitization of CRA loans containing subprime mortgages. The first public securitization of CRA loans started in 1997.

  There are those, who pushed for the ‘77 Act ACORN and other groups, that want to increase the scope of the CRA - more gov’t regulation, interference and telling banks how to operate.

  It’s not just me making these claims that gov’t is responsible for the debacle. Some economists claim that government policy actually encouraged the development of the subprime debacle through legislation like the CRA, which they say forces banks to lend to otherwise uncreditworthy consumers. For example, http://www.lewrockwell.com/dilorenzo/dilorenzo125.html
  http://www.nypost.com/seven/02052008/postopinion/opedcolumnists/the_real_scandal_243911.htm?page=0

  That was easy. Too bad you were incapable or unwilling to face the truth that another liberal program screws the country and its taxpayers, again.

  Lying garbage? HA! How does it feel to get bitch-slapped over something so simple?

• 29. Diana Powe  |  March 29th, 2008 at 11:42 pm

  Now, if only you had accomplished it by addressing the actual reasons, the actual exotic, largely-unregulated investment vehicles that are currently shedding value like mad, instead of all this blather about the Community Reinvestment Act arising from your need to believe that all bad things come from Democats. Oh well…

• 30. Plantation Owner  |  March 30th, 2008 at 12:01 am

  southern moron…..

  Lying? Dream on…. you asked and I answered. You truly are in denial. I never said a bank was forced to make BAD LOANS - THAT IS YOUR LIE!

  In practice, the RCA is the tool used. If banks wished to keep their status they have to provide credit to HIGH RISK individuals and make HIGH RISK loans. Those records are reviewed by regulatory agencies to determine of the banks can keep their status and be allowed to merge or acquire other banks. Why else are the records kept?

  If you can’t read the plain text then you have a serious problem. Oh, and pulling the “global warming” style arguments against is typical of a weak minded fool.

  The only time being wasted here is mine. Your party screwed up again, but then those are same government types that you want running our health care.

  My advice to you is to stop posting on something you know nothing about. It only make you look more and more foolish.

• 31. Christian Wright  |  March 30th, 2008 at 12:28 am

  Predatory Lenders’ Partner in Crime
  How the Bush Administration Stopped the States From Stepping In to Help Consumers
  By Eliot Spitzer
Thursday, February 14, 2008; A25

  Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers’ ability to repay, making loans with deceptive “teaser” rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.
  Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.
  Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York’s, enacted laws aimed at curbing such practices.
  What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.
  Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.
  Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.
  In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government’s actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.
  But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.
  Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.
  When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

• 32. felix the cat  |  March 30th, 2008 at 2:37 am

  Great article by Jim Cramer. Read and enjoy!
  http://nymag.com/news/businessfinance/bottomline/35813/

• 33. Eric T  |  March 30th, 2008 at 10:57 am

  #37 Good link-

  I had many investments in REIT- Real Estate Investment Trusts. The cool thing about those stocks is they had a real good dividend. The stockholders like myself lost 90%, even more of the value on those stocks. The stockholders got massacred.

• 34. FmrMarine  |  March 30th, 2008 at 1:56 pm

  ????
  >>>Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners.<<<

  So NOW it the governments job to protect stupid people from themselves?
  Where in the constitution is that?
  “predatory lenders?
  WTF ?
  How about people who are greedy, believing there really is a free lunch.
  Those brought up with the victim mentality, bought homes they couldnt afford, with interest rates so low it is almost comical, now facing the truth, they BOUGHT into a scam thinking they would slip through it.
  Of course it is Bushes fault.

• 35. Southerner  |  March 30th, 2008 at 3:43 pm

  Plantation Owner:

  In practice, the RCA is the tool used. If banks wished to keep their status they have to provide credit to HIGH RISK individuals and make HIGH RISK loans. Those records are reviewed by regulatory agencies to determine of the banks can keep their status and be allowed to merge or acquire other banks. Why else are the records kept?

  Now, for the FOURTH time I am telling you Plantation Owner that what you said above is NOT TRUE and challenge you to post a source (again I have asked you to do this repeatedly) for this nonsense. You say you never claimed that banks had to make “bad loans” and then claim the CRA in practice forces banks to make loans to high risk customers with high risk histories. This just is not true and the reason you cannot post any source for this made-up garbage of yours is cause of that lack of truth.

  The fact is that banks are compelled to maintain records simply in order to explicate the reason WHY credit was denied to any customer. If the customer was high risk or does not have a good credit history the bank doesn’t have to make the loan, simple as that. On the other hand if the bank refuses the loan simply on the basis of the customer living in a “high risk” neighborhood such as Harlem in New York, then the bank is not entitled to refuse the loan and such activity would be illegal under the terms of the CRA.

  Plantation Owner, you talked about “bitch slapping” me above. It’s fair to say at this point that you’re the one who has been bitch slapped. If you want to make another stupid post claiming the CRA does what you say it does when it doen not, that’s up to you. However, it would be really great if you could post a source backing your garbage up. You cannot do that, therefore you lose, therefore go away jackass.

• 36. Prom Dresses Emo Fashion &hellip  |  June 3rd, 2008 at 3:14 am

  Prom Dresses Emo Fashion Prom Dress

  I didn’t agree with you first, but last paragraph makes sense for me

• 37. Jessie&hellip  |  June 18th, 2008 at 4:12 am

  Jessie

  Interesting opinions which are diverse and give reason to a great deal of thought.

• 38. national reverse mortgage&hellip  |  July 2nd, 2008 at 1:21 pm

  national reverse mortgage lenders association

  When you find a good book about the law, the kind of book that needs to be written, one which needs to be read BY EVERYONE, NON LAWYERS ALIKE, you’ll be looking at a true gem.

• 39. Credit Repair&hellip  |  September 8th, 2008 at 11:52 am

  Credit Repair

  Yes we agree with your point. Remember that credit repair will work, but new credit lines must remain current.