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BILL HARRISON

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Bush and McCain Tried To Reform Freddie-Fannie - Democrats Declined

Seeded on Sat Sep 20, 2008 12:51 PM EDT

Article Source: getdrunkandvote4mccain.com

us-news, barack-obama, john-mccain, democratic-opposition, fannie-mae-freddie-mac-reform

Seeded by Bill Harrison

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Dateline 2003 - New York Times:

. . .Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

"These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

The Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190 never made to the floor after a party line vote in committee indicated that Democratic opposition to it (mostly over amendments which would have stripped the GSEs of the ability to donate to politically-motivated "affordable housing" groups like ACORN) would have resulted in a filibuster.

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Public Discussion (75)

Employees of the government-sponsored firms, which own or guarantee half of the nation's mortgages, have donated almost $4.3 million to federal elected officials and their various campaign committees since 2005.

Obama is the largest individual recipient at about $112,000, federal campaign finance reports show.

Nothing to see here folks, let's move along.

8 votes

#1 - Sat Sep 20, 2008 12:57 PM EDT

This corruption goes back to the Clinton years.

As you know I'm a Democrat but the Clinton years were an embarrassment.

6 votes

#1.1 - Sat Sep 20, 2008 2:00 PM EDT

LOLOLOL remind me who was in charge all the entire gov in 2003
yeah them dems were able to stop bush and mccain?? ohhh pleaseeeeeeeeee.

and it didnt really change anythign simply took some of the oversight rolls that congress had(which werent enough) and put them under the fed. or treasury. This was all part of bush tryign to gut congress.

Nothign to see here.. would not have stopped anything.. and with bush.. probably would have made matters worse.

2 votes

#1.2 - Sat Sep 20, 2008 2:24 PM EDT

Actually, Joules is sorta right about the Democrats. It sounds like both Dems and Pubs tried to stop this. The only thing I can find on the Dems was this:

"These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

"I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing," Mr. Watt said.

So it sounds like members of both parties were responsible.

Which is why John McCain is a maverick.

3 votes

#1.3 - Sat Sep 20, 2008 3:28 PM EDT

Andrew, you certainly have to be joking. Both Fannie and Freddie, but especially the former, have been Democratic Party fiefdoms for years. If you haven't done so, please read my earlier article explaining how all of this came about. Without the Clintonian push for "affordable housing" which impregnated the "chicken" there wouldn't have been an "egg" to hatch on Wall Street.

12 votes

#1.4 - Sat Sep 20, 2008 3:41 PM EDT

Sorry Bill, I should have meant "according to this article". I didn't see the other article :-P.

Retraction.

5 votes

#1.5 - Sat Sep 20, 2008 3:54 PM EDT

Haven't really disected the votes and who gave what to our elected officials, as some one who worked for a "Fannie" lender I can tell you we saw less and less regulation from Fannie over the last two years.

We were doing no doc loans for property investors, no doc loans for people with credit scores in the low 600's. We strictly followed Fannie Mae guidelines, they kept making it easier and easier..I only shudder to think what all of the brokers and non Fannie/Freddie lenders were doing. There's crazy paper out there and we are all paying for it.

Fannie Mae guidelines allowed for people with 5000.00 in chargeoffs to get a house, you could get a house only two years removed from a bankruptcy. We allowed loans for people with debt to income ratios in excess of 65 percent, I mean I was at the bottom tier and I could see what was going on, you don't have to have an MBA, or a PHD to wonder when the egg would crack.

I would "warn" management that some of these loans were crazy, they would only say are you underwriting w/in guidelines? The processing system created by Fannie Mae is so easily manipulated that any motivated processor or underwriter trying to make their numbers come out for the month could qualify any body.

We did not get paid commission but your review, annual raise, and annual bonuses all depended on your total numbers, we were constantly being intimidated to get those loans out.

I think the regs definately need to be overhauled, who will enforce them?

The calamity we are witnessing now is a direct result of allowing these companies (lenders) police themselves-our CEO used to stand up and say we need these regs changed so we can do what we want.(paraphrasing)..He "retired" in January.

is getdrunkandvote4mccain really a reliable source? Its all in the name

3 votes

#1.6 - Sat Sep 20, 2008 7:30 PM EDT

All of the links therein are to mainstream publications. I outlined all of this too from my own experience in this article.

7 votes

#1.7 - Sat Sep 20, 2008 7:42 PM EDT

It is really just sad-I've worked in financial services since 89-looks like the industry would learn a proper lesson at some point.

There is not an easy answer; over regulation can make transactions extremely difficult for the consumer. Under regulation exposes everyone to the greed of everyone at the top.

The economic advisers should be the folks that have worked in the trenches, who see at the most base level how people are really affected by this crazy-ness.

3 votes

#1.8 - Sat Sep 20, 2008 8:06 PM EDT

Fannie and Freddie did fine, as did the CDO markets, when they still had the old down payment requirements and 28/36 payment/debt ratio requirements. There's simply no need for these Depression-era (in Fannie's case) giants to still dominate 70% of the market.

4 votes

#1.9 - Sat Sep 20, 2008 8:26 PM EDT

Bill,

Don't know if you saw this video. It caught my eye while I was watching your seeded clip. Don't know anything about nakedemporer, and I will caveat that they definitely have a strong POV. However, if you just pay attention to the facts they present, it's pretty damning. And, the clips are from a year ago...and more.

http://www.youtube.com/watch?v=usvG-s_Ssb0&NR=1

Interested in your take.

3 votes

#1.10 - Sun Sep 21, 2008 2:38 PM EDT

Ralph/Kissimme, Florida

Your Comment:

Bill HarrisonEmployees of the government-sponsored firms, which own or guarantee half of the nation's mortgages, have donated almost $4.3 million to federal elected officials and their various campaign committees since 2005.

Obama is the largest individual recipient at about $112,000, federal campaign finance reports show.

Nothing to see here folks, let's move along.

Wrong Again: Read below

At least 20 McCain fundraisers have lobbied on behalf of Fannie Mae and Freddie Mac, netting at least $12.3 million in fees over the past nine years. Roughly 110,000+per year.
The man who brags that he is the "DEREGULATOR" We are now seeing the results of deregulation.

More to see here folks, let's stick around!!

2 votes

#1.11 - Sun Sep 21, 2008 5:09 PM EDT

Rick Davis and Charlie Black aren't on the ticket nor do I believe were any Republicans the CEOs of Fannie in the last eight years (not sure about Dan Mudd). Apples and oranges.

5 votes

#1.12 - Sun Sep 21, 2008 6:56 PM EDT

Quod erat demonstrandum.

6 votes

#1.13 - Sun Sep 21, 2008 7:08 PM EDT

Yes, Bill. I understand that the Republicans never used there majority in Congress to further their own self-interest. Let's talk to Tom DeLay for some details about that.

This goes back to Phil Gramm, who is tied firmly to John McCain. Did McCain vote against Gramm's bill that rolled back the regulations put in after the Great Depression? Uh, no, he didn't show up.

The feeble attempts to lay this at the feet of the Democrats are amazing. The amounts of money made by the Wall Street firms dwarfs that of Fannie and Freddie, and those guys sure as hell weren't supporting Democratic candidates.

Nothing to see here, indeed.

3 votes

#1.14 - Mon Sep 22, 2008 11:17 AM EDT

What's feeble is your complete lack of knowledge of anything to do with the genesis of this financial crisis in the credit markets. When you garner twenty plus years experience in the relevant field get back to me.

Banks and Wall Street firms were happily buying CMOs and CDOs for fifteen years before Gramm-Leach (a RINO Obamaite)-Bliley ever came about with good results for all concerned. Of course that's before Bill Clinton and the Democrats used their buddies at Fannie to start shoveling @!$%# into the system so every minority with crappy credit and employment histories could buy a house.

3 votes

#1.15 - Mon Sep 22, 2008 8:47 PM EDT

Andrew SpagnoliDeleted

Bill,

Fannie and Freddie did fine, as did the CDO markets, when they still had the old down payment requirements and 28/36 payment/debt ratio requirements. There's simply no need for these Depression-era (in Fannie's case) giants to still dominate 70% of the market.

Fannie and Freddie did fine, as did the CDO markets, as long as property values continued to increase. People could simply refinance, take cash out, relieve whatever financial pressure they had, and continue their lifestyle.

By 2005, they had run out of quality borrowers, but the investors who had become addicted to the returns on these CDO's demanded more of them. Wall Street wasn't going to leave that money on the table, so they put the pressure on lenders (and F/F) to widen their nets and loosen their guidelines. By 2006 we had the "fog a mirror, get a loan" program going. That's when values started to level off, and people in those 2/28s and 3/27's were in prepayment penalty periods that kept them from being able to refinance. By the time the prepay was up, the value wasn't there, so the loans adjusted, and they couldn't make the payments.

In October of 2006, loans were starting to default ON THE FIRST PAYMENT.

By the way, this whole "it's all the minorities fault" stuff is BS. You're correct that the Democrats were very invested in getting F/F to back loans for people who should not have been able to buy houses, but please don't forget that these Wall Street firms we are about to bail out were very happy to package up and sell those loans. The subprime loans, in fact, brought in more profit, because the interest rates were higher, and as I mentioned, as long as values kept going up they never defaulted.

Most of those firms, as you probably know, are run by "conservatives." This was a non-partisan screwup, including the Gramm act that allowed it to happen. that bill passed 90-9, with one "no vote", John McCain. Barbara Boxer and Richard Shelby were two of the "against" votes, so you can see that opposition was non-partisan also.

Get off your high horse. Your man is going down, and your party's time has passed. They have controlled the agenda in Washington since 2001, and brought nothing but problems to the 98% of Americans who earn less than $250,000 per year. It's someone else's turn.

What's feeble is your complete lack of knowledge of anything to do with the genesis of this financial crisis in the credit markets. When you garner twenty plus years experience in the relevant field get back to me.

I used to respect our differences, and I thought you did, also. I guess I was wrong.

1 vote

#1.17 - Wed Sep 24, 2008 8:52 PM EDT

By 2005, they had run out of quality borrowers, but the investors who had become addicted to the returns on these CDO's demanded more of them. Wall Street wasn't going to leave that money on the table, so they put the pressure on lenders (and F/F) to widen their nets and loosen their guidelines.

There is absolutely no evidence to support this allegation. The loosening of the loan underwriting standards at Fannie/Freddie started in the mid-90s under Clinton's "affordable housing" inititative. I know because I worked for what is now SunTrust Mortgage in 1992 before the lax standards hit and Fannie/Freddie had a very limited menu of mortgage products all with strict underwriting guidelines. If you have evidence to suggest that what you say is true then I suggest you put it forth.

This article, by a guy who worked on this for Fannie should offer you enlightenment:

The problem with a 20% down payment is for many people it was very hard to come up with that big a down payment and thus it limited the total size of the mortgage market which in turn limited the volume of mortgage securities that Fannie Mae could purchase for its golden goose. While the obvious solution to this problem is just to lower the down payment requirement, Fannie couldn't do this unilaterally because the government unit that regulated it would see such cuts as needlessly raising Fannie Mae's risk profile. Far more politically astute that that, Fannie Mae began a campaign to increase "home ownership" and "affordability". It created a home ownership "foundation" which opened offices in almost every congressional district and promptly set about mobilizing all the local advocates for "affordable" housing to put pressure on their elected representatives to let Fannie Mae offer "affordable housing programs". Of course, "affordable housing problems" was just a euphemism for allowing Fannie Mae to lower its underwriting standards so that more mortgages could be created and the golden goose could thus kick out more golden eggs.

You see, Fannie wasn't just buying these mortgages and then selling them to Wall Street they were buying them for their own portfolio and that's why their tits are in the wringer right now.

The rest of your post is similarly fact-free although it's long on attitude.

3 votes

#1.18 - Wed Sep 24, 2008 10:23 PM EDT

You always manage to find the dirt pile!
How dare you report this?
It is more interesting talking about Black gang wanting to rape Palin.
Or what is written in Palin's emails.
No one wants to know about Obama, especially if it is true!

7 votes

#2 - Sat Sep 20, 2008 1:37 PM EDT

It's about time there was a sorry about this on the net!!! Clinton wanted it easier for minorities to get home loans, so it was done. Well greedy people gave the money to buy a house, only 1 problem, they really couldn't afford it. So now all the people that really can afford a home, will paying for this mess for years to come. Can you say thank you Bill, thank you Chris Dodd, thank you Barney Frank, thank you to the Democrappers. Thank you Obama and your robbing money giving donators Franklin Raines former ceo of Fannie Mae, that drove it into the ground and your other buddy Jim Johnson. Your economic advisors. That's what I call the 3 Stooges. Electing him wil be a very sad day in America. It will truly show me, just how many stupid people there are. Not that I don't already have a pretty good idea.

7 votes

#3 - Sat Sep 20, 2008 2:06 PM EDT

Sorry Sheila,

You seem to conveniently forget all the gum flapping bush did about the "ownership" society. About people buying homes.

You cannot blame the republiCON desire to drown government in a bathub and deregulate, deregulate, deregulate on Democrats.

7 votes

#3.1 - Sat Sep 20, 2008 2:21 PM EDT

bush touted the home buying.. bush was in charge as the unitary executive for 8 years.. most of that time he has a yess man gop congress.. he could have changed this.. clinton doesnt superced bush..
the fact is yall didnt do crap.
clinton also forgave theoil companies roylaties when oil was only $10 a barrel.. so i guess it was clintosn fault that we still forgave royalities under bush when oil was over $100(royalities equal payments to us for usign our resources and sellign them back to us.. ask palin about htem if you dotn know what they are)

sory yall cant cry clinton when you man was in charge for most of a decade.. and had a yess man gop congress for 6 years of it.

2 votes

#3.2 - Sat Sep 20, 2008 2:27 PM EDT

I would recommend to you my earlier article on the genesis of this mess and this City Journal article from eight years ago which also warned of it.

8 votes

#3.3 - Sat Sep 20, 2008 2:48 PM EDT

Spooky Boyfriend

Who's side are you on?

#4 - Sat Sep 20, 2008 2:18 PM EDT

Sheila-522981
if it makes you more comfortable, see it this way
Since our government used YOUR tax money to save F/F you gave donation to Obama personal pocket.
Happy now?

3 votes

#5 - Sat Sep 20, 2008 2:19 PM EDT

Spooky Boyfriend
ask me, ask me
I am on the winning side.

3 votes

#6 - Sat Sep 20, 2008 2:21 PM EDT

JoulesBeefDeleted

was that a compliment?
or an insult?

3 votes

#6.2 - Sat Sep 20, 2008 2:39 PM EDT

AMR 1960Deleted

Um, "get drunk, and vote for McCain" ?!

I don't even think I would vote for him if I were drunk!

2 votes

#7 - Sat Sep 20, 2008 2:21 PM EDT

jkb171
Why don't you just stay home?
and have a drink.
Obama wins, you loose
McC wins, you can have another drink.

4 votes

#7.1 - Sat Sep 20, 2008 2:26 PM EDT

yep thats how the gop wins.. they want you to stay home or they will make you stay home or they will mail you absentee ballots with the wroing info... plce senate races at the bottom of tthe ticket illegally.
or using forclosue lists to cage voters
or simply sue to make sure you cant vote under a law they themselves passed. and when all else fails hey get religious hackers to hack the vote to save the babies

..t he gop can only win if they can make sure enough peopel dont vote.

3 votes

#7.2 - Sat Sep 20, 2008 2:35 PM EDT

Joules, although you have been on my IL for months, I have a duty to moderate this seed so please keep your comments limited to the financial crisis whose genesis lies in the home mortgage markets. Thank you.

7 votes

#7.3 - Sat Sep 20, 2008 2:41 PM EDT

JoulesBeef
So have you chosen to stay at home?
Why bother?
Or have you anything more to say about this topic?

3 votes

#7.4 - Sat Sep 20, 2008 2:43 PM EDT

AMR 1960Deleted

I'm going to give you the same advice I gave Joules. The seeded piece and the commentary attendant to it isn't about alleged vote fraud, it's about the current credit crisis in the financial markets. Stick to the thread and comment upon that or take it elsewhere.

4 votes

#7.6 - Sat Sep 20, 2008 8:56 PM EDT

Comment 6.1 is a CofH violation and has been deleted. Calling a fellow user's comment "stupid" is not permitted.

7 votes

#8 - Sat Sep 20, 2008 2:54 PM EDT

Obama is the largest individual recipient at about $112,000, federal campaign finance reports show.

******************
Since "we the people" now owe that F/F outfit,
can I get my money back that was spend on Obama?

4 votes

#9 - Sat Sep 20, 2008 3:37 PM EDT

Bor, actually the taxpayer as of yet doesn't own either of them. They're still operating as private companies with infusions of taxpayer dollars. It will be left to the Congress to decide their fate. IMHO, they need to be chopped up and the pieces sold off. No need for either of them in today's markets. Indeed, by having two companies account for 70% of the secondary market for home mortgages their presence is distorting the markets.

7 votes

#9.1 - Sat Sep 20, 2008 3:45 PM EDT

Congress,
but they a

Dem majority

, there it goes my money.

3 votes

#9.2 - Sat Sep 20, 2008 3:52 PM EDT

Andrew Spagnoli

Obama did NOT get a penny from F/F he got individual contributions from employees. Do you have an employer? When you donate to a non-profit do you deduct it from your taxes, or does your boss deduct it from you employer's tax bill? If you want to get money back, ask them where their lobbying budget went to (tens of millions of dollars). The answer is that it went to John McCain's campaign manager and to over 20 of his advisers and fundraisers, who passed it on to McCain now that it had been laundered so that it did not appear as a gift from Fannie/Freddie.

1 vote

#9.3 - Mon Sep 22, 2008 11:42 AM EDT

I've already commented on your nonsensical article today and won't waste a word more saying anything else in this regard.

4 votes

#9.4 - Mon Sep 22, 2008 8:51 PM EDT

Let's just keep going back to the facts: McCain is a do nothing "maverick" who sat around for all those years blowing in the wind with whatever was the way to go at the time!!!...and he is YET to address any real issues with real solutions. And so it goes..........home mortgage problems are of no interest to McBush because he has all the homes that one person (or 2 or 3) could live in and the money that he can spend in a lifetime.

4 votes

#10 - Sat Sep 20, 2008 4:03 PM EDT

When you have some facts to support this opinion get back to me. And take your caps lock off.

8 votes

#10.1 - Sat Sep 20, 2008 4:06 PM EDT

Caps lock is not on...no need to get back to you...the facts remain as I stated.

3 votes

#10.2 - Sat Sep 20, 2008 4:38 PM EDT

I'm confused here - weren't both the House and Senate controlled by Republicans in 2003? So, how did the Democrats stop them?

2 votes

#11 - Sat Sep 20, 2008 5:13 PM EDT

Weren't both the House and Senate controlled by the Democrats in 1992? So why did Clinton fail to pass all his legislation?

3 votes

#11.1 - Sat Sep 20, 2008 5:18 PM EDT

I believe that the Republicans used filibusters in the Senate to block legislation - is there any evidence that the Democrats did this in 2003 to block the "reform" you are claiming that the Republicans were trying to pass? The article does not mention this...

1 vote

#11.2 - Sat Sep 20, 2008 5:25 PM EDT

No, I have no idea how they stopped it. But you asked, and I thought this parallel would be interesting.

3 votes

#11.3 - Sat Sep 20, 2008 5:29 PM EDT

I'm not sure what is interesting about it - I was merely trying to understand how the Democrats stopped this legislation, or even if they did, in fact, stop it. I have yet to see any evidence that they did.

2 votes

#11.4 - Sat Sep 20, 2008 5:46 PM EDT

AMR 1960Deleted

The bill came out of committee on a party line vote which means there wasn't any ability to get it passed in the Senate over the threat of a Democratic filibuster.

6 votes

#11.6 - Sat Sep 20, 2008 7:04 PM EDT

Yankee TurtleDeleted

Spooky Boyfriend

What did Yankee Turtle say?

#11.8 - Sun Sep 21, 2008 12:51 PM EDT

2 votes

#11.9 - Sun Sep 21, 2008 7:00 PM EDT

Spooky Boyfriend

Oh. I think we both know the answer to Yankee Turtles ultimate question.

1 vote

#11.10 - Sun Sep 21, 2008 10:29 PM EDT

AngryWhiteMan63

I got to thinking about this today, and I seem to remember that about 5 years ago commercials started showing up on TV from F/F about watching your credit. Does anyone else remember those. Several of them featured minorities in various situations about credit cards or buying their first home etc. Now at first I was thinking this was F/F attempt at discouraging home buyers with bad credit. But could it have been seen as something else? Am I off base on these commercials?

5 votes

#12 - Sat Sep 20, 2008 6:16 PM EDT

I don't recall these particular commercials but the incipient cause of the crisis is exactly as I stated in my original article on this mess.

I have been in real estate finance my entire working life including a brief stint as a mortgage loan officer for SunTrust (then Crestar) in '92. At that time, Fannie and Freddie both had very conservative underwriting guidelines and a limited menu of mortgage products to choose from. As this article points out, that all began to change after Bill Clinton came into office:

While Fannie still fought to increase its size limits, it quickly found another, much more politically palatable, way to increase the pool of mortgages it could buy: it dropped underwriting standards under the guise of increasing "home ownership" and "affordability". Traditionally, Fannie had required the mortgages it purchased to be so-called 80/20 mortgages wherein the borrower puts at least a 20% down payment on the mortgage. This was a requirement because residential mortgages in the US are a "no-recourse" loan in which the borrow can generally "walk away" from the loan with no recourse to the lender other than seizing the house and reporting the default to a credit agency. A 20% down payment was generally thought to be enough to dramatically limit the moral hazard of borrowers "walking away" because housing values would have to decline 20%+ for the borrower to be underwater and even then the borrower would still face the prospect of losing their own sunk capital which makes walking away even more difficult from a psychological perspective

The problem with a 20% down payment is for many people it was very hard to come up with that big a down payment and thus it limited the total size of the mortgage market which in turn limited the volume of mortgage securities that Fannie Mae could purchase for its golden goose. While the obvious solution to this problem is just to lower the down payment requirement, Fannie couldn't do this unilaterally because the government unit that regulated it would see such cuts as needlessly raising Fannie Mae's risk profile. Far more politically astute that that, Fannie Mae began a campaign to increase "home ownership" and "affordability". It created a home ownership "foundation" which opened offices in almost every congressional district and promptly set about mobilizing all the local advocates for "affordable" housing to put pressure on their elected representatives to let Fannie Mae offer "affordable housing programs". Of course, "affordable housing problems" was just a euphemism for allowing Fannie Mae to lower its underwriting standards so that more mortgages could be created and the golden goose could thus kick out more golden eggs.

This proved to be a highly effective political coalition for Fannie Mae. Not only did they build a huge network of grass roots political supporters through their "foundation", but politicians saw political advantages in supporting the programs because it cast them in the role of trying to help families buy a new home (as opposed to lowering underwriting standards to help a giant corporation keep up its earnings growth by taking a free ride on the US government's guarantee). Even commercial banks and investment banks signed on to the program because it at least resulted in higher origination fees and an expanded credit market, even if most of the assets ultimately went to Fannie Mae and Freddie Mac.

For those of us who have worked in the industry, as opposed to 99% of the political reporters and political spinners who don't know what they're talking about, this isn't even an arguable point.

6 votes

#12.1 - Sat Sep 20, 2008 7:24 PM EDT

AngryWhiteMan63

I lived this Bill. In 1999 we bought a home with no down payment that we should not have been able to buy. We had one home already that was up for sale in another state. But because we had refinanced it, through some glitch with that mortgage company, it did not show up on our credit report. Our lender knew we had that house. We were prequalifying for a Lease/Purchase with the intent to buy when our house sold. But he convinced us to get a mortgage and buy this one. I knew I couldn't afford both house payments. But we thought we had a buyer for our other house, so we did it. Murphy's law, the sale fell through and there I was with two houses. Long story short we lost one house after 3 years. Ruined credit means no refinance, so when the 5 year arm kicked in, along with a job loss due to company merger, we lost the other.

And that is the other side of this story that gets tip toed around. Many people were buying houses when they shouldn't have.

6 votes

#12.2 - Sat Sep 20, 2008 7:48 PM EDT

Angry-

There are lots of others that have the same story! I was taught as an underwriter you have to be a detective, ask questions about other properties.

I do know from some friends in the industry who worked for other companies, they did not always do that. As the regs got relaxed our company also discouraged the detective work.

Realtors can make anything sound good, the fact is that most of them know squat about the financing portion and consumers depend on them way too much for everything involving their home purchase.

You are correct in your summary.Folks can not go into such a transaction with blinders on. I wish you much luck and success in the future.

4 votes

#12.3 - Sat Sep 20, 2008 8:20 PM EDT

Angry and Christina,

Thank you for posting these. I'd like to hear more stories like yours, so people can start to realize there are literally millions of these good intentions compounded by bad management decisions that led us to the mess we're in.

Like you, my husband and I took some LIBOR interest-only, 10% down mortgages during this time. About five years ago, we bagan seeing the handwriting on the wall, though, and "fixed" them. Our primary financial goal now is paying those puppies down.

But, definitely there were what I call -- probably incorrectly -- predatory lending practices in place due to a combination of human nature, excessive greed and regulatory insanity. On the topic of predatory lending, don't even get me started on the credit card companies who target 18 year olds, hanging out all over the collegee campuses. What chaps me is that those are the companies US taxpayers are now bailing out.

4 votes

#12.4 - Sun Sep 21, 2008 11:02 AM EDT

Andrew Spagnoli

actually I know exactly the commercials you are talking about, and my reading of the ads was that they were basically about consumer education. The purpose as far as I know was to show how paying bills late/living beyond means leads to bad credit and then you won't be able to get a home. Not as much about marketing loans to a better group as it was about encouraging young people to take their credit rating as a very serious matter.

1 vote

#12.5 - Mon Sep 22, 2008 11:24 PM EDT

AngryWhiteMan63

Okay, but when did they start? Not in 1977 when the CRA was passed. Not in 1995 when the Clinton Administration took an interest in cracking down on redlineing. Not in 2003 whe the Bush administration first warned of problems as a result of the 7 year evaluation. Not until 2005 when regulation was defeated by the Democrats. That's my point. This crash didn't happen over night. The handwriting was on the wall long before now. And it seems to me there was some kind of effort to try to educate the public about personal financial responsibility.

3 votes

#12.6 - Tue Sep 23, 2008 12:12 AM EDT

If the poster at 11.7 has something to offer by way of counter-argument, then he or she is welcome to comment here again but "more half-truths, distortions, and lame rationalizations by the right-wing excuse machine. Have you no shame? does not constitute an argument and is a CoH violation to boot in its last sentence. Thus, to the trash can it goes.

5 votes

#13 - Sat Sep 20, 2008 7:46 PM EDT

Bill Harrison
Correct me if I am wrong,
Is it the Congress and the Senate that actual run this country?
President has the Veto power, but that is it on that subject.

4 votes

#14 - Sat Sep 20, 2008 8:14 PM EDT

The old adage is, "The president proposes, the Congress disposes." The proximate cause of the '95 government shutdown is that the Congress wouldn't approve any more continuing resolutions to fund the government and Clinton wouldn't sign the GOP drafted budget bill and the GOP didn't have the Senate votes to override a veto from the president.

4 votes

#14.1 - Sat Sep 20, 2008 8:31 PM EDT

Rational Poster

I am appalled not only by the story but by the fact that the media has not reported this.

4 votes

#15 - Sat Sep 20, 2008 8:36 PM EDT

The problem is that most of the political reporters aren't qualified to cover it as they don't have the requisite knowledge base to start with. Almost all of the informed commentary is coming from professionals involved in the business although the Washington Post has done a much better job than most of the other newspapers in this regard.

5 votes

#15.1 - Sat Sep 20, 2008 9:04 PM EDT

Andrew Spagnoli

Actually, that bill was one of many different "reform" attempts -some pro-regulatory change proposals and some anti-regulatory, and some that were neutral on the degree of regulation, but sought to change some other detail... The point is that of all the efforts made to enhance the regulation and accountability of the industry, as well as maintain firewalls between a mortgage crisis and the investment crises that have now been touched off here, Bush and McCain have been on the ANTI side of the issue. Democrats have been on the side of proper regulation; indeed the origin of the original regulations, many of which were opposed by McCain on various occasions, were the product of the Democratic policies of the New Deal necessitated by the '29 crash and the Great Depression. I know that you will disagree, as we both have our own perspectives on this, but that is why the claims by McCain have remained largely the product of ads and speeches, not of many stories in the msm: they simply do not pass journalistic muster as any true indication f McCain's role vis a vis regulation. He IS a DEregulator, and nothing that you, or he, says now can change that fact of history. And btw I thought you'd want to know... The story just broke that McCains Campaign Mgr. Rick Davis has an ongoing $15,000/mth payment from Fannie Mae since 2005... which McCain lied about on Sunday night... or just forgot I can't say for sure. READ About McCain's Man Rick Davis and Fannie's 15K/month

#15.2 - Tue Sep 23, 2008 8:45 PM EDT

Andrew, I've been involved in real estate finance at the highest level probably longer than you've been alive. You do not know what you're talking about as was evidenced by your article to which I responded.

I am simply not going to waste one more word on you and don't you ever come on my column again and post what you posted at 1.16 above, got it?

4 votes

#15.3 - Tue Sep 23, 2008 9:01 PM EDT

Spooky BoyfriendDeleted

Andrew Spagnoli

Let me start by saying that I regret my choice of words in questioning your motivation for some remarks that you made. I still disagree with your opinion, but that does not give me the right to make assumptions about what is behind your thinking about the issue. I apologize if I was indelicate and unfair in my immediate reaction. However, I think I was pretty fair in my exchanges of views while you repeatedly called me a liar and my article devoid of truth. While there are shades of gray aplenty to debate in this mess, there was nothing in the article you responded to that is not widely reported public knowledge, and the fact is, that your perspective as someone who is in the 'highest level' position you make reference to arguably gives you a less objective take on the regulation of public investments and GSE-associated lending than someone who has a little editorial distance, even if you may possess specialized knowledge about the industry. You take offense very easily for someone who leaves nasty comments for others as well, and if I am as odious and ignorant an Obama-phile Newsviner as you seem to think, I marvel that you can stand this site at all. That said, I will not make a comment of that type again, to you or anyone else, as it was no doubt unfair in spite of whatever I may or may not have felt about some of your remarks. I would suggest, if you really do not want to waste words on people you think are a waste of your time because they don't agree with you, or because of your idea of who you are relative to them, then don't seek us out, and don't get personal.

#15.5 - Wed Sep 24, 2008 2:13 AM EDT

Newsvine articles and seeds are free to be commented upon by any Newsvine user. The goal of this site since its inception is not as an arena to put forth partisan positions divorced from verifiable facts. Learn that distinction and you will do fine here.

2 votes

#15.6 - Wed Sep 24, 2008 10:26 PM EDT

Man! What a mess!

I wasn't paying any attention at that point in history.
I do recall the commercials mentioned in #12.

1 vote

#16 - Sat Sep 20, 2008 9:52 PM EDT

Thank you for your articles on this Mr. Harrison. It has been hard to get a clear explanation from MSM.
But then again, what news are they actually reporting and how much are they not reporting and why? I would think they are being embarrassed by the McCain stump speeches and commercials talking about Obama's connection to the FMFM crash which can now be called "breaking news" .

4 votes

#17 - Sun Sep 21, 2008 1:51 AM EDT

You're quite welcome.

5 votes

#17.1 - Sun Sep 21, 2008 10:22 AM EDT

OBVIOUSLY YOU WERE READING MY COMMENT AS I WROTE IT, AND DELETED IT. THIS IS THE THIRD OF FOURTH TIME MY COMMENT HAS BEEN DELETED WHEN I CLICKED ON 'RETURN TO EDITING' FROM THE SPELL CHECK. DAMM YOU, YOU WASTE MY TIME.

1 vote

#18 - Sun Sep 21, 2008 8:01 PM EDT

I haven't even been on this page in two hours. Take your paranoia and your caps lock elsewhere if that's all you can do.

6 votes

#18.1 - Sun Sep 21, 2008 9:37 PM EDT

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