"Neighborworks Organizations Use Section 8 Vouchers for Home Ownership: Fact Sheet," (Neighborhood Reinvestment Corporation, September 3, 2004), 2, Deposits are also guaranteed by the FDIC up to specific limits. They were convinced that they could safely fund the massive expansion of housing credit. The closing costs could come from "a variety of sources, including a grant from a qualified institution, gift from a relative or an unsecured loan." But it wasn't confined to the poor and was caused, at least in part, by a larger delusion that was the bubble's root source. The few that fought (I worked for one, directly with the massive program we set up to fight the DOJ) spent years and a lot of money doing so. I’m thinking Gingrich et al.If you’ll recall, the strategy was based on the observ’n that home owners tended to be more “conservative” y likelier Republican voters than are renters. I am not even convinced that Hillary is a true Leftist. Of course they were. Under the new rules, banks and thrifts were to be evaluated "based on the number and amount of loans issued within their assessment areas, the geographical distribution of those loans, the distribution of loans based on borrower characteristics, the number and amount of community development loans, and the amount of innovation and flexibility they used when approving loans. The Great Recession was largely caused by the bursting of the mid-2000s housing bubble and the damage it caused in the U.S. financial and banking system. But those private banks were responding rationally to incentives put in place by the Fed, the GSEs, implicit and explicit bailout guarantees, and reduced capital requirements.The three big investment bank failures had none of those incentives (except the last on net capital).Lehman had no Fed loan privileges, no GSE recourse, and certainly received no bailout.Merrill and Bear were seized by the Bush Administration and stockholders were shafted (so they thought).Fed interest rate policy and GSE purchases affected the entire housing market, inflating prices and demand. When these off-balance sheet vehicles encountered difficulties beginning in 2007, many depository banks were required to cover their losses.Unlike depository banks, investment banks raise capital to fund underwriting, market-making and trading for their own account or their clients; they are not subject to the same oversight or capital requirements. Hovering in the background was the knowledge that the federal government would bail out troubled "too-big-to-fail" financial corporations, including Fannie and Freddie.The housing boom could last for a while, but the bust was inevitable. And Frank is right to say that he eventually saw his error and corrected it when he got the power to do so in 2007, but by then it was too late. Yet, they are good enough to base far reaching policy decisions on.Apologetic leftist or rightist hacks argue this in terms of a presidential time window. Bill Clinton is certainly full of himself these days. During the housing boom, there was a … The estimates of Wallison, Calomiris, and Pinto are based upon analysis of the specific characteristics of the loans. The agencies — along with laws such as the Community Reinvestment Act (passed in the 1970s, then fortified in the Clinton years), which required banks to make loans to people with poor and nonexistent credit histories — made widespread homeownership a national goal.
On December 30, 2008, the Case–Shiller home price index reported its largest price drop in its history. After researching the default of commercial loans during the financial crisis, Xudong An and Anthony B. Sanders reported (in December 2010): "We find limited evidence that substantial deterioration in CMBS [commercial mortgage-backed securities] loan underwriting occurred prior to the crisis.
Fannie and Freddie eventually adjusted some of their conditions for obtaining a loan in an attempt to prevent a further loss in market share, but it’s very clear that they were followers, not leaders, in the erosion of lending standards. In 2002, the mortgage-debt-to income ratio of the poorest borrowers was 2; in 2006, it was still 2.
If the U.S. government had not chosen this policy path—fostering the growth of a bubble of unprecedented size and an equally unprecedented number of weak and high risk residential mortgages—the great financial crisis of 2008 would never have occurred.
Lehman just happened to be wrong about that, but most weren’t, obviously.
Nothing.Giant JP Morgan Chase famously refused to relax standards and like old JP himself bought cheap assets from strength (Bear and WaMu).This was a bubble caused by the private market like the dot-com bubble was.Did government force people to buy shitty dot-com stocks?Yes, and Chase was in good shape after the credit crisis. My friends out there who needs loan for different purposes i advice you contact Ramse Dave Loan Company for loan instead of falling in to hands of Scammers online. Taken together… we believe that the available evidence runs counter to the contention that the CRA contributed in any substantive way to the current mortgage crisis," Kroszner said: "Only 6%of all the higher-priced loans were extended by CRA-covered lenders to lower-income borrowers or neighborhoods in their CRA assessment areas, the local geographies that are the primary focus for CRA evaluation purposes. It was in specific response to this regulatory effort that Barney Frank made his now infamous statement "These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." Credit standards fell. The trick is to get the media to acknowledge it. .