pacino wrote:Bank of America will pay a $16 billion dollar fine for their role in the subprime mortgage crisis.

dajafi wrote:Romney is a smart guy with some eye for talent.

TomatoPie wrote:

pacino wrote:Bank of America will pay a $16 billion dollar fine for their role in the subprime mortgage crisis.

How much was Barney Frank's fine?

TomatoPie wrote:

dajafi wrote:Romney is a smart guy with some eye for talent.

That would explain, to my satisfaction, why he keeps binders full of women.

pacino wrote:

TomatoPie wrote:

pacino wrote:Bank of America will pay a $16 billion dollar fine for their role in the subprime mortgage crisis.

How much was Barney Frank's fine?

did you even read the articles provided? BoA and others tricked Fannie Mae and Freddie Mac, essentially, into taking on loans that wouldn't have passed muster if they gave them the real facts and didnt try to push garbage on them.

...mortgage lenders didn't wake up one fine day deciding to junk long-held standards of creditworthiness in order to make ill-advised loans to unqualified borrowers. It would be closer to the truth to say they woke up to find the government twisting their arms and demanding that they do so - or else.
...
Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to "meet the credit needs" of "low-income, minority, and distressed neighborhoods." Lenders responded by loosening their underwriting standards and making increasingly shoddy loans. The two government-chartered mortgage finance firms, Fannie Mae and Freddie Mac, encouraged this "subprime" lending by authorizing ever more "flexible" criteria by which high-risk borrowers could be qualified for home loans, and then buying up the questionable mortgages that ensued.

Affirmative-action policies trumped sound business practices. A manual issued by the Federal Reserve Bank of Boston advised mortgage lenders to disregard financial common sense. "Lack of credit history should not be seen as a negative factor," the Fed's guidelines instructed. Lenders were directed to accept welfare payments and unemployment benefits as "valid income sources" to qualify for a mortgage. Failure to comply could mean a lawsuit.

As long as housing prices kept rising, the illusion that all this was good public policy could be sustained.
...
Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, when the Bush administration proposed much tighter regulation of the two companies, Frank was adamant that "these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis."

TomatoPie wrote:In reality, goverment pollicy of loaning money to unqualified borrowers did not begin with Barney Frank -- but he was driving the bus and insisting "everything is peachy" when it was apparent to any savvy observer that government was creating a bubble.

dajafi wrote:To expand on the point a little more, I think all this stuff matters most when the country hits a crisis moment. We've had two in the last 15 years: 9/11 and Lehman Bros. The response to 9/11 was horrible, probably more damaging than the attack itself (and I was there, mind you; I take 9/11 very seriously). It was so bad because the people in power saw it through the lenses of short term political gain (Rove) and ideology (the neocons), and the president couldn't contain them.

The Lehman crisis response by contrast was pretty good. By then, Bush was listening to the realists and he didn't worry about the politics. Obama's part in it was as good or better. The financial system recovered and the stimulus, though too small, was effective.

Try to imagine President Perry and his team of advisors responding to either, then go change your pants.

pacino wrote:that's not really an accurate relay of the facts. President Bush pushed for this. And the meltdown started due to conservative pressure on Clinton to repeal many regulating forces on the market. He first tried to reform the system in 2005, and failed. Frank pushed this through his committe in 2007 when he took over leadership and passed a regulation act that would've combated predatory lending, which was ultimately finally signed into law by Obama, not Bush.

Where people get off blaming Frank is beyond me. So he took some campaign donations? If anything, he helped prevent further disaster.

He used to be looked at as a guy that DIDN'T want too many homeowners; it's become convienent to label him as some lapdog of Fannie Mae and Freddie Mac when his intent was to reform how they conducted business in conjunction with the banks and potential buyers.

dajafi wrote:To expand on the point a little more, I think all this stuff matters most when the country hits a crisis moment. We've had two in the last 15 years: 9/11 and Lehman Bros. The response to 9/11 was horrible, probably more damaging than the attack itself (and I was there, mind you; I take 9/11 very seriously). It was so bad because the people in power saw it through the lenses of short term political gain (Rove) and ideology (the neocons), and the president couldn't contain them.

The Lehman crisis response by contrast was pretty good. By then, Bush was listening to the realists and he didn't worry about the politics. Obama's part in it was as good or better. The financial system recovered and the stimulus, though too small, was effective.

Try to imagine President Perry and his team of advisors responding to either, then go change your pants.

Werthless wrote:

dajafi wrote:To expand on the point a little more, I think all this stuff matters most when the country hits a crisis moment. We've had two in the last 15 years: 9/11 and Lehman Bros. The response to 9/11 was horrible, probably more damaging than the attack itself (and I was there, mind you; I take 9/11 very seriously). It was so bad because the people in power saw it through the lenses of short term political gain (Rove) and ideology (the neocons), and the president couldn't contain them.

The Lehman crisis response by contrast was pretty good. By then, Bush was listening to the realists and he didn't worry about the politics. Obama's part in it was as good or better. The financial system recovered and the stimulus, though too small, was effective.

Try to imagine President Perry and his team of advisors responding to either, then go change your pants.

Call me crazy, but our response to 9/11 was good. This wasn't Katrina. There was little economic meltdown. Etc etc.

You can hate the Iraq War and the justifications used to get into it, but it's not like we invaded on 9/12/01. The actual response to the crisis at hand was good, and Bush was universally lauded for it. It was the rest of his presidency that was bad.

TomatoPie wrote:Bottom line, though - it was government policy that established the rules of the game, tossing aside fundamental market principles and sensible risk management in making housing loans.

drsmooth wrote:

TomatoPie wrote:Bottom line, though - it was government policy that established the rules of the game, tossing aside fundamental market principles and sensible risk management in making housing loans.

You repeatedly demonstrate that you don't know a bottom line from your bottom. Do you know who establishes the rules of any game mediated by our representative form of government?

Regulatory capture - LOOK. IT. UP. MOTHERFUCKER.

drsmooth wrote:

TomatoPie wrote:Bottom line, though - it was government policy that established the rules of the game, tossing aside fundamental market principles and sensible risk management in making housing loans.

You repeatedly demonstrate that you don't know a bottom line from your bottom. Do you know who establishes the rules of any game mediated by our representative form of government?

Regulatory capture - LOOK. IT. UP. #$!&@.

TomatoPie wrote:The game changed when government twisted the arms of lenders to increase home ownership for minorities. Nice premise, worthy goal - but disastrous approach. Were some lenders complicit in this doomed-to-fail practice of making loans to unqualified borrowers? I don't doubt it. Still, it is first and foremost a failure of government.

swishnicholson wrote:

drsmooth wrote:

TomatoPie wrote:Bottom line, though - it was government policy that established the rules of the game, tossing aside fundamental market principles and sensible risk management in making housing loans.

You repeatedly demonstrate that you don't know a bottom line from your bottom. Do you know who establishes the rules of any game mediated by our representative form of government?

Regulatory capture - LOOK. IT. UP. #$!&@.

It's you that have it all topsy-turvy Doctor. The poor are constantly taking advantage of the government and twisting it to their own ends, while major banks and corporations are its sad victims, being buffeted this way and that.

drsmooth wrote:

TomatoPie wrote:The game changed when government twisted the arms of lenders to increase home ownership for minorities. Nice premise, worthy goal - but disastrous approach. Were some lenders complicit in this doomed-to-fail practice of making loans to unqualified borrowers? I don't doubt it. Still, it is first and foremost a failure of government.

The game changed when financiers decided securitizing loans would make them #$!&@ of dough.