Do You Think That Banks Are Crooks?

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thaiturkey said:
Perhaps that was possible because of inadequate regulation?
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Fraud is already illegal. What kind of regulation would have helped this? Government oversight requiring banks to obtain proof of income?? It seems the politicians deregulated in order to allow the default insurance policies to be purchased. Those policies were like a gamble. From my understanding, people that didn't even have a financial interest in protecting certain loans were buying these policies so they could cash in when they defaulted. I can't prove this, but I suspect it.

We should not have to depend on the government to babysit the companies. The very ones declaring their support of free markets and capitalism are the very ones destroying our opportunity to enjoy such a life.
 
hemet dennis said:
Congressman Ron Paul, who serves on the United States House Committee on Financial Services, charged the CRA with "forcing banks to lend to people who normally would be rejected as bad credit risks

CRA=Community Reinvestment Act




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I wonder what sort of evidence he has... I trust him. "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 operations" I wonder if Newt Gingrich helped with some of that forcing when he was on the Freddy and Fanny million dollar payroll.
http://www.federalreserve.gov/communitydev/cra_about.htm

Still I take a left turn away from Dr. Paul on some issues.
 
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Stephanie739 said:
I wonder what sort of evidence he has... I trust him. "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 operations" I wonder if Newt Gingrich helped with some of that forcing when he was on the Freddy and Fanny million dollar payroll.
http://www.federalreserve.gov/communitydev/cra_about.htm

Still I take a left turn away from Dr. Paul on some issues.
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Try this link.

http://tjhancock.wordpress.com/housing-bubble-financial-crisis-detailed-comprehensive-assessment/




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"Only 25% of the subprime mortgages that are now
causing the collapse of the credit markets were
originated by CRA-regulated institutions. The
remaining 75% of subprime mortgages were
originated by independent mortgage brokers or by
lightly regulated subsidiaries of regulated banks
2
.
 Banks subject to CRA are about two-thirds less likely
to offer borrowers high cost mortgage loans. Half of
the subprime loans were not made by federally
insured banks (FDIC) or CRA approved banks, but
instead by independent lenders
3
.
 34.3% of mortgage loans issues by non-CRA lenders
were high cost/ risk loans in 2005. By contrast, those
institutions that were closely examined by CRA only
issued 5.1% of high cost/risk loans"
4
. http://greenlining.org/resources/pdfs/advocatesguidetocraFINAL.pdf
 
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Some people admit when they were wrong.

“I think that the responsibility that the Democrats had may rest more in resisting any efforts by Republicans in the Congress, or by me when I was President, to put some standards and tighten up a little on Fannie Mae and Freddie Mac.” – Former President Bill Clinton (D-AR), September 25, 2008
“Like a lot of my Democratic colleagues I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourage affordable homeownership when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit when it comes to Fannie and Freddie, we were wrong.” – Congressman Artur Davis (D-AL) , September 30, 2008



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hemet dennis said:
Some people admit when they were wrong.

“I think that the responsibility that the Democrats had may rest more in resisting any efforts by Republicans in the Congress, or by me when I was President, to put some standards and tighten up a little on Fannie Mae and Freddie Mac.” – Former President Bill Clinton (D-AR), September 25, 2008
“Like a lot of my Democratic colleagues I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourage affordable homeownership when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit when it comes to Fannie and Freddie, we were wrong.” – Congressman Artur Davis (D-AL) , September 30, 2008



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I don't believe the government is efficient when it comes to business pursuits by any stretch of the imagination, but I am interested in motive. From my perspective, the Democrats motives were to help those with low income obtain homes, an honorable motive. The deregulators, the mortgage bankers, etc. were looking for profit, and they intended to use Freddy and Fanny as a scapegoat to cover for their greed and profiteering. The Federal Reserve doesn't care who gets the blame because they control all the money either way. That is how I see it at this point. I have been studying it for a couple years, and still learning. I'm just leaning more Democrat with each passing day.
 
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