Realtor's Say it Is A Buyer's Market

[patman]

Originally Posted by secondcurve

It's not the Banks!!! It is the government. Please read the papers. The government started the housing crises by keeping rates artificially low and mandating that every stiff who could fog a mirror should own a home.

Originally Posted by Diver Vince

Exactly correct! The government started this entire debacle with red line zones which forced the banks to make loans to those with inadequate financial solvency under the guise of "fairness".

Nobody "forced" the banks to do anything. The combination of things being allowed (not mandated) and the banks' own greed was the problem. The wall-street geniuses that came up with bonds based on sub-prime mortgages that masked the true risk of those instruments created the demand. The banks saw $$ in closing costs and fees, and selling those mortgages to the bond managers, and supplied that demand. Immediate profit, no long-term risk. What's not to like? After all, the banks had no downside to protect, they had that FDIC safety net!

Sorry...wall street and bank greed is behind this one, not a nonexistent government mandate.

If you can stomach the truth, listen to this:

http://www.thisamericanlife.org/radi...-pool-of-money

Oh, and when you're itching to point fingers on this one...remember what administration was in office at the time. Hint: not the current one.

[tis]

That's wrong. Barney Frank and friends forced Fannie and Freddie to give out loans to almost anybody that could wait. They said everybody deserved to buy a home.

[patman]

Originally Posted by tis

That's wrong. Barney Frank and friends forced Fannie and Freddie to give out loans to almost anybody that could wait. They said everybody deserved to buy a home.

Forced or allowed? Big difference. Citation?

[SIKSUKR]

Absolutely forced. Read the bill.

[patman]

Originally Posted by SIKSUKR

Absolutely forced. Read the bill.

Again, citation?

If you're talking about the Community Reinvestment Act, it mandates that they offer loans to all qualified individuals without discrimination...not that they ignore safeguards against making unsound loans. The risky loan idea was all from the banks, fueled by the bond market appetite. If it works, they win. If it didn't, FDIC bails them out. There was no mandate, just no downside, and greed kicked in.

From Wikipedia...(I know, it's not the bill itself, but it's a good summarization) http://en.wikipedia.org/wiki/Community_Reinvestment_Act

The Community Reinvestment Act of 1977 seeks to address discrimination in loans made to individuals and businesses from low and moderate-income neighborhoods.[7] The Act mandates that all banking institutions that receive Federal Deposit Insurance Corporation (FDIC) insurance be evaluated by Federal banking agencies to determine if the bank offers credit (in a manner consistent with safe and sound operation as per Section 802(b) and Section 804(1)) in all communities in which they are chartered to do business.[3] The law does not list specific criteria for evaluating the performance of financial institutions. Rather, it directs that the evaluation process should accommodate the situation and context of each individual institution. Federal regulations dictate agency conduct in evaluating a bank's compliance in five performance areas, comprising twelve assessment factors. This examination culminates in a rating and a written report that becomes part of the supervisory record for that bank.

The law, however, emphasizes that an institution's CRA activities should be undertaken in a safe and sound manner, and does not require institutions to make high-risk loans that may bring losses to the institution. An institution's CRA compliance record is taken into account by the banking regulatory agencies when the institution seeks to expand through merger, acquisition or branching. The law does not mandate any other penalties for non-compliance with the CRA.

Furthermore...from the bill:

Sec. 802.
(a) The Congress finds that—
(1) regulated financial institutions are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business;
(2) the convenience and needs of communities include the need for credit services as well as deposit services; and
(3) regulated financial institutions have continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.
(b) It is the purpose of this title to require each appropriate Federal financial supervisory agency to use its authority when examining financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions.

Sorry, I don't see anything that requires them to make bad loans, and in fact it says 'consistent with the safe and sound operation', which means to NOT make bad loans.

[Mink Islander]

Talking about the local real estate market is interesting.

Bloviating over who is to blame for the mortgage crisis -- not so much.

[patman]

Originally Posted by Mink Islander

Talking about the local real estate market is interesting.

Bloviating over who is to blame for the mortgage crisis -- not so much.

Agreed...my apologies for taking the bait, this is not the appropriate venue for these sorts of discussions.

[Billy Bob]

Originally Posted by patman

Forced or allowed? Big difference. Citation?

Actualy George Bush had a large say in increasing the percentage of homeowners to levels that were not sustanable . Lots of room to find fault .

Lax lending and low downpayments led to buyers with no skin in the game and when values went down they headed for the hills

[Belmont Resident]

Originally Posted by Billy Bob

Actualy George Bush had a large say in increasing the percentage of homeowners to levels that were not sustanable . Lots of room to find fault .

Lax lending and low downpayments led to buyers with no skin in the game and when values went down they headed for the hills

Just because the bank did this or the government did that the bottom line is the person applying for and buying the property got themselves into the situation.
You can lead a horse to water but you can not force it to drink.
People got themselves into the predicament by over extending themselves and buying property that they could just barely afford to begin with.
The banks did allowed them to fail, but in the end they made the decision to purchase the property.