Trump signs EO to begin the rollback of Dodd-Frank

[WVPATX]

Still fulfilling his pledges.

http://dailycaller.com/2017/02/03/trump-signs-executive-order-to-rip-up-dodd-frank-disaster/

Disastrous bill

 

[Boomboom521]

Still fulfilling his pledges.

http://dailycaller.com/2017/02/03/trump-signs-executive-order-to-rip-up-dodd-frank-disaster/

Disastrous bill

This should give you a very good feeling? You've convinced me this (ONLY THIS) is a good move.

 

[WVPATX]

This should give you a very good feeling? You've convinced me this (ONLY THIS) is a good move.

Poorly crafted legislation that went much too far. Small banks being hurt very very badly as is lending.

 

[Boomboom521]

This should give you a very good feeling? You've convinced me this (ONLY THIS) is a good move.

That is until deregulation causes another crash

 

[WVPATX]

That is until deregulation causes another crash

Boom if you would spend some time in looking at the governments role in the crash, it would help your understanding of what caused the crash. And rolling back Dodd.Frank does not mean that every single aspect of that regulation may not be reinstated in some fashion. Don't jump to conclusions.

 

[Boomboom521]

Boom if you would spend some time in looking at the governments role in the crash, it would help your understanding of what caused the crash. And rolling back Dodd.Frank does not mean that every single aspect of that regulation may not be reinstated in some fashion. Don't jump to conclusions.

I meant it when I said you convinced me of Frannie Mac, and I hoping Trump isn't just letting it all go free.

 

[WVPATX]

I meant it when I said you convinced me of Frannie Mac, and I hoping Trump isn't just letting it all go free.

Boom, not just Freddie and Fannie but also the CRA Act.

 

[WVU82_rivals]

 

[Original Mountaineer1]

Still fulfilling his pledges.

http://dailycaller.com/2017/02/03/trump-signs-executive-order-to-rip-up-dodd-frank-disaster/

Disastrous bill

Moron Trump called ACA disasterous and we see he had nothing better. Now he calls Dodd Frank disasterous. Yes let's repeat 2006-09. Good times.

You know nothing of that bill. It needs reworked but to call it disasterous shows that you have no idea. Trump is just not accurate when he says he friends can't get loans. Banks I work with couldnt find businesses who wanted to borrow. Sure There are aspects that are pure pork and there were aspects that no business being included in that act. The CFPB might have been an overreaction. But the Office of Thrift Supervision was killled. Nobody seems to understand or like the Volcker rule. There are more flaws obviously.

Look at the positives
Requiring large banks to understand their risk profile and hold appropriate capital
Requiring banks to Develop robust risk management to fully stress capital.
Requiring that consumers actually have the ability to repay a loan
Simplifying consumer mortgage disclosures
As we found with Wachovia and Bear Sterns, liquidity was a significant issue. Therefore new liquidity requirements and better risk management in this area.


In my opinion, the biggest issue with Dodd Frank is that an unintended consequence was the death of the community bank. Not all related to Dodd Frank but it definitely was/is a contributing factor.

 

[Original Mountaineer1]

Boom, not just Freddie and Fannie but also the CRA Act.

You are as rock headed as Atl........the CRA had almost nothing to do with the crash. Read the bipartisan congressional report. Or the Federal Reserves report. CRA was a 1977 law. The government was complicit due to the Bush and Clinton adminstrations forcing or strongly encouraging Freddie Mac and Fannie Mae (GSEs) to relax their underwritting standards. The private secondary mortgage market was growing with new product types and reduced underwriting. Hey why not let the GSEs get involved ......The government encouraged the two GSEs to assist in the enabling Americans to buy homes. Now everybody was originating ARMs, no doc, low doc, and no downpayment loans. most of these were not low to moderate borrows nor were these loans generally in low to moderate income tracks.

Banks were never encouraged to make poorly underwriten loans to compy with the CRA. In fact they were strongly criticized when they did. From 2002 to 2005 I examined banks including ensuring compliance with CRA. Making risky loans was never encouraged to comply with CRA.

 

[WVPATX]

Moron Trump called ACA disasterous and we see he had nothing better. Now he calls Dodd Frank disasterous. Yes let's repeat 2006-09. Good times.

You know nothing of that bill. It needs reworked but to call it disasterous shows that you have no idea. Trump is just not accurate when he says he friends can't get loans. Banks I work with couldnt find businesses who wanted to borrow. Sure There are aspects that are pure pork and there were aspects that no business being included in that act. The CFPB might have been an overreaction. But the Office of Thrift Supervision was killled. Nobody seems to understand or like the Volcker rule. There are more flaws obviously.

Look at the positives
Requiring large banks to understand their risk profile and hold appropriate capital
Requiring banks to Develop robust risk management to fully stress capital.
Requiring that consumers actually have the ability to repay a loan
Simplifying consumer mortgage disclosures
As we found with Wachovia and Bear Sterns, liquidity was a significant issue. Therefore new liquidity requirements and better risk management in this area.


In my opinion, the biggest issue with Dodd Frank is that an unintended consequence was the death of the community bank. Not all related to Dodd Frank but it definitely was/is a contributing factor.

As I said, Dodd Frank at least the good parts can remain. I didn't say the entire bill was bad as you can read my post. And frankly, the banks were not solely responsible for the disaster of 2008. The government had a very large role to play in if you were honest you would admit that. Actually, not only the banks but I felt the ratings agencies just as much.

I have many friends that both work and own small banks and they too call the bill disastrous. Maybe you know more than they do.

Dodd Frank, it's somewhat like ACA. It has a few good parts but on the whole is an extremely bad bill. Lack of competition, lack of good and balanced risk pools are slowly causing a slow death spiral.

The president has been in office for two weeks, and his has accomplished far more than Obama did. Give him time.

 

[Original Mountaineer1]

As I said, Dodd Frank at least the good parts can remain. I didn't say the entire bill was bad as you can read my post. And frankly, the banks were not solely responsible for the disaster of 2008. The government had a very large role to play in if you were honest you would admit that. Actually, not only the banks but I felt the ratings agencies just as much.

I have many friends that both work and own small banks and they too call the bill disastrous. Maybe you know more than they do.

Dodd Frank, it's somewhat like ACA. It has a few good parts but on the whole is an extremely bad bill. Lack of competition, lack of good and balanced risk pools are slowly causing a slow death spiral.

The president has been in office for two weeks, and his has accomplished far more than Obama did. Give him time.

I actually said in my post that the DFA has the unintended consequence of hurting small banks. Consolidation in that space in my opinion is not a good thing. When I last worked in a bank 2013 ( large community bank) our CEO thought that DFA was well tailored to bank size. Look at the capital rules, they are strict for the systemically significant banks. Almost nonexistent for banks under 10 billion.

We as an economy can't absorb a top 5 bank failure. Prior to 2007, there was no robust stressing of capital or liquidity even at the largest banks.

What is left out of this banking regulatory discussion is the impact of the FASB and the SEC. Some of those changes have been significant but are rarely discussed since those rules are outside of congrssional purview

 

[bornaneer]

The government was complicit due to the Bush and Clinton adminstrations forcing or strongly encouraging Freddie Mac and Fannie Mae (GSEs) to relax their underwritting standards. The private secondary mortgage market was growing with new product types and reduced underwriting. Hey why not let the GSEs get involved ......The government encouraged the two GSEs to assist in the enabling Americans to buy homes. Now everybody was originating ARMs, no doc, low doc, and no downpayment loans. most of these were not low to moderate borrows nor were these loans generally in low to moderate income tracks.

Banks were never encouraged to make poorly underwriten loans to compy with the CRA. In fact they were strongly criticized when they did. From 2002 to 2005 I examined banks including ensuring compliance with CRA. Making risky loans was never encouraged to comply with CRA.

This is way above my pay grade, so I'll defer to you on this issue. However doesn't the bold and underlined comments go hand in hand.
A former neighbor and friend who was the CEO of Huntington Banks in Columbus Ohio told me a number of times before the housing crash that it would happen and he was right. He basically said people were getting loans who never should have. And he said these things way before Dodd/Frank.

 

[PriddyBoy]

You are as rock headed as Atl........the CRA had almost nothing to do with the crash. Read the bipartisan congressional report. Or the Federal Reserves report. CRA was a 1977 law. The government was complicit due to the Bush and Clinton adminstrations forcing or strongly encouraging Freddie Mac and Fannie Mae (GSEs) to relax their underwritting standards. The private secondary mortgage market was growing with new product types and reduced underwriting. Hey why not let the GSEs get involved ......The government encouraged the two GSEs to assist in the enabling Americans to buy homes. Now everybody was originating ARMs, no doc, low doc, and no downpayment loans. most of these were not low to moderate borrows nor were these loans generally in low to moderate income tracks.

Banks were never encouraged to make poorly underwriten loans to compy with the CRA. In fact they were strongly criticized when they did. From 2002 to 2005 I examined banks including ensuring compliance with CRA. Making risky loans was never encouraged to comply with CRA.

A few of our beloved on the MMB forums who are career mortgage lenders got their asses saved by legislation. They have mostly accepted the lifeline gratefully and don't comment on this subject.

 

[WVPATX]

I actually said in my post that the DFA has the unintended consequence of hurting small banks. Consolidation in that space in my opinion is not a good thing. When I last worked in a bank 2013 ( large community bank) our CEO thought that DFA was well tailored to bank size. Look at the capital rules, they are strict for the systemically significant banks. Almost nonexistent for banks under 10 billion.

We as an economy can't absorb a top 5 bank failure. Prior to 2007, there was no robust stressing of capital or liquidity even at the largest banks.

What is left out of this banking regulatory discussion is the impact of the FASB and the SEC. Some of those changes have been significant but are rarely discussed since those rules are outside of congrssional purview

Frankly, too big to fail is still a huge problem. We have too much systemic risk if we allow this to continue. You're exactly right, we can't afford to lose one of our top 5 banks. That is entirely unacceptable at least to me and leaves us all with entirely too much risk.

I liken it to putting all of your savings in just 5 stocks. Far too much concentration risk.

 

[WVPATX]

You are as rock headed as Atl........the CRA had almost nothing to do with the crash. Read the bipartisan congressional report. Or the Federal Reserves report. CRA was a 1977 law. The government was complicit due to the Bush and Clinton adminstrations forcing or strongly encouraging Freddie Mac and Fannie Mae (GSEs) to relax their underwritting standards. The private secondary mortgage market was growing with new product types and reduced underwriting. Hey why not let the GSEs get involved ......The government encouraged the two GSEs to assist in the enabling Americans to buy homes. Now everybody was originating ARMs, no doc, low doc, and no downpayment loans. most of these were not low to moderate borrows nor were these loans generally in low to moderate income tracks.

Banks were never encouraged to make poorly underwriten loans to compy with the CRA. In fact they were strongly criticized when they did. From 2002 to 2005 I examined banks including ensuring compliance with CRA. Making risky loans was never encouraged to comply with CRA.

Read this with an open mind from a guy that once had the same opinion as you have:

http://www.businessinsider.com/the-cra-debate-a-users-guide-2009-6

 

[PriddyBoy]

You're exactly right, we can't afford to lose one of our top 5 banks.

Agree, and, if need be, we can enact it again at the snap of the congressional fingers.

 

[Original Mountaineer1]

This is way above my pay grade, so I'll defer to you on this issue. However doesn't the bold and underlined comments go hand in hand.
A former neighbor and friend who was the CEO of Huntington Banks in Columbus Ohio told me a number of times before the housing crash that it would happen and he was right. He basically said people were getting loans who never should have. And he said these things way before Dodd/Frank.

Two entirely different initiatives. CRA is a law with vey specific requirements none of which will even remotely cause a well-run bank safely and soundness issues. The law requires banks to lend money, make Investments, and provide services in the communities they serve including the low to moderate income census tracks in those areas. If you read anything on CRA, the law is specific that banks not take excessive risk to comply. Most banks do the minimum to ensure a satisfactory rating. I would estimate that commercial lending in these areas make up the majority of the loans.

The Bush And Clinton mandates to increase home ownership was outside of CRA and abused by all. Bankers and mortgage companies make money on volume. With Fannie and Freddie you had government sponsored entities encouraging or facilitating volume secured by poorly underwriten loans. And as you know, when values were skyrocketing, who cared? Just like any Other Ponzi scheme, when it broke, the players last standing lost. I don't know what the totals were but remember there was a lot of private investment too. This wasnt all caused by the government but no doubt the bush and Clinton mandates were abused and were a very big part of the problem.

 

[Mntneer]

Dodd Frank is a mess and only encourages, "Too Big To Fail".

 

[WVPATX]

Two entirely different initiatives. CRA is a law with vey specific requirements none of which will even remotely cause a well-run bank safely and soundness issues. The law requires banks to lend money, make Investments, and provide services in the communities they serve including the low to moderate income census tracks in those areas. If you read anything on CRA, the law is specific that banks not take excessive risk to comply. Most banks do the minimum to ensure a satisfactory rating. I would estimate that commercial lending in these areas make up the majority of the loans.

The Bush And Clinton mandates to increase home ownership was outside of CRA and abused by all. Bankers and mortgage companies make money on volume. With Fannie and Freddie you had government sponsored entities encouraging or facilitating volume secured by poorly underwriten loans. And as you know, when values were skyrocketing, who cared? Just like any Other Ponzi scheme, when it broke, the players last standing lost. I don't know what the totals were but remember there was a lot of private investment too. This wasnt all caused by the government but no doubt the bush and Clinton mandates were abused and were a very big part of the problem.

I think you are missing how the regulators were enforcing CRA:

"In 1995, regulators began to enforce the CRA in a very different way than they had in the past. Instead of focusing on the process of bank lending, the new regulations were focused on objective performance evaluations. At the same time, regulators began disclosing more information about particular banks. As one commenter put it at the time, “We have learned from 30 years of CRA policy that what is measured gets done.” In short, publicly measuring low-income loans encouraged more of it. And the way regulators advised making low income loans involved features we now regard as toxic.

In November 2000, then-HUD Secretary Andrew Cuomo announced that Fannie Mae and Freddie Mac were committed to purchasing $2 trillion of “affordable housing” mortgages. This greatly increased the willingness of banks to make the kind of mortgages being promoted by the regulators. As the push factor of the CRA was increasing, the pull factor of Fannie-driven securitization was also increasing."

"But don’t mistake this as something that only occurred during the Clinton administration. The Bush administration was also active in pushing expanded home-ownership. That history has been well-explored elsewhere. Instead, I’d like to focus attention on one seemingly unintended way a Bush administration CRA reform helped contribute to lax lending standards.

In early 2005, largely at the behest of the banking sector, the Office of Thrift Supervision implemented new rules that were widely perceived as weakening the CRA. Supervision of banks with under $1 billion in assets was loosened, and larger banks were allowed to voluntarily reduce the amount of regulator scrutiny of their “investment” and “service”–two long-standing categories of assessment under the CRA.

This had two unintended consequences that would later prove to be very costly. In the first place, it increased CRA scrutiny of larger banks, who were now the main focus of regulators. This put even more pressure on the banks to make CRA loans. Secondly, by allowing banks to de-emphasize “investment” and “service,” the new regulations created an even greater incentive for banks to meet CRA obligations by making home loans."

 

[Original Mountaineer1]

Read this with an open mind from a guy that once had the same opinion as you have:

http://www.businessinsider.com/the-cra-debate-a-users-guide-2009-6

Pax, I was an examiner from 2000-2005. I can tell you that the standards didn't relax during that period. At least for the banks I regulated, there was no encouragement of banks to make shiitty loans or relax standards. The author is making some really big reaches. Regulators in the early 2000s were generally stunned at the garbage being originated in the home loan space. Any regulator during that period saw what was going to happen.

CRA is lending in low to mod areas and to low and mod income borrower. as you can see that is a narrow band or small slice of loans originated. Hilton Head was crushed. Surely that area didn't include a single CRA loan. All a bank has to do is meet minimum CRA requirements. Therre are no bonus points other than a better rating. There is very little incentive for banks to do More than the minimum.

You know how stupid the mortgage market got, I worked for a major southeastern bank from 2007-2012. We were making HELOCs to 120% loan to value as late as Sept 2007. And the values were artificially inflated and beginning to crash. We were financing raw land at 100% loan to value. None of that **** was CRA related. banks were lending to builders who had no contract for their homes. CRA sureLy doesn't even encourage unless in a low to mod income area. Nobody was doing massive building in low income neighborhoods.

No matter, investors were buying the **** up like it was crack As you said, the fraudulent rating agencies own a big peice of the blame too.

 

[WVPATX]

Pax, I was an examiner from 2000-2005. I can tell you that the standards didn't relax during that period. At least for the banks I regulated, there was no encouragement of banks to make shiitty loans or relax standards. The author is making some really big reaches. Regulators in the early 2000s were generally stunned at the garbage being originated in the home loan space. Any regulator during that period saw what was going to happen.

CRA is lending in low to mod areas and to low and mod income borrower. as you can see that is a narrow band or small slice of loans originated. Hilton Head was crushed. Surely that area didn't include a single CRA loan. All a bank has to do is meet minimum CRA requirements. Therre are no bonus points other than a better rating. There is very little incentive for banks to do More than the minimum.

You know how stupid the mortgage market got, I worked for a major southeastern bank from 2007-2012. We were making HELOCs to 120% loan to value as late as Sept 2007. And the values were artificially inflated and beginning to crash. We were financing raw land at 100% loan to value. None of that **** was CRA related. banks were lending to builders who had no contract for their homes. CRA sureLy doesn't even encourage unless in a low to mod income area. Nobody was doing massive building in low income neighborhoods.

No matter, investors were buying the **** up like it was crack As you said, the fraudulent rating agencies own a big peice of the blame too.

Not sure where you were a regulator, but I do wonder if the regulator actions taken in states like California, Arizona, Nevada and Florida (which were the leaders of our problems) were different than you experienced? I can't imagine enforcement was the same in all jurisdictions.

 

[Original Mountaineer1]

I think you are missing how the regulators were enforcing CRA:

"In 1995, regulators began to enforce the CRA in a very different way than they had in the past. Instead of focusing on the process of bank lending, the new regulations were focused on objective performance evaluations. At the same time, regulators began disclosing more information about particular banks. As one commenter put it at the time, “We have learned from 30 years of CRA policy that what is measured gets done.” In short, publicly measuring low-income loans encouraged more of it. And the way regulators advised making low income loans involved features we now regard as toxic.

In November 2000, then-HUD Secretary Andrew Cuomo announced that Fannie Mae and Freddie Mac were committed to purchasing $2 trillion of “affordable housing” mortgages. This greatly increased the willingness of banks to make the kind of mortgages being promoted by the regulators. As the push factor of the CRA was increasing, the pull factor of Fannie-driven securitization was also increasing."

"But don’t mistake this as something that only occurred during the Clinton administration. The Bush administration was also active in pushing expanded home-ownership. That history has been well-explored elsewhere. Instead, I’d like to focus attention on one seemingly unintended way a Bush administration CRA reform helped contribute to lax lending standards.

In early 2005, largely at the behest of the banking sector, the Office of Thrift Supervision implemented new rules that were widely perceived as weakening the CRA. Supervision of banks with under $1 billion in assets was loosened, and larger banks were allowed to voluntarily reduce the amount of regulator scrutiny of their “investment” and “service”–two long-standing categories of assessment under the CRA.

This had two unintended consequences that would later prove to be very costly. In the first place, it increased CRA scrutiny of larger banks, who were now the main focus of regulators. This put even more pressure on the banks to make CRA loans. Secondly, by allowing banks to de-emphasize “investment” and “service,” the new regulations created an even greater incentive for banks to meet CRA obligations by making home loans."

The shells of $700,000 houses that stood partially completed all over wake county NC where I lived the. Surely weren't CRA loans.

The lending minimums to meet CRA requirements aren't that high. And again, commercial loans and investments count toward as CRA credits too. The bank I worked for in the 90s was a top 35 bank in the US and located the mid atlantic. We couldn't pay mortgage lenders to touch anything in Baltimore, eastern DC, or parts of Norfolk.

Had Fannie and Freddie and private investors not bought this junk it never gets originated and we don't have this crash.

Since Atl first mentioned this, I asled numerous of my old colleagues....mostly right to far right politically and all of say this wasn't caused by CRA.

 

[WVPATX]

Too many analyses like this one from Forbes paints a different picture. I never claimed the CRA alone lead to the bubble. There were many factors, both in government and in the private sector.

CRA also played a role, not just in my opinion, but in the minds of many, there are too many articles and analyses written about this issue discuss the role CRA played to ignore.

I think we will have to agree to disagree. BTW, I don't believe CRA was the major cause but was a contributing factor or rather the enforcement of CRA was a factor.

http://www.forbes.com/2009/02/13/ho...ibutors_0216_peter_wallison_edward_pinto.html

On a parallel track was the Community Reinvestment Act. New CRA regulations in 1995 required banks to demonstrate that they were making mortgage loans to underserved communities, which inevitably included borrowers whose credit standing did not qualify them for a conventional mortgage loan.

To meet this new requirement, insured banks–like the GSEs–had to reduce the quality of the mortgages they would make or acquire. As the enforcers of CRA, the regulators themselves were co-opted into this process, approving lending practices that they would otherwise have scorned. The erosion of traditional mortgage standards had begun.

 

[atlkvb]

Still fulfilling his pledges.

http://dailycaller.com/2017/02/03/trump-signs-executive-order-to-rip-up-dodd-frank-disaster/

Disastrous bill

About time.

Now we can resurrect community banks and other small lending institutions this disastrous Government overreach destroyed. An important prerequisite in Trump's master strategy to rebuild inner cities using capital from community based lending institutions to jump start small business and other entrepreneurial ventures.

Access to capital is crucial. Community owned banking is crucial. Small business drives well over half of all new hires consistently, and in our inner cities access to capital is nearly non existent.

Once this foundation is in place, Trump and Dr. Ben Carson can move onto the next phase of their deployment strategy to rescue inner cities...developing financial cooperatives and small venture capital projects to incubate and spawn private business economic expansion & other operations.

The engine that drives self-sufficiency.

 

[atlkvb]

You are as rock headed as Atl..

OM you will eventually prove to be massively disappointed keeping your faith in Government regulators.

For as much virtue as you bestow on whatever benefits you believe Dodd-Frank provided to the banking industry, there were far more negative "unintended consequences" from this poorly constructed, overly ambitious attempt of bureaucrats to protect private lenders or consumers.

Get the "rocks" out of your own head about Leviathan.

 

[atlkvb]

I think we will have to agree to disagree. BTW, I don't believe CRA was the major cause but was a contributing factor or rather the enforcement of CRA was a factor.

I said essentially the same thing to OM about this during our recent discussion PAX, as my understanding of it was revealed in numerous detailed analysis I've read about ALL of the aspects of the housing collapse. (Similar to what you've posted) I told him there is nothing to suggest the CRA was solely responsible, and in so much as it was limited in it's scope of oversight among private lending institutions, it too was limited in causing the entire house of cards to collapse.

But I strenuously disagree with OM that it was blameless, or even needed. Government should not be in the business of telling banks who to lend to, or how to qualify applicants for loans, or even how to set their capital requirements for making them. That to me was the biggest fundamental problem behind this whole sad scenario...Government interference and overreach--of which Dodd-Frank is the penultimate personification.

 

[atlkvb]

It needs reworked

It should never have been passed, not in the form it existed. Just like the ACA, it's passed and screwing up Health care, but instead of Dems admitting it's a disaster, they claim it needs to be "reworked".

No thanks...get rid of it...should never have been passed.

Sure There are aspects that are pure pork and there were aspects that no business being included in that act.

So then why include them? Government bureaucrats run amok, and clueless what they were even writing into that legislation.

The CFPB might have been an overreaction.

Might have been? The whole law was an overreaction to a Government created crisis which "might have been" avoided if Leviathan had stayed out of the private lending business back in the late 70's. Thank Dem Jimmy Carter for opening up that can of worms.

Nobody seems to understand or like the Volcker rule. There are more flaws obviously.

Obviously. How's this any different from 99% of what Leviathan gets involved with? Look at the VA, EPA, FCC, FDA, OSHA, BLM, NOAA, Dept of Education...I could go on and on. Common denominator,
inefficient, ineffective bureaucracy causing more problems than it's designed to address.

the biggest issue with Dodd Frank is that an unintended consequence was the death of the community bank.

No sh*t! And we have hollowed out neighborhoods with no access to capital as a result. Not to mention giant insensitive mega banks that could care less about community relationships or understanding the individual needs of their customers. They're "too big to fail", but they have no competition from smaller lenders who are closer to the specific needs of their customers. I don't have a problem with size per se, but these behemoths didn't get that way on their own, they were created and supported by bureaucratic meddlers and regulators who are clueless pencil pushers.

The best thing about Dodd-Frank will be watching it get systematically dismantled.

 

[WVPATX]

I said essentially the same thing to OM about this during our recent discussion PAX, as my understanding of it was revealed in numerous detailed analysis I've read about ALL of the aspects of the housing collapse. (Similar to what you've posted) I told him there is nothing to suggest the CRA was solely responsible, and in so much as it was limited in it's scope of oversight among private lending institutions, it too was limited in causing the entire house of cards to collapse.

But I strenuously disagree with OM that it was blameless, or even needed. Government should not be in the business of telling banks who to lend to, or how to qualify applicants for loans, or even how to set their capital requirements for making them. That to me was the biggest fundamental problem behind this whole sad scenario...Government interference and overreach--of which Dodd-Frank is the penultimate personification.

A friend of mine owns a small bank and he told me that friends of his in California told him they were being coerced to make NINJA loans. He asked what is a NINJA loan? They told him, loans to people with No Income, No Jobs, no Assets. If it didn't prove so dangerous, it would be funny.

 

[lenny4wvu]

Still fulfilling his pledges.

http://dailycaller.com/2017/02/03/trump-signs-executive-order-to-rip-up-dodd-frank-disaster/

Disastrous bill

^^^^^^^^^^^ THIS is BIG LEAGUE ^^^^^^^^^^
☆☆☆☆☆☆☆☆☆☆☆☆☆☆☆☆☆☆☆☆

 

[atlkvb]

A friend of mine owns a small bank and he told me that friends of his in California told him they were being coerced to make NINJA loans. He asked what is a NINJA loan? They told him, loans to people with No Income, No Jobs, no Assets. If it didn't prove so dangerous, it would be funny.

Yes, as well the phony no doc loans that were all the rage. We purchased a rental home that hand't even been appraised! They simply did an "average" of recent sales in the zip code and determined a 'fair market value' for the home to qualify our loan for it.(2003) I didn't care, I bought a home that was really only worth 95,000 but was 'valued' at almost twice that. I bought it, spent about 10K fixing it up, then 'flipped it' about a year later (sold it to an investor) and made almost 60K on the deal. The whole thing was a sham.

Lender told me I qualified for a 165,000 dollar home on a 60K income. Crazy. I asked him how that was so? His answer to me was..."the Government wants to see more people like you owning homes"

I laughed all the way to closing over that one.

 

[lenny4wvu]

As I said, Dodd Frank at least the good parts can remain. I didn't say the entire bill was bad as you can read my post. And frankly, the banks were not solely responsible for the disaster of 2008. The government had a very large role to play in if you were honest you would admit that. Actually, not only the banks but I felt the ratings agencies just as much.

I have many friends that both work and own small banks and they too call the bill disastrous. Maybe you know more than they do.

Dodd Frank, it's somewhat like ACA. It has a few good parts but on the whole is an extremely bad bill. Lack of competition, lack of good and balanced risk pools are slowly causing a slow death spiral.

The president has been in office for two weeks, and his has accomplished far more than Obama did. Give him time.

The movie "The BIG Short" MIGHT help you out there "original "..

 

[lenny4wvu]

Yes, as well the phony no doc loans that were all the rage. We purchased a rental home that hand't even been appraised! They simply did an "average" of recent sales in the zip code and determined a 'fair market value' for the home to qualify our loan for it.(2003) I didn't care, I bought a home that was really only worth 95,000 but was 'valued' at almost twice that. I bought it, spent about 10K fixing it up, then 'flipped it' about a year later (sold it to an investor) and made almost 60K on the deal. The whole thing was a sham.

Lender told me I qualified for a 165,000 dollar home on a 60K income. Crazy. I asked him how that was so? His answer to me was..."the Government wants to see more people like you owning homes"

I laughed all the way to closing over that one.

A LOT of unqualified illegal aliens bought homes they had NO business getting involved in...yeah,it helped to absolutely crush the housing markets in Las Vegas, Nazifornia and several s.w. states..AND EVERY AMERICAN CITIZEN GOT SERIOUSLY, SERIOUSLY SMOKED ,account of greedy,dirty fraudulent "lending"

 

[atlkvb]

A LOT of unqualified illegal aliens bought homes they had NO business getting involved in...yeah,it helped to absolutely crush the housing markets in Las Vegas, Nazifornia and several s.w. states..AND EVERY AMERICAN CITIZEN GOT SERIOUSLY, SERIOUSLY SMOKED ,account of greedy,dirty fraudulent "lending"

The problem lenny4wvu was created, sponsored, promoted, and expanded by needless big Government.
They sh*t the bed, and made us (taxpayers) wash the messy laundry.

Amazing how banks weren't having problems deciding who qualified for loans before they (bureaucrats) stuck their noses into the business?

End result... great recession of 2008 which of course the Left only blames Bush for.

 

[WVPATX]

Yes, as well the phony no doc loans that were all the rage. We purchased a rental home that hand't even been appraised! They simply did an "average" of recent sales in the zip code and determined a 'fair market value' for the home to qualify our loan for it.(2003) I didn't care, I bought a home that was really only worth 95,000 but was 'valued' at almost twice that. I bought it, spent about 10K fixing it up, then 'flipped it' about a year later (sold it to an investor) and made almost 60K on the deal. The whole thing was a sham.

Lender told me I qualified for a 165,000 dollar home on a 60K income. Crazy. I asked him how that was so? His answer to me was..."the Government wants to see more people like you owning homes"

I laughed all the way to closing over that one.

I think the lending practices were particularly bad in 4 states, California, Arizona, Nevada and Florida. They lead the way during this crisis. You'd be nuts, if you were a consumer, not to take advantage of these practices. When real estate values are rising, you can't lose. But when they fall, it's all over and you walk away.

 

[atlkvb]

I think the lending practices were particularly bad in 4 states, California, Arizona, Nevada and Florida. They lead the way during this crisis. You'd be nuts, if you were a consumer, not to take advantage of these practices. When real estate values are rising, you can't lose. But when they fall, it's all over and you walk away.

What you said here PAX was the major problem with these policies in my opinion. As well intentioned as they were, they never considered the borrower's ability to repay. Some of these folks not only were not able to pay back their loans, but they were not really ready for home ownership either.

Many properties went into disrepair because the borrowers had no "sweat equity" in them. It was easy loan money, and they didn't appreciate ownership because 20% of their Hyde wasn't into that house (which had been the standard for down payments before the G-men started meddling)

So, maybe with some better oversight of the borrowers instead of just accusing the lenders of racisim, the Government might have avoided the entire ponzi scheme, and saved the Nation from a near total financial collapse.

 

[WVPATX]

What you said here PAX was the major problem with these policies in my opinion. As well intentioned as they were, they never considered the borrower's ability to repay. Some of these folks not only were not able to pay back their loans, but they were not really ready for home ownership either.

Many properties went into disrepair because the borrowers had no "sweat equity" in them. It was easy loan money, and they didn't appreciate ownership because 20% of their Hyde wasn't into that house (which had been the standard for down payments before the G-men started meddling)

So, maybe with some better oversight of the borrowers instead of just accusing the lenders of racisim, the Government might have avoided the entire ponzi scheme, and saved the Nation from a near total financial collapse.

I think this is the classic example of good intentions (more people owning homes) leading to disastrous results. I don't think libs are evil. I think they fervently believe that big government will cure lots of social ills. Big government then crafts legislation with good intentions but often with terrible consequences. Bush was a big culprit in this one as well (compassionate conservatism).

What I have learned is that individuals must take personal responsibility. They must make good decisions. Government, in trying to help them, actually ends up hurting them, creating dependency that is often passed down from generation to generation. I have seen this first hand in West Virginia. Generations of people on welfare, fully capable of working, but choosing not to. We naturally want to help those who can't help themselves. But for those that can, tough love is often the cure.

Look at the Welfare reform bill. It had a work requirement. Suddenly, those on welfare plummeted. They got jobs. They got skills. They were supporting themselves and there is great personal satisfaction in doing that. They became independent. They became contributing members of society. I think back to JFK's inauguration. "Ask now what your country can do for you, ask what you can do for your country." Be a positive force for your country. Do your part.

Dems have good intentions, for the most part. But their prescriptions often turn out very bad. The current Dem party has moved much too far to the left. Many, now have bad intentions which include things like taking away religious freedoms. I have read more and more articles on this topic and the writer's are actually scary in what they are suggesting. And as we have seen on campus, the First Amendment is in grave jeopardy on campuses. Frequently lead by faculty and administrators. Insane.

 

[Original Mountaineer1]

It should never have been passed, not in the form it existed. Just like the ACA, it's passed and screwing up Health care, but instead of Dems admitting it's a disaster, they claim it needs to be "reworked".

No thanks...get rid of it...should never have been passed.



So then why include them? Government bureaucrats run amok, and clueless what they were even writing into that legislation.



Might have been? The whole law was an overreaction to a Government created crisis which "might have been" avoided if Leviathan had stayed out of the private lending business back in the late 70's. Thank Dem Jimmy Carter for opening up that can of worms.



Obviously. How's this any different from 99% of what Leviathan gets involved with? Look at the VA, EPA, FCC, FDA, OSHA, BLM, NOAA, Dept of Education...I could go on and on. Common denominator,
inefficient, ineffective bureaucracy causing more problems than it's designed to address.



No sh*t! And we have hollowed out neighborhoods with no access to capital as a result. Not to mention giant insensitive mega banks that could care less about community relationships or understanding the individual needs of their customers. They're "too big to fail", but they have no competition from smaller lenders who are closer to the specific needs of their customers. I don't have a problem with size per se, but these behemoths didn't get that way on their own, they were created and supported by bureaucratic meddlers and regulators who are clueless pencil pushers.

The best thing about Dodd-Frank will be watching it get systematically dismantled.

You have zero ability to look at anything from different dimensions or through different lenses. You prove it over and over. You are completely unwilling to debate. It is your way or no way with zero compromise. Like I said, you seem to a good guy but just suck the life out of any discussion. You are far rigth, you refuse to even admit anything is positive about anything from the democrats or even left off he far right.

 

[atlkvb]

You have zero ability to look at anything from different dimensions or through different lenses. You prove it over and over. You are completely unwilling to debate. It is your way or no way with zero compromise. Like I said, you seem to a good guy but just suck the life out of any discussion. You are far rigth, you refuse to even admit anything is positive about anything from the democrats or even left off he far right.

Actually I do think the Democrats provide a useful service to us OM. They expertly show us how ineffective Leviathan is and continues to be, and they also demonstrate how effective they have been convincing others of the fallacy it is effective.

Your allegiance to it (Leviathan) is testament to their ability, but not to it's ineffectiveness.

 

[atlkvb]

I think this is the classic example of good intentions (more people owning homes) leading to disastrous results. I don't think libs are evil. I think they fervently believe that big government will cure lots of social ills. Big government then crafts legislation with good intentions but often with terrible consequences. Bush was a big culprit in this one as well (compassionate conservatism).

What I have learned is that individuals must take personal responsibility. They must make good decisions. Government, in trying to help them, actually ends up hurting them, creating dependency that is often passed down from generation to generation. I have seen this first hand in West Virginia. Generations of people on welfare, fully capable of working, but choosing not to. We naturally want to help those who can't help themselves. But for those that can, tough love is often the cure.

Look at the Welfare reform bill. It had a work requirement. Suddenly, those on welfare plummeted. They got jobs. They got skills. They were supporting themselves and there is great personal satisfaction in doing that. They became independent. They became contributing members of society. I think back to JFK's inauguration. "Ask now what your country can do for you, ask what you can do for your country." Be a positive force for your country. Do your part.

Dems have good intentions, for the most part. But their prescriptions often turn out very bad. The current Dem party has moved much too far to the left. Many, now have bad intentions which include things like taking away religious freedoms. I have read more and more articles on this topic and the writer's are actually scary in what they are suggesting. And as we have seen on campus, the First Amendment is in grave jeopardy on campuses. Frequently lead by faculty and administrators. Insane.

I concur. The essential fallacy of Governmental activism PAX is that it can alter human behavior outside of a person's willingness to change. Government operates by force, or pretends to be arbiter of good intentions, all the while disrespecting or not even recognizing the individual's ability to make decisions on their own. Or forcing them to make decisions against their will.

It's a fundamental flaw in all Government largess. Lack of trust in individuals. What you said about Welfare, what I mentioned in my previous post about the housing mess, the disaster we see in the ACA, and just about every other Government run initiative the results are always the same--unintended consequences that result from removing individual responsibility from the equation.

It's pattern easy to see if you sit on the Right as you and I do, but Leftists get violently angry when you suggest their good intentions have negative consequences such as you and I are describing. They never want to be judged on their results, only by their intentions.

However the results of their intentions usually always end up in disaster both for the individual and the Nation as a whole as they rob people's initiative, means, and ability to do for themselves what Government promises it can do better for them while leaving us with a massive pile of debt from their failures.