Posted on 11/06/2007 10:18:14 AM PST by Hydroshock
Economy/Credit/Housing Issues Ping List
If you want on or off this list let me know.
This would put over 100,000 loan officers/mortgage brokers out of business. And it would make it much more difficult for low income borrowers to buy homes. This must be stopped!
And not to mention the effect of home values. If you thought your house value was down now just wait.
From the way these financial companies have been run, the possession of an advanced business or finance degree from a prestigious university gives its possessor the same appreciation for long term consequences as that of a crack whore, but without the whore’s ethics and sense of self preservation.
I know. There needs to be some regulation and a return to sensible banking stanards but this is crazy.
“You want to kill the mortgage market for years? - get the government involved...”
NO!
You don’t want the government involved.
The government is CAUSING this problem.
A Sarbox for Housing
How to restrict lending to the poor for years to come.
Tuesday, November 6, 2007 12:01 a.m. EST
Throughout the 1980s and ‘90s, Congress prodded, even strong-armed, banks into making more mortgage loans to low-income and minority families. Washington enacted anti-discrimination and community lending laws with penalties against lenders for failing to issue riskier mortgages to homebuyers living in poor neighborhoods or with low down payments and subpar credit ratings. And so it was that the modern subprime mortgage market was born.
Now, and for a variety of reasons, some two million of those loans have gone sour, and the same politicians are searching for villains. Leading the charge is House Financial Services Chairman Barney Frank, who is accusing banks of “predatory lending”—by which he means making loans to the very group of borrowers that Mr. Frank and his colleagues urged banks to serve.
As early as today, Mr. Frank plans to hold a committee vote on his Mortgage Reform and Anti-Predatory Lending Act of 2007, which would impose new rules and financial penalties on subprime lenders, while providing new lawsuit opportunities for distressed borrowers. “People should not be lent money that’s beyond what they can be expected to pay back,” Mr. Frank says. Now, there’s an idea. Why didn’t the bankers think of that?
Mr. Frank’s proposal is a trial lawyer’s dream. It would forbid banks from signing up borrowers for “overly expensive loans”; require banks to make sure that the consumer has a “reasonable ability to repay the loan”; and insist that loans must be “solely in the best interest of the consumer.” This kind of murky language would invite litigation from every borrower who misses a payment. If it becomes law we can expect to see billboards reading: “Behind on your mortgage? For relief, call 1-800-Sue-Your-Banker.”
Also for the first time, banks that securitize mortgages would be made “explicitly liable for violations of lending laws.” This is a version of secondary liability that holds the bundlers and resellers of mortgages responsible for the sins of the original lenders. The reselling of mortgages has been a boon both to housing liquidity and risk diversification. So to the extent the Frank bill adds a new risk element to securitizing subprime loans—and it surely will—the main losers will be subprime borrowers who will pay higher rates if they can get a loan at all.
...
But for all the demonizing, about 80% of even subprime loans are being repaid on time and another 10% are only 30 days behind. Most of these new homeowners are low-income families, often minorities, who would otherwise not have qualified for a mortgage. In the name of consumer protection, Mr. Frank’s legislation will ensure that far fewer of these loans are issued in the future.
http://www.opinionjournal.com/editor...l?id=110010826
That is truly insulting, to the crack whore.
“Pass the bill and all future mortgage loans will cease. There is nothing to compel the Mortgage Lenders to lend to anyone.”
That’s bunk!
We can’t have the government bailing our IRRESPONSIBLE people. Make mortgage companies learn the HARD way not to write BAD business. That’s the ONLY way to stop this crap.
A Sarbox for Housing
A Sarbox for Housing
How to restrict lending to the poor for years to come.
Tuesday, November 6, 2007 12:01 a.m. EST
Throughout the 1980s and ‘90s, Congress prodded, even strong-armed, banks into making more mortgage loans to low-income and minority families. Washington enacted anti-discrimination and community lending laws with penalties against lenders for failing to issue riskier mortgages to homebuyers living in poor neighborhoods or with low down payments and subpar credit ratings. And so it was that the modern subprime mortgage market was born.
Now, and for a variety of reasons, some two million of those loans have gone sour, and the same politicians are searching for villains. Leading the charge is House Financial Services Chairman Barney Frank, who is accusing banks of “predatory lending”—by which he means making loans to the very group of borrowers that Mr. Frank and his colleagues urged banks to serve.
As early as today, Mr. Frank plans to hold a committee vote on his Mortgage Reform and Anti-Predatory Lending Act of 2007, which would impose new rules and financial penalties on subprime lenders, while providing new lawsuit opportunities for distressed borrowers. “People should not be lent money that’s beyond what they can be expected to pay back,” Mr. Frank says. Now, there’s an idea. Why didn’t the bankers think of that?
Mr. Frank’s proposal is a trial lawyer’s dream. It would forbid banks from signing up borrowers for “overly expensive loans”; require banks to make sure that the consumer has a “reasonable ability to repay the loan”; and insist that loans must be “solely in the best interest of the consumer.” This kind of murky language would invite litigation from every borrower who misses a payment. If it becomes law we can expect to see billboards reading: “Behind on your mortgage? For relief, call 1-800-Sue-Your-Banker.”
Also for the first time, banks that securitize mortgages would be made “explicitly liable for violations of lending laws.” This is a version of secondary liability that holds the bundlers and resellers of mortgages responsible for the sins of the original lenders. The reselling of mortgages has been a boon both to housing liquidity and risk diversification. So to the extent the Frank bill adds a new risk element to securitizing subprime loans—and it surely will—the main losers will be subprime borrowers who will pay higher rates if they can get a loan at all.
...
But for all the demonizing, about 80% of even subprime loans are being repaid on time and another 10% are only 30 days behind. Most of these new homeowners are low-income families, often minorities, who would otherwise not have qualified for a mortgage. In the name of consumer protection, Mr. Frank’s legislation will ensure that far fewer of these loans are issued in the future.
http://www.opinionjournal.com/editor...l?id=110010826
“You want to kill the mortgage market for years? - get the government involved...”
Sorry, I mistook your reply.
It’s an election year ... and all the socialists will flock together to show they “care” and “feel your pain” and dumb people down MORE and more them MORE irresponsible. If need be, let both the mortgage company and the consumer LEARN THE HARD WAY to THINK and not FEEL and be GREEDY living beyond their means.
I second that. A major cause of the problems we are experiencing today is government.
If the legit lenders has to be forced to cowtow to irresponsible people and risk heavy losses, wheres the incentive? Its much easier to stop all future mortgages. There is nothing to force a lending institutions to lend money beside profit from interests.
Nothing beats causing a problem, and then angrily demanding solutions to the problems your past legislation caused.
Too little . . . Too late . . . ‘Nuff said here on FR.
When these clowns get done our children will no longer be able to afford a home, they will be destined to become renters for life. I can't argue with the guy's statement.
The dirty little secret right now, is that subprime mortgage products are already gone.
There are some who wish to crash the housing market and our economy; that is a bad idea and will hurt everyone in the nation.
“You want to kill the mortgage market for years? - get the government involved...”
Well, the government has been involved for many years. That is what people must realize. Fannie Mae, Freddie Mac, the failure to release up-to-date financial statements for these GOVERNMENT SPONSORED ENTERPRISES, a Federal Reserve System that happily accomodates politicians’ wishes, pressure from government to loosen lending standards for borrowers who have a sketchy credit history, and the list of government involvement goes on and on...
Just what I want, government rules to protect me from myself.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.