Posted on 11/19/2009 11:50:03 AM PST by FromLori
The coroner’s report left no doubt as to the cause of death: toxic loans.
That was the conclusion of a financial autopsy that federal officials performed on Haven Trust Bank, a small bank in Duluth, Ga., that collapsed last December.
In what sounds like an episode of “CSI: Wall Street,” dozens of government investigators — the coroners of the financial crisis — are conducting post-mortems on failed lenders across the nation. Their findings paint a striking portrait of management missteps and regulatory lapses.
At bank after bank, the examiners are discovering that state and federal regulators knew lenders were engaging in hazardous business practices but failed to act until it was too late. At Haven Trust, for instance, regulators raised alarms about lax lending standards, poor risk controls and a buildup of potentially dangerous loans to the boom-and-bust building industry. Despite the warnings — made as far back as 2002 — neither the bank’s management nor the regulators took action. Similar stories played out at
(Excerpt) Read more at nytimes.com ...
A comment I found
here’s more to this:
Untill the mid-90’s banks had a mortgage success rate of 94.4 to 96.6%. Everyone filled in the same forms and was judged on the same merits on mortgage qualification. Banks made money available to people who could pay it back. In the interest of Diversity the measure of a banks success was - legislated - to become mortgages awarded by percentages of the race of the neighborhood the bank did business in. More poor people could own their own homes. The bankers - local, not Wall St. - told the regulators they’d be broke in 5 years. Regulators came up with the mortgage guarantee trust (taxes), and the bankers said - “okaaayyy “. Now all one needed for a mortgage was a name on a 3x5 card. No record of earnings, no job, not even a citizen. Some creative thinkers realized they could own more than 2 or 3 or 5 houses. And so they did. The beginning of the end was when the realization that a mortgage meant - payments - welfare wasn’t enough. Free housing allowance wasn’t enough. Oh! The horror! The big bankers bought out some of the smaller ones at discount, and from there went to the gov’t by the means most people have become familiar with.
This was set in motion by the Clintons. Were they really just trying to be nice to poor people and made an honest mistake? Or, being the Alinsky acolites they were, did they see a way to deliver the country a blow that would shake the people’s faith in a system that had been working well and deliver it to Marxism?
No wonder clinton repealed glass-steagall!
You are absolutely correct-
Congress got all up in arms calling it ‘redlining’ - when a bank checked to see if you could afford a loan.
They not only KNEW banks were doing it, they FORCED them to, saying if they practived ‘redlining’ they would suffer consequences from the federal government
Barney Frank and Chriss Dodd are almost SINGLE-HANDEDLY RESPONSIBLE for bringing the world economy to its knees
To his credit - John McCain actually said this in congress around 2002 - and his proposed legislation was rejected by ...Barney Frank
Which is why I gag every time I see H. Clinton talking about the financial mess Obama inherited.
I do also fault the banks though they pushed for glass steagall to be repealed and offered those toxic loans had they not done that they could not have been forced to give those loans.
Also I don’t care about them since I believe many of them to be fake capitalists for donating so heavily to obama and the democrats and for taking our tax dollars to bail themselves out and because they donate heavily to Acorn, Black Panthers, etc.
Google the capitalist conspiracy and watch it talks about communism and fake capitalists like them. It is an older video but well worth the time to watch it.
Finally, someone bringing sanity to this forum. This should be read by all those that bought into the leftist mantra of "blame the Fed, greedy Wall Street, and capitalism itself."
The present crisis is a government failure, not a market failure.
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