Time to stop the merry go round.
Posted on 10/26/2016 9:18:56 AM PDT by Lorianne
Some of the same characters that played leading roles last time.
The value of the US housing market has ballooned to $26 trillion. In many markets, prices exceed even the peak of the prior house price bubble that blew up so spectacularly. This construct is weighed down by $14 trillion in mortgage debt, or about 76% of US GDP. Of that, $10 trillion is owed on one- to four-family residences. The numbers are big – and they matter.
But who’s doing the lending? More and more: nonbanks, evocatively called “shadow banks.” They have now overtaken commercial banks “to grab a record slice” of government-guaranteed mortgages, Attom Data Solutions reported in its housing report.
And these shadow banks are different:
[T]hey typically borrow from Wall Street hedge funds, private investors, or banks to make loans, then quickly sell these mortgages to Fannie Mae and Freddie Mac and other buyers, so they can repay their loans and start the process over again.
Nonbank lenders dominate the origination of mortgages insured by the Federal Housing Administration (FHA) and by the Veterans Administration (VA), the riskier corner of housing lending due to no down payment or low down payment loans and poor-credit buyers.
So subprime mortgages with low or no down payments.
These government entities don’t actually make loans; they buy loans from lenders, package them into mortgage-backed securities, and guarantee them to make investors whole if the mortgages default.
Wells Fargo is still the largest mortgage lender by far, with 26,262 purchase mortgage originations in the second quarter, according to ATTOM. But number two is nonbank Quicken Loans with 18,753 originations, followed by Caliber Home Loans with 13,580 originations, followed by Bank of America, Fairway Independent Mortgage, JP Morgan Chase, Movement Mortgage, Prime lending, Guaranteed Rate, and Guild Mortgage.
Of these top ten originators, shadow banks originated 63% of the mortgages!
SNIP
The only lesson of history is that people do not learn from history.
Hey, the big banks got away with this the last time. Bad behavior was rewarded. No surprise the big banks would do the same again.
Coming soon to a theater near you:
“The Big Short II”
Remember when he sued banks for "discrimination" for not giving mortgages to bottom-feeders who could not possibley pay them off?
Then Pres Obama sued banks for "burdening" bottom-feeders w/ mortgages they couldn't possibly payoff.
Like I said......community organizer genius at-work.
========================================
Caught w/ his pants down, Obama's primary instinct is to appeal to
ignorance; b/c as a Chicago community organizer, ignorance always got the job done.
in 1995, Obama was a lawyer in a lawsuit vs. Citigroup that helped open up sub-prime\interest only mortgages for Holders people.
When these loans went south, Obama as president, sues the lenders for making these loans. in 2014, Citigroup settles for 7 billion.
“Here we go again.”
Took the words right outta my keyboard.
KYPD
Too big to fail. Hey, what’s another Trillion dollar pay off?
You don’t think Goldman Sachs made a modest investment in a Hillary speech to guarantee their place at the head of the trough?
The massive mortgage fraud ended in disaster for which no one has been held responsible. Taxpayers got saddled with billions of dollars in bailout bills.
These subprime activities were not simply the mortgage market at work. They were fueled by avarice, greed, stupidity--all enabled by Congressmen and other groups which leave a trail at the door of then-Cong Joe Baca (D-Cali).
Between 2000 and 2009, Hispanic populations increased; but Hispanic home ownership grew even faster, increasing by 47%, to 6.1 million from 4.1 million, according to the US Census Bureau. Over that same period, homeownership nationally grew by an enemic 8%. In 2005 alone, mortgages to Hispanics jumped by 29%; Latinos with multiple fraudulent identities in low-paying jobs obtained costly non-prime mortgages---soaring to a shocking 169%, (Research provided by Wall Street Journal)
The subprime mortgage bank fraud network was spearheaded by then-Cong Joe Baca (D-Calif 43rd), in his powerful position as chairman of the Congressional Hispanic Caucus. Baca's district ranks No.5 among all US Congressional districts in percentage of home loans tailored to sub-prime borrowers.
Baca used his the legislative power of his office and his leadership position in the Congressional Hispanic Caucus to calculatedly launch a housing initiative called "HOGAR"-- Spanish for home. conspiract and colluison the Congressuial Hispanic caucuss has been quiet about his role in financing, and, earmarking the blood-thirsty America-hating La Raza. race-based "La Raza" was given tax dollars and Congressionsl earmarks to finance its so-valled mortgage activities. La Raza's "strategic partnerships” with Wachovia and Bank of America forced the frgradayiio pg mortgage-application requirements and documentation standards.......whuch caused tac[aurts ro br siked w. billions bailputs and secimating the YS evinimy.\.
La Raza aided and abetted risky federal and private-home loans to latinos over the last decade. ontryide thanks to the lending industry’s version of “don’t ask, don’t tell.”
In addition to millions of federal tax dollars, La Raza also collected a $1 million Democratic earmark that funded “community-development” projects. Analysts report that much of it went to (cough) "mortgage counseling."
CUE LAUGH MACHINE.
The Federal govt is responsible. If they stopped buying the mortgages the banks would tighten the standard real quick.
Jump on board while you can. Take out a VA loAn of 110% and walk
away at the next crash. They’ll never learn these commie/socialists.
What could possibly go wrong?
Good Lord!
Lord, please let Trump drain the swamp that poisons America!
The price tag for the Wall Street bailout is popularly put at $700 billion—---the actual size of TARP--the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside untraceable money to bail out financial firms and inject money into the markets.
To get a sense of the size of the real $14 trillion bailout, see MJ chart at web site. A guide to the pieces of the puzzle includes massive untraceable Treasury Department bailout programs.
Money Market Mutual Fund: In September 2008, the Treasury controlled by Obama/Emanuel announced that it would insure the holdings of publicly offered money market mutual funds. According to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), these guarantees could have potentially cost the federal government more than $3 trillion [PDF].
Public-Private Investment Fund: This joint Treasury-Federal Reserve program bought toxic assets from banks and brokerages—as much as $5 billion of assets per firm. According to SIGTARP, the government's potential exposure from the PPIF is between $500 million and $1 trillion [PDF].
TARP: As part of the Troubled Asset Relief Program, the Treasury controlled by Obama/Emanuel made loans to or investments more than 750 banks and financial institutions. $650 billion has been paid out (not including HAMP; see below). As of December 21, 2009, $117.5 billion of that has been repaid.
Government-sponsored enterprise (GSE) stock purchase: The Treasury controlled by Obama/Emanuel bought $200 million in preferred stock from Fannie Mae and another $200 million from Freddie Mac [PDF] to show that they "will remain viable entities critical to the functioning of the housing and mortgage markets."
GSE mortgage-backed securities purchase: Under the Housing and Economic Recovery Act of 2008, the Treasury controlled by Obama/Emanuel may buy mortgage-backed securities from Fannie Mae and Freddie Mac. According to SIGTARP, these purchases could cost as much as $314 billion ---SNIP---.
LONG READ---go to web site to read more and checkout the shocking financial charts.
SOURCE http://motherjones.com/politics/2009/12/behind-real-size-bailout
Commie Obama knows exactly what he is doing in this plundering. Nothing was done in Congress to fix anything since the 2007-2009 crash. We are being stripped clean on PURPOSE. Why don’t people understand this intentional destruction of America???
Exactly. I want to throw a brick into the TV when that lying bitch keeps blaming “Trickle Down Economics” for causing the 2009 Great Recession. As anyone with a modicum of knowledge knows, it was created by the housing bubble bursting and banks holding all this bad mortgage debt. The source of the problem of course was Dems pushing the Community Reinvestment Act on the country and encouraging all this irrational lending. Fannie Mae had a huge role in that too, of course.
Another possible time bomb ready to go off is the nothing down car loans for new cars.
Ford’s sales are slowing down, and they are shutting down some plants for a while to try and catch up re low sales.
How many of these new home and car buyers are a paycheck from being underwater?
Another scary issue is the rising cost of Obama Care, which will force many people/couples not to carry any insurance. Then, if they do have a serious health problem involving a hospital stay or even same day surgery, they will end up losing their homes/cars and could be on the street.
Many of these people in the above situations are math deprived idiots and were not able to do basic math to just say no.
The way home mortgages are presented in this article does not reflect what I’m dealing with right now in redoing my home mortgage
Income qualification
Down payment
Adequate appraisal
Manageable household global debt
That’s what we’re going thru
Non bank lenders are not in and of itself a bad thing and I’m sure not seeing anything like pre 2008
The lending restrictions are tight as hell and apply to non bank lenders as well if they use govt surety
My two cents
Any bankers here?
We had bnblflg..,..bank president southeast Texas and good southerner
Sadly he’s RIP
Lori this comment is strictly about the article
I do a lot with debt every year personal and business and my experience is cheap money is much more inaccessible post Dodd Frank
It’s almost crippling
I’ll tell you EXACTLY the reason this is happening again. The Gibsmedats want a mortgage. Ability to pay it be damned.
Time to stop the merry go round.
This is precisely why I believe the government will seize IRAs and 401Ks when the next crash occurs.
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