What Or Who Caused The Housing Crisis In The Us?

[Mr Lee]

People are welcome to read THIS if they have any doubt who actually caused the bubble which burst and screwed us all. All of which has now made it less expensive to buy a home in many parts of the US than in the PHL.Government policiesMain article: Government policies and the subprime mortgage crisis

U.S. Subprime lending expanded dramatically 2004-2006

Securities and Exchange Commission (SEC) and Alan Greenspan conceded failure in allowing the self-regulation of investment banks.^[110][111]Increasing home ownership has been the goal of several presidents including Roosevelt, Reagan, Clinton and G.W.Bush.^[112] In 1982, Congress passed the Alternative Mortgage Transactions Parity Act (AMTPA), which allowed non-federally chartered housing creditors to write adjustable-rate mortgages. Among the new mortgage loan types created and gaining in popularity in the early 1980s were adjustable-rate, option adjustable-rate, balloon-payment and interest-only mortgages. These new loan types are credited with replacing the long standing practice of banks making conventional fixed-rate, amortizing mortgages. Among the criticisms of banking industry deregulation that contributed to the savings and loan crisis was that Congress failed to enact regulations that would have prevented exploitations by these loan types. Subsequent widespread abuses of predatory lending occurred with the use of adjustable-rate mortgages.^[1][38][113] Approximately 80% of subprime mortgages are adjustable-rate mortgages.^[1]In 1995, the GSEs like Fannie Mae began receiving government tax incentives for purchasing mortgage backed securities which included loans to low income borrowers. Thus began the involvement of the Fannie Mae and Freddie Mac with the subprime market.^[114] In 1996, HUD set a goal for Fannie Mae and Freddie Mac that at least 42% of the mortgages they purchase be issued to borrowers whose household income was below the median in their area. This target was increased to 50% in 2000 and 52% in 2005.^[115] From 2002 to 2006, as the U.S. subprime market grew 292% over previous years, Fannie Mae and Freddie Mac combined purchases of subprime securities rose from $38 billion to around $175 billion per year before dropping to $90 billion per year, which included $350 billion of Alt-Asecurities. Fannie Mae had stopped buying Alt-A products in the early 1990s because of the high risk of default. By 2008, the Fannie Mae and Freddie Mac owned, either directly or through mortgage pools they sponsored, $5.1 trillion in residential mortgages, about half the total U.S. mortgage market.^[116] The GSE have always been highly leveraged, their net worth as of 30 June 2008 being a mere US$114 billion.^[117] When concerns arose in September 2008 regarding the ability of the GSE to make good on their guarantees, the Federal government was forced to place the companies into a conservatorship, effectively nationalizing them at the taxpayers' expense.^[118][119]

Both government failed regulation and deregulation contributed to the crisis. In testimony before Congress both the

[Mr Lee]

People are welcome to read THIS if they have any doubt who actually caused the bubble which burst and screwed us all. All of which has now made it less expensive to buy a home in many parts of the US than in the PHL.Government policiesMain article: Government policies and the subprime mortgage crisis

U.S. Subprime lending expanded dramatically 2004-2006

Securities and Exchange Commission (SEC) and Alan Greenspan conceded failure in allowing the self-regulation of investment banks.^[110][111]Increasing home ownership has been the goal of several presidents including Roosevelt, Reagan, Clinton and G.W.Bush.^[112] In 1982, Congress passed the Alternative Mortgage Transactions Parity Act (AMTPA), which allowed non-federally chartered housing creditors to write adjustable-rate mortgages. Among the new mortgage loan types created and gaining in popularity in the early 1980s were adjustable-rate, option adjustable-rate, balloon-payment and interest-only mortgages. These new loan types are credited with replacing the long standing practice of banks making conventional fixed-rate, amortizing mortgages. Among the criticisms of banking industry deregulation that contributed to the savings and loan crisis was that Congress failed to enact regulations that would have prevented exploitations by these loan types. Subsequent widespread abuses of predatory lending occurred with the use of adjustable-rate mortgages.^[1][38][113] Approximately 80% of subprime mortgages are adjustable-rate mortgages.^[1]In 1995, the GSEs like Fannie Mae began receiving government tax incentives for purchasing mortgage backed securities which included loans to low income borrowers. Thus began the involvement of the Fannie Mae and Freddie Mac with the subprime market.^[114] In 1996, HUD set a goal for Fannie Mae and Freddie Mac that at least 42% of the mortgages they purchase be issued to borrowers whose household income was below the median in their area. This target was increased to 50% in 2000 and 52% in 2005.^[115] From 2002 to 2006, as the U.S. subprime market grew 292% over previous years, Fannie Mae and Freddie Mac combined purchases of subprime securities rose from $38 billion to around $175 billion per year before dropping to $90 billion per year, which included $350 billion of Alt-Asecurities. Fannie Mae had stopped buying Alt-A products in the early 1990s because of the high risk of default. By 2008, the Fannie Mae and Freddie Mac owned, either directly or through mortgage pools they sponsored, $5.1 trillion in residential mortgages, about half the total U.S. mortgage market.^[116] The GSE have always been highly leveraged, their net worth as of 30 June 2008 being a mere US$114 billion.^[117] When concerns arose in September 2008 regarding the ability of the GSE to make good on their guarantees, the Federal government was forced to place the companies into a conservatorship, effectively nationalizing them at the taxpayers' expense.^[118][119]

I moved this topic over to world events where I should have posted it in the first place, yet I feel that the cost of housing in the US directly affects the costs of housing in the PHL in some ways, maybe we can discuss what actually happened to cause the housing crash in the US which I feel snowballed to directly impact countries around the world due to derivatives, the purchases of mortgages by worldwide banks and REIT's etc. It is my opinion that the US govt in their zeal to get poor people, who could not afford to buy a house and who had little to no credit, and who did not know how to handle home ownership, into houses of their own, is what started the whole mess in the first place, what are your thoughts on the subject? and do you agree that things such as that which happen in the US directly or indirectly affect things in many other countries such as specifically the Philippines?

Both government failed regulation and deregulation contributed to the crisis. In testimony before Congress both the

[softail]

I feel that greed was a major cause of the housing collapse. The banks were going to sell off there mortgages in a bundle to investors so it was of no concern whether the loan made sense or not, they were selling it off anyway.A good example of that is a workmate of my wife, a Filippina as well. She had been in the country only a short time, working at the same pre school as my wife, minimum wage position. Someone introduced her to a Filippino real-estate salesman. In no time he had her looking for a house and eventually buying from him, just so happened that he was more than happy to arrange financing. The mortgage, HOA dues and real-estate taxes combined exceeded her income. The condo is in foreclosure as we speak. This women had no business buying a place, she was just plain taken advantage of out of pure greed, nobody gave a sh&t what happened after she was handed the keys, everybody got paid and were out scouting for the next victim. Doug and Sally

[MikeB]

It wasn't any single who or what that caused this debacle, as the article points out, there are many factors and it's nice they have all the facts assembled after the iceberg. Too bad someone in charge didn't sound the alarm, or did they? If there was any justice in this world Bush, Mozilo, and many others would be in prison instead of on their yachts. Politicians and prostitues, exactly the same. There's a movie/documentary called Inside Job that is supposed to be an excellent account of what went on and the various causes. I'm going to download and watch it tonight.

[Inspector]

[Mr Lee]

I believe THIS STORY might shed some light on who was responsible and it was not Bush. Mind you I am not a Bush supporter, but people keep blaming stuff on him that he tried to stop but others would not let him. The key sentence towards the end tell who stopped him from doing it.

Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

September 11, 2003New Agency Proposed to Oversee Freddie Mac and Fannie MaeBy STEPHEN LABATONWASHINGTON, Sept. 10— The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

[Inspector]

[Inspector]

I believe THIS STORY might shed some light on who was responsible and it was not Bush. Mind you I am not a Bush supporter, but people keep blaming stuff on him that he tried to stop but others would not let him. The key sentence towards the end tell who stopped him from doing it.

Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

September 11, 2003New Agency Proposed to Oversee Freddie Mac and Fannie MaeBy STEPHEN LABATONWASHINGTON, Sept. 10— The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

:AddEmoticons04230:

[Mr Lee]

Please note the people who have run Detroit HERE since 1968 and it has steadily declined from a once great city to what it is today, a place that looks like a nuclear bomb hit it in many areas. Now what does that say, I have no idea, but I think it shows what can happen if the wrong people in govt make the wrong choices, and there are wrong people in all political parties. So what does this have to do with the failed housing crisis, the wrong decisions were made by people who had their own agenda and not the good of the US in their hearts. Below is a youtube on the same subject, and if Japan can fix a country that was hit by an atom bomb, why can't all politicians not allow things such as Detroit and the housing crisis to happen? http://www.youtube.com/watch?v=S20u2u67HcU

[Art2ro]

Yeah, the Detroit City video and comparing it to the Nagasaki A-bomb blast after 65 yrs is pretty remarkable, the before and after! The U.S. Government and politicians really screwed over the people of Detroit! Shame on those politicians and the U.S. Government! Where's their conscience? What's the next major city will it happen to or is already happening to?