Democrats Want to give 15 Billion to Banks that Forclose on Property? - Page 2

cheapseats · 05-10-2008, 11:16 AM

Quote:

Originally Posted by DRS112

I agree...and actually I'd extend it from just R's and D's....that people act the same way in regards to their preferred politician.

And their own pocketbook.

cheapseats · 05-10-2008, 11:21 AM

The recession doesn't end until the real estate market hits bottom.

They're trying to prop up the bottom. But by doing so, by artificially bolstering values, these foreclosed properties will be rendered desirable and affordable to...people higher on the totem pole.

Let those houses fall to their true values and ALL housing prices will adjust accordingly, as they should.

This way, the spruced-up low-end houses will not go to the lowest end. The lowest end will not be able to afford the houses, except as renters.

That the banks holding the real estate will benefit from sale of higher-priced homes is something that a grade schooler would understand.

THAT, my friends, is a Republican design. Democrats are dupes and dopes.

BillCosby · 05-10-2008, 12:14 PM

Quote:

Originally Posted by DRS112

I agree...and actually I'd extend it from just R's and D's....that people act the same way in regards to their preferred politician.

lol............ Yep..........

I believe that this is so common as to be part of our nature........

& it (our vulnerability) can only be overcome by a constant & diligent effort... If we lower our guard or fail to keep up we are susceptible........

Heretic · 05-10-2008, 02:54 PM

Quote:

Originally Posted by DRS112

Defying Veto Threat, House Backs Foreclosure Bill

By DAVID STOUT
Published: May 9, 2008

WASHINGTON — House Democrats defied a veto threat from President Bush on Thursday as they approved a bill that would provide $15 billion to the states to buy and spruce up foreclosed properties.

The bill, sponsored by Representative Maxine Waters, Democrat of California, would make federal money available in loans and grants for the rehabilitation and eventual sale or rental of blighted properties. The measure is one of two major housing initiatives being pushed by Democrats despite the stated opposition of the president.

The Waters bill was approved by a vote of 239 to 188, with 11 Republicans siding with the majority. Only one Democrat, Kirsten Gillibrand, a first-term representative from the Hudson Valley area of New York, voted against the measure.

In any event, the bill was approved by a majority that was well short of the two-thirds that would be required to override President Bush’s expected veto. And even if enough Republicans could be persuaded to change their positions to give the bill a two-thirds majority in the House, its fate would remain uncertain in the Senate, where Democrats hold only a razor-thin majority.

Backers of the Waters bill have argued that it would help prevent neighborhood blight and assist deserving people. Republican opponents of the bill have countered that it could have the unintended effect of encouraging foreclosures.

Meanwhile, Democrats were still promoting a broader bill pushed by Representative Barney Frank, the Massachusetts Democrat who heads the Financial Services Committee. Mr. Frank proposes having the Federal Housing Administration give its backing to $300 billion in loans to aid homeowners overwhelmed by debt.

President Bush has vowed to veto the Frank bill if it reaches him in its present form, on the ground that it would assist lenders and borrowers who have acted irresponsibly. But Treasury Secretary Henry M. Paulson Jr., who has been able to work with Mr. Frank in the past, has promised to keep working for a bill that the president would sign, and House Democrats are trying to win over Republican votes by attaching to the Frank bill items that President Bush favors, like an overhaul of the housing administration.

I find myself agreeing with the republicans on this one. I've seen attempts in this neighborhood to bully owners of "blighted" property out of their homes [mostly, the victims were non-mormons, eluding to their intent]. My father would get complaints and notices from the city because he wouldn't mow his lawn. The fact is city or town "beautification" committees are where some of the ugliest of neghborhood behaviors manifest. And the democratic bill would only feed the beast.

Rigged · 05-10-2008, 06:40 PM

Quote:

Originally Posted by DRS112

Defying Veto Threat, House Backs Foreclosure Bill

By DAVID STOUT
Published: May 9, 2008

WASHINGTON — House Democrats defied a veto threat from President Bush on Thursday as they approved a bill that would provide $15 billion to the states to buy and spruce up foreclosed properties.

The bill, sponsored by Representative Maxine Waters, Democrat of California, would make federal money available in loans and grants for the rehabilitation and eventual sale or rental of blighted properties. The measure is one of two major housing initiatives being pushed by Democrats despite the stated opposition of the president.

The Waters bill was approved by a vote of 239 to 188, with 11 Republicans siding with the majority. Only one Democrat, Kirsten Gillibrand, a first-term representative from the Hudson Valley area of New York, voted against the measure.

In any event, the bill was approved by a majority that was well short of the two-thirds that would be required to override President Bush’s expected veto. And even if enough Republicans could be persuaded to change their positions to give the bill a two-thirds majority in the House, its fate would remain uncertain in the Senate, where Democrats hold only a razor-thin majority.

Backers of the Waters bill have argued that it would help prevent neighborhood blight and assist deserving people. Republican opponents of the bill have countered that it could have the unintended effect of encouraging foreclosures.

Meanwhile, Democrats were still promoting a broader bill pushed by Representative Barney Frank, the Massachusetts Democrat who heads the Financial Services Committee. Mr. Frank proposes having the Federal Housing Administration give its backing to $300 billion in loans to aid homeowners overwhelmed by debt.

President Bush has vowed to veto the Frank bill if it reaches him in its present form, on the ground that it would assist lenders and borrowers who have acted irresponsibly. But Treasury Secretary Henry M. Paulson Jr., who has been able to work with Mr. Frank in the past, has promised to keep working for a bill that the president would sign, and House Democrats are trying to win over Republican votes by attaching to the Frank bill items that President Bush favors, like an overhaul of the housing administration.

Damn it people don't sign a binder in the back of the brokers car! so stupid.

Rigged · 05-10-2008, 06:43 PM

Quote:

Originally Posted by cheapseats

The recession doesn't end until the real estate market hits bottom.

They're trying to prop up the bottom. But by doing so, by artificially bolstering values, these foreclosed properties will be rendered desirable and affordable to...people higher on the totem pole.

Let those houses fall to their true values and ALL housing prices will adjust accordingly, as they should.

This way, the spruced-up low-end houses will not go to the lowest end. The lowest end will not be able to afford the houses, except as renters.

That the banks holding the real estate will benefit from sale of higher-priced homes is something that a grade schooler would understand.

THAT, my friends, is a Republican design. Democrats are dupes and dopes.

Its not the housing market, its fucken banking. When banks stopped following the basic formula for lending that is when all the trouble started.

Ever hear of NIL loans? NO INCOME loans? how the hell do you loan people money who have no job no income no way to pay it back?

The problem is BANKS, people got greedy. Then investment bankers instead of putting money in boring and safe US Tbills they started putting cash in secondary mrket for a quick buck. Then all the big hedge fund masters of the universe did the same thing. Boom! bottom falls out...major crisis.

DanS. · 05-10-2008, 06:51 PM

Alot of those loans came about because of Govt. programs that encouraged lending to people with low incomes and poor credit....but like they say....the road to hell is paved with good intentions...

and banks weren't the only greedy ones....people bought houses they couldn't afford and refinanced to buy toys.....everybody is greedy..

Rigged · 05-10-2008, 06:57 PM

Quote:

Originally Posted by DRS112

Alot of those loans came about because of Govt. programs that encouraged lending to people with low incomes and poor credit....but like they say....the road to hell is paved with good intentions...

and banks weren't the only greedy ones....people bought houses they couldn't afford and refinanced to buy toys.....everybody is greedy..

Yeah I stand corrected...your right. Everyone got greedy. With times like that I suppose that its sort of understandable on a certain level.

True. I still think banks are primarily responsible, they serve a "gate keeper" function. There is a reason they have lending criteria, and when it is not followed this is what happens. They also have several options outside of seeking foreclosure. From a long-term perspective its not lucrative to have thousands of parcels of non-uniform, possibly already developed land with no way to make money off it it. The longer they hold the parcels the more money they lose.

I suppose another aspect here is the type of mortgages. ARMs...what the hell happened to truth in lending? If you are given the terms of the arm in plain english and you still sign it you have to be nuts. Statistically people who lend in the secondary market are 9 times more likely to become deficient. It's amazing. Lenders KNOW this but still went on doing it.

BillCosby · 05-10-2008, 07:27 PM

Quote:

Originally Posted by Rigged

Yeah I stand corrected...your right. Everyone got greedy. With times like that I suppose that its sort of understandable on a certain level.

True. I still think banks are primarily responsible, they serve a "gate keeper" function. There is a reason they have lending criteria, and when it is not followed this is what happens. They also have several options outside of seeking foreclosure. From a long-term perspective its not lucrative to have thousands of parcels of non-uniform, possibly already developed land with no way to make money off it it. The longer they hold the parcels the more money they lose.

I suppose another aspect here is the type of mortgages. ARMs...what the hell happened to truth in lending? If you are given the terms of the arm in plain english and you still sign it you have to be nuts. Statistically people who lend in the secondary market are 9 times more likely to become deficient. It's amazing. Lenders KNOW this but still went on doing it.

You seem like you understand the sitch............

Were does regulation come in to play here.........???

Markets don't regulate markets.......... We knew that before???

There were regulations to prevent this type of thing.. Put in place long ago.... Not to long ago those prohibitions were removed..........

It did not happen over night but soon the "chickens came home to roast".................

Repeal of the Glass-Steagall Act??????

What Was The Glass-Steagall Act?

In 1933, in the wake of the 1929 stock market crash and during a nationwide commercial bank failure and the Great Depression, two members of Congress put their names on what is known today as the Glass-Steagall Act (GSA). This act separated investment and commercial banking activities. At the time, "improper banking activity", or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash. According to that reasoning, commercial banks took on too much risk with depositors' money. Additional and sometimes non-related explanations for the Great Depression evolved over the years, and many questioned whether the GSA hindered the establishment of financial services firms that can equally compete against each other. We will take a look at why the GSA was established and what led to its final repeal in 1999.

Reasons for the Act - Commercial Speculation
Commercial banks were accused of being too speculative in the pre-Depression era, not only because they were investing their assets but also because they were buying new issues for resale to the public. Thus, banks became greedy, taking on huge risks in the hope of even bigger rewards. Banking itself became sloppy and objectives became blurred. Unsound loans were issued to companies in which the bank had invested, and clients would be encouraged to invest in those same stocks.

Effects of the Act - Creating Barriers
Senator Carter Glass, a former Treasury secretary and the founder of the U.S. Federal Reserve System, was the primary force behind the GSA. Henry Bascom Steagall was a House of Representatives member and chairman of the House Banking and Currency Committee. Steagall agreed to support the act with Glass after an amendment was added permitting bank deposit insurance (this was the first time it was allowed).

As a collective reaction to one of the worst financial crises at the time, the GSA set up a regulatory firewall between commercial and investment bank activities, both of which were curbed and controlled. Banks were given a year to decide on whether they would specialize in commercial or in investment banking. Only 10% of commercial banks' total income could stem from securities; however, an exception allowed commercial banks to underwrite government-issued bonds. Financial giants at the time such as JP Morgan and Company, which were seen as part of the problem

, were directly targeted and forced to cut their services

and, hence, a main source of their income. By creating this barrier, the GSA was aiming to prevent the banks' use of deposits in the case of a failed underwriting job.

The prime enabler under Clinton of deregulation was Robert Rubin, Secretary of the Treasury. And Rubin comes out of Goldman Sachs, then he goes to work as one of Clinton’s top guys. He presides over the repeal of the key piece of New Deal legislation designed to prevent conflicts of interest, the Glass-Steagall Act. And then he lets a short interval go by, and then he becomes chairman of the executive committee of Citigroup, which was only able to become the kind of conglomerate it did because of the repeal of the Glass-Steagall Act. Now, that’s a flat-out conflict of interest.

Rigged · 05-10-2008, 08:08 PM

Quote:

Originally Posted by BillCosby

You seem like you understand the sitch............

Were does regulation come in to play here.........???

Markets don't regulate markets.......... We knew that before???

There were regulations to prevent this type of thing.. Put in place long ago.... Not to long ago those prohibitions were removed..........

It did not happen over night but soon the "chickens came home to roast".................

Repeal of the Glass-Steagall Act??????

What Was The Glass-Steagall Act?

In 1933, in the wake of the 1929 stock market crash and during a nationwide commercial bank failure and the Great Depression, two members of Congress put their names on what is known today as the Glass-Steagall Act (GSA). This act separated investment and commercial banking activities. At the time, "improper banking activity", or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash. According to that reasoning, commercial banks took on too much risk with depositors' money. Additional and sometimes non-related explanations for the Great Depression evolved over the years, and many questioned whether the GSA hindered the establishment of financial services firms that can equally compete against each other. We will take a look at why the GSA was established and what led to its final repeal in 1999.

Reasons for the Act - Commercial Speculation
Commercial banks were accused of being too speculative in the pre-Depression era, not only because they were investing their assets but also because they were buying new issues for resale to the public. Thus, banks became greedy, taking on huge risks in the hope of even bigger rewards. Banking itself became sloppy and objectives became blurred. Unsound loans were issued to companies in which the bank had invested, and clients would be encouraged to invest in those same stocks.

Effects of the Act - Creating Barriers
Senator Carter Glass, a former Treasury secretary and the founder of the U.S. Federal Reserve System, was the primary force behind the GSA. Henry Bascom Steagall was a House of Representatives member and chairman of the House Banking and Currency Committee. Steagall agreed to support the act with Glass after an amendment was added permitting bank deposit insurance (this was the first time it was allowed).

As a collective reaction to one of the worst financial crises at the time, the GSA set up a regulatory firewall between commercial and investment bank activities, both of which were curbed and controlled. Banks were given a year to decide on whether they would specialize in commercial or in investment banking. Only 10% of commercial banks' total income could stem from securities; however, an exception allowed commercial banks to underwrite government-issued bonds. Financial giants at the time such as JP Morgan and Company, which were seen as part of the problem

, were directly targeted and forced to cut their services

and, hence, a main source of their income. By creating this barrier, the GSA was aiming to prevent the banks' use of deposits in the case of a failed underwriting job.

The prime enabler under Clinton of deregulation was Robert Rubin, Secretary of the Treasury. And Rubin comes out of Goldman Sachs, then he goes to work as one of Clinton’s top guys. He presides over the repeal of the key piece of New Deal legislation designed to prevent conflicts of interest, the Glass-Steagall Act. And then he lets a short interval go by, and then he becomes chairman of the executive committee of Citigroup, which was only able to become the kind of conglomerate it did because of the repeal of the Glass-Steagall Act. Now, that’s a flat-out conflict of interest.

Actually its funny you mention that, I wrote a major paper in graduate school on the Glass-Steagall act. It wasn't published, for a few reasons that wouldn't surprise you, I predicted that something like this would happen. Of course nothing close to the subprime crash, even some years ago now the data was moving that way. I didn't want to be a snob before but I graduated from Emory and one of my professors there was on a committee 10 years ago when they looked at repealing the act. He advised against it. But all the toity Harvard, AIE, and Brookings assholes got on board and in bed with the devil. So it is written so it is done...

Its really a fucken shame.

05-10-2008, 11:21 AM	#12 (permalink)
cheapseats Senior Member Join Date: Nov 2007 Posts: 3,719 Blog Entries: 14 Thanks: 0 Thanked 54 Times in 41 Posts	The recession doesn't end until the real estate market hits bottom. They're trying to prop up the bottom. But by doing so, by artificially bolstering values, these foreclosed properties will be rendered desirable and affordable to...people higher on the totem pole. Let those houses fall to their true values and ALL housing prices will adjust accordingly, as they should. This way, the spruced-up low-end houses will not go to the lowest end. The lowest end will not be able to afford the houses, except as renters. That the banks holding the real estate will benefit from sale of higher-priced homes is something that a grade schooler would understand. THAT, my friends, is a Republican design. Democrats are dupes and dopes. __________________ =-=-=-=-=-=-=-=-=-=-= ©2008 Implausible Endeavors LLC ImplausibleEndeavors.com* =-=-=-=-=-=-=-=-=-=-= Last edited by cheapseats; 05-10-2008 at 11:23 AM.
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05-10-2008, 06:51 PM	#17 (permalink)
DanS. Administrator Join Date: Aug 2007 Posts: 8,380 My Mood: Thanks: 140 Thanked 313 Times in 232 Posts	Alot of those loans came about because of Govt. programs that encouraged lending to people with low incomes and poor credit....but like they say....the road to hell is paved with good intentions... and banks weren't the only greedy ones....people bought houses they couldn't afford and refinanced to buy toys.....everybody is greedy.. __________________ PUMA What really got me into this was a negative: lurking on DU I was absolutely repulsed by the disgusting attitude of the obots - speaking as a global politics junkie I never encountered anything like it. I shudder to think of the malignantly orgasmic, frenzied glee that they must be feeling now
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