WaPo: Obama pushes banks to make home loans to people with weaker credit

[ScipioCowboy]

What could possibly go wrong, right?



"The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place. ..."

http://www.washingtonpost.com/busin...a19bce7af755_story.html#.UVw2JIXoMK8.facebook

 

[dbair1967]

Seems like we went down this road before thanks to guys like phag ass Frank and his dickweed buddy Dodd

 

[JBond]

With landmark lawsuit, Barack Obama pushed banks to give subprime loans to Chicago’s African-Americans

Read more: http://dailycaller.com/2012/09/03/w...-to-chicagos-african-americans/#ixzz2PV7L4uDa

President Barack Obama was a pioneering contributor to the national subprime real estate bubble, and roughly half of the 186 African-American clients in his landmark 1995 mortgage discrimination lawsuit against Citibank have since gone bankrupt or received foreclosure notices.

As few as 19 of those 186 clients still own homes with clean credit ratings, following a decade in which Obama and other progressives pushed banks to provide mortgages to poor African Americans.

The startling failure rate among Obama’s private sector clients was discovered during The Daily Caller’s review of previously unpublished court information from the lawsuit that a young Obama worked on as an attorney for the lead plaintiff.

Since the mortgage bubble burst, some of his former clients are calling for a policy reversal.

“If you see some people don’t make enough money to afford the mortgage, why would you give them a loan?” asked Obama client John Buchanan. “There should be some type of regulation against giving people loans they can’t afford.”

Banks “were too eager to lend to many who didn’t qualify,” said Don Byas, another client who saw banks lurch from caution to bubble-inflating recklessness.

“I don’t care what race you are. … You need to keep financial wisdom [separate] from trying to help your people,” said Byas, an autoworker.

Nonetheless, Obama has pursued the same top-down mortgage lending policies in the White House.

Read more: http://dailycaller.com/2012/09/03/w...-to-chicagos-african-americans/#ixzz2PV7VlLDd

Obama’s African-American clients got coupons, not cash

Plaintiffs’ attorneys took home nearly $1 million in Barack Obama’s 1995 class-action discrimination lawsuit against Citibank, but 183 of the 186 plaintiffs did not get a dime.

Three named plaintiffs in the lawsuit — Selma Buycks-Roberson, Calvin Roberson and Renee Brooks –- each collected $20,000. But none of the 18 ordinary, or non-named, plaintiffs that The Daily Caller was able to reach for comment reported receiving any money. This is despite a claim to TheDC by the lawsuit’s initiator, attorney Fay Clayton, that the settlement paid the 186 non-named clients between $770 and $3,250 each.

According to the court docket, President Barack Obama was lead attorney for Roberson and Brooks, as well as the second listed attorney for Buycks-Roberson, in the lawsuit, which claimed that Citibank discriminated against African-Americans in its mortgage practices.

Read more: http://dailycaller.com/2012/09/03/o...n-clients-got-coupons-not-cash/#ixzz2PV8RpeDi

 

[jeebus]

I love this sh1t, I sell forclosures for a living and I have been worried about my long term prospects as inventory has been coming down.

 

[superpunk]

This is a good thing.

Right now the banks are sitting on money and lending to noone. They've been fed money and liquidity by the federal government and refuse to pass that on to the electorate. As the article (which I'm sure noone read) stated, lending to people with credit scores between 680 and 620 (historically respectable) has dropped 90%. The article also stated they want to make it easier on people who are upside down on their mortgage to refinance at today's lower rates. If they want the economy moving they need to loosen up a bit.

 

[ScipioCowboy]

Whenever the government starts to manipulate a market, issues arise because they're creating artificial price floors and ceilings. As we saw during the Great Depression and the stagflation of the 1970s, this can create serious problems.

In this case, the FED created a record amount of money ex nihilo, which caused inflation, ate into people's wages, and caused prices to rise. The government gave that money to the banks, and expected them to start lending again. When they didn't start lending again, it created an environment in which the only way to shake out that money was to risk the same lending behaviors that put us in this situation in the first place.

Housing prices are the great irony of Keynesianism. When the prices for other necessities such as food or energy increase, we lament the added burden on the poor. When the price of housing, another necessity, goes up, the government rejoices.

 

[superpunk]

Noone is encouraging the same lending behaviors, ffs read before spouting off.

 

[ScipioCowboy]

Banks going under due to bad investments is nothing new, but the government's reaction to it isn't always the same. During the Housing Crisis, the Bush Administration bailed out the bad banks, essentially creating zombie banks and leading to economic repercussions we're still feeling today. During the S&L crash in the 1990s, rather than bailing out all the underwater S&Ls, the government incentivized the healthy S&L to buy up the bad S&Ls. This preserved the assets of the bad S&Ls while putting them under new and better management. That financial crisis didn't last anywhere near as long as this one.

 

[jeebus]

Noone is encouraging the same lending behaviors, ffs read before spouting off.

They are encouraging banks to lend to people with poor credit. If you can't get a 620 credit score to qualify for a loan, and you don't make the $16,000 needed for a $100,000 loan then you god damn shouldnt get that loan! If they do they are probably going to lose that house and some ass hole will buy it for half that price and sell it to their aunt for 20% more than it is worth

 

[MetalHead]

Liberalism:The anti-life,anti-mind doctrine.Reason and logic be damned.

 

[MetalHead]

They are encouraging banks to lend to people with poor credit. If you can't get a 620 credit score to qualify for a loan, and you don't make the $16,000 needed for a $100,000 loan then you god damn shouldnt get that loan! If they do they are probably going to lose that house and some ass hole will buy it for half that price and sell it to their aunt for 20% more than it is worth

How bigoted of you.
Why do you hate poor people?
If someone can't come up with the $16,000,they have no business buying a $100,000 house?
That's mean...can't you see the compassion on SP's part?
He cares for the poor,you don't,you are just mean.
If they can't come up with the money,just lend them the money anyways,because it feels good.
Lower the lending standards,it always works well.

 

[iceberg]

Noone is encouraging the same lending behaviors, ffs read before spouting off.

why? you never do.

 

[jeebus]

You don't need to have $16,000, you need $3,500 for a $100,000. You need two years work history making $16,000, or $8 full time. These are the standards we want lowered in federally guaranteed loans? And 620 is bad credit, and that is the current standard. How much worse can you take? Have you ever seen what the history looks like of someone with a 590 credit score? I guarantee you wouldn't lend them $100,000, but the government wants to make banks do it and guarantee the loans... WTF!

 

[superpunk]

620 doesn't necessarily mean credit problems.

 

[ScipioCowboy]

620 doesn't necessarily mean credit problems.

It doesn't necessarily equate to sustainability either. Markets are constantly evolving. What was sustainable at one point in time isn't necessarily sustainable at another point in time. So-called "bubbles" are created when the government attempts to artificially influence the market's natural ceilings and floors. Eventually, the artificial rate becomes unsustainable, and the bubble pops.

 

[MetalHead]

You don't need to have $16,000, you need $3,500 for a $100,000. You need two years work history making $16,000, or $8 full time. These are the standards we want lowered in federally guaranteed loans? And 620 is bad credit, and that is the current standard. How much worse can you take? Have you ever seen what the history looks like of someone with a 590 credit score? I guarantee you wouldn't lend them $100,000, but the government wants to make banks do it and guarantee the loans... WTF!

What if the can't come up with the $3,500?
Why do you hate the poor?...everyone is entitled to a home.It feels good to help the poor.
Where do you want those poor people to live?...in a van by the river?...in the underpass.
Your are bigoted against low income people.

 

[MetalHead]

OK Jeebus I'm just fucking with you.I agree with you.
I just wanted to sound like SP for a little bit.
Now I need a shower,because I feel dirty.

 

[dbair1967]

620 doesn't necessarily mean credit problems.

 

[JBond]

620 doesn't necessarily mean credit problems.

Your right. Now it means you can buy a house you will never be able to afford. Awesome plan!

 

[superpunk]

Or it might mean you're a perfectly respectable first time home buyer without extensive credit history.

You know, like it said in the article that none of you fucking read.