US govt created subprime crisis 30 yrs ago
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US govt created subprime crisis 30 yrs ago
Why US banks lent so much loans for so many years
to sub standard borrowers?
Our first reaction is the banks wants to have more biz .
I find a new explantion related The Community Reinvestment Act and quite credible.Also the banks are also threatened by Community Org
to lend or donate money.They just rob the banks in a legal way!!
The so called community org can block the banks operations,like
open new branch,merge and acquisition,etc
The US authority also can fine the banks if they cant meet the loans
target in the designated area!!
US pass The Community Reinvestment Act (or CRA, Pub.L. 95-128, title VIII, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law that
2.One of the link in wikipedia provide a very good anaylsis
requires banks and thrifts to offer credit throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services, a practice known as "redlining." The purpose of the CRA is to provide credit, including home ownership opportunities to underserved populations and commercial loans to small businesses.
The CRA was passed into law by the U.S. Congress in 1977 as a result of national grassroots pressure for affordable housing, and despite considerable opposition from the mainstream banking community. Only one banker, Ron Grzywinski from ShoreBank in Chicago, testified in favor of the act. [1]
The CRA mandates that each banking institution be evaluated to determine if it has met the credit needs of its entire community. That record is taken into account when the federal government considers an institution's application for deposit facilities, including mergers and acquisitions. The CRA is enforced by the financial regulators (FDIC, OCC, OTS, and FRB).
In 1995, as a result of interest from President Clinton's administration, the implementing regulations for the CRA were strengthened by focusing the financial regulators' attention on institutions' performance in helping to meet community credit needs. These changes were very controversial and as a result, the regulators agreed to revisit the rule after it had been fully implemented for five years. Thus in 2002, the regulators opened up the regulation for review and potential revision.
The Government-Created Subprime Mortgage Meltdown
by Thomas J. DiLorenzo... So-called "community groups" like ACORN benefit themselves from the CRA through a process that sounds like legalized extortion. The CRA is enforced by four federal government bureaucracies: the Fed, the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation. The law is set up so that any bank merger, branch expansion, or new branch creation can be postponed or prohibited by any of these four bureaucracies if a CRA "protest" is issued by a "community group." This can cost banks great sums of money, and the "community groups" understand this perfectly well. It is their leverage. They use this leverage to get the banks to give them millions of dollars as well as promising to make a certain amount of bad loans in their communities.
3.HSBC US branch settled a class law litigation with ACORN
A man named Bruce Marks became quite notorious during the last decade for pressuring banks to earmark literally billions of dollars to his organization, the "Neighborhood Assistance Corporation of America." He once boasted to the New York Times that he had "won" loan commitments totaling $3.8 billion from Bank of America, First Union Corporation, and the Fleet Financial Group. And that is just one "community group" operating in one city – Boston....
ACORN got the ransom!!...In connection with the proposed settlement, Household has agreed to provide funding over a three-year period for
4.Justice in US
ACORN-sponsored financial counseling and literacy programs...
Rubbish.This is the failure of voting system.The community org
is quite well organised,like Mafia.They can win offices in community
and have more political power!!
God save America. -
My curiousity was tweaked recently by the constant mention of "sub-prime".
Thank you for the information. -
1.u really have to say thanks you,I am the first one connect The Community Reinvestment Act (CRA),community org likeOriginally posted by phil30k:My curiousity was tweaked recently by the constant mention of "sub-prime".
Thank you for the information.
the Association of Community Organizations for Reform Now, ,Fannie Maeand the current sub prime crisis.
2.Before the CRA,there are areas called Red lining.It is very tough for
buyers to get loans.Thanks to some so called community org,
Fannie Mae come to buy the mortgages which the banks
lend to all these high risks owners!!
This is the beginning of sub prime...
r.
Community Reinvestment
Negotiated landmark agreements with banks in St. Louis, Baton Rouge, Boston, Bridgeport,New York City, Jersey City, Philadelphia, Phoenix, Denver, Little Rock, New Orleans, Chicago, Minneapolis-St. Paul, Brooklyn, Des Moines, Dallas and Washington, D.C.,
making over a billion dollars available for loans in low-income neighborhoods. Blocked the gutting of the federal Community Reinvestment Act. Forced Fannie Mae to establish a precedent-setting program to buy community reinvestment mortgages.
Each branch has a designated area to serve---
to provide loan to every borrowers.
Fine will be imposed if target cant be met.
The community org can object to banks operations,
like open new branch.Banks have to pay money to the
so called Community org in the form of loans or donations .
This is a legal way to rob a bank!!
2.The road to hell is paved with good intentions
But CRA ban the followings which crates the current troubles:
A.Adjust interest rates to reflect the risks the lenders face.
This make the bank charge a over all higher interest rate
to EVERY BORROWER.
The compartitive lower rick borrower pay a higher rate he
should have paid!!But the compartitive higher risk one
pay the same rates.
You will say this is impossible as the borrower can turn to other
banks to borrow.But every bank is the same...
B.Charge the one time risk premium to reflect risk.
C.Death insurance cover.
Over 50% of the states pass the similiar law to let every one
to own house!!
3.The flat interest rate distort market mechanism of
risks and return
4.Why u cant read the above connections in western medias
5.Why no one dare to change this practice
Low pay US President(20% pay as SG PM),Senators,
Congressman,Govenors etc dare not to touch this bee hive.
What benefits I have after I change this situation?
6.Use your brain
Thousand of billions of sub prime loans.Why?
Why did every banks,every branch grant the sub prime loans?
There is must be a reason! -
Only one word... idiot.
-
You better ask God to save you from your stupidity.Originally posted by lionnoisy:US govt created subprime crisis 30 yrs ago
Why US banks lent so much loans for so many years
to sub standard borrowers?
Our first reaction is the banks wants to have more biz .
I find a new explantion related The Community Reinvestment Act and quite credible.Also the banks are also threatened by Community Org
to lend or donate money.They just rob the banks in a legal way!!
God save America.
Care to explain why the US sub-prime crisis hit Singapore banks? Are the Singapore banks lending money to US citizens because they are covered by the 30 year old US law to do so?Straits Times: OCBC shocks with huge $221m in write-downs November 7, 2007
http://sgpropertynews.wordpress.com/category/bank-news/
Posted by catherinefong63 in OCBC, Property News, StraitsTimes.
Tags: OCBC
add a comment
Nov 7, 2007
OCBC shocks with huge $221m in write-downs
Figure is three times what DBS is setting aside to cover fallout
from risky debt By Gabriel Chen
OCBC Bank has delivered a shock with a far bigger-than-expected $221
million write-down on its portfolio of investments exposed to the
United States sub-prime mortgage crisis.
another word... fool.
If you don't know, ask. Do not try to be smart and make a fool of yourself. -
Morning everybody
Another beautiful day this morning..... just a little reminder to brighten your day.
It has been 69 Days since Dear Andrew warn us a Stock Market Meltdown is coming.....
Yawn......
Still no news about thousands and thousands of Stock Invester killing themselve la........ So, don't worry too much ok.
Just remember to spent within your means.......
-
Originally posted by hloc:
ass-hole, it has already melted-down and solidified and you are still in the dark... I guess IHM does not provide you newspapers to read.
Morning everybody Another beautiful day this morning..... just a little reminder to brighten your day.
It has been [b]69 Days since Dear Andrew warn us a Stock Market Meltdown is coming.....
Yawn...... Still no news about thousands and thousands of Stock Invester killing themselve la........ So, don't worry too much ok.
Just remember to spent within your means....... [/b] -
69 Days and counting......
-
Originally posted by hloc:
Since IMH does not give you newspapers to read and you are too stupid to go online and find out, let me do you, an insane idiot unable to access information a favor....
[b]69 Days and counting...... [/b]
Since you like to live in delusions so much, when IMH offers to release you, remember to tell them "no". -
Fannie Mae stock has dipped since 2005.
http://phx.corporate-ir.net/phoenix.zhtml?c=108360&p=irol-stockquotechart&control_javaupperindicator=&control_javauf=&control_javatype=&control_javascale=&control_javanumberperiods=&control_javamovingaverage=&control_javalowerindicator2=&control_javalowerindicator1=&control_javachartfunctions=&control_javaapplet=&control_yearlistbox=&control_monthlistbox=&control_daylistbox=&s=Current%20Stock%20Information
2.US__What a helping coutry!!u cant believe it that u can buy house at 3% down payment or even 0%!!
Fannie Mae and US Dept of Housing Na dUrban Developement cofirm this.
http://www.fanniemae.com/homebuyers/findamortgage/mortgages/eatpr.jhtml?p=Find+a+Mortgage&s=Mortgage+Solutions&t=By+Borrower+Need&q=No/Low+Down+Payment
http://www.hud.gov/news/release.cfm?content=pr06-088.cfm
''The Expanding American Homeownership Act will:
1) Eliminate the current statutory three percent minimum down payment, reducing a significant barrier to homeownership. FHA’s existing down payment requirement does not meet the demands of today’s marketplace, where most first-time homebuyers put down two percent or less. The "new” FHA would offer a variety of down payment options.''
- ''You can borrow up to the full amount of the purchase price of the home, and only need to contribute either $500 from your own funds, or 3 percent of your home's purchase price (from flexible sources such as gifts, grants, loans from relatives, or employer-assisted housing). This money will go toward closing costs, and/or the down payment if there is one.)''
- 3.Now u know the source of subprime---created by US gavamen!!