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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: ManyMoose who wrote (17366)	2/6/2007 8:50:47 AM
From: haqihana	Read Replies (1) \| Respond to of 71588

Many, My wife lived in the LA area for many of her early years, and I lived there for about 3 years in the late 80's. Her Mother still lived out in the desert in 2000, and we went to visit her. Her daughter lived in Long Beach at that time, and we drove over there to see her. Where this is leading, is that when we lived there, there were a lot of the 4 lane freeways, but on the drive to Long Beach, one of those had grown to 16 lanes, and it was crowded with vehicles of all kinds, and sizes. I consider that to be over kill. The ecology zealots are nit picking when they should be killing the lice. Their antics are nothing but a way to get attention to them, but does very little to stop the rape of nature.

To: ManyMoose who wrote (17366)	2/8/2007 9:29:32 AM
From: Peter Dierks	Respond to of 71588

Subprime Politics The housing boom is over; time to whoop on the bankers. Wednesday, February 7, 2007 12:01 a.m. EST Mortgage delinquencies are rising, subprime lenders are going belly-up--another company filed for bankruptcy Monday--and the Senate Banking Committee is holding hearings today on "predatory lending." All of this can only mean one thing: Congress is looking for someone to blame now that the housing boom is over. The noted banking expert Jesse Jackson is scheduled to be a featured witness at today's hearing, along with a couple of unfortunate consumers who were sold mortgages they couldn't afford to repay. Senator Chris Dodd, Chairman of the Banking Committee, is in high dudgeon, threatening legislation and talking about the American dream becoming a nightmare for those who can't make their mortgage payments. It's time for a reality check. No one likes to see anyone lose his home to foreclosure--and that includes the banks. Banks make money by lending to people who can repay their loans with interest. Lending people money they can't pay back is a lousy business, as the many recent headlines about subprime lenders going bankrupt demonstrate. If rapacious banks really had a goal of lending people more than they could afford to pay back, they wouldn't be swimming in red ink. Related to this is the contention, made by the same populists on the current "predatory lending" rampage, that banks make money by charging them "excessive" interest. But, if anything, the recent spate of bankruptcy among subprime lenders suggests that they were charging too little interest to compensate for the credit risk they were taking by lending to people with bad credit histories. This is not to say that there were no mistakes made during the recent housing boom. There always are excesses during asset bubbles. Quickly rising prices made a lot of people giddy on both sides, and it's now clear that loans were offered and taken that should not have been. Both the asset-price increases and the lending risks were also facilitated by a prolonged period of easy money, courtesy of the Alan Greenspan-Ben Bernanke Federal Reserve. The combination of exceptionally low interest rates over an extended period contributed to booming prices that encouraged lenders and borrowers to overextend themselves. Borrowers figured that if rates rose or things got sticky, they could always sell for a profit. Lenders likewise became accustomed to lending with little or no money down from the buyer, confident that rising prices would soon provide the buyer with an equity cushion. Meanwhile, regulators at the Fed and Comptroller of the Currency waited a long time to question some of the riskier lending practices. However, Members of Congress know it's a pain to wrestle with Mr. Bernanke over monetary policy, and the Comptroller's rules for mortgage lending don't make for sexy newspaper copy. It's so much more fun to knock around a couple of prosperous-looking bankers. So in searching for a scapegoat, the politicians are returning to that old chestnut, "predatory lending." They may want to think twice before stringing up the bankers, though. Whether their borrowing history is good, bad or indifferent, Americans enjoy some of the best access to credit of anyone in the world. Those no-money-down loans are risky for both sides. But for many people, the alternative is no chance to buy that house at all. The politicians arguing for tighter credit standards are some of the same folks who deplore banks for "red-lining" by refusing to lend in poor urban neighborhoods. And the result may be less credit, or no credit at all, for the working poor or newly employed. Last week the percentage of subprime mortgages that were more than 90 days past due was placed at just over 10% in November, the latest period for which figures are available. That's the highest it's been in years. But, remember, this also means that close to 90% of loans are still being paid off more or less on time. Tightening standards means not only "protecting" the 10% who got caught short but also hurting the 90% who stretched for a mortgage and are still making their payments. Lenders know that some percentage of marginal loans will go bad. But they can't know in advance which loans will sour--or presumably they wouldn't make those bets in the first place. The only way to ensure close to 100% loan performance is to restrict lenders to making only the safest loans. This in turn means shutting out of the market a whole lot of people who may be "risky," but still manage to send in their checks every month. For such borrowers, a lender who makes a risky loan is not a predator, but a gatekeeper to homeownership and the economic opportunity that goes with it. We suspect that the vast majority of those who stretch to afford a home and sacrifice to make their payments don't need the kind of protection Mr. Dodd is offering. opinionjournal.com