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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Brumar89 who wrote (436657)	11/25/2008 12:03:27 AM
From: tejek	Read Replies (1) \| Respond to of 1574199

Nevertheless the securitization of subprime mortgages began under Clinton as I indicated. And it was never a good idea. The securitization of sub. mort. would not have been a problem if the loans had not been subprime. Had normal underwriting procedures been followed the mort. applicants would not have been approved and the loans would not have been made. The loans became subprime because the applicants had a poor credit history and were likely to default. Greed trumped good business practice as the housing boom began to mature and slow down, and that's how we got into the mess we are in. Your assertion that ALL the loans which have defaulted were written while Bush was President is something you clearly just made up. Why do you keep bringing this subject up when you clearly don't understand the problem? The vast majority of the loans were written under Bush. It was during this time that normal and recommended underwriting procedures were suspended. Loans made during the Clinton era would be considered 'seasoned' by this time. Once a mortgagee has been paying off a loan for more then a couple of years, they have a vested interest in the property and do everything they can to prevent foreclosure. Usually when it does happen, the economy has soured and they lose their job suddenly and can't make their payments. That's not what happened here. The economy was fine......people were not losing their jobs. Mortgagees began to default because their loans had interest rates that were designed to reset upwards significantly after a year, making their mort. payments unaffordable due to their less than acceptable incomes. In other words, they were set up to fail. The underwriters knew they would not be able to pay the loan once the interest rate reset but they didn't care. In the meantime, the originating lender and all the brokers involved in the deal had been paid their fees upfront. Shortly after the loan originated, it was sold by the lender in a bundle of loans called CDOs to an unsuspecting secondary lender like FNM who had no idea the shit they were getting and didn't bother to do any due diligence. Suddenly, the interest rate on the loans reset and the defaults started flying. At first they thought the problem was minor until they started going through their CDO's. It took roughly a year for most banks to figure out they were in over their heads. Not that it matters when they were written. They were written because of government policies that Democrats initiated and loudly supported right up to the end and that Republicans acquiesced in against their better judgment. The bad loans were written because they knew the Bush administration was not paying any attention and doing none of its fudiciary regulation; that in fact, the Bushies could care less what they were doing. Every person, including you, who voted for Bush is directly or indirectly responsible for this mess. It was this culture of indifference permeating the Bush White House and the Republican party that allowed this subprime garbage to happen. Its why the Republicans are out of favor now.