POLITICS 2008 Housing Crisis

Discussion in 'Politicants' started by kmf600, Mar 11, 2019.

  1. kmf600

    kmf600 Energy vampire

    I read a book that blamed Clinton for the housing collapse. Said he made it harder for banks to deny loans for houses.
  2. JayVols

    JayVols Walleye Catchin' Moderator

    Or he opened up more folks to home ownership. Depends on what you think about him, I guess.

    For the record, he did relax loan requirements, but the banks are the ones that chose to approve predatory loans, then peddled that bad debt. There's a whole passel more to the housing crash than making loans easier to get.
  3. Volst53

    Volst53 Super Moderator

    They weren’t predatory loans. The government set what it wanted, which went against the whole history or loaning capital and made it extremely easy to get capital.

    It’s a complex issue that Clinton started with wanting to increase home ownership that neither the Democrats or Republicans wanted to stop once it started going.

    Basically the federal government made it the Wild West and banks had little choice but to extend the credit or go out of business. The issue was when security bonds started buying these loans that were actually rated high and safe.

    I do fear that we’re on the other side of the coin now though. Now we’re seeing the rise of populism. Trump and Bernie being the biggest examples of that
  4. JayVols

    JayVols Walleye Catchin' Moderator

    Ok. Forbes disagrees.


    IP likes this.
  5. kmf600

    kmf600 Energy vampire

    This is basically what I read in that book.
  6. JayVols

    JayVols Walleye Catchin' Moderator

    It's wrong.
  7. Volst53

    Volst53 Super Moderator


    Here's a better write up on it.

    They weren't under traditional overview because they couldn't be approved for loans in traditional ways. That's why they were in a subprime because Fannie Mae pushed subprime loans to help those with poor credit or assets to have the American dream of owning their own home.

    The subprime loaning become a bubble because housing prices couldn't keep rising forever, and those paying on them were basically paying interest. So once the market leveled off, a ton of them were upside down on their houses.
  8. JayVols

    JayVols Walleye Catchin' Moderator

    Most of the loans were from private banks not under federal guidelines. All to make a quick buck.

    That isn't disputable.

    That wasn't Fannie or Freddie ..
  9. Volst53

    Volst53 Super Moderator

    Fannie pushes those institutions to make those loans though. Even though they were risky as hell.

    It’s not like they just woke up one morning and said you know what, let’s start handing these risky son of [itch bay]es money that we’ve never done before.

    The feds policy dictated that and they had to get creative to do it.

    Yes people made money. Everyone was making money till the bubble popped.

    People with poor credit or little assets pay higher in interest. That was never an issue till the housing market cooled off and finally leveled off, because even though they weren’t paying down very little on the note. Property prices kept rising so they could sell it for a profit while just treading water.
  10. NorrisAlan

    NorrisAlan Put Custom Title Here

    Why I hate economics. Unlike physics, where you have math and experimentation, economics is 90% mob psychology and 15% voodoo.
    JayVols likes this.
  11. JayVols

    JayVols Walleye Catchin' Moderator

    The Mortgage Backed Securites & Credit Default Swaps were the big problems that busted the banks. Not Fannie or Freddie.
  12. Volst53

    Volst53 Super Moderator

    The big problem was they were holding a shit ton of assets that had just lost their value and people were defaulting on them left and right.

    They had those assets though because policy pushed that to increase homeowner ship.

    That’s a good and noble goal. It just blew up and we all were left holding the bag.

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