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Originally Posted by CC1
Randy Wayne. That is the kind of logic that just makes steam come out of my ears.
If whatever rescue package they come up with includes rewarding idiots who bought homes they could not afford or low lifes who just don't make their mortgage payements I am going to be furious.
I have read of proposed plans tht would both reduce a person's principal and their interest rate.
In other words if I had been irresponsible when I bought my home 2 1/2 years ago and had got in over my head by buying a home $100,000 more expensive than I did I might have ended up having the mortage and interest rate reduced so thta I would be making the same payment I am now.
If my tax dollars end up going to subsidize idiots who bought too much house I am going to be steamed.
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The the FDIC forecasted that this could happen and lenders sold ARMs and subprime loans anyway. People trusted their bankers to only qualify them for what they could afford. Sadly too many people let the banks put them into this position.
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The libs in Congress pressured Fannie Mae and Freddie Mac to put unqualified people in homes the last decade or more and now we are reaping the result.
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I just have to mention that this is a misconception. A common myth being told right now is that the CRA (Community Reinvestment Act) forced lenders to lend to unqualified buyers.
First, the CRA doesn't require Adjustable Rate Mortgages or any other form of subprime lending. These were a scheme dreamed up by the banking industry for quick profit on international markets (please note that in the 80's ARMs like these and many of these other subprime loans would have been illegal due to regulations that have since been removed).
Second, banks and lenders decided to put ARMs forward as a measure to fulfill CRA's requirements and the Republican Congress more than agreed. However, the banking industry didn't merely sell just enough ARMs or subprime loans to meet CRA's requirements...they sold them like crazy to unqualified borrowers; going well above and beyond what CRA asked of local banks and lenders.
It all boils down to the fact that the industry was deregulated to allow such a thing to happen and then the industry went hog wild with subprime loans to satisfy their greed for quick profits. Of course now that it's blown up in their faces they, and the politicians that supported them, are blaming the CRA to justify their actions. Please note that the FDIC recommended against the practice calling it, "predatory lending", as outlined in the inter-agency
Expanded Examination Guidance for Subprime Lending Programs (I think the original document was issued in 2001).
Here's my question...if ARMs, or subprime lending programs, were only meant to meet the CRA's requirements to satisfy the "libs" in Congress...why didn't the banks stop selling them once the CRA's requirements were met? Why did they continue to sell these things like they were going out of style?
Just a few honest questions.
God bless.
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