Mon
Dec 1 2008
02:54 pm
20/20 hindsight on mortgage meltdown
By: R. Neal

The AP has reviewed regulatory documents and concluded that the warning signs were there, regulations were proposed, but banks pressured the Bush administration not to act:

Many of the banks that fought to undermine the proposals by some regulators are now either out of business or accepting billions in federal aid to recover from a mortgage crisis they insisted would never come. Many executives remain in high-paying jobs, even after their assurances were proved false.

And the Bush going out of business sale continues...

(P.S. There's no mention of Congress and their dereliction of duty.)

Topics:
Lisa Starbuck's picture

Mortgage Meltdown

Submitted by Lisa Starbuck on Mon, 2008/12/01 - 3:18pm.

Here's a case study from the St. Petersburg Times - very readable - on the housing collapse.

(link...)

Joe328's picture

Excellent story you linked

Submitted by Joe328 on Mon, 2008/12/01 - 5:38pm.

Excellent story you linked to. It's seems to be operating the same in this area. My father had a tenant with bad credit move out and buy a home. They paid no money down and left the closing with a $1,700 dollar check. I've been told one of the developments in Gatlinburg has homes so overinflated that some have left the closing with $35,000 dollars and never put a dime into the home.

The loan officer, real estate agent, surveyor, appraiser, and maybe a few more make their bonus at the closing. Some of the fees added to the closing are well above average cost for this area. The money being loaned belongs to the stockholder and investors so they could care less if the loan goes bad.

bizgrrl's picture

Geez, what can be said?

Submitted by bizgrrl on Mon, 2008/12/01 - 3:59pm.

Geez, what can be said? Shouldn't someone, some entity besides the American taxpayer suffer for their hubris?

  • Washington Mutual (failed bank): "These mortgages have been considered more safe and sound for portfolio lenders than many fixed rate mortgages."
  • Lehman Brothers (bankrupt): "An open market will mean that different institutions will develop different methodologies for achieving this goal."
  • Countrywide (bought by BOA): "The proposal "appears excessive and will inhibit future innovation in the marketplace."
  • IndyMac (failed bank): "...criticized regulators for not recognizing the track record of interest-only loans and option ARMs, which accounted for 70 percent of IndyMac's 2005 mortgage portfolio."
  • Downey Savings (failed bank): "To conclude that 'nontraditional' equates to higher risk does not appropriately balance risk and compensating factors of these products."

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