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<blockquote data-quote="The Other Side" data-source="post: 908632" data-attributes="member: 17969"><p>Cool, now youre asking the right questions. I appreciate that. Lets examine some of them (Time constraints) NOT ALL the changes to the regulatory system of housing needed congressional approval. Only the de regulation process allowed the banking and mortgage industry to create the "FINANCIAL INSTRUMENTS" necessary to assist low income, and bad credit buyer. BUSH directly states that BAD CREDIT was a barrier to home ownership and HE was going to REMOVE that "BARRIER"</p><p></p><p>BUSH called for the creation of NEW FINANCIAL INSTRUMENTS (aka interest only loans) to assist in the first time home buyer process. You are correct, BUSH encouraged both FANNIE AND FREDDIE to set aside 440 billion to "COVER" the millions of homes he was proposing to be built. At a median price of 100K, that 440 billion would have been enough to cover the bet. Unfortunately, the runaway prices changed the original model and both FANNIE and FREDDIE were unable to cover the losses.</p><p></p><p>How did this happen? Easy, Builders at first used BUSH's idea of 100K homes and they sold at a pace faster than they could be built. Seeing this, the builders started raising prices on the homes in phases. The rate of sales was still outperforming building rates so they raised prices again. What wasnt considered by BUSH or his advisors but caught by Alan Greenspan in 2002 was that the original 440 billion dollars set aside for this massive housing project would soon be in the red as home prices skyrocketed.</p><p></p><p>friend and friend wasnt able to cover home loans of 1 million or more. It wasnt able to cover homes at 500K either. The original BUSH plan called for 440 billion, but as homes reached outrageous prices, it was obvious that lenders would be stuck holding the bag, so the mortgage selling process started to break down.</p><p></p><p>Only insiders knew this. When it comes to Barney Frank, when he made the statement about friend and friend, this was at the begining when the 440 billion was in the bank and it was suppose to cover any losses. Frank had no idea what was happening to pricing and trends.</p><p></p><p>At that time, everyone was making money so nobody wanted to pay attention. Only Alan Greenspan called it like it was and he was not only ignored, but replaced by BUSH.</p><p></p><p>BUSH clearly went after the low income bad credit market and says so himself.</p></blockquote><p></p>
[QUOTE="The Other Side, post: 908632, member: 17969"] Cool, now youre asking the right questions. I appreciate that. Lets examine some of them (Time constraints) NOT ALL the changes to the regulatory system of housing needed congressional approval. Only the de regulation process allowed the banking and mortgage industry to create the "FINANCIAL INSTRUMENTS" necessary to assist low income, and bad credit buyer. BUSH directly states that BAD CREDIT was a barrier to home ownership and HE was going to REMOVE that "BARRIER" BUSH called for the creation of NEW FINANCIAL INSTRUMENTS (aka interest only loans) to assist in the first time home buyer process. You are correct, BUSH encouraged both FANNIE AND FREDDIE to set aside 440 billion to "COVER" the millions of homes he was proposing to be built. At a median price of 100K, that 440 billion would have been enough to cover the bet. Unfortunately, the runaway prices changed the original model and both FANNIE and FREDDIE were unable to cover the losses. How did this happen? Easy, Builders at first used BUSH's idea of 100K homes and they sold at a pace faster than they could be built. Seeing this, the builders started raising prices on the homes in phases. The rate of sales was still outperforming building rates so they raised prices again. What wasnt considered by BUSH or his advisors but caught by Alan Greenspan in 2002 was that the original 440 billion dollars set aside for this massive housing project would soon be in the red as home prices skyrocketed. friend and friend wasnt able to cover home loans of 1 million or more. It wasnt able to cover homes at 500K either. The original BUSH plan called for 440 billion, but as homes reached outrageous prices, it was obvious that lenders would be stuck holding the bag, so the mortgage selling process started to break down. Only insiders knew this. When it comes to Barney Frank, when he made the statement about friend and friend, this was at the begining when the 440 billion was in the bank and it was suppose to cover any losses. Frank had no idea what was happening to pricing and trends. At that time, everyone was making money so nobody wanted to pay attention. Only Alan Greenspan called it like it was and he was not only ignored, but replaced by BUSH. BUSH clearly went after the low income bad credit market and says so himself. [/QUOTE]
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