Bush speech on home ownership: flashback

[Ozzie]

Oversight for Fannie and Freddie falls on OFHEO headed by Bush appointee James Lockhart. His backgound includes heading a risk management software firm that sold its products to banks, insurance companies, S&L’s, etc. You know, all the folks that are now needing to get bailed out. He also worked in the oil business. One big, happy family that W put together.

When you hear the phrase “deer in the headlights” you only need to watch a replay of Bush last night to understand its meaning.

[Anonymous]

“But undoing this would have been political suicide at that point.”

Bush didn’t just “not undo” CRA he *expanded.* Nothing in CRA ever told low-income would-be homeowners they could have “as nice a home as anybody else,” and nothing in CRA ever pressed lenders to use creative financing to lend people many times more than what their actual incomes qualified them to borrow.

And this entire discussion overlooks the fact that CRA had no real impact on loans to homebuyers in the affluent areas that saw the greatest rises during the bubble and are now seeing the greatest drops.

[Anonymous]

“But undoing this would have been political suicide at that point.”

Bush didn’t just “not undo” CRA he *expanded.* Nothing in CRA ever told low-income would-be homeowners they could have “as nice a home as anybody else,” and nothing in CRA ever pressed lenders to use creative financing to lend people many times more than what their actual incomes qualified them to borrow.

And this entire discussion overlooks the fact that CRA had no real impact on loans to homebuyers in the affluent areas that saw the greatest rises during the bubble and are now seeing the greatest drops.

[Anonymous]

“But undoing this would have been political suicide at that point.”

Bush didn’t just “not undo” CRA he *expanded.* Nothing in CRA ever told low-income would-be homeowners they could have “as nice a home as anybody else,” and nothing in CRA ever pressed lenders to use creative financing to lend people many times more than what their actual incomes qualified them to borrow.

And this entire discussion overlooks the fact that CRA had no real impact on loans to homebuyers in the affluent areas that saw the greatest rises during the bubble and are now seeing the greatest drops.

[Anonymous]

“But undoing this would have been political suicide at that point.”

Bush didn’t just “not undo” CRA he *expanded.* Nothing in CRA ever told low-income would-be homeowners they could have “as nice a home as anybody else,” and nothing in CRA ever pressed lenders to use creative financing to lend people many times more than what their actual incomes qualified them to borrow.

And this entire discussion overlooks the fact that CRA had no real impact on loans to homebuyers in the affluent areas that saw the greatest rises during the bubble and are now seeing the greatest drops.

[Anonymous]

“But undoing this would have been political suicide at that point.”

Bush didn’t just “not undo” CRA he *expanded.* Nothing in CRA ever told low-income would-be homeowners they could have “as nice a home as anybody else,” and nothing in CRA ever pressed lenders to use creative financing to lend people many times more than what their actual incomes qualified them to borrow.

And this entire discussion overlooks the fact that CRA had no real impact on loans to homebuyers in the affluent areas that saw the greatest rises during the bubble and are now seeing the greatest drops.

[DWCAP]

[quote=genek1953]
And this entire discussion overlooks the fact that CRA had no real impact on loans to homebuyers in the affluent areas that saw the greatest rises during the bubble and are now seeing the greatest drops. [/quote]

I thought most of Rich’s charts showed that the greatest gains in % increase were in the low and middle income groups. Ironically those same groups are responsible for the majority of the decline from peak to date.

[DWCAP]

[quote=genek1953]
And this entire discussion overlooks the fact that CRA had no real impact on loans to homebuyers in the affluent areas that saw the greatest rises during the bubble and are now seeing the greatest drops. [/quote]

I thought most of Rich’s charts showed that the greatest gains in % increase were in the low and middle income groups. Ironically those same groups are responsible for the majority of the decline from peak to date.

[DWCAP]

[quote=genek1953]
And this entire discussion overlooks the fact that CRA had no real impact on loans to homebuyers in the affluent areas that saw the greatest rises during the bubble and are now seeing the greatest drops. [/quote]

I thought most of Rich’s charts showed that the greatest gains in % increase were in the low and middle income groups. Ironically those same groups are responsible for the majority of the decline from peak to date.

[DWCAP]

[quote=genek1953]
And this entire discussion overlooks the fact that CRA had no real impact on loans to homebuyers in the affluent areas that saw the greatest rises during the bubble and are now seeing the greatest drops. [/quote]

I thought most of Rich’s charts showed that the greatest gains in % increase were in the low and middle income groups. Ironically those same groups are responsible for the majority of the decline from peak to date.

[DWCAP]

[quote=genek1953]
And this entire discussion overlooks the fact that CRA had no real impact on loans to homebuyers in the affluent areas that saw the greatest rises during the bubble and are now seeing the greatest drops. [/quote]

I thought most of Rich’s charts showed that the greatest gains in % increase were in the low and middle income groups. Ironically those same groups are responsible for the majority of the decline from peak to date.

[NotCranky]

DWCAP,
The situation is very bad in the 600k to 1M range too.The fudging on loans was profilgate throughout all housing values. Some of these homes, though by no means all, were purchased with higher down payments but still used the liar loan method of financing.There has been some equity to burn through.
We have already seen many realtors who were in nicer areas go up in smoke with their purchases. When other professions or investor types, face loss of income that most Realtors have already faced we will see more distress. Alternately maybe we will see less failures with the only difference being that people upside down in this range can hold out long enough to be recipients for “rescues” and any inflation scenarios, whereas the poorer have already succumbed. Some of them may be using up their inheritances, before their parents pass,to survive, which is an option many people in areas like Encanto, which imploded, don’t have.

It will be interesting to see how this unfolds.

[NotCranky]

DWCAP,
The situation is very bad in the 600k to 1M range too.The fudging on loans was profilgate throughout all housing values. Some of these homes, though by no means all, were purchased with higher down payments but still used the liar loan method of financing.There has been some equity to burn through.
We have already seen many realtors who were in nicer areas go up in smoke with their purchases. When other professions or investor types, face loss of income that most Realtors have already faced we will see more distress. Alternately maybe we will see less failures with the only difference being that people upside down in this range can hold out long enough to be recipients for “rescues” and any inflation scenarios, whereas the poorer have already succumbed. Some of them may be using up their inheritances, before their parents pass,to survive, which is an option many people in areas like Encanto, which imploded, don’t have.

It will be interesting to see how this unfolds.

[NotCranky]

DWCAP,
The situation is very bad in the 600k to 1M range too.The fudging on loans was profilgate throughout all housing values. Some of these homes, though by no means all, were purchased with higher down payments but still used the liar loan method of financing.There has been some equity to burn through.
We have already seen many realtors who were in nicer areas go up in smoke with their purchases. When other professions or investor types, face loss of income that most Realtors have already faced we will see more distress. Alternately maybe we will see less failures with the only difference being that people upside down in this range can hold out long enough to be recipients for “rescues” and any inflation scenarios, whereas the poorer have already succumbed. Some of them may be using up their inheritances, before their parents pass,to survive, which is an option many people in areas like Encanto, which imploded, don’t have.

It will be interesting to see how this unfolds.

[NotCranky]

DWCAP,
The situation is very bad in the 600k to 1M range too.The fudging on loans was profilgate throughout all housing values. Some of these homes, though by no means all, were purchased with higher down payments but still used the liar loan method of financing.There has been some equity to burn through.
We have already seen many realtors who were in nicer areas go up in smoke with their purchases. When other professions or investor types, face loss of income that most Realtors have already faced we will see more distress. Alternately maybe we will see less failures with the only difference being that people upside down in this range can hold out long enough to be recipients for “rescues” and any inflation scenarios, whereas the poorer have already succumbed. Some of them may be using up their inheritances, before their parents pass,to survive, which is an option many people in areas like Encanto, which imploded, don’t have.

It will be interesting to see how this unfolds.

[Author]

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