Kevin
Well-known member
There was an article in the New York Times, hardly a conservative think tank, written in 09/1999, that predicted the downfall, here is a paragraph from that article:
(In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.)
As far as just offering proof that the lowering of standards by Franklin Raines of Fannie Mae "was a contributing factor to the subprime crisis", I'll offer you the commissions own words:
(The Financial Crisis Inquiry Commission reported in 2011 that Fannie & Freddie "contributed to the crisis, but were not a primary cause." GSE mortgage securities essentially maintained their value throughout the crisis and did not contribute to the significant financial firm losses that were central to the financial crisis. The GSEs participated in the expansion of subprime and other risky mortgages, but they followed rather than led Wall Street and other lenders into subprime lending.)
Of course, the FCIC was a government created commission. So the government basically found that government policies weren't the primary cause. That is hardly newsworthy. Even still, there was a good bit of disagreement within the commission on its findings. When I was 8, I wish my mother had allowed me to create a commission to investigate her broken vase
.
Rules requiring that banks come up with more "innovative" and "flexible" ways to allow more people to qualify for mortgages that otherwise wouldn't have passed the smell test was bound to lead to the underwriting of bad mortgages. Hence my spending time here in the office pouring over clients payment activities, to see if they had made monthly installments in a timely manner, so I could put it back into a letter to the lending institution. I don't know what "proof" I could offer to satisfy yourself, I only know what conclusions I have come to from what I personally experienced .
I will grant you, that you can ask 20 different people, even experts, and get 30 different conclusions based upon their own thoughts, data, and/or political leanings, etc. I still stand by the fact that there was plenty of blame to go around wether your talking left vs right, gov't vs private, or individual vs lending institution. It's a tangled web of mess that has no easy answers.
It's time for me to leave the office and enjoy my weekend!!!
(In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.)
As far as just offering proof that the lowering of standards by Franklin Raines of Fannie Mae "was a contributing factor to the subprime crisis", I'll offer you the commissions own words:
(The Financial Crisis Inquiry Commission reported in 2011 that Fannie & Freddie "contributed to the crisis, but were not a primary cause." GSE mortgage securities essentially maintained their value throughout the crisis and did not contribute to the significant financial firm losses that were central to the financial crisis. The GSEs participated in the expansion of subprime and other risky mortgages, but they followed rather than led Wall Street and other lenders into subprime lending.)
Of course, the FCIC was a government created commission. So the government basically found that government policies weren't the primary cause. That is hardly newsworthy. Even still, there was a good bit of disagreement within the commission on its findings. When I was 8, I wish my mother had allowed me to create a commission to investigate her broken vase
. Rules requiring that banks come up with more "innovative" and "flexible" ways to allow more people to qualify for mortgages that otherwise wouldn't have passed the smell test was bound to lead to the underwriting of bad mortgages. Hence my spending time here in the office pouring over clients payment activities, to see if they had made monthly installments in a timely manner, so I could put it back into a letter to the lending institution. I don't know what "proof" I could offer to satisfy yourself, I only know what conclusions I have come to from what I personally experienced .
I will grant you, that you can ask 20 different people, even experts, and get 30 different conclusions based upon their own thoughts, data, and/or political leanings, etc. I still stand by the fact that there was plenty of blame to go around wether your talking left vs right, gov't vs private, or individual vs lending institution. It's a tangled web of mess that has no easy answers.
It's time for me to leave the office and enjoy my weekend!!!
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