Is BO the April Fool?

H

Horn6721

Hook'em
if this was not a WaPo link most sane people would think again that it was from the Onion
"The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.
Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default."The Link



brickwall.gif
 
Wow! History repeats itself, but the really stupid stuff is usually on a 20-25 year cycle.
 
I know all of us wish everyone who wants to could be buying a home but that is not possible. and to do this again is insane.
For all those who want a house I wish the gov't would help them learn the steps and responsibilites they must take on their own first. No one is " entitled" to own a home

It is impossible to think this admin would even think of doing the exact same thing that contributed so heavily to our slide down .
If Fool isn't the roght word what is?
 
Rv I direct you to the first past of the first sentence in the link
""The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit"

Are you actually saying giving out risky loans did not as I posted contribute to the housing problem?

As usual you use a strawman , I did NOT say or even suggest this new horrible policy is to grant everyone a home.

It is if WaPo is quoting the Admin correctly a horrid step back to policies that contributed to severe problems.
If that lower credit score was such a good measure then I guess all those foreclosures didn't really happen?

rv if you re so ok with lowering credit requirements then will you sign up to have more and more of YOUR taxes taken to pay off any of these new mortgages given to people with " weaker credit scores"?
from link
"If borrowers with FHA loans default on their payments, taxpayers are on the line — a guarantee that should provide confidence to banks to lend.
so will you step up?

or are you just contrary to be contrary?
 
I think RV makes a point. There are different risk levels among suboptimal credit. AAA bonds and BBB bonds are investment grade bonds. Comparing mortgages to bonds, it looks like only borrowers AA and above are getting loans. Lots of room to loosen credit before issuing "junk" bonds. Nobody's asking anybody to resurrect "liar loans" and the like.
 
I say again it would be nice if everyone who wants to buy a house could buy a house
but it is not feasible for everyone.
If you want to think that is me saying BO wants everyone who wants to buy a house should get granted a loan
fine, Everyone should NOT be granted a house loan simply because they want one.

as to you thinking that, according to the bolded quote you posted
But they declined 90 percent for people with scores between 680 and 620 — historically a respectable range for a credit score."

Hmm might that score range that was ' historically acceptable be historically part of the problem?
You say they have been " proven reliable in the past."
have they?
isn't one's credit score based on one's reliability? Or do you think a score of 620 is pulled out of thin air?

let's not be stupid and give out loans to people with weaker credit, loans that we end up paying for.
Let these people who want loans take RESPONSIBILITY and improve their reliability at paying back money they owe. ( isn't that what a credit scores scores?)


croc
The difference between what you mention and what the BO admin is calling for is the person/ institution buying the riskier instrument has made the choice and is willing to take the risk


where is the choice for the taxpayer?
 
Government should get that filthy hands out of banks' business. This is how we got into problems in the first place.

I don't even care if denying loans to people with credit scores of 680-620 is over reach. Quit telling people how to run business!! You don't know better and you aren't my Mama!
 
rv
No there is nothing obtuse about not wanting to put the taxpayers on the hook AGAIN by doing something that failed in the past , the recent past

Rv
friendly tip. Look to Einstein's definition of insanity.
 
Just to be clear, Obama is not asking to do the same thing. If you lose it in your car and almost lose your life doing 120 on a rain slick road, does that mean you will never again drive at normal highway speeds? Obama's just asking the banks to pick it up and drive 60 again when the traffic conditions are right.
 
Some people never learn, that anybody would try to defend this is beyond sane comprehension.

The same people that were bashing banks and Wall Street are now telling them to run into the same brick wall again........I wonder if they know how stupid they look?
 
RV, the banks were doing what they were doing pre2008 because the government had been intervening. Yes banks made bad decisions, but it was due the climate produced by government. If you don't remember that, I can't help you.
 
Will you answer my question from above about "respectable" credit rating and loan eligibility? It really doesn't seem like such a difficult question.
 
rv
Why would anyone think a low credit score that used to be 'historically" acceptable during the times that created part of our problem should be used again?

What kind of payment behavior do you think lowers one's credit score?
 
I don't care what the credit scores were historically. Banks are gun shy as they should be. Time not lectures from daddy will give them the confidence they need to grant loans to those who can reasonably pay them off.
 
Why are you both ignoring what is presented as historic evidence that this lending policy is not tied to the crash? These borrowers have performed well. The crash was created by loans to borrowers who clearly were unlikely to pay back their loans. These are not the same class of borrowers according to the link you try to use to make your case.

You ignore this evidence and insist on sticking to your original premise that this is a policy exactly like that which led to the crash. Provide evidence that it is the same thing because nothing in the original link supports your speculation.
 
The problem with the crash was not just low credit scores, it was across the entire spectrum because regardless of what your score was you were getting put into homes that you had no business buying. IT INCLUDED PEOPLE WITH ALL CREDIT RATINGS, I know a half a dozen idiots that had perfect credit and they bought off more than they could chew. The government allowed the Banks to do this and they are doing it again, what don't you understand?
 
Why do you insist on ignoring the fact that this group of borrowers has historically performed well.

You seem to have set a standard that suggests since some borrowers of all credit ratings have failed to repay their loans, no loans should be insured.

A last time, why should borrowers who have proven in the past to be good risks be denied loans? There's no evidence that this class of borrowers caused the crash.

Why can't you allow yourself to grasp this simple notion or find some evidence to refute it? Your position can hardly even be called an argument. To make it so, try this:

Find evidence that the borrowers in question have historically been bad risks resulting in enough defaults to justify denying the loans.

If they pay back their loans they build personal wealth and banks make money on the loans. Why is that bad?

Or choose to be obtuse. It's your call.
 
rv?
I think you are misreading the link you keep citing as saying low credit score people paid on their loans.
The link ONLYmentions the fact that historically credit scores of 620 etc were accepted
Nothing in that link says people with low credit scores used for loans paid on their loans.

edit to add
YES loans made to people with lower credit scores were PART of the crisis.
NO one on here as said they were the entire problem but to try to deny they defaulted at a hugher rate than people with good credit is just silly.

I do NOT want my taxes to go up to pay off shaky loans made to people who have demonstrated they can't or won't pay their other bills on time or at all.


Do you understand what lowers one's credit scores.
 
Sure, I'm having a big problem understanding all of this evidently because I read the entire article rather than focusing on a single sentence that I could bend to fit a political agenda.

I'm just stupid that way.
 
rv
I have never and will never call you stupid and I hope you don't think I have/

I am saying people with low credit scores are usually poor credit risks
and I am saying people with low credit scores that were given loans in the early to mid 2000s defaulted on those loans at a higher rate and WERE part of the housing crisis.

rv
please be so kind as to point out in the link I provided in op where it says those people with low credit scores 620-680 good borrowers and paid on their loans.
 
I believe in the last 10 years the scale was moved up about 90 or 100 points. so the 800+ of today was the 700+ of 10 or so years ago. So the 620 of yesterday is actually a much higher score today. 620 to 640 on the old scale was not A rated or probably more like B- types. Today 620-640 are certainly not even B anything borrowers.

Stats used with the word "historical" should be apples to apples. Ratios and the underwriting of the pre-Clinton era should be the standard.
 
rv You asked "Find evidence that the borrowers in question have historically been bad risks resulting in enough defaults to justify denying the loans. "First of all do you understand they have a lower credit rating because they have proven to be poor risks based on their credit history?
do you accept that? They don't have a rating in the low 600s because they are GOOD credit risks

BUT here from the FDIC report on what caused the housing crisis
page 6,
During 2006, 4.9% of current home owners (2.45 million) had
subprime adjustable rate mortgages. For this group, 10.13% were classified as delinquent21; this
translates to a quarter of a million home owners. At the end of 2006, the delinquency rate for
prime fixed rate mortgages was 2.27% and 10.09% for subprime.22
There are four reasons why delinquencies on these loans rose significantly after mid-
2005. First, subprime borrowers are typically not very creditworthy, often highly levered with
high debt-to-income ratios, and the mortgages extended to them have relatively large loan-tovalue
ratios."The Link

so the delinquent rate in 2006 for good credit borrowers was 2.27% and for subprime ) the 600's people) was 10.09%

I'd say that was evidence enough. I did not look for other years but there would be no reason to think it would be vastly different

rv You may be ok paying off some 620 credit person's mortgage through higher taxes. I am not
 
At least you tried to find something. I don't see the part that addresses the specific group of borrowers being addressed here.

I'm done.
 
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