Obama administration pushing for more risky subprime loans. Not enough poor folks are getting loan

This is brilliant. We are still reeling from the results government's policy to force banks to loan money to poor people, under the notion of "home ownership". Since the 70s, the government has forced banks to make loans in neighborhoods heavily populated by poor people under the threat of being redlined, essentially being put out of business. The logic that poor people were not really in a position to assume large debt was countered by the supposed social good of having more folks in houses. That worked out well.

"In the wake of the subprime implosion, the Obama Administration has stepped up its scrutiny of disadvantaged neighborhoods' credit access"

"Community activists in St. Louis became concerned a couple of years ago that local banks weren't offering credit to the city's poor and African American residents. So they formed a group called the St. Louis Equal Housing and Community Reinvestment Alliance and began writing complaint letters to federal regulators. "

"The agencies have refocused on redlining because, in the wake of the subprime explosion and sudden implosion, they are looking at these disadvantaged neighborhoods and not seeing any credit access," says Jo Ann Barefoot, co-chair at Treliant Risk Advisors in Washington, D.C., which consults with banks on regulatory issues.

www.businessweek.com...

So poor folks can't get access to credit. Nobody can get access to credit today and one of the biggest contributors to the housing implosion was the inflation in prices caused by giving people access to credit who had no business getting credit in the first place. Banks are forced to engineer loans to comply with balance sheet regulations, hence the 0 interest and subprime loans.

I would have thought we had learned this lesson with $billions spent to rescue banks, hundreds of banks failed, Freddie and Fanny essentially bankrupt and the entire stream of credit dry, but I guess not.

What is the priority here, fixing the economy so that more jobs will be created to improve the chance that more folks will actually be credit worthy, or simply playing this shell game of feel good finances that makes folks in the government think they are doing something worthy.

This is beyond irresponsible

Makes you wonder what is going on behind the scenes now?!?

I doubt any one of these credit agencies are doing this to comply or better yet, to deliberately take a lose.

They will not be happy until we are all slaves to loans, tuition, and medical costs. There is nothing good about banking for a profit. Nothing.

If you really want to help the people, you would have a state-owned "reserve" you could borrow from with zero interest. Why we ever thought that having a middle-man (banks) between the reserve and the end-user is beyond me. Banking is not a legitimate business. I had to leave the industry because I couldn't sleep at night. I wish the rest of the world wouldn't view it as normal. It's not normal. At all.

reply to post by AnteBellum


Part of this is the acceleration of the "too big to fail" trend. The large banks, JP Morgan/Chase, BofA, Wells Fargo have enough cash on hand to handle a significant number of blown up loans. The smaller community and regional banks can not. The banks are all subject to the same redlining regulations, so forcing the smaller banks to engage in risky lending greatly increases the probability that they will go under. They will actually be forced under due to bank regulators coming in and looking at their balance sheets and recognizing that they have a bunch of bad loans. The feds take over the bank and what happens next? The big boy banks purchase up the deposits and good loans for pennys on the dollar and the bad loans get written off by the feds.

Thats whats going on behind the scenes, with the bankers manipulating the feds to think what they are doing is actually implementing policy that supports the tired notion of social justice.

It's getting to the point where I just cannot believe they are this stupid.

There has to be some plan they're working off of because this is really no different than diving head first into a puddle or surfing on top of a car or picking up a gun, looking down the barrel and asking "is it loaded?" while pulling the trigger.

They just cant be this stupid.

It seems the entire US economy is run from loans, spending, consuming. Too bad there aren't jobs to keep up that type of lifestyle. It isn't sustainable.

Canada's government is still warning us to save, save, and save more. They're warning us about the pitfalls of too many loans out. And they're telling us that we're out of our recession, but they're worried about the US going back into one.

"Community activists in St. Louis became concerned a couple of years ago that local banks weren't offering credit to the city's poor and African American residents.

If these people are poor, how are they expected to pay the loans back? How are they expected to make minimum monthly payments, when they're poor? Probably struggling to eat, and cloth themselves.

There's a reason that there's regulations, it's so people don't take out credit they cannot afford, or get loans when they're not working.

People need to learn how to save for things they want, like they used to.
If you always get what you want, you won't be able to afford what you need.
Sometimes a person will NEED a loan to get by, like when a country has no medical for it's people, and someone has to be hospitalized. That's what loans should be for, when you NEED something, like when an emergency happens, either to your person, family, or the roof on your house falls in, since it is very hard, if not impossible for many people to have a savings account these days.

This is beyond irresponsible

I can't help thinking they're doing this on purpose, to bring the country down, they can't really be that stupid, can they?

Originally posted by dolphinfan
reply to post by AnteBellum

 

Part of this is the acceleration of the "too big to fail" trend. The large banks, JP Morgan/Chase, BofA, Wells Fargo have enough cash on hand to handle a significant number of blown up loans. The smaller community and regional banks can not. The banks are all subject to the same redlining regulations, so forcing the smaller banks to engage in risky lending greatly increases the probability that they will go under. They will actually be forced under due to bank regulators coming in and looking at their balance sheets and recognizing that they have a bunch of bad loans. The feds take over the bank and what happens next? The big boy banks purchase up the deposits and good loans for pennys on the dollar and the bad loans get written off by the feds.

Thats whats going on behind the scenes, with the bankers manipulating the feds to think what they are doing is actually implementing policy that supports the tired notion of social justice.

The banks have a loss, and then the government gives them billions in bailouts, taxes must eventually go up for the people with all these bailouts, making life less affordable. Then something happens, the person needs a loan, they can't afford it, they default on it, the bank takes away all their stuff, calls it a loss on the books, and then the government gives them another bailout...repeat, repeat......

Originally posted by dolphinfan
reply to post by AnteBellum

 

Part of this is the acceleration of the "too big to fail" trend. The large banks, JP Morgan/Chase, BofA, Wells Fargo have enough cash on hand to handle a significant number of blown up loans. The smaller community and regional banks can not. The banks are all subject to the same redlining regulations, so forcing the smaller banks to engage in risky lending greatly increases the probability that they will go under. They will actually be forced under due to bank regulators coming in and looking at their balance sheets and recognizing that they have a bunch of bad loans. The feds take over the bank and what happens next? The big boy banks purchase up the deposits and good loans for pennys on the dollar and the bad loans get written off by the feds.

Thats whats going on behind the scenes, with the bankers manipulating the feds to think what they are doing is actually implementing policy that supports the tired notion of social justice.

Thanks for explaining Dolphinfan. That makes total sense to me. Not that it is a good idea though. S&F

reply to post by thisguyrighthere


Not stupid at all. Get political mileage out of pushing for the loans under the notion of fighting for the little guy. The folks get into the loans and then into the house they can not afford and housing prices rebound, the economy begins to turn around a bit as it always does when there is a boost in the housing market and when credit eases. Folks feel good and get out the vote in 2012. At some point after the reelection, the whole business implodes again, but at that point, who cares? Can only run for two terms.

Any vocal opposition of this will be described as anti-poor, pro-bank, pro-rich and of course, racist in the MSM.

Naked, self serving, irresponsible, pandering politics. Not stupid at all once you think about what the motivations are and they are all about reelection and the timing associated with it.

Originally posted by thisguyrighthere


They just cant be this stupid.

unless............it's all about November 2012.

say it with me....4 MORE YEARS, 4 MORE YEARS!

those votes have to come from somewhere, and asking the average voter if the last 4 have been better than the ones before that probably won't cut it at the polls.

reply to post by dolphinfan


Ugh.

Short-sighted and selfish idiocy.

Right back to looking down the barrel and asking "is it loaded?"

geez the only color banks care about is that color green as in cash.

its got nothing to do with race its all about who can pay and who cant.

being forced to take risky loans is the biggest stupidity you would think that learned from the last 8 years and the housing bubble and over inflating homes.

but no what did they do they bailed out and injected money to keep that over inflated prices keeping the status quote.

real estate rises and falls just like everything but forcing banks to make more risky loans its stupidity to infinity.

they will never learn because government knows best and you dont know jack.

next time people cry out free market just laugh in their face and tell them they dont know what the hell they are talking about.

Yet again another sheep who will use any half arsed excuse to attack Obama as this is not The WH, The US Federal Gov't plan but one drafted by TPTB led by the Banksters in order to further bankrupt and destroy the USA.

Quit being manipulated and stop using every lame arsed excuse to attack Obama.