UN to open 'probe' on US housing crisis
 

Not sure how or why but...

http://www.youtube.com/watch?v=Fjl0T...layer_embedded

Why not? It's not like this is something new. Didnt UN investigate housing crisis in US after hurricane Katrina? Maybe they'll want to come back and see how it's going? Or something, I dont know, dont understand what's so special about this. :hmmm:

I wonder how much money it will cost to conduct this probe of the obvious?

I will save them alot of time and money.

The current housing crisis was caused by banks whom were 'forced' to give home loans to people whom could not pay them back.

The origin of this debacle can be traced all the way back to Roosevelt but Jimmy Carter and Bill clinton put the program on steroids.

The Bush adminstrations exacerbated the issue.

Now the Obama adminstration keeps digging and the hole doesent get any shallower.

The whole global recession originated from the US housing market. I'd say that's reason enough to take a look at the thing and the system around it.

Run Barney run....

Bull. The loan to securitize model is what pumped the system full of bad loans. Don't even bring up the long-debunked "CRA caused the crisis!" red herring. Banks weren't forced by the big bad government to make loans. And the ones they DID make under CRA were such a tiny percentage of the whole, not to mention less likely to default. No, the profit margin of making loans and turning around and selling them to Wall Street before they ever had to worry about the loan defaulting is what "forced" them to make the loans.

Besides, if it was truly a problem of just bad loans, we could have bought out every subprime loan in existence with the billions upon billions that have been thrown at the problem. But we're still feeling the after-effects despite that money going to Wall Street. That fact alone should tell you its something else.

If you want someone to blame, blame Greenspan's Fed for keeping rates too low for too long. Blame Phil Gramm for exempting derivatives from the Commodities Futures Modernization Act. Blame the overleveraging of firms like AIG, Lehman and Bear Stearns. But save me the CRA garbage.

Didn't you get the memo? Everything is supposed to be blamed on the Democrats? :har:

But thanks for that post. I also snicker at the thought of the government forcing banks to make loans. I have read the CRA and have not found anything in the wording that "forces" banks to make loans.

There is much to criticize about the CRA, but causing the economic problems we have is not one of them. The CRA may have made it easier for the banks to choose to use poor business practices, but it did not mandate any. :nope:

The question would be how many of these "bad" loans were made by institutions not regulated by CRA?

75%. Many of these loans were made by mortgage brokers not covered by the CRA:

http://www.ritholtz.com/blog/wp-cont...chartg1109.gif

Furthermore, if CRA was to blame, you would have expected to see the largest housing bubbles in big time CRA areas like Harlem, the south side of Chicago, Washington DC. This was not the case. Tony areas like Miami, Phoenix and Southern CA are where real estate skyrocketed and foreclosures have hit hardest.

And what you say is true: read the CRA law and you'll see its not about forcing banks to make loans they otherwise wouldn't - just the opposite: it's about forcing banks not to reject loans they otherwise would make. This is what I do for a living and I've given presentations to professional societies and seminars on this. I like to take the printout of the CRA law (its only 7 pages) and offer someone $20 if they can point out anywhere in it that there are quotas or hard numbers in it. So far no one has gotten my $20.

I think the reality of keeping up with the Jones was the cause. I always wonder how the Jone's got their money in the first place :hmmm:

http://misc.mortgagebrokers.ie/image.../debt_free.jpg

That's true, there was definitely a lot of that. Shows like "Flip This House" and that garbage only fed the fire. There was a ton of demand, and banks were all too willing to feed it and give money to people who had no business getting a loan. And why shouldn't they? If they knew they could make a loan on Monday and sell it to Wall Street by Friday, what the heck did they care if the borrower was going to repay it 30 years down the line?

Guilty as charged.

When The Frau and I were first looking for a house to buy, we wanted to find something in the 300-350K range but could not find anything to our liking.

Then we stumbled upon a builder and started considering a new construction for 450K. If I was smart, I should have stopped there and started looking for existing houses in the 400K range. But we got caught up in the excitement of a "new" house.

Of course the initial cost of 450K is a fantasy. about 500K later we had our new house.... too big... too expensive for what we needed (or even wanted).

Fortunately we were smart enough not to take out a loan we could not afford, but still we allowed ourselves (no one to blame but ourselves) to get suckered in to buying too much for too much.

Well sure Mookie, it was a soup pot full of things that contributed. I believe most can be attributed to living way beyond their means. Some lived off their homes with refinancing to the hilt. These individuals paid the credit cards after the refinance but ran the cards up again. Sooner or later you can not refinance your home. Just not smart living off your home like that. So, the next thing you know your mortgage is twice what it was before the refinance, you credit cards are up to the limit again because you needed that John Deere tractor and the Craftsman at a 1/3 of the price would just not do in your neighborhood. So, who gets the shaft first with no payments? The credit card folks. That only last so long before the long arm of the lawyer is sending court order for payment. Now that the law is after you for the credit cards what suffers next? The house payment. You basically got three months to figure it out before that long arm is putting your goods out on the street. The house sold at a short sale. I can only point one finger here....the consumer. The one who signed the dotted line without reading. The one who needs a trip to Disney every six months. The one that need the Hummer. Time for a lot of folks to take the responsibility of the failure of their finances.

Rubbish

While what you say is true, the consumer isn't in charge of the loan approval process. They can want want want, but at the end of the day the ones holding the purse strings are the banks who extended these ridiculous amounts of credit and loans to people without regard to traditional lending standards.