Do you think there could be a second Great Depression?

[Chowderhouse]

But don't sue a bank for giving out loans to low income people.

Could a lawsuit like this discourage other banks from giving out loans to low income people in the future?

 

[V.C. Brunswick]

Hmmmm...The bank does what the Federal Regulators forced them to do and now they are being sued by the government. Hmmmm....

I believe Charlie Yankee Alpha is the operative term.

 

[jamespowers]

Could a lawsuit like this discourage other banks from giving out loans to low income people in the future?

That is what I am thinking anyway. Way to go government.

 

[jamespowers]

I believe Charlie Yankee Alpha is the operative term.

And the two main players are out of government now. Hmmmmm.....

 

[sheeplady]

Could a lawsuit like this discourage other banks from giving out loans to low income people in the future?

Well, I don't know. If money is to be made (and there was money made off of Frannie and Freddie loans) I will doubt it. But the key was that Frannie and Freddie loans were government backed and encouraged by the government. Previously, banks couldn't give out too many loans to low income individuals because of a combination of government requirements and internal requirements. But one of the biggest problems standing in the way of low income individuals is that banks have consistently become mega-corporate banks where people purely are numbers, which stands in the way of low income individuals who don't look that good on paper but will pay the bank back- but only a banker with a personal relationship could know this.

I do think it will take government intervention to get low income loans going again, but the laws with this should be carefully written.

Now the whole slew of other loans (opened up by the loopholes in sub-prime mortgage law) that banks took advantage of (to their own profit and then semi-demise) I have absolutely no sympathy for, and these are the loans that caused the crisis, not really the Fanny and Freddie loans. Fanny and Freddie loans were a drop in the bucket. This crisis wouldn't have been nearly as bad if we were just looking at Fannie and Freddie loans.

 

[V.C. Brunswick]

Yeah, like there is tons of incentive to loan low income people money now. What will it be like if the government starts suing for doing it?!:eusa_doh: Can the government sue itself for starting this in the first place?

Government is also famous for its ability to turn failure into a demand for even more tax dollars.

 

[jamespowers]

Government is also famous for its ability to turn failure into a demand for even more tax dollars.

Government at all levels turns ANYTHING into a demand for more tax dollars---failure or success.:eusa_doh:

 

[John in Covina]

Well, I don't know. If money is to be made (and there was money made off of Frannie and Freddie loans) I will doubt it. But the key was that Frannie and Freddie loans were government backed and encouraged by the government. Previously, banks couldn't give out too many loans to low income individuals because of a combination of government requirements and internal requirements. But one of the biggest problems standing in the way of low income individuals is that banks have consistently become mega-corporate banks where people purely are numbers, which stands in the way of low income individuals who don't look that good on paper but will pay the bank back- but only a banker with a personal relationship could know this.

I do think it will take government intervention to get low income loans going again, but the laws with this should be carefully written.

Now the whole slew of other loans (opened up by the loopholes in sub-prime mortgage law) that banks took advantage of (to their own profit and then semi-demise) I have absolutely no sympathy for, and these are the loans that caused the crisis, not really the Fanny and Freddie loans. Fanny and Freddie loans were a drop in the bucket. This crisis wouldn't have been nearly as bad if we were just looking at Fannie and Freddie loans.

The problem was for many that they bought too much house and had loans they could not pay for on their current income.
Many banks simply said we can refinance you to get the payments down but when the time came the buyer could not refi.

I don't feel bad for the banks because they are blood suckers to begin with and will figure out how to charge you to do anything or charge you to do nothing. However, signing a contract you don't undestand is no excuse.

They tossed the morgages around between companies like the game hot potato and everyone made money when the morgage changed hands...


2-3 years before the collapse one side said we need some reform it's gonna collapse and Charly Rangle said - you don't want poor people to have homes.

Charley It sure did a lot of good to have ALL those bankruptcies and foreclosures. And

 

[John in Covina]

If the government was in charge of the Sahara desert there'd be a sand shortage.

 

[sheeplady]

The problem was for many that they bought too much house and had loans they could not pay for on their current income.
Many banks simply said we can refinance you to get the payments down but when the time came the buyer could not refi.

I don't feel bad for the banks because they are blood suckers to begin with and will figure out how to charge you to do anything or charge you to do nothing. However, signing a contract you don't undestand is no excuse.

They tossed the morgages around between companies like the game hot potato and everyone made money when the morgage changed hands...


2-3 years before the collapse one side said we need some reform it's gonna collapse and Charly Rangle said - you don't want poor people to have homes.

Charley It sure did a lot of good to have ALL those bankruptcies and foreclosures. And

I think viewing all banks as evil is a failure of our society which wants to take everything in black and white. Not all banks participated in the sub-prime mortgage market, particularly smaller hometown based banks. The financial crisis had little to do with poor people owning homes- and more to do with a house you can't afford. If a person makes a million dollars a year but buys a home they can't pay off, it's a bad loan. And one can imagine that the sub-prime loans that middle and upper class people got were much more money in a single shot than 5 or 10 low income loans. Fannie and Freddy was literally a drop in the bucket. If just low-income people were foreclosed on, this would be a much different situation.

A sub-prime loan is a sub-prime loan is a sub-prime loan. This had so little to do with low income people getting loans and so much more to do with the fact that plenty of people, regardless of class were greedy and got loans they couldn't afford. Trying to hoist the blame on low income loans (which, by the way, included people who were making $40,000 a year- middle class where I live and a darn good wage) is just trying to misplace the blame on somebody else rather than taking a hard look at how our society thinks and operates.

 

[V.C. Brunswick]

Government at all levels turns ANYTHING into a demand for more tax dollars---failure or success.:eusa_doh:

Politicians and bureaucrats have more of a vested interest in failure than success because accomplishing what they set out to do only makes it harder to justify an increase in their budget (or even maintaining it at current levels) for the next fiscal year because now that "the battle has been won," their program or pet project has less priority. Whereas failure readily provides the rationalization that the failure was the result of not spending enough money.

 

[jamespowers]

Politicians and bureaucrats have more of a vested interest in failure than success because accomplishing what they set out to do only makes it harder to justify an increase in their budget (or even maintaining it at current levels) for the next fiscal year because now that "the battle has been won," their program or pet project has less priority. Whereas failure readily provides the rationalization that the failure was the result of not spending enough money.

Talk about a vicious circle.:eusa_doh:

 

[John in Covina]

Politicians and bureaucrats have more of a vested interest in failure than success because accomplishing what they set out to do only makes it harder to justify an increase in their budget (or even maintaining it at current levels) for the next fiscal year because now that "the battle has been won," their program or pet project has less priority. Whereas failure readily provides the rationalization that the failure was the result of not spending enough money.

There are very few programs that end at all. It always needs to be said that the government always spends somebody else's money.

 

[John in Covina]

Could a lawsuit like this discourage other banks from giving out loans to low income people in the future?

Probably. A lot of banks are shy of giving out loans to businesses too.

 

[Flicka]

I would personally define fiscal matters and government spending as politics. Aren't we supposed to stay away from that?

 

[John in Covina]

I would personally define fiscal matters and government spending as politics. Aren't we supposed to stay away from that?

How can one dicuss as to the posibility of 2nd depression with out discussing fiscal matters and government spending both are fundimentally tied to the question.

 

[V.C. Brunswick]

Now if the topic of what tax monies is being spent on was under discussion then I would agree that we're drifting into the realm of verboten politics.

 

[Flicka]

How can one dicuss as to the posibility of 2nd depression with out discussing fiscal matters and government spending both are fundimentally tied to the question.

One possible answer to that might be that if that is the case, then we shouldn't discuss the possibility of a second depression.

 

[jamespowers]

There are very few programs that end at all. It always needs to be said that the government always spends somebody else's money.

Someone once said that the nearest thing to immortality is a government bureau.

 

[Gregg Axley]

Someone once said that the nearest thing to immortality is a government bureau.

Oh great, I just spit my gov't issued coffee and donuts everywhere.
Banks not giving out money or making wreckless loans is bad business, not politics.
Which is what caused the crash and led to the depression, isn't it?