Comments on: If It’s Regulated, It’s Vindicated

By: Cynical In CA

Cynical In CA — Thu, 09 Oct 2008 15:55:43 +0000

“Frustrating how a guy who can wax so eloquently on personal freedom can be so clueless about economic freedom.”

There is no personal freedom without economic freedom.

Frank’s eloquent waxings on personal freedom are meaningless, worse, are lies meant to disguise his real motives.

Frank belongs to a cowardly criminal gang whose business is putting guns to people’s heads and taking the fruit of their labor, forcing them into slavery, all the while mouthing platitudes and bromides to deceive the gullible masses.

By: Lee

Lee — Thu, 09 Oct 2008 13:20:00 +0000

I’ve not gotten around to doing the research, but apparently we have had the same MBS collapse happen before (multiple times). Some earlier collapses occured prior to the existence of the CRA.

So while the CRA probably did contribute to this collapse, it was not the sole reason for the collapse.

The last I checked (few weeks ago) Fannie and Freddie’s foreclosure rate was actually lower than the industry average.

By: David Nieporent

David Nieporent — Thu, 09 Oct 2008 04:07:29 +0000

A January Study (pdf) by the Trager-Hinckley law firm found

…lots of things that don’t really address the question directly. I read that study a few days ago, because it was being touted by some liberals as evidence that the CRA didn’t play a role. First, it looked at all of one year, 2006. Second, if one was interested in seeing whether CRA banks are a problem, shouldn’t one look at actual default rates on their loans, rather than the ‘kinds’ of loans these banks made?

It would be like saying, “Ford makes a lot of SUVs. SUVs are safe. Therefore, Ford vehicles didn’t harm many people.” But if one wants to see whether Ford vehicles harmed many people, one ought to look at whether Ford vehicles harmed many people, not just assume that since the “kind” of vehicle Ford makes is generally safe, Ford must be safe.

By: whiskey

whiskey — Thu, 09 Oct 2008 03:11:12 +0000

Rep. Barney Frank has taken a lot of heat for his implication that people who say Frannie and Freddie are partially to blame for the mortgage crisis are playing the race card. And deservedly so.

It's deserved that he's taking heat, or it's deserved that he is accusing people focusing on Fannie and Freddie of racism? Because there's stuff like this. While Fannie and Freddie aren't blameless, the idea that it's all their fault is fucking, fucking dumb.

By: ice9

ice9 — Thu, 09 Oct 2008 00:05:41 +0000

I agree. Frank is essentially correct–the default rate of minority and poor mortgagees under FM and FM programs is lower than the default rate of numerous other programs that served wealthy or middle-class people. the FM’s didn’t offer subprime mortgages, though they did participate in the market for them. Blaming the programs that led to lending for poorer people is an ugly dodge with racist overtones. Wealthy people trying to get wealthier are under nearly every rock in this situation.

ice

By: strech

strech — Wed, 08 Oct 2008 23:20:55 +0000

His phrasing is poor, but I think he's saying that institutions regulated under the CRA specifically had fewer foreclosure problems than non-CRA institutions. A January Study (pdf) by the Trager-Hinckley law firm found

CRA Banks were substantially less likely than other lenders to make the kinds of risky home purchase loans that helped fuel the foreclosure crisis.

and

Foreclosure rates were lower in MSAs with greater concentrations of bank branches.

I haven't examined the study closely, though, and there are a lot of regulations other than the CRA.

By: Ben

Ben — Wed, 08 Oct 2008 23:06:13 +0000

I think he was making the factual assertion (and I have no idea if it’s right or wrong) that the loans issued by regulated entities under the CRA had lower foreclosure rates than those issued by other, non-regulated entities.

In other words, his point is that the regulation did make them better lenders.