Jay,
C'mon you write for the O'Malley. The paper has spent the last 20 years in lock step with the left, shoud we be surpised that you write an opinion (or forwarding one as the case maybe) stating liberals were not the cause of this problem.

Sorry Jay but you have the same creditability as Rush or Oberman. Until the Sun realizes this in will continue it's spiril to nonexistentence

Jay,
C'mon you write for the O'Malley. The paper has spent the last 20 years in lock step with the left, should we be surprised that you write an opinion (or forwarding one as the case maybe) stating liberals were not the cause of this problem.

Sorry Jay but you have the same creditability as Rush or Oberman. This creditability doesn't affect them because people pay to hear their opinions. However people pay (or did at one point) the Sun for news not opinions. Until the Sun realizes this in will continue its spiral to non-existence

I suggest that Mr. Hancock inform himself before writing things like this. You will not find a single credible economist who will deny that government policies promoting home ownership by the poor and minorities mainly fueled the subprime bubble.

"In 1995, Fannie Mae and Freddie Mac began receiving affordable housing credit for purchasing mortgage bank securities which included loans to low income borrowers. This resulted in the agencies purchasing subprime securities.[83] Subprime mortgage loan originations surged by a whopping 25 percent per year between 1994 and 2003, resulting in a nearly ten-fold increase in the volume of these loans in just nine years. [84] As of November 2007 Fannie Mae a held a total of $55.9 billion of subprime securities and $324.7 billion of Alt-A securities in their portfolios[85]. As of the 2008Q2 Freddie Mac had $190 billion in Alt-A mortgages. Together they have more than half of the $1 trillion of Alt-A mortgages.[86] The growth in the subprime mortgage market, which included B, C and D paper bought by private investors such as hedge funds, fed a housing bubble that later burst." See http://en.wikipedia.org/wiki/Subprime_mortgage_crisis#Government_policies and notes thereto.

Mr. Cardiff is right, but for the wrong reasons.

Fannie's "housing goals" actvity (charter requirement to do 55% of their nanaul busienss in mortgages serving low, moderate, and middle income families, whose incomes were various degrees below the "area median": and who lived in inner cities and "other underserevd areas") was not the cause of their red ink and later acquisition by the federal government.

That "cause" was the purchase of Alt A and "subprime" mbs originated and securitized by Wall Street.

Those Alt A loans--because they lacked details, i.e. "liar loans," were seldom employed to meet housing goals. SP and Alt A had high yields, which was their attraction.

After all of the major Democrats --who get blamed by the Right Wing--left by the end of 2004, new CEO Dan Mudd made a series of very bad business decision to acquire the subprime mbs because he was concerned about loss of market share to Wall Street. he made the same bad decisions as execs at Indy Mac, Ciountrywide, Wachovia, Merrill, Bear, etc. etc. Greed not housing goals was the rationale.

Perhaps I'm the selfconfoozled one here. Mr. Cardiff slams Mr. Hancock -- saying he should "inform himself before writing things like this." As near as I can tell, Mr. Hancock wrote three lines which boil down to: "Hey, look what I found on the internet" and offered a link to another site. Again, I'll be the first to admit I'm often selfconfoozled, but it strikes me that Mr. Cardiff's beef is with Mr. Ritholtz, whose material Mr. Hancock shared. Does that put Mr. Cardiff in the position of needing to "inform himself" about who wrote what before peeing on Mr. Hancock's leg?

On a note unrelated to Mr. Hancock, but related to Mr. Cardiff's post, when the heck did wikipedia become the be-all, end-all source of knowledge? If I read it on wikipedia, it must be true...

Jay,
Hopefully you are more intelligent than the above article would indicate. Your statement that Ritholtz demolishes the myth of the causes of the housing bubble and the impact of the CRA is no where close to the truth. While these acts in and off themselves did not independently cause the current crisis, they opened the door to the candy store. The push to expand home ownership and offer credit to unqualified borrowers stems directly from them and the political push to expand this segment. It was also a direct result of the failure of Congress to manage their oversite responsibilities. It has been extremely amusing to watch the current congressional chairmen responsible for oversight disavowing any knowledge or culpability for the current crisis. If not them then who does have oversight responsibility.

You also attack realtors and corrupt appraisers. Again an erroneous statement. As one involved in both of these functions I watched this happen. Our office sales meetings in this time frame were filled with a parade of Loan officers touting zero down options, ARMs and 80/20 options for first time buyers and other creative financing vehicles. The credit rating & capability of the client is between the individual and the financer not the realtor. You slam "corrupt appraisers" which is again interesting. When appraisers did not come up with the suggested mortgage values they were pressured to raise the value, if not they were dropped from the banks list of approved appraisers driving them out of business.

The only thing your article is correct about is that these items are not singularly responsible for the current crisis. Unfortunately they opened the door and coupled with government complicity and malfeasance of banks, they lead us to where we are now. The liberal drive for increased lending coupled with the resistence to increased regulation and essentially not congressional oversight are a major part of the problem. Laying the problem solely at the feet of the current administrating is equally ridiculous. There is more than enough blame to go around.

Is it so hard to believe that your average buyer wanted or was duped into buying a bigger and more expensive home? Builders wanted to charge more so they released them in "phases". Realtors held Dutch auctions for buyers so they got higher commissions. Banks came up with products like interest only or option payment ARM that could let people borrow more money. Investment companies could earn a higher spread on these "safe as houses" investments.

It might have worked if it weren't for a housing bubble, higher energy costs, general inflation and an economic slowdown.

This is Randian economics gone wrong and the only thing the Randians have left to blame are the remaining regulations that "hindered" economic growth.

Don't be duped again! The people that want to blame CRA, FRD and FNM want less regulation across the board, not more!