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The housing bubble in Nevada: How big a slice were ‘subprime’ loans?
Chris Morris
Monday, Oct. 13, 2008 | 2 a.m.
The death knell for the subprime loan in Nevada began to sound in 2007. These mortgages, exemplified by relaxed standards and higher interest rates that made it easier for borrowers to qualify, dropped by 70 percent. A Sun review of nearly 2 million loan applications from 2004 to 2007 also shows a considerable decrease in approved loans statewide last year, partly because fewer people were applying. By this time, home values across the valley were in free-fall and Nevada was at the forefront of an unprecedented foreclosure boom.
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Here is a good article on the Sub-prime issue including the growth of sub-prime in 2004.
http://online.wsj.com/article/SB12221294...
Here are other article that support the one above:
http://www.washingtonpost.com/wp-dyn/con...
http://www.aei.org/publications/pubID.28...
http://query.nytimes.com/gst/fullpage.ht...
http://relistr.com/real-estate/fannie-ma...
http://www.nhi.org/online/issues/125/goi...
http://www.bloomberg.com/apps/news?pid=2...
http://www.nypost.com/seven/09092008/pos...
http://biz.yahoo.com/ibd/080915/issues01...
http://www.fanniemae.com/ir/pdf/earnings...
I see Nance is still passing an opinion piece as a source of information. Those wanting a reliable source for our financial mess watch the 60 Minutes story here: http://www.youtube.com/watch?v=0Y9A0C45K...
Subprime was not a problem until 2003 when the Bush administration lacked oversight. Watch subprime explode in 2003 in the chart here http://bigpicture.typepad.com/.shared/im...
The combination of deregulation, lack of oversight, and greed caused our financial melt down. This all occurred during the republican control of government from 2001-2006.
Vote for Obama and brink back sensible reform and leadership. Vote for McCain (the self proclaimed champion of deregulation) and we will get more of the same.
An even better piece on the local bubble...includes a graph. http://npri.org/blog/the-anatomy-of-a-cr...
You can really see Nevada's housing bubble blast off.
And no, it wasn't lack of oversight Gordon, there was plenty of oversight. There was bad government regulation..lots of bad regulation that helped cause the crisis.
Greed will always be there...private or public sector.
Another sound article: http://npri.org/publications/less-is-mor...
If you want to know exactly what caused what, don't ask Vance, the neo con will never admit the Republicans are responsible for any of this mess.Of course he fails to mention McCain and his chief economic advisor Phil Gramm and their deregulation of the banking industry. Of course the neo cons don't want oversight and rules, that prevents them from stealing and plundering without consequences, or atleast have their friends do it for them.
And then when all else fails there is the ridiculous post of Nances that blaims Harry Reid for everything. Let's not look at the guy and his party who were in charge while this was going on.
Ensure More Accountability in the Subprime Mortgage Industry: Obama has been closely monitoring the subprime mortgage situation for years, and introduced comprehensive legislation over a year ago to fight mortgage fraud and protect consumers against abusive lending practices. Obama's STOP FRAUD Act provides the first federal definition of mortgage fraud, increases funding for federal and state law enforcement programs, creates new criminal penalties for mortgage professionals found guilty of fraud, and requires industry insiders to report suspicious activity.
Mandate Accurate Loan Disclosure: Obama and Biden will create a Homeowner Obligation Made Explicit (HOME) score, which will provide potential borrowers with a simplified, standardized borrower metric (similar to APR) for home mortgages. The HOME score will allow individuals to easily compare various mortgage products and understand the full cost of the loan.
Close Bankruptcy Loophole for Mortgage Companies: Obama and Biden will work to eliminate the provision that prevents bankruptcy courts from modifying an individual's mortgage payments. They believe that the subprime mortgage industry, which has engaged in dangerous and sometimes unscrupulous business practices, should not be shielded by outdated federal law.
Article on lack of oversight http://www.usatoday.com/money/economy/ho...
"A top Federal Reserve official admitted Thursday that the central bank could have done more to prevent the escalating crisis in the subprime mortgage sector, as lawmakers told the Fed to use its broad power to clamp down on abusive lending."
Committee Chairman Chris Dodd, D-Conn., said the
Fed had evidence by spring 2004 that lenders were easing standards but did not take strong action. He reiterated his desire to move legislation on predatory lending and use a variety of means to help borrowers now stuck with loans they can't repay.
"Our nation's financial regulators were supposed to be the cops on the beat," Dodd said. "Yet, they were spectators for far too long."
Um, hello...
http://npri.org/blog/the-anatomy-of-a-cr...
http://npri.org/publications/less-is-mor...
The Federal Reserve is partly responsible for the bubble, so yeah they could have done a lot more by doing a lot less.
The bubble that Gordon talks about is after Fannie Mae and Freddie Mac got caught with their hands in the cookie jars.
The ex-CEO's of that time served as Obama campaign advisors. Those crooked CEO's were cooking the books so that they would get paid millions in bonuses.
The ex-CEO's of that time promised to Democratic leaders to open the flood gates to sub-prime so that even more minorities would get homes. They were trying to evade punishment. They bride their way out the punishment so now we are paying the price.
Obama wants women to be drafted and then to serve on the fronts lines of a war.
Woman in combat units will be problematic. Unplanned pregnancy among female soldiers is higher than what is in the civilian area. High occurrence of rape of capture of females in a war is a proven fact.
http://online.wsj.com/article/SB12221294...
Anybody that is says that Fannie Mae and Freddie Mac played no role in this sub-prime mess is a FULL BLOWN LAIR!!!!!!!!!
The culprits are the Republicans - but, they will never admit it - so, don't hold your breath!
Republicans do NOT believe in government, but as a source of power and profit. So, they run and get elected, then, do all they can to undermine government. Then, say "See, government doesn't work" - it's a classic sophmoric, self-fulfilliing "prophecy" that the American people know is just BULL!
Beyond the hypocrisy, what gets me, is that the Republicans constantly tromp on "welfare" and "social services" - yet, they are the first to get in line for these same services - and refuse to admit that most of the "welfare" is for their greedy corporations!
I just wish there was a practical way to outlaw such traitors from politically organizing!
John A,
That is bull, Republicans believe in big government. Republicans often want government to benefit their private friends.
Democrats want big government to benefit their friends working for government.
...and the government caused the market failure...http://npri.org/blog/the-anatomy-of-a-crisis
http://npri.org/blog/the-anatomy-of-a-cr...
By the way, when you create a "welfare program" i.e. government taking from A to give to B, who do you think is honestly going to get the money?
THE POOR?
HAHAHA,
Poor people don't vote and they don't donate to campaigns.
American welfare is for the rich and Democrats and Republicans both support it.
That is why we give $300 billion to agro companies and $30 billion for food stamps so the poor people can afford the artificially more expensive food.
KDR81, it may not work as well as hoped for, but it has to be better then the "Corporate Welfare Program" that we have had and continue to have in this country for the last 8 years.
One day soon the budget will only be two things:
Interest Payments
Entitlement Payments
Obama, if elected, will probably be the first trillion dollar man because he has promise tons of new spending that are not paid for. Just today, he has announced more tax cuts to buy the election.
Have to love the republican crowd trying to tie this whole crisis to "minorities" getting sub-prime loans. Gordon is spot on about the 1977 CRA.
The big problem that not a lot of people talk about is the rich/middle class folks who defaulted. Some were just getting their first home and screwed up, but many were getting their second or third.
It also doesn't help that these shaky mortgages were packaged as good securities that were then swapped around like a doob at a Greatful Dead concert. By the time the crap hit the fan, the people who originally sold these were already out and rich.
Here's a good MSN article:
http://articles.moneycentral.msn.com/Ban...
Can anyone say race baiting?
That is so much BS.......that sub-prime has nothing to do with this mess??????
You Democrats have blood on your hands and you refuse to accept ANY respondibility.
http://articles.latimes.com/1999/may/31/...
I guess you think the Clinton admistration was race baiting when it said, "There have been points in the past when the economy has done well but minority homeownership has not increased proportionally."
I guess in 1992 Congress was race baiting when it:
"In 1992, Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains"
To bad we did not heed this warning in the article: "argues that a higher target would only produce more loan defaults by pressuring banks to accept unsafe borrowers."
This social engineering to get more minorities into homes was a homemark of the Democratic Party for decades. Now, shssssss....not us. Minorities into homes via sub-primes.....not us.......
Yes the crap did hit the fan and now we are all paying for this social experiment that blew up in our faces.
Ummm, it's THEM against US for the last 30 years or so kids, it's not republican against democrat.
You've all been played! Won't you ever learn? It seems not...
What a complete waste of effort just to get screwed in the end by the elite.
You koolaid drinkers out there can't handle the truth. Carter helped get the CRA (community reinvestment act) passed in 1977. It mandated a certain percentage of a banks deposits be reinvested in the neighborhoods where the bank did business, even if they were "redlined." Fast forward to 1995 and Andy Cuomo, Clinton's HUD secretary. He brought suit against 25 banks for discriminating against minorities applying for mortgages. The banks folded like cheap lawn chairs even though they never discriminated against any minorities. The reason more blacks and latinos got turned down was because minorities have more credit problems than whites. This is a statement of fact, not racism. The CRA on steroids forced banks to make stupid loans if they wanted to expand. This happened to BOA when it acquired Fleet. Clinton encouraged abusive use of the CRA to pry more money out of the banks for non-credit worthy buyers. Many millions in slush went to Obama groups such as Acorn. Barry even sued Citibank in Chicago to get them to make stupid loans. Around 1998, Fannie passed 1 trillion in mortgage holdings. Prior to the Clinton years, Fannie bought mortgages and packaged them up and then sold them off in the secondary market, complete with Fannie's implicit federal guarantee. During the Clinton years, the loans Fannie and Freddie were buying consistently declined in quality. Therefore, rather than sell them off to unwary unwitting buyers, they kept them for their own account and sold debt instead. Can you spell time bomb. Jim Johnson and Franklin Delano Raines repeated this toxic recipe many times over. Raines, to collect million in bonuses cooked the books to the tune of 9 billion in bogus profits. He got 50 million in bonuses. From the time Bush came into office in 2001 he made 17 attempts to rein in Fannie and Freddie. Guess who became their stuanchest defenders, not John McLame, but Solomon Barney Frank, Chris Countrywide Dodd, Barry Soetoro Obama, Maxine Waters, etc. Who got the largest amount in contributions from Fannie/Freddie? Chris Countrywide, Barry Obama, Barney Frank. All totaled Freddie/Fannie contributed to 334 congress critters, mostly dems.
These are the facts. Don't preach to me about deregulation or repubican corruption of which there is no shortage. Show me facts. Explain to why Barry Obama got the second highest total contributions in just one year as a senator. (To be continued)
continued
Now the real problem is that owning a home is the American Dream. The dems turned owning a home into just another socialistic program. By eliminating the need to have a downpayment, any income or asset verification and any knowledge of your borrower, they guaranteed that this debacle would occur. I personally have been waiting for it to happen for the last 10 years. Every true credit professional out there knew this day would come. And those greedy Wall Street guys, investment bankers, mortgage bankers and mortgage brokers were all part of this debacle. But they were all part of a grand socialist experiment and like all socialist experiments it was doomed to failure from the beginning. And like all socialist failures, the socialist dem party blames the republican party.
McCain co-sponored a bill in 2005 and 2006 to limit and bring discipline to Fannie/Freddy, guess who stopped him? Chris Countrywide. Barney Frank's lover worked where, you got it, Fannie Mae, no pun intended.
Finally, the largest seller of crap mortgages to Fannie was Angelo Mozillo's Countrywide. He had a special program for VIP's including Chirs Countrywide and Senator Kent Konrad from North Dakota (also a dem).
Finally, kudos to Paul Gigot, managing editor of the Wall Street Journal. He took on Freddie/Fannie since 2000. He was attacked and had much political pressure brought upon him and the Journal. But he didn't flinch.
"These are the facts."
Care to cite your source(s)? Call me a skeptic because McCain did NOT sponsor that bill (S.190) in 2005. He didn't sign on until AFTER the bill was dead.
I've already linked this information via the Congressional Record in another post ... here's the link to the Congressional Record: http://www.govtrack.us/congress/bill.xpd...
McCain didn't sign on to S.190 until a year and four months after it was introduced, which was five months after the bill was technically dead.
To tout this as some sort of "maverick" approach is disingenuous at best; dishonest at worst.
This is not a partisan thing -- it is pure GREED. How about not living above your means? How about not taking advantage of the less fortunate? How about not BREEDING? Let's face it -- human nature is really messed up. We'll never fix the real problem, and that is dwelling in the very heart of us all.
Sweet Jesus, from many of these comments, I am praying we get Universal Healthcare that INCLUDES MENTAL HEALTH SERVICES!
All I can offer is what I tell non-compliant, treatment resistent disabled people. The road to health and happiness is all about the right combination of good hygiene, a good diet and exercise program, a good nights sleep and the right medication(s) in the right dosage and frequency with whatever variety of therapy you need - but you must, first, cross the bridge of denial and listen to your medical professionals with an open mind!
For those that do this, they will find happiness in really learning - like how to think rationally and logically and correct dysordered misbehavior - and learn to love and be loved! It's really worth it gang!
That Graph is so wrong!!! there is so much more
MELT DOWN going on out there!! I have been selling Las Vegas and Henderson Nevada real estate for over 12 years now,, the entire real estate market is on MELT DOWN!!!
But on the other hand,, how is exciting it is to be able to purchase a hot rockin foreclosure investment deal for peanuts on the dollar!!
Hey I just wrapped up in escrow a 1650 sqft. 2car
Green Valley location home for $150k !! if you were to rent her out, you could bring in $1300 a month on it.
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