McCain Campaign General Co-Chair at Heart of Foreclosure Crisis

[suedanim]

Mainstream news is notoriously bad about reporting stories like this on rightwing crooks. I'll do my part to help. Maybe they'll catch up later. I looked for this to be posted on this site. Maybe I missed it.

Gramm... Treasury Secretary... :thumbsup::madlaugh: Sounds like a plan John. like a fox guarding the henhouse.


McCain Campaign General Co-Chair At Heart Of Foreclosure Crisis–UPDATED (http://www.crooksandliars.com/2008/05/27/breaking-mccain-campaign-general-co-chair-at-heart-of-foreclosure-crisis/)

By: Logan Murphy on Tuesday, May 27th, 2008 at 6:20 PM - PDT

Breaking news on Tuesday’s Countdown, as Keith Olbermann reveals that former Senator Phil Gramm, a general co-chair of Senator John McCain’s campaign, actually lobbied Congress on behalf of financial giant UBS to try and stop legislation aimed at installing industry regulations that could have prevented the current mortgage foreclosure crisis. As with many issues, McCain has done a full flip flop (http://www.perrspectives.com/blog/archives/001016.htm) on the mortgage crisis and the gaffe filled train wreck that is his campaign continues to fall deeper into the muck. Can you imagine the outrage from the right and McCain’s media (http://www.crooksandliars.com/2008/05/07/matthews-russert-admit-theyve-given-john-mccain-a-free-pass/) if Gramm worked for a Democratic candidate’s campaign?

Gramm officially joined the McCain campaign on March 12, 2007… but as early as October, 2006, RealClearPolitics reported that
McCain was already relying on Gramm for fundraising help… McCain’s top political operative at the time saying, Gramm, quote, "obviously gives us advice on economic issues."

At the same time he was giving that advice, federal disclosure forms reviewed by Countdown show that Gramm was simultaneously being paid by UBS to lobby the U-S Senate about the mortgage crisis… opposing government regulation… helping to kill a 2006 anti-predatory lending bill that would have tightened consumer protections, and might have mitigated the current crisis…

As recently as Dec. 31st of last year, still working for Swiss bankers specifically to help kill the "Emergency Home Ownership and Mortgage Equity Protection Act" and the "Helping Families Save Their Homes in Bankruptcy Act," a bill that would have let bankruptcy judges adjust mortgage terms so American families facing foreclosure could repay their loans, and keep their homes.
UPDATE: The McCain campaign asked Olbermann to read a statement from them :

Three months later, McCain gave his broadest statement to date on the mortgage crisis…
"Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments"

"Removing regulatory impediments," a Gramm mantra… Politico dot-com writing, "some housing experts and economists see Gramm’s thinking in the recent housing proposal."

The McCain campaign confirmed that Gramm had input on the speech and that McCain consulted Gramm specifically on the housing issue.

Some economists blame Gramm in part for the crisis itself.

As Senate Banking Chairman, Gramm consistently weakened federal regulations… his deregulation of energy commodities first helped his wife’s employer… then killed it.

In 1999, the Gramm-Leach-Bliley Act, which McCain voted for, broke down the decades-old wall separating commercial banks, heavily regulated… from the wild and woolly world of investment banking… a wall erected in 1933 to prevent a repeat… of the Great Depression.

One month after Gramm knocked that wall down, UBS bragged to investors that his bill would "liberalize restrictions."

UBS bought Paine Weber the very next year… and hired Gramm before he even left the Senate.

Gramm’s deregulation helped set the stage for an explosion of banks slicing up subprime mortgages, bundling them with other mortgage slices to hide the credit risks, and selling mortgage stew to other investment firms.

That gave lenders powerful incentive to make as many loans as possible, regardless of risk… because they could turn around and sell those mortgages almost immediately.

Gramm himself said he was "totally unaware" just how many bad mortgages his own company bought.

At last count, UBS had lost 37 billion in the mortgage crisis, and plans to lay off 55-hundred people next year, primarily in the US.

McCain has hinted he might make Gramm his Treasury Secretary.

But Gramm’s economic track record worries even McCain’s own advisors… one of them telling the Washington Post last month, "I, for one, have thought about it a lot."

One economist said, "McCain is counting on people having very short memories and not connecting some pretty obvious dots here."

Two weeks after that report, UBS removed Gramm from its list of registered lobbyists.
But federal lobbying forms show at least two other McCain staffers… congressional liaison John Green… and national finance co-chairman Wayne Berman… were both still lobbying on behalf of the mortgage industry as recently as the first quarter of this year.

[Buck Laser]

How COULD they? And I thought McCain was SO honest!!

Oh yeah...the Keating 5, the savings & loan thing...sigh.

[lily]

McCain has hinted he might make Gramm his Treasury Secretary.


HAHAHAHAHAHA

::snort::

Bwahahahahaha

::cough cough::

LMFAO

::breathe::

Muhahahaha

::drinks glass of water::

HAHAHAHAHAHAHA


Oh my God, my side is hurting so bad!!!

[suedanim]

I hear the echos of Keating Five scandal.. with John McCain once again playing soft ball with corruption.

McCain's scary economic advisor (http://www.salon.com/opinion/conason/2008/05/30/mccain_gramm/)

Not only is former Texas Sen. Phil Gramm a shill for special interests, his deregulation policies helped spur the mortgage crisis, among other financial disasters.

By Joe Conason

May 30, 2008 |

Even as John McCain struggles to preserve his image as a reformer by dismissing a few of the Washington lobbyists who dominated his presidential campaign, the futility of that effort suddenly became painfully obvious. Dire bulletins in the financial media warned of many billions in rotting mortgage paper held by UBS, the financial conglomerate that just happens to employ former Texas Sen. Phil Gramm, McCain's campaign chairman and chief economic advisor. Until two months ago UBS listed Gramm as a federal lobbyist on housing and mortgage issues.

So there at the shoulder of the Arizona maverick is perched yet another special-interest shill, in this instance not merely an errand boy for various dictators but the vice chairman of a Swiss bank whispering advice on how to cope with our economic woes. Or how not to cope, as in McCain's do-nothing approach to the foreclosure crisis, which displayed the strong influence of the financial lobby on his campaign.

Undoubtedly Gramm is promoting the agenda of those who subsidize him, as he has done ever since he entered politics as a servant of oil interests in his home state. He took hundreds of thousands of dollars from energy and financial interests as a congressman and then as a senator, rising to the chairmanship of the Senate Banking Committee, where he could really perform major favors. He is famed for slipping in an amendment desired by Enron Corp. back when his wife was on that doomed company's board. His employment by UBS, (http://www.politico.com/news/stories/0308/9246.html) a company that recently warned some of its executives to avoid entering the United States for fear of criminal prosecution, demands fresh scrutiny of him as well as McCain.

But if Gramm's role as a banker and lobbyist is embarrassing to McCain, the greater harm is likely to be done by his economic advice. He and McCain have been friends since they were young congressional "foot soldiers in the Reagan revolution," as both like to say, and he is often touted (or was until lately) as a likely candidate for Treasury secretary should McCain win the White House.

Now that Gramm has resurfaced in national politics, he surely deserves to be arraigned for his long history of service to powerful interests, dating from the Enron scandal and beyond. But for most Americans, the dubious connections of McCain's lobbying pals, including Gramm, should be less worrisome than the likely results of yet another four years of Republican economic nostrums. Gramm's career stands for the false promises of right-wing ideology and the troubles that such schemes, embodied in legislation, have repeatedly inflicted on us.

The former Texas senator is less voluble these days than he used to be, perhaps unsurprisingly, but in years past he has boasted of his central role in key conservative legislation, especially in liberating major sectors of the economy and finance from public oversight and skewing taxation in favor of the wealthy.

So how has that worked out over the past few decades?

Back in the '80s, Gramm smiled upon the abrupt deregulation of the savings-and-loan industry, described by his idol Ronald Reagan as America's opportunity to "hit the jackpot" of growth. He used his political clout to protect the Texas operators whose crooked machinations eventually helped to bankrupt the S&L industry. In fact, the S&L debacle cost taxpayers hundreds of billions of dollars.

Meanwhile, Gramm had lent his name and energy to passage of the first Reagan budget in 1981, whose sweeping tax cuts failed to prevent recession -- and eventually required a long series of tax increases, beginning in 1982, to stanch the enormous deficits they created. At the same time he coauthored the Gramm-Rudman Act, which supposedly placed sharp constraints on federal spending but in reality had little impact.

When Bill Clinton came into office and found that the Reagan and Bush administrations had left the nation in deep deficit, he got no help from Gramm in cleaning up their mess. When Clinton bravely demanded a tax increase on the wealthiest Americans, who had profited hugely from Reagan policies skewed to their benefit, Gramm and his fellow Republicans bawled piteously about the nation's impending doom.

"I want to predict here tonight," he said on the evening that Clinton's budget passed in the spring of 1993, "that if we adopt this bill the American economy is going to get weaker and not stronger, the deficit four years from today will be higher than it is today and not lower ... When all is said and done, people will pay more taxes, the economy will create fewer jobs, the government will spend more money, and the American people will be worse off."

Is it necessary to point out how utterly wrong that prediction turned out to be? Most Americans did not pay more taxes, the economy created millions more jobs, the deficit was sharply reduced, and people were better off by every measure of economic progress, from productivity and profits to homeownership and reduced poverty.

But Gramm was not the kind of economist whose convictions are shaken by evidence, no matter how compelling. So obsessed with protecting bankers from government oversight was he that when Clinton tried to place stronger controls on terrorist money laundering, Gramm opposed even that measure as a "totalitarian" incursion.

Before he retired from the Senate in 2002, he wrote the Gramm-Bliley bill, an act broadly deregulating the financial industry -- and now blamed by many economists for the epidemic of speculation and fraud that has shaken the global economy.

Touting those changes as a way to "modernize" American finance for a global future, Gramm said they would bring wonderful new efficiencies and savings to consumers. As with the energy deregulation that he sponsored -- which was supposed to bring lower prices and better service, but led to blackouts and price gouging -- those economic wonders never quite appeared. The damaging effects of banking deregulation took nearly a decade to be felt, but whether we have experienced the worst still remains to be seen.

Over and over again, from the savings-and-loan fiasco to the Enron shock to the global banking meltdown, the golden promises of deregulation have turned to leaden ruin. Perhaps nobody cares about the lobbyists surrounding McCain, but someone should ask him why he would cherish the advice of a man whose devotion to ideology has already done us so much damage.

[Drocket]

McCain has hinted he might make Gramm his Treasury Secretary.
Hey, compared to most of the Bush administration, this guy is almost remarkably qualified...

[suedanim]

It looks like, though, this is who McCain listens to, his expert on economic issues. If so... McCains vision for the United States is 1) deeper in debt, if thats possible, we're already $11 trillion in debt now and 2) continued and deeper tax cuts on the most wealthy, leaving the middle class ... where? Holding the burden of government borrow and spend policies Republicans favor?

[ECW]

Gramm is an asshole. Another Texan pol without a clue.

[Katrolis]

they are all blue blood... I don't care what you wanna say, but I'll boil it down for you so there is no argument on these petty points. ANYBODY running for high office these days is bought and paid for by people more powerful than they are. THEY ARE IN THE CLUB OF POWER!! Forget about them. Learn how to hunt, fish, gather firewood, and live a simple life. We don't need these dam phones, tv's, gas, and crap they try to sell us for their power trip... we think we need them. Think about that

[BoogyMan]

You mean the mortgage crisis wasn't caused by people signing a note with flexible interest rates for a property they couldn't afford in the first place?

Egads....

[PostmodernProphet]

You mean the mortgage crisis wasn't caused by people signing a note with flexible interest rates for a property they couldn't afford in the first place?

Egads....

nope, it was caused by these folks who came up with a novel idea to make money.....the theory was that they would find people who would sign notes with flexible interest rates for properties they couldn't afford so that they could foreclose on the mortgages and take the properties away and sell them for half of what they gave out in loans......

didn't work quite so well in practice as it did in theory.....

[suedanim]

nope, it was caused by these folks who came up with a novel idea to make money.....the theory was that they would find people who would sign notes with flexible interest rates for properties they couldn't afford so that they could foreclose on the mortgages and take the properties away and sell them for half of what they gave out in loans......

didn't work quite so well in practice as it did in theory.....

A year ago we were in the market to buy a house. I can personally testify to the aggressive predatory lending that was out there then and still advertised now. I also have done years of working with our local fair housing alliance.. I KNOW what people have been going through.

Its difficult for some people with their noses stuck permanently in the air to understand how people who live in poverty or damn near it... working lower middle class, both parents working hard to support their families who have a dream of owning their own home can be duped into signing their names to something that over time they could not handle. These people had great hope, great desire to live the American Dream too, but many had lower credit scores ..or no credit rating at all when they were signed up.

Most of the stories I've heard were people whose credit was shaky not because of irresponsible spending,credit cards and pleasure related expenses, but whose credit scores were down due to paying delinquent medical bills from not having any medical insurance or tax debts and the like. These are people who fall just outside qualifying for Medicaid, work two or three jobs, take no welfare, no charity and are just barely within what might be called lower middle class income. They seek a step up.....and OUT of the ghetto or countryside poverty ... into neighborhoods where their children can get better educations, safer streets, better shopping and overall public services.

When they began hunting for a way out, they had lenders making them offers, telling them that even with weak or even bad credit, they too could own a home. Those lenders took buyers few thousands, saved and scrimped for and put them into homes and told that the lender will assist them building their credit to a better score.

Many have lost about everything. They have lost many thousands and some today are homeless. REAL lives and families have been destroyed by predatory lending. It would have been kinder to have told them their credit score was insufficient and sent them to a specialist who could help them repair it.

So... I cannot place the bigger burden of responsibility on the people who signed their names, who were or are victims of predatory lending practices, but instead on these lenders who KNEW the chance was high these people might fail, but used persuasive pressure to sign these people on. They all made money off the backs of these hardworking people.... while those same people lost all their investment and hope are today are either renting in bad housing or living at Salvation Army or their familiies split up between relatives.

JMO!

[NortheastCynic]

You mean the mortgage crisis wasn't caused by people signing a note with flexible interest rates for a property they couldn't afford in the first place?

Egads....Shhhh....It's McCain's General Co-Chair's fault. :rolleyes:

-NC

[Buck Laser]

You mean the mortgage crisis wasn't caused by people signing a note with flexible interest rates for a property they couldn't afford in the first place?

Egads....
Boogy, I don't know about you, but I've been bombarded for the last seven years or so with outlandish "offers" from various mortgage lenders, mostly offering the moon. And where I've lived, new subdivisions keep springing up with bigger and bigger houses of shoddy construction.

Having been around the block a few times, I'm not easily duped--but it's not because the people trying to earn money off of me haven't tried their damndest.

Yes, people who bought into those sub-prime mortgages have to bear a share of the blame, but who expected, seven years ago that mortgage lenders would become today's carnival hucksters? Most of us have always taken complete responsibility for our own financial woes. But who's been getting bailed out lately??

Here's a little hint: it's not the borrowers, but the people who lent them the money. And a couple of years ago when we had that so-called bankruptcy reform, who got baled out? Was it the borrowers? Nope.

I am sick unto death of this cycle of deregulation and bailout for businesses without any effort to put some reasonable controls back in place on these reckless predators. The Obama administration will have its hands full trying to restore sanity to US fiscal affairs.

[Osborn F. Enready]

This has nothing to do with deregulation, it has to do with people willfully looking away from bad loaning practices, in order to scam and cop government insurance at the expense of the taxpayers.

One party wants to use force to bail-out the irresponsible lenders.....
One party wants to use force to bail-out the irresponsible borrowers.....
The innocent people who had nothing to do with any of it, come out losers, and end up footing the bill when both the borrowers, and the lenders should suffer for their own poor decisions.

In some cases there was fraud on the part of the lenders....
In some cases there was ignorance, apathy or poor decision making on the part of the borrower.....

Failing is how we learn not to make the same mistakes the next time...let them fail.

[Buck Laser]

This has nothing to do with deregulation, it has to do with people willfully looking away from bad loaning practices, in order to scam and cop government insurance at the expense of the taxpayers.

Os, what made those bad lending practices possible and profitable was in fact deregulation. While I think the lending institutions took unfair advantage of the mess, the regulators sat there with their hands tied because the Bush administration owed its power to the lending institutions. They knew a good thing when they saw it.

[Osborn F. Enready]

Buck, I am saying regulation isn't going to change it.

People make bad choices, but that is their right, and they don't deserve to be bailed out.
Some lenders have bad practices, and when those practices cut their own businesses longevity, they don't deserve to be bailed out.

Both sides want to screw the innocent to pay for the mistakes of the few, all with a threat of force to back it up.

How noble.....

[Buck Laser]

Buck, I am saying regulation isn't going to change it.

People make bad choices, but that is their right, and they don't deserve to be bailed out.
Some lenders have bad practices, and when those practices cut their own businesses longevity, they don't deserve to be bailed out.

Both sides want to screw the innocent to pay for the mistakes of the few, all with a threat of force to back it up.

How noble.....
Os, there was a time when this kind of thing didn't happen. But it began in modern history when the Reagan administration decided that deregulation was "good." And we got the savings & loan crisis. The unfortunate fact is that the financial "industry" will seize on any opportunity it can find or create to grab as much money as it can.

I think it was about 20 years ago that my banker began talking about "financial products." I thought it was strange then, and it' still strange. All "financial products" amount to are new ways to create a profit margin for some creep who really doesn't give a shit. It's selfishness without a single ethical qualm. "Ethics? Fuck ethics--there's money to be made."

[ECW]

Regulation isn't going to change it but it may protect the people from predatory lenders who are interested in nothing more than lining their pockets at YOUR expense. That alone makes regulation worthwhile.

Phil Gramm was at the heart of breaking down the barrier between conventional banks and the speculating banks at the heart of this crisis. Having him standing behind John McCain and being his economic advisor sure tells me where McCain would stand as President: with big business, not the working class people.

[Osborn F. Enready]

Buck Laser said:
Os, there was a time when this kind of thing didn't happen.

I doubt it was in either of our lifetimes pal.

Buck Laser said:
But it began in modern history when the Reagan administration decided that deregulation was "good."

Unfair, or biased criticism in my opinion. Deregulation is good, as long as it stops before infringing individual rights, and allows prosecution of those who do violate individual rights. Reagan played one small role in a long history of bi-partisan deconstruction of individual rights in social and economic matters, and as both parties, toward the corrupt business intrests he valued, much like the democrats favor the corrupt unions.

Buck said:
And we got the savings & loan crisis. The unfortunate fact is that the financial "industry" will seize on any opportunity it can find or create to grab as much money as it can.

That is as accurate as saying that all (insert race here) people are the same.

There are good and bad businesses, CEO's, banks and corporations. I will admit that over the last 50 years, the trend in corruption in big business has grown right alongside corruption in washington, mainly because corrupt big business pretty much now owns washington, but the regulation through government is what built this corruption monopoly in the first place. When you become a regulator with reach at that level, the only question is your price tag. The problem is, the currency itself is rigged to the disadvantage of the American People.

They are why we are dependent on foreign oil.(by discouraging, or making the market un-equal for competing forms of energy and exploration.)

They are why we are dependent on multi-national corporations.(by discouraging, or making the market un-equal regarding taxation, loans, etc between private and corporate business, and the obvious bias of corporate welfare bailouts.)

They are why every value, every ideal we have is being compromised on both the national, and global scale. (since now political debate is a sideshow, decisions take place behind closed doors, after hours and on "special envoys" where the real players can be directly addressed, and pimped for their support. House and Senate debate is a joke, no valid arguments hit the floor except from the "fringe" who both work roundly to demonize at every chance they get.) One side sacrifices our social rights, the other side sacrifices our economic rights, the only losers are the citizens.
Legislation eminates from special intrests, not the people, regulation is there to limit the theivery and distribute the payoffs of that theivery, not to protect us from it.)

Its a bi-partisan racket, as is the creation and maintenance of corporate personhood, income taxes, and the federal reserve note thats has no tangible value other than the paper its printed on.

Buck said:
I think it was about 20 years ago that my banker began talking about "financial products." I thought it was strange then, and it' still strange. All "financial products" amount to are new ways to create a profit margin for some creep who really doesn't give a shit. It's selfishness without a single ethical qualm. "Ethics? Fuck ethics--there's money to be made."

The fact is Buck, there were two issues here to blame....

Ignorant, apathetic or irresponsible borrowers.....
In some cases, fraudulent and criminal lending and appraising practices....

They compliment each other, and together make a bursting bubble for us all to suffer through and pay for.

NONE, have a claim to my labor or my income, so neither should be getting "bailed out".

[suedanim]

McCain is never far from bad financial legislation or corruption. Is there anyone in McCain's world who ISN'T a lobbyist?

From the Keating Five Scandal onward, McCain is always in the mix with these people. He's part of the problem, never the solution.


Foreclosure Phil (http://www.motherjones.com/news/feature/2008/07/foreclosure-phil.html)

By David Corn
May 28, 2008

Who's to blame for the biggest financial catastrophe of our time? There are plenty of culprits, but one candidate for lead perp is former Sen. Phil Gramm. Eight years ago, as part of a decades-long anti-regulatory crusade, Gramm pulled a sly legislative maneuver that greased the way to the multibillion-dollar subprime meltdown. Yet has Gramm been banished from the corridors of power? Reviled as the villain who bankrupted Middle America? Hardly. Now a well-paid executive at a Swiss bank, Gramm cochairs Sen. John McCain's presidential campaign and advises the Republican candidate on economic matters. He's been mentioned as a possible Treasury secretary should McCain win. That's right: A guy who helped screw up the global financial system could end up in charge of US economic policy. Talk about a market failure.

Gramm's long been a handmaiden to Big Finance. In the 1990s, as chairman of the Senate banking committee, he routinely turned down Securities and Exchange Commission chairman Arthur Levitt's requests for more money to police Wall Street; during this period, the sec's workload shot up 80 percent, but its staff grew only 20 percent. Gramm also opposed an sec rule that would have prohibited accounting firms from getting too close to the companies they audited—at one point, according to Levitt's memoir, he warned the sec chairman that if the commission adopted the rule, its funding would be cut. And in 1999, Gramm pushed through a historic banking deregulation bill that decimated Depression-era firewalls between commercial banks, investment banks, insurance companies, and securities firms—setting off a wave of merger mania.

But Gramm's most cunning coup on behalf of his friends in the financial services industry—friends who gave him millions over his 24-year congressional career—came on December 15, 2000. It was an especially tense time in Washington. Only two days earlier, the Supreme Court had issued its decision on Bush v. Gore. President Bill Clinton and the Republican-controlled Congress were locked in a budget showdown. It was the perfect moment for a wily senator to game the system. As Congress and the White House were hurriedly hammering out a $384-billion omnibus spending bill, Gramm slipped in a 262-page measure called the Commodity Futures Modernization Act. Written with the help of financial industry lobbyists and cosponsored by Senator Richard Lugar (R-Ind.), the chairman of the agriculture committee, the measure had been considered dead—even by Gramm. Few lawmakers had either the opportunity or inclination to read the version of the bill Gramm inserted.

"Nobody in either chamber had any knowledge of what was going on or what was in it," says a congressional aide familiar with the bill's history.
It's not exactly like Gramm hid his handiwork—far from it. The balding and bespectacled Texan strode onto the Senate floor to hail the act's inclusion into the must-pass budget package. But only an expert, or a lobbyist, could have followed what Gramm was saying. The act, he declared, would ensure that neither the sec nor the Commodity Futures Trading Commission (cftc) got into the business of regulating newfangled financial products called swaps—and would thus "protect financial institutions from overregulation" and "position our financial services industries to be world leaders into the new century."

It didn't quite work out that way. For starters, the legislation contained a provision—lobbied for by Enron, a generous contributor to Gramm—that exempted energy trading from regulatory oversight, allowing Enron to run rampant, wreck the California electricity market, and cost consumers billions before it collapsed. (For Gramm, Enron was a family affair. Eight years earlier, his wife, Wendy Gramm, as cftc chairwoman, had pushed through a rule excluding Enron's energy futures contracts from government oversight. Wendy later joined the Houston-based company's board, and in the following years her Enron salary and stock income brought between $915,000 and $1.8 million into the Gramm household.)

But the Enron loophole was small potatoes compared to the devastation that unregulated swaps would unleash. Credit default swaps are essentially insurance policies covering the losses on securities in the event of a default. Financial institutions buy them to protect themselves if an investment they hold goes south. It's like bookies trading bets, with banks and hedge funds gambling on whether an investment (say, a pile of subprime mortgages bundled into a security) will succeed or fail. Because of the swap-related provisions of Gramm's bill—which were supported by Fed chairman Alan Greenspan and Treasury secretary Larry Summers—a $62 trillion market (nearly four times the size of the entire US stock market) remained utterly unregulated, meaning no one made sure the banks and hedge funds had the assets to cover the losses they guaranteed.

In essence, Wall Street's biggest players (which, thanks to Gramm's earlier banking deregulation efforts, now incorporated everything from your checking account to your pension fund) ran a secret casino. "Tens of trillions of dollars of transactions were done in the dark," says University of San Diego law professor Frank Partnoy, an expert on financial markets and derivatives. "No one had a picture of where the risks were flowing."

Betting on the risk of any given transaction became more important—and more lucrative—than the transactions themselves, Partnoy notes: "So there was more betting on the riskiest subprime mortgages than there were actual mortgages." Banks and hedge funds, notes Michael Greenberger, who directed the cftc's division of trading and markets in the late 1990s, "were betting the subprimes would pay off and they would not need the capital to support their bets."

These unregulated swaps have been at "the heart of the subprime meltdown," says Greenberger. "I happen to think Gramm did not know what he was doing. I don't think a member in Congress had read the 262-page bill or had thought of the cataclysm it would cause." In 1998, Greenberger's division at the cftc proposed applying regulations to the burgeoning derivatives market. But, he says, "all hell broke loose. The lobbyists for major commercial banks and investment banks and hedge funds went wild. They all wanted to be trading without the government looking over their shoulder."

Now, belatedly, the feds are swooping in—but not to regulate the industry, only to bail it out, as they did in engineering the March takeover of investment banking giant Bear Stearns by JPMorgan Chase, fearing the firm's collapse could trigger a dominoes-like crash of the entire credit derivatives market.

No one in Washington apologizes for anything, so it's no surprise that Gramm has failed to issue any mea culpa. Post-Enron, says Greenberger, the senator even called him to say, "You're going around saying this was my fault—and it's not my fault. I didn't intend this."

Whether or not Gramm had bothered to ponder the potential downsides of his commodities legislation, having helped set off an industry free-for-all, he reaped the rewards. In 2003, he left the Senate to take a highly lucrative job at ubs, Switzerland's largest bank, which had been able to acquire investment house PaineWebber due to his banking deregulation bill. He would soon be lobbying Congress, the Fed, and the Treasury Department for ubs on banking and mortgage matters. There was a moment of poetic justice when ubs became one of the subprime crisis' top losers, writing down $37 billion as of this spring—an amount equal to its previous four years of profits combined. In a report explaining how it had managed to mess up so grandly, ubs noted that two-thirds of its losses were the fault of collateralized debt obligations—securities backed largely by subprime instruments—and that credit default swaps had been "key to the growth" of its out-of-control cdo business. (Gramm declined to comment for this article.)

Gramm's record as a reckless deregulator has not affected his rating as a Republican economic expert. Sen. John McCain has relied on him for policy advice, especially, according to the campaign, on housing matters. The two have been buddies ever since they served together in the House in the 1980s; in 1996, McCain chaired Gramm's flop of a presidential campaign. (Gramm spent $21 million and earned only 10 delegates during the gop primaries.) In 2005, McCain told a Wall Street Journal columnist that Gramm was his economic guru.

Two years later, Gramm wrote a piece for the Journal extolling McCain as a modern-day Abraham Lincoln, and he's hailed McCain's love of tax cuts and free trade. Media accounts have identified Gramm as a contender for the top slot at the Treasury Department if McCain reaches the White House. "If McCain gets in," frets Lynn Turner, a former chief sec accountant, "we'll have more of the same deregulatory mess. I like John McCain, but given what I know about Phil Gramm, I wouldn't vote for McCain."

[BoogyMan]

Regulation isn't going to change it but it may protect the people from predatory lenders who are interested in nothing more than lining their pockets at YOUR expense. That alone makes regulation worthwhile.

Phil Gramm was at the heart of breaking down the barrier between conventional banks and the speculating banks at the heart of this crisis. Having him standing behind John McCain and being his economic advisor sure tells me where McCain would stand as President: with big business, not the working class people.


Predatory lenders? What do you think these guys do, hunt people down and force them to sign on the dotted line?

[NortheastCynic]

Boogy, do you mean to tell me people should...take responsibility for contracts they willingly sign their name on?

What a right-wing nut. :rolleyes:

-NC

[ECW]

Predatory lenders? What do you think these guys do, hunt people down and force them to sign on the dotted line?

No, they prey upon the unfortunate and down-on-their-luck working class people who are trying to make their lives better. These shysters then lie, obfuscate, and cover-up the true effects of the contracts that these poor people sign hoping to put their lives back in order only to discover they were lied to and now they stand to lose everything.

Phil Gramm and the Neocon deregulation mavens count on these people to make money for their companies because they cannot do it fairly or justly. It's why they want deregulation in the first place: they cannot stand playing by the rules because they are greedy fucks who want it all.

McCain's true colors come out more and more the longer that Gramm is associated with his campaign. I hope this becomes an issue. McCain will get an ugly brand from this willing association with a crook like Gramm.

[apdst]

No, they prey upon the unfortunate and down-on-their-luck working class people who are trying to make their lives better. These shysters then lie, obfuscate, and cover-up the true effects of the contracts that these poor people sign hoping to put their lives back in order only to discover they were lied to and now they stand to lose everything.

Didn't they read the contract?

The folks that are losing their homes right now aren't poor. Poor people don't purchase 3,000 sq. ft. + homes for 200 g's. Besides, anyone that would knowingly sign a contract on a flexible rate loan is stupid and deserves what they get.

[suedanim]

The problem is much bigger than blaming the buyer-victims.


Home foreclosures set record in first quarter (http://www.rawstory.com/news/mochila/Home_foreclosures_set_record_in_fir_06052008.html)

Home foreclosures, late payments set records in first quarter of 2008

JEANNINE AVERSA
AP News

Jun 05, 2008 09:48 EST

Home foreclosures and late payments set records over the first three months of the year and are expected to keep rising, stark signs of the housing crisis' mounting damage to homeowners and the economy.


The latest snapshot of the mortgage market showed that the proportion of mortgages that fell into foreclosure soared to 0.99 percent in the January-through-March period. That surpassed the previous high of 0.83 percent over the last three months in 2007.

The report by the Mortgage Bankers Association also found that more homeowners slipped behind on their monthly payments.

The delinquency rate jumped to 6.35 percent in the first quarter, compared with 5.82 percent for the three months earlier. Payments are considered delinquent if they are 30 or more days past due.
Both the rate of new foreclosures and late payments were the highest on record going back to 1979.

Jay Brinkmann, the association's vice president of research and economics, told The Associated Press that the slump in house prices was the biggest factor for rising foreclosures and late payments.

With prices expected to keep dropping, foreclosures and late payments "are going to continue to go up" in the months ahead, he said.

Homeowners with tarnished credit who have subprime adjustable-rate loans took the hardest hits. Foreclosures and late payments for these borrowers also swelled to all-time highs in the first quarter.

The percentage of subprime adjustable-rate mortgages that started the foreclosure process climbed to 6.35 percent. The rate was 5.29 percent in fourth quarter, the previous high. Late payments rose to 22.07 percent from 20.02 percent, the previous high.

The association's survey covers just over 45 million home loans.

More problems also cropped up with loans to more creditworthy borrowers.

The percentage of such loans falling into foreclosure was 0.54 percent, compared with 0.41 percent at the end of last year. Late payment rose to 3.71 percent, compared with 3.24 percent.

The numbers were higher for prime borrowers with adjustable rate mortgages. The proportion of those loans falling into foreclosures jumped to 1.55 percent from 1.06 percent. The delinquency rate rose to 6.78 percent, compared with 5.51 percent.

"The number one problem is the drop in home prices," Brinkmann said. Declining prices, especially in newer built areas, "are hurting people's ability to recover when they run into trouble — a divorce or loss of job," he said. "In other days, you could sell the home. But because home prices have fallen so much, in many of those cases, the homes are going into foreclosure."

California, Florida, Nevada and Arizona accounted for 89 percent of the total increase in new home foreclosures, he said. Those are places where prices have fallen sharply and there was a lot of home building, creating too much supply, Brinkmann said.

After a five-year boom, the housing market fell into a deep slump two years ago. That dragged down sales, and prices with it. As the value of homes plummeted, many newer homeowners found themselves owing more on their mortgages than their homes were worth.

Homeowners with adjustable-rate mortgages were clobbered when their initially low rates reset to much higher ones. That made it difficult, if not impossible, to keep up with monthly mortgage payments.

As foreclosures and late payments climbed, financial companies took multibillion losses when their investments in mortgage-backed securities soured. A credit crisis erupted and spread, crimping other types of financing. The fallout plunged Wall Street in turmoil, disrupting the normal functioning of markets.

All those troubles have pushed the economy to the brink of a recession, if the country isn't already in one. Consumers and business have tightened their spending. Employers have cut more than a quarter-million jobs in the first four months of this year.

To bolster the economy, the Federal Reserve made aggressive interest rate cuts. That has helped homeowners facing rate resets on their adjustable-rate mortgages. But with inflation on the rise, Fed Chairman Ben Bernanke this week sent his strongest signal yet that the central bank's rate-cutting campaign started that started in September is coming to an end.

The Bush administration has taken steps to help distressed homeowners. It has urged lenders to freeze rates for some homeowners and encouraged lenders to rework mortgage terms so troubled borrowers can stay in their homes.

A congressional plan that includes a foreclosure prevention program has stalled as lawmakers figure out how to pay for it.

The government would back as much as $300 billion in new loans to help certain borrowers refinance into cheaper, fixed-rate loans. Mortgage holders would have to agree to take a substantial loss on the existing loans; borrowers would have to show they could afford the new mortgage and share future proceeds with the government.

The House passed its version last month. Senate leaders say they want to vote by July.
___
Associated Press writer Julie Hirschfeld Davis contributed to this report.
Source: AP News (http://www.ap.org/)

[Trish]

People have to take personal responsibility for their own decisions as well. You only buy what you can afford to buy even if it's not what you want or you wait until you can afford to buy what you want. Whether it's a house, a car, or any other expenditure - you don't bite off more than you can chew financially or you risk choking on it.

[ECW]

People have to take personal responsibility for their own decisions as well. You only buy what you can afford to buy even if it's not what you want or you wait until you can afford to buy what you want. Whether it's a house, a car, or any other expenditure - you don't bite off more than you can chew financially or you risk choking on it.

And the people you trust to help you lie to you...

Let's blame the victim here and let the criminals get away... again.

[Elrathin]

People have to take personal responsibility for their own decisions as well. You only buy what you can afford to buy even if it's not what you want or you wait until you can afford to buy what you want. Whether it's a house, a car, or any other expenditure - you don't bite off more than you can chew financially or you risk choking on it.

While I don't necessarily disagree with that, Banks and Credit Card givers ALSO have to accept irresponsibility. So when they don't get the money they are owed, they shouldn't be allowed to go crying to Uncle Sam wanting to be reimbursed for their poor decision making abilities either.

Currently, we are only punishing those that get the credit, not those that give it.

[BoogyMan]

No, they prey upon the unfortunate and down-on-their-luck working class people who are trying to make their lives better. These shysters then lie, obfuscate, and cover-up the true effects of the contracts that these poor people sign hoping to put their lives back in order only to discover they were lied to and now they stand to lose everything.

Phil Gramm and the Neocon deregulation mavens count on these people to make money for their companies because they cannot do it fairly or justly. It's why they want deregulation in the first place: they cannot stand playing by the rules because they are greedy fucks who want it all.

McCain's true colors come out more and more the longer that Gramm is associated with his campaign. I hope this becomes an issue. McCain will get an ugly brand from this willing association with a crook like Gramm.

I see a whole lot of accusation here , ECW, and little else. If those lenders lied about the loans that fact will be born out by an examination of the paperwork filed to actually GET the loan.

I have heard NOTHING to date about that kind of activity and such assertions will be easily proven by the document evaluation I mentioned above.

[suedanim]

We're talking MILLIONS of foreclosures.

The numbers are simply too high and the high foreclosure rate has gone on for too long, to chalk these devastating events up to simply buyer error, ignorance or irresponsibility. There's more to the story and that is deliberate, aggressive prospecting by lenders into the bank accounts of trusting, unsuspecting buyers whose primary fault is that they wanted a better home. These people are making huge monetary investments in these homes, only to lose them and all the money they worked hard to save.

Come on now conservatives. Where is all that compassionate conservatism?? Is there not one of you willing to admit there have been aggressive, deceptive lending practices going on that would lead to the high number of foreclosures represented below?


US foreclosures rise in December; reach 2.2 mln in 2007, up 75 pct from 2006 (http://www.forbes.com/markets/feeds/afx/2008/01/29/afx4584956.html)

01.29.08, 5:16 AM ET

WASHINGTON (Thomson Financial) - The number of foreclosures filed by US homeowners increased sharply in December and left calendar-year 2007 foreclosures higher by nearly 1 mln compared with 2006, according to a private sector report released today.

The number of foreclosure filings for December was 215,749, up 6.8 pct from November, according to California-based RealtyTrac.

December foreclosure filings are 97 pct higher than the number of foreclosures seen in December 2006.

This rise led to a total of 2.2 mln foreclosures in 2007, up 75 pct from the roughly 1.26 mln the company reported in 2006. RealtyTrac said 1 pct of all US households was in 'some stage of foreclosure' in 2007, up from 0.58 pct in 2006.

'The year ended with a monthly increase of 7 percent in December, making it the fifth straight month with more than 200,000 foreclosure filings reported and giving the fourth quarter the highest quarterly total we've seen since we began issuing our report in January 2005,' said James

Saccacio, chief executive officer of RealtyTrac.

Saccacio added that the number of properties in some stage of foreclosure was up 79 pct in 2007. He said this indicates that 'some properties may have just entered the initial stage of foreclosure in 2007 and could be going through the rest of the foreclosure process in 2008 unless lender and government intervention efforts begin to gain more traction.'

RealtyTrac said Nevada had the highest foreclosure rate in 2007 at 3.4 pct of all households, or three times the national average. Florida was second highest, with a foreclosure rate of more than 2.0 pct, and Michigan was third at 1.9 pct.

California was one of the top ten states with the highest foreclosure rate, but was first in actual number of foreclosures in 2007 at 481,000.



pete.kasperowicz@thomson.com

[BoogyMan]

I am willing to consider that there may have been some practices that were not sound being undertaken by some in the lending industry.

I am still waiting for proof that deception was the problem. That can be born out by showing the contracts signed lied to the consumer. I have not seen a single case where this has been the cause to date.

When will you admit that there were also huge numbers of people signing notes they knew would have floating interest rates and which their ability to repay was dubious at best.

I guess what I am trying to get at is that instead of this being a McCain caused problem as you so desperately and without proof have tried to make it. This is an issue created by foolish actions on the part of the lenders as well as those who took out the loans.

[suedanim]

This is a more recent article. The devastation of these lending practices continues. Blaming the victims simply does not explain it.

Foreclosures spike 112% - no end in sight (http://money.cnn.com/2008/04/29/real_estate/foreclosures_still_rising/index.htm?postversion=2008042909)

More than 155,000 families have lost their homes to foreclosure this year; one out of every 194 U.S. households received a foreclosure filing.

By Les Christie, CNNMoney.com staff writer
Last Updated: April 29, 2008: 9:09 AM EDT

NEW YORK (CNNMoney.com) -- Foreclosure filings in the first three months of 2008 rose more than 112% over last year, according to a study released Tuesday.

Real estate information firm RealtyTrac reported that nearly 650,000 foreclosure filings - which include notices of default, auction sales and bank repossessions - were issued in the first quarter. That represents 1 of every 194 households and marks a 23% increase from the last quarter of 2007.

So far this year 156,463 families have lost their homes to repossessions.

"Foreclosure activity hasn't slowed down yet," said Rick Sharga, spokesman for RealtyTrac. "But I was a little surprised that foreclosure filings more than doubled since last year."

Foreclosures increased in 46 states and in 90 of the nation's 100 largest metro areas. Some regions that had been only marginally hurt by the mortgage meltdown recorded large increases in filings. In Connecticut, for instance, filings tripled compared with the first three months of 2007. Massachusetts recorded a 260% increase.

Nevada: Hardest hit

The worst hit states are still clustered in the Southwest; Nevada, California and Arizona lead the nation in foreclosure filings. Prices ran up rapidly in these areas during the bubble years as speculators snapped up single-family homes and condos as investments.

In the first quarter, 1 of every 54 homes in Nevada received some type of foreclosure filing - more than any other state. Its largest city, Las Vegas, had 1 out of every 44 homes go into foreclosure.

Stockton, Calif., had the highest foreclosure rate out of any U.S. metro area, with 1 out of every 30 homes receiving a notice - nearly seven times higher than the national average. The Riverside/San Bernardino region had the second highest rate in the quarter, with one of every 38 homes in default.

Only two metro areas in the ranks of the 20 hardest hit were outside the Sunbelt - Detroit, which ranked sixth in the nation with 1 in every 68 households in default, and Cleveland which saw 1 in every 105 homes go into foreclosure.

The news comes despite increased foreclosure prevention efforts (http://money.cnn.com/2008/04/28/real_estate/Hope_Now_workouts_slow/index.htm?postversion=2008042817) by lenders and community organizations. Hope Now, the coalition of mortgage lenders, servicers investors and community groups, announced Monday that it helped over a half a million home owners (http://money.cnn.com/2008/04/28/real_estate/Hope_Now_workouts_slow/index.htm?postversion=2008042817) avoid foreclosure during the first three months of the year.

And some local governments have stepped up their programs to help borrowers, according to RealtyTrac CEO James Saccacio.

"For example, in late March Philadelphia issued a temporary moratorium on all foreclosure auctions for April," he said. "The city has since adopted a program that will delay foreclosure proceedings on owner-occupied properties until the owners have met face-to-face with lenders to attempt to create a loan workout plan that would prevent foreclosure."

More trouble ahead

Additionally, lawmakers in Washington, D.C. are at work on several plans (http://money.cnn.com/2008/04/18/news/economy/fha_rescue_plan_odds/index.htm?postversion=2008041815) that would deliver foreclosure relief to distressed borrowers.

All of these foreclosure prevention efforts may not be able to stand up to the tsunami of foreclosures on the way. Sharga says that a record number of hybrid adjustable rate mortgages (ARMs) - worth $362 billion - will reset in 2008.

These so-called "exploding ARMs" usually have low introductory interest rates that reset much higher after two or three years, and then re-adjust as often as every six months after that. Unless these loans can be reworked, many will fail.

"We expect to see another foreclosure peak in the late third or fourth quarter of the year," said Sharga, "because of the record number of resets coming." http://i.cdn.turner.com/money/images/bug.gif (http://money.cnn.com/2008/04/29/real_estate/foreclosures_still_rising/index.htm?postversion=2008042909#TOP)

[BoogyMan]

Apparently you don't read the responses to your posts Sue. I will repost it for you so you can enjoy it again.

I am willing to consider that there may have been some practices that were not sound being undertaken by some in the lending industry.

I am still waiting for proof that deception was the problem. That can be born out by showing the contracts signed lied to the consumer. I have not seen a single case where this has been the cause to date.

When will you admit that there were also huge numbers of people signing notes they knew would have floating interest rates and which their ability to repay was dubious at best.

I guess what I am trying to get at is that instead of this being a McCain caused problem as you so desperately and without proof have tried to make it. This is an issue created by foolish actions on the part of the lenders as well as those who took out the loans.

[Buck Laser]

I am willing to consider that there may have been some practices that were not sound being undertaken by some in the lending industry.

I am still waiting for proof that deception was the problem. That can be born out by showing the contracts signed lied to the consumer. I have not seen a single case where this has been the cause to date.

When will you admit that there were also huge numbers of people signing notes they knew would have floating interest rates and which their ability to repay was dubious at best.

I guess what I am trying to get at is that instead of this being a McCain caused problem as you so desperately and without proof have tried to make it. This is an issue created by foolish actions on the part of the lenders as well as those who took out the loans.

Boogy, I'm glad you finally recognize that the mortgage crisis has several culpable groups. To my knowledge, no one is trying to hang this one on McCain. But McCain IS a republican, and it IS the republican party which has to bear a large share of the blame for creating the conditions that allowed this kind of thing to happen.

There are no "innocent" parties in this mess: certainly borrowers were urged to buy more expensive houses than they were when I bought my first house. The guidelines for mortgage size used to be something like two or three times a family's annual income. None of the six homes I've owned over the years has ever cost more than about double our family's income, and we've always had adequate income.

A major selling point recently has been the "promise" that houses will always increase in value, and it worked for a long time. Mortgage lenders profited greatly from this practice because each new mortgage brought increased profit to the lenders.

The ironic thing now is that the LENDERS are the ones likely to get relief if republicans get their way, just as the new bankruptcy law favored lenders. Yet with all the bailouts the financial "industry" (how I HATE that term!) has gotten, my mailbox is still full of cockamamie offers from credit card vendors, mortgage lender, and scam artists who want a chance to get their hands on my life's savings.

I might even be a republican if the republicans were the party of fiscal responsibility. Can ANYONE show how they've promoted fiscal responsibility? So, Boogy, thank you for recognizing a few nuances in this situation. It's a welcome change from what most conservatives have been saying, and it gives me some hope that we might find ways to work together.

[ECW]

I am willing to consider that there may have been some practices that were not sound being undertaken by some in the lending industry.

I am still waiting for proof that deception was the problem. That can be born out by showing the contracts signed lied to the consumer. I have not seen a single case where this has been the cause to date.

When will you admit that there were also huge numbers of people signing notes they knew would have floating interest rates and which their ability to repay was dubious at best.

I guess what I am trying to get at is that instead of this being a McCain caused problem as you so desperately and without proof have tried to make it. This is an issue created by foolish actions on the part of the lenders as well as those who took out the loans.

The crooked lenders are not going to put their lies in writing. How totally absurd.

They lie during the contract signing. I've had it happen to me by a lender that the realtor lined up for me. I started to read the contract and the guy asked me what I was doing. "I'm reading the contract," I told him. He made some statements in the previous meeting and I wanted to see if those statements were reflected in the contract. They were not. I pressed him on it and he said that this was just a standard contract. So, I started writing in the margins putting down in writing what he claimed in the previous meeting. Then I signed it. He almost crapped his pants when I held it out for him to sign. He didn't. I walked out. Left him hanging.

Most people have their backs to the wall or are in tough situations now because of promises made verbally that are not in the contract despite assurances they were. If you don't think there is a crisis going on because of greedy lenders, you are out of touch, my friend.

Phil Gramm is at the heart of this crisis. Gramm works for McCain. If enough people beat that drum and loudly enough, McCain is toast. Burned to the black kind of toast.

[suedanim]

I guess what I am trying to get at is that instead of this being a McCain caused problem as you so desperately and without proof have tried to make it. This is an issue created by foolish actions on the part of the lenders as well as those who took out the loans.

First... I'm not saying McCain caused anything here ... yet. I'm kinda learning as this develops and I delve deeper into it. Take the journey with me.

But, McCain IS listening to one of the primary authors of government deregulation for lending practices it appears and calls Gramm his guru on the economy. This news gives us a headsup that we will embark on a dangerous path laid out for the US economy should McCain be elected.... crossing fingers, God forbid, get out the garlic, holy water, silver bullets, crosses and stakes cause the vampires and werewolves will rule.

Now I, obviously, am not an expert on economic issues. I'm just a lay observer whose listened to a lot of personal stories, read a bit,listen to the news. But, even Stevie Wonder can see that something a LOT more than buyer ignorance or irresponsibility is going on here.

Alan Greenspan claims he isn't responsible (http://www.salon.com/tech/htww/2007/12/12/greenspan_didn_t_do_it/). Gramm claims he isn't responsible (http://www.usnews.com/blogs/capital-commerce/2008/3/31/phil-gramm-i-didnt-cause-the-subprime-crisis.html)

Seems like a lot of people pointing fingers, but the bottom line is those two people above have wielded the greatest clout and had the most influence on the economic mess we are in today. Right or wrong?

[BoogyMan]

Finally recognize? Egads Buck, I have always held this position and have been arguing to get people to consider more than just the dishonest meme that it is only the fault of the lenders.

It seems there never will be the ability to honestly deal with the problem as every response so far has been to include some political pet position or class warfare view of the problem.

[BoogyMan]

The crooked lenders are not going to put their lies in writing. How totally absurd.

In other words all you have to backup your assertion is your belief? How totally absurd.


They lie during the contract signing. I've had it happen to me by a lender that the realtor lined up for me. I started to read the contract and the guy asked me what I was doing. "I'm reading the contract," I told him. He made some statements in the previous meeting and I wanted to see if those statements were reflected in the contract. They were not. I pressed him on it and he said that this was just a standard contract. So, I started writing in the margins putting down in writing what he claimed in the previous meeting. Then I signed it. He almost crapped his pants when I held it out for him to sign. He didn't. I walked out. Left him hanging.

You did your job in this instance and actually read the contract. If it isn't in the contract it doesn't apply.


Most people have their backs to the wall or are in tough situations now because of promises made verbally that are not in the contract despite assurances they were. If you don't think there is a crisis going on because of greedy lenders, you are out of touch, my friend.

Most people don't do what you did and actually read the contract. If I am going to sign a note for big dollars, I am going to have read the agreement from top to bottom multiple times.

What are you calling greed, profit motive? If that is the case every business on the planet is guilty. All businesses have profit motive as the basis for their actions. Read my previous comments, lenders and borrows are BOTH responsible for making this mess, not just the lenders as you want to suggest.

Phil Gramm is at the heart of this crisis. Gramm works for McCain. If enough people beat that drum and loudly enough, McCain is toast. Burned to the black kind of toast.

In the current dishonest and hostile political environment where repetition is more valuable than truth, you can probably make it stick ECW.

[BoogyMan]

First... I'm not saying McCain caused anything here ... yet. I'm kinda learning as this develops and I delve deeper into it. Take the journey with me.

But, McCain IS listening to one of the primary authors of government deregulation for lending practices it appears and calls Gramm his guru on the economy. This news gives us a headsup that we will embark on a dangerous path laid out for the US economy should McCain be elected.... crossing fingers, God forbid, get out the garlic, holy water, silver bullets, crosses and stakes cause the vampires and werewolves will rule.

Now I, obviously, am not an expert on economic issues. I'm just a lay observer whose listened to a lot of personal stories, read a bit,listen to the news. But, even Stevie Wonder can see that something a LOT more than buyer ignorance or irresponsibility is going on here.

Alan Greenspan claims he isn't responsible (http://www.salon.com/tech/htww/2007/12/12/greenspan_didn_t_do_it/). Gramm claims he isn't responsible (http://www.usnews.com/blogs/capital-commerce/2008/3/31/phil-gramm-i-didnt-cause-the-subprime-crisis.html)

Seems like a lot of people pointing fingers, but the bottom line is those two people above have wielded the greatest clout and had the most influence on the economic mess we are in today. Right or wrong?

Yet again, you don't seem want to acknowledge that the lenders AND the borrowers are to blame, Sue.

[Buck Laser]

Finally recognize? Egads Buck, I have always held this position and have been arguing to get people to consider more than just the dishonest meme that it is only the fault of the lenders.

It seems there never will be the ability to honestly deal with the problem as every response so far has been to include some political pet position or class warfare view of the problem.

Including, everyone should note, yours as well.

[BoogyMan]

Including, everyone should note, yours as well.

I think if you honestly look at my comments they have been to simply get people to realize that borrowers hold responsibility as well as the lenders. I am not laying this at the feet of any single entity, simply arguing for an honest view that takes into account all the players.

[ECW]

What are you calling greed, profit motive? If that is the case every business on the planet is guilty. All businesses have profit motive as the basis for their actions. Read my previous comments, lenders and borrows are BOTH responsible for making this mess, not just the lenders as you want to suggest.

In the current dishonest and hostile political environment where repetition is more valuable than truth, you can probably make it stick ECW.

I'm calling greed what it is: greed. Making a profit is no problem. Making one while putting another person at a disadvantage or lying about your product comes down to greed. I proved my point about lying crooked lenders with the story I told. It happened to me.

Phil Gramm is at the heart of this fiasco because the law would not have changed without his input. All of McCain's talk about the influence of lobbyists is BS as long as Phil Gramm is on the payroll of the campaign.

Another powerful Texan with his head up his ass...

[BoogyMan]

I'm calling greed what it is: greed. Making a profit is no problem. Making one while putting another person at a disadvantage or lying about your product comes down to greed. I proved my point about lying crooked lenders with the story I told. It happened to me.

I can agree with your general premise here, I cannot agree that you proved your point as you have demanded much more as proof from me in the past. You can call just about anything proof that way.


Phil Gramm is at the heart of this fiasco because the law would not have changed without his input. All of McCain's talk about the influence of lobbyists is BS as long as Phil Gramm is on the payroll of the campaign.

This is simply desire to stick something on McCain, ECW. It is akin to the claim that since FDR started the Social Security program and it doesn't cover all expenses for seniors, that he is responsible for some on Social Security having to do without. It is just silly. The dishonest extension and assignment of responsibility we now see going on is going to continue to divide us.

[Easy90]

I am willing to consider that there may have been some practices that were not sound being undertaken by some in the lending industry.

I am still waiting for proof that deception was the problem. That can be born out by showing the contracts signed lied to the consumer. I have not seen a single case where this has been the cause to date.

When will you admit that there were also huge numbers of people signing notes they knew would have floating interest rates and which their ability to repay was dubious at best.

I guess what I am trying to get at is that instead of this being a McCain caused problem as you so desperately and without proof have tried to make it. This is an issue created by foolish actions on the part of the lenders as well as those who took out the loans.

You have it BM... All these people who are trying to blame Conservatives for the fact that an increased number of homes (still a fraction of the big picture) are in the process of foreclosure are totally ignorant of the facts.

Those who have a bit of a clue are simply engaging in political rhetoric.

In the past fifteen years, pressure on housing has resulted in a pricing situation that led many people to become convinced that they could risk taking out a mortgage that was beyond their ability to support...then, before any scheduled interest increase...which they are fully aware is part of the "deal," flip the house and use the equity as income...buying an even more expensive home in the process.

That's a gamble...and it paid off for a LOT of people who made it work. I spent over 15 years in the home selling industry, and saw a lot of people become "millionaires" buying and flipping houses...including ones they personally lived in.

But when supply caught up with demand in some markets, and market appreciation (inflation) began to slow...then borrowers who were over-extended had a real problem.... Big payments, balloon clauses, and they couldn't sell with enough equity to pay off the note... What happens then? They walk away...because home lenders can't come after you for their losses.

As for "predatory" lenders... That's a laugh! If someone offers to get lend you money you can't afford to pay back, and you take the offer..THEY are the predictor? When I was first in the market to buy a home..a conventional mortgage required almost 20% down payment to secure. The typical family home in my area was around $20,000-$30,000, so that meant saving around five grand to put down. Later, it became possible to get a government backed loan for much less down payment, and a veteran could even buy with zero down, if you could get the seller to pay points. Those that did, simply added the points to the sales price...but it was a good deal for the buyer.

Over the past few years, there became so many options to buy homes as lenders were offering anyone low to no down payment loans because the housing market effectively gave lenders equity almost immediately. All lenders disclose the terms and specifics in such a loan. They know how to cover their asses when it comes to disclosure..but buyers are notoriously guilty of signing things without even reading the contract... They even sign paperwork that says nothing more than they understood and were satisfied with their understanding of all the previous paperwork they had signed.

As for the amazingly small number of homes (in relation to the numbers sold) that end up in foreclosure...all that's happened is, for some reason the owner has decided to sell, and the housing market dictated that the home wasn't worth what they already owed on it. Saying that was the lender's fault for lending them the money to buy it...is simply wrong.

[suedanim]

Yet again, you don't seem want to acknowledge that the lenders AND the borrowers are to blame, Sue.

Yes I do acknowledge that borrowers share a portion of the blame. But, imo, that portion is small compared to the overt, predatory lending practices in effect since Republicans have driven the economy in the ground.

Lets face it, the numbers of foreclosures are staggering to say the least. This shows an unprecedented aggression to go after any warm body with even a hint of an ability to pay and telling them whatever the lender thinks the buyers needs to hear to sign 'em up. If the devil is in the details, the buyer will never know it and few average citizens keep up with Alan Greenspans pronouncements. They are working every day and need to be able to lean on the honesty and integrity of the lending bank. Unfortunately, those two qualities rarely exist in the lending industry anymore in large part, thanks to Republican pushed deregulation.

[BoogyMan]

Yes I do acknowledge that borrowers share a portion of the blame. But, imo, that portion is small compared to the overt, predatory lending practices in effect since Republicans have driven the economy in the ground.

Lets face it, the numbers of foreclosures are staggering to say the least. This shows an unprecedented aggression to go after any warm body with even a hint of an ability to pay and telling them whatever the lender thinks the buyers needs to hear to sign 'em up. If the devil is in the details, the buyer will never know it and few average citizens keep up with Alan Greenspans pronouncements. They are working every day and need to be able to lean on the honesty and integrity of the lending bank. Unfortunately, those two qualities rarely exist in the lending industry anymore in large part, thanks to Republican pushed deregulation.

If the devil is in the details that means he lives in that contract that the borrower signed. If an unscrupulous lender makes false promises to a borrower, that borrower can mitigate the problem by actually READING the contract before signing. We have a great deal of power as borrowers by withholding our signature.

[Easy90]

Yes I do acknowledge that borrowers share a portion of the blame. But, imo, that portion is small compared to the overt, predatory lending practices in effect since Republicans have driven the economy in the ground.

Lets face it, the numbers of foreclosures are staggering to say the least. This shows an unprecedented aggression to go after any warm body with even a hint of an ability to pay and telling them whatever the lender thinks the buyers needs to hear to sign 'em up. If the devil is in the details, the buyer will never know it and few average citizens keep up with Alan Greenspans pronouncements. They are working every day and need to be able to lean on the honesty and integrity of the lending bank. Unfortunately, those two qualities rarely exist in the lending industry anymore in large part, thanks to Republican pushed deregulation.

Let's face it? OK...Lets. And without exaggerating... The real number is about 1% (Not 8%)
http://www.businessandmedia.org/printer/2008/20080307121223.aspx

The foreclosure start rate differed considerably by loan type. For example:

• Prime fixed rate loan foreclosure starts increased 7 basis points to 0.29 percent over the previous quarter and prime ARM foreclosure starts increased 49 basis points to 1.55 percent.
• Subprime fixed foreclosure starts increased 28 basis points to 1.80 percent and subprime ARM foreclosure starts increased 106 basis points to 6.35 percent.
• FHA foreclosure starts decreased 4 basis points to 0.87 percent and VA foreclosure starts increased 11 basis points to 0.39 percent.

http://www.mortgagebankers.org/NewsandMedia/PressCenter/62936.htm

So, essentially, borrowers with decent credit, who qualified for a standard loan are seeing a 0.29 percent default rate, whereas those who got subprime FIXED loans (essentially, relatively poor credit risks) default at a 1.8% rate, and those (with less that high qualifying credit)with ARMS are walking away at a little over 6%. The last category is a very small segment of the housing market. FHA and VA loans are defaulting well under 1%...and comprise a huge segment of the overall housing loan market. Although the trend is up....fractionally...over years past...it's ultimate cause is the leveling and even declining housing market price range...combined with a general trend to approve loans for people who shouldn't have had their home loans approved in the first place.

[ECW]

I can agree with your general premise here, I cannot agree that you proved your point as you have demanded much more as proof from me in the past. You can call just about anything proof that way.

What happened to me doesn't make the news as a general rule. Your point is valid in that respect.

This is simply desire to stick something on McCain, ECW. It is akin to the claim that since FDR started the Social Security program and it doesn't cover all expenses for seniors, that he is responsible for some on Social Security having to do without. It is just silly. The dishonest extension and assignment of responsibility we now see going on is going to continue to divide us.

1) I want to stick this to McCain because without his support in the Senate, Gramm would not have been able to get as far as he did with his deregulation scheme. If he did this in the Senate, what will he do as president? Much, much worse.

2) I want to stick this on Gramm, the worst piece of crap and the biggest idiot to call himself an economist or economic advisor of any kind.

3) I want this to show Mccain's hypocrisy when it comes to bashing lobbyists and special interests when his campaign is infested with lobbyists from the word "go." The only kind of lobbyists and special interests Mccain does not like are the ones that look out for Democratic interests. He loves the rest of them.