Here we go again--Where's Barney Frank?

What does this have to do with NY residential real estate?

It was Democratic reps in the early 1990s that pushed for the government to subsidize lower-income housing purchases by buying loans from financial institutions that lent to minorities.

This was the very origin of the most recent housing bubble as the government went from buying "minority" loans to just about all loans in the system.

15 years of doing this simply pushed RE prices up and up as more and more people could "afford" the financing - which of course became zero down and no income required.

While the inflated RE prices made people happy, it made lower- and middle income buyers completely dependent on cheap financing - plus the ability to refinance because "housing prices never go down".

Government involvement in housing has done the same as gov't involvment in medicine and higher education - drive prices far out of range of 85% of incomes and promote the need for financing (which has allowed financial institutions to become an essential part of the home buying process and thus an extremely influencial part of the economy as a whole).

The government's involvement has made housing price inflation a REQUIREMENT, which has made housing more expensive in real terms than if the government hadn't gotten involved in the first place.

The same has happened in NYC, but the real difference is NYC is the HQ of many of the institutions that exploited the gov't policy and made tens of billions doing so - hence $6M 2 bedrooms abound.

I can pretty much predict what will happen. The banks and smart customers will retain the 30% down payment full doc mortgages, then get Congress and the regulators to agree to no money down as long as Private Mortgage Insurance is taken out. The M.I. provider collects the fees, the banks sell the loans to the gov't, the loan defaults, the m.i. provider renegs on the insurance and the tax payer gets stuck.

The m.i. providers always look to claim fraud and not wiggle out of contracts. Of course the lenders still get the origination fees..

As opposed to the social security checking farts that'll tell us, so sorry no mas for e tu.

When is Barney going to appear on Bill Maher again?

w67th can join that panel. You get paid scale, w67th. Shake them up!

Right on, sister!

It's an odd coalition.
Brokers, Realtors and builders looking to earn money off of anyone who isn't stellar credit and using the
race card for political reasons. Then you have politicians and special interest groups who represent those same borrowers needing to stand up.
Nobody can force lenders to make bad retained risks, but putting tax-payer funds at risk is a whole other issue. Nothing changes.

Here's Bill introducing w67th to the audience:

"You've read his comments. He's the Don Rickles of cyber-space.
The Triumph the Insult-Comic Dog of streeteasy...
The king of the one-liners,
The king of the two-liners,
The king of the ocean-liners..."

Don Rickles?

Maybe more like a bad Redd Foxx

"It's the big one, Weezy!"

No, wait: Weezy was on "The Jeffersons".

Lizbeth was Redd's t.v.dearly departed wife.

>w67th can join that panel. You get paid scale, w67th. Shake them up!

Truth, does "scale" also apply to dirty apes?

Yes, huntersburg.
Even if he looks like Magilla Gorilla.

Hey, I don't know much about the gorilla / ape family. I'm no fancy scientist. But do you know, is it correct, a dirty ape's children are a bunch of dirty monkeys? What kind of offspring does w67thstreet have?

Also, is there a zoo upstate in Columbia County?

This caught my eye. Shaun Donovan who prior to being Secretary of Housing under Obama worked for Clinton is now pushing banks to lower credit standards when under-writing new loans.

http://www.washingtonpost.com/realestate/federal-agencies-could-induce-private-lenders-to-ease-restrictions-on-home-loans/2012/07/06/gJQAlIduRW_allComments.html#comments

Two federal agencies with far-reaching influence over the mortgage market are working on a problem that could affect the ability of many consumers to obtain a home loan: How to encourage private lenders to ease up on their underwriting restrictions that go beyond what the agencies themselves require for mortgage approvals.

Both the Federal Housing Finance Agency, which oversees giant investors Fannie Mae and Freddie Mac, and the Federal Housing Administration, which runs the low-down-payment FHA program, are considering steps they might take to persuade lenders to open the mortgage spigots a little wider. Together, Fannie, Freddie and FHA account for more than 90 percent of all home loan funding. The focus of their little-publicized reform projects: the “overlay” rules many lenders have adopted that lump extra fees, larger down payments and higher credit-score requirements onto home loans than Fannie, Freddie or FHA require.

Let me poke this in your eye, oh great manhattan rents keep going up forever so my coop bubble prices will be bubbly FOREVER!

Zeit heil, oh great Bubbler!

Barney frank was headed to the alter, I do believe. Sadly it could not be the Elvis chapel in las Vegas, which would have added a bit of louche charm to the event.

Memito, I appreciate your posts. Truly. But you really ought to do some more research on the default rates, etc. for the loans originated as a result of the (if memory serves) CRA. Go to ritholtz's blog and search, for an easy starting point. And ritholtz is not particularly partisan.

Ugh, again with the Ritholtz blog. Never stops with the Ritholtz blog.

>Zeit heil,

Not quite, but I'm still impressed that an ape can talk, even if gibberish.

Ugh, again with the apes. Never stops with the apes. Glass houses.

We have an ape posting on streeteasy. And he recently came back.

Barry Ritholtz has never been on streeteasy. ... Or has he?

You are far more repetitive than I am. And repetitive is repetitive, whatever your self-indulgent justification.

>And repetitive is repetitive

Insightful

True