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BAR[_3_]

wrote:
On Fri, 09 Jan 2009 19:53:08 -0500, BAR wrote:

20% cash down. If you don't have 20% down get a second job. If you have
to wait 15 or 20 years to buy a hose then that is what you have to do.
You do not have a right to buy a house regardless what Barney Frank or
Chris Dodd have to say.

Damn conservatives, always wanting government to regulate everything. ;-)

Government, no government regulation needed just good risk analysis. If
you buy a $200K house are you going to walk away from $40K? Or if you
buy a $500K house are you going to walk away from $100K?

From my seat, it wasn't the CRA or the sub-prime loans that did this
economy in. It was the stupid actions of the banks and investment houses
in their dealings with sub-prime loans. Lehman Brothers was leveraged
somewhere @ 33 to 1. That's just downright dumb.

What gave rise to the sub-prime loan market? Who started underwriting
97% and 100% loans? If I obtained a 100% loan what do I have to lose if
I walk away from it and leave the bank holding the bag?

Remember "redlining"? It was a racist, and illegal, policy of grouping
entire neighborhoods as "out-of-bounds" for loans. That was what the CRA
was intended to alleviate. What a concept, banks doing their jobs
loaning money without regards to race, religion, or gender.

Racist and illegal? It was based upon risk analysis. Why would I want to
lend money to people who were most likely not going to pay it back. And,
if I did have to foreclose just before getting the sheriff to evict them
they would trash the place. Where is my motivation to lend money in
those areas?

What a concept banks lending money to those who they believed would
actually pay the money back.