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Mr. Luddite

On 10/20/2013 2:16 AM, wrote:
On Sat, 19 Oct 2013 20:42:15 -0400, "Mr. Luddite"
wrote:

On 10/19/2013 7:27 PM, F.O.A.D. wrote:
Reuters) - JPMorgan Chase & Co has reached a tentative $13 billion
agreement with the U.S. Justice Department to settle government agency
investigations into bad mortgage loans the bank sold to investors before
the financial crisis, a source said on Saturday.

The tentative deal does not release the bank from criminal liability for
some of the mortgages it packaged into bonds and sold to investors, a
factor that had been a major sticking point in the discussions, the
source said.

As part of the deal, the bank will likely cooperate in criminal
inquiries into certain individuals involved in the conduct at issue, the
source, who declined to be identified, said.

- - -

Too bad there's a settlement and that none of the banksters probably
will ever be sent to the slammer.

Too bad the banking industry was forced into giving bad mortgage loans
in the first place. Without them there would not have been a financial
crisis.

There was [plenty of greed to go around. We also had lots of house
flippers (AKA "investors") who were milking that easy loan money on
all 4 tits and nobody is suggesting that we should claw back any of
that money. A lot of the foreclosures around here were simply "walk
aways" on investor property that was not going to sell for what they
had borrowed so they defaulted and kept their profits. .

True, but that was more of a "result of" and not a "cause". The
"cause" resides in changes to the Fair Housing Act during Clinton's
administration championed by people like Barney Frank whereby 50 percent
of mortgages involving Freddie Mac and Frannie Mae were required to be
given that were previously considered high risk. In fairness, the
percentage was increased to 55 percent in the early days of the Bush
administration. That is the single most cause of the housing market
bubble burst that started in 2006-2007 and finally exploded in 2008.
All the bundled bad loans brought the financial sectors and this country
to it's knees.

We may have had a typical cyclic recession and market correction that
normally occurs but it would not have become the "Great Recession" that
it did without the housing market burst.