Government warned of mortgage meltdown(Bush WH Ignored Mortgage Meltdown Warnings)

[RedEarth]

Source: AP

WASHINGTON (AP) -- The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.

"Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job.

Bowing to aggressive lobbying -- along with assurances from banks that the troubled mortgages were OK -- regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.

.......

In 2005, faced with ominous signs the housing market was in jeopardy, bank regulators proposed new guidelines for banks writing risky loans. Today, in the midst of the worst housing recession in a generation, the proposal reads like a list of what-ifs:

--Regulators told bankers exotic mortgages were often inappropriate for buyers with bad credit.

--Banks would have been required to increase efforts to verify that buyers actually had jobs and could afford houses.

,,,,,,more

Read more: http://money.cnn.com/2008/12/01/news/ignored_warnings.a...

[slackmaster]

1. See my shocked face

[yardwork]

2. Nobody could possibly have predicted that...

[sam sarrha]

3. EVEN THE PEOPLE DOING IT KNEW IT WOULD LEAD TO DISASTER...

[underpants]

17. Exactly

Well at least Greenspan couldn't have predicted it

[Incitatus]

29. but it WAS predicted

Even some here on DU were talking about it years before it happened.


Do you really think nobody could have predicted millions of people wouldn't be able to pay their mortgage when their payment doubled, or did you just forget a sarcasm tag?

[yardwork]

44. Has DU really become that humor impaired?

The phrase "nobody could have predicted that (insert something that the Bush administration was repeatedly warned would happen)" has been used by the Bush administration so many times I can't believe they can still say it without laughing.

"Nobody could have predicted that Osama bin Laden would fly airplanes into buildings" - except that the president was warned repeatedly of this very thing in the months and weeks before 9/11/

"Nobody could have predicted that the levees would fail" - except that engineers had been warning of this exact thing for years before Katrina, and the city of New Orleans itself had begged the government for money to repair the levees, in vain.

Now we have, "Nobody could have predicted that an unregulated mortgage market drunk on risky loans might collapse."

Duh.

[Rosa Luxemburg]

47. nobody could have anticipated.........

[axollot]

48. 10/4 RE: Humour impaired.....I read it , like it appears you meant it. needed

:Sarcasm: I guess.

Does certainly piss one off that we had an economic 9/11 and AGAIN with the 'warned' shit....:Facepalm:

peace
Sandy

[ksimons]

4. geesh, we need to replace the government with military members

who have no stake in corruptive influences, because they are serving the country in general

[Stuart G]

5. SOUNDS FAMILIAR..DIDN'T HE IGNORE OTHER WARNINGS TOO??? ....NOW ..WHAT WERE THEY?

[Stuart G]

6. now let's see...there were warnings for...KATRINA....yes..and what else??..

did he ignore some other warnings??? The Katrina Warnings were very very public..Did he really help?

No,.. I think he was at a Birthday party...hmmmmmmmmmmmmmmmmmmmmmmmmmmmm what else did he ignore...

[Duppers]

11. I'm leaving off some things too....

He ignored
warnings about 9-11,
the good intel regarding Iraq,
global warming,
Katrina,
and now the economy....

[MetaTrope]

18. But they've reaped an enormous amount of money and political capital off each one

[bertman]

34. I'd say George did his job very well--overseeing the largest transfer of public money

to private hands in recorded history.

[shanti]

37. LIHOP anyone?

n/t

[Amonester]

39. Chimpy 'joked' about an impressive crowd he had there...

"the Have's... and the Have More's" (laughters of arrogance...)

then 'it' added: some call you the Elite, i call you my base (louder laughters of pure evil arrogance...)

'it' already knew then 'itself' and them were WAY ABOVE ALL LAWS.

then, 'it' went on to literally LOOT the U.S. Treasury of TRILLIONS that weren't even there at the moment, and will never be because they're ALL IOUs for DECADES ahead

'nobody could have foreseen they would steal it all for themselves' (except us)

[AlbertCat]

19. That's because Government IS the problem...

...so they didn't govern for 8 friggin' years.

The basic ideas and tenants of the GOP... say it with me.... DO NOT WORK!

They are not a party bereft of ideas. They have plenty of BAD ideas that don't work! All their ideas benefit the power brokers and hoi poloi but screw everyone else. The main job of the GOP is to somehow make it seem like these bad ideas will benefit everyone (lower taxes!) when they really don't (no services!)

[VP505]

7. Sure seems like we heard

of a similar scenario before. Must be my imagination, since Booo$hCo has been such a competent and efficient Admin on top of everything.

[Stuart G]

9. Yes..........I seem to recall.......and..

what could that be?????????

[Democrats_win]

8. Thee leadership skill of George W. Bush: inaction in the face of catastrophe.

We've seen it again and again:

Iraq falling apart
9/11 Presidential briefing
My Pet Goat on 9/11
Flying all over the country on 9/11
Katrina
Afghanistan falling apart
Financial crisis
Torture at Gitmo/Abhu G.

Then there's the actions that he did take which were usually wrong.

[Stuart G]

10. OH....was he warned about 9/11?...no...........????????

How could a President ignore such a warning????

[BrklynLiberal]

12. Of all the things prez shit-for-brains did during his admin, ignoring warnings was the

one thing he did very well.

[LynnTheDem]

13. I'm shocked. SHOCKED, I tell ya.

Ok, not.

[zzxo]

14. What should have Bush done?

Should he have vetoed a bill that would have stopped it all?

[elias7]

20. What bill did he receive that wanted to keep it going?

[ourbluenation]

21. I don't know - how about exert some, you know, actual leadership.

3 posts. hmmm?

The banking regulators proposed new guidelines but anything that would impede the lending frenzy was stripped from the document. By who ya think? Fairies? Goblins?

[Pastiche423]

22. Yep, a 3 poster whose hero is...

Milton Friedman!

[ourbluenation]

24. I've alerted the mods. n/t

[az chela]

27. for what??/lack of warnings???

[Pastiche423]

33. Thank you, kindly

[ozymandius]

25. Maybe Bush could have appointed people who gave a shit about

toxic mortgage mechanisms. That would have been a great start. Regulators were never empowered to do the jobs they were given. Denial of the existence of subprime mortgage trouble threw more fuel on the fire. Greenspan (Mr. ARMs himself) retired. Bush gave the new Fed Chairmanship to Greenspan's bud, Bernanke, who swore that the nascent subprime crisis was contained way back in 2006.

The Bush administration also intervened to prevent states from protecting its own citizens from predatory lending practices. The OCC (Office of the Comptroller of the Currency), under Bush control, was perverted for the first time since its inception after the Civil War to allow banks to prey on customers.

Bush: failure all the way with this supply-side laissez-faire government nonsense.

[Webster Green]

35. Probably not much, since he's a fucking idiot!

Worst president ever!

Worst president ever.....of any country.....on any planet in the Universe!!

Totally evil, totally useless piece of maggot shit.

I don't like him!

[shanti]

38. enjoy your stay

friedman-lover....

[xchrom]

15. why -- why does that sound so familiar? nt

[stevedeshazer]

16. They didn't ignore it. They MADE IT HAPPEN ON PURPOSE.

And they were brilliant...only off by a few weeks (too soon to drop the turd in Obama's punchbowl.)

[eowyn_of_rohan]

28. The bu$h MIHOP "legacy"

hopefully this dark era of right wing crime & abuse of power will come to a close soon, and there will be investigations into and prosecutions for every GD thing they have done from President Kennedy's assassination forward ( I can dream, can't I...)

[Kingofalldems]

23. This thread should be pinned-- to show a couple

DUers (freepers?) who are blaming the whole mess on Dodd and Frank.

[Name removed]

26. Deleted message

Message removed by moderator. Click here to review the message board rules.

[mascarax]

30. Gee, twas only a memo titled "Financial Industry Determined to Attack...

in United States"

I mean, who could know just be reading that?!

[Baby Snooks]

31. He knew the Republicans would blame the Democrats...

The banks were making money. What it's all about. And if things went bad, well, he knew the Republicans would blame the Democrats. Which they did. And still do. When he is on the helicopter flying over Washington one last time on his way to Andrews and his last trip on Air Force One to Dallas he will be shooting the bird at everyone. And laughing. Particularly at Nancy Pelosi and her table.

[2Design]

32. is any democrat surprised - not this one n/t

[shanti]

36. more warnings ignored?

bull-shit! another lihop, if you ask me...

[Stuart G]

40. Yep....seems bush...doesn't read any warnings...nt

[Amonester]

42. warnings R 'very good news' for *...

they 'signal' another bundle of 'free' cash is heading in his buddies' off-shore accounts

and all * has to do is... nothin' (or 'ignore' them, which is very 'hard werk')

The Brave Of The Home Lost The Home...

[Zech Marquis The 2nd]

41. just like 9/11

* just stood there and let it happen anyway...now where and when have i seen THAT before?

[Gman]

43. But, but, but.... it's the Democratic Congress in 2006 that caused this

at least, that's what Rush told me.

[rurallib]

45. "Bin Laden determined to strike within US"

"Financial crisis will follow current policy"

The warnings needed to be less cryptic.

[bonito]

46. M3 is no longer published.......I think it never made the headlines

[Rosa Luxemburg]

49. the American people need to reminded that allthis has been Bush's fault!

Obama warned them a few years ago too

[No Elephants]

50. Not all Bush's fault. Ronnie and Poppy did their part and, sadly, iClinton signed the Glass-

Steagall Act. Each of them had a role in allowing creation of "funny" securities, "funny" mortgages, less disclosure to borrowers or institutions getting "too big to fail." And that combination proved lethal.