Comments on: Once there was a law that would have prevented all this http://blownmortgage.com/2008/10/16/once-there-was-a-law-that-would-have-prevented-all-this/ #1 Free Home Loan Modification & Debt Relief Help For US Home Owners - Truths, Facts & News About the Mortgage Industry Sat, 07 Nov 2009 02:53:18 -0700 http://wordpress.org/?v=2.8.3 hourly 1 By: I-Man http://blownmortgage.com/2008/10/16/once-there-was-a-law-that-would-have-prevented-all-this/comment-page-1/#comment-72149 I-Man Sun, 19 Oct 2008 06:17:59 +0000 http://blownmortgage.com/?p=1472#comment-72149 No sale. Remember the last banking crisis in the 80s. Your analysis of what went wrong + where is illogical + just partisan. There is lots of blame to go around + IMO mostly with the Fed's (Greenspan) cheap money policy. Over-leverage. Inept regulations. Corrupt + incompetent politicians. Complex securitizations that ultimately no one fully understood the ramifications. Glass-Steagall is just a canard. No sale. Remember the last banking crisis in the 80s. Your analysis of what went wrong + where is illogical + just partisan. There is lots of blame to go around + IMO mostly with the Fed's (Greenspan) cheap money policy. Over-leverage. Inept regulations. Corrupt + incompetent politicians. Complex securitizations that ultimately no one fully understood the ramifications. Glass-Steagall is just a canard.

]]> By: I-Man http://blownmortgage.com/2008/10/16/once-there-was-a-law-that-would-have-prevented-all-this/comment-page-1/#comment-12549 I-Man Sun, 19 Oct 2008 06:17:59 +0000 http://blownmortgage.com/?p=1472#comment-12549 No sale. Remember the last banking crisis in the 80s. Your analysis of what went wrong + where is illogical + just partisan. There is lots of blame to go around + IMO mostly with the Fed's (Greenspan) cheap money policy. Over-leverage. Inept regulations. Corrupt + incompetent politicians. Complex securitizations that ultimately no one fully understood the ramifications. Glass-Steagall is just a canard. No sale. Remember the last banking crisis in the 80s. Your analysis of what went wrong + where is illogical + just partisan. There is lots of blame to go around + IMO mostly with the Fed's (Greenspan) cheap money policy. Over-leverage. Inept regulations. Corrupt + incompetent politicians. Complex securitizations that ultimately no one fully understood the ramifications. Glass-Steagall is just a canard.

]]> By: I-Man http://blownmortgage.com/2008/10/16/once-there-was-a-law-that-would-have-prevented-all-this/comment-page-1/#comment-12552 I-Man Sun, 19 Oct 2008 06:17:59 +0000 http://blownmortgage.com/?p=1472#comment-12552 No sale. Remember the last banking crisis in the 80s. Your analysis of what went wrong + where is illogical + just partisan. There is lots of blame to go around + IMO mostly with the Fed's (Greenspan) cheap money policy. Over-leverage. Inept regulations. Corrupt + incompetent politicians. Complex securitizations that ultimately no one fully understood the ramifications. Glass-Steagall is just a canard. No sale. Remember the last banking crisis in the 80s. Your analysis of what went wrong + where is illogical + just partisan. There is lots of blame to go around + IMO mostly with the Fed's (Greenspan) cheap money policy. Over-leverage. Inept regulations. Corrupt + incompetent politicians. Complex securitizations that ultimately no one fully understood the ramifications. Glass-Steagall is just a canard.

]]> By: I-Man http://blownmortgage.com/2008/10/16/once-there-was-a-law-that-would-have-prevented-all-this/comment-page-1/#comment-12554 I-Man Sun, 19 Oct 2008 06:17:59 +0000 http://blownmortgage.com/?p=1472#comment-12554 No sale. Remember the last banking crisis in the 80s. Your analysis of what went wrong + where is illogical + just partisan. There is lots of blame to go around + IMO mostly with the Fed's (Greenspan) cheap money policy. Over-leverage. Inept regulations. Corrupt + incompetent politicians. Complex securitizations that ultimately no one fully understood the ramifications. Glass-Steagall is just a canard. No sale. Remember the last banking crisis in the 80s. Your analysis of what went wrong + where is illogical + just partisan. There is lots of blame to go around + IMO mostly with the Fed's (Greenspan) cheap money policy. Over-leverage. Inept regulations. Corrupt + incompetent politicians. Complex securitizations that ultimately no one fully understood the ramifications. Glass-Steagall is just a canard.

]]> By: I-Man http://blownmortgage.com/2008/10/16/once-there-was-a-law-that-would-have-prevented-all-this/comment-page-1/#comment-12555 I-Man Sun, 19 Oct 2008 06:17:59 +0000 http://blownmortgage.com/?p=1472#comment-12555 No sale. Remember the last banking crisis in the 80s. Your analysis of what went wrong + where is illogical + just partisan. There is lots of blame to go around + IMO mostly with the Fed's (Greenspan) cheap money policy. Over-leverage. Inept regulations. Corrupt + incompetent politicians. Complex securitizations that ultimately no one fully understood the ramifications. Glass-Steagall is just a canard. No sale. Remember the last banking crisis in the 80s. Your analysis of what went wrong + where is illogical + just partisan. There is lots of blame to go around + IMO mostly with the Fed's (Greenspan) cheap money policy. Over-leverage. Inept regulations. Corrupt + incompetent politicians. Complex securitizations that ultimately no one fully understood the ramifications. Glass-Steagall is just a canard.

]]> By: Miami Title Company http://blownmortgage.com/2008/10/16/once-there-was-a-law-that-would-have-prevented-all-this/comment-page-1/#comment-72148 Miami Title Company Fri, 17 Oct 2008 13:42:29 +0000 http://blownmortgage.com/?p=1472#comment-72148 Regarding the mortgages, if every borrower had to put 20% down, mortgages would have been much more stable and secure. In 2000-2002, maybe 5% of sales I closed had the standard 80% ltv. From 2003-2007, I think abut 90% of transactions I closed had 100% ltv, with one or two loans, regardless of arms. People gamble when they do not have to risk their actual cash. Regarding the mortgages, if every borrower had to put 20% down, mortgages would have been much more stable and secure. In 2000-2002, maybe 5% of sales I closed had the standard 80% ltv. From 2003-2007, I think abut 90% of transactions I closed had 100% ltv, with one or two loans, regardless of arms. People gamble when they do not have to risk their actual cash.

]]> By: Miami Title Company http://blownmortgage.com/2008/10/16/once-there-was-a-law-that-would-have-prevented-all-this/comment-page-1/#comment-12548 Miami Title Company Fri, 17 Oct 2008 13:42:29 +0000 http://blownmortgage.com/?p=1472#comment-12548 Regarding the mortgages, if every borrower had to put 20% down, mortgages would have been much more stable and secure. In 2000-2002, maybe 5% of sales I closed had the standard 80% ltv. From 2003-2007, I think abut 90% of transactions I closed had 100% ltv, with one or two loans, regardless of arms. People gamble when they do not have to risk their actual cash. Regarding the mortgages, if every borrower had to put 20% down, mortgages would have been much more stable and secure. In 2000-2002, maybe 5% of sales I closed had the standard 80% ltv. From 2003-2007, I think abut 90% of transactions I closed had 100% ltv, with one or two loans, regardless of arms. People gamble when they do not have to risk their actual cash.

]]> By: Miami Title Company http://blownmortgage.com/2008/10/16/once-there-was-a-law-that-would-have-prevented-all-this/comment-page-1/#comment-12551 Miami Title Company Fri, 17 Oct 2008 13:42:29 +0000 http://blownmortgage.com/?p=1472#comment-12551 Regarding the mortgages, if every borrower had to put 20% down, mortgages would have been much more stable and secure. In 2000-2002, maybe 5% of sales I closed had the standard 80% ltv. From 2003-2007, I think abut 90% of transactions I closed had 100% ltv, with one or two loans, regardless of arms. People gamble when they do not have to risk their actual cash. Regarding the mortgages, if every borrower had to put 20% down, mortgages would have been much more stable and secure. In 2000-2002, maybe 5% of sales I closed had the standard 80% ltv. From 2003-2007, I think abut 90% of transactions I closed had 100% ltv, with one or two loans, regardless of arms. People gamble when they do not have to risk their actual cash.

]]> By: Miami Title Company http://blownmortgage.com/2008/10/16/once-there-was-a-law-that-would-have-prevented-all-this/comment-page-1/#comment-12553 Miami Title Company Fri, 17 Oct 2008 13:42:29 +0000 http://blownmortgage.com/?p=1472#comment-12553 Regarding the mortgages, if every borrower had to put 20% down, mortgages would have been much more stable and secure. In 2000-2002, maybe 5% of sales I closed had the standard 80% ltv. From 2003-2007, I think abut 90% of transactions I closed had 100% ltv, with one or two loans, regardless of arms. People gamble when they do not have to risk their actual cash. Regarding the mortgages, if every borrower had to put 20% down, mortgages would have been much more stable and secure. In 2000-2002, maybe 5% of sales I closed had the standard 80% ltv. From 2003-2007, I think abut 90% of transactions I closed had 100% ltv, with one or two loans, regardless of arms. People gamble when they do not have to risk their actual cash.

]]> By: Constantine von Hoffman http://blownmortgage.com/2008/10/16/once-there-was-a-law-that-would-have-prevented-all-this/comment-page-1/#comment-72147 Constantine von Hoffman Thu, 16 Oct 2008 14:38:20 +0000 http://blownmortgage.com/?p=1472#comment-72147 You raise some very good points. I have not looked closely enough at the savings and loan collapse yet, but I suspect some of the groundwork for today's mess can be found there, too.<br><br>As far as risk goes -- it is not that Glass-Steagall was an effort to remove risk. Your point about the absurd geographic limitations is spot in showing how it actually increased some types of risk. But G-S was an effort to remove excessive risk caused by what happens when an institution has a fiscal incentive to get others to participate in its own risky investments. G-S was designed for a time when those others were the banks' customers and the investments were stocks. Today we have a situation where financial institutions had a clear interest in getting others to buy the bad mortgages they were making. Their profit came from the resale of these loans -- and their risk -- to others. Therefore there was a huge disincentive for them to do the due diligence that should have been done. You raise some very good points. I have not looked closely enough at the savings and loan collapse yet, but I suspect some of the groundwork for today's mess can be found there, too.

As far as risk goes — it is not that Glass-Steagall was an effort to remove risk. Your point about the absurd geographic limitations is spot in showing how it actually increased some types of risk. But G-S was an effort to remove excessive risk caused by what happens when an institution has a fiscal incentive to get others to participate in its own risky investments. G-S was designed for a time when those others were the banks' customers and the investments were stocks. Today we have a situation where financial institutions had a clear interest in getting others to buy the bad mortgages they were making. Their profit came from the resale of these loans — and their risk — to others. Therefore there was a huge disincentive for them to do the due diligence that should have been done.

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