patrick.net

klarek says

Now all the agents just take those other offers and throw them in the trash when they get them. Cousin still gets the house.

That's a dangerous thing for them to do really. Before they resort to that, they say there are multiple offers massively over the asking price. It discourages buyer agents from filling out the paperwork for their client. That way, they eliminate the possibility of a complaint.

Buyers are still a bit foolish in my area when it comes to foreclosures....tried to buy one..but the bank wanted 5% of the purchase price as an earnest money deposit with the financing contingency falling off after 30 days...

sorry, but that is just too much risk that the loan can get through underwriting...not to mention I heard the property needed about 40K in rehab (25k unobvious apparent water penetration and foundation issues) (The home inspector is a personal lifelong friend). If you add the 40K to what I was willing to offer before I found out about the 5% earnest money deposit, I think the house wasn't a good deal after all. I would estimate the total price of 220k to be pretty much what it would go for from a normal seller...maybe even a tad more.

They do it all the time. I know someone who recently wanted to make an offer on an active listing and was told "don't bother". On an ACTIVE listing. Agents ought not be saying that even if a house were under contract. They're shady as shit.

So yeah, they'll say whatever they can to save the ink toner on their fax machines, but if that fax comes through, they can pop it in the shredder and the bank will likely never know about it.

david1 says

Buyers are still a bit foolish in my area when it comes to foreclosures….tried to buy one..but the bank wanted 5% of the purchase price as an earnest money deposit with the financing contingency falling off after 30 days…
sorry, but that is just too much risk that the loan can get through underwriting…not to mention I heard the property needed about 40K in rehab (25k unobvious apparent water penetration and foundation issues) (The home inspector is a personal lifelong friend). If you add the 40K to what I was willing to offer before I found out about the 5% earnest money deposit, I think the house wasn’t a good deal after all. I would estimate the total price of 220k to be pretty much what it would go for from a normal seller…maybe even a tad more.

Foreclosures benefit many people that are skilled and can do the work themselves. If one has to hire a contractor to do the work, they really should look elsewhere. They're competing with people that are going to DIY. 30 days of financing contingency is more than enough.

klarek says

They do it all the time. I know someone who recently wanted to make an offer on an active listing and was told “don’t bother”. On an ACTIVE listing. Agents ought not be saying that even if a house were under contract. They’re shady as shit.
So yeah, they’ll say whatever they can to save the ink toner on their fax machines, but if that fax comes through, they can pop it in the shredder and the bank will likely never know about it.

There is a chance that the active listing had offers that the seller is reviewing already. My property was on Active for a whole week before the bank got us the signed documents.

They are trying to combat agents shredding these offers. The latest RE Purchase Agreement contracts has a part for the signature of the seller indicating that they are rejecting the offer. I suppose the listing agent can forge that too, but then there will be a paper trail for a larger wrong doing. Sadly, buyer agents aren't even following up with the listing agents for the rejection signature, and I've never seen it used.

Blo-Bama

Right. Carter had "the hostage crisis," whereas Obama...

Most buyers don't look for confirmation of a seller's rejection. Sure, if all buyers sent a hard-copy via express mail to the owners, agents wouldn't pull this crap. But that very rarely happens because of a lack of public awareness. There's no real oversight in the RE industry.

sbourg says

He’s wrong that Bush tax rate cuts were mainly for the ‘rich’. Nothing could be further from the truth.
In short, the tax rate reductions were vastly larger for lower-paids. That’s a fact.

You know, when you make a factual assertion it helps your argument to actually provide facts.

The top quintile of the country raked in about two-thirds of the Bush tax cut.

http://www.economiajusta.org/files/Distribution_and_Cost_Bush_TaxCuts.pdf

And what ideologues don't understand is that tax cuts on the poor and middle class just ended up in the pockets of the rich thanks to rent increases. I'll give you an iron law -- cut taxes, and you'll see higher land values and rents in response. The 2001-2005 period perfectly illustrates this.

"Though tax cuts for the rich were bigger than those for other groups, the wealthiest families paid a bigger share of total taxes. That is because their incomes have climbed far more rapidly, and the gap between rich and poor has widened in the last several years."

http://www.nytimes.com/2007/01/08/washington/08tax.html

And he’s wrong that the rate cuts were the primary cause of the current $1.7T deficit.

It also helps to not be a knee-jerking idiot and actually reading the piece for comprehension. Here's what Krugman actually said:

The answer is, three main things. First, there were the Bush tax cuts, which added roughly $2 trillion to the national debt over the last decade.

Krugman did not make the assertion you say he did. Learn how to read plz.

sbourg, tell us the truth, did you get this "job" through an add like this?

sbourg says

IMHO was Clinton/Cuomo/Frank’s 7/1/95 bank regulations

? sbourg, who controlled Congress in 1995 on your planet?

Since FY’09 and now for the 3rd-year in a row, the fed govt’s spending $3.7T and it’s creating havoc, mismanagement, waste, and fiscal budgetary crisis.

Here's the deal. The Bush Economy was an orgy of private and corporate debt.

Here's home mortgage debt vs. home asset value:

http://research.stlouisfed.org/fred2/graph/?g=gx

See that run-up. It got rolling in the late 1990s but everyone doubled down on the bubble in 2003-2005.

then see how asset values (red line) have crashed? But the debt remains. We are in horrific over-extension now and it's all going to come crashing down eventually unless somebody somewhere "bails out" the system more.

That borrowed money wasn't just printed -- it was the banks and Wall Street packaging peoples' savings and pension money into home mortgages.

Since FY’09 and now for the 3rd-year in a row, the fed govt’s spending $3.7T and it’s creating havoc, mismanagement, waste, and fiscal budgetary crisis.

Your understanding of how the economic system works is very very suspect.

in 2008-2010 the Federal government tried to engineer a "soft landing" of the economy from the excesses of the bubble times that ran 2003-2007. Here's a chart of year-on-year PRIVATE debt growth (blue) vs YOY growth in Federal spending (red):

http://research.stlouisfed.org/fred2/graph/?g=kP

that little blip at the end of the red line was the "stimulus". Not much compared to the real stimulus of FIVE TRILLION dollars being injected into the economy 2005-2007 via the housing bubble, no?

The "havoc and crisis" is coming from the withdrawal of the credit bubble.

I don't know what you're referring to about "mismanagement and waste" and I suspect you don't either, you're just typing words that sound good to you.

shouldn't "incombent" be referring to Trump?

this is not a horrible article but:

"The SIBs really represent unfunded pension liabilities, not true third party debts. "

is kinda off. The SSTF is a debt to FICA payers, who are the "third party".

Keeping the SSTF as part of the debt limit illustrates that the SSTF is in fact a real obligation of Congress, and thus the US taxpaying base -- which is increasingly NOT FICA payers, given the increasing income disparity in this country.

So, the question is whether it is more disastrous for the USA to have huge debt so that interest payments on this debt are larger than the growth rate of the GDP, or whether some pain and suffering today will cause some financial disaster. Is also "economic collapse" defined by the stock market dropping, or some other convenient measure?
Gazillionaires have lost billions betting on stock market and interest rate predictions, so I won't know until the far future whether or not we'll have a tremendous stock market crash, but if the emerging markets continue to grow better than the USA, which they are, I will not be afraid of owning stocks. Also, every portion of my investments is made according to when I believe I will need the money, so in my case, the mutual funds of stocks started in 92 with the purpose of retirement and there are still many years left.
Since I have lived in, and since 82 still visited a third world country which has had various disasters, I still have seen a steady increase of the standard of living, and a steady increase in the rabid consumerism that the USA exports around the world with the export around the world of our media. This gave me a different perspective.
My own feeling is that there will be economic suffering in the USA no matter who does what. However, I want them to stop borrowing and spending this money on silly things like extending unemployment to 2 years, cash for clunkers, tax credits for buying over priced houses, "economic stimulus" checks in the mail, etc. Cut Fannie and Freddie loose. Get the government out of the windmill and car business. Stop burdening small businesses with Obamacare, and it's unfair that unions and McDonalds and others got exempted from it.
So we will argue about 1. what should be done in Washington 2. what they will do 3. what will happen 4. how markets will react.
Most of the above are unknowns, but my opinion is the sky is not yet falling.
Historically, whether tax rates are high or low, over time the govt gets 8% of GDP from us in taxes. If the total debt keeps growing, and the GDP doesn't grow fast enough to keep up, our taxes will mostly go to paying interest on the debt.
An unknown is politics, so whether people believe keeping his "boot on their neck" and illegally canceling oil drilling permits helps or hurts our economy will be seen. I think we saw the reaction in November.
But, regardless of what happens, some stocks will be fine. For anyone who says that a shitty economy that is in near collapse with a failing currency means stocks suck I have one word: TELMEX.

clambo says

My own feeling is that there will be economic suffering in the USA no matter who does what.

I don't agree with everything you have to say, but I do agree with this. It seems to be more a matter of whether the intensity of suffering is more acute now or later.

Don't you guys know? Tax cuts increase Government receipts? Take a look at Reagan and Bush....the deficit must've gone down during this period of slashing taxes! I don't have time to look at "facts" or "charts" or "reality", but I saw (seen? sic) it on a billboard...we're Taxed Enough Already!!!

Also, Obama was born in Kenya.

Thank you

Troy says

shouldn’t “incombent” be referring to Trump?

Haw!

Vain,

You would risk 5% of the purchase price on an earnest money deposit? Sorry, no way. Not me. I don't care if I had cash in hand for the property...no way I am putting up 5% in earnest.

Why you ask? Well that deposit is gone my friend once it is deposited.. if the deal falls through..there is no guarentee you get it back, it least without a fight. At the end of the day, yeah, the contract may say that it is refundable given certain conditions, but no way am I risking $9000 on that...the hold the money..it is up to you to take legal action to get it back.

One could always sue to get it back, but then there is the problem of paying for an attorney, court costs, etc. To file a lawsuit against a bank isn't going to be an immediate settle I promise that...these banks get multi-million dollar a year attorney invoices...you think a few thousand here and there is going to discourage them? Come on, it is tough to play poker with someone who isn't sacrificing any of their own money...which is essentially what the employees of these banks are...

And you might not win the case. You should, but you might not. Bottom line, I would never risk an amount on an earnest deposit that significant. I have bought a few houses in my day (one closes tommorow in fact, $1000 was good enough of a deposit, less than 1%) You just never know...and it is just not worth the risk. Especially if you aren't getting a steal of a deal...

david1 says

You would risk 5% of the purchase price on an earnest money deposit? Sorry, no way. Not me. I don’t care if I had cash in hand for the property…no way I am putting up 5% in earnest.
Why you ask? Well that deposit is gone my friend once it is deposited.. if the deal falls through..there is no guarentee you get it back, it least without a fight. At the end of the day, yeah, the contract may say that it is refundable given certain conditions, but no way am I risking $9000 on that…the hold the money..it is up to you to take legal action to get it back.

The money is a good faith deposit. If you can't get the loan in 30 days, tell them and they will give you your money back. This is not a gamble. 30 days is plenty.

If banks were really getting savvy, they would get rid of Realtors. They lie and manipulate and I despise doing business with them. Of course, not all Realtors are like that, but most of the ones I meet are. I am now in the market for a home and I'm exploring different states, as I am free to live wherever it is best for my future. My favorite lie from Realtor's today is, "Oh, in OUR market, we aren't seeing the problems other markets have." As soon as I hear that from an agent, I tell them I am not interested in working with a Realtor who fails to give me enough common courtesy to tell the truth from the first. While some markets have seen more of a drop in price than others, ALL markets have declining prices and ALL market are affected by mortgage fraud and MERS, a registration system which likely has clouded the title of millions of homes. As for me, I am searching for a home that has never been registered in MERS, as I know that is a major problem just waiting to happen to buyers who don't do their homework. Mortgage fraud and MERS interfere with marketable title of a home (regardless of whether the home is a foreclosure or not). Each state has cases that have ruled in favor of and against MERS, but the trend now is against MERS. Fannie Mae released a report yesterday confirming the severe danger MERS is causing to its bottom line. Keep in mind, this report is from a government entities that admits it is one of the owners of the parent company MERSCORP!

I am utterly shocked and appalled when I ask a real estate agent if he or she knows about MERS and the answer is NO. Any agent who does not know how MERS affects the title of a home is not competent enough to be selling properties. I hope people start suing agents for errors and omissions. And by the way, Realtors in most, if not all, states are required by LAW to present EVERY offer to the seller. If you doubt that the agent will submit your offer, follow up yourself with the owner. It is easy to find out the owner's name from online property records, which are searchable by name, address, or the Tax map # (often listed on Zillow or Cyberhomes).

MERS has registered an estimated 80 MILLION homes in the US, and MERS is listed as the mortgagee on the first or second page of the mortgage. Images of mortgages are online in many counties and are usually accessed free. If a buyer finds a home, it is wise to search the county records before making an offer. Find out for yourself! Realtors will lie saying that MERS or falling prices is not problem in their area. I don 't know about anyone else, but as for me, LIARS don't get my business!

If banks really want to be more savvy, then they should forget Realtors. Allow the homebuyer to benefit by buying at a lower price to offset the high Realtor commission and give them more confidence in buying a home at a price that will help alleviate the possibility of losing value over the next few years. The bad Realtor service I get from online Web sites and Realtor.com has been shocking. I am a qualified buyer and I am looking to buy immediately, but sometimes I inquire two or three times about a property online and don't get a reply for 2-6 weeks. If a Realtor listed my house and he or she were that lazy or inattentive to my home, I would end that listing immediately. (And if I had a Realtor to showcase my home with photos from a cheap cell phone or shots taken at weird camera angles, such as a fish-eye view or other stretched angles, I would fire them straight away. When I see those kind of pictures, I mark those Realtors to never view any listing they have.)

Everything anyone needs to complete a real estate transaction is online now, and the contract could include a contingency of 10 days for the offer to be reviewed by legal counsel, to include results of the review acceptable to the buyer. Legal fees from an attorney for a purchase is far less than a Realtor commission.

The housing market will improve when banks get real about the listing prices. Depending on a Realtor to set a price when he or she has another non-foreclosure listing down the street is counterproductive to getting the foreclosures sold quickly. Selling at lower prices will cause more people to buy and at least save our neighborhoods. Make no mistake, deeply discounted prices will not lower existing home values any more than a street full of vacant foreclosures decaying nearby.

Here's a recent study from Duke on groundwater contamination near hydrofracking sites. The good new is no contamination from 'fracking fluids'. The bad news: elevated levels of methane (avg. 17x) in tap water. Then again, I suppose you can save on your gas bill...

SG and the like will be denying Global Warming as the seas rise around them to drown them. No amount of proof will ever be enough for him and the GW Deniers' Club.

EBGuy says

Here’s a recent study from Duke on groundwater contamination near hydrofracking sites. The good new is no contamination from ‘fracking fluids’. The bad news: elevated levels of methane (avg. 17x) in tap water. Then again, I suppose you can save on your gas bill…

Yes, you can gather around your sinks and toilets after igniting them to stay warm in the winter. Isn't that special?

Troy: YOU need to re-read Krugman's 7th paragraph, because he certainly DOES describe that Bush's tax cuts were the #1 cause of fiscal 'difficulty' over the last 10 years, 'costing' the federal govt $2T of receipts.
Don't tell me I read Krugman's article wrong. You're a freaking moron. Just like Krugman. He is WRONG that $200B per year is a major cause of the current $1.7T annual deficit. For a smart guy, he doesn't 'man-up' to the numbers, and neither do you.
And YES the poor folks got a larger % of their federal income taxes reduced, than high-income earners.
And if you think higher and higher taxes will cause lower rents, and that in total this is good, then you're just delusional.
Don't REPLY to me unless you show some facts, some numbers -- high income earners had their federal tax rates reduced by Bush from 39.6% to 35% phased in over 5 years -- that's 4.6% reduction out of 39.6% which is approx 10% marginal rate reduction. Not a giant cut by any means. But poor folks had MUCH larger % reductions. If you don't believe it, look it up and tell me the answers. I guess you agree, but you deflected your rebuttal to say they had higher rents. What a freaking idiot you are.

sbourg says

because he certainly DOES describe that Bush’s tax cuts were the #1 cause of fiscal ‘difficulty’ over the last 10 years, ‘costing’ the federal govt $2T of receipts.

i already quoted that. Krugman was talking chronologically, not in order of importance, since the third item is larger than the second.

Again, here's Krugman:

First, there were the Bush tax cuts, which added roughly $2 trillion to the national debt over the last decade. Second, there were the wars in Iraq and Afghanistan, which added an additional $1.1 trillion or so. And third was the Great Recession, which led both to a collapse in revenue and to a sharp rise in spending on unemployment insurance and other safety-net programs.

First came the tax cuts (2001), then the wars (2001-2003), and third was the recession in 2008/stimulus of 2009-2010. Krugman here isn't talking about the deficit -- notice his words: "to the national debt" -- he's talking about the national debt having gone from $3.3T to $9.7T from 9/30/2001 to now.

Do you deny the Bush tax cuts are roughly responsible for $2T of this $6.4T new debt?
That the GWOT is responsible for another $1.1T?

As for the recession, here's government revenue:

http://research.stlouisfed.org/fred2/graph/?g=rF

you can see it fall about $200B in 2008 and $500B in 2009 and about $300B in 2010, for $1T in lost revenue.

On the spending side, here's the stimulus:

http://research.stlouisfed.org/fred2/graph/?g=rH

2008-01-01 $3017.4B
2009-01-01 $3227.1B +$210B, ~$100B more than trend
2010-01-01 $3637.1B +$620B, ~$300B more than trend
2011-01-01 $3757.6B +$740B, ~$300B more than trend

(this is just ballparking the stimulus and other "Keynesian" spendng -- but it was around $600B for 2009-2010)

so these three factors Krugman listed account for up to $5T of the $6.4T in debt addition from Clinton's last budget until now.

Don’t REPLY to me unless you show some facts, some numbers — high income earners had their federal tax rates reduced by Bush from 39.6% to 35% phased in over 5 years — that’s 4.6% reduction out of 39.6% which is approx 10% marginal rate reduction.

Now try these numbers on long term capital gains and not taxing dividends as regular income. That's where the big money was given away by the Bush tax cuts, and why the richer are so much richer now than they were 10 years ago.

What a freaking idiot you are.

You seem to be in a deep need to flame here. Check yourself before you wreck yourself.

sbourg says

But poor folks had MUCH larger % reductions. If you don’t believe it, look it up and tell me the answers.

On paper, the tax cuts looked good. But poor people weren't paying income taxes before the tax cuts.

"Families in the middle fifth of annual earnings, who had average incomes of $56,200 in 2004, saw their average effective tax rate edge down to 2.9 percent in 2004 from 5 percent in 2000. That translated to an average tax cut of $1,180 per household, but the tax rate actually increased slightly from 2003.

"Tax cuts were much deeper, and affected far more money, for families in the highest income categories. Households in the top 1 percent of earnings, which had an average income of $1.25 million, saw their effective individual tax rates drop to 19.6 percent in 2004 from 24.2 percent in 2000. The rate cut was twice as deep as for middle-income families, and it translated to an average tax cut of almost $58,000.'

http://www.nytimes.com/2007/01/08/washington/08tax.html

sbourg says

And if you think higher and higher taxes will cause lower rents, and that in total this is good, then you’re just delusional.

You *do* realize you're calling about half the founders of the study of economics delusional, right?

It shouldn't be controversial to claim that that $1,180/yr tax cut the middle quintile got in 2001 just ended up in rents ($100/mo) or higher mortgage payments.

Land is the dominant draw out of most people's incomes. Increase their incomes, either through higher wages or lower taxes, and land will go up in value.

So, yes, I think it is indeed "good" to run a balanced budget with higher taxes on everyone, vs. cutting taxes, running deficits, and having land values explode, like what happened 2001-2006.

CL says

Don’t you guys know? Tax cuts increase Government receipts? Take a look at Reagan and Bush….the deficit must’ve gone down during this period of slashing taxes! I don’t have time to look at “facts” or “charts” or “reality”, but I saw (seen? sic) it on a billboard…we’re Taxed Enough Already!!!
Also, Obama was born in Kenya.
Thank you

Amen Brother! The gummint takes too much of my money anyway. Why should I have to pay for someone else's healthcare or their abortions? Them Libruls are socialisst communist fashists. I dun herd it on Glen Beck's show. We were living in a paradise under Bush. He knew how to keep us safe. He knew that taxing the rich destroys the economy. He was a genius. He's much better than that Kenyan, the majic n--ro.

Thanks for speaking the truth Brother!

Speaking of "needs" -- this country needs fiscal conservatism, not bigger federal govt. Democrats have run most major cities for decades, and now certain states for decades like California, Illinois, Mass, NY, NJ -- how'z that working out -- the Democrat big-govt experiment?

I'm aware of those numbers, and it's funny you tried so hard to support Krugman, but failed b/c he DID say the #1 reason was Bush tax cuts, which most certainly was NOT -- the number #1 reason was federal spending gone wild, esp by Pelosi/Reid/Obama, the 3 socialist musketeers. And dude, the growing size of the national debt is the result of annual deficit spending. That's why the Natl Debt grows at the rate of $1.7T per year now -- I guess you're ok with that -- oh wait, you want to tax the rich more so it's only $1.6T/year.
And you are WRONG that cap gains reduction is/was a huge factor is smaller govt revenues. Wrong on 2 fronts: 1) it's not much $ of the $2T govt rev each year, and 2) it's a fact that raising the rate does NOT increase rev, and I don't even want to explain that fact to you, because you don't buy facts. You deal with static projections. If cap gains is 15% (excl state) and it's increased to 39.6%, then people will invest differently and sell later. Duh. You're an intellectual dolt, although you probably went to Bezerkely so you think you're brilliant -- belief in the progressive fiscal mantra = intellectual dolt. QED.

Troy: You are hopelessly theoretical, as many economists including Krugman are. He spouts out his stupid static numbers as if they mean a damn thing. Truth is that tax rates have major effects on behavior, oh, and tax cuts for poor and middle income people did NOT increase their rents in the '00s. Rents have contracts and end-of-contracts have choices. Have you noticed how illegal immigrants seem to save a boatload of money on rent? I have. It's not rocket-science. Open your eyes, and get out of your textbook closet.

It's a fact that the Bush tax rate cuts did not significantly reduce federal govt revenue. The '01-'02 recession did at first, but the revs recovered. There was a significant economic 'jolt' after 9/11. But revenues and total spending in the economy recovered. The reduced tax rates for all, helped. Did you like the 'marriage penalty' before Bush finally got rid of it? It pissed me off, charging us $1500/year just because we both worked together being married, rather than separately, single. I guess you were ok with that during the Clinton years. What a freaking bad joke in the tax code that was. Just like the AMT -- Clinton vetoed the elimination of the AMT in '98. Thks Bill. Even a high fraction of Dem Senators were pissed that he vetoed it. Look it up.

Yes, the article demonstrates a good grasp of the debt, but still winds up twisting the analysis. To use their own reasoning, the govt could "pay off" the borrwed trust funds and simply have a 14.3T debt straight up. OK, doesn't that pretty much make clear that there is no smoke and mirrors to make the intragovernmental debt go away without pain? It's the same as the so-called public portion of the debt. Or you could just repudiate the intragovernmental debt and declare that social security, as well as the dozens of other smaller trust funds, all have zero dollars. How would that work for the ratings agencies and the bean counters?

Another place where the twisted thinking is evident, is where intragovernmental debt is called a wash, because one side has an asset and one a liability. Well, guess, what? I had a hundred dollars. My wife took it went to the hair salon. Now I have an IOU on a scrap of paper. Yep, I have an asset, and my wife has a liability. But before the trip to the hair salon, I had a BETTER asset, and my wife had NO liability. As a household, we went from having a $100 asset - cash, to a marginal asset in the form of an IOU, that is offset by a liability. Anyone who want to call that a wash, with the implication that you are no worse off than before, is either daft or intentionally trying to pull the wool.

ShekGrinch: You are SOOOOO right. This crowd bows at the altar (perhaps every day) of the New York Times. They're therefore hopelessly entrenched into the NYT mantra of delusional bashing of fiscal conservatives -- and they bash (they actually change the subject) any idea of reducing federal govt spending. They act as if the $3.7T CANNOT be cut by 20% across the board, or the economy will come crashing down. They're temporarily right, that the economy will see a reduction in GDP -- but they're permanently wrong, because this insane spending of nearly $4T/year just be the fed govt is moving us towards the 'cliff'.

But you're right, and I had a LOL moment reading your comment!!!!!

By the way, they always quote articles from the NYT -- have they ever seen how bizarre/socialist/America-hating Arthur Punch Sulzberger is? He's totally divorced from reality -- check out his graduation speech at SUNY ___ (?) on youtube 3 yrs ago. What a sick lecture he gave the students, on how 'our generation' ruined America and these young ones have to fix it. He got it 180 degrees wrong, but it wasn't the place to spout out his delusions.

Tatupu: Those requirements on banks and S&Ls were regulations created by Clinton's minions in 1994,1995 -- Barney Frank and Andrew Cuomo. They were regulations to the 1977 Community Reinvestment Act, to put 'teeth' in the act and require loans to poor people. The regulatory process completely sidestepped the Republican Congress in 1995 when they became effective.
I read the regulations in 2008 when the bubble burst. They were only 40 pages or so, of mass-destruction though.

Troy: They were regulations to the 1977 Community Reinvestment Act to ramp up lending to poor people. As regulations, they therefore sidestepped the legislative process. Clinton knew he couldn't get a Republican Congress to pass a law to require banks and S&L's to make millions of high-risk loans, so he back-doored it.
I read the regulations in 2008 when the bubble burst. They were something out of Politburo Russia -- top/down control over the economy -- over-regulation to the extreme. Actually forcing every bank and S&L to prove they made correct fractions of loans, or else they'd have a huge penalty. So they did it. And thus began the bundling of 'troubled assets' to sell, a creative game to get the junk off-loaded to another sucker by whatever creative means possible. Oh, and Fannie/Freddie were eventual-willing buyers of much of it too. That became part of the 'game'. Thanks for nothing, Barney & BJ (and Jimmy Carter for CRA) for the idea!