Administration requires banks to write guaranteed subprime mortgages


No. Seriously. Read on.

New mortgage rules issued last week by the administration will have the effect of forcing lenders to approve prime loans to borrowers who would normally only qualify for subprime loans carrying higher interest rates and fees to cover the added risk of default.

Banks are already under renewed pressure from federal prosecutors and regulators to make home loans to low-income borrowers with blemished credit as part of the administration’s stepped-up enforcement of anti-redlining laws.

Before the mortgage crisis, lenders were able to hedge losses by placing such homebuyers in higher-cost subprime mortgages — something the government at one point actually encouraged as part of a strategy to expand credit opportunities for lower-income minorities and close the racial “mortgage gap.”

But under the new mortgage rules, loans with subprime features do not fall under the official government definition of “qualified mortgages,” and therefore do not provide a “safe harbor” against lawsuits and other action.

As a result, analysts warn lenders may end up having to “subsidize” riskier borrowers at the expense of other customers.

This means that if you have a good credit rating and reliable income source you will have to pay a higher interest rate (and possibly higher closing costs) when buying a home. This arrangement favors the banks, the government and the sub-prime applicants, but punishes you for being a productive, credit-worthy and responsible member of society.

But wait, there’s more. When these loans inevitably go belly up, you will be on the hook for bailing them out… just like last time. You remember last time. It was four yeas ago.

That’s okay. When this new house of cards collapses, they will blame it on George Bush, Bain Capitol and Wall Street greed. Nobody will remember who really did it. Nobody.

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6 Responses to Administration requires banks to write guaranteed subprime mortgages

  1. Bman says:

    You can’t fix retarded.

  2. RJ says:


  3. messup says:

    LBJ re-kindled what FDR started back in 1933 with his 3,466 Executive Orders with LBJ’s “Great Society.”
    Another manufactured crisis by this administration: The Debt Ceiling (Breitbart –Mike Flynn 1/14/2013 rewritten)
    The US is approaching its own “triple witching hour.” When the US hits the debt ceiling, automatic spending cuts are triggered, and the government’s continuing resolution spending authority expires. Progressive New Left activists know this and are furiously spinning an apocalyptic tale that anything less than a clean increase in the fed’s borrowing authority will usher in an economic world disaster.
    Mr. Paul Krugman, a Nobel-Prize winning economist and New York Times columnist, argued (on ABC’s “This Week” program) that congressional Republicans are “threatening to blow up the world economy” if they don’t get their way in the debt-ceiling debate. After a difficult fiscal cliff battle, President Barack Obama said he would not negotiate over the debt ceiling, but Republicans have said they won’t authorize any increase in the country’s spending limit without major spending cuts.”We should not allow this to become thought of as a legitimate or normal budget strategy. This is hostage taking,” he said!
    We The People have already approached the intolerable point of government no longer being able to issue unlimited IOUs in order to keep open all (fraudulent and corrupt We The Elite People of culture of corruption in Washington DC) spigots of government’s frivolous spending. The day of reckoning is coming, but Progressive New Left activists are desperate to put off “this triple witching hour” as long as they can. Political bribes they have made these past few decades, are getting outstripped by demographics (95 million, or so, Americans on some form of government assistance programs) and the private economy’s ability to finance this ever increasing number.
    What’s the game plan? . Progressive New Left activists may convince Americans the debt ceiling is just a fictitious number and some goofy, out-dated idea. If this happens, they will have been proven right. Why, one asks? Because, a country’s debt ceiling is only relevant if investors want to buy its bonds. Once that changes (in America), not even the Federal Reserve will be able prop it up and do more “fixing.” The fuse has been lit.
    Is there proof of this? Yes! The week of 1/15/2013 Congress will vote on a Sandy “porkulus” Relief Bill in which couched in an $8 billion dollars (an undetermined amount)will be allocated to a defunct “Head Start Program.” Since 1965, what began as a “Small Summer Program” and when LBJ and his “Great Society” spending spree began, Head Start has since gobbled up $180 billion dollars for: Health, Nutrition, Social Services, Education, Cognitive Development & Services(whatever that is), all Responsive to a childs…Ethnic, Cultural and Linguistic Heritage. A Report issued in 2013 from HHS’s own findings reports that this program has:1) morphed into a gigantic medusa with multiple heads; 2)empowered NEA and HHS. 3)increased fraud and corruption, 4)stated goals of “Head Starting” children from birth to 5 years old has never been met. (Heritage Foundation Report 1/14/2013) Pray. Amen. It’s just plain shameful!

  4. Angela Barton says:

    Before the economic downfall we were a hardworking family of 5 with good credit and great jobs. Due to lay offs that lasted over a year we lost over 50% of our income. We were able to short sale out home that took us 3 years of blood sweat and tears to build exactly how we wanted and ended up losing both our vehicles and couldn’t afford to keep up on our credit card payments. Instead of working with us we kept getting monthly late fees and if course an ungodly interest rate. We were jacked up to 34%. It may have took a little longer but we would have been able to dig out from under it if there was some kind of rules and regulations on the credit card companies more than half of the hard working middle class would not be in the situation we are all in now. They should have to close out the account and make a payment arrangement with a governed amount of interest instead of forcing the middle class into bankruptcy. Who do they think carries this country while the poor keep collecting for free and the rich keep getting richer. We always paid all of our bills and mortgage and have made a come back, but with the damaged credit we are forced to rent for more than we would be able to mortgage. The banks all got bailed out but the middle class all got *#+%#*#€. If you know what I mean. If they don’t come up with something to help out the middle class it sure as hell is going to get a lot worse. If all the worker bees or the soldier ants are helpless what happens to the colony. It can’t survive.

    • notamobster says:

      I lost my (gravy) 6-figure job as a direct result of Obama’s drilling moratorium. I lost my McMansion & SUV’s. My kids were in private parochial schools before that. I made a comeback and lost my new job in the auto-industry a year later. I will now move across the country to start over. I learned my lessons the hard way. I don’t live in a hive. I am a free individual. Sometimes life sucks. Improvise, adapt, and press-on. I don’t want a bail out. I never wanted one. In fact, I refused easy money, twice. First from BP, then from the federal lawsuit settlement. I just couldn’t do it. It wasn’t my money. I didn’t earn it. I am responsible for me. I will adapt & survive. Always & without question.