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Bill USA

(6,436 posts)

33. if you take away the opportunity to make a fast buck (by flipping a bad mortgage) - this has a way

Tue Jun 10, 2014, 04:13 PM

Jun 2014

of making it much less likely that untenable mortgages (written only so they can be flipped) are written - and flipped.

.. the very fact that the banker types (above) are so vigorously arguing this wouldn't work - provides confirmation that it would. If they bankers are arguing against it, you are probably onto a good thing.

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If Banks MUST keep their CDSs here's a way to remove the risk of another housing bubble [View all] Bill USA Jun 2014 OP

That would be wonderful wonderful wonderful. truedelphi Jun 2014 #1

you've got that right. The blizzard of such commercials shows there's money to be made and Bill USA Jun 2014 #2

And such commercials at the other end ... 1StrongBlackMan Jun 2014 #26

A thinking person can only imagine the "help" truedelphi Jun 2014 #43

does the dodd-frank 5% risk retention rule address your concern? unblock Jun 2014 #3

5% is a joke. My idea would end th predatory lender scam of writing bad mortgages only to flip them Bill USA Jun 2014 #4

No practice but the total cessation of mortgage lending will do that. Chan790 Jun 2014 #5

banks wrote mortgages and kept them on their books - for decades before securitization came along Bill USA Jun 2014 #8

That's what caused the depression. FBaggins Jun 2014 #12

securitization of mortgages didn't exist before 1970 - Bill USA Jun 2014 #16

That's not relevant to your claim. FBaggins Jun 2014 #20

Fannie and Freddie started buying mortgages in the 1980's. Securitization of mortgages was going Bill USA Jun 2014 #34

I don't know where you got that idea... it's simply wrong. FBaggins Jun 2014 #39

I was thinking of "mortgage securitization" which began in the 1970's by Fannie Mae Bill USA Jun 2014 #46

all banks hold only a fraction of their total loaned $s in liquid assets. Any bank suffering a "run" Bill USA Jun 2014 #17

Also irrelevant... There are degrees of liquidity. FBaggins Jun 2014 #21

of course now the Federal Reserve provides liquidity to banks needing it. The fact remains banks Bill USA Jun 2014 #29

Why change the subject? FBaggins Jun 2014 #30

the point is the large banks aren't interested in CDSs used properly as hedges of risk. What really Bill USA Jun 2014 #31

Sorry... you remain confused in this whole thing FBaggins Jun 2014 #42

Please note this quote from the OP...... Bill USA Jun 2014 #49

"change the subject"? CDSs were originally created as hedges to risk.. Bill USA Jun 2014 #36

And that's not the subject on this piece of the debate. FBaggins Jun 2014 #40

I am focussed on the securitization of mortgages - and in particular with CDSs used to sell subprime Bill USA Jun 2014 #48

what relevance does your recitation of various term loans have to your cmnt 12 where you said: Bill USA Jun 2014 #35

There are TWO primary reasons they don't want to hold mortgages. FBaggins Jun 2014 #41

the most important factor in banks not getting into trouble is to write mortgages that do not Bill USA Jun 2014 #44

Close enough. FBaggins Jun 2014 #45

well, except that in the 2004-2008 timeframe the CDS did make it a lot easier to sell subprime CDOs Bill USA Jun 2014 #47

Right...and now they're no longer willing to. Chan790 Jun 2014 #13

Mortgage debt outstanding - Federal Reserve - Board of Governors report Bill USA Jun 2014 #18

I'm not sure I see your point. Chan790 Jun 2014 #19

not trying to stop them from securitizing. I just want to make sure that at the beginning - Bill USA Jun 2014 #32

LOL. you said (13) "and now they're no longer willing to." and .... Bill USA Jun 2014 #37

oh, dodd-frank is a joke but your idea of paying the homeowner to default isn't? unblock Jun 2014 #7

CDS would be paid only tothe extent of the equity the homeowner has in the home. see link: Bill USA Jun 2014 #10

Could you clarify? FBaggins Jun 2014 #6

I knew someone would ask this. First of all he has to pay for the CDS - which costs money.. Bill USA Jun 2014 #9

You're kidding... right? FBaggins Jun 2014 #11

please note the quote from the comment 9. Bill USA Jun 2014 #14

That still doesn't leave you with a workable solution. FBaggins Jun 2014 #22

"make a profit on the deal"? .. how much after paying more for his insurance on a riskier loan. NOt Bill USA Jun 2014 #24

"pretty effectively stopped."?? LOL! It won't happen again?: Subprime Lending is Back -- link Bill USA Jun 2014 #15

Sorry... you're still confused. FBaggins Jun 2014 #23

thanks for the little history lesson on the Financial crisis. I'm 'not without' knowledge of the Bill USA Jun 2014 #25

How would this help? MFrohike Jun 2014 #27

if you take away the opportunity to make a fast buck (by flipping a bad mortgage) - this has a way Bill USA Jun 2014 #33

I'm a bit confused MFrohike Jun 2014 #38

Better idea: national usury rate jmowreader Jun 2014 #28