12/11/2008
In a panel discussion on Monday, John Dugan, head of the U.S. Office of the Comptroller of the Currency reported,
[R]ecent data showed that after three months, nearly 36 percent of borrowers who received restructured mortgages in the first quarter re-defaulted.
The rate of re-default jumped to about 53 percent after six months and 58 percent after eight months, Dugan said, without providing an explanation for the trend.
Regulators speaking at an OTS-housing forum did not provide any explanations for the causes behind the data.
Regulators speaking at an OTS-housing forum did not provide any explanations for the causes behind the data.
"We don’t know the answers yet, but these are the types of questions that we have begun asking our servicers in detail," Dugan said.
Sheila Bair, chairman of the Federal Deposit Insurance Corp, who has been pushing for fast and systematic loan modifications, said regulators need to examine re-default data more closely.
"I think it’s very important to look at this data carefully and know what it says and what it doesn’t say," Bair said.
Homeowners re-defaulting after getting aid; by John Poirier and Karey Wutkowski, edited by Brian Moss; Reuters; Dec 8, 2008, 2:10pm EST.
They don’t know, and they don’t want to know. Somehow, they’ll finesse, obfuscate, and sidestep the truth; and if necessary, flat out lie.
We already knew the reason for the original mortgage meltdown–the handing out of mortgages with little or no money down, on the basis of race or ethnicity, to people who had previously proved themselves not creditworthy. Indeed, mortgage bankers had known under what conditions lending is successful or leads to defaults, respectively, for generations but had been coerced into ignoring that hard-won knowledge through the original and amended versions of the Community Reinvestment Act (CRA).
Indeed, we learn elsewhere that during the very same panel discussion, the participants had already ruled the truth out of bounds:
OTS director John Reich insisted [CRA] "had absolutely nothing to do with the mortgage crisis." FDIC chief Sheila Bair said it was a "myth," adding that "it’s really unfortunate that this is out there." "It’s simply not true," she asserted. Next up was Comptroller of the Currency John Dugan, who agreed the CRA "certainly was not the cause of the subprime crisis."
Though they offered little evidence to support their assertions, a Fed governor released findings of a study the Fed did with the Brookings Institution to quash the idea the CRA encouraged high-risk subprime lending to uncreditworthy borrowers.
In a speech to the "Confronting Concentrated Poverty Policy Forum," Randall Kroszner asserted that CRA-mandated loans are "nearly as profitable" as conventional loans. He cited a 2000 Fed study on CRA loan performance.
A careful reading of the 99-page report finds evidence that seems to undercut his conclusion that CRA loans are just as safe. For example, the study found that "nearly 90% of large banking institutions report higher 30-89 day delinquency rates for CRA-related home lending than for overall home lending."
CRA Defenses Sound More Like CYA, Investor’s Business Daily, Posted December 9, 2008.
This forked-tongue routine reminds me of back in 1999, when the NAACP began its successful campaign to blackmail (pun intended) the TV networks into hiring even more talentless blacks to fill primetime shows that fewer and fewer Americans found entertaining. A few months later, New York Daily News TV critic David Bianculli criticized the baneful influence of ”political correctness,” while emphasizing that his criticism did not apply to the NAACP campaign.[TV TONIGHT, July 2, 2001,]
On Monday, the Wall Street Journal published a letter from the FDIC’s ”Director Office of Public Affairs,” claiming that the re-defaults were only running at ”15 percent.”
These folks really need to get their lies straight.
A market economy cannot run, and a free society cannot long endure, based on false information. For dictatorships, and for the racial socialist calling himself ”Barack Obama,” however, deception works just fine, thank you.
A tip “o’ the hat to Bill Quick at the Daily Pundit.
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