Buffalo Rising Online

The housing meltdown is mainly the result of greedy bankers conspiring with appraisers to artificially inflate home values and of course their commissions.

The 4700 houses that are on the chopping block this month are not mortgage foreclosures, they are tax foreclosures. A huge proportion of these houses are paid off and the owners have no mortgage payments but they cannot afford the taxes for various reasons (illness, seniors, death in the family, etc.) and the city is taking their homes. Many of these people owe less than $1000.

Blackrocklifer - You know better than that, it isn't a big conspiracy between the banks and the appraisers to exploit the average American. Seriously, your victim mentality is showing again. Do you have a source that documents the collusion between the Banks and the Appraisers?

I think what you are seeing is the result of lax regulations and regulations that were altered or removed to make home ownership more universal to all Americans. The intentions behind these changes were good, but they had downside consequences that weren't fully considered when the changes were enacted in the late 90s. The creation of sub-prime, near-prime, Alt-A, and a host of other mortgage packages came from these regulatory changes. These products were made available to all but the riskiest customers, and were coupled with other changes that enabled companies to sell new mortgage products like interest only loans, no money down loans on investment properties, home equity lines of credit, and other products that required little verification to secure. Add competition between companies who would alleviate their exposure to risk by bundling and selling mortgages, and you get a few of the factors that contributed to this mess.

Add on top of this people who bought houses that they could not afford, or who borrowed against artificial equity that was created by the growing housing bubble, and you have people who are upside down in payments when the bubble deflated. The supply of houses increased and demand decreased, partially due to the sell off of investment properties, and you have people who are unable to sell their houses due to the financial implications of the sale. They will effectively owe tens or hundreds of thousands of dollars after the sale.

You can cry that the consumer didn't understand the paperwork that they were signing, or the terms of the loans that they were getting, but I believe that this is a cop-out. Too many people bragged and boasted about the great deal they got on their mortgage, until the terms expired and they had to refinance, then all of the sudden they are too ignorant or confused to understand the terms. If you are too ignorant to understand the terms of the loan, then you should not be borrowing money.

The bottom line is that there are many, many, many causes of the Housing and Financial crisis, but one of those is not collusion between the banks and the appraisers. That may have happened, but it is not the "Main" factor, as you so confidently claim.

The United States is not one huge conspiracy against lower and middle income Americans. It is not a huge conspiracy by the wealthy to exploit and cheat the rest of the Americans. It is not a conspiracy by huge, nameless, evil corporations against the poor, innocent and weak people who work for them. I am not sure that you will ever have the capacity to allow yourself to see that.

Dagner - I did say that this happened, but it is not the "main" reason as BRL claims. Even reading through this article, the impact of said collusion is minimal when compared to the changes in community reinvestment act legislation, the softening of requirements for loans, the reduction of cash backing requirements of FannieMae to 2.5% of total loans, etc, etc, etc.

The bottom line is that this isn't a major conspiracy against Americans by big corporations, as BRL claims.

You should start with a search of major causes for the financial crisis, to see how many sources site collusion between banks and appraisers as one of the 'Main' causes.

This mess began with home equity loans aggressively marketed to the poor, the elderly, and the just plain dumb. The banks portrayed these loans as "risk free", you know the value of your house will ALWAYS rise. Here in Black Rock homes that were in families for generations were leveraged and lost resulting in vacancy and blight. Of course borrowers are responsible for being foolish and should have known better but the banks DID know better yet continued this practice solely for their own short term gain. allfit- I was a board member at Neighborhood Housing Services for 12 years and saw this first hand. Appraisers were sued to end the practice of inflated home values but the damage (and profit taking) was already done. I think you are naive if you do not believe the wealthy and corporations have and continue to exploit the average American.

Fannie Mae and Freddie Mac started this whole mess. Why are we pointing fingers at Wall Street? Keep the government out of the economy.

I rarely see eye to eye with Collin, but in this post he is 100% correct, the auction has nothing to do with anything other than unpaid tax liens. Not one house on the auction block is a bank forclosure.

Heather- This is more about pure greed, something the private sector has a long record of being guilty of. To claim it is the governments fault is just ridiculous. Lack of government oversight resulted in no accountability and now the taxpayers will foot the bill.

heather- I read your comment but thought it was an editorial from Fox news/opinion channel. I see, its poor people and minorities that are at fault enabled by big government and Democrats.

Heather - We require government policies to keep greedy businesses in check. Without the community reinvestment act, the greedy businesses would not approve mortgages for African Americans, Hispanic Americans, Single Women, and other minorities. Without the community reinvestment act, we would all be renting from elitist white rich people who had the means of securing a decent mortgage from their banker friends. The community reinvestment act put controls in place to open up banking and home ownership to all Americans.

It was the greed of Freddie Mac's CEO that lead to the financial problems. He wanted to make more money off the poor and needy so he developed mortgage products that were designed to exploit their vulnerabilities. He was a greedy man who ran a government sponsored entity like a big business and that is where the problems started.

As Blackrocklifer says, you sound like a deeply conservative war mongering and poor hating republican. We have seen what 8 years of these policies have done to our country. Don't try pinning the failures of your incompetent President on the policies of a great one. Bill Clinton new how to run this country and he lead us through the most prosperous times in recent history, all of his hard work and genuine interest in humanity was negated by 8 years of conservative republican tyranny. I cannot wait for Barack Obama to win the election in a month, he is the only candidate with the promise and intelligence to enact real change in our country. Change that will prevent another banking crisis by keeping corporate greed in check. Change that will look out for the less fortunate and poverty stricken. Change that will equally distribute wealth from the hoarding rich to share with the needy poor.

Are you incapable of seeing how wrong you are? Are you incapable of seeing how great Barack Obama will be for America. Are you incapable of seeing that electing John McCain means 4 more years of republican tyranny and oppression of the working class?

Quijibo is not even intellectually consistent with his own ideology. Where to begin?

How about here?

'...Don't try pinning the failures of your incompetent President on the policies of a great one. Bill Clinton new how to run this country and he lead us through the most prosperous times in recent history, all of his hard work and genuine interest in humanity was negated by 8 years of conservative republican tyranny. ...'

Quick facts:

In 1999 Bill Clinton supported and signed into law the Graham-Leach-Bliley legislation to remove the ban (which had been in place since the 1930s) on banks engaging in much higher risk, highly leveraged investment and insurance activities. That change is being criticized by financial experts on both the left and right as a key factor in the recent credit/bank industry mess.

(Btw, it's also interesting that "Leach" of the 1999 Graham-Leach-Bliley Act is Jim Leach, a left-leaning Republican now appointed to be in charge of a group within Barack Obama's campaign.)

Bill Clinton appointed Goldman Sacks CEO Robert Rubin as Treasury Secretary and supported his fiscal policies which are very consistent with those of current Treasury Secretary Henry Paulson. Paulson was also a Goldman Sacks CEO, just like Rubin was.

Bill Clinton signed into law the NAFTA treaty and worked very hard for Congress to ratify it.

Bill Clinton strongly supported the updated W.T.O. agreement, and he also advocated China's admission into the W.T.O.

Bill Clinton advocated welfare reform and signed into law in 1996 the Newt Gingrich legislation for that.

Bill Clinton cut capital gains tax rates for wealthy investors.

Although Quijibo usually tries to sound like a serious leftist, he reveals himself to be a partisan of a mainstream political party by calling Clinton a "great" president for economic policies which are in most important ways the same as those of Bush 41 and Bush 43. A few differences, mostly symbolic and rhetorical, but in substance no major disagreements between Clintom and the Bushes in fiscal, trade, an other economic policies. Yet Quijibo lays all that gushing praise on Clinton. Very revealing.

Paul - Sure, for completeness with what I noted about Leach's position in the Obama campaign I could also have noted that Gramm is a long term McCain supporter and former member of McCain's campaign. I also spelled his name wrong - my mistake - you spelled it correct. It's pretty clear my comment wasn't praising McCain. It also clearly wasn't saying Democrats are the only ones to blame for anything.

My point centered on Quijibo's hypocritical gushing praise of President Clinton's mostly-right-of-center economic policies - hypocritical when compared to so much of what Quijibo writes on BR about how bad Republican economic policies are.

Atwater- You are correct, Clinton's policies were right of center but in no way were they as damaging to our economy as the extreme right policies of the last 8 years. Democrats are not without blame but it is the Republican ideology of free markets and deregulation combined with pure greed that has proved to be a disaster for most Americans.