Financial reform bill passes cloture vote in Senate

[CloudStrife]

Financial reform bill passes cloture vote in Senate, now awaits final vote
http://www.examiner.com/x-11326-Lib...-cloture-vote-in-Senate-now-awaits-final-vote

Washington, D.C. – With a tally of 60 yeas to 38 nays, the U.S. Senate on Thursday passed a key cloture vote which ended the chamber’s debate process on the final version of Congress’ financial reform bill. Now the bill will move toward a final Senate vote where it only needs a simple majority to pass on its way into law.

According to CNN, Senate Majority Leader Harry Reid (D-NV) stated, “Wall Street rigged the game. When they won, they won big. . . but when they lost…they came crawling to the taxpayers for help.” He finished the thought by adding, “We're saying to those who game the system, the game is over.”

The final bill had already passed in the U.S. House of Representatives where only the simple majority vote was required. After Senate passage, which may occur as early as Thursday afternoon, the bill will be sent to the White House for President Barack Obama’s signature, which is expected to occur next week.

In the vote, 56 of 57 Democrats all voted yea; the exception was Senator Russ Feingold of Wisconsin who said that the bill was not strong enough for him to support. In addition, three Republicans, Senators Susan Collins and Olympia Snowe of Maine and Scott Brown of Massachusetts voted to end debate and send the bill to final vote.

The bill, officially named the Restoring American Financial Stability Act of 2010 was created to help regulate the financial system and create more oversight for derivatives market in order to help negate or at least minimize future financial meltdowns. The bill also includes greater protection for consumers by creating a new financial consumer protection agency.

 

[ejt1469]

"the biggest expansion of government power over banking and markets since the Great Depression."

Lord, help us!

http://www.marketwatch.com/video/as...97-97BA-4C56-9654-ED29A22B79EE?dist=afterbell

 

[kcinnick]

But this is so much better than actually doing something, say like reducing the budget and paying down debt. This will work much better!

 

[CEHollier]

The natives do not care. They do not bank. They do not work or produce. Unless illegitimate children count as producing something.

 

[swamper]

The natives do not care. They do not bank. They do not work or produce. Unless illegitimate children count as producing something.

It produces votes for their overlords.

 

[Hardballing]

Why do I feel like I just sat down, hard, on a plunger?

A plunger covered with a sandpaper rubber.

 

[CEHollier]

It produces votes for their overlords.

That is the problem. Our own money is used against us.

 

[gbundersea]

This bill, like everything coming out of DC, is a disaster on many levels. One particular section of it pertains to mortgage lending. What it does is impose a cap on the compensation lenders and loan originators can make. Included within that cap are most of the general fees charged for a loan, so what's left is drastically reduced. This means that on an average home purchase, a hardworking, diligent loan officer will take about a 45% cut in their gross pay.

Smaller loans won't even be worth the trouble. Reports have already surfaced indicating that many loan originators are leaving the industry.

The net result of this is that homebuyers may someday soon have no place to get a mortgage except from large banks. Private lending could easily be forced out of existence, which is probably the ultimate goal. Banks are notorious for poor mortgage service, and are exempt from the full disclosure now required of mortgage brokers. In other words, these nanny state laws, passed to "protect" us and to insure that every borrower knows all about the loan they're getting, are actually forcing people to be at the mercy of the government-backed institutions who can avoid that very disclosure. Banks make all sorts of "back-end" profits on mortgage loans, about which the borrower is not informed.

Bank loan officers also are not required to meet the strict standards imposed on mortgage brokers. In fact, I'm not sure a license is even mandatory! As a contrasting example: In addition to the massive disclosure requirements which reveal every penny Danielle makes on every transaction, each year she has to pass 2 annual exams, and must also periodically get fingerprinted and pass a background check exactly like we do for our CHP's.

Just the mortgage portion of this latest crap from Washington will have a devastating effect on home purchases and the real estate market. I shudder to think of what else is in there, but everything I've heard about is only more bad news.

It's another giant leap for socialism.

 

[bryan54]

They just keep spending like its coming out of the sky, then cut the tax breaks. Now they have to raise our taxes to pay for this massive giveaway crap. Is it our fault we have so much debt, they all need to be voted out.

 

[Yrdawg]

I think this is a good move to have Hitlery run up his but before oh 12

 

[my-rifle]

Oh Good Lord! There are no hard-working scrupulous mortgage lenders. For the love of God! I worked in that industry, and these people will tell any kind of lie they can get away with to get someone to buy their product. They need BIG-TIME regulation. Remember they're the ones who caused the real estate melt-down.

 

[gbundersea]

Oh Good Lord! There are no hard-working scrupulous mortgage lenders. For the love of God! I worked in that industry, and these people will tell any kind of lie they can get away with to get someone to buy their product.

BULL SH!T

There are indeed scrupulous, principled mortgage lenders. It's a shame you didn't know any. Just ONE fine example is the woman I love and live with. She works incredibly hard, and often for very little money, to get people an affordable loan so that they can purchase a home. She also frequently advises people NOT to buy a house if she sees that it will affect their lives in a negative way. (There are a few members of this very board who can attest to what I say.) I've seen other examples of honest, hardworking loan officers as well.

Just because you worked in the mortgage industry at some point in the past doesn't give you the right to pass judgement on every person who makes a living at it. Or at least tries to, which is increasingly difficult thanks to your pals in Washington.

They need BIG-TIME regulation.

Spoken like a true big-government liberal.

Remember they're the ones who caused the real estate melt-down.

Wrong again. While there indeed were (and are) crooked loan officers (and realtors, and appraisers) it was Carter and Clinton's CRA which MANDATED that lenders give loans to people who could not afford them, or else pay a $10,000.00 fine. This opened up many opportunities, both for honest lenders as well as crooks. When things got out of hand, the pendulum swung too far the other way, and it's not finished yet. Your precious "regulation" has ended so-called "subprime" lending, which means self-employed people like me with 800 FICOs and NOT ONE late payment, EVER, in my 48 years, can no longer buy a house; has brought about HVCC, causing the price of appraisals to rise 40% while inaccuracy and fraud have jumped by the same amount; and is about to all but end private lending. As I pointed out earlier, pretty soon most if not all mortgages will be issued by banks, who are exempt from disclosure and make lots of money on the back side which is (by law) hidden from the borrower. And who is increasingly in control of the banks? The federal government.

In the usual hypocritical way which leftists operate, right AFTER shutting down and crucifying lenders for "risky" loans, none other than FHA (in other words, the federal government themselves) took over as the new subprime lender. I found it unbelieveable that FHA had by far the lowest standards of any remaining entity. Yet, if a private lender wanted to provide a mortgage to a borrower with low scores or low income, they had been forbidden to do so. It was sure OK for FHA to do it though! This went on for a year or two, but eventually bit them in the a$$. FHA foreclosures skyrocketed; they panicked; and the boom started coming down. Minimum scores were raised, along with other requirements, and fees went up too. Yesterday, the bulletin went out for public comment on the upcoming (believe me, it will happen) reduction on seller concessions. Currently a seller can pay up to 6% of the purchase price toward closing costs for the buyer, which helps many qualified but cash-poor people get a home. Soon that will be cut to 3%. Such a drastic reduction will make homebuying impossible for a LOT of people. FHA will no longer be an option, and since other loan types were legislated out of existence, there will be no other way to get financing. Only people with a ton of money available for down payment and closing costs will be able to buy a home. Lower- and middle-class folks will be well and truly screwed. Sound familiar?

As always though, the liberals in DC continue to vilify everyone else for having done exactly what they continued to do. As always, they fail to understand that a free market, with reasonable oversight, is always the best solution. Instead, they eliminated many worthwhile loans and lenders, yet kept handing out high-risk loans to the very same people who defaulted the first time around, thus causing more of the same problems, and now everyone will suffer and pay the price.

It's not hard to catch crooked loan officers, realtors, and appraisers. When they perpetrate fraud, they should be prosecuted and locked away. However, the liberal a$$holes running this country instead have heaped layer upon layer of onerous regulations on EVERYONE in the mortgage and real estate fields. They say it's to "protect the homebuyer" and "keep homes affordable." As a result of this feel-good, nanny-state crap which only works in the fantasy land of the liberal mindset, the exact opposite has occurred in the real world. The costs associated with buying a home have risen dramatically, choices have been drastically limited, and many people who COULD and SHOULD own a home are now denied the opportunity to do so.

Maybe you saw things a certain way back when you were (past tense) in the industry. Maybe you only saw the bad apples. Well, Danielle and I are in it now, full-time, and have been for years. I can assure you that all this regulation you so dearly call for is utterly destroying the dream of home ownership for a huge number of Americans. Frighteningly, with the further restrictions which are soon to be inflicted on the public, it will get WAY worse, and unless things change, a HUGE crash is on the horizon, one which will make the "mortgage meltdown" look like childs play.

 

[D-DAY]

Oh Good Lord! There are no hard-working scrupulous mortgage lenders. For the love of God! I worked in that industry, and these people will tell any kind of lie they can get away with to get someone to buy their product. They need BIG-TIME regulation. Remember they're the ones who caused the real estate melt-down.

I gotta agree, this is utter BS!

Our .gov approached this new overhaul with the thought in mind that the free market and Wall St. were the sole culprits for the housing and derivatives debacle. Just look at the bill, who was left out of the heavy regulation? Government run Fannie Mae and Freddie Mac!

They are the secondary market to whom a majority of banks sell their mortgage loans to and one of the major reasons for the housing crisis. Those 2 companies, ie the .gov, sets all the rules and qualifications for the loans they will buy on that secondary market. So with regard to the mortgage lenders, that part of the market (for the most part) was and is already regulated.

Now they are going to clamp down on everything but the problem which is the secondary .gov run markets.

 

[LACamper]

Being in insurance gives me a different perspective to watch what has happened in the mortgage industry over the last 15 or so years. The government loosened the rules to the point that people were moving from the projects to being homeowners (I saw it happen, I'm not exaggerating) with nothing down. The banks no longer had to underwrite loans, the underwriting standards were set. No one was sweating the appraisal anymore, since if the appraiser didn't come up with the right numbers they were not going to be hired by lenders any more. Down payments were no longer required. PMI became common place. Since everyone could get a loan, builders started throwing up houses as fast as they could. One builder in laplace threw together almost 500 houses in a year (quality construction?).
There were some terrible loan brokers out there. I've heard of brokers that manufactured their own documents to get a loan approved. There are some good lenders out there too. Danielle is one of them. Unfortunately the good ones are rare...
None of this is good. The government needs to get out of the lending business all together. Let the lenders do their own underwriting. If they make bad loans the bank will fail, so be it. That will keep them honest. Personally, I see nothing wrong with a buyer needing to save up 6% or even 10% for a down payment, but that needs to be the lenders decision.

 

[dantheman]

But what else is in the bill ? Sure , some parts of the financial industry need overhaul , but I promise you there are things in that bill that will further cede control of our lives to the Federal Gov. So far , everything else they have passed has done so .

 

[gbundersea]

But what else is in the bill?

Good question, Dan, and a question that I suspect most of the idiots who passed this cannot answer, much like the "health care" bill. We've mainly concentrated on the sections pertaining to mortgages, but I have read that it creates an entirely new, massive federal bureau to "safeguard" everything pertaining to financial matters. There's a lot more crap in it too, none of which sounds like it will help the average American. I have no doubt that the exact opposite will happen.

 

[D-DAY]

Being in insurance gives me a different perspective to watch what has happened in the mortgage industry over the last 15 or so years. The government loosened the rules to the point that people were moving from the projects to being homeowners (I saw it happen, I'm not exaggerating) with nothing down. The banks no longer had to underwrite loans, the underwriting standards were set. No one was sweating the appraisal anymore, since if the appraiser didn't come up with the right numbers they were not going to be hired by lenders any more. Down payments were no longer required. PMI became common place. Since everyone could get a loan, builders started throwing up houses as fast as they could. One builder in laplace threw together almost 500 houses in a year (quality construction?).
There were some terrible loan brokers out there. I've heard of brokers that manufactured their own documents to get a loan approved. There are some good lenders out there too. Danielle is one of them. Unfortunately the good ones are rare...
None of this is good. The government needs to get out of the lending business all together. Let the lenders do their own underwriting. If they make bad loans the bank will fail, so be it. That will keep them honest. Personally, I see nothing wrong with a buyer needing to save up 6% or even 10% for a down payment, but that needs to be the lenders decision.

Ok, I gotta call you out on this. The first paragraph was going good, then you went south again bashing the loan officers.

Again, The secondary market ie. Fannie and Freddie, ie. the .gov, sets the requirements and qualifications for a loan that they will buy from a bank. So if a bank wants to sell a loan on the secondary market, it must comply with said requirements, if not the loan is not bought secondarily then they (the lending bank) will have to service the loan and it will remain on their books.

A loan either meets the qualifications set out by Fannie and Freddie or it does not. There is not very much wiggle room for loan officers or mortgage originators to cheat the system.

Totally agree with the last paragraph though.

 

[LACamper]

I've heard of brokers that manufactured their own documents to get a loan approved. There are some good lenders out there too. Danielle is one of them. Unfortunately the good ones are rare...

OK. Then let me rephrase... I have had loan brokers when in conversations about whether a loan would close said they had 'docs they could use' to make it close. I've had clients tell me that their loan broker was great because he 'made the closing happen' wink...wink.... Or made statements like 'just have your employer fax me something so I have their letterhead'.
Now this was at the height of loan activity, not now. Things have tightened up since then, for both lenders and appraisers. Maybe it was just a higher percentage of poor lenders in my area. Maybe it was the fact that just a few lenders were getting the majority of the business in my area. All I can say is that from my perspective there were a high percentage of brokers at least appearing to be bending the rules. I am not bashing the system or loan brokers in general (banks are just as guilty). I'm saying the underwriters (and the LA office of financial institutions) were not doing their job in verifying the documents to prevent things like this from happening.

While this was going on to some extent, I don't think the brokers were at fault to any major extent in getting us in this mess. I do put some of the blame on the appraisal system. Appraisers should be on a pool or rotation basis so that the outcome of their appraisals are not a deciding factor in whether or not they get hired by a lender (not government run, maybe a professional organization of appraisers pool?). I've heard lenders say, oh I need a high appraisal on this property we'll use Bob's appraisal service.

The majority of the blame falls squarely on the government's shoulders. The system was set up to give as many loans to people that didn't qualify as possible. Want proof? Look at the failure rates of mortgages. For many major banks first mortgage failure rates are 20% plus. Second mortgage failure rates for the same bank are under 3%. What's the difference? The government is not involved in underwriting those 2nds... Those banks are on the hook for the loan if it fails, not the government.

 

[D-DAY]

OK. Then let me rephrase... I have had loan brokers when in conversations about whether a loan would close said they had 'docs they could use' to make it close. I've had clients tell me that their loan broker was great because he 'made the closing happen' wink...wink.... Or made statements like 'just have your employer fax me something so I have their letterhead'.
Now this was at the height of loan activity, not now. Things have tightened up since then, for both lenders and appraisers. Maybe it was just a higher percentage of poor lenders in my area. Maybe it was the fact that just a few lenders were getting the majority of the business in my area. All I can say is that from my perspective there were a high percentage of brokers at least appearing to be bending the rules. I am not bashing the system or loan brokers in general (banks are just as guilty). I'm saying the underwriters (and the LA office of financial institutions) were not doing their job in verifying the documents to prevent things like this from happening.

While this was going on to some extent, I don't think the brokers were at fault to any major extent in getting us in this mess. I do put some of the blame on the appraisal system. Appraisers should be on a pool or rotation basis so that the outcome of their appraisals are not a deciding factor in whether or not they get hired by a lender (not government run, maybe a professional organization of appraisers pool?). I've heard lenders say, oh I need a high appraisal on this property we'll use Bob's appraisal service.

The majority of the blame falls squarely on the government's shoulders. The system was set up to give as many loans to people that didn't qualify as possible. Want proof? Look at the failure rates of mortgages. For many major banks first mortgage failure rates are 20% plus. Second mortgage failure rates for the same bank are under 3%. What's the difference? The government is not involved in underwriting those 2nds... Those banks are on the hook for the loan if it fails, not the government.

There are numerous loan types for mortgages that all have various requirements. Sometimes borrowers can qualify for many different types of these loans. Of these, the loan officer is usually supposed to choose which plan bests helps their borrower. I can only assume the loan officers you are referring to had borrowers that were either self employed or just outright committing fraud with borrower income. If so, then they should be held accountable.

As for the appraisers, they definitely have pools and a rotations now. Appraisers are licensed, so they have to also work within the confines of a regulated system or risk losing their paperwork. An appraisal is is nothing more than an estimation of value with a high side and a low side. So there is always some wiggle room, but I do know what you are talking about when the numbers were excessively high. Funny thing is now all appraisals I see and hear about are coming back excessively low, even when the comps are there. Not looking any better in the near future either.

Remember too that local government assessors love high appraisals because it means more revenue every year. They probably didn't have anything to do with the problem either.

 

[I_FLY_LOW]

[ame]http://www.youtube.com/watch?v=qtjfMjjce2Y[/ame]