[Rhodes22-list] Brad - A little more on CRAs

Tue Sep 30 19:54:09 EDT 2008

Brad, I did watch the some of the Clinton video and when I searched under
CRA I find this link earlier. Believe it or not I rhave already read the
entire doc.The guy from Countrywide on Page 15 states that CRA loans
performed worse than conventional conforming loans. This is what I stated
earlier and supports what I  found when I worked at First TN.

I am not sure why you bring this up. I have been asking about CRA loans
verse sub-prime  not A paper. (scroll down and re-read email) If CRA loans
were not in the pools they would have been replaced by sub-prime.  You do
realize this right?  My original question was/is what is the default rate of
CRA loans verse traditional sub-prime?. Fairly simple Question but it seems
to have pissed you off. You have jumpred all around but this is the only
question I  asked you. None of the links provided answer this simple
question. You could have nipped this in the bud by saying you had no
numbers. Instead you tried to re-hash the whole crisis and sent me to wiki.

For what it is worth here is why CRA loans (in my experience) traditionally
performed much better than sub-prime loans. The credit profile of the CRA
customer was the so called cream of the sup-prime crop. They had crappy
credit but they usally never lost anything due to default. Their FICO
 scores were from 500 to 660. CRA credit scores were usually low to lack of
credi history or slow pay on revlolving credit. But the history also showed
they paid stuff off. CRA loans were generally given to first time home
buyers with no bankruptcies and no foreclosure. Note - The programs I am
familiar with allowed no bankruptcies or foreclosures but other states may
be different. They also were offered to people that typically had no history
of slow rent or mortgage history.  They usually had good job history and CRA
loans were almost always full doc loans. Also appraisals were much better
controlled for CRA loans. Another plus is brokers were not normally involved
in the process.

Now compare this to the credit profile of a true sub-prime customer....FICO
scores from 500 to 620. Low scores due to extensive late payment history on
credit report. Typically sub--prime customers have a bankruptcy and in some
cases two. often they have history of slow  rent/mortgage or foreclosure.
Many of these were no doc loans with inflated appraisals or worse yet "drive
by appraisals" or AVMs (automated evelauation models)..The guidelines for
these programs were very different. Brokers were often involved and the
chance for fraud was increased CRA program usually gave someone their first
shot. Sub-prime customers were given their second and third shots to screw
up. Also sub-prime lending was big on automated underwriting ( a huge
problem rarely mentioned). Most if not all CRA programs went through a
manual underwrite. This is a huge difference.

I really don't care if you take my word for this. I know this above is true.
I did not read this on the web. I will freely admit that CRA loans offered
to higher credit risk customers performed worse than corforming loans
offered to lower risk customers.If that is you point it is kind of silly and
a little different from what we started with ... I do not agree that CRA
sup-prime loans performed worse than traditional sup-prime loans. I do not
agree that CRA loans are a leading cause of this mess.

No attack on my end...I asked a simple question and you used your
usual tactic of providing all kinds of irelevant information while never
actually trying to answer the origianl question.

On Tue, Sep 30, 2008 at 3:30 PM, Brad Haslett <flybrad at gmail.com> wrote:

> Wally,
>
> I really do have a life and the only reason I'm in front of the
> computer all day today is because of some things going on at "The
> Coast" involving home building.
>
> Here's your "money shot" -
>
> "For example, both Countrywide and NationsBank (now merged with Bank
> of America) have reported that their affordable home loan portfolios
> have had higher delinquency rates than their other conventional home
> loans." (circa 2000 before the Wall Street subprimes took off)
>
> Page 15 of this report-
>
> http://www.federalreserve.gov/BoardDocs/Surveys/CRAloansurvey/cratext.pdf
>
> Now read the whole g-damn thing and watch the videos I posted before
> you shoot another spitball.
>
> Brad
>
> On Tue, Sep 30, 2008 at 1:45 PM, TN Rhodey <tnrhodey at gmail.com> wrote:
> > Brad, Ha ha ha...A little testy huh?  It is not my fault you make claims
> > that you can't support. It is not my fault you can't keep track of this
> > thread either. Something isn't true just because  Brad say it is.
> >
> >  I am beginning to remember why I bailed out of the politics on this
> list.
> > Folks can say and post what ever they want and that is all well and good.
> > Heaven forbid you actually ask some one to provide a little data to
> support
> > their claims. I asked you for data on CRA default rates several times and
> > you produced nothing so why should one believe you? I guess it is just
> best
> > to drop this...you can go on beliving CRAs have a higher default rate
> than
> > normal subprime and that thay they were a leading cause of this problem.
> >
> > Based on numbers I saw a year ago this is just flat wrong. I just asked
> if
> > you had anything more current. It turns out you don't have jack and I can
> > see asking you to actually prove what you say is not to your liking.
> >
> > Me thinks i will go back to lurk mode.
> >
> >
> >
> >
> > On Tue, Sep 30, 2008 at 1:37 PM, Brad Haslett <flybrad at gmail.com> wrote:
> >
> >> Wally,
> >>
> >> I'm not the friggen National statistician.  Someone has to call a halt
> >> to this circle jerk and I'll do it first.  What exactly was your
> >> point? This was a bubble, yes?  The bubble was caused by lax lending,
> >> yes?  Who created the lax lending practices?  I assert that it started
> >> with CRA.  And you assert what?  Please do explain to us all with your
> >> infinite wisdom how we got where we are.  Here's my explanation of
> >> every airplane crash since 1903.  Gravity!
> >>
> >> Brad
> >>
> >> On Tue, Sep 30, 2008 at 12:14 PM, TN Rhodey <tnrhodey at gmail.com> wrote:
> >> > Brad, So you still got no numbers huh...what I figured. Frankly you
> >> trying
> >> > to explain (to me) how the mortgage crisis happened is like me trying
> to
> >> > explain (to you) the cause of a plane crash. Like many you hear a bite
> on
> >> > the web and you latch on to it because it sounds good.
> >> >
> >> > You make claims without numbers....why should one believe you? I sure
> >> don't.
> >> > Sorry but I will trust my real world job experience and actual data
> that
> >> I
> >> > have seen with my own eyes. You in turn can rely on wiki and your
> other
> >> web
> >> > sources. Good luck with that!!!
> >> >
> >> > Wally
> >> > __________________________________________________
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