Who Really Drove the Economy Into the Ditch? (Google eBook)

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Algora Publishing, 2012 - Business & Economics - 326 pages
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Joseph N. Fried examines the factors leading to the financial crisis of 2007/8 and the mess it's put us in today. Although he analyzes the transgressions of Wall Street, the author also presents a wide variety of factors — including some that originated in the governmental sector and others that originated in the private sector. The book includes several rarely mentioned contributing factors such as the detrimental impact of automated underwriting systems that were heavily promoted by Fannie Mae and Freddie Mac. This is an opinionated book with an attitude. However, the author, a CPA and MBA, presents economic information in a conversational tone and meticulously backs up his views with references, charts, and quotes. Joseph N. Fried has published several books with Algora, explaining financial controversies and challenges for the general reader. Here, he highlights eye-popping aspects of the recent financial circus including: Drive-by house appraisals; the impact of hundreds of local housing programs funded by HUD; state governments, and housing advocacy groups; false delinquency statistics put forth by Fannie Mae and Freddie Mac; 'silent second' and 'piggyback loans'.
  

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Contents

Mechanics of mortgage loan securitization
176
Securitization is not needed but it is here to stay
177
Conclusion
179
Mortgage fraud
182
Predatory lending
184
Mortgage brokers and nonbanks were responsible for predatory lending
188
FF were indirectly responsible for predatory lending
189
Regulatory efforts with respect to predatory lending
193

Automation and subprime dont mix
27
Push enough subprime and some will slip through
30
Risky riskbased pricing
32
Fannie and Freddie misconstrued the warning signs
33
Conclusion
35
Lending on the basis of Zillow estimates
38
The many problems of the Automated Valuation Models
39
A Full Monty
42
Epilogue
44
The sound of silence
50
Down payments are gifted
58
What did FF think of down payment corruption assistance?
62
The real reason we lack affordable homes
64
Summary
65
Once a crook always a crook
68
Like Sinatra they did it their way
71
What were the real delinquency rates?
74
More creative accounting
80
Smoke and mirrors
82
Epilogue
83
Pauls Principle explained
85
What are subprime loans?
87
The junk loan orgy
88
FF paid top dollar for subprime
94
Purchases of subprime were leveraged
96
The Fannie and Freddie apologists and their logic errors
97
A man completely vindicated
99
Fannie and Freddie promoted brokers over banks
104
They got cozy with subprime aggregators
108
They were cheerleaders for subprime
109
FF designed the subprime loans of private lenders
112
Fannie and Freddie misled the market about subprime
114
FF redefined conforming to include subprime
115
The GSEs fought predatory lending laws
118
A brief history of FF subprime and politics
119
What is the Community Reinvestment Act and how did it change?
126
The government refuses to produce reliable CRA data
139
What is the best estimate of CRAs impact on the crisis?
143
What torture teaches us about the CRA
151
The deflation argument
158
Exactly when did the housing bubble start?
159
Can the US Federal reserve cause a worldwide bubble?
161
Fed policy doesnt affect longterm rates?
162
monetary policy and subprime
164
Transcripts show a clueless Federal Reserve
165
A brief history of securitization
172
Was our 40year securitization experiment a success?
173
The two most notorious investments
199
The credit rating process was no secret
200
The Levin hearings produce useful data and smoke
201
The rating agencies made many mistakes
203
A very tepid defense of the rating agencies
207
The future of rating agencies
210
What are Credit Default Swaps CDS?
215
The early controversy regarding CDS derivatives and regulation
216
Credit Default Swaps and the Commodity Futures Modernization Act
217
Are credit default swaps beneficial or harmful?
222
A brief marktomarket history
230
The pros and cons of marktomarket
231
Conclusion
234
The normal traditional short sale
235
The naked short sale
236
Naked and ugly
238
The naked shorts regulatory smackdown
240
Regulation SHO and the Uptick Rule
241
Conclusion
242
MERS the system designed to track loan ownership interests
249
Real cases that will break your heart
252
Commonsense solutions
254
The 25 billion solution
255
The Consolidated Supervised Entity program
258
The driveby professors
261
Did the SEC fail? If so why?
262
Was the nonrecourse lending a cause of the crisis?
269
The ethics and psychology of the strategic default
270
Nonrecourse lending bad public policy
272
Did broccoli cause the mortgage meltdown?
278
The truth about deficits
284
Was the problem deregulation regulation or something else?
286
The mixed record of the Bush Administration
292
Class warfare politics
295
Conclusion
298
The dog who did not bark
303
Terror by mid Night
304
Affordable Gold 100s not cigarettes but nearly as deadly
305
Conservative wisdom from Canada??
306
The government and its advocacy of affordable housing
308
Theyre still pushing deadbeat loans
310
Dont be tricked by a bogus definition of subprime
317
Affordable housing policies led to highpriced home foreclosures
318
Dont be confused by misleading statistics
319
Business and liberalism are not mutually exclusive
320
A lemon is a lemon no matter how it is financed
321
Copyright

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