IndyMac the foreclosure crisis and politics

And how as a member of Congress would you propose solving the foreclosure crisis?

I would have the same question; What would be your proposal? At this time any average individual, even with no real estate background can see and feel our current situation and say "we need a solution!" but, that's exactly what we need... a solution!

Debbie,

First, let me point out that the bank is INDYMAC not INDIMAC.  As a member of Congress, these minor mistakes tend to snowball.

As a Republican -- I take personal affront to your statement that this problem is the result of only Republicans.  

So your position is that if the Democrats controlled the Congress and the White House-- That the Real Estate boom would never have occurred?  Is that correct?  

The issue was supply, demand and greed.  This coupled with criminal acts and pressure from Mortgage Lenders and Real Estate agents (like us) --- to "Just get the deal through".  This coupled with Decreasing Supply and Increasing Demand-- prices rocketed upwards. 

Had the average income rose at the level of real estate prices-- then we would be in something that is also familiar to history...  SIGNIFICANT INFLATION.

In regards to the loss of deposits above the FDIC insured limit of $100,000 -- it is unfortuate.  However, those who were smart-- and typically had this much money-- don't keep it sititng in a checking or savings account.  They would either invest it-- or keep it in other, insured assets.  Furthermore, Indymac bank has been in trouble for quite a while-- and a LOT of people saw the writing on the walls.

It might be prudent to mention that SOME at OTS (The Office and Thrift Supervision-- the group that took over Indymac) -- actually attributed their collapse to statements made by Senator Charles Schumer (Democrat-- New York).  His statements about 5 months ago-- which questioned the ability of Indymac to function-- caused a huge wave of depositors-- to withdraw their money.

And if you understand the dynamics behind the issue of liquity (the reason they were shut down)  -- then you would realize that by having over 1 billion dollars withdrawn -- was enough to cause the downward spiral for Indymac.

You never said what party that you belong to.  Are you Democrat? Libertarian? Socialist? Nor did you state what you think the solution is-- except by implying "Get the Republicans out of office".

Let us know your thoughts.

-Jason

Debbie,

You didn't address the comments made by Senator Charles Schumer-- The one who a lot blame for the fall of Indymac.  

What about those people who lost 50% of their deposits over the FDIC insured limit of $100k?  Would you help them-- by raising the FDIC insured limit (which has remained the same for as long as I can remember)?  If you raise the limit-- then how would you offset the liability to the government?  Since, of course it is ultimately, the government who is backing these accounts?

With the oversight that you are proposing-- how would you have responded to the calls of the constituents who said "I can not qualify for a loan on a house-- and I want to finally be a homeowner"  Would you tell these people -- Sorry, I as a regulator, believe you are a bad person to lend to?

If you could go back in time, without the benefit of hindsight, would you proposed to have stiffled free trade and commerce by telling banks what types of loans they could and could not make? 

-Jason

p.s. FINALLY, ActiveRain is becoming fun again!!! =)

"With proper oversight (regulation), which the Feds are now proposing, we would not be in this crisis.  I am sure that even as a Republican you know that prices will not stablilize until the number of foreclosures decline."

The problem is that the regulatory agencies have been completely asleep at the wheel and have not enforced the existing regulations for years.  A lot of the proposals I hear bantered around in congress involve trying to give more power to those that have been the most inept at handling the crisis.

The one the really irks me is the attempted power grab going on by the Federal Reserve.  They have been one of the worst offenders in not excersizing their existing regulatory capacity and in fact helping banks circumvent regulations through such things as issueing "23A Exemption Letters). 

Here's a post of a letter I sent to several Congressmen and Senators on the subject of regulation back in Oct.

http://activerain.com/blogsview/237142/My-letter-to-congress

Also my take on IndyMac, regulators and the OTS

http://activerain.com/blogsview/590265/IndyMac-Fight-Schumer-vs

Don't purely blame the Republicans for the financial regulation, lots of it happened under a Democratic controlled congress and one of the worst pieces of financial regulation the repealing of the Glass-Steagall act happened under the watch of the Clinton administration.  No, I'm not a Republican myself, just someone who doesn't like to see partisan politics get in the way of dealing with issues.

Debbie,

Are ya coming back?? :)

Hey Debbie,

Hope you are feeling better.  But I'd still love to hear your responses to the above issues.  Although, I'm not in your district-- I want to see how an aspiring Senator responds!

Thanks

-Jason

The government should not do anything to solve any crisis especially when they created it begin with.

It's nice to blame it on republicans, just don't see how you arrive at that conclusion unless you are delusional.

I seem to remember Democrats getting control of the congress in 2002 and we were told everything was going be ok, what happened? 

This housing problem was for the most part was brought on by Liberal democrat policies to provide homeownership to people who couldn't afford homes. and yes some republicans went along with it.

But I believe it was Barney Frank , the hero of many democrats who said when warned about the road Freddie and Fannie were headed down was disastrous that "there was no problem and that Freddie and Fannie weren't going anywhere" are were rock solid. and was it not democrat congressman Meeks who at hearings about the potential problem asked "what are we even doing here" there's no problem and was it not congress woman Maxine Waters who said "we don't have a crisis particularly at Fannie Mae"  http://www.youtube.com/watch?v=_MGT_cSi7Rs

Before you ask for support to run for elected office and offer no ideas on what you will do to change things, other then the same tired line "I will fight for change" you should first get your facts straight. 

This is the internet its not MSNBC ,CBS,NBC  we deal with facts. 

Why don't you start your own bank and lend money to all the people you feel so sorry for? 

Why is it that all the "do gooders" never can offer a solution other then to regulate a business someone else created. Create something yourself!!