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To Observers Of The Financial Markets, This May Sound Familiar

A report from the Wall Street Journal. “Cerberus Capital Management LP is bringing back a type of mortgage bond that went extinct during the financial crisis. A unit of the private-equity firm issued bonds Friday backed entirely by home-equity lines of credit. The $174 million issuance received a triple-A rating from four agencies including Fitch Ratings. Mortgage bonds pooling esoteric pieces of the home-loan market have been mostly out of style in the decade since the housing market collapsed, a period when government-backed entities ended up standing behind much of the mortgage market.”

“But some structures have slowly returned, including bonds that hold unconventional mortgages resembling the Alt-A home loans of yesteryear for borrowers with hard-to-document income. There have also been a handful of deals involving fix-and-flip loans, and a market for single-family rental bonds emerged after the financial crisis.”

“‘We are starting to have a lot more creative issuance around mortgage credit,’ said Neil Aggarwal, deputy chief investment officer at Semper Capital Management. ‘I wouldn’t be surprised if there’s more to follow after this transaction.'”

“Home-equity lines of credit are more like credit cards in that borrowers can draw upon them as needed, sometimes to make repairs or pay bills. They typically come with floating interest rates that are, on average, higher than those of a conventional mortgage. While demand among homeowners for products to tap into home equity has been relatively static, it’s starting to creep up. Mortgage refinancings in which borrowers pull cash out of their homes have been popular recently.”

From The Real Deal. “Something about this moment seems all too familiar. Prior to the financial crisis, small mortgage companies were lending to thousands of homeowners throughout the country with the backing of credit lines from the largest banks. Now, more than a decade later, nonbank lenders are once again ramping up their mortgage lending in the U.S. and South Florida with credit lines from America’s largest financial institutions.”

“These nonbank lenders such as Quicken Loans, Freedom Mortgage and loanDepot claim they aren’t making risky loans, but are instead filling a void by offering home mortgages in just a few days instead of the weeks that it would take banks to issue such loans. At the same time, local banks have also pulled back from originating residential mortgages. Take for example South Florida’s largest bank, Miami Lakes-based BankUnited, which announced in 2016 that it would no longer originate residential mortgages. Other banks across the country, including HomeStreet Bank in Seattle, are backing away from the mortgage business.”

“Raj Singh, the current CEO of BankUnited, said residential mortgages are a low-margin business that is very competitive. Profits are highly dependent on interest rates. ‘I think it’s tough for regional banks with residential lending… at best you will break even,’ he said.”

“While some say nonbanks are filling a need to low-income and moderate-income borrowers, critics wonder whether these new entities are taking on too much risk and could run into liquidity issues if the economy were to head into a recession, leaving the government to clean up the mess. ‘One of the things that saved the mortgage market during the financial crisis was… there were large banks to pay fines,’ said Edward Pinto, a co-director of Housing Markets and Finance at the conservative think tank AEI. ‘The nonbanks just don’t have those type of assets.'”

“‘Companies like Quicken stepped into the breach to become national lenders. They really weren’t scared to go down on credit scores,’ said Ted Tozer, the former president of Ginnie Mae from 2010 to 2017. Tozer called these nonbanks ‘one trick ponies’ that were able to devote all of their resources and money to making the mortgage process more efficient. Detroit-based Quicken Loans — second in the ranking, with $848.2 million in mortgage loans issued — became one of the most well-known and successful nonbank lenders through its online platform called Rocket Mortgage, which claimed it could close on a mortgage in eight days.”

“During his tenure at Ginnie Mae, Tozer was beginning to notice that some of these new lenders that were filling this void were also taking on a lot of risk. Many of these nonbank loans were guaranteed by Ginnie Mae, and Tozer worried about what would happen if the economy soured and borrowers started to fall behind on their loan payments.”

“These nonbanks will still have to service these loans, meaning that they would have to make interest payments on the loans until they go into foreclosure. Nonbanks don’t have access to the same government resources as banks, and if lenders pulled back on their financing, nonbanks could run out of cash to keep making loans. ‘The issuers that we had to deal with, they weren’t insolvent, they ran out of cash,’ Tozer said.”

“To observers of the financial markets, this may sound familiar. Investment banking powerhouse Bear Stearns collapsed in 2008 not from insolvency but because of a run on the bank. Bear Stearns investors started to pull their money out of the banks, and the bank ran out of cash before JPMorgan bought it for $2 a share.”

“Josh Migdal, an attorney with Miami-based Mark Migdal & Hayden, said that these nonbanks are threatened when warehouse lenders re-price their lines of credit and borrower delinquency increases. ‘To stave off insolvency, nonbanks will need to expedite the foreclosure process to stop the bleeding that will be caused by having to fund servicing advances while a loan is in default,’ he said.”

“Since these nonbanks are the largest providers of these loans, a widespread collapse of this industry could be devastating to the housing market. If nonbanks stopped lending, it could create a domino effect where home buyers would not be able to get a loan. ‘If that does happen, then mortgage bankers have to start hoarding cash, then they are not going to make new FHA or VA loans,’ Tozer said.”

“But if a recession arrives, borrowers buying homes at the end of the cycle would once again be hurt the worst, Pinto said. The issue is compounded by nonbank lenders, which are providing riskier loans than banks, which is allowing people to purchase homes that they ordinarily could not afford, he said. If borrowers start defaulting, it could quickly lead to major issues with nonbank lenders. ‘Even with a small bank, you are not worried about them not being able to honor their obligations,’ Pinto said. ‘You can’t say the same thing about nonbanks. They don’t have anywhere near that capital.'”

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This Post Has 91 Comments

  1. ‘some structures have slowly returned, including bonds that hold unconventional mortgages resembling the Alt-A home loans of yesteryear for borrowers with hard-to-document income’

    Eat yer crowz oxide.

  3. ‘If nonbanks stopped lending, it could create a domino effect where home buyers would not be able to get a loan. ‘If that does happen, then mortgage bankers have to start hoarding cash, then they are not going to make new FHA or VA loans’

    Credit dries up at precisely the worst time. Isn’t that how it always goes? This non-bank trap has been set right out in the open for years and nobody did a damn thing to stop it.

    1. Well, over @ Thee billionaire$ play.boy club hou$e,
      dtRump, Mnuchin, Hassett, Kudlow, Moore & Ross LLC, they’$ pre$$uring milktoa$t Powell into to $ubmi$$ion.

      “Lower the Fed’$ fund$ to 0% … Now damn it!”

      Look @ ’em $tamp.their.lil’.feet$ …

      1. $ad …

        ✔ @realDonaldTrump

        despite a Federal Re$erve that doesn’t know what it is doing – raised rates far too fast (very low inflation, other parts of world slowing, lowering & easing) & did large scale tightening, $50 Billion/month, we are on course to have one of the best Months of June in US history…

        ✔ @realDonaldTrump
        ….Think of what it could have been if the Fed had gotten it right. Thousands of points higher on the Dow, and GDP in the 4’s or even 5’s. Now they stick, like a stubborn child, when we need rate$ cut$, & ea$ing, to make up for what other countries are doing again$t u$. Blew it!

        1. He’s just trying to levitate it for another long 18 months. Personally I don’t think it’s possible.

          1. I think it’s not ONLY possible, but certainly happen.

            What’s another 4 trillion in Central Bank’s balance sheet?

          3. What’s another 4 trillion in Central Bank’s balance sheet?

            I think we’ve nosed over enough that throwing money at it won’t stop the downturn right away. That’s probably why he’s so frustrated that the Fed is slow slow to stop QT and lower rates. But you can really see how he’s trying to set things up so that he can blame them during his campaign. Which probably won’t work with the 50th percentile voter who only cares if things seem to be getting better or worse when they pull the lever.

          5. Reminds me of the saying, “There are no atheists in foxholes.”

            Now that DJT is president, he loves rate cuts and loose monetary policy. It’s a 180 shift from the campaign rhetoric against Obama/Bernanke.

        1. How does that work exactly? Is it like Huck Finn getting paid for other people to paint his fence?

    3. “Credit dries up at precisely the worst time. Isn’t that how it always goes?”

      Or, a nudder way of looking at it, the worst time occurs when precisely when credit dries up.

      If values are determined by prices and these prices are driven by the availability of credit then these prices (and thus the values) will drop if the credit dries up.

      It is credit, the availability of credit, that drives it all.

      1. The easy money credit keeps flowing to the point when a critical mass of bad gambles collapses the system, at which point credit dries up.

    4. great stuff, this would be different from 2007

      To stave off insolvency, nonbanks will need to expedite the foreclosure process to stop the bleeding

      1. thinking about this, it seems obvious that the Fed will start lending to nonbank lenders should the scenario of ‘expediting foreclosures’ happen

        1. it seems obvious that the Fed will start lending to nonbank lenders

          That’s my expectation. And I expect the payback requirements to be very flexible. If it weren’t for the need to maintain appearances I would expect the Fed to just buy them. But instead we’ll extend and pretend like we always do. And if they completely collapse and the Fed ends up owning them (and all the houses) nobody will have seen that coming.

          2. Would it just be some sort of conservatorship a la Fannie and Freddie that never ends of these non-bank lenders? Thoughts?

          3. Would it just be some sort of conservatorship a la Fannie and Freddie that never ends of these non-bank lenders? Thoughts?

            No idea. Does it even matter if the end result is the same? They’ll call it something, wave their hands for a while, step in and take over when it all collapses and then say nobody could have seen that coming. But I think what you describe is as likely as anything else. It has to be something where they can claim for as long as possible that they don’t own the company and all the houses, they are just helping those companies through a rough spot because they are critical to the economy. Doing it for the American people so that we can still get home loans.

          4. If most mortgages are backed by Fannie and Freddie anyway, it might be a distinction without a difference. A similar circumstance reminds me of student loans originated in the private market and sold back to the government. Eventually the government just cut out the private market anyway since they were making a guaranteed markup and not adding much value while the risk on the balance sheet remained the same.

          5. the Fed will start lending to nonbank lenders

            The Fed is more likely to save payday loan shops.

            Quicken loans can dry up and blow away and nobody important loses a thing. They just turn off the lights and go home. They lived on the skim for a season. The Fed is not here to save these itinerants.

          6. The Fed is not here to save these itinerants.

            What if letting them fail means that true price discovery happens in housing? Seems like that can’t be allowed to take its course.

        2. Nix,nix, nix! … Thee Mega.Wanker.Banker$ are $uper $trong! … they’ve been $tockpiling account$ for Distre$$ed, Delinquencie$, Default$, Foreclo$ure, & Bankruptcies $helter.$hack intervention$ … a.k.a: SKSFFS >>> $harp.knife $wift.Filet$.fat.$lices … HB.B ll knot.their.fault$!!!

          NON.bank$, $acrificial lamb$ awaitin’ to bee sent to $laughterhouse$

          (Iffin’ they want credit$, they’ll have to $uckup to Deutsche banker$, Iffin’ they’$ alive & lending.)

  4. ‘A unit of the private-equity firm issued bonds Friday backed entirely by home-equity lines of credit. The $174 million issuance received a triple-A rating from four agencies including Fitch Ratings’

    Well, a triple A rating to shack ATM loans has never gone wrong, has it?

    1. “(Well, a triple A rating to shack ATM loans has never gone wrong, has it?”

      & Thee punishment$ they received, oh lordy, that was some har$h $uffering$, my, my.

  5. “But if a recession arrives, borrowers buying homes at the end of the cycle would once again be hurt the worst, Pinto said. The issue is compounded by nonbank lenders, which are providing riskier loans than banks, which is allowing people to purchase homes that they ordinarily could not afford, he said. If borrowers start defaulting, it could quickly lead to major issues with nonbank lenders. ‘Even with a small bank, you are not worried about them not being able to honor their obligations,’ Pinto said. ‘You can’t say the same thing about nonbanks. They don’t have anywhere near that capital.’”

    “Non-prime” lending …. CHECKED
    Exploding Inventory …. CHECKED
    Collapsing Sales …. CHECKED

    Still NO BUBBLE!!!!!!!

  6. So, we’re very close to the end again; Resurrection of failed financialization products; Check. Triple-A ratings by ratings of said products by the ratings agencies; Check. Gov’t agency oversight MIA; Check… This will end well.

    “YEAH, BUT YOUR SCIENTISTS WERE SO PREOCCUPIED WITH WHETHER OR NOT THEY COULD THAT THEY DIDN’T STOP TO THINK IF THEY SHOULD.” – Dr. Ian Malcolm, Jurassic Park

  8. “As a dog returns to its vomit,
    so fools repeat their folly.”
    – Proverbs 26:11

    1. “ Vengeance is mine, I will repay, says the Lord” … Romans 12:19

      “Two brothers who are high-ranking members of a Utah polygamous group The Order were hit with 50 additional charges in their ongoing tax fraud case earlier this week.”

      U$ Taxpayer$ IR$ Trial starts in July … ( $helter.$hack.$alaciou$! )

      Polygamous leaders of incestuous, white power cult bought $20M Utah compounds, $7M luxury cars, a $4M California beach house, Texas ranch and mansion in Turkey with profits from $1.1BILLION tax fraud scheme
      Jacob and Isaiah Kingston are charged with submitting $1.1 billion in false records to obtain $511 million in profit for Washakie Renewable Energy

      Jacob and Isaiah are the sons of John Daniel Kingston and his cousin Rachel, two of the highest-ranking members of The Order

      The Order is a polygamist cult that was started during the Great Depression which promotes polygamy and incest, to keep bloodlines pure

      John spent seven months in prison for beating Jacob and Isaiah’s sister after she tried to escape the cult when she was forced to marry her uncle at 15

      Jacob and Isiah used the money they made of their scheme to buy over $20M worth of property in Utah and a $4M beachfront pad in California

      It is not clear how many wives Jacob has, but Julianna Johnson claimed that she was forced to marry Jacob when she was 15 and he was 19. She is also his aunt

        1. Thanks for the link Hwy. Most Utahans (myself included) know almost nothing about the Kingston clan. But I do know they have tons of money. They are very much invested in mining, construction, energy, and industrial trades.

  9. ‘residential mortgages are a low-margin business that is very competitive. Profits are highly dependent on interest rates. ‘I think it’s tough for regional banks with residential lending… at best you will break even’

    That non-bank lenders aren’t making a profit has been known for some time. So why keep going? Like the apartment industry, bang a few more paychecks in the account before it goes under. You really have to keep it all in one picture. Money-losing lenders with no capital are supporting the entire market. And they get their money from: ta-da! line of credit! Which can be pulled overnight. More, they have zero skin in the game. So what makes this engine keep running? Unca sugar is backing the whole gotdam scheme:

    May 25, 2018

    “In his corner of American finance, where hard selling meets hard luck, Angelo Christian is a star. Each time Christian sells a home loan, the company he works for, American Financial Network Inc., takes as much as 5 percent. Many of Christian’s customers have no savings, poor credit, or low income—sometimes all three. Some are like Joseph Taylor, a corrections officer who saw Christian’s roadside billboard touting zero-down mortgages. Taylor had recently filed for bankruptcy because of his $25,000 in credit card debt. But he just bought his first home for $120,000 with a zero-down loan from Christian’s company. Monthly debt payments now eat up half his take-home pay. ‘If he can help me, he can help anyone,’ Taylor says. ‘My credit history was just horrible.’”

    “Christian can do this kind of deal because he is, in effect, making the loan on behalf of the federal government through its most important affordable housing program. It’s a sweet deal: He gets his nearly risk-free commission. Taylor puts no money down. If things go south, the government ultimately bears the risk. Many borrowers ‘are living paycheck to paycheck and, if they lose their jobs, they go into default immediately,’ says John Burns, a housing consultant.”

    http://thehousingbubbleblog.com/?p=10443

    1. “Mortgage not making a profit.”

      Discussed frequently. Lots of companies were (are still?) losing money.
      Dip in rates helped margins and volumes.

  10. I was looking at something on MSN which had data on both what the average house cost and the average mortgage. I am not sure if the latter number included home equity loans. What was amazing is how little the average worth was above the average mortgage. A few exceptions in the bubble areas for the most part but for most states it was thousands or a few ten thousands. It is clear houses are nothing but ATMs. The bubble areas apparently rose fast enough that the borrowing did not keep up but with them correcting first, I am not sure how much equity there will be to tap.

    1. A triple aaa. horror movie$ or double -bb horror movie$? … Netflix or Amazon or Roku or Di$ney or Hulu or Popcorn or …

      “Albert Edwards says we’re in an economic Ice Age. The BIS says we’ve got too many zombies. The U.S. president is a clown. There’s a horror movie in this somewhere.

      But look on the bright side. Wall Street’s having another party.

      The Dow Jones Industrial Average DJIA, +0.12% has risen nearly 2,000 points since investors began expecting falling interest rates earlier this month. The S&P 500 Index SPY, +0.02% has climbed 7.5%. What could possibly go wrong?”

        1. Cereal War$! … Lucky Charms were OK, but eye had to suffer with Captain Crunch because of my big brother … No Euell Gibbons Post Grape Nuts in our $helter.$hack. … $ad

          ames Edward O’Keefe III
          “… for his first video, he and other Centurion writers met with Rutgers dining staff to demand the banning of the cereal Lucky Charms from dining halls because of its offense to Irish Americans. O’Keefe said the leprechaun mascot presented a stereotype. He intended to have officials lose either way: to appear insensitive to an ethnic group, or to look silly by agreeing to ban Lucky Charms. They expected to be thrown out of school,ll but the Rutgers official was courteous, took notes, and said their concerns would be considered. Rutgers staff say the cereal was never taken off the menu.”

          2. Project Veritas:

            Project Veritas: how fake news prize went to rightwing group beloved by Trump
            The Guardian

            Project Veritas: how fake news prize went to rightwing group beloved by Trump

            “The fake account was peddled by a woman named Jaime Phillips who claimed to have had an abortion when she was 15 after sexual encounters with the Republican senatorial candidate in Alabama, Roy Moore. Post reporters did their due diligence, grew suspicious of her narrative, and later watched her walking into the Project Veritas offices in New York.”

            “They also discovered a GoFundMe page under the name of Jaime Phillips in which she said she had accepted a job in New York “to work in the conservative media movement to combat the lies and deceit of the liberal MSM”. When these matters were put to O’Keefe in a filmed encounter, he refused to answer questions about the apparent attempt to plant a fake story on the Post presumably intended to undermine the paper’s earlier exposé of Moore’s alleged molestation of underage girls as young as 14.”

          3. Attach the source instead of addressing the substance of what was said. Not very original. Kinda weaselly actually.

          4. the substance

            Speaks for itself: deliberate social engineering and election meddling.

          5. Fair point. I just bring that up because I think it is worth questioning if he is trying to create a narrative of “the oppressed conservative” and how authentic interview is giving his past. He has a history of gotcha journalism and a lot of items strung together out of context. I watched the video. Here are my thoughts on it:

            1) I don’t think O’Keefe demonstrates by a couple of Google search trend comparisons a bias against conservatives. Google doesn’t need to show every auto-populated search that has trended high in its search bar. There is absolutely nothing stopping anyone from searching Hillary Clinton’s emails as a search term. But people truly search for some horrific things and maybe many people do. So they (Google) can make a decision which to show up highlighted and which not (kind of like they can make a decision which videos show up on my son’s YouTube kids and which will not- which is another topic for another day). But that doesn’t really amount to censorship.

            2) We know that there are lots of trolls (including Russian ones) trying to sow misinformation and manufacture outrage. The Internet Research Agency was funding “not my president” rallies and “Lock her up” rallies at the same time. The point is to drive division between Hillary and DJT supporters in order to generate confusion, sow discord and chaos, and basically undermine democracy.

            3) A lot of really inaccurate articles do get re-shared, forwarded, and spiral out of control because bad actors game the algorithms. Google is right to try and and limit some of the gaming that occurs (e.g. Macedonian teens earning millions by publishing fake news).

            4) There are lot of people who just aren’t that sophisticated and who will believe anything that fits their narrative (take a look at the parody Facebook site “America’s Last Line of Defense”). It regularly gets people who share its satire posts because it fits their worldview. I think Google is trying to limit these types of propaganda wars. Just like it might not be PC to suggest that higher incarceration rates might be due to higher racial crime rates rather than police profiling, Google’s effort to sniff out fake news probably looks like it is targeting the right-wing more frequently, but that is probably just because there is a lot of garbage out there.

        2. Streisand effect TBD: “Error establishing a database connection” using Safari and Firefox.

      2. The U.S. president is a clown.

        Ah, but he is no ordinary clown. Half the country still doesn’t understand why we elected him. That’s unfortunate because it means worse need to come before better.

        1. “That’s unfortunate because it means wor$e need to come before better.”

          That alone speaks for x 2,000,000 + now u$ taxpayer $upported farmers.

        2. Ah, but he is no ordinary clown. Half the country still doesn’t understand why we elected him.

          Blue, you think half the country _does_ understand why we elected him??!? I think you are way overly-optimistic in that.

          1. You have a point! I read somewhere that only 3% of the population understood why we were having a Revolution back in the day.

      1. I didn’t think they needed an explanation. Gut the company with debt to make money on stock options?

  14. Underwriting – I recently worked with someone who was getting a mortgage. In the past, the under writers would collect copies of tax returns from the borrower and then verify that those returns were actually filed by collecting return transcripts directly from the IRS. In this particular instance, the under writer didn’t even bother to check if the return presented had been filed, much less any tax due on the return paid.

    It certainly wasn’t like that 6-7 years ago.

  15. Wow, here we go again. This article has a familiar smell from early 2000s.

    Not exactly the same but, as we know, history rhymes but does not necessarly repeat verbatim.

    Here in Florida, recent data shows fairly large uptick in foreclosure suits. Can confirm from auction list on local clerk of court website. Old shadow inventory or more recent delinquencies? Dont know, but still can affect local market with time as well as consumer confidence.

    Nothing at this point really teaches away from repeat of bubble 1.0 with possible exception of lowering interest rates. Changes are happening while at full employment, therefore any rise in layoffs might have substantial effects. Although I do think that large portion of defaults in this environment are due to bailing on investment properties where plans did not materialize. Economists are not discussing this aspect.

    Stay tuned.

    1. while at full employment

      Good news for you. we are nowhere close to full employment. We are only at full Department of Truth statistics.

  17. a leveraged-lending bust could hit economy quicker than subprime blowup, warns ex-FDIC boss Sheila Bair

    excerpt:
    *if debt-laden companies can’t repay their leveraged loans, the economic impact on the economy could hit jobs and economic growth faster than the slow-rolling mortgage crisis did a decade ago.*
    […]
    “With subprime, at least you had a bit of a flow-through,” she said. “It took a while. There was a market shock. But in terms of the real economic impact, it was more gradual.”

  19. seems like the next scam is………………..tap that sweet equity pay off your kids/ grandkids student loans, pay a few mortgage payments then oops default, foreclosure or bankruptcy. I wonder when Bernie or Liz will propose this.

      1. I’ve always wondered about student loans (unable to be discharged in bankruptcy) being rolled into platform loans (e.g. Marcus by Goldman Sachs or SoFi) and then watching the borrowers declare bankruptcy. Definitely not encouraging that, but wondering if that might happen.

  20. Thinking about the effect of the Democrats falling all over themselves, competing for the biggest giveaways. If I had student loans right now, why would I continue to pay? The debt may be forgiven in 2 years, which would make those payments look foolish.

    I can only imagine the anger of those who paid off their loans and those who decided to forego college because of cost. How did we become a society that rewards impudent borrowing while punishing those who sacrifice in order to save?

      1. But in the meantime…

        If I had student loans right now, why would I continue to pay?

    2. I can only imagine the anger of those who paid off their loans and those who decided to forego college because of cost.

      Freeloading, parasitism, and the shirking of personal responsibility are core progressive virtues, to be encouraged and enabled as our mighty Free Sh*t Army rallies to the DNC’s collectivist banners.

      1. The government enacted the GI Bill for veterans in 1944. The Bill payed for college costs for returning vets who put their life on the line.

        How does Bernie Sanders justify paying off the school debt which is a choice made . No doubt the price is too high today for education based on the government backing these student loans to begin with.

        My point is that the G-I benefit was earned for service to the Country. Bernie Sanders picking the winners and losers Is a joke.

        1. It takes two to tango though. Which is worse, irresponsible borrowers taking out money for a degree which will not give them ROI or the lenders who were complicit in the scam and willingly allowed these marks to become indentured servants? Seems like the pain should at least be shared on both sides, even if full bailout isn’t warranted.

          Full disclosure: I’ve never had any student loans. Went to university on scholarship and worked two jobs during the entire time to pay for books, food, housing, and miscellaneous. I also chose a very cheap school to begin with, although I did graduate with a “humanities” major.

          1. Maybe we should pay down the National debt that went high because of the last bail out we did for Banks.

            The lure of going into debt for a future gain or immediate gain for that matter is out of control. But, why should government pick and choose who gets telieved.
            I feel sorry for people with chocking student debt, just as I feel sorry for people with consumer debt or house debt for that matter.
            . I feel sorry for our National debt.

    3. ***I can only imagine the anger of those who paid off their loans and those who decided to forego college because of cost. How did we become a society that rewards impudent borrowing while punishing those who sacrifice in order to save?***

      Well, they can stomp their feet. In this Merica nobody in Gov cares for people that to the right thing…

      1. Eventually the people that did the right thing may conclude the only path to justice is to become veterans of civil war 2.0

    4. So a guy who couldn’t read a measuring tape or drive a nail straight is going to pay for $1.6 trillion of student loan debt and raise $800 million more with a 0.5% tax on stock trades etc.? Right. If that camel’s nose ever got under the tent you would be looking at 20.5% tax on stock trades etc. plus a whole separate camel packin’ carbon taxes.

      Bernie Sanders unveils plan to cancel all $1.6 trillion of student loan debt

      By Ryan Nobles and Gregory Krieg, CNN
      Updated 1:00 PM ET, Mon June 24, 2019

      Sanders also talked about his detailed roadmap — centered on new taxes on Wall Street — to raise the $2.2 trillion dollars necessary to pay for this program and his other college funding plans. It will include a 0.5% tax on stock trades (or 50 cents for every $100 worth of stock), a 0.1% fee on bonds, and a 0.005% fee on derivatives. Sanders believes that could raise more than $2.4 trillion dollars over the next ten years.

      https://www.cnn.com/2019/06/23/politics/bernie-sanders-student-loan-debt-cancellation/index.html

      1. “Sanders believes that could raise more than $2.4 trillion dollars over the next ten years.”

        If they had any ballz they could cut middle-east spending by 25% to raise that $2.4 trillion.

        1. “If they had any ballz they could cut middle-ea$t $pending by 25% to raise that $2.4 trillion$. ”

          “Nation Building” / CONver$ion of Foreign people’s to Western Christian + Capitali$tic belief$ is essential to the Military.Industrial.Mega.Expenditure$.Complex

          Please review your per$onal legal requirement$ of compliance to the U$ IRS payment demand$.

    5. I had student debt and paid it back. Cant just forgive em all. Need to structure it with lower rates and get gov out of guarenteeing them so costs drop. I’d rather see education costs lower vs handouts to Israel and wall st.

      1. Valuable degrees like Engineering or Computer science should get more of a rebate then the other “fun” degrees.

      2. I would rather see the cost go down of education also.

        Why doesn’t Sanders promise to pay off car loans for instance, or credit card debt in general.

        Government picking the winners and losers Is bad policy.

  22. wouldn’t Quicken, and the other non bank lenders, resell their toxic crap to GSE’s like Ginne/Fannie/Frieddie for the taxpayers to backstop anyway. They have no skin in the game at that point once sold so they can record record profits no matter the risk, as long as its under whatever generous cutoff credit score, downpayments, the GSE’s require…3% down w/500 FICO wouldn’t surprise me.

    Do non-banks not have the ability to clear this garbage off their books like a real bank as the article states?

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