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RE: Latest news on Obama Care - 1/11/2016 7:13:02 PM   
Lucylastic


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Where is the replacement for the ACA?

Speaker of the House Paul Ryan shares a laugh with Republican members of Congress after signing legislation to repeal the Affordable Care Act, also known as Obamacare, and to cut off federal funding of Planned Parenthood during an enrollment ceremony in the Rayburn Room at the U.S. Capitol January 7, 2016. Chip Somodevilla/Getty Images
The GOP’s Obamacare alternative? Don’t hold your breath
01/11/16 10:40 AM
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By Steve Benen
At an event over the weekend, South Carolina Gov. Nikki Haley (R), who’ll deliver her party’s State of the Union response this week, made a curious boast about her congressional allies. House Speaker Paul Ryan (R-Wis.), the governor argued, “said that when he took his leadership role, things were going to change. How about the fact that they repealed Obamacare? Was that not fantastic?”

The comments left many confused. House Republicans voted last week for the 62nd time to repeal the Affordable Care Act, but that doesn’t mean they succeeded. On the contrary, President Obama vetoed the repeal bill on Friday afternoon, issuing a statement to Congress that read in part, “Because of the harm this bill would cause to the health and financial security of millions of Americans, it has earned my veto.”

Haley may have been impressed, and Republican lawmakers themselves may have had a grand time pretending to take Americans’ health benefits away – see the above photo – but nothing has changed.

So, now what? If we’re to believe the congressional GOP’s rhetoric, the next step is the release of the long-awaited Republican alternative to the current health care reform law. On CBS’s “Face the Nation” yesterday, host John Dickerson asked Speaker Ryan about this:
DICKERSON: You said you wanted the Republicans to offer an alternative to the president. One of the first things you did this year, though, was offer [an ACA repeal bill]. How is that an alternative?

RYAN: It’s not. That’s why we have to come up with an alternative.
Evidently, that’s easier said than done. The GOP’s alternative has been in the works since June 2009 – a mere six-and-a-half years ago – and asked last week why he’s moving forward with a repeal bill before the Republican alternative ready, Ryan told reporters with a smile, “Just wait.”

Around the same time, the House GOP leadership quietly signaled just how long that wait is likely to be.

Politico reported that the Speaker’s office is pushing Republicans to “go big on ideas” in the 2016 election cycle, but for now, it appears “those ideas might just remain, well, ideas.”
Senior House Republican aides and lawmakers say they do not plan to hold votes on many of the agenda items the party plans to unveil – such as a health care plan to replace Obamacare, or tax reform – because of a tight legislative calendar over the next few months and the reality that none of the bills would be signed by the president, anyway.
The idea that Congress shouldn’t work on bills that won’t earn the president’s signature might be more compelling if Congress hadn’t just sent an ACA-repeal bill to the White House, knowing all the while that the legislation stood no chance of success. Indeed, the House Republican majority has spent roughly five years repeatedly working on measures that they knew would never receive Obama’s support. Why change now?

As for the “tight legislative calendar,” note that this has nothing to do with a busy work schedule – Congress has very little on its to-do list for the rest of the year – and everything to do with vacation time lawmakers have given themselves. In other words, “tight legislative calendar” refers to the limited amount of time members have given themselves for actual work.

If the House Republican majority wanted to give itself more time to do actual work, it could – it’s within the GOP’s power to expand the “tight legislative calendar” by weeks or months. Party leaders simply prefer not to.

The end result suggests we won’t see any real consideration of the Republicans’ ACA alternative until 2017 – at the earliest.

http://www.msnbc.com/rachel-maddow-show/the-gops-obamacare-alternative-dont-hold-your-breath?cid=sm_fb_maddow


It’s time for an Obamacare checkup.
Despite much doom and gloom portended for years by the law’s opponents, Obamacare looks surprisingly ... healthy. Consider its performance on four major fronts.
First, expanding health insurance coverage, the law’s primary objective.
Between the year that the Affordable Care Act passed (2010) and the first half of 2015, the share of Americans younger than 65 who were uninsured was nearly halved, falling from 18.2 percent to 10.5 percent, according to the Centers for Disease Control and Prevention.
For comparison, just before the law was passed, the Congressional Budget Office projected that it would reduce the nonelderly uninsured rate to 9 percent in 2015. That CBO estimate was premised on all 50 states expanding Medicaid, though; a subsequent Supreme Court ruling allowed states to opt out, and today only 30 states and the District have expanded Medicaid. In this context, the law looks remarkably successful.
Second, cost control.
In 2010, there was a lot of discussion about “bending the cost curve.” That meant not necessarily reducing health-care spending but preventing spending from growing as quickly as it had in the years before health-care reform.
On this objective, the law has exceeded everyone’s wildest dreams.
Shortly before Obamacare was passed, experts predicted that national health expenditure growth rates would be 5.5 percent in 2013 and 7 percent in 2018. In reality, 2013 growth was 3.6 percent, and for 2018, experts now predict a pace of 5.3 percent, according to the Centers for Medicare and Medicaid Services.
Growth in health-care prices, as measured by both premiums and even overall medical care costs, has also fallen way below the pace of the decade leading up to the passage of Obamacare. Likewise, today’s trends are lower than what the Congressional Budget Office and other forecasters projected in 2010.
Lower-than-expected health-care costs have also resulted in lower-than-expected public health spending. In 2009, the CBO forecast that Medicare would cost $723 billion in 2015; according to the latest estimates, it cost about $90 billion less than that last year ($634 billion).
The question, of course, is whether Obamacare really deserves all the glory for this good news.
Some of the slowdown in spending growth is probably attributable to the sluggish recovery (and indeed, health-care spending has slowed or even fallen in other developed countries dealing with their own economic struggles). Expiring patents on some popular brand-name drugs may have played a role, too.
Most worryingly, the implementation of Obamacare’s strongest cost-control tool — the unpopular “Cadillac tax” on high-cost health plans — has been kicked down the road. Surveys of employers suggest that the threat of this impending tax has already spurred them to find ways to hold down costs, but if the tax gets delayed indefinitely, its motivating power will diminish.
Third, the labor market.
Obamacare’s passage was accompanied by fears that it would encourage people to drop out of the labor force (since they would no longer need to work to get insurance) and encourage employers to shunt full-time workers into part-time positions (to dodge a new mandate for larger firms to offer all full-time workers health insurance).
There have been anecdotal examples of workers and firms affected by both incentives. But right now this looks like the dog that didn’t bark. A new batch of studies suggests that this “job-killing,” part-time-work-shifting law has had no discernible effect on labor markets. That may change with time, of course, as more firms become subject to the employer mandate.
Finally, public opinion.
Whatever the law’s successes, Americans still seem to mostly hate it. At least, they say they hate it, even though they like what it does.
Surveys show that Americans are pretty keen on almost all of Obamacare’s specific provisions, such as guaranteeing coverage for people with preexisting conditions, the Medicaid expansion, no out-of-pocket costs for preventive care, and letting children stay on their parents’ health plans until age 26.
In other words, Obamacare has a branding issue. But given how many court and legislative challenges the law has survived, I’d say that even on this metric, our patient’s prognosis still looks good.


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(in reply to Lucylastic)
Profile   Post #: 21
RE: Latest news on Obama Care - 1/11/2016 9:23:30 PM   
Phydeaux


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1. Your smart enough to know the repeal vote was kubucki theatre. Never expected to get past obama - and your posturing about them not having a replacement - is likewise kubuki theatre.
2. Latest figure for uninsured is 11.9%. Your figure is from Q1 2015. Mine from Q4.
3. I would have argued that the salient detail was improving health outcomes. I mean, if the point was to give health insurance - just give everyone a health insruance worth $10 and be done with it.
4. Funny. According to Forbes,
quote:

When the CBO first estimated Obamacare’s impact on the uninsured, in March 2010, the agency predicted that the law would reduce the number of uninsured U.S. residents by 32 million by 2019. Its now predicts a reduction of 24 million; in other words, Obamacare’s impact on coverage will be 8 million fewer than originally predicted.
http://www.forbes.com/sites/theapothecary/2015/03/10/cbo-downgrades-obamacares-enrollment-projections-subsidy-costs/

Seems to me I recall the the purpose of ACA was to give health care to the 30 million people that didn't have it. And yet, 33 million people still don't have it.

5.
quote:

Second, cost control.
... On this objective, the law has exceeded everyone’s wildest dreams.


Funny - the Washington Post rates that three Pinocchios.
https://www.washingtonpost.com/news/fact-checker/wp/2014/11/06/obamas-claim-that-obamacare-has-reduced-health-care-inflation-every-single-year-since-it-was-passed/

And contrary to your assertion that
quote:

That meant not necessarily reducing health-care spending but preventing spending from growing as quickly as it had in the years before health-care reform.


Obama said directly that the average family would save $2500/year in health care premiums.

Here are four links: http://votesmart.org/public-statement/316384/democratic-presidential-candidates-debate-transcript/?search=$2,500#.VpSIc_krK70

http://votesmart.org/public-statement/346763/remarks-of-senator-barack-obama-health-care-town-hall/?search=$2,500#.VpSIyvkrK70

http://votesmart.org/public-statement/314382/democratic-presidential-candidates-debate/?search=$2,500#.VpSI2fkrK70

http://votesmart.org/public-statement/314382/democratic-presidential-candidates-debate/?search=$2,500#.VpSI2fkrK70


So thats pretty blatantly Three Pinnochios too, now isn't it.

In fact, no nonpartisan study has found that the ACA has caused any significant reduction in health care costs. Most of the reductions have occured because the a lot of medicines came off patent protections. Most significantly, statins.

6. Since 2010, democrats have been telling themselves that once Americans find out whats in it - they'd love it. And yet year after year it remains unpopular.

The latest democrat talking points are that Americans like all the important bits about obamacare.

And? Thats like asking someone to a Roast Beef Dinner - and then stiffing them with the check. Sure - they're going to like the roast beef. Its only when you ask them to pay for it that things get sticky.

7. Branding issue.

Snicker.

Sure, if by branding issue you mean there is no way the democrats can blame this on the repubicans. Dims are saddled with this monstrosity that has resulted them losing historic state, local, and federal offices. And 538 opines that Republicans are going to maintain that at the federal level and continue their gains at the local levels.

Sure. A branding issue.

Lets see - The extend living trust pool has been repealed.
The Group Insurance has been delayed
The medical device tax has been repealed
The cadillac tax has been repealed.
The high risk pool is gone.
The ACA has steamrollered the consolidation of medical practices. If you love big banks - you're going to just go ape-shit over Big Healthcare.

Doctors attitudes toward the practice of medicine is now 65% somewhat or very negative.

19% of doctors intend to cutback on hours worked.
16% plan on retiring
12% plan to cut back patients seen (medicare, medicaid etc)
8% plan to go part time
6% plan to retire.

80% of doctors believe the ACA eroded the viability of the private practice model. 86% saying it it is either on shaking ground or bound to go extinct.

http://www.physiciansfoundation.org/uploads/default/Health_Reform_and_the_Decline_of_Physician_Private_Practice.pdf


Oh yeah - and remember obamacare putting large numbers of people into medicaid?

Medicare pays 48% of what private insurance pays. Medicaid pays 61% of what Medicare pays... or roughly 28%.

And you wonder why people on medicare/medicaid have trouble finding doctors?
http://www.forbes.com/sites/peterubel/2013/11/07/why-many-physicians-are-reluctant-to-see-medicaid-patients/

Note that the ACA included a bribe for 2 years of higher reimbursement rates for doctors. That has now expired. And the full effect of piss-poor reimbursement rates will now be felt.

And - Deloitte found 60% of ACA enrollees unsatisfied with their coverage. http://www.washingtontimes.com/news/2015/aug/3/obamacare-enrollees-less-satisfied-others-survey/?page=all

And - over half out of the 23 health care cooperative established by obamacare have gone bankrupt; all but one is losing money. Cost to tax payers: 5.9 billion dollars.

Yeah - that sure looks like a sustainable business model.




< Message edited by Phydeaux -- 1/11/2016 9:57:00 PM >

(in reply to Lucylastic)
Profile   Post #: 22
RE: Latest news on Obama Care - 1/11/2016 11:30:07 PM   
Phydeaux


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Joined: 1/4/2004
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Oh - and last year Obama estimated 11.7 mil sign ups. And this year its 11.3... 400,000 people finding out ACA sucked. ...

(in reply to Phydeaux)
Profile   Post #: 23
RE: Latest news on Obama Care - 1/12/2016 5:18:52 AM   
DominantWrestler


Posts: 338
Joined: 7/4/2010
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quote:

ORIGINAL: bounty44

quote:

ORIGINAL: DominantWrestler
You mean 2008 while the second major economic collapse caused by republicans in a decade was occurring? Oh and you forgot the elderl use Medicare AND Medicaid Fido. You also forgot that was you link. Even if when you compare to 2008, there still was a drop in the uninsured rate of 2.5%

Insult my intelligence again, please. It just makes me laugh


when you do patently erroneous things and its pointed out, its probably better to say "sorry, I stand corrected" rather than to be snarky.

and what you said at the end of your first sentence above is really irrelevant to the point.

its boggling to me that, if i am correct in presuming you mean the housing bubble bursting, liberals continue to point to republicans as the cause of that.

if we pointed you to some reading that sets your record straight, would you even bother to read it and change your mind?


The economy collapsed. People chose food and their homes over health insurance. Theretire 2.5 is is minimum estimate. Considering Uninsurance rate was going up, it would seem that a 6% estimate is low. That's why it's not erroneous.

The republicans repealed glass steagall and then bush created an affordable housing act. Glass steagall prevented banks that lent money to sell those as investments. The housing act encouraged banks to lend more money to more people than could be payed back. But banks didn't care because they lent the money, packaged thousands of mortgages together and sold people a portion with a nice chunk of money going to the bank. This is called a derivative. Now here's where it gets criminal. The derivatives were given a AAA rating by companies that had a conflict of interests with the lending banks. This hadn't been a problem until now because the evaluation process had been pretty legit until now. Now do you see the problem?

Basically, glass steagall, one of the primary lessons of the Great Depression, prevented derivatives. The housing bubble was caused by the housing act. And all the banks sold larger mortgages, took their cut, passed on the bad debt to consumers while having their friends lie about the trustworthiness of the investment. Do you get it now Bounty44?

(in reply to bounty44)
Profile   Post #: 24
RE: Latest news on Obama Care - 1/12/2016 5:46:46 AM   
DominantWrestler


Posts: 338
Joined: 7/4/2010
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Obamacare was gutted. Massachusetts (the model off which Obamacare was built) has done fine for years as does Europe. Problem is, and my MIT graduate republican friend agrees, the strength of Obamacare was the consumer protections, almost all of which was gutted by republicans who knew it could work (because it works in so much of the world) and would literally prefer anything to Obama succeeding. They shut down the government to cause malcontent and then, when the same was brought up this year, slipped the concept under the rug. They need republicans rallying, not remembering how stupid, infantile, ineffective and destructive their party has been

(in reply to DominantWrestler)
Profile   Post #: 25
RE: Latest news on Obama Care - 1/12/2016 11:46:34 AM   
Phydeaux


Posts: 4828
Joined: 1/4/2004
Status: offline

quote:

ORIGINAL: DominantWrestler


quote:

ORIGINAL: bounty44

quote:

ORIGINAL: DominantWrestler
You mean 2008 while the second major economic collapse caused by republicans in a decade was occurring? Oh and you forgot the elderl use Medicare AND Medicaid Fido. You also forgot that was you link. Even if when you compare to 2008, there still was a drop in the uninsured rate of 2.5%

Insult my intelligence again, please. It just makes me laugh


when you do patently erroneous things and its pointed out, its probably better to say "sorry, I stand corrected" rather than to be snarky.

and what you said at the end of your first sentence above is really irrelevant to the point.

its boggling to me that, if i am correct in presuming you mean the housing bubble bursting, liberals continue to point to republicans as the cause of that.

if we pointed you to some reading that sets your record straight, would you even bother to read it and change your mind?


The economy collapsed. People chose food and their homes over health insurance. Theretire 2.5 is is minimum estimate. Considering Uninsurance rate was going up, it would seem that a 6% estimate is low. That's why it's not erroneous.

The republicans repealed glass steagall and then bush created an affordable housing act. Glass steagall prevented banks that lent money to sell those as investments. The housing act encouraged banks to lend more money to more people than could be payed back. But banks didn't care because they lent the money, packaged thousands of mortgages together and sold people a portion with a nice chunk of money going to the bank. This is called a derivative. Now here's where it gets criminal. The derivatives were given a AAA rating by companies that had a conflict of interests with the lending banks. This hadn't been a problem until now because the evaluation process had been pretty legit until now. Now do you see the problem?

Basically, glass steagall, one of the primary lessons of the Great Depression, prevented derivatives. The housing bubble was caused by the housing act. And all the banks sold larger mortgages, took their cut, passed on the bad debt to consumers while having their friends lie about the trustworthiness of the investment. Do you get it now Bounty44?


Except you're wrong on all the details that matter.

The community redevelopment act of 1993 required the banks to make a certain amount of redline loans - ie., loans that were predominantly minority areas.
The 1995 standards required banks to be flexible and required banks to make a certain number of loans to low and moderate income borrows.
Over time, the amount of loans was eventually set to 20%. Over the time over the housing boom, Sharpton and others led sitin's at the major bank's to *make* them make loans; the cry at those times was that the lack of loans was causing minoriies not to be able to share in the appreciation of the home market.

In 1994 HUD published the national homeownership study callinf for financing strategies to allow homeowners that lacked cash to by a loan.

At the time, Fannie and Freddie both had democrats as their CEOs. In 1995, Freddie automated its loan processes, and in 1999 it eased its credit standards so that it would, for the first time, accept sub prime loans. It did so, because the democratic congress under clinton were threatening additional regulations.

The amount of loans, and the quality of loans got worse, and worse. By 2007, Fannie and freddie were required to show that 55% of their loans were LMI loans; 38% of purchases wree from redline zones, and 25% of loans were to low and very low income borrowers.

This loan policy was INSANITY and was a giveaway to democrat constitutencies, pushed by democrats.


In 2003 and 2004 republicans, in response to red flags issued by the regulators of fannie and freddie make attempted to rein in these programs. And were roundly, soundly gob smacked.

quote:

“Like a lot of my Democratic colleagues I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourage affordable homeownership when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit when it comes to Fannie and Freddie, we were wrong.” – Congressman Artur Davis (D-AL) , September 30, 2008


quote:


“I think that the responsibility that the Democrats had may rest more in resisting any efforts by Republicans in the Congress, or by me when I was President, to put some standards and tighten up a little on Fannie Mae and Freddie Mac.” – Former President Bill Clinton (D-AR), September 25, 2008



After that, the process did go substantially as you indicated. Once the mortgages were acceptable to the big two loan clearinghouses - they were marketable. And so the banks consolidated huge numbers of these, and sold collateralized debt obligations, characterizing them as investement grade.

The idea that huge bundles of subprime loans were investment grade - was ridiculous - because even well before the housing crunch default rates of 4-5 % were occuring- which were unheard of in regular loans.


Home ownership had been roughly constant for 25 years. Under bill clinton - it added 6% - a rate never seen nor equalled in the history of the country - all financed by funny money.

Now there are a lot of gory details about this. But here's a few things you need to know.

1. Eight of the top ten recipients - and all 5 of the top 5 recipients of campaign donations from the mortgage industry were to democrats. Notable names: Barack Obama, the Clntons, Barney Frank.
2. After the savings and loan crash in the 80's - widely blamed on republicans - 1147 people went to jail. After this crash - which was more than 20 times larger, to date - no one has gone to jail.

The following document gives quotes, transcripts in case you want to read up on what happened.

https://tjhancock.wordpress.com/housing-bubble-financial-crisis-detailed-comprehensive-assessment/
http://spectator.org/articles/42211/true-origins-financial-crisis

(in reply to DominantWrestler)
Profile   Post #: 26
RE: Latest news on Obama Care - 1/12/2016 12:38:12 PM   
Phydeaux


Posts: 4828
Joined: 1/4/2004
Status: offline

quote:

ORIGINAL: DominantWrestler

Obamacare was gutted. Massachusetts (the model off which Obamacare was built) has done fine for years as does Europe. Problem is, and my MIT graduate republican friend agrees, the strength of Obamacare was the consumer protections, almost all of which was gutted by republicans who knew it could work (because it works in so much of the world) and would literally prefer anything to Obama succeeding. They shut down the government to cause malcontent and then, when the same was brought up this year, slipped the concept under the rug. They need republicans rallying, not remembering how stupid, infantile, ineffective and destructive their party has been



A lot of accusations here. Obamacare uniquely reflects democrat priorities. Taxpayer funded abortion - check. Repeal the medical device tax - check. Repeal cadillac tax on union healthcare plans - check.

So be more specific. What consumer protections do you think republicans gutted. More specifically, in what bill? And since this was passed on a party-line democrat vote - and since Obama wields veto authority - how exactly do you think republicans gutted a damn thing?

(in reply to DominantWrestler)
Profile   Post #: 27
RE: Latest news on Obama Care - 1/12/2016 12:42:56 PM   
mnottertail


Posts: 60698
Joined: 11/3/2004
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quote:


The community redevelopment act of 1993 required the banks to make a certain amount of redline loans - ie., loans that were predominantly minority areas.



Since your first statement is wrong, what follows must be asswipe. They were required by law to do nothing. you are wrong on all the details that matter.

In early 2005, largely at the behest of the banking sector, the Office of Thrift Supervision implemented new rules that were widely perceived as weakening the CRA. Supervision of banks with under $1 billion in assets was loosened, and larger banks were allowed to voluntarily reduce the amount of regulator scrutiny of their “investment” and “service”–two long-standing categories of assessment under the CRA.

This had two unintended consequences that would later prove to be very costly. In the first place, it increased CRA scrutiny of larger banks, who were now the main focus of regulators. This put even more pressure on the banks to make CRA loans. Secondly, by allowing banks to de-emphasize “investment” and “service,” the new regulations created an even greater incentive for banks to meet CRA obligations by making home loans.

_____________________________

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(in reply to Phydeaux)
Profile   Post #: 28
RE: Latest news on Obama Care - 1/12/2016 1:05:55 PM   
bounty44


Posts: 6374
Joined: 11/1/2014
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after having read what phydeaux wrote, or any of the material he provided, putting democrats squarely in the culpable seat....

"do you get it now??"

or as I said the first time around:

if we pointed you to some reading that sets your record straight, would you even bother to read it and change your mind?


< Message edited by bounty44 -- 1/12/2016 1:19:48 PM >

(in reply to DominantWrestler)
Profile   Post #: 29
RE: Latest news on Obama Care - 1/12/2016 1:40:08 PM   
Phydeaux


Posts: 4828
Joined: 1/4/2004
Status: offline
quote:

ORIGINAL: mnottertail
They were required by law to do nothing. you are wrong on all the details that matter.


The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits.
They're banks. If they want to act as such, they were required to loan to low and moderate income borrowers.

Wiki: https://en.wikipedia.org/wiki/Community_Reinvestment_Act#Original_act

(in reply to mnottertail)
Profile   Post #: 30
RE: Latest news on Obama Care - 1/12/2016 2:53:15 PM   
mnottertail


Posts: 60698
Joined: 11/3/2004
Status: offline
Yeah, no. It 'requires' no such thing. Read it.

from 2000 to 2007 (when it hit) the house was republican (sometimes a lot, some times a little) and the senate was back and forth but pretty much a toss up.


In the old days, banks used to make mortgages in house and keep them on their books. Because they held onto the loans they made, stringent guidelines were put in place to ensure quality loans were written. After all, if something went wrong with the loans, they’d be accountable. And they’d lose lots of money.

Recently, a new phenomenon came along where banks and mortgage lenders would originate home loans and quickly resell them to investors in the form of securities on the secondary market (Wall Street). This method, known as the “originate to distribute model,” allowed banks and lenders to pass the risk onto investors, and thereby loosen guidelines. The result was casual underwriting, less oversight, and more aggressive financing, which ultimately led to a lot of bad loans being made.

[See the latest mortgage rates from dozens of lenders, updated daily.]
Banks and lenders also relied on distribution channels outside their own roof, via mortgage brokers and correspondents. They incentivized bulk originating, pushing those who worked for them to close as many loans as possible, while forgetting about quality standards that ensured loans would actually be repaid. Because the loans were being sliced and diced into securities and sold in bulk, it didn’t matter if you had a few bad ones here and there, at least not initially…

Fannie Mae and Freddie Mac

Of course, banks and lenders modeled their loan programs on what Fannie and Freddie were buying, so one could also argue that these two “government-sponsored enterprises” also did their fair share of harm.

In short, if the loan conformed to the high standards of Fannie and Freddie, it’d be easier to sell on the secondary market. And it has been alleged that the pair eased guidelines to stay relevant in the mortgage market, largely because they were publicly traded companies steadily losing market share to private-label securitizers.

At the same time, they also had lofty affordable housing goals, and were instructed to provide financing to more and more low- and moderate-income borrowers over time, which clearly came with more risk.

However, the private mortgage market took control during the lead up to the eventual crisis thanks to their bevy of high-risk mortgage products, so Fannie and Freddie had to ease their own guidelines to maintain market share.

As a result, bad loans appeared as higher-quality loans because they conformed to Fannie and Freddie. And this is why quasi-public companies are bad news folks.

Bad Underwriting

That brings us to bad underwriting. Now it wasn’t that underwriters didn’t know what they were doing, it was more a matter of influence from upstairs. They were often told to make loans work, even if they seemed a bit dodgy at best.

Again, the incentive to approve the loan was much, much greater than declining it. And if it wasn’t approved at one shop, another would be glad to come around and take the business. After all, the loans weren’t being held for more than a month or so before they were the investors’ responsibility.

Faulty Appraisals

Going hand-in-hand with bad underwriting was faulty appraising, often by unscrupulous appraisers who had the same incentive as lenders and originators to make sure the loans closed. If the value wasn’t there, it only took a little bit of tinkering to find the right comparables to get it right. If one appraiser didn’t like the value, you could always get a second opinion somewhere else or have them take another look.

Home prices were on the up and up, so a stretch could be concealed after a few months of appreciation anyways. And don’t forget, appraisers who found the right value every time were ensured of another deal, while those who couldn’t, or wouldn’t make it happen, were passed up on that next deal.

No Skin in the Game

Another big issue was the lack of a down payment in the most recent boom. Back when, it was common to put down 10-20 percent when you purchased a home. In the last few years, it was increasingly common to put down five percent or even nothing. In fact, zero down financing was all the rage because banks and borrowers could rely on home price appreciation to keep the notion of a home as an investment viable.

However, it wasn’t long before prices began to peak and eventually fall, causing all types of problems for borrowers with little or no equity in their homes. Those that purchased with zero down simply chose to walk away, as they really had no skin in the game, nothing to keep them there. Sure they’ll get a big ding on their credit report, but it beats losing a whole lot of money. Conversely, those with equity would certainly put up more of a fight to keep their home.

Aggressive Financing

Playing off the lack of a down payment, aggressive loan programs like the pay option arm and other interest-only options also contributed to the mortgage mess. As home prices marched higher and higher, lenders and builders had to come up with more creative financing options to bring in buyers. Because home prices weren’t going to come down, they had to make things more affordable. One method was lowering monthly mortgage payments, either with interest-only payments or negative amortization programs where borrowers actually paid less than the note rate on the loan.

Some banks, like now-defunct Bear Stearns, actually offered a pay option arm at 100% LTV, meaning you could come in with zero down and make a super low payment, often as low as one percent, for several years before the loan adjusted to a more realistic rate.

This of course resulted in scores of underwater borrowers who now owe more on their mortgages than their current property values. As such, there is little to any incentive to stay in the home, so borrowers are increasingly defaulting on their loans or walking away. Some by choice, and others because they could never afford the true terms of the loan, only the introductory teaser rates that were offered to get them in the door.

Limited Documentation

Home loans used to be underwritten full doc, meaning you would need to provide pay stubs or W-2’s, along with asset and employment information. This would give the bank or lender plenty of reliable information to make an underwriting decision. Then came limited documentation loans, such as stated loans, now known as “liar’s loans,” which were intended for people like doctors and the self-employed who had complicated tax structures.

Eventually, everyone seemed to be taking advantage of limited documentation underwriting, often because they couldn’t meet guidelines legitimately. After all, your interest rate would only be another quarter-percent higher in many cases, so why provide real income if you can fudge the numbers a little and get approved? More troubling were no-doc loans, where borrowers only provided a credit score. No income, asset, or employment information was provided, allowing virtually anyone with a decent credit history to get their hands on a new home.

none of which is 'required'. Deregulation was a great deal of the trouble.

< Message edited by mnottertail -- 1/12/2016 2:58:13 PM >


_____________________________

Have they not divided the prey; to every man a damsel or two? Judges 5:30


(in reply to Phydeaux)
Profile   Post #: 31
RE: Latest news on Obama Care - 1/12/2016 3:39:14 PM   
bounty44


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Joined: 11/1/2014
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comrade critter parts, the content of your post aside for a moment---do you understand what "plagiarism" is?

(in reply to mnottertail)
Profile   Post #: 32
RE: Latest news on Obama Care - 1/12/2016 4:29:27 PM   
bounty44


Posts: 6374
Joined: 11/1/2014
Status: offline
some highlights I found, which echo whats already been said, and perhaps adds a bit more:

quote:

Contrary to my initial conclusion, the evidence is overwhelming that the CRA played a significant role in creating lax lending standards that fueled the housing bubble.

The CRA was not a static piece of legislation. It evolved over the years from a relatively hands-off law focused on process into one that focused on outcomes. Regulators, beginning in the mid-nineties, began to hold banks accountable in serious ways. Banks responded to this new accountability by increasing the CRA loans they made, a move that entailed relaxing their lending standards.

• What about "No Money Down" Mortgages? Were they required by the CRA?

Actually, yes they were. The regulators charged with enforcing the CRA praised the lowering of down payments and even their elimination. They told banks that lending standards that exceeded that of regulators would be considered evidence of unfair lending. This effectively meant that no money down mortgages were required. A Treasury Department study published in 2000 found that the CRA had successfully lowered down payments not just for CRA loans, but for all mortgages.

• Explain the shift in loan to value away from the traditional lending requirement of 80%.

Again, the regulators told banks that much higher LTVs was an appropriate way to meet the CRA obligations.

• What about the elimination of payment history? How about income requirements?

Regulators instructed banks to consider alternatives to traditional credit histories because CRA targeted borrowers often lacked traditional credit histories. The banks were expected to become creative, to consider other indicators of reliability.

• Point out to me where in the CRA or any regulation that any of this is required. [here is to your nitpicky point comrade critter parts]

I cannot. But this kind of legislative fundamentalism misconstrues the way laws constrain business activity. An unenforced law exercises little constraint, regardless of how onerous it is worded. Think of the way anti-trust enforcement changes from presidential administration to presidential administration.

In the case of the CRA, it was the activity of the regulators that matters. And each of these credit innovations described above was put into place to satisfy the CRA regulators.

• If the CRA was forcing all this lax lending, why weren't bankers objecting?

this would have been career suicide and an open invitation to bias litigation and increased scrutiny from regulators. In this case, silence is misleading.


http://www.businessinsider.com/the-cra-debate-a-users-guide-2009-6


(in reply to bounty44)
Profile   Post #: 33
RE: Latest news on Obama Care - 1/12/2016 4:41:23 PM   
bounty44


Posts: 6374
Joined: 11/1/2014
Status: offline
if you are academically minded, there is this on the national bureau of economic research:

"Did the Community Reinvestment Act (CRA) Lead to Risky Lending?"

the abstract:

quote:

Yes, it did. We use exogenous variation in banks' incentives to conform to the standards of the Community Reinvestment Act (CRA) around regulatory exam dates to trace out the effect of the CRA on lending activity. Our empirical strategy compares lending behavior of banks undergoing CRA exams within a given census tract in a given month to the behavior of banks operating in the same census tract-month that do not face these exams. We find that adherence to the act led to riskier lending by banks: in the six quarters surrounding the CRA exams lending is elevated on average by about 5 percent every quarter and loans in these quarters default by about 15 percent more often. These patterns are accentuated in CRA-eligible census tracts and are concentrated among large banks. The effects are strongest during the time period when the market for private securitization was booming.


(fascinating stuff)

and pdf to the full article on the website.

http://www.nber.org/papers/w18609


(in reply to bounty44)
Profile   Post #: 34
RE: Latest news on Obama Care - 1/12/2016 4:57:57 PM   
Phydeaux


Posts: 4828
Joined: 1/4/2004
Status: offline

quote:

ORIGINAL: mnottertail

Yeah, no. It 'requires' no such thing. Read it.

from 2000 to 2007 (when it hit) the house was republican (sometimes a lot, some times a little) and the senate was back and forth but pretty much a toss up.


In the old days, banks used to make mortgages in house and keep them on their books. Because they held onto the loans they made, stringent guidelines were put in place to ensure quality loans were written. After all, if something went wrong with the loans, they’d be accountable. And they’d lose lots of money.

Recently, a new phenomenon came along where banks and mortgage lenders would originate home loans and quickly resell them to investors in the form of securities on the secondary market (Wall Street). This method, known as the “originate to distribute model,” allowed banks and lenders to pass the risk onto investors, and thereby loosen guidelines. The result was casual underwriting, less oversight, and more aggressive financing, which ultimately led to a lot of bad loans being made.

[See the latest mortgage rates from dozens of lenders, updated daily.]
Banks and lenders also relied on distribution channels outside their own roof, via mortgage brokers and correspondents. They incentivized bulk originating, pushing those who worked for them to close as many loans as possible, while forgetting about quality standards that ensured loans would actually be repaid. Because the loans were being sliced and diced into securities and sold in bulk, it didn’t matter if you had a few bad ones here and there, at least not initially…

Fannie Mae and Freddie Mac

Of course, banks and lenders modeled their loan programs on what Fannie and Freddie were buying, so one could also argue that these two “government-sponsored enterprises” also did their fair share of harm.

In short, if the loan conformed to the high standards of Fannie and Freddie, it’d be easier to sell on the secondary market. And it has been alleged that the pair eased guidelines to stay relevant in the mortgage market, largely because they were publicly traded companies steadily losing market share to private-label securitizers.

At the same time, they also had lofty affordable housing goals, and were instructed to provide financing to more and more low- and moderate-income borrowers over time, which clearly came with more risk.

However, the private mortgage market took control during the lead up to the eventual crisis thanks to their bevy of high-risk mortgage products, so Fannie and Freddie had to ease their own guidelines to maintain market share.

As a result, bad loans appeared as higher-quality loans because they conformed to Fannie and Freddie. And this is why quasi-public companies are bad news folks.

Bad Underwriting

That brings us to bad underwriting. Now it wasn’t that underwriters didn’t know what they were doing, it was more a matter of influence from upstairs. They were often told to make loans work, even if they seemed a bit dodgy at best.

Again, the incentive to approve the loan was much, much greater than declining it. And if it wasn’t approved at one shop, another would be glad to come around and take the business. After all, the loans weren’t being held for more than a month or so before they were the investors’ responsibility.

Faulty Appraisals

Going hand-in-hand with bad underwriting was faulty appraising, often by unscrupulous appraisers who had the same incentive as lenders and originators to make sure the loans closed. If the value wasn’t there, it only took a little bit of tinkering to find the right comparables to get it right. If one appraiser didn’t like the value, you could always get a second opinion somewhere else or have them take another look.

Home prices were on the up and up, so a stretch could be concealed after a few months of appreciation anyways. And don’t forget, appraisers who found the right value every time were ensured of another deal, while those who couldn’t, or wouldn’t make it happen, were passed up on that next deal.

No Skin in the Game

Another big issue was the lack of a down payment in the most recent boom. Back when, it was common to put down 10-20 percent when you purchased a home. In the last few years, it was increasingly common to put down five percent or even nothing. In fact, zero down financing was all the rage because banks and borrowers could rely on home price appreciation to keep the notion of a home as an investment viable.

However, it wasn’t long before prices began to peak and eventually fall, causing all types of problems for borrowers with little or no equity in their homes. Those that purchased with zero down simply chose to walk away, as they really had no skin in the game, nothing to keep them there. Sure they’ll get a big ding on their credit report, but it beats losing a whole lot of money. Conversely, those with equity would certainly put up more of a fight to keep their home.

Aggressive Financing

Playing off the lack of a down payment, aggressive loan programs like the pay option arm and other interest-only options also contributed to the mortgage mess. As home prices marched higher and higher, lenders and builders had to come up with more creative financing options to bring in buyers. Because home prices weren’t going to come down, they had to make things more affordable. One method was lowering monthly mortgage payments, either with interest-only payments or negative amortization programs where borrowers actually paid less than the note rate on the loan.

Some banks, like now-defunct Bear Stearns, actually offered a pay option arm at 100% LTV, meaning you could come in with zero down and make a super low payment, often as low as one percent, for several years before the loan adjusted to a more realistic rate.

This of course resulted in scores of underwater borrowers who now owe more on their mortgages than their current property values. As such, there is little to any incentive to stay in the home, so borrowers are increasingly defaulting on their loans or walking away. Some by choice, and others because they could never afford the true terms of the loan, only the introductory teaser rates that were offered to get them in the door.

Limited Documentation

Home loans used to be underwritten full doc, meaning you would need to provide pay stubs or W-2’s, along with asset and employment information. This would give the bank or lender plenty of reliable information to make an underwriting decision. Then came limited documentation loans, such as stated loans, now known as “liar’s loans,” which were intended for people like doctors and the self-employed who had complicated tax structures.

Eventually, everyone seemed to be taking advantage of limited documentation underwriting, often because they couldn’t meet guidelines legitimately. After all, your interest rate would only be another quarter-percent higher in many cases, so why provide real income if you can fudge the numbers a little and get approved? More troubling were no-doc loans, where borrowers only provided a credit score. No income, asset, or employment information was provided, allowing virtually anyone with a decent credit history to get their hands on a new home.

none of which is 'required'. Deregulation was a great deal of the trouble.


Thanks for a lucid post mnotter. I agree with a lot of what you said.

I have read the CRA. While most of your post is pretty fair, saying its not 'required' is a dodge. If banks did not perform under CRA standards, regulators could deny bank branches, license applications etc. The CRA compliance record was also taken into account in banking regulatory agencies, such as the Office of thrift supervision, FDIC, Federal Reserve, Comptroller of the Currency etc. There has only been one bank that chose to not comply with the CRA - and that was E-trade.

Fannie and Freddie relaxed their credit scores required - I remember the newspaper and interviews, and discussions with Raines.. Previously, with downpayments the standard was 620.

The fact that Fannie and Freddie did not buy or fund all the loans understates their importance in the marketplace. The overwhelming majority of loans were done by brokers or originators who wanted to quickly turn them over. Having loans that conformed were marketable - and could be marketed in CDO's.
Loans that couldn't - weren't.

And it is still true that by 2007 the CRA was requiring 55% of loans to be LMI/CMI, as I said in my previous post.

Best to you mnotter.




(in reply to mnottertail)
Profile   Post #: 35
RE: Latest news on Obama Care - 1/12/2016 8:24:52 PM   
ifmaz


Posts: 844
Joined: 7/22/2015
Status: offline

quote:

ORIGINAL: DominantWrestler
The economy collapsed. People chose food and their homes over health insurance. Theretire 2.5 is is minimum estimate. Considering Uninsurance rate was going up, it would seem that a 6% estimate is low. That's why it's not erroneous.
...


quote:

ORIGINAL: http://www.nytimes.com/2016/01/04/us/many-see-irs-fines-as-more-affordable-than-insurance.html
...
Mr. Murphy, an engineer in Sulphur Springs, Tex., estimates that under the Affordable Care Act, he will face a penalty of $1,800 for going uninsured in 2016. But in his view, paying that penalty is worth it if he can avoid buying an insurance policy that costs $2,900 or more. All he has to do is stay healthy.
...
People, like Mr. Murphy, who earn too much to qualify for federal subsidies that defray the cost of coverage may be most likely to opt out.
...
Susan Reardon, 61, of Kalamazoo, Mich., said she was leaning toward going uninsured this year. She calculated that she would have to spend more than $12,000, including premiums of nearly $500 a month and a $6,850 deductible, to get anything beyond preventive benefits from the cheapest exchange plan available to her.
...


(in reply to DominantWrestler)
Profile   Post #: 36
RE: Latest news on Obama Care - 1/12/2016 8:35:36 PM   
DominantWrestler


Posts: 338
Joined: 7/4/2010
Status: offline

quote:

ORIGINAL: Phydeaux


quote:

ORIGINAL: DominantWrestler

Obamacare was gutted. Massachusetts (the model off which Obamacare was built) has done fine for years as does Europe. Problem is, and my MIT graduate republican friend agrees, the strength of Obamacare was the consumer protections, almost all of which was gutted by republicans who knew it could work (because it works in so much of the world) and would literally prefer anything to Obama succeeding. They shut down the government to cause malcontent and then, when the same was brought up this year, slipped the concept under the rug. They need republicans rallying, not remembering how stupid, infantile, ineffective and destructive their party has been



A lot of accusations here. Obamacare uniquely reflects democrat priorities. Taxpayer funded abortion - check. Repeal the medical device tax - check. Repeal cadillac tax on union healthcare plans - check.

So be more specific. What consumer protections do you think republicans gutted. More specifically, in what bill? And since this was passed on a party-line democrat vote - and since Obama wields veto authority - how exactly do you think republicans gutted a damn thing?



Ok, look up Massachusetts health care. It prevents price gouging. You can't have a ninety percent profit margin on a service supposedly established for consumer protection. It would be like selling Kevlar body armor that was highly poisonous

(in reply to Phydeaux)
Profile   Post #: 37
RE: Latest news on Obama Care - 1/12/2016 8:51:24 PM   
Phydeaux


Posts: 4828
Joined: 1/4/2004
Status: offline

quote:

ORIGINAL: DominantWrestler


quote:

ORIGINAL: Phydeaux


quote:

ORIGINAL: DominantWrestler

Obamacare was gutted. Massachusetts (the model off which Obamacare was built) has done fine for years as does Europe. Problem is, and my MIT graduate republican friend agrees, the strength of Obamacare was the consumer protections, almost all of which was gutted by republicans who knew it could work (because it works in so much of the world) and would literally prefer anything to Obama succeeding. They shut down the government to cause malcontent and then, when the same was brought up this year, slipped the concept under the rug. They need republicans rallying, not remembering how stupid, infantile, ineffective and destructive their party has been



A lot of accusations here. Obamacare uniquely reflects democrat priorities. Taxpayer funded abortion - check. Repeal the medical device tax - check. Repeal cadillac tax on union healthcare plans - check.

So be more specific. What consumer protections do you think republicans gutted. More specifically, in what bill? And since this was passed on a party-line democrat vote - and since Obama wields veto authority - how exactly do you think republicans gutted a damn thing?



Ok, look up Massachusetts health care. It prevents price gouging. You can't have a ninety percent profit margin on a service supposedly established for consumer protection. It would be like selling Kevlar body armor that was highly poisonous



Do you realize that the insurance margins on healthcare are some of the lowest in any industry? Clearly, you don't because the idea of 90% profit margins in the insurance industry is ridiculous.

The profit margin of fortune 500 insurance companies is around 3.5%.
http://www.forbes.com/sites/theapothecary/2014/06/27/profits-in-health-insurance-under-obamacare/#2715e4857a0bccd739a4c42a

This was one of those sound bites that was meant to rile up a democratic base, but to which there was no truth.

If you don't believe forbes.. how about NYU? Which pegs the profit margin of the healthcare industry at 4.02%
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html

Your liberal biases, once again are losing out to reality.



(in reply to DominantWrestler)
Profile   Post #: 38
RE: Latest news on Obama Care - 1/12/2016 9:16:45 PM   
DominantWrestler


Posts: 338
Joined: 7/4/2010
Status: offline
I am economically aware enough to know when the profit margin is drawn, which is well after those responsible takes their 7+digit profit

(in reply to Phydeaux)
Profile   Post #: 39
RE: Latest news on Obama Care - 1/12/2016 9:24:45 PM   
Phydeaux


Posts: 4828
Joined: 1/4/2004
Status: offline
Oh cmon mate.

The average salary of a fortune 500 company is 10.5 million.

take United Healthcare. Revenue of 141.5 billion. Gail Boudreaux CEO pay 8.5 million. .005 %

Even made all the top 20 executives work for nothing - it wouldn't change the profitability by .1%

Face it - you are just *wrong*

Healthcare has never had margins like you on the left imagine.


lets play a game shall we? How much fraud was pushed through medicare in 2014. Was it bigger or smaller than the profits of the large insurance companies.

Of course - at roughly $50 billion dollar - rampant fraud in Medicare dwarfs ((15x) the profits of America's biggest insurance companies.
So if you really want to cut down health care costs- target fraud in government programs....

The total amount of Medicare fraud is difficult to track, because not all fraud is detected and not all suspicious claims turn out to be fraudulent. According to the Office of Management and Budget, Medicare "improper payments" were $47.9 billion in 2010, but some of these payments later turned out to be valid.[1] The Congressional Budget Office estimates that total Medicare spending was $528 billion in 2010.[2] https://en.wikipedia.org/wiki/Medicare_fraud

< Message edited by Phydeaux -- 1/12/2016 9:40:11 PM >

(in reply to DominantWrestler)
Profile   Post #: 40
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