Senate Committee Votes To Fingerprint Lenders 146
tjstork recommends a blog post up at Openmarket.org on the passage by a Senate committee of a fingerprinting provision in a foreclosure assistance bill. The provision would require thousands of people connected with the mortgage industry, even tangentially — possibly including part-time and seasonal real estate agents — to send fingerprints to the feds for storage in a database. No explanation is in evidence as to how this would help the problem of loan fraud. The measure passed the Senate Banking Committee by a bipartisan majority of 19 to 2. "The measure the committee passed states that 'an individual may not engage in the business of a loan originator without first... obtaining a unique identifier.' To obtain this 'identifier,' an individual is required to 'furnish to the newly created Nationwide Mortgage Licensing System and Registry 'information concerning the applicant's identity, including fingerprints for submission' to the FBI and other government agencies."
Knee-jerk (Score:4, Insightful)
Uh, how about, so they can track the people making fraudulent loans regardless of what identity they assume? Maybe?
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Yes, some fraud will certainly occur from within the industry, but the majority is done by people outside.
naturally (Score:5, Insightful)
Re:naturally (Score:4, Insightful)
I would just call it a knee-jerk reaction which is the typical operating and decision method of our Congress. Of course, if they actually stopped to think and get their facts straight, they would immediately be accused of not doing anything or not acting fast enough.
Re:naturally (Score:4, Insightful)
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This trend of creeping fascism has to stop.
Re:naturally (Score:4, Funny)
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All those things work against a centralized government with limitless power over its subjects. I doubt anything like this would even be considered today. If the founding fathers saw what became of their country, I'm fairly sure they'd start another revolt.
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Woa, dude. My whole world just turned upside-down.
Re:Knee-jerk (Score:5, Insightful)
Unfortunately 99% of this crisis fits the standard market bubble paradigm. The difference is that this hits people
In fact, we have the opposite problem: investors are spooked. Coming down hard on fraud might help a tiny bit, but primarily investors are spooked by their own collective insanity.
If it makes investors a bit less risk averse, it's worth doing, but I doubt it will. We need to get a bit more momentum going in the credit market. Financial markets have about a ten year memory, so the time to really come down hard on fraud will be in about five years.
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The current mortgage crisis was caused by a bunch of well meaning, but otherwise lazy or stupid people making loans that shouldn't have been made. The contribution of criminal activity (the sort of thing fingerprint tracking would discourage) is not significant.
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Of course an educated and relatively egalitarian public (that is a public were economic abuses and monopolistic practices don't occur) will be naturally immune from abuses. But this is not what the Elite wants. The Elite would rather have a small percentage of poor
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I remember when your SSN wasn't supposed to be used to identify you other then for tax purposes and we see how well that intent was stuck to. ( and if you honestly believe at lie that they fed you, then you are a fool ).
Re:Knee-jerk (Score:4, Insightful)
With certain exceptions, including police, politicans, elite criminals and terrorists.
Re:Knee-jerk (Score:5, Informative)
Mirrored surveillance is no solution to this mess (Score:4, Insightful)
Mirrored surveillance will never be a complete solution to the Big Brother problem, for the simple reason that power to act on the information is not equal on both sides. You can write a blog post about how unfair some cop busting you was, but you're still spending the night in jail and he's still at work the next day. The authorities, on the other hand, can abuse information to set you up, and you're still spending the night in jail and they're still at work the next day. Whichever side appears to have the information upper-hand, you're the loser.
Remember, you (assuming you're in the US) have a president who thinks your constitution is scrap paper and is busily ignoring it whenever it suits his purposes. We're not doing any better here in the UK: we have a Prime Minister who gained the office on an almost unbelievable series of political technicalities and has no popular mandate, who is busily trying to push through lots similarly abusive and unpopular legislation. Everyone who watches the news or reads a paper knows this, but what good does it do when there is now way to remove such people from office, or put them in a court where they must defend their actions or face the consequences?
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So you think the solution to having an unelected Prime Minister that the people don't want is for the unelected Monarch to remove him?
I'm not sure that fills me with confidence... :o)
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AFAIK, most states require that a peace officer submit fingerprints...
...and yes, his/her own fingerprints...
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goodluckwiththat (Score:2)
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Oh, I'm sure that Guido will be sending in fingerprints. They may or may not be his fingerprints, you understand
Re:goodluckwiththat (Score:4, Funny)
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Just like some other law I can think of... (Score:5, Insightful)
Two men sit in a train... (Score:5, Insightful)
Why, it keeps the elephants away.
-But there are no elephants here.
See how good this works?
Get the point?
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The news seem to disagree:
http://en.wikipedia.org/wiki/List_of_terrorist_incidents%2C_2002 [wikipedia.org]
And there have been a couple of others that, while (intentionally or unintentionally) not causing any fatalities, were quite successful at terrorizing. Or does a "successful terrorist attack" need to kill at least X people ?
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Actually we have had plenty of terrorism. The anthrax attacks of late '01, the Virginia Snipers of '02, let alone a variety of school shootings. Nothing huge and massive since the Patriot Act, and the most recent events have been Domestic Terrorism. But don't forget that it was Americans who did Oklahoma City - we have our own brand of homegrown loonies. But Terrorism has been continuing.
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Seems to me.. (Score:4, Interesting)
This panacea coming to the country near you soon.. stay tuned!
Police states and the sad case of Fritz Thyssen (Score:5, Interesting)
Those of you who think you can make a buck off a police state would do well to remember learn the fate of Fritz Thyssen [wikipedia.org]. He was an industrialist and early supporter of Adolf Hitler, in part financed by Prescott Bush [prlog.org]. He made plenty of money re arming Germany and he approved of racial purity laws. By the time he realized the Nazis believed all of the crazy things they said, it was too late for him to do anything about it. He was thrown into a concentration camp and was lucky to survive the wars he did not approve of. If you don't think the Neocons are just as crazy as the Nazis you have not been listening to them long enough [stallman.org].
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This being something which fools believe, though increasing taxation appears to go along with this. Probably to pay for all the increased paperwork and spying.
Solves *A* problem (Score:4, Insightful)
What they should do is pass a bill that requires new loans to be made under the following term:
For collateral backed loans, turning over the collateral relieves the debtor's obligation.
That forces the banks to assume the risk of risky loans instead of the borrower. Which is right and proper because they'll have a better understanding of what those risks are, anyway. Of course, they'll have to charge more for their money, and that will mean that some people won't be able to buy the house they want (and housing prices will drop somewhat to accommodate *some* of those people), but those are the people that would have found themselves homeless with thousands of dollars of debt after a pretty-likely future foreclosure, anyway.
Re:Solves *A* problem (Score:4, Insightful)
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The problem is that their customers (borrowers) are buying business-grade money, but they aren't thinking like businesses about the risk, so they are *far* less prepared for a decline in property values coinciding with a drop in income or increase in interest rates.
Re:Solves *A* problem (Score:5, Insightful)
Charging interest rates that high wouldn't just put home ownership out of the reach of a huge fraction of buyers, it would also remove a major incentive for home ownership. You'd be paying interest rates so high that they would, on average, offset any appreciation in the value of your property.
There would be virtually no takers for such loans. As a result, housing prices would probably drop significantly (there would be much less demand), but you'd basically have to pay for a house with cash up front. Financial institutions and those few individuals with hundreds of thousands of dollars or more in liquid assets would end up snapping up all the property at severely reduced rates, and everyone else would simply have to rent, ultimately resulting in a massive ongoing wealth transfer away from the middle class.
Oops.
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The credit crisis was caus
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I probably ought to start reading the WSJ.
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Even though the majority of mortgages is non-recourse, that didn't put the risk on the banks, as
There is no problem - really. (Score:5, Informative)
I volunteer helping some of those folks that were "victimized" by the "evil" mortgage industry. In every case, folks just bought too much house than they can afford. And a few times, they bought a few houses. Folks don't leave any wiggle room in their budget - at all. So if they lose a job, or they get sick, or a divorce, or any combination thereof, they get behind in their payments. There's nothing in their budget for savings.
A lot of those folks bought a house with one of those interest only loans counting on the house price increasing dramatically in the first couple of years, sell it for a huge profit, and buy more. Folks pyramided their profits with the expectation that home prices can go only up. The mortgage industry went long because these folks were able to make the payments. now, the economy slows, folks lose their jobs, and now they can't make their payments - bankruptcy and this current crisis.
Here's the real problem: in America we have this budget by payments mentality. In other words, we can afford something as long as we can make the payments and of course that's counting on having a job that gives raises every year and asset prices always increasing. Some folks actually lied on their applications - FYI.
There's no evil entity here to blame and there are no victims: just some folks who don't know how to mange their money and were too optimistic about the economy and the real estate market.
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I'm not saying there are bad guys that need to be punished. In fact, it's a case of "to
Some are able to live in their homes w/o payments (Score:2)
Who Owns Your Home? [kuro5hin.org] has all the links.
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In fact, it's a case of "too-good" guys in some ways. But the situation needs to be resolved in a way that makes it harder to happen again and bailouts is not going to do that.
No doubt. Lenders have been caught in a Catch-22-esque trap here. They chose not to lend money to people with poor credit ratings and insufficient assets, because those people probably wouldn't be able to pay off their debt. All based on actuarial calculations. But since minorities tended to fall into the "do not lend to" category more frequently, this was viewed as racist.
So they (subsidized by the Government and pressured by public opinion) started lending to bad risks. And then those people w
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There's no evil entity here to blame and there are no victims: just some folks who don't know how to mange their money and were too optimistic about the economy and the real estate market.
That is exactly right. I grow weary of hearing our politicians and activists bemoan the problems of "predatory lenders" and the plights of their "victims". Have they not heard the saying, "If you think that education is expensive then try ignorance"? People want to live in this world as adults and be treated as adults, but they want the government and their fellow taxpayers to bail them out of risky financial transactions, which they willingly engaged in, when their debts get called in. Those of us who are
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Uh, that's already how the system works (Score:2)
Your proposal is already in effect, and has been for almost a century.
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There are some remedies for the debtor in this case, but they are all unpleasant to the debtor, and the recent spate of bank failures indicates that the banks themselves weren't prepared (i.e. they were not charging the correct fees to compensate the risk and/
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California, for instance, mandates nonrecourse loans for all primary mortgages.
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You get a return on your money because you're risking it. The risk is that if the debt doesn't get repaid, your fraction of the house might not be worth what you paid for the note.
More risk should equal more return. Pawning off the risk on some third party shouldn't even be on the table.
My suspicion (Score:3, Interesting)
NASD (Score:2)
Will this affect me? (Score:2)
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I'm not here for legal advice; I'm here to get a variety of perspectives.
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prosper (Score:2)
Fingerprint everybody (Score:3, Insightful)
Here's something I would really like to see: Drug tests for every elected office holder, every day. Make the results public as soon as they're available. No exceptions. Another would be to implement transparency on all elected office holders' bank accounts. Let the sun shine in.
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Which drugs would the tests be for? If the tests were for everything currently illegal there might be a long wait for all of the results...
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It
Typical American Response. Ignore the real problem (Score:5, Insightful)
You should have done what Canada and many other countries did DECADES ago to protect your citizens from the banks, protect your banks from your citizens, and to ensure the market could not be manipulated into such a crisis
- that mortgage applicants actually have the income needed to support paying back the mortgage! DUHHH!
- that a large enough down payment is made that if a small drop in the home's value happens, it won't eliminate the collateral the mortgage was secured on. (currently minimum 5% downpayment)
- that if a downpayment is not significant (under 25%), the mortgage applicant must have mortgage insurance.
Too many Americans still ignorantly believe that the mortgage crisis was accidental!
It was entirely predictable and preventable. It was entirely based on the greed of your unregulated banks!
Your housing market had prices that were rising so fast
I spoke to a young up-and-coming American mortgage broker recently who was not just entirely blind to the damage his industry had caused to the American (and world) economy for a short term again, he was dumbstruck with adoration and respect for the professors of American business schools that had come up with the idea and was going to attend a conference hosted by them soon after! He referred to his favourite mortgage applicants as NINJA's
Once the market turned, and prices stopped increasing, the mortgage pyrimid scam became unprofitable. Suddenly your banks couldn't resell all their stolen houses, suddenly your banks were stuck with huge amounts of debt that they couldnt carry.
But instead of stopping and minimizing the losses, and preventing the ruin of the American economy, they kept going! They intentionally carried the scam so far that not only could they not be punished for it lest it destroy your banking system, you as taxpayers were forced to bail them out for your own protection!
So you got scammed into mortages you couldnt afford, got your houses stolen back by the scammer, and are now paying off the debts through your taxes! It's the great American way! Life, Liberty, and the pursuit of being a victim of fraud perpetrated by other Americans!
So go out and submit those fingerprints. It will solve EVERYTHING!
Re:Typical American Response. Ignore the real prob (Score:5, Insightful)
A friend of mine is a mortgage broker and explained the problem. The Feds demanded the mortgage industry provide more loans to minorities. All too often, minorities applying for loans did not have sufficient income to qualify. If they turned them down, AS THEY SHOULD HAVE, they would have been accused of discrimination. This whole mortgage crises was created by the Feds forcing the industry to give loans to people who had no chance of paying them back.
A secondary problem was idiots rolling over interest-only loans, hoping the market would keep going up. Interest-only loans aren't much different from gambling.
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Horsecrap. The mortgage issuers were packaging up mort
Re:Typical American Response. Ignore the real prob (Score:5, Interesting)
In any case, I don't think loaning to minorities is causing the current issues. For one thing, I don't think that so-called minorities are the primary people who speculated on property in florida, and other places, assuming that the price would go up by the time that development was finished and they could flip for a quick profit. Why banks would lend to such speculators, often with no obvious source of income, is beyond me. Furthermore, the NYT published a graphic on the largest foreclosures, and the cities are not those one associates with urban minority populations. Place like Merced, minneapolis, fort myers. Though these do have the minority population, and everyone has to take blame, the finance industry blaming it on government regulation is just weak.
This is why. Many years ago, Texas has a good regulation. The regulation was based on the idea that a persons home was not a liquid asset, but a vital possession. As such, texas allowed a person a great deal of protection to keep the home. The taxes would be fixed after 65. Your home could not be easily foreclosed or taken in a bankruptcy. In many jurisdictions taxes are easily disputed so people would not lose their houses due to excessive taxes. In exchange for these protections, Texans did not have the right to home equity loans.
That is until the financial industry bought out the Administration of George Bush and won his support to change the law. We now have a state of speculators instead of home owners. Prices went through the roof(tripled in 8 years) because the financial speculators wanted them to. Homeowner lost their house to due high taxes. Speculators moved in, borrowed against the house, and then moved out when they could not borrow leaving a blighted block. this was not due to government regulation forcing mortgage companies to loan to minorities. This was a calculated attack on the home owner back bone of america.
The sad thing is that the financial industry has made it bag of gold, and now is crying foul. Many of the mortgage holders are walking away, which they should, and the financial industry doesn't like it. Instead of renegotiating loans, they are begging the government for a bailout. It is sad. Those of us with eyes saw what was happening all those years ago, but all anyone else could see is free money. Now, as always, they are blaming it on regulation and minorities. The fact that the mortgage brokers were greedy bastards had nothing to do with it.
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It was one of Clinton's last gifts to us that his administration began pressuring banks to issue sub-prime loans.
Of course, it isn't politically correct to criticize political correctness, so it's all blamed on the banks.
Government is causing most of the problems (Score:2)
As for this mortgage 'crisis' (it really isn't one other than to the lenders, a very small percentage face forclosure) it WAS largely created by pressure from the Government to writ
Re:Typical American Response. Ignore the real prob (Score:4, Insightful)
1) Most of the people defaulting on loans are not, in fact, minorities.
2) All the anti-discrimination provisions of federal housing law are public. Try http://www.ftc.gov/bcp/edu/pubs/consumer/homes/rea08.shtm [ftc.gov] for a start. None of it has anything in it about lowering standards, only prohibiting discrimination.
3) People can accuse of discrimination all they want; if they can't prove it who cares? There's no way defending those cases would be as expensive to mortgage companies as having the loans blow up.
So, sorry, but this problem cannot be blamed on the economic actors in the situation who had the LEAST control over what was happening. Aim Higher!
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Are you really so gullible as to believe those lies? And you have no clue if you think 'interest-only' loans were the worst of it. Some mortgage lenders were giving out mortgages where your principle increased each month
And I havent even touched upon the misleading deals where interest rates ramped up over time far beyond following the prime rate.
When in doubt, blame the poor (Score:3, Insightful)
Said regulations were enacted initially as a result of the 1929 crisis; when they got turned off, well, no surprise, what was supposed to happen, happened.
Re:Typical American Response. Ignore the real prob (Score:2)
There's no doubt about it...
Thats what that old army post was for...
all the best,
drew
Re:Typical American Response. Ignore the real prob (Score:2, Informative)
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Stepping over a dollar to pick up a dime...
Re:Typical American Response. Ignore the real prob (Score:2)
No way.
The mortgage crisis was entirely caused by the fact that our loan operators didn't have fingerprints taken, and so when they skipped out of town, there was no way for the lendees to track them down to pay them back.
This bill will finally solve the problem of deatbeat lenders who don't want to get paid back.
Amen!
Re:Typical American Response. Ignore the real prob (Score:2)
On point one, mortgage companies want to do this-- most do. There is an impression out there that banks want
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Uhh, what? 0% down loans are easily available in Canada, and have been for some time now. Or perhaps you just live in a different Canada than I do?
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Funny when I was a kid, the bank was a place where you put your cash for safe keeping, where they paid you for the privilege of using your money while they kept it safe.
20 years later and just about the only bank that actually does the above is ING Direct
This explains it all (Score:2)
A better idea: Fingerprint CEOs (Score:2, Insightful)
If your bank uses an automated approval process, then designate some human being to sign off on the rules the automated process uses, and fingerprint him.
Even better, skip the bureaucracy and don't fingerprint people, just hold the companies responsible if they don't do due diligence on their hiring.
Geesh, this is banking, not munitions transport.
double edged sword (Score:3, Interesting)
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I for one... (Score:3, Interesting)
Sounds similar to SEC fingerprinting regulations (Score:3, Insightful)
I work for a large financial services firm. Everyone who comes to work there is required to undergo a background check and criminal records check, which includes fingerprinting (and running those fingerprints for matches in criminal and disciplinary databases). The goal with the SEC is, at least partly, to ensure that someone who has been convicted of securities fraud cannot sneak in after suspension of their license, etc.
Note, I'm not a licenses broker or any such thing - I'm in IT. But the rules apply.
Big Deal (Score:3, Insightful)
Maybe I'm just used to it, so I don't see the big deal. But I think I have been fingerprinted at least 4 times over the past 10 years in order to work for financial firms.
Meh. Perhaps it is something to get worked up over. But it isn't really a new thing--perhaps it is to many here? This practice, or something like it, has been in place for years in the greater financial market.
Microsoft IE tactics (Score:2, Informative)
This sounds like the establishment wanting the FBI to have fingerprints on everybody (you're all potential criminals, after all), but knowing it will never
Well, la-dee-dah. (Score:2)
So, is the SEC regulating mortgage originators? Hmm... might as well, as mortgages are still being packaged up into financial securities...
Fingerprinting the population (via the) backboor (Score:2)
I think those who propose this stuff should get the same treatment as meted out to the German Minister of Justice by the Chaos Computer Club.
There IS a use for biometrics, but it's not by storing it in a large data bank.
Next week (Score:2)
Really. We're PAST the level already of spying on your citizens that the East-German Stazi had reached.
Fingerprint who? (Score:2)
California already does this (Score:2, Interesting)