Goldman takes on new role: taking away people's homes

[kpete]

Source: McClatchy

By Greg Gordon | McClatchy Newspapers

SAN JOSE, Calif. — When California wildfires ruined their jewelry business, Tony Becker and his wife fell months behind on their mortgage payments and experienced firsthand the perils of subprime mortgages.

The couple wound up in a desperate, six-year fight to keep their modest, 1,500-square-foot San Jose home, a struggle that pushed them into bankruptcy.

The lender with whom they sparred, however, wasn't the one that had written their loans. It was an obscure subsidiary of Wall Street colossus Goldman Sachs Group.

Goldman spent years buying hundreds of thousands of subprime mortgages, many of them from some of the more unsavory lenders in the business, and packaging them into high-yield bonds. Now that the bottom has fallen out of that market, Goldman finds itself in a different role: as the big banker that takes homes away from folks such as the Beckers.

The couple alleges that Goldman declined for three years to confirm their suspicions that it had bought their mortgages from a subprime lender, even after they wrote to Goldman's then-Chief Executive Henry Paulson — later U.S. Treasury secretary — in 2003.

Read more: http://www.mcclatchydc.com/227/story/77841.html

[AllentownJake]

1. This company should have been allowed to die

[rfranklin]

2. It should be put out of business now...

It's not too late.

[OhioChick]

3. Yes, they should have. n/t

[WriteDown]

4. Ugh...

"Earlier this year in Los Angeles, the Wall Street giant took possession of the home of Gladys Aguirre, a housecleaner who's married to a construction worker. Together, the couple listed monthly earnings of $7,480, including $3,480 from a job she'd held for two months.

Aguirre originally took a $444,000 subprime mortgage on Sept. 1, 2005, from Argent Mortgage Co."

[No Elephants]

10. And the bank never asked for documentation? I wonder how they were coached to

fill out that application.

Funny, that kind of thing did not happen before 1980, isn't it? Yet, there have been banks in the US all along. Hmmm.


http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=103&topic_id=492922&mesg_id=492932

Please see also Reply 13.

[WriteDown]

14. Before 1980?

When mortgages were about 18%? Yeah, a lot of things didn't happen then. Its amazing how they couldn't compare their monthly income to the mortgages amount and come to the BASIC realization that it was unaffordable. If you can't do that, then there is little hope for you.

[No Elephants]

16. Mortgages were 18% for over 200 years? Besides, stop shifting the goal post.

The issue is not high interest. The taxpayer never bailed out banks because of high interest.

Did you even read "Goldman Sachs is only the tip of the iceberg" in the thread to which I linked you, or are you too intent on the one thing you bring up over and over when anyone tries to place the lion's share of the blame for this mess where it belongs?

[WriteDown]

18. I was referring to 1980 and the near surrounding years...

I have no idea what mortgage rates were during the time of the pilgrims. :eyes:

I read it. It's quite a rant.

Plenty of blame to go around. Probably should also blame Fannie who was the progenitor of the no doc loans and its always Fannie which drives the industry.

[Vidar]

5. That couldn't be the same Golman Sachs that has been the biggest

contributor to Obama's campaign?

[mule_train]

8. it was their best investment nt

[No Elephants]

11. The one that hired Paulson?

[wordpix]

6. I agree these mortgage slimeballs need to be taken to task BUT

snip: " ...qualified for two mortgages totaling nearly $500,000, with monthly payments starting at $2,004. By 2007, the payments had grown to $3,761. In a bankruptcy filing early this year, Alfero-Pacheo said she was a bartender earning $3,800 a month."

The issue here is not just with the mortgage co, subsidiary of Goldman or not, who stupidly gave the mortgage hoping for a quick, easy profit. The issue is also with the purchaser. This person thinks it's OK, on a $3800 income, to take out two mortgages for $500K? :crazy:

I don't care if the housing market is up, down or sideways, this is just nuts on the part of BOTH mortgage co. and buyer.

[No Elephants]

13. Please see Reply 10, including the thread linked in that Reply, especially the .

post that claims Goldman Sachs is only the tip of the iceberg.

Quick question: As between the bank and a bartender, which one should be getting verification? Which one is the most financially sophisticated?

You do not know what the bank or the loan originator told the borrower. For that matter, the application may have been filled out by the loan originator.

As I've posted before, banks were paying originators more for risky loans than for safe loans. The banks wanted the risky loans and they gave the originators the incentive to produce what the banks wanted. Pacheco lost a down payment and a home and went bankrupt.

What did this cost the bank executives and the loan originator?

[WriteDown]

15. I went to the grocery store the other day...

I only had 100$ on me, but tried to buy 1000$ worth of groceries? If only I was more financially sophisticated! I blame the grocery store for not keeping me better informed. :eyes:

[No Elephants]

17. Since that never happened, and the taxpayers never bailed out the grocer......

Did the grocer ask you for proof of your ability to pay before delivering the groceries to your kitchen cabinet and leaving them there? If so, why should I sympathize with the grocer?

It's not about information. Banks should not have made certain deals, period. They did so--sought the riskier ones, in fact, because they made money on them until the house of cards fell--and then the taxpayer bailed them out.

[WriteDown]

19. I asked for COD...

I could not for the life of me understand why he wouldn't just give me the groceries since it was an honest mistake and all those sale item signs confused me. :rofl:

[mule_train]

7. For perspective on the bailout, what 1.5 billion looks like

suppose you went down to your boat dealer showroom and said 'i'll take a new 5,400 passenger cruise liner, the biggest in the world, 5 times the size of the titanic, 16 stories tall'

here's what it would look like, for just 1.5 billion brand new (Royal Carribian's barand new 'oasis of the seas' launched just 4 days ago)



we gave 180 billion 'fo nuthin' to AIG


180 billion / 1.5 = 120

we gave AIG the equivelant of 120 of these boats for free, as a consequence of their screwing up so big

and you can bet that some of them are on that ship right now, with their BONU$$$$$$$ money

imagine a fleet of 120 of these in formation, in the water, with the head of AIG standing on the bow of the lead boat, giving you (the taxpayer) the finger

that's basicly, what just happened

that's what geithner just gave to his buddies

that's your 'change'

[Pavulon]

9. That is an AIR wing or a fucking fleet

aircraft carrier, subs, surface ships and aircraft. It is an obscene amount of money. The fact that the SAME people who fucked it all up are not in boiling tar, but STILL RUNNING SHIT is insane. God help us all.

[lonestarnot]

12. Sending people out into neighborhoods to figure out which homes they'd like to steal.