Let's get something straight ...... the issuance of unsustainable mortgage loans is morally bankrupt

[Stinky The Clown]

I'm no economist and no financial genius. I've bought and sold a few houses over the years and have always had a mortgage (although my current one is getting pleasingly old and is pleasingly small by today's standards).

Mortgages always used to be a set rate for a set term with the only 'adjustments' being to the escrow account for taxes and insurance. Basically, the longer you owned the house, the smaller the mortgage 'felt' to you. That's the way it was supposed to work.

So along come the gangsters posing as honest citizens. No, not the borrowers .... the lenders. We'll call them (being kind here) Predatory Mother Fuckers (PMFs - so as not to offend ::::wink wink::: ).

In their zeal to hang more and more paper around the necks of consumers (installment loans, credit cards, mortgages ... all nothing more than sales instruments to get schlubs like us into contracts for the use of money). When house prices went up as mortgage rates went down and everyone saw home ownership as easy and .... well ..... erotic ...... the PMFs saw another way to make even more money. Teasers Rate ARMs. Come on, they said in their catchy teevee ads with Norman Rockwell Apple Pie appeal ...... own your home now. Hurry. Rates may go up Soon. Don't be left out. Act now. Hubba Hubba.

But like the suit salesman who grabs a fistful of the back of the shiny sport coat he has you try on, shoves you in front of a mirror, and tells you how great you look in that perfectly fitting sport coat, the lenders tell their marks (nee customers) how the new ARMs can even get *them* into a new house.

The lenders told people they didn't need to show a pay slip .... just tell us what you earn, they said. We trust you. Stated income? Good enough for us, they gleefully intoned. And man, when that rat trap house wouldn't appraise for the inflated asking price, they ....... protected the borrower? Hell No! They leaned on the appraiser! Come one! Come All! Everyone Qualifies. Every Property a Castle. Step Right up, Ladies and Gents. Its Party Time!

Predatory Mutha Fukkaahs. We're gunna get ours, ya saps.

Back in the old days, when three card monty and shell games were played on the street, the cop on the beat ran the con artists off with billy clubs. Why? Because the public, while stupid, perhaps, does not DESERVE to be taken advantage of. This is a good example of why we have ***LAWS***. to protect the vulnerable among us.

It is my view that some of the people who got sucked into the housing market for the enrichment of the PMFs were greedy and got out greedied. Okay. And if that happened to a few or even a few thousand, they wouldn't elicit a whole lot of sympathy from me.

But we are talking about a MINIMUM of 1.8 MILLION households who are facing a resetting ARM that will double their payments. That's not the result of mass greed hysteria. That is an ongoing criminal enterprise. And people DESERVE to be protected from that. This is a replay of the Great Depression and the banks foreclosing on loans and throwing families out into the street. THAT led to LAWS to protect borrowers. Today, the criminals just invented new means to screw people that fell within existing laws ..... just like back then.

Its time. Time for new laws. And time to HELP the victims of this MASSIVE crime against our entire society ...... not call its victims stupid.

The enemy is the PMFs and Citifinancial and Bank of America and Countrywide and DiTech and Fannie Fucking Mae and all the rest who CREATED and then cashed in on this smoked and mirrored gravy train.

It seems to me that all we need to do is have all these ARMs declared null and void, FORCE the criminals to renegotiate a FIXED RATE for each criminal loan they made, set the rate to where their VICTIMS can afford to pay it, and get the FUCK out of the business. I want CEOs in JAIL.

Don't tell me that the millions of 'little guys' are at fault. They may not be without fault, but the CRIMINALS are the PMFs.

So reach out and HELP your neighbor ...... don't tell him what an dummy he is. I bet he already feels like one. The last thing he needs is some self righteous ASSHOLE bleating self-righteously.

Being an asshole isn't a crime. But its nearly as disgusting.

[WolverineDG]

1. well said!

k&r

dg

[ORDagnabbit]

2. good vid to watch about money

www.moneyasdebt.net

and then

www.freedomtofascism.com

[Lucky Luciano]

108. ANother clever video on the subject....

...but the bit about "uneployed black man in ALabama" is a bit offensive...they could have not brought up race and gotten the same point across.

http://www.youtube.com/watch?v=SJ_qK4g6ntM

Still wellworth it to watch this.

[Matariki]

3. I see the real problem being house buying as 'investment'

This past feeding frenzy has driven prices up until they've become out of reach for most people. I remember my parents paying the equivilant of about my dad's annual salary. I'm lucky to have found a place equal to 6 years my pay, and that was nothing fancy and far out of the city.

I'm sure many people panicked thinking that costs would continue to rise and wanted to get in on it before it became completely out of reach - even if it meant a very bad sort of mortgage.

Also there were plenty of people thinking they would flip the house before the higher rates kicked in and make a small fortune.

It's not just lenders to blame, or borrowers. We need to reassess our values when it comes to necessities like housing.

[Stinky The Clown]

5. Well, let's just think abut that ........

The lenders created the dangerous instruments - ARMs

The house builders and their financial backers (the lenders) sold the housing as investment meme.

The money guys started bleating about the ever rising prices (profits) of real estate.

Is there blame for all? Possibly so.

The the HEAVY DUTY blame - I consider it criminal - accrues to those who controlled all this. not their marks/victims/customers.

[JuniperLea]

8. Enough blame to go around, for sure

But don't people have enough brains to ask one simple question? What's the highest mortgage payment I might have to make?

I'm living in home #3, with mortgage #3, and even when I was young and stupid, I knew enough to ask this question and to be sure I could actually make that payment.

People need to live within their means. That being said, the bigger the loan, the bigger the earnings for mortgage brokers. Do you see a disconnect here? I do.

I don't want to see people being bailed out if they get to live in a home that is bigger than their means, but I certainly don't want to see banks getting bailed out either. It's just not fair to the rest of us who were smart about their money. Not fair at all.

[Stinky The Clown]

16. Lemme tell ya what I fear more than anything else

A total metldown on the housing market.

Housing (as an umbrella term - includes services like lawn, home improvement, plumbing, etc. etc., retail stores like Home Depot, Sherwin Williams, furniture, etc.) is all that drives our economy, really. We can't afford the hit. Not me (who has NO stake in the housing bubble or the housing crisis) or you (who would appear not to have a stake either) or anyone in the country. An 'adjustment' to home prices is okay. Maybe even welcome. But a meltdown? That would make 1929-1934 look like rosy times. Forget the stock market. We couldn't afford to go to the super market.

[JuniperLea]

48. I just had a horrid thought!!!

Who benefits from a meltdown? Who benefits from a bailout?

Those who have the money to do the bailing, that's who.

Pardon me if I sound too tinfoily, but think about this for a minute. There's not a chance in hell these creeps didn't know what they were doing and didn't know the outcome. It's obvious to me that if a person cannot afford the home and mortgage they are in, push will come to shove eventually... and sooner rather than later.

So, those that do the bailing out will also do the owning, right?

Could this be a carefully (though thoroughly transparent) orchestrated plan to get real estate moved over from the have nots to the haves?

[Stinky The Clown]

50. I blame Bush .... but nmot in the way you might think .......

I HONESTLY think they intended these ARMs as a way to get people to keep their cost of housing at the level of "barely affordable" forever .... essentially taking the maximum monthly slice of peoples' incomes forever. Better than credit card dept, because the houses have intrinsic value.

Along comes our boy and his war hardon and his GROSS overestimation of the cost and duration of the war. The money guys were banking on a fairly even rate of salary appreciation and a stable economy. Instead they get MASSIVE debt, and the ever present threat of inflation or recession. So old President Fuckup never did hold up his end of the bargain. The economy has turned to shit and now they're all screwed.

[JuniperLea]

54. I blame Bush too...

But when those loans adjusted, the payments went from 30% to sometimes 80% of the 'stated' income! And we all know the stated income was far higher than the actual.

I think they knew these would default. There's no way a person's income could be expected to grow by 50% before the shit hit the fan.

[ret5hd]

81. Somebody said "A depression is when property returns to its rightful owners."

i don't know who, just something i read a long time ago.

[earthlover]

105. Sorry, but the credit crisis is a lot more complicated than that

For one, lenders lose big bucks when they foreclose on a house. Part of this risk is alleviated by private mortgage insurance, however foreclosures COST the lenders money, not gain. The lenders do not hold on to the properties, they sell them, often for less than market value.

Second, the mortgage lending crisis of last summer was caused..and this is the simplified version...well let me explain what was happening....

Lenders were making loans left and right, stretching the rules, and pretty much making loans to high risk people. The lenders, however, did not keep the loans, they sold them in "bundles" to Wall Street. Things were very profitable for everyone for awhile.

Then came the higher foreclosure rates. When Wall Street saw that there was so many foreclosures they basically "sold back" a lot of these loans to lenders. They didnt want any part of these unprofitable packages. Problem was, a lot of these lenders did not have the money to buy them back. And a lot of the lenders went belly up because they did not have the money to buy them back.

The ensuing crisis has led to a severe tightening of the lending credit standards....a lot of loan products are no longer available and people looking for a mortgage have to have much better credit to qualify than was the norm before the crisis began. I should point out too that lower income groups and minorities have been affected the most by this tightening of credit standards.

Well....point is foreclosing is not a profitable process for the lenders. That is why Wall Street sold back all these loans--they didn't want to suffer the losses. And that is why many lenders have gone out of business.

Another thing...in some (but not all!!!!) parts of the country is that the price of homes that were in a bubble have now gone down sharply. I am speaking, again, not about everywhere but in the former boom towns. So a homeowner who had a mortgage that may have been a more expensive mortgage thinking they would refinance later to get a better rate when they build-up their credit again....now has a house worth less than the mortgage and cannot refinance the loan....and many of these loans were on an adjustable rate that kicked in after a year or two. So some homeowners are really stuck by this.

Other homeowners in other parts of the country where the real estate values have NOT dropped, still are facing more difficult credit standards so that even if they improved their credit rating, they may not have improved it enough for the now higher lending standards. So they are stuck too, with adjustable rates going up.

Well, anyhow, it is a lot more complicated than just thinking the banks are wanting to foreclose on properties. Believe me, they are not in the real estate business--they are lousy at it and they know it! There ARE investors out there that stand to make a killing off of foreclosed properties, though.

[nosferaustin]

121. I'm in the business

I work for a sub prime mortgage servicer. I can say first off that you're right, the investors and lenders are not making any money foreclosing on homes. The company I work for has some of the longest time lines to foreclosure in the industry and for the past few years we've gotten nothing but grief for it from the ratings agencies (whose ratings make or break a company like ours). No one could understand why we worked so hard at NOT foreclosing. Fact is that not only is it better for the borrower to remain in their home but it's much better for the investors to keep those payments coming in, even when we have to modify a loan to a lower rate or payment (which we're doing by the bucketful now.) We don't make a dime if the borrower doesn't pay. (It is theoretically possible to make money with REO (real estate owned) property (what we have when it goes to foreclosure sale and the bank / investor ends up with the property to try to sale on the market.

I've been saying for years that these loans coming across my desk were going to lead to trouble. I didn't imaging how much, however.

[bluerum]

135. Yeah - I feel bad that foreclosures "cost" the lenders too,,,

:sarcasm:

They get the property, equity, and future sale income from the home. The homeowners get,,, er lose their equity and get to move out into the street.

Many lenders are going under because they were in the business of making and selling predatory loans. And once someone who knew better caught on, they dumped them. No mystery there.

On the other hand people are jumping all over the homeowners and saying that they should have known better than to trust a shyster loan shark-that they should have asked questions. Believe it or not, there are some folks to whom the words interest/principal/variable rate/equity have vague meaning-they cannot sense how these things will manifest in their lives. Does this make them "high risk" people-or simply uneducated?

Does we have to assume that in all aspects of our lives that someone who knows more than us is trying to separate us from what little $$$ we have?

IMO the lenders were and are responsible for making the loans. They knew that they were shafting the homeowners. The chickens have come home to roost.

[JuniperLea]

169. You are missing a huge part of the puzzle

These loans were sold to investment vehicles. The banks made their money back long ago. That's why some foreclosures are not going through, because the banks are trying to foreclose and they no longer own the properties. The investment vehicles actually own the mortgages as an investment, and were promised higher returns once the ARMs kicked in.

This is just another method of putting money into the hands of a few.

The housing market was artificially inflated due to the flood of money going into mortgages. There were even bidding wars! The bottom line is that many, many people bought far more home than they could afford. And no one held a gun to their heads and forced them to take out those loans. Nor was a gun placed to the heads of the mortgage lenders to take such risks. Everyone should share in this debacle... except those of us who were fiscally responsible in the first place.

[Yupster]

145. So what does the A stand for in ARM?

Adjustable? But it can't adjust up right?

I can't imagine getting an adjustable rate mortgage. I guess plenty of people did them though.

[dansolo]

170. The Truth in Lending for ARMs does not have this info

I had an ARM in the past, and I found it strange that in the adjustable portion, they calculated the monthly payment based on the MINIMUM possible rate.

[JuniperLea]

181. Then you didn't read far enough

ARMs and NAs (Negative Amortization) both require full disclosure. If the numbers were not fully disclosed to you, you can sue. You must be given a date certain and if not a interest cap, then the name of the rate your mortgage is tied to. Was it tied to prime?

Did your loan have an interest cap? Were you given dates of maturity on the different levels of adjustments, if there were several?

[Joe Fields]

13. "marks/victims?customers."

It seems we live in a "no fault" society anymore, where it is so convenient to blame everyone else for our problems but ourselves. This philosophy runs rampant in America. And not once, in all of the posts, in all of the threads on this board concerning the housing crisis has one person spoken up and said that they share the blame for their housing troubles. It's always "somebody else." Nothing that they, themselves did wrong. Real estate lawyers aren't hard to find, if you want to understand just what is in the mountain of paperwork you have to sign. What is wrong with this country that we refuse to take responsibility for our own actions anymore?

And on edit, I DEFINITELY do not excuse the way lenders have passed out mortgages like candy. They should pay the price for their greed, just as homeowners are having to pay the price. No one wins.

[sandnsea]

20. Ever heard of con men?

I knew a guy who used to hold seminars and con people out of thousands of dollars. It was a definite con because when you ran the numbers of what he was offering, there's no way he could ever deliver. When someone is conned, don't we hold the con man criminally liable? Do we blame the victim for being conned?

What is wrong with this country is that we always let the greedy get away with their con games in the name of capitalism. That's what's wrong with this country.

[Stinky The Clown]

25. I wish I could recommend your reply!

Perfect! Absolutely perfect!

[Matariki]

29. One thing that con men can bank on is HUMAN greed.

The mark bears a certain amount of responsibility as well - for failing to 'run the numbers' themselves amongst other things.

The problem is probably more complex than 'lenders bad' or 'borrowers bad'.

[sandnsea]

31. They couldn't have run the numbers

The numbers were in what was being delivered and the average person wouldn't know the time required to deliver. I did. The people were just looking to buy into a business.

The problem is not more complex than a government that lets its citizens get screwed in the name of capitalism and that pushes its citizens into the "ownership" society with shame and blame.

[Matariki]

34. What motivated people to buy into a business without being able to check the numbers for themselves?

That seems like a basic requirement of buying into a business.

[sandnsea]

35. New opportunity

Looked good on paper. Not a lot of people out there to compare to at the time.

[Joe Fields]

71. The fact of the matter is that no one twists anyones arm into buying a home.

People buy homes for a variety of reasons. And generally, people want what they want right now, if not sooner. A whole lot of people didn't use any common sense, when it came to wanting a home. If you want to excuse their lack of common sense and foresight, go right ahead. There is blame to be shared by all parties. I will say this much, though. I would be curious to know how many people wanted homes so badly that they were willing to sign as many pieces of paper necessary to make it happen, without even caring what the contract stated? Like I said before, real estate attorneys are always available.

No matter how you or I feel, the biggest percentage of home owners in foreclosure bear some responsibility for the situation they are in. I refuse to buy into the victim crap. It's too convenient.

[sandnsea]

97. That's what you want to believe

It's easier than the responsibility that goes with empathy.

[Mike Daniels]

157. One can empathize with someone's bad fortune but still find them responsible for their undoing

But then again, I guess it's more satisfying to blame everyone else.

[whathappened]

147. sounds like i got mine

and screew the rest of the world , just maybe these people you are talking about are the same people who were renting from shit head land owners who were chargeing twice what they should have for rent to these same stupid people you have no time for

[sss1977]

134. Exactly!

[Stinky The Clown]

23. 1.8 Million ARMs

In that group - AS STATED IN THE OP - were a few or few thousand greedy sons of bitches, I am sure. But most people were naive and doing what was portrayed in the media as a savvy thing.

No one is saying they should 'get away' with anything. I just want to see two things ...... as few lives as possible ruined and the CRIMES be dealt with. Yes, I know that actual crimes have probably *not* been committed, but in my view, the 'punishment' remains valid. Outlaw these sorts of loans and force the lenders to renegotiate a fair loan with the borrowers (who I still see predominantly as victims, your self-righteousness notwithstanding).

I guess, however, if everyone were as wise and all knowing as you, we'd not be where we are ...... sigh.

[Joe Fields]

77. It's so PC here to play the "victim" card, isn't it?

Since when did progressive = a complete abdication of responsibility for one's mistakes?

Were millions taken advantage of? Yes. Were millions taken advantage of without their knowledge? You'll never get me to believe that. Did millions knowingly enter into risky loans, not too worried about what comes down the line a few years after they sign on the dotted line? In my opinion, yes. Did a significant percentage of borrowers buy homes they knew there was no way in hell they could afford? Undoubtedly. I am not all wise and knowing, as you so snidely suggest, but I do know bullshit when I see it.

I don't want one red cent of my tax dollars going for a bailout of any kind. Not to home owners and certainly not to greedy lenders who grossly mismanaged their corporations.

[Stinky The Clown]

79. I also can only wish everyone were as wise as you seem to think you are.

is compassion dead? is concern for your fellow man passe? Quiant?

I hope you never need help.

Read the end of my OP.

[Joe Fields]

82. I'm wise enough to know that a person can understand when someone

makes a mistake, and yet still have compassion. Where did you ever get the idea that I had no compassion? I've been there and done that. You damned sure don't know what I've been through in my life. But I have always owned up to the mistakes I've made. Maybe you should quit apologizing for other peoples mistakes.

[Stinky The Clown]

88. Yeah sure right whatever

You come off as one heartless son of a bitch. I don't know if you are or not. You might even be a real cupcake of a guy. But in this thread .... read the end of my OP.

[Joe Fields]

96. Heartless? No. Realistic? Yes.

This marks the third time you've insulted me, which is a clear sign that your "rational" argument has run out of gas. Anymore comments of mine on this thread will not only be lost on you, but might also be construed as thread hijacking, so I am finished with you. You may have the last word, if you wish.

[Stinky The Clown]

110. Thank you

I'll take it.

Blow it out your shorts.

[anitar1]

118. Great reply , H2S. May I borrow the final line? n/t

[Imperialism Inc.]

174. Ask yourself this.

If these lenders were able to fool wall street then how could it be that they weren't able to fool average people?

[jberryhill]

190. I love a guy so full of compassion....

....that he has room to spend half of his time calling others moral cretins for disagreeing with him.

I have compassion for alcoholics, but I would like them to stop drinking.

[Matariki]

100. I've been wondering that too.

Since when did progressive = a complete abdication of responsibility for one's mistakes

Good question.

For that matter, when did acknowledging responsibility in personal decisions == lack of compassion? As if the only way compassion can be sincerely expressed is to assert that people are victims without any volition in their actions?

With the housing 'bubble', people got swept up in the momentum. Banks too probably - I hardly think lenders are gleeful over mass foreclosures.

Most issues are too complicated to break down into either/or, villian/victim, etc. - but plenty of people are willing to do just that. Things just aren't that simple.

[Donnachaidh]

28. it ain't just the lneders -- mortgage brokers are on the bottom of the food chain

Some in this *profession* can and regularly DO falsify documentation in order to push through loans that never should have been started. If there is ANY group that needs to be investigated and reigned in to the point of pain - it's the mortgage brokers.

[Stinky The Clown]

33. Lots of that happened

Just as bad as a bad appraisal.

But so many LOVE to blame the victims.n (not saying you do .... just a side rant! :) )

[earth mom]

51. FYI-"Personal Responsibility" is a rethuglican meme.

What we are looking at with the mortgage crisis is a TOTAL SCAM perpetrated on the entire country.

You can sit there and point fingers at people and make your mean little rethuglican judgment about them, but it really doesn't fly because those people were SOLD A PRODUCT-a mortgage with a safety valve that they could "refinance" at a later date-but that really doesn't give them what they thought they were buying in the first place. Now those people can't refinance and are losing their homes.


Excuse me, but in my book the entire disgusting thing is called "FRAUD".


NOT a "lack of personal responsibility". :eyes:


http://www.pbs.org/now/shows/346/video.html

[Stinky The Clown]

52. Amen! Amen!

Amen!

[tavalon]

124. I think you both had really good points

I'll admit the other guy seemed to lack all compassion but what he was attempting to say is that there is responsibility all around. I came into buying a house I couldn't afford a few years before this current fiasco. Yes, things were not explained to me well enough and they certainly didn't care that my income was based on being a float nurse, which happened to tank about a year into my loan. I couldn't afford to take a staff nurse job at that point, even though the hours would be secure because I based my loan on my higher "supposed" income from being a float nurse. No one tried hard at all to help me look at all scenariosbefore I bought that house, but neither did I do that work myself. I'm three years past my foreclosure and my bankruptcy and I know that the lenders were stinkers but I also know I didn't take enough responsibility for protecting myself. I wanted that cute little house, right then, right there and damn the torpedoes, it was full steam ahead.

I think the previous guy was saying that more people should understand that they also have a part of the responsibility, to believe otherwise means that we are complete victims and completely without any hand in our own life.

Now, do I think every predatory lender who found an easy mark like me should be prosecuted to the fullest extent of the law? Damn tootin' I do!

These days, I don't have a credit card nor a house loan. I only spend what I have and am trying to save as much money as possible. Will I buy another house one day. We'll see, but I know that I will be a much more savvy consumer at that point.

[Dorian Gray]

151. Congratulations

for turning things around, Tavalon. That's so difficult, but it sounds like you have got a really good attitude about your financial health, and you are doing all that you can to maintain it.

[Matariki]

64. "Personal Responsibility" is a 'rethuglican' meme?

Really?

[Pithlet]

76. The way the Republicans use it, yes.

There's personal responsibility, and then there's Personal Responsibility. I don't think anyone advocates people never taking personal responsibility for everything. But, the fact that people should be responsible for their actions doesn't give corporations carte blanche to take advantage of as many people as they can get away with, as Republicans apparently think it should. They also never seem to acknowledge that corporations can indeed victimize people through no fault of the victim. It's a common theme in Republican Values.

[tavalon]

125. They turned it into their catch phrase,

along with "rule of law". They were phrases before they got them, but became copyrighted by repitition by the repubs. Our side is known for caring about the other guy, their side is known for getting their own and telling everyone else to go fuck themselves.

Of course personal responsibility is a universal concept, just as taking care of one's fellow citizen should be.

[Matariki]

127. That's an excellent response. Very nice.

Of course personal responsibility is a universal concept, just as taking care of one's fellow citizen should be.

[fredrickdouglas]

173. Yes, really. It is.

Because they represent the ultra rich who aren't in the least bit responsible, as the predatory lending scam clearly illustrates. So, instead they spend their time and pay their minions to proselytize everyone about responsibility.

It all comes out of their propaganda platform of family values. While committing genocide, starting wars, creating poverty and causing millions of deaths globally, they claim to be pro-life, pro-God and pro-family. This gives them the propaganda moral high ground to discuss responsibility even though their actual record is, of course, the exact opposite.

For all its problems, Marxism at least had a clear view of power. All of this rhetorical nonsense happens on the analytical level of an 8 year old!

These guys run the country. So when something goes wrong of course they are going to blame the regular people they rule over. There seems to be a near endless supply of 'politicos' that can't seem to understand this most basic of principles.

[Joe Fields]

85. So are you calling all of those people stupid?

You don't give people much credit for brains. Are you trying to tell me that when those millions of people went to get home loans, the minute they stepped into their lender's office, their brains just flew right out of their heads and that they were then hypnotized by these jerks in suits?

FYI_personal responsibility for one's actions is NOT a republican meme. It's called being grown up. You should try it sometime.

[earth mom]

86. People have been scammed. What don't you understand about that?

Did you even watch the NOW video I posted to understand what I was trying to tell you?

Probably not, because then your point would be moot. Not very grown up of YOU I'd say. :eyes:

[Joe Fields]

87. What is it that you don't understand about personal responsibility?

Is it that you've no concept of it? Never tried it?

[Stinky The Clown]

90. Here's a google for ya

"Jerk"

How many hits does it get?

[earth mom]

178. Thank You.

:rofl:

[Matariki]

101. Say, do you have a link to that NOW video?

I don't see it in this thread.

[earth mom]

177. Here you go. You will see that average people were targeted.

http://www.pbs.org/now/shows/346/video.html

[HowHasItComeToThis]

122. BINGO FOR YOU

[CANDO]

63. I've said it before on threads.

People need to take into account what they REALLY can afford, not what they think they can. There are too many other costs in our daily lives to think we can afford $300-500K homes on a modest middle class income. The only way I see you could would be if you had a substantial down payment. I suppose many people use estate money from deceased parents to buy these expensive McMansions and that is fine, but others need to live within their means.

[fredrickdouglas]

171. The Personal Responsibility Rant Is Getting Old

Been hearing that from the right wing for the longest. Now that they own the lion's share of the ideological real estate in this country we have to listen to the same prattling from the center and even some who describe themselves as the Left in the US.

No thanks.

Its disingenuous nonsense. And it's proved by the way you all refuse to talk to the rich in the same way. If you did, you'd be so busy getting on their cases that you wouldn't have time to find yourself here blaming a working stiff for his plight. This isn't to denounce responsibility its to say you guys/gals aren't interested in that, only in parroting the right wing in its blaming of anyone but the rich.

[truedelphi]

183. I agree with you about everything you say except here is a little back drop on the ARM's

First of all, I too think that what has happened lately with the ARM's is immoral etc.

But they were created as a borrowing tool for the populace way back in the late 1970's when interest rates were between 20 and 23%. They were about the only way that the very few people who considered buying during that economic downturn would consider buying. The idea was that you could buy the house, and while interest rates went up, your rate would go up also, but not more than 1.5% annually (I think that that was the cap on it then.) When rates finally fell, your rate would come down, and it might save you the re-financing charges. Though anyone with any sense went out and replaced that ARM with a fixed rate when the interest rates finally fell in late 1983 and '84.

So the ARM's actually were conceived of to help people.

It is only under these greed mongerers that we saw the system go bananas. And as people are mentioning - that has a bit to do with the Banking reform act of 2005.

And also with the fact that over the last ten years, lenders "Loosened" up their old standards for loans. I myself had a real estate agent tell me that he would consider helping me find a mortgage of 175 K - and that was based on my $ 18K a year salary - excluding my husband's salary. TO me that is nuts. The old rule was that a person never got lent more than four times their yearly salary.

[Joe Fields]

7. Nice post. n/t.

[Javaman]

15. On the money...

You wrote, "I'm sure many people panicked thinking that costs would continue to rise and wanted to get in on it before it became completely out of reach - even if it meant a very bad sort of mortgage."

that's exactly what the lenders where banking on when they sucked these people in. "get in now!!! before it's too late!!! And can never afford a home!!!"

Sadly, most of these people in their desperation, couldn't afford it then, but like many americans that fall for the "american dream", thought they could figure out a way to pay it once they were in. And you know, they probably did, until the rates reset.

[high density]

98. I agree. It's not an investment, it's housing

Too many people thought the market would keep going up up up up and their $500k home would be $1m in a decade (or sooner.) But who exactly was going to afford that sort of appreciation? I know it happened in the past few years, but why did everybody think that exponential growth was going to continue to infinity? The dot com bubble was only about seven years ago and we seem to have forgotten that one already.

A house provides no sort of diversification of your "investment," as many people are noticing at this point in time.

[WorseBeforeBetter]

117. Exactly. Dot com, then housing...

what's the next big scam on the horizon that people will get sucked in by?

[Matariki]

128. So the question is - who is making the money on this?

The banks aren't, unless they convince the government to do some sort of bail out.

I'm not convinced it was 'a scam' as much as a lot of people drunk on 'easy' money thinking the party was never gonna end. Or at least they'd 'get theirs' before it did. And by that I mean buyers and lenders alike.

[midlife_mo_Jo]

159. Drunk on Easy Money

I SO agree with your post.

[kcass1954]

162. The guys at the top - the assholes with the golden parachutes...

They got theirs when things were looking all hunky-dory - originations were up, when the bank was making money on points and origination fees and all the various and sundry "junk" fees associated with getting a mortgage, millions more sitting in the pipeline.

The loan originators got theirs, because they're paid up-front when the loan closes. That paper just has to look good enough to get a loan approval, and their commission is assured. (A ruthless mortgage broker will go after a borrower who was approved but decided not to take the mortgage - according to his contract with the borrower, he earned his commission by getting the loan approval, but didn't get paid because the loan didn't close.)

Every single person and company associated with originating mortgages has made absolutely obscene amounts of money the last few years.

No one is going to benefit from all these foreclosures, but John and Jane Homeowner are going to be the biggest losers.

[WorseBeforeBetter]

167. I should have said "next big thing."

There's plenty of blame to go around on this one. Meanwhile, those of us who lived within in our means and didn't allow ourselves to be sucked in by the greed frenzy (I MUST have a $75K kitchen!) will be affected. Surprisingly (or not), I still come home to a mailbox full of "free" credit offers and those puppies go straight to the shredder.

Where was the personal responsibility? The basic understanding of risk (hell, the basic understanding of fixed v. variable)? Not having a sense of entitlement? Living within one's means?

And lest anyone jump on me for being cruel, I am sympathetic to, say, young families affected by this. Many of the foreclosure properties in my area are under $200K--"starter" homes. Then there's the friend whose college-educated sister got waaaay in over her head buying rental condos in Florida. She's now bankrupt and you know what? I have no sympathy--she brought this on herself.

A young family in Detroit (or maybe Cleveland?) was featured on NBC and they're living in total fear because "thugs" have taken over the many abandoned homes in their neighborhood. This 2-income family with young children thought they were buying into "the American Dream"; instead, they have they have the double whammy of tanked property value and fear. Then there are the foreclosure properties being stripped while sitting empty (a Las Vegas home with urine-soaked floors and feces strewn about comes to mind). Lovely.

Who ends up paying for all of this? And yes, who is making money off of it? Where is the big money going next? No one can say they didn't see it coming--especially not our elected officials. Actions have consequences and what pisses me off is that lenders were not reined in a LONG time ago. Many of us on this board knew this was a house of cards just waiting to fall and sure as shit, here we are.

So, at its most basic, I think a bail-out is wrong, but on a more macro level, I see why it needs to be done.

[truedelphi]

187. The banks did make the money on the dot com

They had their financial people posing as experts to advise the public on TV and radio shows that such and such a dot com was going to go big.

The banks and the other big money funders would create the buzz before the initial public offerings were posted - and they would drive the initial stock price high for the first few days - which would attract more investors. then BAM! the banks and other big money entities would pull out, and the little guys would get hurt.

This was all documented in movies and in print for about a year after the bust went down.

[truedelphi]

185. The dot com bubble was barely over with

When the real estate market came along to replace it - using the same platitudes etc.

In fact,I had several friends who got burned on the dot com thing, who went out and did the house flipping thing - telling me the same slogans of "This is a different economy" and "It can go up but can't go down."

Jeesh!

I feel very bad for low and middle income people who got scared and/or pressured into buying a home during the over-heated end of the cycle (I don't know why we don't have economics 01 in every eighth grade and teach people four things: What goes up must always come down. DOn't count your chickens before they are hatched. Buy LOW, sell HIGH (NOt vice versa) ANd never put all your eggs in one basket.)

[JVS]

126. Your point is worthy of its own OP

[Stinky The Clown]

139. I agree that it is. You should start one

[Orsino]

4. And where is all that wealth concentrating?

In the hands of those lobbying for finance "reform" laws. This is the danger of corporate lobbying.

Qui bono?

[Stinky The Clown]

6. Absolutely

They're lobbying for a short term diet so they can get fat atop the next wave of their creation ...... gawd only knows what that is.

[slackmaster]

9. Secondary market muddies up this otherwise fine rant

Most notes are not held by the institution that originated them.

Should current investors and loan servicers be held liable for shady originations? I don't know the answer.

[Stinky The Clown]

44. If we have massive loan defaults, the secoindary markets get KILLED ......

If we force the lenders to renegotiate the ARMs to reasonable fixed, then the WORST that happens is that huge profits shrink to modest profits.

"Bailing out" the borrowers, it seems to me, helps everyone.

Then we need to jail the CEOs who started this crap.

[slackmaster]

161. I see that as "Bailing out the borrowers helps some who don't deserve help"

i.e. investors who bought packages of weak loans, and borrowers who knowingly bit off more mortgage than they could chew.

The natural order of things in the market is for people who make risky financial moves to sometimes lose. If they don't, the whole process is subverted.

People who were intentionally misled into taking out loans they could not sustain are indeed victims and deserve some kind of compensation. The problem with a broad-brush bailout is that it would not distinguish between those who were defrauded, and those who thought they could get away with gaming the system.

[truedelphi]

188. NO I think that many of these notes ended up in hedge funds

And in other ways to bundle them up and sell them off.

One of the clearer and yet most hilarious economic courses I have taken recently was this one:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=385&topic_id=64467&mesg_id=64637

Watching it is entertaining but very informative.

Posted by someone here on DU.

[Richard Steele]

10. Kicked and recommended.

[EFerrari]

11. Yes, it is. Especially when in order to get one of those things

someone usually has to represent you as an agent, aka, someone who is sworn to represent your interests.

[Stinky The Clown]

27. Not so ......

The Realtor works for the seller .... even when he doesn't know the seller and you called them to show you houses. The Realtor fee comes from the seller and that's where the fiduciary responsibility lies.

The closing company protects you from error at closing ...... NOT in securing a loan.

The lender is the BIGGEST predator in the whole deal. And only LAW protects you from those snakes. Sometimes. Maybe.

The only way the BUYER gets protection is to either hire a buyer's agent or hire a real estate attorney. And since that costs money, very few do it.

[EFerrari]

53. Maybe it's different in your state.

Here in CA, each party much have an agent or sign a release that they are acting on their on behalf. And that doesn't begin to cover the loan. Yes, so.

[Stinky The Clown]

57. Here, they require disclosure, but no remedy for the unprotected buyer

I've always hired a buyer's agent. Turns out that you ask them to lower their commission and they do. The net result is the seller's agent only gets half the commission, but doesn't have to split it with the buyers' agent. The house price is reduced the amount of half the commission and the buyer pay the buyer's agent at closing. It all nets out to EXACTLY the same fees all around, only the pot from which they are drawn differs.

Now think about that for a sec ........ You can be unrepresented for the same cost as being fully represented. Why do they make it so complicated???? Why not codify the representation? Who benefits from a confused buyer?

Follow the money.

[Javaman]

12. Well said, well posted.

You have put so eloquently, what I have been trying to say for a while now.

We have our modern snake oil salesmen selling homes to people who are desperate to get out of the apartment rut. And the sellers know that and use that as leverage when selling these buyers a bill of goods. "you mortgage will be lower than your rent!"

Buyer beware, yeah right. if it were only a few hundred people that got duped it would be one thing, but close to 2 million homes coming up for reset?

These lenders were sharks in a gold fish pond.

[Lex]

14. Like sleazy used car salesmen

is exactly what many mortgage brokers are like. Not all, but more than a few.

[Javaman]

17. Like any scam purpetrated upon the public, follow the money...

those lenders that made it, got out early, those lenders who got greedy stayed in and lost it.

[MrCoffee]

18. you forgot the part where they held guns to the borrower's heads and made them sign in blood

don't forget that part.

[Lex]

21. lied to them and didn't fully disclose the terms

more like it

[MrCoffee]

24. so they're enforcing terms that weren't in the contract?

or did the borrower not read the contract?

[Stinky The Clown]

37. Blame the victim

Did you read to the end of the OP? I'm just curious.

By the way, did you ever the one about the guy in prison for rape who got there because of some girl who wore a short, sexy skirt, no panties and a too-small tank top ....... ? sheesh.

[Adsos Letter]

172. So, by your way of thinking....

...his prosecution for rape was wrong? We're supposed to excuse him?

[killbotfactory]

26. Some of them also changed the terms right before closing

forcing people either to accept the new predatory terms, like an ARM when they were told it would be fixed rate, or walking away and losing thousands of dollars.

[Matariki]

36. Do you have any links for that? Or is it anecdotal?

Earnest Money is typically refunded if financing falls through.

[sandnsea]

39. No, not really

I know people who lost their earnest money. I know people who had to threaten legal action to get theirs back. My own experience is that 4 loan offers, on the same property with the same lender, had 4 different "Good Faith Estimates" on the monthly payment. They changed the estimated taxes and insurance every time to keep the payment the same. No thank you. I still rent. I've bought homes before and this was nothing like what I'd previously experienced. It has been totally out of control. Put a young couple in that mess, how are they supposed to know. They'e got nothing to compare it to. This corrupt blood sucking attitude in this country is really sick.

[sandnsea]

19. Absolutely

I am so sick of people always siding with the corrupt bastards. Nobody holds a gun to a fraud victims head either, but they still lock up the con man. This is no different.

[flamin lib]

22. The emeny is more than the lenders, it's the banking lobby and a

willing Congress.

See this thread for a bit of history: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x2350050

[Stinky The Clown]

30. I agree .....

.... and when I refer to 'lenders' I mean every rotten part of their operation ...... including the lobbyists.

[donkeyotay]

66. A succinct bit of history in that link for those wondering about the banksters

They lobbied to get rid of dreaded regulation (Give a shout out to Newtie, Delay and the boys). Free schmarket. Don't let them forget that we know they raked in record profits over the fees they made creating and selling this paper. Don't let them forget that we know the cheerleading for this neo-economy went all the way to the top. Greenspan even told people they should get adjustable rate mortgages. People were buying these cheap mortgages thinking they were a better deal than the outrageous rents working people are paying.

[Atman]

32. I wish I could rec this a thousand time.

It should be on the GREATEST page, and pinned there.

I'm disgusted at the number of DUers who are quick to say that the fucked-over didn't actually get fucked. THEY DID. The "DiTechs" (General Motors) and "Lending Trees" of the world CONNED PEOPLE, no better than snake-oil salesmen. Should people have known better? Fuckin' A! Yes, they should have!

But people vote for GWB, too, didn't they?

People are fucking stupid. Praying upon their stupidity doesn't make the predator right.

.

[AngryAmish]

38. Problem - those holding the loans now didn't make the loans

I'm sure you know this - and I agree with you in many respects -- the people who made the loans are not the people who hold the loans now.

As everyone knows the makers of the loans put a bunch together and sell bonds based on the mortgage payments. Everyone was happy. Especially Wall Street.

Now many institutions holding the bonds based on the loans will not get the returns they invested in. Pension funds, for example.

Nobody can price their risk right now because no one knows how many of the loans will default or if the government will cap ARMS like you suggest. If they do, watch out. The riskier bonds based on riskier loans were worth buying because of greater return. If one has bought a bond based on high risk and high return and then the return is much less, even defaulting the bond, well then a lot lot of investment funds - which are supposed to be "rock solid" -- will be worth a lot less then they thought. Pension payouts less, for example.

[Stinky The Clown]

41. Oh ...... the possible ramifications will make a sane person's head explode

To say nothing of making our ENTIRE ECONOMY explode.

But of course (said with sarcasm NOT directed at you) the real culprit is the Sam and Sally and their greed to buy that shitty, overpriced, mold infested, 30 year old apartment converted to a two bedroom condo.

[AngryAmish]

43. A note of optimism

Not everyone is going to default. The bonds will always have some return.

I disagree on your prescription. The #1 thing I would go for is bankruptcy reform and allow cram-downs on mortgages. But we have to get that past Joe Biden (D-MBNA) first.

[Stinky The Clown]

46. I gotta tell ya .........

..... on an overall basis, I like Biden. I fault his propensity for limelight and a microphone and I detest that bankruptcy bill, but I think even he'd have a hard time stopping rational reform in this arena.

[Rex]

40. It is the Savings & Loan bullshit, Enron bullshit, stealing from you

own employees bullshit. Making sure we stay in debt bullshit. Spending? Ha, no limits. Restrictions? Bullshit, raw unethical business practices because they CAN. Who gives them the power? Political types. Money. Kickbacks.

It is the way business goes, just look at the Roll Model In Office. Criminals of the highest order.

[Stinky The Clown]

42. Amen! Amen!

Amen!

[Elspeth]

45. "That is an ongoing criminal enterprise." AMEN

That's exactly what it was and is.

[KitchenWitch]

47. Thank you for this.

I was so tired of the "bash the victim" attitude around here.

[annabanana]

49. Thank you Thank you Thank you!

This is the knd of response I expect to see here at DU to the mortgage mess in this country. I have seen bunches of mean spirited posts that overmuch blame the victim of the scam and am pleased to see this post here.

[aikoaiko]

55. There is nothing inherently predatory about ARMs.

[Stinky The Clown]

58. Wow

That's so heavy ....... and insightful.

:eyes:

[aikoaiko]

59. The OP wants all ARMs declared null and void because s/he thinks they are predatory

that is bullshit, but apparently most of the people have drank from his kool-aid already.

So yes, my post would be heavy and insightful to some.

eta: I didn't realize you were the OP, but I'll leave it as is.

[Stinky The Clown]

61. Uh

I am the OP

Wanna glass?

[aikoaiko]

62. No thanks.

Yeah, I realized you were the OP too late.

But seriously, I think you cast too broad a blanket in your OP. Lots of people will like the bail out of the type you advocate, but its only because it saves them from the consequences of their poor decisions. Who wouldn't like that?

[Stinky The Clown]

65. I'll tell ya what. I am NOT suffering from the mortgage crisis, and **I** want a bailout because ...

.... it is morally the right thing to do and it is, I think, the smartest economic move. I've discussed this upthread and don't wish to repeat it here.

[Connonym]

56. We've ALL been taken in by this

I'd wager that almost everyone who buys a house does so with the thought in the back of their mind that as circumstances in life change so will their needs for housing. You buy a house with the belief that some day you'll sell it -- to buy a bigger house for more kids or downscale to a smaller house when the kids go to college or, god forbid, if something happens with your job you sell it and walk away to something your new circumstances afford. You go into it thinking that it's worth what you're paying -- the city tax assessor says so, the mortgage company says so, the appraiser says so, why should we not believe them? So fast forward to that day that you knew would come in one way or another -- you're moving to Houston or you got a divorce and you want out. But nobody wants to buy your house. Even if you read every fucking word of your contract with your attorney and understood exactly what all that crap meant you never expected that after a reasonable amount of time you wouldn't be able to sell your house. I'm not even talking about all the "flip this house" people who try to double their money in 8 weeks. I'm talking about people who live in their house for years, take care of it and expect to be able to sell it when the time comes. Houses sitting on the market for over a year with no offers. Houses that owners have slashed the prices on. They're NOT selling. Houses are just not selling. How the hell do you get out of the mess then? We're all in this together and as I crash you're coming down with me (like it or not and I personally take no satisfaction whatsoever). My empty house on your block, the other foreclosed house 2 blocks away, what do you think this is doing to your property value? It's not helping, I can tell you that. If you can hunker down and wait out the storm you'll probably come out on the other end ok but if you NEED to move, dude, you're screwed. Meanwhile, there are plenty of sharks circling waiting to make a killing. This is already about more than being a victim of predatory lending. This is now about the inability to get out when you need to get out. You can't sell what nobody wants to buy. There is no consumer confidence in the market. It's gonna get even uglier out there if that doesn't turn around soon.

[Danger Mouse]

60. I wish I could recommend this more than once. I have been DISGUSTED with how many DUer's

are so anxious to piss on the VICTIMS of loan sharks. Many of them are weak and foolish, but it doesn't mean they DESERVED TO BE DEVOURED BY THESE GREEDY FUCKS.
What we have here is a society that is so tightly controlled by mega-powerful corporations, that even loads of duer's rush to defend their corporate overlords without nary a qualm.
In the end, they are just getting screwed, with too many people on the sideline having a good chuckle over the screwing.
Your post, my friend, says what I feel beautifully.
Nicely done.
:hi:

[MadHound]

68. No, most of these "victims" were being greedy fucks themselves

They let their greed and desire to get it all, now, overwhelm their intelligence and common sense. They tried to reach for what was beyond their grasp, and got burned. In fact many of these people really decided to go whole hog, and keep up these insane loans when they thought they could make a pretty penny flipping houses.

These people forgot that old piece of wisdom about something that looks too good to be true usually isn't. Instead, they got caught up in greedy fantasy that they could afford something for nothing down, and low initial payments. I'm sorry, but buying a house is the most important decision of most peoples' lives, and you need to do your homework before you sign your name. You have every right to take the perspective contract home and study it, and if you don't understand it, to somebody who does understand it and can explain it to you. But instead these people, with visions of a grand house in their eyes, allowed their desire overwhelm their common sense, and made an impulse buy instead of deliberately thinking things through.

Sorry, but these people shouldn't be bailed out. They made a mistake and they need to learn from it. Is it a hard lesson, sure, but sadly, their greed is going to effect all of us, even those of us who did the right thing as our own property is devalued due to the glut on the market. Why should we forgive stupidity and greed, yet continue to punish those who made the right decision? Is it fair, is it right?

Nobody put a gun to these peoples' heads, nope. They, for the most part, did this to themselves. If we start rewarding this kind of stupidity, then what's next? Rewarding those people with high credit card debt? Rewarding losing gamblers? What?

I know that sounds cold and heartless, but quite frankly I don't care. I don't think that it is right to reward people who were motivated by greed and stupidity while neglecting, or with our falling house values, punish those of us who did the right thing and thought before we bought.

[Danger Mouse]

70. That's what our society pushes on people, though.

And the corporations are the ones who benefit from them. The little guys lose everything either way...whether they do the right thing or give into the temptations of greed.
They are fooled into buying the dream, believing the hype...and lenders are more than eager to sucker them into it. These practices are the real problem...allowing lenders to prey on the naive. They are VICTIMS...of themselves and their own foolishness, yes, but most certainly of the corporate con men who are all too eager to exploit them, suck them dry, and leave them penniless.
This is millions of people who are going to be screwed here!

[MadHound]

Then it is your duty to yourself to push back.

Do you buy the first lemon on the lot that a slick used car salesman pushes on you? No, you do your research, kick the tire, get an inspection, and make an informed decision. Yet many people put less thought into buying their house than they did when they bought their car. Remember, no matter who the sales huckster is, no matter what he is selling, you always have the right to walk away from the deal and not buy it. Instead these people let their greed and hunger take hold, and signed on that dotted line without thinking. Whose fault is that? Who do you blame for these people's lack of thought and common sense? The guy who was doing the sale, or those who signed their names? I personally put the blame on those who signed their names. Nobody forced them to do this, nobody put a gun to their head. They did this of their own free will, as poorly thought out as it was, and they need to accept the consequences.

Yes, there are slick hucksters and snake oil salesmen out there, no doubt about it. They are of questionable morals and shady reputations, and yes, they have many, many tricks up their sleeve, all designed to get you to buy. But a person buying a house should know this going in, they should do their research, and if they don't understand what they're getting into, they have the option to take the contract to somebody who does and have it explained to them. You are correct, they are victims of their own foolishness and lack of common sense, but does that mean we have to bail them out? If that were the case, we would be bailing people out of all sorts of similar situations, from the stock market to the car market. Yet we don't do that.

Yes, millions of people are going to be screwed here, this particular bubble took in millions of greedy, foolish people. But bailing them out is going to achieve what? Nothing more than a simple transfer of wealth from the taxpayers to the mortgage holders. It won't help these people, their homes are still going to be worth less than the notes they hold for them. Millions will still be walking away from their mortgages for this very reason. So what will we have accomplished, once again bailing out corporations and still screwing the little guy.

And frankly, many of us out here simply can't afford it. We're already being pushed to the wall by falling housing values, rising prices, rising taxes, and a sinking economy. We've already got trillions of dollars in national debt, yet you want us to add a few hundred billion more, with all of that money going to corporations, not homeowners. No thanks, I've got better things to do with my money. Like surviving myself.

Yes, these people are going to suffer, no doubt about it, and I feel for them. I've been there with them, with no home and living on the streets for a couple of years. But you know what, that period of homelessness taught me some very important lessons in finance, corporate trust and other important things about life. It is a hard way to learn such lessons, but it was effective. I'm not wishing homelessness on these people, so please don't interpret it that way. But perhaps with this mistake they've made they can learn from it and go on.

[Connonym]

176. the falling housing prices are the very REASON why this is happening

the cause and effect here is very blurred. How the fuck is someone supposed to recover from a financial mistake if the market is broken? You, Mr. Fucking Genius, tell me about your crystal ball that allows you to see into the future and let you know that what you earn today is the same in real dollars as what you'll earn in 5 years. That your job will still be there and that you won't suffer any unforeseen misadventure? If people facing foreclosure could sell their houses we wouldn't have a fucking problem would we? Bully for you for seeing how this was all going to turn out because you sure were smarter than the fed, the CEOs of major financial institutions, the government and 10's of millions of your fellow Americans.

And you know I've always figured (and psychological tests tend to back this theory) that people who believe everyone else is a cheat and lie, do, in fact, tend to be more dishonest themselves because we see ourselves reflected in others. You see a cheater? good chance it's because you're seeing yourself reflected back.

[Stinky The Clown]

80. You got statistics to back that shit up, right?

[MadHound]

84. Those stats are out there, why don't you go look

I'm not going to do your research for you.

[Stinky The Clown]

91. No, its far easier to spout crap, hold it up as fact, and then challenge the challenger

Nice gambit.

......... pointless and makes you look like an unarmed man at a gun fight, but whatever ......

[MadHound]

95. Oh, kind of like somebody who hurls insults, issues demands,

All the while being unable to refute a damn thing that was said:hi:

So you got anything else to back your happy ass up with other than insults and bile?

Or are you simply one of those people who mindlessly attacks anybody who disagrees with you?

[Stinky The Clown]

111. Nice try

The OP ..... read the end of it.

[Joe Fields]

189. He seems to be the latter.

In his world you can do whatever you want and not claim responsibility for your own actions, because you can claim stupidity, then point fingers at those who take advantage of you. And THEN hurl insults at anyone who dares to question his poor judgment.

[midlife_mo_Jo]

158. They got adjustable rate mortgages because they couldn't afford

the house they wanted without the ARM/subprime loan. And they were all too stupid to realize that they might not be able to afford to keep the house when the payments went up? Are Americans that stupid or are we that greedy? They gambled that they would be making more money or that the house would increase in value and they could then sell it. They lost the gamble, unfortunately.

The lenders took risks on these loans. Well, they were stupid, too, and sometimes downright predatory, but not always.

Too many Americans are in the debt cycle (including myself.) As long as we can point the finger at the lender, we're never going to learn some restraint. It's time we start acting like grownups, and accept some blame for the sorry state of our financial affairs.

We don't have to buy that bigger house.

We don't have to buy that more expensive car.

We don't have to buy the crap advertised on tv.

Plenty of people show financial restraint. The rest of us need to learn from them.

(Disclaimer: I know that some borrowers are in trouble due to medical bills, lost jobs, etc. I'm not talking about them.)

[Doremus]

92. Hear hear! I wish I could recommend your post!

It's shocking how supposedly progressive people rush in to blame the victim.

Even more shocking is how willingly they write a pass for the perps who knew damned well there was no way in hell these borrowers were going to keep their heads above water but sold them the notes anyway (no doubt with their best, time-tested hard sell).

I thought Freepers were the only card-carrying members of the Chickens for Colonel Sanders Club.

[Dorian Gray]

154. The thing is...

are borrowers actually victims?

I liked the take the OP had on the subject, and I DO think that we should feel sympathy for people who may have been pushed into something that wasn't good for them. But, are they actually victims? Or did they make a bad choice? I tend to lean toward to latter. Victimhood means that they were powerless, which they weren't.

[eridani]

129. Yep. Reminds me about people who get snotty about how rape victims dress n/t

[ElboRuum]

186. I don't think that it is the weak and foolish we're talking about here...

It was the greedy ones, the house-flipper types, who looked at the housing market, eyes glazed over with dollar signs as they contemplated playing Monopoly with real money.

Maybe even THEY don't deserve to be devoured, but they're a lot closer to being so deserving than those who were weak and foolish.

The real lack of moral fiber, as I see it, lies with the lenders, of course. The whole point of credit rating is to make it such that lenders have a tool by which they can avoid extending credit to those not likely to be able to pay it back. Once lenders see that tool as an impediment, people end up getting credit they can't afford.

[troubleinwinter]

67. I think the time is near when some of the assholes will not be happy.

In order to keep her home, he lady across the street will be renting out rooms in her house to people who have lost their homes, and there will suddenly be losts of cars parked there.

Down the block, vacant homes will have dead, weed-overgrown yards with broken windows where vagrants camp out.

Next door, three families with children will share a home, with ten children playing in the yard, yelling, leaving toys strewn over the yard, six cars in the driveway and taking up the street spaces.

Then Asshole decides he would like to do a little work on his home, or perhaps pay a medical bill, or help out with kid's college expenses, or buy that little fishing boat he's always dreamed of for his retirement, so decides to take a little of the equity out of his home that he has been building upon for many hard working years... but SURPRISE! The home isn't worth the equity he has in it anymore. Shit out of fucking luck.

The 'American Dream' has kicked bucket. Maybe if Asshole had cared anything about those "other people" keeping their homes, his neighborhood would be healthy and vibrant with others living the dream of home ownership and he'd have equity enough to have made his hard work and life-long investment worth something, rather than nearly worthless.

[Stinky The Clown]

69. I wish for Mr. Asshole nothing but .......

..... painful, inflamed, swollen, bleeding, fucking hemorrhoids.

And a Preparation H shortage.

[troubleinwinter]

102. I wish the mutherfucker gets his little boat for fishing.

I hope he can put a new deck on the back of his house. I hope he gets the equity he worked for and counted on all his life. I hope his neighbors DON'T lose their homes. I hope he doesn't see his next-door neighbors living three families in a house together. I hope he doesn't see vacant homes in his neighborhood.

But if my wishes don't come true, I will opt for your wishes, six times over.

[HughMoran]

72. K&R

Thanks for the post.

[Faryn Balyncd]

73. And a govt bailout facilitates REAL ESTATE INFLATION & rewards PREDATORY FINANCIAL INSTITUTIONS.....

[Stinky The Clown]

94. If there's gunna be abailout, how about we bail out people instead of corporations?

Just for shits and giggles. Just this once.

Whuddaya think?

[KG]

74. steal a little, they'll call you a thief, steal a lot and they'll make you a king...

[blondeatlast]

75. What Stinky said. nt

[bring_em_home_bush]

78. k&r

Really great post. There was a deliberate failure on the part of the responsible regulatory agencies -- the FTC? -- to put a brake on the PMFs. Really, for all intents and purposes, most of the government has been captured by the PMFs.

[sendero]

83. Yeah...

.... let's pass a law against selling something that is a bad deal. Half of our economic activity would be over in an instant. No more TV specials. No more casinos. No more sporting events.

Perhaps you didn't read about the study that found that the majority of these loans did not go to poor people at all, but solidly middle class people buying not inexpensive houses.

I agree the loan sharks are reprehensible. But more than a few of the borrowers are no better, gambling with other peoples money, they lost and now we ALL lose.

You'll forgive me if I don't choose sides on this, there are no good guys in this scenario.

[riglerej]

164. wrong, the 'good guys' are...

...those of us who weren't greedy, but just wanted a place to call our own.

I don't see my house as an investment in anything but my education in safe power tool usage, which is why I bought something within my means (yea sweat equity!). I *would* like it to hold its value though, maybe even appreciate due to my home improvements, but it sure as hell shouldn't lose a fourth of its value three years after closing because a few less handy neighbors might have been conned into buying/refinancing beyond their own means. See post 67 in this thread for some financial logic that goes far to explain why government intervention (on the side of buyers, not lenders) is warranted if 'simple human decency' is not a good enough reason for ya.

(BTW, I'd love to read 'the study' you mentioned, but did not cite; any references?)

[trashcanistanista]

89. Thank you for posting this.

K&R

[Doremus]

93. K&R

We have an old fixed-rate mortgage ourselves so have no horse in the race either.

Your post has eloquently and succinctly summed up my feelings about this.

Thank you.

[leftist_not_liberal]

99. In Australia

a person facing foreclosure sees his home go up for auction on the courthouse steps.

So what's different?

The bidders do not know the amount owed on the house.

Any monies obtained via the sale over and above mortgage value go by law to the person foreclosed upon.

I just wanted to mention what things are like outside the belly of the beast where some decency and fairness still remain despite the cancer of global capitalism.

[rockybelt]

103. Supposedly

everybody that had a loan from Ameriquest is included in a class action suit against this predatory lender. Just a word up to anyone who might be involved.

[Mutineer]

104. So I made my loan payments and what's my reward

for being fiscally responsible? Nothing. Nada. So what does the guy down the street or in the next block who was fiscally irresponsible get? Forgiveness. And tell me how this is fair exactly? BS on the OP's comment that everyone who got themselves in to trouble was taken advantage of. I KNOW people who knew damn well that their ARM's were going to raise up to the point they couldn't afford them but they did them anyway, thinking they'd be able to renegotiate their rates or sell before then. It didn't happen. They were using the loan company's money and hoping to take advantage of them. They gambled. They lost. Oh wait, they don't lose because someone is going to come along and reward them for their efforts. And who pays? You and I do. And this is "helping" people how exactly? They get to keep houses they couldn't afford to begin with? How about we enact laws where if you can't qualify for a conventional mortgage you don't get to take out one of these loans? How about doing away with these predatory lenders and the "creative financing"?

[rockybelt]

107. No

I wasn't trying to insinuate anything like that. It is only a way for some people to possibly get some measure back from the predators. Liken it to taking a bite out of the wolf's lip as he crunches you between his jaws. It is at least something. Also, keep in mind that the vast majority of the people effected were only trying to protect themselves and their families and do the honorable thing by keeping their mortgage payments up to date and were desperate to do this. Thus, the term "predatory lending". They did not lend to people that had stellar credit records and were making lots of money or had a mortgage that had a 50% payback. They fed upon people who were desperate to do the right thing.
A lot of these loans came about because the mortgage holder had some bad luck. They may have been laid off from, let's say the dot coms, or they may have had an illness or any number of things may have happened to them Maybe a relative had to move in or sickness, who knows?

The point is that they were trying to retain their dignity and pride, bolstered with optimism that things would get better, and were taken advantage of. They were told that there is no problem, we will work with you and we will help you. They were told that all of their other debts would be paid and their monthly payments would be lower.
What they were not told is that there were hidden interest costs, the lenders did not check out and verify any debt amounts that were listed by the borrowers nor did they care if you could not make the payments.

People get desperate and they want to maintain their pride that they are doing the best they can. They will do anything to keep from "being a failure". These are people that have worked hard all their lives only to see the American dream being taken from them.

So for you to sit there on your pedestal and tell me that this is bull shit is way beyond my tolerance. You have no soul. You have no conscience. You are most likely a republican.

[lonestarnot]

114. You prefer instead to devalue your own property? Oh I see.

[Gormy Cuss]

106. Agreed.

See this link.
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=2391526&mesg_id=2391803

[On the Road]

109. Negotiating a Fixed Rate

is actually not too far off from what's being proposed. Whatever the period the freeze is in effect, it gives legitimate borrowers (ie, those that afford their payments at a reasonable fixed rate) plenty of leeway to refinance for a market rate.

If a few borrowers took out bad loans and can't pay, it may be their fault. If 1,800,000 borrowers do it, it's a structural problem with the lenders. What a lot of people don't realize is that people were talked into these loans by verbal assurances that since this loan was so easy, they would be able to refinance before the teaser rate expired. This did not turn out to be true, and the lenders just shrugged and foreclosed.

[mzmolly]

112. The frikken MOB charges less for loans.

It's legalized loan sharking is what it is.

Great post H2S! :toast:

[Danger Mouse]

115. The mob only breaks your legs.

The banks break your spirit.

[mzmolly]

116. Indeed, and that of your children.

I can't imagine losing a home, and I hope I don't find out what that's like - ever.

[Danger Mouse]

120. But hey, that's perfectly fine to many duer's...

and they had it coming, besides!

[NanceGreggs]

113. Amen!

:applause:

[HowHasItComeToThis]

119. REPUBLICANS ALL THE WAY THROUGH

:puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke:

[Bozita]

123. Best.piece.of.the.day.!.

[Indi Guy]

130. My Girlfriend's Sister - now Defaulting on a Loan That Should Never Have Been Approved!...

Whoever approved the loan should have known that the person who applied had no chance whatsoever of being able to meet its terms.

Foreclosure was premeditated.

[Oerdin]

131. So true

This thread deserves a bump so more people can read the truths in it.

[sss1977]

132. Mother fucking HEAR HEAR to that!

I agree 100%! Excellent post!

[ingac70]

133. Sorry, I refuse to call folks who signed ARMs victims...

While I think Congress should even go as far as outlawing ARMs to protect gullible consumers, the terms of the mortgages were right there in black and white for folks to read, and now they are acting like they've been blindsided.

Because of this ignorance on the part of the lenders and the borrowers, folks who did their homework and played by the rules and being punished with falling home values, loads of them now stuck in homes they can't sell. My 80 year old Grandmother, who owns her home outright and needs to sell her home to live off the money is currently suffering from this mess (house on market almost TWO YEARS). Those folks are the real victims.

[Phoebe Loosinhouse]

136. Your grandmother should get a reverse mortgage.

She sounds like EXACTLY the sort of person that program was designed to help. The original reverse mortgages had some shady "equity sharing" bs written into them, but the new versions are federally underwritten and do exactly what they're supposed to do - free up equity as money for living. Your grandmother's estate will have to pay back the money taken out after her death or if she moves out, but the rest will still go into her estate. This program is a godsend for elderly with little bucks but lots of equity.

[troubleinwinter]

163. YES YES YES!

My father does not need a reverse mortgage at this time. But I had him look into it so that he knows that he has that option, should he ever want or need it. It is a good program.

I encouraged my mother-in-law to look into it, and it SAVED her home AND she now has monthly income to pay her bills. Her heirs won't inhertit her home, but SHE remains safely and comfortably in her own home, can meet her bills and need never, ever worry.

Yes there are good and less good programs, but regulations are better now, as banks must be approved to offer these loans so that they cannot be bogus or predatory. I know my dad had to take a little one-day course to understand the options... such as lump-sum vs. monthly payouts.

Some people fear they could lose their homes through reverse mortgage, but it is NOT true. Even if you use up/exceed your equity by outliving it, they STILL pay you until you die or move out.

[ingac70]

166. thanks for the info, but...

my grandma is alone, as my grandfather died in Oct., she's kinda far from the family, in a 4600 sq ft house that was purchased in the '80's. We need her closer, in a smaller, cheaper to run home!. She won't be able to pay taxes, utilities and such on that house and have the cash to float her the rest of her days. Her savings will probably last only two more years keeping her in that home.

She can't drive due to a stroke a couple years back, all it affected was her speech, and she's about 85% what she used to be, and can do for herself. Driving 50 miles for the family members to be with her at the very least every other day is getting expensive for us.

[glowing]

137. The only thing ARMs are good for are people who turn over homes..

and I don't think that is the worst thing either. If you have an old dilapidated home, and someone comes in a improves it, and improves the whole neighborhood and then sells it to someone who is looking for a more finished product, then an ARM is something you'd want instead of a standard mortgage. Most prospecting has been nullified though here because it caused the final homeowner a much higher rate than they should have. Anyone who looks for a longer term place, really needs to be able to afford the fixed long term option, otherwise, you get this.

Some loans, though, were gotten at a low rate. Then that lender sold to another bank and that bank raised the rates... I'm not sure how this happened, other than it was in the fine print. This scam is even more disgusting than the ARMs.

[aikoaiko]

143. Not true.

ARMs were useful for people wanted to spend money on home improvements and furniture for their new house for the first 3 -5 years, and then were ready to pay in a fixed, higher rate when the ARM adjusted.

[Yupster]

150. Or arms might make sense

for wealthy investors who have millions in investments. They can pay the very low rate for two years and then pay the loan off before it bumps up to a higher rate.

Not a particularly large group of people, but a savvy group.

[NuttyFluffers]

138. correct. people have expectations of regulation and good faith in many businesses.

but unless you've been deeply political and observant the past few years, you would not have picked up that institution after institution has changed into corrupt, deregulated, nebulous scams essentially. the blame being thrown around here is like blaming victims for their expectations when they bought toys and pet food at the supermarket. we expect safeguards to be in place, not some sick Libertarian (big L) anarchy of 'caveat emptor'.

it'd be the same as walking into the legal neighborhood casino you've seen growing up, and by the time you come of age, enter, and start playing a bit find out that each hand is double-or-nothing, the deck is completely stacked, and the house has no legal responsibility for all this unspoken bait 'n switch. remember people, credit card policies have been changing nearly quarterly, new strangely termed mortgages were being whipped out of lenders asses never seen in the market before, and easily over half the media material available was touting this as on the up-and-up and the salvation of our economy. people were led in blind and being conned, and a pressured one at that.

to get some sort of jollies or self-righteousness out of this mess is not very healthy. and such spite is exactly what these thugs are waiting for because this is the economic crisis they need for the next phase for disaster capitalism. for people claiming they are so smart for not getting suckered into this mess they sure are getting led blind into "Phase 2" of this fiasco. these self-righteous DUers need to stop falling for the divide and conquer bullshit; unite with the real vicitms and shaft the real orchestrators of this nightmare -- before it gets worse and sucks you in beyond anything your measely individual will can withstand!

[Lance_Boyle]

140. Being unaware/incurious enough to get suckered by the PMFs

is not a crime, either, but it will damn sure cost you a lot of money. I'm not at all certain that the foolishness that incurred that cost should be rewarded with a bailout. Adults who sign legal contracts should be held to those contracts. The proper remedies when they can't are foreclosure or bankruptcy. It is a tough lesson for those who got suckered. But the rest of society should not have to suffer their consequences for them.

[DFW]

141. Two sides to a question plus a third?

I know I sure as hell wouldn't have the time to research the
necessary stuff to check out whether I was making a sound
decision or a risky one. I do know that I NEVER trust some
bank tie telling me what a great investment plan he has, or
trying to sell me a loan. But if I were in a situation where
I had no expertise or time, I might well fall victim to being
sold a loan I could maybe (or for sure) not repay. There are
definitely some evil lenders out there knowing full well that
they are selling loans to people who will end up defaulting
and getting kicked out of their houses, which will then be sold
for far less.

And THAT is what got me to thinking. Who profits from THAT? A bank
loses money if its loans become "non-producing." UNLESS they have
a real estate division along with their lending division. I know
some banks do, maybe even many of them (that I don't know). If a
lender is connected with a real estate brokerage, THEN this whole
scam suddenly makes a LOT of sense. The lender makes his money on the
loan as long as payments are made, and then his real estate division
gets a shot at the same house on the cheap when the occupant is forced
to sell and move out. They then buy the house back at auction at a
reasonable market price, and can sell it again at a profit, giving a loan
to the buyer, and here we go again.

A few thousand of these incidences, widely scattered around the country,
would not constitute a business plan on by themselves, but 1.8 million?
That's like 1% of the population of the whole country if you figure
an average of 2 people per house, and that's probably low. It seems far
fetched enough to be worthy of doubt as a conspiracy theory, that's for
sure. But then, so did starting an invasion of a country halfway around the
world for the enrichment of a few Republican-friendly mass contractors.

I guess since the Iraq invasion and the sinister (and cynical) reason for
its having taken place, I'm a lot more susceptible to evil financial
conspiracies than I was before. Paul Erdman is alive and well, I guess.

[frogcycle]

142. I agree with your characterization of the predatory lenders

Yes, some of the "victims" pretty much deserved their comeuppance, but a relatively small portion. Buyer beware is all well and good, but the scam artists, whether at he county fair convincing you that with just one more try you can win the boombox, or at an elderly persons door telling them their driveway needs "resurfacing" (with cheap black paint) need to be controlled - dare I say "regulated?"

Ultimately this is/was the predictable outcome of the deregulation campaign mounted in the Reagan scam - er - presidency.

Sales con artists, whether selling snake oil, used cars with sawdust in the crankcase to (temporarily) stop the leaks, or "mortgage brokers" are skilled at picking people's pockets. That is how they make a living. Watch the movie Glengarry Glen Ross for a good overview of what makes them tick. Vultures, hyenas, whatever you want to call them, they prey on the ignorant, naive, ill-informed... the vulnerable.

It comes down to Thom Hartman's definition of the difference between Democrats and Republicans. Paraphrasing, Thom says Democrats believe government is a means whereby society should look out for the common good - protect and support the less fortunate, support enabling programs like education, healthcare, etc. Republicans believe government is a means whereby business can control the masses and further its own interests.

So of course the republicans wanted to deregulate business, and of course they are more interested in bailing out the businesses that get bit by taking on absurd risk writing junk loans, but don't care about the individuals who get chewed up in the process.

When my Dad was about 80, shortly after my mother died, a mortgage broker convinced him he really should refinance - he got the idea he was making a responsible financial decision (something he never was very good at) paying a couple of thousand in closing costs to save like a half percent on a mortgage there was no way he'd still have after a year or so. It ended up almost a wash - he probably only lost about $11-1200 - but he could have used that cash a couple of years later for medical bills. And a car dealer convinced him his 4-year-old car was about to become a maintenance nightmare (oh-so-old, and all those miles! - probably 50k) and he bought a new one - identical car, ten grand or so pissed away. I digress, but everyone should take this as a word of caution - your elderly parents need your help BEFORE they are physically incapacitated - they are prime targets!

[catrose]

144. Can I bring it back to education?

The first time I ever heard of an ARM mortgage, I was horrified. The friend who was getting one said, "Oh, I'll sell the house before the rate goes up."
But what if you don't?
WHAT IF YOU CAN'T?
The idea of setting my name to repay something I couldn't, given the worst case scenario, was a risk I wouldn't take.
Why did I learn that but other people didn't?
Every time my husband and I have looked to buy a house, the mortgage people look at our debt load, yada, and tell us what monthly payment we can afford--how much house we can buy. And I always say, No, we can't. We don't have a car payment now, but sometime during our house ownership we will, and there needs to be space in the budget to accomodate the car payment. Repair bills. Sick cats. Weddings. Funerals.
My budget never agreed with theirs--and I always believed mine. Even then, it's not always been easy to get the mortgage payment together.

People need more financial education than they get from someone whose best interests are served by talking them in to spending more.

[johnaries]

149. There's plenty of education - the OTHER way!

Lot's of "get rich quick" "help" books and seminars on buying houses with a balloon payment, then flip it before the interest goes up.

And they have plenty of success stories to prove it!

But they never show all the people who went bankrupt and were foreclosed.......

[catrose]

156. Absolutely! eom

[blondeatlast]

175. Personal economics should be a required HS course, but you can bet that

the financial industry will see that it never happens.

Absolutely correct. Welcome to DU, catrose! :toast:

[IronLionZion]

180. Exactly, people who know this stuff take advantage of people who don't

but never forget that this is America, and most of the people affected simply do not know any better.

My parents taught me to carefully consider these types of decisions and take salt with any advice given by someone who wants my money. Not everyone has had that luxury.

[gtar100]

146. Yes!!! I'm not alone!!

I am a renter and have torn up every mortgage and credit card offer that came my way. But I have never, ever felt that it was the consumers that are at fault in this housing crisis. My god! it's the basic necessity of housing that these PMF's are peddling. And they work in nice suits, work out of expensive offices, and they have nice smiles and are very kind and generous. "Buyer beware", yes. But the other side of the coin is "Seller don't deceive". Ignoring either side leads to bad consequences. Our problem as a society is that when it comes to business practices, we are no better than cannibals.

PMF - That says it all. I hope it sticks.

[Dorian Gray]

148. I like your take on this Hubs...

Though I'm of the belief that the borrowers need to look out for their own best interests, the predatory mortgage companies really did push these ARMs and other mortgage tools that were dangerous to people who might not know better. I've always been of the belief that if it sounds too good to be true? It is. But, people do put their faith into their financial consultants, and people have pushed these things for years.

I do feel sympathy for people finding the bottom falling out from under them. Hopefully, however, this happening now will make the financial industry really become more honest in giving out mortgages in the future.

[NashVegas]

152. Sorry, H2S, But I Do Think the Victims Are Either Stupid, or Dishonest

Because if they're not stupid, then that would make me a fucking genius for telling the guy who tried to tell me I could afford a condo that was 6 times my salary, 'get lost.'

Speaking as one of the assholes, my opinion is that if the government steps in, then in the long run we're all going to be fucked for a very long time. In every scenario I can think of for relief, the relief is temporary and someone is going to pay for it over the longterm.

Do you remember when a 5 year, 7 year, car loan would have been considered ridiculous? If rates were fixed low on the ARMS, we'll see 45 year, 60 year mortgages become the norm. Who is going to pay for Billy "I figured I'd be making more money when the higher rate kicked in" Jones' or Dickey "I thought it would have sold by now" the real estate mogul's fuck-ups.

In the long run, it will be the lenders who ultimately benefit. We can help a few people now and fuck everyone for the future, or we can offer compassion and help for finding new digs.

[EnviroBat]

153. I almost got suckered too.

My credit wasn't the best but I was working, and had achieved a good income level. I saw this ad in a magazine about getting a mortgage for no money down even with shaky credit. What these vampires were selling was something called an 80/20 loan at 8.5%for 40 years. Well, it didn't sound too good but at the time I thought that was going to be my only option. Thank God for a honest real estate lady who put me straight. When we started really looking into the terms I was furious and I told the lender that he could personally shove the offer up his ass. I waited exactly 1 year, and told myself that I would purchase a home at summers end. I contacted my bank and was set up with an FHA at a fixed rate for 30 yrs. I bought well below what I was approved for, and my credit is getting better by the month.

I guess that I can say that I understand the desire for a home, and at one time I was willing to do something foolish to get out of the apartment rip-off. When it comes down to it, there are the vampires who feed on the desperation of people wanting to come home to something, anything night after night that they can feel like is theirs. I despise these shysters bastards, and the credit card companies too. They should all be dragged behind a truck. What the hell is wrong with being straight with a borrower? Why not sit them down and say, "Look, based on your NET income, and credit, we don't feel that now is a good time for you to purchase a home." Maybe they could even help offer to "guide" them in to the best, least risky situation possible. But no. wheres' the greed in that? Where's the profit right? Fuck them. I hope the feds come back and cap the ARMS, and force a renegotiation with realistic terms. But look, if you've bought "too much house", then your partially to blame as well. Educate yourself in terms of the worst case scenario. It's a simple question really. If my mortgage payment goes from 1900.00 to 2500.00 a month, can I afford that?

[Eurobabe]

155. K&R, one of your best rants H2S

[knitter4democracy]

160. A couple of thoughts from a young homeowner with an ARM

First of all, you're totally right. There are many waiting to take advantage of people who don't know any better, from the realtor to the bank to the title company and on and on.

Secondly, I think there's a lot at play here. We decided to get a house through a program with Hubby's residency program, and I loved that house. We went small, only what we could afford, and the bank screwed up our escrow account (which was required for the program, even though I fought it--the bastards) and upped our payments every year. It got harder and harder to make ends meet, all because of their stupid escrow crap.

When Hubby got an attending job half an hour away, we weren't going to move for at least a couple of years in order to dig out and get the house ready to sell. His hours got longer, the commute was horrible (very dangerous stretch of highway with too many close calls), and we both got tired of it.

We sat down, figured up how much house we could afford, what we were looking for, and what we thought our house would sell for. I went through four realtors until I found an honest one that listened to me (I got really sick of being shown "doctor's houses" in the "right" neighborhoods when I was very clear we couldn't afford that). Our bank sent the wrong paperwork at closing (all ARM, not the 80/20 we'd agreed on), and I sat there and refused to sign anything or budge until they faxed over the right papers. I was able to read all that boilerplate and understand that the terms were wrong--when even the realtor missed it, the title lady missed it, and Hubby (the doctor) was about to sign it.

Most people think they need a bigger house than they really need. I watch shows with young families saying they "need" a house with at least 2500 sq.ft. That's ridiculous! I had our babies in an 1100 sq.ft. house, and we were fine. Now we're in a 2200 sq.ft. house with a nice deck and yard in an older neighborhood that was underpriced in order to sell quickly. We're not in the "right" neighborhood, but we're in walking distance from the kids' elementary and close to everything. We're working on paying down our credit card debt from residency and moving and being stupid (I'll admit it--I spent too much money), and then we're tackling the ARM and paying that thing off.

[cgrindley]

165. CAVEAT EMPTOR and if my tax dollars go to bail a person out...

I have the right to call them a sponging moron.

And, yes, the banks should also be punished. They should have the be-jesus regulated out of them.

It is possible for both sides to be wrong in this issue.

[Hekate]

184. Your tax dollars go to bail out mega-corporations, or didn't you know that? nt

[Danger Mouse]

191. Coroporations uber alles!

We don't mind being screwed as long as it's by our corporate overlords, we are the American Sheeple! Bah! Bah!

[NMDemDist2]

168. the PMFs *needed* all those mortgages to fund their Hedge Funds

that's where the real crime is

the mortgages are so chopped up no one is sure *who* actually owns the house if it goes into foreclosure (as proven by the Courts in a couple states)

the Hedge Funds were the real rip off, the home buyers were just the pawns in the Hedge Fund Ponzi Scheme

[madrchsod]

179. it was`t only the "little guys or gals and their families" that were conned

there are guys over at the deutsch bank in germany that have some explaining to do. the bank may own nothing but the paper. where i live duetsch bank is second only wells fargo in foreclosures

[Hekate]

182. "Some will rob you with a 6-gun, some with a fountain pen": Pretty Boy Floyd by Woody Guthrie

Thank you kindly, Stinky. It was true in the days of the Great Depression, and it sure as hell is true now.

Hekate


"Pretty Boy Floyd"
....
Then he took to the trees and timber
To live a life of shame;
Every crime in Oklahoma
Was added to his name.

But a many a starving farmer
The same old story told
How the outlaw paid their mortgage
And saved their little homes.

Others tell you 'bout a stranger
That come to beg a meal,
Underneath his napkin
Left a thousand dollar bill.

It was in Oklahoma City,
It was on a Christmas Day,
There was a whole car load of groceries
Come with a note to say:

Well, you say that I'm an outlaw,
You say that I'm a thief.
Here's a Christmas dinner
For the families on relief.

Yes, as through this world I've wandered
I've seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.

And as through your life you travel,
Yes, as through your life you roam,
You won't never see an outlaw
Drive a family from their home.

http://www.fortunecity.com/tinpan/parton/2/pretty.html