"Predatory" lenders...

[westvirginia]

It seems that the democratsic prez candidates, both screaming about subprime lending, have campaign managers who helped foment the "crisis".

[Chavez]

Everyone is balls deep in that mess. Ever see the speech from about '04 where Greenspan was speaking out against fixed-rates and encouraging people to get ARMs?

[Jimmy Neutron]

Yeah, it's all the lender's fault. Frankly, I think people that signed up for homes too expensive for their incomes and the morans that gave them loans deserve each other. They alone fold the responsibility for this mess and yet we're all left holding the bag.

[Ursa Majoris]

The bottom line is that this country runs (or should run) on the principle of caveat emptor for the most part. To me, it is no excuse to say you "didn't understand what you were signing" or you "didn't realize the repayment rate was going to go way up". Do the f'n math, people. And if you're too stupid to do the math or so greedy you ignore it, tough - I cannot for the life of me see why it's necessary to use the tax dollars of the people who were sensible to bail out the stupid, greedy and careless.

[Randall]

Yeah, it's all the lender's fault. Frankly, I think people that signed up for homes too expensive for their incomes and the morans that gave them loans deserve each other. They alone fold the responsibility for this mess and yet we're all left holding the bag.

 

 

That's true but where were the major banks when these loans came in? This isn't just Household Finance and Joe Schmo Finance, it's major players. If you're a loan officer at a credible bank don't you have to say What the...????

 

I don't think any party holds all the responsibility here. There is a lot of blame to go around.

[polksalet]

That's true but where were the major banks when these loans came in? This isn't just Household Finance and Joe Schmo Finance, it's major players. If you're a loan officer at a credible bank don't you have to say What the...????

 

I don't think any party holds all the responsibility here. There is a lot of blame to go around.

 

 

This is not the fault of a political party. This is the fault of moronic lenders and lendees.

[Randall]

This is not the fault of a political party. This is the fault of moronic lenders and lendees.

 

 

I never mentioned any political party. You are assuming things that were never done.

 

You're right it is the fault of lenders and lendees. My point was the better quality lenders should have caught it. I am suprised it affected so many people. If it had been contained to idiots lending and buying it wouldn't be such a big problem.r

idiots

[TheShiznit]

Yeah, it's all the lender's fault. Frankly, I think people that signed up for homes too expensive for their incomes and the morans that gave them loans deserve each other. They alone fold the responsibility for this mess and yet we're all left holding the bag.

 

Can you do Ammortization Calculations? If you can...great...consider yourself in the 4% of Americans that can do these. It is also the responsibility of the lending institution to make sure the clients back end isn't too big for the purchase...as well as making sure the monthly payment isn't outside the bounds of all budgetary reality. Even the lender knew the rate would increase....so the blame is 50-50....at best. Certainly not just on the consumer...consumers go to banks for ADVICE......and they paid a broker for ADVICE....seems lots of them got bad ADVICE. If it were me and muck...we would have been sued individually...and the consumer would have won...but since it is a bank....nothing to see here...move on. This is why I place 75% of this problem on the banks. Now, if it was someone doing speculatory buying...then that person is a much more sophisticated than a normal home buying american...and that person should be held to be on par with banks in purchase.

Edited April 6, 2008 by TheShiznit

[Ursa Majoris]

Can you do Ammortization Calculations? If you can...great...consider yourself in the 4% of Americans that can do these. It is also the responsibility of the lending institution to make sure the clients back end isn't too big for the purchase...as well as making sure the monthly payment isn't outside the bounds of all budgetary reality. Even the lender knew the rate would increase....so the blame is 50-50....at best. Certainly not just on the consumer...consumers go to banks for ADVICE......and they paid a broker for ADVICE....seems lots of them got bad ADVICE. If it were me and muck...we would have been sued individually...and the consumer would have won...but since it is a bank....nothing to see here...move on. This is why I place 75% of this problem on the banks. Now, if it was someone doing speculatory buying...then that person is a much more sophisticated than a normal home buying american...and that person should be held to be on par with banks in purchase.

There are amortization calculators available on the Internet and you go to banks and brokers for advice, not guarantees - you still have to take responsibility simply because it's your money.

 

While I completely agree about the loosening of the rules and poor underwriting oversight being partially to blame, I still hold that stupidity, greed and carelessness are largely responsible for this problem.

[I Like Soup]

There are amortization calculators available on the Internet and you go to banks and brokers for advice, not guarantees - you still have to take responsibility simply because it's your money.

 

While I completely agree about the loosening of the rules and poor underwriting oversight being partially to blame, I still hold that stupidity, greed and carelessness are largely responsible for this problem.

Good info here. If you are lucky enough to be in a situation that allows you to consider purchasing a home, you owe it to yourself to educate yourself accordingly, especially with the amount of money involved. I knew nothing of real estate and mortgage loans, etc., but I did the research to make myself a fairly competent consumer, and I'll end up paying for everyone else's laziness, greed, etc.

[Chavez]

While I completely agree about the loosening of the rules and poor underwriting oversight being partially to blame, I still hold that stupidity, greed and carelessness are largely responsible for this problem.

So....you ARE blaming the banks?

[Ursa Majoris]

So....you ARE blaming the banks?

Partially, like I said. Greed, stupidity and laziness will always be with us but that's no reason for us (Mr and Mrs Did-Our-Due-Diligence) to have to underwrite either mindless buyers or sellers with tax dollars that are needed in a hundred better causes. Bear Stearns should have been allowed to collapse or have it's assets stripped rather than get propped up. Who learns from that?

[I Like Soup]

Partially, like I said. Greed, stupidity and laziness will always be with us but that's no reason for us (Mr and Mrs Did-Our-Due-Diligence) to have to underwrite either mindless buyers or sellers with tax dollars that are needed in a hundred better causes. Bear Stearns should have been allowed to collapse or have it's assets stripped rather than get propped up. Who learns from that?

Agree with this also. It is not the government's job to prop up private business. Our tax dollars were not meant for that. Furthermore, those of us not needing help, do we get some kind of bonus for not being the problem while everyone gets theirs?

[Rebellab]

Partially, like I said. Greed, stupidity and laziness will always be with us but that's no reason for us (Mr and Mrs Did-Our-Due-Diligence) to have to underwrite either mindless buyers or sellers with tax dollars that are needed in a hundred better causes. Bear Stearns should have been allowed to collapse or have it's assets stripped rather than get propped up. Who learns from that?

 

 

So if the 5th largest bank in the US failed, there wouldn't be a ripple effect throughout the US economy or even the world. The Fed bailed out Bear and opened the discount window because it had to. If Bear fails, each person with money in a retirement account, bank account, any thing monetary other than cold hard cash would have felt it. Globally things would have happened as well, not just in the US.

[Ursa Majoris]

So if the 5th largest bank in the US failed, there wouldn't be a ripple effect throughout the US economy or even the world. The Fed bailed out Bear and opened the discount window because it had to. If Bear fails, each person with money in a retirement account, bank account, any thing monetary other than cold hard cash would have felt it. Globally things would have happened as well, not just in the US.

Ripples eventually disappear. Short term, maybe bailing a very badly run investment (you forgot that "investment") bank is good for the economy but in the longer term I don't believe it is. It sets a precedent that Wall Street will notice - however crappily you run your business, Joe Taxpayer will come along and bail you out.

 

And what about the bleating shareholders who had the Morgan bid raised from $2 to $10? Just what publicly funded bribe was given to Morgan to do that? And why weren't the shareholders paying attention while Bear was investing in poisonous instruments? Why should those shareholders now complain and get more reward for their foolishness when in truth they should have learned a much harsher lesson?

[Dr. Sacrebleu]

-IT IS QUASI IMPOSSIBLE TO FUNCTION IN TODAY'S SOCIETY WITHOUT A CREDIT CARD

-IT IS QUASI IMPOSSIBLE TO GET A CREDIT CARD WHEN STARTING OUT IN LIFE THAT DOES NOT CARRY THE TERMS 'WE ARE FREE TO CHANGE YOUR RATE FOR ANY REASON"

[Bill Swerski]

-IT IS QUASI IMPOSSIBLE TO FUNCTION IN TODAY'S SOCIETY WITHOUT A CREDIT CARD

-IT IS QUASI IMPOSSIBLE TO GET A CREDIT CARD WHEN STARTING OUT IN LIFE THAT DOES NOT CARRY THE TERMS 'WE ARE FREE TO CHANGE YOUR RATE FOR ANY REASON"

 

Ever heard of a debit card?

[Ursa Majoris]

-IT IS QUASI IMPOSSIBLE TO FUNCTION IN TODAY'S SOCIETY WITHOUT A CREDIT CARD

-IT IS QUASI IMPOSSIBLE TO GET A CREDIT CARD WHEN STARTING OUT IN LIFE THAT DOES NOT CARRY THE TERMS 'WE ARE FREE TO CHANGE YOUR RATE FOR ANY REASON"

Not quite sure what point you're trying to make here, Sac. Having a credit card doesn't mean you have to spend it. The Ts and Cs are given to you when you sign up - you don't have to sign up.

 

Oh.....your Caps Lock key is broken.

[Randall]

Not quite sure what point you're trying to make here, Sac. Having a credit card doesn't mean you have to spend it. The Ts and Cs are given to you when you sign up - you don't have to sign up.

 

Oh.....your Caps Lock key is broken.

 

 

True and many people use MC and Visa debit cards that withdraw directly from a bank acct(check card). They are free at most banks I know of.

[I Like Soup]

So if the 5th largest bank in the US failed, there wouldn't be a ripple effect throughout the US economy or even the world. The Fed bailed out Bear and opened the discount window because it had to. If Bear fails, each person with money in a retirement account, bank account, any thing monetary other than cold hard cash would have felt it. Globally things would have happened as well, not just in the US.

Of course there would be a ripple effect. But that is short term, like Ursa mentioned. The only way to stop this type of activity is to let people/businesses learn from their mistakes and they will be a little more diligent in their dealings afterward. People are so f'n shortsighted...what if we don't help out now?...people will be inconvenienced...oh no, anything but that. :oldrolleyes:

[Chavez]

Bear Stearns should have been allowed to collapse or have it's assets stripped rather than get propped up. Who learns from that?

I'd be willing to bet that large banking corporations learned that if they f*ck up Uncle Sam will bail them out.

 

Of course, they'd already learned that a few times before.

[Randall]

I'd be willing to bet that large banking corporations learned that if they f*ck up Uncle Sam will bail them out.

 

Of course, they'd already learned that a few times before.

 

 

No kidding. Ask Neil Bush about the Savings and Loan bailout.

[Chavez]

Good info here. If you are lucky enough to be in a situation that allows you to consider purchasing a home, you owe it to yourself to educate yourself accordingly, especially with the amount of money involved. I knew nothing of real estate and mortgage loans, etc., but I did the research to make myself a fairly competent consumer, and I'll end up paying for everyone else's laziness, greed, etc.

 

I agree we should listen to what the experts say...

 

"....recent research within the Federal Reserve suggests that many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade, though this would not have been the case, of course, had interest rates trended sharply upward.

 

"American homeowners clearly like the certainty of fixed mortgage payments. This preference is in striking contrast to the situation in some other countries, where adjustable-rate mortgages are far more common and where efforts to introduce American-type fixed-rate mortgages generally have not been successful. Fixed-rate mortgages seem unduly expensive to households in other countries. One possible reason is that these mortgages effectively charge homeowners high fees for protection against rising interest rates and for the right to refinance.

 

"American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage. To the degree that households are driven by fears of payment shocks but are willing to manage their own interest-rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home."

 

- Alan Greenspan, Feb 23, 2004.

 

[I Like Soup]

I agree we should listen to what the experts say...

- Alan Greenspan, Feb 23, 2004.

 

When I locked in my interest rate in February of 2003, the rate was the lowest it had been in 40 years...seemed like a no brainer to me. Why play the ARM game? The interest rates pretty much had nowhere to go but up. Even with rates hovering around 6% right now, you'd be an idiot not to take advantage of fixing your rate. You play the shell game long enough, it will bite you.

 

And, I think Greenspan was looking in hindsight as well as ARM effects of other countries.

[Chavez]

My point was essentially that if someone wants to educate themselves, are they going to regard the chairman of the fed as pretty savvy in economic matters?