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Time to take out a really BIG mortgage

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JamesWilson said:
alana said:
From: Get out of jail free

<div class="ubbcode-block"><div class="ubbcode-header">Quote:]"...it probably makes more sense (and dollars) for the lender to simply write down the value of the mortgage to what the home is actually worth on the market. Writing down the principal would allow the borrower to refinance into an affordable mortgage in many cases.
Click to expand...
Click to expand...

Well, I'm all in favor of an over-eager and/or greedy lender eating his loss.

The wonderfulness of capitalism supposes that big profits are compensation for risk taking and big losses, if and when they happen. The impecunious buyers aren't the only culprits in this mess, imho. [/QUOTE]

Ok, I'll try to say this without getting kicked out of here. Only in childrens games and bad dice roll in "Monopoly" do you EVER get a "DO OVER". I have found nothing in life and certainly not in money matters where someone can say " Oh, wait. I didn't mean for that to happen. I knew there was a good chance it could happen, but it's not fair that it happened to me so I get a DO OVER. Since I can't get past my greediness and accept what has happened to me, I expect SOMEONE to do something about it. I mean it's not like it's MY FAULT!!!" I think these stoooooopid people SHOULD have a hit on there credit(I mean it's not like there very responsible with it to begin with), have to move out of their McMansion and live where they can AFFORD it, and have the banks and lending companies have to deal with the foreclosures. They were MORE than happy to take their money and risk. I'll bet the bank president made a small fortune on the new loans that were written during all of this. THEY should have to clean this mess up, not ME!!!!!! :wall:
 
Great comments being made! I read many articles how the Government and a few of the big-time lenders have plans of bailing people out before they go into foreclosure. Before a bank starts foreclosure procedings, the procedings usually don't start until 90+/120 days late on a mortgage. Read FHA guidelines and you can't be late on a mortgage to qualify for a bailout (or an FHA loan). Go figure. It all sounds noble, but I sure don't see it happening. And not that it should! I just get mad reading a lot of baloney propaganda.

The big lenders have pointed their fingers at everyone but themselves for this mess. They set the guidelines and programs for Stated/Stated loans and made a fortune on up front lender fees, then selling the loans to their investors. Now they distance themselves from the mess they made and blame mortgage brokers, realtors, appraisers and anyone else they can find. The Feds are after some of them, but I have no confidence justice will be made to the guys with fat wallets.
 
My economics professor friend believes that lenders are NOT to blame for the vast majority of it...
(so far as percentage of defaults go)

That they were pressured (actually threatened) into making these loans by powerful politicians.
(Who shall remain nameless on account of where I'm posting this)

The FHA & HUD backed a bunch of zero down payment loans and backed them 100%

These should not be confused with the sub prime problem that happened at the same time.
(But are....)
 
WhatsThatNoise said:
My economics professor friend believes that lenders are NOT to blame for the vast majority of it...

That they were pressured (actually threatened) into making these loans by powerful politicians.
(Who shall remain nameless on account of where I'm posting this)

https://realtytimes.com/rtpages/20020529_fhadefault.htm
Click to expand...

Now that's interesting. But the article doesn't say anything about politicians pressuring lenders. It does say, however, that default rates are higher in low-income neighbors than higher-income neighborhood. Not surprising.

Can you give a reference to actual "powerful politician" pressure?

Thanks.
Tom
PS - that "Realty Times" website sure has a decidedly "protect the realtor" slant.
 
WhatsThatNoise said:
Try this....

It's not too inflammatory...

Basically google sub prime, HUD & FHA...

https://www.homelandstupidity.us/2007/04/16/oh-alphonso-fha-modern-is-so-subprime/

And this is an interesting one...

https://www.homelandstupidity.us/2006/12/11/rocky-mountain-mortgage-fraud-fever/
Click to expand...

I notice you removed your original reference. Still can't find anything in that "homelandstupidity.us" source about powerful politicians forcing lenders to make loans. Note how "homelandstupidity" describes itself on its homepage:

<span style="font-style: italic">“Entertaining and insightful” — Jim Harper, director of information policy studies, Cato Institute

“Always irreverent, never irrelevant” — W. David Stephenson, homeland security consultant

“Patently ridiculous” — Markos Moulitsas, Democratic pundit</span>

Did that economics prof give you any real evidence of powerful politicians?

Tom
 
NutmegCT said:
Did that economics prof give you any real evidence of powerful politicians?
Click to expand...

He said that the banking industry was the most highly regulated industry in the US...
And that some people in power threatened to make their lives miserable unless they started putting more people in houses.
Presumably so that they could boast about it & get reelected.

And this was in reference to the sub prime (non HUD) debacle.
Where the banks & investors lost money....Not the FHA.

And no...The Fed is not going to bail out the banks on that one.
But they have to bail out HUD
So they are making it look like it is all the same problem to take the heat off.

I'll be talking to him again soon...
(he does my taxes)
And I'll try to pay better attention to what he is saying.
(although...I think I have gave you a general idea)
 
OK - thanks. Unfortunately there are some profs who talk off the top of their head in generalities, with no real evidence to back up what they're specifically saying. My "radar" beeps whenever I see fingers pointing toward "the taxpayers", "the politicians", "the fed", "government workers", "bailouts", "unions", "foreigners", etc.

Blaming "general groups" for problems is way too easy, and happens way too much. It's a cop-out. I'd be interested in what your prof says in detail. PM if you'd like.

Thanks.
Tom
PS - the Elva is *cool*!
 
<div class="ubbcode-block"><div class="ubbcode-header">Quote:]Some economists claim that government policy actually encouraged the development of the subprime debacle through legislation like the CRA, which they say forces banks to lend to otherwise uncreditworthy consumers[/QUOTE]

https://en.wikipedia.org/wiki/Community_Reinvestment_Act

There were a bunch of people pushing CRA reforms that I believe he was blaming.

I'll ask him for the smoking gun next time I see him.
But his line of argument does suggest another way of looking at the cause of the problem.

BTW...Thanks....The Elva is looking a bit "disassembled" at the moment.
 
WhatsThatNoise said:
<div class="ubbcode-block"><div class="ubbcode-header">Quote:]Some economists claim that government policy actually encouraged the development of the subprime debacle through legislation like the CRA, which they say forces banks to lend to otherwise uncreditworthy consumers
Click to expand...

https://en.wikipedia.org/wiki/Community_Reinvestment_Act [/QUOTE]

OK - we're getting there. But your quotation is a criticism from the writer of the Wikipedia article - again, no evidence at all. It's just his/her own personal thoughts. By the way, the CRA (Community Reinvestment Act) became federal law in 1977.

Thanks.
Tom
 
Here is another reference...
(I'm still researching)

<div class="ubbcode-block"><div class="ubbcode-header">Quote:] Banks have been placed in a Catch 22 situation by the CRA: If they comply, they know they will have to suffer from more loan defaults. If they don’t comply, they face financial penalties and, worse yet, their business plans for mergers, branch expansions, etc. can be blocked by CRA protesters, which can cost a large corporation like Bank of America billions of dollars. Like most businesses, they have largely buckled under and have surrendered to their bureaucratic masters.

Consequently, banks in every community in America have been forced to hold a portfolio of bad loans, euphemistically referred to as "subprime" loans. In order to compensate themselves for the added risk of extending these loans, many lenders have increased the lending fees associated with mortgage loans. This is simply an indirect way of doing what banks always do – and what they must do to remain solvent: charging effectively higher rates of interest on riskier loans. [/QUOTE]

https://www.lewrockwell.com/dilorenzo/dilorenzo125.html
 
Truce! I have to take a *big* grain of salt when I read anything from a website which describes its editor thus:

<span style="font-style: italic">Lew Rockwell, former congressional chief of staff to Ron Paul and founder and president of the Ludwig von Mises Institute, is an opponent of the central state, its wars and its socialism.

A student and colleague of Murray N. Rothbard, he is the editor of six books, most recently The Irrepressible Rothbard and Speaking of Liberty. For more on Rockwell, see his interview in Spintech Magazine. Also read his interview in the Slovakian magazine, OS as well as his interview in FrontPageMag. Here is a (slightly flawed) transcription of his interview with Bill Moyers. Here's the video. And here is his interview with the Polish website Liberalis.</span>

Spintech Magazine, the Slovakian magazine OS, the Polish website Libralis, and FrontPageMag? Those are his recent "credits"?

I'm sorry - I may be totally whacked - but that's not my thing.

Truce!

Tom
 
Yep...I know he's a whack job but....Ain't he fun?
 
yep - he's a whack job.

but at least he's not a bio-chem major ...

<runs and hides>

:jester:

T.
 
Truce w/ a Rumphie? :rolleyes:

Ceasefire maybe....
grin.gif
 
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