So now that everyone has health care on everyone else’s dime, they will now get help with the mortgage they probably never should have purchased.
Ok, now its official.
“Land of the free and home of the brave” can no longer be part of your national anthem.
Sorry.
I agree with you there Orion. Buying votes any way possible. If a trillion dollars wasn’t enough lets pay down the principle of someones loan that they took out. When are we going to start being responsible for our own actions. I am getting really mad about all this socialist crap going on.
I don’t know about you guys but this stuff is really starting to make me lose my mind. My girlfriend is threatening to sit me in the corner for some “Quiet Time.” LOL.
My wife said a spanking, but she knew I would like that too much. I have been trying to find an outlet for my frustration, and weights just are not handling it.
What are your thoughts on running for political office?
[quote]dmaddox wrote:
My wife said a spanking, but she knew I would like that too much. [/quote]
Yeah, we’ve got the same joke going on…hah.
I know how you feel - I’m not quite sure what to do with myself; I’ve been training really hard lately, trying to relax, hoping I’ll be able to sleep at night. Of course, just before going to bed I cannot resist checking in…and bang, I’m up late again and unable to sleep. I’ve got to stop this.
If you’re asking me, it’s awfuly tempting - I’ve thought about it often. I know I could raise the $$$. However, I have too much on my plate as it is; and the sort of compromises that a politician must make to get anything done…well, that sort of thing just isn’t in me. I do plan on helping others (cash, connections, time, etc.) though - for example, two friends who are running for state level public office; and anyone else at other levels whom I trust and admire.
Personally, I’ve always felt guilty that I have never had to fight for this country or sacrifice very much at all; and yet, here I am, living like a king. I owe this country so much - and the least I could do is to learn the truth and tell it to everyone I know; and to help others do so by getting them in office.
But, still - that seems lame compared to, say, suffering through Valley Forge.
Who’s running in Mass?
“Officials said the new initiatives will take effect over the next six months and be funded out of $50 billion previously allocated for foreclosure relief in the emergency bailout program for the financial system. No new taxpayer funds will be needed, the officials said.”
“The new push takes direct aim at the major cause of the current wave of foreclosures: the spike in unemployment. While the initial mortgage crisis that erupted three years ago resulted from millions of risky home loans that went bad, more-recent defaults reflect the country’s economic downturn and the inability of jobless borrowers to keep paying.”
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No new taxes.
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So you have sympathy for people who lose their jobs in the crisis, but not for those who can’t pay off their mortgages BECAUSE they lost their jobs?
The previously allocated funds are from taxpayer money already, which could be used to for something else, or not taken from taxpayers altogether. I am curious to know what you think will happen when unemployment continues and increases, you don’t think that is the fast lane to severe debt?
Notice the “risky home loan” part of the article, so you have people who got into shitty loans they were never qualified for in the first place. I would have loved to get in over my head in a million dollar home in the hills, and cry for sympathy when I got upside down on it. But I didn’t.
Because I am responsible.
Because I am my own accountant.
Because I don’t want to ask for a handout.
Because I refuse to believe I am entitled.
Because I know better, and just because I can doesn’t mean that I should.
[quote]MaximusB wrote:
The previously allocated funds are from taxpayer money already, which could be used to for something else, or not taken from taxpayers altogether. I am curious to know what you think will happen when unemployment continues and increases, you don’t think that is the fast lane to severe debt?
Notice the “risky home loan” part of the article, so you have people who got into shitty loans they were never qualified for in the first place. I would have loved to get in over my head in a million dollar home in the hills, and cry for sympathy when I got upside down on it. But I didn’t.
Because I am responsible.
Because I am my own accountant.
Because I don’t want to ask for a handout.
Because I refuse to believe I am entitled.
Because I know better, and just because I can doesn’t mean that I should.
[/quote]
Excellent post. Exactly.
I can understand some of the frustration that I’m reading on this thread and I can’t say that I don’t feel a little of it too on occasion. But, there really isn’t anything that any of you can do to change what is happening at the highest levels of our government.
We are in a tax and spend mode right now. The spending has been happening for sometime (including during GW’s Watch). The taxing is going to come next year and we’ll all be hit. But don’t worry about it, I’ve seen plenty of political cycles in this country and this too can be reversed. Keep your chins up I have a pretty good feeling that in November we will all be celebrating. I firmly believe that Obama’s final two years in office won’t look at all like his first two, not at all.
[quote]thefederalist wrote:
“Officials said the new initiatives will take effect over the next six months and be funded out of $50 billion previously allocated for foreclosure relief in the emergency bailout program for the financial system. No new taxpayer funds will be needed, the officials said.”
“The new push takes direct aim at the major cause of the current wave of foreclosures: the spike in unemployment. While the initial mortgage crisis that erupted three years ago resulted from millions of risky home loans that went bad, more-recent defaults reflect the country’s economic downturn and the inability of jobless borrowers to keep paying.”
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No new taxes.
-
So you have sympathy for people who lose their jobs in the crisis, but not for those who can’t pay off their mortgages BECAUSE they lost their jobs?
[/quote]
Reading your posts on this forum lead me to believe you value intent over results, like any good progressive. It’s quite easy to find some poor soul that, by no fault of their own, has suffered and would benefit from some gov’t program. The problem is that federal gov,t has a very poor record supervising benefits and ensuring that only those in need get help. Think about unintended consequences if you can find the time.
Who is more likely to be selective about who they help and who is most deserving of help? Some anonymous bureaucrat handing out someone else’s money, or the person that actually earned that money?
Zeb, that makes sense. The best part is that the conservatives have the movement and momentum with the people and I think the votes will be there.
I’m glad people are angry about the last 10 years of fiscal mismanagement and it shows in the people.
Last terms of GOP we spent on wars, last 2 we are spending on social programs and war.
[quote]ZEB wrote:
I can understand some of the frustration that I’m reading on this thread and I can’t say that I don’t feel a little of it too on occasion. But, there really isn’t anything that any of you can do to change what is happening at the highest levels of our government.
We are in a tax and spend mode right now. The spending has been happening for sometime (including during GW’s Watch). The taxing is going to come next year and we’ll all be hit. But don’t worry about it, I’ve seen plenty of political cycles in this country and this too can be reversed. Keep your chins up I have a pretty good feeling that in November we will all be celebrating. I firmly believe that Obama’s final two years in office won’t look at all like his first two, not at all.
[/quote]
The problem is not knowing what the point of no return is. How long will we be able to continue on path we are on? When will our credit no longer hold value? How do we pay what we owe now with no credit to leverage?
The numbers being thrown around for debt and unfunded liabilities are off the scale. I have yet to find anyone that has outlined a sensible plan of action to return to financial stability. How are we going to recover? How are going to pay our debt? How are we going to fund the currently unfunded liabilities we have?
[quote]MaximusB wrote:
The previously allocated funds are from taxpayer money already, which could be used to for something else, or not taken from taxpayers altogether. I am curious to know what you think will happen when unemployment continues and increases, you don’t think that is the fast lane to severe debt?
Notice the “risky home loan” part of the article, so you have people who got into shitty loans they were never qualified for in the first place. I would have loved to get in over my head in a million dollar home in the hills, and cry for sympathy when I got upside down on it. But I didn’t.
Because I am responsible.
Because I am my own accountant.
Because I don’t want to ask for a handout.
Because I refuse to believe I am entitled.
Because I know better, and just because I can doesn’t mean that I should.
[/quote]
I feel for you. The morality of the situation is messed up completely. It is what economists called the free call option, the heads I win tails I win scenario.
You could argue all you want about how the right thing to do is let every bad borrower go bankrupt but it wont be allowed to happen. When push comes to shove that scenario never plays out the government didnt let it happen in Japan in the 90s it wont happen now in America and definitely not in Europe. The policy makers are too scared of the unknown.
I’m not sure whether allowing bankruptcy to happen and then stimulate the “good”/worthwhile parts of the economy is better than current policy. The reason I say that is because there was never a free market in place where incentives made sense and because of that there are just too many firms and individuals in poor financial situations.
What policy makers should be doing is going further than just increasing banking regulation. They should abolish tax deductible interest payments, that is basically a government subsidy on indebtedness and risk taking. I can’t think of a GOOD reason why debt should be subsidised ahead of equity on a balance sheet. There also needs to be a rethink of the anglo-saxon cult of home ownership, there is no inherent reason why ownership should be preferred to renting especially for those who can’t afford to own.
This legislation is a day late and a dollar short - as usual.
I am a loan officer and I think I can offer a perspective that most of you on your high horse don’t understand.
In 2003 and 2004, the bubble began to expand. Guidelines were lowered, and secondary market investment created such a HUGE vacuum of demand that caused a further deterioration of guidelines set forth by banks, hedge funds and other investment conglomerates. There was a push by the account executives that worked for these banks to focus on “emerging markets” (aka minorities). This isn’t something I read in some magazine somewhere, it is something I personally experienced as loan officer working in northern Virginia. Look at where the problems are: California, Florida, and northern Virginia… Do they have high immigrant populations there? Hmmm…
Sub-prime broker shops started popping up all over the place. In the three story office building that housed my company there were TEN title companies… It was ridiculous! there was no barrier to entry what so ever. You could be an illegal immigrant working as a dishwasher, but if you walked into one of these sub-prime broker shops with a borrower, you were now a Loan Officer and your “team leader” (who got an override on your commissions) would show you how to put that person into a neg-am option ARM that paid four points on the back (cuz you fucked the client on the margin) on a 600K loan. So you just made almost 25K in commission (~12K after split) in about two weeks with little or no trouble. On just ONE loan.
If YOUR cousin or friend started making that kind of money, and you were an illegal immigrant with little or no education, what would YOU do? You’d jump right on the gravy train, that’s what! That’s what happened. At the height of the bubble in 07 we had over 300 “loan officers” working in our office. Six months after Bear Stearns folded and reality bitch slapped everyone in the face, we had 12 - including myself.
Let me tell you all how it was on the front lines. Sub-Prime loans dominated the market. You couldn’t do a “responsible” loan even if you wanted to! Why? Because the stupid Realtors wouldn’t accept an offer that had FHA or VA or even some conventional financing! If they had a stack of offers, all having an escalation clause to a certain amount (do you think that any “fake offers” were provided to max out the escalation clause? Noooo! Realtors wouldn’t do THAT!) if there were an offer in the mix with a financing section that actually made the borrower QUALIFY, the offer was thrown out! FHA and VA loans require paper work and qualification, all the sub-prime loans needed was a 480 FICO score and a heartbeat! Hell, there were some programs where you didn’t NEED a credit score! If you were a Realtor trying to make a quick buck on a listing, what would YOU have done?
So now we have a bunch of former dishwashers running around looking for easy money to sign up EVERYONE they knew who had the ability to fog a mirror! If you had a heart beat, you had a house! 300 Banks sent their Account Executives to our office every week, all kissing our ass, taking us to lunch, sucking our cocks so that we’d give New Century the loan, instead of Greenpoint (or insert ANY bank that imploded). I never had to buy lunch for two years because some asshole from a bank or a title company had brought Panera or Pizza(I am so fucking sick of Panera, even to this day). They gave us strategies, marketing materials, spreadsheets to show how an Negative Amortizing Option ARM was a smart choice. So these people went out and got everyone they could to sign up! It was all Stated Income, Stated Assets… If you worked as a burger flipper at Wendy’s, they put manager at Davco on the loan application. There was no Employment verification! These Banks had a portfolio to fill, and sell and they did not care how they filled it. They OPENLY encouraged fraud - it was all about what you could get to close.
Keep in mind that a majority of these borrowers that some of you here are so quick to judge, don’t even have a high school diploma. They signed loan documents in English (many of them didn’t read English) with Pre-Payment penalties, Margins, Indexes, Points, Second Trusts, and a slew of other BULLSHIT that they were lied to about, but they trusted their loan officer, who was pimping paper for the bank. So this goes on for a few years. If you worked at a bank or a broker shop and raised any concerns about the sustainability of all this your ass was fired. It was about production. Then Bear Stearns crashed and everything changed. They crashed because they (along with every other Hedge Fund) lumped “A” paper in with “SHIT” paper, chopped it all up into a Consolidated Debt Offering (CDO), securitized it and gave it a AAA rating. Then when people (and countries that invested their reserve funds into these exotic financial instruments) started noticing that the stuff they were buying on the secondary wasn’t performing like it was promised to and they pulled out, taking away the demand.
Now it starts to get interesting. People talk about all the fraud that was committed in the sub-prime days, but that was NOTHING compared to the fraud that followed it. Their was actually a kind of “resentment” that many sub-prime loan officers felt against the banks for getting stricter on the guidelines. So when everything tightened up, things like “silent seconds”, fake borrowers, fake tax returns, people “selling” tradelines to boost credit scores… it was a MESS! But again, the banks encouraged the behavior! In my company, the Account Executive for JustMortgage came in to do a presentation on how to “properly fill out a Verbal Verification Of Employment form” - it was a “class” on loan fraud! A bank came in and taught us how to cheat the FHA! They wanted the volume! Three months later, when City decided to not to accept JustMortgage’s warehouse line, and about 80 million in volume, some of which had already closed, ended up not funding, it was a straw that broke many a Broker’s back. It ended up causing the Broker I worked with to close his doors and, even though I didn’t have any loans with JustMortgage, I still got fucked out of almost 20K worth of commission that was owed to me.
Now about this time we have the “bank bailout” where the Federal government pays the fucking crooks that started this whole mess in the first place. And what do they do with the money? Nothing. They don’t lend it out to stimulate the economy. They don’t use it to forgive principal and bring loans to an appropriate Loan to Value ratio for their customers… No, B of A uses their bail out money to pay the fucking executive bonuses for it’s newly acquired Lehman Brothers! AND THEY GET AWAY WITH IT!!!
My whole point of writing all of this is to make a case that the whole thing was based on a lie. People were LIED to and pressured into these mortgages by banks and loan officers that KNEW they couldn’t qualify. They were “sold” the American Dream hook, line and sinker. It was classic predatory lending at it’s finest, and there wasn’t any oversight to protect them, as there is in the FHA and VA (anyone who’s ever signed FHA disclosures can testify to the number of consumer protection acts you have to acknowledge) And when they found out they’d been HAD, they had a pre-payment penalty that kept them locked in - EVEN after their ARM was scheduled to adjust! They couldn’t refinance, because the guidelines had contracted and the lending pendulum had swung so far in the other direction… SO WHAT THE FUCK WOULD YOU DO?
What COULD the government have done? If all this money was going to have been spent (and I’ll leave that argument for another time), but IF all this money were to have been spent, the program that they are putting out now would have been a FAR better solution! Instead of giving the money to the fucking banks, they could have implemented this program of principle forgiveness, along with nullifying pre-payment penalties. Those two SIMPLE things, would have staved off a significant portion of the fall out created by the housing collapse.
As for my personal opinion on the banks, I believe that those fuckers should have been left to die of their gluttony, and allowed the market to correct itself by allowing second tier banks, with track records of responsibility, to step up and fill the void. Unfortunately, George Bush and our special interest controlled government, had too many golf buddies that would have lost their asses, so they decided to pass the fucking ball.
As for my personal foreclosure record, I am only aware of two loans that I have ever written that have gone bad. One was a good friend of mine who was a Realtor, who’s income was decimated by the housing bubble collapse, and the second was my good friend John, who I have known for 20 years - he is a plumber who lost his job and got divorced at the same time. Both of them qualified when I did their loan applications. So my conscience is very clean with regard to this whole mess.
Bottom line, these people were lied to by a system of greed and corruption and never should have been homeowners in the first place. So it is in very poor taste to hold them to a standard that you and I, educated professionals, should be held accountable for. They were victims of predatory lenders, plain and simple.
AC, some people took bad mortgages intentionally too, they took out home equity loans and cashed out. They bought all sorts of goodies, electronics, cars, boats, vacations, and then walked away from the home when it went under water. Some people got suckered, some were in on the whole deal.
All that would never have happened had it been the bank’s own money that was at risk, rather than the bank knowing that government sponsored entities would snatch the loans up and they could make money on the sales with zero risk.
Of course the banks should not have done as above, morally speaking, but had the government not created a situation where the banks’ own money was not at risk, the banks would have continued, as they historically had, to care a great deal whether a borrower was able to repay.
[quote]MaximusB wrote:
AC, some people took bad mortgages intentionally too, they took out home equity loans and cashed out. They bought all sorts of goodies, electronics, cars, boats, vacations, and then walked away from the home when it went under water. Some people got suckered, some were in on the whole deal. [/quote]
I agree, but it was the bank GUIDELINES that allowed them to do this. You gotta remember, people are stupid and they were marketed to with some very persuasive advertising and marketing campaigns. Shit, Greenspan said that the economy was in good shape! I don’t think that if proper due diligence was done, proper lending ratio’s were maintained (15/1), and these predatory lending campaigns that made people believe they were heading into a “never ending period of economic bliss”, that people would have made the poor financial decisions they did. I mean, common fucking sense (and history) tells us that we run in economic cycles. This last bubble was treated like it would never end.
Personally, I did not fall into the trap that many of my colleagues fell into, of buying ten or twenty properties with no money down - now they are all short sold or in foreclosure and most of them are bankrupt. I bought four properties with cash and while they have certainly depreciated in value, I am not under water by any means.
But what about the homeowners you mention? NOW what are they supposed to do? If you are 35 years old, lost most of your 401K and retirement savings due to the market crash, lost over 30% of the equity in your home, what is the prudent financial move to ensure you have enough money to retire?
If you look at just the numbers, the solution is SIMPLE: you walk on the property, rent for two years and save enough for a 3.5% down payment on a home that is exactly the same size, only now your monthly payment is HALF of what it was and you are not 200K underwater. You then invest the difference to try and rebuild your retirement. That’s called being smart.
Now I understand PERFECTLY that you can argue that you signed you name on the Note and made an agreement with the bank. The part I don’t buy is, that the bank LIED to all those other people that got you under water in the first place. And then, instead of accepting the responsibility of their actions, took a bail out that they didn’t pass along to you. FUCK the bank, because that’s exactly what they did to all of us. They looked out for #1 and as a result, we, our children and our grand children will have to pay the price.
Thanks for the insights, AC.
Mufasa