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Ah, so you want rights without personal responsibility?
Since these people are too stupid to make financial decisions do we just confiscate their paychecks and buy thier food for them too so they don't buy lottery tickets, beer etc?
We all know this is BS. The majority of foreclosures are people voluntarily walking away from VERY upside down properties or that have been caught up in the economic downturn.
To portray the "problem" as that the people can't pay their mortgages because they "don't know who to pay" is a steaming load.
The people that got hosed on the reselling of mortgages were not the homeowners but rather the investors that bought them (and then later the tax payers but that's a whole other can-o-worms.)
Your typical loan foreclosures are:
-Family with medical bills, lay-offs etc. can't make payment due to bad economy and catastrophe.
-Guy bought house in boom area for 500k, they sell for 250k now....stops paying.
-Gal buys house (true story) in FL for 150k, keeps refinancing it to fund lifestyle. Housing market drops, can't refi, can't pay off 40k in credit card debt or keep up with 300k mortgage....bankrupt. (Note they had originally bought house for 150k but kept sucking all the equity out to take vacations, drive nicer cars?)
Personal responsibility.
Was there some fraud out there? Absolutely but it was fractional and hopefully those people are hiring a lawyer...but since they didn't do the basic pre-work to buying a HOUSE by taking free classes to learn about mortgages, housing etc. my sympathy is tempered as it's as much lazy as stupid.
I say tit then you say tat but in the end all will agree that predatory lending is a crime.
I say tit then you say tat but in the end all will agree that predatory lending is a crime.
Yes. We absolutely agree on that point.
The extent to which the loans were "predatory" is pretty questionable.
Everything I've seen so far indicates that most of the loans were fine but that the economy or steep decline in home values have caused people to (in)voluntarily default.
We've had a bunch of threads around here with people talking about their 500k mortgage on a house that now sells for 300k and how they're going to just stop paying and pocket the money until they are kicked out and then just rent. That is their contractual right and is not predatory, just the sound of the bubble popping.
Bank lending is no more predatory than junk food vending, drug hawking, fashion pushing, electronic toys, flow-chart health-care, or any other activity that involves interactions between the for-profit sector and the gullible consumers. When was the last time your cable company said "No pay-per-view for you---we don't think you can afford it"? You're expecting mortgage lenders to do that, and calling them predatory if they don't.
If you want to call the ordinary wheels of free-market commerce "predatory", there is plenty of room for you over in the Liberal camp, now recruiting for the impending revolution.
When was the last time your cable company said "No pay-per-view for you---we don't think you can afford it"?
Funny that you should mention the cable company. We recently recieved a notice from our cable company that read something like this: In order to serve you better, we will be removing the CMT, CSpan, & Hallmark channels from the basic cable package. These channells will still be available for an additional charge. A few days later those channells were gone. The cable company service is now sooooooo much better!
You know, things could get really ugly. I know what my strategy would be, credit fraud.
If someone pushes me, I'm going to push back. Accuse me of predatory lending, I'll level accusations of credit fraud.
Would anyone on this forum like to know the difference? You don't go to jail for predatory lending, but someone who falsified anything on their loan documents committed credit fraud and could face jail time, and even if they don't, they'd have a felony record if convicted.
Mircea, this reminds me of what I read in a local newspaper in Charlotte, NC 6-8 years ago. To finalize a mortgage the new homeowner either had to write out a check for $1.00 or receive/cash a check for $1.00--I forgot which. I call that collusion.
No convictions, unless the people who signed on the dotted line also go down!
There is plenty of blame to go around. I was watching a recent episode of House Hunters on HGTV and the recently-married couple was complaining that they didn't want to have to come up with $1500 of their own money for the $220k house. The wife said she would rather have the $1500 for shopping. They didn't have a dime and were borrowing the only money they were putting down, $8k, from their parents.
People should not get loans unless they have 20% to put down or the lending institution is willing to hold the risky loan with no government support.
Its scarey when the House Hunter couple says " This is EVERY penny we have, we really can BARELY afford this payment on THIS house but this is the house we want although its at the TOP of our budget. Yeah, we won't be able to buy furniture and we will sleep on the floor but we MUST have this house !"
This is truly scary. They won't have anything but dirt in their backyard for years...
Meaning : Don't buy a house you can't afford, with no savings in the bank afterwards.
Mircea, this reminds me of what I read in a local newspaper in Charlotte, NC 6-8 years ago. To finalize a mortgage the new homeowner either had to write out a check for $1.00 or receive/cash a check for $1.00--I forgot which. I call that collusion.
No convictions, unless the people who signed on the dotted line also go down!
When you purchase a home, in addition to a realator, you consult a real estate attorney. If you cannot afford a real estate attorney, that that is the first clue that you cannot afford a house.
Many real estate attorneys also specialize in probate, since they go hand-in-hand being so closely related, so before closing on the home, you should have a Will drawn up or an existing Will and related Codicils amended in the event something happens.
The bottom line is that you cannot afford to protect stupid people, because the costs to do so are way beyond your capacities.
In any event, giving a mortgage to someone who cannot afford it isn't predatory lending any more than giving an auto loan or credit card to someone who cannot afford either would be predatory lending.
If you wanted to do something, then push your legislatures to enact a law that says you can only take the mortgage interest deduction if you put at least 25% down on the home.
Personally, I don't think that would do much good as people would still buy homes they cannot afford.
Quote:
Originally Posted by Mathguy
The extent to which the loans were "predatory" is pretty questionable.
That's pretty much the whole point. The fact that ignorant people keep screaming "predatory loans" in crowded internet chat rooms doesn't prove the loans were predatory.
Quote:
Originally Posted by Mathguy
Everything I've seen so far indicates that most of the loans were fine but that the economy or steep decline in home values have caused people to (in)voluntarily default.
In Ohio there were a rash of "utility foreclosures."
In November 2006 I paid $400 to heat my 980 sq ft apartment (with the thermostat set at 68°F), while my father paid $1,900 to heat is 2,400 sq ft two-story house. You can imagine what people were paying to heat a 4,100 sq ft McMansion, and then Duke had a 30% rate hike.
A large number of foreclosures were in reality people who defaulted on utility bills and Duke shut off the electric and natural gas, so they just abandoned the property.
Well the house flippers ruined my town. a livable piece of crap went from 49000 to 180000 in just 3 years it was all greed from the seller to the buyer turned seller and the greedy banks and investors. I dont really care my house is my home , not a flipper and it sure beats renting. unless you can find a totally remodeld 4 br victorian for under 600 a month
Good for homeowners. We have to hold those who caused this depression accountable and restore the rule of law. Globalism and the big banks did it and Iceland continues to show the world what to do with the bankers.
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