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Old 05-31-2010, 01:34 PM
 
2,143 posts, read 8,001,546 times
Reputation: 1156

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You still haven't answered these questions:

Quote:
AND the home values can stay reasonable. As a taxpayer, how does that help me? Or will EVERYONE automatically get a 20% reduction in their principle? Your scheme would only punish those of us who are responsible and prudent and reward those who bought more than they could afford.
Quote:
Considering that in the big picture a small percentage of homeowners in this country are in foreclosure, how is this at all equitable to all tax payers. Why should I pay your mortgage?
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Old 05-31-2010, 01:40 PM
 
2,143 posts, read 8,001,546 times
Reputation: 1156
Quote:
Originally Posted by ognend View Post
I was/am responsible, I can afford my home just fine but it is worth half of what I owe and has been for the last few years. What if you and I have the same discussion in five years? I would have just spent 7-8 years putting money into a bottomless pit. How is that responsible (in regards to myself?). Am I to blame that you, my neighbor, were greedy and got a loan approved by an equally greedy bank? The bank washed its hands off from you, you walked away, my house's value dropped as a result. Now I have a worthless house that I spent years paying for, I paid taxes so that the banks can legally wash their hands off you. Who wins in the end?
You bought a HOME to live in. you agreed to pay a certain price for it. You asked someone to lend you money to pay for the home your wanted at the price YOU wanted to pay. The money was lent to you. At your request. For your HOME.

You have a responsibility to repay the loan. It is the honorable thing to do, The right thing to do. The moral thing to do. There is no other way to look at it. People are either honorable or they are not. Our country was built on honor. A man's word was his bond. I can see no other way to live. I'm not sure I want to live in a country where there is no decency anymore.
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Old 05-31-2010, 01:55 PM
 
11,642 posts, read 23,808,705 times
Reputation: 12270
Quote:
Originally Posted by ognend View Post
Mine got SOLD twice.. The letters I got from the lenders said so. I doubt that someone buys a mortgage from someone else for the same exact amount. In the last few years mortgages were sold to get rid of them. Every time you sell to get rid of something, you take a hit by selling cheaper. Conversely, the new lender gets a good deal.
When interest rates decrease (as they have done lately) the value of existing fixed income securities increase. There is a very good chance that the seller of your mortgage made a very nice profit on it if it was sold during a time when interest rates were declining.
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Old 05-31-2010, 02:50 PM
 
2,733 posts, read 1,750,747 times
Reputation: 4395
Quote:
Originally Posted by Lilybeans View Post
You bought a HOME to live in. you agreed to pay a certain price for it. You asked someone to lend you money to pay for the home your wanted at the price YOU wanted to pay. The money was lent to you. At your request. For your HOME.

You have a responsibility to repay the loan. It is the honorable thing to do, The right thing to do. The moral thing to do. There is no other way to look at it. People are either honorable or they are not. Our country was built on honor. A man's word was his bond. I can see no other way to live. I'm not sure I want to live in a country where there is no decency anymore.
Those days are long gone. The current manifestation of it is the HAMP program where the government is subsidizing writing off principal for people who can't afford their homes and bitching about the institutions that hold second mortgages on these houses because they want to get repaid and are hindering the governments efforts to reduce these debts.

This is all possible because they changed the tax law to exclude forgiveness of mortage debt, as long as it was used to buy the property. The feds didn't want poor debtors to get stung with a pesky tax bill because they made a bad purchase decision.

Before that it was the bailout of all of the greedy bastards that exercised ISOs during the tech bubble and owed millions in AMT. They didn't sell the stock because they wanted to hold for a year to get a lower tax bill but wound up with an AMT bill that wound up exceeding the value of the stock. The federal government ultimately decided that they didn't have to pay the tax.

These days, honor has nothing to do with these types of financial decisions, and you can thank your socialist federal government for it.
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Old 05-31-2010, 03:49 PM
 
26,585 posts, read 61,818,009 times
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Quote:
Originally Posted by ognend View Post
Strategic defaults have nothing to do with people who bought what they could not afford. The TARP fund should have been used to modify loans that made sense modifying based on the income of people at that point in time (what banks should have done the first time?). Some loans just never had a chance of being repaid (again the banks approved them apparently by saying "signature=debt and people must do the right thing regardless so we don't care either way"?).

I was/am responsible, I can afford my home just fine but it is worth half of what I owe and has been for the last few years. What if you and I have the same discussion in five years? I would have just spent 7-8 years putting money into a bottomless pit. How is that responsible (in regards to myself?). Am I to blame that you, my neighbor, were greedy and got a loan approved by an equally greedy bank? The bank washed its hands off from you, you walked away, my house's value dropped as a result. Now I have a worthless house that I spent years paying for, I paid taxes so that the banks can legally wash their hands off you. Who wins in the end?
Again, why should you get a reduction in principle with my tax dollars paying for it? Where's my reduction? I'm not sure how you can say I'm greedy. We bought a house that we can afford, even on a single income. We put 20% down. We have a convention, fixed rate loan. How on earth am I greedy? Because I've got my own bills and don't feel that I should pay yours as well? I've got no problem with banks modifying loans to lower interest rates to todays typical rates in fixed rate loans. I have a huge problem with people getting money lopped off their principle. Someone's going to end up paying for that---the responsible people who are paying their mortgages, whether they are upside down or not.

When you buy a car, it depreciates as soon as you take it off the lot. Does that mean that the finance company should knock some of the principle off the loan?
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Old 05-31-2010, 03:51 PM
 
26,585 posts, read 61,818,009 times
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Quote:
Originally Posted by Lilybeans View Post
You still haven't answered these questions:
And he won't because his entitlement mentality won't allow him to face the reality that he's morally bankrupt.
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Old 05-31-2010, 04:44 PM
 
27 posts, read 24,824 times
Reputation: 40
Default Deadbeat buyers?

You my friend are out of line. I personally am being foreclosed on because I was laid off THIRTEEN MONTHS ago. Deadbeat? NO. You have no idea what my profession is or prior salary, but I and many others were high income educated buyers who have lost our jobs.

Quote:
Originally Posted by annerk View Post





It's not at all immoral. The banks were able to borrow money from teh government which has been repaid. The other option would have been that the banks failed, the FDIC paid out everyoen with money in those banks, and then didn't get it back. Uh, right. The proper business decision was to give the banks a line of credit from the government so they could regroup and remain open. The only reason loans were written off was because deadbeat buyers didn't repay what and how they ahd promised, in many cases even when they were able to.

We also saw people go to jail for fraud where fraud existed. Otherwise nobody held a gun to anyone's head to make them sign for thei note for their home, therefore the IMMORAL thing is to walk away and leave your friends and neighbors holding the bag for you greed.
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Old 05-31-2010, 05:17 PM
 
27 posts, read 24,824 times
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The gist here is that the banks had the taxpayer-subsidized ability to borrow unlimited funds from the Federal Reserve and then invest it in Treasuries paying almost 4%.


The banks aren't suddenly doing any kind of business that would have allowed them to earn that kind of cash to pay back TARP. They wanted to pay back TARP so they could continue their bonus programs.

Perhaps some of the people on this thread work as P/R reps for banks.


Quote:
Originally Posted by ognend View Post
On the topic of banks and TARP money:
Troubled Asset Relief Program - Wikipedia, the free encyclopedia

Just so we know who actually paid back the money, here is a list of all the entities that borrowed the money and the ones who returned it. I am willing to bet that none of that money went into foreclosure prevention. The ones that returned the money are the ones that needed it least (according to the Senate report below):
Tracking the $700 Billion Bailout - The New York Times

Finally, you can read the Senate report on the effectiveness of TARP:
Taking Stock: What Has the Troubled Asset Relief Program Achieved? (http://cop.senate.gov/reports/library/report-120909-cop.cfm - broken link)
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Old 06-01-2010, 06:03 AM
 
2,878 posts, read 4,611,659 times
Reputation: 3113
Quote:
Originally Posted by Lilybeans View Post
You bought a HOME to live in. you agreed to pay a certain price for it. You asked someone to lend you money to pay for the home your wanted at the price YOU wanted to pay. The money was lent to you. At your request. For your HOME.

You have a responsibility to repay the loan. It is the honorable thing to do, The right thing to do. The moral thing to do. There is no other way to look at it. People are either honorable or they are not. Our country was built on honor. A man's word was his bond. I can see no other way to live. I'm not sure I want to live in a country where there is no decency anymore.
Welcome to the 1920s. Wake up and look around. Your word means squat. Maybe I would concur with you on a lot of what you are saying IF we did not make corporations and banks entities with equal rights to common citizenry. Nowadays they are more powerful than you or I. They can lobby better than me, they can spend more money on causes than me, they can get lines of credit from the government for their own stupid mistakes (while telling me to shut up and pay), they can run ads on TV for various hidden agendas that I cannot afford, they can pretty much do anything they want.

You my friend live in la-la land. What happened here was a heist - banks rode the wave with everybody else until time came to face the music. They realized that letting them fail would be catastrophic so instead of taking up their share of the responsibility, they just decided to sit and wait for the inevitable bailout. Fast forward a year or two later, bonuses are again vogue, stock prices are up. What is the only difference? The person who got screwed.

How is it MY fault that the prices of housing went down? The bank that gave me my loan surely had responsibility to screen its customers. That is the responsibility to ME (!). But no, for every one person like me who could afford their house, they chose to loan money to 5 more whould could not. So, yeah, screw them, they got their bailout after they screwed me. That's the "entitlement mentality" I have.
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Old 06-01-2010, 06:15 AM
 
2,878 posts, read 4,611,659 times
Reputation: 3113
Quote:
Originally Posted by annerk View Post
And he won't because his entitlement mentality won't allow him to face the reality that he's morally bankrupt.
You seem to have been brought up with a dose of blind servitude in you. Perhaps you work for a bank and saying something against them offends you?

This has nothing to do with morals. We cannot enforce morality (by sheer force) only on one side of the equation. In order for the "morality" game to be played, the rules have to be obeyed on both sides. The banks acted immorally and so did their customers. To now enforce only one side is unfair.

Plus, if you are invoking the "old times", we should have let the banks fail. That is how capitalism works, last time I checked.

Now, let me ask you this: if you were a good client and then your bank lent to five more that were bad, resulting in bad conditions for everyone - does the bank not have any responsibility? Is bailing the bank (who clearly was greedy and stupid) the "moral" thing to do?

It is the job of banks to approve loans. I can go and ask for a $5M loan even though I might make $12,000/year - when it gets approved whose fault is it when I default? I would say we are both equally at fault. What is the purpose of the loan officer at the Bank? Clearly the bank thinks it has some kind of responsibility, otherwise there would be no job titled "loan officer".
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