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Old 06-30-2011, 08:46 AM
 
8,760 posts, read 16,104,943 times
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Quote:
Originally Posted by mainegrl2011 View Post
Over the past several years there have been people who borrowed money to buy a house when they couldn't afford it. That was their mistake. Just because they were able to get the loan, doesn't mean they should have accepted the loan. The desire to own a home took over anything they may have learned in a business/consumer math class or common sense. Others could afford it at the time, but............Then came job losses and foreclosures. I honestly believe it would have been in BoFA's best interest along with some other financial institutions to work out with as many borrowers as possible a way for them to continue paying for their homes by adjusting the payments, etc. Due to the lack of a willingness to do so in many cases, banks have tons of foreclosed properties and may sell them eventually for a fraction of the original loan/value.....and thus, suffer huge losses right along with those who lost their homes. I don't think soooooooooo many foreclosures were necessarily in the best interest of the financial institutions. How do foreclosures affect profits? Just for the record, I am fine with businesses making a profit. The profit motive is why anyone goes into business in the first place. Well, I have known a few people who wanted to show a loss but that's another story.

About two hours ago, I heard a news story about people who had stopped paying their mortgages and had seen a lawyer to straighten out payment issues involving who really held the mortgage at the time of foreclosure.....at least one bank foreclosed on someone's property whose loan was no longer in their hands! The story also said that the courts are so backed up with foreclosures in NY that the estimate is 61 years to straighten it all out.

Here's the link. What happens when you stop paying your mortgage? - CBS News
There will always be horror stories, bad decisions by banks, unwillingness to re-negotiate, people foreclosed on who are current. They are for the most part mistakes. Glitches. "Bumps in the road " to quote a famous President. The usually get ironed out. People cannot expect banks to allow them to stay in a house they are not paying for. It is NOT the bank's fault if you paid far more than your house is now worth. Blame Fannie Mae and Freddy Mac for screwing up the housing industry by allowing anyone who could walk a home loan regardless if they could pay it back or not. This caused a huge demand for housing and prices artificially skyrocketed out of sight. The people who jumped on the bandwagon toward the end when prices were highest are the ones who have taken a big bath in this market. They are the ones who have seen their over inflated home values drop by up to 60% in some markets and the slide will continue until the wave of bad mortgages is settled. A little common sense goes a long way here. Prices during the bubble were unsustainable. People could not afford to buy houses starting at half a million dollars. It was a good time to wait for the inevitable adjustment that was sure to come. Remember the dot com fall?? Same thing. People jumping in out of desperation sat by and watched all of their investments dry up. Many had borrowed to buy the stock as it was "a sure thing". A sure trip to bankruptsy court maybe. I'm no financial wizard but my wife and I knew instinctively something was really wrong with the housing market. Prices were way too high, people who had no business owning fancy cars, boats, $20,000 motorcycles, Rv's, second homes,building tennis courts and swimming pools, taking long expensive vacations, etc were doing so by borrowing against the artificially high "equity" they were seeing in their over inflated home values. There was NO WAY these houses were worth that much and we KNEW not to jump in regardless of what the bank told us our home was worth then. Common sense rule #1 if it sounds too good to be true it probably is too good to be true. I personally know several people who have gone bankrupt after the housing prices began to fall. Maine has not seen the bottom yet.
You can put the blame squarely on the government for ruining the housing market by strong arming banks into making bad loans to the less advantaged and poor minorities in an effort to "be fair" to them. Is it fair to put someone in a home they can't pay for then foreclose on them several years later?? The loans never should have been made and would not have been made if the government just left banks to do their own loan screening.
Bottom line is the banks owe the borrowers nothing. The loans were made in good faith. If you buy a car and a year later decide you don't want to pay for it do you get to keep it? No, they reposess it and your credit rating is shot.
These people for the most part should not have been buying homes in the first place. If they were duped into making a bad investment that's their problem. There's a sucker born every minute and a lot of them bought into the housing bubble. The responsible among us should NEVER have to pay for the irresponsibility of others. This is why I and so many others in this country are DEAD SET AGAINST bailouts of any kind to anyone. Leave the markets alone and let them sort it out on their own. The same goes for banks, car companies , insurance companies and anyone else. No one is too big or too small to fail.
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Old 06-30-2011, 09:31 AM
 
Location: Forests of Maine
29,722 posts, read 47,472,880 times
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I do not intend to 'blame' the bank for my misfortune.

I signed the loan agreement. I knew that to cover the mortgage and to support my family I would need to keep the apartments rented. It was a risk that we did multiple times, with different apartments in different regions. It worked for us for a while.

The Achilles heel to the scheme was that employment needed to stay high. We knew that mass lay-offs would cause it to all fall apart. After 24 years of being landlords our luck turned sour. Huge pay-offs happened, our tenants lost their jobs, we lost the income and savings, and the bank began foreclosure.

I knew the risk. I think that everyone who signs for a mortgage knows the risk. I took a risk, a gamble and after a long time I lost.

In our case the bank was not at fault specifically for the economy collapsing.

I find it amusing that the bank is so completely messed up that they can not complete their foreclosure.

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Old 06-30-2011, 10:26 AM
 
1,360 posts, read 1,855,527 times
Reputation: 1244
Hi Maineah

Just to clarify, I didn't think it was/is a bank's fault if someone uses poor judgment and buys a house that is priced too high or that they cannot afford. I knew something was very wrong 13 years ago when a young couple I know who didn't make much money were approved for a loan with a payment of $900 a month. They lost the house--no surprise.

Yeah, I remember dot com....someone tried to convince me to sell some property and invest in dot coms--thankfully, I did not listen to them.

I agree with you about the government's role in trying to offer "fairness" to poor and less advantaged individuals by promoting/requiring loans be made to pretty much anyone. I am in favor of less government in people's lives. (I can still hear my mom talk about her disgust with seat belt laws and how it should be an individual's decision... knowing the risk.) and how often has government mismanaged our tax dollars and FICA employed individuals and their employers have paid in for 20, 30, 40 years....didn't mean to get off topic. Yes, In a truly free enterprise, market economy the failures present opportunities to others and the market takes care of itself over time. That's when the government often decides to jump in in an attempt to control the outcome.

I am not saying the banks owe anyone anything for getting loans they really shouldn't have gotten in the first place. My question was are all these foreclosures in the banks' best interests? It just seems to me that in some cases, it would have been to the bank's advantage to try to refinance the loan....not because the bank owed it to the borrower.
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Old 06-30-2011, 12:08 PM
 
Location: On a Slow-Sinking Granite Rock Up North
3,637 posts, read 5,261,488 times
Reputation: 2650
Quote:
Originally Posted by Maineah View Post
You can put the blame squarely on the government for ruining the housing market by strong arming banks into making bad loans to the less advantaged and poor minorities in an effort to "be fair" to them. Is it fair to put someone in a home they can't pay for then foreclose on them several years later?? The loans never should have been made and would not have been made if the government just left banks to do their own loan screening.

I can see your points in most of what you're saying; however, I refuse to put the blame squarely on just the government.

Uh, uh. Nope.

There were plenty of banks and shady 2nd mortgage companies (those suckers sprung up like poison mushrooms all over my area) which were quite willing to encourage people to take advantage of credit in order to profit. "Got bad credit?? NO problem!"

Many of them were started or run by shifty former used car salespeople. The "cream of the sleazy salesman crop" if-you-will.

One of them in my area was fired by an auto parts place I formerly worked for in the 80s. He was the manager, and he was totally ripping off the owner - BIG time. Funny, he never saw any jail time for that.

I digress. Anyway, I used to see his smiling business portrait all over the place as a loan shark...er, ah...owner of a 2nd mortgage company.

Yes, people have to have personal responsibility, but they also need to have education beyond "Hey! It's no problem! Come on in and we'll cut you a check!" Reality here. Not everyone is savvy in business. Then there are the gullible, and shister types know just how to take advantage of them, and it's wrong. Period.

I worked for a couple of different banks in my lifetime. I've seen the bonuses - LOTS of bonuses - some bordering on ridiculous. All in the name of garnering the most profit possible, so the banks aren't completely innocent in this situation.

Okay, that's the American way right? Yes. I don't have a problem with a free enterprise making a profit. Really I don't, but let's not paint all banks with a broad brush because just like there are suckers born every day, there are shisters willing to part them with their cash in the name of "profit".
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Old 06-30-2011, 01:49 PM
 
Location: Dade City, Fl.
885 posts, read 1,188,552 times
Reputation: 528
Sadly, I too have lost a house in this economess. Thankfully I was able to do a short sale which isn't quite as bad. I in no way blame my bank(wells fargo).........
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Old 06-30-2011, 02:35 PM
 
Location: Out West
20,595 posts, read 15,415,894 times
Reputation: 24157
Quote:
Originally Posted by forest beekeeper View Post
Not familiar with WGAN a quick google says they broadcast on 560 AM, I will see if their signal comes up into Maine, thanks.

Have not heard about the lay-offs at LLBean.
Forest, they weren't laid off, they were fired. Something about a bag for sale that was ridiculously cut down in price, (found to be an error), and they snapped 'em up as fast as they could. BDN gave the employees side of the story but we haven't heard LL Bean's side of the story. I'm inclined to think that common sense should have prevailed regardless if you were told to "trust the system"...ESPECIALLY if I was going to be buying for myself. I think there is much more to the story than the employees are letting on. But, we have yet to see.


Quote:
Originally Posted by mainegrl2011 View Post
Over the past several years there have been people who borrowed money to buy a house when they couldn't afford it. That was their mistake. Just because they were able to get the loan, doesn't mean they should have accepted the loan. The desire to own a home took over anything they may have learned in a business/consumer math class or common sense. Others could afford it at the time, but............Then came job losses and foreclosures. I honestly believe it would have been in BoFA's best interest along with some other financial institutions to work out with as many borrowers as possible a way for them to continue paying for their homes by adjusting the payments, etc. Due to the lack of a willingness to do so in many cases, banks have tons of foreclosed properties and may sell them eventually for a fraction of the original loan/value.....and thus, suffer huge losses right along with those who lost their homes. I don't think soooooooooo many foreclosures were necessarily in the best interest of the financial institutions. How do foreclosures affect profits?
I agree with you for the simple fact that yes, they will take a loss and also, at least where I came from, (so that's my experience..haven't been here long enough to know how it is here), there were SO. MANY. houses that sat there for many, many months to over a year or two. All that time, the bank could have been getting money if they would have tried to work something out with the buyer.

And I say that for those who experienced a loss of some sort such as they lost their job, or they got in to a car accident and were out of work for extended periods of time because of it, someone who may have suffered identity theft, (big problem in FL), etc.

I would not, however, have extended that to those who made $30,000 a year as a school bus driver and applied and got the loan for an $800,000 home. I mean, ya gotta be pretty dang stupid to think you can afford that on that salary. The reason I would not extend it is because there is no way someone like that will ever be able to afford that house....in fact, that loan should never have been granted in the first place. (True story out of CA.)

Not everyone who has had a home go in to foreclosure is a business/financial idiot. Some times drastic things happen that totally turns their world upside down and even if they had a large chunk of savings, sometimes, that savings can run out.

I don't have a lot of sympathy for those like the story from CA, that's just dumb but I do realize that not everything is as black and white as a lot of people make it out to be.
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Old 07-01-2011, 10:24 AM
 
Location: Log "cabin" west of Bangor
5,487 posts, read 6,424,991 times
Reputation: 9378
Quote:
Originally Posted by reloop View Post
I can see your points in most of what you're saying; however, I refuse to put the blame squarely on just the government.

Uh, uh. Nope.

There were plenty of banks and shady 2nd mortgage companies (those suckers sprung up like poison mushrooms all over my area) which were quite willing to encourage people to take advantage of credit in order to profit. "Got bad credit?? NO problem!"

Yes, people have to have personal responsibility, but they also need to have education beyond "Hey! It's no problem! Come on in and we'll cut you a check!" Reality here. Not everyone is savvy in business. Then there are the gullible, and shister types know just how to take advantage of them, and it's wrong. Period.

I worked for a couple of different banks in my lifetime. I've seen the bonuses - LOTS of bonuses - some bordering on ridiculous. All in the name of garnering the most profit possible, so the banks aren't completely innocent in this situation.

Okay, that's the American way right? Yes. I don't have a problem with a free enterprise making a profit. Really I don't, but let's not paint all banks with a broad brush because just like there are suckers born every day, there are shisters willing to part them with their cash in the name of "profit".
The problem was created by a number of factors. Skyrocketing 'values' and prices, 'no income verification loans', 2nd mortgages, unscrupulous mortgage brokers, people suddenly thinking they were 'rich' because it appeared that their homes were 'worth' much more than they paid, economic crunch and job losses, etc. etc.

Much of the problem had to do with greed, in the industry and on the part of the homeowners.

Some people may want to point the finger at the homeowner(s) as being to blame because they 'should have known better'. The sad fact is, [it appears to me] that the 'average' people in this country are woefully ignorant when it comes to finances and economics and are easy targets, and didn't/couldn't 'know better'.

I must admit that I too was somewhat ignorant in this regard until I read a book called "The Bank Book: How To Revoke Your Bank's License To Steal". It was a real eye-opener. I'm not a complete dummy, but there were a lot of things I didn't know and that no one had ever taught me. "You don't know what you don't know" and if you don't know how to find out, you are a prime target to be taken advantage of.

When I first met with a mortgage broker to arrange for a home loan [preparatory to buying a house], there was a lot of fast talking, glossing over of hard facts and manipulation of numbers to see just how large of a loan I could qualify for. If I hadn't previously read that book, and then taken the time and effort to learn *more* about personal finances from successful people, I could have been in a lot tougher situation than I am now. The broker said I was 'qualified' for a loan of more than double what I eventually took. Fortunately, I *did* know better...but I can easily see how the 'average Joe' could get taken to the cleaner's.
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Old 07-01-2011, 11:47 AM
 
Location: On a Slow-Sinking Granite Rock Up North
3,637 posts, read 5,261,488 times
Reputation: 2650
Quote:
Originally Posted by Zymer View Post
The problem was created by a number of factors. Skyrocketing 'values' and prices, 'no income verification loans', 2nd mortgages, unscrupulous mortgage brokers, people suddenly thinking they were 'rich' because it appeared that their homes were 'worth' much more than they paid, economic crunch and job losses, etc. etc.

Much of the problem had to do with greed, in the industry and on the part of the homeowners.

Some people may want to point the finger at the homeowner(s) as being to blame because they 'should have known better'. The sad fact is, [it appears to me] that the 'average' people in this country are woefully ignorant when it comes to finances and economics and are easy targets, and didn't/couldn't 'know better'.

I must admit that I too was somewhat ignorant in this regard until I read a book called "The Bank Book: How To Revoke Your Bank's License To Steal". It was a real eye-opener. I'm not a complete dummy, but there were a lot of things I didn't know and that no one had ever taught me. "You don't know what you don't know" and if you don't know how to find out, you are a prime target to be taken advantage of.

When I first met with a mortgage broker to arrange for a home loan [preparatory to buying a house], there was a lot of fast talking, glossing over of hard facts and manipulation of numbers to see just how large of a loan I could qualify for. If I hadn't previously read that book, and then taken the time and effort to learn *more* about personal finances from successful people, I could have been in a lot tougher situation than I am now. The broker said I was 'qualified' for a loan of more than double what I eventually took. Fortunately, I *did* know better...but I can easily see how the 'average Joe' could get taken to the cleaner's.

Excellent points which I would rep you for if I could.

Ignorance I see on a daily basis often leaves me agog to be honest - really. There are a LOT of people who are by no means 'dummies' but trust in what a supposed 'professional' is telling them.

This is not to mention those who for whatever reason can't or won't take the time to educate themselves.

It's very easy to blame someone for believing something they're told rather than blaming the snake oil salesman who's telling them it. Lately I see that entirely too much.

I am a strong advocate for personal responsibility; however, responsibility should be a two way street when it comes to ethical business practices as well IMHO. One's not any worse than the other to me.
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Old 07-04-2011, 08:23 PM
 
8,760 posts, read 16,104,943 times
Reputation: 3486
Quote:
Originally Posted by reloop View Post
I can see your points in most of what you're saying; however, I refuse to put the blame squarely on just the government.

Uh, uh. Nope.

There were plenty of banks and shady 2nd mortgage companies (those suckers sprung up like poison mushrooms all over my area) which were quite willing to encourage people to take advantage of credit in order to profit. "Got bad credit?? NO problem!"

Many of them were started or run by shifty former used car salespeople. The "cream of the sleazy salesman crop" if-you-will.

One of them in my area was fired by an auto parts place I formerly worked for in the 80s. He was the manager, and he was totally ripping off the owner - BIG time. Funny, he never saw any jail time for that.

I digress. Anyway, I used to see his smiling business portrait all over the place as a loan shark...er, ah...owner of a 2nd mortgage company.

Yes, people have to have personal responsibility, but they also need to have education beyond "Hey! It's no problem! Come on in and we'll cut you a check!" Reality here. Not everyone is savvy in business. Then there are the gullible, and shister types know just how to take advantage of them, and it's wrong. Period.

I worked for a couple of different banks in my lifetime. I've seen the bonuses - LOTS of bonuses - some bordering on ridiculous. All in the name of garnering the most profit possible, so the banks aren't completely innocent in this situation.

Okay, that's the American way right? Yes. I don't have a problem with a free enterprise making a profit. Really I don't, but let's not paint all banks with a broad brush because just like there are suckers born every day, there are shisters willing to part them with their cash in the name of "profit".
The stupid in life get what they deserve. It is not my fault or my neighbors fault if someone is too stupid to stay away from bad loans, gambling, drinking to excess, smoking , over eating, riding a motorcycle without a helmet etc etc etc. They are the idiots not me. I'm realtively intelligent, fairly well read, and do not toss all of my eggs in one basket. I know bull**** when I see it and know how to avoid it. I do not feel the least bit sorry for people engaging in something they have no business engaging in. Too bad... Learn a lesson..don't expect to be bailed out. If they have to rent the rest of their lives because they made a bad home loan tough! I still should not have to pay for the mistakes of the stupid, nor should I be guilted in to it by shameless politicians. To hell with them all.
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Old 07-04-2011, 08:33 PM
 
8,760 posts, read 16,104,943 times
Reputation: 3486
Quote:
Originally Posted by reloop View Post
Excellent points which I would rep you for if I could.

Ignorance I see on a daily basis often leaves me agog to be honest - really. There are a LOT of people who are by no means 'dummies' but trust in what a supposed 'professional' is telling them.

This is not to mention those who for whatever reason can't or won't take the time to educate themselves.

It's very easy to blame someone for believing something they're told rather than blaming the snake oil salesman who's telling them it. Lately I see that entirely too much.

I am a strong advocate for personal responsibility; however, responsibility should be a two way street when it comes to ethical business practices as well IMHO. One's not any worse than the other to me.
Since when is it unethical to take advantage of the un-educated. Ever see the QVC channel or those types of infomercials?? They FEED off the stupid and make a good living at it. Millions and Millions of dollars for whole house antennas, in the shell egg scramblers, cheesy vegetable steamers etc etc . MORONS on parade and they sell TONS of that stuff. Is it any wonder they could find millions of stupid people who actually believed a $1500 a month mortgage on some dump in Detroit or elsewhere was a good deal and they COULD actually afford it on a burger flipping wage????
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