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Thread summary:

Mortgages: real estate, market, affordable, financial advisers, foreclosure.

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Old 09-23-2008, 01:20 PM
 
Location: MID ATLANTIC
7,614 posts, read 17,717,380 times
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Quote:
Originally Posted by TristansMommy View Post
When looking individually..yes.. you can't neccesarily blame the bank for your own personal situation because you signed the papers.

However.. when looking at the entire picture of what is going on with financial markets you can't blame the homeowners.. because ultimately it was the banks/ wall street that were at the wheel of the whole movement.. THEY were the ones that are/were responsible for who got what mortgage. So whereas the homeowner is responsible for only themselves.. the banks/wall street are responsible for the entire economy.

And basically.. they screwed the pooch!! BIG TIME!
I have to agree with rtjr on many of his points. And, every situation has it's exceptions. I am not addressing those exceptions. We all can agree fraud exists in our world, and those guilty, should be behind bars.

Just because the banks had programs available does not make them responsible because someone could not meet their mortgage payments. I am sorry, I can't buy into that. That is like accusing a car dealership for selling you a $60,000 car and and now you can't afford to make the insurance payments.

I am not taking the high and mighty road, but your, and now our, problems are not because of banks. Some of the best and brightest in the industry totally missed this crisis, and the few that did bring it up back in 2003 and again in 2005, were poo-poo'd as being chicken little. If you don't understand how loans are moved within the industry, how can you possibly blame banks?

Where people do have the judging mentality is when the consumer claims no responsibility. "I didn't know my loan was an adjustable, I thought I was getting a 3% loan." Or, "I knew I couldn't afford the home, but after two years I was going to sell before the payment adjusted, so what difference does it make?" Time and time again, the consumer has pointed a finger at the banker and broker and said "they made me do it."

It's like blaming the automaker for allowing your car to drive up to 100 mph. Is it their fault you are driving 75 mph in a 45 mph zone?

Seriously, give me some real examples how it is a bank's fault so many homeowners are defaulting? Personally, I see our elected officials as the guilty party. Guilty for lack of oversight, lack of independence from campaign contributors. Now, they are guilty for over-reacting and making sure there is no remedy for the unfortunate homeowner.
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Old 09-23-2008, 01:24 PM
 
Location: Great State of Texas
86,093 posts, read 70,127,848 times
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Sorry..blame has to go all around on this one.
Banks offered too much money to people.
People took that money not caring that an ARM can reset UP as well as down

Everyone assumed rates would stay low and home values would keep going up.
Well you know what the word ASS-U-ME means ?
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Old 09-23-2008, 01:29 PM
 
Location: Oxygen Ln. AZ
9,321 posts, read 16,174,721 times
Reputation: 5685
Trying to get past all the political posturing and seeing just where this country went wrong is quite the adventure. There is plenty of blame to go around both parties and sadly the American people as well. We do have an "entitlement" mentality in this country, where luxury living is a right and should be spread out to the masses, even to those that can't afford the lifestyle. Our kids have to have the IPODS, the car, the bling. We have to have two new cars in a driveway we can not pay for just to fit in the neighborhood. This started under the Carter administration and has been nurtured along by both democrats and republicans. I believe my country is gone and we are entering into a new America, one I will not recognize.
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Old 09-23-2008, 01:30 PM
 
Location: Oxygen Ln. AZ
9,321 posts, read 16,174,721 times
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Quote:
Originally Posted by JerseyGirlinFL View Post
I dont think you are putting the blame where it really belongs. The catastrophic impact on this country and its economy was largely and mostly due to what the BANKS did.. and don't tell me they didn't know better. I, as a homeowner not in the real estate or mortgage business or bank business had NO IDEA what was going on with banks and mortgages. I just thought it was a hot real estate market so I wasn't worried about my house selling. Even if the market came down, I knew that I could lower my price and sell, no problem. But I didnt know the banks were courting disaster! How could I have known that? Stop judging people. Start judging the banks who made tons of money then, & are getting bailed out now.
I judge you both equally and find you lacking.

The lending institutions were threatened by then attny general Janet Reno with legal action if they attempted to "red line" any of the subprime language in these insipid loans. So the lending institutions carried on.
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Old 09-23-2008, 01:34 PM
 
Location: Pennsylvania, USA
5,217 posts, read 4,125,506 times
Reputation: 908
Quote:
Originally Posted by SmartMoney View Post
I have to agree with rtjr on many of his points. And, every situation has it's exceptions. I am not addressing those exceptions. We all can agree fraud exists in our world, and those guilty, should be behind bars.

Just because the banks had programs available does not make them responsible because someone could not meet their mortgage payments. I am sorry, I can't buy into that. That is like accusing a car dealership for selling you a $60,000 car and and now you can't afford to make the insurance payments.

I am not taking the high and mighty road, but your, and now our, problems are not because of banks. Some of the best and brightest in the industry totally missed this crisis, and the few that did bring it up back in 2003 and again in 2005, were poo-poo'd as being chicken little. If you don't understand how loans are moved within the industry, how can you possibly blame banks?

Where people do have the judging mentality is when the consumer claims no responsibility. "I didn't know my loan was an adjustable, I thought I was getting a 3% loan." Or, "I knew I couldn't afford the home, but after two years I was going to sell before the payment adjusted, so what difference does it make?" Time and time again, the consumer has pointed a finger at the banker and broker and said "they made me do it."

It's like blaming the automaker for allowing your car to drive up to 100 mph. Is it their fault you are driving 75 mph in a 45 mph zone?

Seriously, give me some real examples how it is a bank's fault so many homeowners are defaulting? Personally, I see our elected officials as the guilty party. Guilty for lack of oversight, lack of independence from campaign contributors. Now, they are guilty for over-reacting and making sure there is no remedy for the unfortunate homeowner.
The government is guilty as well. Funny.. a lot of people want "deregulation" you deregulate and then what happens.

Wall street ran amok with greed! They were making tons of money and turning a blind eye! Those giving out the loans didn't underwrite them properly and when those buying those securities or whatever.. they weren't bundled properly.. but no one cared because they were making the dough and it was a rolling in.

Yes.. people didn't have to utilize the programs. I get that. There were some pretty stupid people out there who for some reason made only $40 a year and thought they could really afford a $500K house..

But then where was the guy looking at the applicant that said "office admistrator" with a stated salary of.. oh say $100K!! Yes.. that person lied.. but the lender was an idiot for believing that ridiculous lie.

And.. for therecord.. I didn't lie. I make some nice money. yes. .I bought with an Alt-A Arm.. it was my fault for having gotten a mortgage with an ARM thinking that in 2 years when my score improved I'd be able to refinance and lock in a fixed rate (I did put money down and improved thehouse significantly). What I didn't count on and what I couldn't know was that the industry was being irresponsible in their lending practices and giving out mortgages like candy.

and.. just to add.. when I did my mortgage I went stated because Im' self employed.. but I did show 2 years of bank statements that showed how much went in and out of my accounts in those 2 years. It was clear to me that unless I refinanced I wouldn't be able to afford where the payments went. If I knew it.. the lender knew it too. The thought of not being able to refinance never really crossed my mind.. and had the industry not given out loans irresponsibly.. I would be in a fixed rate right now and staying in my home.

I bet once.. the banks and financial industry made the same bet 1 millin times over.. .. and THEY are the ones that are supposed to know what they are doing.

Funny.... it's like a kid who wants their freedom, parents give it and then they screw up and blame the parents for not giving them enough discipline.. Which is what the banks/Wall Street is doing now.. they are saying "well it's your fault becaues you didn't regulate us!"

They better not cry after all is said and done and the government IS regulating them more..

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Old 09-23-2008, 03:28 PM
 
Location: MID ATLANTIC
7,614 posts, read 17,717,380 times
Reputation: 8112
Quote:
Originally Posted by TristansMommy View Post
The government is guilty as well. Funny.. a lot of people want "deregulation" you deregulate and then what happens.

Wall street ran amok with greed! They were making tons of money and turning a blind eye! Those giving out the loans didn't underwrite them properly and when those buying those securities or whatever.. they weren't bundled properly.. but no one cared because they were making the dough and it was a rolling in.

Yes.. people didn't have to utilize the programs. I get that. There were some pretty stupid people out there who for some reason made only $40 a year and thought they could really afford a $500K house..

But then where was the guy looking at the applicant that said "office admistrator" with a stated salary of.. oh say $100K!! Yes.. that person lied.. but the lender was an idiot for believing that ridiculous lie.

And.. for therecord.. I didn't lie. I make some nice money. yes. .I bought with an Alt-A Arm.. it was my fault for having gotten a mortgage with an ARM thinking that in 2 years when my score improved I'd be able to refinance and lock in a fixed rate (I did put money down and improved thehouse significantly). What I didn't count on and what I couldn't know was that the industry was being irresponsible in their lending practices and giving out mortgages like candy.

and.. just to add.. when I did my mortgage I went stated because Im' self employed.. but I did show 2 years of bank statements that showed how much went in and out of my accounts in those 2 years. It was clear to me that unless I refinanced I wouldn't be able to afford where the payments went. If I knew it.. the lender knew it too. The thought of not being able to refinance never really crossed my mind.. and had the industry not given out loans irresponsibly.. I would be in a fixed rate right now and staying in my home.

I bet once.. the banks and financial industry made the same bet 1 millin times over.. .. and THEY are the ones that are supposed to know what they are doing.

Funny.... it's like a kid who wants their freedom, parents give it and then they screw up and blame the parents for not giving them enough discipline.. Which is what the banks/Wall Street is doing now.. they are saying "well it's your fault becaues you didn't regulate us!"

They better not cry after all is said and done and the government IS regulating them more..

It was clear to me that unless I refinanced I wouldn't be able to afford where the payments went. and It was clear to me that unless I refinanced I wouldn't be able to afford where the payments went. If I knew it.. the lender knew it too. It was clear to you.

What I didn't count on and what I couldn't know was that the industry was being irresponsible in their lending practices and giving out mortgages like candy. I think you mean you did not know the industry would stop giving out mortgages like candy. When you bought, it was at the height of the market.

and.. just to add.. when I did my mortgage I went stated because Im' self employed.. but I did show 2 years of bank statements that showed how much went in and out of my accounts in those 2 years. and I bought with an Alt-A Arm.. it was my fault for having gotten a mortgage with an ARM thinking that in 2 years when my score improved I'd be able to refinance and lock in a fixed rate (I did put money down and improved thehouse significantly). I feel real bad for you, and if you were told the 2/28 loan program was an Alt A loan program you were mislead. Horribly. It is a subprime loan product. It was designed to afford those making good money the means to purchase a home without the traditional tax return requirements.

The thought of not being able to refinance never really crossed my mind.. and had the industry not given out loans irresponsibly.. I would be in a fixed rate right now and staying in my home. Almost all of the 2/28 loans had a prepayment penalty, designed to make it REALLY cost to refinance. After all, you were making good money.
There were some pretty stupid people out there who for some reason made only $40 a year and thought they could really afford a $500K house. and But then where was the guy looking at the applicant that said "office admistrator" with a stated salary of.. oh say $100K!! I already conceded that fraud was involved in the industry and I was not addressing fraud in my comments. That is an entirely different subject. But since we are here: Many cultures (emerging markets) have multi-generations living under one roof. Much of this income is cannot be documented. So, while the guys that said he made 100K, there were that thought they were not committing fraud, believing they were lumping in the family income as one income. Right/wrong, not my call. At the end of the day, it's not the loan officer that signs the documents at closing and the final 1003 (application) attesting to their income. Again, that is fraud. If the borrower did it, go to jail. If the loan officer did it, ditto. The FBI can't prosecute these transactions fast enough.
Which is what the banks/Wall Street is doing now.. they are saying "well it's your fault becaues you didn't regulate us!" They better not cry after all is said and done and the government IS regulating them more.. In 1999, Clinton signed the Financial Services Modernization Act of 1999 which deregulated everything. Paul Volker, the then Secretary of Treasury was one of those chicken littles I was referring to....being very vocal that this was a disaster waiting to happen. A younger, Alan Greenspan, was standing next to Volker when the legislation was signed. He thought this was good for our economy, and everyone was being over cautious. And you are correct about over-regulating, it's already happening and swiftly. Right now, loopholes are being closed quickly for homeownership if there is a foreclosure or short-sale (both are regarded the same by the credit bureaus and mortgage lenders, one is just through the courts). It use to be 2 years after FC to purchase, it went to 4 years and now some are already at 7 years. I suspect, it's going to be close to 10 years by the time it is all said and done, and if that is what it takes to right the system, we don't have much of a choice, do we?
Yes.. people didn't have to utilize the programs. I get that. If the ones that knew they were taking a risk, didn't take that risk, then all we would have to worry about are those that committed fraud. Prosecution would be so much easier. Unfortunately, as you have seen, there are many different factors when a home is lost by foreclosure, the lines are becoming blurred and those that should be prosecuted are blending with those that are guilty of nothing but poor judgment.

At the end of the day, there is plenty of blame to pass around. Unfortunately, even those that shouldn't be touched with one bit of blame are going to pay for the sins of others. I find that very sad, very sad, because the majority are in the senior sector of our population.


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Old 09-23-2008, 03:49 PM
 
52 posts, read 97,361 times
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Quote:
Originally Posted by rtjr View Post
Ok, not singling any one person out here but yes, the lenders share the blame and now we are all paying for it - but at some point, we are all responsible to ourselves. If you took out an ARM and cannot afford the higher payments when the ARM resets, how is that the Bank's fault? If you bought a home before selling your existing home, therefore assuming two mortgages, how is that the banks fault? Just because the housing market has been hot, does not mean it will stay hot. that holds true for any market. Why would you take a lender's word regarding what you can afford and what you cannot afford? Only you know your spending habits, the security of your career, and what you can comfortably afford every month - why would you let a bank dictate that for you? People need to think for themselves, educate themselves, and take responsibility for their decisions. When I bought my house, my lender told me I could be approved for almost twice as much as I borrowed. I knew damn well there was no way I could ever afford that kind of payment so I went with a mortgage I knew I could afford - it was my decision, not the banks.
Yes I did put a deposit down before my house was sold. Wrong move and I admit it, and never again. However at the time, and I am saying this again, there was NO reason to believe that I could absolutely NOT SELL my house at any price! This situation never existed before in my lifetime. Of course I knew that a hot market could and eventually would cool off again, but to stop cold like it did? No way. How could I know what all banks and mortgage companies were doing with all that creative financing? My mortgages, both of them, are very nice rates and both are very affordable.

Yes, people need to think for themselves and be educated, I agree. But the majority will rely upon advice from the professionals, and that includes the banks and mortgage companies. They were in a position to know the house of cards they were creating but the greed kept them going. And Tristansmom is right, the banks had the overall picture, whereas each of us were only dealing with our own personal situation. These large corporations are the ones running this country and ruining it as well.
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Old 09-23-2008, 03:59 PM
 
52 posts, read 97,361 times
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Quote:
Originally Posted by MotleyCrew View Post
I judge you both equally and find you lacking.

The lending institutions were threatened by then attny general Janet Reno with legal action if they attempted to "red line" any of the subprime language in these insipid loans. So the lending institutions carried on.
With all due respect, I find your smug and judgmental attitude lacking.
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