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I noticed a number of posts using language like "those irresponsible people who bought more house than they could afford..." I don't know about you but I couldn't buy a single penny's worth more house than what I was pre-approved for. The blaming of minority homeowners for bringing down the largest economy in the world is ludicrous. A small percentage of the smallest (economic) minority in this country could not by themselves cause such large scale insolvency. Could it be that the true cause is more like what Mr. Moore posits?: "And let's set the record straight. People who have defaulted on their mortgages are not "bad risks." They are our fellow Americans, and all they wanted was what we all want and most of us still get: a home to call their own. But during the Bush years, millions of them lost the decent paying jobs they had. Six million fell into poverty. Seven million lost their health insurance. And every one of them saw their real wages go down by $2,000. Those who dare to look down on these Americans who got hit with one bad break after another should be ashamed. We are a better, stronger, safer and happier society when all of our citizens can afford to live in a home that they own."
The last line is over the top but he's entitled. Bostonian08 (you've got rep BTW) needs to be read again. Enough of this Demican/Republicrat ****! What more than the present mess do you need as proof that these jokers do not have the interests of 98% of Americans at heart. These are the only parasites that can actually kill their hosts without penalty. Don't let them do it.
I noticed a number of posts using language like "those irresponsible people who bought more house than they could afford..." I don't know about you but I couldn't buy a single penny's worth more house than what I was pre-approved for.
H
Just because a mortgage broker (who gets paid a % of your final loan amount and the more you borrow the more he/she makes BTW )says you can borrow $X does'nt mean it is the right thing to do. Especailly if you structure a mortgage & purchase betting that you can re-fi before your loan costs change. That is irresponsible.
When I went to buy my house in 1999 my wife & I did our homework & decided that depending on the rate we could swing a mortgage somewhere in the $250K range. And that was a stretch, but we were willing to do it to get into the OC housing market. When I called the Mortgage broker and laid out our income they were willing to pre-approve us for $325k mortgage. Wayyyy more then was prudent.
Alot of what Nep said. (Repped ya Nep) a few nits here and there but overall...
>When I called the Mortgage broker and laid out our income they were willing to pre-approve us for $325k mortgage. Wayyyy more then was prudent.<
A couple points.
1) I have a 4 year business degree, the average person does not. The average person does not understand the time value of money, cash flow etc. Its not suckered as much as not making sure they understand. Many just dont "get it"
2) I got laid off last year and relo'ed to NJ. I thought I would take a stab at buying a house. (Renting does suck with a family). I got approved for $310K with 5% down. I ran the numbers including cash flow and found we ran out of money 5 months later. I even found a cute house that even looked good for 300K! (DIRT cheap in NJ not in the 'hood) It hurt not to buy that house... It was so nice it sold in a week in a down market.
NOT buying was still the right decision. That being said; I ***DESPISE*** renting. I despise the crapshack I rent for near 2k a month that is being sold and torn down next year. I despise having to move AGAIN next year.
Setting CEO salaries maxxing at ~1M (roughly the 40X rule) is socialist. I will never likely earn that but I wouldnt set them that way.
Now, harder rules about making BIG bucks while destroying a company... The Gordon Bethunes of this world should not be held down to stop the Wall Streeters. Again some kind of pay for performance rule on publicly traded companies would be useful.
Because currently only ~10% of all 30 year mortgages ever go full term. The average mortgage term is 7 years. Lower income families move 1.5 times as often as higher income families. How many of these families are going to stay in a house for 40 years? The increase term will reduce the rate at which they build equity. The problem they have now is they are upside down. This is a nice idea, but not realistic in my opinion.
they keep telling us this is a cash flow problem that has to be fixed. that helps the cash flow. other plans have to be implemented in the interim, but clearly is paying too much for overpriced houses to start with any kind of even reasonable solution? housing will always be devalued because we will never be able to build it back up again with these current inflated housing prices as our starting base.
1. APPOINT A SPECIAL PROSECUTOR TO CRIMINALLY INDICT ANYONE ON WALL STREET WHO KNOWINGLY CONTRIBUTED TO THIS COLLAPSE.
Would you also support criminally prosecuting anyone who falsified an application for a mortgage by inflating/lied about their income ? There is plenty of blame to go around and the outright fraud should be punished but it cuts both ways.
I noticed a number of posts using language like "those irresponsible people who bought more house than they could afford..." I don't know about you but I couldn't buy a single penny's worth more house than what I was pre-approved for. The blaming of minority homeowners for bringing down the largest economy in the world is ludicrous. A small percentage of the smallest (economic) minority in this country could not by themselves cause such large scale insolvency. Could it be that the true cause is more like what Mr. Moore posits?: "And let's set the record straight. People who have defaulted on their mortgages are not "bad risks." They are our fellow Americans, and all they wanted was what we all want and most of us still get: a home to call their own. But during the Bush years, millions of them lost the decent paying jobs they had. Six million fell into poverty. Seven million lost their health insurance. And every one of them saw their real wages go down by $2,000. Those who dare to look down on these Americans who got hit with one bad break after another should be ashamed. We are a better, stronger, safer and happier society when all of our citizens can afford to live in a home that they own."
The last line is over the top but he's entitled. Bostonian08 (you've got rep BTW) needs to be read again. Enough of this Demican/Republicrat ****! What more than the present mess do you need as proof that these jokers do not have the interests of 98% of Americans at heart. These are the only parasites that can actually kill their hosts without penalty. Don't let them do it.
H
That's true and it is ludicrous at this point to be blaming the homeowners who signed the loan docs for this fiasco. The problem is much bigger than that. We can not have an economy where wealth is created by debt. It's a giant pyramid scheme. Regulations in the banking industry has been systematically swept away, interest rates were lowered to create a bubble economy where money became almost free, manufacturing has been shipped overseas, and our economy has been propped up by this FIRE sector for decades. What we need is strict regulation in the banking industry and the crooks on Wall Street to be held accountable.
What I see is Americans beings lied to. I see them pushed into this thing, so that they are confused and don't understand what's going on. I see our government becoming a kleptocracy. And if this bill passes in the House, I see foreign investors pulling out of our markets, the dollar dropping, and hyperinflation. I see a very cold winter ahead.
Michael Moore provides a useful alternative view and interjection into the debates. I think he is unrealistic on a lot of points, but at least he isn't just jumping on the panicked leap over the cliff with the rest of the lemmings. It is really stupid at this juncture to just dismiss anything he says as socialist crap when the current free market, anything goes paradigm is going down in flames as a failed policy.
To answer the statement that extending out the failing mortgages not giving those people equity - well, the greed bandwagon was hopped on by way too many people. They are not innocent in this mess. Some got caught in the ARM mess, which shouldn't have been happening given how low the Fed interest rates are, but most made foolish loans, failed to understand what they were signing, failed to do the most basic of budgeting, and just wanted to get money out their houses, often for frivolous things. Reworking the loans into something they could afford keeps them solvent and housed. They should not be rewarded for their irresponsible decisions any more than that Wall St fat cats should be. But neither should we just let such large numbers completely fail and become a social problem. There is a middle ground.
It used to be, when the banks were regulated, that the banks would not loan to people who were not a decent risk for paying back the loan (duh!). It has gotten so insanely crazy that that is exactly what happened to a lot of these people. The banks were not forming the natural check on foolish people (or criminal fraudsters) by refusing to give loans to people who could not pay them back. These victims should be helped because the crunch is based on the large numbers of defaults and this is not entirely their fault. By helping them, you stem the tide of defaults and the whole system is a bit healthier.
The liar loans are simply fraud and should be prosecuted - both the liar and the institution who failed to perform the most basic of credit checks.
Most of the perpetrators of this mess cannot be criminally prosecuted because the laws have gotten so lax that most of what they did is legal. Stupidity is not a criminal offense. I don't how we got to the point of actually believing that unfettered greed would regulate itself. It never has in the history of mankind. It always ends up in a financial mess, if not wars.
I absolutely agree that the current blaming of the poor and minorities for this mess is a red herring. It's the only thing they could pin solely on the Democrats, so that's why they are trying to drum up that blame game. Those people are a tiny minority of the defaults and got caught up in the huge teetering leveraged mess that the banks have become. The Dems are certainly not innocent as they have gone along with all the deregulation over the past 30+ years, but this a Republican fostered ideology that got us here.
There is a lesson in the state of the Credit Unions and the few remaining local banks. These institutions are still healthy and solvent. They never joined in the massive fraud game that our economy has become. The CUs are still regulated and keep 70% of the loans they make. They vet loaners and don't take stupid risks. They are well capitalized and not leveraged 40+ times beyond their assets.
Careful, middle of the road regulation works. It keeps people more or less honest and levels the playing field so most people can partake of a robust and healthy economy.
I also agree that executive compensation is nothing less than the rape and pillage of companies. They routinely get rewarded with many millions for incredibly poor performace - at the cost of the company employees and stockholders. It is an insane system that has got to stop somehow. I'm not sure how, but it is an incredibly stupid way to run a business or an economy.
I'm glad Moore has enough clout to get people talking about these issues and the problems he highlights. They need to be part of the converstion and they need to be addressed, even if his proposals are not the right solution. For that, I laud his efforts, even if I disagree with him.
After all, just about every car dealer and dentist in his home town is also worth a few million---that is not really a lot of money.
I doubt you will find too many millionaires in Flint.
Wrong. Flint, like any other city of 100,000, has car dealers and dentists, and beliee me, any dentist who is not making money in one town will quickly move to another. Do you think when Flint went into decline, it was the rich who were affected as much as the poor? Yellowbook.com has 282 listings for dentists in Flint. Why do you suppose they are staying there, if they are not earning the typical wealth that dentists can expect in thie country? Eveb though unemployment in Flint is abut 15%, an overwhelming majority of people live in employed households, and they buy cars from dealers who are making money, same as anywhere else.
I have no idea what kind of a mental picture you have of Flint---probably about as accurate as your mental picture of Iran. What do you think Flint looks iike? There is a Sam's club and two Super WalMarts in Flint. There are Starbucks and Best Buys, and city hall is issuing buklding permits. But you will not see Michael Moore there. His primary home is in Leelanau County, 200 miles to the north.
if michael moore didn't go to pizza hut buffet, he could save up that $700B in a couple of months.
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