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Good analogy. The only thing I would add is that the banks (crack dealers) hedged the drug sales because they knew the users would get addicted and arrested. By selling the loans (in some cases BEFORE they even underwrote them) and intentionally classifying them incorrectly (with no oversight), they made gobs of money on the fraud. Countrywide is a great example and an anchor around the neck of BofA who is going to bear the brunt of the putbacks (and another bail out).
FCNova needs to do some research on RMBS, MBS, CDOs, et al... The fraud and criminal activity by these banks was epic. It got so bad and wound so tight they knew there would be nothing but rescues. In fact, now they won't even lend without the gubmint backstop of HUD / FHA.
Lastly, of course they knew there would be bailouts... Geithner, Bernanke, Sacks - the list goes on of influential policy folks making the financial decisions for our government. All with blatant ties to the Goldman Sachs, Citi, and PIMCOs of the financial world. That's not even including a MONSTER BANK LOBBY that wields the real power. Watch where all the ex-gubmint economists end up after service - nice cush jobs doing nothing "working" at an investment bank. Frankly, what the Fed is doing overtly with the stock market is criminal, but that's another thread entirely. Wealth preservation for the rich.
Do you have a link to statistics on how many of the bad loans were fraudulent? See, I don't argue that all were legit. There were obviously fraudulent loans, and some of the fraud was incredibly blatant. But to blame the downfall of the housing market on bank fraud is just wrong IMO, unless you can show me some numbers that show most of the bad loans were illegal. The main downfall was just irresponsibility. The standards were too lax, and people were preapproved for way too much by the banks, and they took it. Your 800 credit score isn't going to put money into your pocket when you lose your job, and when these people who were stretched thin did due to the recession they defaulted. And honestly I'm not even sure if it's gotten much better. My wife and I were preapproved for way too much back in 2005, but still kept our purchase reasonable. I had heard standards were much tighter now, and we just went through it again and my god I was blown away how much our loan officer said he could preapprove us for. If we maxed it out and one of us lost a job we'd be in big trouble. The crack dealer analogy is good, and I do think the banks deserve more blame than individuals because of that rationale. But to put it all on them and absolve the people who took out the loans from guilt because of "ignorance" is just silly and it irritates me to hear so many people take that stance.
Yeah, I suppose so. My house is worth 20% less than what I paid for it.
Everybody who owns a home got screwed. Their mortgage balance is irrelevant.
I'm really glad that the bitterness shows. I tried hard to make that impression.
So you got burned and are pissed at the banks for it. I wish you had just said this from the start, because we are obviously not going to have a rational conversation about it until you let the bitterness go. FYI I bought in 2005 and lost quite a bit of money on my condo.
All these loan programs had been around for decades.
Irrelevant.
The lax lending standards were the catalyst and those were recent.
Quote:
Originally Posted by FCNova
So you got burned and are pissed at the banks for it. I wish you had
just said this from the start, because we are obviously not going to
have a rational conversation about it until you let the bitterness go.
I like the bitterness. It has nothing to do with my ability to be rational.
As a matter of fact, I have made more money during these past few
years than I ever did before - thanks to the depression that is on now
( it's not a recession - it's not a "recovery" either ).
I reserve the right to be angry over instututions that should have been
allowed to fail that absolutely ruined so many families. Even if you have
a house that is mostly paid off and still have a good job, the institution
of buying and owning a house and using it to finance one's retirement is
now over. It was a good system that a relatively few people screwed up.
The fact that I've made money from it doesn't mean that I like it.
I'd rather make money from a successful economy than a failed one.
Do you have a link to statistics on how many of the bad loans were fraudulent? See, I don't argue that all were legit. There were obviously fraudulent loans, and some of the fraud was incredibly blatant. But to blame the downfall of the housing market on bank fraud is just wrong IMO, unless you can show me some numbers that show most of the bad loans were illegal. The main downfall was just irresponsibility. The standards were too lax, and people were preapproved for way too much by the banks, and they took it. Your 800 credit score isn't going to put money into your pocket when you lose your job, and when these people who were stretched thin did due to the recession they defaulted. And honestly I'm not even sure if it's gotten much better. My wife and I were preapproved for way too much back in 2005, but still kept our purchase reasonable. I had heard standards were much tighter now, and we just went through it again and my god I was blown away how much our loan officer said he could preapprove us for. If we maxed it out and one of us lost a job we'd be in big trouble. The crack dealer analogy is good, and I do think the banks deserve more blame than individuals because of that rationale. But to put it all on them and absolve the people who took out the loans from guilt because of "ignorance" is just silly and it irritates me to hear so many people take that stance.
You're downplaying what they did by calling it irresponsible. That irresponsibility on the part of the banks is criminal and what they're doing to cover it up now is clear cut fraud - that's the point I'm making... Whether it's the robosigning most recently or the no-doc loans at the height. The banks continue to break very specific laws that you or I would go to jail for. You can't ruin financial derivatives by not doing the due diligence when you sold them into securities - magically classifying them as A debt knowing they can't make the payments long term. You can't sign legal documents that you read them when you obviously didn't. You can't transfer a note on the fly and post sign documents when the law says specifically that you can't. You can't foreclose on property as the servicer with no documented way to show who holds the note... The list goes on.
Ignorance or irresponsibility... The "people" are by and large getting foreclosed on regardless of their ignorance or irresponsibility and paying the price by losing their homes. Yet, the banks? Laws don't apply.
I don't have the time to link statistics, but there is some real good writing on the topic... take a look at the book Griftopia from Matt Taibbi who also writes/blogs for Rolling Stone.
You're downplaying what they did by calling it irresponsible. That irresponsibility on the part of the banks is criminal and what they're doing to cover it up now is clear cut fraud - that's the point I'm making... Whether it's the robosigning most recently or the no-doc loans at the height. The banks continue to break very specific laws that you or I would go to jail for. You can't ruin financial derivatives by not doing the due diligence when you sold them into securities - magically classifying them as A debt knowing they can't make the payments long term. You can't sign legal documents that you read them when you obviously didn't. You can't transfer a note on the fly and post sign documents when the law says specifically that you can't. You can't foreclose on property as the servicer with no documented way to show who holds the note... The list goes on.
Ignorance or irresponsibility... The "people" are by and large getting foreclosed onregardless of their ignorance or irresponsibility and paying the price by losing their homes. Yet, the banks? Laws don't apply.
I don't have the time to link statistics, but there is some real good writing on the topic... take a look at the book Griftopia from Matt Taibbi who also writes/blogs for Rolling Stone.
I get it, you're so irate at the banks you're calling their irresponsibility criminal even though in majority of cases they operated within the law(unless you show me some statistics otherwise). My point is it wasn't criminal, just extremely irresponsible. Whatever, it's pointless to argue semantics, especially when we're basically in agreement that what they did was wrong. Just admit that the people who signed and took out these mortgages they couldn't afford are due a significant portion of the blame for what went down.
I get it, you're so irate at the banks you're calling their irresponsibility criminal even though in majority of cases they operated within the law(unless you show me some statistics otherwise). My point is it wasn't criminal, just extremely irresponsible. Whatever, it's pointless to argue semantics. Just admit that the people who signed and took out these mortgages they couldn't afford are due a significant portion of the blame for what went down.
lol ok
The people you're blaming are losing their homes, which you find justified and I won't argue about with you based on semantics.
The bankers had world record breaking years based on doctored up backstopped bailed out markets using bogus accounting and will see mindboggling huge bonuses at the end of this year.
You're darn right I'm irate and the fact that you're not is amazing to me. Yeah, it's all those middle class folks in houses that need to pay. Everything is working out perfectly.
The people you're blaming are losing their homes,which you find justified and I won't argue about with you based on semantics.
The bankers had world record breaking years based on doctored up backstopped bailed out markets using bogus accounting and will see mindboggling huge bonuses at the end of this year.
You're darn right I'm irate and the fact that you're not is amazing to me. Yeah, it's all those middle class folks in houses that need to pay. Everything is working out perfectly.
If you purchase something and you can't afford it, then yes you should give it back. I think that's justified. I really really feel sorry for people who lose their home but come on. It was a sh**ty situation for alot of people(me included) and the banks deserve tons of blame but I still can't just sit here and say people who took out huge mortgages they could barely afford or used their home as an ATM aren't to blame as well, like you apparently can. You still haven't even acknowedged that the people who took out the mortgages are deserved of some blame.
And no I'm not irate, life is too short. Live & learn.
All that back and forth yet never you guys touched on who punted the housing ball off, Barney Frank, Chris Dodd, Maxine Waters, with the lowering of the bar to set the mechanism in place as so the predators (banks) can feast on it's prey (consumer). The poor sheep were led to the slaughter house with nary a chance, not the consumers's fault, not the banks fault, but our politicians who in trying to protect us (as always) held our heads up high while our throats were cut..
In the United States, we used to make stuff. --- Now, the most iconic "manufacturing" company in the
world - Apple makes everything in China. Making it here - like the Apple II was never a consideration.
That's just one example.
We used to do stuff just for the heck of it like the Empire State Building, the
mission to the moon, et al. Now we say "We've already been there. Get over it."
The richest people in this country used to make stuff and have factories.
Now, the really big bucks are made by people who engage
in "producing" "advanced financial instruments/tools."
Of course I'm bitter. The only thing that makes us look good
is that most of ( the other countries ) suck worse in some way.
Quote:
Originally Posted by FCNova
... people who took out huge mortgages they
could barely afford or used their home as an ATM
They're gone. They are not the people hanging on by their fingernails now.
Why why why do you people keep dragging that out?
You need to get over it.
Quote:
Originally Posted by FCNova
You still haven't even acknowedged that
the people who took out the mortgages
are deserved of some blame.
Aren't you the same guy that said 90-95% of the mortgages created were probably legit?
The people who took out the mortgages are just ordinary people caught up in
something way bigger than them. How you can blame them is way beyond me.
It's like blaming a victim of a violent crime for being in the wrong place at the wrong time.
"Yeah, she knew he was an ex-con and dated him anyway. She deserved to have her
face blown off." ( She shares some of the responsibility for her 1,000 plastic surgeries. )
( This happened in my town. )
Wells Fargo Agrees to Compensate Borrowers
Wells Fargo & Co. has reached an agreement with the state of California to pay more than $2 billion to compensate more than 12,000 borrowers who lost their loans because they defaulted on Pick-A-Payment loans.
"Customers were offered adjustable-rate loans with payments that mushroomed to amounts that ultimately thousands of borrowers could not afford," California Attorney General Jerry Brown said in a statement. "Recognizing the harm caused by these loans, Wells Fargo accepted responsibility and entered into this settlement with my office."
The loans were originated by Wachovia Corp. and Golden West Financial Corp. Wells Fargo acquired those companies. Wells has entered into similar agreements in nine other states.
Lenders knew these loans could never be paid off in full.
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