A Tourist's Guide To Rhode Island: Part 1: Pros and Cons (my best so far) (Westerly: credit rating, home)

[marc melchiori]

no the credit crunch is evidence of banks being forced to lend to credit unworthy folks who were prevoiously red lined. Thats what you get when government orders business to put the liberal ethos ahead of good business sence.

[wavehunter007]

Originally Posted by marc melchiori

no the credit crunch is evidence of banks being forced to lend to credit unworthy folks who were prevoiously red lined. Thats what you get when government orders business to put the liberal ethos ahead of good business sence.

Your right,

How dare anyone who doesn’t make six figures, have a collage education, rich parents, and is debit-free – dare to think they deserve a place to call home…………….those animals.

[marc melchiori]

As a business, banks are in business to generate a profit for themselves and their shareholders. Should less than credit worthy people look to purchase a significant asset, such as a home, where the bank, its depositers (YOU AND I) and its shareholders stand to loose profits, it stands to reason the bar should be set higher. Everyone should have access to capital to finance and fund their dreams and needs, but there are some folks who, for whatever reasons, should be rejected by traditional financial institutions. The current subprime debacle is clearly evidence enough. And no, banks do not look at income alone in determining a mortgage, there are several other factors - one of which is credit history. Would you lend $1000 to a freind who is frequently out of work, has had a hard time repaying you on previous loans and whose income cannot cover the principle and interest of that loan. For those who say yes, I'd like to apply for a loan, please.
In this whole equation, the one topic that nevers gets mentioned by RI politicians is the fact that part of home-ownership is being able to afford property taxes. Over the past half decade, my own property taxes have doubled adding significantly to the cost of my mortgage. People scream for affordable housing, well part of affordable housing is affordable taxation - something this state lacks.
Folks this is how the real world operates.

[wavehunter007]

Originally Posted by marc melchiori

As a business, banks are in business to generate a profit for themselves and their shareholders. Should less than credit worthy people look to purchase a significant asset, such as a home, where the bank, its depositers (YOU AND I) and its shareholders stand to loose profits, it stands to reason the bar should be set higher. Everyone should have access to capital to finance and fund their dreams and needs, but there are some folks who, for whatever reasons, should be rejected by traditional financial institutions. The current subprime debacle is clearly evidence enough. And no, banks do not look at income alone in determining a mortgage, there are several other factors - one of which is credit history. Would you lend $1000 to a freind who is frequently out of work, has had a hard time repaying you on previous loans and whose income cannot cover the principle and interest of that loan. For those who say yes, I'd like to apply for a loan, please.
In this whole equation, the one topic that nevers gets mentioned by RI politicians is the fact that part of home-ownership is being able to afford property taxes. Over the past half decade, my own property taxes have doubled adding significantly to the cost of my mortgage. People scream for affordable housing, well part of affordable housing is affordable taxation - something this state lacks.
Folks this is how the real world operates.

Obviously you live in a dream world……….(or are very old).

Of course banks are in the business to make money – but there is a difference between making money and predatory lending. The current mortgage mess is the result of one thing - greed. Mortgage brokers, mortgage companies, Wall Street investors……financial prostitutes …….who did and said anything to get someone to qualify. Ever heard of no doc loans, no income verification loans, interest only loans , goofy adjustable rate mortgages (ARM’s). Ask a banker from the 1950’s about these type of banking products….he or she will laugh you out of the room.

Families in pervious generations only bought a home buy saving and scrounging for years, then they bought a home with a fair and workable mortgage - and paid it for 30 years. It worked for two basic reasons -

1) Wages always rose.
2) Your mortgage payment slowly became less of a burden.

Those two things started to change in 1979. Since 1979 - real wages (inflation adjusted) stagnated for most working people. In fact, much of the middle class, has actually seen inflation-adjusted wages fall since 1979. According to EW (below) In 1970, a family spent maybe 28 % of their income on living costs (mortgage, utilities, food), by 1990 that rose to 40%, in 2005 it was a whopping 64%.

Google the name “Elizabeth Warren” (Harvard ) and take a quiet minute to read what she wrote. Big business, special interests, Wall Street low life’s, and humans who measure their self worth in $ signs are responsible for the current mess. The theme of this group is “If things are going great and were making money were partners ……if you lose your job, get sick, or your house blows away in a hurricane…. you’re on your own”. If you even want to talk intelligently on this subject (let alone make sense) you should google the name Elizabeth Warren.

Next - who and what should determine who is credit worthy is debatable. A credit report is the most useless piece of paper in the world in determining who will pay and who will not. I have family members in the medical and academic field (including my wife) who earn well over $100,000 a year and have bad credit. We know single, high earning professionals, who missed auto or credit card payments when they were injured in an auto accident, and they had bad credit and couldn’t conventional financing. If I had not bought my home 11 years ago - I would like have had a to sigh up for one of these predatory loans. My brother declared Bankruptcy, had ton’s of late payments, and had cars repossessed,…..all while fighting cancer for years, but that doesn’t show up on his credit report. So don’t give the credit report bull – it was created by the self-absorbed Baby-Boomers who lived in a time of economic expansion (1955 – 1980). Now that their kids are grown, they are at the top of their earning power, and the homes are paid for - they created a ridiculous system that makes younger people, families with young kids, and the poor or sick, appear unworthy of credit. Perfect credit exists in a world without real life problems. Once all the boomers are dead and buried (I for one can’t wait) someone like Obama will outlaw it. If Jesus were alive today – he’d have bad credit -so give me a break.

Finally - taxes are everywhere – not just Rhode Island. Yea, property tax is lower in a place like North Carolina, but other things are more expensive. Wages, taxes, incomes, it all balances out. NYC and San Francisco are more costly than some rural town in North Carolina or New Mexico, but one can not compare economic, social, entertainment, and other oppurtuties between the two. YOU GET WHAT YOU PAY FOR! All these people running to another state are in for a rude awaking.

Now that big business and special interests run this country….. there is nowhere left to hide.

[Rnrboy]

Hear hear!

Excellent post wavehunter. Couldn't have said it better myself.

For more on the Mortgage Meltdown (foreclosures are up to 35% now, a record), go here:

http://rawstory.com/news/2007/Subpri...kets_1231.html

[dutch10]

Considering that this thread has already been hijacked...

First this....

If you even want to talk intelligently on this subject (let alone make sense) you should google the name Elizabeth Warren.

And then this...

If Jesus were alive today – he’d have bad credit -so give me a break.

Ok, so the only way one can speak intelligently on the subject of economics is to google
the name Elizabeth Warren? And a demonstration of the knowledge gleaned from studying the work of Ms. Warren is Mr Waves claim that were Jesus were alive today he too would be a victim of predatory lending and would be unable to secure credit at a reasonable rate? Unfortunately this is the type of silliness that passes for "making sense" in wavehunter's world. Everyone is a victim aren't they. I must be super duper smart or in Mr Waves world super duper privileged or lucky to have a good paying job, my own home and a decent credit rating that allowed me to get a traditional mortage with a low fixed rate. How could I accomplish all this with big business, special interests and Bush Co. running the country??? Hell, I must be bigger than Jesus! Hey Marc if you live in a dream world I'm right there with you.

[marc melchiori]

Boy, thought I was the only sane one left in this place Dutch10. Wavehunter, I am both older and living in a dream world - took me a long time to get here and had to scratch my way up every step. Sorry to hear about your family circumstances - I to could go on about my trials and tribulations. Whether credit history reports were created by baby boomers or not is not relevant nor does Jesus Christ factor into the current debate. If you angry about how the world works change or adapt to it. As for greed. Why would banks enter into a financial arrangment knowing that there is a better than 50% chance at losing revenue. Foreclosures cost a bank more in lost revenue than keeping a loan to maturity. In fact, most mortgages originate at a bank, but the bank sells the mortgage to investors who seek a low risk return on an asset backed investment. Turned out wall street flubbed up and investors will pay dearly for that flub up. I happen to be one of those investors and have seen the financial side of my portfolio suffer. If you want to intervene and rescue these "victims" feel free it would meen $ALOT$ to me. As for Obama, wall street will have him in their pockets within a few months - heck we already have Edwards and Clinton ( can you say cattle futures and hedge funds). I don't get what I pay for in my taxes. As it stands, I can't even send my daughter to the local public school becasue its so horrible so instead I spend an extra $4000+ dollars a year to send her elsewhere. Lastly, folks have been leaving New England for the last two decades and buy all accounts most of those who left were surprised to fing a better America - kinda like the one we old folks remember (when there were no boomers!). Why, when I started in business as a spry young lad I was moving whole manufacturing plants out of the region to places live OK and MS. Whole +&*^%^ plants from the foundation to the wiring - just like what the Soviets did before the Germans rolled across the Ukraine. Those were great times and lots of fun for me. Sorry, I get lost in my memories - ah youth! Well, suffice it to say, I'm not going to convince you of changing your ways and ideas and your not going to teach this old dog new tricks. I've got a couple of years left here before I leave so take solace in the fact that there will be one less tax paying, job producing, investment creating conservative moron left. Sorry about the spelling - my secratary refuses to edit my posts. Boy am i a prick!

[wavehunter007]

[quote=marc melchiori;2386039] "and your not going to teach this old dog new tricks. QUOTE]

I could say a thousand things -but you shot yourself with your own words....

I may be rich or poor, wise or unwise, in or out, but it beats being a money *****!


PS - Now how did I know you were old boomer or something ---becuse you talk like a someone who has taken their whole life.

GO ahead eat a lttle more fried food - it good for you. Make room for us.....

[Rnrboy]

It's actually patently false that "people are leaving New England in droves". A little research will tell you that back in the 90's there was the same talk about population loss in Rhode Island. Between then and now we've actually had net growth.

Consider per capita real GDP by state. Here's how Rhode Island ranked:
2003 -- 22nd
2004 -- 20th
2005 -- 22nd
2006 -- 22nd

Check the numbers, GDP per capita has grown every year. So I ask you what's a better indicator of a "trend," crowds or wealth?

[mikey2]

Well, I'm a baby boomer (and not really young anymore), but I've gotta say that Wavehunter nails this one dead on.

It's all GREED boys and girls.... I just read a good article from the BBC yesterday which describes in detail how the financial institutions manipulated the system, all in the name of Greed, and caused this crisis.
(I'll post a link, but I'm not sure if it will work... the article is worth reading anyway)

http://news.bbc.co.uk/1/hi/business/7164898.stm

The middle class in this country have been squeezed to death...it's all third world now... filthy rich and filthy poor.

Relating this to R.I. ... lots of people are leaving or trying to leave. But it's not easy.. if you don't have assets, you're not likely to make it in North Carolina, Florida, or wherever.

Working with the poor in Providence and Pawtucket I saw hundreds of stories of poverty that would sicken anyone with a conscience... but it's not just Providence....it's every city.

I'll bet when the Roman Empire was falling... no one would believe it either.

What a mess for future generations.

Mikey