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Old 11-03-2009, 10:38 PM
 
Location: Conejo Valley, CA
12,460 posts, read 20,014,267 times
Reputation: 4365

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Quote:
Originally Posted by jertheber View Post
Your thinking is of the type that brought on those scams, after all, according to you, Wall Street is really just a bunch of sweet old men who are greatly misunderstood.
No, Wall-street is filled with greedy/lazy rent seekers. But again, it takes two to tango. If your "average American" was not so greedy and interested in "get rich quick" nonsense the problems would have never occurred. Nobody forced people to purchase homes they could not afford, nor did anybody force people to gamble on the housing market.

Its sorta funny though, people like to think of the people on "wall-street" as if they are some alien race. No, they are just like most other people.
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Old 11-04-2009, 10:39 AM
 
18,196 posts, read 16,800,272 times
Reputation: 7426
I think it's been stated time and time again regarding the housing collapse that no parties were completely innocent and all parties were mostly to blame. 95% of the buyers, brokers, banks, appraisers, & wall street gurus knowingly engaged in fraudulent activities. 4% knew something was wrong but closed their minds to contemplating things further than that. A case could be made that only 1% truly had the wool pulled over their eyes.
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Old 11-04-2009, 12:40 PM
 
5,252 posts, read 4,649,227 times
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The majority of mortgages that went bad did so because the ultimate price to pay was hidden from the hordes of not-too-savy buyers. The house prices that these mortgages served to uphold were above the reach for the masses of young married buyers seeking the American dream of home ownership. When their neighbor's were getting out of those aprtments and into a nice new house it stands to reason that those not following suit would be considered chumps of a sort.

It's not as though the buyers and sellers were on an equal footing in regard to the complexities of home buying. Most of those who defaulted were sincere at some point, they really thought the real estate and mortgage folk's were doing them a favor, when they expressed concern over the worry that they didn't earn enough money to qualify they were told ,"don't worry, you won't need any documentation on that score". When they said they couldn't afford the high monthly payments that these prices commanded they were told, "don't worry we can get those payments in line with your budget".

I'd like to hear from some of those who have defaulted on those trick mortgages, to make them all out to be some kind of co-conspirators in this shameful marketing ploy is really reaching a bit. Young, dumb, and yearning, is no crime, but can we say that those "professionals" in the real estate and mortgage business' were merely suffering from a heightened level of greed, or were they engaging in what they knew to be an absolute flim flam marketing scheme?
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Old 11-04-2009, 12:59 PM
 
18,196 posts, read 16,800,272 times
Reputation: 7426
Quote:
Most of those who defaulted were sincere at some point, they really thought the real estate and mortgage folk's were doing them a favor, when they expressed concern over the worry that they didn't earn enough money to qualify they were told ,"don't worry, you won't need any documentation on that score". When they said they couldn't afford the high monthly payments that these prices commanded they were told, "don't worry we can get those payments in line with your budget".
When a buyer expresses concern that the numbers don't add up and a broker says, "Don't worry" then you should worry. And then head for the nearest door, even if it means losing your dream home. That red flag going off in a buyer's head is not going off for nothing---they sense something is wrong and they should immediately cease any further action until the red flags stop raising. A broker saying, "Don't worry' is the kiss of death. EVERYTHING a broker says should be interpreted just the opposite of that. Don't worry mean worry; you're fine means you're not fine; I don't think that's good idea means it's a very good idea, it's just not a good idea for the broker. IOW's brokers as crooked as Lombard Street in SF, which, incidentally, is officially the crookedest road in the world.
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Old 11-04-2009, 02:38 PM
 
12,867 posts, read 14,869,886 times
Reputation: 4459
Quote:
Originally Posted by jertheber View Post
The majority of mortgages that went bad did so because the ultimate price to pay was hidden from the hordes of not-too-savy buyers. The house prices that these mortgages served to uphold were above the reach for the masses of young married buyers seeking the American dream of home ownership. When their neighbor's were getting out of those aprtments and into a nice new house it stands to reason that those not following suit would be considered chumps of a sort.

It's not as though the buyers and sellers were on an equal footing in regard to the complexities of home buying. Most of those who defaulted were sincere at some point, they really thought the real estate and mortgage folk's were doing them a favor, when they expressed concern over the worry that they didn't earn enough money to qualify they were told ,"don't worry, you won't need any documentation on that score". When they said they couldn't afford the high monthly payments that these prices commanded they were told, "don't worry we can get those payments in line with your budget".

I'd like to hear from some of those who have defaulted on those trick mortgages, to make them all out to be some kind of co-conspirators in this shameful marketing ploy is really reaching a bit. Young, dumb, and yearning, is no crime, but can we say that those "professionals" in the real estate and mortgage business' were merely suffering from a heightened level of greed, or were they engaging in what they knew to be an absolute flim flam marketing scheme?
people did lie on their applications. bad behavior is bad behavior, period.

of course, the amount of damage that the homeowners could do was limited, whereas the amount of damage that the "higher-ups" could do doesn't seem to be limited.

denninger had another good read on the fed statement today.
fed statement:
In these circumstances, the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

response:
When something doesn't work, do more of it! That's the ticket! Pay no attention to that ******* Einstein - he's dead, and besides, I'm smarter than he ever was.

fed statement:
To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. The amount of agency debt purchases, while somewhat less than the previously announced maximum of $200 billion, is consistent with the recent path of purchases and reflects the limited availability of agency debt.

response:
We bought it all. We're no longer part of the market, we are the market! We have no freaking clue how to exit from this, and we know that when we do rates will spike higher. Unfortunately we also know that if Fannie and Freddie continue to bleed red ink we will blow up instead of them by doing this, so in March we pinky-promise to stop, even though that will destroy what's left of the housing market.

we really do have no clue how to exit this.....
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Old 11-04-2009, 06:19 PM
 
5,252 posts, read 4,649,227 times
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People were told what to do and how to do it every step of the way on these bad mortgages, to pretend as though the majority of mortgages sold during the years 02 thru 07 were'nt being marketed in such a way that made liars out of those who would have otherwise not been able to get the mortgage in the first place is to not see the truth of who ultimately benefitted from these scams. It's plenty obvious to me that the sheer amount of homes sold throughout that period would be someones first clue that the number of qualified buyers just got a big boost or, the qualification scrutiny went south. Yes, it takes two to Tango, but still, somebody has to lead..........

I can't believe that American's are so devoid of the facts in this case, just ask yourself who ultimately gains from such a scam as this, the buyer who eventually gets thrown in the street, homeless, or the others, realtor's and lenders that still have the residual money from said scam right in their pocket?
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Old 11-05-2009, 03:29 AM
 
Location: Conejo Valley, CA
12,460 posts, read 20,014,267 times
Reputation: 4365
Quote:
Originally Posted by jertheber View Post
The majority of mortgages that went bad did so because the ultimate price to pay was hidden from the hordes of not-too-savy buyers.
No, the majority of mortgages that went bad did so because the people were gambling on future appreciation. Nothing was hidden from the buyers and most loans were pretty easy to understand. The most exotic and perhaps hard to understand were option pay arms, but the people using these loans were higher income prime borrowers!

I'm sure that some people never bothered to understand what they were signing, but that is because they were ahem.....lazy.


Sorry, but most buyers were not innocent. Almost everyone I spoken with that extracted massive equity from their home or purchased a home they could not afford did so because they believe that house prices would continue to increase. Massive assets bubbles like this can only occur when everyone starts drinking the koolaid.
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Old 11-05-2009, 05:49 AM
 
Location: Castle Hills
1,172 posts, read 2,625,413 times
Reputation: 656
Quote:
Originally Posted by user_id View Post
No, the majority of mortgages that went bad did so because the people were gambling on future appreciation. Nothing was hidden from the buyers and most loans were pretty easy to understand. The most exotic and perhaps hard to understand were option pay arms, but the people using these loans were higher income prime borrowers!

I'm sure that some people never bothered to understand what they were signing, but that is because they were ahem.....lazy.


Sorry, but most buyers were not innocent. Almost everyone I spoken with that extracted massive equity from their home or purchased a home they could not afford did so because they believe that house prices would continue to increase. Massive assets bubbles like this can only occur when everyone starts drinking the koolaid.
I just about never agree with user id, but this time he is 100% correct. I can't tell you how many people bragged to me during those years about how much their house was worth etc. They knew the risks, but were too busy enjoying the equity in their homes. Once the tide turned then they suddenly became victims etc. You can save that sad story. Again, I lived through this and watched the idiocracy of co-workers, friends, family, etc. It was greed in its purest form.
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Old 11-05-2009, 05:54 AM
 
12,867 posts, read 14,869,886 times
Reputation: 4459
Quote:
Originally Posted by jertheber View Post
People were told what to do and how to do it every step of the way on these bad mortgages, to pretend as though the majority of mortgages sold during the years 02 thru 07 were'nt being marketed in such a way that made liars out of those who would have otherwise not been able to get the mortgage in the first place is to not see the truth of who ultimately benefitted from these scams. It's plenty obvious to me that the sheer amount of homes sold throughout that period would be someones first clue that the number of qualified buyers just got a big boost or, the qualification scrutiny went south. Yes, it takes two to Tango, but still, somebody has to lead..........

I can't believe that American's are so devoid of the facts in this case, just ask yourself who ultimately gains from such a scam as this, the buyer who eventually gets thrown in the street, homeless, or the others, realtor's and lenders that still have the residual money from said scam right in their pocket?
americans aren't devoid of the facts and they know who is really getting shafted-and that is the responsible working american.

they are being asked to contribute to the welfare of the deadbeats on the bottom (who want to live rent free while others pay) and the cheaters on the top. we have to watch our dollar devaluate, which represents a ripping away of any savings that americans have, all because of incompetent federal reserve policy. people do get it and that is why they are voting OUT incumbents now!


this is why:
Indeed, close to $100 billion in taxpayer funds have been larded into those institutions to prevent their utter collapse but the bogus lending has simply shifted as a matter of formal policy over to the FHA, which is then selling the paper back into - you guessed it - Fannie and Freddie!

Fraudie and Phoney are not new to trouble. Documents from 2004 show that the "massage the earnings" game was well-embedded into these institutions as early as 2001, yet nothing was done.

Seven years later, the taxpayers are on the hook for $100 billion, the firm's capital continues to erode as their default rate skyrockets by the month and yet not one of the people responsible is sitting in the dock - or in a prison cell. (denninger)

Last edited by floridasandy; 11-05-2009 at 06:17 AM..
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Old 11-05-2009, 06:23 AM
 
Location: Londonderry, NH
41,478 posts, read 59,599,064 times
Reputation: 24858

All "get rick quick" schemes make the schemers rich quick and the victims poor quicker.

I bought my condo 24 years ago and when I refinanced 10 years ago I was offered a credit line for 5 times my salary. I politely declined. There was no way I could have met the eventual payments. My condo price has increased almost in line with inflation so I consider myself well off. I will probably keep this condo until I am forced into an old folk’s warehouse.

My in-laws BECAME MILLIONAIRS by changing houses every few years in the San Francisco Bay market. They bailed at the top of the market and took over the family land in upstate New Hampshire. Some people actually did make out but I was not one of them.

If prices collapse even more some will get burned but it will provide access to housing for the few workers left in our deflating economy. I think the day of the $250,000 two BR "starter" is dead and gone.
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