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I have no sympathy for anyone who bought during the last few years and are now losing their homes. Absolutely none, zero, zilch. It was their decision to buy, they have to live with the consequence. They either didn't do their due diligence prior to making the biggest decision of their lives..due to ignorance, stupidity, callousness, arrogance or a combination of these factors. Making bad decisions has consequences in life. You can't have your cake and eat it as well. If I don't pay my rent I get kicked out, if you don't pay your mortgage guess what... you get unceremoniously kicked out as well, that's how it works!
They made the bad decision now it is time to lose the home and make it available to the responsible person who can truly afford it. For every person who loses, another person gains. These people who are complaining about losing their homes are self-absorbed a-holes who do not realize that their willing participation in the liar loan ponzi scheme has made a mess of the whole thing for the responsilble people.
The difference is people like investment bankers, stock brokers, real estate agents, and mortgage brokers are professionals with legal and fiduciary responsibility to their clients. They have more knowledge and expertise with financial matters than Joe and Jane six pack, and are supposed to use that knowledge to guide their clients into making sound decisions.
Wait, you think the people on Wall-street are actually knowledgeable about financial matters? Hahaha.....Usually they believe the same stupid things Joe six-pack believes. That is especially the case with stock brokers, real estate agents and mortgage brokers. Do you also believe cars sales men know about cars?
Quote:
Originally Posted by jimhcom
Instead they used their knowledge to take advantage of a situation for their own gain. That cost hundreds of thousands of people their homes and the country millions of jobs.
Nobody forced someone to buy a home they could not afford. People are greedy, they are always greedy. Saying this situation was caused by "greed" is completely vacuous. Thinking about this crisis just in terms of housing is to miss the mark, this was a classic credit bubble. In this case, the excess credit largely went into housing. Real estate agents, stock brokers, mortgage brokers and so on have always been self-serving and greedy....so why did this not happen before? Because it requires more than that! It required stupid FED policy, stupid government policy, and a stupid and greedy general public sold on the idea that "housing never declines in value".
so why did this not happen before? Because it requires more than that! It required stupid FED policy, stupid government policy, and a stupid and greedy general public sold on the idea that "housing never declines in value".
Yeah, the fed and government policy was very stupid but it takes two to tango. The GREED of millions and millions of people is what put us here. You can say the fed policy made it tempting to buy a house with the low rates but again, ultimately it was the consumer who pulled the trigger to purchase those homes and bragged to their friends about how much their house had gone up in value already, and then rolled new cars into re-finances, or got hard wood floors and granite counter tops, and did bathroom remodels etc. Lets just say, the word spread fast and before long "everyone" was going it. Now is the aftermath.
The hardwood floors, granite countertops, updated bathrooms and even generally using the "magic equity" as piggy bank were not the bad part -- the disaster came from folks over committing too much of their income to debt service!
It was STOOOPID for lenders to allow it but even STOOOPIDER of people to willingly toss that 'yoke' on their own backs knowing that by having that debt secured by their house they would be far tooclosetoruin...
I usually agree with everything you say and enjoy your posts, but I'm going to have to disagree with you here. Ultimately, it is 100% up to the consumer to do their own homework when they buy something.....ANYTHING. If they don't understand something, they need to research it until they do understand it. Taking the financial advice of a mortgage lender, mortgage brokers, buyers agent, real estate agent, etc. Is just plain dumb. Their jobs are to give loans and sell houses. It would be like asking a USED car salesman.. is this a good car? Do you think I can afford the monthly note? His response? It's an outstanding car, and I don't think you would have any problems affording this.
When something sounds too good to be true, it probably is. Have you ever heard that line? Its not just a "line", its something you can bank on.
Consumers acted irresponsibly and GREEDY and put themselves in the jam they were/are in. They gambled and lost. My wife and I actually looked at houses during those times and heard all the dumb ideas, like low rate arms, and interest only loans, etc. We thought to ourselves, how desperate are people going to get to get into these WAY over priced homes? If they can barely afford the monthly note now, what will they do when the arms mature, etc? That is BASIC.. VERY BASIC THINKING. These people were not tricked, they were GREEDY. They didn't care about when the loans matured etc, heck in 5 years their house would probably be worth 100k more right? WRONG.
Why didn't these people think like us? GREED got in the way. Screw them, they help put us in this mess and because of them, responsible buyers will have to suffer or possibly lose their homes as a result of this recession.
[“A real estate broker who becomes an agent of a seller or buyer is deemed to be a fiduciary. An agent is obligated to use reasonable care and diligence when pursuing the principal's affairs. The standard of care expected of a buyer's or seller's real estate broker is that of a competent real estate professional. By reason of his/her license, a broker is considered to have skill and expertise in real estate matters superior to that of the average person.”
I am not saying consumers were not irresponsible, but the fact remains that real estate agents are licensed and have legal fiduciary responsibility to advise their customers that if they go thru with the deal and the rates change, they will not be able to make the payments and that the results could be catastrophic. How many do you think did that? Lenders on the other hand have fiduciary responsibility to their depositors and share holders. Freddy Mac, Fannie Mae, Most Banks, and other lending institutions were criminally negligent in their responsibilities and those responsible should be doing jail time instead of reaping bonuses paid with taxpayer monies.
[“A real estate broker who becomes an agent of a seller or buyer is deemed to be a fiduciary. An agent is obligated to use reasonable care and diligence when pursuing the principal's affairs. The standard of care expected of a buyer's or seller's real estate broker is that of a competent real estate professional. By reason of his/her license, a broker is considered to have skill and expertise in real estate matters superior to that of the average person.â€
I am not saying consumers were not irresponsible, but the fact remains that real estate agents are licensed and have legal fiduciary responsibility to advise their customers that if they go thru with the deal and the rates change, they will not be able to make the payments and that the results could be catastrophic. How many do you think did that? Lenders on the other hand have fiduciary responsibility to their depositors and share holders. Freddy Mac, Fannie Mae, Most Banks, and other lending institutions were criminally negligent in their responsibilities and those responsible should be doing jail time instead of reaping bonuses paid with taxpayer monies.
Jim,
I understand where you are coming from and you are right that real estate agents etc, acted irresponsibly/slimy. However, ultimately it is up to the consumer to sign on the dotted line and buy the home. The consumers didn't even care if the real estate agents/lenders where lying, all they cared about was getting into that home and then bragging about it. I lived through it, because I was looking for a house then, and just about everyone I know had bought one. To get a real estate license it takes about 2 months and no prior schooling. Why would you trust someone with so little schooling on the BIGGEST purchase of your life?
The market was FLOODED with agents and a lot of them bad/ uneducated in selling homes. There are good/experienced agents out there, but there are a lot of bad ones too. Again, its the consumers job to educate themselves on their purchase and who they use to facilitate that purchase.
I certainly remember a friend (an RN who married a spoiled trust fund girl) saying sagely, "You can never go wrong with real estate."
Even then, as a renter, I thought, "Sure you can. Wrong place, wrong price, wrong time."
He ended up living high off the real estate hog in Florida with the family money behind him. Spoiled kids, non-working wife getting her nails done a lot.
I remember hearing people just parrot things, "The house will go up 50 percent a year" "I'm putting our down payment money into a stock fund for 18 months" "Prices only go up."
Parroting what? Some TV show, or newspaper column, or what someone said over a drink somewhere?
Certainly some people made huge money in real estate. Bubbles have a way of being that way, unless you're at the end of the whip cracking.
I always figured, by the time I heard of something as a good idea, it probably had run its course.
I certainly remember a friend (an RN who married a spoiled trust fund girl) saying sagely, "You can never go wrong with real estate."
Even then, as a renter, I thought, "Sure you can. Wrong place, wrong price, wrong time."
He ended up living high off the real estate hog in Florida with the family money behind him. Spoiled kids, non-working wife getting her nails done a lot.
I remember hearing people just parrot things, "The house will go up 50 percent a year" "I'm putting our down payment money into a stock fund for 18 months" "Prices only go up."
Parroting what? Some TV show, or newspaper column, or what someone said over a drink somewhere?
Certainly some people made huge money in real estate. Bubbles have a way of being that way, unless you're at the end of the whip cracking.
I always figured, by the time I heard of something as a good idea, it probably had run its course.
Your story is one of millions of stories about home prices never going down, and you can't go wrong etc. Sadly, most of these people just walked out of their houses when the going got rough, which helped PUNISH our economy and put it in a deep recession.
Jim,
I understand where you are coming from and you are right that real estate agents etc, acted irresponsibly/slimy. However, ultimately it is up to the consumer to sign on the dotted line and buy the home. The consumers didn't even care if the real estate agents/lenders where lying, all they cared about was getting into that home and then bragging about it. I lived through it, because I was looking for a house then, and just about everyone I know had bought one. To get a real estate license it takes about 2 months and no prior schooling. Why would you trust someone with so little schooling on the BIGGEST purchase of your life?
The market was FLOODED with agents and a lot of them bad/ uneducated in selling homes. There are good/experienced agents out there, but there are a lot of bad ones too. Again, its the consumers job to educate themselves on their purchase and who they use to facilitate that purchase.
You are assuming the consumer in most cases knew the people telling them this would work knew better. What we need to remember is people who did not have the benefit of seeing the recessions of the 70's and 80's were living in a world where people were rewarded for going into debt for real estate. Real estate values were being pumped up by the banks and the government since 1990 and for 15 years anyone who got on board benefited. Those who waited for a correction were punished. The consumer did not create this system, the banks did. Leverage was the magic ingredient of prosperity, and those who did not use it were destined to fall farther and farther behind the people who did. Most people did not know this was a pyramid scheme, they just knew what had worked during their adult life. When the police go after people who create ponsie schemes, who do they go after? The victims? No they go after the people who created the scheme for their own financial gain. The people who gambled on the ever rising value of real estate are now paying the price for their poor judgment; some have lost everything they worked a lifetime to build. My question is when will the bankers and government officials who were behind this whole scheme going to pay for their part? In order for a society to prosper, there needs to be ethics from the top down. If the government is unethical, the people have no choice but to do what they must to survive. That is basically the difference between developed countries and the third world. So long as we give government and big business a pass on unethical behavior, our country will continue to deteriorate, and our standard of living will decline.
You are assuming the consumer in most cases knew the people telling them this would work knew better. What we need to remember is people who did not have the benefit of seeing the recessions of the 70's and 80's were living in a world where people were rewarded for going into debt for real estate. Real estate values were being pumped up by the banks and the government since 1990 and for 15 years anyone who got on board benefited. Those who waited for a correction were punished. The consumer did not create this system, the banks did. Leverage was the magic ingredient of prosperity, and those who did not use it were destined to fall farther and farther behind the people who did. Most people did not know this was a pyramid scheme, they just knew what had worked during their adult life. When the police go after people who create ponsie schemes, who do they go after? The victims? No they go after the people who created the scheme for their own financial gain. The people who gambled on the ever rising value of real estate are now paying the price for their poor judgment; some have lost everything they worked a lifetime to build. My question is when will the bankers and government officials who were behind this whole scheme going to pay for their part? In order for a society to prosper, there needs to be ethics from the top down. If the government is unethical, the people have no choice but to do what they must to survive. That is basically the difference between developed countries and the third world. So long as we give government and big business a pass on unethical behavior, our country will continue to deteriorate, and our standard of living will decline.
Jim,
I was a child in the late 70's and early 80's, so I didn't really experience the recessions then. My wife and I still knew better than to make dumb decisions. We did look at real estate during that time but realized quickly that it was WAY overpriced. Millions of others knew better as well, it was greed that blinded them. They were unwilling to listen to reasoning from anyone. These people deserve what they get.
Same thing with the people who get tied up in the ponzi schemes. Why in the hell would someone in their 50's, 60's or 70's invest ALL of their money into a ponzi scheme? Simple, greed. They want the biggest returns they can get, and they GAMBLE and don't use reasoning or logic. Am I supposed to feel sorry for someone who is retired and loses all of their money to a ponzi scheme? Ponzi schemes have been around since the 1920's. These people need to educate themselves or pay the price.
You said they don't go after the people who were tricked in the ponzi schemes, they go after the person who created the ponzi? They don't need to go after the people who were "tricked" they already lost EVERYTHING because they were GREEDY, and they didn't believe this simple saying... "If it sounds too good to be true, it probably is.
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