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Well we bailed out banks to the tune of 800 billion dollars and they were supposed to help keep people in their homes but they did the exact opposite.
And it's disgusting how some so arrogantly and easily accuse people of being irresponsible when what caused this mess in the first place was predatory loans banks gave to people banks knew full well were unqualified to pay back.
One has to wonder at what point in our society did blaming those with no money and power start to make sense? It's like blaming a rape victim for being raped. Having lived in Richmond, I will say that the city isn't run as poorly as some seem to think. They are tackling issues like this all the while tackling crime in the city as well. There will be banks that will refuse to do business in the city. They'll simply be replaced by other banks who will fill the void.
Definitely the entire subprime mortgage crisis was entirely the fault of the guy making min wage at Wendy's, rather than the entire industry of people whose job it is to understand what a loan is and when you should offer one. You really can't expect that working on thousands of mortgages every day would lead any of those loan office managers or banking CEO's to understand a complicated mortgage or figure out whether a customer can afford one or not. Nope, totally the fault of cashier #0213 at Wendy's, what a predatory criminal he was.
Exactly! There are people who go to these institutions to get advice and trust what they are told. It's like blaming the victim of a medical malpractice for not knowing what the doctor knew and should have done correctly.
If the banks told these people to jump off a bridge and they do it, are the banks to blame also? The problem with society today is people don't take any responsibility for their actions. It is always someone else's fault if they have misfortune.
How about we reward people for doing the right thing instead of doing the wrong thing? Responsible people who knew they couldn't afford to buy didn't buy a house. Irresponsible people bought. Why should the irresponsible person get a kickback to keep this house when the responsible person doesn't even have one?
If the banks told these people to jump off a bridge and they do it, are the banks to blame also? The problem with society today is people don't take any responsibility for their actions. It is always someone else's fault if they have misfortune.
How about we reward people for doing the right thing instead of doing the wrong thing? Responsible people who knew they couldn't afford to buy didn't buy a house. Irresponsible people bought. Why should the irresponsible person get a kickback to keep this house when the responsible person doesn't even have one?
If the banks told people to jump off a bridge, the people wouldn't do it but quite likely, the banks would still get into trouble because a bank should probably not be encouraging suicide, just saying.
Now that you've seen how ridiculous that sounded, back to the program. If a person is told by a bank that they can afford a mortgage and proceeds to explain exactly how they can afford and paint a good picture for them, then yes, the banks are responsible. Just as your doctor is responsible should he/she suggest a treatment or activity that puts you at risk. People are responsible for their day to day activities and actions in life. They are not responsible for information they are paying to receive from a financial institution who's job it is to inform people about things they themselves are not trained in. If in my job I give someone I'm in service to bad or misleading information, it's not that person's fault, it's mine as it should be and ultimately, the companies. That is how we take responsibility for what we do, not by blaming the victim!
If the banks told people to jump off a bridge, the people wouldn't do it but quite likely, the banks would still get into trouble because a bank should probably not be encouraging suicide, just saying.
Now that you've seen how ridiculous that sounded, back to the program. If a person is told by a bank that they can afford a mortgage and proceeds to explain exactly how they can afford and paint a good picture for them, then yes, the banks are responsible. Just as your doctor is responsible should he/she suggest a treatment or activity that puts you at risk. People are responsible for their day to day activities and actions in life. They are not responsible for information they are paying to receive from a financial institution who's job it is to inform people about things they themselves are not trained in. If in my job I give someone I'm in service to bad or misleading information, it's not that person's fault, it's mine as it should be and ultimately, the companies. That is how we take responsibility for what we do, not by blaming the victim!
The government is going overboard though. I agree with having disclosures and having the borrower(s) sign them. However, the new laws, namely ATR (ability to repay) are ridiculous. They won't effect the upper income people, but will hurt lower income people.
Basically the government is saying, lenders must make sure the borrower has the ability to repay the loan, which sounds fine, but they didn't give details. If a borrower forecloses 5 years or even 20 years after the loan, they could then sue the lender saying, you should have known I didn't have the ability to repay. The potential liability is astronomically higher than before. A court will decide the outcome, but without any specifics, how does a lender know? What is a reasonable FICO 650+, 700+, 750+ etc. A borrower could also sue within 3 years of obtaining the loan if they can no longer make the payments. Once again, who knows what a court will determine as an adequate income, credit score, down payment etc. Lenders basically said, okay we just won't lend to anyone that doesn't have a perfect credit score and massive down payment because the liability is too questionable and huge. The government then made an amendment that ATR won't apply to loans that are accepted into DU or LP for the next 7 years or until Fannie and Freddie no longer exist (whichever comes first).
So essentially, the government is protecting lower income families by making credit impossible for them to receive. We will see what happens after 7 years or whenever they get rid of Fannie and Freddie.
The government is going overboard though. I agree with having disclosures and having the borrower(s) sign them. However, the new laws, namely ATR (ability to repay) are ridiculous. They won't effect the upper income people, but will hurt lower income people.
Basically the government is saying, lenders must make sure the borrower has the ability to repay the loan, which sounds fine, but they didn't give details. If a borrower forecloses 5 years or even 20 years after the loan, they could then sue the lender saying, you should have known I didn't have the ability to repay. The potential liability is astronomically higher than before. A court will decide the outcome, but without any specifics, how does a lender know? What is a reasonable FICO 650+, 700+, 750+ etc. A borrower could also sue within 3 years of obtaining the loan if they can no longer make the payments. Once again, who knows what a court will determine as an adequate income, credit score, down payment etc. Lenders basically said, okay we just won't lend to anyone that doesn't have a perfect credit score and massive down payment because the liability is too questionable and huge. The government then made an amendment that ATR won't apply to loans that are accepted into DU or LP for the next 7 years or until Fannie and Freddie no longer exist (whichever comes first).
So essentially, the government is protecting lower income families by making credit impossible for them to receive. We will see what happens after 7 years or whenever they get rid of Fannie and Freddie.
Well, if what you're saying is true, then I agree that more details should be laid out. Let me ask you this though; Do you really think that lower income people won;t get future loans? Say Wells Fargo, Bank Of America and Chase say screw it. Citi Bank and especially smaller banks make take advantage of the sudden disappearance of the huge competition the other banks provided. Who would really lose then? Rich people are inherently stingy and it's this rich only helping the rich and near rich that caused them all to be bailed out in the first place. They got themselves into that mess because of greed and trying to out compete other wealthy companies.
If the banks told these people to jump off a bridge and they do it, are the banks to blame also? The problem with society today is people don't take any responsibility for their actions. It is always someone else's fault if they have misfortune.
How about we reward people for doing the right thing instead of doing the wrong thing? Responsible people who knew they couldn't afford to buy didn't buy a house. Irresponsible people bought. Why should the irresponsible person get a kickback to keep this house when the responsible person doesn't even have one?
Why aren't the banks responsible for handing out massive loans to people who clearly couldn't afford a $600,000 house? You don't care about responsibility, you just care about defending the rich.
Well, if what you're saying is true, then I agree that more details should be laid out. Let me ask you this though; Do you really think that lower income people won;t get future loans? Say Wells Fargo, Bank Of America and Chase say screw it. Citi Bank and especially smaller banks make take advantage of the sudden disappearance of the huge competition the other banks provided. Who would really lose then? Rich people are inherently stingy and it's this rich only helping the rich and near rich that caused them all to be bailed out in the first place. They got themselves into that mess because of greed and trying to out compete other wealthy companies.
It's true, I'm in the business. You could probably find all the information through google too. The liability is huge and without underwriting details, I'm sure most lenders would stop lending to people without stellar income, credit scores and/or down payments. Lenders already don't make much from small loan amounts already. People in the business dislike doing them already. Many major banks have already the left the wholesale channel this year because they want to lower their exposure.
We should also understand greed was all around. There was greed by both borrowers and lenders. I'm happy with RESPA etc. Those are good changes, but ATR without the safe harbor period would be a nightmare for everyone.
Why aren't the banks responsible for handing out massive loans to people who clearly couldn't afford a $600,000 house? You don't care about responsibility, you just care about defending the rich.
It's kind of a lose-lose situation for lenders... if lenders required 50% down payments, 750+ fico scores and 25% DTI caps, we would hear people complaining saying, lenders only want to help the wealthy by making credit impossible for low income families. If lenders give credit too easily, then people complain that they are being greedy and don't care about the borrower. I think both lenders and borrowers need to learn their lesson from the housing crash. Lenders lost a ton of money and so did many borrowers. If you only play the victim card, you will never learn. If someone says, I can make you $1 million dollars per year if you give me $1,000 and you blindly hand it over, then shame on the person and YOU.
Why aren't the banks responsible for handing out massive loans to people who clearly couldn't afford a $600,000 house? You don't care about responsibility, you just care about defending the rich.
So by your standard, if someone takes out a loan for a fancy car, boat, or vacation house, and later can no longer afford the payments, they should be entitled to keep it, right? Because it was the bank's fault for loaning the money, and the person taking out the loan bears no responsibility?
I don't see how that is defending the poor. That is simply defending the stupid.
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