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Here's the thing..."someone" decided to start this bubble...but I can assure you it wasn't the waitress at Hooters, and neither was the dentist at x office (that guy was busy screwing people out of money his own way, but that's another thread)...
The BANKS are, and should be held accountable for this. IF these banks did not play with the money they held, we would have never been in this mess in the first place. If you watch that show above, it clearly explains what happened.
Do I think its OK your brother is doing that? NO...but you know what...the banks DESERVE IT. Matter of fact, they should have been left to rot in the hell they created, because we, humans, have a gene called: "GREED", and if its tickled enough, it will produce this kind of situation. That's a fact.
The banks were meant to "serve" their clients, and technically they should be trusted with our money, the bank CEO did not work his ass off at MY job...nope, so how can he think for one second he gets to spend MY money?
All the people who defaulted purposely shouldn't be excused for what they did, but in the scope of the general situation they only returned the favor the bank did to them when they started handing out mortgages like they were lemonades!
The BANKS, created a waterfall effect...their actions were brought to the consumers by realtors who wanted bigger and bigger commissions, and so on not thinking for 1 second about the consequences of their actions.
Now they both get what they deserve.
Quote:
Originally Posted by planedition
There's a lot of hot air going back and forth here, but here are some cold hard facts.
My brother has not paid his mortgage in 3 years. He decided to stop paying b/c "everyone else was doing it," why not him? In the 3 years he has done this, he has saved well over 52,000 dollars and taken multiple trips to Disney World, Paris, paid for private school tuitions, bought a new car, paid for dinners out with the family 4-5 times a week, bought luxury items at International Plaza like iPads and IPhones, and so on and so on. Of course he brags about how everyone who is underwater should do this and "they are idiots if they do not."
Meanwhile we are paying our mortgage, struggling every month, with no idea when on god's green earth we would EVER have the chance to save $52,000. The fact is: NEVER.
And what will happen to my brother? He will get evicted from his house, one day, and then he will rent a place and, well, that's about it. And he will have amassed THOUSANDS of dollars in the process.
I don't know whether to blame the banks for this, or my brother, or the media. But what I can tell you is that my brother's scenario, which is being played out in MILLIONS of families in this country, is a knife through the heart of every American who thought that working hard and being responsible was the right thing to do.
That is what every socialist is saying...blame someone else, even if the person is misusing the system and omg if they start crying if the go after them in a court of law....
Every adult is and was responsible for what they signed for...otherwise 100% of all people would be in the same boat and that isn't the case!
Quote:
Originally Posted by algia
Here's the thing..."someone" decided to start this bubble...but I can assure you it wasn't the waitress at Hooters, and neither was the dentist at x office (that guy was busy screwing people out of money his own way, but that's another thread)...
The BANKS are, and should be held accountable for this. IF these banks did not play with the money they held, we would have never been in this mess in the first place. If you watch that show above, it clearly explains what happened.
Do I think its OK your brother is doing that? NO...but you know what...the banks DESERVE IT. Matter of fact, they should have been left to rot in the hell they created, because we, humans, have a gene called: "GREED", and if its tickled enough, it will produce this kind of situation. That's a fact.
The banks were meant to "serve" their clients, and technically they should be trusted with our money, the bank CEO did not work his ass off at MY job...nope, so how can he think for one second he gets to spend MY money?
All the people who defaulted purposely shouldn't be excused for what they did, but in the scope of the general situation they only returned the favor the bank did to them when they started handing out mortgages like they were lemonades!
The BANKS, created a waterfall effect...their actions were brought to the consumers by realtors who wanted bigger and bigger commissions, and so on not thinking for 1 second about the consequences of their actions.
So you don't think the banks "misused" the system?
I think most Americans STILL have no idea what "Socialism" is.
In a "Socialist" medium, companies are held accountable by their employees(who in turn make them profits.) when they start practicing "rules" that will hurt them. (By not offering comprehensive healthcare, paying ridiculously low wages etc)
That is what every socialist is saying...blame someone else, even if the person is misusing the system and omg if they start crying if the go after them in a court of law....
Every adult is and was responsible for what they signed for...otherwise 100% of all people would be in the same boat and that isn't the case!
That is what every socialist is saying...blame someone else, even if the person is misusing the system and omg if they start crying if the go after them in a court of law....
Every adult is and was responsible for what they signed for...otherwise 100% of all people would be in the same boat and that isn't the case!
Socialist is a very poor word to use. Doesn't really fit the way you are using it.
Interesting thread for sure.
Planedition: I think your brother is going to be on the hook for some very costly living mistakes.
I think blaming a realtor is rediculous. You want to blame a program or the system, go ahead. But you want to say a realtor drives up the price, that someone will pay, just to receive a higher commission. Come on, I don't buy it.
Do the banks deserve what they get? IMO, YES! But that would have meant bankruptsy for them, and I am okay with that. The CEO's of these huge banks make millions and if it wasn't for the taxpayer, they would have been dead broke (which I feel they should have).
Let someone list a property sky high for whatever reason, a CMA will be done for the buyer and it will be evident. The appraisel will not come through enough to get a loan and it will sit.
Do you go to the car dealer and pay 45,000 for an SUV that you know is listed on KBB for 26,000? Nope, you don't. Do you laugh and walk away from the car salesman, hopefully that is all you do.
Bottom Line: Can't blame one segment in all this, nor should you bail out one segment.
I understand that these "trophy" listings will go nowhere but it spoiling the market since some inexperienced agents who don't perform a CMA will show the property and some buyers make a high offer due to no real advise from their so called professional and than throw money away for an appraisal which is very sad and it is going on right now making realtor getting a bad name and I wish realtors wouldnt take a listing like that...if you check the MLS closely than you will see that at least 30% of all listings are like that...
I'm not the one blaming a realtor for inflating the market because these properties will not sell but I blame them for bad business...
Quote:
Originally Posted by gulfer
Interesting thread for sure.
Planedition: I think your brother is going to be on the hook for some very costly living mistakes.
I think blaming a realtor is rediculous. You want to blame a program or the system, go ahead. But you want to say a realtor drives up the price, that someone will pay, just to receive a higher commission. Come on, I don't buy it.
Do the banks deserve what they get? IMO, YES! But that would have meant bankruptsy for them, and I am okay with that. The CEO's of these huge banks make millions and if it wasn't for the taxpayer, they would have been dead broke (which I feel they should have).
Let someone list a property sky high for whatever reason, a CMA will be done for the buyer and it will be evident. The appraisel will not come through enough to get a loan and it will sit.
Do you go to the car dealer and pay 45,000 for an SUV that you know is listed on KBB for 26,000? Nope, you don't. Do you laugh and walk away from the car salesman, hopefully that is all you do.
Bottom Line: Can't blame one segment in all this, nor should you bail out one segment.
Point out to me where in the CRA or any regulation that any of this is required.
I cannot.
The article supposedly builds a case as to how the CRA (a program from the 70's) influenced the lax lending practices that eventually led to the housing bubble and it's ultimate demise. That's quite a bit different than holding this Act responsible for the the puffed up values and subsequent defaults as so many claim. Furthermore the article dances around the assertion by insinuating that banks who did not participate (again they were not required or "forced" to do anything, the article even says this) would risk their CRA credit rating. Which is highly speculative at best and certainly not synonymous with the claim(s) being made.
I certainly would not equate any of this with a "fact" but rather an opinion piece that references prior opinion pieces about the same subject. Other links provided to back the writer's assertions were either broken or did not contain data to back the claim.
In reality CRA loans had normal default rate. This showed that people with lower incomes could and did pay their mortgages, especially if they were not high cost loans. The majority of the defaults over the previous years were triggered by high cost loans which were sold by mortgage servicing companies who had nothing to do with the CRA or their regulations (required if they choose to participate.) They were funded by Wall Street firms who were able to borrow up to 30 times their capital. The writer even addresses this and works hard to spin it into that silly assertion again:
Quote:
But even during the crisis, CRA loans didn’t default at higher rates than other mortgages. CRA banks aren’t failing more than other financial institutions, CRA areas aren’t hotspots of defaults. What about that?
In part, this is evidence that the lending standards of the CRA had spread to the rest of the mortgage market.
Nope. It isn’t losses from CRA loans that drove the crisis. Instead, the CRA required lax lending standards that spread to the rest of the mortgage market. That fueled the mortgage boom and bust.
Here the writer contradicts himself. First he claimed the banks were not required to participate in the "lax" lending standards, but did so out of fear of receiving bad ratings. Next he states that because they were "required" to participate that this ultimately set the tone for the mortgage industry as a whole. Aside from talking about of both sides of his mouth, it's complete non-sense.
So are we really to believe that a law created in 1977 to help lower income families attain a home created a lending environment nearly 30 years later that would decimate our housing market? Or now as this blogger asserts that while they weren't forced (he'll admit that) that banks participated out of fear and that while the CRA was not responsible (blogger's admission again) that this ACT was the genesis of flimsy lending standards. Or that lenders, backed by Wall Street dollars, who could not even meet CRA lending guidelines, sold high cost ARM loans and then repackaged them to be resold as quickly as possible. Of course lets not forget the ratings companies too who gave these junk securities AAA ratings, which enabled them to keep selling them to everybody.
Which one makes more sense based on the facts?
The primary driver here was the ability to make billions if not trillions of dollars selling these garbage loans, then re-selling them and ultimately betting against them (ask Goldman Sachs how that worked for them.) Nobody "forced" these wall street funded lenders to make these loans, just as nobody "forced" banks to participate in the CRA. As stated prior, the notion is absurd. Lenders took part in these sub-prime loans to do one thing and one thing only: Make money.
Oh and btw, a house 4 doors down from me went under contract in 12 days...and is a flip. Not only that but it's priced 3% higher than the previous high sale here (which was also sold about 3% higher than the previous top sale.)
Do the banks deserve what they get? IMO, YES! But that would have meant bankruptsy for them, and I am okay with that. The CEO's of these huge banks make millions and if it wasn't for the taxpayer, they would have been dead broke (which I feel they should have).
I wished this would have happened, because once the banks started going belly up, mortgage lending would have literally stopped overnight as the entire economy began to shut down. The slow, wrenching 50-75% drop in prices that we have seen over the past 6 years would have occurred instantly, as the entire market would have turned into a cash buyers market. [In fact, the whole economy might have turned into a cash market as banks would also stop lending for credit cards, autos, etc]
Some of us who were stockpiling cash for a rainy day would have made a mint in the ensuing depression. Instead I got to buy a house at 50% off the asking price from a realtor that was either going to have a short sale or a bankruptcy filing. I would have preferred a 90% discount or a house twice as big, though...
The article supposedly builds a case as to how the CRA (a program from the 70's) influenced the lax lending practices that eventually led to the housing bubble and it's ultimate demise. That's quite a bit different than holding this Act responsible for the the puffed up values and subsequent defaults as so many claim. Furthermore the article dances around the assertion by insinuating that banks who did not participate (again they were not required or "forced" to do anything, the article even says this) would risk their CRA credit rating. Which is highly speculative at best and certainly not synonymous with the claim(s) being made.
I certainly would not equate any of this with a "fact" but rather an opinion piece that references prior opinion pieces about the same subject. Other links provided to back the writer's assertions were either broken or did not contain data to back the claim.
In reality CRA loans had normal default rate. This showed that people with lower incomes could and did pay their mortgages, especially if they were not high cost loans. The majority of the defaults over the previous years were triggered by high cost loans which were sold by mortgage servicing companies who had nothing to do with the CRA or their regulations (required if they choose to participate.) They were funded by Wall Street firms who were able to borrow up to 30 times their capital. The writer even addresses this and works hard to spin it into that silly assertion again:
Here the writer contradicts himself. First he claimed the banks were not required to participate in the "lax" lending standards, but did so out of fear of receiving bad ratings. Next he states that because they were "required" to participate that this ultimately set the tone for the mortgage industry as a whole. Aside from talking about of both sides of his mouth, it's complete non-sense.
So are we really to believe that a law created in 1977 to help lower income families attain a home created a lending environment nearly 30 years later that would decimate our housing market? Or now as this blogger asserts that while they weren't forced (he'll admit that) that banks participated out of fear and that while the CRA was not responsible (blogger's admission again) that this ACT was the genesis of flimsy lending standards. Or that lenders, backed by Wall Street dollars, who could not even meet CRA lending guidelines, sold high cost ARM loans and then repackaged them to be resold as quickly as possible. Of course lets not forget the ratings companies too who gave these junk securities AAA ratings, which enabled them to keep selling them to everybody.
Which one makes more sense based on the facts?
The primary driver here was the ability to make billions if not trillions of dollars selling these garbage loans, then re-selling them and ultimately betting against them (ask Goldman Sachs how that worked for them.) Nobody "forced" these wall street funded lenders to make these loans, just as nobody "forced" banks to participate in the CRA. As stated prior, the notion is absurd. Lenders took part in these sub-prime loans to do one thing and one thing only: Make money.
Dream on big guy.. It started under carter, Clinton amped it up.. Bush pushed it to the next level. You don't have to make something mandatory.. The government just does what it always does. "If you don't play along, we take this away." Under each president the regulations were for loans were lowered and lowered. So everyone can buy a house. Now when the banks get stuck with these bad loans what do you think they were going to do with them. Your told by your government that its the right thing to do or else. So they bundled them up and sold them as investments. Now I'm not saying that banks were innocent. They went along with the sham. Yet so did all the people that got loans, that said "OOH we were tricked". SO when this house of cards came down Barney Frank and Chris Dod just pointed their fingers at the banks and walked out the door.
When the government gets involved in the privet sector business. Tells business how to run their business. Bad things will always happen.
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