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Did preparatory lending have a hand in housing bubble and collapse. Yes of course. But a lot this can be avoided by following common sense rules....Dont buy more than 3 times your income. Or save 20 percent to put down on a house. Perhaps the buyers of these houses werent educated enough on the housing market and building wealth in america.
I disagree. I don't think you can ever have a stable or fair economy when one party is allowed to commit fraud and the other is exploited because "They didn't know any better." It sounds like how this country treats rape victims. "Well, they should have known better." Yet, the rapist is not held responsible for his actions. The whole country got raped by the banking industry and the government raped us again by giving our money to the very same criminals. But Bob should have known better. Maybe we've been raped so much by banks that we think it's as normal as breathing. So, we need another scapegoat. ignorant Bob. Yeah, I'm trying to change the narrative.
Why don't you create your own thread then? Problem solved.
You wish.
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Hmm..that's not really the same thing. The people who sell the product are not the financial people.
Uh huh. But they have bosses. And their bosses have banking relationships with the "financial people." Just like a car salesman is not the "financial person." But they can't sell you that car for 26% interest if a bank won't allow them to. If you can't see how it's all connected, then you won't understand my point.
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Does that mean lenders should give out money in the manner that they have? No, but out of everyone involved the buyer has the most information.
This is not always the case. Some people don't even know their own FICO scores until they sit down with the lender. A lot of people don't understand how rates work. A lot of people don't understand how their mortgage gets sold and bundled in the secondary market and how that affects certain markets, etc. etc. But they have income. And that's all the lenders wanted to know. Regardless of whether the buyer thought they could afford it or not. The lender didn't care.
I'm not going to talk in circles. Because we had the SAME discussion over and over. Yes, some people bought more than they could afford, but I place the blame on the ones who had a responsibility to lend responsibly and fairly. Apparently there was a LOT more of that going on than people buying more than they can afford. so many applications that banks didn't even know who had what mortgage. Robo signing? Come on. they were giving mortgages out like candy and the KNEW BETTER. Now with that, I leave you all to your thread where you repeat the very same arguments you all made multiple times year after year.
Uh huh. But they have bosses. And their bosses have banking relationships with the "financial people." Just like a car salesman is not the "financial person." But they can't sell you that car for 26% interest if a bank won't allow them to. If you can't see how it's all connected, then you won't understand my point.
Again the bank takes responsibility for not having stricter rules against who they will allow to borrow, I never denied that. What I don't agree with you on here, is this idea that the buyer is somehow a victim. You don't have to buy the maximum of what you qualify for and you don't have use every product that they bank offers you. The onus is on you as a buyer to know what is best for you.
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Originally Posted by adelphi_sky
This is not always the case. Some people don't even know their own FICO scores until they sit down with the lender. A lot of people don't understand how rates work. A lot of people don't understand how their mortgage gets sold and bundled in the secondary market and how that affects certain markets, etc. etc. But they have income. And that's all the lenders wanted to know. Regardless of whether the buyer thought they could afford it or not. The lender didn't care.
I'm not going to talk in circles. Because we had the SAME discussion over and over. Yes, some people bought more than they could afford, but I place the blame on the ones who had a responsibility to lend responsibly and fairly. Apparently there was a LOT more of that going on than people buying more than they can afford. so many applications that banks didn't even know who had what mortgage. Robo signing? Come on. they were giving mortgages out like candy and the KNEW BETTER. Now with that, I leave you all to your thread where you repeat the very same arguments you all made multiple times year after year.
Who fault is that? Who fault is it that they do not know their FICO score? The lender? The bank? The realtor?
You ignored my question, how much responsibility do you believe the buyer should have in this process?
I agree with you adelphi_sky -- the banksters are primarily to blame for this mess. I would say 60 to 70 percent to blame. At the very least, they had a fiduciary duty to their stockholders to do a better job of underwriting their mortgages and a moral obligation to their customers to lend out only what their customers could realistically repay. I would love to see a bunch of them frog-marched to jail but it ain't going to happen. But remember, for everyone who paid too much for a house back in 2004-2007, there was a seller who walked away with a windfall that they didn't deserve. Pure luck and market timing. It wasn't just the banks that made out like bandits. I remember going to open houses in Alexandria/Arlington during that time period, seeing dozens of stary-eyed couples, listening to real estate agents claiming they already had 10 offers on the tiny dump. I wanted to stand on a chair and scream at the top of my lungs: "You suckers, stop and think! This house isn't worth this. This is a bubble!" But the sheeple wouldn't have listened anyway. So everyone, in a way, is to blame, including me for not standing on that chair. It was the great housing Ponzi scheme. I have family members who got ruined by this -- they're all white, college educated, knowledgeable about financing and FICO scores. They were just greedy, plain and simple. Both couples now divorced. One set of kids raised by a single mom.
I agree with you adelphi_sky -- the banksters are primarily to blame for this mess. I would say 60 to 70 percent to blame. At the very least, they had a fiduciary duty to their stockholders to do a better job of underwriting their mortgages and a moral obligation to their customers to lend out only what their customers could realistically repay. I would love to see a bunch of them frog-marched to jail but it ain't going to happen. But remember, for everyone who paid too much for a house back in 2004-2007, there was a seller who walked away with a windfall that they didn't deserve. Pure luck and market timing. It wasn't just the banks that made out like bandits. I remember going to open houses in Alexandria/Arlington during that time period, seeing dozens of stary-eyed couples, listening to real estate agents claiming they already had 10 offers on the tiny dump. I wanted to stand on a chair and scream at the top of my lungs: "You suckers, stop and think! This house isn't worth this. This is a bubble!" But the sheeple wouldn't have listened anyway. So everyone, in a way, is to blame, including me for not standing on that chair. It was the great housing Ponzi scheme. I have family members who got ruined by this -- they're all white, college educated, knowledgeable about financing and FICO scores. They were just greedy, plain and simple. Both couples now divorced. One set of kids raised by a single mom.
And that's my whole point that some people refuse to see. We've sang the song of blaming buyers who for various reasons ended up loosing their homes. Some people like to maximize the minimum and minimize the maximum. I'm sure the number of people who knowingly bought more than they could afford pales in comparison (the minimum) to those that lost their jobs, didn't know what they were getting into, or simply entered the market at the wrong time. But no one wants to talk about the main cause of the downturn (the maximum). We've already heard about the mortgage crises in PGC. For about 6 years now. I think a talk about the banks and lenders would be more refreshing. A change of pace. But some people enjoy hashing out the same discussion points year-in year-out.
Yes! something related but new to the discussion. Now we're getting somewhere. Yes, I do recall that this was the start. Coupled with deregulation, this put dollar signs in lenders eyes. A whole new pool of applicants were then opened up to them. But a very important question would then be, if the more strict lending standards were there in the first place, couldn't they see that relaxing them would degrade the quality of mortgages on the secondary market opening it up to more defaults? In the many centuries of mortgage lending, did this not occur to banks? Of course! But why should they care? They made it so they would never be on the hook. They could take as much risk as they wanted without any of the consequences. They helped to rewrite the laws and deregulate. They got what they wanted. Then on the other end, they still got what they wanted - a bailout with no questions asked.
I would like to know how it all trickled down from the formation of that act to predatory lending. And where was that lending most rampant. I read a few articles years ago, but the details are fuzzy. I think it is that story that should be rehashed a bit more. But we just read about the fallout.
I agree with you adelphi_sky -- the banksters are primarily to blame for this mess. I would say 60 to 70 percent to blame. At the very least, they had a fiduciary duty to their stockholders to do a better job of underwriting their mortgages and a moral obligation to their customers to lend out only what their customers could realistically repay. I would love to see a bunch of them frog-marched to jail but it ain't going to happen. But remember, for everyone who paid too much for a house back in 2004-2007, there was a seller who walked away with a windfall that they didn't deserve. Pure luck and market timing. It wasn't just the banks that made out like bandits. I remember going to open houses in Alexandria/Arlington during that time period, seeing dozens of stary-eyed couples, listening to real estate agents claiming they already had 10 offers on the tiny dump. I wanted to stand on a chair and scream at the top of my lungs: "You suckers, stop and think! This house isn't worth this. This is a bubble!" But the sheeple wouldn't have listened anyway. So everyone, in a way, is to blame, including me for not standing on that chair. It was the great housing Ponzi scheme. I have family members who got ruined by this -- they're all white, college educated, knowledgeable about financing and FICO scores. They were just greedy, plain and simple. Both couples now divorced. One set of kids raised by a single mom.
Except they were mandated, no ordered, by the government to make loans to minorities. There is a noticeable gap in credit worthiness between Blacks & Whites and default rates for Blacks are about twice that of Whites. So any government mandate to make more loans to minorities would yield higher risk for the banks. So banks hedged their risks by pooling the mortgages into securities. I guess they shouldn't have sold them to investors as investment grade but if you have 100 mortgages in a pool and 4 fail the pool in total is harmed minimally.
I mean sure the banks deserve the blame but let's not forget the government.
FYI the Obama administration is about to do the same thing again.
I agree with you adelphi_sky -- the banksters are primarily to blame for this mess. I would say 60 to 70 percent to blame. At the very least, they had a fiduciary duty to their stockholders to do a better job of underwriting their mortgages and a moral obligation to their customers to lend out only what their customers could realistically repay. I would love to see a bunch of them frog-marched to jail but it ain't going to happen. But remember, for everyone who paid too much for a house back in 2004-2007, there was a seller who walked away with a windfall that they didn't deserve. Pure luck and market timing. It wasn't just the banks that made out like bandits. I remember going to open houses in Alexandria/Arlington during that time period, seeing dozens of stary-eyed couples, listening to real estate agents claiming they already had 10 offers on the tiny dump. I wanted to stand on a chair and scream at the top of my lungs: "You suckers, stop and think! This house isn't worth this. This is a bubble!" But the sheeple wouldn't have listened anyway. So everyone, in a way, is to blame, including me for not standing on that chair. It was the great housing Ponzi scheme. I have family members who got ruined by this -- they're all white, college educated, knowledgeable about financing and FICO scores. They were just greedy, plain and simple. Both couples now divorced. One set of kids raised by a single mom.
That's fair and that's your opinion, but since other individuals don't like answer questions they feel make them look bad, maybe you can explain to me, in your opinion what responsibility do you believe the buyers have? Do you think they should be responsible for their own financial decisions?
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Maybe we've been raped so much by banks that we think it's as normal as breathing. So, we need another scapegoat. ignorant Bob. Yeah, I'm trying to change the narrative. 
