Do you live paycheck to paycheck? 61% of Americans now do

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Do you live paycheck to paycheck?

  • Yes I live check to check

  • Some times I live check to check

  • No, I am in good shape


Results are only viewable after voting.

Pulsar

Diamond Member
Mar 3, 2003
5,224
306
126
Actually I was just pointing out the fact that the people who are the worst at throwing the mud seem to be avoiding this thread.

A few of them are very active posters and yet they are no where to be found in this thread, why not?


Actually, you're just doing exactly what he said you're doing. You're turning an interesting informative thread into another you versus them shitfight. Think you've ever changed anything for the positive in one of those threads? I already know the answer - the question was rhetorical.
 

Pulsar

Diamond Member
Mar 3, 2003
5,224
306
126
I can't help but think about those folks that work their whole lives, save, have a nice nest egg because they lived conservatively. Then they go to retire and die within a year or two. Never having enjoyed anything in life but the satisfaction of knowing they were fiscally responsible :'(

I certainly hope you're not posting that as a motivator or excuse to live beyond your means.

Also - let me give you a hint. If you're not having fun every day and you're working a job you hate for 30 years just to get to retirement, I feel very very sorry for you.
 

IceBergSLiM

Lifer
Jul 11, 2000
29,932
3
81
I certainly hope you're not posting that as a motivator or excuse to live beyond your means.

Also - let me give you a hint. If you're not having fun every day and you're working a job you hate for 30 years just to get to retirement, I feel very very sorry for you.

probably most americans.
 

SammyJr

Golden Member
Feb 27, 2008
1,708
0
0
I certainly hope you're not posting that as a motivator or excuse to live beyond your means.

Also - let me give you a hint. If you're not having fun every day and you're working a job you hate for 30 years just to get to retirement, I feel very very sorry for you.

This is the American way of life. We live to work and provide our Wealthy masters with more. We glory in our serfdom.
 

daishi5

Golden Member
Feb 17, 2005
1,196
0
76
I don't think they were going over income and expenses with you in grade school .

They did in my grade school, we were given an "income" of a random job, and given "bills" to pay. We wrote checks to pay the bills and had to track the balance. We could buy small class perks, and at the end we could spend the money we had saved on candy.

I was living paycheck to paycheck for a few months very recently, up to the point that I delayed paying a few bills till the last moment, and almost had to pull from retirement savings. Long story short, I got married, and my mother-in-law had wanted to pay for a nice wedding. But, it turned out to be a bit beyond her means when reality went bad for their finances. We ended up picking up more than I expected, and a few other unexpected expenses hit us at the same time that drove my emergency funds down to less than $100.

Between the finance lessons in grade school, and living through a time when my family was living no-paycheck to no-paycheck when I was younger, I am very conservative with my money. But, I know just how easily stuff out of my control could devastate my finances.
 

PricklyPete

Lifer
Sep 17, 2002
14,582
162
106
This is the American way of life. We live to work and provide our Wealthy masters with more. We glory in our serfdom.

Yeah...sure. I personally know way too many people who have started with nothing and have made themselves into very successful people to believe that shit. Is life fair? No...but don't go on like it's "America" that's doing it to you...playing the victim excuse is pretty lame.
 

DanDaManJC

Senior member
Oct 31, 2004
776
0
76
It's almost a catch22.. we have a consumer culture where it's cool to have things. Some people are more affected by this than others.. but regardless, our culture is saturated with consumerism. It's what drives our economy. Those that buck the trend are therefore not in the in crowd... simply put, we're not like the asians who still save a lot of money.
 

KCJohnGalt

Junior Member
Sep 1, 2010
2
0
66
Very interesting posts - so interesting I signed up so I could post in it. ;)

I agree with the point made that often those living paycheck to paycheck are younger and have student loan debt, don't make a lot to begin with or are simply not experienced enough to handle their finances. I also agree that financial education needs to be made mandatory starting with high school freshmen, NOT seniors, because you want to get the younger kids exposed before they get jobs in high school, the few still remaining that older folks haven't snatched up.

I'm 53 and I retired at the age of 46, had a good-paying job but I started out broke at the age of 30, due to medical bills and a general layoff at my company, even though by nature and education I'm really fiscally conservative. I looked at my friends, saw their toys and shiny new cars and nice houses and thought that was great, except of course they went into debt to get them, some of them really in the hole. Though I'd recently landed a then-decent job, I needed a loan from my Dad to pay off the medical bills, then I sat down over a long, (cheap) Scotch-soaked weekend and determined that while I really do like material things, I liked freedom from financial distress a lot more. The following Monday I set as my goal for every year to save at least 50% of my pay, live well beneath my means and except for housing never go into debt (other than paying off monthly any credit card debt). When I moved to KC years ago, I bought another house and paid that mortgage off in 3 years in 2001. In two of those 17 years I worked massive overtime, and one of those years I 'rewarded' myself with a nice car which I still own and maintain after 17 years. During those overtime years I saved probably double the amount in the other years instead of spending it.

When I decided to quit work, I did so without considering Social Security, so if I ever get anything, fine, if not, getting humped by Uncle Sam was to be expected. I've lived frugally but well and didn't want to be the guy that spent freely, retired at 70 and died the next year. This extra free time has been fantastic for me and well worth whatever I gave up in terms of material goods to get here.

Yes, I was fortunate to get into mainframe IT when I did because timing was everything (pre-Y2K), but I was also prepared to take advantage of it, both by continually educating myself in the field and by saving my @ss off. Both sets of grandparents had lived during the Depression and I learned from their stories that if you live month-to-month then eventually you'll die day-by-day, and that they hated dependency. I also distrusted the stock market and my investments were usually outside the market and always conservative. My nephews are young and financially stupid (one in the Air Force wondered why companies can't be forced to give free weapons to the military during war time) and they are paying for it and will do so until either they wise up or pay the price. I warned them years ago what was coming but one of them responded by buying a new computer and a widescreen TV with the 'found' money from his federal tax refund instead of saving it (and he had a new baby to boot).

But I am honestly stunned about the 61% poll figure - I had no idea so many people were in this situation. But of course this figure is not monolithic with respect to the people within in, just as my economic situation varied with time in my own life. A lot caused their own problems and a lot didn't, so I see both sides having been on both, but fundamentally I believe it is not government that should directly provide for those without but the people, through churches, charities, family and friends. It won't be MY church since I'm an atheist :whiste: but I have directly financially helped out both family and friends when I felt they should have been.

Either last night or the night before the Democrat strategist Bob Beckel actually admitted on TV that the dependency culture fostered starting in the 60's was wrong and has created a culture of dependents unable to provide for themselves due to their expectancy that it is their 'right' that government do so. How people can still believe government will make things better in almost any type of human endeavor is beyond me. The only reason I think that most of them support government's ever-enlarging encroachment is because (a) they personally will benefit from money taken from another person by implied or direct force (taxes) or (b) their ideology blinds them to the reality of the fact that motivated individuals and businesses make far better decisions (in general) with the fruits of their labor than government confiscation and redistribution of those same fruits can ever make - not only that, they have the RIGHT to.

I just hope we can finally expose Keynes' economic theories for the failures they are and move on to something far closer to free enterprise than the entitlement-reliant, crony capitalist pseudo-socialist malaise we seem to be camped in.

p.s. I also had a friend who purposefully ran up credit card debt nearing 100K without any assets whatsoever except his car and some personal cr@p, then purposefully filed before the bankruptcy laws were tightened. Ain't my friend no more.
 
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Darwin333

Lifer
Dec 11, 2006
19,946
2,329
126
Wow, so you can thank Obama for that... Something Bush would never do for you....

Funny, they will take every rebate and handout - stimulus cash... Yet on the same sentence say how bad everything is. Oh well... Maybe you should consider giving that 8K back since it goes against everything you stand for.

Dumb argument.

I disagree with a lot of the shit they pass but I will damn sure take the opportunity to get some of my money back if they decide to do stupid shit. Its not like my lack of participation is going to change how much they spend, just who it goes to. Since they are going to be spending X amount anyway than some of it might as well end up in my pocket.

I think cap and trade is a horrible idea, especially at this point in time, but if they pass it I will make millions off of it. Trust me, I won't refuse the money. Then again, I have no problem calling myself a hypocrite while I deposit the checks.

BTW, didn't Bush send us all a "stimulus check"? You know, something that everyone can spend and not something intended solely to help the banks out? That was a bad idea too, imo, but I sure as hell cashed mine. I also think its a bad idea for Newegg to give away their entire inventory for free but if they do I am getting me a new monitor and maybe another video card.
 

bozack

Diamond Member
Jan 14, 2000
7,913
12
81
I'm 53 and I retired at the age of 46, had a good-paying job but I started out broke at the age of 30, due to medical bills and a general layoff at my company, even though by nature and education I'm really fiscally conservative. .....

This is what is great about life, not everyone has to live it the same...

Your story reminds me of "The Millionare next door" playbook sans the millions, truly something to be commended for in this day and age but personally I couldn't fathom being that fiscally conservative, my take is life is far too short...for all I know I could be hit by a bus tomorrow and then what?

I know for many early retirement is a goal, and I can understand that, but personally I enjoy working and don't think I would ever be comfortable "retired", just too boring unless you have the funds to travel the world.

Great story though and enjoy retirement.
 

Mursilis

Diamond Member
Mar 11, 2001
7,756
11
81
There is some truth to that...but there is also some truth to the fact that people who feel they must spend money to enjoy life often miss a lot of what life has to offer. So their are two sides to that coin.

Not to mention that fact that when the "live for now!" folks actually do reach old age, they've saved absolutely nothing, and are the first ones to vote themselves other people's money. Look what ridiculous percentage of the federal budget goes to seniors.
 

ProfJohn

Lifer
Jul 28, 2006
18,161
7
0
It was, of course, the "Free market! Deregulated Banking! Cut red tape!" mentality that led to giving out that sort of loan on real estate, too, running up the price, leaving huge numbers of families completely screwed.
Actually it was government interference in the market that got us to where we are.

Fannie and Freddie ran around buying up all the mortgages which poured more money into the game and things spiraled out control.

Take away the government interference and people wouldn't be running around risking huge sums of money loaning houses to people making 25K a year or loaning homes to people who couldn't even prove their income etc etc.
 

Jhhnn

IN MEMORIAM
Nov 11, 1999
62,365
14,681
136
Actually it was government interference in the market that got us to where we are.

Fannie and Freddie ran around buying up all the mortgages which poured more money into the game and things spiraled out control.

Take away the government interference and people wouldn't be running around risking huge sums of money loaning houses to people making 25K a year or loaning homes to people who couldn't even prove their income etc etc.

Well, yeh, of course. The part you're leaving out is that the Bush Admin demanded that the GSE's accept more and more crappy mortgage paper if they were to meet their executive bonus targets, and that Greenspan's FRB held rates ridiculously low as enablement. They also allowed financial entities to shuffle that paper around in such a way that it could be deemed to be "assets", enabling even more fractional reserve lending, accepted the notion that risk could be eliminated with a wave of the magic derivative hedge wand.

They rode the Ownership Society deception to re-election in 2004, kept blowing up the bubble until it popped in 2006, managed to execute the Greenspan put prior to their exit in 2008...

Anybody who thinks this was really an accident isn't really thinking. It was the most successful looting spree in the history of finance, well planned and executed from start to finish.
 

Phokus

Lifer
Nov 20, 1999
22,994
779
126
Actually it was government interference in the market that got us to where we are.

Fannie and Freddie ran around buying up all the mortgages which poured more money into the game and things spiraled out control.

Take away the government interference and people wouldn't be running around risking huge sums of money loaning houses to people making 25K a year or loaning homes to people who couldn't even prove their income etc etc.

You literally don't know anything

http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-fannie.html

And i'll say it again, the way you bought a house is not what i would consider responsible borrowing.

Me and my SO have enough cash savings to pay off the mortgage, taxes, and insurance for the next 38 months on our recently purchased home without any additional paychecks. We scrimped and saved for years to make sure that we could weather the absolute worst case scenario because we are risk adverse to the extreme. You buying a house with only one or two months of paychecks in savings after your rebate arrives is what I would consider highly irresponsible.
 
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ProfJohn

Lifer
Jul 28, 2006
18,161
7
0
Don't forget that the Democrats blocked attempts to reform Freddie and Fannie or that fact that the GSE were run by Democrats!!!! Barney Frank himself "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

Look at who was in charge of Fannie Mae when it started us down this path. It was Franklin Raines the former director of OMB under Clinton. He was in charge of Fannie Mae when they were doing their accounting tricks, Bush had NOTHING to do with it. In fact it was Bush who wanted to regulations tightened up to prevent problems like, but the Democrats blocked the regulations.

Hell, it was actually the Clinton administration that first pressured Fannie Mae to get into the sub-prime business to begin with.
 

Phokus

Lifer
Nov 20, 1999
22,994
779
126
I"m just going to copy/paste this since ProfJohn is too lazy to click:

WASHINGTON — As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail.

Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.

Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.

Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.

Federal Reserve Board data show that:

* More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

* Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

* Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.


The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime

mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets reported Friday.

Conservative critics claim that the Clinton administration pushed Fannie Mae and Freddie Mac to make home ownership more available to riskier borrowers with little concern for their ability to pay the mortgages.

"I don't remember a clarion call that said Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster," said Neil Cavuto of Fox News.

Fannie, the Federal National Mortgage Association, and Freddie, the Federal Home Loan Mortgage Corp., don't lend money, to minorities or anyone else, however. They purchase loans from the private lenders who actually underwrite the loans.

It's a process called securitization, and by passing on the loans, banks have more capital on hand so they can lend even more.

This much is true. In an effort to promote affordable home ownership for minorities and rural whites, the Department of Housing and Urban Development set targets for Fannie and Freddie in 1992 to purchase low-income loans for sale into the secondary market that eventually reached this number: 52 percent of loans given to low-to moderate-income families.

To be sure, encouraging lower-income Americans to become homeowners gave unsophisticated borrowers and unscrupulous lenders and mortgage brokers more chances to turn dreams of homeownership in nightmares.

But these loans, and those to low- and moderate-income families represent a small portion of overall lending. And at the height of the housing boom in 2005 and 2006, Republicans and their party's standard bearer, President Bush, didn't criticize any sort of lending, frequently boasting that they were presiding over the highest-ever rates of U.S. homeownership.

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.


In 1999, the year many critics charge that the Clinton administration pressured Fannie and Freddie, the private sector sold into the secondary market just 18 percent of all mortgages.

Fueled by low interest rates and cheap credit, home prices between 2001 and 2007 galloped beyond anything ever seen, and that fueled demand for mortgage-backed securities, the technical term for mortgages that are sold to a company, usually an investment bank, which then pools and sells them into the secondary mortgage market.

About 70 percent of all U.S. mortgages are in this secondary mortgage market, according to the Federal Reserve.

Conservative critics also blame the subprime lending mess on the Community Reinvestment Act, a 31-year-old law aimed at freeing credit for underserved neighborhoods.

Congress created the CRA in 1977 to reverse years of redlining and other restrictive banking practices that locked the poor, and especially minorities, out of homeownership and the tax breaks and wealth creation it affords. The CRA requires federally regulated and insured financial institutions to show that they're lending and investing in their communities.

Conservative columnist Charles Krauthammer wrote recently that while the goal of the CRA was admirable, "it led to tremendous pressure on Fannie Mae and Freddie Mac — who in turn pressured banks and other lenders — to extend mortgages to people who were borrowing over their heads. That's called subprime lending. It lies at the root of our current calamity."

Fannie and Freddie, however, didn't pressure lenders to sell them more loans; they struggled to keep pace with their private sector competitors. In fact, their regulator, the Office of Federal Housing Enterprise Oversight, imposed new restrictions in 2006 that led to Fannie and Freddie losing even more market share in the booming subprime market.

What's more, only commercial banks and thrifts must follow CRA rules. The investment banks don't, nor did the now-bankrupt non-bank lenders such as New Century Financial Corp. and Ameriquest that underwrote most of the subprime loans.

These private non-bank lenders enjoyed a regulatory gap, allowing them to be regulated by 50 different state banking supervisors instead of the federal government. And mortgage brokers, who also weren't subject to federal regulation or the CRA, originated most of the subprime loans.

In a speech last March, Janet Yellen, the president of the Federal Reserve Bank of San Francisco, debunked the notion that the push for affordable housing created today's problems.

"Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans," she said. "The CRA has increased the volume of responsible lending to low- and moderate-income households."

In a book on the sub-prime lending collapse published in June 2007, the late Federal Reserve Governor Ed Gramlich wrote that only one-third of all CRA loans had interest rates high enough to be considered sub-prime and that to the pleasant surprise of commercial banks there were low default rates. Banks that participated in CRA lending
 

ProfJohn

Lifer
Jul 28, 2006
18,161
7
0
If the GSE's have nothing to do with the sub-prime mess then why are we on the hook for billions of dollars for the failure of them?
 

Phokus

Lifer
Nov 20, 1999
22,994
779
126
If the GSE's have nothing to do with the sub-prime mess then why are we on the hook for billions of dollars for the failure of them?

If you actually read the article, it's not the Freddy and Fannie weren't involved, it's that the private banking system dwarfed them and would have picked up all their business if they didn't exist. The fact that they had regulations that curtailed their business while private industry subprime loans exploded during the peak, shows you how fucking moronic free market true believers are.

Tell me this, PJ, if banking regulations are so bad, why is it Canada didn't experience the subprime mess that we did? OH That's right, because their people/government aren't full of fucking retarded free market true believers who think deregulation is the anwer to everything and things like 'limits on leverage' and 'consuemr protection' against predatory lending practices are considered common sense up there.

http://www.nytimes.com/2009/02/28/opinion/28tedesco.html?_r=1&em

The Canadian banking system, which proved resilient in the global economic crisis, is finally getting its day in the sun. A recent World Economic Forum report ranked it the soundest in the world, mostly as the result of its conservative practices. (The United States ranked 40th).

Most people don’t know that the vision behind Canada’s banking system, made up of a few large, national banks with branches from coast to coast, actually had its beginnings in the United States. Canada’s system is the product of a banking framework inspired by Alexander Hamilton, the first American secretary of the Treasury. Hamilton envisioned the First Bank of the United States, chartered in 1791, as a central bank modeled on the Bank of England.

Canadians found inspiration in Hamilton’s model, but not all Americans did. In the 1830s, President Andrew Jackson opposed extending the charter of the Second Bank of the United States, perceiving it as monopolistic. Money-lending functions were then assumed by local and state-chartered banks, eventually giving rise to the free-market, decentralized system that America has today.

Today, Canada’s system remains truer to Hamilton’s ideal. The five major chartered banks, the few regional banks and handful of large insurance companies are all regulated by the federal government. Canadian banks are relatively constrained in the amounts they can lend. Canadian banks are required to have a bigger cushion to absorb losses than American banks. In addition, Canadian government regulations protect the domestic banks by limiting foreign competition. They also keep banks broadly owned by public shareholders.
 
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dmcowen674

No Lifer
Oct 13, 1999
54,889
47
91
www.alienbabeltech.com
Quote:
Originally Posted by ProfJohn
If the GSE's have nothing to do with the sub-prime mess then why are we on the hook for billions of dollars for the failure of them?

If you actually read the article, it's not the Freddy and Fannie weren't involved, it's that the private banking system dwarfed them and would have picked up all their business if they didn't exist.

Tell me this, PJ, if banking regulations are so bad, why is it Canada didn't experience the subprime mess that we did? OH That's right, because their people/government aren't full of fucking retarded free market true believers who think deregulation is the anwer to everything and things like 'limits on leverage' and 'consuemr protection' against predatory lending practices are considered common sense up there.

If you actually read the article, it's not the Freddy and Fannie weren't involved, it's that the private banking system dwarfed them and would have picked up all their business if they didn't exist. The fact that they had regulations that curtailed their business while private industry exploded during the peak, shows you how fucking moronic free market true believers are.

Tell me this, PJ, if banking regulations are so bad, why is it Canada didn't experience the subprime mess that we did? OH That's right, because their people/government aren't full of fucking retarded free market true believers who think deregulation is the anwer to everything and things like 'limits on leverage' and 'consuemr protection' against predatory lending practices are considered common sense up there.

http://www.nytimes.com/2009/02/28/opinion/28tedesco.html?_r=1&em

You may as well talk to a brick wall trying to get any sense into the like like PJ but I commend you for trying.
 

ProfJohn

Lifer
Jul 28, 2006
18,161
7
0
Phokus, you have an article saying that the GSE's had little to do with the problem.

Here is one that claims that the government had a lot to do with the problem;
http://online.wsj.com/article/SB122298982558700341.html

There are a lot of factors that lead to our economic meltdown and one of them was government interference in the housing market.

The well intentioned desire to increase home ownership rates pushed millions of people into the housing market that should not have been there. This caused the prices of houses to jump greatly and it led to things spiraling out of control.
 

Phokus

Lifer
Nov 20, 1999
22,994
779
126
Phokus, you have an article saying that the GSE's had little to do with the problem.

Here is one that claims that the government had a lot to do with the problem;
http://online.wsj.com/article/SB122298982558700341.html

There are a lot of factors that lead to our economic meltdown and one of them was government interference in the housing market.

The well intentioned desire to increase home ownership rates pushed millions of people into the housing market that should not have been there. This caused the prices of houses to jump greatly and it led to things spiraling out of control.

Oh wow, a WSJ opinion piece pushes a conservative viewpoint? Why i never.

He's being dishonest: If freddie/fannie did something bad, he makes it out to be them causing most of the mess when it's actually private banks who did the exact same thing but only on a MUCH LARGER scale.

* More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

* Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.

The CRA? Are you kidding me?

* Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

What's more, only commercial banks and thrifts must follow CRA rules. The investment banks don't, nor did the now-bankrupt non-bank lenders such as New Century Financial Corp. and Ameriquest that underwrote most of the subprime loans.

These private non-bank lenders enjoyed a regulatory gap, allowing them to be regulated by 50 different state banking supervisors instead of the federal government. And mortgage brokers, who also weren't subject to federal regulation or the CRA, originated most of the subprime loans.

Oh wow, so the CRA was literally a non-issue.

The really funny thing is PJ, RICH PEOPLE ARE MORE LIKELY TO DEFAULT THAN THE POOR , yet you are seeking out to blame government helping poor minorities as the culprit when that had little to nothing to do with anything. That's why i say you and your ilk are what's wrong with this country: You protect the rich at all costs, but will blame the poor with no proof whatsoever. And you aren't even in the rich income brackets.

http://www.nytimes.com/2010/07/09/business/economy/09rich.html?pagewanted=1&_r=1&hp

Biggest Defaulters on Mortgages Are the Rich
By DAVID STREITFELD

LOS ALTOS, Calif. — No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars.

The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

Five properties here in Los Altos were scheduled for foreclosure auctions in a recent issue of The Los Altos Town Crier, the weekly newspaper where local legal notices are posted. Four have unpaid mortgage debt of more than $1 million, with the highest amount $2.8 million.

Not so long ago, said Chris Redden, the paper’s advertising services director, “it was a surprise if we had one foreclosure a month.”

The sheriff in Cook County, Ill., is increasingly in demand to evict foreclosed owners in the upscale suburbs to the north and west of Chicago — like Wilmette, La Grange and Glencoe. The occupants are always gone by the time a deputy gets there, a spokesman said, but just barely.

In Las Vegas, Ken Lowman, a longtime agent for luxury properties, said four of the 11 sales he brokered in June were distressed properties.

“I’ve never seen the wealthy hit like this before,” Mr. Lowman said. “They made their plans based on the best of all possible scenarios — that their incomes would continue to grow, that real estate would never drop. Not many had a plan B.”

The defaulting owners, he said, often remain as long as they can. “They’re in denial,” he said.

Here in Los Altos, where the median home price of $1.5 million makes it one of the most exclusive towns in the country, several houses scheduled for auction were still occupied this week. The people who answered the door were reluctant to explain their circumstances in any detail.

At one house, where the lender was owed $1.3 million, there was a couch out front wrapped in plastic. A woman said she and her husband had lost their jobs and were moving in with relatives. At another house, the family said they were renters. A third family, whose mortgage is $1.6 million, said they would be moving this weekend.

At a vacant house with a pool, where the lender was seeking $1.27 million, a raft and a water gun lay abandoned on the entryway floor.

Lenders are fearful that many of the 11 million or so homeowners who owe more than their house is worth will walk away from them, especially if the real estate market begins to weaken again. The so-called strategic defaults have become a matter of intense debate in recent months.

Fannie Mae and Freddie Mac, the two quasi-governmental mortgage finance companies that own most of the mortgages in America with a value of less than $500,000, are alternately pleading with distressed homeowners not to be bad citizens and brandishing a stick at them.

In a recent column on Freddie Mac’s Web site, the company’s executive vice president, Don Bisenius, acknowledged that walking away “might well be a good decision for certain borrowers” but argues that those who do it are trashing their communities.

The CoreLogic data suggest that the rich do not seem to have concerns about the civic good uppermost in their mind, especially when it comes to investment and second homes. Nor do they appear to be particularly worried about being sued by their lender or frozen out of future loans by Fannie Mae, possible consequences of default.

The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent.

With second homes, the delinquency rate for both types of owners was rising in concert until the stock market crashed in September 2008. That sent the percentage of troubled million-dollar loans spiraling up much faster than the smaller loans.

“Those with high net worth have other resources to lean on if they get in trouble,” said Mr. Khater, the analyst. “If they’re going delinquent faster than anyone else, that tells me they are doing so willingly.”

Willingly, but not necessarily publicly. The rapper Chamillionaire is a plain-talking exception. He recently walked away from a $2 million house he bought in Houston in 2006.

“I just decided to let it go, give it back to the bank,” he told the celebrity gossip TV show “TMZ.” “I just didn’t feel like it was a good investment.”

The rich and successful often come naturally to this sort of attitude, said Brent T. White, a law professor at the University of Arizona who has studied strategic defaults.

“They may be less susceptible to the shame and fear-mongering used by the government and the mortgage banking industry to keep underwater homeowners from acting in their financial best interest,” Mr. White said.

The CoreLogic data measures serious delinquencies, which means the borrower has missed at least three payments in a row. At that point, lenders traditionally file a notice of default and the house enters the official foreclosure process.

In the current environment, however, notices of default are down for all types of loans as lenders work with owners in various modification programs. Even so, owners in some of the more expensive neighborhoods in and around San Francisco are beginning to head for the exit, according to data compiled by MDA DataQuick.

In Los Altos, Los Altos Hills and the most expensive neighborhood in adjoining Mountain View, defaults in the first five months of this year edged up to 16, from 15 in the same period in 2009 and four in 2008.

The East Bay suburb of Orinda had eight notices of default for million-dollar properties, up from five in the same period last year. On Nob Hill in San Francisco, there were four, up from one. The Marina neighborhood had four, up from two.

The vast majority of owners in these upscale communities are still paying the mortgage, of course. But they appear to be cutting back in other ways. The once-thriving Los Altos downtown is pocked with more than a dozen empty storefronts in a six-block stretch.

But this is still Silicon Valley, where failure can always be considered a prelude to success.

In the middle of a workday, one troubled homeowner here leaned over his laptop at the kitchen table, trying to maneuver his way out from under his debt and figure out the next big thing.

His five-bedroom house, drained of hundreds of thousands of dollars of equity over the last 13 years, is scheduled for auction July 20. Nine months ago, after his latest business (he has had several) failed in what he called “the global meltdown,” the man, a technology entrepreneur, said he quit making his $9,000 monthly payments.

“I’m going to be downsizing,” he said.

The man spoke on the condition of anonymity because, he said, he did not want his current problems to interfere with his coming reinvention. “I’m a businessman,” he explained. “I have to be upbeat.”
 
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