slideshow about underwater homeloans

[Texashiker]

If a bank's assets were to simply evaporate because it failed, then nobody would fund banks and thus banks wouldn't fund loans, that or the interest rates would be so high that nobody could afford it. It's basically an unsecured personal loan at that point.

Dont banks carry insurance to cover its debts?

Bank fails, file an insurance claim, everyone gets their money, everyone is happy, well, besides the insurance company that is.

 

[QuantumPion]

I would like to add, we would need less rules if banks were held accountable for their actions.

The problem is that the bank in this case is the federal government (FNMA/FHLMC) and the federal government is not accountable for their actions.

 

[LegendKiller]

Dont banks carry insurance to cover its debts?

Bank fails, file an insurance claim, everyone gets their money, everyone is happy, well, besides the insurance company that is.

LOL. And you are calling borrowers stupid?

You don't even know how a balance sheet works, how debt works or even how capital works and yet you want to dictate how this whole process should work.

Educate yourself on how even regular companies fund themselves before you call other people stupid about finance.

 

[Texashiker]

LOL. And you are calling borrowers stupid?

Do banks have insurance to protect their investors?

 

[IHateMyJob2004]

I paid $380. Expected the housing market to crash when I did. But i had 2 kids and a wife so I didn't want to rent till the bubble burst. I remodeled my home. Have a nice place to live and could care less.

 

[Jadow]

this is really sad, especially when there are kids, and the 50+ year olds who are now homeless and have zero saving.s

That being said, every single one of these people are responsible for their own situations. No banks put a gun to their head and forced them to buy an overpriced home.

Additionally in many cases, they failed to assess job loss risk and what would happen to them.

 

[BD2003]

Dont banks carry insurance to cover its debts?

Bank fails, file an insurance claim, everyone gets their money, everyone is happy, well, besides the insurance company that is.

Isn't that exactly what happened with credit default swaps that precipitated this whole mess?

 

[Jadow]

I would like to add, we would need less rules if banks were held accountable for their actions.

QF MFING TRUTH. Banks privatize profits and socialize risks. NO MORE BAILOUTS OF ANY PRIVATE COMPANY EVER, IT SHOULD BE A CONSTITUTIONAL AMENDMENT.

 

[LegendKiller]

Do banks have insurance to protect their investors?

If you don't know the answer to that then you should just shut up and exit the thread.

 

[LegendKiller]

Isn't that exactly what happened with credit default swaps that precipitated this whole mess?

Except that most parties holding the CDS were not banks.

 

[dmcowen674]

The hate for Americans and America is so strong in this thread.

Too bad the ones that hate Americans so much don't leave.

What is holding you here?

 

[LegendKiller]

QF MFING TRUTH. Banks privatize profits and socialize risks. NO MORE BAILOUTS OF ANY PRIVATE COMPANY EVER, IT SHOULD BE A CONSTITUTIONAL AMENDMENT.

I guess you call taxation of the banks...what? Obviously not socializing the profits. What do you call them paying dividends or paying interest on their debt...? Also, what do you call them lending money to corporations and individuals?

Obviously that's all privatizing.

 

[Texashiker]

If you don't know the answer to that then you should just shut up and exit the thread.

You said banks have creditors and investors the bank needs to pay back. So the banks assets are auctioned off to pay back the investors.

Call the insurance company in, have the insurance cover the investors, and everyone is happy.

 

[BD2003]

this is really sad, especially when there are kids, and the 50+ year olds who are now homeless and have zero saving.s

That being said, every single one of these people are responsible for their own situations. No banks put a gun to their head and forced them to buy an overpriced home.

Additionally in many cases, they failed to assess job loss risk and what would happen to them.

There's more than enough blame to go around on both sides.

Traditionally, the job of the loan officer was only to give loans to people that could likely pay them back. Throwing that out the windows, lending to anyone, securitizing it and selling it as investment grade bonds, and then when that house of cards crashes, getting a bailout from the same citizens theyve just screwed now that the bubble they created burst....thats kind of worse IMO.

But obviously we couldn't let the banks fail. As much as they deserved it. That's cutting off your nose to spite your face.

The real problem is that nothing has seemed to change, the lessons haven't been learned. The powerful and greedy are still pushing the limits and they just don't know when or even how to stop. We all know how this ends. Please let there be some sanity before this gets that far.

 

[BD2003]

Except that most parties holding the CDS were not banks.

Right, wasn't it the insurance companies like AIG that sold them? And needed a bailout because they couldn't cover them?

 

[desy]

Or you would only invest in banks who are quality and meet their due diligence on the loans they make and the sh1tty banks would perish

 

[LegendKiller]

You said banks have creditors and investors the bank needs to pay back. So the banks assets are auctioned off to pay back the investors.

Call the insurance company in, have the insurance cover the investors, and everyone is happy.

Do banks have insurance companies that guaranty their debt?

 

[LegendKiller]

Right, wasn't it the insurance companies like AIG that sold them? And needed a bailout because they couldn't cover them?

Yeah but the people they sold the insurance to weren't all banks, even if they were it was more akin to insurance on somebody else's default, it wasn't to insure their own debt.

 

[LegendKiller]

Or you would only invest in banks who are quality and meet their due diligence on the loans they make and the sh1tty banks would perish

Yeah, because people can determine that so easily. People loved Bear Sterns and Lehman until a week before they went under.

 

[Texashiker]

Yeah, because people can determine that so easily. People loved Bear Sterns and Lehman until a week before they went under.

Just like people loved enron.

 

[LegendKiller]

Just like people loved enron.

That's my point, you cannot expect people to know exactly what a company is doing at the micro level without being deep in the company, that's what bankers and stock analysts are supposed to before, however, they cannot even see what's really going on behind the scenes. Insuring against those losses are impossible and no insurance company on earth would write catastrophe policies for that.

The mere idea that somebody insures bank debt is ridiculous and you are foolish for even thinking its possible.

 

[BD2003]

That's my point, you cannot expect people to know exactly what a company is doing at the micro level without being deep in the company, that's what bankers and stock analysts are supposed to before, however, they cannot even see what's really going on behind the scenes. Insuring against those losses are impossible and no insurance company on earth would write catastrophe policies for that.

The mere idea that somebody insures bank debt is ridiculous and you are foolish for even thinking its possible.

Yep.

There's a small part of me that's kind of hoping for a second crash. Just to spur people to real action. It has to get worse before it gets better.

 

[Jhhnn]

You know how conservatives claim that liberals think people are too stupid to handle their own lives and that's why they need the government to run it for them? This is one of those cases where the conservatives are right about liberals, and the liberals are right about policy. Some people really are too stupid to function, but they don't fit the legal definition of "retarded," so we end up making broad rules that everyone needs to follow.

example of something Canada just did:
-mortgages cannot be longer than 25 years
-all borrowers must meet qualifications for a 5 year fixed term even if that's not the type of mortgage they are getting
-minimum down payment for owner-occupied homes is 5%, but it's 20% for investment properties

We wouldn't need rules if the average person was smarter than a fifth grader.

I wouldn't be quite so disparaging about it, but 50% of the population has below average intelligence, simply by definition.

They've also been taught to think in circles by 30+ years of relentless right wing propaganda, the true intent of which was revealed in Texas Repubs' platform calling for the teaching of critical thinking skills to be banned in public schools...