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The root cause of the housing bubble

blackangst1

Lifer
Feb 23, 2005
20,775
781
126
What a crock. The reason the secondary market collapsed is lenders loaned money to people who shouldnt have qualified for a mortgage in the first place.

Funny...when he says

"And it starts with setting a goal. And so by the year 2010, we must increase minority home owners by at least 5.5 million. In order to close the homeownership gap, we've got to set a big goal for America, and focus our attention and resources on that goal"

he doesnt talk about people getting their finances straight, quit relying on the government, cleaning up their credit reports, and paying their fucking bills on time.
 

Engineer

Elite Member
Oct 9, 1999
39,255
699
126
Originally posted by: blackangst1
What a crock. The reason the secondary market collapsed is lenders loaned money to people who shouldnt have qualified for a mortgage in the first place.

[/b].
This may be the first time we actually agree on anything! :shocked:

I also don't think that the government should be bailing out anybody (of course, I suspect it's more to help the finance/mortgage companies than it is to help the borrowers). The borrowers signed the papers, many hoping that the market would drive up the prices of their homes even more, for a quick future profit. Touch crap if you get bit by the market. Can the government give me back the money that I lost on picking a bad stock this year?
 
Sep 12, 2004
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Originally posted by: blackangst1
What a crock. The reason the secondary market collapsed is lenders loaned money to people who shouldnt have qualified for a mortgage in the first place.

Funny...when he says

"And it starts with setting a goal. And so by the year 2010, we must increase minority home owners by at least 5.5 million. In order to close the homeownership gap, we've got to set a big goal for America, and focus our attention and resources on that goal"

he doesnt talk about people getting their finances straight, quit relying on the government, cleaning up their credit reports, and paying their fucking bills on time.
lol.

That reminds me of Chris Rock in Bring the Pain. In one schtick he talks about a guy who boasts "I take care of my kids."

Chris Rock practically spitting: "You're suppose to take care of your kids, stupid motherf*****."

I mean, c'mon. Is it Bush's responsibility to tell people to pay their bills on time? That's shouldn't be a presidential edict, that's just plain common sense.
 

IronWing

No Lifer
Jul 20, 2001
61,852
14,974
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Originally posted by: TastesLikeChicken
:confused:

So you're against minorities owning homes?
Homeownership didn't go up, only homeloanership*. While the nominal rate of home ownership has increased, the rate of equity ownership has declined faster than the nominal ownership rate has risen so more people own less of their homes.

Graph through 2003. If I could find equity data for more recent years I'd love to update the graph.






*I just coined that term. Makes you want to punch your monitor, doesn't it? ;)

 

nageov3t

Lifer
Feb 18, 2004
42,826
83
91
it arguably is Bush's fault for the systematic failure to oversee these loans... I wouldn't call this speech the root of the problem, though.
 

GrGr

Diamond Member
Sep 25, 2003
3,204
0
76
Originally posted by: blackangst1
What a crock. The reason the secondary market collapsed is lenders loaned money to people who shouldnt have qualified for a mortgage in the first place.

Funny...when he says

"And it starts with setting a goal. And so by the year 2010, we must increase minority home owners by at least 5.5 million. In order to close the homeownership gap, we've got to set a big goal for America, and focus our attention and resources on that goal"

he doesnt talk about people getting their finances straight, quit relying on the government, cleaning up their credit reports, and paying their fucking bills on time.
Did you read the speech? Bush decided it was a great idea to ease the loaning standards so people didn't need to prove they had any money to pay their bills with. If people cannot afford to make a downpayment, chances are they cannot afford to pay the bills for their house.

"One of the barriers to homeownership is the inability to make a downpayment. And if one of the goals is to increase homeownership, it makes sense to help people pay that downpayment."
 
Sep 12, 2004
16,852
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Originally posted by: ironwing
Originally posted by: TastesLikeChicken
:confused:

So you're against minorities owning homes?
Homeownership didn't go up, only homeloanership*. While the nominal rate of home ownership has increased, the rate of equity ownership has declined faster than the nominal ownership rate has risen so more people own less of their homes.

Graph through 2003. If I could find equity data for more recent years I'd love to update the graph.






*I just coined that term. Makes you want to punch your monitor, doesn't it? ;)
How many people own their homes outright without loans or mortgages in the first place? Has that percentage changed appreciably?

Your chart is a bit misleading. As more new homeowners come into a market the amount of equity is bound to drop, particularly in a market with as much bear to it as the recent housing market.

I wonder how much equity has risen or declined overall in actual dollar value instead of as a percentage of old vs. new? That would be a more telling statistic.
 

hellod9

Senior member
Sep 16, 2007
249
0
0
Originally posted by: brxndxn
The economy.. the way it is set up right now.. is doomed to 'bubbles' over and over and over.. until artificial incentives are taken away and free market capitalism is allowed to take place.
Dude, bubbles are a natural result of a free market economy. And, I would argue that bubbles are actually good for us, over the long haul. They are an important component of a healthy, expanding, economy. They result in innovation, creation of new infrastructure, and completely new industries that needed a "bubble" in order to be born into the economy.


 
Sep 12, 2004
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Originally posted by: GrGr
Originally posted by: blackangst1
What a crock. The reason the secondary market collapsed is lenders loaned money to people who shouldnt have qualified for a mortgage in the first place.

Funny...when he says

"And it starts with setting a goal. And so by the year 2010, we must increase minority home owners by at least 5.5 million. In order to close the homeownership gap, we've got to set a big goal for America, and focus our attention and resources on that goal"

he doesnt talk about people getting their finances straight, quit relying on the government, cleaning up their credit reports, and paying their fucking bills on time.
Did you read the speech? Bush decided it was a great idea to ease the loaning standards so people didn't need to prove they had any money to pay their bills with. If people cannot afford to make a downpayment, chances are they cannot afford to pay the bills for their house.

"One of the barriers to homeownership is the inability to make a downpayment. And if one of the goals is to increase homeownership, it makes sense to help people pay that downpayment."
Did YOU read the speech? It was about the lack of minorities owning homes. Bush wanted to close the gap between minorities and white America in home ownership.

Do you not support that goal? If so, explain why.
 

Slew Foot

Lifer
Sep 22, 2005
12,387
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If minorities want to own homes at the same rates as whites, maybe they should earn money at the same rates as whites.
 

blackangst1

Lifer
Feb 23, 2005
20,775
781
126
Originally posted by: GrGr
Originally posted by: blackangst1
What a crock. The reason the secondary market collapsed is lenders loaned money to people who shouldnt have qualified for a mortgage in the first place.

Funny...when he says

"And it starts with setting a goal. And so by the year 2010, we must increase minority home owners by at least 5.5 million. In order to close the homeownership gap, we've got to set a big goal for America, and focus our attention and resources on that goal"

he doesnt talk about people getting their finances straight, quit relying on the government, cleaning up their credit reports, and paying their fucking bills on time.
Did you read the speech? Bush decided it was a great idea to ease the loaning standards so people didn't need to prove they had any money to pay their bills with. If people cannot afford to make a downpayment, chances are they cannot afford to pay the bills for their house.

"One of the barriers to homeownership is the inability to make a downpayment. And if one of the goals is to increase homeownership, it makes sense to help people pay that downpayment."

Of course I read it. and my point is still the same. A president cant do anything exept request easing of lending rules. He cant actually do it. Ultimately, like I said, it's the lenders fault for loaning to credit unworthy clients. Period.
 

blackangst1

Lifer
Feb 23, 2005
20,775
781
126
Originally posted by: loki8481
it arguably is Bush's fault for the systematic failure to oversee these loans... I wouldn't call this speech the root of the problem, though.
So let me get this stright. Bush should oversee lending practices? LOL Put down the pipe man.
 

blackangst1

Lifer
Feb 23, 2005
20,775
781
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Originally posted by: Slew Foot
If minorities want to own homes at the same rates as whites, maybe they should earn money at the same rates as whites.
Not to mention have credit worthiness. There's no discrimination in home lending. 95 if not 100% of the time the decision is made at some other location, with nothing but the financial profile of the applicant in front of the loan officer. If minorities dont own homes at the same rate as whites, its only for two reasons:

1. They dont WANT to buy a house, or
2. Their finances arent up to par.

The man aint holdin' em down.
 

3chordcharlie

Diamond Member
Mar 30, 2004
9,861
1
81
Originally posted by: GrGr
President Calls for Expanding Opportunities to Home Ownership June, 2002

There are no deadbeats. There are only good citizens following the policies of their beloved President Bush.
Did it really take this long for someone to point this out on here?

Fourty year and interest-only mortgages in a period of massive paper-gains and historically rock-bottom interest rates?

The only thing that puzzles me is that the bubble lasted as long as it did.
 

blackangst1

Lifer
Feb 23, 2005
20,775
781
126
Originally posted by: 3chordcharlie
Originally posted by: GrGr
President Calls for Expanding Opportunities to Home Ownership June, 2002

There are no deadbeats. There are only good citizens following the policies of their beloved President Bush.
Did it really take this long for someone to point this out on here?

Fourty year and interest-only mortgages in a period of massive paper-gains and historically rock-bottom interest rates?

The only thing that puzzles me is that the bubble lasted as long as it did.
Yep. This was allll started by Bushie. Yep. None of this happened before he was president. Yep.
 

MadRat

Lifer
Oct 14, 1999
11,643
27
91
Hey, lenders could of played it cool and kept rates down. But, no... they all had to hike them when their customers could least afford the change.
 

Auryg

Platinum Member
Dec 28, 2003
2,377
0
71
Originally posted by: MadRat
Hey, lenders could of played it cool and kept rates down. But, no... they all had to hike them when their customers could least afford the change.
And what, go bankrupt? You think they wanted everyone to default?
 

MadRat

Lifer
Oct 14, 1999
11,643
27
91
Go bankrupt, on what principle? They borrowed the money at a fixed rate, they lent it to customers on a flexible rate. Greed sank the boat.
 

Wheezer

Diamond Member
Nov 2, 1999
6,732
1
0
Originally posted by: Slew Foot
If minorities want to own homes at the same rates as whites, maybe they should earn money at the same rates as whites.
ding! ding! ding! we have a winner!!!!

:thumbsup:


and yes, they can....after all, everyone LOVES to go on and on about how immigrants built this country.....if they could contribute over course of the last 200+ years to build this country to what it is today....then continuing to do so and earning money to pay their bills and own a home should not be a problem.
 
Sep 12, 2004
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Originally posted by: Wheezer
Originally posted by: Slew Foot
If minorities want to own homes at the same rates as whites, maybe they should earn money at the same rates as whites.
ding! ding! ding! we have a winner!!!!

:thumbsup:


and yes, they can....after all, everyone LOVES to go on and on about how immigrants built this country.....if they could contribute over course of the last 200+ years to build this country to what it is today....then continuing to do so and earning money to pay their bills and own a home should not be a problem.
Don't forget to apply for 40 acres and a mule tomorrow.
 
Sep 12, 2004
16,852
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Originally posted by: Starbuck1975
The root cause of the housing bubble is greed fueled speculative stupidity.
You mean people, and not the government, should be responsible for their own actions?

:gasp;

What a concept.

;)
 

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