This is the ONLY news that matters

[bl4ckfl4g]

How is this a secret? I heard it on NPR....you know..."teh librul media"

 

[rudder]

Originally posted by: 0marTheZealot

Originally posted by: Triumph
I've noticed that there has been a shift in the blame over the last 9 months or so, from people who bought more than they should have, to the banks who sold what they shouldn't have. Nobody seems to be calling out all the people who bit off more than they could chew, even though they deserve it. It's impossible to do so, but I'd love to see an evaluation of the finances of these "victims" of foreclosure, circa May 2008. I'd like to know how many of them had 3 months of cash readily available in a checking or savings account at that time. This would be purely an exercise for my curiosity. I'm not implying that the impending financial crisis would have been stayed if all of these people had a 3 month security net. I just think it would be very telling about their own ability to be financially responsible.

I'm not even sure if lenders should be punished, or regulated, for "predatory lending". It's what the lenders did with the mortgages after the fact that ruined everything - the risk to the initiator of the loan was effectively absolved. This is what should not have happened.

The problem is that a lot of bankers, systematically at some places, outright forged their clients' incomes. Instead of making 40,000 on paper, they were making 140,000. A lot of people were goaded into buying houses they could not afford. Sure, they have some culpability, but when someone in authority is saying "hey look man, you can buy this bigger house over here for only 48 bucks a month more, just let me handle the paperwork" then neglects to tell you about the ARM resetting and jacking your bill up 400 bucks.

It was a big party and everyone was happy. Until the ones who did not bother to read their mortgage paperwork suddenly realized their payments went up drastically.

In a lot of cases people bit off more they can chew because they saw home values skyrocketing. So they probably thought they could simply get a loan where they just pay towards interest for a couple of years in a nice house, sell it for a profit, rinse, repeat.

 

[StageLeft]

pfft... so many mortgage defaults are intentional right now it's not even funny. I could write a book about it. So many people who are underwater on their homes think they can just walk away. While countless others are gaming the system to live in their homes for free.

Not sure how accurate but yesterday I read that about 1/4 of current foreclosures are by people who do have the money but simply want to stop paying because they don't feel it's worth it right now. I can definitely see their point in some cases.

 

[ahurtt]

Originally posted by: Vic

As to predatory lending, people should read legal documents before they sign them. But why do that when homes were appreciating in value 25% a year and you were missing out on the big money? But uh oh the music stopped and now everyone's a victim... :roll:

Cuz basically anybody who thought that steep of an upward trend in home prices was sustainable and NOT a big red flag for something fishy going on is either complicit in the whole scheme or else a complete ignoramus. Anybody with an ounce of intelligence would have seen that trend as all the more reason to carefully read those documents but greed all so often gets the better of our common senses.

 

[Fingolfin269]

Originally posted by: ahurtt

Originally posted by: Vic

As to predatory lending, people should read legal documents before they sign them. But why do that when homes were appreciating in value 25% a year and you were missing out on the big money? But uh oh the music stopped and now everyone's a victim... :roll:

Cuz basically anybody who thought that steep of an upward trend in home prices was sustainable and NOT a big red flag for something fishy going on is either complicit in the whole scheme or else a complete ignoramus. Anybody with an ounce of intelligence would have seen that trend as all the more reason to carefully read those documents but greed all so often gets the better of our common senses.

The intelligence bell curve was seriously fucked then.

 

[ahurtt]

Originally posted by: Skoorb

pfft... so many mortgage defaults are intentional right now it's not even funny. I could write a book about it. So many people who are underwater on their homes think they can just walk away. While countless others are gaming the system to live in their homes for free.

Not sure how accurate but yesterday I read that about 1/4 of current foreclosures are by people who do have the money but simply want to stop paying because they don't feel it's worth it right now. I can definitely see their point in some cases.

Yeah I can see why they would try to walk away too. It only makes sense to cut your losses and stop throwing good money after bad sometimes. But there's the little issue of the mortgage contract which is not so easily walked away from if you actually have the money to pay it. If they actually have the money I think they are deluded if they think the lender doesn't have ways of extracting it from them.

 

[Modelworks]

Originally posted by: LTC8K6
Weren't some bankers forced to loan people money that they considered bad risks?

All banks were forced to.
It is called the community reinvestment act.
Either a bank makes loans to the people that are high risk like low income or the FDIC penalizes them.

http://en.wikipedia.org/wiki/Community_Reinvestment_Act

In November 2000 Fannie Mae announced that the Department of Housing and Urban Development (?HUD?) would soon require it to dedicate 50% of its business to low- and moderate-income families." It stated that since 1997 Fannie Mae had done nearly $7 billion in CRA business with depository institutions, but its goal was $20 billion.[48] In 2001 Fannie Mae announced that it had acquired $10 billion in specially-targeted Community Reinvestment Act (CRA) loans more than one and a half years ahead of schedule, and announced its goal to finance over $500 billion in CRA business by 2010, about one third of loans anticipated to be financed by Fannie Mae during that period

 

[Dr. Detroit]

Unemployment of 10% is what is causing the record foreclosures.

Job recovery has not happened so people can only dip into their savings so long to pay for their first home let alone the 2nd investment home that so many middle class purchased.

The default rates in Las Vegas, Phoenix, and Miami are some of the highest in the country because those purchases were 2nd homes.

2nd biggest factor in the default rates increasing is negative equity, being underwater by a huge margin, has many homeowners saying they aint paying no more. Only way to restructure your loan is to stop paying. Once you receive a few notices in the mail the lenders will attempt to restructure your loan.

Personal responsibility has flown the coop - much like WebVan at $100 a share in the dot come boom where everyone thought they could make millions so did people in real estate. Many did not treat their homes as something they would own 30+yrs from today - they treated it as a short term investment.

Once it started going down - write if off!

Banks are to blame for a minor portion of the problem - blame the recession!

 

[ahurtt]

Originally posted by: Fmr12B

...snipped for brevity, not to disregard your thoughts...

Banks are to blame for a minor portion of the problem - blame the recession!

So what precipitated the recession?

 

[ahurtt]

Originally posted by: Modelworks

Originally posted by: LTC8K6
Weren't some bankers forced to loan people money that they considered bad risks?

All banks were forced to.
It is called the community reinvestment act.
Either a bank makes loans to the people that are high risk like low income or the FDIC penalizes them.

http://en.wikipedia.org/wiki/Community_Reinvestment_Act

...quote snipped for brevity...

This is true but they were not forced to make anywhere near the sheer number of bad/risky loans that they did. The bankers went well above and beyond the call of duty in that respect.

 

[Slew Foot]

Why shouldn't the banks loan out tons of money? You the taxpayers is providing the insurance. its not their skin int he game.

 

[0marTheZealot]

Originally posted by: Genx87

Originally posted by: 0marTheZealot

Originally posted by: Triumph
I've noticed that there has been a shift in the blame over the last 9 months or so, from people who bought more than they should have, to the banks who sold what they shouldn't have. Nobody seems to be calling out all the people who bit off more than they could chew, even though they deserve it. It's impossible to do so, but I'd love to see an evaluation of the finances of these "victims" of foreclosure, circa May 2008. I'd like to know how many of them had 3 months of cash readily available in a checking or savings account at that time. This would be purely an exercise for my curiosity. I'm not implying that the impending financial crisis would have been stayed if all of these people had a 3 month security net. I just think it would be very telling about their own ability to be financially responsible.

I'm not even sure if lenders should be punished, or regulated, for "predatory lending". It's what the lenders did with the mortgages after the fact that ruined everything - the risk to the initiator of the loan was effectively absolved. This is what should not have happened.

The problem is that a lot of bankers, systematically at some places, outright forged their clients' incomes. Instead of making 40,000 on paper, they were making 140,000. A lot of people were goaded into buying houses they could not afford. Sure, they have some culpability, but when someone in authority is saying "hey look man, you can buy this bigger house over here for only 48 bucks a month more, just let me handle the paperwork" then neglects to tell you about the ARM resetting and jacking your bill up 400 bucks.

If any of this is true that is fraud and people should be going to jail. I am sure this happened in isolated instances. But systemwide I highly doubt it.

ARM loans people knew what they were getting into. The loan documents spelled it out for them. I have little sympathy for anybody who utilized an ARM(including myself) to purchase a home.

They should go to jail, but the FBI is woefully understaffed to address this matter. There's something like 12 agents in the country that can investigate these sorts of acts. It's not a crime until it's persecuted. Secondly, a lot of those banks were sold (when they went under) behind closed doors with little or no accompanying paperwork. Look at what happened to Bear Sterns where JP Morgan was basically forced to buy them at a steep discount. There's been a ton of shady shit that went down during the crisis.

 

[BigDH01]

Originally posted by: ahurtt

Originally posted by: Modelworks

Originally posted by: LTC8K6
Weren't some bankers forced to loan people money that they considered bad risks?

All banks were forced to.
It is called the community reinvestment act.
Either a bank makes loans to the people that are high risk like low income or the FDIC penalizes them.

http://en.wikipedia.org/wiki/Community_Reinvestment_Act

...quote snipped for brevity...

This is true but they were not forced to make anywhere near the sheer number of bad/risky loans that they did. The bankers went well above and beyond the call of duty in that respect.

And most of the subprime loans that were made came from brokers not under CRA regulation (Countrywide, etc).

 

[WhipperSnapper]

Originally posted by: Fmr12B
Unemployment of 10% is what is causing the record foreclosures.

Job recovery has not happened so people can only dip into their savings so long to pay for their first home let alone the 2nd investment home that so many middle class purchased.

----------

Banks are to blame for a minor portion of the problem - blame the recession!

The economy has been in the dumps since the turn of the century. The problem that the media and the politicians refuse to acknowledge or even mention is called Global Labor Arbitrage--foreign outsourcing, foreign work visas, and mass immigration.

• Foreign outsourcing sends manufacturing and knowledge-based service jobs overseas where they can be done less expensively (resulting in perhaps lower prices on the front-end and invisible back-end costs in the U.S. such as unemployment, etc.).
  
  Foreign work visas such as the H-1B and L-1 displace Americans domestically from often knowledge-based, college-education-requiring jobs. "My job was bombed by the H-1B."
  
  Mass immigration, both legal and illegal, imports poor people from other countries to compete with America's poor and working class, resulting in unemployment and downward pressure on wages.

Basically, we are merging our economy and our labor market with the third world, resulting in an averaging out of wages and the standard of living. 300 million relatively middle class Americans plus 3 billion relatively impoverished people (India + China + Mexico) will necessarily mean a decrease in the American standard of living. We can have all of our jobs back--as soon as we are willing to do them for third world wages along with third world levels of environmental protection and labor laws.

Foreign Outsourcing, Work Visas, and Immigration: Exporting American Prosperity, Importing Third World Poverty, one lost American middle class job at a time. Are you ready to join the third world?

Our politicians, our intellectuals, and our media pundits refuse to substantially acknowledge these as substantial issues. Like the health care debate where they refuse to suggest that outright socialism and national health care might be the solution when it has been proven to work in other countries, there are just too many powerful, wealthy stakeholders who have interests in maintaining the status quo. It's going to take a political revolution to fix this country's economy.

My prediction: America will slowly transform into an impoverished, overpopulated third world country and join history's ash heap of failed impoverished nations. Americans are already pretty complacent and the promise that they might "make it" and succeed if only they work hard enough and get enough education will keep them from recognizing the nation's real problem. In the meantime, as a result of mass immigration, more an more Americans will already regard a third world standard of living as the norm. Hence, Americans will be complacent and won't rebel against their masters. A small portion of the populace will be very rich, extracting a large fraction of workers' contributions to the act of production for profit, and everyone else will be poor, similar to how things are in South America where the people haven't staged a revolution.

 

[WhipperSnapper]

Originally posted by: ahurttSo what precipitated the recession?

Several things. Manufacturing jobs had been leaving the nation for decades and the nation had been importing impoverished immigrants for decades, often through illegal immigration. Then the amount of H-1B and L-1 visas was increased. For a couple years in the late '90's the tech boom masked all of this, but then the coming of the Internet made it possible to transfer huge amounts of data across great distances at lightening speeds, which meant that any job that wasn't almost literally bolted down to the floor could be done less expensively in India. The recession started when the Dot.com bubble burst but was temporarily masked by the housing bubble.

 

[piasabird]

Maybe it is just idiot borrower.

I have been seeing more offers to refinance at low rates. The problem is the new low rates are often temporary or they are just the same old ARM loans with a reset date. Bankers are predators, but a lot of the peole making the loans are not banks.

 

[Jaskalas]

The DOW is high because we spent $12 trillion dollars to inflate it. It?s fake money and I don?t know how it isn?t going to crash as soon as the government cash cow stops propping it up.

 

[tk149]

Originally posted by: 0marTheZealot

Originally posted by: Triumph
I've noticed that there has been a shift in the blame over the last 9 months or so, from people who bought more than they should have, to the banks who sold what they shouldn't have. Nobody seems to be calling out all the people who bit off more than they could chew, even though they deserve it. It's impossible to do so, but I'd love to see an evaluation of the finances of these "victims" of foreclosure, circa May 2008. I'd like to know how many of them had 3 months of cash readily available in a checking or savings account at that time. This would be purely an exercise for my curiosity. I'm not implying that the impending financial crisis would have been stayed if all of these people had a 3 month security net. I just think it would be very telling about their own ability to be financially responsible.

I'm not even sure if lenders should be punished, or regulated, for "predatory lending". It's what the lenders did with the mortgages after the fact that ruined everything - the risk to the initiator of the loan was effectively absolved. This is what should not have happened.

The problem is that a lot of bankers, systematically at some places, outright forged their clients' incomes. Instead of making 40,000 on paper, they were making 140,000. A lot of people were goaded into buying houses they could not afford. Sure, they have some culpability, but when someone in authority is saying "hey look man, you can buy this bigger house over here for only 48 bucks a month more, just let me handle the paperwork" then neglects to tell you about the ARM resetting and jacking your bill up 400 bucks.

Understood. However, I find it hard to believe that the promissory note did not contain the exact terms of the loan, including language about variable rates and resetting monthly payments. If people can't be bothered to read and understand what is likely the largest loan note of their lives before they sign, I have no sympathy for them.

A lot of debtors knew exactly what they were getting into, and just figured they would be able to flip the house before the market crashed. They gambled wrong.

 

[piasabird]

I think the DOW is high because a lot of the companies on the stock market are international corporations like Intel that make a lot of money in international markets. Very few corporations do business only in the USA. A lot of business is being forced overseas.

 

[jpeyton]

Originally posted by: Jaskalas
The DOW is high because we spent $12 trillion dollars to inflate it.

Really, we spent $12 trillion? Is that since the beginning of time, or over the last year, or what?

 

[Jaskalas]

Originally posted by: jpeyton

Originally posted by: Jaskalas
The DOW is high because we spent $12 trillion dollars to inflate it.

Really, we spent $12 trillion? Is that since the beginning of time, or over the last year, or what?

It has only been my signature for the past year, until I changed it this week.

$12.8 Trillion committed in the past 12 months to "save the economy".

What would you have done with $121,349 per household?

 

[ahurtt]

Originally posted by: WhipperSnapper

Originally posted by: Fmr12B
Unemployment of 10% is what is causing the record foreclosures.

Job recovery has not happened so people can only dip into their savings so long to pay for their first home let alone the 2nd investment home that so many middle class purchased.

----------

Banks are to blame for a minor portion of the problem - blame the recession!

The economy has been in the dumps since the turn of the century. The problem that the media and the politicians refuse to acknowledge or even mention is called Global Labor Arbitrage--foreign outsourcing, foreign work visas, and mass immigration.

• Foreign outsourcing sends manufacturing and knowledge-based service jobs overseas where they can be done less expensively (resulting in perhaps lower prices on the front-end and invisible back-end costs in the U.S. such as unemployment, etc.).
  
  Foreign work visas such as the H-1B and L-1 displace Americans domestically from often knowledge-based, college-education-requiring jobs. "My job was bombed by the H-1B."
  
  Mass immigration, both legal and illegal, imports poor people from other countries to compete with America's poor and working class, resulting in unemployment and downward pressure on wages.

Basically, we are merging our economy and our labor market with the third world, resulting in an averaging out of wages and the standard of living. 300 million relatively middle class Americans plus 3 billion relatively impoverished people (India + China + Mexico) will necessarily mean a decrease in the American standard of living. We can have all of our jobs back--as soon as we are willing to do them for third world wages along with third world levels of environmental protection and labor laws.

Foreign Outsourcing, Work Visas, and Immigration: Exporting American Prosperity, Importing Third World Poverty, one lost American middle class job at a time. Are you ready to join the third world?

Our politicians, our intellectuals, and our media pundits refuse to substantially acknowledge these as substantial issues. Like the health care debate where they refuse to suggest that outright socialism and national health care might be the solution when it has been proven to work in other countries, there are just too many powerful, wealthy stakeholders who have interests in maintaining the status quo. It's going to take a political revolution to fix this country's economy.

My prediction: America will slowly transform into an impoverished, overpopulated third world country and join history's ash heap of failed impoverished nations. Americans are already pretty complacent and the promise that they might "make it" and succeed if only they work hard enough and get enough education will keep them from recognizing the nation's real problem. In the meantime, as a result of mass immigration, more an more Americans will already regard a third world standard of living as the norm. Hence, Americans will be complacent and won't rebel against their masters. A small portion of the populace will be very rich, extracting a large fraction of workers' contributions to the act of production for profit, and everyone else will be poor, similar to how things are in South America where the people haven't staged a revolution.

Cliffs: "'Dey took are jawbs!"

Sorry . . . Couldn't resist.

 

[ahurtt]

Originally posted by: WhipperSnapper

Originally posted by: ahurttSo what precipitated the recession?

Several things. Manufacturing jobs had been leaving the nation for decades and the nation had been importing impoverished immigrants for decades, often through illegal immigration. Then the amount of H-1B and L-1 visas was increased. For a couple years in the late '90's the tech boom masked all of this, but then the coming of the Internet made it possible to transfer huge amounts of data across great distances at lightening speeds, which meant that any job that wasn't almost literally bolted down to the floor could be done less expensively in India. The recession started when the Dot.com bubble burst but was temporarily masked by the housing bubble.

Ok got it. So the solution seems perfectly clear to me. Sounds like the best temporary solution to our problem that will make all this go away for a while longer so we don't have to think about it any more for a while is to create another bubble. What kind of bubble should this one be? The floor is now open for suggestions.

 

[ahurtt]

Originally posted by: Jaskalas

Originally posted by: jpeyton

Originally posted by: Jaskalas
The DOW is high because we spent $12 trillion dollars to inflate it.

Really, we spent $12 trillion? Is that since the beginning of time, or over the last year, or what?

It has only been my signature for the past year, until I changed it this week.

$12.8 Trillion committed in the past 12 months to "save the economy".

What would you have done with $121,349 per household?

I woulda used it to take out an ARM and buy a second house and then take out a HELOC on that house to buy myself a fancy car.

 

[StageLeft]

Job recovery has not happened so people can only dip into their savings so long to pay for their first home let alone the 2nd investment home that so many middle class purchased.

I'm sure that most people unwillingly being foreclosed on never had much in the way of savings anyway. It's the American way.

Banks are to blame for a minor portion of the problem - blame the recession!

Banks are a major part. They threw money into investments that were terrible (their clients) and their easy money helped fuel the insanity. It became such that even if you were a responsible person with some money to pay down and not lying on your mortgage app you still ended up in a ridiculous house unless you planned on riding out the bubble (assuming you knew for sure it was one--remember many "experts" said it was not). So you saved for a while, made $80k/year and bought a $260k/house with 52k down that wasn't really worth that but it's what the market was demanding at the time, then two years later it's worth $160k and you're upside down by 45k. Imagine how pissed you'd be.

I woulda used it to take out an ARM and buy a second house and then take out a HELOC on that house to buy myself a fancy car.

Love it :thumbsup: