Get fired up! Congress considering bailing out SUB PRIME!

[SHILOH]

“I am a strong advocate of subprime lending,” Dodd said. “I don’t want that word to become a pejorative as junk bonds did.”

uummm….he is a “strong” advocate of the worthless lending standards that have created this “subprime” mess and caused the failure of several lenders…

but he doesn’t want “subprime” to become a pejorative as junk bond —i.e., “junk loan” but that is what it is….

[GoUSC]

Dodd is an idiot. No one should be a “fan” of subprime lending. In general subprime lending refers to mortgages to people with bad credit. Not really lower income people, but people that choose to live a certain lifestyle that has eclipsed their earning capacity.

Our government is rotten to the core.

[bob007]

what is exact definition for subprime lending ?

[GoUSC]

There is no exact definition per se. However here are some guidelines:

People have told me it’s loans with FICO scores of 620 or less. Others have told me it’s 660 or less. But I’ve seen loan matrices that count loans as subprime with FICOs above 660 but loan-to-value ratios of 95 percent plus, or with low documentation, or both. People outside the industry might count those as subprime and people in the industry are more likely to call them Alt-A.

[drunkle]

clinton joins the stupid, send more emails:

http://news.yahoo.com/s/nm/20070315/pl_nm/subprime_congress_dc_2

[GoUSC]

Ugh. Let’s bailout fiscally irresponsible people. Great.

[Cow_tipping]

Some how its mirroring Tulip bulbs more and more …
Didn’t the Dutch government say they will buy Tulip bulbs at 10% of market … and didn’t that run the Dutch govt into bankruptcy and they re negged on it …
Watch as this implodes bigger and better with each government intervention.
Cool.
Cow_tipping.

[meadandale]

@4plexowner

Yeah, I’ve read this talk from Griffin, the author of that book:

http://www.bigeye.com/griffin.htm

It’s pretty scary that probably 99% of the people in this country have no idea the true nature of the Federal Reserve or how our monetary system works.

[23109VC]

it’s mortgage welfare…

what do you think the welfare system is for? what percent of welfare recipients are “temporarily” on it due to hard times, versus the people who are frickin low life leeches who have no brain, no job, no incentive, and just pump out babies, drink beer, and stay fat stupid and lazy?

ON OUR DIME???

I wish I could pick where my tax dollars go… I wouldn’t let it go to welfare. I’d let my tax dollars go build the nuclear bomb we ought to drop on the terrorists…. 😉

[4plexowner]

meadandale – yes it is scary and very frustrating that people don’t understand how this country’s monetary system works

I believe the system has been intentionally complicated and obfuscated to discourage the typical citizen from looking ‘behind the curtain’

I have stopped posting my most gloomy and doomy forecasts but I don’t see a bright future for this country until we get rid of the Federal Reserve and restore our monetary system to its Constitutional form

(yes, that’s right, the US Constitution designated that the US Dollar would consist of a certain weight of silver and that only the US government could create these Dollars

in 1913 the US Congress was strong-armed into allowing the creation of the US Federal Reserve – this act turned the right of creating money over to a private corporation in direct violation of the US Constitution – the Constitution has never been revised to allow our current monetary system)

Every chance I get I try to point out to people that whatever financial issue they are focussed on, it somehow relates back to the underlying monetary system which is rotten to the core – eventually, I hope enough of us will understand this issue so we can address it

[louise]

All this sounds very absurd, and it can’t possibly happen.
But in case, I have come up with the only solution that would be fair.
Let the people who bought and sold their house for a profit during this time (1998 until 2006) pay. The ones making a lot of money on this housing bubble should pay, including banks, real estate agents (with their huge commissions etc). There is probably an economic genius somewhere that could come up with a calculation how much they should pay back. Of course the money is already spent, but at least they got a chunk of money to spend, and probably they understand that it is not really fair, and will pay back. Or not!
I feel sorry for a lot of young families caught in this mess, but they will probably never receive a dime from anybody. The ones screaming the loudest will get it, and as all know, those are not the people that deserve it.

[SD Attorney]

Finally people are talking about the absurd Federal Reserve. I watched this documentary that I linked to below about the legality of Federal Income Tax. Which by the way is a “voluntary” tax. The video is about 1 hour and 45 minutes, but it is very well done and informative. It speaks at length about the establishment of the Federal Reserve, but the primary focus is on the fact that there is no law that requires the average American to pay income tax on their wages. This movie blew my mind. I think you can paste the link in your browser.

p://video.google.com/videoplay?docid=-4312730277175242198&hl=en

[Bugs]

We’ll always have subprime products of some sort. During a tough market the subprime category will actually grom because of the problems people have when times are bad.

These lenders and investors aren’t having problems with their subprime portfolios because it’s some sort of illegitimate product. The problem is the way the lenders have been underwriting those borrowers. Subprime works great when they run it in a responsible manner:

Reduce the maximum LTVs in proportion to the borrower’s credit; and

Verify the borrower’s income and credit over a period of several years, not just the previous year; and

Use real appraisals that call it how it is, not how the loan originator wants it to be.
———————–

If the most credit worthy borrowers are good to go at 100% LTV then the subprime borrowers shouldn’t be any higher than 80%, and that’s COMBINED loan to value (CLTV). Some of those borrowers shouldn’t be higher than 70% and the most marginal borrowers should be at 50%. They should be able to prove their income for at least 2 or 3 years. Those appraisals should be heavily scrutinized and anything that even smells funky should be tossed without recourse.

Do all that and those subprime loans won’t be that risky. Of course, those types of financing terms won’t prop up an overextended market, so there won’t be that many transactions in that category either.

[Anonymous]

To 23109VC

“it’s mortgage welfare…

what do you think the welfare system is for? what percent of welfare recipients are “temporarily” on it due to hard times, versus the people who are frickin low life leeches who have no brain, no job, no incentive, and just pump out babies, drink beer, and stay fat stupid and lazy?

ON OUR DIME???”

OK, first off, I totally understand where those that are upset about possible bail out of this mess are coming from….I’m right there with you. I’m all about small government and tend to vote toward libertarian. I’m all about letting the market sort its self out with as little intervention as possible (that’s the economist in me). After all, when those who try to do “good” and modify the system, the end result is not what they were shooting for and could actually end up worse off than when we started.

So far I’m on board with most posters on here….I think.

My big question/observation and comment to 23109VC and to everyone is this:

If we do not help out those that are unable to help themselves, or are too lazy to help themselves, what do we end up with? Could we end up with a privileged few controlling the majority of assets/power. The remaining majority left with very little assets/power. How long would this last….where is the tipping point? When do we see the “lower class” majority stand up and say enough is enough? I’m thinking something like the French Revolution….storming the Bastille.

I think there needs to be a happy medium to maintain “balance” and stability. Just enough “lower class” welfare to sedate those that are too lazy and/or unable to help them selves get a leg up and out of their current situation.

Just a thought/observation.

[drunkle]

there’s been plenty of corporate bailouts/welfare programs while real welfare (and education and health care…) has been “personal responsibilitized”. the airline bail out, s&l, oil/energy, dot com…

not enough regulation, not enough trust busting, union busting, fudging real unemployment numbers…

we end up with what we have now. stagnant wages, record corporate profits, insecurity in the labor force, diminishing middle class…

[Author]

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