Mortgage woes could be ‘tip of the iceberg’

[SD Realtor]

Agreed with Perry, Bugs, Kev and in a more tactful lingo, kicksavedave.

I have no sympathy for the people who signed on the dotted line. They could have asked the realtor to be with them and analyze the loan for them. They could have asked an attorney to look at the loan docs. The could have NOT signed them if they doubted in any way shape or form that they couldn’t or wouldn’t be able to make the payments.

Furthermore, for the boneheads that refinanced themselves into a mess I have even less sympathy for as they had a 3 day right of recision and could have pulled out AFTER signing loan docs.

As Perry said, if everyone keeps the hands out of the mess, the market will cleanse itself.

Finally, no excuses about the press. If people are dumb enough to listen to the press all the time without examining how a financial decision will affect their well being then that is their own problem.

SD Realtor

[kewp]

There is a difference between ignorance and malice.

Show some compassion, people. The FB’s will pay, to be sure.

[hipmatt]

But the kids will still watch the hip-hop videos and aspire to the hip-hop lifestyle of being the thug and getting paid. I'm afraid that living buck wild will be in fashion for a long time to come.

Sad but true! 

[Borat]

There sure is a lot of anger towards the FBers. Are you guys as angry at the irresponsible business practices of the lenders who wrote these loans and then tossed off the liability to unknowing purchasers of MBSes (which probably includes all of us by way of 401K/pension investments). Many of these guys got very rich and will be working their next scam while we are all stuck picking up the tab. The FBers are screwed, period. They’re gonna lose their houses and many will go bankrupt. Yes they were stupid and deserve what they get but it is amazing to me to see how everyone on this board has already been manipulated by the media into giving the lenders a free pass and focusing all of their anger on the FBers. Those loans SHOULD HAVE BEEN ILLEGAL. PEOPLE SHOULD BE GOING TO PRISON but they’re not going to. Everything is going according to plan in this giant game of 3-card monty and we’re all getting conned.

[hipmatt]

That's why we need to let the market clean itself. When lenders go bankrupt, they'll learn not to make stupid loans in the future. When borrowers go bankrupt, they'll know not to sign stupid loans in the future. They'll tell their children and grand-children to beware of stupid loans.

True!  This is the only way to correctly deal with this dilemma. 

[kewp]

I wonder how many posters here that are howling for FB blood have 401k’s loaded w/MBS’?

A point to ponder!

[Anonymous]

Borat, you make a good point. For me, it’s because I expect that anywhere there is big money to be made, corruption will be present. So, I expect that a fair share of mortgage brokers will be shady and will push bad loans on people. Would I like to see these dudes go to prison? Of course I would. But I doubt it will happen in any meaningful numbers.

What really irks me though, is when people refuse to take responsibility for their actions. This is what is happening. People, whether driven by greed, unfortunate circumstances, or plain stupidity, made very bad decisions. They now claim that they are not at fault, that they were preyed upon by the big bad mortgage brokers. They won’t learn and this pattern will repeat itself in another aspect of their lives in the future.

[Borat]

They now claim that they are not at fault, that they were preyed upon by the big bad mortgage brokers. They won’t learn and this pattern will repeat itself in another aspect of their lives in the future.

True, but the mortgage brokers are pinning the blame on the FBers, and they’re already a very successful at it based on the responses I’m reading here. This was a HUGE scam to STEAL money, and only some of it came from the FBers. The VAST MAJORITY of it came from the purchasers and holders of MBSes (probably 90% of us) that were tainted with toxic amounts of risk. When your pension goes bust or some of your 401K investments go t*ts-up under the weight of these doo-doo loans, I’ll bet a lot of you will be screaming that no one told you that those investments were risky! “You should have read the fine print — you deserve what you get!” will come the howls from the media.

[bob007]

I hold very little in domestic bond funds.

[kev374]

my portfolio is larely international diversified funds. Last years return was 20%, this year it’s already screaming. When the dollar drops in value these funds should do well.

[Borat]

my portfolio is larely international diversified funds. Last years return was 20%, this year it’s already screaming. When the dollar drops in value these funds should do well.

Why? Weaker dollars mean more business for US exporters as consumers abroad switch to cheaper US alternatives (where available). A weak dollar will be good for any US exporter.

[barnaby33]

Thats a red herring. Most US based exporters depend on components bought from overseas. So their inputs will get more expensive. There are a few business, like farm products, whose inputs are mostly domestic, but not many.

Josh

[kicksavedave]

“There sure is a lot of anger towards the FBers. Are you guys as angry at the irresponsible business practices of the lenders who wrote these loans and then tossed off the liability to unknowing purchasers of MBSes (which probably includes all of us by way of 401K/pension investments). Many of these guys got very rich and will be working their next scam while we are all stuck picking up the tab. The FBers are screwed, period. They’re gonna lose their houses and many will go bankrupt. Yes they were stupid and deserve what they get but it is amazing to me to see how everyone on this board has already been manipulated by the media into giving the lenders a free pass and focusing all of their anger on the FBers. Those loans SHOULD HAVE BEEN ILLEGAL. PEOPLE SHOULD BE GOING TO PRISON but they’re not going to. Everything is going according to plan in this giant game of 3-card monty and we’re all getting conned.”

Where to begin?

First off, the anger is not directed at FBs in general, only those who act as if it’s not their fault, act as if they have no responsibility in the matter, and act as if they were “victims” here. They voluntarily signed their name to a million dollar contract, without reading it all! Yeah, I’ve got anger to those who did something incredibly stupid and then want a handout or a do over or a bailout. Screw them…

However, I have a buddy who bought recently (late 04) and had his rate reset and have his payments skyrocket, after he took out equity, and now his property has declined, making a new loan nearly impossible. He’s truly a FB, but he’s not blaming everyone else, or looking for a handout, or calling himself a “victim”. He’s finding solutions, accepting that his timing sucked, and dealing with it, without all this “whoa is me, how could THEY have done this to ME” hand wringing and blaming others for his situation.

As for the “industry”, and things like “these loans should have been illegal”… I call nonsense. I have another buddy, much better off, who bought in the same time frame. He put almost 50% down, and did an interest only arm loan, so that he could control the payments. In months when he made a huge commission, he’d pay a ton, other months, pay a little, some months, pay interest only. These loans were designed not just for those folks who couldn’t afford a place (for those, the loans should never be used) but also for folks like this guy who just want flexibility.

Brokers/Lenders who committed outright fraud are liable under the law, and I hope that someday they get their legal due. Sure there’s anger at them, but they are under the legal microscope now and hopefully they’ll get theirs. But buyers who bought more than they could possibly afford didn’t necesarily break any laws. If a buyer was subject to fraud by a broker, the buyer still had to sign a large document which details all the Ts and Cs perfectly well, for anyone who “cares” to read it. I read every single word of my contract in 1997. No one even told me I had to. My buddy in the first example read his contract… he knew the situation. He’s not asking for someone else to fix his problem. So I’ve got no anger there.

Its these fake “victims” who are really just dumbasses looking for a bailout, who piss me off.

[JJGittes]

I agree. And I don’t think it is even a matter of an idiot’s failure to read the ‘fine print.’ I’d wager virtually every one of these poor pathetic buyers who stretched beyond their means to get a mcmansion knew EXACTLY what they were signing up for. However, their foolish presumption, likely fueled by crappy advice from a crooked RE agent and mortgage broker, that RE prices would grow to the sky, turned out to be wrong wrong wrong. Nope, no sympathy, and they all should learn the lesson they (literally) signed up for.

[Borat]

You guys are all mesmerized by the magician’s waving fingers as he picks your pocket. The FBers are a pathetic sideshow and they deserve what they get, but the real crime is the money made at the top of companies like New Century and others. While many of these firm will end up in bankruptcy, the top pigs have all stashed their pockets with tons of money stolen from the MBS market by misrepresenting the quality of mortgages they sold into it. These comapnies will go bankrupt but their personal assets will remain intact and they will move on to the next scam, which will undoubtedly involve more of your money. Once these loans start defaulting in large numbers those MBSes are going to be revealed for the doo-doo they are and many pension funds are gonna be in deep trouble. Just because you and some of your friends made money speculating using ARMs doesn’t mean that you’re smart — just lucky enough to go along for the ride.

I am also angry at the FB speculators but the real criminals are at the top. They keep you distracted by focusing your attention on their victims while they move on to the next scam. Enron, Worldcom, New Century, welcome to the American e-CON-omy.

[Author]

Posts