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kicksavedave
ParticipantHillary or Obama, Democrat or Republican, it doesn’t matter. The latest poll we saw about a bailout was 91% to 9% against it. Americans are never so united as a 9 to 1 support for or against anything… except this. No matter how many FBs are subject to a bailout, the number of everyone else who either rents and saves, or has an appropriate mortgage, will far outnumber the FBs. So any bailout would serve a small minority of Americans, while benefitting primarily a tiny fraction of super rich bank execs.
Any politician who would support such a bailout does so at their own tremendous political peril. I’ll be writing a letter to any pol who even mentions supporting it, that it will cost them my vote.
91% of voters are against it… I’m not sure even Dick Cheney could muster enough balls to support bailing out nothing but bank millionaires in the face of that much unanimous voter opposition.
April 13, 2007 at 1:59 PM in reply to: Surprisingly good article on money.cnn.com on the bialout debacle #50061ParticipantShould there be a bailout?
91% No
9% YesPretty much sums it up… any politician who supports diverting taxpayer money to save moron lenders, or deadbeat buyers, does so at their own risk.
ParticipantMy letter to my congress-persons will be a little more direct:
Dear Sir or Madam:
If you should decide to support any taxpayer funded initiative to assist subprime borrowers who bought property which they could not afford, I will make it my duty to vote for your closest competitor in the next election. I will not cast a vote for a politician who feels that my tax money should be given to people who made stupid financial decisions, failed to read loan contracts, or tried to take shorcuts to wealth by purchasing things they could not afford.
If Congress decides to interfere and bail out this impending forclosure tide, then it will be time for a new Congress.
/Dave
ParticipantI agree Bugs, and I think that will happen. Maybe not all, but some execs from the Worldcoms and Enrons of the world have been sentenced to serious prison terms, to enjoy their retirement years.
If the big wigs at the top are guilty of fraud or other crimes, I expect they’ll pay the appropriate penalty, as naieve as that may sound. Many of these brokers and LOs who used shady prqactices to make a quick buck during this frenzy, will end up back where they came from, Jiffy Lube, soon enough. I know one who is freaking about about A) what he’s going to do for a new career, and B) how he’s going to pay for his condo that he bought on a no doc stated income loan that even he couldn’t afford 3 years ago, let alone now.
As far as all those MBS’s coming back to hurt Average Joe’s retirement… well there again, if Average Joe isn’t monitoring and understanding his investments, who’s to blame when they go down the toilet?
I don’t know about “stealing from the MBS’s by misrepresenting” The MBS buyers had to know they were buying junk risky loans, they just all expected non stop appreciation. And again, if there was fraud, then individual people are liable. We’ll see how that plays out, how many get caught and pay the price.
ParticipantIf by stronger, he means less forclosures forcing values down, I could see that, but it would be many years before that dynamic takes effect. But if by stronger, he’s overlooking that an enormous segment of the market that was formerly buying up everything in sight, is no longer involved, then I’d say “There are no troops in Baghdad, either”
Participant“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.
ParticipantA living mammal… no kidding!
Not a $600K house, but credit, nonetheless.
Participant“Like many borrowers who were sold mortgages they couldn’t afford, Russo says that when she called the broker to complain, she was told that because she failed to read the fine print, the responsibility for getting in too deep was hers.”
Damn strait it was!
“After coming up with about $14,000 to get out of the downward spiral into yet another loan, Russo says she’s learned an important lesson.”
“I have learned a new term called ‘predatory lending,’” she said. “And that is what I am a victim of.”
Oh Bull FCKNG SHIP!!!! You signed it, you didn’t read it, it’s YOUR fault that you didn’t like how it turned out!
All ya had to do was tell the LO, no thanks! But you would have actually had to read the document to know that now, wouldn’t you?
Screw these morons!
Participant“Furthermore, there’s nothing inherently wrong with the loan products themselves, according to Dinham. “They were designed to give the credit-challenged a chance,” he says. “To see if they could make it.” ”
Huh, what? They were designed to provide a brokers/lenders an easy commission and then dump the problem on someone else. How exactly did they expect these FBs to “make it”? By doubling their income magically in a year?
Participant“tell the buyer to find a lender will get it appraised for that number…”
Smells like mortgage or appraisal fraud.
Only if an appriaser actually gives an appraisal higher than what he/she actually believes. We’re not talking about offering bribes, or asking anyone to lie. We’re talking about shopping around for someone to give a different number than the first one. Even if they won’t give you $238, if they give you $230 or $225, thats less cash that either of you have to come up with to bridge the gap.
ParticipantOption D?
Cancel the current contract, ask for a new one at $238K, and tell the buyer to find a lender will get it appraised for that number. The buyer may still have plenty of options for financing, including THEM ponying up the dinero to cover the difference between appraisal($212) and your loan($238), or a net of $26K. The buyer was obviously willing to buy for $250, now they just have to figure out who will help them do it at $238k…
If your options are
A Bad
B Worse
C DreadfulI’d work very hard to find option D.
ParticipantI have the perfect way to help these poor, beleagered debtors out of this mess that everyone else except for themselves has created. Its simple… the relief they should get is, they won’t be thrown in jail for mortgage fraud. Beyond that, get the heck out of that house which you can’t afford, and go back to renting, like you did for the past 15 years. Work those two jobs, take on a roomate, and save up some money, and do things they way the rest of the world does. I see people all the time working two jobs, living ten to a house, saving every penny, just to start a business, so that some day they can afford to buy a nice house and live the American Dream. My wife works two jobs, her second one is an hour away, just so we can try to save for a down payment for when the pricing returns to sanity levels. These idiots thought they found a shortcut, didn’t they? There are no shortcuts to good old fashioned hard work, is there?
Seriously, I have a hard time figuring out who’s more to blame for these situations. The mortgage companies and brokers who obviously sold mortgages to unqualified buyers that they KNEW would not be able to afford them… or the people who actually purchased these houses that they KNEW they couldn’t afford. I refuse to accept the “I didn’t know” excuse! It’s BS!
This is nothing more than a gamble gone bad, and now some schmucks want to bail them out. I say, heck no!
ParticipantThis Massachusetts thing is blown out of proportion. They are suggesting laws to give court oversight to the forclosure process, not to BAN them altogether. 30 other states require court approval on the foreclosure, MASS does not, but is trying to legislate that in. Its not a big deal.
That’s a far cry from saying they are trying to BAN forclosures. They are not doing that. That would be tantamount to telling the banks who are not getting paid “tough noogies” while telling borrowers who aren’t paying “don’t bother”.
ParticipantWow, that article had a ton of interesting information, with consideration given to how much of it you choose to believe. For example:
San Diego County placed 17th among the state’s 58 counties, with a default rate of 3.3 per 1,000 homes, compared with 6.9 in top-ranked San Joaquin County.
The problem is nowhere near the crisis levels seen elsewhere in the nation, analysts said.
Nationally, the county’s default rate placed 203rd out of 332 markets surveyed, according to mortgage tracking company LoanPerformance. By comparison, Cleveland was reported to have a default rate of 24.9 with Detroit, New Orleans, Indianapolis, Atlanta and Denver not far behind.
So San Diego is hurting, but no where near like other CA counties, and no where as bad as other parts of the US. If we were so bubbleicious before, why are we holding up better than many other non extreme bubble areas?
Also this:
The DataQuick figures, assembled by ZIP code, show high concentrations of distressed properties in newly built South County communities such as Otay Ranch and among condo conversion complexes countywide. In both cases, buyers stretched their finances to purchase a home and then saw values fall, making it impossible for them refinance into more affordable loans.
The area with the highest local default rate this year was San Ysidro ZIP code 92173, with a rate of 10.79 per 1,000 homes. Default activity for January and February ranked San Ysidro 15th among 1,100 ZIP codes statewide having 1,000 or more homes.
From there, the local ZIP codes with the most default notices dropped to 49th and lower in the statewide survey.
Also in South County, three Chula Vista ZIP codes were among the 10 worst-performing San Diego-area communities. Rancho San Diego was the 10th-worst performer, ranking 168th statewide.
Taken as a whole, it appears South County (Upper Mexico) is dragging the whole county down, as far as NODs and foreclosures go. Remove those badly hit areas, and I wonder what the overall strength of SD county is?
Finally this:
Edward Leamer, director of the UCLA Anderson Forecast, agreed, saying the California housing market is likely to resemble an “L,” as prices and sales drop and then remain low for the foreseeable future.But in his update on the state’s economy due Monday, Leamer said he will predict a relatively stable economy without the job losses and other reverses that devastated California 15 years ago and triggered the last real estate downturn.
“We think the problems in real estate will stay in real estate and not affect the rest of the economy,” he said. The Forecast’s accuracy in predicting the path of real estate suffered a blow in 2005 when some of its economists warned of an impending correction in the housing market and a possible recession that never materialized.
Well, that correction HAS started happening, just not exactly in 2005, but it is here now. Still, a prediction that the problems tied to a real estate related economy pullback will be isolated to the real estate economy, are scary if you believe them.
A good read, but if you buy the entire premise there, it sounds like a splash of cold water on the face of some expectations. We’ll just have to see.
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