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(Chron)   Ninjas responsible for the second wave of defaulting home loans   (chron.com) divider line 274
    More: Obvious  
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16451 clicks; posted to Main » on 25 Aug 2008 at 1:24 PM (6 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2008-08-25 05:17:58 PM  
The Black Spy: I live in Rochester Hills. Rochester Rd and South Blvd. But before you start calling me a filthy suburbanite, I did live in Detroit City proper for a number of years, at Cass and Bagley (in the apartments above the City Club).

Those were some crazy fun times.


Hey, no worries on that one - I'm a former Pointer, which is even worse. I used to be in Steel but took of for greener Pharmaceutical pastures this year & I feel for bad all the suburbs out there. When VW/Audi left there was a big drop in selling prices over by you. Plus with Hizzoner still in office, things are bad all over the area. The 'rents are still in GPF so they get to deal with his shenanigans every day. Their home's value has dropped by a significant margin and who knows when it will even begin to rebound (they've owned for over 30yrs so it's still about initial cost, even with inflation). I used to think there was hope for the city, but as things stand right now...

/Still haven't found a bar as good as the Ye Olde Tap Room down here
 
2008-08-25 05:23:28 PM  
SchlingFocker: SuperCrackMonkey: Those of us who already own property are farked.

Why are you farked?

Your house is still providing the same service it used to provide.

You're still paying the same mortgage used to pay.

Where's the problem?


You've made this same response to multiple posts here, but I think you are using a different definition of value. You are correct that the utility value hasn't gone down. The house still provides living space, and the cost of owning it hasn't changed.

Unfortunately, the market value has changed. For those who bought into the market expecting their home's value to continue at 10%+ annual growth this is a shock. Many people are upside down on their mortgages because the market value has changed so drastically. Obviously, many people also made poor financial decisions, and have lost net worth and financial stability because of the market upheaval.
 
2008-08-25 05:26:25 PM  
The_Pink_Pimp: TossedSaladMan:



But what do I care. I am all cash right now.


How's that inflation treating you?


Not that great. My interest rate is 3.75% risk free versus maybe 5.5% inflation (pulled strictly out of my butt). That said most asset categories seem overvalued more than the -2% I am currently looking at.

In the current market I can only find two investment options: Get screwed a little or get screwed a lot. Housing seems like a screwed a lot category right now. I'll keep renting and go without the deduction for another year.
 
2008-08-25 05:38:46 PM  
Lucidz 2008-08-25 02:21:59 PM
That one night I kept hearing,
WOOF WOOF WOOF WHAM, YELP!!!
The dog was gone the next day. I'm convinced they put it in a bag and dropped it off a bridge.


No, one of your other neighbors just prayed to Joe Pesci.

Mr Guy 2008-08-25 04:14:23 PM
I paid $210 for mine, but it'd be a hell of a commute to Hawaii.
And my dad keeps biatching at me, asking when I'm going to buy a house.
Hmmm...when I move to a state where I can get twice as much house for half as much coin?
Somehow he is opposed to that part of the idea.

I just screwed with Google Earth to get an idea of distances.

Miles of water between Honolulu, Hawaii and the nearest major sea port of San Diego, California: 2,600
Miles of land between San Diego and New York, New York: 2,500
(roughly. Google Earth doesn't zoom that well at those ranges)

It's just completely irrelevant to the topic at hand, but I just found that incredible.
 
2008-08-25 05:39:28 PM  
TossedSaladMan: Not that great. My interest rate is 3.75% risk free versus maybe 5.5%

I have some CDs that are locked in at 5.75%. I'm not looking forward to having those rollover, because they'll drop to 3.85% (today's rate).

/tax on interest is a pain in the butt
 
2008-08-25 05:43:53 PM  
All the DC and NOVA denizens who decided to move out here to the Eastern Panhandle of WV are doubly screwed. Yeah, they could get a single-family home for around $300,000, but with a 2 to 2.5 hour commute, there's not much time to enjoy it. Plus, with the price of gas, they're getting foreclosed on right and left and don't even have the option of moving closer to their jobs because they can't even afford a condo. Right up the road there's a Dan Ryan hell-hole cookie cutter subdivision that's advertising "rock bottom prices" - townhomes at $130K and single-family on 1/4 acre for $180K.
 
2008-08-25 05:48:49 PM  
Yes I am a pirate
three hundred years too late
cannons don't thunder there's nothing to plunder
I'm an over forty victim of fate

Arriving too late
 
2008-08-25 05:49:42 PM  
jgk3: In 1993, with Clinton in the White House and the Democrats in control of Congress, they beefed it up to threaten bank's charters if they didn't make a specified percentage of mortgage loans to low income individuals (no longer aimed at families).

The Special affordable housing goals only apply to GSEs, that is Freddie, Fanny and Federal Home Loan Banks.

As I see it, the agencies weren't in the subprime business; you needed a decent FICO score, money down, and pretty sane loan-to-income standards.

Even this legislation doesn't force the GSEs to buy badly underwritten debts, or buy any debt at any price - though it does authorize the Secretary to buy debts the GSEs wouldn't touch.

This of course can still come back to haunt us, in that the GSEs are "technically insolvent", but it doesn't explain the huge losses over at folks like Citi, Merrill, UBS, HSBC, Wachovia, BoA, etc. etc.

If you're aware of other legislative initiatives that would force banks to take on bad debts, I'd like to know; it's hard to find information from before the credit crisis on google when searching mortgage related keywords.
 
2008-08-25 05:53:38 PM  
Came for the Sexxy Ninja chick pics
So sad none here
 
2008-08-25 06:24:11 PM  
How come Farking deadbeats get a break, but folks who actually pay their mortgage every month (even if it means not buying a bunch of crap at the mall) get no additional consideration at all?

I know a gal, who has paid exactly nothing for the last year, she is still in her house, and the mortgage company is now asking her to sign a deal that forgives the last year!!!11ELEVENTY!! of missed payments.

/I'm doing it wrong?
 
2008-08-25 06:53:04 PM  
We paid off our mortgage last month.

We had a novel approach to buying and owning a home; we have decided to live in it for the rest of our lives.

Have watched my friends move, move and move and are paying big bucks for houses they will never own, houses that are huge, costly to maintain.

We now have the deed to our house. Frickkin' sweet!
 
2008-08-25 07:01:16 PM  
I thought the problem was caused by the loansharks!

animeoltre.altervista.org

Yeesh! No respect!
 
2008-08-25 07:13:55 PM  
Bohemian: I know someone who was one of these liar loan mortgage brokers, he made out pretty good financially. They are currently living in a pretty swanky McMansion.

I'm expecting to hear the story about him getting marched out of his house in his pj's wearing cuffs by the feds one of these days.



If it makes you feel better, I know two people who made a shiatton of money off liar loans and subprime loans, and they are now broke. One of them is unemployed.

Turns out, when you make a shiatload of money without having to do much, you tend to take it for granted and live beyond your means.
 
2008-08-25 07:14:10 PM  
I for one, welcome our new img151.imageshack.us overlords.

/Hi YA!
 
2008-08-25 07:47:26 PM  
impaler: From 75 to 97, there was little inflation adjusted value change


hotlinked for her pleasure


Of course inflation topped out at 17% in 1980 and house loans were 20%.

There was also this thing called - "downpayment" - that you had to have before you could buy.

History often repeats itself...
 
2008-08-25 07:49:50 PM  
Ishidan: Yes I am a pirate
three hundred years too late
cannons don't thunder there's nothing to plunder
I'm an over forty victim of fate

Arriving too late


To save a drowning witch?
 
2008-08-25 07:51:33 PM  
littlett's: Dammit! I knew those hedges looked kind of funny! Stupid ninjas.

I work in the online gambling financial risk management industry, so I got a kick out of your reply...

/hehe
//hedging
 
2008-08-25 07:52:29 PM  
HempHead: There was also this thing called - "downpayment" - that you had to have before you could buy.

What is this prehistoric thing you're referring to? Down what??
 
2008-08-26 12:53:14 AM  
Knara: Oh, and btw, this is yet another example of how unregulated free markets don't work. Next time your favored conservative commentator talks about how you want to let the "market sort it out", think back to this (and the telecom industry, and the cable industry, etc etc).

Of course, those markets are "unregulated" to the same extent that I'm a left-handed African American helicopter pilot.
 
2008-08-26 01:18:47 AM  
Lucidz: The dog was gone the next day. I'm convinced they put it in a bag and dropped it off a bridge.

Hard to say....was his wife selling tamales the next day?
 
2008-08-26 06:38:55 AM  
TopoGigo - Jument: 1) If you can't afford a farking house, don't buy one.

2) Never sign anything you don't understand.

No sympathy from me.

Second. I'd also like to add:

3) If an investment idea sounds too good to be true, it probably is.

Some people who actually could read a damn contract got these loans, planning on paying the least amount possible, then selling after 2 or 3 years, making a profit. If you're like me, that is, willing to do the work involved to make some money, but without the capital to do it, this seemed like a good idea. As long as you took certain things to be laws that were in fact just trends. It sucks responsible people who made a high-risk investment (for what seemed like free) got screwed by too many morons jumping on the bandwagon. Granted, they took a chance and lost. The bad part is that now they're totally farked, as opposed to richer people who lose their investment and still have money to eat.



Frankly, I don't think it sucks, and I don't think it's a "bad part." I think it's a very good and wonderful karmic payback for empty un-ambitious greed and the desire to make something for nothing at the expense of others.

I see it as every bit as deliciously deserved as when scalpers get burned on a pile of unsold tickets, or people horde the next big "IT" thing, thinking they'll be able to charge a fortune for them, only to have the manufacturer dump a glut into the market and leave them holding a whole lot of nothing much.

That "easy" money these people were trying to get at wasn't coming out of the ether. It was coming out of the pockets of others. They all but completely farked (or at least attempted to) a whole lot of people who didn't have a home out of the possibility of owning one, and a whole lot of others were saddled with shiat they had to struggle to afford.

This bullshiat brand of greed needs to be recognized as the slimy, low-down, no-good parasitic bullshiat it is.

I've got respect-o-plenty for people who make a fortune off genuine hard work or TRUE ingenuity, but "let's horde a bunch of houses and try to sell them at an obscene profit, raping other working schmucks like us" isn't ingenious. It's just sleazy.

I can only hope that the people who engaged in it will be paying the price and learning the lesson for a long, long time to come.

Then maybe houses will go back to being homes... a place to raise a family, provide a little financial security, and if you're lucky... a nice little profit over the years as a bonus, not some bullshiat investment in which assholes who already have homes snatch up half a dozen others in an attempt to corner the market and end up squeezing everyone else by the balls.

In short, they were trying to fark others to make a whole lot of money for doing a whole lot of nothing... I'm finding it very hard to feel much sympathy that they ended up farking themselves. It just means that sometimes karma really does work.

The only way the poetic justice could be any more delicious is if they actually ended up homeless.
 
2008-08-26 09:44:04 AM  
Bohemian: H31N0US: nlscb: I get the feeling fly over country is going to start losing its temper about bailing out the coasts and rusted out midwest.

Ever hear of the farming subsidies?

But they think they are entitled to that tasty tasty govt pork! Oh and it is totally different cause they are feed hat wearing truck drivin republican votin patriots!

You want to make red state good old boys quake in their boots suggest cutting farm subsidies or the CRP program.


-1/10

But you're not even really trying, are you?
 
2008-08-26 12:19:32 PM  
You people and your ninja crap are so farking stupid.

\It's not funny
\\It's never funny
\\\Same goes for you Pirate idiots, too
\\\\You should never go full retard...
 
2008-08-26 10:30:20 PM  
280 replies and not one mention of the effects that the federal reserve had on these mortgages.
all sub-prime and alt-a loans (as well as most car loans and credit cards) had interest rates based on the "prime rate" (which was set by the federal reserve). The prime rate goes up, the interest on these loans goes up, the repayments have to go up to account for the higher interest.

So, a home that you are making payments on (if you only eat 3 times a week and give up smoking), suddenly costs you an additional 100 to 150 per month. You were barely making payments before, now there is no way to do so. Not to mention that your credit cards and car loans also cost you more.

In the meantime, the mortgage broker sold your loan to a big bank, who in turn sold it to an investor. You default, the investor demands his money back, the bank gets it from the broker and the broker has only one recourse -- bankruptcy.

In 1996 the prime rate was about 6.5%. By 1999 the prime rate had jumped to almost 8.5%. Millions of loans were called in or defaulted, the feds started dropping the prime rate, finally ending at about 0.25%. Recovery was slow but gaining speed until 9/11/2001 (you know what happened then right?).

Sub-prime home loans became all the rage. Housing prices were climbing faster than ever, with some areas seeing double or even triple growth. The feds stepped in again and started raising the prime rate. This got to about 6.5% when the housing bubble broke. Once again millions of loans were called in, mortgage brokers went bankrupt, banks went bankrupt, investment houses went bankrupt.

Credit dried up.

Now housing prices are falling all over the place. Foreclosures are higher than ever.


If the feds had just kept their noses out of it, the housing bubble would not have burst, and sub-prime and alt-a lending would still be going on.

Also note that raising the prime rate had no effect on inflation, it was around 3% before the prime rate went up and is still around 3% now.
 
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