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(Washington Post)   Five years after the federal government spent brazillions bailing out homeowners who'd bought more home than they could afford, what have we learned? Well, that those homeowners aren't exactly the most fiscally astute people in the world   (washingtonpost.com) divider line 250
    More: Fail, federal government, interest rate risk, Greg McBride, HAMP, homeowners, mortgages  
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10120 clicks; posted to Main » on 11 Mar 2014 at 10:30 AM (19 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2014-03-11 09:15:21 AM
As long as the market stays above 16000 no farks will be given.
 
2014-03-11 10:19:15 AM
Some people were meant to be renters.
 
2014-03-11 10:33:53 AM
bbsimg.ngfiles.com
 
2014-03-11 10:34:26 AM
And by "homeowners" I presume subby means "banks" since the vast majority of dollars allocated went toward padding those farkers' and their shareholders' pockets.
 
2014-03-11 10:34:27 AM
Neither are the people that lent them money.
 
2014-03-11 10:36:50 AM

HotWingConspiracy: Neither are the people that lent them money.


No!  You are wrong!  The banks and Wall St...with a few exceptions......ALL PROFITED.   Ever hear of , "Too big to fail"?
 
2014-03-11 10:37:43 AM
So this has nothing to do with the deregulation of the lending market and fraud of repackaging those risky loans as safe?

Once upon a time there was some called the "loan officer" whose job it was to protect the depositors from risky borrowers. When that safety net was removed, the banks agressively marketed to people with no real ability to repay loans and sold them houses while helping them falsify income stability on loan papers. "We'll take care of those messy forms for you!"

So yeah, let's blame the borrowers for the coordinated malfeasance of the banks setting up the entire scam.

Why is there not one bank CEO in prison for fraud?
 
2014-03-11 10:38:37 AM
Uh, yeah, we don't expect everyone to be great in managing their money. I'm pretty sure these people went to banks to help them figure out what kind of houses they could afford and then got screwed over when the banks pushed them into subprime loans. And none of those home buyers forced the big banks to leverage the market fifteen times over.

Blaming the home buyers instead of the bank managers is idiotic.
 
2014-03-11 10:39:44 AM

lohphat: So this has nothing to do with the deregulation of the lending market and fraud of repackaging those risky loans as safe?

Once upon a time there was some called the "loan officer" whose job it was to protect the depositors from risky borrowers. When that safety net was removed, the banks agressively marketed to people with no real ability to repay loans and sold them houses while helping them falsify income stability on loan papers. "We'll take care of those messy forms for you!"

So yeah, let's blame the borrowers for the coordinated malfeasance of the banks setting up the entire scam.

Why is there not one bank CEO in prison for fraud?


Because there's a republican in the White House.
 
2014-03-11 10:40:22 AM

HotWingConspiracy: Neither are the people that lent them money.


No, they made off with the fraudulent income when they repackaged those "AAA loans" as investments to unsuspecting institutional investors.

This is what Glass-Steagall was designed to prevent because they knew bankers were after all that cash to gamble with.

Best deregulation money can buy.
 
2014-03-11 10:40:45 AM
Why should they learn when the government promises to take care of their needs? 

One thing I have noticed here in Fredericksburg (and I assume it is like this everywhere): They no longer build "starter homes". As a teen I worked for a company that built them (1200 square foot, 1 floor) and marketed them to newlyweds. I don't remember the cost but they were fairly cheap. Now it seems the only thing being built is the mcmansion; 3 or 4 stories of huge house on a .25/.5 acre lot. Not much yard; you fart in bed and the neighbors will hear it. Thank God this house has 5 acres that go with it.
 
2014-03-11 10:40:51 AM
Banks should do their job and be punished for giving loans to people who they know can't afford them and them selling these crappy loans disguised as something else?

Keep up with that deregulation... it's working like charm.
 
2014-03-11 10:42:03 AM

Dancin_In_Anson: Some people were meant to be renters.


The issue at hand is the entitlement mentality that people deserve to live in a 5000 square foot house with the best school districts. Dont forget to mention that you need your BMW and your kids need to wear all those designer clothes to show everyone just how awesome you are.
 
2014-03-11 10:42:08 AM
Do something about the loans to the students of these so they can do the home purchases.
 
2014-03-11 10:42:13 AM
Obvious tag busy filing for bankruptcy.
 
2014-03-11 10:42:52 AM
the world's largest companies aren't models of self-sufficiency and unbridled capitalism. To the contrary, they're propped up by billions of dollars in welfare payments from state and local governments.
 
2014-03-11 10:44:43 AM
I don't understand how massive bailouts count as "deregulation" to people.
 
2014-03-11 10:46:01 AM

Lee451: Why should they learn when the government promises to take care of their needs? 

One thing I have noticed here in Fredericksburg (and I assume it is like this everywhere): They no longer build "starter homes". As a teen I worked for a company that built them (1200 square foot, 1 floor) and marketed them to newlyweds. I don't remember the cost but they were fairly cheap. Now it seems the only thing being built is the mcmansion; 3 or 4 stories of huge house on a .25/.5 acre lot. Not much yard; you fart in bed and the neighbors will hear it. Thank God this house has 5 acres that go with it.


I'll take some of what you're smoking.

Affordable housing has to be sponsored by the government these days to get built because the banks aren't financing these projects on their own.

Also, the government hasn't promised to take care of everything . . . ever. Democrats were trying to prevent these people from losing their homes and the Republicans have fought them at every step to further deregulate the large institutions.
 
2014-03-11 10:47:57 AM

SphericalTime: Blaming the home buyers instead of the bank managers is idiotic.


We shouldn't blame the buyers instead of the banks. We should blame them both.

Fact is, there's a ton of information about what these loans are. If you can't be bothered to read about what will happen with the thing then maybe you're just too damn dumb to be given a mortgage. However, the banks normally would have weeded those folks out and not given them mortgages. Instead, they realized they could repackage them and sell them off instead of holding these incredibly stupid loans. When they did so they found security rating agencies who helped pawn them off as better than they were. To top it all off, you had banks establishing credit default swaps- basically insurance on these securities (but it wasn't even necessary to own those securities to buy a CDS, so the total impact on those selling CDSs was greater than the number of loans out there).

It was a fark up on every possible level.

Nobody forced the people to take out the mortgages. Sorry, but the buck finally stops with the individual- you take out a loan you can't repay, you suffer the consequences.

Still, the banks should have suffered the consequences of their own misdeeds- none of this too big to fail BS. Those who fraudulently rated the securities and those who endorsed it should all be in prison as well; they did real damage to real people who weren't involved in any of this. They should pay for it but none of the politicians are interested in that... they don't want to endorse this idea that people in responsible positions should be responsible or they might find their asses in a sling.

There was plenty of blame to go around. Unfortunately, the consequences seem to have been suffered almost entirely by people who were already in a tough spot (their homes lost even more value than they would have otherwise, so those behind on mortgages were not just behind, but even more underwater) or by those who weren't even participating (those who lost jobs that had been secure due to the credit liquidity issues, which then put THEM into being behind on mortgages they had been able to service easily).
 
2014-03-11 10:48:35 AM

TofuTheAlmighty: And by "homeowners" I presume subby means "banks" since the vast majority of dollars allocated went toward padding those farkers' and their shareholders' pockets.


This. They could have just paid off everyone's mortgage and ended the crisis....but that wasn't what they were after. They wanted to eat their cake and still get monthly cake checks. And it worked like a charm.
 
2014-03-11 10:48:36 AM

YixilTesiphon: I don't understand how massive bailouts count as "deregulation" to people.


Privatized profits and socialized risk? Probably because "forcing institutions to risk their own money" counts as regulation.
 
2014-03-11 10:49:20 AM

YixilTesiphon: I don't understand how massive bailouts count as "deregulation" to people.


You have the relationship wrong. Deregulation leads to massive bailouts.
 
2014-03-11 10:50:33 AM

Fissile: HotWingConspiracy: Neither are the people that lent them money.

No!  You are wrong!  The banks and Wall St...with a few exceptions......ALL PROFITED.   Ever hear of , "Too big to fail"?


Well, the ones that were small enough to fail were allowed to. You know, like every major trading firm except Goldman.

And honestly most of the bank employees were hit just as hard by the recession. No, it's mostly a few people at the top who profited.

Trickle up economics.
 
2014-03-11 10:50:43 AM
This is the single most defining piece of evidence illustrating just how corrupt our government has become. It was balls out brazen. The fact it was signed by Clinton means nothing. If not him, Bush would have.

Enjoy your puppet show.
 
2014-03-11 10:51:36 AM

SphericalTime: Uh, yeah, we don't expect everyone to be great in managing their money. I'm pretty sure these people went to banks to help them figure out what kind of houses they could afford and then got screwed over when the banks pushed them into subprime loans. And none of those home buyers forced the big banks to leverage the market fifteen times over.

Blaming the home buyers instead of the bank managers is idiotic.


No it isn't.  And I'm going to put this is in the most unbelievable anecdotal story ever.

I had a professor who taught the REAL ESTATE portion of my FINANCE program in college.  He literally explained to a room full of people the reasons that purchasing homes at $0 down (this was literally a month or two before the bubble burst) and getting subprime mortgages was a bad idea.  He also explained how the banks bundled the high risk loans and sold them down the line to unknowing investors.  He told us that he believed that in the very near future the market was going to crash and burn with horrific consequences to investors, homeowners, banks, and the general public.  A bit overblown, but a few months later he was proven right and "mortgaged backed security" became common knowledge.

He then told us how awesome the house was he just bought at $0 down and how cool the surround sound was since he could blow his down payment on furniture and electronics.  Want to tell me he was an unsuspecting victim?
 
2014-03-11 10:51:38 AM

GoldSpider: lohphat: So this has nothing to do with the deregulation of the lending market and fraud of repackaging those risky loans as safe?

Once upon a time there was some called the "loan officer" whose job it was to protect the depositors from risky borrowers. When that safety net was removed, the banks agressively marketed to people with no real ability to repay loans and sold them houses while helping them falsify income stability on loan papers. "We'll take care of those messy forms for you!"

So yeah, let's blame the borrowers for the coordinated malfeasance of the banks setting up the entire scam.

Why is there not one bank CEO in prison for fraud?

Because there's a republican in the White House.


nice.
 
2014-03-11 10:54:03 AM

akula: SphericalTime: Blaming the home buyers instead of the bank managers is idiotic.

We shouldn't blame the buyers instead of the banks. We should blame them both.

Fact is, there's a ton of information about what these loans are. If you can't be bothered to read about what will happen with the thing then maybe you're just too damn dumb to be given a mortgage. However, the banks normally would have weeded those folks out and not given them mortgages. Instead, they realized they could repackage them and sell them off instead of holding these incredibly stupid loans. When they did so they found security rating agencies who helped pawn them off as better than they were. To top it all off, you had banks establishing credit default swaps- basically insurance on these securities (but it wasn't even necessary to own those securities to buy a CDS, so the total impact on those selling CDSs was greater than the number of loans out there).

It was a fark up on every possible level.

Nobody forced the people to take out the mortgages. Sorry, but the buck finally stops with the individual- you take out a loan you can't repay, you suffer the consequences.

Still, the banks should have suffered the consequences of their own misdeeds- none of this too big to fail BS. Those who fraudulently rated the securities and those who endorsed it should all be in prison as well; they did real damage to real people who weren't involved in any of this. They should pay for it but none of the politicians are interested in that... they don't want to endorse this idea that people in responsible positions should be responsible or they might find their asses in a sling.

There was plenty of blame to go around. Unfortunately, the consequences seem to have been suffered almost entirely by people who were already in a tough spot (their homes lost even more value than they would have otherwise, so those behind on mortgages were not just behind, but even more underwater) or by those who weren't even participating (those who lost jobs that had been secure due to the credit liquidity issues, which then put THEM into being behind on mortgages they had been able to service easily).


I'm sorry, I just can't blame people for going to their banks and asking, "Hey, can I get a loan and for how much?" And then getting screwed for not understanding the technical language the banks used to screw them.

Hell, it took me months to understand what happened and I'm college educated with friends in financial services that could sit down and explain these things to me.

These people trusted the bankers in their communities and got utterly screwed.
 
2014-03-11 10:54:40 AM

akula: SphericalTime: Blaming the home buyers instead of the bank managers is idiotic.

We shouldn't blame the buyers instead of the banks. We should blame them both.

Fact is, there's a ton of information about what these loans are. If you can't be bothered to read about what will happen with the thing then maybe you're just too damn dumb to be given a mortgage. However, the banks normally would have weeded those folks out and not given them mortgages. Instead, they realized they could repackage them and sell them off instead of holding these incredibly stupid loans. When they did so they found security rating agencies who helped pawn them off as better than they were. To top it all off, you had banks establishing credit default swaps- basically insurance on these securities (but it wasn't even necessary to own those securities to buy a CDS, so the total impact on those selling CDSs was greater than the number of loans out there).

It was a fark up on every possible level.

Nobody forced the people to take out the mortgages. Sorry, but the buck finally stops with the individual- you take out a loan you can't repay, you suffer the consequences.

Still, the banks should have suffered the consequences of their own misdeeds- none of this too big to fail BS. Those who fraudulently rated the securities and those who endorsed it should all be in prison as well; they did real damage to real people who weren't involved in any of this. They should pay for it but none of the politicians are interested in that... they don't want to endorse this idea that people in responsible positions should be responsible or they might find their asses in a sling.

There was plenty of blame to go around. Unfortunately, the consequences seem to have been suffered almost entirely by people who were already in a tough spot (their homes lost even more value than they would have otherwise, so those behind on mortgages were not just behind, but even more underwater) or by those who weren't even participa ...



You need to throw Fannie,  Freddie and congress in there to make this 100% accurate.
 
2014-03-11 10:56:00 AM
No, unfortunately we haven't learned that.

Just look at the comments here.
 
2014-03-11 10:56:57 AM

akula:
Nobody forced the people to take out the mortgages. Sorry, but the buck finally stops with the individual- you take out a loan you can't repay, you suffer the consequences.


Do you read through the 34 page Apple ToS everything one they update it? So you stop and read every EULA when you install software or register at a new subscription website?

The actions of the baks were predatory, looking for people who could sign a form, not protect the deposits of the other customers.

Sure, blame the people who said "yes" to the possibility of owning a home while the fraudsters pursued them -- and in thousands of documented cases -- falsified the paperwork themselves, not the applicant.

When your strategy is to find dupes for your scam to make off with ill-gotten gains, make sure up you make it look like it's the dupes fault. This has nothing to do with re-selling these unstable loans as A-OK at all, right?
 
2014-03-11 10:57:13 AM

Fissile: HotWingConspiracy: Neither are the people that lent them money.

No!  You are wrong!  The banks and Wall St...with a few exceptions......ALL PROFITED.   Ever hear of , "Too big to fail"?


Profited due to political connections, not being fiscally astute.
 
2014-03-11 10:57:47 AM

mike_d85: SphericalTime: Uh, yeah, we don't expect everyone to be great in managing their money. I'm pretty sure these people went to banks to help them figure out what kind of houses they could afford and then got screwed over when the banks pushed them into subprime loans. And none of those home buyers forced the big banks to leverage the market fifteen times over.

Blaming the home buyers instead of the bank managers is idiotic.

No it isn't.  And I'm going to put this is in the most unbelievable anecdotal story ever.

I had a professor who taught the REAL ESTATE portion of my FINANCE program in college.  He literally explained to a room full of people the reasons that purchasing homes at $0 down (this was literally a month or two before the bubble burst) and getting subprime mortgages was a bad idea.  He also explained how the banks bundled the high risk loans and sold them down the line to unknowing investors.  He told us that he believed that in the very near future the market was going to crash and burn with horrific consequences to investors, homeowners, banks, and the general public.  A bit overblown, but a few months later he was proven right and "mortgaged backed security" became common knowledge.

He then told us how awesome the house was he just bought at $0 down and how cool the surround sound was since he could blow his down payment on furniture and electronics.  Want to tell me he was an unsuspecting victim?


In this case, he knew it was a fait accompli.....he was trolling you.    He put no money down, and was probably paying less for mortgage....interest only...than he would have been paying in rent.    He took advantage knowing that it was all a scam.  The reality is that most people did put some money into it....5%-10% is a substantial amount on a house with a $500K selling price.  Believing they were going to profit.   All that is gone now.
 
2014-03-11 10:58:08 AM

SphericalTime: I'm sorry, I just can't blame people for going to their banks and asking, "Hey, can I get a loan and for how much?" And then getting screwed for not understanding the technical language the banks used to screw them.

Hell, it took me months to understand what happened and I'm college educated with friends in financial services that could sit down and explain these things to me.

These people trusted the bankers in their communities and got utterly screwed.



Are you telling me an amoritization schedule is complicated?
 
2014-03-11 10:59:03 AM

mike_d85: SphericalTime: Uh, yeah, we don't expect everyone to be great in managing their money. I'm pretty sure these people went to banks to help them figure out what kind of houses they could afford and then got screwed over when the banks pushed them into subprime loans. And none of those home buyers forced the big banks to leverage the market fifteen times over.

Blaming the home buyers instead of the bank managers is idiotic.

No it isn't.  And I'm going to put this is in the most unbelievable anecdotal story ever.

I had a professor who taught the REAL ESTATE portion of my FINANCE program in college.  He literally explained to a room full of people the reasons that purchasing homes at $0 down (this was literally a month or two before the bubble burst) and getting subprime mortgages was a bad idea.  He also explained how the banks bundled the high risk loans and sold them down the line to unknowing investors.  He told us that he believed that in the very near future the market was going to crash and burn with horrific consequences to investors, homeowners, banks, and the general public.  A bit overblown, but a few months later he was proven right and "mortgaged backed security" became common knowledge.

He then told us how awesome the house was he just bought at $0 down and how cool the surround sound was since he could blow his down payment on furniture and electronics.  Want to tell me he was an unsuspecting victim?


Was he actually affected? Some universities run super generous loan programs to help professors buy homes, because they are the employers and have much better control of the risk. It sounds like he might have gotten one of these deals which means that he's not in the same boat as a dishwasher that got a half million dollar loan.
 
2014-03-11 10:59:29 AM

Lee451: Why should they learn when the government promises to take care of their needs? 

One thing I have noticed here in Fredericksburg (and I assume it is like this everywhere): They no longer build "starter homes". As a teen I worked for a company that built them (1200 square foot, 1 floor) and marketed them to newlyweds. I don't remember the cost but they were fairly cheap. Now it seems the only thing being built is the mcmansion; 3 or 4 stories of huge house on a .25/.5 acre lot. Not much yard; you fart in bed and the neighbors will hear it. Thank God this house has 5 acres that go with it.


This is a frequent occurance when the value of land goes up.  In the sticks, starter homes are more common, because land is cheap.  In higher priced areas, it makes more sense to put the biggest house on the smallest lot possible.  IE, if the value of a plot of land itself is half a million, few buyers willing to pay for that expensive location are going to want only $100k worth of house on said plot of land; they are going to want a half a million worth of house there as well.  But if the plot of land is only worth $100k, building a $100k house makes sense.  When you worked at that company, the area probably wasn't in as high a demand.
 
2014-03-11 11:02:14 AM

SphericalTime: Affordable housing in prime locations has to be sponsored by the government these days to get built because the banks aren't financing these projects on their own.


Wanna live in the sticks?  There's plenty of affordable housing in the middle of nowhere.

Want to live in a prime location?  Obviously, you have to pay more (barring government subsidies like you mentioned).
 
2014-03-11 11:02:37 AM

I alone am best: SphericalTime: I'm sorry, I just can't blame people for going to their banks and asking, "Hey, can I get a loan and for how much?" And then getting screwed for not understanding the technical language the banks used to screw them.

Hell, it took me months to understand what happened and I'm college educated with friends in financial services that could sit down and explain these things to me.

These people trusted the bankers in their communities and got utterly screwed.


Are you telling me an amoritization schedule is complicated?


Are you insane? I bet 75% of people can't even explain what that term means, and even fewer can understand them without help . . .

Wait, did I just get trolled? Darn it.
 
2014-03-11 11:02:47 AM

SphericalTime: I'm sorry, I just can't blame people for going to their banks and asking, "Hey, can I get a loan and for how much?" And then getting screwed for not understanding the technical language the banks used to screw them.


I can. Reason being, I've taken out mortgages. I've read the documents- every damned line. I remember seeing these interest only ARM option mortgages being offered... even a couple years before the bubble burst, I thought "What a farking stupid idea!"

The only way you could avoid knowing what you were doing was by completely ignoring everything you are signing and assuming that the lender has your best interests in mind. That's a pretty oblivious way to go through life. The only folks I had sympathy for were the ones who had been caught up on things, they did live below their means, but when everything tanked they lost jobs and suddenly their means were extremely meager. That isn't their fault. But we'd seen numerous people with $400,000+ houses, two $50,000 vehicles, a boat, etc. all parked outside. I knew they were going to suffer because we make a decent income and we couldn't afford all that. They had to be in debt up to their eyeballs; one hiccup in the economy and they were farked. That's exactly what happened.

If a bank tells you "you can take out a loan up to X amount" any reasonably intelligent person will reduce X by a decent margin so to maintain some kind of cushion. Instead they pushed the limit and ended up over their heads. Are they as culpable as the banks and government? No. But they do have SOME responsibility for their own predicaments. Wall Street got a lot of blame in the media for their greed, and rightly so. Thing is, none of that would have been possible without some greed on Main Street too.

The hell of it all is that only the bankers got bailed out. As somebody pointed out upthread, we could possibly have paid off all these mortgages (and taken over the servicing thereof) for less than we ended up handing out to these plutocrat bastard bankers. We'd even have ongoing income streams to repay that money over time... even though the mortgages might need to be stretched out to insane levels, we'd see some of that come back in the future and people would have kept their homes.
 
2014-03-11 11:03:36 AM
Those homeowners you say aren't too bright almost brought down the world financial system

They are clever alright. More clever than the rubes they fleeced on Wall Street. Their bonuses haven't tripled this year.
 
2014-03-11 11:04:41 AM

Geotpf: SphericalTime: Affordable housing in prime locations has to be sponsored by the government these days to get built because the banks aren't financing these projects on their own.

Wanna live in the sticks?  There's plenty of affordable housing in the middle of nowhere.

Want to live in a prime location?  Obviously, you have to pay more (barring government subsidies like you mentioned).


True. You're right about this.
 
2014-03-11 11:05:07 AM

mike_d85: Want to tell me he was an unsuspecting victim?


Based on your story, I don't see that he was a victim at all. He had a down payment saved up, so he was probably fiscally responsible. He was a professor in a finance program, so it's likely he made at least decent money. You didn't mention him defaulting, which you probably would have if he did. If he would rather buy the surround system now and pay for it over the course of his mortgage, then what's the problem?

Using a stupid system to get what you want isn't the same thing as being a victim of that system.
 
2014-03-11 11:05:46 AM
Irresponsible home owners:  We're morans that bought more house than we can afford. Wahhh!

Government: Fine, here is a temporary reduction in rates so you can straighten this out.

Irresponsible  home owners: Problem solved. We like this big house so we are just gonna stay here. Nothing more to do for us!

I say let em burn this time.
 
2014-03-11 11:06:11 AM

lohphat: Do you read through the 34 page Apple ToS everything one they update it? So you stop and read every EULA when you install software or register at a new subscription website?


We aren't talking EULAs. We're talking mortgages.

And yes, when I sign promissory notes promising to repay things, I do indeed read every single page. It doesn't take a genius to understand that if you aren't paying principal for the first few years and interest rates will also rise, that mortgage payment is going to be painful in 5 years.

Yes, some people were indeed taken advantage of. They were still participants. Nigerian scam victims are also taken advantage of by predatory scam artists... it doesn't mean they weren't stupid for believing it.
 
2014-03-11 11:08:01 AM

SphericalTime:  Democrats were trying to prevent these people from losing their homes and the Republicans have fought them at every step to further deregulate the large institutions.


Most of these folks needed to lose their homes.  They couldn't afford them.  Why do we want to keep people in a financial arrangement where the payment on their home is 40+% of their income?

SphericalTime: I'm sorry, I just can't blame people for going to their banks and asking, "Hey, can I get a loan and for how much?" And then getting screwed for not understanding the technical language the banks used to screw them.


Yes you can.  You know what you make every month.  You know the monthly payment the loan requires.  If the bank hid that somehow, then sure, the bank's at fault.  Otherwise, you're a farking idiot.
 
2014-03-11 11:08:14 AM

Lee451: Why should they learn when the government promises to take care of their needs? 

One thing I have noticed here in Fredericksburg (and I assume it is like this everywhere): They no longer build "starter homes". As a teen I worked for a company that built them (1200 square foot, 1 floor) and marketed them to newlyweds. I don't remember the cost but they were fairly cheap. Now it seems the only thing being built is the mcmansion; 3 or 4 stories of huge house on a .25/.5 acre lot. Not much yard; you fart in bed and the neighbors will hear it. Thank God this house has 5 acres that go with it.


This
Plus the new homeowners had to put down 20% to get the loan. Today you can move in with zero down and get more credit because you "own" a home. And people aren't satisfied unless they outfit the place with all the latest and greatest, God forbid that my home doesn't have granite countertops, all new stainless steel appliances, 60" flat screen on the wall.
 
2014-03-11 11:10:48 AM
Spain and some other nations should actually declare a shooting war on several Wall Street firms that passed on bundled mortgage commercial paper worth less than bogus.

I mean actually drag them out in the street shooting war .. with real bullets ..
 
2014-03-11 11:11:10 AM

akula: SphericalTime: I'm sorry, I just can't blame people for going to their banks and asking, "Hey, can I get a loan and for how much?" And then getting screwed for not understanding the technical language the banks used to screw them.

I can. Reason being, I've taken out mortgages. I've read the documents- every damned line. I remember seeing these interest only ARM option mortgages being offered... even a couple years before the bubble burst, I thought "What a farking stupid idea!"

The only way you could avoid knowing what you were doing was by completely ignoring everything you are signing and assuming that the lender has your best interests in mind. That's a pretty oblivious way to go through life. The only folks I had sympathy for were the ones who had been caught up on things, they did live below their means, but when everything tanked they lost jobs and suddenly their means were extremely meager. That isn't their fault. But we'd seen numerous people with $400,000+ houses, two $50,000 vehicles, a boat, etc. all parked outside. I knew they were going to suffer because we make a decent income and we couldn't afford all that. They had to be in debt up to their eyeballs; one hiccup in the economy and they were farked. That's exactly what happened.

If a bank tells you "you can take out a loan up to X amount" any reasonably intelligent person will reduce X by a decent margin so to maintain some kind of cushion. Instead they pushed the limit and ended up over their heads. Are they as culpable as the banks and government? No. But they do have SOME responsibility for their own predicaments. Wall Street got a lot of blame in the media for their greed, and rightly so. Thing is, none of that would have been possible without some greed on Main Street too.

The hell of it all is that only the bankers got bailed out. As somebody pointed out upthread, we could possibly have paid off all these mortgages (and taken over the servicing thereof) for less than we ended up handing out to these plutocrat bastard bankers. We'd even have ongoing income streams to repay that money over time... even though the mortgages might need to be stretched out to insane levels, we'd see some of that come back in the future and people would have kept their homes.


I'm so glad that you are able to place blame on people that aren't are smart as you. Obviously they should be jailed for not meeting your minimum level of intelligence.

. . . Americans aren't all smart, they're not all educated, and a lot of them thought the guy at the bank was trustworthy. The vast majority of them didn't understand that they were grabbing way to much.

I blame the guys that did understand what they were doing.
 
2014-03-11 11:12:21 AM

lohphat: akula:
Nobody forced the people to take out the mortgages. Sorry, but the buck finally stops with the individual- you take out a loan you can't repay, you suffer the consequences.

Do you read through the 34 page Apple ToS everything one they update it? So you stop and read every EULA when you install software or register at a new subscription website?

The actions of the baks were predatory, looking for people who could sign a form, not protect the deposits of the other customers.

Sure, blame the people who said "yes" to the possibility of owning a home while the fraudsters pursued them -- and in thousands of documented cases -- falsified the paperwork themselves, not the applicant.

When your strategy is to find dupes for your scam to make off with ill-gotten gains, make sure up you make it look like it's the dupes fault. This has nothing to do with re-selling these unstable loans as A-OK at all, right?


Actually, in many cases, the "homeowners" made out like bandits.  Basically, the zero down, interest only, neg am, bullshiat loans allowed them to buy much bigger houses for far less money than they would have been able to using a normal 30 year fixed loan.  Plus, they could take out "home improvement" loans and get more free money (which they then spent on everything except improving the home).  Then, when the fit hit the shan, they could simply stop paying their mortgage and wait one or two years (or more) before the bank finally foreclosed, getting free rent that entire time.

In fact, the real losers here were those who bought responsibily during the bubble, using a 30 year fixed with a large down payment.  They had higher monthly payments and lost that down payment (either if they were foreclosed upon or via the drop in their house's value).
 
2014-03-11 11:13:00 AM

Fissile: HotWingConspiracy: Neither are the people that lent them money.

No!  You are wrong!  The banks and Wall St...with a few exceptions......ALL PROFITED.   Ever hear of , "Too big to fail"?


that what they said about the titanic
 
2014-03-11 11:13:21 AM
I tuned in for traffic on the AM station and there was an ad for home equity loans, once again.

The farkers are going to torch the mortgage industry for a bailout a second time.
 
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