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(CNN)   Aw geez, not this shiat again   (money.cnn.com) divider line 86
    More: Stupid, adjustable-rate mortgages, Federal Housing Administration, mortgages, credit reports, subprime mortgage crisis  
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6142 clicks; posted to Business » on 21 Mar 2014 at 5:06 PM (35 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



86 Comments   (+0 »)
   
View Voting Results: Smartest and Funniest
 
2014-03-21 02:40:40 PM  
What could possibly go wrong?
 
2014-03-21 02:42:49 PM  
We just don't farking learn, do we?
 
2014-03-21 02:49:49 PM  
Huh!

I guess we should have re instituted some of those regulations that were removed that caused this whole thing. Yes, you can blame Clinton AND Bush.
 
vpb [TotalFark]
2014-03-21 03:07:04 PM  
I think it wasn't so much the sub-prime mortgages themselves, it was the whole fraudulently selling them as prime mortgage financial instruments thingy.
 
2014-03-21 03:31:26 PM  

Nadie_AZ: Huh!

I guess we should have re instituted some of those regulations that were removed that caused this whole thing. Yes, you can blame Clinton AND Bush.


And Obama, don't forget him.  He's been in charge long enough to enact some changes.
 
2014-03-21 03:32:06 PM  
Please no more bailouts.
 
2014-03-21 03:43:20 PM  
HAHAHAHAHAHAHAHAHAHAHA!
 
2014-03-21 04:02:11 PM  
Sweet, I can finally start flipping homes again!
 
2014-03-21 04:20:30 PM  
Hey, I just had a brilliant idea.  Why don't all those subprime loans get bundled into a package then reshuffle the packages again and again and sold off and traded in portions as some sort of, I don't know, credit default swap, and then finally traded to like a big investment bank or maybe an insurer.  Wow, this could begin the boom of the 21st century!
 
2014-03-21 04:20:43 PM  

Sin_City_Superhero: We just don't farking learn, do we?


We did learn.  When the banks took a gamble on these and went tits up, they got bailed out.

Lesson learned: if you take a huge risk and it pans out, you make piles of dough.  If you take a big risk and lose your shorts, our government will bail you out.  So huge risk with lots of upside and no downside risk?  You'd be stupid not to do it.
 
2014-03-21 04:35:50 PM  

SlothB77: Lesson learned: if you take a huge risk and it pans out, you make piles of dough. If you take a big risk and lose your shorts, our government will bail you out. So huge risk with lots of upside and no downside risk? You'd be stupid not to do it.


Exactly. Hey! we're "too big to fail!"
 
2014-03-21 04:43:08 PM  
And there goes any remaining hopes that Millennials and older Gen Y folks ever had of selling their starter homes to get a tad more space.
 
2014-03-21 05:08:24 PM  

jwa007: Nadie_AZ: Huh!

I guess we should have re instituted some of those regulations that were removed that caused this whole thing. Yes, you can blame Clinton AND Bush.

And Obama, don't forget him.  He's been in charge long enough to enact some changes.


hahahah, nice!

As if anything Obama would try to do would make it past the House.
 
2014-03-21 05:09:43 PM  

Prey4reign: Hey, I just had a brilliant idea.  Why don't all those subprime loans get bundled into a package then reshuffle the packages again and again and sold off and traded in portions as some sort of, I don't know, credit default swap, and then finally traded to like a big investment bank or maybe an insurer.  Wow, this could begin the boom of the 21st century!


Well, I don't think anyone's thought of that yet. Let's give it a go. What's the worst that could happen?
 
2014-03-21 05:11:32 PM  

vpb: I think it wasn't so much the sub-prime mortgages themselves, it was the whole fraudulently selling them as prime mortgage financial instruments thingy.


Well yeah, but I want to hate poor people.
 
2014-03-21 05:14:52 PM  
lenders are charging interest rates of as high as 8% to 10% and requiring borrowers to make down payments of as much as 25%-35%..

In other words, banks are actually going to have to really fark this up in order to not make a profit. Even if there was a downturn, it's hard to lose when you already have 20% of the house value.
 
2014-03-21 05:17:19 PM  
And I'm about to change jobs.  Looks like a new house in my future!
 
2014-03-21 05:19:42 PM  
with high interest rates and 25-35% down.  that's how credit lending works.  higher risk, higher premium/down payments.

/ also, it wasn't subprime lending that brought it all down.  it was a combination of improperly described mortgage backed securities sold on the market, mortgage servicer fraud/malfeasance, and a vacuum of accountability where lenders engaged in predatory lending, mortgage fraud and a complete indifference to risk because the the secondary market would buy any mortgage because the improperly defined mortgage-backed security pools were being sold as gold when in fact they were shiat.
 
2014-03-21 05:19:47 PM  
Student loans......
 
2014-03-21 05:24:27 PM  
on another note, i think subprime only means that you have a low credit score.  credit scores are not the most important factor to accurate risk assessment.

these matter more: debt to income, stability of income, value of collateral, value of other collateral/assets, and amount of down payment.
 
2014-03-21 05:38:37 PM  
The last 2 years, I've been saving for a 20% down payment on a house. As soon as I got my credit score to a good level, I stated getting hit HARD with people trying to get me to agree to all sorts of loans with hidden fees and ridiculous rates.

Reading all the stories I've read about the last collapse put the fear in me big time, making me proactive about researching all about mortgages. They are very good at trying to make it sound like the greatest idea ever though. They really latched on when I mentioned how much I hated renting and was wanting to close.
 
2014-03-21 05:44:44 PM  

timujin: As if anything Obama would try to do would make it past the House.


For his first two years his party had both houses of Congress.  In that time he spent most of it trying to reach across the aisle rather than channeling LBJ and getting shiat done.  I have no respect for his actions during or since that time.
 
2014-03-21 05:49:38 PM  
To be fair, subprime mortgages decimated the economy by being forced on people who shouldn't have had it. If done properly subprime mortgages could help out those who need a bit of room.
 
2014-03-21 05:51:49 PM  

jwa007: timujin: As if anything Obama would try to do would make it past the House.

For his first two years his party had both houses of Congress.  In that time he spent most of it trying to reach across the aisle rather than channeling LBJ and getting shiat done.  I have no respect for his actions during or since that time.


Good he stopped trying. That's the way to get things done, right?
 
2014-03-21 05:55:16 PM  
One of the more curious aspects of this is that Texas (yes, wild and wooly Texas) instituted state regulations on mortgages after the S&L mess.  So Texas didn't have as many sub-primes due to regulation.  The irony is fungible.
 
2014-03-21 06:11:18 PM  

cretinbob: Student loans......


Still a huge problem...for students and recent grads.

As for the topic, this is the way sub-prime loans should be handled: the higher the risk, the higher interest rate and down payment to offset that risk. Hopefully, the due diligence will also be stricter, too, so only people who are really serious about buying a home, and are able to pay back the higher costs of obtaining the necessary sub-prime loans, will qualify.
 
2014-03-21 06:11:39 PM  

Sin_City_Superhero: We just don't farking learn, do we?


That's why I advocate hanging people for fraud.  It would put an end to this shiat in a hurry
 
2014-03-21 06:21:38 PM  

Grand_Moff_Joseph: And there goes any remaining hopes that Millennials and older Gen Y folks ever had of selling their starter homes to get a tad more space.


Starter home? nubian please. We are still living with our Boomer parents.
 
2014-03-21 06:30:22 PM  

Smeggy Smurf: Sin_City_Superhero: We just don't farking learn, do we?

That's why I advocate hanging people for fraud.  It would put an end to this shiat in a hurry


But I'm already well-hung.
 
2014-03-21 06:32:04 PM  
But this time around, the loans are much more costly. During the housing bubble, lenders were handing out subprime loans with cheap teaser rates and little or no down payments. Now, lenders are charging interest rates of as high as 8% to 10% and requiring borrowers to make down payments of as much as 25%-35%.


This time, when we lend money to people who can't make their mortgage payments let's make it cost them more and get a bunch of cash up front so when they walk away they are REALLY farked!
 
2014-03-21 06:33:52 PM  
"They're just Americans who want to buy homes but can't," said Dallas, who used to run First Franklin, a subprime lender that went bust in the mortgage meltdown.

A real humanitarian, this guy.

*waves 'murkan flag furiously*
 
2014-03-21 06:35:08 PM  
God dammit. What the fark, mortgage industry?

When something doesn't work and almost destroys the entire economy of the country, you bury it deep, be glad for your bailout, and never speak of or entertain the thought of it again, ever.

Seriously, never again. No comebacks, no subprime mortgage retro days, nothing.
 
2014-03-21 06:42:09 PM  
Well sure. Why not? It's not like the banksters responsible for the last implosion ever had to bear any responsibility, or ever will.
 
2014-03-21 06:42:27 PM  
"New Leaf lending division"? Must be named after the only thing that will be left to cover the bank's balls after they go bankrupt
 
2014-03-21 06:49:34 PM  

HighlanderRPI: "New Leaf lending division"? Must be named after the only thing that will be left to cover the bank's balls after they go bankrupt


Who needs leaves?  They're just gonna get bailed out while teabagging the taxpayers again.
 
2014-03-21 06:53:21 PM  

edgesrealm: God dammit. What the fark, mortgage industry?

When something doesn't work and almost destroys the entire economy of the country, you bury it deep, be glad for your bailout, and never speak of or entertain the thought of it again, ever.

Seriously, never again. No comebacks, no subprime mortgage retro days, nothing.


Do you honestly think even 10% of the people who got sub-prime loans from 1995-2008 could've put 25% down? I think that in order to put that much money down on a house, you have to be pretty financially responsible or have a rich relative. That's the difference between then and now.
 
2014-03-21 06:58:02 PM  

Grand_Moff_Joseph: And there goes any remaining hopes that Millennials and older Gen Y folks ever had of selling their starter homes to get a tad more space.


I find the idea of buying a starter home then selling it and moving repugnant.  Maybe America's work force is too willing to uproot and move at the drop of a hat, and it is killing communities.

Half the damn problem is not seeing a home as a place to live but as somewhere to sit on your ass while it's value appreciates so you can sell it in a few years to some other sucker.
 
2014-03-21 07:07:48 PM  
Don't worry.  This time it will be different.
 
2014-03-21 07:15:07 PM  

meat0918: I find the idea of buying a starter home then selling it and moving repugnant


Yeah. There's no reason a 25 year old with no family and a 35 year old with 2 kids would have different needs in a home. You should buy a house in your 20s and live in it until you die. To do otherwise is just despicable!
 
2014-03-21 07:15:30 PM  
Not just mortgages and student loans, car loan financiers have been dabbling in subprime loans for awhile now. History doesn't always repeat but sometimes it rhymes.
 
2014-03-21 07:18:24 PM  
Wall Street owns a whole lot of inventory.  They have to cash out somehow.
 
2014-03-21 07:19:57 PM  

timujin: jwa007: Nadie_AZ: Huh!

I guess we should have re instituted some of those regulations that were removed that caused this whole thing. Yes, you can blame Clinton AND Bush.

And Obama, don't forget him.  He's been in charge long enough to enact some changes.

hahahah, nice!

As if anything Obama would try to do would make it past the House.


Thought he had a pen and a phone.
 
2014-03-21 07:21:13 PM  

thurstonxhowell: meat0918: I find the idea of buying a starter home then selling it and moving repugnant

Yeah. There's no reason a 25 year old with no family and a 35 year old with 2 kids would have different needs in a home. You should buy a house in your 20s and live in it until you die. To do otherwise is just despicable!


Let me addendum it since it's the end of the day and I (again) got things mixed up.

I find the idea of flipping homes, to which the starter home has been warped from it's original idea and worked into the start for flipping, repugnant.

Buy this "starter" (your first quickly resellable) home, and flip it for quick cash.
 
2014-03-21 07:27:25 PM  

runwiz: Don't worry.  This time it will be different.


It will. At that money down and interest rate, the loans are good.

People will have to default within a couple years AND see a major real estate crash before a bank loses money on a loan like this.
 
2014-03-21 07:30:50 PM  

meat0918: Grand_Moff_Joseph: And there goes any remaining hopes that Millennials and older Gen Y folks ever had of selling their starter homes to get a tad more space.

I find the idea of buying a starter home then selling it and moving repugnant.  Maybe America's work force is too willing to uproot and move at the drop of a hat, and it is killing communities.

Half the damn problem is not seeing a home as a place to live but as somewhere to sit on your ass while it's value appreciates so you can sell it in a few years to some other sucker.


I bought at twenty. I have had other pay my mortgage for 95% of my ownership of that property. I rented out rooms when I lived there and continued after moving elsewhere.

I would have been an idiot to have bought it primarily with personal housing in mind.
 
2014-03-21 07:34:10 PM  

gizmanjr: timujin: jwa007: Nadie_AZ: Huh!

I guess we should have re instituted some of those regulations that were removed that caused this whole thing. Yes, you can blame Clinton AND Bush.

And Obama, don't forget him.  He's been in charge long enough to enact some changes.

hahahah, nice!

As if anything Obama would try to do would make it past the House.

Thought he had a pen and a phone.


He also has control of the Department of Justice and could have prosecuted some high ranking fraudulent asshole bankers. That tends to convince the rest of them not to commit rampant fraud.

Hell, Bush Senior put over a thousand fraudulent bankers into prison after the Savings and Loan debacle in the late 80's early 90's ant that was crisis was barely a drop in the proverbial bucket compared to the rampant fraud behind the recent collapse.

Instead, Obama named a millionaire Wall Street defense lawyer as head of the Justice Department and refused to criminally prosecute his wealthy donor friends.
 
2014-03-21 07:34:13 PM  

Smackledorfer: meat0918: Grand_Moff_Joseph: And there goes any remaining hopes that Millennials and older Gen Y folks ever had of selling their starter homes to get a tad more space.

I find the idea of buying a starter home then selling it and moving repugnant.  Maybe America's work force is too willing to uproot and move at the drop of a hat, and it is killing communities.

Half the damn problem is not seeing a home as a place to live but as somewhere to sit on your ass while it's value appreciates so you can sell it in a few years to some other sucker.

I bought at twenty. I have had other pay my mortgage for 95% of my ownership of that property. I rented out rooms when I lived there and continued after moving elsewhere.

I would have been an idiot to have bought it primarily with personal housing in mind.


I'm just another internet asshole that got his terms mixed up.  See above for my clarification, but I had heard "starter" home recently used as a pitch to get into flipping.  They're on the radio more and more trying to get people to attend their "free" seminars.
 
2014-03-21 07:35:30 PM  
They never went away. The FHA has been churning out sketchy mortgages like mad since 2008.
 
2014-03-21 07:46:19 PM  

meat0918: Smackledorfer: meat0918: Grand_Moff_Joseph: And there goes any remaining hopes that Millennials and older Gen Y folks ever had of selling their starter homes to get a tad more space.

I find the idea of buying a starter home then selling it and moving repugnant.  Maybe America's work force is too willing to uproot and move at the drop of a hat, and it is killing communities.

Half the damn problem is not seeing a home as a place to live but as somewhere to sit on your ass while it's value appreciates so you can sell it in a few years to some other sucker.

I bought at twenty. I have had other pay my mortgage for 95% of my ownership of that property. I rented out rooms when I lived there and continued after moving elsewhere.

I would have been an idiot to have bought it primarily with personal housing in mind.

I'm just another internet asshole that got his terms mixed up.  See above for my clarification, but I had heard "starter" home recently used as a pitch to get into flipping.  They're on the radio more and more trying to get people to attend their "free" seminars.


I heard one of those ads the other day. I lol every time.

The premier house flippers in the country want to let me get in on their racket? Where do I sign?
 
2014-03-21 07:48:55 PM  

jwa007: timujin: As if anything Obama would try to do would make it past the House.

For his first two years his party had both houses of Congress.  In that time he spent most of it trying to reach across the aisle rather than channeling LBJ and getting shiat done.  I have no respect for his actions during or since that time.


Yawn.

Too much foxnews rots your brain.
 
2014-03-21 07:54:55 PM  
Once again, the government is forcing honest, hard-working lenders to give money to inner-city people.  Thanks, Obama.
 
2014-03-21 08:30:29 PM  

Sin_City_Superhero: Smeggy Smurf: Sin_City_Superhero: We just don't farking learn, do we?

That's why I advocate hanging people for fraud.  It would put an end to this shiat in a hurry

But I'm already well-hung.


www.dvdtalk.com
 
2014-03-21 09:23:27 PM  

Smeggy Smurf: Sin_City_Superhero: Smeggy Smurf: Sin_City_Superhero: We just don't farking learn, do we?

That's why I advocate hanging people for fraud.  It would put an end to this shiat in a hurry

But I'm already well-hung.


It's twoo! It's twoo!
 
2014-03-21 10:05:23 PM  
Subprime was not the cause; it was the symptom.
 
2014-03-21 10:13:47 PM  

SlothB77: Sin_City_Superhero: We just don't farking learn, do we?

We did learn.  When the banks took a gamble on these and went tits up, they got bailed out.

Lesson learned: if you take a huge risk and it pans out, you make piles of dough.  If you take a big risk and lose your shorts, our government will bail you out.  So huge risk with lots of upside and no downside risk?  You'd be stupid not to do it.


At least in the UK when the government bailed out some banks it took ownership, or a very significant shareholding, in return. Which it's now preparing to sell to get their money back. The bankers didn't just get bailed out for free.
 
2014-03-21 10:35:40 PM  
BWA-HAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHAH A!!!

*takes breath*

They made a killing last time!

BWA-HAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHAH A!!!

*takes breath*

Nothing! Absolutely NOTHING stopping them from doing us again!

BWA-HAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHAH A!!!

*takes breath*

HAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH A!!!
 
2014-03-21 10:48:14 PM  
Why is owning a house part of the "American Dream"? I own a house, and I'm ready to sell it. Too much maintenance, upkeep, cleaning, yard work, expense, etc. I miss living in an apartment.
 
2014-03-21 11:16:44 PM  

Sin_City_Superhero: We just don't farking learn, do we?


Banks learned they can get away with it.

What more do they need to do?
 
2014-03-21 11:20:39 PM  

DubyaHater: Why is owning a house part of the "American Dream"? I own a house, and I'm ready to sell it. Too much maintenance, upkeep, cleaning, yard work, expense, etc. I miss living in an apartment.


I like business trips when I live out of a suitcase and hotel room.  I still have 90% of what I want on a daily basis, clean sheets/towels daily, and an awesome shower.  Then I come home and wonder why I need all the rest of the crap I have.
 
2014-03-21 11:27:35 PM  

fluffy2097: Banks learned they can get away with it.

What more do they need to do?


Tell that to Washington Mutual and Lehman Brothers.

Banks learned that MOST of them will get away with it if they ALL fail at the same time.
 
2014-03-21 11:30:25 PM  

syrynxx: DubyaHater: Why is owning a house part of the "American Dream"? I own a house, and I'm ready to sell it. Too much maintenance, upkeep, cleaning, yard work, expense, etc. I miss living in an apartment.

I like business trips when I live out of a suitcase and hotel room.  I still have 90% of what I want on a daily basis, clean sheets/towels daily, and an awesome shower.  Then I come home and wonder why I need all the rest of the crap I have.


You don't need it.

But living in a shoebox apartment? I want a house, a million acres of land, and a sniper to put a slug through every subwoofer on the planet.
 
2014-03-22 01:39:58 AM  

DubyaHater: Why is owning a house part of the "American Dream"? I own a house, and I'm ready to sell it. Too much maintenance, upkeep, cleaning, yard work, expense, etc. I miss living in an apartment.


This. I rent a perfectly nice 3 Br house that was built in 2006 for a reasonable price every month. Sure, I don't own the place and when my lease expires I guess the person that owns it could decide the want it back, but that is pretty unlikely. In the meantime, I have a nice house, and if the furnace or any other appliance decides to take a shiat, guess what? I call the property manager, and somebody fixes or replaces it, and my savings account stays intact. I have the additional luxury under my lease to fix minor problems (leaky faucet, etc) myself and deduct the cost from my rent if I so desire. Can you deduct the cost of a new kitchen faucet from your mortgage payment?

Brief version: Renting isn't all that bad if you have a decent landlord. It keeps your out of pocket costs consistent at the very least.
 
2014-03-22 01:43:34 AM  
It's cute that anybody thought that the banks had learned anything from the last financial meltdown.  Oh wait, they did learn one thing, that the taxpayers will bail them out.
 
2014-03-22 01:45:35 AM  

vernonFL: Please no more bailouts.


... for ANYBODY.
 
2014-03-22 01:58:28 AM  

buzzcut73: DubyaHater: Why is owning a house part of the "American Dream"? I own a house, and I'm ready to sell it. Too much maintenance, upkeep, cleaning, yard work, expense, etc. I miss living in an apartment.

This. I rent a perfectly nice 3 Br house that was built in 2006 for a reasonable price every month. Sure, I don't own the place and when my lease expires I guess the person that owns it could decide the want it back, but that is pretty unlikely. In the meantime, I have a nice house, and if the furnace or any other appliance decides to take a shiat, guess what? I call the property manager, and somebody fixes or replaces it, and my savings account stays intact. I have the additional luxury under my lease to fix minor problems (leaky faucet, etc) myself and deduct the cost from my rent if I so desire. Can you deduct the cost of a new kitchen faucet from your mortgage payment?

Brief version: Renting isn't all that bad if you have a decent landlord. It keeps your out of pocket costs consistent at the very least.


This is the reason:

Rent for similar house: ~$1900/month
Mortgage/Insurance/Property Tax = $1621
Mortgage and Property Tax Deduction = - $300.00
Net Cost = $1321

House Appreciation since purchase = ~$80,000
Principal Reduction = $400 month (and increases each month)
 
2014-03-22 03:18:24 AM  

Pincy: It's cute that anybody thought that the banks had learned anything from the last financial meltdown.  Oh wait, they did learn one thing, that the taxpayers will bail them out.


It is also cute how many people comment from ignorance w/o reading article or thread.
 
2014-03-22 08:49:45 AM  

Smackledorfer: jwa007: timujin: As if anything Obama would try to do would make it past the House.

For his first two years his party had both houses of Congress.  In that time he spent most of it trying to reach across the aisle rather than channeling LBJ and getting shiat done.  I have no respect for his actions during or since that time.

Yawn.

Too much foxnews rots your brain.


Yeah, Obama's really Jimmy Carter III. Duh.
 
2014-03-22 09:14:28 AM  
now that we are starting to cross the seven year mark on people who went bankrupt in the bust..lets see who is stupid enough to do it again...
 
2014-03-22 09:17:00 AM  

vpb: I think it wasn't so much the sub-prime mortgages themselves, it was the whole fraudulently selling them as prime mortgage financial instruments thingy.


This!

Also, the Alt-A mortgages (loans issued in 2006 had a 40% default rate), no to negative down payment mortgages, and issuance of credit default swaps on those fraudulent mortgage financial thingies (AIG anyone?)
 
2014-03-22 11:20:46 AM  

Grand_Moff_Joseph: And there goes any remaining hopes that Millennials and older Gen Y folks ever had of selling their starter homes to get a tad more space.


You're assuming Millennials can even afford to buy a starter home.

/ Damn student loans.
 
kab
2014-03-22 11:33:11 AM  
"They're just Americans who want to buy homes but can't, so we're here to fleece them.  Wait, I mean help them." said Dallas, who used to run First Franklin, a subprime lender that went bust in the mortgage meltdown.
 
2014-03-22 12:30:06 PM  

impaler: Tell that to Washington Mutual and Lehman Brothers.

Banks learned that MOST of them will get away with it if they ALL fail at the same time.


What, do you think the execs there DIDN'T make out like bandits?
 
2014-03-22 12:50:24 PM  

meat0918: Grand_Moff_Joseph: And there goes any remaining hopes that Millennials and older Gen Y folks ever had of selling their starter homes to get a tad more space.

I find the idea of buying a starter home then selling it and moving repugnant.  Maybe America's work force is too willing to uproot and move at the drop of a hat, and it is killing communities.

Half the damn problem is not seeing a home as a place to live but as somewhere to sit on your ass while it's value appreciates so you can sell it in a few years to some other sucker.


THIS
 
2014-03-22 01:58:21 PM  

Greybrd: Not just mortgages and student loans, car loan financiers have been dabbling in subprime loans for awhile now. History doesn't always repeat but sometimes it rhymes.


As someone who literally deals with auto lenders every day at work (F/I guy, accountant, title clerk at a dealership), you're on to something.

The shady places that thrive on volume over quality of loans (let's call them "Santander Consumer Lending USA") are sending out coupons for $500 cash off the price or adjustable rate loans that start at 0% for the first 24 or 36 months for very specific models of vehicle: Jeep and top-levels of trim packages for Ram trucks. When I process deals for people like that, I notice that they tend to have marginal credit scores in the low-mid 600s.

If I was the cynical sort who distrusted corporations, I would wager that these people are being set up to fail so the company can pocket the money and repo the car which has a high re-sale value while also reaming the poor bastard for processing fees. But I'm not, and I trust international banks completely.
 
2014-03-22 02:26:12 PM  

kab: "They're just Americans who want to buy homes but can't, so we're here to fleece them.  Wait, I mean help them." said Dallas, who used to run First Franklin, a subprime lender that went bust in the mortgage meltdown. they need to farking wait until they can afford the damn things and have the fiscal discipline to keep up with payments.


But I want it NOW, golrammit!
 
2014-03-22 03:05:47 PM  

Snarcoleptic_Hoosier: Greybrd: Not just mortgages and student loans, car loan financiers have been dabbling in subprime loans for awhile now. History doesn't always repeat but sometimes it rhymes.

As someone who literally deals with auto lenders every day at work (F/I guy, accountant, title clerk at a dealership), you're on to something.

The shady places that thrive on volume over quality of loans (let's call them "Santander Consumer Lending USA") are sending out coupons for $500 cash off the price or adjustable rate loans that start at 0% for the first 24 or 36 months for very specific models of vehicle: Jeep and top-levels of trim packages for Ram trucks. When I process deals for people like that, I notice that they tend to have marginal credit scores in the low-mid 600s.

If I was the cynical sort who distrusted corporations, I would wager that these people are being set up to fail so the company can pocket the money and repo the car which has a high re-sale value while also reaming the poor bastard for processing fees. But I'm not, and I trust international banks completely.


Aah, good old Banco Satander. Wait, Santander. Yeah, that was a typo and not at all intentional.

/first rule of banking is do not open an Account with Santander
 
2014-03-22 07:58:15 PM  

vpb: I think it wasn't so much the sub-prime mortgages themselves, it was the whole fraudulently selling them as prime mortgage financial instruments thingy.


What do you think happens at most financial companies after originating mortages?
 
2014-03-22 08:00:21 PM  

pute kisses like a man: these matter more: debt to income, stability of income, value of collateral, value of other collateral/assets, and amount of down payment.


Man, I'll never get a home loan.

/Don't want to own a home
//maint. costs kill
 
2014-03-22 08:03:00 PM  

pute kisses like a man: / also, it wasn't subprime lending that brought it all down.  it was a combination of improperly described mortgage backed securities sold on the market, mortgage servicer fraud/malfeasance, and a vacuum of accountability where lenders engaged in predatory lending, mortgage fraud and a complete indifference to risk because the the secondary market would buy any mortgage because the improperly defined mortgage-backed security pools were being sold as gold when in fact they were shiat.


Of course, none of those shenanigans could ever happen again, because Congress got pissed and regulated the industry so they couldn't crash the economy again.


/made it 2 sec. before I couldn't hold back the lulz.
 
2014-03-22 08:49:05 PM  
So when do we start blaming the blah homeowners Community Reinvestment Act this time?
 
2014-03-22 09:13:35 PM  

pueblonative: So when do we start blaming the blah homeowners Community Reinvestment Act this time?


The law is still on the books, and it was the driving force behind the first housing bubble/crash, so any sane person would never have stopped blaming it.
 
2014-03-22 09:15:26 PM  

Nadie_AZ: Huh!

I guess we should have re instituted some of those regulations that were removed that caused this whole thing. Yes, you can blame Clinton AND Bush.


Are you talking about the regulations that punished banks for not catering to "underserved*" banking customers.

* - which means, "those who are unlikely to pay back loans."
 
2014-03-22 09:16:33 PM  

DrPainMD: pueblonative: So when do we start blaming the blah homeowners Community Reinvestment Act this time?

The law is still on the books, and it was the driving force behind the first housing bubble/crash, so any sane person would never have stopped blaming it.


Sure it was, snookums.

Now go get another cookie and some milk, mama will be in to make sure the big bad blah man that lives in the white house isn't gonna scare you again.
 
2014-03-22 09:23:00 PM  

SlothB77: Sin_City_Superhero: We just don't farking learn, do we?

We did learn.  When the banks took a gamble on these and went tits up, they got bailed out.


The banks weren't gambling, they were doing what was necessary to not get hosed by the government. Clinton, literally, called bankers into the Oval Office and told them that he would ruin them if they didn't start making home loans to poor people and people with bad credit. It was the fulfillment of one of his most often-repeated campaign promises. People act as if Clinton didn't promise everybody, regardless of ability to pay, the "right" to own a home, even tho that's the reason that they voted for him.
 
2014-03-22 09:25:37 PM  

pute kisses like a man: on another note, i think subprime only means that you have a low credit score.  credit scores are not the most important factor to accurate risk assessment.

these matter more: debt to income, stability of income, value of collateral, value of other collateral/assets, and amount of down payment.


None of that matters if the person has a history of not paying his bills. Oh, and, debt-to-income is part of what makes up your credit score.
 
2014-03-22 09:29:02 PM  

pueblonative: DrPainMD: pueblonative: So when do we start blaming the blah homeowners Community Reinvestment Act this time?

The law is still on the books, and it was the driving force behind the first housing bubble/crash, so any sane person would never have stopped blaming it.

Sure it was, snookums.

Now go get another cookie and some milk, mama will be in to make sure the big bad blah man that lives in the white house isn't gonna scare you again.


Thank you for providing factual information to refute my claim. You have changed my mind.

It's a fact, provable beyond any doubt, that Clinton was the main cause of the bubble/crash. You refute it with snark because that's all you have.
 
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