DU'ers..should the Federal Government implement a bail-out of sub-prime mortgage lenders?

[AzDar]

Would this be an effective (albeit tremendously expensive) solution to the impending foreclosure disaster, or akin to re-arranging deck chairs on the Titanic?

[sinkingfeeling]

1. No. How would bailing out the lenders help those who will lose their homes because they

already got suckered into 0 down, 2% ARMs?

[Robbien]

65. Right. Bailing out the predatory lenders is giving the money to

people who caused the mess in the first place. The people really being hurt here are the people at the bottom of the chain, the homeowners.

[bryant69]

2. They knew the risks loaning money to these people

They chose to anyway.

Bryant
CHeck it out --> http://politicalcomment.blogspot.com

[AzDar]

6. I personally don't feel a bail-out is the answer. I'm having a hard

time wrapping my head around the concept of so many losing their homes in so short a time-frame, though.
Horrifying.

[azurnoir]

19. The reason is interest rates

We have an FHA first time home owner loan with an adjustable rate that has more then doubled in 4 years.Add to that most banks pushed people to buy homes they really could not afford (in that we were smart we went 60k less then what the bank said)and well you what's happening.

[bryant69]

34. I don't have a problem bailing out those who are going to lose their homes

I guess I misunderstood - we will have a similar day of reckoning with credit cards eventually - companies who choose to loan money to anything with a pulse - I have no sympathy for corporations who behave so irresponsibly. That said I do have sympathy for individuals suckered into this cruel system.

Bryant
Check it out --> http://politicalcomment.blogspot.com

[butterfly77]

64. How about a bail out...

for those with student loans?

[AZBlue]

83. If only!! That would be a beautiful thing!

In the meantime, I'd be happy if they just created oversight and regulation for student loans. Stop them from being able to raise your payment every couple of months (based on "your income" - is that my falling income you mean??); make them more accessible and have to assign you a "case worker" who will see the problem through to the finish and not just pass you back and forth between different offices who all say something different; have a local office in each state so you can actually go meet with someone face to face and get a solid answer; prevent them from engaging in predatory practices when they go after college students and make them explain anticipated payments before any paperwork is signed; and finally make them realize that you can't get blood from a stone!

:rant:

[peace13]

3. How about we put the lenders in jail

for making loans that were destined to fail? Maybe they can give the people who are losing their homes a new credit card.

[frankenforpres]

28. only if borrowers go too

no plasma TVs in their jail cell either

[peace13]

60. Yup, I hear you.

Unfortunately the borrowers have not had a Congress to pass all kinds of special perks for them...unlike the banking industry.

[benddem]

4. hell no

it was their stupidity that got them into this mess. But then I guess yes, we will. We bail out multimillionaires when they do stupid things but can't take care of old ladies with no health insurance.
:sarcasm:

[southerncrone]

5. Hell, No!

The lenders have already made out like the bandits they are! A program to help the homeowners is more in line with helping the victims.

We need to clamp back down on the usury tactics that are now allowed by the financial market.
There use to be guidelines that lenders had to follow when extending credit. They could not extend over 100% of the value of the home, nor could they lend to people who were not in a financial state that would allow them to make the payments. It sorta took care of both parties, & our economy.

I'm not sure when those regulations were changed to allow lenders to gouge their customers, but they need to be changed back. That is what has caused this disaster in the mortgage market.

[AzDar]

13. ...And perfectly timed to fall prey to the 'Bankruptcy Relief' legislation, too.

Bush/Cheney and their enablers have managed to screw the country in ways I'd never even imagined in 2000...

[southerncrone]

20. A long time in the planning, this little coup of theirs;

this must go back decades. I know G1 had 12 years to line things up w/Cheney, Rummy, & their ilk, but I suspect it goes back to the '50s. We are just "lucky" enough to have their planets align properly during our lifetime.

[Turbineguy]

7. The only way

the Rethugs will have it only if people still lose their homes. That will teach them some personal responsibility. Send a message. Then the bailout will go to the lenders who are dumping the houses at less than loan amounts.

Politically connected vultures can buy the houses for "no money down" financed by the same lender dumping the houses.

The people who lose the house can rent it and don't have to move.

It's what could be called a win-win-takeituptheass-takeituptheass situation. The second "takeituptheass"ee is the US taxpayer.

[southerncrone]

23. Yes, very likely.

Most of the "homeowners" who had these loans were not really making any payment toward principal anyway. So they were basically just renting from the lender with the "illusion" of ownership.
It's all about illusions & facades with this crowd.

Where DO these evil minds come from?

[Raven]

8. Who and what would you bail out?

The sub-prime lenders who are failing are failing because they made lousy, reckless loans to people who really couldn't afford the mortgages. They have already filed foreclosure proceedings on these unfortunate borrowers. So if the feds bail these lenders out it will be no help to the people who have already been foreclosed upon. I say let these predatory lenders go under, they shouldn't have been allowed to operate in the first place. And they set up a regulatory scheme that really polices this business.

One more thing: people taking out these crazy mortgages must have known they were taking a gamble. The old saying "if it's too good to be true..." applies here. Many people in this Country have gotten used to living on credit thanks, in part, to GWB and his "spend, spend, spend" attitude. This whole problem of people tapping the equity in their homes for things that should be affordable in the normal course (health care, education...) is an example of Bush's policies of spend now pay later and screw the little people.

[HamdenRice]

49. The sub prime lenders don't need a bailout, they have nothing at stake

Sub prime lenders are overwhelmingly loan originators, not actual lenders. They sell their loans and move on.

The buyers are real estate investment trusts and other forms of asset backed security issuers.

But many of the underlying mortgages are guaranteed by Fannie Mae, Freddie Mack and Ginnie Mae.

Therefore, there has to be a bailout. It's contractually already decided.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=410850&mesg_id=411175

[KamaAina]

104. And Fannie Mae and Freddie Mac are both already under clouds

Fannie Mae hasn't filed an earnings statement in over two years, while Freddie Mac has apparently been employing Arthur Andersen-style accounting for about that same time period.

http://en.wikipedia.org/wiki/Fannie_Mae#Accounting_scandal

Fannie Mae is the second-largest U.S. financial institution after Citigroup Inc. yet hasn’t filed an earnings statement since late 2004, even though required to by SEC regulations and New York Stock Exchange listing standards. Fannie Mae expects to spend more than $1 billion in 2006 alone to complete its internal audit and bring it closer to compliance. The anticipated restatement was estimated at $10.8 billion, however, after review resulted in $6.3 billion in restated earnings as listed in Fannie Mae's Annual Report on Form 10-K

http://en.wikipedia.org/wiki/Freddie_Mac#Investigations

As of 2004, Freddie Mac is under investigation for creative accounting practices that may have been aimed more at protecting figures than actually managing risk.

Ruh-roh, Rorge... :scared:

[Cobalt Violet]

9. No. n/t

[MadHound]

10. Should we, shouldn't we, doesn't matter, because the simple fact is, we can't

This isn't just a matter of bailing out a few sub prime lenders with a few, or few dozen billion dollars. The scope of this effects our major financial institutions(where the sub primes get their money), along with the entire consumer credit industry(which the average American cosumer owes an average of $11,000). It would take trillions of dollars to keep this collapse from happening, and we simply don't have that kind of money. And where are we going to get it? Not from China, not from US banks, not from those fine folks in the ME who hold a lot of our consumer credit.

Sorry, but we're screwed, and it could get very ugly. Sub primes topple over the big banks, the big banks topple over the consumer credit industry, the consumer credit industry brings our whole economic house of cards down. We all go boom.

Pay off as much debt as you can. Learn to grow and preserve your own food. Get ready for going back to basics. Strap yourself in folks, we're in for a really, really rough ride.

[AzDar]

14. All good points. n/t

[no_hypocrisy]

17. We ARE, for all extensive purposes, OUT OF MONEY!!

Get used to the idea . . .

[MadHound]

29. Not only am I used to the idea, I'm prepared for it.

One reason that I moved out to the country. Grow my own food, generate my own electricity. I have no credit cards. And I well remember the words of my parents who went through the Great Depression, that it is always easier to go through economic hard times in the country rather than the city. If I need food, I can either grow it or kill it. Both are hard to do in most urban areas.

[Cobalt Violet]

I wonder if I should take all my cash out of the bank.

I don't owe any debt to pay off or any stocks but I'm not sure what to do with my cash. I'm kind of naive about all this stuff as I have always been a cash person.

[MadHound]

32. I'm a cash person myself, and I haven't taken mine out

Wait and see what happens, you'll have warning before it all starts to crash. Watch the stock markets and economic news. That's the best way to keep on top of things.

If you have some spare cash, I might however suggest buying some good gold or silver jewelry or coins. When economic crisises hit, gold and silver goes a hell of a lot further than cash will.

[Cobalt Violet]

41. It's not really spare cash.

I've been trying to save up for when I start a medical treatment that may leave me unable to work for nearly a year. I have to have the cash available to use. There are many unknowns as far as when and if I will be well enough to hold a job during the treatment.


I hope I can read the warning signs if they are there.

[no_hypocrisy]

44. Problem with gold. Uncertainty whether government will try to

confisgate it like FDR did. Only "rare" coins will be exempt.

[MadHound]

56. Lots of ways to get around that, I know several of my parent's generation who did

And besides, they will never confiscate gold jewelry, utterly impossible to find it all, and people would raise too much of a fuss.

[gravity]

37. Leave it in the bank

You will get interest and its protected by insurance to $100k

If you are that worried, I would invest in gold, since it will retain value better in an event of a crash. There is no guarantee that cash will remain valuable.

[Cobalt Violet]

47. I'm very worried.

I have sacrificed a lot to be able to save. I am low income and it has been a big struggle to save anything at all. There is no safety net that will help me if I can't work once I start interferon treatment. I may be unemployed and unemployable for a year. The only thing I know for certain about money is if I lose this money I will living on the streets while being treated. I really dread seeing that happen.

[gravity]

51. It's still a lot safer to keep money in the bank

than to keep cash. If someone steals your money it would be just as bad, and is a lot more likely than the bank losing it. Even if they do lose it, it is insured by the government.

If there was a finacial crisis where you couldn't recieve your money from the bank, everyone would be living out on the streets, not just you.

[spanone]

11. SHIT NO. You take the risks, you pay the price.

So I would be penalized, thru taxes etc., for staying out of the real estate market? bullshit.

[AlCzervik]

12. absolutely not, if they go under it will be because of their own shoddy practices.

there is no way the taxpayers should have to bail out greedy snake oils salesmen.

[Richard Steele]

15. No. Howbait we bail out the CITIZENS who got screwn by these predatory sleazebags?

[MadHound]

22. No, sorry, but for the most part I have no sympathy for the idiots who chose this route

To finance their lifestyle. And the sad thing is, their egotistical, self centered, instant gratification driven stupidity could very well bring our entire economy crashing down, thus hurting all of us, idiots and the cautious alike.

Sorry, but in this age of instant gratification too many fools were willing to do anything to get their McMansion in the 'burbs right now, rather than waiting for it, working for it, and working up the ladder sensibly. Instead of buying a starter home, investing in it, improving it, and selling it for a profit in order to afford the big manse, these idiots tried to greedily get it all at once.

I have no sympathy for most of them, in fact I'm rather pissed at them. Because of their greedy self centered infatuation for fulfilling their need to have it all NOW, those of us who worked hard, done the right things, sacrificed, and are now in a nice house with a sound economic footing are going to suffer right along with the fools. They tossed responsibility and common sense out the window and we will all get to pay.

Fuck 'em! I have no sympathy.

[deadmessengers]

26. Thank you

I'm glad I'm not the only one around here that feels that way.

[Richard Steele]

27. Harsh. nm

[MadHound]

38. Life is harsh at times, sorry

I realize that there are people out there who've gotten caught up in this through no fault of their own. But if you are having to go to a sub prime lender, pay no money down, with an ARM, your good common sense should tell you that either you are buying a house way out of your league, or you simply don't have any business buying a house.

And I agree, the sub primes have their own burden of blame to bear, for pushing these things off like candy to kiddies. But still and all, it boils down to the simply fact that it is the individual who chose to follow this perilous route. Lack of common sense, and lack of foresight.

Harsh, yes. But the harshest part is the simple fact that this mess, caused by greed, self centeredness and the need for instant gratification, could very well send our entire country into an economic crash that would make the Great Depression look like the Roaring Twenties. And those of us who have been responsible, done the right thing, and used our heads for something besides a hat rack are going to feel the pain right along with the idiots who needed it all now. That's not only harsh, but also quite unfair. I have no sympathy for these people, and I'm just praying that they will only take themselves down, rather than all of us. Sadly, I don't think that's going to happen, I think that we'll all be sinking in a ship that these fools helped drill holes in.

[Richard Steele]

88. Yes, life is harsh. All the more reason for us not to be.

[frankenforpres]

30. I agree

no one forced them to take the loans. let them and their lenders suffer together

[southerncrone]

36. Sounds like you & I suffer the same plague, personal fiscal responsibility!

You are right; those of us who SAVED, DID NOT OVEREXTEND OURSELVES, & PLAYED BY THE RULES will also suffer. Where is our reward for keeping this economy afloat for this long! Without us, it would have fallen long ago.

Give a fool enough rope & he will hang himself. That's what these fools have done.:banghead:

[MadHound]

43. I spent two years homeless, out in the streets, and have struggled long and hard

Played by the rules, and managed my finances in a responsible manner. It burns me no end to think that because of ego driven idiots, I could lose it all right along with them and be out in the streets again.

But I prepare as best I can, for I've seen this coming for years. I have no debt excepting the mortage, I can grow my own food, I will be generating my own electricity this summer, and this fall will have a wood stove for heating, and I can hunt and fish still. Hopefully this is enough, but I fear a bank run like in the Great Depression. I'm only one generation removed from that, and heard the horror stories from my folks(one thing that made me fiscally responsible), and I really don't want to live through one.

[slackmaster]

73. It's a tough cross to bear, but some of us have to do it

I was unable to buy my own home until I was almost 38 years old. I'd been a full-time, productive member of the "working class" for more than 15 years by that time.

[southerncrone]

76. Enlightening story...

In 8th grade my daughter brought a friend home, she asked my daughter if we were "poor" because our house was "old". Our house was 10 yrs old at the time, & over half paid for. She lived in a newer, brick house that was smaller than ours.

These are the values that the kids are being raised on today. No wonder our country is in such disarray.

[pampango]

39. Rule number 1: It is always someone else's fault.

Rule number 2: Sue that someone else.

It is easy to see how borrowers will use rule #1. It will be interesting to see how rule #2 plays out.

[slackmaster]

33. Only ones who were not properly notified of the terms of their loans

They deserve a break.

[Tierra_y_Libertad]

16. No. They should follow Bush's advice and let private charities do it.

You know, like he wants them to take care of the homeless, the poor, the ill.

I'm sure United Way will step up to bail out the needy and downtrodden lenders.

[BootinUp]

46. I like your attitude. n/t

[Double T]

18. This is just the beginning, wait till the prime mortgage lenders.........

start to get in similar trouble. The government ('WE') can not bailout every corporation, nor should we. The Titanic is already taking on water.....

[slackmaster]

82. Some of them are already feeling the heat

Countrywide has taken a beating for the last several days. They've gotten themselves entangled with the sub-prime stiff.

[InkAddict]

120. Here's the trail....

Countrywide>Full Spectrum Lending>Bank of New York

[gravity]

21. There should be a bill against predatory lending

Sub prime mortgages are high risk for a reason, some are expected to fail. The borrower is taking a risk and can't always come on top.

Predatory lending is what exploits the borrowers.

[deadmessengers]

24. Nope. Greed shouldn't be rewarded.

On the other hand, the people who are going to get foreclosed on aren't getting any sympathy from me, either, because most of them were JUST AS GREEDY as the loansharks. I know a few people who are feeling the pinch right now as their loans adjust. The ones who are in trouble right now are the ones who overbought into McMansions they couldn't really afford. If they didn't do their due diligence before taking these absurd loans, well... caveat emptor.

When I bought my house back in 2000, I heard the same pitch from realtors that they did: "If you underbuy, then you're not going to be happy with your purchase". "Have you considered an ARM? You'll be able to get a lot better investment for your money!" They were trying to push me into houses that cost double and triple the house I ended up buying. Somehow, though, I still managed to say, "No, I've done my homework on this, and I'd like to look at houses in my original price range". Why the hell couldn't these people do that? They couldn't because they didn't WANT to. They were greedy. They were so blinded by the idea of having a bigger house for the same monthly payment that they didn't bother to do their homework and take a real look at the risks when making the biggest freaking purchase of their lives.

The realtors and mortgage scammers who sold them their houses and loans definitely bear a big chunk of the blame, but there's definitely plenty of blame to go around.

[frankenforpres]

25. HELL NO!

i dont believe in private profits and socialized losses

[slackmaster]

31. No fucking way!

The only thing the .gov should do is figure out how to regulate the sub-prime lending industry, to end its predatory practices.

[Atman]

35. Can't they get the money from Neil Bush and Silverado S&L?

How come anytime a Bush is in the government, we taxpayers are bailing out some failed stupid fucking financial institutions? Haven't 90% of us been saying this was coming for the last year, at least????

.

[Donnachaidh]

40. hell NO.

Let them go under.

They Knew what the hell they were doing. NO MORE CORPORATE WELFARE.

[HamdenRice]

42. In most cases, they already are committed to bailout

It's how the home mortgage loan system works.

As one lecturer once put it, everything you need to understand the home mortgage market is in the movie, It's a Wonderful Life. In that movie, there was the good "thrift" institution, Baily's S&L, and the evil commercial bank owned by Mr. Potter. The thrift actually depended on the bank as its own bank.

The problem with thrifts was that they could only loan as much money as they took in as deposits. Remember the scene during the "run on the bank" where George explains that he can't give back deposits because they're in Mr. Jone's house?

This was a big limit on the mortgage market. It was very local. So as part of the New Deal and on an even greater scale after the war, the federal government came up with a system to "nationalize" the scale of the mortgage market.

George Baily could "sell" his loans on a national market in batches. But to make investors want to buy, George would go to Fannie Mae (Federal National Mortgage Association) and get a federal guarantee on a "package" of mortgages and sell the package. Now George had more money to make loans.

This turned small banks into "originators" of loans rather than actual lenders. Eventually even tiny companies specializing in mortgages could act like banks, as long as they acted as "originators" rather than lenders. Some got into the "sub prime" market by coming up with the technique of "over collateralization".

The problem is that the system relies on the federal guarantee. So as the crisis progresses, the federal government will be called on the make good on the guarantees, ie bailout the system.

[BootinUp]

45. Hell no!

The people who financially backed those loans should have known the risks. I would be very pissed off if my tax dollars are used to prop up risky investors.


edit:There sure are a lot of hell no replies! lol.

[HamdenRice]

48. I guess almost no one on DU knows how the home mortgage market works

It's amusing reading this thread.

First of all, so called "sub-prime lenders" have nothing at stake. They have passed the risk of default onto other investors.

Moreover, the ultimate investors of course will be bailed out because it was part of their initial investment agreement.

[jannyk]

54. that's odd - because on Bloomberg the other day I heard

that if the borrower defaults, even though the SB lender has sold the loan onward, they then have to take it back. Are you saying the 'expert' on Bloomberg was wrong?

[BootinUp]

69. An agreement to be bailed out?

got any source for that?

[slackmaster]

74. I thought securities backed by sub-prime mortgages carried high risk

Much as "junk" corporate bonds. Fannie Mae and Freddie Mac aren't allowed to touch them.

http://knowledge.wharton.upenn.edu/article.cfm?articleid=1664

Fannie Mae and Freddie Mac, the quasi-governmental lenders, had long sold mortgage-backed securities, but these companies were restricted to making prime loans. Once other lenders realized money could be made from subprime borrowers, they began bundling these loans into securities. "What happened in the middle 1990s was the development of private-label mortgage-backed securities, as opposed to these quasi-public enterprises which had implicit government backing," Wachter says....

...Most experts believe securitization generally works to reduce risk in the marketplace, because easy trading of these securities allows lenders to pass risk to investors who feel able to shoulder it. It is widely believed that hedge funds are among the major investors in securities based on subprime and other aggressive loans, but no one knows for sure.

Securitization, says Guttentag, "does diversify the risk," but, he adds, "We don't have any good data on who exactly holds those securities."

One of the largest subprime players, HSBC Holdings, announced early in February that bad debts had exceeded a staggering $10.5 billion in 2006, sending shivers through the industry. "What other cases are out there like that?" Wachter asks. "We don't know."...

I have a friend who works in Collections at HSBC. I should give her a call and see how things are feeling.

[jannyk]

50. No! nt

[Geek_Girl]

52. Even though this could hurt the stock market I say no

They're the reason why housing cost are so high. They did this to themselves. I don't want my tax dollars bailing them out. Let the chips fall and we'll just have to deal with the mess.

[Horse with no Name]

53. No.

Bail out the homeowners...not the lenders. The mortgage brokers will take the fed money AND the houses and people will still be in trouble.
Make some type of forbearance loans available to homeowners so they can come up with a payment they can afford.

[MadHound]

55. Sorry, but no, I don't believe in rewarding stupidity and greed

And that's exactly what led so many of these people to take out these loans, stupidity, greed, the need for instant gratification, and self centeredness. They wanted it all now, and went about getting it all by any means they could. Rather than going through the neccessary work of purchasing a starter house, investing in it, and finally selling it for a profit in order that they could move up, they decided to get it all on credit, with no effort on their part. Now they're having to pay the price, and frankly I don't think that we should bail them out. If that sounds harsh, so be it, but life is harsh sometimes. That's why it is best to follow the advice of experts, and those who know better than you do, rather than grabbing with both hands.

The sad thing is that their stupidity could bring down our entire economy, all of us, and we'll be suffering right along with the fools.

Yes, I realize that there are those people who did get caught in this through no fault of their own, and for those I feel sympathy. But the overwhelming majority of these people let their greed rule, and now have to pay the price. Hopefully they'll learn from this and choose wisely in the future.

[Horse with no Name]

57. And some were driven by desperation

Sorry. I think that many of these folks may have started out wanting hamburgers and the mortgage brokers talked them into steak.
Also, people who had good jobs when they purchased the homes may have ended up with service jobs.
We simply should NOT punish the ones who tried to play by the rules but were instead blindsided by job loss or someone who heavily persuaded them to bite off more than they could chew.
There are those that were greedy. No doubt about that, however, I would rather give them a chance to make it right than to take the opportunities away from the well-meaning.

[MadHound]

58. Sorry, but I don't see it that way

I've been desperate, I've been homeless, I've been poor. And frankly, the number one rule in this situation is if at all possible, don't make your situation, either now or in the forseeable future, worse than it already is. And frankly, if you are looking with a cold, calculating eye at sub primes and ARMs, you would realize that these lending practices would do just that, put your future in a very precarious situation.

And if a person had a good job in the beginning, then why in the hell are they getting a sub prime or ARM? They could have easily qualified, especially during the boom/bubble years for a fixed rate:shrug: Besides, I've worked service jobs all my life, and I could afford a house. Granted, it was a modest one, 900 sq ft. But the payment was low, and it allowed me to work my way up to a bigger place. But it seems that too many people don't want a smaller house, they want to keep up with the Jones, get that McMansion out in the Dales. Thus, they go way beyond their budget and their good common sense.

And frankly, I don't believe in that it is somebody else's fault when somebody allows themselves to be talked into stupidity. You can always say no, get up, walk out. It is that simple. Yes, I've dealt with many, many pushy salespeople of all sorts, and I've never had a problem in saying no, getting up, and walking away from the deal. Yes, these mortage lenders and the like can be overbearing, pushy, etc. They are simply doing their job. It is up to you, and you alone to look out for your own interests in these situations, and you, not anybody else, has the final authority in this matter. If you are of the personality type that finds this sort of thing hard to do, take a friend or family member with you. Or simply say that you wish to think about it, give yourself some time, and then make the call. You are supposed to take your time with a home purchase, it is the biggest investment that most people make in their lives. Therefore you take your time to get it right, don't impulse buy like it's candy at the checkout counter. But it is disingenous to blame somebody else for their own actions, their own stupidity and greed. They ultimately had the final authority in the deal, it was their call.

And sorry, but bailing these people out isn't just giving them a chance, it is rewarding their stupidity and greed. I find that hard to swallow, especially since it is starting to look like their foolishness could bring it all down for all of us.

[deadmessengers]

61. "No"

First of all, we're not talking about people who got hit with job loss here. Unemployed people can lose their houses regardless of whether they overbought, underbought, financed with a fixed-rate mortgage or one of the greed-driven gimmick loans that are threatening to bring down our entire economy. For that matter, unemployed renters end out on the street, too. It sucks, but it's a completely separate issue.

The thing is, those people who are now in financial trouble had the most powerful tool imaginable at their disposal, but they chose not to use it. That staggeringly powerful tool is the word "No". That's the only word they needed to say. No one had a gun to their head making them take those loans out on houses they couldn't afford otherwise. No one was making them overbuy into McShitboxes. They could have said "no" at any time, but they chose not to.

As far as the "heavily persuaded" argument: I'm sorry, but these are adults we're talking about, not impressionable children. I heard the same sales pitches, and I actually used my extremely powerful tool ("no") on more than one realtor and mortagage broker who tried to steer me into one of these financial trainwrecks. One even told me that I was wasting his time trying to buy a house worth $X when I could afford a house worth $3X. No problem - I told him to go to hell and found an agent that was willing to work within my parameters.

There's a saying: "You can't cheat an honest man". These people got cheated, but they did so in an incredibly transparent and well-regulated market. They got cheated because they were just as greedy as the realtors and mortgage brokers. They thought that by financing into an ARM, they were going to get something for nothing, and they got screwed as a result. I'm not going to absolve them of blame just because they're individuals. They didn't do their due diligence, they gambled, they lost. C'est la vie.

[porphyrian]

59. Fuck the lenders, bail out the citizens. - n/t

[deadmessengers]

62. Why should my taxes bail out someone who bought a McMansion? n/t

[porphyrian]

77. Because they aren't your taxes, they're every Americans'...

...and only a small percentage of the people who will be hurt by this are "McMansion" buyers. What the fuck, do you go to republican night school or something? A few assholes abuse the system, so fuck all the poor?

[slackmaster]

86. Most McMansion loans are not sub-prime

They're jumbos; not conforming like standard loans, but a typical sub-prime borrower isn't living in a ridiculously large house.

[MadHound]

66. No, let's not bail out the citizens. It was, for the most part, their own greed and stupidity

That got them in this mess, why should we reward that greed and stupidity by bailing them out? With my tax money? When their greed and stupidity could very well sink this economy, and all of those of us who have been fiscally responsible? Hell no!

Sorry if that sounds harsh, but these people got into this mess because they wanted instant gratification, that McMansion on the hill, now, rather than first purchasing a starter house and working their way up to something bigger. They didn't take the time to educate themselves on what was most likely the biggest investment in their lives. Rather, they decdided that they wanted it all now, by any means neccessary, and went with a sub prime loan, an ARM with no money down, and now they're getting burned. Oh well, everything is a learning experience, hopefully they'll take this lesson to heart.

Meanwhile, their stupidity and greed could well bring down our whole economy, causing grief and pain for all of us, those who were fiscally responsible and those who were stupid and greedy. If we reward the stupid and greedy now by bailing them out with our hard earned, fiscally responsible tax dollars, who's going to bail out those of us who will truly lose everything we have through no fault of our own? Those of us who worked their way up, watched their pennies, and didn't grab with both hands? Who will bail us out? Those who we bailed out? Doubtful, they won't have any money.

There comes a point in time when you stop throwing good money after bad. This is one of those times.

[porphyrian]

79. You really think all sub-prime mortgages went to "McMansion" buyers?

What the fuck country do you live in? I know people, definitely of the sub-prime variety, who have third mortgages out just to get by, and they don't live in fucking mansions.

[MadHound]

90. No, but I do know that many sub primes went to McMansions

To the tune of 416 billion dollars in 2005. All for the purchase of a vanity house. That's huge, that's aprox. forty percent of the mortages taken out annually. That's a whole lot of stupidity friend.

And frankly, even if they're not going to buy a McMansion, buying any house with a subprime, ARM, no money down loan is foolish and stupid. If you can't qualify for a regular loan, that's a good sign that you probably shouldn't be getting into a house at this point in your life:shrug:

As far as the folks with three subprimes to just get by? They too are being foolish. They're never going to get out of the hole they're in, they will probably lose their house at some point, and frankly, they should have waited to get into a house until matters were more suitable to them.

[porphyrian]

91. So you only have compassion for people who don't make stupid decisions.

That's very white of you.

[MadHound]

93. Big, foolish, preventable, stupid decisions, no, I have little compassion for those people

What's the old truism, if something is too good to be true, it probably is. ARMs, subprimes, zero down are all sucker's games. If these people had done a little, just a little research, used a little, just a little common sense, then they wouldn't be in this fix. Instead, they got greedy, they got stupid, and they grabbed with both hands. And now, not only are they going to pay for their greed, but it is increasingly looking like we'll all be paying the price with them. For the subprime lenders can bring down the prime lenders, which can start eating away at the consumer credit market(another piece of stupidity that too many foolish people jumped into with both feet), and when that goes, our whole economic house of cards comes tumbling down, taking the good, the bad and the ugly with it. No, I have no sympathy for those who displayed stupidity and greed in their borrowing decisions. I'll reserve that for those who made wise decisions, played the game like it sensibly should be played, got ahead through hard work and foresight, and yet now are going to get burned anyway due to the greed and stupidity of those who grabbed with both hands.

And it's not like this is rocket science. If your mortage payments are going to take up more than a quarter of your monthly budget, then you should look for something more in your price range. If it is zero down, realize that now you're going to have to be paying back your normal downpayment also, with interest. Better to save up for that downpayment, get better points on your mortage and start with a little equity in your new home. If you are looking at an ARM, realize that while interest rates are low now, they will indeed rise in the future, probably the near future, and you will be screwed. If you are buying a house in an overheated market, perhaps you should look elsewhere or wait until the market cools. Otherwise you're going to wind up paying for a house that is grossly overvalued, and it will be a long time, perhaps your lifetime, before you get your money back out of that house. And finally, if you're having to go to a subprime lender to get a mortage, don't. Suck it up, put off buying a houe until your finances and credit rating are able to pass muster at a prime lender. Otherwise all you are doing is playing a fool's game, and you will get burned.

Hell, a person with a decent high school education can figure this out. But lots of people these days want the American dream now, and they aren't willing to invest the time and effort to get it. Instead they try taking shortcuts, putting everything on credit, buying a house with a zero down, ARM, figuring that as long as they can make the current monthly bills, all is well and they've got it made. They don't plan for emergencies, or when the interest rates rise, or the housing market goes bust, instead they simply live in the present, leaving the future there until it all comes crashing down around their ears.

Sorry, but the fault lies with the individual. They can always say no to pushy lenders, they can always defer that gratification until later, they can actually go through the work and process that people normally go through in order to get the big house out in the 'burbs. But many don't, and they whine about how they were fooled, pushed or duped. Sorry, no sympathy, especially when they're foolishness could very well cost me my dream when our entire economy collapses.

And please don't assume that I don't know what I'm talking about, or that I have no clue as to what these people are going through. I started out my adult life homeless, living on the streets for two years. I've been poor most of my adult life. But buying using my own common sense, asking for the help of others who were more knowledgeable than I, working hard, saving money, putting of instant gratification, I now have the house that I want, with twenty acres out in the country. It took me twenty years to achieve this dream, and I had to start out small, a trailer that I bought cheap in order to save money for the down payment on my first house. I moved my way up to a small starter house that I invested time and money in to improve so that I could realize a profit from selling it. And finally here I am. Twenty years, not overnight, not instant gratification, twenty years. And I didn't fall for the ARMs, subprimes or all that shit, because I knew it was a sucker's game for the greedy and stupid, both of which are preventable.

Why should we reward such stupidity? Do you reward a child or pet when they've done something stupid? Of course not, you let them learn from their mistakes and move on. Same with these people. Life is harsh sometimes, that's just the way it is. And if you reward somebody's stupidity, more than likely they'll go out and do it all again, because gee, somebody bailed out their sorry ass before, they'll do it again.

Besides, where in the hell are we going to get all that money to bail these fools out? If you hadn't noticed, Bush has pretty well bankrupted this country, and we simply don't have the money to do so. And please don't suggest that we raise taxes or some such in order to pay for it. Not my taxes friend, I will refuse to pay for other's greed and stupidity.

[porphyrian]

94. You are paying for others' greed and stupidity now.

I suppose you have no compassion for yourself, either.

[MadHound]

96. I suppose that you have no way of clearing that comment up just a wee bit do you?

I realize that in many small ways I am paying for other's greed and stupidity, and also their simple bad luck and horrible circumstances. That I have no beef with. However when the greed and stupidity of a group of people is threatening to bring down our entire economy down about our heads, no, I have little compassion for such fools.

As far as having compassion for myself, I have that. I also have compassion for the homeless, the hopeless, and those less fortuanate than I. In fact I give much back to the community, both in time and money, in this regard, for I remember where I came from and how the least bit of help could be a blessing.

But when somebody allows greed and stupidity cloud their common sense, no, I have very little compassion. I suppose that we'll have to agree to disagree on this one:shrug:

Peace:hi:

[Name removed]

98. Deleted message

Message removed by moderator. Click here to review the message board rules.

[MadHound]

99. You very, very quickly come to the conclusion that I lack compassion

You know nothing about me, very little about my background, and smaller yet, what I lack or not in the way of emotions. You are merely hurling insults due to your lack of agreement with myself over on specific issue. Rather disingenous of you, don't you think? Why not try to get to know the entire person better before making such accusations? Oh, that's right, it serves your own self interest more to hurl an insult and run rather than taking the time to get to know people. Fit them into your own predetermined category and go, that's you.

You would probably be in for a very rude awakening if you actually bothered to truly know people. Sorry, we don't all fit into your preconcieved notions.

Oh, and rather than hurling insults, which I've yet to do with you, why not actually engage on the issues? Yeah, that's true, ad hominem attacks are the last refuge of the morally bankrupt and intellectually destitute:eyes:

[porphyrian]

113. I'm basing my observation on your posts here.

If you don't like what you sound like, think a little longer before you spout off.

[MadHound]

123. Me, spouting off? That's rich friend,

Especially given your history in this thread.

Again, why do you insist on personal attacks rather than dealing with the issue? Do you honestly think that we should reward those who have chosen to live beyond their means, taking on a risky mortage that will quickly get beyond their control? Do you think that we should bail out those who have chosen to be greedy and stupid, especially since it will come at the expense of those who have be prudent, wise, and successful?

Please, let's try to do this without the personal attacks, OK.

[porphyrian]

127. Cry all you want, but I'm going to call you on your lack of compassion and hypocrisy.

Let's talk about name-calling and personal attacks:
"It was, for the most part, their own greed and stupidity" - you
"When their greed and stupidity could very well sink this economy" - you
"their stupidity and greed could well bring down our whole economy" - you
"they got greedy, they got stupid," - you
"a sucker's game for the greedy and stupid" - you
"Why should we reward such stupidity?" - you
"other's greed and stupidity" - you
"I am paying for other's greed and stupidity" - you
"when somebody allows greed and stupidity" - you

I suppose it's OK to call people names and make personal attacks as long as you do it in the third person, huh?

Now, let's address your compassion, which you decided I was making a personal attack by pointing out (and apparently a mod agreed):
"I have little compassion for those people" - you
"No, I have no sympathy for those who displayed stupidity and greed in their borrowing decisions." - you
"Suck it up, put off buying a houe until your finances and credit rating are able to pass muster at a prime lender. Otherwise all you are doing is playing a fool's game, and you will get burned." - you
"Sorry, but the fault lies with the individual." - you
"Sorry, no sympathy" - you
"I have little compassion for such fools." - you

So don't give me your bullshit about how compassionate you are when you're fucking telling me how little compassion you have.

Who in the fuck ordained you the one who gets to judge that everyone who made this bad decision did it because they were stupid and/or greedy? If I were to hear someone say that, I would call them an incompassionate thick-headed fuck, but that's me, friend.

[MadHound]

129. Why else would one put themselves into such a position?

Why would anybody, other than stupidity or greed, or lack of common sense, set themselves up to be screwed over by a subprime lender, ARM, zero downpayment arrangement? The person has the capability of saying NO. They should have made themselves familiar with what these sort of lending practices fully entailed. They could have waited and worked towards getting more favorable lending circumstances, like from a prime lender with a fixed rate. They could have moved somewhere where the housing market wasn't such an overheated mess.

So why else would somebody take out one of these damn mortages? Please, explain.

[porphyrian]

130. You can't understand everyone else's reasoning, so it must be stupidity or greed?

Simply brilliant.

[MadHound]

132. Then enlighten me oh wise one!

Why else would somebody subject themselves to a subprime ARM with zero downpayment? What other reasons could there be?

[porphyrian]

133. Don't try to use me to justify your lack of compassion.

Figure it out yourself.

[NashVegas]

101. I'll Make a Deal With You:

If home prices come back down to where they were eight years ago, so I can afford a mortgage, I'll have all the compassion in the world.

[porphyrian]

114. I'm not interested in making a deal with you. Lack compassion all you want.

Just don't bitch if I point it out.

[InkAddict]

121. Sorry to join your semi-private conversation, but I have a

real question for you Madhound. You say you have compassion for the few that found themselves in "horrific" circumstances versus no sympathy for "flippers" and the like. How would you propose to sort out which ones would be deserving of assistance?

For some here, I imagine it is hurtful to be lumped into your category of greedy, stupid, and looking for the easy money NOW! Some just found too much on their plate with unstable employment, providing that well-rounded education for their families, and caretaking elderly parents. Not exactly easy tasks to handle.

How are you coping with the high gasoline prices since you are out in the countryside? Do you telecommute? Are you now retired? Are you worried at all about the possibility of the corporatists practicing some "eminent domain" in your neck of the woods?

Remember the Sunscreen Song: "Don’t worry about the future; or worry, but know that worrying is as
effective as trying to solve an algebra equation by chewing bubblegum. The real troubles in your life are apt to be things that never crossed your worried mind; the kind that blindside you at 4pm
on some idle Tuesday."

Back to the debate!

[MadHound]

125. Frankly I find that question pretty darn easy

Anybody who takes out an ARM, a subprime mortage, with zero downpayment, is playing a sucker's game, and should know it and avoid it. I know, everybody wants the American dream, but sometimes you have to defer that dream until it makes financial sense to persue it. Your credit score isn't a static thing, and you can change it to the point where you don't need that ARM from the subprime lender. Be patient, put the work needed into getting your credit up, and though it may take a while, you too will get a house on financial terms that make sense.

As far as what I'm doing about high gas, well this is what I commute on.

A Bajaj scooter, cruises at fifty five mph, gets 100 mpg. I'm also seriously considering getting some sheep to mow the lawn, already have a biodiesel powered tractor, and am putting up a wind turbine this summer.

I fully realize that people get blindsided by events beyond their control. But walking into an ARM, subprime, zero down mortage that eats up more than twenty five percent of your monthly income is playing a suckers game, and you're the sucker. Wait, be patient, do the work needed, and choose a cheaper property to start with, this is what will get you a fixed rate mortage, and prevent you from being blindsided by rising interest rates.

[laylah]

63. Absolutely NOT!

We are still paying for Neil Bush and that debacle!

[IanBean]

67. Free market sorting itself out

Some thought they could make a lot of money by ripping off poor people, now they're gonna learsn their lesson.

[PhilipShore]

68. How about forgive the debts...then close down the banks

that abused the process -- to take advantage of the homeowners.

I am not a lawyer; but I have been doing some research into at least of one of these banks, and research into a mortgage company Insurance company owner in Miami, and they are all crooks and thieves.

The Insurance companies -- and the banks involved should be shut down, because they are full of Enron like corporate swindlers.

[Skidmore]

70. With what money? The federal government is teetering on a mountain of IOUs

as it is. Shall we make it worse? Bad money after bad is not a solution.

[malaise]

71. Let Bushco stay the course

The Rethugs won't be allowed near government for two decades. The only way Americans will wake up is when Bushco's economic policies bite hard. WHen this scandal blows up, the people will remove Bush. A New Deal is coming. The corrupt banks will be going down with Bush.

[AzDar]

136. I like the way you think. Perhaps it will take such a tremendous domestic

blow to make people understand...Republicans are WRONG!!

[ComerPerro]

72. It sounds nice, but it takes responsiblity from the lenders

why is it that conservatives, supposed champions of the free market, always want to cut all of the risk out of doing business, but keep all the rewards?

[Sapere aude]

75. That reminds me of the bail out of the S&L's. They were aloud to invest in high risk ventures and

lost. We had to pay their losses while the owners of the S&L's kept their wealth. I did not like that deal at all!

[slackmaster]

80. That's pretty much what it would be

My then-wife and I lost four jobs between us during the years 1990 and 1991 due to the S&L debacle. The shutdown of Great American Bank and Home Federal Savings and Loan cost about 6,000 jobs in California and Arizona. Add Lincoln Savings (biggest financial hit) and several others, and we saw about $20 billion go down the tubes just in my state.

I personally lost about $11,000 in S&L stock that became worthless almost overnight. The top managers (personal friends of Ronald Reagan BTW) made out like bandits.

We were unable to buy our own home until late in 1994 in spite of having good careers and earnings potential.

Ah, the memories. :argh:

[Lone_Star_Dem]

78. No!

The should be banned from the lending business for their foolish practices if anything.

[tammywammy]

81. NO

[Solo_in_MD]

84. Originators or the purchasers of the loans

The answer is more subtle than many realize

[slackmaster]

85. Having worked in mortgage-related industries I do understand it

The purchasers of securities backed by sub-prime mortgages basically are holding junk bonds. They bought risky instruments and don't deserve to be bailed out, even though it will be painful and cost thousands of people their jobs, and great loss of equity as companies take losses or file for bankruptcy.

[Solo_in_MD]

87. There is also the repurchase clause...

which many people are unaware of. The originatior of the loans often accept such a clause when they resell them to "more respectable" institutions. Right now the loan buyers are trying to enforce them and the originators lack the liquidity to honor the clause. That effectively transferred the risk. Up until now, the new loan owners treated them zero risk due to the repurchase clause. They will now have to restate their own risk positions. It could be the start of a domino thing...

Mortage Industry and serious shooter/defender of gun rights...makes for an interesting combination

[slackmaster]

89. I'm growing a whole bunch of garlic this spring too

A few specialty varieties, and seeing if my conditions are good for producing sets (small bulbs that commercial growers plant).

I have to keep a lot of interests going to keep my mind plastic.

[Blackhatjack]

92. If you believe in putting sub-prime borrowers in jail, try this little experiment...

Pull out your own Mortgage Documents and Your Credit Card User Agreement, read it through in less than 15 minutes, and tell us if you fully understand each provision and the possible consequences for being late in making a payment, the rights of the issuer to change the terms of the agreement, etc. THis is basically what happens when a sub-prime borrower closes on their home loan.

Sub-prime borrowers have the same basic needs of other people. They need a place to live, and a source of borrowed funds to meet emergencies like medical care.

However, just because they are sub-prime borrowers, that should not give lenders the right to financially devastate them with onerous provisions that raise rates sky high, impose huge fees, and make it almost impossible for borrowers to refinance into a more reasonable lending situation.

IT is all about the greed and willingness to exploit those least able to fight back, to fatten the wallets of those lenders in this business. There used to be laws against 'usury' which is defined as the charging of unconscionable interest and or fees on money loaned.

Even states that have passed consumer protection laws to rein in these despicable practices have been preempted by federal laws that allow these practices to go on anyway. It happened here in North Carolina.

We surely do not want to 'bail out' the sub-prime lenders, for the bad loans they made.(They also made the obscene profits!). But we do need to 'bail out' borrowers stuck in these unconscionable loans and make it possible for them to keep their homes under more reasonable terms. Everyone would benefit from this, except those who were intent on profitting from their egregious business practices.

If this does not happen, you will see up to 2 million homes thrown onto the existing housing market, that will be sold at huge discounts and drag down sales and sale prices of other homes already on the market. It will reverberate throughout the economy as building starts will fade even more, jobs will be lost, and suppliers to the housing industry will suffer. Stocks and investments will suffer, and credit will be contracted for even prime borrowers.

Sometimes helping the less fortunate is just good business for everyone else.

[MadHound]

95. Umm, no, this is not how the deal goes down

The subprime borrower has days in which to review the agreement before hand, consult with those whom they trust, and have the agreement explained to them in non technical language. This is the law in most if not all states. It isn't a quicky railroad job.

And just because they are subprime borrowers doesn't mean that they're any more stupid or gullible than those who borrow at the prime rate. Common sense isn't an exclusive property of well off or even middle class, everybody should and does have some. What it does mean is that these people lacked patience to go through the process in order that they qualify for a better loan. Instead, they wanted it all now, rather than doing the required work and sacrifice needed to make it their on reasonable terms.

And frankly, why should we bail them out with our tax money, rewarding them for their stupidity and greed? What's to say that not having learned their lesson, these people will simply go out and repeat their stupidity once again? In addition, where the hell are we going to get the money to bail out either the lenders or borrowers? If you hadn't noticed, this country is broke, and frankly we don't have the hundreds of billions of dollars that such a bail out would entail.

I agree, we're all going to be in for a world of hurt, no matter what happens. That's simply one more reason why I'm much less inclined to bail these people out. It was their own stupidity and greed that got them in this mess, and now it is threatening the economic well being of everybody in this country, including those of us who used our heads for something besides a hat rack, who worked hard and used our common sense. Since we might just be paying the price right along with the fools, I'm much more inclined to reserve my money for my own self preservation, or that of my friends and family, rather than bailing out those who let their greed guide them. If that sounds harsh, so be it, but there it is.

Any twelve year old with common sense can tell you that when somebody is promising you the moon and the starts, you better watch out because you're about to be royally screwed. Yet these people seemed to have less common sense than a twelve year old. I have little sympathy for them.

[sandnsea]

97. Well this country always sides with the predator class

So I wouldn't worry your beautiful mind about helping people who were just trying to build some equity in their future.

[MadHound]

100. Another one who would rather hurl insults than engage on the issue

Not suprising from you. Sad, but not suprising.

[sandnsea]

102. Hey, you dumped on the "greedy and stupid"

Not me. You chose to take the side of those who would cheat decent people out of their money. Don't come pissing on me because I called you on your lack of common human decency.

[MadHound]

103. One question for you

Do you think that it is the right thing to do to bail out those who chose, freely and of their own voalition, to live well beyond their means?

[sandnsea]

105. Why do you choose to believe the worst of people?? n/t

[MadHound]

107. It is called living in the reality based world

If you are looking to go to a subprime lender, get an ARM, with zero downpayment, then the odds are pretty heavy in favor of the fact that you really can't afford the property that you're interested in buying. Thus, you are aiming to live beyond your means. The tried and true rule of thumb is that if a mortage payment takes up more than a quarter of your monthly income, then that is beyond your means and you should scale back on the price of the house that you're considering buying.

Now then, will you answer my questions that I posed above, or will you continue to dance around the topic in a vain effort to avoid reality?

[sandnsea]

108. McMansion Owners Are Not The Majority

That's the reality based world. The odds are that the person getting a zero downpayment ARM is a young couple just starting out who sees rent and property prices skyrocketing and is afraid of being homeless in 5 years if they don't lock in a monthly payment.

I don't dance around anything. Ever. I know that 90% of US households are living on less than $80,000 a year. They aren't McMansion owners. I don't know where you got the idea that the majority is doing anything but scraping by.

[IanBean]

111. The majority are people living above their means

simple as that, some had McMansions, some had mansions, but almost everyone had a place they had no way of actually affording.

[sandnsea]

112. Bullshit

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x24257

The Mobility Agenda finds that over 40 million jobs in the United States — about 1 in 3 — pay low wages ($11.11 per hour or less)

You put two $11 an hour jobs together and you've got just enough to qualify for one of these loans. The majority of people in this country are hanging on by a very frayed thread. You did note that Neiman Marcus sales are up, those are the McMansion owners. They're fine. They're the ones becoming millionaires through exploiting everybody else, like selling the houses and ARM loans to the people they knew could barely afford them. And you want to punish the people who were already exploited. Gads.

[IanBean]

115. Do the math

mortage calulator are out there.

A person earing 1800 a month (11/hr) without an extravagent car could afford a 90 Grand home loan. These homes are out there. Of course no one wants to live in these homes so they get a house they can't afford, driving up housing prices, thus making homes more unaffordable, until we get to the situation we have now, which is people discovering they have been living above thier means for several years, and lenders discovering they have been financing a bubble that is about to burst.

[sandnsea]

116. $23,000 a year can't GET A LOAN

If you think they're the ones driving up housing prices, when the most they could afford would be $600 a month which barely covers a $90,000 loan, then I'm with Obey on too many people smoking too much shit. And by the way, there are literally NO $90,000 homes where I live. I don't think there are any west of the Rockies. I can't find one in my town for less than $150,000 and that would be a 900 sq ft 2 bedroom dump.

[IanBean]

117. see for yourself

http://mortgage.alloptions.com/mortgage-qualifier-calculator.asp


a couple making a combined income of 40,000/ yr, with 3000 cash on hand and a modest car payment and modest credit card payment are able to get a home valued at 125,000.


Can you get a house for that price, sure, it depends where you live. Your town seems pretty expensive not everyone can afford to live there. I found this website.

http://www.mouse-house-tour.com/results.php?inState=AL


first ad is a 3 bedroom for under 100 G. Seems like this couple could have some money left over to remodel. Probably not the best location but then you get what you pay for right.

[sandnsea]

119. $11 an hour?? West of the Rockies??

You've changed your tune.

I originally said it was NOT people buying McMansions who were going to be in trouble with these loans. It was the low-income couple putting their $11 an hour together. That's what *I* said.

What, are you now pretending these people are the McMansion owners???

[IanBean]

131. ..

if they get a house for more than 125 G, then they are buying a house they can't afford, kinda simple huh?

Get real.

[MadHound]

124. I've never said that the majority were McMansion owners,

You're reading waaay to much into my posts. In fact I've said just the opposite, but darn those facts:shrug:

But one doesn't have to purchase a McMansion to live beyond one's means. Let's take that young couple just starting out. They have the choice between a property whose mortage payments would cost twenty five percent of their monthly income. The trouble is this property is in a marginal neighborhood, not a slum, but on the edge of the inner city which has lots of crime passing through and rubbing off in the neighborhood along the way. This neighborhood also has the distinct prospect of becoming gentrified in the relatively near future, thus increasing their property values. They also have the option to buy a property, in a much nicer neighborhood, but the monthly payments would take a forty percent bite out of their monthly income. Which should they take?

Let's say they take the nicer, more expensive property. They're now locked into giving up forty percent of their income every month, and possibly more in the future, since this is an ARM. Bad, bad decision, one that is setting themselves up for failure. Especially since they could have gotten a fixed rate for the cheaper property. This is what I'm talking about when I blast people for being greedy, stupid and living beyond their means. The price of the house doesn't matter, the question is how big a chunk of your monthly income are you givingup, and what are the particulars of the deal. It is these people that I feel no sympathy for, the ones that walk willingly into a financial trap that is set up for their failure. This is true for those scraping by, and those looking at McMansions, the same principle applies.

And frankly, if they're getting into a bad house deal in order to escape a rising rental market, that's great, if they can afford the house. If they can't afford the house, then they have two choices, either ride the rental market or move. There is no way in hell that I would ever live in an overheated housing market such as San Francisco, LA, etc. You're just setting yourself up for a fall:shrug:

It's all about using your brains and your common sense, not rocket science. And if you willingly put yourself into a situation that is a set up for failure, then I do not think that we should bail out people from the consequences of their own stupidity. Your hypothetical couple has two heads to put together, why didn't they use them? Sorry, but rewarding stupidity is counterproductive.

[Blackhatjack]

110. Sorry but you have no idea what you are talking about ...

and if you think it is appropriate to condone the practices of sub-prime lenders because sub-prime borrowers were too stupid to protect themselves, then there is a good likelihood you are a Republican in your beliefs regardless of what you call yourself.

Egregious practices are always wrong. Sub-prime borrowers as a class are exploited because they have fewer options.

And in case you did not know it, many sub-prime lenders are actually owned or are arms of prime lending institutions who are banking the ill-gotten gains.

IF sub-prime lending practices are so good, why don't millionaires and everybody else get the same deal as they do? Would you like to pay your mortgage and credit obligations under the terms they are offered? If not, then you admit they are treated differently, and your argument that they deserve what they get just does not hold water.

[MadHound]

126. Nowhere have I condoned the practices of sub-prime lenders

I think that they're scum of the earth. Having said that though, it is pretty damn obvious that they are scum of the earth, and thus borrowers should avoid them like the plague. Instead, people become impatient, greedy, and stupid, and sign right up for that subprime ARM with zero down. That is a sucker's play friend, and such stupidity shouldn't be rewarded.

And yes, I know that many subprimes are corporate partners of prime lenders, how is that germaine to the conversation?

And please, please read for comprehension friend. Nowhere have I said that subprime lending practices are good, in fact I've said just the opposite, that they're horrible and should be avoided at all costs. My arguement is that those who patronize subprimes are playing a sucker's game, and we should not reward their stupidity. Rather than resorting to a subprime, these people should put off getting a house until they have put the work in and qualify for a regular fixed rate mortage from a prime lender. Oh, and it isn't like subprimes are forcing these mortages on people, it takes two to make a deal, and these borrowers made a poor one.

And I find if funny that you're trying to label me as a Republican friend. Thanks for that, it's refreshing, since most of the other people on this board have shoved in into the really out there, looney left category.

[NotGivingUp]

106. hell no! -eom

[mmonk]

109. As a realtor with a degree in Liberal Studies

with concentrations in economics and government, I say bail out only victims of predatory lending with some sort of assistance.

[Digit]

118. HELL NO

They knew it was a risky loan to begin with. They made their bet, now deal with it.

[JCMach1]

122. What happened to Due Diligence? It was buried in bogus credit databases

that reward people for some really stupid behaviors.

Kill the credit bureaus and bring back real due diligence to banks!

[Toucano]

128. Is it resounding yet? HELL NO! Bail out the homeowners!

If we want to prevent the economic disaster, we need to keep as many people in their homes as we can.

Similar to the homestead act, legislation should be passed granting full title to anyone whose predatory lender has gone under.

How about a golden parachute for the working people for a change?

[frogcycle]

134. fuck sub-prime lenders

they knew exactly what they were doing.

let them go to hell


and people who were not qualified for mortgages and managed to find someone to take them so they could go in hock way beyond their means? not so sympathetic.

[bridgit]

135. no...