Posted on 09/25/2008 5:33:24 PM PDT by Checkers
If you want to get a good handle on the kind of toxic waste Hank Paulson and Congress think we need to buy, read “Behind the Housing Crash: Confessions from an Insider” by Aaron Clarey (better known as “Captain Capitalism”). Clarey was an analyst for several banks in Minnesota from 1998 to 2007 and he witnessed the utter destruction of lending standards over the last decade.
Clarey makes an important point — there would be no crisis if individuals and businesses who had promised to pay back their loans were doing so. The vast majority of those who are not paying back their loans are not victims – they are irresponsible. There are also a lot of careless banks, lenders, politicians and investors who enabled unworthy borrowers to get these loans. Why American taxpayers must pay for this nonsense still has not been adequately explained by the White House, the Treasury or leaders on Capitol Hill.
(Excerpt) Read more at corner.nationalreview.com ...
The latest scam is :
People with houses that have greatly devalued are buying a cheaper house and letting the other house get foreclosed on.
The banks are allowing this !
Racist
[/sarcasm]
But, the ability to repackage and sell the debt as a financial product is what is screwing the system. If it was simply a case of individual banks having bad loans then that would be one thing but it goes far beyond that. The debt was supposedly good but in fact it wasn’t.
A part of me thinks we shouldn’t spend a penny of tax payer’s money on this.
Let the people and businesses that are going to hurt get hurt. I don’t care what happens to the markets. Some pain is necessary when bad decisions are made by massive amounts of people. We will all be better off in the long run.
Yeah...credit check?
Maybe the government will just buy the mortgages so no one needs to worry about it.
“Clarey makes an important point — there would be no crisis if individuals and businesses who had promised to pay back their loans were doing so.”
Not true. The decline in home values across the board, not in default, are effecting the valuation of real estate derivatives.
I can attest to that. My home in E.TN appraised for more than 300K three years ago. I t is now values at 10% less and I’m feeling lucky that it has only slipped 10% so far.
Back in the day, banks REQUIRED a 20% minimum down payment, which weeded out most of the irresponsible borrowers and home owners. Very very few people will put 20% down on a home and then just walk away, unless they are well upside-down on the loan.
Once again, the cause of the crisis is greedy lenders, greedy appraisers, greedy insurers, greedy brokers, greedy politicians AND greedy stupid homeowners. But how stupid do you have to be to let someone own a quarter-million or half-million dollar asset without asking them for any collateral whatsoever? VERY stupid.
The lenders got stuck on stupid in a New York minute.
But that only matters if you are selling your home. If you aren’t, its just numbers on paper.
My house is lower in value this year than last. Who cares? I’m still making my payments, mowing the yard, living my life.
Lower home values aren’t the reason people are foreclosing. People are losing homes they couldn’t afford in the first place. Lots of people got homes who never should have. And others bought too much house for their income. Either way, the banks never should have made those loans. Nobody should be surprized that these mortgage payments arent being made.
You nailed it. Idiot borrowers combined with idiot lenders, enabled and blessed by idiot politicians, and BAM! Crisis.
An upside down loan is bad for both the borrower and the lender. The property value is less than the loan, thus the lender takes a bath on a foreclosure. The borrower feels cheated in paying more for the property than it is worth. Sometimes that turns around. I saw it happen a few times in San Diego.
Have your property taxes gone down correspondingly?
Imagine that. People acting responsibly. LOL
Between the WallSt robber barons who are directly responsible for this crisis going nuclear and who will get off scot-free. Along with a long list of public servants in WashDC, both elected and appointed, who screwed the American people in royal fashion. Both groups allowing a small percentage of bad loans to be approved to people who couldn't even afford a downpayment. And voila!
Big government gets bigger through massive intervention and the free market takes a huge hit. In the end, the burden will fall on the US taxpayers and no one else.
The govt told them to make those loans. Clinton said, get these people into homes. Or else, we’ll sanction you. And Bush made it worse. If you are going to give minorities loans they dont qualify for, you have to give them to everyone. And, hey, if they dont care if I qualify or not, why not just buy a more expensive house.
The govt started this mess. Contrary to the dems, it wasnt too little regulation, it was too much that caused this.
You might consider having the tax assessor re-evaluate your taxes based on the lower value. That would save you some property tax. There's not much you can do about the mortgage payments. My son has successfully worked out some principal reductions for a few homeowners. The lenders preferred taking a small bath to a complete wipe out. The borrowers had a good payment record. It just a hell of a lot of work to shepherd the negotiations through all the necessary parties.
Are you kidding? The only place more corrupt than E.TN is Washington, DC.
the responsible get shafted once again....
I just had it appraised because I’m planning on selling it and moving the Richard Shelby’s state.
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