Posted on 09/07/2018 6:16:58 AM PDT by ChicagoConservative27
A week before Lehman Bros. went under, I discussed selling my $30,000. of Lehman Bros. preferred stock with my a$$hole broker at Morgan Stanley because of my concerns. He told me if he wasn’t proscribed by company rules, he’d buy it from me for his personal account because it was a really good stock to own. A week later, he called me to say that my Lehman Bros stock was worth ZERO! Thanks to his “stewardship” of my 401k, I lost 30% of my retirement savings, Lehman Bros was only a part of it. Stock brokers are lower than Democrat and Morgan Stanley is the lowest of the low.
We have good friends who were living in a very large home out in Carmel Valley, CA which went under water. Their experience was much the same as your relatives. Finally, they moved out into a rental. After a year, the bank called and asked them if they would move back in to their as yet unforclosed home and stay in it rent free. Since there was only the two of them, they moved into the guest house on the property and rented out the main residence. That is how it’s been for several years. They are earning rental income and staying in the guest house for free. Tell me that banks aren’t f*cked up!
One of the traders in our company worked for a mortgage broker in Nashville in the mid 2000’s. He says that stated income loans were the biggest problem/scam. NINA loans they were called(No Income No Assets). You had to have a credit score over 600. However, all you had to do was STATE that your income was X. There was no verification. People committed fraud. This led to thousands of loans on real estate that people could never pay back.
Everyone should watch the movie or read the book “The Big Short”.
Hydro,
Please come home.
You were right.
You are missed!!!
It all started very early in the meltdown. There were a couple of foreclosures in the northeast and in the courtroom, the homowner’s attorneys asked for the documentation proving they owed the money to the bank foreclosing. The banks objected, saying this was unprecidented and something along the lines of “everybody knows we are the one they owe the money to”. The judge said that it was a reasonable request. It ended the charade. And all the bundling that was going on really messed up the paper trail.
I suspect a LOT of people don’t realize that the bank really could not have legally foreclosed on them. In fact, there were a lot of stories in those days of people being evicted from their homes when they owned them free and clear and the bank behind the eviction had never loaned them money. It was a real mess.
“I suspect a LOT of people don’t realize that the bank really could not have legally foreclosed on them.”
YES! They were all lazy and didn’t complete paperwork when making loans or they didn’t do it when transferring loans to the “bundlers.” At one point in time, we asked our lender, Wells Fargo at the time, to renegotiate our loan based on falling interest rates. They said they weren’t interested. So we obtained a new loan at 2 points lower from a mortgage broker who was actually fronting for for a private party. Not thirty days after closing on the new loan, we received a notification that our loan had been “sold” to guess who, Wells Fargo. For us, Wells Fargo has been a bad penny for all of our lives. Try as we can, we cannot get away from them. We have changed banks two or three times, only to have WF buy the bank in question making us their customer once again. Go figure!
One result of the bank problem was the fact that Wells Fargo was forced to buy Wachovia. Wachovia had bounced around and ended up being too leading edge to survive.
I attribute the decline of Wells Fargo at least in part to the forced aquisition of the tarnished and failed Wachovia banks.
The fact it happened though is a positive indication that a remedy for bank failure on a large scale not only exists but works.
For the reasons you stated about banks selling your mortgage and no longer handling the servicing of my loans I have got my last two mortgages from local credit unions.
You can usually get a local credit union to give you a competitive rate plus agree to keep the servicing of the loan in house. DCU(formerly Digital Federal Credit Union) for Digital Equipment Employees operates out of Mass & NH.
This is who I have my current and former mortgages with. You typically have to join the credit union by opening a savings or checking account. I started my account with $5.
Best precursor of such a fall is like back in the Jimmy Carter and George W Bush admins when you see advertisements on TV offering you refinancing of a home loan for “110% of the value of the home! JUST SIGN!”
Didn’t Dodd and Frank fix this permanently again? /s
I’m sorry, but this is just plain wrong. The guy is essentially an economic illiterate. He doesn’t know much about foreign policy either.
This is just a stupid statement.
We need to let them collapse. The market, like nature, abhors a vacuum, and new, efficient entities will arise to take their place — if the government doesn’t interfere.
Kind of makes the whole article that way to me.
Maybe she will flip it and learn several things at once.
The movie was like watching a movie made about a Super Bowl victory without ever talking about the rules of the game or the officiating. Your friends experience was just part of the issue.
That was ten years ago.
She solved her problem by marriage to an officer in the US Army
I work with banks on customer development and they are practically giving away money. The NINJNA loans are making a comeback.
If you read the book they explain many of the numerous reasons for the collapse of the housing market. My friends experience is just one. However, he experienced it first hand. He saw people that came in and lied on their application, nobody cared because everyone was doing it.
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