I see by the morning paper that we, the taxpayers, are going to buy
Fannie Mae and Freddie Mac. It's going to cost us "billions of dollars"
according to the article.
Why are we bailing out companies that knowingly gave mortgages to people
who couldn't afford them? If a mortgage holder has been defrauded by a
company, he should have legal recourse. If a company has been defrauded
by a mortgage holder, likewise. Other than that, let them eat cake.
Just watch - I'll bet the bailout goes into the pockets of some fat cats
on Wall Street. It's the S&L bailout all over again.
Are we on the same side this time, Doug and Tim?
You don't seem to understand.
Here's how the game is played
You "privatize" profits.
If there's a profit
- it goes to the "investors"
You "socialize" losses.
If there's a loss
it's paid for by the tax payer.
Why we don't crucify
- and I mean
upside down, naked, crown of
thorns crucifiction (sp?)
during the Super Bowl at least
a few of these greedy bastards
still amazes me.
Let "The Market" have its way
and it'll solve all problems
Mr. Friedman? Have you studied
history - at all?
So this is just another installment
in a very old story - that has no
end in sight.
They are hungry?
Let them eat cake!
Have you lost your head?
On Sep 7, 11:32 am, "<<<__ B=F8b __>>>" <[email protected]> wrote:
> Actually. Larry, from what I have read, the Fed. Govt. passed a law
> (either G.H.W. Bush and/or Clinton) that all lending institutions MUST
> make a percentage of all mortgages in the sub-prime category.
While those two knuckleheads may have overseen some kind of resolution
that reinforced the fact that less than perfect loans must be taken as
well as A grade paper, this happened while those guys were daydreaming
about the presidency.
Congress passed several laws aimed at eliminating discrimination
(e.g., Fair Housing Act (1968); Equal Credit Opportunity Act (1974);
and finally the CRA. or Community Reinvestment Act in (1977). You can
read more about it here:
http://www.ffiec.gov/cra/
Granted the above is a govt. site so there could be neferious forces
at work, but you can dig into it and read all about the Community
Reinvestment Act. Lenders were REQUIRED to make loans to people that
were not qualified. Marginal, but not fully qualified.
Later on though, I was in lending at the time as a mortgage loan
officer (specializing in construction loans). We were required to
make loans that NO ONE wanted. Period. Crappy loans, but we had to
take them as we didn't make the mean failure rate for an institution
our size. I hated those loans and freely admit I wouldn't take any
application where I didn't think the borrowers could qualify for a
loan. There was no race, no redlining, no nothing involved. I just
don't beat a dead horse.
But as it became a moral/social issue once again, we were pushed even
harder.
Fannie and Freddie are government associated and backed now, as well
as FHA and VA. They write and approve a great deal of the guidelines
for loan acceptability as well as dictating all the criteria for loan
purchase. You can read about red lining here. Note the date on this
article; had been in lending full time for two years when it came
out. We were getting pushed hard on this issue.
http://tinyurl.com/6epnm4
If you want to know the real reason for the failure of the mortgage
loan industry, read this:
http://tinyurl.com/5tldoq
It is obvious what happened. Plain old GREED. That's it. All
around; the lenders, the borrowers all went hand in hand. Note the
failure rate on the "liar" loans and the fact that for Countrywide
their failure represents almost half the failed loans in their
portfolio.
And the now famous ARM. What idiot doesn't understand the payments
will go up? Who? Apparently there are too many to count.
When you take an application, the universal form is the govt. approved
form 1003. YOU certify the information you give is true and correct.
When you go to closing, YOU certify the information is true and
correct. This is why they call them LIAR loans, as the people that
took them out did just that in many cases. Why are the lender tasked
with shouldering all the blame? There is plenty to go around.
I am on the other side of this. I was brought up on the other side of
the mortgage business. I assume that the borrowers are liars. I
always did. People lie about their income, lie about their assets,
and lie about their credit. It's the American way!
When I opened my own mortgage business in 1990, I stayed out of
trouble using those concepts of "borrowers are liars" and it kept me
out of trouble.
>The
> lenders obliged, and, after having made the loans, then bundled them up
> and sold them off on the financial market, implying that they were
> perfectly good. After the sub-prime crash, it's all coming back to
> haunt them.
Nope. There is plenty of information on how loan blocks of money are
securitized, how they are graded, and what methods are used.
Extensive, closely worded buy back agreements kept lenders and
security providers from screwing each other too much.
>In a way, it is all the Govt's fault, so maybe they are
> obliged to bail out the institutions involved.
I agree there, to some extent. As we have moved from a society of
self reliance and some measure of integrity, the government didn't
catch up with their legislation. (Hard for a politician to stick on
either of those points, I know.) The govt. sat back and let lending
regulations be relaxed, they were warned about the increase in loan
fraud by the FBI as long ago as 2004, and yet did nothing.
In fact, they encouraged all that "American Dream" horseshit about
owning a home. I personally believe it is a privilege, not a right.
But on the great political crusades, all politicians think that
everyone should own a home. The rich, the poor, people with little or
no income, people that have demonstrated no ability to repay, or the
folks that need a "second chance" because life dealt them a difficult
hand.
Bullshit.
If you cannot provide adequate proof you can repay, and have a history
of loan repayment you shouldn't get a loan on a bicycle.
The second straw on the camel's back is the intense amount of loan
fraud committed by criminals. Go to your favorite browser's news
links, or google loan fraud in Google News. Story after story of
outright theft, mismanagement of funding instruments and securities,
Ponzi schemes, "flipper" schemes, and on an on.
Each one of the top stories involve millions and millions (tens,
hundreds) of outright criminal schemes made to take advantage of an
overheated real estate market.
Last, I couldn't find the page on mortgage default demographics, but
the amount of folks that defaulted that were under 50 were astounding.
From what I have read, the amount of folks that were actual victims of
outright bait and switch paper work that gave them different loans or
program instruments was less than 4%.
I am not going search for the printed material, but I have read that
many folks are using the "I didn't understand the actual program when
I signed the papers" excuse; it runs hand in hand with the "no one
told me that" excuse. My local friends still in banking and in the
mortgage industry say this is one of the most often heard excuses. It
begs the question; " if you didn't understand the documents,
disclosures, affidavits, or contracts, why did you sign them? If you
had other questions, why didn't you ask them before you signed an
agreement to pay for a quarter of a million dollar loan?"
Most often, the reason they hear from delinquent borrowers though, is
the fact they go in over their heads with debt. Never planning for he
future, some never having had loans of any size before, they feel that
if they "really tried", that's all anyone could expect. After all,
living "The Dream", you need a nice new car in the driveway, a house
full of furniture and all the other cool things that suburbia expects,
right?
Many delinquent borrowers are surprising unconcerned about their
foreclosure or impending foreclosure as they feel like they have been
caught in an unfair economy, so that's their ticket out. High gas
prices, high grocery costs, etc., all are cited as reasons for not
paying. For some reason, they feel like it is a "get out of jail
free" card.
I am sure some have good reason to not pay their bills. But for most,
they just don't want to suffer through the long payment schedule. If
they pay out their house or buy another one, they will be facing the
same things again later in their lives. Many here have faced high
energy costs (remember gas in the 70s ?) high heating costs, and the
collapse of the housing market in the 80s, and the collapse of the
stock market in the later 80s.
But I didn't stop making my house payment.
It was important to make, and foreclosure was not only a social
stigma, but it totally screwed you for future purchases. When I was
in the business, we wouldn't even take an application if there had
been a foreclosure within 10 years!
> We'd all be a lot better off if the Govt. would just stay out of our
> affairs. This type of legislation is simply none of their business.
Absolutely couldn't agree more. All the schemers, criminals, and
anyone else involved in this mess whether they be the money men or the
borrowers that perpetrated fraud should be prosecuted to the fullest
extent of law. They should be banned from all future dealings in
finance and the borrowing of any other money.
Getting the government involved for any other reason than vigorous
prosecution of the criminals would only legitimize the idea that the
government is our bailout system for failed business. It will tell
those that are ready to walk away from their mortgage loans (or that
already have) that their default is OK, since everything is now
covered by the government.
I think they should beef up the FBI, beef up the prosecution of anyone
involved, and pay for these efforts with seized assets, fines,
penalties and any other assessments they need to make to keep the
taxpayers for paying the ride for the jackasses involved.
Robert
In article <[email protected]>, Larry Blanchard <[email protected]> wrote:
>I see by the morning paper that we, the taxpayers, are going to buy
>Fannie Mae and Freddie Mac. It's going to cost us "billions of dollars"
>according to the article.
>
>Why are we bailing out companies that knowingly gave mortgages to people
>who couldn't afford them? If a mortgage holder has been defrauded by a
>company, he should have legal recourse. If a company has been defrauded
>by a mortgage holder, likewise. Other than that, let them eat cake.
>
>Just watch - I'll bet the bailout goes into the pockets of some fat cats
>on Wall Street. It's the S&L bailout all over again.
>
>Are we on the same side this time, Doug and Tim?
Yep. No authority under the Constitution for the federal government to be
involved in this in any way.
Larry Blanchard wrote:
> I see by the morning paper that we, the taxpayers, are going to buy
> Fannie Mae and Freddie Mac. It's going to cost us "billions of dollars"
> according to the article.
>
> Why are we bailing out companies that knowingly gave mortgages to people
> who couldn't afford them? If a mortgage holder has been defrauded by a
> company, he should have legal recourse. If a company has been defrauded
> by a mortgage holder, likewise. Other than that, let them eat cake.
>
> Just watch - I'll bet the bailout goes into the pockets of some fat cats
> on Wall Street. It's the S&L bailout all over again.
>
> Are we on the same side this time, Doug and Tim?
>
Actually. Larry, from what I have read, the Fed. Govt. passed a law
(either G.H.W. Bush and/or Clinton) that all lending institutions MUST
make a percentage of all mortgages in the sub-prime category. The
lenders obliged, and, after having made the loans, then bundled them up
and sold them off on the financial market, implying that they were
perfectly good. After the sub-prime crash, it's all coming back to
haunt them. In a way, it is all the Govt's fault, so maybe they are
obliged to bail out the institutions involved. Some of the details may
be a bit murky, but this is the gist of what I have read so far. We'd
all be a lot better off if the Govt. would just stay out of our
affairs. This type of legislation is simply none of their business.
charlieb wrote:
> You don't seem to understand.
>
> Here's how the game is played
>
> You "privatize" profits.
>
> If there's a profit
> - it goes to the "investors"
>
> You "socialize" losses.
> If there's a loss
> it's paid for by the tax payer.
>
> Why we don't crucify
> - and I mean
> upside down, naked, crown of
> thorns crucifiction (sp?)
> during the Super Bowl at least
> a few of these greedy bastards
> still amazes me.
>
> Let "The Market" have its way
> and it'll solve all problems
> Mr. Friedman? Have you studied
> history - at all?
>
> So this is just another installment
> in a very old story - that has no
> end in sight.
>
> They are hungry?
> Let them eat cake!
>
> Have you lost your head?
The problem with your rant on this topic is that both Freddie Mac and
Fannie May are GOVERNMENT agencies. Fannie May was started during the
Roosevelt administration. The "fat cats" of which you speak are former
government employees who lined their pockets knowing the government would
bail out the agencies. People who cashed in? Franklin Raines to the tune
of $52M, Jamie Gorelick (yep the one who helped enable the 9/11 attacks by
erecting the "wall" between the CIA and FBI, preventing sharing of
information): $15M, James A Johnson: $1.9M. There were plenty of warnings,
but because this is a quasi-government organization, nobody was willing to
take on the political fallout. Imagine the howls of outrage over those
evil Republicans going after agencies that assure low-income people of
loans. This information can be found in stories in the Washington Post and
Barron's.
--
If you're going to be dumb, you better be tough
Mark & Juanita <[email protected]> wrote in
news:[email protected]:
> charlieb wrote:
>
>> You don't seem to understand.
>>
>> Here's how the game is played
>>
>> You "privatize" profits.
>>
>> If there's a profit
>> - it goes to the "investors"
>>
>> You "socialize" losses.
>> If there's a loss
>> it's paid for by the tax payer.
>>
>> Why we don't crucify
>> - and I mean
>> upside down, naked, crown of
>> thorns crucifiction (sp?)
>> during the Super Bowl at least
>> a few of these greedy bastards
>> still amazes me.
>>
>> Let "The Market" have its way
>> and it'll solve all problems
>> Mr. Friedman? Have you studied
>> history - at all?
>>
>> So this is just another installment
>> in a very old story - that has no
>> end in sight.
>>
>> They are hungry?
>> Let them eat cake!
>>
>> Have you lost your head?
>
> The problem with your rant on this topic is that both Freddie Mac
> and
> Fannie May are GOVERNMENT agencies. Fannie May was started during the
> Roosevelt administration. The "fat cats" of which you speak are
> former government employees who lined their pockets knowing the
> government would bail out the agencies. People who cashed in?
> Franklin Raines to the tune of $52M, Jamie Gorelick (yep the one who
> helped enable the 9/11 attacks by erecting the "wall" between the CIA
> and FBI, preventing sharing of information): $15M, James A Johnson:
> $1.9M. There were plenty of warnings, but because this is a
> quasi-government organization, nobody was willing to take on the
> political fallout. Imagine the howls of outrage over those evil
> Republicans going after agencies that assure low-income people of
> loans. This information can be found in stories in the Washington
> Post and Barron's.
You're both of the mark. This crisis was manufactured the day the banks
decided on the idea that you can safely lend to people who may be unable
to repay. And almost everyone happily and profitably promoted that idea,
including government agencies and regulators. It's as simple as that.
In a real free market system the banks and the people who borrowed would
all go out on the street in their birthday suits. Some rich guys would
profit because they could buy the lost properties at 5 cent to the $, sit
on them until the economy recovered, then sell them at 20-fold profit.
In reality, too much harm would come to everyone (the economy as a whole)
if that script were to be followed. So, now we all have to suffer
somewhat by rescuing at least some of the institutions and private
individuals. That was the way it happened (for the god of most) during
the savings and loan crisis, and that should (IMO) happen now.
What is the lesson? If it sounds too good to be true, it probably is too
good to be true. Ponzi schemes work only so long. Should someone be
prosecuted? Yes! But I am not going to decide who should be.
--
Best regards
Han
email address is invalid
Larry Blanchard <[email protected]> wrote in
news:[email protected]:
> On Sun, 07 Sep 2008 10:44:34 -0500, Tim Daneliuk wrote:
>
>>> Are we on the same side this time, Doug and Tim?
>>
>> Yes, with one provise. We shouldn't be bailing out the lenders,
>> but we also should not be bailing out the *borrowers* either.
>
> Agreed.
>
What about overpaid executives? Should they get their exit bonuses if they
are even considered fired without cause (apparently not small bonuses
either).
--
Best regards
Han
email address is invalid
In article <[email protected]>,
Larry Blanchard <[email protected]> wrote:
> I see by the morning paper that we, the taxpayers, are going to buy
> Fannie Mae and Freddie Mac. It's going to cost us "billions of dollars"
> according to the article.
>
[snip]
>
> Just watch - I'll bet the bailout goes into the pockets of some fat cats
> on Wall Street. It's the S&L bailout all over again.
>
And McCain won't have ANYthing to with it again...right?
On Sat, 06 Sep 2008 22:46:00 -0700, Mark & Juanita wrote:
> The problem with your rant on this topic is that both Freddie Mac and
> Fannie May are GOVERNMENT agencies.
I've heard them described more as quasi-governmental entities. But
regardless of that, I suspect the buyout will also protect those
private entities who purchased the mortgages that were securitized.
I doubt any of it will "trickle down" to the people who took out those
liar loans. Even though it takes two to tango :-).
Larry Blanchard wrote:
> I see by the morning paper that we, the taxpayers, are going to buy
> Fannie Mae and Freddie Mac. It's going to cost us "billions of dollars"
> according to the article.
>
> Why are we bailing out companies that knowingly gave mortgages to people
> who couldn't afford them? If a mortgage holder has been defrauded by a
> company, he should have legal recourse. If a company has been defrauded
> by a mortgage holder, likewise. Other than that, let them eat cake.
>
> Just watch - I'll bet the bailout goes into the pockets of some fat cats
> on Wall Street. It's the S&L bailout all over again.
>
> Are we on the same side this time, Doug and Tim?
Yes, with one provise. We shouldn't be bailing out the lenders,
but we also should not be bailing out the *borrowers* either.
--
----------------------------------------------------------------------------
Tim Daneliuk [email protected]
PGP Key: http://www.tundraware.com/PGP/
Han wrote:
> Larry Blanchard <[email protected]> wrote in
> news:[email protected]:
>
>> On Sun, 07 Sep 2008 10:44:34 -0500, Tim Daneliuk wrote:
>>
>>>> Are we on the same side this time, Doug and Tim?
>>> Yes, with one provise. We shouldn't be bailing out the lenders,
>>> but we also should not be bailing out the *borrowers* either.
>> Agreed.
>>
> What about overpaid executives? Should they get their exit bonuses if they
> are even considered fired without cause (apparently not small bonuses
> either).
>
They should get whatever they are owed by contract (as should anyone
who enters into a contract) and/or what their stockholders deem
appropriate. (I'm assuming here that there has been no fraud or
malfeasance on their part.)
The constant whining we hear about "overpaid executives" is mostly
bogus and is nothing more than class envy. Most executives work
for corporations that have stock holders. Those stock holders
can vote execs' compensation via the board they elect. The
reason execs make what they do is because that is the market rate
for a fairly rare skill (relatively speaking, say, compared to
someone to work on an assembly line).
--
----------------------------------------------------------------------------
Tim Daneliuk [email protected]
PGP Key: http://www.tundraware.com/PGP/
> {snip}
> Just watch - I'll bet the bailout goes into the pockets of some fat cats
> on Wall Street. It's the S&L bailout all over again.
>
> {snip}
Well, yes!!
What is being bailed out is not the failed mortgages, but the holders of
the securities and stocks issued Freddy and Fanny. How much Freddy and
Fanny securities do you own? How much do the very rich own? How many
very large insurance companies, banks, and Investment Banks own such
securities?
And when does this bailout occur? Before it affects the number of homes
that are foreclosed because the homeowner lost his job due to his job
being sent overseas? or did the bailout occur when it started to cause
Lehman Brothers Investment bankers to loose a large portion of their
stock market capitalization value?
Aside: Lehman Brothers has lobbyist at both political conventions, was
your lobbyist there or was your 'guy' a guest at the lobbyist parties?
Larry Blanchard wrote:
> I see by the morning paper that we, the taxpayers, are going to buy
> Fannie Mae and Freddie Mac. It's going to cost us "billions of dollars"
> according to the article.
>
> Why are we bailing out companies that knowingly gave mortgages to people
> who couldn't afford them? If a mortgage holder has been defrauded by a
> company, he should have legal recourse. If a company has been defrauded
> by a mortgage holder, likewise. Other than that, let them eat cake.
>
You do realize that Fannie May and Freddie Mac aren't really private
companies. They are "Government Sponsored Enterprises" that were designed
to provide low-income loans (i.e., loans to people who more than likely are
not going to be able to pay them back). In addition to poor business
management, it appears that these two federal government enterprises are
also being used to channel money to politically oriented groups:
<http://www.marketwatch.com/news/story/nlpc-blasts-fannie-mae-freddie/story.aspx?guid={44A2D123-FBDF-4FB5-A17C-E964C8828438}&dist=hppr>
One of the previous overseers of Fannie May was forced to resign because of
malfeasance.
> Just watch - I'll bet the bailout goes into the pockets of some fat cats
> on Wall Street. It's the S&L bailout all over again.
>
This isn't a federal bailout of private institutions. This is paying the
consequences of another set of tender-hearted fuzzy thinking on Congress's
part.
> Are we on the same side this time, Doug and Tim?
--
If you're going to be dumb, you better be tough