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  #16  
Old 03-29-2009, 11:52 AM
Inna-propriate-da-vida
 
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Quote:
Originally Posted by mwood View Post
Predatory lending sounds like such BS to me. It makes the people who fell for the crazy interest only loans or the variable rates they could hardly afford at their lowest point sound like innocent sheep being hunted by wolves.
You've identified exactly what happens to some. Not everyone is as well schooled, intelligent, or good looking as all of us here on shopforum. Borrowing money can be a confusing proposition, to say the least, and quite a number of people were led to poor decisions by 'salesmen' lenders. Also, the sub-prime loans are made to people who don't have much leverage when trying to borrow. Many, I'm sure, took the only loan available to them. When I bought my current house, every mortgage broker I talked to (except the one I borrowed from) tried to get me into an ARM loan first. "Take the ARM loan, then just before the rate goes up, refinance!!" That's where a huge number of the defaults are coming from, the inability to refinance.
As the OP stated, ther is enough blame for everyone, both sides of the aisle.

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  #17  
Old 03-29-2009, 01:16 PM
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The problem started when ARM's, and interest only loans went from being used by investors who knew what they were doing, to Joe six pack who can't figure out that ARM's are going to adjust.


Its everyones fault, plenty of blame to be spread around.
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  #18  
Old 03-29-2009, 01:42 PM
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Quote:
Originally Posted by Hatterasguy View Post
The problem started when ARM's, and interest only loans went from being used by investors who knew what they were doing, to Joe six pack who can't figure out that ARM's are going to adjust.


Its everyones fault, plenty of blame to be spread around.
No, it started with a decline in real estate values and people could not refinance or sell their way out of harm. Years ago ARM's were more half of the loans but there were other re-amortization and balloon options, not to mention policy to curtail inflation raised the bank prime lending rate.
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  #19  
Old 03-29-2009, 02:07 PM
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Quote:
Originally Posted by RichC View Post
How about adding into the equation the high gas prices that people had to pay.

Causing them to not have the money needed to pay credit card loans.

Then the card company jacking up the intrust rates to insane amounts.

Causing bankruptsy.

--------------------------------

Funny thing. Back in December, just for the heck of it I called the issuer of the credit card I use most to ***** about a late charge ( which was actually my fault for e-paying the bill a day late). While I was talking to the rep, I asked if they offered lower rates for good ( low risk) card holders.

No sooner had I asked the question, she replied that she could reduce the rate on my card to about half the previous rate. Amazing what a good credit score will get you. ...
and the late payment fee and related interest charge were removed too.
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  #20  
Old 03-29-2009, 02:09 PM
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Quote:
Originally Posted by Howitzer View Post
No, it started with a decline in real estate values and people could not refinance or sell their way out of harm. Years ago ARM's were more half of the loans but there were other re-amortization and balloon options, not to mention policy to curtail inflation raised the bank prime lending rate.
Good point, the bubble burst as they do.
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  #21  
Old 03-29-2009, 05:40 PM
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Quote:
Originally Posted by Brian Carlton View Post
It's not total BS. Many Americans cannot understand basic arithmetic. To expect them to understand a variable rate loan that climbs from 2% to 4%........effectively doubling their payments.........is entirely unrealistic.

Sure, it's their responsibility to understand what they sign.......but, unfortunately, if that was actually occurring, we wouldn't be in the current situation.
Predatory lending YA RIGHT.
There was some OK, but the bulk of it is being used as an excuse "It's NOT MY FAULT".

Back in the very early days of this fiasco they had a couple on 60 Minutes, or whatever who were losing their house.

I didn't know ARM meant adjustable !!!

OK, she was a homemaker, with an DEGREE in nursing and had been an RN for several years before she got married and pregnant with a COLLEGE educated mid level manager.

IF your statement is true that most americans can't figure this out then each of the colleges that granted this couple should be shut down, burned, bulldozed and every degree they have ever handed out be revoked.



I will keep repeating this until someone explains why it didn't cause us problems, US being the MILLIONS that bought houses when we did.
In '88 when we bought our house fixed 30 years were low to mid TEENS.
YES a conventional fixed rate 30yr Mtg would have been for 14ish percent.
We got an ARM at 10ish, 9.875 I believe specifically WITH a BUY DOWN.

We made the payments, never missed a payment etc. So did Millions of others.

The government did NOT throw TRILLIONS of our dollars at millions of people who CAN'T AFFORD TO OWN A HOUSE, SHOULDN'T OWN A HOUSE OR FIGURE YOU AND I WILL PAY FOR THEIR HOUSE.
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  #22  
Old 03-29-2009, 05:58 PM
Inna-propriate-da-vida
 
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It is very frustrating for those of us who bought homes we could afford, and continue to make payments on those homes, while watching some people getting hand outs for houses they couldn't afford in the first place. That doesn't change the fact that there are many people who REALLY didn't understand what they were getting into with their home loans. If you want to grasp the full measure of how some of these lenders operate, even now, after the meltdown, just fill out a request for quotes on a site like lending tree, and the sleazy, pushy, crooked lenders will melt your phone. Everyone wants to own their own home, and many will clutch at the straws extended to them by these unethical lenders.
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  #23  
Old 03-29-2009, 07:54 PM
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I still disagree, and that is a luxury of america.
I still feel they KNOWINGLY took a risk, they could refi, they would get a raise, they would have a job ....
AGAIN THEY took the risk, and I totally disagree with OBs addition "and then through no fault of their own" ...

So this returns us to one of my original ideas.
Don't pay Mtg Brokers the fat upfront fee's, in fact take that away from Real Estate agents and the Wall Street jerks (a bit strong but It is my opinion) that packaged these things up.
They get something up front and something each year as the mtg is paid off.
You don't need regulation if the people have their own interests to protect.
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  #24  
Old 03-29-2009, 09:04 PM
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People assumed that housing prices would always rise, and looked to make a killing off appreciation each year. That is very unrealistic, housing prices can and do fall.

The reality of the situation, which has been true forever is that it takes a long time to make money on your home through appreciation. Things simply got way out of whack for awhile.

I still think buying the worst house in the best neighborhood and stay in it for at least 10 years is the way to do it.
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  #25  
Old 03-29-2009, 09:18 PM
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Quote:
Originally Posted by Hatterasguy View Post

I still think buying the worst house in the best neighborhood and stay in it for at least 10 years is the way to do it.
My plan exactly.
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  #26  
Old 03-29-2009, 09:35 PM
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Luckly in CT we have plenty of areas with long track records so picking a good neighborhood isn't that hard.
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  #27  
Old 03-29-2009, 09:58 PM
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Quote:
Originally Posted by kknudson View Post

OK, she was a homemaker, with an DEGREE in nursing and had been an RN for several years before she got married and pregnant with a COLLEGE educated mid level manager.

IF your statement is true that most americans can't figure this out then each of the colleges that granted this couple should be shut down, burned, bulldozed and every degree they have ever handed out be revoked.



.
How about reading my statement before you comment on it. See if you can find the adjective "most"??

There are educated people who certainly bear most of the burden for signing such documents. There are also uneducated people who bought their first house with credit that they should not have received.
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  #28  
Old 03-29-2009, 10:21 PM
1990 500SL
 
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I did read that, what I disagree with is MOST.

MOST of these people knew, to some extent, that they were taking a risk.

There was some fraud, there were people taken advantage of.

BUT IMHO this was NOT the MOST category, MOST knew enough that they were walking the fine line of responsiblity.

I gave one example, and there are plenty on both sides.

I'll still go back though and set the root on our elected officials, because it was popular they changed homeownership from a privilege to a right. Over time this attitude became common, and possibly clouded the ??? of people.

Again, make the people on the frontline of this, Real Estate agents, Mtg Brokers and the Wall street folks put their skin in the game UP FRONT.

OK you said MANY I read that as MOST, my error. even so either way MOST people knew what they were getting into.
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Last edited by kknudson; 03-29-2009 at 10:30 PM.
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  #29  
Old 03-29-2009, 10:30 PM
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Quote:
Originally Posted by kknudson View Post
I did read that, what I disagree with is MOST.

MOST of these people knew, to some extent, that they were taking a risk.
If you did read it...........you would know that "most" was not in the statement.

How can you possibly know what most of these people knew...........did you poll them?
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  #30  
Old 03-29-2009, 11:52 PM
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Quote:
Originally Posted by Howitzer View Post
How do you know?
It's obvious. Even he admits that there are people in this world who have pretty much proven that they can discern, to a remarkable degree of accuracy, the immediate future in interpersonal encounters based on a person's facial expressions. I don't claim to be in the vanguard of that group but I have had some experience dealing with the public in random encounters while driving taxi nightshift (read: crazies) part-time for years and I lived to tell the tale somehow.

This whole thing started years ago when I said that I had an instinctive distrust for Dick "GFY" Cheney in '88 when I saw him on TV for the first time. Jeez, how could I have been so wrong?

If Bot wants to fall back on some cheap ad hominum when his arguments are falling flat, I'm all like, go fer it, duuuddde.

But don't expect me or anyone else to be impressed.

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