Subprime 'crisis' is just how our free market works

I agree.

These subprime loans should have been fully explained to the borrower, that is if they were not, and the potential consequences and pitfalls and documents signed to indicate that the borrower fully understands. Maybe they were.........No taxpayer bailout. The fallout of such loans it would seem to be best handled by the borrower and the lending institution to work out together. Seems it would be in their best "interest"

You have to be kidding with this article!
HR 3915 or S.2452 and other legislation should have been implemented many years and tears before this destabilizing practices were implemented.
Newsflash!.... The loans were set out as lures which would fail after the reset. Now to expect any positive momentum from these loans is irresponsible on the community.
As far as subsidies for home loan rescue, the issues are related to loan modification and not for effects on the already overburdened taxpayers.

But, when preadatory lenders make $12-15,000 on each loan they make and intentionally screw the buyer by upping the interest rate at the last minute or at the closing table (because they can), THAT IS WRONG and should be outlawed.
I am sure the free market can get by on a still otherwise tidy profit without unconscionable gouging.

No one forced these people to sign these loans. Most of the one's I have seen interviewed on TV stated they had bought with the intent to resale in a few years at a big profit. A lot of them made interest only payments during that time. I see this as no different than playing the stock market. You make bad choices you loose money. My house is paided for and I owe that to two rules. 1 don't buy more than you can afford. 2 Do what ever it takes to make those payments. Why should I have to help pay for their stupidity? No one wants to take personal responsability for their mistakes. The banks that lend amounts larger than they should will also loose money as should be.

Where were you people who don't believe in a bailout when w gave 30 billion to Bears Stern?Guess your like most repukes it o.k to give bailouts to big company's just not the average person.

Stupid is as stupid does!

This isn't much different between these loans and the known risks the borrowers knew they were undertaking and those buying homes on a river, lake or ocean and known risks of flooding and hurricanes. They knew it could go "south" on them but thought it never would while they held the property or there would be reaction time.

It's never a good feeling when you put a sizable bet down and you shoot craps.

Got to love such stupid explanations!

The entire subprime crisis has been caused by the purchaser thru an alluring combination of lies distortions and deceptions on their part. On the other hand, the lofty and perfectly honest practices of the banking/loan industries are so pure that they were all taken in by these loan applications.

Once again many on this list see people trying to get a part of the American dream as conspirators etc. The marketplace sucks the life out of people and is perhaps the greatest “reagan” myth of all. It’s a joke, along with deregulation and low taxes (only for the rich of course).

bushwacker canton wrote:

Where were you people who don't believe in a bailout when w gave 30 billion to Bears Stern?Guess your like most repukes it o.k to give bailouts to big company's just not the average person.

Common, remember the writers on the list create their "own reality"!!!!!

It's never them, its ALWAYS the other guy. The writers are all self made superintelligent and gifted. They all come from lake wobegon.

Realtor as well wrote:

But, when preadatory lenders make $12-15,000 on each loan they make and intentionally screw the buyer by upping the interest rate at the last minute or at the closing table (because they can), THAT IS WRONG and should be outlawed.
I am sure the free market can get by on a still otherwise tidy profit without unconscionable gouging.

I suspect you are not a realtor.

I did mortgages for 10 years. I never made 15K on a loan. And it is illegal to change the rate and terms at the closing table. If you were really a realtor you would know that.

The rate reset was explained to all "subprime" borrowers. The most common loan taken was a 2/28 ARM. And the borrowers knew their rate would go up and they had 2 years to improve their credit so they could refinance to a conforming A paper loan.

Refinancing previous customers is a sizeable source of mortgage closings for mortgage lenders. I would always take a look at my subprime customers situation 18 months after original closing to try and get them out of that loan and into a conforming loan. The % of those who had actually improved their credit during those 18 months was in the single digits. Most of them got WORSE!

And the subprime market was a direct result and response to the governments demands for expanding who money was lent to under the guise of the Community Reinvestment Act.

The "Sub Prime" mortgages were a gimmic/scam set in motion by some "entrepreneurs" to make money quick and get out, like the CEO of Countrytime that made $400 million and is set to make another $150 million on that stock. They sold and resold the mortgages all the while making money. They gave mortgages to people that couldn't afford them on houses worth half what they were appraised for. A lot of people were involved in this scheme, real estate agents that got inflated commissions, appraisers and even local governments who were happy to increase property taxes. The ones that pay the price are the ones who can least pay the price. The people who wanted a home but really couldn't afford it or bought way above their means/ability to pay and are now stuck with an escalating mortgage while the value of their home is less than what they paid for it. All the while, the schemers are counting their money. Take the local government in Macon county that paid $240K per acre for land that was worth $15K per acre, in a bad location, for a school. Who made the profit off that deal? Friends or family members of the commissioners that paid such an exorbitant price for land not saleable to anyone else? Same with the town gov't, buying land at 3 times it's assessed value, just had to have it, then haven't used it in 5 years. Now the town is going to pay an exorbitant price for a building that couldn't be sold or leased and is not suitable for a police dept. Its always the back room/sweetheart deals that stick the taxpayers with either the bailout or the tax increases to pay for profits for the few!

Ghost,

You have little to no knowledge of how the mortgage market works/worked, and what Countrywide (not Countrytime, thats a lemonade) did/does.

Countrywide has taken it in the shorts because they hold so many of the mortgage that are going bad. Meaning they DIDN'T sell them off. In fact, they were buying many mortgages from other lenders as they are the largest mortgage servicer in the country (or were).

To explain to you how it actually worked would take too much time, and you have shown no ability to learn so I won't waste my time.

Ghost,

And on the portion of your post about the government, why don't you take that as a learning experience for yourself and realize that your continual push for, support for, and even demand for bigger and bigger and more powerful government at all levels will only increase such activity. But no, you won't. It would be impossible for you to accept the reality that a smaller, less powerful government would be better.

Ghost Dog wrote:

The "Sub Prime" mortgages were a gimmic/scam set in motion by some "entrepreneurs" to make money quick and get out, like the CEO of Countrytime that made $400 million and is set to make another $150 million on that stock. They sold and resold the mortgages all the while making money. They gave mortgages to people that couldn't afford them on houses worth half what they were appraised for. A lot of people were involved in this scheme, real estate agents that got inflated commissions, appraisers and even local governments who were happy to increase property taxes. The ones that pay the price are the ones who can least pay the price. The people who wanted a home but really couldn't afford it or bought way above their means/ability to pay and are now stuck with an escalating mortgage while the value of their home is less than what they paid for it. All the while, the schemers are counting their money. Take the local government in Macon county that paid $240K per acre for land that was worth $15K per acre, in a bad location, for a school. Who made the profit off that deal? Friends or family members of the commissioners that paid such an exorbitant price for land not saleable to anyone else? Same with the town gov't, buying land at 3 times it's assessed value, just had to have it, then haven't used it in 5 years. Now the town is going to pay an exorbitant price for a building that couldn't be sold or leased and is not suitable for a police dept. Its always the back room/sweetheart deals that stick the taxpayers with either the bailout or the tax increases to pay for profits for the few!

Dan, at some point in time people HAVE to become responsible for their actions. With bad credit or not enough income or downpayment to purchase an expensive home, these people willingly went into debt on an ARM mortgage. They were TOLD that their rate would rise. If they werent, they should have researched it on their own. The old caveat LET THE BUYER BEWARE should be known to all above 18 years of age.

It is not the place of the taxpayer's to bail these people out. I feel for them. But, noone pays my mortgage for me. We all could use a little help right now, but to willingly FORCE taxpayers to pay for bad choices made by other individuals isnt right.

willard wrote:

<quoted text>
Common, remember the writers on the list create their "own reality"!!!!!
It's never them, its ALWAYS the other guy. The writers are all self made superintelligent and gifted. They all come from lake wobegon.

Oh no...I actually live there -- uff da!

Ghost Dong must be a first-class idiot. He can't tell the difference between countrytime lemonade and countrywide lending and he thinks justice Alito was on the supreme court in 2000. Just goes to show how stupid the left wing is.

Bushwhacker

Where do you go to make up your nonscence? The Beir Sterns bailout was bipartisan, and more important than that was done on the sly by both parties. Much like their attempt at an amnesty bill, which we luckily stopped. They slid the bailout through without ever letting the public know what was going on. I promise you that I would have been on the phone to Liddy Dole, and Burr to tell them to deny the bailout had I known.

A true conservative asks not for help from the government, but takes responsibility for his or her own lives.

Some people made really bad mistakes. I know a few friends of mine in trouble right now. They bought big homes that were a little more than they could afford. Then they kept refinancing every year or so, for the last six or seven years. They found that their property value kept going up so they could pull money out of the property for remodeling or trips. Now the bubble burst, and their property is going down in value. They are left with huge mortgage payments, and no way to sale the house.

I feel for my friends that did this to themselves, but I don't think it is our governments job to bail them out.

Ghost Dog wrote:

The "Sub Prime" mortgages were a gimmic/scam set in motion by some "entrepreneurs" to make money quick and get out, like the CEO of Countrytime that made $400 million and is set to make another $150 million on that stock. They sold and resold the mortgages all the while making money. They gave mortgages to people that couldn't afford them on houses worth half what they were appraised for. A lot of people were involved in this scheme, real estate agents that got inflated commissions, appraisers and even local governments who were happy to increase property taxes. The ones that pay the price are the ones who can least pay the price. The people who wanted a home but really couldn't afford it or bought way above their means/ability to pay and are now stuck with an escalating mortgage while the value of their home is less than what they paid for it. All the while, the schemers are counting their money. Take the local government in Macon county that paid $240K per acre for land that was worth $15K per acre, in a bad location, for a school. Who made the profit off that deal? Friends or family members of the commissioners that paid such an exorbitant price for land not saleable to anyone else? Same with the town gov't, buying land at 3 times it's assessed value, just had to have it, then haven't used it in 5 years. Now the town is going to pay an exorbitant price for a building that couldn't be sold or leased and is not suitable for a police dept. Its always the back room/sweetheart deals that stick the taxpayers with either the bailout or the tax increases to pay for profits for the few!

Just a suggestion Dog, It would be easier to read your rants if you put things into occasional paragraphs. Or at least every so often double spaced some. Just a suggestion, from someone that totally disagrees with you, but would like to be able to read you.

yona wrote:

Bushwhacker
Where do you go to make up your nonscence? The Beir Sterns bailout was bipartisan, and more important than that was done on the sly by both parties. Much like their attempt at an amnesty bill, which we luckily stopped. They slid the bailout through without ever letting the public know what was going on. I promise you that I would have been on the phone to Liddy Dole, and Burr to tell them to deny the bailout had I known.

Bipartician you idiot noboby voted on this w and Paulson just did it.Since you don't like the Amnesty bill don't guess you be voting for McSame .