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  1. #16
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    Re: This really erked me this weekend...



    Can't really blame the banks.

    They were being forced to lend to lesser qualified applicants least face the wrath of the federal government, thanks to the Community Reinvestment Act. Up until 2002, the feds were going after banks and fining them under the provisions of the act if they did not pass a certain percentages of loans to lesser qualified applicants. As a result, in 2002, that practice had stopped but by then it was too late.

    Having bought three homes now, I can say with certainty nobody held a gun to my head, forcing me to sign the paperwork and taking on mortgage debt. Totally agree with NC. You have only yourself to blame if you have debt.
    WARNING: This post may contain material offensive to those who lack wit, humor, common sense and/or supporting factual or anecdotal evidence. All statements and assertions contained herein may be subject to literary devices not limited to: irony, metaphor, allusion and dripping sarcasm.




  2. #17
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    Re: This really erked me this weekend...

    Quote Originally Posted by NCRAVEN View Post
    Here is a book that talks about that.
    http://www.amazon.com/Reckless-Endan.../dp/0805091203

    I've got to disagree with placing the ultimate blame on the banks. They are part of the problem (as the book lays out) they gave out the loans I think more of the blame goes to the people who took them out. I mean if I took out a loan and couldn't afford to pay it back, I am not blaming anyone but me for that.
    I don't disagree that the people who took these loans out are at fault.

    However, I think the banks are just as much to blame for allowing these people to think that they could afford these ridiculous loans. The banks KNEW they couldn't afford it and didn't advise them on reconsidering doing it. If you took the loan out and couldn't afford to pay it back, then yea, you're at fault, but if the bank could have advised you to reconsider because they were able to deduct that you couldn't afford the loan, then who's fault is it really?

    If I were to go to a bank and try to get a loan for something and the bank didn't think I could pay it back, they'd send me on my merry way to some other place. The banks are and were partly responsible for the situation that we're in right now. The more I read about it, the more it seems like a total scam. Banks give out billions in loans they know cannot be paid back, government writes a check to banks for amount owed and still gets to sell the houses.

    IMO, it's like 60/40 (60% of the blame being on the people/40% on the banks).
    Milk is for babies. When you grow up, you have to drink beer.

    -Arnold Schwarzenegger



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  3. #18
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    Re: This really erked me this weekend...

    Quote Originally Posted by HoustonRaven View Post
    Can't really blame the banks.

    They were being forced to lend to lesser qualified applicants least face the wrath of the federal government, thanks to the Community Reinvestment Act. Up until 2002, the feds were going after banks and fining them under the provisions of the act if they did not pass a certain percentages of loans to lesser qualified applicants. As a result, in 2002, that practice had stopped but by then it was too late.

    Having bought three homes now, I can say with certainty nobody held a gun to my head, forcing me to sign the paperwork and taking on mortgage debt. Totally agree with NC. You have only yourself to blame if you have debt.
    Agreed, but if you go to a car dealership and want to buy a BMW and only make $25,000 a year then the dealership is going to tell you that they're sorry, but they can't sell you a BMW because you'd not be able to afford the payments.

    All I'm saying is that the banks took advantage of the situation. It's not all their fault, but they're definitely at fault in this whole mess.
    Milk is for babies. When you grow up, you have to drink beer.

    -Arnold Schwarzenegger



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  4. #19
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    Re: This really erked me this weekend...

    Quote Originally Posted by wickedsolo View Post
    Agreed, but if you go to a car dealership and want to buy a BMW and only make $25,000 a year then the dealership is going to tell you that they're sorry, but they can't sell you a BMW because you'd not be able to afford the payments.

    All I'm saying is that the banks took advantage of the situation. It's not all their fault, but they're definitely at fault in this whole mess.
    Using your analogy, there isn't an act of congress forcing the BMW dealership to sell that car to the lesser qualified person and if the BMW dealer failed to do so, they'd face very stiff fines.

    There was for mortgages. For a long time.

    And I fail to see how the banks were taking advantage of this. They make their money when people pay back their mortgages, not when people default. It's in their best interest ensure the folks getting mortgages do so under good terms with an ability to pay them back.

    These days, there are very few banks even funding mortgages -- BofA, Wells Fargo, Fanny Mae, Freddy Mac -- they were the ones being forced to lend to people who were not qualified.
    WARNING: This post may contain material offensive to those who lack wit, humor, common sense and/or supporting factual or anecdotal evidence. All statements and assertions contained herein may be subject to literary devices not limited to: irony, metaphor, allusion and dripping sarcasm.




  5. #20
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    Re: This really erked me this weekend...

    Quote Originally Posted by HoustonRaven View Post
    Using your analogy, there isn't an act of congress forcing the BMW dealership to sell that car to the lesser qualified person and if the BMW dealer failed to do so, they'd face very stiff fines.

    There was for mortgages. For a long time.

    And I fail to see how the banks were taking advantage of this. They make their money when people pay back their mortgages, not when people default. It's in their best interest ensure the folks getting mortgages do so under good terms with an ability to pay them back.

    These days, there are very few banks even funding mortgages -- BofA, Wells Fargo, Fanny Mae, Freddy Mac -- they were the ones being forced to lend to people who were not qualified.
    The banks were going to get their money regardless. Either the people who took the mortgage were going to pay it back or the government would bail them out, which they did.


    What was the point of forcing banks to give out mortgages to folks who couldn't afford it? Who's bright idea was that bill?
    Milk is for babies. When you grow up, you have to drink beer.

    -Arnold Schwarzenegger



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  6. #21
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    Re: This really erked me this weekend...

    Quote Originally Posted by wickedsolo View Post
    The banks were going to get their money regardless. Either the people who took the mortgage were going to pay it back or the government would bail them out, which they did.
    Well, that was the end result. But not every bank got money and that was certainly not their intention. And it was nothing close to the amount they lost from bad mortgages. Remember, they make their money on the interest. They don't see interest obey unless the note is getting paid so they have a strong vested interest in making sure they lend money to the right folks AND it gets paid back.

    Quote Originally Posted by wickedsolo View Post
    What was the point of forcing banks to give out mortgages to folks who couldn't afford it? Who's bright idea was that bill?
    The perceived issue was that lesser qualified folks, typically minorities, were being discriminated on by the banks by not approving their applications. The idea was to help minorities get mortgages and it was well-intended enough. It was a bipartisan bill passed back in 1977 and, at first, didn't have the element of enforcement to it (meaning, banks were not getting fined) That was not added to the bill until the late 1990's.

    So, to answer your question, it was the federal governments bright idea.
    WARNING: This post may contain material offensive to those who lack wit, humor, common sense and/or supporting factual or anecdotal evidence. All statements and assertions contained herein may be subject to literary devices not limited to: irony, metaphor, allusion and dripping sarcasm.




  7. #22
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    Re: This really erked me this weekend...

    Quote Originally Posted by HoustonRaven View Post
    The perceived issue was that lesser qualified folks, typically minorities, were being discriminated on by the banks by not approving their applications. The idea was to help minorities get mortgages and it was well-intended enough. It was a bipartisan bill passed back in 1977 and, at first, didn't have the element of enforcement to it (meaning, banks were not getting fined) That was not added to the bill until the late 1990's.

    So, to answer your question, it was the federal governments bright idea.
    Brilliant.


    The government are such ninnies about some things.
    Milk is for babies. When you grow up, you have to drink beer.

    -Arnold Schwarzenegger



    Check out Fatherhood Rules - a blog site dedicated to sports, food, music, movies, and politics.
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  8. #23
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    Re: This really erked me this weekend...

    Yea, I heard a speaker say it just wasn't the poor people trying to get the American dream.
    There were people that upgraded their homes from $600G to $1M and what not. There were
    escalating interest rates and the dummies figured them out for the first year but not the
    4th or 5th year so when it ballooned, they were screwed.

    We've said many times that it started with Clinton wanting each American to have the American dream and he got the Fannies and Freddies to make that happen and they gave loans w/o
    background checks. Then the gov't got the banks to do it.

    When OBY issued the tarp $$ a condition was attached that they loan it out to the people
    but they didn't. They weren't getting screwed again so they hoarded the money. BOA
    paid their $59B loan back in 7 months and CitiCorp and the others by 9 months.

    During that time they got interest on those billions. Now figure 3 or 5% or whatever on
    $59B for 7 or 8 months and you can see how they paid the Fed off. They even said they
    did it with cash on hand.

    That's how they got the cash. I posted a link that it will take 10 years to occupy all
    those vancant homes but I just read where people with money are starting to buy
    property again because they know it is going up.

    The house across the street will be worth $150,000 more in 10 years.




  9. #24
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    Re: This really erked me this weekend...

    Quote Originally Posted by wickedsolo View Post
    What was the point of forcing banks to give out mortgages to folks who couldn't afford it? Who's bright idea was that bill?
    To add to what Houston said above.





  10. #25
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    Re: This really erked me this weekend...

    Wow.

    That's pretty incredible. That d-bag publicly admitted to these mortgages having a higher risk of default.


    Pretty eye opening.
    Milk is for babies. When you grow up, you have to drink beer.

    -Arnold Schwarzenegger



    Check out Fatherhood Rules - a blog site dedicated to sports, food, music, movies, and politics.
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  11. #26
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    Re: This really erked me this weekend...

    Quote Originally Posted by wickedsolo View Post
    Wow.

    That's pretty incredible. That d-bag publicly admitted to these mortgages having a higher risk of default.


    Pretty eye opening.
    You should read that book I linked to.

    Here is a good review.
    http://online.wsj.com/article/SB1000...730887312.html

    Here is people trying to do something about it (and a few trying not to)



    And here is why a few tried not to.
    http://www.opensecrets.org/news/2008...d-freddie.html




  12. Re: This really erked me this weekend...

    Anybody ever heard the term "House Poor"?

    That's alot of what happened, and quite frankly, still happens to a certain extent.

    Financial institutions making loans only look at what you're currently in debt for and your employment to determine if you're eligible.

    They don't take into account everyday expenses like how much you need to spend on groceries, gas for your cars, insurance payments, clothes, etc.

    All they look at is whether or not there is enough money left over in your check to cover the mortgage payment or car payment once the payments you're already obligated to pay are taken out.

    It's up to the individual to consider everything else in life when making a decision to finance something.

    I could have bought a much bigger house then I live in now at the time I bought this house.

    Hell, the banks even tried to push me further because my credit is so good and the numbers showed I could afford much more then I was willing to spends per month.

    I just re-financed this place (3.875% ) trying to cut the payment down some because shit is getting tight with everything else in this world going out of control.

    IMO, this mess is both the banks fault and the individuals fault for not looking at the whole picture when taking out a loan.
    Somebody on here mentioned in another thread about needing schools to have classes and courses about the basic skills needed to survive life, handle credit, etc.
    This situation is a perfect example of that notion.
    Will Die A Ravens Fan!!




  13. #28
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    Re: This really erked me this weekend...

    Quote Originally Posted by The Fanatic View Post
    Somebody on here mentioned in another thread about needing schools to have classes and courses about the basic skills needed to survive life, handle credit, etc.
    This situation is a perfect example of that notion.
    Maybe we could also have our elected officials attend this course as well...?




  14. #29
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    Re: This really erked me this weekend...

    Quote Originally Posted by NCRAVEN View Post
    Maybe we could also have our elected officials attend this course as well...?
    And the politicians say

    More taxes will solve everything

    And the band played on...

    The Temptations, Ball of Confusion sometime around 1970? And nothing has changed.




  15. #30
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    Re: This really erked me this weekend...

    Quote Originally Posted by The Fanatic View Post
    Anybody ever heard the term "House Poor"?


    IMO, this mess is both the banks fault and the individuals fault for not looking at the whole picture when taking out a loan.
    Somebody on here mentioned in another thread about needing schools to have classes and courses about the basic skills needed to survive life, handle credit, etc.
    This situation is a perfect example of that notion.
    I also include the real estate industry that facilitated the artificially high housing prices of a decade ago.

    Individuals were clearly at fault for signing loans they really didn't understand, but if you accept that trust is part of human nature, you've got to blame those who led the individuals to believe signing was in their best interest somewhat more than the individuals themselves.




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