An amazing number of Americans don’t truly understand compounded interest. This is the sustaining principle of any number of examples of Darth Kapital: credit card vampirism, payday loan stores that sprout like fiscal toadstools in the neighborhoods that can least afford…etc. ad nausea spiritu.
I don’t think this makes them proper prey for those who do. As an orthodox Cecilian, I am commited to fighting ignorance, I cannot condone exploiting it.
Obvious exception: if the mortgage arrangement was entered into as a speculation, with no actual intent to occupy but simply to resell for value, yes, in that case, tough noogies, somedays you bite the bear, but today the bear bites you.
This is nonsense. MANY of the people who took on these mortgages were wheeled and dealed into thinking that they could afford the houses by scheming, shrewd used-car-salesmen mortgage brokers who didn’t give a crap if they were deceiving people in the process, because all they gave a damn about was the huge commission check they’d be getting from the lender for writing such an atrocious loan in the first place. Interest Only and Variable Interest Rate loans paid a whole hell of a lot more in commissions than Conventional loans. But what did these fuckers care? They knew the bottom would fall out eventually, but they weren’t holding the mortgages, having taken their giant piece of the pie to the tune of hundreds of thousands, if not millions of dollars playing this game.
And many of these same people could perfectly have afforded their homes had they been allowed to refinance when they saw their variable rates going up and up and up. But by that time the value of their home had fallen below the amount of the note, so no one would write them a better loan that they actually could afford. We were lucky – we were able to refi before the bubble burst and before our variable rate 2nd was out of control, into a conventional Jumbo loan. And don’t you dare insinuate that we couldn’t afford our house, seeing as how we have tens of thousands of dollars in cash in the bank and pay extra principal on our loan every single month. It’s not about being able to afford it, it’s about being lucky that we weren’t among the millions who got screwed.
You people need to stop blaming the victims in all of this. And MOST of the people hit hardest were not intentionally gaming the system, but were genuinely misled by these greedy jackasses trying to make a buck off their backs.
I don’t want to reward anyone for making a mistake. The banking industry can recover without them eventually and the former homeowners now renters will also recover without them. Companies rolled in the dough while giving loans to people who couldn’t afford it, and the people rolled in the dough even though they knew they couldn’t afford the loans. Proposing a bailout to either the companies or the people is asinine.
I am a believer in laying the blame first on anyone who equates renting with something less than the American dream. It is that stupid “American Dream! buy a home” that helped get us here. Many people can live the American Dream with a nice rental. Then start blaming everyone else, anyone that has a R or D next to them in any federal office deserves to have a 70% tax rate on current pay and those that retired pensions. Until they learn how to manage our money.
Eventually you will hear a giant pop it will be either everyone collectively withdrawing head from ass at once or the complete and total bottoming out of the entire nation. I really hope it is the pop of heads outta asses myself. But it looks like it won’t be.
Take a look at this chart, pay attention to the HUGE increases in home prices. Now it is popping and it needs to pop. Wanting to prop up the bubble will not stop it from bottoming out, only delay it.
If there is no good solution? Then, if we are to be asinine, might I suggest that foolishly helping people is better than foolishly helping corporations. Actually, might I insist? Thank you, I will.
This is a disaster, but one can salvage benefit from disaster, or lose it.
The value of houses is going down, this is inevitable. The upside would be that these revalued houses will become more accessible to the moderate income American. A nationwide garage sale, involving actual garages. Perhaps we can anticipate and approximate that decline in value and repackage existing mortgages commensurate with a houses reassessed value? A family being forced out of a house “over-valued” at $500,000 may be able to keep it if it is “realisticly valued” at $250,000.
The mortgage holding entity keeps the mortgage at its new value. So long as the mortgagee can make payments that reflect that new value, they are at no risk. The mortgage holder takes a chilling bath, but gets a solid investment rather than a hopeful intangible. And if they cannot survive, then someone else will buy that realistic mortgage because it ensures a modest but reliable profit.
Otherwise, I fear that many of these houses will remain houses and never become homes. Now that’s asinine! We’ve already squandored the resources, we may as well get some good out of it. And The Leader has already said that home ownership is the tits!
I know **elucidator ** that if one must, well they should pick the one that helps the people. My helping the people would be a freeze on any interest rate increases for the mortgage. That’s all I am willing to give. I think the glut of empty houses will do good, when the prices drop they will get bought. And they will be more affordable er more realistic maybe is a better wishful thinking. And with that more rentals would be available lowering not only the cost of buying a home but also renting a home.
I am against all forms of the bailout, not because I don't want to help but because I do not feel the policy will help. No matter where they throw the money, it will just delay the fall out. Didn't they just try throwing money at a problem? Yeah something like a 150 billion worth of throwing money at a problem. Did it work? Are Americans better off now then they where before that stimulus package?
Find the problem, fix the problem so it doesn’t just come back again and again. Do I have a solution, nope not even close (Though I did like my sell off Hawaii ) but I don’t feel this current idea will be the solution.
Salvage, not solution. We are not so much preventing a disaster as staunching the wounds from a disaster that already happened. Hell, it happened years ago, we got creamed because we were standing on the railroad tracks and got hit by a train going 2 miles an hour! How many years have I been reading about this? Three, maybe four?
But nothing was done because too many people were making money. Nothing was done because household equity was being siphoned off to pay credit card bills, siphoned off to buy loud, shiny crap to keep a consumerist economy humming even while the stewards of that economy played drunken sailor. Who in the world doesn’t understand that starting a ruinously expensive military adventure while simultaneously cutting taxes is dumber than a barrel of hair!?
This makes me curious about something: a lot of folks are saying that the actions of the past week were necessary because to do nothing would lead to a complete collapse of the national (and perhaps international) economic system.
Do you believe this collapse is inevitable, then? Or do you simply disagree that it’ll be the result (as many do)?
When you get up tomorrow the international reaction will be known. It may be a hard sell. They have a lot of money in these mortgages and they will not escape like the American thieves will.
That’s a lot of dropping needing to be done. That’s a lot of loans people will find it more attractive to default on than pay. That’s a lot of money the government will have to absorb.
And this is before we start the second phase of operation live within our means, the credit card debt collapse is just around the corner. We can print all the money we can get ink for but eventually other nations are not going to buy our notes.
I guess to me in summary is we need to prepare for the landing, trying to “save” it will not work. So better to use that trillion dollars to prepare. Start the Third New Deal right now, why wait until the collapse. I honestly believe they know it is just cosmetic but they’re afraid if they say something else it will be political suicide.
Just want to add, I am not talking about end of the world, apocalyptic chaos I am talking a few years of harder times. I just think delaying it very well could make it worse. Because as of yet no one has stood up and said “STOP SPENDING MONEY YOU DO NOT HAVE”
I did not say they were thieves. They were imprudent, some of them greedy. They made unwise decisions. And those decisions have ramifications. They should lose their homes. The prices should be allowed to drop closer to real value where others will pick them up. And as I said, if people were shown to do something illegal, they should be prosecuted.
And the way you keep using the phrase “mortgage experts” is hilarious. You do so in order to equate them with doctors or lawyers so you can absolve them of responsibility. Their salesmen. You turned them down. I turned them down. Millions of people turned them down. Like in other aspects of life it doesn’t pay to be dumb or imprudent. Actions have consequences. Sometimes they’re bad. When they are, let others see what happens and learn from it.
I agree. Some of these people may have gone over the line and broken the law. If they did, let’s lock them up. I’m all for it. But most did not. Most of the borrowers were simply imprudent. They salivated at 0%-down loans at low rates and just assumed that the tide would continue to rise and all would be well. Not everyone assumed this. Gonzomax, for one. Me for another. Rule #1 to do well in life: don’t be dumb. Don’t take risks you can’t afford. Break rule #1 and you may find yourself in a bad situation. So be it.
Yep, some of these people are scumbags. Some used car salesmen are scumbags. Who woulda thought?
I’m with you with one exception. Luck had nothing to do with it. You were smart enough to small a future problem and concerned enough to fix it pronto. Your weren’t lucky, you were responsible. Good for you.
Big deal. There are scammers all around us. It’s up to each of us to sign on the dotted line or not. No one holds a gun to your heads. We make choices. Choices have consequences. Bad choices often have bad consequences. Such is the real world.
If the real value falls within the affordable range of the current owners, why not let them keep it? What value is created by exchanging one set of occupants for another?
And it shouldn’t pay to take advantage of dumb or imprudent people, any more than it is right to take advantage of blind people. It is a subtext of our capitalist ethic, that while it may not be very nice to steal from a blind man, if you can outsmart somebody, they are your ordained prey, why, it wouldn’t be natural for you not to stick it to them!
And while the screwed are absorbing these realistic imperatives, has it occured to you to notice what the other set of players has learned, that you can screw your fellow man, get away with it and do rather nicely at that. The other lesson, the one that seems to have escaped your notice.
If they keep up payments, fine. If they default, they should not be given a pass or rewarded. Let them move out and let someone else who has been more prudent move in. Contracts matter to our society. And whatever we do now will be a lesson to people in the future.
Please. You say one “shouldn’t pay” and the other “wouldn’t be right”. I agree they’re both morally wrong, but there is immoral behavior all the time. But you’re trying to create the impression that EVERYONE who lost their home is a victim of some dastardly lender. That’s bullshit and you know it. As I said, I’d love to prosecute those lenders who broke the law. And I think we should. Other than that caveat emptor to all the either greedy, dumb, or imprudent borrowers.
You must have missed the other two times I said let’s lock up anyone who broke the law.
) but I don’t feel this current idea will be the solution.