When i read what Obama has planned (a massive bail-out for people overextended on kortgage loans), I wonder if the old fable needs revision. here i am 9an ant) who scrimped and saved, paid his bills, and never overextended myself with credit. It is winter, and i have enough to live on. now, the profligate grasshoppers 9who spent every penny and lived beyonf their means) want ME and all the other ants to bail them out!
pretty sick!
Dems sour grapes, you betcha.
The only way I would compare the grasshopper and the ant story to the subprime mortgage fiasco would be if the bumblebees had lied to the grasshopper, telling him that if he followed their plan he would be set for the future so that they could take his food supply and vanish. I worked for Countrywide during the subprime mortgage bubble and I cried every single day at work because of how they treated their customers and their employees. The company was flat out lying to lower income families about how their mortgages would work and how much they would end up paying. There were quotas set up for how many low-income individuals you needed to set up with a mortgage and signs up all over the corporate headquarters about how much they wanted, “to provide everyone with affordable mortgages so that they could own a home for themselves” and the like. Then when the homeowners couldn’t pay because their mortgage shot up several hundred dollars a month the company blamed them and refused to defer payments or make any other adjustments to help them keep from defaulting on their loan.
Mortgage companies really took advantage of a lot of people and purposely set them up to fail. If you have a complaint about anyone it should be the CEO’s of the companies that set up this bizarre attempt at a business model.
Well, in the fable, the grasshopper died due to his own shortsightedness, so I’d say he wasn’t.
Well, I am not sure what his plan is and how it’s supposed to work but I think the mortgage crisis is legitimate. Some people got in trouble not because they were living beyond their means but because things happened, like health issues, that caused them to not be able to pay their bills and use up any savings they might have had.
I see on the news reports of abandoned once nice homes that were foreclosed on and are being let sit empty to rot. How is this good for the banks, the former owners or the home, the property value of the neighborhoods, etc.? Why couldn’t these banks make arrangements with the families so they could keep their homes? I had the same problem due to a health problem. Notified my mortgage company that I would have the money as soon as I got my tax refund, because they refused to take partial payments I had to have the full lump sum, sent them a check for the full amount and they sent it back saying they were foreclosing. I was barely 3 months late (technically my late date had not even passed). I was forced to declare bankruptcy to keep my home and force them to take my payments.
I don’t see how it is good for their business to foreclose and allow those houses to rot and become worthless. I think a smackdown on mortgage company practices (and health insurance) is more warranted than an outright bailout. But maybe even that will be more help to people in trouble than pretending there is nothing wrong with the economy and giving people a piddling little bonus refund so they can go out and stimulate the economy.
Oh wait, this is MPSIMS? Um …
I have a bucket of toxic grasshoppers I picked off my plants and I am too wussy to squish them.
In the Disney version the ant looks into the grasshoppers huge anime-type eyes and learns a lesson in compassion and shares his food with the grasshopper and they sing and dance and live happily ever after, but the ant still harbors a secret grudge.
I’m sorry, but nobody held a gun to their head. If you’re saying Countrywide flat out lied to people, telling them their mortgage was a fixed-rate instead of an adjustable, I’d say you have a very good point. But when you’re talking about spending hundred of thousands of dollars, the buyer bears some responsibility to educate themselves. We recently refinanced our house, dropping the interest rate and shortening the length of the loan. I told the loan officer right up front that we were only interested in a fixed rate loan at a certain interest rate, and if he couldn’t do it, fine. When we were signing the papers the notary said that she’d done dozens of refis with (this company), and we were the first one she’d seen that had a fixed rate loan. :smack:
Do you still work for Countrywide?
No, I would have slit my wrists long ago had I stayed there any longer than I did.
I understand everyone needs to educate themselves when it comes to their finances and that the buyers are partially responsible (and in some cases, completely responsible) for their situations. It just ripped me apart to watch them go searching for people who were under educated and under employed and set up advertisements aimed directly toward people who they would not give a mortgage to 5 years before, convince them that they MUST own a home and then give them two choices - interest only payments or ARMs.
When potential customers asked questions they were given answers that didn’t actually pertain to the question they had asked. These were people who hadn’t even considered trying to purchase a home until Countrywide and other mortgage companies went out of their way to promise them “The American Dream.” It reminded me quite a bit of MLM scams, actually, but instead of a promise of earning thousands of dollars a week it was a promise of a fenced in yard for your children to play in and no pothead neighbors sharing a wall with you. They were very guilty of predatory lending and they did not care.
They were also set up to refuse help to people after they got in above their heads. We were told to tell them to cash out 401k to make payments. The only payment plan we had to “help” anyone actually increased the cost of their mortgage payments for up to 6 months. We refused to defer even a single payment. Even after I spoke with several members of management and eventually Angelo Mozilo (the CEO at the time) about the crappy way things were set up for both employees and customers and the fact that they were breaking an enormous number of laws every single day nothing was done.
I understand that we live in a buyer beware economic environment. I personally make a point of educating myself about any and every major purchase I make and my $0 debt and high credit score reflect that. There are a lot of people in our country who haven’t ever figured that out though and the mortgage companies found a way to capitalize on that, specifically seeking out those individuals and offering them a shitty product. I know I am biased after being an employee there and watching how horribly they treated their customers but honestly, you know a company is horrible when a third of the people working your shift (myself included) sit in their cars and sob quietly to themselves before they go into work.
If Countrywide did engage is such dishonest practices, then a pox on their house.
Have you thought of being a whistle blower?
Weird. I refi’d with Countrywide and had no problems. They didn’t try to get me a variable rate…the rate was at the market…smooth as silk.
Maybe I looked like I knew what I was doing and so left me alone?
Wasn’t there another version where the grasshopper threatens to eat the ant if he doesn’t share with him? I like that one.
Anyway, I always found this fable way too sanctimonious. Bruno Bettelheim did, too–no one wants to ID with the ant because he’s kind of a prig, and no one wants to ID with the grasshopper because he gets his in the end. It’s not really a fable that helps kids learn or transcend anything–just sort of a, “Ha ha!” for the old grasshopper.
It depends on whether you think the mortage companies are analogous to ants or grasshoppers. Sounds to me like the mortgage companies are grasshoppers too.
Snatch the pebble from my hand, grasshopper. Only then can you get a mortgage.
I’m a grasshopper! I can’t snatch the pebble.
You want tobacco juice on it instead?
There was an excellent episode of This American Life about this question recently. It was useful to me in examining what happened from the top down through the middle level guys to the borrowers-- a very complicated problem.
Without getting too argumentative here, I heard this story on NPR (This American Life) that tried to boil the subprime mortgage crisis down to a one hour story. I think that they did a pretty good job of it.
Skipping the frills: There was an ever increasing pool of investment money looking for a place to get a steady income stream of interest. The Federal Reserve Bank was cutting their rates. However, years before, Salomon Bros. had found a way to package mortgages into a bond that would pay a steady stream of money over a number of years. The appetite for those bonds, both in this country and abroad, was insatiable. After the normal homebuyer market had been exhausted, mortgage originators and lenders started to cast further and further to find any new source of borrowers. Borrowers qualifications, once rigidly defined, started to become more “flexible” as originators stretched the rules to get these loans. We all saw the end result.
ivylass, you are not incorrect that those who could meet the qualifications that you and I had to meet would be fine today. But, to my mind, there were several factors at work here.
The first was that the lenders played upon the fears of people who saw the real estate market spiralling ever upward, getting further and further out of reach. We all said that it was a bubble, but we had been saying that for years and the housing prices just kept going up. Of course, it was this stampede for housing that artifically raised the prices, but we knew that too. It is hard for people to give up that most cherished American dream.
Second, new (and dangerous) debt instruments were being offered along with traditional mortgages, letting people infer that they were just as safe. Admittedly the borrowers should have educated themselves, but the markets are always changing. My first mortgage was a variable rate 30 year loan, with 5% down, three things that would have been completely incomprehensible and alien in my parents’ time.
Lastly, mortgage originators made a killing during that time. Listen to the broadcast if you can. Those guys were living like rock stars. It would be facile to think that they would not try to push risky investments as much as they could and thereby put their commissions at risk. They took the money and ran.
I don’t know how I feel about the bailout, but I know that vacant homes bringing neighborhoods into decay while people go homeless can’t be good for anyone. I’m doing fine (my mortgage is less than most people pay for rent), but I really have sympathy for those who just wanted to own a house.
Maybe. 
They offer perfectly normal mortgages for people who want them and all of that, but they were set up specifically to screw over the uneducated and the vulnerable while I was there.
The best way to explain it in my mind is a scene from Water For Elephants. They are running a circus sideshow and they have the caller explaining to a bunch of “rubes” that for a quarter they can go in and see this mystery thing that, from the description, sounds like it is going to be a naked woman. The caller never comes out and says it is a naked woman in the tent but everything he is saying is conjuring up images of this incredibly flexible whore of a woman just aching to be leered at for the afternoon. All the men line up, pay their quarter, and go in to see a pair of suspenders on a hanger. They come out completely embarrassed and pissed off at losing their quarter but most of them just kind of roll with it since they should have known better than to trust the side show caller and that anything that sounds too good to be true probably is, yadda yadda. This is very much what the mortgage industry was doing when I worked there-finding the rubes of society and conjuring up images of this happy, middle class lifestyle they had always thought was out of reach and dangling it in front of them for what seems like almost nothing only to find when it is all said and done that they got nothing but a place to live for a year and a half before being foreclosed upon and forced back into an apartment, this time with a mountian of debt to go with it.
I also heard on the radio that another problem with abandoned houses is abandoned pools. People are walking away, and their pools are turning into nasty algae filled ponds.
I would not be in favor of a government bailout. However, if some of the mortgage companies/banks/investors got together to come up with some sort of plan, I would not be averse. But still…unless you were flat-out lied to, the homebuyer must bear some responsibility.
I have always been the grasshopper. I may or may not be “smart”. I’ve never needed a bail-out, nor do I ever expect one.
Wile E. - Im sorry for your misfortunes, but why should we the people have to come to your rescue? The one thing the lawyer said to me when I was closing on my present house is “if you don’t pay, you don’t stay”. That sounds about right to me. If I had to borrow from family or dip into my 401K, I’d do it to keep my mortgage up. And if I couldn’t pay the mortgage I wouldn’t expect them to let me slide.
pbbth - I don’t see anything wrong with expecting people behind on their debts to withdraw from their 401K. I’ve had to do it when I"ve been unemployed. Surem there’s a tax penalty, but I also got a for match on my contribution. I came out ahead of the game and had money when I needed it. Face it, it’s savings. If you need that money before retire, it should be used to pay your creditors.
I expect nothing more from creditors than to act in their best interest. They’re in business for a reason. I feel sorry for folks that didn’t read the fine print, but not sorry enough to make their mortgage payments.
StG