Bush's bailing out of the irresponsible Options

[Hartmann]

http://seattletimes.nwsource.com/html/busi...mortgage06.html

Of course this still has to go through Congress where it will get a bunch of crap amended to it and blah, blah, blah.

It is not the government's job to intervene on the free market. If people are irresponsible then there is no reason to change the market to cater to them, hurting others who were prepared.

[GOB]

yeah, this really pisses me off. people who shouldn't have had a mortgage in the first place are getting coddled by the fucking government. they'll never learn. i think the rates should be frozen at 10% for everybody in this situation with no option to refinance. there's a reason owning a home is the american dream: if everybody could do it, it wouldn't be a big damn deal.



as much as i do not favor supporting these people, this rate freeze really needs to happen. most investors (and analysts) are borderline retarded, so any more negative news is just going to keep the housing market in the toilet indefinitely.

these idiots royally screwed real estate for everybody else. it's going to be a million times harder to get a decent rate on a mortgage after this is all said and done


edit: a financial planner i know said some lady came to him because she has 2 homes with subprime mortgages in california. like $900k in real estate and she made $45k a year. she couldn't even cover one of the payments on her salary, so they're both going into foreclosure. he basically laughed at her told her to spend whatever she's got left on a good bankruptcy attorney.

[Mommy]

who changed their name to GOB? I cant figure it out

[GOB]

i'm posting from within your womb


now, please stay on topic

[impala454]

http://seattletimes.nwsource.com/html/busi...mortgage06.html

Of course this still has to go through Congress where it will get a bunch of crap amended to it and blah, blah, blah.

It is not the government's job to intervene on the free market. If people are irresponsible then there is no reason to change the market to cater to them, hurting others who were prepared.

I hope by "irresponsible" you're referring to the mortgage companies.

You can't have your cake and eat it too. You can't complain (not saying you are) about the housing market being shot, and then complain when someone starts trying to fix it. If you really read into what this is doing, I think it's great. It's bullshit that these giant mortgage companies can throw out teaser rates and ARM loans and just jack rates whenever they feel like upping their margins.

People are defaulting on these loans because of this bullshit, not because they're biting off more than they can chew (except maybe in high value areas like California and the northeast). Double digit interest rates on a f'n house!?? Hell I couldn't own a decent house with rates like that. If my mortgage interest rate was double digits right now, my payment would nearly double.

I hope a plan like this can be devised to put the hammer down on credit card companies too. I've heard of people having rates hitting the mid 30% range lately...

[jonathan83]

who changed their name to GOB? I cant figure it out

if you go to their profile it'll tell you if you click on message board user name history or whatever.
it's lamonts lament.

[GOB]

I hope by "irresponsible" you're referring to the mortgage companies.

You can't have your cake and eat it too. You can't complain (not saying you are) about the housing market being shot, and then complain when someone starts trying to fix it. If you really read into what this is doing, I think it's great. It's bullshit that these giant mortgage companies can throw out teaser rates and ARM loans and just jack rates whenever they feel like upping their margins.

People are defaulting on these loans because of this bullshit, not because they're biting off more than they can chew (except maybe in high value areas like California and the northeast). Double digit interest rates on a f'n house!?? Hell I couldn't own a decent house with rates like that. If my mortgage interest rate was double digits right now, my payment would nearly double.

I hope a plan like this can be devised to put the hammer down on credit card companies too. I've heard of people having rates hitting the mid 30% range lately...

i'm pretty sure he was referring to both buyers and lenders. the government intervention is the shit part. if we were truly a free market, this wouldn't be an option. stuff like this is what often leads to inflation/deflation or a recession/depression, depending on the situation, because the market gets the metaphorical stick shoved into its spokes while going full-speed.

and i'm glad you mentioned credit cards, too, because i believe it's the same thing. buyer beware! if there's even the slightest possibility of your rate doubling (or in the case of credit cards, tripling or quadrupling), and you can't afford the increase, you have no business using whatever it is they're offering.

[Spectatrix]

The lenders are assholes, but the homeowners are fucking retarded as well. If they'd read what they were signing, they would have known that their rate would jump after 2 or 3 years, often doubling, often with a high pre-payment penalty so that they couldn't refinance. I have little sympathy for people who don't pay attention to the financial obligations they're getting entangled in.

On general principle, I disagree with the government bailing these people out, but I really worry about how our economy in general might suffer if they didn't...

[Hartmann]

I think the economy has to suffer sometimes. It is supposed to be a free market after all and there are peaks and troughs.

The administration claims that this isn't meddling because there is no money involved, what I think the general public is missing about all this is that in 5-10 years, there is going to be government tax incentives for the mortgage companies to make sure they don't fold due to the fall out of all of this.

Oh, and the other reason I'm pissed, there are people who save up their money (me included), for such a situation so that we could buy a house at a lower rate. Now you've screwed over the well intentioned by "helping" the irresponsible (loan companies and borrowers).

[pebkac]

I agree with impala (did I just type that?) on the fact that it was the banks that were irresponsible. They've been lending to people that they really shouldn't be lending to. It was just a matter of time before interest rates went up or the economy went bad and something like this happened. Maybe it isn't the best thing to do, but predictions are that this will be far worse than the S&L crisis in the 80s.

[Hartmann]

I agree with impala (did I just type that?) on the fact that it was the banks that were irresponsible. They've been lending to people that they really shouldn't be lending to. It was just a matter of time before interest rates went up or the economy went bad and something like this happened. Maybe it isn't the best thing to do, but predictions are that this will be far worse than the S&L crisis in the 80s.

I agree that banks do have some fault in this... However, people agreed to the terms of the loans which are clearly spelled out.

It's just like those places that give loans in exchange for your car title, yeah, what they do is a little shady, but the people who go in there and sign-up are just as guilty.

[impala454]

I agree that banks do have some fault in this... However, people agreed to the terms of the loans which are clearly spelled out.

To my knowledge none of you have ever bought a house (I'm sure I'll be corrected if I'm wrong). Mortgage terms are most definitely not clearly spelled out. Especially with ARM loans, which is what the President's plan targets. With these loans, lenders can basically change the terms of the mortgage at will. It's as if they have a little margin dial on their end and any time they want to increase it they just turn the dial and bam your mortgage payments double. Oh, you have to default? Shucks we'll just keep all that money you already paid us, take a huge chunk from the mortgage insurance company (driving up everyone else's mortgage insurance rates), then sell your house to some other poor soul who's buying their first home that we can trick into this situation.

I agree with impala (did I just type that?) on the fact that it was the banks that were irresponsible. They've been lending to people that they really shouldn't be lending to.

Well it's not even really that though. These people can afford the homes they're in. They're making every payment just fine, until the lender skyrockets their interest rate. If ARM loans were simply done away with, we wouldn't have any of these problems. The whole idea of a ARM loan is to suck people in with a low rate and then nail them with a high rate later. The sad part is the "low rate" has been replaced with the standard rates.

Is it partly the buyer's fault? Sure, but again I'm guessing none of you have ever purchased a home and have been through the process. It can be a daunting task when you've searched for a house for six months, find the perfect one at a great price, and then have to complete the loan process within a day or two or you'll lose the house to another buyer.

There are a lot of local city government sponsored first time home buyer classes/seminars/pamphlets you can take advantage of, I'd highly recommend them even if you post on Techsans and believe you already know everything about it .

Moral of the story:

FIXED
RATE
LOAN

[Hartmann]

To my knowledge none of you have ever bought a house (I'm sure I'll be corrected if I'm wrong). Mortgage terms are most definitely not clearly spelled out. Especially with ARM loans, which is what the President's plan targets. With these loans, lenders can basically change the terms of the mortgage at will. It's as if they have a little margin dial on their end and any time they want to increase it they just turn the dial and bam your mortgage payments double. Oh, you have to default? Shucks we'll just keep all that money you already paid us, take a huge chunk from the mortgage insurance company (driving up everyone else's mortgage insurance rates), then sell your house to some other poor soul who's buying their first home that we can trick into this situation.
Well it's not even really that though. These people can afford the homes they're in. They're making every payment just fine, until the lender skyrockets their interest rate. If ARM loans were simply done away with, we wouldn't have any of these problems. The whole idea of a ARM loan is to suck people in with a low rate and then nail them with a high rate later. The sad part is the "low rate" has been replaced with the standard rates.

Is it partly the buyer's fault? Sure, but again I'm guessing none of you have ever purchased a home and have been through the process. It can be a daunting task when you've searched for a house for six months, find the perfect one at a great price, and then have to complete the loan process within a day or two or you'll lose the house to another buyer.

There are a lot of local city government sponsored first time home buyer classes/seminars/pamphlets you can take advantage of, I'd highly recommend them even if you post on Techsans and believe you already know everything about it .

Moral of the story:

FIXED
RATE
LOAN

Have bought a home, several in fact. My dad and I flip two homes together every few months when we're not on the road. I buy one and he buys the other.

Terms of the loan are spelled out, especially the variable part. Rates on the loans are not just arbitrarily changed by the banks, they increase and decrease in flux with the market, allowing the bank to assume less risk. This is spelled out in the terms of loans. It may be in bank talk but it's there. Yeah, the terminology should be easier but people need to be doing a little research themselves don't you think, you even suggested it.

What this move has done is basically make me hold off pumping money into the market.

People can afford these homes at fixed rate prices, not variable rates. We both agree on that. However, the fact that these folks signed up for what they thought were lower rates (at the time) is not the need of government to fix.

I feel bad for people losing their homes but I don't feel bad for their judgment, which was to get a variable rate loan.

[Spectatrix]

Correct me if I'm wrong, but isn't the variable rate set with respect to a reference rate like the prime rate? E.g. prime + 5%?

[impala454]

No, ARM loan interest rates set by an index the lender specifies. Essentially like I said, giving them a "margin dial" that they can turn at will.

Hartmann is trying to assume all responsibilty on the home buyer, which IMHO is wrong. Yes, you sign the paper, but the paper is intentionally ambiguous to get the buyer to sign on the dotted line. There needs to be some type of regulation on these things to prevent these kinds of problems. I'm sure someone could write up a contract that says you owe them half your paycheck the rest of your life, and make it ambiguous enough to get people to sign it. It doesn't make it right. And it doesn't mean the buyer is stupid or irresponsible. Anyone trying to purchase a home instead of renting is heading in the right direction IMO.

I don't see how regulating or doing away with ARM loans would hurt the economy in any way, or prevent you (Hartmann) from "pumping more money into the market." It doesn't penalize you in any way.

[Hartmann]

I don't see how regulating or doing away with ARM loans would hurt the economy in any way, or prevent you (Hartmann) from "pumping more money into the market." It doesn't penalize you in any way.

Regulating doesn't hurt us, but bailing these people out and not letting the market fluctuate as it should does. We depend on foreclosures to revitalize. We buy a foreclosure for a decent price, pump $20,000 into the economy fixing it up, then sell it for a slight profit. Or the other option, my dad and I watch the listings and public records that list late or missing payments and we work that person so that they don't foreclose. We buy their house for more than the estimated foreclosure and fix it up.

I am not at all putting this all on the buyer. There are certainly issues in the banking industry that need to be fixed. However, buyers are responsible to learn the T&C of their loans.

It is not the job of the federal government to adjust the free market on a whim. The Fed has enough of an impact on interest rates, the last thing we need is more government intervention.

Also, buying isn't always better than renting. There is a lot more responsibility and cost associated with buying than there is with an apartment or townhome. If people were smart and saved, then bought, things would be different.

[Hartmann]

Loan Descriptions
Lenders must give you written information on each type of ARM loan you are interested in. The information must include the terms and conditions for each loan, including information about the index and margin, how your rate will be calculated, how often your rate can change, limits on changes (or caps), an example of how high your monthly payment might go, and other ARM features such as negative amortization.

Straight from the federal reserve.

Where I think the banks are wrong is the fact that most require penalties for prepayment. That's stupid.

[Spectatrix]

Thanks, Hartmann. While ARM mortgages might be confusing, people shouldn't sign the contract if they don't understand it. I know that people do that all the time, but it's retarded. I don't have sympathy for people when their credit cards jump to a 28% interest rate after the teaser runs out and I don't have sympathy for people getting into mortgages that they don't understand.

Yes, it's confusing. Yes, it's stressful. All the more reason to research extensively before you hit the time crunch.

[blaarg]

I feel all the responsibility is on the homeowner. It is a big investment and you should know what the fuck you're getting into.

As for the lender, let me get this straight, we are criticizing them because they are trying to make more money? Everyone has to get paid....

I find it on the same lines as people who pay inordinate amount of money on name-brand stuff without looking around for better deals. I would hope that no one would go to Best Buy, see the ticket price and pay for it full price of a TV without looking around...and that is a TV, makes sense that for a house you would be 1000x more careful and wanting to "lookaround" for a better deal, shrug*

[Spectatrix]

I'm not criticizing the lenders for trying to make more money. I'm criticizing them for being stupid. You can't peddle large loans to high risk buyers and not expect to get burned. Eventually the law of averages will catch up with you. Foreclosures are damn expensive for everyone involved, including the mortgage companies. Why do you think New Century Financial Group filed for bankruptcy, with many other lenders on the verge of the same?

[Hartmann]

I'm not criticizing the lenders for trying to make more money. I'm criticizing them for being stupid. You can't peddle large loans to high risk buyers and not expect to get burned. Eventually the law of averages will catch up with you. Foreclosures are damn expensive for everyone involved, including the mortgage companies. Why do you think New Century Financial Group filed for bankruptcy, with many other lenders on the verge of the same?

This is exactly right. These lenders need to suffer as well (not just homeowners). But, they won't, just like the homeowners won't. When the freeze is up, there will be tax incentives for the lenders so that they can deal with the lost profits.

And, what do you people think the homeowners are going to do during this freezing of rates? Save their money. No. That would be too easy. They'll spend their cash and when the freeze is up, they'll go into foreclosure anyway (but Bush will be out of office and it will be someone else's problem).

[pebkac]

Thanks, Hartmann. While ARM mortgages might be confusing, people shouldn't sign the contract if they don't understand it. I know that people do that all the time, but it's retarded. I don't have sympathy for people when their credit cards jump to a 28% interest rate after the teaser runs out and I don't have sympathy for people getting into mortgages that they don't understand.

Yes, it's confusing. Yes, it's stressful. All the more reason to research extensively before you hit the time crunch.

An ARM usually has a fixed rate for a certain period of time (usually around 3-5 years), then usually jumps up to a variable interest rate. Banks love them because they don't have to have a low interest rate for too long a period of time.

An ARM is a good deal if you don't plan on keeping your house past the term. Other than that, it's better to go with a fixed rate loan.

[woody]

I blame the home owners and the lenders cause they knew damn well what they were doing.

they were even given people who could afford a home and had good credit these shitty deals.

true, the people should read the contract. but the lenders should know the outcome of it as well.

[Psykopath]

Bring on the recession.
I want to buy stocks at lower prices.

And I'm very much against the government bailout. (ZOMG Zach's not some communist freak?!?)

[pebkac]

they were even given people who could afford a home and had good credit these shitty deals.

Which is sad because that's illegal. I hate banks with a passion.

[impala454]

Regulating doesn't hurt us, but bailing these people out and not letting the market fluctuate as it should does. We depend on foreclosures to revitalize. We buy a foreclosure for a decent price, pump $20,000 into the economy fixing it up, then sell it for a slight profit. Or the other option, my dad and I watch the listings and public records that list late or missing payments and we work that person so that they don't foreclose. We buy their house for more than the estimated foreclosure and fix it up.

Maybe you and your Dad make a quick buck off of foreclosed homes, but having millions of people foreclosing on their homes does not "revitalize" anything.

[Hartmann]

Maybe you and your Dad make a quick buck off of foreclosed homes, but having millions of people foreclosing on their homes does not "revitalize" anything.

We don't make a quick buck and a lot of flippers don't. We make enough profit to buy another home and save a little, that's it.

I don't thrive off of foreclosures, I am simply saying there are people who are intelligent and buy foreclosed homes and revitalize largely poverty stricken areas. My dad and I were actually looking at the mid-ranged homes in Sugar Land as possible areas of buying when this thing first started going down the crapper.

There would be a difference in these foreclosures, no outside force (death in the family, loss of job, etc.) would be responsible, it would be on the shoulders of the buyer and the bank. Buy within your means, below even, and you'll be fine.

But thanks for assuming my dad and I are trying to 'make a quick buck'. In reality we do it because we can fund good businesses to do work for us and help them employ folks.

Also, I don't have the numbers in front of me, but I don't think the speculation was that "millions" would be foreclosing. If anything, people would have to give up their precious vehicles or 85" TVs to pay for their houses.

[impala454]

Oh please... I didn't say or even imply that flipping was a bad thing, nor is making a quick buck. But you can't really expect me to believe that you and your dad were sitting around one day and thought to yourselves "hmm lets go flip a house so we can create jobs and help others!"

Buy within your means, below even, and you'll be fine.

This is the whole friggin problem. First time home buyers don't have a clue what is within their means. They have to rely on the lender to tell them. That same lender who says, "sure you can get a $200,000 at 5% for 30 years and your payment will only be $1,500!" (and then in the fine print it says there's the possibility that it could increase).

[Spectatrix]

This is the whole friggin problem. First time home buyers don't have a clue what is within their means.

Why not? I know what's within my means and I plan to buy a home well below that. If you've been renting, you should have a pretty good idea of what monthly payment you can afford (also taking into consideration the cost of homeowners insurance, property tax, and repairs).

This post has been edited by Spectatrix: Dec 7 2007, 02:12 PM

[Hartmann]

Oh please... I didn't say or even imply that flipping was a bad thing, nor is making a quick buck. But you can't really expect me to believe that you and your dad were sitting around one day and thought to yourselves "hmm lets go flip a house so we can create jobs and help others!"

Actually, no it wasn't. My first thought was "quick buck" (my dad has been into real estate his whole life). Then we discovered that we could sell the homes at a decent value, add some nice touches, and make a little money. Then we found that there were people who were deserving of the homes and we helped them get the house funded and worked with them on the price so that they could afford it.

My dad and I do this quietly and for a reason. We are not just helping the economy, it's more than that. We're helping people who want to own a home and have a job but can't afford anything super nice or amazing. They want to put their kids in good schools or anything like that, we make sure they get with people to understand the taxes associated with a home and the financial risk.

This is the whole friggin problem. First time home buyers don't have a clue what is within their means. They have to rely on the lender to tell them. That same lender who says, "sure you can get a $200,000 at 5% for 30 years and your payment will only be $1,500!" (and then in the fine print it says there's the possibility that it could increase).

You said it better than I could. If first time home buyers don't know their means, they don't need to buy a home. They don't have to rely on a lender, that's a straight up lie. If people took the time, researched, talked with a financial advisor, etc. they would be much more aware of what is possible. But that's not how folks operate; Instead they decide they "need" a home and that they can just pop in and get one.

[GOB]

i just think it's funny how 60% of the people whose ass bush saved by doing this are going to be bitching about him tomorrow. oh well!

99% of these subprime mortgages are not the banks pulling new rates out of thin air. when most of these morons bought their homes back in 01-02, banks were giving ridiculous rates because they could; the tech bubble, recession carried over from the clinton administration, and 911 caused the horrible worldwide economic slowdown... banks were offering the ridiculous rates because they could, not to trick people. who knew that that many idiots wouldn't think to refinance before the real check came due? the banks knew exactly what was going on, but the average blob had no idea. teaser? maybe, but it's fucking genius.

and really, this rate freeze did nothing but delay the inevitable atomic blast. everybody will be as dumb as they are now when these rates are unfrozen in 5 years, and all of the debt will probably have been sold to some rich chinese or arabs, so when these assholes in their manhattan penthouses and orange county paradises can't make the REAL payments, they'll be booted out with more force than 10 million illegal immigrants.

[Testm0nkey]

you watch too much jim cramer

[GOB]

you watch too much jim cramer

and you're a bitch!


in 5 years the economy is either going to crap out because of this, or they're just going to change the diaper again so nobody loses their home

[DaveFireDancer19]

impala, its like you're trying to put all the blame on lenders.

ARM mortgages ARE set to an index, lenders cannot just "turn up the dial". ARMs reset according to their terms (sometimes means two years fixed, then a large increase in interest rate or even when the principal has gotten to $X amount from negative amortization from paying so called "minimum payments", then ARM resets). Some Lenders gave ARMs to people who would not qualify for a fixed rate loan and showed the customer a lower payment, and made them think "oh I can afford this" but never explained that it would readjust or that no principal is being paid down thus not building equity thus making it damn near impossible to refi into a fixed rate before the ARM resets.

However, if the customer is stupid enough not to do their homework and realize that teaser rates expire, principal does not reduce with a payment that doesn't even pay interest, and housing prices could decrease (despite the market at the time), then they don't deserve to have a home to begin with...If they would have read the fine print and realized that if their ARM fully adjusted they wouldn't be able to make payments or if they realized that their minimum payment was resulting in negative amortization...then they wouldn't have done it to begin with, hopefully at least....bottom line, the customer is a dumbass for signing something he/she did not FULLY understand

What do you base your information on? Being a home buyer does not make you the end-all be-all for all things mortgage (or credit cards for that matter, remember that thread, you're wrong)

I work in the banking industry (on the other side of the fence at least)...I look at mortgages/loans all the time. Terms are spelled out...very clearly in fact...and then there are all the disclosures the customer gets, Im sure you remember signing all that paper work. ARMs have their own set of disclosures, including one that says "you are applying for (or getting or whatever) an Adjustable Rate Mortgage" then tries to explain what it is...most people, stupidly, just don't read all that paper work, did you?

Bottom line, if the buyer is ignorant enough not to read the fine print (or their mortgage contract where everything is spelled out), then they deserve whatever is coming...Its surprising that you actually admit you weren't able to find your mortgage terms (or whatever you said, something to that effect), when in fact they are very clearly printed. You shouldn't have signed something you didn't understand. Hopefully you're lucky and didn't sign something you won't be able to pay for eventually

Im thankful that lenders who provided no-doc mortgages or 100% financing are getting theirs, but I think the government should back off and let the consumer reap what they sowed (or is it sew?)

If you want to bitch and moan about something, but about the high concentrations of CRE (commercial real estate) loans in our banks portfolios...

(sorry that was a little jumbled, I get annoyed when people think they know what they are talking about simply because they happen to have a mortgage. I probably left some important things out, like stupid people who think no-doc loans are absolutely fabulous because they won't have to supply income information and maybe squeak by with being qualified for a loan by lieing about their income...oh well)

[pebkac]

impala, its like you're trying to put all the blame on lenders.

ARM mortgages ARE set to an index, lenders cannot just "turn up the dial". ARMs reset according to their terms (sometimes means two years fixed, then a large increase in interest rate or even when the principal has gotten to $X amount from negative amortization from paying so called "minimum payments", then ARM resets). Some Lenders gave ARMs to people who would not qualify for a fixed rate loan and showed the customer a lower payment, and made them think "oh I can afford this" but never explained that it would readjust or that no principal is being paid down thus not building equity thus making it damn near impossible to refi into a fixed rate before the ARM resets.

However, if the customer is stupid enough not to do their homework and realize that teaser rates expire, principal does not reduce with a payment that doesn't even pay interest, and housing prices could decrease (despite the market at the time), then they don't deserve to have a home to begin with...If they would have read the fine print and realized that if their ARM fully adjusted they wouldn't be able to make payments or if they realized that their minimum payment was resulting in negative amortization...then they wouldn't have done it to begin with, hopefully at least....bottom line, the customer is a dumbass for signing something he/she did not FULLY understand

What do you base your information on? Being a home buyer does not make you the end-all be-all for all things mortgage (or credit cards for that matter, remember that thread, you're wrong)

I work in the banking industry (on the other side of the fence at least)...I look at mortgages/loans all the time. Terms are spelled out...very clearly in fact...and then there are all the disclosures the customer gets, Im sure you remember signing all that paper work. ARMs have their own set of disclosures, including one that says "you are applying for (or getting or whatever) an Adjustable Rate Mortgage" then tries to explain what it is...most people, stupidly, just don't read all that paper work, did you?

Bottom line, if the buyer is ignorant enough not to read the fine print (or their mortgage contract where everything is spelled out), then they deserve whatever is coming...Its surprising that you actually admit you weren't able to find your mortgage terms (or whatever you said, something to that effect), when in fact they are very clearly printed. You shouldn't have signed something you didn't understand. Hopefully you're lucky and didn't sign something you won't be able to pay for eventually

Im thankful that lenders who provided no-doc mortgages or 100% financing are getting theirs, but I think the government should back off and let the consumer reap what they sowed (or is it sew?)

If you want to bitch and moan about something, but about the high concentrations of CRE (commercial real estate) loans in our banks portfolios...

(sorry that was a little jumbled, I get annoyed when people think they know what they are talking about simply because they happen to have a mortgage. I probably left some important things out, like stupid people who think no-doc loans are absolutely fabulous because they won't have to supply income information and maybe squeak by with being qualified for a loan by lieing about their income...oh well)

What do you get when you give a person who already has poor credit and a low income a loan that will jump to astronomical interest rates? Banks should have known better than to make most of these loans.

[impala454]

Actually, no it wasn't. My first thought was "quick buck" (my dad has been into real estate his whole life). Then we discovered that we could sell the homes at a decent value, add some nice touches, and make a little money. Then we found that there were people who were deserving of the homes and we helped them get the house funded and worked with them on the price so that they could afford it.

My dad and I do this quietly and for a reason. We are not just helping the economy, it's more than that. We're helping people who want to own a home and have a job but can't afford anything super nice or amazing. They want to put their kids in good schools or anything like that, we make sure they get with people to understand the taxes associated with a home and the financial risk.
You said it better than I could. If first time home buyers don't know their means, they don't need to buy a home. They don't have to rely on a lender, that's a straight up lie. If people took the time, researched, talked with a financial advisor, etc. they would be much more aware of what is possible. But that's not how folks operate; Instead they decide they "need" a home and that they can just pop in and get one.

Aww so touching . Sounds just like the kind of thing uppity people with too much money would say. "Yeah well ah we just pulled in a $50,000 profit, but we don't do it for the money we just love helping out the community!"

Oh and now I'm straight up "lying". Well sorry to break it to ya Mr. Real Estate Tycoon, but not everyone is raised with their daddy buying and selling houses all the time. The lenders most definitely do decide for you how much you can afford. They decide because they're the ones that give you the friggin loan.

FireDancer: Yes ARMs are set on an index, an index controlled by the LENDER. And most of them have clauses pretty much saying they can change the terms of the agreement after X amount of time.

For the last effin time, to all of you, I'm not putting the sole blame on the lenders, but they sure as hell deserve a lot of it. They knew damn well what they were getting into. It's like throwing out some steaks to a dog and then getting upset with the dog for eating em. Yes the consumers were irresponsible, but so were the lenders. So what would you guys rather see? Huge amounts of your tax dollars going to subsidize the lenders, or just a freeze on the rates so it doesn't get any worse, and people might actually wise up on this shit for a change.

And to all the "this is gonna put the economy in the crapper" people... how about giving some reasons? If George Bush wiped his ass the wrong way some of yall would say it will up the economy.

[GOB]

uh, when did the lenders get upset? they were the ones who were going to fuck people over and make double the money because they could re-sell these properties.

[DaveFireDancer19]

What do you get when you give a person who already has poor credit and a low income a loan that will jump to astronomical interest rates? Banks should have known better than to make most of these loans.

People should have known better to sign loans like these...they just didnt feel like doing their homework! its not hard....

btw impala if a person cant figure out how much they can afford, they should continue renting or living with their mother....also, how is..say LIBOR controlled by the lender? or WSJ prime? I know what your saying about some bank's having their "own" prime, but those are usually set to something as well and aren't changed on a whim....

[Hartmann]

Aww so touching . Sounds just like the kind of thing uppity people with too much money would say. "Yeah well ah we just pulled in a $50,000 profit, but we don't do it for the money we just love helping out the community!"

Oh and now I'm straight up "lying". Well sorry to break it to ya Mr. Real Estate Tycoon, but not everyone is raised with their daddy buying and selling houses all the time. The lenders most definitely do decide for you how much you can afford. They decide because they're the ones that give you the friggin loan.

Wow, I like how I don't brag about it and try not to even bring it up but all the sudden it's "uppity". Looking at my financial statements I haven't pulled more than $18,000 net profit on any property. And it isn't just about giving people homes, we also make sure they don't get in trouble financially when they get it.

Some lenders have wrongfully given loans to people but you are making broad generalization.

Attack me and attack my dad, that's real mature. I never disagreed with you in saying that lenders are at fault here, they just aren't the entire reason this is happening. Some of these people genuinely can afford the terms, if they work at it. What happens all too often is people see a lower rate and automatically assume that they can spend more.

[impala454]

Haha "attack". The reason I pointed it out was clear. You seemed to think your experience was the norm when it obviously is not. First time home buyers have to buy a house eventually. Sometimes the best way to learn is by doing. It doesn't make it any easier when there are lenders out there handing out loans that are fiscally irresponsible just to reel people in.

Sorry if you took it so personally. I just take a dim view of those who talk about how much they're helping someone out when they're raking in huge profits at the same time. Same goes for anyone that takes tax writeoffs for donations.

[Billy]

I'm actually very surprised Hartmann is disappointed with the plan. It was that cheap and easy access to credit that has allowed the housing market to boom, in turn creating more buyers to sell to.

Well, it turns out these people were fools by being blinded by the belief they could own a real decent home because things didn't turn out the way they had hoped. Well, shame on them, honestly. But what really makes me sick is how ticked you are because the government is bailing them out so assholes like yourself can't take advantage of them by buying up all their homes for dirt cheap, sitting on them until the market settles, and selling them for massive bank just to do it all again in 30 years when people get themselves into the same shit, because they always do this crap. People are idiots, what can I say? But if you're going to take advantage of the masses, don't bitch about it when someone doesn't make it easy for you.

And I agree with Impala: don't for one second believe you are any different than the next greedy fuck who does the same thing you do. You aren't doing business because you care about society. You're in real estate because you want to make money. I won't fault you for wanting to make money, but nigga please.

[Testm0nkey]

theres a big difference between slum lords and people who are refurbishing vacant or stale homes in impoverished areas (not that sugar land technically counts as that)
theres a lack of affordable living (maybe not anymore - shits cheap if you got the money!) and there will always be one. people trying to do something about it do make a quick buck and there are some other negatives to the dealings, but in the end you can technically change a neighborhood into something decent

its better than not doing anything or seeking out real estate investments only when your potential profits are ridiculously high!

[Billy]

There's also a difference between refurbishing a house that no one wants and selling it for a legitimate profit for the work you put into, and hoping people lose their asses so you can buy their desirable house for dirt cheap to flip for a nice profit. (And I say desirable because people who took out these mortgages aren't exactly buying slum houses that need fixing up)

Which, as far as I know, he may only improve slum houses and sell them after fixing them up. But if that's the case, why does he care that the government is helping people not lose their homes? Is he just a schadenfreunde?

[Spectatrix]

The banks were stupid.
The buyers were stupid.
End of story.


As for Bush's plan... could be good, could be bad. I agree with GOB that it's probably just delaying the inevitable.

This post has been edited by Spectatrix: Dec 10 2007, 08:45 AM

[Hartmann]

I'm actually very surprised Hartmann is disappointed with the plan. It was that cheap and easy access to credit that has allowed the housing market to boom, in turn creating more buyers to sell to.

Well, it turns out these people were fools by being blinded by the belief they could own a real decent home because things didn't turn out the way they had hoped. Well, shame on them, honestly. But what really makes me sick is how ticked you are because the government is bailing them out so assholes like yourself can't take advantage of them by buying up all their homes for dirt cheap, sitting on them until the market settles, and selling them for massive bank just to do it all again in 30 years when people get themselves into the same shit, because they always do this crap. People are idiots, what can I say? But if you're going to take advantage of the masses, don't bitch about it when someone doesn't make it easy for you.

And I agree with Impala: don't for one second believe you are any different than the next greedy fuck who does the same thing you do. You aren't doing business because you care about society. You're in real estate because you want to make money. I won't fault you for wanting to make money, but nigga please.

Thank you for completely misunderstanding my reasoning and taking only one point of mine. Yes, it helps people who buy homes if foreclosures occur (even people who aren't in it to make money, including first time homebuyers). Yes I'm upset about it because of this reason but there are others.

I am also mad because I know the impact this will have in 7-10 years. You guys are saying it's the lenders fault, well, by bailing out the homeowners, the government is going to have to give tax breaks to the lenders, effectively bailing them out. Do you think the lenders will learn anything by being bailed out? Hell No. They'll keep giving these loans out (legally and illegally) and we'll have the same problem again somewhere down the road.

The government should go after the lenders, and at the same time give a little help to the buyers (not completely bail them out). I definitely think the buyers need some help, but they do not need their loans frozen so that they can spend their "savings" on something else.

Your first sentence is very true, but the housing boom is on the downward spiral and this will do very little to boost it.

And to clarify Test, we've refurbished a lot of the old Sugar Land homes over by the sugar factory. Those folks are actually sitting on gold mines now since the sugar factory is being turned into lofts and the area will be entirely revitalized. We also have "flipped" houses on the north side near Aldine-Bender and off of Telephone. My dad did a few homes in Pearland before the recent boom there.

And we don't rely on foreclosures to do what we do. For example, the house behind my parent's had a former lawyer turned drug dealer in it. One night he tried to shoot his girlfriend. My dad went over and bought the guy out for something like $45,000, way more than the house was worth since the guy completely trashed it. We fixed the house up and sold it to a woman who was a foster parent. I believe the selling price was around $85,000. With the cleanup my dad had to do and the specialist he had to bring in I don't think he made over $5,000.

And again, this plan is just delaying the inevitable.

[Hartmann]

Haha "attack". The reason I pointed it out was clear. You seemed to think your experience was the norm when it obviously is not. First time home buyers have to buy a house eventually. Sometimes the best way to learn is by doing. It doesn't make it any easier when there are lenders out there handing out loans that are fiscally irresponsible just to reel people in.

Sorry if you took it so personally. I just take a dim view of those who talk about how much they're helping someone out when they're raking in huge profits at the same time. Same goes for anyone that takes tax writeoffs for donations.

The fact that you say my dad and I are getting rich is what "I took personally", well, considering that's completely false. I am not extremely wealthy or even wealthy.

Of course the best way to learn is to do it, but does that mean they deserve to get a free pass when they screw up?

You don't like people who give donations and gets the tax writeoff? Will you then be ok with the lenders getting tax writeoffs when this freeze affects their bottom lines and the government doesn't want them to go under?

If I give a thousand dollars to a charity, I don't want that being counted as income I could have spent, because I could have spent it if I wanted to.

[Testm0nkey]

if you have the capital to invest in real estate for purposes like that, thats one of the most amazing things you can do to help people. getting a bit of a tax write off, or making a bit of a profit is nowhere near something one should feel bad about. the people doing good things have got to survive to and if that just helps them put some more money away to do it again then so be it!

like people who donate money to get a bit of their taxes cut - hey the are still donating to charities. the charity will appreciate the funding regardless of the reasons behind it (except for extreme cases like blood money or RANSOM)

i seriously cant wait to work in houston!

[impala454]

The fact that you say my dad and I are getting rich is what "I took personally", well, considering that's completely false. I am not extremely wealthy or even wealthy.

The terms rich/wealthy are all about point of view bud. To quote Chris Rock, "People think Shaq is wealthy, Shaq aint wealthy, Shaq's rich. The guy that signs Shaq's paycheck is wealthy."

Of course the best way to learn is to do it, but does that mean they deserve to get a free pass when they screw up?

How in the hell is this plan a "free pass" for the consumer? Preventing hardship due to ballooning interest rates is suddenly a "free pass"? Let me go cry a river for the lenders who will only make 7% interest off of these people's home loans.

You don't like people who give donations and gets the tax writeoff? Will you then be ok with the lenders getting tax writeoffs when this freeze affects their bottom lines and the government doesn't want them to go under?

WTF do these two things have to do with each other? I didn't say I have a problem with tax writeoffs in general (i.e. tax writeoff for a business purchasing a car). What I have a problem with is those who go donate $5,000 to some charity and then want something in return (a tax writeoff). All they're doing is taking money from the government to make their donation. If you truly want to make a donation you don't ask for shit in return *cough* rawls college of business *cough*.

If I give a thousand dollars to a charity, I don't want that being counted as income I could have spent, because I could have spent it if I wanted to.

This is exactly what I'm talkin about.

[Hartmann]

I don't understand your logic. I don't ask for a tax write off. I do give to charities (not a ton of money) but the first thing I ask is not "so where do I get the tax write off form?". I do agree with you that people shouldn't expect recognition but I disagree that there shouldn't be some (slight) incentive for donating to charities (comparing donating to a college and to a charity are two different things).

Also, my overall wealth is not that much. I don't live in a fancy house, I don't drive a fancy car (in fact I drove a junker up until last year), I don't own a lot of stuff, etc.

You don't have a problem with businesses buying a car and putting a large or small sticker on it to make it a tax write off? Wow. I knew a company that did this just for the write off.

Last time I checked I am required to list all tax exemptions (even though according to tax law, taxes are voluntary). So you're saying I should not list any donations to charities?

What you are arguing is that it's the reasoning behind the donations, etc. How do you know my reasoning?

[Hartmann]

How in the hell is this plan a "free pass" for the consumer? Preventing hardship due to ballooning interest rates is suddenly a "free pass"? Let me go cry a river for the lenders who will only make 7% interest off of these people's home loans.

Well, for one, they should have known the terms. Two, the ballooning interest rates are due in part to the "boom" in housing. Like DaveFireDancer said, there is more to it than simply increasing rates.

[impala454]

I don't understand your logic. I don't ask for a tax write off. I do give to charities (not a ton of money) but the first thing I ask is not "so where do I get the tax write off form?". I do agree with you that people shouldn't expect recognition but I disagree that there shouldn't be some (slight) incentive for donating to charities (comparing donating to a college and to a charity are two different things).

Also, my overall wealth is not that much. I don't live in a fancy house, I don't drive a fancy car (in fact I drove a junker up until last year), I don't own a lot of stuff, etc.

You don't have a problem with businesses buying a car and putting a large or small sticker on it to make it a tax write off? Wow. I knew a company that did this just for the write off.

Last time I checked I am required to list all tax exemptions (even though according to tax law, taxes are voluntary). So you're saying I should not list any donations to charities?

What you are arguing is that it's the reasoning behind the donations, etc. How do you know my reasoning?

It's not an argument bud. It's just my opinion. If you donate to charities that's great.

[impala454]

Well, for one, they should have known the terms. Two, the ballooning interest rates are due in part to the "boom" in housing. Like DaveFireDancer said, there is more to it than simply increasing rates.

So what?!? They should have known the terms. Who is being hurt by this plan to help out? Who does it cost? All this thing means is the assholes who gave the loans in the first place aren't going to make as much money. Big whoop. And no, the housing boom doesn't have jack shit to do with the rates rising. Like I have now said three times, ARM loan terms are based on an index.

AN INDEX WHICH IS SET AND ADJUSTED BY THE LENDER

[Hartmann]

So what?!? They should have known the terms. Who is being hurt by this plan to help out? Who does it cost? All this thing means is the assholes who gave the loans in the first place aren't going to make as much money. Big whoop. And no, the housing boom doesn't have jack shit to do with the rates rising. Like I have now said three times, ARM loan terms are based on an index.

AN INDEX WHICH IS SET AND ADJUSTED BY THE LENDER

It will cost the entire economy.

Wow, by your logic if I did make tons of money buying and selling houses it shouldn't matter because "no one is being hurt" and "it doesn't cost anyone".

I suggest reading this: http://www.federalreserve.gov/pubs/arms/ar...nglish.htm#drop

Even if interest rates go down or stay the same, payments may still increase.

Actually, read the whole thing: http://www.federalreserve.gov/pubs/arms/arms_english.htm

I don't see anywhere in there where the rate can arbitrarily just go up.

[Spectatrix]

AN INDEX WHICH IS SET AND ADJUSTED BY THE LENDER

btw impala if a person cant figure out how much they can afford, they should continue renting or living with their mother....also, how is..say LIBOR controlled by the lender? or WSJ prime? I know what your saying about some bank's having their "own" prime, but those are usually set to something as well and aren't changed on a whim....

This post has been edited by Spectatrix: Dec 10 2007, 03:42 PM

[impala454]

Uh, and who adjusts those f'n indexes??? Geezus.

[Spectatrix]

They're based on broad surveys of banks in general and thus are less prone to arbitrary fluctuation than anything maintained by an individual lender. Hell, LIBOR, which I understand is the basis for a lot of ARMs, isn't even based on banks in our own country.

The London Interbank Offered Rate (or LIBOR) is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the London wholesale money market (or interbank market). LIBOR will be slightly higher than the London Interbank Bid Rate (LIBID), the rate at which banks are prepared to accept deposits.

The Wall Street Journal Prime Rate (WSJ Prime Rate) is defined by The Wall Street Journal (WSJ) as "The base rate on corporate loans posted by at least 75% of the nation's 30 largest banks." It is not the 'best' rate offered by banks. It should not be confused with the federal funds rate set by the Federal Reserve, though these two rates often move in tandem. The current rate is 7.50% (as of 2007-10-31).

[impala454]

Right, they're rates set by BANKS.

How about lets form a new speed limit commitee. We'll call it some acronym. Then we'll appoint race car drivers as the members.

[johnthedrunk]

i really wanted to capitalize on the suckers whose houses are getting auctioned off and swoop up all of their houses and then 5 or 10 years later sell it back to them at 10 times the cost.

[Spectatrix]

Right, they're rates set by BANKS.

Yes, because banks in the UK have a stake in margins on ARMs in the US...

Do you even think about the stuff you type?

Scratch that. I give up. You won't listen to somebody who works in the banking industry (Amber), you won't listen to someone who has bought and sold many more homes than you (Hartmann). Who am I to think you'll listen to me, who's done neither?

[Mommy]

Christine: 1
Impala: well, let's face it... -4,563

[impala454]

You guys are sad sometimes. You instantly hate everything I say and don't give it a second thought. It's disappointing considering how smart some of you are.

A. lenders hand out ARM loans.
B. ARM loans are set on an index X.
C. index X is set based on what lenders give out as interest rates.

Do yall need me to connect the dots too?

[impala454]

Christine: 1
Impala: well, let's face it... -4,563

Oh shut up. She wasn't even correct and you don't have a f'n clue about any of this.

[Spectatrix]

C. index X is set based on what lenders give out as interest rates [to each other, not consumers]

And the banks involved in determining the indexes are usually IN NO WAY RELATED to your mortgage lender.

You act like the whole banking industry is some Illuminati-esque conspiratorial entity that thrives on forcing their customers into foreclosure.

This post has been edited by Spectatrix: Dec 10 2007, 05:31 PM

[Mommy]

Oh shut up. She wasn't even correct and you don't have a f'n clue about any of this.

I know about this stuff. I just chose not to argue on it because you are the one that fails to listen to anybody, not the other way around. It's whatever though. I was more commenting on how she was saying it didn't matter telling you anything because you will continue to argue the opposite even if we laid out stone-cold fact that you are wrong.

[impala454]

And the banks involved in determining the indexes are usually IN NO WAY RELATED to your mortgage lender.

You act like the whole banking industry is some Illuminati-esque conspiratorial entity that thrives on forcing their customers into foreclosure.

Where the hell do you see that? And no, it's an illuminati-esque conspiratorial entity that thrives on having rates as high as humanely possible. I put mortgage lenders on almost as low of a "good business" totem pole as credit card companies.

[Spectatrix]

I'm not saying mortgage lenders are angels... far from it. I'm just disagreeing that they can arbitrarily up your rates just for the hell of it. Even if they did have a magic margin dial, there are caps built into ARMs that limit how much they can raise the rate at any given time.

From Wiki:

Loan caps provide payment protection against payment shock, and allow a measure of interest rate certainty to those who gamble with initial fixed rates on ARM loans. There are three types of Caps on a typical First Lien Adjustable Rate Mortgage or First Lien Hybrid Adjustable Rate Mortgage.

Initial Adjustment Rate Cap: The majority of loans have a higher cap for initial adjustments that's indexed to the initial fixed period. In other words, the longer the initial fixed term, the more the bank would like to potentially adjust your loan. Typically, this cap is 2-3% above the Start Rate on a loan with an initial fixed rate term of 3 years or lower and 5-6% above the Start Rate on a loan with an initial fixed rate term of 5 years or greater.

Rate Adjustment Cap: This is the maximum amount by which an Adjustable Rate Mortgage may increase on each successive adjustment. Similar to the initial cap, this cap is usually 1% above the Start Rate for loans with an initial fixed term of 3 years or greater and usually 2% above the Start Rate for loans that have an initial fixed term of 5 years or greater

Lifetime Cap: Most First Mortgage loans have a 5% or 6% Life Cap above the Start Rate (this ultimately varies by the lender and credit grade).

* Industry Shorthand for ARM Caps

Inside the business caps are expressed most often by simply the 3 numbers involved that signify each cap. For example, a 5/1 Hybrid ARM may have a cap structure of 5/2/5 (5% initial cap, 2% adjustment cap and 5% lifetime cap) and insiders would call this a 5-2-5 cap. Alternately a 1 year arm might have a 1/1/6 cap (1% initial cap, 1% adjustment cap and 6% lifetime cap) known as a 1-1-6, or alternately expressed as a 1/6 cap (leaving out one digit signifies that the initial and adjustment caps are identical).

* Negative amortization ARM caps

See the complete article for the type of ARM that Negative amortization loans are by nature. Higher risk products, such as First Lien Monthly Adjustable loans with Negative amortization and Home Equity Lines of Credit aka HELOC have different ways of structuring the Cap than a typical First Lien Mortgage. The typical First Lien Monthly Adjustable loans with Negative amortization loan has a life cap for the underlying rate (aka "Fully Indexed Rate") between 9.95% and 12% (maximum assessed interest rate). Some of these loans can have much higher rate ceilings. The fully indexed rate is always listed on the statement, but borrowers are shielded from the full effect of rate increases by the minimum payment, until the loan is recast, which is when principal and interest payments are due that will fully amortize the loan at the fully indexed rate.

* Home Equity Lines of Credit HELOC

Since HELOCs are intended by banks to primarily sit in second lien position, they normally are only capped by the maximum interest rate allowed by law in the state wherein they are issued. For example, Florida currently has an 18% cap on interest rate charges. These loans are risky in the sense that to lenders, they are practically a credit card issued to the borrower, with minimal security in the event of default. They are risky to the borrower in the sense that they are mostly indexed to the Wall Street Journal Prime Rate, which is considered a Spot Index, or a financial indicator that is subject to immediate change (as are the loans based upon the Prime Rate). The risk to borrower being that a financial situation causing the Federal Reserve to raise rates dramatically (see 1980, 2006) would effect an immediate rise in obligation to the borrower, up to the capped rate.

As for "where the hell do you see that?"... taking LIBOR as an example, why would banks in England care what mortgage rates in the US are?

[Spectatrix]

The main point I'm trying to make is that ARMs aren't as mysterious as you're making them out to be. Anybody who cares to can look at the index their mortgage will be based on and look at it's historical performance. Hartmann touched on some of this back on page 2: http://www.techsans.net/forums/index.php?s...ost&p=93045

[impala454]

Forgive me I'm not following where you're getting this UK banks stuff from.

And the caps are a joke. 2% adjustment cap? 5% lifetime cap? 2% is insane. 2% would increase most people's payments by about 40-50% (oh, btw which is exactly what's happening now). Then asshats like you guys who don't have a f'n clue come in and tell those people they're irresponsible.

[Spectatrix]

Forgive me I'm not following where you're getting this UK banks stuff from.

And the caps are a joke. 2% adjustment cap? 5% lifetime cap? 2% is insane. 2% would increase most people's payments by about 40-50% (oh, btw which is exactly what's happening now). Then asshats like you guys who don't have a f'n clue come in and tell those people they're irresponsible.

LIBOR (London Interbank Offered Rate) is one of the indexes commonly used for adjustable rate mortgages (yes, in the US). It's the interest rate that banks in England lend money to each other at. Chances are, those banks aren't the ones financing your mortgage, so why would they bump up their lending rate to affect a US bank's margin on your mortgage?

Another index used is the MTA, or 12-month Treasury Average Index. It's a 12-month average of monthly yields on US T-Bills. Pretty sure that's controlled by the federal reserve, not private banks.

[Spectatrix]

In any case, I'm out. I wash my hands of this thread. You wouldn't budge when I provided concrete information in the credit card thread and you're not budging now. I don't see why I should waste my time doing more and more research only to see you put your fingers in your ears and go "lalala, I'm right, you're wrong."

PEACE OUT, NIGGAS!

[impala454]

Uh, they all want to make money whether its UK or US. By the same token, why would they ever want to lower your rates?

But yeah, yall are all right my bad. It's just the typical dumb post by Impala. Lets just do a couple of wikipedia searches and paste em and suddenly we're all experts. Let's not look at what this bullshit really means. I mean, ARM loans are great! They're wonderful for consumers because they sure don't mass foreclose on them. And those mass foreclosures that sure don't happen are great for the lenders too, because they definitely don't discourage others from getting loans!

[Mommy]

LOLZ

[Spectatrix]

Uh, they all want to make money whether its UK or US. By the same token, why would they ever want to lower your rates?

But yeah, yall are all right my bad. It's just the typical dumb post by Impala. Lets just do a couple of wikipedia searches and paste em and suddenly we're all experts. Let's not look at what this bullshit really means. I mean, ARM loans are great! They're wonderful for consumers because they sure don't mass foreclose on them. And those mass foreclosures that sure don't happen are great for the lenders too, because they definitely don't discourage others from getting loans!

Amen, bro! Glad you finally saw the light!

Seriously, though... I really, truly agree that most banks are bottom-feeding, scum-sucking evildoers. No doubt. The bigger the bank, generally the more they suck.

ARM loans? Yeah, they suck too. I'd never buy one and I'll never have to because I have great credit, a great job, and will have a large down payment whenever I do buy a house (probably a couple of years from now). Like I said before, I only disagree with you on how "mysterious" the terms are.

Foreclosures suck for consumers. No doubt about that. But mass foreclosures are bad for lenders too.

As best I've been able to determine, this whole mess started with the housing bubble earlier this decade, with people borrowing way beyond their means and with banks willing to let them do so. The banks were greedy fucks and incredibly short-sighted, now resulting in many lenders filing for bankruptcy because foreclosures are hellaciously expensive for everyone involved. Those that aren't going bankrupt are facing billions of dollars in losses.







Why can't I quit this thread?

This post has been edited by Spectatrix: Dec 10 2007, 09:31 PM

[impala454]

Why can't I quit this thread?

Probably the same reason I never quit any thread

btw just saw the news mentioned WaMU is cutting a shit ton of jobs because of this subprime mess. bummer.

[TetraGrammaton C...]

i don't know how to quit you

[Spectatrix]

btw just saw the news mentioned WaMU is cutting a shit ton of jobs because of this subprime mess. bummer.

Ouch. Doesn't surprise me, though... a lot of banks are hurtin' big time because of this.

http://en.wikipedia.org/wiki/2007_subprime...siness_entities

[Hartmann]

http://www.nytimes.com/2008/05/11/business...amp;oref=slogin

People can't afford their homes so they default, move out, and put stuff in storage, then they can't afford the storage unit. I'm not sure these folks were responsible enough to have loans...

[impala454]

Honestly I have noticed a huge boom in storage units. We have one nearby that went from a few rows of units to about 15, plus some giant ones in the back and a huge area for RVs/Boats/etc.

[impala454]

I'm not sure these folks were responsible enough to have loans...

Well obviously they could afford the smaller payments, because these problems didn't occur until the loan rates hit their increase. So its not that people weren't responsible enough to have loans, they just shouldn't have gotten as much as they did. Still mostly the loan company's fault IMHO. It's like handing a kid a bucket of candy and letting him decide how much is ok for him to eat.

[Hartmann]

Well obviously they could afford the smaller payments, because these problems didn't occur until the loan rates hit their increase. So its not that people weren't responsible enough to have loans, they just shouldn't have gotten as much as they did. Still mostly the loan company's fault IMHO. It's like handing a kid a bucket of candy and letting him decide how much is ok for him to eat.

I should have rephrased, yes they should have been given smaller loan amounts but the person should have looked at the terms and said, "wait, my rate could go up?".

[impala454]

I don't even care to have a big expensive house... I wish I could find a small-mid sized 2-3 bedroom house that has a HUGE garage and a fair amount of land.

[Hartmann]

I don't even care to have a big expensive house... I wish I could find a small-mid sized 2-3 bedroom house that has a HUGE garage and a fair amount of land.

Tomball? Or you could live somewhere off 225.

[impala454]

yeah tomball is the complete wrong direction for me, but yeah the 225 area, Deer Park, Pasadena, Baytown, Longview, etc is where I'm lookin. Just hard to find exactly what I want. I think a lot of people are hesitating selling their homes right now. I know I'm still not even gonna try to sell my house in Lubbock until the market gets better. Also still got a card I'm almost done payin off before I snag a second mortgage.

[Oasis]

I don't even care to have a big expensive house... I wish I could find a small-mid sized 2-3 bedroom house that has a HUGE garage and a fair amount of land.

We got a 3 bedroom with a nice size garage and a fucking par 3 backyard



It's gonna be baller when we get the deck finished, build an actual firepit, and get an above ground pool

Of course, my pleas to put a Moonwalk or a ferris wheel in the backyard are falling on deaf ears

[impala454]

sweet