The coming financial crisis

[Seabiscuit36]

Yep, new borrowers are going to find it very hard to get loans, the fargups who took out ridiculous mortgages might get bailed out of they meet specific criteria. 

I'm for it and against it.  For it since i work in the financial industry and this shtein really has us scared.  The worst of it is supposed to be around January thru March of 2008, but the ramifications would be immense had they not done anything. 

Against it because someone who's making 50k a year, and gets a mortgage for a 400k house deserves to lose their house.  I've seen so many people take these loans, who obviously had no idea what they were getting themselves into.  It's people living out of their means that pisses me off.  I bought a new townhouse because i knew what we could afford, and would make some equity, meanwhile someone gets to live in a ridiculous neighborhood, and now gets Uncle Sam bailing them out.

[Diomedes]

It doesn't piss you off that Uncle Sam is also bailing out the financial institution that should never have given that loan in the first place?  Christ, they've got all the Harvard educated economist running numbers for them..they should know that you can't make a 400k mortgage on 50k yearly income.

[Susquehanna Birder]

There are a lot of related financial markets that are hinged on the mortgage industry. It's bigger than the immediate players in the mortgage fray, so providing some backing could be a good thing.

[Diomedes]

It seems like the federal government had to get involved or it would just spiral out of control.  I get that.  It's an essentially liberal function and one I support..if we don't have a strong federal government/reserve to step in when the shtein hits the fan, to soften the awful blows that attend a truly free market, then we'd have a much harder time mainting a ciliized society.  Fine.

But I'm very unhappy that it was allowed to happen, and that the people who are responsible--both lendors and borrowers--are getting propped up by, essentially, me.

farg them.

In a couple years I'll finally have enough money saved to try to buy a house for the first time and from the looks of things, it's going to be harder because of these farg offs.  So I prop them up with my tax dollars, and I have less chance of buying a house.  farging great.

[Seabiscuit36]

The problem Dio is people are stupid, and dont read the fine print.  Meanwhile there was new mortgage companies popping up every day, who had only one goal in mind, sell mortgages, make money, and did not fully disclose everything that a reputable larger company would have. 

For you Dio, your right, it might be tougher.  Just have steady work, a good amount to pay down, and decent salary between you and the wifey.  You'll be fine. 

[rjs246]

In a couple years I'll finally have enough money saved to try to buy a house for the first time and from the looks of things, it's going to be harder because of these farg offs.  So I prop them up with my tax dollars, and I have less chance of buying a house.  farging great.

This sums things up nicely. Bad enough that I supported the ladyfriend while she went to school without being able to save shtein, let alone buy a house, now that we're mostly on our feet and can actually save a decent amount of money it's going to be harder to buy a house? farg everyone.

[Diomedes]

Bad enough that I supported the ladyfriend while she went to school without being able to save shtein, let alone buy a house, now that we're mostly on our feet and can actually save a decent amount of money it's going to be harder to buy a house? farg everyone.

farging exactly my situation, only it was my bright idea to walk away from corporate America, to actually walk the talk and not hate the people I work with, make an honest living, etc.  An honest living=barely a living at all.  So between the two of us, it's gonna be a couple years to get the money together.  I'm alright with that part..I chose it.  But I really hate that all these greedy irresponsible bastiches are farging me over twice on my way to a modest american dream.

[Rome]

From what I gather the feds are acting as intermediaries between the lending industry and borrowers who without a rate freeze would lose their asses.

Trust me, predatory lenders are at fault here, not the dopes who got the mortgages.  They were sold a bill of goods by scheming and unethical mortgage whores who did anything to get deals closed.  Most of those fargers are out of business now.

As for the effect this will have on real estate values, it will depend on the market.  Fewer foreclosures means fewer properties on the market.  Less supply usually means less depreciation in values but there are already so many active listings in a lot of markets that a few more really wouldn't have made things much worse.

I've been an appraiser for 21 years and have NEVER seen a market this bad.  As of yesterday there were 7,121 active single family residential listings in Daytona MLS.  That means over 7,000 houses in a marketplace with less than 100,000 people living here are for sale.  Just in MLS alone.  That's not counting vacant land, duplexes, triplexes, and commercial properties either.  All totaled there's over 10,000 properties for sale in this area. 

That's what you call a market in free fall.

[MadMarchHare]

farg that, Rome.  People go and buy a 3000 sq ft house, while working at Wal-Mart, are farging stupid.  Or they refinance because the initial rate is lower, but balloons?  Morons.  Read the fine print.  You're signing a document saying you owe 100s of thousands of dollars, and the fact that it sounds too good to be true doesn't ring an alarm?  farging idiots.

How about some personal culpability.  The mortgage companies were fools to play this game, but the ultimate responsibility is on the borrower who agrees to this shtein.

[Geowhizzer]

To summarize:

People are idiots.

[Diomedes]

How about some personal culpability.  The mortgage companies were fools to play this game, but the ultimate responsibility is on the borrower who agrees to this shtein.

I disagree.  Who has the power in this borrower/lendor system?  The lendor.  Who has the money?  The lendor.  Who has the greatest amount of knowledge and expertise?  The lendor.

I hear comments like yours all the time and I don't get it.  The most possible blame I could attribute to idiotic borrowers is half.  But since they don't have wiz kid number crunchers on their side, and since they are the supplicant in this relationship, I have a hard time giving them even half.  When a credit card company gives a credit card to trailer trash no job Stan and he maxes it out and defaults, the credit card company cries foul and would like us not to notice that trailer trash no job Stan was obviously a high credit risk.  Same shtein with these mortgages.  These companies make very stupid loans--knowingly, for a quick buck, in many cases--and then sit back smugly as people like you to scream personal responsibility at the poor sap borrowers.

I hate how easily the financial corporations are getting off here.  Not only did they make off with the money, but they've got the average Joe defending their predatory practices.

[Seabiscuit36]

Dio, its not the big guys who did this, it was the Mortgage brokers that popped up overnight that were predatory lending to ridiculous levels

[MadMarchHare]

Dio, come on.  Even the dimmest bulb should know up front A) the price of the home and B) the monthly payment.  If you're taking out a loan for 200,000 or more, you should at least ask if the rate is fixed or variable.  My first mortgage was a 3-year arm, which was a 4% rate for the first 3 years, but then floated with certain caps to prevent it from getting berserk.  But there was a sheet of estimated monthly payments for the entire 30 years, and it showed that as the mortgage matured, the payments increased.  With a balloon mortgage, or some of this other bullshtein these assclowns were selling, it would be even worse.

I agree the lendors have more knowledge, and have been irresponsible.  But if you're taking a loan out for many multiples of your yearly income, and you just assume that the first payment will never change without reading the paperwork, especially when you get a cold call from some bank you never heard of from the do-not-call list, you're an idiot.  If it sounds too good to be true, it probably is.

BTW, I'm not defending the sleazeball lendors here.  But you can't give the borrowers a free pass.  They farged up, and I really don't feel like paying for their mistakes, or the icehole lenders.

[Diomedes]

Do you see me giving anyone a free pass here?  I'm just saying..the people with the advantage in this game are the lendors, yet more often than not, I hear self righteous people bitching about irresponsible borrowers.   No one gets a pass, and the people with the advantage deserve a lot more of the hate than they're getting.

[Diomedes]

Dio, its not the big guys who did this, it was the Mortgage brokers that popped up overnight that were predatory lending to ridiculous levels

Fair enough..but who in turn is buying those mortages?  The big boys.  They don't get off the hook simply by being one step removed; without their patronage, the whole thing collapses.  The are accomplices to the crime as much as the getaway driver.

I'd kinda like to see them all eat their shorts on this, but then everyone suffers even worse.  It's a real bitch of a system.