General > General info Somewhat hot tub related
another one bites the dust
Webini:
Vanguard, I work in the industry. There is plenty of blame to go around. The CRA loans were less than 2% of loans that went bad. The biggest issues were: 1) the deregulation of the financial services industry, and 2) the creation of exempted over-the-counter derivatives. Both of those were primarily the work of Senator Phil Gramm (R - Texas).
http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877330,00.html
Vinny:
--- Quote ---Vanguard, I work in the industry. There is plenty of blame to go around. The CRA loans were less than 2% of loans that went bad. The biggest issues were: 1) the deregulation of the financial services industry, and 2) the creation of exempted over-the-counter derivatives. Both of those were primarily the work of Senator Phil Gramm (R - Texas).
http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877330,00.html
--- End quote ---
I don't work in the industry but believe that it stems down to - It is not a right to own a house but a privilege.
The people, whoever they are, that lent money to potential home buyers and didn't verify income or use the 28% rule for affordability of housing are to blame first.
The second tier to blame are the rating agencies who rated a $500,000 mortage by a person making $33,000 as AAA. That was pure B.S.
Third tier was Wall Street trading based on the rating of these derivitives. Of course I don't understand how a CEO who's company loses millions or better yet billions is granted a bonus.
But I guess that it all comes down to we all need to live through really hard times to get back to reality; so our generation, our children's generation and I guess if there are grandchildren old enough to understand what's going on will have a life lesson ... we all can't have the things we want!
Webini:
The exempted over-the-counter derivatives accounted for most of this behavior. Everyone in the mortgage industry from the loan officers to the CEOs were incented based on loans closed. With derivatives all you had to do was to get the loan written - the bank / mortgage company did not care if you could pay since the loan would be sold and packaged with 1,000s of others into a security. The linkage between the lenders and the loan was gone.
The people I have NO sympathy for are the people that "bought" a house knowing they could not afford it. How do you think you can pay a $2,000 a month mortgage when you bring home $2,800 per month?
Renee:
--- Quote ---The people I have NO sympathy for are the people that "bought" a house knowing they could not afford it. How do you think you can pay a $2,000 a month mortgage when you bring home $2,800 per month?
--- End quote ---
Well, evidentally they did something right, cause now they're gonna get bailed out, and you and I are gonna pay for it! A gamble that paid off....(note the hint of bitterness in my voice)
Webini:
--- Quote ---
Well, evidentally they did something right, cause now they're gonna get bailed out, and you and I are gonna pay for it! A gamble that paid off....(note the hint of bitterness in my voice)
--- End quote ---
That is an unfortunate misconception. They are not getting bailed out. The only homeowners that are getting help are the ones that have not defaulted yet and can prove that they have the income to pay the reduced monthly payment. The irony is that in the vast majority of cases the homeowners will end up paying more in the long run due to having their payment stretched out for 40 years.
If you are already late on your payments and can't prove you have the income needed you are going to lose the house. The media is feeding this hysteria with inaccurate and misleading reporting.
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