Morality of Wealth Redistribution

[Immanuel]

Really? Hmmm... Interest rates go up on a variable rate mortgage... to the point where they can't afford their payments anymore. Apparently someone has not been paying attention. After all... every time one company sells the mortgage, they have to get their cut in.

Except that if I am not mistaken the formula for interest rate changes is laid out in the mortgage documents. A company that purchases a note is bound by those documents and cannot later change the formula.

Also, as a side note, it is not only ARM's that are being foreclosed upon. My mortgage is fixed rate. I absolutely refused to enter into an ARM. I have now been unemployed for nearly 16 months. I have not missed a payment yet, but I am beginning to think that if things don't turn around by the end of the year, I'm not positive I can keep this up.

Immie

 

[Care4all]

hey mr nick, how do you think the grahm/ leach/ biley bill got it's name?

Sen. Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia), the co-sponsors of the Gramm–Leach–Bliley Act.

So this was Republican legislation with 3 republicans, congressmen and senator, creating and sponsoring the bill....

wonder WHY you didn't mention such and just tried to nail clinton for the deregulation?

hmmmmm....

 

[Care4all]

Really? Hmmm... Interest rates go up on a variable rate mortgage... to the point where they can't afford their payments anymore. Apparently someone has not been paying attention. After all... every time one company sells the mortgage, they have to get their cut in.

Except that if I am not mistaken the formula for interest rate changes is laid out in the mortgage documents. A company that purchases a note is bound by those documents and cannot later change the formula.

Also, as a side note, it is not only ARM's that are being foreclosed upon. My mortgage is fixed rate. I absolutely refused to enter into an ARM. I have now been unemployed for nearly 16 months. I have not missed a payment yet, but I am beginning to think that if things don't turn around by the end of the year, I'm not positive I can keep this up.

Immie

Happy Birthday Immie!

 

[Mr.Nick]

hey mr nick, how do you think the grahm/ leach/ biley bill got it's name?

Sen. Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia), the co-sponsors of the Gramm–Leach–Bliley Act.

So this was Republican legislation with 3 republicans, congressmen and senator, creating and sponsoring the bill....

wonder WHY you didn't mention such and just tried to nail clinton for the deregulation?

hmmmmm....

The hell I didn't..

I bash the fuck out of the republicans all the time for passing that bullshit...

 

[Mr.Nick]

If you must know I'm a fiscal conservative and a social libertarian....

I only vote against progressive communists, it not like I support the republican party. I support the Tea Party but the republican party is just a consolation prize....

Hell I had to painfully vote for Mark Kirk (the RINO tyrant) because Alexi Giannoulias is Obamas pet...

Normally I would have voted against the republican Kirk...

Its difficult being a libertarian...

 

[Care4all]

The fucking government forced the lending in the first place.

Lenders were strict before Bill Clinton and Jesse Jackson claimed lending bias against the poor was pure racism.

Creditors were forced to lend to anyone - credit was turned into a right via the community reinvestment act..

Thats the fucking problem... Thats the root cause...

Simply not true.

90% of the loans foreclosed are NOT CRA area loans....they were loans to people not protected or covered by the Community Reinvestment Act

the banks CHOSE to lower their own standards to keep their ponzi scheme going.... had NOTHING to do with CRA.

But you dont understand...

CRA loans are 90% home loans, however people used their home ownership status to get CREDIT CARDS and other loans...

Understand now???

You get a CRA loan for a home, you then take that home and use it as some kind of collateral or proof that you can pay back a loan and then rack up 60-70k in debt...

Nick....listen to me, pretty please....

90% of the mortgages that have been foreclosed on in this crisis, ARE NOT loans to people that lived in the areas that were covered under the Community Reinvestment Act protection....so this means that the government DID NOT force those 90% that were foreclosed upon, in to those shady loans....it means that the Banks and Mortgage companies, created these risky loans, all by themselves. they did this for no purpose other than wanting and needing to sell more mortgages than the previous year in order to keep the prices climbing on homes.

their Ponzi scheme could not work, unless prices continued to go up on homes....so they decided to lower their standards on their loans, so that they could reach a wider market, and then when those lower standards did not capture enough people to keep their scheme going they lowered their loan standards even more.....the banks did this, to themselves Nick....and greed is what drove their extremely poor business decisions.


Care

 

[MikeK]

Ummm- yeah. Those buyers signed the contract when they bought their home with a variable rate mortgage. If they weren't able to figure that out, then they were being stupid.

Whether or not the signee of an adjustable rate mortgage is stupid or is simply naive and unaware of the potential trap he or she is stepping into, do you think such financial shenanigans should be permitted by law? Aside from the patent immorality of such devious contracts the kind of economic chaos they have caused is evidence their overall effect is damaging to society. The terms of a mortgage contract should be fixed and predictable throughout its duration.

 

[Mr.Nick]

Simply not true.

90% of the loans foreclosed are NOT CRA area loans....they were loans to people not protected or covered by the Community Reinvestment Act

the banks CHOSE to lower their own standards to keep their ponzi scheme going.... had NOTHING to do with CRA.

But you dont understand...

CRA loans are 90% home loans, however people used their home ownership status to get CREDIT CARDS and other loans...

Understand now???

You get a CRA loan for a home, you then take that home and use it as some kind of collateral or proof that you can pay back a loan and then rack up 60-70k in debt...

Nick....listen to me, pretty please....

90% of the mortgages that have been foreclosed on in this crisis, ARE NOT loans to people that lived in the areas that were covered under the Community Reinvestment Act protection....so this means that the government DID NOT force those 90% that were foreclosed upon, in to those shady loans....it means that the Banks and Mortgage companies, created these risky loans, all by themselves. they did this for no purpose other than wanting and needing to sell more mortgages than the previous year in order to keep the prices climbing on homes.

their Ponzi scheme could not work, unless prices continued to go up on homes....so they decided to lower their standards on their loans, so that they could reach a wider market, and then when those lower standards did not capture enough people to keep their scheme going they lowered their loan standards even more.....the banks did this, to themselves Nick....and greed is what drove their extremely poor business decisions.


Care

Gerrr..

Do you not understand that if you own a home you can get credit and buy all kinds of rims and shit for your 89' Caprice... Yeah you can get blastin sound systems and nice paint jobs too.

You know why?

Because if you own a home your credit limit goes from 500.00 to 5,000 if not more.. BECAUSE YOU OWN A FUCKING HOUSE...

What don't you understand about that????

Owning a house is a lot different than renting one...

Do you really believe renters get 5,000 dollar limits? no they get 500 dollar limits at 18%

 

[Mr.Nick]

What the fuck do people not understand about the ownership of assets and credit??

Ever hear of a lien???

 

[Steelplate]

Mr Nick.... I want you to prove your blanket ignorant assertions... that these people were out "buying rims" and all the rest of the shit.

The simple truth is... you were either told this bullshit or simply believe it on your own accord. Either way, It's not proven, so stop acting like your opinion is fact.

 

[editec]

Absolutely James... Good point about the foreclosures. And I love how the Conservative Spin machine paints all those who lost their homes as people who "bought too much house". There are hundreds of thousands of these foreclosures that had absolutely nothing to do with people overextending themselves and everything to do with these mortgage companies reselling the mortgages over and over and over again until things fell apart.

The part I bolded is 100% horsefeathers, no offense. A homeowner's ability, or lack thereof, to make their own mortgage payments has ABSOLUTELY nothing to do with how many times that mortgage is bought and sold in secondary markets.

No, I'm afraid you're minfinformed on that point, Mani.

Without that secondary mortgage system banks would have had to hold the paper. The mortgages they were holding would have not be capitalized, and therefore they wouldn't have been able to lend out more money.

Hence on the macro scale, there'd have been less money available for people to buy homes.

Less money in that RE market would have resulted in lower home prices overall.

Since banks knew they could pass off the debts to bondholders, they invented more and more dubious mortgages like NINJA loans.

As these loans qualifed more people, people who really were not qualified to repay those mortgages, they created an artifical demand.

Had banks STUCK to the 20% down 30 year fixed mortgages, median housing prices would have stayed roughly in line with the meadian income ratios that existed post WWII.

In that case median housing prices would have stayed at roughtly 1-2 years median family incomes.

The median price of a home would have been roughly $100,000.

Instead the median price of homes in the USA climbed to over $200,000.

The contraction in pricing you see now is the market correcting to the more appropriate pricing that would have existed if but for that secondary mortgage market.

 

[Gadawg73]

Wow... you guys are going at it.

Let me ask a few simple questions.... who benefits MOST from our country is it the welfare bum making...what?.... $600 or so/month from Welfare? Or is it the conglomerate, who buys legislation that makes them billions upon billions of dollars every year... of which, millions go to their CEO's and Corporate attorneys as salary?

I am upper middle class and I have no... READ... zero problem with the taxes my wife and I pay.

Funny that some of you should mention public employees.... how many of you help pay for your own wages? Public employees do.

You're spot on here. People act as if public employees don't pay taxes like everybody else.

As a side note a lot of people forget that what other people do effects them as well. Let's say on your street there's a few foreclosures. Guess what happens to the value of your home, and thus your total assets? We don't live in economic bubbles.

Well I do have a problem with the taxes I pay because the majority of those taxes are transfer taxes.
Transfer from my bank account into another citizen's account.
And that is not what government should be. Social security, Medicare, Medicaid and welfare consume almost 60% of the entire budget.
Explain to me how any corporation forces me at the point of a gun to give them $$$.

 

[Gadawg73]

Absolutely James... Good point about the foreclosures. And I love how the Conservative Spin machine paints all those who lost their homes as people who "bought too much house". There are hundreds of thousands of these foreclosures that had absolutely nothing to do with people overextending themselves and everything to do with these mortgage companies reselling the mortgages over and over and over again until things fell apart.

The part I bolded is 100% horsefeathers, no offense. A homeowner's ability, or lack thereof, to make their own mortgage payments has ABSOLUTELY nothing to do with how many times that mortgage is bought and sold in secondary markets.

No, I'm afraid you're minfinformed on that point, Mani.

Without that secondary mortgage system banks would have had to hold the paper. The mortgages they were holding would have not be capitalized, and therefore they wouldn't have been able to lend out more money.

Hence on the macro scale, there'd have been less money available for people to buy homes.

Less money in that RE market would have resulted in lower home prices overall.

Since banks knew they could pass off the debts to bondholders, they invented more and more dubious mortgages like NINJA loans.

As these loans qualifed more people, people who really were not qualified to repay those mortgages, they created an artifical demand.

Had banks STUCK to the 20% down 30 year fixed mortgages, median housing prices would have stayed roughly in line with the meadian income ratios that existed post WWII.

In that case median housing prices would have stayed at roughtly 1-2 years median family incomes.

The median price of a home would have been roughly $100,000.

Instead the median price of homes in the USA climbed to over $200,000.

The contraction in pricing you see now is the market correcting to the more appropriate pricing that would have existed if but for that secondary mortgage market.

Where is the fact that the market WAS OVER BUILT in your analysis?
The fact that there are and were far more houses on the market than demand BEFORE the collapse also played a major part in this and the pricing.

 

[rightwinger]

If you give business incentives to create jobs in the economy and they end up just keeping the money...

Is it moral to continue giving them the money?

 

[sparky]

The part I bolded is 100% horsefeathers, no offense. A homeowner's ability, or lack thereof, to make their own mortgage payments has ABSOLUTELY nothing to do with how many times that mortgage is bought and sold in secondary markets.

No, I'm afraid you're minfinformed on that point, Mani.

Without that secondary mortgage system banks would have had to hold the paper. The mortgages they were holding would have not be capitalized, and therefore they wouldn't have been able to lend out more money.

Hence on the macro scale, there'd have been less money available for people to buy homes.

Less money in that RE market would have resulted in lower home prices overall.

Since banks knew they could pass off the debts to bondholders, they invented more and more dubious mortgages like NINJA loans.

As these loans qualifed more people, people who really were not qualified to repay those mortgages, they created an artifical demand.

Had banks STUCK to the 20% down 30 year fixed mortgages, median housing prices would have stayed roughly in line with the meadian income ratios that existed post WWII.

In that case median housing prices would have stayed at roughtly 1-2 years median family incomes.

The median price of a home would have been roughly $100,000.

Instead the median price of homes in the USA climbed to over $200,000.

The contraction in pricing you see now is the market correcting to the more appropriate pricing that would have existed if but for that secondary mortgage market.

Where is the fact that the market WAS OVER BUILT in your analysis?
The fact that there are and were far more houses on the market than demand BEFORE the collapse also played a major part in this and the pricing.

Editec is talkin' manipulation, far and away more than simple supply/demand Gadawg

for your perusal, the perps are being outed

well after the damage done, and $$$ made, Unfortunatly>


This investigation has the potential to be a Mother of All Nightmares situation for the banks for a couple of reasons. For one thing, the decision to go after the securitization process is a total prosecutorial bullseye. This is the ugly heart of the wide-scale fraud scheme of the bubble era. Again, the business model during this time was a giant bait-and-switch scam. Sleazy lenders like Countrywide and New Century first created huge masses of bad loans, committing every conceivable kind of fraud to get people into loans (from doctoring income statements with white-out to phonying FICO scores to engineering fake appraisals). They then moved the bad loans quickly to the big banks, which pooled them and chopped them up (this is the “securitization” process), sprinkled hocus-pocus math on them, and them sold them to suckers around the world as AAA-rated securities.

A New Wall Street Investigation: Is the Hammer Finally Coming Down? | Rolling Stone Politics | Taibblog | Matt Taibbi on Politics and the Economy

 

[sparky]

If you give business incentives to create jobs in the economy and they end up just keeping the money...

Is it moral to continue giving them the money?

well, don't we know how that works out?>

 

[Gadawg73]

If you give business incentives to create jobs in the economy and they end up just keeping the money...

Is it moral to continue giving them the money?

Where is it my responsibility to create jobs in the economy?
If elected officials give $$ to businesses in incentives then vote out that crowd and vote in those that give no incentives to business.

 

[Gadawg73]

No, I'm afraid you're minfinformed on that point, Mani.

Without that secondary mortgage system banks would have had to hold the paper. The mortgages they were holding would have not be capitalized, and therefore they wouldn't have been able to lend out more money.

Hence on the macro scale, there'd have been less money available for people to buy homes.

Less money in that RE market would have resulted in lower home prices overall.

Since banks knew they could pass off the debts to bondholders, they invented more and more dubious mortgages like NINJA loans.

As these loans qualifed more people, people who really were not qualified to repay those mortgages, they created an artifical demand.

Had banks STUCK to the 20% down 30 year fixed mortgages, median housing prices would have stayed roughly in line with the meadian income ratios that existed post WWII.

In that case median housing prices would have stayed at roughtly 1-2 years median family incomes.

The median price of a home would have been roughly $100,000.

Instead the median price of homes in the USA climbed to over $200,000.

The contraction in pricing you see now is the market correcting to the more appropriate pricing that would have existed if but for that secondary mortgage market.

Where is the fact that the market WAS OVER BUILT in your analysis?
The fact that there are and were far more houses on the market than demand BEFORE the collapse also played a major part in this and the pricing.

Editec is talkin' manipulation, far and away more than simple supply/demand Gadawg

for your perusal, the perps are being outed

well after the damage done, and $$$ made, Unfortunatly>


This investigation has the potential to be a Mother of All Nightmares situation for the banks for a couple of reasons. For one thing, the decision to go after the securitization process is a total prosecutorial bullseye. This is the ugly heart of the wide-scale fraud scheme of the bubble era. Again, the business model during this time was a giant bait-and-switch scam. Sleazy lenders like Countrywide and New Century first created huge masses of bad loans, committing every conceivable kind of fraud to get people into loans (from doctoring income statements with white-out to phonying FICO scores to engineering fake appraisals). They then moved the bad loans quickly to the big banks, which pooled them and chopped them up (this is the “securitization” process), sprinkled hocus-pocus math on them, and them sold them to suckers around the world as AAA-rated securities.

A New Wall Street Investigation: Is the Hammer Finally Coming Down? | Rolling Stone Politics | Taibblog | Matt Taibbi on Politics and the Economy

Manipulation is not being downplayed in any argument I make but to single it out as the only and primary factor is not valid.
Personal responsibility of buyers and the market demand played a large part.
No one forced anyone to buy a home anywhere that they could not afford.

 

[Care4all]

But you dont understand...

CRA loans are 90% home loans, however people used their home ownership status to get CREDIT CARDS and other loans...

Understand now???

You get a CRA loan for a home, you then take that home and use it as some kind of collateral or proof that you can pay back a loan and then rack up 60-70k in debt...

Nick....listen to me, pretty please....

90% of the mortgages that have been foreclosed on in this crisis, ARE NOT loans to people that lived in the areas that were covered under the Community Reinvestment Act protection....so this means that the government DID NOT force those 90% that were foreclosed upon, in to those shady loans....it means that the Banks and Mortgage companies, created these risky loans, all by themselves. they did this for no purpose other than wanting and needing to sell more mortgages than the previous year in order to keep the prices climbing on homes.

their Ponzi scheme could not work, unless prices continued to go up on homes....so they decided to lower their standards on their loans, so that they could reach a wider market, and then when those lower standards did not capture enough people to keep their scheme going they lowered their loan standards even more.....the banks did this, to themselves Nick....and greed is what drove their extremely poor business decisions.


Care

Gerrr..

Do you not understand that if you own a home you can get credit and buy all kinds of rims and shit for your 89' Caprice... Yeah you can get blastin sound systems and nice paint jobs too.

You know why?

Because if you own a home your credit limit goes from 500.00 to 5,000 if not more.. BECAUSE YOU OWN A FUCKING HOUSE...

What don't you understand about that????

Owning a house is a lot different than renting one...

Do you really believe renters get 5,000 dollar limits? no they get 500 dollar limits at 18%

no, it's YOU Nick that just doesn't get it.

Buying a home does not give you MORE spendable credit....not if your mortgage is taking up a good deal of your monthly income....a mortgage could make it more difficult to buy a car and get new credit cards, if you are mortgage strapped.

Yes, after you have paid your mortgage for a few years, and some equity has been built in to your house where your house is now worth more than the loan you had originally taken out to buy it. you can take out that equity and borrow on it.

And yes this was a problem this past decade BECAUSE we were in a Bubble.... a Bubble driven by the "easy Money" the banks loaned out and they loaned out this "easy Money" down to the homeless or unemployed man towards the end of their ponzi scheme because the only way to keep the prices going up on homes was to sell more mortgages....sell more homes. they got their easy money to sell to us for free or near free from our lovely Fed.

sooooo, because home prices were (artificially) rising leaps and bounds, the banks were able to then sell the community home equity loans, and second mortgages and they advertised with billboards and radio ads and tv ads and newspaper ads directed towards homeowners to take out home equity or second mortgages to buy all their coveted goodies..when homes started to slow down in their sales and there were no more homeless that they could sell 1st mortgages to, the banks pushed the second and home equity loans....

as long as home prices kept going up, everybody was happy....

Humpty dumpty came falling down when some of those people that were sold an adjustable mortgage could not get refinanced in to a conventional fixed rate mortgage and when the economy began to slow and people began losing their jobs....then losing their homes, then more homes on the market, slowed the home market, then this caused more layoffs in the construction industry and the mortgage loan industry, then more homes were not being sold and so on and so forth....the Bubble busted.

 

[Gadawg73]

Nick....listen to me, pretty please....

90% of the mortgages that have been foreclosed on in this crisis, ARE NOT loans to people that lived in the areas that were covered under the Community Reinvestment Act protection....so this means that the government DID NOT force those 90% that were foreclosed upon, in to those shady loans....it means that the Banks and Mortgage companies, created these risky loans, all by themselves. they did this for no purpose other than wanting and needing to sell more mortgages than the previous year in order to keep the prices climbing on homes.

their Ponzi scheme could not work, unless prices continued to go up on homes....so they decided to lower their standards on their loans, so that they could reach a wider market, and then when those lower standards did not capture enough people to keep their scheme going they lowered their loan standards even more.....the banks did this, to themselves Nick....and greed is what drove their extremely poor business decisions.


Care

Gerrr..

Do you not understand that if you own a home you can get credit and buy all kinds of rims and shit for your 89' Caprice... Yeah you can get blastin sound systems and nice paint jobs too.

You know why?

Because if you own a home your credit limit goes from 500.00 to 5,000 if not more.. BECAUSE YOU OWN A FUCKING HOUSE...

What don't you understand about that????

Owning a house is a lot different than renting one...

Do you really believe renters get 5,000 dollar limits? no they get 500 dollar limits at 18%

no, it's YOU Nick that just doesn't get it.

Buying a home does not give you MORE spendable credit....not if your mortgage is taking up a good deal of your monthly income....a mortgage could make it more difficult to buy a car and get new credit cards, if you are mortgage strapped.

Yes, after you have paid your mortgage for a few years, and some equity has been built in to your house where your house is now worth more than the loan you had originally taken out to buy it. you can take out that equity and borrow on it.

And yes this was a problem this past decade BECAUSE we were in a Bubble.... a Bubble driven by the "easy Money" the banks loaned out and they loaned out this "easy Money" down to the homeless or unemployed man towards the end of their ponzi scheme because the only way to keep the prices going up on homes was to sell more mortgages....sell more homes. they got their easy money to sell to us for free or near free from our lovely Fed.

sooooo, because home prices were (artificially) rising leaps and bounds, the banks were able to then sell the community home equity loans, and second mortgages and they advertised with billboards and radio ads and tv ads and newspaper ads directed towards homeowners to take out home equity or second mortgages to buy all their coveted goodies..when homes started to slow down in their sales and there were no more homeless that they could sell 1st mortgages to, the banks pushed the second and home equity loans....

as long as home prices kept going up, everybody was happy....

Humpty dumpty came falling down when some of those people that were sold an adjustable mortgage could not get refinanced in to a conventional fixed rate mortgage and when the economy began to slow and people began losing their jobs....then losing their homes, then more homes on the market, slowed the home market, then this caused more layoffs in the construction industry and the mortgage loan industry, then more homes were not being sold and so on and so forth....the Bubble busted.

Well said and that happened. The banks fucked themselves no doubt.
However, I was given a 250K additional line of credit in 2008. I never drew a penny on it.
Why?
Discipline and personal responsibility. I knew maybe I could not pay for it.
No one forced anyone to buy any home or borrow any $$ they could not afford.