We didn't learn a thing from the housing bubble

[OohPooPahDoo]

We've been getting a lot of refi offers lately. A lot of ARM's, they always emphasize in bold letters we'll be able to skip up to two payments, and they always encourage us to consume the difference on our note rather than save it.

I ask of the loan industry and government - did we not learn anything from the housing bubble? Its like it never happened! These guys are ready to do it all over again.

 

[GWV5903]

We've been getting a lot of refi offers lately. A lot of ARM's, they always emphasize in bold letters we'll be able to skip up to two payments, and they always encourage us to consume the difference on our note rather than save it.

I ask of the loan industry and government - did we not learn anything from the housing bubble? Its like it never happened! These guys are ready to do it all over again.

Yes we will, about every 10 years...

It's recorded history...

And this is the government you think should have more say in our everyday lives?

 

[bucs90]

No. We didnt.

Buying and owning a house used to mean something different. It was a place you laid a foundation for life. You created memories, and remembered them for decades as you grew old with that grand or humble home. You buried the old loyal dogs you had over the years in the backyard. You watched the neighbors kids grow up.

Now? Well, now it's used as a piggy bank, to try to sell in a few years for a huge profit, so you can move into a bigger, more expensive home..........and thus, increase your self worth as a person, since EVERYTHING we use today to measure a man's worth is done in property and money.

So no. We didnt learn shit.

 

[OohPooPahDoo]

We've been getting a lot of refi offers lately. A lot of ARM's, they always emphasize in bold letters we'll be able to skip up to two payments, and they always encourage us to consume the difference on our note rather than save it.

I ask of the loan industry and government - did we not learn anything from the housing bubble? Its like it never happened! These guys are ready to do it all over again.

Yes we will, about every 10 years...

It's recorded history...

And this is the government you think should have more say in our everyday lives?

Our "everyday lives" ? Are you an FDIC insured bank? I'm not.

 

[OohPooPahDoo]

No. We didnt.

Buying and owning a house used to mean something different. It was a place you laid a foundation for life. You created memories, and remembered them for decades as you grew old with that grand or humble home. You buried the old loyal dogs you had over the years in the backyard. You watched the neighbors kids grow up.

Now? Well, now it's used as a piggy bank, to try to sell in a few years for a huge profit, so you can move into a bigger, more expensive home..........and thus, increase your self worth as a person, since EVERYTHING we use today to measure a man's worth is done in property and money.

So no. We didnt learn shit.

I see it as a necessity for retirement. A house is an actual tangible thing you can save for retirement.

I had a friend who was delighted to be able to cash out 20k from his home after paying into it for the better part of a decade. He refinanced 10 years into a 30 year mortgage with another 30 year mortgage. He told me it was no problem because his payments were the same. The fact that his 30 years had started all over did not seem to dawn on him as significant. People don't think about the future any more.

 

[The Rabbi]

For every loan made there is a borrower as well as a lender. The lesson last time was that if you fucked up Uncle would bail you out, both borrower and lender. So expect lots more of the same this time. This is what "moral hazard" looks like.

 

[MeBelle]

We've been getting a lot of refi offers lately. A lot of ARM's, they always emphasize in bold letters we'll be able to skip up to two payments, and they always encourage us to consume the difference on our note rather than save it.

I ask of the loan industry and government - did we not learn anything from the housing bubble? Its like it never happened! These guys are ready to do it all over again.

Don't do it!!
It takes two to tango.

 

[francoHFW]

Dems brought back regulation to make insured toxic assets rated A+ impossible AGAIN. Won't happen again until lying cheating GOP get in again...

 

[auditor0007]

While sub-prime financing played a somewhat significant part in the housing bubble and bust, it was only part of the problem. Average people who bought their homes were fine and could afford the payments, until the bubble burst and they lost their jobs in the ensuing meltdown. Once they lost their jobs, they could no longer afford the payments, but it wasn't because of the financing.

The real problem was caused by speculators flipping houses. As prices were going up and up, investors stepped into the action in a very big way. As they purchased these homes, they continued to drive up the price as they could turn those homes for a 20% profit overnight. This continued to a point that in the last two years before the market bust, about one-third of all homes sold were sold to speculators or to individuals buying a second or third home.

The charts reveal some astonishing facts. At the peak of the boom in 2006, over a third of all U.S. home purchase lending was made to people who already owned at least one house. In the four states with the most pronounced housing cycles, the investor share was nearly half—45 percent. Investor shares roughly doubled between 2000 and 2006. While some of these loans went to borrowers with “just” two homes, the increase in percentage terms is largest among those owning three or more properties. In 2006, Arizona, California, Florida, and Nevada investors owning three or more properties were responsible for nearly 20 percent of originations, almost triple their share in 2000.

Investors Are Different from Owner-Occupants
Whether they were buying vacation homes or flipping houses, real estate investors behaved very differently from borrowers with just one first lien, a group almost certainly dominated by owner-occupants. For one thing, investors are very unlikely to move to the house they bought, especially if they own three or more properties. In rising markets, “buy-and-flip” investors typically want to hold properties for relatively short periods, and we show in our study that multiple-property owners in the mid-2000s tended to sell their properties much more quickly than those with just one first-lien mortgage. Importantly, we also show how buy-and-flip investors can make higher bids on houses, even if they had relatively little cash, by using low-down-payment loans. Nonprime credit—mortgage lending to borrowers who were unable or unwilling to qualify for cheaper, prime loans—enabled optimistic investors to speculate by making highly leveraged bets on house prices.

Because investors don’t plan to own properties for long, they care much more about reducing their down-payments than reducing their interest rates. The expansion of the nonprime mortgage market during the 2000s provided the perfect opportunity for optimistic investors to get low-down-payment credit, albeit at high interest rates. As shown in the charts below, investors were far more likely than owner-occupants to use nonprime credit to make their purchases, especially at the peak. Again, the colors show the number of properties the borrower owns, but this time we leave in the single-property borrowers for comparison.

?Flip This House?: Investor Speculation and the Housing Bubble - Liberty Street Economics

The problem with this is that all of a sudden, there were no more buyers. Because speculators pushed the market so hard, builders were going crazy building like there was no tomorrow and like there was an unlimited stream of buyers out there. The problem was that everyone that wanted to buy a house had done so, and then all of a sudden these speculators were caught holding all the excess inventory which nobody wanted. Since they couldn't even rent out these homes let alone sell them, they couldn't make the payments. We all know what happened after that.

So, the easy financing was somewhat of a problem, but it was exasperated by the speculators. Had the easy lending terms been limited to primary home buyers only, the bubble would likely have never happened.

 

[S.J.]

We've been getting a lot of refi offers lately. A lot of ARM's, they always emphasize in bold letters we'll be able to skip up to two payments, and they always encourage us to consume the difference on our note rather than save it.

I ask of the loan industry and government - did we not learn anything from the housing bubble? Its like it never happened! These guys are ready to do it all over again.

Same old liberal social engineering that caused it the last time.

 

[Politico]

did we not learn anything from the housing bubble?

Nope and I anticipate making money off stupid for years to come.

 

[Mac1958]

.

Until we...

• Break up the "too big to fail" banks
• Improve regulation (note I didn't say "increase")
• Reverse our shallow, "I want it all now no matter what" consumer culture

... we will not be out of the woods. We're still on the precipice.

.

 

[kwc57]

April's Fools Day is over and this is no joke. Would all the liberals who want to blame the conservatives for the previous housing disaster please mark this day on their calendar. President Clueless is at it again asking banks to make loans to people who are high risk and can't repay them......but not to worry, they will be backed by the government.

2016 can't get here quick enough.

Obama administration pushes banks to make home loans to people with weaker credit - The Washington Post

"The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default......."

 

[Defiant1]

We have become a materialistic society. I don't have a problem with that as long as one can afford it.

The problem is bleeding-heart liberals that think everyone is entitled to participate regardless of financial stature.

 

[Wacky Quacky]

We've been getting a lot of refi offers lately. A lot of ARM's, they always emphasize in bold letters we'll be able to skip up to two payments, and they always encourage us to consume the difference on our note rather than save it.

I ask of the loan industry and government - did we not learn anything from the housing bubble? Its like it never happened! These guys are ready to do it all over again.

Why shouldn't they try it again? They know big daddy government will be there to catch them if they fall.

We should have let everything fail, let the chips fall where they may. It would have hurt more in the short term, but we would have been a lot better off in the long term.

 

[kwc57]

We've been getting a lot of refi offers lately. A lot of ARM's, they always emphasize in bold letters we'll be able to skip up to two payments, and they always encourage us to consume the difference on our note rather than save it.

I ask of the loan industry and government - did we not learn anything from the housing bubble? Its like it never happened! These guys are ready to do it all over again.

Why shouldn't they try it again? They know big daddy government will be there to catch them if they fall.

We should have let everything fail, let the chips fall where they may. It would have hurt more in the short term, but we would have been a lot better off in the long term.

Courtesy of President Mulligan.

 

[Little-Acorn]

This has all been tried in the past, with disastrous results.

http://www.usmessageboard.com/polit...nomic-collapse-of-2008-democrat-policies.html

See a summary of what led to the economic collapse of 2008 (from which we still suffer today). Complete with quotes, interviews, and references to videos.

 

[Two Thumbs]

We've been getting a lot of refi offers lately. A lot of ARM's, they always emphasize in bold letters we'll be able to skip up to two payments, and they always encourage us to consume the difference on our note rather than save it.

I ask of the loan industry and government - did we not learn anything from the housing bubble? Its like it never happened! These guys are ready to do it all over again.

Have you learned yet that the housing bubble was Carters idea that Clinton ran with?

And that since it worked so well for clinton, obama is going to do it again?

You, to get the same results.

Still glad you blindly supported obama?

well, are you?

 

[NoTeaPartyPleez]

.

Until we...

• Break up the "too big to fail" banks
• Improve regulation (note I didn't say "increase")
• Reverse our shallow, "I want it all now no matter what" consumer culture

... we will not be out of the woods. We're still on the precipice.

.

Yup, we sure are.

The big banks that perpetrated this fraud which caused the bubble in the first place did not suffer the consequences of their actions (Ninja loans, CDOs, credit default swaps, slicing/dicing mortgages and then selling them to foreign investors, etc.) In fact, bonuses and profits went up over the last four years. They had money put aside to pay the fines and penalties that came down from the state AG's offices for their malfeasance, which they are doing.

So why not make billions and billions again using the very same tactics that put them into a financial stratosphere that 99.9999% of us can't even imagine?

 

[NoTeaPartyPleez]

We've been getting a lot of refi offers lately. A lot of ARM's, they always emphasize in bold letters we'll be able to skip up to two payments, and they always encourage us to consume the difference on our note rather than save it.

I ask of the loan industry and government - did we not learn anything from the housing bubble? Its like it never happened! These guys are ready to do it all over again.

Have you learned yet that the housing bubble was Carters idea that Clinton ran with?

And that since it worked so well for clinton, obama is going to do it again?

You, to get the same results.

Still glad you blindly supported obama?

well, are you?

Sorry, but you offer no facts about Carter. And actually it was Reagan who signed off on the law that gave banks the ability to securitize mortgages. Clinton signed off on the repeal of Glass-Steagall and the housing bubble began.