gut;1113492 wrote:I've said no such thing. Owning a home is a privilege, not a right. Owning a bigger home isn't a right, either. Not sure what this has to do with the debate, but you're not paying attention if you think I've offered an opinoin on the merits of home ownership.


You mean deregulated institutions like FNMA and FMAC? And the 58% of the population or whatever the number of current home owners is might contest your claim about "false hopes of ownership". You're not being intellectually honest here - what happened was Bob & Jane go looking for houses. Bob & Jane would LOVE to have the $200k house but can really only afford a $150k house. Bob & Jane find an ARM that enables them to buy the $200k house. It's too good to be true! Bob & Jane's greed cost them their hope of home ownership and, ultimately, nobody else.


And they WERE affordable They were and ARE good products. But you don't use the lower rates to buy more house than you can afford. This goes back to greed - rather than take the savings from these lower rates and putting it in their pocket, people immediately paid that savings forward into a more expensive house. The worst loans were the negative amortization that deferred interest payments into higher loan outstanding - and no matter what else, if you're buying a $300k house and your pymts are only $1000 a month a little common sense should have been setting off all kinds of alarm bells.

There is simply, absolutely no excuse for not understanding what you sign. Beware the used car salesman. In most cases, these people could not afford standard interest/pymts on these houses. It was simply more house than they could afford, and even a minimal amount of due diligence on their part would have made this clear. They are just as guilty of greed as anyone else in this mess.

Actually the rate of home ownership in higher than the number you quoted. 65.1%
http://money.cnn.com/2011/10/07/real_estate/home_ownership/index.htm
Two thirds of American families are home owners but the number is declining because of the false hopes provided by duplicitous financial institutions. That is my opinion. Yours is quite different.
Financial institutions do not use predatory lending and mortgage servicing practices, Working class people are just greedy.
Financial institutions do not prepare mortgage agreements tilted in their favor in ways only understood by lawyers and accountants. Working class people should of course understand it and if they don’t, it is what they deserve for not getting law and accounting degrees.
What does it get us protecting these average folks hoping to own a home. Why according to you they are just greedy, they should know their place.
"What does that get us? A discontented, lazy rabble instead of a thrifty working class."
Mr. Potter, it’s a wonderful life

isadore;1113568 wrote:Actually the rate of home ownership in higher than the number you quoted. 65.1%
http://money.cnn.com/2011/10/07/real_estate/home_ownership/index.htm
Two thirds of American families are home owners but the number is declining because of the false hopes provided by duplicitous financial institutions. That is my opinion. Yours is quite different.
Financial institutions do not use predatory lending and mortgage servicing practices, Working class people are just greedy.

http://research.stlouisfed.org/publications/review/06/09/Garriga.pdf
So, the current rate of home ownership is about what it had been historically up until about 1994? Ohhhhh, HORRORS, the American dream of owning a home is being crushed! No, Francis, it's just returning to normal levels.

And, golly gee, I guess I was just lucky because I was raised not to blame others for the consequences of my decisions. Culturally this country is increasingly adopting the victim mentality, and it's pathetic but goes hand-in-hand with promoting socialism and having people reliant on the govt.

Footwedge;1113505 wrote:. You see, most people in business want to keep their customers and have them come back...and not try to hoodwink people..

LMAO. Defensive much? I don't make loans and I don't have "customers". Here I am telling people to do some research, get a lawyer if need be....but I'm out to screw people? Sad, really, you claim to accept responsibility for your mistake but you really don't. Truthfully many of these mortgage officers selling these products don't understand their products all that well. Your mistake, ultimately, was entrusting a major financial decision to the competence and honesty of a person you knew nothing about. Like I said, lesson learned.

Footwedge;1113504 wrote: Again, very, very few people pay lawyers hundreds of dollars to review mortgage papers. They just don't.

Who's fault is that?!? Who deserves 100% of the blame for that?!? Honestly the victim mentality in this thread is beyond disgusting. Nobody held a gun to their head. People have to take responsibility for their actions.

Footwedge;1113504 wrote:The point is....I wouldn't have read 6 pages of legalese even if I had a month to cancel.

Maybe you have so much money that it doesn't matter to you, but I read the papers when when I have thousands of dollars at stake. What are you doing on those days that is more important than at least tens of thousands of dollars per day?

isadore;1111948 wrote:For those tricked into buying homes by deceptive mortgage offers allowed to bankers by deregulation, for those whose gas price are raise by oil speculators allowed by deregulation, to those unemployed by bain capital type corporate predatores allowed by deregulation hopefully our government of the people will be there to protect them.

I stubbed my toe real bad this morning. Is that because the government has been deregulating home safety standards?

stlouiedipalma;1112014 wrote:Nothing like a thread about the black vote to get you righties all worked up. I've yet to see one intelligent post explaining why Obama won't get a huge percentage of the black vote or, for that matter, what Republicans have done to attract the black vote.

The Republicans' answer to countering Obama's appeal to blacks is voter ID laws, brought on by the lie that voter fraud is rampant, but really a thinly veiled disguise for voter suppression. The R's have always been all about voter supression. They can't beat 'em, so they'll disqualify 'em. Isn't that how it works?

Showing a photo ID is an attempt at voter suppression? Because blacks have a harder time obtaining photo ID's than whites? You cannot be serious.

stlouiedipalma;1112029 wrote:I suppose "predatory lender" is something you've never heard of, right?

Until banks and mortgage specialist start kidnapping people from their homes, dragging them to their lending institutions, and forcing them to sign papers at gunpoint, it's time to eliminate the term "predatory lending" once and for all.

gut;1113495 wrote:No they didn't, especially in cases of 0% down or even 5% down. The default risk premium in most mortgages is traditionally not very high. Most of what you really are paying for is just the cost of capital, competing with demands for capital paying various interest rates. Various higher risk segments, sure (segments that tradionally couldn't get loans at the normal 7-8% rates with 20% down, which should tell you something about the risk assumed here).

It's pretty clear that the operation of mortgages for the sub prime mortgage business is quite foreign to you. The predatary lending practices that the attorney generals of 49 states filed suit...were for a pretty good set of legal reasons. Laws were broken..execs were prosecuted...and hundreds of millions of dollars were punitively given back to the homeowners. So why did that happen? Hmmmm? Was it because all the home owners were just stupid? Your problem is that you haven't read what they did...in a completely deregulated environment.

Besides, you talk about the buyer assuming more risk like it's a bad thing or unfair. Shouldn't the person BUYING an asset be assuming most of the risk?

Risk assessment traditionally is set by the professionals who understand risk assessment....such as the bankers..many of whom have had post graduate education and are professionally geared to make those judgements. The law was deregulated in 1999, and there became less culpability in LYING about risk and or the ability for a customer to pay back in a timely fashion. Since you are not very well read on the subject, I will give you one example of these irresponsible practices.

The housing market between 04 and 06 saw an amazing spike in home values...mainly due to speculators taking advantage of a deregulated housing market. These speculators knew then loan collateral was as loose as could be and that easy credit could fly from everywhere. Now imagine the loan officer presenting to the potential home buyer that he sees "no reason that the 20-25% annual growth would slow down" or go in reverse which was a logical scenario. It's called manipulating the truth to close deals. The loan officer made his commissions are booked business...not necessarily profitable business, That's the way it worked. And that a typical scenario and the reason why companies like Washington Mutual booked billions...and were then forced into bankruptcy...all after the money handlers skimmed their windfalls out of the company coiffers.

Truthfully the problem with non-recourse, the low money down and the low interest rates is the buyers actually didn't have nearly enough skin in the game to act any more responsibly. The buyers chased easy money in the era of greed just as much as any one else.

Not gonna deny that at all. But you will find that these people were professional "home flippers" and understood the investment game. or so they thought. But we are not talking about them. We are talking about the naive first time home buyers...who wanted desparately to own their first home, play by the rules, make their payment every month, and live happily ever after. Many of these couples were making 80/90 thousand per year...plunked down 10% and then found themselves underwater equity wise. Do you know people that had that happen to? I do. Never in their wildest dreams did they think that the value of their home would drop 30% in 18 months because a mortgage bubble would pop by unprecedented amounts.

jhay78;1113846 wrote: Until banks and mortgage specialist start kidnapping people from their homes, dragging them to their lending institutions, and forcing them to sign papers at gunpoint, it's time to eliminate the term "predatory lending" once and for all.

Clueless.....so the Attorney Generals of 49 states and the District of Columbia were awarded hundreds of millions in punitive damages.... for illegal, preditary lending practices.

Your statement here suggests that the United States legal system is fraudulent. Is that what you're saying?

Too many ignorant people here regarding what happened on the housing bubble debacle.

LJ;1113509 wrote:The prepayment penalty is on the Note (which is usually about 10-15 page) under the section titled "prepayment penalty"

Never seen it any differently.

Most likely you were hosed though in the fact that you probably bought points and were never told.

The bank offered a fixed rate and a variable rate option....as they all do. True, there were different plans for different point payments.

I chose the variable rate which was very, very small in percentage number. I was told that I would pay...I think 2 points. My understanding that the continuing low variable rate would offset the up front cost of paying 2 points. What I didn't understand...and what I was not told.....that there would be a penalty for early payoff.
When I said that I lost thousands, I really exxagerated. Because the exceedingly low variable rates that I had...for 8 years, offset a ton of the penalty assessed, whenever I bought a new home...and closed my original mortgage.

Al Bundy;1113836 wrote:Maybe you have so much money that it doesn't matter to you, but I read the papers when when I have thousands of dollars at stake. What are you doing on those days that is more important than at least tens of thousands of dollars per day?

So...you take the 6 hours to read the size 6 font print....for 30 pages. Good for you, Did the banker sit there for 6 hours as well? Did he look at his watch while you did so?

Call up your bank....any bank...and ask them how long it takes to sign the papers on a mortgage closing. No one is going to tell you 6 hours...or else "bring your lawyer".

Footwedge;1113956 wrote:So...you take the 6 hours to read the size 6 font print....for 30 pages. Good for you, Did the banker sit there for 6 hours as well? Did he look at his watch while you did so?

Call up your bank....any bank...and ask them how long it takes to sign the papers on a mortgage closing. No one is going to tell you 6 hours...or else "bring your lawyer".

I took the papers home. If it takes me 6 hours to read for $180,000, I feel ok reading for a rate of $30,000/hr. I didn't have a lawyer read it, but if I shelled out a few hundred dollars to pay a lawyer, it would still be a very small percent of the money that I had invested. In hindsight, wouldn't it have made more sense for you to pay a lawyer a few hundred dollars instead of choosing not to read the document and lose thousands of dollars?

gut;1113631 wrote:http://research.stlouisfed.org/publications/review/06/09/Garriga.pdf
So, the current rate of home ownership is about what it had been historically up until about 1994? Ohhhhh, HORRORS, the American dream of owning a home is being crushed! No, Francis, it's just returning to normal levels.

And, golly gee, I guess I was just lucky because I was raised not to blame others for the consequences of my decisions. Culturally this country is increasingly adopting the victim mentality, and it's pathetic but goes hand-in-hand with promoting socialism and having people reliant on the govt.

What do we see that with relatively low interest rates in a prosperous economy, home ownership increases. Of course through the periods of greatest expansion of home ownership we had strong regulation on the banking institutions. In the 2000s we had the low interest rates but the largely unregulated financial institutions were let loose on families trying to fulfill the American Dream of homeownership.
Gosh I was raised to have compassion for Americans in difficult economic circumstances. I was taught to believe government should protect its people from predatory corporate practices that can destroy their lives.

No...nothing illegal at all.....Mortgage lenders across the board have been ordered to pay over 20 billion dollars due to predatary lending practices. But these home buyers should have known better....and our justice system is obviously flawed. No salesman would ever shade the truth when it comes to his commission check.

"Media investigations have disclosed that mortgage lenders used bait-and-switch salesmanship and fraud to take advantage of borrowers during the home-loan boom. In February 2005, for example, reporters Michael Hudson and Scott Reckard broke a story in the Los Angeles Times about “boiler room” sales tactics at Ameriquest Mortgage, the nation’s largest subprime lender. Hudson and Reckard cited interviews and court statements by 32 former Ameriquest employees who said the company had abused its customers and broken the law, “deceiving borrowers about the terms of their loans, forging documents, falsifying appraisals and fabricating borrowers' income to qualify them for loans they couldn't afford.”[SUP][16][/SUP] Ameriquest later agreed to pay a $325 million predatory lending settlement with state authorities across the nation."

http://en.wikipedia.org/wiki/Predatory_lending

According to Lovie Smith, blacks should "have Obamas back" and vote for him, well, because he is black.
http://www.theblaze.com/stories/chicago-bears-head-coach-tells-african-americans-to-have-obamas-back-in-2012/

Footwedge;1113922 wrote: Never in their wildest dreams did they think that the value of their home would drop 30% in 18 months because a mortgage bubble would pop by unprecedented amounts.

And that doesn't mean their loan was the result of predatory lending. I'll say it again, you don't take out a loan that requires you to be able to refinance to afford a future rate increase. Did predatory lending take place? Yes. Is that the reason for the meltdown or why so many millions of people lost their homes? No. Believe it or not, it's possible with cheap money to have a bubble without predatory practices. Did some good people lose their homes because they were taken advantage of? Sure, but in almost all cases they have no one to blame but themselves...stupidity does not imply fraud. And don't confuse the politics of scapegoating with actual fact - most of the fraud in the lending business has nothing to do with predatory lending, it was inflated appraisals and not properly qualifying/reviewing credit that pumped a bunch of risk into the system not taken into account by the models.

Much of the predatory lending actually centers around pushing refinancing again and again - that's the mom & pop scheister I was talking about and while it makes compelling headlines it's a drop in the bucket. Hardly the poor "first-time home buyer" shattered dream you're alluding to. And as for people coming in to pull equity out of their home with a refinance....what did I say about homeowner greed again? Professional home flippers, huh? Sounds like greed to me.

By the way, deregulation does not imply no regulation. It's in fact proven again and again that fraud is not enough to create a bubble, but bubbles can certainly form without fraud. It's easy money and a govt policy that everyone should own a hold that is at fault. The whole predatory lending and fraud makes for a nice boogeyman and it tells people "it's not your fault", but it's bullshit. And, in fact, most of the fraud committed was in direct violation of regulations in place because there is nothing predatory about selling an ARM. It's not the job of the lender to tell me what I can afford, nor is it anyone's decision but mine and mine alone. The lender, however, does have to accurately price risk, and the systemic fraud put into the system then comes into play with securities being sold not accurately reflecting their risk-adjusted value.

So who becomes harmed if we have regulation prohibiting predatory lending? Who loses out there? It certainly isn't any honest, hard working businessman.

Footwedge;1113951 wrote:..and what I was not told.....that there would be a penalty for early payoff.

Not sure why that surprised you. It's common practice. Redeem a CD early and there's typically a penalty for doing so. Banks have to manage their liabilities, and when people go chase better rates or want to change terms that imposes costs on the bank but you probably don't understand how they match their assets and liabilities. This is not predatory lending and is a perfectly common, and legitimate, practice.

I Wear Pants;1114407 wrote:So who becomes harmed if we have regulation prohibiting predatory lending? Who loses out there? It certainly isn't any honest, hard working businessman.

We have had regulation prohibiting it as such. Most of what has been called "predatory lending" in fact involved acts that were already illegal. This should be obvious - people aren't being retroactively prosecuted for illegal acts that weren't on the books at the time.

By the way, Glass Steagall didn't prevent the S&L crisis. The housing crisis had at its roots cheap credit and a federal mandate to increase home ownership - I don't think any amount of regulation would have prevented this. Glass Steagall would have done little to prevent the massive securitization program that greased the wheels. The names might have changed in the fallout depending on who ultimately owns the assets, but the result is ultimately still the same.

And it's a fringe impact. It plays nice with the whole "evil Wall Street" theme but it's not why the bubble formed or popped. The vast majority of homeowners who got into trouble got into trouble because they lost their job, or had hours/bonuses cut, or because they couldn't afford a payment higher than the teaser rate.

I'm sympathetic to someone who has their house broken into, or their car stolen, or mugged at gun point. But these homeowners willingly walked in to get a loan. Made a choice of their own free will to sign a loan document. And when someone offers you a great rate well below what 90% of the other lenders are offering, a little common sense should be telling you to read & understand the fine print.

Footwedge;1114073 wrote:deceiving borrowers about the terms of their loans, forging documents, falsifying appraisals and fabricating borrowers' income to qualify them for loans they couldn't afford.”[SUP][16][/SUP] Ameriquest later agreed to pay a $325 million predatory lending settlement with state authorities across the nation."

deceiving borrowers: "but officer, she said she wasn't a hooker and just needed to borrow some money"
forging documents: sounds like that was in violation of REGULATORY practice
falsifying appraisals: see above
fabricating income: see above

And when you sign your loan documents, do you not agree to the accuracy of the statements made in you application? These are the infamous NINJA loans, and it's ultimately a marginal effect on the fringe. And while you will find some truly unscrupulous frauds who altered documents after the fact, in most cases the homeowners were complicit with the fraud. They knew about the fib on their income. They got the "wink and a nod" about "my appraiser" that comes back with an inflated value, instantly "creating" equity for you. It's greed all around, plain and simple. Blameless ignorance about buying more house than they could afford. Really?

isadore;1114040 wrote:I was taught to believe government should protect its people from predatory corporate practices that can destroy their lives.

And I was taught not to rely on other people to protect me from myself. We believed that, as a country, 20-30+ years ago.

isadore;1114040 wrote:What do we see that with relatively low interest rates in a prosperous economy, home ownership increases. Of course through the periods of greatest expansion of home ownership we had strong regulation on the banking institutions. In the 2000s we had the low interest rates but the largely unregulated financial institutions were let loose on families trying to fulfill the American Dream of homeownership.
Gosh I was raised to have compassion for Americans in difficult economic circumstances. I was taught to believe government should protect its people from predatory corporate practices that can destroy their lives.

Try looking at what I posted again. Specifically, take a look at Figure 1 on page 2. From about 1962-1995 ownership was remarkably constant around an average of 64% give or take a point or two. Moreover, rates were RISING quickly and steadily in the 60's and 70's (from 6% in 1963 peaking at nearly 15% in 1982). In this same time period, home ownership increased steadily from about 63% to 66%. So you are, simply, wrong.

Lower interest rates lead to higher prices - practically an axiom of bubble formation. It doesn't really change the affordability of a house so it has no real impact on home ownership. What really juiced demand was all the mortgages given with 0-5% down when historically you plunked down 20%. It was the downpayment, particularly in markets like CA, that put home ownership out of reach for so many people. And before people start crying about regulation, realize the first time home buyer loans pushed by the govt STILL require just 3% (or maybe 3.5%) down. And that's a good thing. But it's no one's responsibility but my own to know what my payments can go to in 3-5 years when the ARM resets and whether or not I can make those payments.

The government should be prosecuted for predatory student loan lending then. Plenty of college kids are in the same situation as many homeowners (or former homeowners).

Or maybe people should be responsible and research and do their due dilligence before taking on any debt.

dwccrew;1114444 wrote:The government should be prosecuted for predatory student loan lending then. Plenty of college kids are in the same situation as many homeowners (or former homeowners).

Or maybe people should be responsible and research and do their due dilligence before taking on any debt.

Oh no no no no no no, no no. There's no place for personal responsibility in the nanny state! Get with the program.

gut;1114419 wrote:And I was taught not to rely on other people to protect me from myself. We believed that, as a country, 20-30+ years ago.

And I was taught to feel empathy for people who have been taken advantage.
It is interesting to see your view of them.

gut wrote:deceiving borrowers: "but officer, she said she wasn't a hooker and just needed to borrow some money"

You see them as Johns knowingly involved in an illegal activity with the hope for some fleeting satisfaction. Your view of working class people engaged in a legal in fact admireable action of acquiring a home for their family. The illegal or what should be illegal acts are on the part of the lender not the borrower who is the victim. You sound like one of those folks who claim a rape victim got what she deserved for walking into a bar alone. Where others would be want her protected by the police and her attacker punished.

dwccrew;1114444 wrote:The government should be prosecuted for predatory student loan lending then. Plenty of college kids are in the same situation as many homeowners (or former homeowners).

Or maybe people should be responsible and research and do their due dilligence before taking on any debt.

No maybe we should be considering more government action rather than less. No interest loans and forgiveness of payment in vital economic sectors with a scarcity of trained professionals.