I guess thats true I was going to school for finance when this started to unravel and I guess I wouldn't be able to sleep if I made a loan like that. I guess thats why I know I will never be able to be a used car salesman.
Can someone explain to me why Foreclosures
- Thread starter Knownothing
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We're talking total nationalization.... not just giving them regulations and telling them not to give billions of bonuses with our tax payer money to failed, incompetent execs. While nationilization might be less painful in the short term I think it would be the worst option for our economy in the long run.
The "so-called" experts (I don't trust many of them since they have been so consistently wrong, but there are two writers for MSN who are very Doom and Gloom and have been right about this financial crisis all along) basically say that a couple of more large banks failing will cause a ripple effect through the economy of the entire world.
I would really love to see what would happen; if things would really collapse to the point of devestating our economy, or if all these financial people and politicians aren't just protecting their peeps and their money.
There was a lot of criminal action going on with these banks/lending institutions and I think that is why the FBI is now investigating, hopefully a lot of people go to jail over the mess they created.
I don't put the blame so much on the homeowners some of which were seniors and who have worked very hard all of their lives, I put it on the institutions and how the whole thing got rolled into wall street. MSNBC just had a special on how this whole thing happened, and it is probably worth while seeing so everyone is informed on what exactly happened. Frontline had a show about the bigger picture collapses last night.
I would prefer to see people stay in their homes and have their payments locked in by the feds at an affordable amount rather than throwing an excessive amount of people out on the streets and have neighborhood of abandon homes.
I don't put the blame so much on the homeowners some of which were seniors and who have worked very hard all of their lives, I put it on the institutions and how the whole thing got rolled into wall street. MSNBC just had a special on how this whole thing happened, and it is probably worth while seeing so everyone is informed on what exactly happened. Frontline had a show about the bigger picture collapses last night.
I would prefer to see people stay in their homes and have their payments locked in by the feds at an affordable amount rather than throwing an excessive amount of people out on the streets and have neighborhood of abandon homes.
Its amazing... if some poor guy walked into a bank and robbed it for 1K He'd be thrown in jail..... but these guys have robbed people of billions of dollars of investments from people with their greed and incompetence. Hell, Madoff is just sitting under house arrest after stealing billions of dollars! If he is some poor kid from the ghetto he'd be somebody's ***** in San Quentin by now.
Can anyone explain why this is a good idea?
In addition to providing incentives to servicers and investors, the administration will also reduce borrowers' loan balances by up to $1,000 a year for five years if they keep up with payments.
In addition to providing incentives to servicers and investors, the administration will also reduce borrowers' loan balances by up to $1,000 a year for five years if they keep up with payments.
Answer: Yes
Let's look at those who are in trouble here:
1) Big banks that got greedy. They began lending lots of money to high-risk people/companies for high interest rates. These banks could make more money off of these high-credit risk individuals when economic times were good. They took a gamble, and got burned.
2) People who were broke, but still wanted that new car/house/boat/etc. They went to the greedy banks mentioned above, and borrowed money that they couldn't afford to pay back. Many of these people used their homes as an ATM machine, borrowing against any available equity in the home as home values rose.
At the end of the day, there were a lot of bad/dumb decisions going on. The bailouts only shelter the dolts who made these poor monetary decisions. If anything, they only encurage the type of behavior that got us into this situation. Why would the banks change their lending policies if they knew that the Federal government would absorb all of the "Toxic" debt? They can continue to lend money to high-credit risk people at sky-high interest rates. Why would individuals change their spending/borrowing habits if they knew that the Federal government would step in and prevent foreclosure? Those that got us into this situation need to be held accountable.
The heck of it is, not only do the bad decision-makers get rewarded, but the good decision-makers pay for them with increased taxes and such for many, many years into the future.
They would probably only give it to people not making their loan payments so the people putting their education to use and meeting their obligations would be left out once again...... :skeptical:
I work at a bank in Iowa. What we are seeing in this area of the country is much different than in many of the large metro area on the coasts. I have had to go through a number of foreclosures and unfortunately, most of them can be declared a direct result of poor decisions. I have seen a number of spouses quit $35,000 per year jobs because they had a baby and wanted to stay home. I've seen people that easily qualified for the house loan go out and buy RV's , boats, expensive vehicles and other toys that made it so they couldn't afford to make the house payment any more. Most of these people refuse to sell the toys because they owe more than they're worth. There are people that should be able to make the monthly payments, but when you look at the checking account and they are spending a large portion of their income eating out, buying video games, and traveling.
Unfortunately, our government always trys to paint the picture that these people are victims. There are some people that have just had some bad luck and lost jobs due to medical issues or shutdowns. Most banks will work with these people and try to find a way to keep them in the house. However many people know how long they can live in a house for free before they will get kicked out and basically say the heck with it. They don't pay the taxes or insurance, many don't pay utitlites and many abuse the house to the point of needing significant repairs and cleanup when they are finally removed.
This plan will help some people. Unfortunately, it will also be abused by many people that are victims of their own doings.
Unfortunately, our government always trys to paint the picture that these people are victims. There are some people that have just had some bad luck and lost jobs due to medical issues or shutdowns. Most banks will work with these people and try to find a way to keep them in the house. However many people know how long they can live in a house for free before they will get kicked out and basically say the heck with it. They don't pay the taxes or insurance, many don't pay utitlites and many abuse the house to the point of needing significant repairs and cleanup when they are finally removed.
This plan will help some people. Unfortunately, it will also be abused by many people that are victims of their own doings.
I used to work in sub-prime, and I'd say 98% of people just flat chose to not live within their means.
The government has actively encouraged overspending for a long time. It's the only way that they can get away with doing do the same. They've got to keep it going, or they won't be able to pay their "bills" either.
As many have pointed out, one of the risks of letting all the foreclosures happen is the risk of credit becoming so tight that people who can afford it are unable to get loans.
Another risk is that markets get flooded with cheap foreclosed homes and I'm unable to sell my house at a reasonable price.
Some are complaining that their taxes shouldn't be used to bail out people who made bad decisions. Valid argument. I can also complain that why should I be punished by being forced to sell my house at a reduced price because the market is flooded by foreclosures. They argument can go both ways.
Another risk is that markets get flooded with cheap foreclosed homes and I'm unable to sell my house at a reasonable price.
Some are complaining that their taxes shouldn't be used to bail out people who made bad decisions. Valid argument. I can also complain that why should I be punished by being forced to sell my house at a reduced price because the market is flooded by foreclosures. They argument can go both ways.
Law of supply and demand. Sure you will not be able to get top dollar for your house, but the next house you buy will be cheaper too. We need to let this bubble burst, I feel sorry for the 25 year olds that want to buy a first house now and prices are 2x what they really should be.
That isn't a valid argument in my opinion. You bought the house, you didn't buy the housing market.
My house has negative equity right now but I can still make my payments and I will continue to do so. Frankly I am embarrassed to be an American right now with all of the bullcrap going on like this.
What about the 28 year old who bought a house three years ago and it's now work 65% of what they bought it for? They can't move, their stuck in the house untill the market adjusts or they are able to come up with 15 years in payments...
If anyone needs something to help them sleep I had to write a paper about this for my last semester of school last year I can send it to you. I'm pretty sure I called that something like this was going to happen if the mortgage problem didn't get fixed anytime soon.
