My personal rant!!!

[Javaman]

:rant:

I see a grand disconnection flying all over GD these days!!!!

I see many expressing total self righteousness when banks, loan companies, etc, fail and get pissed when they get bailed out, yet when a home owner gets kicked out, it's the homeowners fault and get angry over proposals to help the homeowner with a bailout proposition.

then there are the others that get pissed because, their property value is dropping because of foreclosed houses in their neighborhoods, but be damned the neighbor who got screwed by an ARM gets helped out by the government and is allow to keep their home!!

At the same time, they crow about how the market should be allowed to fail and reset. Yet get angry when their investments are losing value!

the circular firing squad cluster fuck propaganda has turned many of us into mindless knee-jerking morons, without the ability of critical thought.

Who are we for? the corps, the little guy? OR just our selves? The "us or them" mentality has risen to some truly epic mind numbing proportions.

If we are to get anything done that helps the little guy, you know, most of us, then we have to stop casting aspersions and help our fellow poor and middle class out. Even if they fucked up. Glass houses, remember?

Jeez...

:rant:

[Mountainman]

1. It all depends on whether you have something to lose or not.

I have a house for sale and am losing money everyday. But if you are a buyer you are waiting for prices to fall further.

Some here just have it in for people who are more well off than they are.

I don't think you can find a real DU politically correct position on this.

[EOTE]

2. Ummm, excuse me. It's 'casting asparagus'. Otherwise, it's all good.

I like to think I'm for the little guy.

[Javaman]

3. fixed LOL thanks. nt

[notesdev]

4. Due diligence

There are a lot of different parties at fault in the housing mess.

Here's a list:

- homebuyers
- buyers' agents
- loan originators
- lending institutions
- underwriters
- guarantors
- securities brokers
- investors
- the Federal Reserve
- Congress


Note that the taxpayer who is being asked to bail out the irresponsible parties is not on the list.

The data exists - we could determine who precisely is at fault and put precise dollar figures next to each, if someone were to do the work of assembling the records and identifying the individual points of failure.

But this won't happen; too many powerful interests would end up on that list. So rather than do the work, the easy (and most destructive) solution is to start bailing people out.

[notesdev]

5. I should add

that none of those people would have shared their profits with you had the market not collapsed.

You have every right to ask by what right they have to take your money to mitigate their losses.

[Stinky The Clown]

10. That's a good list ............

..... think of it this way:

homebuyer

vs

every other motherfucker you can name, said motherfuckers having lots of resources and information and the ability to make the best deal that the law allows.

Is that fair?

Compassion ..... its only human.

[dajoki]

20. If that is so easy...

Why haven't they done it? Because they are too busy and spending too much to bail out the banks!! I see "homebuyers" is at the top of your list, I don't know if that is happenstance or if you think they are the main culprit in this mess.

But let me tell you some facts, every homebuyer who now faces the prospect of losing their homes are not in that situation for the same reasons. I just got my home out of foreclosure, and not with ANY help from the government, and the reason I was in foreclosure is not because of a subprime loan or an ARM. My family and I have experienced, over the last few years, a series of unforseen circumstances, from job loss to illnesses to disability, which caused us tremendous financial hardship. Fortunately for us, it seems like we are on our way back and were able to make a deal with the mortgage company, but the stress has taken its toll on all of us.

I personally believe that we got lucky, but many millions haven't, and I feel for them because I know what its like and I wouldn't wish it on ANYBODY. I also believe that the government has a responsibility to do something, if they can bail out the financial institutions they sure should be able to help the people they helped put in this situation.

[Coyote_Bandit]

6. Ummmm

I don't think anyone should be bailed out - corporation or homeowner.

Because corporations and businesses typically employ trained financial and business professionals they have the capability to identify and manage the risks they undertake. Ignorance is not an excuse. They ought to face the consequences of their choices. The only rationale for undertaking high risk financial transactions is the desire for the high reward that accompanies such transactions. Greed accompanied by a willingness to gamble - and sometimes the willingness to take advantage (which is a high risk behavior itself if successfully litigated). By definition the higher the risk undertaken the more likely the security will not perform as expected. The boys with the golden parachutes should know that. The only way they can rationalize undertaking these kinds of risks is by making certain assumptions regarding their debtors. And, essentially, they are betting that the borrowers will largely experience long term stability with respect to both income and health.

Caveat emptor. People get screwed everyday and it is incumbent that they learn to act with suspicion and utmost care to protect themselves especially in financial matters. I have noticed that many folks undertake long term financial obligations with expectations of stable or improving income without considering that they might find themselves in a situation where their income declines. Or their health. And it may be permanent - not a short term bump in the road that 6 months of savings can cover. Some folks are status conscious and measure their worth by where they live and what they have. Too many folks find themselves facing financial disaster because of their naivete, their assumptions and their attitudes. It is unfortunate and for many a life altering tragedy. Doesn't mean they should be bailed out and avoid the consequences of their choices. A possible bailout for borrowers would not even be mentioned if we were talking about personal loans or credit card obligations - even if those obligations resulted from purchasing necessities.

The thing about future expectations is that they are often based on past history. There has been an assumption on the part of both lenders and borrowers that past history is the best predictor of future events. The thing that has not been widely recognized is that as a group today's home buyers (in their 20s, 30s and early to mid 40s) have not had the same economic experiences as the generations that came before them. Most of those who are well educated are saddled with significant debt before undertaking a home purchase. Many work in the service sector. Professional opportunities in these age groups have been limited. Job creation has not kept up with the number of trained professionals available. Ad the boomers in those positions damn sure are not leaving until they choose to do so - and that is often at a later age than in earlier generations.

I suspect that we will see several things play out in the housing industry over the next several years. First, the financial vehicle of the future will be the reverse mortgage. The boomer generation has placed a large proportion of their assets into housing. As people age they tend to deplete and use their savings. The easy way to do that while maintaining your lifestyle is to take the reverse mortgage. Second, square foot prices on the over sized McMansions are likely to continue to decline for some time. They are overbuilt relative to other sectors of the housing market. Institutions that obtain them through foreclosure or reverse mortgage will dispose of them with little regard to their initial cost in order to recover whatever funds they can as quickly as they can. Arguably the population group that is willing and able to purchase them is small relative to the number of homes available. Younger generations working in the service sector may not be able to afford them. Even those who can afford them may be reluctant to purchase with increasing energy costs and the associated expense of heating and cooling a large home. Finally, housing is likely to remain depressed for some time. That will be the result of the present mortgage mess which will be followed closely by the aging and death of the boomer generation over a period of many years which will result in still more homes being placed on the market.



FWIW, I would like to sell my home in the next year or so and relocate to another area. I will probably be able to get about what I paid for my home 7 years ago. Possibly a bit more. Even with only a minimal return from the time value of the money invested into the home, I don't necessarily consider that a loss. I purchased a very small, older home not located in a trendy part of town that needed some work. Paid cash and bought the home outright. Have made some improvements and need to make a few more in order to sell. My expense has been limited to insurance, property taxes and the maintenance/improvements I have done. Meanwhile, I have foregone rental expenses to house myself elsewhere. I have done many of my own improvements and all my own lawn care and landscaping (with the exception of removing 2 large diseased trees for a total cost of about $800). Instead of purchasing this home, I could have financed a much nicer home - and be facing a much worse financial outcome. I suspect that some of the folks now facing foreclosure could easily have made similar choices.

[Javaman]

7. And what of these people? are they guilty or was it a matter of poor choice

That they went with crooked lenders who misrepresented themselves?

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3254026

[Coyote_Bandit]

11. Anyone who is going to undertake to finance

the purchase of anything would be well advised to shop around for that financing and to compare what is available to them from a variety of lenders. And the exact terms under which that financing is made available. Buyer beware. Educate yourself. It is your responsibility.

If it sounds too good to be true then it probably is. If four out of five lenders refuse to underwrite the mortgage then a responsible buyer would be asking why the hell the fifth lender would do so - instead quickly and fully utilizing all the funds available.

And, oh by the way, why the hell, would a responsible borrower rely on the word of the lender to understand the terms of their mortgage agreement? Clearly borrowers and lenders have a conflict of interest. But apparently borrowers don't always get that. They naively take lenders at their word and assume those same lenders are as pure and honest as the driven snow.

I do not support bailouts. Sometimes poor choices are the result of naivete, misplaced trust, laziness, a failure to investigate.

[Javaman]

14. baby with the bath water, huh? nice compassion.

way to support the crooks. you're blocked.

[Coyote_Bandit]

15. Back at ya

[dajoki]

21. I did the same thing...

regarding buying an older home and restoring it myself, but still ended up in foreclosure, which I was able to rectify. My point is that no one can see the future and if we had to buy our homes with such caution the industry would surely collapse. See my post above about what I'm talking about.

[ThomWV]

8. No one should be bailed out unless they are regulated but who would regulate borrowers?

It is only right to demand that if we are to bail out the mortgage brokers then they must come under Federal regulation, but then would we say the same thing about borrowers? If we plan to bail out borrowers is it not also reasonable to regulate them, to decide who has met the qualifications to apply for a loan?

Not a very pleasant thought, is it?

[Stinky The Clown]

9. Oh man ...... where to start?

Okay, I'll start with a K&R.

Then I'll endorse every single word you wrote.

I'll underscore the part about mindless, knee-jerking morons without the ability of critical thought.

I'll end by saying that some of the moronic vitriol I see here surpasses any I might expect to see in some far right knuckle walking, mouth breather circles.

(Wow ..... I did all that a never even used a cuss word. I'm losing my touch, I guess.)

[dajoki]

22. You did good!!

And I couldn't agree more with your statement: "moronic vitriol I see here surpasses any I might expect to see in some far right knuckle walking, mouth breather circles."

Way to go and THANK YOU!!
:yourock:

[nichomachus]

12. I'm really opposed to putting this on the back of homeowners

With the exception of house-flippers, speculators, and people on meager salaries who bought a McMansion, let's cut some slack for the average homeowner.

If the "smartest guys in the room" screwed this up, why put the blame on some couple or individual who thought they were doing what they had to do to have a place to live.

Bankers making $60 million a year got suckered by this market. These are supposed to be the experts. Why should a plumber in Peoria, holding down two jobs, have known better?

[notesdev]

16. re: borrowers

> why put the blame on some couple or individual who thought they were doing what they had to do to have a place to live

There are a number of good reasons to do so.

- First, a large number of borrowers flat-out lied to qualify for mortgages. Alt-A loans (a set of loans which will go very bad but has NOT hit yet) are known as 'liar loans' since it is so routine that people misrepresent their income to qualify for them. Subprimes are no better.

- A lot of borrowers were plain greedy. They took out loans up to the very limit of their affordability on an adjustable rate, in the unreasonable expectation that housing valuation would continue to grow at the rate we saw from 2002-2005.

- Many borrowers didn't deal with the situation with the level of seriousness such a massive commitment deserves. It's not terribly uncommon to find people who spent more time picking out a plasma TV than a mortgage.

- HELOCs - on top of getting mortgages they could barely afford before the first rate adjustment, borrowers, once they bought their homes, turned around immediately and got a line of credit against the value of the home, and then went out and spent that money on luxury items.

The guys making $30k a year, buying $350k homes, driving around in $50k SUVs and stocking themselves with all the latest tech gadgets - they were living a lifestyle that any reasonable person could see was way beyond their means. It had to come crashing down somewhere.

Greed shouldn't be rewarded with a bailout anywhere in the list of people who are responsible for this mess. Borrowers, like many of the other participants, wanted something for nothing, and now expect the rest of us to be their unwilling guarantors.

Justice demands that the people who made commitments beyond what they could meet should suffer the consequences of those decisions, and that as little as possible of the burden should fall on the people who were responsible and didn't make those commitments. Compare these borrowers to people who didn't buy homes, and continued to rent instead - the renters got no property, no big tax breaks, no lines of equity - and thanks to irresponsible borrowers it will be harder for the responsible people to get homes in the future.

Borrowers were half the transaction - they should probably bear half the overall burden of fixing this problem, minus the losses that the taxpayer is going to have to be the unwilling financier for to prevent the entire system from collapsing.

[Stinky The Clown]

17. That's a perfectly logical viewpoint ......

.... for a 'personal responsibility Repubican'.

Compassion ..... its only human

[notesdev]

18. Personal responsibility

doesn't belong to the Republicans. It belongs to everyone who has personal integrity.

It's really not wise to stake a claim to the practice of borrowing to the limit then defaulting and letting everyone around you deal with the fallout. Democrats rightly stake a claim on a decent standard of living for the average working man, and McMansions and super SUVs are way beyond what the average working man is due.

The working man is due a chance to get a job with reasonable working conditions that will pay him a living wage. Thanks to the excess of the housing bubble, a lot of good and decent average people are going to go jobless.

More than personal responsibility, this is about justice.

[Stinky The Clown]

19. Forget it ...... you're ossified in that viewpoint

Do me a favor ....... unlike most everyone is invited to do ..... don't ask me for favors. You're on your own .... as you seem to say everyone else is.

[dajoki]

24. Is that your idea of justice?

You have got to be kidding, where's the sarcasm emoticon? First of all, you are generalizing everything and lumping everybody into the same category and that doesn't cut it, too easy to lay it off like that, and it is not factual.

[dajoki]

23. "A large number of borrowers flat-out lied"?...

more likely encouraged or duped into exaggerating their income by their agents/brokers and on up the list. That is not the buyer's fault, but the greed of the lenders and the lack of regulation on the part of the government.

[poppysgal]

13. helping

each other out is what it is all about. We need to break it all down to the fact that we are all we have. It is time to start to care again. O8)