Bye Bye Banks and Wall Street

[BarTopDancer]

Originally Posted by The Lovely Mrs. tod

A lot of people who went in "over their heads" didn't know they were doing it...there was a LOT of predatory lending and "pick your own payment" action going on out there.

I don't buy the "there was a LOT of predatory lending and pick your own payment option" argument. There is no room for ignorance in a several hundred thousand dollar purchase. The terms were laid out in the paperwork, the people should have read it. Yes, there was some predatory lending - I was targeted. But I knew that I could barely afford it then and would be hosed with the adjustments.

Maybe I should have bought something I could barely afford back then. Then I would have property that I barely can afford that the government is going to help me keep and afford.

I'm not happy about having to pay for those who couldn't bother to read the fine print and got in way over their heads. It's [for the most part] their fault. And if there are lenders who failed to disclose the terms of what the payments could be, then they need to be responsible for this. Not me.

Try again.

Oh, and my rent? Pretty fvcking close to a mortgage payment.

[innerSpaceman]

Originally Posted by BarTopDancer

I'm not happy about having to pay for those who couldn't bother to read the fine print and got in way over their heads. It's [for the most part] their fault.

Ditto. I suffer no fools. And BTD is right, there's no excuse for stupidity and ignorance with a multi hundred thousand dollar real estate purchase.

Originally Posted by BarTopDancer

Oh, and my rent? Pretty fvcking close to a mortgage payment.

Oh pulease. My condo association fee is pretty fvcking close to a mortgage payment, and I own the thing. I know I'd likely pay more in maintenance for an SFR (not to mention way higher property taxes), but I hate having a condo that I must shell out mortgage-level payments for on a monthly basis.

[The Lovely Mrs. tod]

Originally Posted by BarTopDancer

I don't buy the "there was a LOT of predatory lending and pick your own payment option" argument. There is no room for ignorance in a several hundred thousand dollar purchase. The terms were laid out in the paperwork, the people should have read it. Yes, there was some predatory lending - I was targeted. But I knew that I could barely afford it then and would be hosed with the adjustments.

Maybe I should have bought something I could barely afford back then. Then I would have property that I barely can afford that the government is going to help me keep and afford.

I'm not happy about having to pay for those who couldn't bother to read the fine print and got in way over their heads. It's [for the most part] their fault. And if there are lenders who failed to disclose the terms of what the payments could be, then they need to be responsible for this. Not me.

Try again.

The smartest of people miss things in 32 page loan agreements. Just becasue YOU got it all doesn't mean everyone did. There's blame to share, and plenty of banks approved loans they knew full well the customer wasn't qualified for. "But gee, you think $4000 a month is out of your league? Well, we have options, let's look at them. How about $2475, would THAT work for you?" If it were all the fault of the borrower no lender would have to write down up to 30% principle on a neg am loan. Why not just say "I'm sorry, you don't qualify for that kind of loan." Lenders were handing over money as fast as the government could print it.

And no, I'm not talking about people who deliberately lied on their "stated income" app. I'm talking about the people who were promised such a rosy future by their banks, how in five years, even through their payments would double there would be SO many options for re-financing. The people who honestly said "my wife and I clear $60K annually" and were gleefully told by their loan officer "excellent! I can approve a loan up to $425K for you".

No one's blameless. But the mortgage industry (in general, not in specific) failed to work with it's customers an attempt to rectify the problem. What good did declining to modify an existing loan do anyone? The homeowner's on the street, the house sits abandoned, the lender may, if they're lucky, get a short sale on the property. A bank working with a customer to avoid the worst case scenarios that are becoming so common would not have affected you or your loan adversely. It's been a fairly common practice to demand "all or nothing" payments from customers. So here's some honest guy, probably in over his head and the lender says "you owe me $2500. And the honest guy says "I have $1965, I can give it to you right now." But the lender, as a rule, says "nope, $2500 or nothing."

And nothing is exactly what everyone winds up with. The lender's carrying bad paper, the house sits empty and abandoned, the neighborhood propery values go down yet again and another family's on the street. Everyone loses.

[Disneyphile]

From being very strapped lately, I will say this:

Because we've been forced to eat at home and cook (since raw foods can be cheaper than pre-packaged crap if a little effort is made), we've been healthier and enjoying a lot of neat dinners lately. I've even slowly been losing weight without trying at all. So, not being able to eat out or run over to a drive-thru has been a blessing really.

I think that people feel the burn more when they don't get creative with what they already have. I've even been rediscovering all kinds of old hobbies lately and having a blast with them. It's a way to "ride the tide" until things get better. Why be miserable when I don't have to be? There might not be money to buy new things, but we have plenty of crap already that can be enjoyed.

For example, I really wish we could afford a Wii, but it's not in the cards right now. However, I have my old NES system out in the garage that hasn't been touched in over a decade. It will be like setting up a whole new system and playing the games for the first time. I'm quite looking forward to it.

[Snowflake]

Originally Posted by Disneyphile

From being very strapped lately, I will say this:
There might not be money to buy new things, but we have plenty of crap already that can be enjoyed.

For example, I really wish we could afford a Wii, but it's not in the cards right now. However, I have my old NES system out in the garage that hasn't been touched in over a decade. It will be like setting up a whole new system and playing the games for the first time. I'm quite looking forward to it.

No kidding, having no mad money at all is forcing me to write (AUGH) and watch some DVDs that have been gathering dust that I bought about 4 years ago!

[wendybeth]

iSm- do you own, or rent? If you rent, the market is probably going to get tighter and as a result spendier. If you own, you're going to see your property's value take a nosedive- and I really believe that you all have a long way to fall before you hit bottom in SoCal. Investment groups own/operate many rental properties up here, so I'm guessing that's the same dynamic down there as well. Those groups are probably going to falter, and who will pick up the pieces? I don't pretend to understand the intricacies of real estate, but I do know that it is largely an investment and to invest takes capital.

[CoasterMatt]

The whole bailout package as currently put forth, reminds me of the Three Stooges, "Booby Dupes" - when Curly drills another hole in their leaky boat to "let the water out"

[innerSpaceman]

To answer Wendy, I own my condo. I don't care if property values take a dive, because I'm not looking to sell, nor am I looking to take out a home equity loan.

For that matter, I won't need a car loan for a few years.


This month, between art framing and a fabulous Halloween party, I'm going a lot deeper into credit card debt. But I'm finally out of IRS debt.


I have no savings and I have no investments.


All in all, I'm about the most non-affected person in America. Oh, and my job only gets more secure as the economy worsens and everone starts suing everyone else for the money owed.

[bewitched]

Originally Posted by BarTopDancer

Does whatever bailout they are proposing have any help for people who didn't fvck up and take on more debt then they could afford?

Or are us people who didn't get in over their heads expected to hold on for the dive.

That's about the long and short of it. My house was entirely affordable prior to my (almost but not quite yet) divorce. It is still barely (with child support and spousal support) affordable; but I've had to make cutbacks. Do I get any relief? Does anyone want to cut me a deal? Nope.

Thankfully, my mortgage is held by a smaller, local bank and they have been willing to work with me when I've had money flow problems (like when I had to replace my furnace, air conditioner and water heater-- all within about 6 weeks of each other.)

Originally Posted by innerSpaceman

All in all, I'm about the most non-affected person in America. Oh, and my job only gets more secure as the economy worsens and everone starts suing everyone else for the money owed.

Luckily, my not quite ex is a lawyer too so I feel pretty secure about what I have. In good times, and especially bad, lawyers are ALWAYS in demand.

[LSPoorEeyorick]

Well, be glad that you don't have any room for ignorance in a several-hundred-thousand-dollar purchase. Lots of people aren't educated enough, or are ignorant enough, not to know better. And they're encouraged to live the American Dream, considered a failure if they don't - and, yes, the predatory lenders pounced on them. Basically - be glad you're smart.

But, no, the non-ignorant people like you and I, who did not purchase more than we could afford, should not have jumped on that bandwagon. It'd be an even bigger mess.

Plus, it's not my understanding that the homeowners are benefiting from any of this, or would particularly be benefiting from a bail-out. With so many homes in foreclosure, the write-off is more about the stupid bank lending/greed than the people who've lost their homes.