Bye Bye Banks and Wall Street

[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.

[The Lovely Mrs. tod]

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.

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.

The majority of foreclosures didn't have to take place. Most homeowners WANTED to pay their mortgage. But they were stuck in ARM's and neg am's and the banks, rather then working with them simply made land grabs. Wachovia sold homes without notifying their customers they were going to do it. Those houses are sitting empty now, and some guy is making a fortune painting dead grass green so they don't hurt neighborhoods plummeting property values any more than they already have been.

It would, most likely, take some sort of government intervention to accomplish it, but not to the tune of how many bazillion dollars? Take that empty house, put the owner back in it and give him a payment plan he can make for 12 - 18 months. THEN go back and see if the loan CAN be made workable. Call the terrified owner up and say, "okay, we don't want your house, we want your business. Let's see what we can do to save this."

And yep, I know there's WAY more to deal with than just that. But it's a jumping off point.

[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.