Bye Bye Banks and Wall Street

[LSPoorEeyorick]

Well, that's what I'm saying. I'm saying you're smart. I'm glad you're smart. I'm glad I'm smart. I am sorry that others are not smart. And what they did - live beyond their means - is frustrating. And I'm not celebrating them for it. But I do think there are people out there who don't have the smarts or the resources to know they're being conned (or that they even NEED to read up on the subject.) This does not resolve them from their responsibilities, and I don't exactly feel sympathy for them. Mostly, I feel glad I'm smart.

But the lenders NEVER should have given them loans to begin with. This situation is just as much their responsibility.

[BarTopDancer]

Originally Posted by innerSpaceman

Oh, my condo fee wasn't meant to negatively compare to you, BTD. I was just joining the chorus.

Thanks for clarifying.

Oh, but I do owe a truckload of credit card debt. Yay American
Dream!!!

Me too. I'm working really hard to not accrue more and pay it off. But even if I was debt free I still couldn't buy a house.

Originally Posted by LSPoorEeyorick

Well, that's what I'm saying. I'm saying you're smart. I'm glad you're smart. I'm glad I'm smart. I am sorry that others are not smart. And what they did - live beyond their means - is frustrating. And I'm not celebrating them for it. But I do think there are people out there who don't have the smarts or the resources to know they're being conned (or that they even NEED to read up on the subject.) This does not resolve them from their responsibilities, and I don't exactly feel sympathy for them. Mostly, I feel glad I'm smart.

But the lenders NEVER should have given them loans to begin with. This situation is just as much their responsibility.

Agreed.

[Kevy Baby]

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.

Originally Posted by 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.

About the only Latin I know is Caveat Emptor. While there were mistakes made on both sides (lenders and buyers), the majority of the blame seems to be falling on the lenders. We always want to go after the big bad evil corporation but I don't think that people (individuals) take the responsibility that they should.

Again, I am not letting the lenders off the hook in a wholesale fashion; just pointing out that a lot of people made some stupid decisions.

[Alex]

Originally Posted by Kevy Baby

About the only Latin I know is Caveat Emptor. While there were mistakes made on both sides (lenders and buyers), the majority of the blame seems to be falling on the lenders.

The majority of the blame does belong upstream from the individual homeowner.

Sure the mortgage company and the homeowner can split the blame 50-50 on the stupidity of the initial loan. But the homeowner gets none of the blame for that stupid mortgage being repackaged in such a way that the entire world economy comes to be so dependent on ever increasing home values that a widespread 5% value drop and less than 3% default rate triggers a global economic crisis.

Yes, there was a lot of homeowner stupidity. But then there are a lot of simply not well informed/educated people who can obviously see that they're getting more than they think they should be able to get and yet being told by a massive international corporation "hey, we're experts in this. No, you can't afford the balloon payment but you'll never need to make it. In a couple years, you can refinance and get out if it, you're personal income situation will likely have improved dramatically since that is the standard life cycle for people, and worst case scenario if you don't you just sell the house at a small profit and move into something smaller when the time comes. We don't want to foreclose on your house so this must make sense, why would we give you money expecting to lose it?" You may recall a thread here on LoT a couple years ago when someone was asking for advice on whether to refinance their loan into some option arms. Fortunately, I believe if you go back and look at that you'll find the LoT giving good advice (primarily that the loan was structured on the faulty assumption of guaranteed appreciation of the home) but there were compelling arguments in favor and the last 15 years supported them.

On top of this you have major "how to" organizations telling people that if you aren't continuously extracting equity out of your house (read: living perpetually at maximum debt) then you're a sucker (for some reason I haven't seen so many people reading Rich Dad, Poor Dad on the train this last year and some).

Lani and I have watched over the years wondering how it is that we make 2-3 times what most people we know do and yet we're driving around in one $22k car, no kids, and an apartment and not exactly socking it away. Yes, it could be said we were very prudent and smart about the whole thing. We're just lucky in that we are temperamentally disinclined to each own a nice car (seriously, if I really wanted to I could have my dream car, an SL500) or even our own house (mostly just lazy, we hate shopping so much that buying a house seems like pure torture).

[The Lovely Mrs. tod]

Originally Posted by Kevy Baby

About the only Latin I know is Caveat Emptor. While there were mistakes made on both sides (lenders and buyers), the majority of the blame seems to be falling on the lenders. We always want to go after the big bad evil corporation but I don't think that people (individuals) take the responsibility that they should.

Again, I am not letting the lenders off the hook in a wholesale fashion; just pointing out that a lot of people made some stupid decisions.

Oh, agreed. But I don't think we HAD to end up where we are because of them. Slamming the door shut on lending wasn't the answer, it may have been the last straw. This has been simmering for several years now, I maintain that it could have been fixed long before it imploded.

[Ghoulish Delight]

Originally Posted by Kevy Baby

, the majority of the blame seems to be falling on the lenders. We always want to go after the big bad evil corporation but I don't think that people (individuals) take the responsibility that they should.

As it should. The lenders were playing with an unfair advantage. They were the only ones with implied assurance that the federal government had their back should something go wrong.

It's one thing to irresponsibly put yourself at risk when the playing field is even. It's an entirely different ballgame to knowingly take advantage of people in a situation where you had an insurmountable advantage which guarantees that you can't lose the game.