Bye Bye Banks and Wall Street

[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.

[Ghoulish Delight]

Or how about the homeowners that got into loans they CAN afford, and due to the irresponsible actions of OTHER people who couldn't afford their loans and the greedy people who took advantage of them are now seeing their home values drop precipitously and their options for keeping their home loan affordable in the future disappear?

[BarTopDancer]

Originally Posted by innerSpaceman

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.

I didn't say it was the same. I said it was pretty close. When I was looking at buying I did the math.

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.

If they couldn't be bothered to do a little research, read one of the kazillion finance and home buying for dummies style books out there and bother to read the fine print and realize that when their rate adjusted they wouldn't be able to afford what they could barely afford, well I don't have sympathy for them. That they are losing their house? Ya, that fvcking sucks. But it's a huge amount of money and common sense should dictate to research before spending it. I'm not saying that the predatory lenders shouldn't be punished but I resent having to bail out those who bought way more than they could afford and that they knew that going in (if you can barely afford a house at $1500 a month what makes you think you can afford it when it adjusts to $2k a month with principal?)

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. .

You think that I don't feel like a failure because I have to rent while those around me are able to own? You don't think I feel like a failure because unless I have a dual income or some sort of miracle I won't be able to buy? You think I'm not encouraged to live the American Dream? I want that "white picket fence" It really sucks having a place that isn't big enough to have people over. It really sucks throwing away money on rent every month. It is a feeling of failure every time I rent that rent check instead of a mortgage payment. What do I have to show for the $20k or so I pay in rent every year. Nothing. FAIL.

[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.

[innerSpaceman]

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


And yeah, I want the American Dream as much as everyone else whom it's peddled to. But I didn't go buying a house I could not afford, and even though I'm a single guy, I feel pretty failure sometimes not owning a house long past the time when most people do.


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

[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.

[Strangler Lewis]

What other responsibility do prospective home buyers have to take other than pledging their home as collateral and losing it if they can't pay?

[Disneyphile]

To me, success and wealth are measured by the quality of the people in our lives and how we spend our time, not by what objects we own.

I know of many very successful people who rent their home, and I also know some much less successful people who own theirs. A home is what we make it, whether it be rented, made, or purchased.