...but I do not feel one bit sorry for those people that lost their homes because they chose to purchase a home they could not afford.

I'm sorry they did not realize what an "adjustable rate mortgage" was. But when you make a huge purchase you need to do your homework.

Just because someone tells you you can buy a $200,000 home and pay $700 a month for a year or so, "but we are going to increase your interest rate later" ...should you do it?

7 years ago we purchased a piece O' crap home for $65,000 because that was what we could afford with the 10% down payment. We've worked our a$$es off fixing it up. Now it's worth about $85,000 but we've put in $20,000 at least. Sure, I would have liked a nicer home, but we could not afford it. Period.

So flame away if you disagree. I'm just so tired of having to use my tax dollars to bail out people who were naive, just plain greedy and/or maybe a little stupid.

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Mary

No flames for you my dear. I agree with you completely. You don't buy something you can't afford. It's very simple! And it's called being responsible!! Like you!

I think when things are handed out so easily and freely to people who haven't had the benefit of the discipline that comes with some years of preparation to be able to buy a home, it's often a recipe for disaster. It feels like Monopoly money because there is no investment of time or effort in the aquisition of that cash, so it really just feels like a game.

We bought our first house when I was 20 and a newlywed... and admittedly, I hadn't saved a dime towards that house. We borrowed a bit to be able to make the full down payment.

But... my husband was 24 and had been out of college and working and saving and preparing. Like you, we bought what we could afford at the time. It was an older home in an older neighborhood... and the payment was in our price range. $150/month less than rent would've been in a nice two bedroom apartment... and that's why we did it. It was cheaper than renting. That probably says a lot about the level of house we bought! lol

I do feel sorry for a lot of those people. Here in So. CA the prices were going up so fast that many people thought that if they waited they would never be able to buy anything and would have to leave the state. The rents were going sky high and first time homes and condo prices were going up thousands each month. I had friends that moved in with their parents to save up a down payment but the prices were going up faster then the amount they saved. We pruchased our home for $152,000 about 16 years ago. We have a very, very small lot and our home is 1,450 sq. feet. When the prices started to skyrocket our home may have been worth in the low $200,000's but I'm not sure. When it ended homes like ours were going for close to $500,000. Even small condo's were well over $350,000. My dh was excited that our home was worth so much. He would say that in so many years our home would be worth $700,000 the way the prices were going. I would say to him that they could not keep going up because pretty soon even if a Dr. was married to another Dr. they would not be able to even purchase a home like ours. I think a lot of first time home buyers thought like my dh. The loan people would say buy now with this horrible adj. morg. and in a year when the price of the home has gone way, way up you can refinance to a fixed rate morg. Here in CA that never happened and home prices plummetted. Now those people are going to lose everything. But I'm sure that all those people that gave out these terrible loans to people that they knew could not really afford it made a lot of money. They are probably laughing all the way to the bank.

What about people who lost homes due to losing a job? What about people who bought homes before the prices shot up across the board for food gas electric and heat. Just an example we purchased our house in 1999. We could fill our van for 17-18 now it could be 60 plus dollars. Our electric bill was 80-to very high 180, now our last bill was 378 that is one month. Our water was 60 dollars now 160. Food was under 300 for a family of 5 now double that. My husband health insurance was nothing(the company gave him 5thousand to spend on heath insurance) now we are paying 300 a month office visit were free to 10 now they are 25 plus. RX was a flat 5 dollars now 20 if RX is really high we have to pay 20% of RX. This mess is alot more than just people taking out loans that they could not afford.

I think situations like this are different, and the OP is talking about people who specifically bought too much house for their budget. That is how I interpreted it, anyway.

I do feel bad for people who can no longer afford their home, living expenses, due to medical bills, loss of job, etc. People that bought a house beyond their means??? NOPE. I'm not falling too much for the "predatory lender" scenarios, either. When we were shopping for a mortgage, we were offered everything BUT the type of mortgage we wanted (fixed rate VA loan). We finally had to tell the lady we were dealing with "thanks but no thanks on the loan" and went elsewhere. She was a mortgage broker, which we did not really want. Just give me a regular old bank, I'll negotiate my own loan, thanks. See, this is what happens when you let others make decisions for you......next thing you know, you are at their mercy.

Got off on a bit of a tangent, I guess, but, to sum it up, I'm with the OP on this one.

Maybe now people will wake up and smell the coffee.

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Doing the right thing isn't always the same as doing the easy thing.

What ever happened to living within your means?

I remember the first house DH and I bought. We've been married over 30 years now. We didn't run out and buy a house when we first got married. We rented and SAVED MONEY for a DOWN PAYMENT to buy our first house. Back then, you had to have at least 20% downpayment of the total of the house in order to buy a house. You didn't buy something you couldn't afford. You couldn't afford to. All of our friends, we talked about saving money for a downpayment on a house.

Now young people think they have to have everything right now. They can't wait and save to get things our parents worked and saved for (or for us older folks on here, what we worked and saved for). They've got to have everything now, now, now.

As for being laid off or getting sick -- that's why you buy something you can afford and you think before you buy -- can we afford this on unemployment pay if something happens? We bought long-term disability insurance in case something happened to one of us so we could keep paying our bills and house payment.

We planned in advance in case something happened. And you know what -- something DID happen. I became disabled. Did we go bankrupt? Did we lose our house? No, we didn't because we had planned for the 'what-ifs'.

I think our society should go back to the way it was 30 plus years ago. Make people come up with a 20% downpayment on a house. Then maybe people would buy what they could afford instead of trying to outdo their friends and neighbors. Make people accountable again.

I completely agree w/ you, OP. It's a bunch of BS that Biden is now proposing that bankruptcy judges can actually adjust the price of a home in addition to the interest rate. WTF???

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Proud Wife of an Army Soldier and proud mother of an Army MP currently serving in Iraq.


"To any critics who say a woman can't think and work and carry a baby at the same time, I'd just like to escort that Neanderthal back to the cave." - Sarah Palin

The problem is is the effect that those unsold houses have on the market. If you can keep people in those houses by lowering the current balance of their mortgage to reflect the actual value of the house, then everybody wins. The amount of the mortgage that is lost to the bank could be treated as an unsecured debt. It isn't as if the bank would be able to sell the house for what's owed and would also incur the costs of foreclosing plus the cost of maintaining the property.

There are people who took out conventional loans who are allowing their houses to go into foreclosure because they cannot sell them for what they owe.

Exactly, allinaugust, my comments were meant for those that purchased homes out of their budget.

I absolutely feel for those who are now having trouble with mortgage payments because of the higher prices of gas, heating fuel, etc. My family is tightening our "free" spending like crazy. No more weekly trips to Blockbuster, eating out is now a treat, and going shopping just to go shopping is just not happening.

My sister has a wonderful job offer which means she would be able to move back to our hometown, where most of the rest of the family lives, but she just is not able to sell her home right now. So it's a huge disappointment. Those that caused this housing crisis need to be tarred and feathered.

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Mary

We live in a consumer based economy and that will never change no matter how many of us try to live within our means and save up as much as we can. It is a buy sell market and always has been. This will never change no matter how bad things seem to get because America has been through this several times and if you haven't noticed with just part of the people not spending and not driving all over the place gas prices have gone down and if we stop buying things we do not need for day to day life prices will fall because places will have to do it to keep a float.

That makes no sense at all. It's like people who bought VCR's when they first came out for $800 and now they are only worth $100 coming back and saying to adjust the price down because the value has gone down. There is no guarantee of value in the real estate market. If you payed an inflated price, which is what people did during the housing bubble, then that's on you. Those were the terms you agreed to because you had to have it. Btw. . .the values of everybody's houses have gone down. Are we going to adjust everybody's mortgages to reflect that?

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"No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?"
- George Orwell Animal Farm

I bought UNDER my means, planned, saved, spent carefully, etc, etc and still do!

So reward me by ".......lowering the current balance of my mortgage to reflect the actual value of the house....."

There is little reward for me except to know that I can afford what I have and can keep paying my taxes so I (along with others like myself, who seem to be more and more in the minority) can support those who made bad decisions, were greedy, can't stop their spending, etc, etc.

dl

Ok then, depression it is!

You get a gold star for not contributing to the housing bubble! And, doggone it, so do I. But, we do have a market that's crashing and we need a solution. This one works.

I agree with you that plan of Biden's is BS. That would only cause more problems in the long-run. Besides being totally unfair to responsible home owners, it would not work.

A lot of these mortgages are in trouble because of the use of "equity line" combined with their mortgages.
If we allowed people that brought stuff (boats, , jewelry , vacations, etc) with their equity line just to be able to keep it almost free of charge... a lot other people would try to get their mortgages rewritten.

I do think it would be fair if they reduced the subprime mortgages interest rate down to what is the same rate that a convention loan interest rate.
But even with that ..most still can not afford the house they are in now. They simply are over their heads in other debt also.

forest, you really hit the nail on the head. People really maxed those helocs and suddenly erasing that debt without a repo on the boat... it's just not right.

ETA: Some of my favorite relatives found themselves stuck in this mess. About a year and a half ago they bought 'up' in housing, just as prices were starting to fall. They found the house of their dreams in the location of their dreams at what seemed to be the price of their dreams. So they snapped it up and quickly put their own house on the market.

Next thing they knew they were stuck with two houses and two big mortgages because the market had crashed and they couldn't unload their first house. For years people have bought a 2nd house knowing that the equity from their first one would carry them through the down payment on the 2nd one.

Now they're upside down on both of them!

So what'd they do? My SIL who'd been a SAHM for seventeen years went out and got a job, that's what they did.

And they decided to rent their first house out since it just wasn't selling. They didn't just walk away.

That's why they are some of my favorite relatives.

Hmmm. . .A loss of 50% of all wealth and 30% unemployment that was the Great Depression in the U.S.A., at this point we are no where near that...

And we just pumped in $700 billion. Look at the markets. Doesn't seem like it did much. There is no proof, no guarntee at all that this plan will even work! Most enconomists agree that it will only prolong the problem.

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"No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?"
- George Orwell Animal Farm

And maybe it needs to crash and the situation be what it may. I don't believe this bailout is the answer. And those who are bailed out will NOT learn a thing.

We were talking recently about how people truly sacrificed and did without during the depression. They didn't have all the extras to start and thus had, in a way, less to lose. They became resourceful ON THEIR OWN.

Our conclusion is that this generation won't get it if we do go into another depression. They now feel entitled to all their crap as a given. Can you imagine those with the huge houses, suv's, boats, phones, expensive vacations, jewelry, etc having to wash their clothes by hand or put in (and care for ) a garden? Only 1 phone for the family? Rationed gas?

That's the real travesty. They don't , and they won't, get it.

dl

We're at the beginning.

And, despite all the resourcefulness, people didn't get to eat every day during the depression. They lived in makeshift tents. Their children went without as well.

Let us blame the poor schlubs who bought their houses for way too much or didn't understand their loan terms. Let's not blame the Wall Street wiz kids who came up with such creative ways to improve their bottom lines.

Yes. . .let's not forget Raines or Johnson or Frank or Dodd. . . .oh yeah and Barney Frank's ex Herb Moses can't forget him now either.

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"No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?"
- George Orwell Animal Farm

Or Phil Gramm, John McCain, Bill Timmons! Deregulation of business has always been a sacred mantra of the Republican Party.

Yes, as long as that business hasn't already been messed up with . . .well. . .government regulation.

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"No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?"
- George Orwell Animal Farm

Actually, there's no logic in your statement.

I have stated that there is plenty of blame to go around. It was definitely a bi partisan effort. Unlike you, I'm not trying to lay this mess in the lap of one party.

Poor schlubs??? How about stupid idiots??? How damn difficult is it to read a contract? How difficult is it to sit down w/ a calculator and figure out your budget based on your earnings and your debts? It is the entitlement mentality that got most of these so called "poor schlubs" into trouble. They are not a bunch of mentally handicapped people who went out and bought houses they couldn't afford based on contracts they couldn't comprehend. They are a bunch of people who wanted that big McMansion and gosh, now they can't afford the payments. Boohoo. Live within your means is the message. If you go above your means, be prepared to suffer the consequences. I, nor the rest of us responsible people, should have to bail them out. If I can't afford my car payment all the sudden, that sucker is getting repossessed. I don't expect other responsible citizens to lower the cost of my vehicle so I can keep it.

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Proud Wife of an Army Soldier and proud mother of an Army MP currently serving in Iraq.


"To any critics who say a woman can't think and work and carry a baby at the same time, I'd just like to escort that Neanderthal back to the cave." - Sarah Palin

All the blame goes to the people who took out the mortgage; none will go to the whiz kids who designed loans that no one could repay (with prepayment penalties to boot). I see your POV. Blame the victims.

Oh, see, I think you're not understanding; Not all of them were or are VICTIMS!
I think that a lot of people wanted to believe they could get something (a $200K house) for nothing (on their $8.95/hr. jobs).

If these "victims" did not read the contract (mortgage agreement) and understand it---that is their fault!
My daddy always taught me to read things AND understand them prior to signing my name to them; and if I didn't understand the papers ask questions/get professional advice--or not sign them!

Did some mortgage bankers/companies take advantage of some people's ignorance? You betcha'! But a lot of these people who are crying foul right now do have some culpability in this whole fiasco.

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Mental that one, I'm telling you. ---Ron Weasley, "Harry Potter and the Chamber of Secrets"

For those people that like the SNL skits

Hulu - Saturday Night Live: C-Span Bailout

Victims? The majority are not. How hard is it, as Traci pointed out, to read a contract? To have some sense of what you can and cannot do?

How hard is it to know how much is coming in and how much is going out? THAT is what determines affordability. Personal resposibility. Get the foot off the suv gas pedal, do without the nail jobs, take the phones away from the kids, stop the shopping trips, give up the boat/4 wheeler whatever, and then maybe they could afford the house they are now losing!

That WE will end up helping finance ! Enough !

dl

ITA, I keep reading posts and blogs that insinuate we're in the mess we're in because of Freddie Mac and Fannie Mae with the unsaid belief (IMO anyway) that it's the uneducated, lower paid worker who bought more house then they could afford and now we have to bail these people out of a mess of their own making.

The following relates specifically to the blame that can, in fact be placed on Freddie and Fannie and that which cannot.

Fannie Mae and Freddie Mac were victims, not culprits - BusinessWeek

I'm not in anyway saying some buyers are not to blame but IMO there is plenty of blame to go around. I also believe, as some posters have noted, life circumstances sometimes put you in a bad situation and the best intentions and plans can't help you avoid those times.

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Ana
The Republicans have been putting lipstick on a pig for 8 years. Is a pitbull wearing lipstick an attempt to keep us from noticing the pig?

I understand your POV. I already agreed that you blame the victims of these predatory loans.

People like you really irritate and frustrate me.

It's clear that you don't agree with my opinion, or several others---but twisting the words to make it seem as WE are blaming "victims" of wrongdoing is just so juvenile! It actually shows me what kind of person you are and what tactics you use to argue a point. It's not a good picture of you.

And to think, at one point I actually thought you had good points to make. I guess I was wrong. A person can argue their point without twisting other people's words.


It's more correct (and true) to say that YOU feel the people who bought these homes were victims of malicious intent. Some of us feel that these people are not victims and suffer some culpability in the situation.
So quit twisting crap, and act like the intelligent, decent person I hope you are.

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Mental that one, I'm telling you. ---Ron Weasley, "Harry Potter and the Chamber of Secrets"

Victims

8 minutes into this video a couple with a house they brought for 399.000.00

SOCAL:FORECLOSURE ALLEY

I never said that the people who signed up for these predatory weren't stupid for doing so. These loans didn't just have adjustable rates, they also carry prepayment penalties. People were sold on the idea that that the value of the house would rise enough that they could refinance the loan before the nasty rate kicked in. I would be willing to bet that most of these borrowers weren't told about the prepayment penalty. For some people, the houses went up in value amd they were able to refinance into a conventional loan. For others, the bubble burst and they lost everything. I do feel sorry for them.

I place the blame on pure unmitigated greed which led the mortgage lenders to make loans with high interest rates and hefty prepayment penalties.

Well, as someone who bought their house with one of these types of loans---It was all in the paperwork. All you have to do is read it! We knew that at the end of 2 years are payments were going to triple. We knew that we had to pay for 2 years on time, every time. We knew that if we missed a payment or was late, we would blow any chance we had at refinancing at the end of 2 years. How did we know this? Because we read the freaking paperwork BEFORE we signed it!!!!

Do you know how much our house appreciated in value in 2 years? Barely $25K--but yet, we were able to refi. You know what else? We made sure that we budgeted for the payments should they triple!

And all it took was READING the flipping paperwork!

That's why I don't think of these people are victims--the majority of them were dreaming of pie in the sky, they didn't go into the situation realistically, they obviously didn't read the paperwork!!!! They are victims of their own making.

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Mental that one, I'm telling you. ---Ron Weasley, "Harry Potter and the Chamber of Secrets"

Are you in / close to being in this position that you have such a stance that people didn't do this to themselves? Is this hitting a little too close to "home" ? Just curious for someone to continue twisting and promoting the "it's not my fault" bs.

dl

Nope. Nowhere near close.

That was a good read. thanks for posting that. I agree that Fannie and Freddie weren't the sole reason. . .but it was the legislation that required other lenders to make these loans. With the changes to the CRA in 1995 they were forced to get into the subprime market. Many banks didn't want to initially. . .it went against sound financial sense. BUT. . .then they got sued.

ETA: The real problem was in securitizing these loans. And the investor impression that they were good investments because they were gauranteed by the feds.If it was just a matter of people losing their homes to foreclosure we wouldn't be spending $700 billion on a bailout. That $700 billion is enough to payoff all those mortgages. We are providing some false sense of security to investors on Wall Street with that money. "See. . .banks are liquid. . .don't pull out your money."

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"No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?"
- George Orwell Animal Farm

I'm not saying that the mortgage companies or banks aren't at fault . They are partially to blame for offering such stupid mortgages in the first place.
But, I don't think most of the people in foreclosure are "innocent" victims. The last I knew signing a mortgage was signing a LEGAL document. If you sign a LEGAL document without reading or understanding it is your problem, not anyone else.
Judy

Weren't told??? There is a thing called a Real Estate Attorney. I highly recommend them to anyone making such a huge financial purchase.

A little story for you: My neighbors bought a house a month or so before us. A house that we had looked at ourselves, and didn't like, so we know what they paid for it. Anyway, they got a balloon mortgage, and also refinanced their house to buy a travel trailer. Now, their mortgage is much more than their house is worth. They are looking at foreclosure. Do I feel sorry for them??? NOPE. Do I think they are "victims"? NOPE.

You know??? It's like when you buy a car..... the dealership is trying to sell you that car at as high a price and with as many add ons, and extra charges as possible. Are they bad for doing this??? Not entirely. That is their job.....that's part of what makes it so gut wrenching to haggle a car deal, IMO. I think many people bought above their means and had fairly tale dreams. There's a reason I don't live in Santa Monica.....I can't afford it. Plain and Simple.

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Doing the right thing isn't always the same as doing the easy thing.

There is absolutely no legislation requiring any lender to make any mortgage loan. None. The CRA does no such thing. Mortgage companies have been prohibited from discrimination based on race since 1968. There is no law that requires mortgage companies to make subprime loans. They made subprime loans, lots of them, because they thought that housing prices would continue to rise. They couldn't lose, they thought, because if they had to foreclose, they had a cushion in appreciating equity. As late as 3 months ago, Wachovia was still advertising Option ARMs; they weren't trying to recruit subprime borrowers.

Subprime loans are not guaranteed by the Fed. Never have been. By the way, subprime lending is not new. It just wasn't done by banks. Other things that aren't new are balloon mortgages, negative amortization or ARM's. What is new are prepayment penalties.

Securitization of mortgage loans came in with the demise of the savings and loan industry. It had been around in small part before that but really took off when S&Ls no longer were able to make mortgage loans from their assets. You can thank deregulation for that. And, you can thank deregulation for this mess too.

Closing attorneys are usually hired by the mortgage broker. The borrower pays for it but the attorney gets his business from the mortgage broker. They aren't always as scrupulous as they should be.

We're all victims here. Your neighbor's foreclosure, should it sit on the market for any length of time, is going to drag down the value of your house.

I'm not talking about a Closing Attorney. Here's a little info. on a closing attorney:


What to Expect at a Real Estate Closing

I am talking about a buyer going out and hiring an attorney who specializes in Real Estate Law. They will look over the terms of the contract, and all that is contained in it, and explain it to you.

No, we're not all victims here, I disagree with you there.

If someone is facing foreclosure, they should do everything they can to keep that from happening, at the very least to save their credit. As for my neighbors, they should sell their camper and use that money to try and pay down their mortgage. If need be, people can, and should, sell off some of their belongings.

Our society has gotten so used to being "entitled" to things, and relying on the government for practically everything. Oh, a hurricane is coming??? Don't worry, that's what the government is for, right??? They'll get me out of harm's way, at tax payer expense. And no need to insure my property, the government will pay for all of that. Heck, why have any responsibilities at all??? You see, that is a VERY dangerous place to be.....at the mercy of the Government. No thank you.

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Doing the right thing isn't always the same as doing the easy thing.

I know, this is a blog, but, has some good things in it that CAN be verified.

AsianWeek The Affirmative Action Economic Meltdown
In Obama’s brief senate career, he racked up the second highest amount of Fannie and Freddie contributions. John McCain stated, “Senator Obama may be taking their advice and he may be taking their money but I want to tell you in a McCain/Palin administration, there will be no seat for these people at the policy making table.”

It was left wing meddling inspired by affirmative action that led to politically correct credit decisions. As Ann Coulter put it, “They gave your mortgage to a less qualified minority.” The Clinton administration pushed investigations of Fannie Mae for discrimination and “redlining” of minority neighborhoods, even if factors such as credit histories, job stability, loan-to-value ratios and income levels were completely different between communities. It was urged that half of Fannie Mae and Freddie Mac’s portfolio be made up of low / moderate income borrowers by 2001.

Old criteria such as credit history and down payment ability would become less important, as welfare and unemployment payments would be counted, and “stated income” allowed borrowers to make up their own income, whether it was backed up by a cash business or nothing but thin air. People were rewarded for signing up loans, not for making sure they would be repaid.

When G.W. Bush entered office, his economist warned that loans to under-qualified borrowers created a risk for the entire financial system. In 2003, Treasury Secretary John Snow proposed oversight with strict controls over risk and capital reserves. When McCain joined the fight in proposing legislation to reform and stave off corruption, the effort was stopped by Democrats like Barney Frank, who stated there was no financial crisis at Fannie / Freddie, and affordable housing was the priority.


Taki's Magazine: The Diversity Recession, or How Affirmative Action Helped Cause the Housing Crisis


Long before Bush came up with the phrase “ownership society,” Democrats had gleefully been using this justification to funnel vast sums of mortgage money to their base voters among minorities through the liberal-dominated quasi-state institutions Fannie Mae (once run by former Obama adviser Jim Johnson) and Freddie Mac and via leftwing NGOs such as ACORN (to which Obama had long and close ties). The government both devised de jure quotas and leaned on lenders with discrimination lawsuits to get them to impose their own de facto quotas.

The CRA enables leftist lobbies like ACORN to shake down big financial firms whenever they tried to merge. Economist Thomas J. DiLorenzo observed that the Community Reinvestment Act:

compels banks to make loans to low-income borrowers and in what the supporters of the Act call ‘communities of color’ that they might not otherwise make based on purely economic criteria. … These organizations claim that over $1 trillion in CRA loans have been made …The law is set up so that any bank merger, branch expansion, or new branch creation can be postponed or prohibited by any of these four bureaucracies if a CRA ‘protest’ is issued by a ‘community group.’ … They use this leverage to get the banks to give them millions of dollars as well as promising to make a certain amount of bad loans in their communities.

To avoid the Community Reinvestment Act hassles, more than a few respectable institutions avoided doing business in minority communities. A lender could define its “community” as, say, stretching only five miles north and south from Mulholland Drive along the top of the Hollywood Hills.

Then, who’s more likely to offer mortgages to Compton and Pacoima? Why, high-pressure bucket shop operations that have no skin in the game—they’re just sales outfits that immediately repackage often fraudulently documented subprime mortgages and sell them to Wall Street.


*** I have not been able to find a specific law, per se, that states that banks HAVE TO issue sub prime mortgages, but, there sure are ways to put pressure on them, don't you think??? And, the CRA definitely comes into play in that area.

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Doing the right thing isn't always the same as doing the easy thing.

I would hope that there will never again be a qualified borrower is denied a loan based on the color of their skin or the neighborhood that they live in. Anne Coulter? Since when has she ever been a credible source?

Just because someone lives in a minority community doesn't mean that they are a bad credit risk. All banks were ever asked to do was to stop redlining.

I think that you have a picture in your mind that this whole mess is caused by poor Mr Banker having to loan to ghetto dwellers. Nothing could be farther from the truth.

With the "liar" loans, there is absolutely no need to need to provide any sort of fraudulent information. All that was provided were names and addresses and, bingo, loan approived.

There were an awful lot of people who bought properties for pure speculation. There were an awful lot of homeowners who speculated on their own homes draining every last drop of equity through refinancings and HELOCs.

You aren't going to find any law that required banks to make loans to unqualified borrowers because there isn't one.

Blame Greenspan for this bubble, too - MSN Money

No, absolutely not. There is MUCH blame to go around. I totally agree with that, and whoever said it. There is no ONE person/entity to put all the blame on.



That is EXACTLY what I stated in my post above....but, there are ways to "lean" on people. I think everyone would agree with that.

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Doing the right thing isn't always the same as doing the easy thing.