Home › Forums › Open Discussion › Let’s bring back the mortgage crisis!
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December 11, 2014 at 8:56 pm #816307
skeeterParticipantMost lessons – especially painful ones – are memorable for more than a few years. But it seems we’re quickly moving back toward repeating mistakes of the past. Taxpayers (through FHA loan guarantees) are now on the hook for mortgages with only 3% down. That’s right folks. For every $1 a person puts into a home, the taxpayers are now willing to put in $32. Sure – these loans are only for the folks with good credit. But that’s for now. I see us continuing to slide along a comfortable path of making loans easier and easier.
I think the fundamental plan is everyone loves easy loans. The liberals love them because it means more people can buy a house they could not otherwise afford. And businesses love easy loans because that is where the biggest profit margins are. It really is too perfect.
Skeeter predicts the next mortgage crises in 2018. I hope I’m wrong.
http://www.forbes.com/sites/markgreene/2014/12/09/3-down-conventional-loans-are-here-for-real/
December 11, 2014 at 9:24 pm #820056
wakefloodParticipantSkeets, this is only one part of the plan to get back to the Casino that broke us. I didn’t notice that you posted about the provisions that gut Dodd-Frank and derivatives deregulation? You know that’s IN the funding bill and that section was WRITTEN BY A CITIBANK LOBBYIST. THAT’S a huge part of how the whole system got out of whack before and the GOP IS LICKING ITS CHOPS TO DO IT AGAIN.
In the ’00s you had banks desperate for ways to monetize mortgages BEYOND the simple notion of basic interest and principle. So they MADE SH*T UP out of whole cloth and eliminated any vetting of capacity to pay a mortgage just to keep feeding their pyramid scheme. And they could only do it because Clinton ditched Glass-Steagal.
You want to be upset about something? Get upset about the fact that the Casino is being dusted and vacuumed and prepared to open for bidness. At least with the FHA, they have some responsibility to vet the potential owners. You have ZERO capacity to vet a derivative’s legitimacy.
December 11, 2014 at 10:29 pm #820057
skeeterParticipantYup, I pretty much agree with you Wake.
If it was up to me every home loan, regardless of credit history, would require at least a 10% down payment. Would that keep some people as renters for longer? Probably. But that’s a trade-off for price stability and protection from brokers pushing unfair loans targeting the poor and unsophisticated.
December 11, 2014 at 10:45 pm #820058
dobroParticipant“The liberals love them because it means more people can buy a house they could not otherwise afford. And businesses love easy loans because that is where the biggest profit margins are.”
So you apparently can read the minds of “the liberals” but you don’t mention the “conservatives”. Oh, I guess that’s because you figure all businesses are run by “conservatives” because only they know anything about profits.
News Flash: There are many businesses run by “liberals”. I know, I run one and I know other “liberals” that do. And I have no interest in anyone owning things they can’t afford. I also would like the people that made fraudulent loans and coerced people into loans by mis-stating and misleading people about their obligations to be prosecuted to the fullest extent of the law for their fraudulant practices. Now, would you say that’s a “liberal” position or did I just turn into a “conservative”, according to your categories?
December 11, 2014 at 10:55 pm #820059
skeeterParticipantdobro you’re kinda putting words in my mouth. At what point did I say that liberals don’t own businesses? Lots of liberals run businesses.
As far as prosecuting fraudulent loan practices that’s good with me. If people are breaking the law they should be punished. I think both conservatives and liberals would agree with that.
December 11, 2014 at 11:42 pm #820060
dobroParticipantThe syntax of your sentence structure posits that “liberals love X” as opposed to “businesses love X” thereby suggesting that liberals and businesses are two different things. I don’t think the conclusion I drew was too far fetched.
The part I most object to is the right-wing trope that liberals think its great that people can get things they don’t “deserve” or “can’t pay for”. It’s a BS right wing talking point and I think, from reading previous posts of yours, that you’re smarter than that. Please don’t let me down :)
December 12, 2014 at 12:06 am #820061
wakefloodParticipantYeah, I’ll have to go looking for the article cuz I know it’s several years old now but it detailed how many mortgage lenders like Country Wide, WAMU, etc. made serious coin by going into lower tier economic communities and virtually begging them to buy a house/condo.
Free money, gitcher free money! Hey buddy, you’re already paying rent – might as well be getting a home and equity, right? Amiright?
That’s the thing about pyramid schemes, they’re insatiable.
December 12, 2014 at 12:26 am #820062
waynsterParticipantDecember 22, 2014 at 8:36 am #820063
HMC RichParticipantSkeeter, were you referencing the Community Reinvestment Act from Mr. Bill Clinton regarding the fact that “liberals . . . ” which they did like!? And our liberal friends, some of whom are business owners, may blame the repeal of the Glass-Steagall ACT. Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act, a cornerstone of Depression-era regulation WHICH PRESIDENT CLINTON SIGNED, but they forget that part when complaining. Just curious.
I myself would prefer tougher standards for people to get loans. Amazing how much money banks throw at people when they are gainfully employed, but want to foreclose on you the second you lose your job or a significant amount of income.
The fact is the mortgage crisis will only be part of the next depression. The major players want the dollar to be replaced and with the right circumstances that could easily happen. Once the dollar is not the world’s energy and trading currency, our debts will be called in and the country’s financial system will collapse.
The future doesn’t look very bright to me. And I really hate to say it.
December 22, 2014 at 5:12 pm #820064
JTBParticipantThe change is to reduce the required downpayment from 5% to 3% for those who qualify. This in part is a recognition that the free money given by the Fed to the banks didn’t strengthen the housing market as hoped. What did happen in a number of metro markets, in the South and Southeast particularly, was that banks acquired properties, rented them out for a bit then sold them to yield hungry investors after which they largely left the market. So now we are still waiting for the residential real estate market to recover and we’ll see if the acceptance of a lower down payment is enough to prompt lenders to make more loans. Meanwhile, there are places like San Francisco where the results of the real estate speculation by the high rollers has resulted in both huge price increases and falling sales.
December 22, 2014 at 6:53 pm #820065
wakefloodParticipantThere you go again, JTB, messing up a perfectly good ideological screed with your reality-based junk.
Cut it out.
December 23, 2014 at 3:01 am #820066
dobroParticipant“…a cornerstone of Depression-era regulation WHICH PRESIDENT CLINTON SIGNED, but they forget that part when complaining.”
Actually, I remember that quite well and was against it at the time and still think it was a huge sell-out. Am I still a liberal?
“I myself would prefer tougher standards for people to get loans.”
How about some tougher standards like, say, prosecution and jail time for banksters that committed fraud when enticing borrowers with false promises?
“The future doesn’t look very bright to me. And I really hate to say it.”
America’s future is being darkened by one political party that is 100% owned by Wall St. and another that is 75% owned by Wall St. There won’t be much brightness until that changes.
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