I had a huge discussion about this last night and I agree. Don't understand why the banks won't consider refinancing some of these loans to a fixed rate. They are still going to lose some money, but banks lose so much more when they have to auction off a foreclosed home, especially if it's been sitting there for some time not being kept up. It really boils down to greed....
Unfortunatly for the shysters, the American people seemed to have learned not to trust them. I guess the people remember how the Iraqi oil revenues were supposed to pay for that war and how that turned out. As has already been mentioned, they will probably try to pass this again. It would be great if the people can pressure "their" representatives to continue to vote against this fraud.
On the other hand it's rewarding those who are not making it. I sure wish the bank would reduce my rate out of the goodness of their hearts. The people agreed to a interest method, the banks should not IMO under any circumstance just lower the rate or make it a fixed after the adult on the other end agreed to a contract and a term. Refinance, show the bank did something illegal, then it should be possibly created into a fixed lower rate.
Well, frankly, it might be in the bank's interest to lower payments before foreclosing. Its not like these abandoned and run-down foreclosures are actually worth anything at auction - I think in many cases the bank owner could get more if they just cut the borrower's principle. Of course, if they're just rewarding those who don't make it, what stops the slippery-slope spiral? I think there's a deeper reason why there's no "logical" way out of the mortgage mess: There's no logical explanation of how we got here. 100 years ago, typical mortgages took 5-10 years to pay off. Despite technological improvements in building, are houses really 4-6 times more expensive? Have wages not kept up? Have the banks simply had their way with us, through the help of government and central planners? I think its the latter. "I sincerely believe... that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale." --Thomas Jefferson to John Taylor, 1816
Grim, I agree with the premise that you signed the paper = you pay the bill. BUT, if there is anything that can stop the major bleeding, it would be to allow for those to refinance. This would stop the market drop from having too much supply and stop losses from those who just can't pay with the higher interest rates. I am not saying they shouldn't be held responsible, but the banks made the mistake of lending to people that were too high of risk as well. So, this could be a fix put in place on the side of the bank. I may not be the smartest guy on the earth, but what part of this plan would not make financial sense in the short and long term?
Ahh yes it might be in their best interest. However even 'if' the bailout may have been in the 'best interest' of the US I opposed it on principle above all else. In the end there is no true winners. I understand that, I know where you're coming from. I am simply look at it as a matter of principle. BTW some of those people also certainly had their part in trying to make their credit look cleaner than it was with methods of making your credit ready for buying a house. Possibly paying off as much debt just so they could get the house, then after spending like it was going out of style. My neighbors for instance are selling their house "I believe" since they can't afford it. Right before they put it up for sale they went out and bought a brand new Chrysler Hemi SUV fully loaded, all new expensive washer dryer and much more. Many simply bought way too much after the fact putting them into the position they are now. Sure the banks are to blame in some cases, many times the home owners themselves however are just as much to blame or even more so. How about getting a 2nd job? Is that too difficult for people now adays?
I figured my neighborhood was going to complain since we don't have the new SUV and ??? other expensive vehicle, not to mention the ATV's, the Travel trailer with ATV parking and the boats... I know what you are saying and agree with you on those points as well. It is a big mess that no one seems to say "I (yes the word I) made a mistake.)
THEN... 100 years ago a house was approximately a 1000 sq ft frame structure on pier and beam foundation within which to live. It had a bathroom, a couple of bedrooms, a living area, and a kitchen with a place to eat. The same was true for the next 50 years at least. VS NOW It did NOT have 2500 - 4400 sq ft, a gameroom, 3+ baths, a powder bath for guests, a "master suite" with closets the size of older bedrooms, a media room, a study, marble floored entry, granite countertops, distressed hardwoods, a sub-zero fridge, zoned central heat and air, Cat-5 wiring, phone jacks in every room, built in surround sound, a three car garage, and a utility room with sink. INCREASED MIN STANDARD I see people buying houses of that description for their first home today. Our "minimum" standard of living has changed from the necessary to the ridiculous. Buying a house that impresses people you don't even like is the national sport, and living inside one's means is considered "quaint" but outdated. HOW TO DO IT If you had to get an adjustable rate mortgage that was fixed for 3 years then turned into a monster with an interest rate tied to the square of the body temperature of somebody's pet ground hog... or an "interest only" loan with zero down and based on "stated income", there was always a lender ready to make a loan both the borrower and the lender had to know was outrageously stupid unless they had crack for breakfast. FEDS TO THE "RESCUE" in Form of Fannie and Freddie If you didn't have the down payment, no problem. Why save up. In the 1990's Washington invented a nice legal way to add the down payment you didnt have to the mortgage payment you couldnt pay. Prior to that program you could do it too... but if caught you were thrown in Federal prison. "Up for down" is still of course illegal, unless you do it via one of several government created shell game methods called by several names, the best known being "The Nehemiah Program". PLAY BALL OR LEAVE Lenders that failed to meet certain ratios of "low income" or "minority" borrowers were threatened with Federal penalties if not prison, and underwriters were leaned on for not being "minority friendly" if they turned down even the most poorly collateralized loans in cases where the person that didnt meet even the expanded lending criteria was the correct color to qualify. Underwriters that turned down similarly ridiculous loans for non-minorities were told they were not "business friendly". Appraisers that didnt rubberstamp the increased prices for Nehemiah "up for down" scams were suddenly "no longer on the approved vendor list". My wife's a former underwriter that quit rather than continue to get pressured to approve bullshit loans that were sure to default in response to pressure from above and below. How'd we get here? A nice combination of greed and stupidity. People wanted what they didnt need, bought what they couldnt pay for... and the Federal government encouraged it by threatening anyone that tried to stop it. Big lenders encouraged it because they made money by doing it. Some Realtors encouraged it because it didnt matter if the guy could pay later, the agent got paid at closing. Buyers encouraged it because they *deserved* to live above their means, dammit, and who is anyone else to deny them what someone else had. Blame Who? Basically Everyone The blame goes all over the place. The problem is so heavily leveraged that the $700bil bailout is but a bandaid on a gaping chest wound. Collective greed caused the problem. There is no one administration or industry to blame. The public played a complicit role by wanting to live above our means, and it caught up with us. Now the nation as a whole is gonna pay for our excess, and we may have to make a fundamental shift in expectations to move forward.
Maybe that's why it is so easy for me to get loans. My Spanish last name, since I always mark other or nothing at all when it comes to my "skin color" which I find offensive that people want me to put that on paper when it has nothing to do with what I am doing. Now if they need a physical description they should take a picture, because my ethnicity won't tell them anything about me, now will it?
TRUE BUT... To be sure I'm not misquoted later as having blamed the whole fiasco on minorities... loans made to unqualified minority borrowers in order to keep the lender in compliance with regulatory bodies were one of MANY factors. If anyone pretends it's the only one they're misinformed or have an agenda of their own. There were similarly stupid loans made to wealthy whites that just wanted to look wealthier than they were. If they didnt have the money, at least they had a CPA who made it LOOK like they did. Figured I oughta clarify, not that I think you'd misread it, but in case anyone else does. That's just the ASSET side The ridiculous mishmash of good and bad loans that were created over time were packaged and became "assets" to many corporations, hence the current woes. Bad loans are laced like cyanide through IRA's, 401k's, REITs, pretty much any investment vehicle out there is affected. Already your 401k is a 301k... this time next year it may just be a "k". THE OTHER SIDE OF THE EQUATION: Executive Compensation Gone Wild At the same time this was happening on the asset side of corporate America... the other side was being undermined by creating unrealistic overhead... massive executive compensation packages. CEOs, CFOs, and all the other "O" family were sitting on interlocking directorates of companies voting to give each other pay pakages that could fund the feeding and care of entire third world countries for years. No employee however lofty is really brining enough to the table to warrant 90 million dollars for less than a decade of work... and thats an old figure now. One of the companies being bailed out had a 22 million "golden parachute" planned for a CEO that lasted 3 weeks. In the originally proposed bailout he'd have been paid that. This type pay was ignored by the stockholders as long as they got a check... but our executive class basically raided the value of many US corporations while we slept. It isnt technically illegal... just immoral on one side and stupid on the other. Everyone Seems to Have a Chair... until the music stops So we have corporations that have paid out cash by the truckload to executives at the same time they became collateralized by securities that are backed by home loans that include a massive number which are worthless. Combine the factors and our corporations across the nation are only afloat because nobody realizes they are already bankrupt. When the lending music stops... it will become apparent. Thats why Wall Street wants a bailout. The music (aka: lending) might stop if there isnt a bailout, and there will be hell to pay when people realize every safe in every company is not just empty, it's full of bills to pay. It won't of course just affect them, it might have some rather dire implications for all of us. Still I dont even think $700 bil will be more than a spit in the bucket toward the problem, and a helluvalot of it wont get there if our congress remains in their normal form... it'll be scammed off. There's an old saying... when the tide goes out you find out who isnt wearing a bathing suit. We're about to see.
Seems like an honest assessment coming from a conservative. But then I'm basing the typical assessment of corporate compensation on that of conservative radio hosts. They seem to often be for the rich guy no matter what, but maybe they don't represent the average conservative in this regard.
The answer is "self-employed / small business" conservative. Make's a big difference. In my world your raise becomes effective when YOU do. I've dealt with too many people that were paid 100s of times their real value to any business, and knew corporate America was gonna pay for that practice sooner or later. Appears to be approximately now.
Awww man. That's a great saying I've never heard before, but boy did it leave me with a bad image....picturing all of these old, gross politicians trying to cover their junk, only wearing their business socks and shoes, freezing on a cold, cloudy beach....watch out for shrinkage!!!