Thank goodness I'm not a pax guy!
#23
Gets Weekends Off
Joined APC: Sep 2006
Position: Retired
Posts: 3,717
This 'bailout' is very important to our profession (and the entire country) and therefore I'm replying to this 'political' thread.
W0xOFF - I followed your advice, called the number and left a voice mail telling them the bail out is a MUST!
The main reason, not the only reason but the reason #1 to this crisis in my view was the political correctness in our country which was forcing banks and financial institutions to give out loans and mortgages to people with very shady credit histories. It's so easy to get sued for discrimination nowadays and now we are paying the price for political correctness running amok.
No, it had nothing at all to do with PC. It only had to do with good old Greed.
One news channel interviewed a single mother of 2 small children, who was being evicted from her 3/4 of a million dollar house, somewhere in California. She couldn't understand why the banks would foreclose. The fact that she had gotten into that house, with no money down, while her salary was around $47,000 a year, is a testament to the greed of the company who "sold" her that loan (she, of course is equally to blame,because she should have realized that she couldn't afford the house, but with no money down, what did she have to really lose, right?) What was pathetic was the fact that she said she never read her contract and had no idea that her rate could go up. The only one making any money on these foreclosed properties is the originator of the loan, who made a couple of thousand dollars in fees at the origination of the loan, and then maybe a little more when that loan was sold further up the food chain. Everyone else, from homeowner to brokerage house and individual investor has taken it in the shorts.
I too called my Senator and told him that while we need to bail out these banks and brokerage houses, to please be sure and not reward the CEO's/CFO's and the rest of these company's management, by allowing them to take exorbitant amounts of money (golden parachutes) when they leave. I forget the name of the bank, I think it was WaMu, but the CEO who had been there for 3 weeks (in total) was getting something like 30 Million Dollars as a severance package. WaMu just went under (I believe) last Thursday.
Bottom line is that we do need to save the banking industry as well as Wall Street, but hopefully our elected representatives will be smart enough to not give it all at once, while at the same time, protecting you, me, and Joe-Sh!t-the-ragman, by limiting management compensation and going after those who outright stole from us all. On that last point, I wouldn't hold my breath.
JJ
#24
Gets Weekends Off
Joined APC: Mar 2006
Posts: 3,333
People don't deserve a mortgage because they're Black, White, Oriental, Hispanic, or Martian. They are entitled to be treated fairly by the banks and other lending institutions, based on their ability to repay the loans that they are applying for. No more or no less.
Agree 100%
These banks and mortgage lending businesses were giving loans to folks who could barely afford to pay the interest-only portion of the monthly loan, and that was when the loans were at rock-bottom, and sometimes even below rock-bottom rates. They were doomed from the first day they moved in, to be foreclosed upon. It was only a matter of time before their variable rate loan came up for renewal, at which point, the company or brokerage house that had acquired that loan (as part of a giant package of sub-prime mortgages, that they bought at a discount) raised the rate the maximum as allowed in the mortgage contract.
No, it had nothing at all to do with PC. It only had to do with good old Greed.
Well, so are you saying that an adult who can vote is unable to make the conclusion that he/she cannot afford the house? I agree with you that many if not most institutions are responsible for giving credit to many people who shouldn't be getting approved however, the US government DID threaten many financial institution with lawsuits if they didn't increase home ownership amongst the minorities, immigrants etc., and the rules governing loan practices were eased significantly in the mid 90s.
Therefore some people who shouldn't be getting loans did indeed get those loans. We should never look at ones race, gender or origin when approving loans however that's exactly what did happened - they got those loans not because they had enough money for a down payment but because the banks were under pressure to increase the "economically disadvantaged" -share of home ownership.
One news channel interviewed a single mother of 2 small children, who was being evicted from her 3/4 of a million dollar house, somewhere in California. She couldn't understand why the banks would foreclose. The fact that she had gotten into that house, with no money down, while her salary was around $47,000 a year, is a testament to the greed of the company who "sold" her that loan (she, of course is equally to blame,because she should have realized that she couldn't afford the house, but with no money down, what did she have to really lose, right?)
Absolutely! It's also a testament to HER greed of wanting to own the house NOW even though she knew she didn't have enough money. My wife and I are still living in a tiny condo in the middle of nowhere and will until we have enough money to make at least a 30% down payment and get approved for a fixed 15-year loan. Why couldn't she? She got an adjustable rate loan because she couldn't get qualified for a fixed rate loan - isn't that a give away that maybe she shouldn't be buying the house? You see, her "I want it and I want it NOW!" mentality took over her common sense.
What was pathetic was the fact that she said she never read her contract and had no idea that her rate could go up.
So in other words she couldn't read or didn't want to read because she was afraid to find the truth in the fine print? The truth was she could not afford that house; she should have rented or looked for a smaller/cheaper house. I don't mean to sound cold or condescending but what about the personal responsibilities?
So let me revise my earlier statement – the main reason for this crisis is greed from the loan institutions but also those who wanted the houses NOW even though they couldn’t afford them.
Ps. I totally agree with you on limiting the CEO compensation in this package...
Agree 100%
These banks and mortgage lending businesses were giving loans to folks who could barely afford to pay the interest-only portion of the monthly loan, and that was when the loans were at rock-bottom, and sometimes even below rock-bottom rates. They were doomed from the first day they moved in, to be foreclosed upon. It was only a matter of time before their variable rate loan came up for renewal, at which point, the company or brokerage house that had acquired that loan (as part of a giant package of sub-prime mortgages, that they bought at a discount) raised the rate the maximum as allowed in the mortgage contract.
No, it had nothing at all to do with PC. It only had to do with good old Greed.
Well, so are you saying that an adult who can vote is unable to make the conclusion that he/she cannot afford the house? I agree with you that many if not most institutions are responsible for giving credit to many people who shouldn't be getting approved however, the US government DID threaten many financial institution with lawsuits if they didn't increase home ownership amongst the minorities, immigrants etc., and the rules governing loan practices were eased significantly in the mid 90s.
Therefore some people who shouldn't be getting loans did indeed get those loans. We should never look at ones race, gender or origin when approving loans however that's exactly what did happened - they got those loans not because they had enough money for a down payment but because the banks were under pressure to increase the "economically disadvantaged" -share of home ownership.
One news channel interviewed a single mother of 2 small children, who was being evicted from her 3/4 of a million dollar house, somewhere in California. She couldn't understand why the banks would foreclose. The fact that she had gotten into that house, with no money down, while her salary was around $47,000 a year, is a testament to the greed of the company who "sold" her that loan (she, of course is equally to blame,because she should have realized that she couldn't afford the house, but with no money down, what did she have to really lose, right?)
Absolutely! It's also a testament to HER greed of wanting to own the house NOW even though she knew she didn't have enough money. My wife and I are still living in a tiny condo in the middle of nowhere and will until we have enough money to make at least a 30% down payment and get approved for a fixed 15-year loan. Why couldn't she? She got an adjustable rate loan because she couldn't get qualified for a fixed rate loan - isn't that a give away that maybe she shouldn't be buying the house? You see, her "I want it and I want it NOW!" mentality took over her common sense.
What was pathetic was the fact that she said she never read her contract and had no idea that her rate could go up.
So in other words she couldn't read or didn't want to read because she was afraid to find the truth in the fine print? The truth was she could not afford that house; she should have rented or looked for a smaller/cheaper house. I don't mean to sound cold or condescending but what about the personal responsibilities?
So let me revise my earlier statement – the main reason for this crisis is greed from the loan institutions but also those who wanted the houses NOW even though they couldn’t afford them.
Ps. I totally agree with you on limiting the CEO compensation in this package...
#25
Gets Weekends Off
Joined APC: Nov 2006
Position: 767 FO
Posts: 8,047
short version
The PC came in when the banks were told by a certain female attorney general that if they didn't make loans to the correct PC categories they would be investigated. Were the banks stupid yes. Were they encouraged to be stupid; ask Fannie and Freddie.
#26
#27
Gets Weekends Off
Joined APC: Mar 2006
Posts: 3,333
That's exactly right, amazing no newspapers write about it today.. or maybe it's not that amazing after all...
#29
It's folks like you who are part of the problem.
Without a Presidential 'Line Item' VETO, like some Governors have, these turkeys clutter & LOAD UP otherwise good, important and vitally necessary Bills with unimaginable CRAP that is ruining the country.
Most times the President has no other choice than to sign something that is loaded with loathsome stuff, just to keep the country running.
And you KNOW these scum are way too smart to give the President a 'Line Item VETO' that he/she could use against this underhanded tactic.
Get off the sofa! Make the calls!(202-224-3121) Become part of the solution and not part of the problem. There are 'market solutions' being proposed that will fix the problems. A 'Bail Out' will be the ruination of our way of life as we know it.
Without a Presidential 'Line Item' VETO, like some Governors have, these turkeys clutter & LOAD UP otherwise good, important and vitally necessary Bills with unimaginable CRAP that is ruining the country.
Most times the President has no other choice than to sign something that is loaded with loathsome stuff, just to keep the country running.
And you KNOW these scum are way too smart to give the President a 'Line Item VETO' that he/she could use against this underhanded tactic.
Get off the sofa! Make the calls!(202-224-3121) Become part of the solution and not part of the problem. There are 'market solutions' being proposed that will fix the problems. A 'Bail Out' will be the ruination of our way of life as we know it.
Let the president grow some testicles and veto a bill. Some presidents have the testicles to threaten to shut the government down with the threat of a veto bill. WOXOFF do not give me some civics lesson.
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