Money – The mortgage industry, facing the prospect of tougher regulations for its central role in the housing crisis, has begun an intensive campaign to fight back.
We know how this will play out during the time left to Bush. Limit the scope of the regulations or gut it of any real bite. Another toothless regulation propagated by those who are to be regulated and promoted by the Bush regime to pretend they are actually doing something about the mortgage crisis. When will the public rise in anger and disgust at how this administration has always helped their rich and powerful friends at the expense of the rest of us.
"When will the public rise in anger and disgust at how this administration has always helped their rich and powerful friends at the expense of the rest of us."
More to the point, when will the public finally accept personal responsibility and exercise restraint when it comes to signing their lives and their futures away on mortgages they KNEW they couldn't afford, all while running up their credit cards into the stratosphere?
But it's O.K. There's always hard-working, responsible taxpayer chumps like me around to pick up the bill. So go ahead. Take out another loan for home improvement. Buy those lead-poisoned toys from China so your little brats can keep up with the Jones' little brats. Keep your Starbucks habit and keep filling your SUV up with gas like there's no tomorrow. Why change your habits? We're all here to bail you out because personal responsibility is no longer in vogue, and Socialism is.
" More to the point, when will the public finally accept personal responsibility and exercise restraint..."
And I could say the same for the mortgage companies and banks. Their irresponsible policies are directly responsible for this mess, too, but where is your indignation about them? Ah yes, you do believe in socialism - hand outs and welfare for business.
Baloney.
When you go to the grocery store, is it your grocer's responsibility to make sure you have the money to pay for your food? No. Is it the grocer's responsibility to tell you that you can't buy food based on your income level? No. The grocer is there to sell his food, and he doesn't give a rat's ass if you can afford it or not, or if you buy caviar when you should be buying carrots. NOT HIS PROBLEM.
Same goes for mortgage companies and banks. What do you think they're in business for? TO SELL MORTGAGES AND MAKE MONEY. If they're not doing that, they're outta business. Therefore, it's up to the buyer to beware. The buyer needs to look over his or her own finances, spending habits, financial obligations, etc. and determine for themselves what they can afford, or if they can afford at all. If you can't babysit yourself, then hire a professional to advise you. If you can't afford to hire someone, then you probably shouldn't be taking out a mortgage.
C'mon, the banks and mortgage companies knew what they were doing. And when they got in trouble they looked to Bush to bail them out and he obliged. According to you this debacle was only the borrower's fault. What a load of baloney. Takes two to tango in that complex fiscal dance that banks and mortgage companies wrote in their contracts. No, the banks and mortgage companies, much like Bush, went full steam ahead without thinking about the repercussions and now expect others to bail them out.
Until you get some education on the responsibility of lenders, both legally and morally, I'll leave you with this link. It isn't for YOU to decide whose at fault. It's for the courts. And when people get over their shock of losing their homes, we'll undoubtedly see civil cases. The responsibility of CLEARLY explaining a loan, lies with the person telling you to sign on the dotted line.
http://en.wikipedia.org/wiki/Predatory_mortgage...
"Ah yes, you do believe in socialism - hand outs and welfare for business."
No I don't. I never advocated the government getting involved and bailing out the banks and the mortgage companies. I believe they should take their hard knocks, just like the borrowers. Of course, if the borrowers had been responsible for themselves to begin with, there wouldn't be any hard knocks for the banks and mortgage companies to take. But they weren't doing their jobs properly and like any other business, they should experience the consequences of that.
Here's what I think might help: Any person working for a bank or mortgage company found to be guilty of misleading, bamboozling, misdirecting, fine-print swindling or flummoxing any borrower, should be taken out and shot dead. Soon, the industry would be MUCH cleaner and this type of crap wouldn't be likely to happen. Not that the sudden extinction of their buddies in the industry would necessarily discourage anyone, mind you (I know that the greedy are incorrigible), but at least the guilty wouldn't be able to do it again (and again, and again and ...)
How about the borrower's educating themselves a little, taking some personal responsibility and showing some restraint?
Nah. That would mean we would have to rely on the intelligence, the responsibility and the good judgement of the general public. And God knows, THOSE qualities went the way of the dodo a long time ago.
I don't necessarily disagree. Certainly there is a role for "Caveat Emptor" here. And, certainly anyone old enough to be signing a mortgage SHOULD be smart enough to know that something that sounds too good to be true PROBABLY IS. And yet... do you hear people blaming Adam and/or Eve because the serpent TEMPTED them? Is it the fault of the common man that mortgage documents are damn nearly impossible to decipher? No - there's plenty of blame to go around - and the evidence of the culpability of the mortgage industry is: THEY ARE LOSING THEIR AS*ES NOW. In what should be a VERY careful industry, this is (to me) the very best evidence that THEY are largely at fault. Hoist by their own petard, if you will.
"Is it the fault of the common man that mortgage documents are damn nearly impossible to decipher?"
Yes, it is. There are books at the library that will help you step by step. There is the Internet that if full of all the information you need, as well as posts of people sharing their experiences. If you still can't understand the document, hire a professional who can, and who will advise you whether to take out the mortgage or not.
If you can't understand the mortgage system, and can't afford to hire someone to advise you on something that affects your life, your future and your finances, then you really need to question whether a mortgage is for you.
Got any other sad, lame excuses? Sorry, but people need to pull their heads out of "American Idol" and "Lost" and start educating themselves on real world issues for a change.
I'm not making sad, lame excuses. Why are YOU so absolutely INSISTENT on clearing the mortgage industry of any wrongdoing? You by any chance WORK for one of those weasels? And, if you have ever actually CLOSED on a home, you MIGHT possibly be aware that in MANY instances the mortgage company is apt to CHANGE some things right at the very last minute and present you with a set of documents - AT CLOSING - that you have never seen before, and don't really have an opportunity to study at leisure. Because they diddle you around until the payout on your existing is JUST about to expire and you CAN'T (reasonable) postpone the closing to consult the library, the internet, or an attorney. Not to mention possibly taking another day off work.
Even if there is an attorney SITTING AT YOUR TABLE, he won't have a proper chance to go through the papers. This has been done to me, personally, TWICE. After the second time, I have warned everyone involved that any changes in paperwork made at closing will result in a lawsuit. It SHOULDN'T be necessary to make threats like that, but sometimes it is.
Another example: Right here, in the Chicago area, there is a mortgage company running ads advising that they will do your mortgage "for free - NO closing costs. It won't cost you a nickel." This is a lie. What they do is, they don't charge closing costs OK, but they DO add a quarter or half point to your rate. They sort of forget to mention that in their ads. I personally complained to the States Attorney (we have laws against misleading advertising) and NOW their ads are a bit more honest. If mortgage companies didn't LIE, and weren't extraordinarily greedy, maybe they wouldn't have the big trouble they now have.
"there is a mortgage company running ads advising that they will do your mortgage "for free - NO closing costs. It won't cost you a nickel."
Come on, joeblowe.... Did you just fall off a turnip truck? Are you new to the American way of advertising? If you are, I'll let you in on a little secret: Advertising is used to SELL PRODUCTS. Advertising is designed to appeal to our BASE DESIRES. There is LITTLE TRUTH in advertising.
As such, it's again up to the buyers to beware. YOU have the power as a consumer to not only choose which mortgage company to do business with, but also to bring aboard anyone you wish to help you make a sound decision. Or to choose not to buy anything at all. YOU act as if we're all dummies, just standing around waiting for someone to take advantage of us. I don't care that they "diddle you around" to sign "at the very last minute". NEVER sign anything you don't understand.
"There is LITTLE TRUTH in advertising" - perhaps you haven't heard: there are laws in many states (Illinois is one) that make some effort to INSURE that there IS, in fact, truth in advertising. Why would you excuse ANYONE for flat out LYING to entice someone to sign up for something - to their eventual detriment? Who raised you, anyway?
We have had real estate attorneys review closing documents. It was done PRIOR to closing in all but one case. We simply told them to send every document to his office before closing. We took the documents he had "pre-approved" with us and compared them to the documents we were signing
The attorney was actually there at the very first closing we ever had. There is no time limit on closing. He reviewed every document BEFORE we signed
If you paid an attorney to review documents and he didn't, you certainly didn't get what you were paying for
I refinanced right before the market started going bad. I was a general contractor and had been dealing with this bank exclusively for a few years yet when I went in I was hit with this hard sell for every type of bad loan out there. They all knew me yet they still pushed this stuff. Knowing them I just laughed and said No. Eventually they showed me the fixed rate loan I had asked for. If they did this to someone they should have known,knew better. I have no pity what so ever for them getting bit in the A$$ for giving out these loans. There were the get rich quick jerks out there taking these loans thinking they would turn them around and dump the homes before the money came do, and those people do deserve to fall Hard but so do the lenders which were pushing these loans.
I agree, normallysilent. There should be no bailout of these lenders, and no bailout for the borrowers. PERIOD. Let them all take their hard knocks, and let the market be the ultimate decider. When government steps in, it mucks everything up, and ultimately it's going to be unfair for SOMEBODY - - namely the responsible taxpayer who wisely chose not to get suckered in to the real estate game, yet is ending up paying for everybody.
Thanks, government!
Thanks, lenders!
And most of all, THANKS buyers! Good job there, showing restraint, responsibility and good judgement. We'll all be paying for YOU for a long, long time!
There was a time not long ago when you applied for a mortgage directly to a bank, a local bank. This was before credit ratings and score were applied from loans to job applications. Since banking was deregulated, many banks have been gobbled up by larger national banks and the local banks are none existent.
Banks have outsourced many of their functions - IT, customer service - in order to be more profitable. Mortgage brokers and financial institutions have taken up the slack, albeit for fees which aren't detailed in the closing costs. Banks have also become a one stop location for other financial services which they never were able to do before - insurance, annuities, ect.
Now they rant and rail against the very proposals that may reduce those profit margins. They even count as their mortal enemies local banks such as credit unions which they see as encroaching their market share.
Too bad. Let them eat cake.
My daughter just bought a house last fall
Closing costs through a large national bank were over $9000
She went with a loan from a credit union - closing costs were under $4000
Banks don't like credit unions because credit unions are "owned" by the members and are "not-for-profit" organizations
As the booklet from our credit union notes "credit unions exist solely to meet their members' financial needs, not to make a profit off of them"
As credit unions were allowed to expand into other areas beyond checking and savings accounts, they became real competition to banks and cut into their business
If the mortgage lenders have to tighten the rules, there will be fewer loans! Fewer loans means less profits!
Some of the main rules for a mortgage loan for the past 30 years was;
The monthly payment for the house, adding all Long term debt monthly payments, not to exceed 39% of a person's gross monthly income! (Long term debt is considered a loan and credit cards, that will take more than a year to payoff.) A down payment of a substantial amount. This was according to a Realtor that I know!
Thanks Mark!
This is interesting
New York Times carried a front-page article chronicling the many warnings the former Federal Reserve chairman Greenspan received about aggressive subprime lenders luring unsuspecting customers into crazy mortgages they never could afford. ``Where was Washington?'' the newspaper asked. And where was Alan?
here was Edward Gramlich, the late Fed governor, who urged Greenspan in 2000 to have Fed examiners investigate the industry. Greenspan said no. Activists from a California housing group, the Greenlining Institute, met with Greenspan in 2004, urging him to press lenders for a voluntary code of conduct. Greenspan wasn't interested and didn't give a reason.
I knew a person who ultimately paid $1800 for a smog check and emissions repairs to her car. I had a similar car with the same symptoms and I paid about $100 which included new oxygen sensors.
The difference? I did my homework before I took my car into the smog check station. I educated myself about the process before I went in. I am a pretty good mechanic now but I didn't know jack at that time so it was all new to me. Nobody came to my house to teach me and there was no government watchdog to make sure I didn't get hosed. I educated myself to protect myself and this was just a car repair.
People spend more time researching their plasma tv purchase than they do studying real estate law or loan documents. What's up with that?
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these people have no shame, they caused a recession and still they don't want to be regulated.
I used to work in the mortgage industry and there's a simple way to deal with bad quality loans. Make it mandatory for financial institutions that originate loans to service them for one year before they can sell them on the secondary market. The complete removal of loan origination from servicing has directly led to a lack of incentive to make loans based on traditional measures of creditworthiness. Make the originating lender bear some risk up front. Some poorer quality loans souldn't even be eligible for the secondary market.
damn i knew if i hung around long enough you'd make sense...
also don't allow lending institutions to HIRE THE APPRAISER or have ANY INPUT into the valuation process by the appraiser..
"they caused a recession and still they don't want to be regulated."
WHO "caused" a recession??
Let's not make moronic, broad-stroke statements like that, marshx. It shows your lack of intelligence, and the idiots on Nutscape are extremely gullible.
and you have your head somewhere other than your shoulders.. if you think the housing industry is not what "fuels the economic fire" at this point in history.. we have ALMOST NOTHING ELSE we produce..... no production.. no economy..
Speaking for yourself again NUMPTY,,,,LMAO...
You are still a jester in a Wendy's uniform..ROTFLMFAO..Oh shine on oh dense one...lol