Re: Home Foreclosures: Crisis Is Only Getting Deeper, conservatives echo Custer, indians, what indians?

<milt.shook@[EMAIL PROTECTED]
> wrote in message 
news:e08eb61b-1518-4a82-aa8b-119fc868911f@[EMAIL PROTECTED]
> On May 15, 3:37 pm, "FrediFizzx" <fredifi...@[EMAIL PROTECTED]
> wrote:
>> <milt.sh...@[EMAIL PROTECTED]
> wrote in message
>>
>>
news:92ddb59c-bd91-4045-913b-ea501da31626@[EMAIL PROTECTED]
>>
>>
>>
>> > On May 14, 8:30 pm, "BuffettHa...@[EMAIL PROTECTED]
" 
>> > <BuffettHa...@[EMAIL PROTECTED]
>
>> > wrote:
>> >> On May 14, 8:02 pm, "Patriot" <liber...@[EMAIL PROTECTED]
> wrote:
>>
>> >> > Dumb ****ing idiots shouldn't have bought a home that they 
>> >> > couldn't
>> >> > afford.
>>
>> >> > Now that's common sense!
>>
>> >> Everyone was doing it.  The credit crunch and real estate collapse
>> >> still
>> >> has not hit canada by any measure. . . and the big sub prime 
>> >> lenders
>> >> here are the german and swiss banks, lol.
>>
>> > Over here, there was a lot of corruption. There is nothing 
>> > inherently
>> > wrong with subprime loans, or even interest-only loans. The problem
>> > was, we allowed pretty much anyone to be a broker, and a lot of 
>> > crooks
>> > took applications from people, faked their qualifications to submit 
>> > to
>> > the bank, then, after the bank approved the underwriting of the
>> > mortgage and supplied the cash, the broker sold the paper, then
>> > someone else sold the paper, etc.
>>
>> > One of the problems lawyers are having right now is, there is a lot 
>> > of
>> > obvious fraud out there, but they can't find someone to sue, 
>> > because
>> > it's almost impossible to figure out who owns what mortgage.
>>
>> > This goes a lot deeper than a bunch of foreclosures. It's a 
>> > criminal
>> > enterprise gone wild.
>>
>> Nonsense.  Whilst there was some fraud involved here and there, it
>> mostly was a capital market's experiment that failed.  There was a 
>> lot
>> of money to be lent and not enough takers so it is just natural to
>> extend credit to less credit worthy people when that happens.
>
> Wow. You're some revisionist.
>
> Banks didn't mind lending the money to people with less than stellar
> credit. They were more than willing to take a chance on someone with a
> below average credit score on a starter house. That wasn't where the
> problem was. The problem was in the instances where people filled out
> a mortgage application, and the broker faked the details regarding
> income. There are actually cases where the brokers placed a "1" on the
> application in front of the applicant's stated monthly income, to get
> them approved. You see, banks don't see someone with a below average
> credit score but high income as a huge risk. They do see someone with
> ANY credit score, signing on to a mortgage where the eventual mortgage
> payment, after the interest only period, constitutes 50% of their
> income as a risk. But brokers lied to the banks. That is where that
> part of the problem came from.
>
>> When we
>> look back at this 5 years from now, it won't look all that bad.  Soak 
>> it
>> up and move on.  Interest rates remain relatively low for those that 
>> ARE
>> credit worthy.  The financial companies were fairly stupid to package
>> the debt the way they did and are paying for it now via lack of trust
>> issues between them.  The experiment simply didn't work.
>>
> This isn't a 'soak it up and move on" kind of problem. There are still
> tons of these mortgages out there, yet to be foreclosed. Since home
> prices were hyperinflated, a whole bunch of people took out home
> equity loans on equity that didn't actually exist. And a lot of people
> with GOOD CREDIT and plenty of income (you know, GOOD risks) are
> paying on $500,000 mortgages on homes that are now worth $400,000 and
> still dropping. It also means banks are suddenly left carrying a lot
> more unsecured debt than they're supposed to, which means money
> available for credit is going to be very tight for a while, at the
> same time there is a glut of homes for sale out there.
>
> It wasn't an "experiment." It was government gleefully looking the
> other way, while robber barons made the economy look good for a few
> years, while actually robbing it blind. Just think; there is a huge
> inventory of homes out there that were built just FOR people who are
> being foreclosed on, and there is no one to fill those homes. Millions
> of homes will sit empty, millions of condo buildings will become
> rentals, millions of single family homes will either remain empty or
> become rentals, reducing home values even further, and pretty much
> everyone who purchased a home in the last 5-10 years will find himself
> upside down in their mortgage, and will likely NOT see any sort of
> profit from their initial investment.
>
> I know you people WISH this wasn't so bad, but as my grandmother used
> to say, you can wish in one hand and **** in the other; they're both
> worth basically the same...
>
> This is bad, will get worse, and will probably take a decade or more
> to shake out.

Fortunately, the facts don't sup****t your "doom and gloom" scenario. 
;-) About half of US homeowners don't even have a mortgage.  The 
subprime thing is way overblown.  And the market knows that. 
Foreclosures went from about 1 percent to 2 percent of total mortgages. 
Not really that big of a deal.  Home prices are coming down, mortgage 
rates have held steady or came down, so it will fix itself in not that 
long of time.  It was an experiment to try to get more lower-income 
people into homes and there was really nothing wrong with that.  It 
didn't work out.  The bubble busted.  Move on.

Fred