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

On Thu, 15 May 2008 14:21:05 -0700, "FrediFizzx"
<fredifizzx@[EMAIL PROTECTED]
> wrote:

><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 


Absolutely correct...   The foreclosures caused trouble to be sure,
but the homeowners that went down were losers in the first place or
they wouldn't have had to have sub-prime loans..