General Contractor · Midland, TX · Member since 2008 · 160 posts · 24 votes
Seeking to provide more aid to troubled borrowers, House lawmakers on Wednesday advanced legislation that would enable homeowners to shrink their mortgages in bankruptcy court.
Carpenter · Mt Martha · Member since 2008 · 19 posts · 0 votes
18y
Interesting thread and while it is all too complex (probably because nobody knows the real truth), the bottom line remains that:
The banks/lenders got THEMSELVES into this mess for one reason and one reason only - they thought that they were going to make a lot of money from these mortgages. They simply took a bet and lost. They did not do these 'deals' for humanitarian purposes!
The bigger picture here is that the average homeowner/taxpayer/working person is again being forced to bail out corporate mistakes, and possibly as time may tell, corporate crime. For some reason it is our fault because inevitably we (as a community) have to pay.
I am an Australian and we see the same thing here, it is a pattern of corporate greed and failure that repeats and repeats and repeats. Governments in our Western democracies kow tow to the corporate world and get 'sold' the message that these entities, even when they prove breathtaking incompetence, somehow need saving - and then to add insult to injury, all at our cost.
Agreed, this does offer a huge opportunity for those of us with the tools to operate in this market but for me, there is a bigger picture that can and will benefit humanity. We need to find a new model that forces the banks and Government to work for us, not us for them.
Sometimes it is too easy for us to get lost in the details but we have to remain focused on the bigger picture while concentrating on generating cash flow for survival. I believe creative investors with creative finance tools are the future.
Real Estate Investor · liberty township, OH · Member since 2008 · 149 posts · 6 votes
18y
i recall some radio talk show host (so i will take it with a grain of salt) saying that years ago, during clinton era, the feds loosened the lending rules and asked banks (sub prime) to lend out more money. So anyway here are some of my thoughts/questions..
1) why would any lender lend money to someone with poor credit and no money down?
2) why would anyone borrow 110% of a homes value?
3) why did the feds keep upping the interest rates, knowing all along that it was just about time for all those sub prime loans to re-adjust?
Residential Lender · Los Angeles, CA · Member since 2008 · 57 posts · 0 votes
18y
It all makes alot of cents it was so they could make more money trust me look at all the forcloseures they made money on the refi and the sale of your property its to keep people in dept so they have to keep working its to keep the economy going right now all of the baby boomers that are retireing, are retireing into bankruptcy within 5- 10 years of retirement and reverse mtg are on the rise people dont realy get to keep anything trust me i have seen this trend for a while now !
Real Estate Investor · liberty township, OH · Member since 2008 · 149 posts · 6 votes
18y
we are spending trillions in iraq/afghanastan because we (the US) started something and now need to finish it. If you remember when we (the US) pulled out of vietnam, millions were slaughtered. So If we (the US) pull out of iraq and afghanastan it will be a very very very ugly picture... Not that i am for spending all that money, but i am for ensuring the job is done right!!!!
and thanks for insight on the other issues... So why dont the feds tell wall street to go pound salt? If anyone knows the risks of investing it SHOULD be those on wall street... I understand the concept of giving a loan on a hand shake, but i would be hard pressed on lending someone money without first meeting them face to face....
Carpenter · Mt Martha · Member since 2008 · 19 posts · 0 votes
18y
That is exactly the point - they knew the risks, but they also knew that in the end they didn't hold the ultimate exposure. That is, they were making gazillions with a simple bet on the property market and it did not pay off in the end - maybe they just got greedy but it was not their money they were gambling with - it belonged to the community, the people.
I also surmise that they knew (most probably in advance) that the Government simply would not allow the collapse of the banking system so why not keep betting on a lame horse - after all, if you had an unlimited supply of money for a weekend at the track that you never had to pay back then what would you do????
Governments all over the world wring their hands and cry crocidile tears over poor investors and home owners that get screwed, but in the end they (Governments) are at the mercy of those Corporations with the financial clout make them pay at the ballot box.
What home owners and investors like us haven't realised is that we actually have the clout, we just haven't figured out how to organise ourselves enough to use it effectively.
Carpenter · Mt Martha · Member since 2008 · 19 posts · 0 votes
18y
Hope I haven't sidetracked you all with my posts but I think that in reality you cannot take the politics out of this topic - "Mortgage insanity bailout".
The Housing bubble and the sub prime bailout market effects on Real estate is a political issue, and there is no escaping it.
Maybe the war can go elsewhere - I'll grant you that!