Queens Homeowner Pleads:"i Need Your Help....

[BeanCounterGrad'03]

The creditors aren't really trying to finance purchases anymore and get them paid off; they're just trying to keep debtors paying whether or not there's any real chance they'll pay off anything.

Gagree...I get that feeling everytime I get a credit card offer from a bank that I already have 3 cards with...thanks Chase! (BOA use to do it to me too)

[eulessismore]

Yeah, the paperwork is enough to choke a horse. When I went to close on my loan, they told me it would take just an hour to sign everything. What they were not prepared for was me sitting down at the table and reading every single word of everything I signed. It ended up taking almost 6 hours.

Most of it is necessary, and a lot of it is mandated by the federal government.

They may still be talking about you. If everyone did that; a lot less of that paperwork would be found necessary. Lenders would be lobbying Federal and State legislators for paperwork reduction and fine print removal. I can imagine reading "Mortgage industry leaders petition congress for plain language, fixed rate loans; just this one thing, and we'll never ask for another bailout".

[UNTflyer]

And here is where I disagree with most on this mortgage mess...

Even if the paperwork was simple, plain language... easy for a 8th grader to understand... people would still have signed mortgages they couldn't afford because they want that McMansion, no matter what! Their judgment is clouded by the prospect of getting out of an apartment and into a 3000 square foot house for just $700 a month (for the first 2 years, then it goes to $2700 a month).

The mortgage brokers didn't care, because they had the federal government encouraging them to do it, Fannie and Freddie to guarantee the loans, and the mortgage backed securities market to sell off the note. The market didn't care, because the mortgages still had value even if the owner defaulted... there was a house they could sell and recoup the loss. The risk was low, or so they deluded themselves into believing.

It used to be that government backed mortgages had meet certain credit, income, and debt-ratio requirements. Fannie/Freddie lowered those standards, with the blessing of Congress and Bill Clinton. BOOM! The housing bubble inflated. Suddenly, during the mid to late 90s, almost anyone could buy a house. Along comes refinancing and zero-documentation loans and interest-only loans, again all encouraged and blessed by the government, and before you knew it the house of cards came down.

Now credit markets are frozen and we have almost zero growth. THAT is what is causing the recession. That is how we need to get out of this mess... unfreeze the credit market. Buy up all the bad loans, let the government do what they want with the mortgages (foreclose, extend payments, refinance, whatever). We do not need to spend $1 trillion on wasteful government programs. Because you can bet the farm on it... within 18 months Obama and Congress will start talking about the need to raise taxes in order to cover all this spending.

[oldguystudent]

This whole thing has been pissing me off for years because it kept me OUT of the housing market for so long. I refused to pay such inflated prices, and had to move to Texas to afford a house. But I seem to be having the last laugh.

[LongJim]

Even if the paperwork was simple, plain language... easy for a 8th grader to understand... people would still have signed mortgages they couldn't afford because they want that McMansion, no matter what! Their judgment is clouded by the prospect of getting out of an apartment and into a 3000 square foot house for just $700 a month (for the first 2 years, then it goes to $2700 a month).

This is exactly right, and a major reason that my wife and I walked away from a new home over 4 years ago. I read the contract, and decided that I was going to be paying the absolute limit of what I could afford. The lender told me--"You can afford this. The numbers say so." We looked at the deal and told ourselves: "No way we do this. If something happens, we're screwed."

It was very hard to walk away from the deal, but we absolutely made the right decision.

[KRAM1]

Agreed...my wife and I walked away from the first house we had signed a contract to buy. Lucky we were "smart enough" to put some contingencies in the contract regarding financing levels. When we saw the financing paperwork, it dawned on us that we would be stretched way to thin, and would be an "accident waiting to happen" should either of us have a hiccup with our jobs. Gee, what a concept...read the paperwork and figure out what you can afford.

Worked for us. And, everyone from the realtor to the lender to the tiltle company was telling us "no problem" it looks great...you can definitely afford this! Yea, right! We bought another home, sold it and built the home we now live in...and get this concept...IT'S PAID FOR!!!!!!!! And, without your taxdollars helping us pay for it!

Tell me how happy I am about my tax dollars going to pay for other people's homes! It was a real struggle sometimes covering that mortgage payment/taxes/insurance/utilities/repairs, etc., but my ife and I an our three kids made some tough choices when we had to do so and got through it just fine. Seems to me that's what it is all about. No one ever promised that growing up and being responsible for your own decisions was going to be easy. But, it sure is satisfying!

[Guest JohnDenver]

And here is where I disagree with most on this mortgage mess...

Even if the paperwork was simple, plain language... easy for a 8th grader to understand... people would still have signed mortgages they couldn't afford because they want that McMansion, no matter what! Their judgment is clouded by the prospect of getting out of an apartment and into a 3000 square foot house for just $700 a month (for the first 2 years, then it goes to $2700 a month).

The mortgage brokers didn't care, because they had the federal government encouraging them to do it, Fannie and Freddie to guarantee the loans, and the mortgage backed securities market to sell off the note. The market didn't care, because the mortgages still had value even if the owner defaulted... there was a house they could sell and recoup the loss. The risk was low, or so they deluded themselves into believing.

It used to be that government backed mortgages had meet certain credit, income, and debt-ratio requirements. Fannie/Freddie lowered those standards, with the blessing of Congress and Bill Clinton. BOOM! The housing bubble inflated. Suddenly, during the mid to late 90s, almost anyone could buy a house. Along comes refinancing and zero-documentation loans and interest-only loans, again all encouraged and blessed by the government, and before you knew it the house of cards came down.

Now credit markets are frozen and we have almost zero growth. THAT is what is causing the recession. That is how we need to get out of this mess... unfreeze the credit market. Buy up all the bad loans, let the government do what they want with the mortgages (foreclose, extend payments, refinance, whatever). We do not need to spend $1 trillion on wasteful government programs. Because you can bet the farm on it... within 18 months Obama and Congress will start talking about the need to raise taxes in order to cover all this spending.

Interesting that your nice neatly packaged blame doesn't include investment banks for labeling sub prime loans as AAA investments... Instead you place the blame on the govt and not the self regulating free market.

[meangreendork]

I clearly heard this in his speech yesterday....

But, he said, it will do nothing to help "the unscrupulous or irresponsible." He cited so-called speculators who took out risky loans on multiple properties to make money by selling them during the housing boom, lenders who took advantage of naive buyers by glossing over the fine print, and people who willingly bought homes that were way beyond their means.

"This plan will not save every home," Obama said.

So what is the purpose of posting the story about this idiot who took out a housing loan that he had (even under ideal circumstances) no hope of paying off?

Trolling. Pretty much. It's trolling. And not just trolling, bad political trolling.

It's like going to a video game forum and screaming out 'OMG XBOX SUX'.

Hell, the article was trolling. Just to get riled-up comments, and to start a flamewar.

[UNTflyer]

Interesting that your nice neatly packaged blame doesn't include investment banks for labeling sub prime loans as AAA investments... Instead you place the blame on the govt and not the self regulating free market.

Did you skip over this part?

"The mortgage brokers didn't care, because they had the federal government encouraging them to do it, Fannie and Freddie to guarantee the loans, and the mortgage backed securities market to sell off the note. The market didn't care, because the mortgages still had value even if the owner defaulted... there was a house they could sell and recoup the loss. The risk was low, or so they deluded themselves into believing."

[DeepGreen]

Wait until the next Obama Bailout comes along. The Credit Card companies.

[SCREAMING EAGLE-66]

---He bought this house during the Bush administration and the policies that were allowed to exist.. Obama has nothing to do with it. This idiot should just eat it, sell it or lose it and move. Don't expect any bail-out for him. Just because he mentions the Obama name and wants one doesn't mean he will get one. Didn't the Bush bail-out reward all these NY rich financial idiots on Wall Street..guess he thinks he deserves one too.

--Read the latest Newsweek... the top two it blames for this mess are the Countrywide head and Phil Gramm (our former Senator) who sponsered legislation that removed many of the controls that had been in place since the depression. (1930's)... Phil gets a lot of the blame.... We had less govenment regulations oversight because of him and greed took over and made these idiot loans.. Make sure you know what the real facts are and not just play politics.

PS: Phill Gramm's wife was on the board of directors of Enron....see a pattern ????

Edited February 21, 2009 by SCREAMING EAGLE-66

[UNTflyer]

--Read the latest Newsweek... the top two it blames for this mess are the Countrywide head and Phil Gramm (our former Senator) who sponsered legislation that removed many of the controls that had been in place since the depression. (1930's)... Phil gets a lot of the blame.... We had less govenment regulations oversight because of him and greed took over and made these idiot loans.. Make sure you know what the real facts are and not just play politics.

PS: Phill Gramm's wife was on the board of directors of Enron....see a pattern ????

Not so fast... Newsweek cites MoveOn.org's CLAIM that Phil Gramm is to blame, but Newsweek also go on to point out that while Gramm sponsored the bill, it passed the House 362-57, and the Senate 90-8, and Bill Clinton signed it into law.

[SCREAMING EAGLE-66]

Wait until the next Obama Bailout comes along. The Credit Card companies.

The Credit card companies ----they are the banks being bailed out... Citi Bank for example.

[SCREAMING EAGLE-66]

Not so fast... Newsweek cites MoveOn.org's CLAIM that Phil Gramm is to blame, but Newsweek also go on to point out that while Gramm sponsored the bill, it passed the House 362-57, and the Senate 90-8, and Bill Clinton signed it into law.

--True... But he started it.....and his name is on the bill.... he took credit for it then .... he gets the credit now. As for Clinton signing... the vote count indicates that any veto would have been overridden anyway. He probably should not have signed it even if his veto meant nothing.... but he did in 1999 or 2000... his last year..

This is consistent with the Enron mess... in which Gramm was involved (wife on board of directors) and resigned his seat when it hit the fan because of it. (actually he withdrew from his re-election bid since he only had a few weeks left). He then left the state in a hurry.

The Move-on Org. comment is misleading ( GOP radio guys are good at that).... a lot of economic experts are claiming the same.

Edited February 21, 2009 by SCREAMING EAGLE-66

[FirefightnRick]

For those who aren't swallowing the continueing social engineering experiment, otherwise known as the "Congressional Relief Action Program"

hRkj5rgRtAs

Here's the PDF format of the full page ad mentioned in the video.

http://www.cato.org/special/stimulus09/cato_stimulus.pdf

Here's an additional list of economists who have joined since the ad came out.

Rick

[SCREAMING EAGLE-66]

--- I am not a supporter this bail-out plan and the Bush one in the fall was so poorly thought through that the execs ripped a lot off with their greed. ... I am just saying this mess was caused by removing controls from the financial institution that had been in place since the depession (60+) years. One party kept demanding less government controls on Wall Street and in the finanacial community... and got it. As a result of the idiots in the financial community making crazy poorly secured loans and their greed, we get these bad economic conditions. The same political party that set it up prior to 1929 --- did to us again...

Edited February 22, 2009 by SCREAMING EAGLE-66

[UNTflyer]

And here we go....

http://www.washingtonpost.com/wp-dyn/conte...2100911_pf.html

President Obama is putting the finishing touches on an ambitious first budget that seeks to cut the federal deficit in half over the next four years, primarily by raising taxes on businesses and the wealthy and by slashing spending on the wars in Iraq and Afghanistan, administration officials said.

Because, apparently, the best way to help the economy is tax the people who have the capital to invest in growth. Of course, when this fails it will just be blamed on Bush. Folks, Obama is running the same playbook as FDR during the Depression, and it didn't work. I predict a 5% drop in the stock market come Monday.

[Green Gas]

But did you see this?

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name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="

type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="295"></embed></object>

[eulesseagle]

here is where the $$ is going.....inclusive breakdown:

http://online.wsj.com/public/resources/doc...FINAL_0217.html

[Green Gas]

here is where the $$ is going.....inclusive breakdown:

http://online.wsj.com/public/resources/doc...FINAL_0217.html

Wow, makes you want to puke!

Everyone should be mandated to read this list and realize what crooks the democratic party is. TOTAL irresponsibility period! The American public needs to make a stand. We need to dig up some real conservative guys. The damn Republicans need to fly right also but this is criminal. Everyone just say no!!!!!!!

This is like giving the nation's checkbook to "Cletis the slack jawed yokel" and then guaranteeing we will back whatever checks he writes no matter how bad we are over drawn,

[SilverEagle]

Wait until the next Obama Bailout comes along. The Credit Card companies.

The Credit Card companies are already bailing themselves out.

read here..

http://www.star-telegram.com/ed_wallace/story/1216334.html

my favorite part.....

"The debate on who was to blame for this problem is still the most inane discussion in American history. In a problem that Wall Street’s financial innovation created, those same financial hotshots have turned the national discussion into a blame game based on their ideology: "The American automobile industry’s problems are solely based on the high cost of labor."

Others claim that our downfall was the outrageous and selfish behavior of poor people buying homes they never could have paid for. Imagine that: Individuals without much education or financial capability were the villains who engineered the world’s financial downfall, not the MBAs and mathematicians who devised the mortgages and forcefully offered them to those poor and less educated individuals – and then turned around and sold those pathetic loans as Triple A investments.

To frame the debate in an analogy that anyone can understand, the convenience store owner is the real criminal behind any robbery because he made it so easy for the crook to hold him up. Certainly that’s what Wall Street wants you to believe.

If You’re Not Outraged …

Last week Vikram Pandit, the CEO of Citigroup, testified in front of Congress, taking minor lumps. And, exhibiting some contrition for the failure of his firm, he said he would accept only $1 in compensation until he "fixed" his broken company. Nice, huh? Even noble – until one considers that taxpayers have already given his firm $45 billion to help him fix things. In the days before he testified on Citi’s errant ways, the bank’s cardholders received a letter saying that Citicards’ interest rates would be reset to 10.99% over the prime interest rate, or 16.99% minimum interest on their credit card balances. (That works out to 13.99% over today’s prime rate.) On reading my letter my first thought was, "My god, Citigroup is turning all American consumers into subprime borrowers!" Apparently if Citi can no longer charge the poor and indebted, they will charge everyone else a rate that once was considered usurious.

At about the same time, Ford, GM and Chrysler again offered Zero Percent Financing on many of their most popular models, hoping to kick-start their sales – thereby improving not only their companies’ fortunes but also the nation’s. Ironic, isn’t it? The media can’t write enough stories lambasting Detroit for their failures, even as automakers are offering exceptional deals to a public that depends on personal automobiles to exist in our mobile society. Yet not a peep of outrage is heard over Citigroup’s jumping the interest their cardholders pay to rates that only Gary Coleman would call great.

Detroit’s gift to help our national economy is Zero Percent Financing. Citigroup offers to fix its internal problems for 16.99 percent interest."

[meangreendork]

Others claim that our downfall was the outrageous and selfish behavior of poor people buying homes they never could have paid for. Imagine that: Individuals without much education or financial capability were the villains who engineered the world’s financial downfall, not the MBAs and mathematicians who devised the mortgages and forcefully offered them to those poor and less educated individuals – and then turned around and sold those pathetic loans as Triple A investments.

That's a huge fallacy. While the behavior of poor people taking out mortgages on homes they couldn't afford was a problem, it was the same way for more well-to-do people doing the same thing, just with larger homes and far larger mortgages. But the whole thing really has a lot to do with consumer confidence and spending habits. For about the last 20 years, the average person has been all about spend-spend-spend and keeping up with the Joneses. Being frugal has really gone out of style. Then the economy turned to crap and now, no one has confidence in the economy.

Without that confidence, all of the tax cuts and tax breaks to any sector won't mean anything because the average person doesn't want to spend money. Sure, give me a tax break. Am I gonna spend it? Probably not since I'm worried that any one of the entities I do work for will suddenly decide they can't afford me or something. Give Best Buy a tax cut, and are they suddenly going to start doing well? Not really. Sure, they just got a better profit this quarter, but that's probably going to line the coffers and not lead to building more stores because no one is buying. Most people are going to take the money they can get and save it so they can be solvent.

It's funny how people like to assign so much numerical science into economics when a huge portion...hell, the core of economics is psychology anyways.

Edited February 22, 2009 by meangreendork

[KingDL1]

That's a huge fallacy. While the behavior of poor people taking out mortgages on homes they couldn't afford was a problem, it was the same way for more well-to-do people doing the same thing, just with larger homes and far larger mortgages. But the whole thing really has a lot to do with consumer confidence and spending habits. For about the last 20 years, the average person has been all about spend-spend-spend and keeping up with the Joneses. Being frugal has really gone out of style. Then the economy turned to crap and now, no one has confidence in the economy.

Without that confidence, all of the tax cuts and tax breaks to any sector won't mean anything because the average person doesn't want to spend money. Sure, give me a tax break. Am I gonna spend it? Probably not since I'm worried that any one of the entities I do work for will suddenly decide they can't afford me or something. Give Best Buy a tax cut, and are they suddenly going to start doing well? Not really. Sure, they just got a better profit this quarter, but that's probably going to line the coffers and not lead to building more stores because no one is buying. Most people are going to take the money they can get and save it so they can be solvent.

It's funny how people like to assign so much numerical science into economics when a huge portion...hell, the core of economics is psychology anyways.

That is not really true about the tax cuts for the wealthy they constantly look for places to invest money, I am in an industry where I see it every day. Besides tax cuts more importantly I think tax incentives work best. Encourage all the investment you can, there are plenty of people out there with money and incentives help reduce the amount of risk with write-offs and tax credits. Part of the problem in Dallas was the loans simply dried up. Getting any financing for commercial projects just disappeared. Lots of developers have gone under because they could not do their financing.

The housing market is bad thing to point at, but unfortunately the housing market is pyramid shaped. Meaning there are 10 times more lower income houses at the Base of the pyramid then high and everything in between. If you knock off the bottom off the rest will crumble, same as a food chain.

[eulessismore]

I'm just wondering how many here can identify the source of the following quote. The first one who does and sees me at a UNT sports event, I'll buy them something to eat or drink.

Social critics are despondent over the failure absolutely to fix blame on somebody for the terrible subprime-mortgage phenomenon. There's the temptation to blame a phenomenon judged to be malicious, or at best thoughtless, on an institutional feature of the free-market system. Jared Bernstein of the Economic Policy Institute in Washington cites a pressing need for regulation, the invisible hand of the marketplace having failed us.

It is useful to remind ourselves that the market does not pose as, or at least ought not to pose as, an executor of justice. If John and Jim, apparently equally endowed and equally motivated, launch identical business enterprises and John succeeds while Jim fails, one can't look to the market to weigh the two entrepreneurs by meritocratic standards. The market can't judge what role sheer luck played in the different outcomes. Free-market theory intervenes only to say that Jim, the loser, should himself bear the costs of failure.

As opposed to what?

Well, as opposed to taxing John from his earnings sufficiently to compensate Jim for his failure. The market seeks simply to individuate the winner and the loser. Interventionists are moved by a desire to temper the judgments of the marketplace, and the way to do this is: by regulation.

Regulation in some form or other is almost everywhere licensed and, generally, applauded. If competitors run taxi companies, regulation denies to any one of them an exclusive franchise: Do not seek to eliminate the competition. And there is regulation built into progressive taxation: The winner climbs into a higher tax bracket, and is thus burdened to the advantage (in the short term) of the competitor.

The mortgage crisis came on because our free society did not think to intervene at a juncture where it could have limited the effects of cosmic thoughtlessness and insouciant greed. So that the question now arises: How does society single out the gross violators, meting out punishment to those who deserve it without harming others? Is it possible to identify the guilty parties?

This family desires a house, but cannot not afford a mortgage based on conventional factors. A friendly mortgage broker emerges. He will arrange for them to get a mortgage at an easygoing rate. The lender will agree to this because, immediately on writing the mortgage, he will sell his interest in this family and their house to yet another party, who bundles it with similar mortgages and sells slices of the package to various investors. And so a great pool of mortgages accumulates, banked away in every corner of the financial house, a bit of everybody's portfolio who has an interest in the financial order.

What the market would do, facing that situation, is to impose punishment on the disorderly mortgage brokers and lenders. But where are they? They are almost universally out of sight. They didn't linger over the worthless mortgages; they passed them on to buyers who have been waking up during the past six months bereft of assets they thought they had.

If we could start from scratch, we might have managed a federal regulation that forbade giving mortgages to people without an adequate credit history. But we cannot do that in retrospect, so we are in mid-quandary, with foreclosures lowering the values of all houses, not just the ones with risky mortgages. Is there a market for, say, 30 million American homes?

The politics of the matter are at least this clear. The federal government being the only agent that can possibly intervene, it needs to do so, by forbidding the liquidation of mortgages until the disparity between true value and hypothetical value is pounded away by time and inflation and a revitalization of the functions of the marketplace.

Here's a hint: The above was written in early January, 2008, while it's writer was still alive.

Edited February 26, 2009 by eulessismore

[Coffee and TV]

$70K in credit card debt? Really? Kids in private school? Really?

I bet this over-indulgent a-- has never clipped a coupon in his life! Time to sell the house for a loss, move to a very cheap rental property, put your kids in public school, and PAY YOUR BILLS.

It's not our (the american taxpayer) problem that you are financially retarded.

This is Queens we're talking about, there's no such thing as "cheap rental property". And if there were, it's probably the same amount as his mortgage.