There Goes Four Years of my Life

friedgreencorrado wrote:

MG Bryan wrote: The federal government brought those loans to be, pushed for many of the lending practices that got us here. Everyone deserves to own a home, ya know?

True enough about the "left's" desire for more homeownership, but also recall that a lot of that deregulation was from the party of "less government". The truth lies somewhere in the middle. I personally think a lot of the housing bubble was because banks no longer had to keep their commercial business and their investment business separate.

Yep all those damned leftists who were pumping up home ownership. Yep yep. Greenspan was a real Bolshevik. Know who his mentor was?? All those commie lobbyists for the construction industry and Home Depot who wanted the government to help pump up home ownership so they could create more jobs. Not to mention the Trotskies over at the National Association of Realtors who are still lobbying to keep tax breaks that encourage buyers to buy the biggest home they can afford. Bunch of bloody commies the lot of them.

Grizz wrote: I blame the government for the stupidity of the average American. Unless the ba- sorry, Banks* somehow control the schools as well.

Funny thing is, the government is you, and me, not them. So the blame is exactly where it should be: on ourselves. Did you quit your bank when they gave bad loans? Did you take a loan that you or the bank couldn't afford to give? Did you cash in at all in the inflated housing market or stock market? We're all self serving and greedy in varying degrees. The banks are a reflection of our innermost desires to get more than our fair share. Government and civilization's role is to help us ignore our self preserving animal instincts and do what is best for society- this is where the argument about government regulation comes in- does Adam Smith's invisible hand truly regulate commerce, or must there be some rules to limit what we can all do?

Aside from all that commie crap, here's a line from my dad that is true now more than ever: "Life ain't fair. Get over it."

In reply to mguar:

You are correct that many bankers fouled the system, and even that some should go to jail.

However, you are grossly mistaken when you fail to also recognize that people spent beyond their means. Big time.

I've been in the construction and Real Estate industries for 37 years. I've NEVER been to a closing where the buyers were not spending more than they knew they should.

And frankly, most of them were also fraudulent. They misrepresented incomes, assets, and employment status to get approval by the banks.

I too hold the banks to a higher standard. But since no one is going to get the consequences they deserve, it sort of doesn't matter. I will continue teaching my children how to do what is right and live within their means. If any of them become bankers, I will encourage them to act ethically in their business practices as well.

350M people. Very few are bankers. ALL are at fault for promoting a culture that is so fiscally irresponsible.

We screwed up. There is no one party to blame. We are now reaping what we sowed.

Datsun1500 wrote: In reply to SVreX: Get ready for 5 replies with quotes that are 3 paragraphs each on why it's not his fault (It's the bankers, real estate agents, appraisers, Ronald Reagan, FDR,..) in 3...2....1...

The core scary thing about a juvinile response like that is the apparent lack of recognition that corporations do have some responsibility in what they sell. I'm stunned by the total anti consumer response on this board sometimes.

Here's an easy question for you- do you know all of the ins and outs of buying a home, getting a mortgage, understanding the title, and etc etc? I doubt anyone here knows everything- people know a LOT of certain aspects- SVreX knows a TON about building a home, and what it takes to do that. carguy123 knows a lot about the financing of it. I have not heard someone who is part of the title processing of buying. And the part where the owner of the loans change hands over and over- I don't think anyone has posted a thing about being a trader.

And the expectation here is that the consumer who buys the home has to know everything there is about that. If you don't know, you are the moron.

So that's one thing.

Now, if you have questions- who do you ask? Does it really make sense to ask this board about what loans your bank has, and what it all measn? You may get some answers, but the accurate answers will come from the lender.

You want to shop for a house, and the logical thing to do is to get pre-approved. So head off to the bank, and they tell you- with current lending practices, you can afford a montly payment X. And I recall THAT is what they look for, not home value Y and income 20% of Y. Since interest only loans were very high on the docket to sell to consumers, you don't seem to see that banks DID tell their customers that they can afford more with the money they have. I even heard this advertised on the radio- buy a $300k home with something like $1200/mo.

So if a bank tells you that it's ok to buy a home that used to be out of your price range, who's fault is it? They are the banks, and they are to be trusted with your money, afterall.

Again, my example- you can get a bigger home for less monthly and with more tax deductions at the end of a year. Banks were selling this feature, and not explaining that it's a baloon payment, since they also told consumers the "truth" that housing prices are climbing so fast, that you can sell the house for a profit very easily, and not be on the hook in 20 years for the baloon. Over a 2-3 year time frame, this is a GOOD thing for your family.

Nobody mentioned that housing prices are atificically high.

Certainly, this lead to bad mortgages, and lots and lots of fraud. And the consumer is fully to blame for lying. But the banks are ALSO responsible for not doing their due dilligance on a loan. (or they ignored it intentionally, when you see how many bad loans were bundled to AAA ratings, and THEN credit default swaps were taken out on those exact financial instruments by the firms selling the product- again, this did happen).

Industry needs to have some part of the responsibility. And if you think they will always do the right thing for themselves, you may want to check today's financial news, where JP Morgan is announcing a $2,000,000,000 loss for this quarter due to bad hedge investments (looking to be bad credit defualt swaps). The news came out a month ago about it, and JP denied it up until now. AND they also admit $1-3B more in additional losses.

Banks are there to get money for themselves. They will do what it takes to make more of it. And my issue with them is that when they screw up and lose money, it should not be taken out on the rest of the economy- which is exactly what happens. Last collapse- banks screwed the pooch on investments, and then locked up their lending to everyone- which put the stop to the ENTIRE economy, not just the housing industry or just in the banks. That is bad.

And now, we still don't recognize how the banks have us like they do- if they do dumb things and lose money, people can't buy homes and SVreX is out of a job; people can't buy cars, and I'm out of a job; people can't buy components to make stuff- a lot here are out of jobs. Like it or not, this economy is built on credit, and the reasonable (not easy) availabilty of that. Lose that, and we lose the entire game.

Here's my juvenile 5 paragraph response.

There's plenty of blame to go around. But to concentrate again on the original post which started all this: people who overspent on houses were getting a break of up to $150,000.00 on the PRINCIPAL of the loan. These people KNEW how much they were borrowing (or should have) yet did it anyway.

If I walk my happy ass into the bank and borrow, say, $10k to buy a 1994 Miata and I overpay for the car, would they say 'aww, poor baby, we will forgive the ~$8k you overborrowed'. Nope, not going to happen. They did not price the car!

I'm on the hook for what I borrow. I expect the playing field to be level. But it's not and there is something fundamentally unfair about that.

I realize life is not fair. E36 M3 happens. People steal. I could go on for a while, but you get the picture. The big problem with all this is, as I said earlier, the principal forgiveness thing rewards bad behavior and living beyond your means which will land us all right back in the same damn mess in another 20 years or so.

I saw the other day where houses were selling for $500 down, bad credit OK. That's what started this whole mess in the first place! No, we haven't learned. History will repeat itself and as always there will be plenty of blame to go around: builders who overprice houses, buyers who spend beyond their means, bankers who make shaky loans and then push the ticking bomb onto someone else, the shady appraisers, real estate agents etc who will do snaky things to facilitate this to get a fat paycheck, etc and when the house of cards collapses yet AGAIN they will all be pointing fingers at each other because just like kindergarden they think if they point long enough and yell loud enough they can shove their part of the blame onto someone else.

Here's a real life scenario:

Buddy (actually 3 different buddies in same situation) moves to Hawaii (military PCS), buys a house with 20% down, makes payments, lives there 4 years, gets another set of PCS orders. Except now, house is worth 40% less, leaving him in a spot without enough cash to buy the loan out, a mandate to move, and a house that won't rent for the payment.

Scenario #2 (fictitious, but common):

Person works hard as an engineer. Saves enough to put 20% down on a house. Buys house. Lives there, making payments. House value drops 35%. Keeps making payments. Gets laid off. Gets job offer in another state. Can't move because underwater on house, can't not take job because he has to work. Rent is well below mortgage note.

Are these two scenarios the fault of the buyer? They paid fair market value for their house, got a good loan, made payments, and now are in a tough spot. I'm not here to place sole blame on the banks, gov't or otherwise. We all share in it. Fact is, it just sucks, all around. If we collectively can help make our economy work better by forgiving some principle on someone's home loan, then I'm all for it (ref: banks losing more money foreclosing than forgiving principle).

alfadriver wrote: And the part where the owner of the loans change hands over and over- I don't think anyone has posted a thing about being a trader.

Sheepishly raises hand....

Good post, alfadriver. Your thesis that this is a complicated matter with many moving parts is spot-on. Folks want to find a villain, but it isn't so cut and dried. The banks (especially the big banks) definitely deserve some blame, so do the GSEs (Fannie/Freddie), and the consumer, and the government, etc. They all played a role in getting us where we are.

I'll just leave this here:

A fourth-grade teacher asked the children what their fathers did for a living. All the typical answers came up - fireman, mechanic, businessman, salesman... and so forth.

However, little Justin was being uncharacteristically quiet, so when the teacher prodded him about his father, he replied, "My father's an exotic dancer in a gay cabaret and takes off his clothes to music in front of other men and they put money in his underwear.”

The teacher, obviously shaken by this statement, hurriedly set the other children to work on some exercises. She took little Justin aside to ask him, "Is that really true about your father?"

"No," the boy said, "He's a mortgage banker, but it's too embarrassing to say that in front of the other kids."

Here's an easy question for you- do you know all of the ins and outs of buying a home, getting a mortgage, understanding the title, and etc etc?

You are absolutely correct here, I have bought 4 homes in my life and Im only slightly smarter about the process even now.

But you know what I do know? I know how to add the mortgage payment to the tax bill and determine my monthly payment. I know how to look at my pay stub and determine my monthly net income. And I know how to subtract Figure one from Figure 2 and see if I've left enough money to not only pay my additional bills but put a little away for a rainy day.

If you lack the basic skills to do this then perhaps home ownership isn't for you. When I bought my first house I was pre-approved for up to $250,000 (on a $30,000 military income) And my ex wife's eyes went wide and she started looking at a whole new class of house. Then I sat her down and did the math above which came out to $90,000 as what we could afford, and that was our budget.

As far as not knowing the rest of the process and who do you turn to? A mortgage attorney is a great start, and they work for you, not the bank so they will give you realistic answers. Turning to the "salesman" for your answers is always a bad idea.

I'm not the poster child for living within my means by any stretch, but it's pretty easy to see that people are wanting to be called "victims" for not having the good sense to know how to manage their own finances. I'm not bagging on those who experience a sudden change in situation just those who's situation has always been the same and they just didn't have the sense to manage what they had.

yawn

you sign the paper, you pay the money. thems the rules. You knew em when you signed up...any other response is called shirking your responsibility. GROW THE berkeley UP

[rolls over and hits the snooze button]

p.s.

Mguar...please stop the epic troll routine

Teh E36 M3 wrote: Are these two scenarios the fault of the buyer?

100%.

You must take into account many things before you make that kind of investment. I have said to my wife in the past, not now, prices are too high. We'll look again when they come down. They almost always come down. Economies work in cycles. That's no secret.

4cylndrfury wrote: *you sign the paper, you pay the money. thems the rules. You knew em when you signed up...any other response is called shirking your responsibility. GROW THE berkeley UP*

Oh yeah, it's definitely as simple as that! And you're calling mguar a troll? You're just as much of one as he is.

Re: GI home loans being less likely to default, I'd have to ask when the last time the military laid anyone off? On top of the garnishment if they don't pay, I'd expect the default rate to be low.

dculberson wrote:

4cylndrfury wrote: *you sign the paper, you pay the money. thems the rules. You knew em when you signed up...any other response is called shirking your responsibility. GROW THE berkeley UP*

Oh yeah, it's definitely as simple as that! And you're calling mguar a troll? You're just as much of one as he is.

it is as simple as that, and yes, I am calling him a troll

I can understand the frustration, but I sure hope that each year of your life has more value than the number of dollars you can stow away.

Lof8 wrote: I can understand the frustration, but I sure hope that each year of your life has more value than the number of dollars you can stow away.

Perspective! Thank you sir!

4cylndrfury wrote: it is as simple as that

Nothing in real life is ever that simple.

"The less a man makes declarative statements, the less apt he is to look foolish in retrospect."

Datsun1500 wrote: I am responsible for me. A corporation is not required to look out for me.

Good thing you think like that. Corporations don't look out for you, they look out for them, that's my point. And even 'honest' ones will mislead to benefit them.

Easy to condemn, apparently....

dculberson wrote:

4cylndrfury wrote: it is as simple as that

Nothing in real life is ever that simple.

2 truths:

1. You can only control yourself, no one else
2. If you say youre going to do something, you should do it.

if someone doesnt follow number 2, please see number 1. If you say youre going to make payments (like you promised you were going to when you signed on the line), you should make them. You shouldnt sign on the dotted line if you dont think youre going to be able to do what youre saying when you sign. You should make sure you have the ability to do what youre saying you are going to, before you accept the obligation. What you do is under your control. You cant control the bank. You cant make them do what they say theyre going to do (again, see number 1). So you have to look out for you. You made the decision to borrow the money - you made the decision to buy the house. The ill-effects of that decision are on you. Thats your responsibility.

Zomby Woof wrote:

Teh E36 M3 wrote: Are these two scenarios the fault of the buyer?

100%. You must take into account many things before you make that kind of investment. I have said to my wife in the past, not now, prices are too high. We'll look again when they come down. They almost always come down. Economies work in cycles. That's no secret.

You're right. Man, they forgot to consult their astrologist who could have told them their future.

Life is sooooo easy when you can live it through the rearview mirror.

Strizzo wrote: Re: GI home loans being less likely to default, I'd have to ask when the last time the military laid anyone off? On top of the garnishment if they don't pay, I'd expect the default rate to be low.

All branches are shedding personnel like crazy. The Air Force has finished offering the voluntary buyout package, they're shoving people out these days.

In reply to Teh E36 M3:

No one can see the future. Tea leaves and goat entrails don't work. But sometimes ya just gotta say 'Ya know, what goes up must come down and if it does where do I want to be?'

I was riding a hare scramble once, on lap 2 I came upon a mudhole I had tiptoed around the first time. I said 'screw it, it's banzai time' and subsequently spent nearly an hour getting the damn bike out of the hole. That gives a person plenty of time to reflect on their decision making process, believe me. Maybe it's just me but I have tried to apply that lesson to other parts of my life as well.

Teh E36 M3 wrote:

Zomby Woof wrote:

Teh E36 M3 wrote: Are these two scenarios the fault of the buyer?

100%. You must take into account many things before you make that kind of investment. I have said to my wife in the past, not now, prices are too high. We'll look again when they come down. They almost always come down. Economies work in cycles. That's no secret.

You're right. Man, they forgot to consult their astrologist who could have told them their future. Life is sooooo easy when you can live it through the rearview mirror.

If you didn't see it coming, you weren't paying attention.

Everybody here who really thought it could go on like that forever, put your hands up.

My hand stays down, even a blind man could see the house of cards getting shaky. It was unsustainable. That's why I purposely stayed below what the mortgage people said I could afford because they don't know diddly about my life.

Curmudgeon wrote: In reply to Teh E36 M3: No one can see the future. Tea leaves and goat entrails don't work. But sometimes ya just gotta say 'Ya know, what goes up must come down and if it does where do I want to be?' I was riding a hare scramble once, on lap 2 I came upon a mudhole I had tiptoed around the first time. I said 'screw it, it's banzai time' and subsequently spent nearly an hour getting the damn bike out of the hole. That gives a person plenty of time to reflect on their decision making process, believe me. Maybe it's just me but I have tried to apply that lesson to other parts of my life as well.

So the lesson is, "everyone makes mistakes", right?