OT: 2008 Elections

[pk500]

Another tipping point toward McCain for me yesterday, as he said he was opposed to the Federal government bailing out irresponsible homeowners afflicted by sub-prime mortgage woes.

It's about time that someone stood up and said people need to be more responsible with their finances. Yes, I feel sorry for those who have lost their jobs or have suffered huge medical expenses or increased child support payments and are losing their homes because of it. These people lack cash but have good credit. They need help.

But I have ZERO sympathy for anyone who borrowed WAY over their heads through a sub-prime ARM and now are paying the piper, those who have sh*t credit because they wanted to buy, buy, buy with little consideration of pay, pay, pay. They were foolish and irresponsible with their finances, and that's their tough sh*t. They should have read the fine print.

I heard some broad on CNN crying that she was going to lose her home because her ARM payment raised to $3,100 per month. The broad and her husband have a combined income of $78,000, and they bought a $325,000 house! That's f*cking lunacy. And it wasn't in California or any other mega high-priced real estate area. They could have purchased a cheaper house.

And there's no way that I'm going to bail them out through increased taxes that will result from any government program to rescue these people from their idiocy.

Any government program to bail out individuals who simply borrowed way more than their income could support will only further reinforce the lack of responsibility in America. It's bad enough that we're a nation bankrupt of moral and personal responsibility; do we want to add fiscal responsibility to that list, too?

It's slowly getting to the point where the only major issue with which I disagree with McCain is the war. That's a huge issue, but if Obama and Hillary keep talking about massive government bailouts, then my lean toward McCain might become a complete tip-over.

Take care,
PK

[F308GTB]

Paul, heard the same thing on NPR this morning. I'm not a McCain fan, but this one sent me over the top. He's got the right idea. If yahoos can't figure out how to pay for stuff, too bad. It's not that tough to figure out how much how you can afford.

[JackB1]

What's the difference between what Obama's pastor said and what Pat Robertson has said over the last 12 years. Saying that we deserved 911 etc since we live in sin blah blah blah. I don't see nobody going after GWB since he and Pat Robertson are close buddies.

That's because many of the people that voted for Bush were Evangelicals who believed the crap that Robertson used to spew. Funny thing is I thought of this same exact analogy when all the furor over Obama's pastor started.
You could also ask Hillary why she choose to stay married to a guy who cheated on her while she was sleeping right down the hall?

[JackB1]

Another tipping point toward McCain for me yesterday, as he said he was opposed to the Federal government bailing out irresponsible homeowners afflicted by sub-prime mortgage woes.

It's about time that someone stood up and said people need to be more responsible with their finances. Yes, I feel sorry for those who have lost their jobs or have suffered huge medical expenses or increased child support payments and are losing their homes because of it. These people lack cash but have good credit. They need help.

But I have ZERO sympathy for anyone who borrowed WAY over their heads through a sub-prime ARM and now are paying the piper, those who have sh*t credit because they wanted to buy, buy, buy with little consideration of pay, pay, pay. They were foolish and irresponsible with their finances, and that's their tough sh*t. They should have read the fine print.

I heard some broad on CNN crying that she was going to lose her home because her ARM payment raised to $3,100 per month. The broad and her husband have a combined income of $78,000, and they bought a $325,000 house! That's f*cking lunacy. And it wasn't in California or any other mega high-priced real estate area. They could have purchased a cheaper house.

And there's no way that I'm going to bail them out through increased taxes that will result from any government program to rescue these people from their idiocy.

Any government program to bail out individuals who simply borrowed way more than their income could support will only further reinforce the lack of responsibility in America. It's bad enough that we're a nation bankrupt of moral and personal responsibility; do we want to add fiscal responsibility to that list, too?

It's slowly getting to the point where the only major issue with which I disagree with McCain is the war. That's a huge issue, but if Obama and Hillary keep talking about massive government bailouts, then my lean toward McCain might become a complete tip-over.

Take care,
PK

I pretty much agree with you PK, but the greedy banks who forgot how to qualify folks for mortgages need to also take some of the blame. They should be more responsible who they loan money to and make sure consumers are completely aware of the pros and cons of taking a low ARM today vs a fixed. There may have been some deceptive practices that went down that can't all be blamed on the consumer.

The best solution is to let people out of mortgages where they can prove deception took place. The other people that were just stupid and irresponsible with their own finances, I can't feel sorry for.

[pk500]

I pretty much agree with you PK, but the greedy banks who forgot how to qualify folks for mortgages need to also take some of the blame. They should be more responsible who they loan money to and make sure consumers are completely aware of the pros and cons of taking a low ARM today vs a fixed. There may have been some deceptive practices that went down that can't all be blamed on the consumer.

There is slime in every industry, but I'm willing to guess that the vast majority of those irresponsible homebuyers now defaulting on ARMs forgot to remember one cardinal rule when signing papers for the largest financial transaction they'll ever make: CAVEAT EMPTOR.

Sleazy sub-prime mortgage factories like Countrywide and Argent shouldn't be bailed out by the government, either.

Take care,
PK

[Jackdog]

What's the difference between what Obama's pastor said and what Pat Robertson has said over the last 12 years. Saying that we deserved 911 etc since we live in sin blah blah blah. I don't see nobody going after GWB since he and Pat Robertson are close buddies.

GWB didn't attend his church for 20 years and have him on his campaign staff. And many people have gone after GWB for his Christain views.

[JackB1]

doesn't sound like Hillary is giving up anytime soon....

http://www.time.com/time/politics/artic ... 14,00.html

Her answers are always so f-ing "politically correct", it makes me nuts. I don't think we ever know what she is really thinking or feeling. She always answers like a "politician" through and through. I don't know how people don't see though her phony-ness. [/url]

[Jackdog]

That's because many of the people that voted for Bush were Evangelicals who believed the crap that Robertson used to spew. Funny thing is I thought of this same exact analogy when all the furor over Obama's pastor started.

That's stereotypical liberal bullshit. I know a lot of soldiers that voted for GWB that weren't even Christians. I also know many Christains that think Pat Robinson is full of horseshit as well. PK's wife voted for Bush because of his stance on many things other than religion. Same with me the first time against Gore. Bush has been blasted and misquoted many times for being a Christain. The same people that did that have been very quite when it comes to Obama. Typical politics.

[Jackdog]

doesn't sound like Hillary is giving up anytime soon....

http://www.time.com/time/politics/artic ... 14,00.html

Her answers are always so f-ing "politically correct", it makes me nuts. I don't think we ever know what she is really thinking or feeling. She always answers like a "politician" through and through. I don't know how people don't see though her phony-ness. [/url]

I don't get it myself Jack. Maybe she was messed up in the head after dodging all those fake snipers in Bosnia.

[JRod]

Paul, heard the same thing on NPR this morning. I'm not a McCain fan, but this one sent me over the top. He's got the right idea. If yahoos can't figure out how to pay for stuff, too bad. It's not that tough to figure out how much how you can afford.

This is for PK as well.


Here you have an industry that offered bad loans to people that couldn't pay. Who's responsibility is it? The banks for encouraging people to take out loans they couldn't afford? Or the people for actually doing so.

It's this typical unintelligent solutions like screw the homeowners because they were stupid to take out a loan like this, that make me question how unselfish many americans are.

The answer isn't by screwing this people because a one size fits all solutions is stupid and anyone that supports ideas like this probably do more harm by voting.

Here's how I would handle it. Granted some of this is suspending many federal rules but I can since I'm playing arm chair president. I would try to Federalize Fannie Mae and Sallie Mae. They were once federal programs. I would then have those in sub-prime loans apply to HUD where they might qualify for a reduced loan program, one that isn't giving the loan away from free but is something they could afford. With one big caveat, if a person or family lives in a home truly beyond their means, by applying to this program, if a loan program doesn't fit you price range, you may have to sell your home and buy another one with a Fannie Mae loan. Or under this option, HUD would innovatory the house and to recover costs, sell it.

This way you give people an option to stay in their homes, give them a reasonable loan program to pay within their means. And it doesn't give people a free ride. You still have to pay.

Free market capitalists will argue this isn't the free market at work. Guess what, a free market is what got everybody in this mess.

Finally McCain statement is pretty much a slap in the face to Americans, saying they the government shouldn't reward those who act irresponsibly. That's great to think that, but I'm sure no all borrowers where trying to be irresponsible in obtaining these loans.

I don't believe the government should give a free ride to bail out these corporations and home buyers, but it should use programs at it's disposal that allow for those that truly need help, not to punished by unscrupulous loan practices.

Oh by the way, he does support the Bear Sterns Bailout because those effects would have been "catastrophic". So, it's really just your regular republican hypocrite policy.

[TheGamer]

As a former mortgage underwriter of a company that filed bk TWICE last year, and was laid off because of it, I can attest that there was some pretty shady goings on with the lenders and with mortgage brokers who were submitting loans. First off I will say, that the borrowers definitely should be reviewing the terms of their loan documents which I know they got prior to signing as I was the one sending them out. On that same note, there were so many loan files that I received that after scrutinizing them, there was a lot of fraudulent action be done by the brokers. Fake income documentation, verificaton of employment that when independently verified, lies were being told on that end. borrowers signatures that were actually forged by the processor, loan officers or someone in the brokers office. I don't know how many times I took something to my boss to point out to them, but because our New York account executive was bringing in so many deals/money, that the broker was given a chance to "correct" the information that they sent into us, instead of the broker being reported to our fraud department and the company stopped doing business with them . All that AE had to do was complain to the president of the company and talk about the millions of dollars he was bringing to the company and get the ok to go forward with the bad deal. Then of course those would be the loans that would get audited and would come back on me. So many times when corporate would verify a file, the borrower would say, I did that loan for my family member because of something the broker told me and my family member promised me they were going to pay. So many first payment defaults because the borrower was misinformed by the broker.

[pk500]

Here you have an industry that offered bad loans to people that couldn't pay. Who's responsibility is it? The banks for encouraging people to take out loans they couldn't afford? Or the people for actually doing so.

I guess I was unclear in my post above: CAVEAT EMPTOR.

It's this typical unintelligent solutions like screw the homeowners because they were stupid to take out a loan like this, that make me question how unselfish many americans are.

What's the relevance of unselfishness? This has nothing to do with charity; it has everything to do with irresponsibility. And my income is not part of an involuntary charity fund -- better known as increased taxes -- that will bail out the irresponsible, whether those parties are homeowners or lenders.

If people can prove that these banks used criminal activity to deceive home buyers, then prosecute and fine the banks. Otherwise, I think my position is pretty clear: CAVEAT EMPTOR.

Here's how I would handle it. Granted some of this is suspending many federal rules but I can since I'm playing arm chair president. I would try to Federalize Fannie Mae and Sallie Mae. They were once federal programs. I would then have those in sub-prime loans apply to HUD where they might qualify for a reduced loan program, one that isn't giving the loan away from free but is something they could afford. With one big caveat, if a person or family lives in a home truly beyond their means, by applying to this program, if a loan program doesn't fit you price range, you may have to sell your home and buy another one with a Fannie Mae loan. Or under this option, HUD would innovatory the house and to recover costs, sell it.

And where will you get the initial outlay of money to fund this vast expansion of government? And what guarantees do the Feds have that these same irresponsible parties who overspent with private lenders won't do the same with government, especially since they now feel financially secure -- which for some is a carte blanche for being irresponsible -- due to the comforting hand of Uncle Sam?

Free market capitalists will argue this isn't the free market at work. Guess what, a free market is what got everybody in this mess.

So the morons who made $75,000 per year and bought a $325,000 home on top of payments for those two $30,000 cars in their garage and a low five-figure VISA bill are tragic innocents?

OK.

My wife worked in the mortgage industry for a decade, and I know there are con artists in that business, just like any. But if someone is gullible enough to believe that they can afford a $325,000 house, $800 of monthly car payments and have a VISA bills in the thousands, then yes, I think they're pretty fiscally irresponsible.

America lives on the premise of "buy everything now, pay some of it later," and it's so wrong. It's about high time it stops.

I don't believe the government should give a free ride to bail out these corporations and home buyers, but it should use programs at it's disposal that allow for those that truly need help, not to punished by unscrupulous loan practices.

That was exactly my point in my original post. Those who are cash-strapped but credit-rich should get help. Those who are cash-strapped and credit-poor should not. They have a track record of fiscal irresponsibility and should not be rewarded for it.

Oh by the way, he does support the Bear Sterns Bailout because those effects would have been "catastrophic". So, it's really just your regular republican hypocrite policy.

They would have been catastrophic, because a collapse of Bear Stearns would have screwed WAY more fiscally responsible Americans, people who pay their bills on time, who invest wisely, than a collapse of the sub-prime mortgage industry, which fulfilled the gimme-gimme fantasies of the financially irresponsible, albeit through some shady methods, too.

Take care,
PK

[JackB1]

That's because many of the people that voted for Bush were Evangelicals who believed the crap that Robertson used to spew. Funny thing is I thought of this same exact analogy when all the furor over Obama's pastor started.

That's stereotypical liberal bullshit. I know a lot of soldiers that voted for GWB that weren't even Christians. I also know many Christains that think Pat Robinson is full of horseshit as well. PK's wife voted for Bush because of his stance on many things other than religion. Same with me the first time against Gore. Bush has been blasted and misquoted many times for being a Christain. The same people that did that have been very quite when it comes to Obama. Typical politics.

I said "many"...not "most" or "all". And I am talking about the "evangelicals", who accounted for a sizeable chunk of Bush's votes in his re-election, not just "Christians". Without them, he never gets reelected.
I dont remember Bush getting blasted for being "Christian" until well into his 2nd term, when the same people that got him elected felt betrayed because he did nothing for their issues.

[F308GTB]

Here you have an industry that offered bad loans to people that couldn't pay. Who's responsibility is it? The banks for encouraging people to take out loans they couldn't afford? Or the people for actually doing so.

It's this typical unintelligent solutions like screw the homeowners because they were stupid to take out a loan like this, that make me question how unselfish many americans are.

Who is at fault ultimately? The consumer taking the loan out. Perhaps I'm atypical, but when going into a big purchase, and I think a home certainly qualifies as a big purchase, I'm damn well prepared. Every consumer out there should be able to run an excel spreadsheet and create an amortization table. If not, get help.

Sure those who deceive or make the loans more appealing are slime, but if you're a sucker who falls for it, why should the taxpayer suffer? I do my homework; I don't fall for cons.

Let's separate self-imposed financial ruin from ruin created by external agents (e.g., natural disasters, layoffs, etc). Americans are very unselfish in the latter. But who in their right mind should bail out someone who was irresponsible when they signed the dotted line?

[matthewk]

Big points for McCain on his mortgage stance. Hopefully it doesn't change a week later once he takes some heat for it from those that want to screw the responsible.

JRod, why should anyone get their mortgage reduced after they've signed the papers? So because someone got in way over their head (and should have known so going into it) and now can't make their house payment, we should give them a rebate for it? Buy a 500,000 home you can't afford, but don't worry, because if you can't pay for it we'll reduce the price afterwards to 300,000. That's BS.

We took out a mortgage we could afford at a set rate. I'm not going to get any breaks on my house payment. By giving any kind of breaks to homeowners, the goverment would once again be encouraging irresponsible behavior and telling those who are being responsible that we are fools. There's this, the flooding of dollars into the world that reduces the value of my money that I've got saved, the lowering of interest rates which does the same, and so on and so on.

It's funny, I was trying to make this point (basically the one PK started with) a few months ago based on a CNN article I read, but was blasted by a couple of people here for it.

[pk500]

The American Dream has devolved in the last 50 years from working hard, saving and providing for your family to earning a check, spending every last dime and then some to get all the toys and goodies you want, and hoping someone will bail your ass out when it comes time to pay.

Bankruptcy laws are a joke in this country. When I was a kid in the 1970s, a person who went bankrupt was the financial equivalent of Hester Prynne. That person was seen as irresponsible unless there was a legitimate reason behind the bankruptcy, such as unexpected medical expenses or the like.

Now it almost seems like declaring bankruptcy is an American rite of passage for anyone who has a charge card and a desire to live the high life.

I have lived like a f*cking fiscal monk for the last 20 years, yet I'm perfectly happy. My family wants for nothing that isn't extravagant, and we live in a comfortable home in a nice area, with savings for the future despite just me working for the last nine years so my wife could stay home with the kids.

Do we have lots of toys? No. Do we drive fancy cars? No. But my wife, kids and I have what we need and are well prepared for the future with no debt other than a mortgage (which will be paid off early) and a loan for a used car we just bought (which also will be paid off early). And yes, I'm damn proud of that. You're f*cking-a right I am.

And at the expense of sounding Dobbsian, I'm f*cking sick and tired of people who haven't lived that way, who have been fiscally irresponsible, looking for a bailout from the government, which in turn will take more of the money that my wife and I have worked our asses off to earn and SAVE over the last 20 years so some d*uchebag who went nuts with a VISA card at Best Buy and bought a huge house on false income statements can get bailed out.

I don't think there's a political issue that drives me more nuts than government's role in personal fiscal irresponsibility.

A bit of fiscal Darwinism toward those who are irresponsible with greenbacks and plastic wouldn't hurt this country one bit.

Take care,
PK

[Leebo33]

Now it almost seems like declaring bankruptcy is an American rite of passage for anyone who has a charge card and a desire to live the high life.

I agree to an extent, but also feel that the lenders are just as guilty in most bankruptcy cases that are due to greed and not things like divorce/health issues/etc. There should be fiscal responsibility shown by all parties. Credit card companies have gotten away with murder, whether it be aggressively marketing to those who cannot possibly afford the credit given to them or for ridiculous fees they charge to businesses, for far too long now. It's about time somebody reeled them in.

I'll have to dig up that stat somewhere, but I swear I read that the majority of the mortgage crisis homes were valued at less than $100k. That could have just been in Pittsburgh though.

[pk500]

Leebo:

Where does the "reining in" stop, though?

My wife and I just bought a 2006 Toyota RAV4, so we went through the entire car buying process for the first time in three years. And as usual, car dealerships are as predatory as any entity. They try to sell you the car for as much money as possible while giving you as little as possible on your trade-in, and they try to pressure you into buying all sorts of sh*t you don't need.

But no one is suggesting that the car industry be reined in despite the high numbers of cars being repossessed these days.

Fast food and junk food are marketed relentlessly, and people's reliance on them for their daily meals -- especially in low-income areas -- are exacerbating the health crisis in America and are creating a generation of fat kids already suffering from diabetes. Should the government regulate KFC and Frito-Lay?

I know the fiscal stakes are much higher with a mortgage, as high as it gets for most Americans. But the responsibility of smart decisions still must fall on the shoulders of the consumer first.

It reminds me of my mental mantra every time I start negotiations to buy a car: "I know you're trying to screw me, and I'm trying to screw you. Let's see who gets screwed more. I'm going to work my balls off to make sure it's you because I'm the customer here, and I come first."

My approach is the same with banks.

Take care,
PK

[pk500]

I'll have to dig up that stat somewhere, but I swear I read that the majority of the mortgage crisis homes were valued at less than $100k. That could have just been in Pittsburgh though.

I bet that's true. A classic case of people who live way above of their means because they want to live in a nice house like their friends on the other side of town or the fools they watch on reality shows.

Reality must strike at some point. And it sometimes bites hard.

Take care,
PK

[JRod]

Big points for McCain on his mortgage stance. Hopefully it doesn't change a week later once he takes some heat for it from those that want to screw the responsible.

JRod, why should anyone get their mortgage reduced after they've signed the papers? So because someone got in way over their head (and should have known so going into it) and now can't make their house payment, we should give them a rebate for it? Buy a 500,000 home you can't afford, but don't worry, because if you can't pay for it we'll reduce the price afterwards to 300,000. That's BS.

We took out a mortgage we could afford at a set rate. I'm not going to get any breaks on my house payment. By giving any kind of breaks to homeowners, the goverment would once again be encouraging irresponsible behavior and telling those who are being responsible that we are fools. There's this, the flooding of dollars into the world that reduces the value of my money that I've got saved, the lowering of interest rates which does the same, and so on and so on.

It's funny, I was trying to make this point (basically the one PK started with) a few months ago based on a CNN article I read, but was blasted by a couple of people here for it.

First off, I didn't say to reduce their mortgages reduced, I said to have their rates reduced to manageable levels. Most people are suffering when their payments ballooned. The loan companies sold individual programs based off of low interest rates or programs where you didn't pay the principal.

Second, you are naive to think this government doesn't reward this type of behavior. The American government does two things to allow this to happen. It bails out large firms, like Bear Stearns and the airlines. Why well we feel certain institutions would fail and cause catastrophic economic distress if the American government didn't bail companies out. The line seems to be drawn when individual Americans make bad decisions or are led into bad situations by companies.

And they encourage people to take risks by starting business. The whole idea of bankruptcy in some cases was to give people clean slates if they started a business but that business failed. Bankruptcy now, has evolved into bailing people out of spending debt. But the program was encourage Americans to take a risk and start businesses. PK is wrong to think this was to get people out of spending debts.

Finally, there are no absolutes in anything we do. I think you would find that some of these people weren't irresponsible but sold terrible loan programs, as TheGamer described.

I'm saying we use former Federal institutions like Fannie Mae, to help Americans stay in their homes with stipulations that require them to pay back their loan but in a responsible and manageable way.

It's funny Americans allow the government to bail out large institutions but when it comes to using programs already established, American are vehemently against doing the same with fellow Americans.

There's a difference between a hand up and hand out. Sadly many here view them as the same.

[pk500]

And they encourage people to take risks by starting business. The whole idea of bankruptcy in some cases was to give people clean slates if they started a business but that business failed. Bankruptcy now, has evolved into bailing people out of spending debt. But the program was encourage Americans to take a risk and start businesses. PK is wrong to think this was to get people out of spending debts.

Huh? I said that bankruptcy TODAY is used as an escape hatch for debts incurred through irresponsible spending.

Finally, there are no absolutes in anything we do. I think you would find that some of these people weren't irresponsible but sold terrible loan programs, as TheGamer described.

So the consumer has no responsibility to do their homework surrounding the largest loan they'll probably ever receive? The adage, "If it sounds too good to be true, it probably is," flies out the window when it comes to mortgages?

There's a difference between a hand up and hand out. Sadly many here view them as the same.

There's a difference between spending and saving. Sadly, millions of Americans don't know that difference and don't care to.

Take care,
PK

[XXXIV]

I dont have a problem with everyone pulling their own weight...The government should not have to take care of idiots who over spend...

BUT...

I do have one when that same govt bails out every freaking corporation that fucks up....

Should all be one way or the other.

[RobVarak]

Just a quick note about where responsibilities may lie legally. There is a huge matrix of intersecting and overlapping state and federal legislation about predatory lending as well as misrepresentation by borrowers. If anyone has been "deceived" there are no shortage of lawyers who would happily jump all over the case. One should distinguish poor lender practices with deceptive or illegal ones.

[fsquid]

Do consumers no longer get a Truth-in-Lending document at closing? Consumer is at fault, not the big bad company.

[TheGamer]

just a little info from an underwriting viewpoint. We had so many training classes in regards to Quality control and Fraud that was given to us from corporate, but when it got to the "real world" of u/w and we had issues, management would have floor meetings saying, "don't worry about your audits, remember you are the lifeline for the account executives, you are their livelihood" . Of course this was from managers who used to be the sales managers and they are looking at the commissions of the AEs. The next year as the company was filing for bk and preparing the company for a buyout and all those pep talks turned to, "we had the worst center in the company, our u/w was sloppy and we are so embarrassed". This is just one company, but the mortgage industry is a small world and we all talk, so these scenarios are rampant amongst most of the subprime lenders that closed down and/or laid off hundreds of employees.

I've had several AEs tell me, the borrower is not the customer, the broker is. this is the mentality of AE and broker. They give a damn about the actual borrower.

I think a lot of borrowers who go through subprime lenders are just unaware of the process and they haven't been educated or the don't have anyone to assist them. They get these brokers and Account Execs who'll do anything and everything for a commission and they really get taken advantage of. Prior to being an u/w, I was a collector so on that side I got to speak with the borrowers, and a good portion always say they just didn't know what they were getting into. There was a time in late 06 to mid 07 that we couldn't do any refinances in certain zip codes in the Chicago city limits without the borrower taking a class first. Brokers and AE's stopped taking loans because they didn't benefit them at all.

Ulitmately, its the borrowers responsibility to be educated before starting the process of trying to buy a home, but unfortunately some people just don't know how to do it.