Our financial system is crumbling this week.

[AWvsCBsteeeerike3]

Here's my question:

What is this 700 billion dollars buying? From what I understand, bad mortgages were given out and that is the beginning of the problem, correct? Then these bad mortgages were sold and insured and that is causing the big freeze because there's all these bad investments that are somehow going to have to be paid for. But, is there no equity or no assets along with that 700 billion dollars? Shouldn't there be a few houses among other things that the government is getting with that big check they're going to write? If the problem is bad mortgages, then the people borrowing have defaulted and forfeited their property, correct?

Which brings me to my next point: WTF? First off, I'm not letting these nitwits who took out mortgages they couldn't afford off the hook. If someone took out a sub-prime loan and couldn't afford it, they deserve to be booted out of their house and on to the street. That's just stupid. But, I find it highly illogical that taxpayers are being kicked out of their house, paying taxes that are saving the banks that they owe and the bank gets the house. Not to say the original nitwit deserves to live in it, but still, it's mind boggling.

Many of these people really had no idea what they bought. And before you go and blame them, have you ever bought a house? The paperwork is absolutely ridiculous, if you read everything in there it would take you weeks. Simply flipping through all the pages and signing everything takes close to an hour. Some people certainly did bite off more than they could chew, but a large number of people were completely blindsided by crooks selling them loans that earned them the highest commision and just flat out lying to them.

No, I've never bought a house, but if you can't do this in your head and realize that someone is lying to you, then you likely deserve to be out on the street: 200,000 * 0.07 = 14,000

That's 14,000 in interest alone on a 200,000 loan. And, 7% isn't an outrageous interest rate. If people thought they were going to be paying anything less than 1,000 a month, as I've heard some people claim, on a 200K loan with nothing down, well, then I have to say they're pretty stupid. But, yeah, I agree that the crooks that sold them their loan shouldn't get away with what they did either.

[Popeye_Card]

It kinda annoys me that cheap gas and cheap mortgages have messed up the urban structure of most US cities for years to come.

[AWvsCBsteeeerike3]

It kinda annoys me that cheap gas and cheap mortgages have messed up the urban structure of most US cities for years to come.

What do you mean?

[Leroy]

That's true, but I saw some what appeared to be reasonably intelligent people when this whole thing was starting to break a couple of years ago. They knew the terms of the loan, but had these things to say:

• * We knew that it would adjust up by x (I can't remember, but it was a lot), but even though it is our first house, it was our dream house.
  
  * I was sure that I'd make enough in five years to cover this (who can possibly know this?).

I think back to when I began paying back my student loan. We had the option of even, smaller payments or five years of very small payments followed by five years of quite a bit larger amounts. I was the only one that took the first option in a room of twenty. But I mean, how did I 'know' that I wouldn't still be sacking groceries in five years? But everyone else 'knew' they'd have a great job.

But yes, there were some sleazeballs taking advantage of some people that didn't know any better.

[Popeye_Card]

It kinda annoys me that cheap gas and cheap mortgages have messed up the urban structure of most US cities for years to come.

What do you mean?

In simple terms, both have led to why quality-constructed buildings in the urban core are vacant and crumbling while McMansions are splattered over the countryside.

I'm a big proponent of preserving and using what you have, instead of letting them turn into eyesores.

[sighyoung]

Here's my question:

What is this 700 billion dollars buying? From what I understand, bad mortgages were given out and that is the beginning of the problem, correct? Then these bad mortgages were sold and insured and that is causing the big freeze because there's all these bad investments that are somehow going to have to be paid for. But, is there no equity or no assets along with that 700 billion dollars? Shouldn't there be a few houses among other things that the government is getting with that big check they're going to write? If the problem is bad mortgages, then the people borrowing have defaulted and forfeited their property, correct?

Which brings me to my next point: WTF? First off, I'm not letting these nitwits who took out mortgages they couldn't afford off the hook. If someone took out a sub-prime loan and couldn't afford it, they deserve to be booted out of their house and on to the street. That's just stupid. But, I find it highly illogical that taxpayers are being kicked out of their house, paying taxes that are saving the banks that they owe and the bank gets the house. Not to say the original nitwit deserves to live in it, but still, it's mind boggling.

Many of these people really had no idea what they bought. And before you go and blame them, have you ever bought a house? The paperwork is absolutely ridiculous, if you read everything in there it would take you weeks. Simply flipping through all the pages and signing everything takes close to an hour. Some people certainly did bite off more than they could chew, but a large number of people were completely blindsided by crooks selling them loans that earned them the highest commision and just flat out lying to them.

When I bought my house in 1995, I had to put down a sizable down payment, and jump through extra hoops to demonstrate that I had the likely income to pay back the loan--otherwise, no deal.

Three years ago, when a former student bought a house, his mortgage company kept urging him to forget about a down payment, and to borrow 120% of the house's value. 120%. The mortgage lender urged this. Wisely, he said, "No."

During the housing bubble, it was amazingly easy to get a mortgage without adequately demonstrating the ability to pay back the loan, and there was abundant fraud, including unscrupulous lenders, and even internet services that would fake employment contracts. In fact, there were reports about increasing mortgage fraud dating back four and five years ago.

Simply put: there's plenty of blame to go around, and it really depends upon the circumstances.

[Freed Roger]

Here's my question:

What is this 700 billion dollars buying? From what I understand, bad mortgages were given out and that is the beginning of the problem, correct? Then these bad mortgages were sold and insured and that is causing the big freeze because there's all these bad investments that are somehow going to have to be paid for. But, is there no equity or no assets along with that 700 billion dollars? Shouldn't there be a few houses among other things that the government is getting with that big check they're going to write? If the problem is bad mortgages, then the people borrowing have defaulted and forfeited their property, correct?

Which brings me to my next point: WTF? First off, I'm not letting these nitwits who took out mortgages they couldn't afford off the hook. If someone took out a sub-prime loan and couldn't afford it, they deserve to be booted out of their house and on to the street. That's just stupid. But, I find it highly illogical that taxpayers are being kicked out of their house, paying taxes that are saving the banks that they owe and the bank gets the house. Not to say the original nitwit deserves to live in it, but still, it's mind boggling.

Many of these people really had no idea what they bought. And before you go and blame them, have you ever bought a house? The paperwork is absolutely ridiculous, if you read everything in there it would take you weeks. Simply flipping through all the pages and signing everything takes close to an hour. Some people certainly did bite off more than they could chew, but a large number of people were completely blindsided by crooks selling them loans that earned them the highest commision and just flat out lying to them.

jim, we usually agree on most everything, but I think the mass majority were not tricked into overbuying. They tricked themselves. Sure the lenders were aggressive, the realtors were BS artists, etc, But just because they qualified for too much credit doesn't mean they were lied to. Even as a young dude years ago, with a household income under 50K, I recall being stunned that we qualified for a $200,000 mortgage, in spite of having other car debts, school loans etc. There was no way I would have considered using $200,000 mortgage back then.

in the few cases were it could be proved people were flat out lied to, then they should have some recourse. Variable rate loan suckers? - maybe the govt could restructure to fixed ( I believe that may be happening).

AWvsCBsteeeerike3, it does sound like these people are suffering for their mistakes and losing their homes. the people getting the bailout are not the homeowners, for the most part the money is going to prop up the markets and dumbarses that started this mess.

I wonder how much of this junk investments ended up in typical mutual funds?

[Popeye_Card]

Here's my question:

What is this 700 billion dollars buying? From what I understand, bad mortgages were given out and that is the beginning of the problem, correct? Then these bad mortgages were sold and insured and that is causing the big freeze because there's all these bad investments that are somehow going to have to be paid for. But, is there no equity or no assets along with that 700 billion dollars? Shouldn't there be a few houses among other things that the government is getting with that big check they're going to write? If the problem is bad mortgages, then the people borrowing have defaulted and forfeited their property, correct?

Which brings me to my next point: WTF? First off, I'm not letting these nitwits who took out mortgages they couldn't afford off the hook. If someone took out a sub-prime loan and couldn't afford it, they deserve to be booted out of their house and on to the street. That's just stupid. But, I find it highly illogical that taxpayers are being kicked out of their house, paying taxes that are saving the banks that they owe and the bank gets the house. Not to say the original nitwit deserves to live in it, but still, it's mind boggling.

Many of these people really had no idea what they bought. And before you go and blame them, have you ever bought a house? The paperwork is absolutely ridiculous, if you read everything in there it would take you weeks. Simply flipping through all the pages and signing everything takes close to an hour. Some people certainly did bite off more than they could chew, but a large number of people were completely blindsided by crooks selling them loans that earned them the highest commision and just flat out lying to them.

When I bought my house in 1995, I had to put down a sizable down payment, and jump through extra hoops to demonstrate that I had the likely income to pay back the loan--otherwise, no deal.

Three years ago, when a former student bought a house, his mortgage company kept urging him to forget about a down payment, and to borrow 120% of the house's value. 120%. The mortgage lender urged this. Wisely, he said, "No."

During the housing bubble, it was amazingly easy to get a mortgage without adequately demonstrating the ability to pay back the loan, and there was abundant fraud, including unscrupulous lenders, and even internet services that would fake employment contracts. In fact, there were reports about increasing mortgage fraud dating back four and five years ago.

Simply put: there's plenty of blame to go around, and it really depends upon the circumstances.

And the bad thing about all of this is that it artificially inflated the real estate market. $200k in 1995 could buy you a heck of a lot more than it can today (well, two years ago anyway). Because it was so easy to finance $200k+.

My house sold for $25k 20 years ago, when it was already mostly rehabbed. Needless to say, I paid quite a bit more than that.

[AWvsCBsteeeerike3]

AWvsCBsteeeerike3, it does sound like these people are suffering for their mistakes and losing their homes. the people getting the bailout are not the homeowners, for the most part the money is going to prop up the markets and dumbarses that started this mess.

Which really is a shame. Not like I wish harm on anyone, but, come on, common sense at some point has to prevail. The biggest joke of all of this is the little guy is getting [expletive] on and the wealthy are getting more money......and that money is coming from the little guy who he is [expletive] on.

I wonder how much of this junk investments ended up in typical mutual funds?

Too much.

[AWvsCBsteeeerike3]

• * We knew that it would adjust up by x (I can't remember, but it was a lot), but even though it is our first house, it was our dream house.
  
  * I was sure that I'd make enough in five years to cover this (who can possibly know this?).

These are the type of people that piss me off the most. If you know it's going up, and you can't afford it, why in the world did you take the loan. Yeah, dream houses are great, but only if you can afford it. I'm not going out and buying a ferrari even though I would love to be driving around in one.