Congratulations America - Everyone's a Homeowner!

07/24/2008 Chris "I will begin jerking the pork shortly" S. says:

Over the past decade or so I've come to realize that as long as big business is taken care of, we will all be better for it. They need that $2665 much more than I do. Mmmm Good Kool-aid!

07/24/2008 MaryAnne "The entire Chinese gymnastic team is 14. Cheaters." M. says:

I love the no accountability. I'm going to start applying it to my everyday life.

07/24/2008 D'Elited D. says:

Just start applying for a lot of loans - apparently your credit history and salary mean nothing.

The arms of the U.S. govt. will coddle you and nestle you close to its breast.

07/24/2008 Nick E. says:

I've seen that Columbia woman she's pretty hot I wouldn't mind.

07/24/2008 Stella "to the Bella, smackin' her gum" Y. says:

D'Elited D. thanks for the rant. I was thinkin' the same thing reading the NYtimes.com the other day...oh Enron and IndyMac USA...

07/24/2008 Craig "hold my beer and watch this" B. says:

I think every mother fucking son of a bitch who couldnt afford a house but bought it anyway should be thrown out on the fucking street...  excuse me for being financially responsible...  JESUS CHRIST

07/24/2008 Craig "hold my beer and watch this" B. says:

If you can't afford it... don't buy it...  what is so hard to understand about that?

07/24/2008 Mike T. says:

So here has what our country has become, Socialist for Corporations and Capitalist for the common man as if we can compete with these guys. It amazes me that the Republicans squawk at any sign of socialism in regards to health care, yet remain surprising mute in regards to the socialism and government bailouts of banks and mortgage companies. Anyone who reads what I write regarding such policies knows that I'm not a lefty, but I can't wrap my head around the right not being fighting mad about this.

07/24/2008 becki s. says:

Being in the mortgage biz...i see this crap first hand. Its amazing to me that there are shady people out there who will give loans to people who cant afford them, and its even more amazing that these people WANT these loans. They are so lucky that America is so forgiving... ::gag:::

07/24/2008 Craig "hold my beer and watch this" B. says:

So let me get this straight..

- The rich get richer (again)
- Idiots who can't even balance their own checkbooks are molly coddled
- Those of us tn the middle get FUCKED AGAIN

P.S.  This is just the tip...  it is guestimated that bailing out Freddie & Fannie will exceed $100 Billion

07/24/2008 Maria "VanDawl" L. says:

Whats worse is when you work for the exec who is scamming and you have to leave your job if you don't want to play along.   You have no security in your job if their is scandal.

07/24/2008 Heather "The bullshit comes naturally" M. says:

I tend toward bleeding heart liberalism, but this bailout of people who took on more than they should have is leaving a bad taste in my mouth.

We purposely underbought in terms of house price and size, and we've been plodding along with our payments ever since, even when I was on medical disability for six months.

Ugh.

07/24/2008 Craig "hold my beer and watch this" B. says:

Thats $100,000,000,000.00 for you people that are so fucking bad at math that you got an ARM that you had no idea how you were going pay for it....

07/24/2008 Steve "Dr. Ellis D. Trayles" R. says:

I especially love how politicians, particularly the righties, like to trumpet about personal responsibility, but are not holding these firms up to the same "invisible hand" rules.  Vomit-inducing.

07/24/2008 Stella "to the Bella, smackin' her gum" Y. says:

Craig "hold my beer and watch this" B. - kudos. Absolutely ridiculous. Seriously its gonna take a lot of time w/ the new president  for it all to balance out again. Probably another 8 years to just be balanced. Since it took 8 years to be trillions in debt. Great job BigWigs USA. arghh

07/24/2008 Michelle "Homer" O. says:

I'm in Real Estate - and this is the crap that keeps me up at night. America sucks in so many ways.  Don't give me that whole "yeah but we're so much better off than so many other countries" crap. There are horrible people and policies lurking here and everywhere on Earth.

07/24/2008 D'Elited D. says:

One other thing - thanks to the economy - the average credit card balance is over $8,000.

Hear Ye, Hear Ye!

America is for Sale people!

Budweiser and the Chrysler Building and Trump's $90 million property in FL being sold to foreign governments and investors is just the beginning.

I don't care who is in the oval office over the next 4 years - plan on tightening those belts further.

07/24/2008 MaryAnne "The entire Chinese gymnastic team is 14. Cheaters." M. says:

Not really a thread jack. Who watched Colbert last night?
http://www.comedycentr...

"Hey, they let Estonia in"

07/24/2008 Dan C. says:

This whole episode underscores how important it is to avoid these quasi-governmental programs. Fannie Mae and Freddie Mac were able to profit without paying heed to its risks because of the implicit (and eventually explicit) guarantee that the government would bail it out, despite numerous assurances to the contrary.

I hope people remember this when another popular/populist campaign with terrible financial footwork asks for money to support a feel-good goal (like home-ownership, in this case).

07/24/2008 Nick E. says:

I have a similar reaction. I try to keep in mind though that the people involved are not morons. They're probably just uneducated.
Maybe this whole thing will inspire some consumer protection laws and make people think harder about deregulation.
On a different note, it seems like our economy has been propped up by speculative bubbles for like a decade now (techs, then real estate, now commodities). Does anybody else wonder about how weird this is? Kind of wish I'd taken an econ course in college or something.  :P

07/24/2008 D'Elited D. says:

There is plenty of blame to go around.

The blanks are to blame for pushing these loans on to people who could not afford them; however, MANY of the homeowners weren't undeducated.  A lot of folks losing their homes are middle-class, upper-middle class,  educated individuals who turned a blind eye to their own financial situation.  The majority of these "bad" loans are for "adjustable rates" and people either didn't read what they were signing, or they were just plain stupid about it.

It's like when you sign up for a credit card with an introductory offer of 0% interest for the first 6 months - but the fine print says it will jump to 21% thereafter.

I have read countless articles and seen countless interviews where  people admitted they didn't understand the way it worked or thought they would just refinance before the rates adjusted.

If you don't understand a piece of paper that is "loaning" you hundreds of thousands of dollars, then don't f*cking sign it...why should the taxpayers bail out these idiots?

As President Kennedy once said, it's only a "mistake" if I didn't learn from it.  If I learned from it, then it was an error."

Let the people feel some pain and they won't keep making errors.  Bailing them out just lends itself to more "mistakes."

07/24/2008 Craig "hold my beer and watch this" B. says:

"Maybe this whole thing will inspire some consumer protection laws"

You can't legislate intelligence...  people are morons.

07/24/2008 Nick E. says:

Fun tip: an ex used to work for Quicken's mortgage division. She specialized in NNJA loans- "No income, No Job, no Assets". They would run credit over the phone and get paperwork out to people overnight. She was laid off when the market imploded, naturally.  :P

07/24/2008 Rachel "Bizzlecakes" W. says:

Craig- I feel you. I mean, typically I'm a commie and side with the little, poor man vs. the giant corporation.

That said, I don't live beyond my means for a reason. It's math.

07/24/2008 Dan "de facto Consigliere" M. says:

Where's the thread about the secretary in New York who bought a $700,000.00 house, with a job that paid her something like $39,000.00 a year?

07/24/2008 D'Elited D. says:

Right next to the one about the mail-lady who bought a $450,000 house who was paid $49,000 a year - I think they moved in next to each other.  They're neighbors.

07/24/2008 Nina G. says:

I'm also a Realtor who is affected by the "sub-prime meltdown mess."  But again, not everyone who got these loans was an "uneducated minority senior citizen" or whatever the current stereotype is.  A lot of "yuppies" (Yelpers?) wanted these deals because it meant they could keep their 40lK's and CD's intact while paying next to nothing down for a cool condo in a hip neighborhood, with the hope that by the time their low introductory rate would change, they'd sell the place, use the profit to buy another, bigger place with another low intro rate, etc., etc.,  As famously quoted by one of the Watergate figures, "It seemed like a good idea at the time."  Yeah,  we all knew that the icebergs were out there, but the cruise was just so much fun!

07/24/2008 gail "a nurse.....in the city....." c. says:

A fellow employee owns a "farm" in Barrington, which he bought with an ARM.  Since he is a dope and doesn't think ahead, his payment just jumped $500 in one month.  (now I couldn't afford a jump like that in one month's time)......

I totally agree, don't live beyond your means.  If I can't buy it outright, I don't get it.  With a few exceptions

07/25/2008 Chris "Santorini loving" G. says:

Personally I feel NO sympathy for individuals who got into loans they couldn't afford (uh, its called the internet. Why not look up your rates?. . .I know not to do anything but a 30year fixed).

Nor do I feel bad about the banks who f themselves over by giving out bad loans.  Yet if the FDIC has to step in they should FIRE everyone of those mother f'ers that were running the bank.

It isn't the capitalistic machine that got us into this mess though, it is our governments interference that continues to f' us all up.  Business must fall to Darwin's blade just as species need to . . .otherwise we just create vicious cycles.

07/25/2008 Valerie L. says:

Oh, the "banks pushing ARMs on people" argument pisses me off like no other.  When I was buying my condo I had a mortgage guy who kept trying to push ARM loans on me....so I got a new mortgage guy.  How difficult is that?

07/25/2008 John "Ain't no shame in John B's game" B. says:

This is an issue I can completely agree with D'Elited Dan on -- there is plenty of blame to go around.

I have no sympathy for the yahoos -- even if they're Ivy League educated yahoos -- who bought homes on these terms. I had friends who kept urging me to buy when I knew I couldn't afford it. Sometimes, just say no works.

But at the same time, I think the financial institutions that put these deals together need to go up in flames. Not only did they knowingly push debt on people they knew couldn't afford it, but then they repackaged this debt as "assets." WTF! This is like me selling you my garbage as groceries.

I feel like Cassandra here, but I see our economy heading for a major tumble. Too much of it is based on bullshit and false dreams. The dotcom bubble, Enron, shoring up these financial institutions is all part of the same stream to me. To quote DD, "Welcome our new Chinese overlords."

07/25/2008 Dan "de facto Consigliere" M. says:

http://www.yelp.com/to...

Back in February, I saw this: http://abcnews.go.com/...

A doctor and a restaurant owner buy a $1,000,00.00+ , 5,300-square-foot home.

"Today, after sinking hundreds of thousands of additional dollars into landscaping, granite counters and high-end appliances, the Hamadanians have listed the house for $1,995,000. It's been on the market for six months, and they have yet to receive an offer.

Hamadanian owns an Italian restaurant and his wife is a doctor, but with their house nearly 100 percent financed and monthly loan payments of $6,500, they're worried.

'After five years, our mortgage is going to jump high, like maybe twice as much,' Mitra Hamadanian said."

or:

"Just up the street, Rudy Diaz is offering his 5,300-square-foot house for $1.888 million. It's landscaped and loaded with granite counters; the kitchen is beautiful. [in the video piece, they mention he spent something like $150,000.00 on landscaping]

'I originally bought the house based on the fact that I don't have a retirement [fund],' Diaz said.

In other words, he bought the house not only as a place to live but as an investment. Now with one daughter out of the house and another on her way out soon, he wants to sell. But in three months he hasn't received even a lowball offer on paper.

According to Prattella, it's the fallout from the loan crisis that's preventing families like the Diazes from selling."

Excuse me if I don't feel an ounce of pity for these people.

I don't think either of these examples could be considered 'undereducated'.

07/25/2008 Nick E. says:

What is this bailout going to be, anyway? Is it a loan or just free money?

07/25/2008 Kyle "for dad of the year 2008" H. says:

I have seen so many sad sack stories of people who couldn't afford the American Dream but stepped into the biggest decision of their lives uneducated; and got stuck with balloon loans and put no money down.

I'm not a home owner because I can't afford it in Chicago- but anyone with a computer or the ability to read Home Buying for Dummies can learn about the different types of loans.

I'm sick of hearing the suckers blaming it on wanting the "American Dream" and on the banks (although the shady ones should be penalized for sure).

And here us renters get to bail them out and they get to keep their overvalued American Dream. And now the process is just going be strict as hell for the rest of us...

07/25/2008 Nina G. says:

Someone earlier mentioned Quicken - one of the main movers and shakers behind this fiasco IMHO.  A few years ago I was representing a family looking to buy their first home. Both spouses working, two kids and one on the way but the wife said even if she took a couple months off they could still swing it. OF COURSE THEY COULD - because every time they saw a house that cost more than what Quicken told them they could afford, they called their Q. rep. on the phone and asked, pretty please, could you  look at our app. again and tell us if we can buy something that costs $25,000 more than you said we could afford?  And guess what, the friendly guy or gal at the other end of the line always said "yes!"

Long story short...after the baby came they found another agent  (per my referral) who informed me that they ended up buying something way below what Quicken "said" they could afford, but other factors took priority. Presumably they came to their senses and are happy where they are now.

07/25/2008 Phil H. says:

I'm less worried about the bailout than I am about people's behavior after this. When the next real estate boom comes, will people overextend themselves again, this time with the mindset that even if they blow up the government will bail them out since they did it before.

07/25/2008 Dan "de facto Consigliere" M. says:

[the mindset that even if they blow up the government will bail them out since they did it before.]

Phil, just kick back and enjoy it!  Buy yourself a house, make a couple of payments, then claim you can't afford it!  Heck, that's what I'm going to do!

(please note the dripping sarcasm in this post- in all seriousness, I'm KIDDING!)

07/25/2008 mary e. says:

I consider myself a lefty, but yeah, this just ticks me off.  Those responsible for this crisis (sub-prime mortgage companies, execs, etc) should be held responsible.  And those who couldn't AFFORD a home should not be bailed out.

07/25/2008 Robin "Let My Fingers Do the Talking" W. says:

Nina is right that in some instances it was people wanting what they cannot afford.

07/25/2008 mary e. says:

Um, credit, credit, credit.  The housing crisis is only one arena in which Americans have overextended themselves.  I bought a (almost) new car in February.  I saved for that car for 10 years, ever since I was a teenager.  It was my dream.  I always wondered how people could afford cars, homes, etc., and I couldn't.  Now I know.  They couldn't either.

07/25/2008 Nicoletta "Narydnik" R. says:

Seems pretty hard to place much of the blame on people who couldn't the mortgage they got (assuming that was the only factor contributing to their foreclosure). Didn't people have to qualify for a mortgage loan at some point in the recent past? What happened to the qualification process? Why weren't the banks looking out for their own assets?

07/25/2008 Dan "de facto Consigliere" M. says:

[Why weren't the banks looking out for their own assets?]

Easy.  Have you heard how banks talk about themselves- 'The nation's largest bank', 'The world's second-largest bank', etc.?  You ever wonder how they calculate that?  Its NOT based on their assets- its based on the amount of money owed to them.  So of course, the more money you lend, the more money owed to you, the bigger you are.  Sure, some of those loans are going to go bad, but when more than you can cover goes bad- uh-oh...  

From an email that one of my banks sent me yesterday, trying to assure my that my funds are 'safe & secure':

"Acme has capital in excess of $625 million, resulting in a net-worth of 12% - almost double the amount required by regulation and much higher than what most banks maintain."

07/25/2008 Nicoletta "Narydnik" R. says:

"but when more than you can cover goes bad- uh-oh...  "

Precisely. Strikes me as pretty basic to running a bank... so my question is, who's watching the store?, and do we have any reason to think anyone is watching it now?

07/25/2008 Dan "de facto Consigliere" M. says:

Nicole-
If I had to guess, then I'd say maybe the banks were treating it more or less like like a Ponzi (Pyramid) Scheme- so long as you have more new loans in the pipeline than loans going south, everything is beautiful, if it ain't broke, don't fix it.

07/25/2008 John "Ain't no shame in John B's game" B. says:

But to answer Nicoletta's first question: yes, once upon a time it was much more difficult to qualify for a mortgage. I've had friends who had difficulty getting a mortgage because they worked freelance, which made their future income difficult to assess. This was before the sub-prime days.

Although individual debt is less, when you consider how much credit card debt has been racked up under similar circumstances -- how many offers do you get in a week -- you get an idea of big the black hole is.

07/25/2008 Nicoletta "Narydnik" R. says:

Black hole, indeed. I'm starting a betting pool for the demise of the dollar. PM me if you want in.

07/25/2008 Penny "ketchup fascist and bacon czar" S. says:

John, we're about to swing right back there. I was a mortgage processor for years and saw them give money to anyone that wanted it. In fact, it was harder NOT to get a loan than to get one for a while there (obviously) but now it's going to be near impossible without A paper credit and very good income. My friends are bartenders and make at least twice what they show on their taxes. They're going to have a really hard time finding something even though they have the funds.

The writing was on the wall four years ago to those in the industry. There was no doubt it was going to crash and burn. Towards the end I stopped doing sub prime and worked only with A paper borrowers and while I felt better about that ethically, you still got your stated income loans pushed through without a blink.

(Stated income meant you didn't have to show any proof of income or asset, they just went off stellar credit reports).