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Posted By:
Jorge Push at 09/24/2008 12:15:19 AM
Comment:
The point isn't that the banks specifically preyed on Black folks. It's that at every turn in the Black existence in America, there was someone or something working to take what they hve. You aren't expected to understand.
Fact is that more caucasians were caught with these bad loans, and many, as it is proven, were high income households. So you should give the same speeches to your rich uncles. -
Posted By:
jennyzig at 09/23/2008 10:53:39 PM
Comment:
Unfortunately people have bought into the myth that they can spend money they don't actually have - people who cashed out equity that may or may not have existed. Similarly the misuse of credit cards - using them for non-essentials with no means to repay.
I am sincerely sympathetic of those whom were mis-led or outright lied to. As a professional realtor, I see a lot of contracts. Even for those who do/did read every word of a contract, they may have been confused and relied on their LO or agent for explanation.
However, a large number of people are simply greedy. They want what they cannot afford but purchase it anyway. The believed that their homes were worth what the appraiser said because they wanted to - or they even encouraged them to give the highest number. Appraisers who didn't play this game often didn't get work. -
Posted By:
Cory at 09/23/2008 5:16:30 PM
Comment:
Personal responsibility man. This website is all about blaming your problems on someone else. It is simple, read a contract before you sign it. I knew how to do this as an 18 year old. -
Posted By:
Rowdy at 09/23/2008 4:41:10 PM
Comment:
Kai,where do you come up with all this tripe? Did someone hold a gun to poor old Mom's head and make her sign the papers? Did all these people signing up for ARM's bother to READ the damn paperwork and see that huge payment looming on the horizon? No,in both cases.
Instead of blaming someone else,(Which we all know is the new national pastime of blacks who screw something up),why don't you preach simple economic theory to your readers. Like the one that says your mortage payment should be what you make in a week. I learned that one in the 9th grade. At a public school. With a black kid in front of and behind me. And it was so important that the teacher repeated it twice. So you can't peddle that bilgewater that only white kids get that kind of education. -
Posted By:
edr3 at 09/23/2008 3:16:47 PM
Comment:
I think both the individual who signed for the loan is just as responsible as the bank who originated the loan. Most everybody knows you can't get something for nothing. Maybe these borrowers aren't being honest with themselves. If you know you have bad credit and you can't keep a job on a regular basis, or the paycheck does match up to the pending bills at the end of the month - common sense says you can't afford the home. We need to living with our heads in the clouds and take responsibility for our actions. -
Posted By:
bxgirl at 09/23/2008 1:48:54 PM
Comment:
In response to tk's comment, posted on 07/17: No one is looking down on those who should have known better, however those who borrowed responsibly should not have to bear the burden of bailing out those who did not. And responsible borrowers will be bailing those folks out because if a lending institution is willing to modify and/or restructure a poor loan, any profit loss the bank will experience will be made up for with increased fees and other money- sucking products that comsumers like you and I will have to pay for.
I purchased my first home earlier this year and I thank God for putting me in a position to do so, but before I signed on the dotted line, I crunched the numbers so hard and so often that I gave myself headaches on a regular basis. I knew exactly what I was getting in to. I took the time to educate myself and asked tons of questions. Any answer to a question I received from a so called "real estate professional" or a mortgage broker, I verified on my own because the only thing I was 100 percent certain about was that I was the only one in the entire process acting in my own best interest. This is a fact that far too many people ignore.
Once we stop allowing the Banking Industry or any other industry talk us into doing things we have no business doing, we will not fall victim to scams like this anymore.
-
Posted By:
BQ at 09/23/2008 7:24:28 AM
Comment:
Sure there where aggressive marketing campaigns on part of these banks. And I am sure your mother may have aggreed to something she did not totally understand. However keep in mind this crisis did not begin as a campaign to steal from the uneducated or vulnerable. No intstead the banking industry was pushed by lobbyist and congress to wright loans on individuals which the industry normally would not make loans to. People with bad credit, sketchy job history etc... All in the name of helping the downtrodden. Now the banks should have fought and said this was irresposible intstead they and the rest of the industry tried to make a buck. As a result of this irresponsible behaviour, your, my and our children have taken on 500+ billion in debt. But lets not be lied to, this started when a group of "well meaning" leaders decided we should push businesses into irresponsible decisions because it is our job to save the world and make everyone else do the same. -
Posted By:
Rocky Mountain at 07/27/2008 7:47:30 PM
Comment:
Just another conspiracy theorist. I live in a place where you can go for days without seeing a black person and there and the white rednecks and white 'non-rednecks' are taking a fall just as much as anyone else. Come on, this is not about taking black wealth wealth. -
Posted By:
Rocky Mountain at 07/27/2008 7:45:25 PM
Comment:
Just another conspiracy theorist. I live in a place where there are very few black people and believe me there are plenty of white rednecks and idiots who are taking the same 'fall' -
Posted By:
nowbluegreen at 07/24/2008 2:58:37 PM
Comment:
You haven't convinced me this wasn't a bad decision on your mother's part. "Countrywide came along and convinced her.."? To use the same language in your article, that really is shifting the blame. Why did she take the loan? Did she pull money out of the house? If so, what did she use it for?
Yes, there absolutely were predatory lenders out there; and I believe that people like Angelo Mozillo (ex CEO of Countrywide) should be held accountable for their blatently predatory practices. But at some point, you have to accept that individuals must also be accountable for their actions.
I was a VP in the sub-prime unit of Countrywide for 7 years (I left in early 2005) and Countrywide had a hard core sales culture. In the beginning, the loans were reasonable and carefully underwritten. That's because if you made a bad sub-prime loan, you, as the lender, had to buy it back. That was a good balance to the dynamic of making as many loans as you could. Make as many loans as you want, but if they're bad, you have to suffer the consequences. That's why they were more carefully underwritten. Things changed in 2004, and lenders were no longer responsible for their bad loans. That gave all lenders the green light to make any loan they could, regardless of the quality of the loan.
By the way, there is a very simple solution to this moving forward. Make all loan officers, brokers, managers and everyone else involved in the loan process a fidiciary. A fiduciary must act in the best interests of the client. If not, they are liable. Clearly, these loans were not in the best interests of the clients. This would hold the mortgage industry accountable for their actions at every level. -
Posted By:
slingback1 at 07/21/2008 4:48:39 PM
Comment:
I agree with MAlan and I also would like to add......I have been a Mortgage Consultant for the last 7 years. As of the very moment none of my clients have lost their homes or in danger of because I explained all of their options when it came to the type of loan they were qualified for(Adjustable, Fixed, Intrest Only), we talked about today as well as the future....how long they were going to stay in the home, employment status and family.
I am angred by all the "talking heads" blaming the banks/mortgage consultants....I cannot tell you how many times that clients who came to me and did not even know what kind of loan they had, what the intrest rate was, if they are paying taxs with mortgage....because when it came down to closing they did not read at least the minimum....the note!!! I have know clients who have signed all of their paperwork in less than half an hour!!!!! Lets get real between the final approval and loan docs things can change, I have actually gone over docs before my clients have even seen them...even if it meant that closing would be held up another day.
This is not the governments issue, its the banks, they are slow to respond to foreclosue prevention. Is there a reason the banks cannot refinance a home at least for what the borrower paid for it?, instead of putting the home in foreclosure? Why does loan modifications take 2 months to get an approval, lets get real the payment went up $800.00 per month, but the income is not!!! Unless a person is pleading proverty the bank will not modify the loan....... -
Posted By:
ggadbury at 07/21/2008 12:57:31 AM
Comment:
The foreclosure crises is colorblind. Institutionsl greed as well as buyer greed is at fault. There are black folks on both sides of the equation. We should all learn from the experience and get on with our life. -
Posted By:
isingbecauseimhappy at 07/20/2008 10:51:18 PM
Comment:
DE-REGULATION.
The same politics, the same DNA and the same ideology that brought 1929's meltdown have done it again in 2008. They do not believe that every American deserves the American Dream. Con is their game of choice. The really serious ones believe that Black folks are 3/5 or some amout less than 100% HUMAN. They smile in yo face. Regardless of pigment if you ain't super rich you ain't white enough to have your dream come true either, hard workong, foreclosed on and struggling to buy gasoline non Black one.
Will we all awake from the con this time? -
Posted By:
MAlan at 07/20/2008 5:33:21 AM
Comment:
This article appears to be bias in form and some content. I personally disagree with a couple of claims that have been vigorously made. Now before I offer my rebuttal I would like to set the stage about my perspective. I haved worked in the mortgage industryfor about 14 years now in origination, operations and management and nowconsulting so my perspective is first hand experience and not interpretation of secondary information.
A mortgage company operates like any business minimize cost and enhance margins to create a profitable operation for it's investors whether public, private or institutional. It is not their business model to seek out innocent customers to facilitate a high interest rate loan hoping they can't pay to foreclose on the property. For one it is not profitable and two it impairs their marketablility for capital resources to fuel their operations. So the theory of predatory lending in context is wrong and misleading. What you have are individual criminals who are fraud experts and nonprofessional in their training and ethics. And I must say unfortunately it's our own people who are supporting this behavior for a marginal payday but that is another story.
The core root of the problem cannot be centered on one individual segment of this cycle everybody has to take part of the blame from wall street to the mortgage company to the loan originator to the consumer. All parties involved has to take part in the cause effect in an effort to correct the mistakesthat were made. Only then can we restore a housing industry that can offer the american dream to all people. -
Posted By:
wantok at 07/20/2008 3:24:22 AM
Comment:
Remember there is always a medicine man selling a magical elixir to whoever is willing to buy in to the scheme. A lot of ???Brooklyn Bridges??? were sold during the housing boom and a lot of people knew it, but many kept seeing the pie in the sky. I have three properties and I did refinance into low fixed rate mortgages taking advantages of the ???Bank.??? While investigating different loan packages among the various lenders there were many ridiculous offers being made. These often-time young lenders who did not own home themselves were trying to pitch loans that had no way of being covered over an extended period.
At the same time, my father thought it would be clever to by some properties using some of these erroneous loan packages. Despite my strong condemnation of buying these properties with those loans, (I was to naive to know better) he went ahead. Now he is in a financial mess.
The Bush administration is at fault for much of the U.S. housing meltdown that is impacting the world economy. But we must also face up to the fact that many consumers are part of the blame as well. And no, we don???t need Jesse Jackson or some other black man to represent us as if the black community is some kine of hopeless defenseless herd of sheep. We need to work within our family, our community, our districts, and our states to rectify the wrongs made to those who will listen. For instanced I am trying to talk to my father on how to get out of his mess, but he still not listening. Therefore, for those who do not heed advice let them deal with the economic brutal hand of Adam???s Smith. -
Posted By:
creswell at 07/19/2008 8:44:31 PM
Comment:
Bottom line, a lot of (black and latino) people were stupid in taking out a loan that they could not afford and now they want politicians to pass laws to protect them from themselves. Kai Wright's mother and others should not have done it. Stupid people making "bad decisions", stupid people now want a or some "public policy response" and stupid people "demand[ing] restitution". How about a law making stupid people suffer for their stupid thinking or non-thinking, like 10 years in prison, a red scarlet letter "S" on their forehead. And a final comment or better yet a question; How stupid were they signing papers without the aid of a lawyer. -
Posted By:
VTyalinH at 07/18/2008 9:53:29 PM
Comment:
Where are our so-called "Civil Rights Leaders" on this issue! Instead of bad-mouthing Senator Obama, this is what Jesse Jackson should be angry about. After slavery African-Americans (without the promised 40 acres and a mule) worked hard to own property. This is often the only inheritance we have to pass on to our children. There was another article in The Nation which discussed how the rich are grabbing more land in rural and inner city areas. In Harlem, New York, developers, under the watch of Charles Rangle et. al., put up million dollar condos in buildings where African-Americans had lived for generations. It seems older "Civil Rights leaders" and wealthy African-Americans are silent as this disastrous crisis unfolds. We need to fight for the inheritance of future generations ... or stand by and watch as everything we have accomplished since slavery gets rolled back. The HAVES don't seem to realize their future security is connected to the fate of the HAVE NOTS. -
Posted By:
Chitta Nirmel at 07/18/2008 5:54:08 PM
Comment:
Unless you want to give a pass to everyone who got into a subprime loan problem you have to expect the borrowers to suffer some. To say that your mother is old or Latin-American and so should be considered a pure victim is both unreasonable and silly. We live in a free country, and so there will always be scam artists. Anyone who has lived in the U.S. for more than a year should be on notice that everything that glitters is not gold. Why does an old lady thnik that getting a new mortgaga on a home is a good idea? Most likely because she wanted to get some cash in hand to spend and feel good about it. Too bad then!-
Posted By:
VTyalinH at 07/18/2008 10:05:33 PM
Comment:
Too Bad Then! You seem to misunderstand the far reaching effect of the housing market on the U.S. economy and on the world economy (foreign banks were a major part of the mortgage scam). We will ALL suffer through lost tax revenues, job losses etc. United we stand Divided fall!!!
-
-
Posted By:
freemayo at 07/18/2008 3:01:06 PM
Comment:
Yes, most people got caught up in the mortgage lending mess out of greed. Pure and simple. But there was a large number who were victims of con artists. This shouldn't be too difficult to understand!
My spanish speaking mother (who happens to have avperfectly sound prime mortgage) would get continuous calls and visitors from "God-fearing" spanish speaking mortgage lenders selling subprime refinancing on a regular basis. If it had not been for the fact that my father did speak english well and could read the fine print, they would have been swindled a long time ago. The fact is if you want to sell to a group of people you send someone who looks like them who appeals to something that is important to them. I imagine the same thing happened in the black community, the elderly community, the uneducated, etc. These salespeople were relentless. -
Posted By:
fsilber at 07/18/2008 6:37:17 AM
Comment:
The banks, by the way, lose big at foreclosure time. The only winners in this debacle were the real estate agents and independent brokers who got fat commissions on the sale of overpriced houses and unpayable mortgages to people whose income they lied about when selling the mortgage contracts to the bank. -
Posted By:
fsilber at 07/18/2008 6:30:15 AM
Comment:
A great many mortgage brokers behaved despicably. They made the world an unnecessarily dangerous place for people who are not good at math and who are not affluent enough to have their own personal lawyers to read their contracts for them. -
Posted By:
eazyim8708 at 07/18/2008 4:37:53 AM
Comment:
If you think Banks are ripping you off why don't you use the same strategy against them? It is simple, when you take a credit card from the credit based institutions at 15% how difficult will it be for them to give you the same 15% for any cent that you have with them as a credit balance.
Creating your wealth is easy when you are still young. Imagine saving your salary in a 15% annually bearing account for a period of 15 years and not more. Obviously one can afford to by property without loans from banks. Which ever way we look at this(Mortgage), Banks will always make a killing. Pay a $300,000.00 vehicle in three years and a $350,000.00 property in thirty years? something must have been missed when calculations were made.
It is not what others think that makes good investments, but your ability to think as an individual. Try to use all interest bearing products with the banks to your advantage. Do you know that a loan account of $100.00 will not be closed before the time lapses, if your period of instalments is 36months. Use this to your advantage and put as much as you can into that account to guarantee yourself better returns. Israel Matjila, SOWETO. +27722429832 -
Posted By:
mjswan at 07/18/2008 12:42:27 AM
Comment:
Stop blaming other people for your own bad decisions. Being an adult means taking responsibility for one's own actions. -
Posted By:
lilnono at 07/18/2008 12:07:42 AM
Comment:
I get upset every time I read about this issue. These articles keep saying that risky borrowers were easily getting subprime loans on houses with inflated values without having to prove how much money they made. At the same time all this was supposedly going on I couldn't even get a home improvement loan to get my roof fixed. I had a full time job working 50 hours a week no other bills besides my $450 a month mortgage and excellent credit plus I was collecting $650 a month in rental income. How in the hell did I get turned down for a loan and all these retired people had predators tricking them into getting loans?
There has to be more to this story. -
Posted By:
esportland at 07/17/2008 10:27:38 PM
Comment:
The horrid thing is that it was people of color who worked for these banks and mortgage companies. Not only dfo we need to establish regulation to protect the banking system for all americans, but americans of coor need to ask themselves what hey are willing to do for a buck. -
Posted By:
theoriginal MissZ at 07/17/2008 8:43:01 PM
Comment:
If people would only learn to read and be able to do simple math calculations they would not "BE TAKEN ADVANTAGE OF" by the unsavory lenders and sellers of loans, regardless of the color of their skin.
Subprime loans used to be for people with histories of bankruptcy and foreclosures. People used to buy within their means, it seems people wanted more for their money and are not willing to save up for the 20% down payment. They start to speculate on increase in value of the home in 2 years instead of 5 years, and began taking out loans of 125% loan to value of the home with no money down. Since there is no money out of pocket they felt nothing if they left the keys and walked away. Everybody with "C" credit - a FICO score of 520 could be guaranteed a fixed 30 year loan of 8.25%. But of course they wanted the lowest possible payment, so they took out adjustible rate mortgages (ARM) with a balloon payment and an increase in rate in two years. They knew they would have to refinance before this time and probably pay about $5000 in prepayment penalties.
People got greedy, all they heard was how much the payment would be. I see it all the time when I watch HGTV House Hunter, and people go into a house and want it to be a showcase home. They don't like that the kitchen is not updated, meaning it dosen't have stainless steel appliances and granite countertops. They want 5-6 bedrooms, when they only have 3 kids. People used to make due with what they could afford and not try to keep up with the JONES and live high above their income. Their Kids learn from the parents and expect to have more than their parents right when they leave home.
My parents lived in the depression, and as a child of the 70's I grew up with high inflation, when minimum wage was $2.25 per hour and a good job paid
$6-8 per hour. There were 8 kids sharing 1 bathroom in a 4 bedroom house of 2000sq ft. We never ate fast food or in restuarants, unless we paid for it ourselves, but we always had meat and all the food we could eat at home with the exception of soda and junk food. We were taught to live below our means and save, re-use and recycle before it became fashionable to be "GREEN" like it is today. My parents lived frugally so they could afford "EXTRA" like a 36' sailboat with a harbor slip, dad's retirement at age 50, mom never had to work outside the home. They became millionaires by living below their means and taught their children to pave and apy their own way. They also expected us to achieve independence once we were adults.
So people teach your children how to read instead of putting them in front of the TV, make them learn to count their money with simple maths skills, and show them how you achieve things you want, instead of blaming your shortcomings on the MAN. It's not our skin that holds us back as a people, it is our mentality that the rims on the car are more important than the car. -
Posted By:
Ania at 07/17/2008 6:29:23 PM
Comment:
in 1980 my husband walked out on me and left me with a new home and a 6 year old child. I was no working . did not have a job, did not go on welfare. called and begged for a job. I supported my son, kept my home , paid a baby sister when necessary. I was making $4.50 cents an hour but I skimped , saved , paid off the mortgage which was at a high 9% so I have no pity for anyone. A home is available in this country but buy whatever one can afford. Most of these people overbought. One can survive but all the luxuries are not available. hard work is the answer and live frugully -
Posted By:
ksilvers at 07/17/2008 4:53:49 PM
Comment:
Many Americans have gotten caught up in the sub prime scam refinacing is just one part of this rip off. -
Posted By:
queeniebunz at 07/17/2008 4:15:02 PM
Comment:
I feel for people in this situation and I know someone in this situation. But as others have said, it's really about educating yourself when you sign any contract. ANY CONTRACT. You have to learn everything you can - every possible outcome, every option, every bit of information that will help you make the right decision. And you have to remember that if it sounds too good to be true, it is. People forget that real estate agents and mortgage brokers profit more if the house you buy is bigger and more expensive. It is their MO to talk you into a bigger home because it means a bigger paycheck for them. And another thing - in home buying, an ARM should be a dirty word. If you can't get a fixed rate mortgage, keep renting until you can. I've refinanced twice and I still have a good amount of equity because I didn't over do it. And both times I refinanced, I got a fixed loan. One thing people tend to forget is that anybody in sales is only looking out for themselves. Forget the whole "I'm a Christian" crap they'll tell you or even using a friend. They are out for self. It's an industry full of sharks and they will eat you up and spit out the bones if you make yourself vulnerable to them. If your remember that, you'll be fine. Lastly, it is better to go through a credit union if one is available to you. They give excellent rates and they aren't as cut throat as regular banks. -
Posted By:
achilles06 at 07/17/2008 3:41:54 PM
Comment:
This does not only happen to "black" people, it happens to all races. And like everyone else has said, use your brain, read the fine print. If you do not then it is your own fault, no one elses. This is just a prime example of how individuals always want to blame someone else instead of takin a good look in the mirror. -
Posted By:
nabb0905 at 07/17/2008 3:41:18 PM
Comment:
God gave us all a brain, so why aren't you using it like it was intended? Yes banks and other large institutions are no exceptions to rip you off. Before signing papers of any transaction, sleep on them over night or better yet read all the fine print. Take someone with you who know the ends and out of the papers when it somes to buying a house or a car for that matter. Blacks and Browns weren't the only race got ripped, so did whites. Some of this going under was because of not taking care of what you had been given by God. I know this will not go well with some readers, but the truth hurts. The only thing to do now is pick your self up and move on. If you can prove the lenders lied about your income, by all means take them to court and let them see how it feel to dish out what they took wasn't theirs in the first place. God don't like ugly.
nabb -
Posted By:
nabb0905 at 07/17/2008 3:28:21 PM
Comment:
God gave us all a brain. Why not use it like it was intended. Yes, there are ungle people out there to scam and make a buck any way they can. You as the borrower have to be smarter. I suggest you go to God and get your answers. Before you sign any papers read every fine print ask question. No question is stupid. Wake up People!! These companies and Banks are no exception. Money is the bottom line.
drs071608 -
Posted By:
seapuppy at 07/17/2008 3:15:22 PM
Comment:
The other posters are absolutely correct and you sound very simple. I work in the mortgage industry and we hear this type of b**ching constantly. Before you can blame me for your mother's "misfortune", let me say that I'm an accountant and not on the mortgage forefront but I find that people that lose their homes are more at fault than the others in the process. If you send the President of Nigeria your bank info, no one would blame the sender of the scam email, they would blame you for being an idiot because you should have known better. While I'm not a follower of Darwin, I believe in survival of the fittest. If you are duped because you're too dumb, blind or ignorant to read the papers that you're signing at your home closing because you're totally depending on your loan officer then you deserve whatever downfall you encounter. Only the smart and strong survive and succeed and the ones who aren't perish and that's the way it should be! -
Posted By:
JillM78 at 07/17/2008 3:12:18 PM
Comment:
While the mortgage boom did follow on the heels of Bush pushing for minorities to have more opportunities to own homes, I doubt it was a strategic move to swindle black people out of their money. If anyone was being swindled it was first time home buyers who didn???t do their homework and the ignorant.
When many signed their names on mortgage agreements, did they not do a little research about what they were getting themselves into? My husband and I considered an adjustable rate mortgage and it seemed like a sweet deal, but we did the research and decided the risk was not worth the benefit. We are not privileged white people who knew any more than the next guy coming into our first home. If anything we both had bad examples of money management coming from our parents. My in laws owed 25 thousand on a mortgage before the housing boom. Then at the peak pulled every penny of equity out and bought a new SUV, a time share, and a few vacations. Now they are upside down and will likely foreclose in their retirement. They are not black, just ignorant and easy enticed by money because they have never had it. We were sent offers to cash out over 80 from our house, but decided to instead live within our means. I???m glad we did because our house lost a quarter of its value and we would have been in the same situation as them. When will people start taking personal responsibility for their actions? Of course my in laws play the ???poor me??? role as much as the next guy. -
Posted By:
jdetmar at 07/17/2008 2:51:41 PM
Comment:
Are you out of your friggin' mind? The mortgage industry created this housing bubble so that it could steal black wealth--one foreclosure at a time? Why, so the mortgage lenders could have a huge inventory of foreclosed houses in a saturated housing market selling for a fraction of their loan balance? So they could lose billions of dollars on their bad loans to high-risk borrowers like your mother? That does not make one iota of sense. What is apparent is that your column is just another example of a black person posturing as a group victim Mau-Mauing the white flack catchers to get a little more political and racial mileage out of your phoney victim status. Even Barack Obama says that it's time for your class of perpetual "victims" to start taking responsibility for youselves. What were you and your brother doing while your elderly mother was making the decision to risk her house by borrowing money against it? If you need to blame somebody besides your mother, look in the mirror. -
Posted By:
Rogericah at 07/17/2008 2:48:16 PM
Comment:
In this dog-eat-dog world, you have to read the fine print yourself. It's sad that Banks and Lenders will take advantage of those who want the American Dream, go to work and just want to live better. Where I live people have lost their homes due to "flex loans" and that is just a scam! But, they are selfish, self-centered people who do not think of the outcome of the person they are scamming on, but if the Government was any better they would criminally prosecute the Banks and lenders, give them some Fed time and maybe they will do the right thing. -
Posted By:
johnnydawson at 07/17/2008 2:47:02 PM
Comment:
Maybge your mother should have kept the original money. Maybe she should have decdided to spend less. What did she do with the money she got out of the refi? Take a cruise? Let her kids leach off of her? It sounds to me like she did not take care of business. She took the money they offered, right? -
Posted By:
tk at 07/17/2008 2:36:20 PM
Comment:
I have to agree with tiffmkenn. The "American dream" is sold to Americans from the time you enter grade school. We don't know about each and every situation in which people have lost their homes. I am always suprised at the lack of sympathy many have shown to the unfortunate.
Those people are probably well off and to that I say God bless you all. But your awareness and ability "to do your homework" isn't some divine right of yours alone. God has blessed you and have guided your footsteps to acquire that knowledge. Don't look down on others because you "think" they should have known better. -
Posted By:
nbctjon at 07/17/2008 2:23:33 PM
Comment:
The bankers, realtors, and loan brokers only concern themselves with commisions and fees, they don't care about the quality of the loan. Once the loan closes they've made their money and anything that happens after that is someone else's problem. If the loan goes bad, the taxpayer covers any bank losses via the latest version of corporate welfare. -
Posted By:
roy2008 at 07/17/2008 2:23:11 PM
Comment:
Sub-prime lending was an organized con game. Con-artists always blame the victim - it's the excuse that fuels all such psychopathic ventures. But in the sense that these are not crimes where victims are chosen by an accident of fate, there is some blame that comes with gullibility. There's no such yhing as a free lunch. -
Posted By:
Cincinnati RIck at 07/17/2008 1:59:57 PM
Comment:
Perhaps half of the explanation of the subprime crisis is based on pressures from all quarters that led to people being put into homes they probably could not afford. If and when things did not go extraordinarily well for them (that is, they did not get lucky), the chickens came home to roost.
The second factor is people using their homes (and their rising value) as a piggy bank. Once again, when things did not go well (the expectation bubble of rising value going on forever burst), the chickens came home to roost.
To pretend that those who (briefly) enjoyed homes they could not afford or those who extracted equity from their homes got nothing is simply wrong. It detracts from our ability to understand what happened and also does nothing to help us learn from the mistakes of the past so that they will not be repeated. It may make the "victims" feel better and it may fuel the rage that others feel toward the "system", but it just keeps us ignorant. -
Posted By:
cjworden17 at 07/17/2008 1:37:55 PM
Comment:
Sorry, but I'm not buying it. Literally. I feel bad for all of these folks, but they were victimized as much by their own ignorance as they were by the industry who didn't care whether their homes got foreclosed. Had your mother talked to you about what she was doing, you could have told her no. But she didn't.
The most urgent thing that needs to happen in this country is: (a) remedial math; and (b) consumer education as a required high school course. If you don't understand an adjustable rate mortgage, DON'T GET ONE! If you have questions, ASK YOUR FAMILY, ASK YOUR CLERGY, ASK A FINANCIAL PLANNER, TALK TO A CONSUMER ADVOCATE. Almost every television and radio station has some type of financial planning program or call-in show. USE THEM! And if you don't trust any of those people, do your own research.
All financial actions have risks, and when you come in with heavy government to regulate everything that happens, people who WANT to take risks won't be able to do so. That's why you get an adjustable rate mortgage. You are BETTING that the rate will stay low. Guess what? If you're wrong, you can get hosed. If you don't understand this very simple principal, you, quite frankly, are not ready to buy a home in the first place.
If this sounds harsh to you, I can only assume it's because you (or one of your friends or family) didn't do their homework before they lept. -
Posted By:
Rocket88 at 07/17/2008 1:27:06 PM
Comment:
If there was actual fraud -- brokers signing contracts without the borrower's knowledge, brokers getting one set of refi paperwork signed but then submitting another set to the lender, contracts that contained flat-out falsehoods -- then the existing legal process already provides a mechanism for rescinding the contracts. It also provides both civil and criminal remedies against those who defrauded borrowers.
If, on the other hand, you entered into a bad deal, you should have my sympathy -- but not my tax dollars to bail you out. I learned this when I was a street lawyer: you can't save people from themselves. -
Posted By:
chele at 07/16/2008 5:12:19 PM
Comment:
how about some personal responsibility here? surely she was educated enough-after all she's a retired school teacher-to get information, ask for help. every homeowner can't be babysat to make sure they make right decisions. -
Posted By:
b.s. at 07/15/2008 2:11:47 PM
Comment:
Usury is always focused on the uneducated, where else can you see the perpetuation of discriminatory practices so blatantly unfolding than in the disproportionate adjustable-rate mortgages distributed to African-American families?
There is a good reason- FYI Republicans- that 150 years of discrimination has a place in the discussion today. Family wealth is accrued over time, and poverty cycles are hard to break. Hope is a victim of discriminatory practices, and all the "it's your own fault" bull doesn't ring true when power begets power.-
Posted By:
DD50 at 07/15/2008 4:19:49 PM
Comment:
How is a schoolteacher uneducated? The problem in the article is that the lady waited, out of shame, until it was TOO LATE to get help from her sons or anyone else. Please people, there is help in the works, the banking problem is being sorted through. That bank in Indy was just foreclosed by the gov't, FannieMae and FreddieMac are being looked at. Get help to refinance, if at all possible. ARM loans did help a lot people get into a home, noone wanted to believe there was a housing bubble, suddenly dropping the home values to below what could be financed in full. Each of us has to be accountable in the end, but this was a really painful chapter "Easy Money", that is not likely to be repeated any time soon. Read that as, for lower income people, getting a house loan will be FAR more strictly guided. The bright side is, home prices have dropped considerably. (Now, if only wages would keep up with inflation.) Any way you look at it, for the next few years, we are all in for a bumpy ride. Young people should stay in school, an education is your ticket to a good job. My dad's parents could not give him or his brothers (8 boys) one dime. He did it all with scholarships for undergrad, with 2 kids and my mom as a secretary (is a doctor today). One of his brothers ate peanut butter sandwiches, for a whole semester, while crashing at night on the floor of a buddy's apartment, trying to cobble together student financing.(Is a retired college professor.) Another brother, who had the GI bill - plus twin boys - got through engineering school in 3 years by going summers too, and taking 21 credits a quarter! So, it's possible to do. Tho' sometimes they thought it would kill them.
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Posted By:
caroaber at 07/15/2008 12:58:20 PM
Comment:
Thank you, Mr. Wright, for an informative and timely article. Not only does it spell out the predatory nature of the lenders, but it also shows the targeting of the vulnerable.
Justmysay overlooks the intense lobbying to erode protections that were in place to prevent this sort of thing. People are not fools for wanting a piece of the American Dream, something that should be attainable to working people. They have been misled, documents were altered, and lies were told to borrowers.
I have a friend who refinanced, and she is now struggling to keep her home. She is a college educated woman who is a single mother (by way of divorce). She's done nothing wrong except be conned.
I would remind Sick2death that this nation began with a caste system, freemen and chattel. For all our advances, this paradigm is extant to this day in the prison-industrial complex.
I shall have to look for those WSJ reports. It sounds like they got to the heart of the matter. -
Posted By:
justmysay at 07/15/2008 10:53:39 AM
Comment:
I totally disagree. I have been to the scam mortgage meetings and heard all the rhetoric. No one is a victim unless they are a victim of their own stupidity. How can a grown man or woman be talked into these loans. So poor people can't be victims because their poor. I am no more savvy than the next person and was never talked into these ridiculous loans. I chose not be a homeowner period. My husband and I are going to have to wait. It is sad that some many of us were targeted but where were all of you when this so called predatory lending was going. Why wasn't there a greater call to shed light on this while it was going on?? None of my colleagues black or white fell for these loans either. If you are poor then you should not be owning a home under an adjustable loan. That's simple math. Too many breaks are given to the poor as it is. It's ok for them to get loans, affordable housing but hard working middle class are stuck with the huge tax payouts and no legislation that would provide affordable real estate for us. Why is it that when an affordable add goes up the maximum income is $70,000 but you have to be a family of like 6 people? What's up with that? -
Posted By:
sick2death at 07/15/2008 10:08:24 AM
Comment:
I am constantly amazed by the lack of compassion and empathy of which human beings are capable. I didn't realize that America has somehow morphed into a caste system while I wasn't looking, and that somehow being poor or even just less equipped financially is now being viewed as yet another reason to treat our fellow man with contempt. The majority of the people who are losing their homes or are already out on the streets are VICTIMS of predatory lending by smooth-talking hucksters, not stupid or irresponsible miscreants who didn't deserve a real home in the first place. Greed is the real culprit here, as is the case with nearly all of the dastardly things that people do to one another. And all of you who choose to blame the borrowers for their situations should take a look around and see how much suffering there is to be found in this, the so-called "richest nation" on earth. Soon you may have to walk in their shoes when the greedy corporations and the legislators in their pockets find a way to take everything you have, too. -
Posted By:
MilesEllison at 07/14/2008 9:46:15 PM
Comment:
If you can't pay your mortgage, you're a deadbeat and your house is taken. If you can't pay THOUSANDS of mortgages, you're Bear Stearns, and the government bails you out with taxpayer's money (many of whom lost their homes because of their predatoryfinancial exploitation). That is a disgrace. The next president needs to throw dishonest lenders out of the economy the way Jesus threw moneylenders out of the temple. Since people seem so determined to comingle politics, economics, and religion, that analogy seems like a good place to start.-
Posted By:
MilesEllison at 07/16/2008 10:12:27 PM
Comment:
The fact is, the subprime mess is the result of relaxed regulation, which was lobbied for by the likes of Bear Stearns. It is also the result of a flawed philosophy that cedes important elements of the economy to irresponsible corporations that are focused on greed rather than economic stability, so there is no choice but to bail them out. The fact is, the risk is socialized, but the profits are privatized. And when these disasters occur, it's the taxpayers who are on the hook. The CEOs of these companies just get voted massive bonuses. -
Posted By:
rwb44 at 07/16/2008 3:35:17 PM
Comment:
Uh....NO, This is WRONG. So so so wrong and misguided and misinformed. You want to know why Bear Stearns got a bailout? Because there were counterparties on the other end of these structured financial products owned by Bear and guess what would happen to our financial system (most likely including YOUR PENSION)???? We'd be royally screwed and it would set off a chain of events that would cripple many of the banks in which we hold our money/investment.
It's understandable that most of you (as in non investment bankers and economists) don't understand this. But it's complete BS Populist rhetoric to suggest that Bear got the bailout because of money they've donated or because of some good old boys network.
Ask anyone who works in finance. WE ALL GOT BAILED OUT when Bear Stearns got bailed out.
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Posted By:
jnswedding at 07/14/2008 8:31:51 PM
Comment:
While I have sympathy for people who are in forclosure situations, they entered into a legally binding contract that they could not afford. People need to take some personal responsibility for their decisions. If a person's income is $2000/month and their mortgage payment is $1000/month, then obviously they won't have enough to live on!
I agree that the adjustable rate mortgages and interest only loans were a bit shady. However, if a person enters into an agreement knowing full well that they cannot afford the balloon payment/higher monthly payments when it adjusts, then they should not get into the contract!
We live in a society of instant gratification and it is catching up with us. Budgeting is a lost art... -
Posted By:
sammohung21 at 07/14/2008 8:07:13 PM
Comment:
What one has to remember about most of these subprime loans is that they home buyer ends up putting almost none of their own equity into the transaction - loan-to-value ratios are often 95-100% of the value of the house, and sometime more to pay for closing costs. On top of that, initial "teaser" rates allowed for monthly payments for the borrower that were often less than what it would have cost them to rent a similar property.
So, even if one of the borrowers is foreclosed upon, what have they really lost in the transaction? Maybe the $5,000 they put down in equity, and nothing else, and in the meantime they were enjoying monthly payments hundreds of dollars less than if they were paying a 30-year fixed conventional mortgage.
It is a tragedy that many people were duped into taking out loans that they could never realistically ever pay, but in the end the financial damages to them have a limit. -
Posted By:
BibiBMore at 07/14/2008 5:55:59 PM
Comment:
It is very sad indeed. But, now we have to stop venting and start coming up with solutions to this issue. It's not coming from the Government (not to the homeowners, at least). It's beneficial for a lender to execute a workout agreement with a borrower instead of risking further and more substantial loss in the borrower's bankruptcy. Who wants bankruptcy on their record? I would not discourage new homeownership as long as the candidate does his/her/their homework ahead of time, first by speaking with a homebuying counselor (who is the most important real estate professional with no expectation of commission). But, understanding money and the process is necessary as well. Sadly, many of us tend to allow ourselves to be led by the hand as opposed to leading ourselves following into the state of consumerism and not participating as the vendor. Look at all the car dealership commercials marketing to African Americans and the number of vehicles in our driveways (all depreciable assets). Nevertheless, we also tend to get charged illegal loan fees because we just don't know any better. Also, our experiences in this country is different from everyone else, so any attempt in trying to acquire the American Dream should be made with extreme caution. We've been bamboozled before when we migrated from the South to the North and purchased homes in the 50s and 60s. As long as we are not the ones to get together and decide the fate of another group of people, we will continue to be the victims of consumerism, on all levels.
I would like to add that persons facing foreclosure (and you can still afford the mortgage payments if modified somehow) should consult a lawyer who has teamed up, or employed, a homebuying counselor in their areas. Many Bar Associations in different jurisdictions are developing foreclosure pro bono projects to find where the glitches were and possibly helping the owner maintain the home. It's fine to discuss the how and why this crisis has occured, but I think most people who face this issue are interested in finding solutions. -
Posted By:
brenda of ireland past at 07/14/2008 5:20:07 PM
Comment:
I am so tired of the 'angles' people use to gain sympathy. Yes, the mortgage situation is ridiculous, but we must be personally accountable for what we put our name to. People need to pray about the decisions they make. The Bible says' neither a borrower nor lender be'. To do anything outside God's own sound advice sets people up for trouble REGARDLESS OF ETHNICITY, NATIONALITY, RACE, COLOR, BLAH BLAH BLAH! -
Posted By:
Monie Hayes at 07/14/2008 3:51:47 PM
Comment:
I am aware of your interest in curtailing predatory lending and thought you might be interested in this. The linked _WSJ_ article is worth a read, too. Monie -
Posted By:
miss lauren at 07/14/2008 2:22:25 PM
Comment:
And the main reason they got away with it is because they hold the money anyways. They were able to fund the campaigns to get the laws changed and then they were able to fund the media's idea that people were the cause. Its the same as the people who signed up the old folks for the wrong medicare plan by just "telling" them about the product and then having them sign a form "that just says they came to tell them about the product." Shady people were in charge of trying to get these loans and they need to be checked out better. -
Posted By:
tiffmkenn at 07/14/2008 1:03:24 PM
Comment:
How depressing our Nation has become. I've given up my dream of owning a home. Even if you can get a normal (non subprime) loan (which I can't) you end up paying way more for a house than its really worth because of the inflated market. Here in Seattle (WA State) the average cost of a home in a decent area is still just way too high. I recently read another article stating you're better off renting than buying here in Washington in the major cities. I even knew someone in the mortgage industry who admitted that a lot of the loans they gave were barely able to escape being called predatory, yet that did not stop them. I think its an industry of greed and lack of morals targeting people full of need and desperation. Owning your own home has always been part of the "American Dream" we like to paint and mortgage companies know this and used it to sell loans to people at any cost, even at the cost of their dream.
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