View Full Version : In Nothing we Trust!
crusader377
04-21-12, 20:22
This is a great editorial on the decline in trust of many important institutions of this country. I think in any institution, trust only can occur when people have confidence in both the competence and integrity of that organization. What are your thoughts?
http://www.nationaljournal.com/features/restoration-calls/in-nothing-we-trust-20120419?print=true
The_War_Wagon
04-21-12, 20:53
People want institutions they don't belong to, don't participate in, and only half-trust, to take care of them COMPLETELY, never let them down, all while THEY never lift a finger to help, volunteer, or participate. :rolleyes:
Don't vote? DON'T trust the gummint then. Don't go to church? DON'T believe in Jesus then. Don't volunteer? DON'T believe the Boy Scouts/Elks/Masons/4-H/Red Cross/Woodmen of the World/Toastmasters/Kiwanis/Rotary/Lions/Knights of Columbus/et.al. will be there to help you in YOUR hour of need then. Pretty easy to see the self-fulfilling FAIL! in that attitude!
BY age 40, MEN used to step up across the country, and fill the leadership ranks of all the organizations of their community, and sometimes beyond. You did it, because to NOT do it, marked you as selfish, cowardly, and UN-trustworthy in your community.
Now we market Viagra to retirees around the clock; Grandpa is too busy humping Grandma to take little Billy fishing and tell him war stories, and little Billy is too busy playing some damn electronic game, to know the difference between a fish, and a microwave fishstick. He has no IDEA of the notion of "civic responsibility" - NO one's teaching him, because NO one KNOWS, anymore.
Furthermore, nobody still in these organizations KNOWS the doubters, because they're too busy DOING, and the doubters are too busy BITCHING. But they do make a CURE for that. Shuffle your bitching ass down the street, STEP up, and BE a MAN.
Or keep bitching. I DON'T know you, and DON'T hang out with your type, and I really don't CARE to hear you bitch about stuff you CHOOSE not to take any control over. :rolleyes:
The problems are actually systemic and come from all angles. For example, you want people to contribute more and do more as they did in the past, but the economy used to operate on a single-income scale per family. Now in many cases both husband and wife have to work a full-time job (or two) just to make ends meet. Thus, many no longer have the free time to contribute as much as they could have in past generations. Throw in the BS "work-life balance" in the private sector that really just means "we'll bother you 24/7" and there's often no escape. And if you don't want to play their game, someone else is desperate enough and will, and in this economy you are at the mercy of your employer more than usual with plenty of equally-qualified but now-unemployed people who would gladly have your job.
Just one example among many factors that result in the downward spiral of American society we have today.
Here is a novel idea: stop depending on institutions and prepare yourself to be self-sufficient. This quote from the article sums up a lot that is wrong with Americans today:
“I’ve lost my home. I live in a trailer now because of a mortgage company and an incompetent government.”
It appears that they are unwilling to confront their own poor decision making that was inevitably more significant than any institutional failure to their current circumstances. Thus, this person better get accustomed to the trailer by the river...
crusader377
04-21-12, 22:44
Here is a novel idea: stop depending on institutions and prepare yourself to be self-sufficient. This quote from the article sums up a lot that is wrong with Americans today:
“I’ve lost my home. I live in a trailer now because of a mortgage company and an incompetent government.”
It appears that they are unwilling to confront their own poor decision making that was inevitably more significant than any institutional failure to their current circumstances. Thus, this person better get accustomed to the trailer by the river...
Although self-sufficientcy is a great trait and I wish more Americans had it, in modern society you do need to rely on insititutions for daily life. I don't think it is too much to ask that the school system that helps educates your kids can be relied on to be competent, or that a clergyman or church member is trustworthy enough to be a good role model to your children instead of molesting them. Or investment products purchased from your banks are well thought investments instead of the shoddy casino culture that rules wall street. Or that government can be a good steward of tax payer dollars instead of pissing away your hard earned money.
IMO this society is infected with the bad traits of entitlement at all levels of society, excessive greed, lack of honor and integrity, and a lack of absolute values.
Although self-sufficientcy is a great trait and I wish more Americans had it, in modern society you do need to rely on insititutions for daily life. I don't think it is too much to ask that the school system that helps educates your kids can be relied on to be competent, or that a clergyman or church member is trustworthy enough to be a good role model to your children instead of molesting them. Or investment products purchased from your banks are well thought investments instead of the shoddy casino culture that rules wall street. Or that government can be a good steward of tax payer dollars instead of pissing away your hard earned money.
IMO this society is infected with the bad traits of entitlement at all levels of society, excessive greed, lack of honor and integrity, and a lack of absolute values.
Reliance to the point of complete dependance followed by denial of personal responsibility is what I'm talking about in my original post.
Reliance to the point of complete dependance followed by denial of personal responsibility is what I'm talking about in my original post.
When I read this article, it reminds me of a quote from Thomas Sowell on the actions of our government and society as a whole...."For the past 30 years, we have pushed out what works and replaced it with what sounds good".
NavyDavy55
04-23-12, 05:22
People do care and still volunteer. I see families volunteer at church events. Men and women all over the country are volunteer fire fighters. Yesterday I saw numerous volunteers at the Multiple Sclerosis Walk.
When I was a kid my grandfather was a volunteer fireman and when I turned 18 I joined too. I have a brother who is autistic and my mother volunteered every summer at a camp for mentally challenged kids. My brother and sisters did too. As an adult I have volunteered at special olympics and as a Reserve Deputy Sheriff.
My point is I was taught to give back and I still see it today. Young children who see mom and dad volunteer at church or events like a MS Walk learn valuable lessons.
Here is a novel idea: stop depending on institutions and prepare yourself to be self-sufficient. This quote from the article sums up a lot that is wrong with Americans today:
“I’ve lost my home. I live in a trailer now because of a mortgage company and an incompetent government.”
It appears that they are unwilling to confront their own poor decision making that was inevitably more significant than any institutional failure to their current circumstances. Thus, this person better get accustomed to the trailer by the river...
Whether you realize it or not (and I'll suspect you don't), this comment reeks of one, possibly two dimensional thinking. If you don't understand the overt facts regarding what has been happening regarding bank mismanagement of mortgages then you aren't properly informed.
If you do know what has been happening and just don't give a crap because it hasn't happened to you, then you are one of the zealots that give the left momentum.
I will count myself as one of those uneducated as to the mismanagement of mortgages by banks and ask for clarification. When my wife and I were buying our home, the banks, the realtor, the mortgage broker, the title house were all on over drive doing everything they could to convince us to buy a much larger and much more expensive home than the one we were looking at. We decide that doing so was a bad idea in the event one of us lost a job or had some form of emergency. It was OUR decision to not go into a mortgage that leveraged us beyond our means. Had we chosen to cave to the experts and been out on our asses when the bubble burst it would have bee OUR fault, not the banks or the realtors for talking us into a bigger home.
I'm obviously out of the loop on what happened with the mortgage bubble, but my understanding was that people who had no business buying homes were doing so simply cause the banks signed off on the loans. Granted the banks and the government busybodies promoting these asinine programs played a role in the issue, but in the end the people choosing to accept those loans need to assume responsibility for their choices. It's like saying you're credit card balances are out the ass simply cause the damned pre approved applications keep coming in the mail. Sorry, but I ain't got no sympathy for you.
Im with lane on this. The responsibility to take care of your needs lies with you and only you. To blindly rely on some third party to take care of you is naive to say the least. Some times it can't be helped, but most of the time if you do your due diligence you mitigate a lot of risk. The sad part is that people are too lazy to do it. They just accept the crap coming out of the black box as gospel and go with it.
Whether you realize it or not (and I'll suspect you don't), this comment reeks of one, possibly two dimensional thinking. If you don't understand the overt facts regarding what has been happening regarding bank mismanagement of mortgages then you aren't properly informed.
If you do know what has been happening and just don't give a crap because it hasn't happened to you, then you are one of the zealots that give the left momentum.
If you are talking about the relatively few people who had their mortgages erroneously foreclosed due to clerical errors at the bank (which happened a few times at BOA after they acquired Countrywide), then yes - I feel bad for them.
If you are talking about the majority of people who bought houses with sub-prime loans, then no - I don't feel bad for them. TAZ did a good job summarizing this issue as I understand it.
Let me know if I'm missing something as I don't like being misinformed.
Let me know if I'm missing something as I don't like being misinformed.
Well for starters, have you read the OP's article referencing the "canceled" although previously accepted modification? One that if adhered to as promised by his lender would have eliminated his problem in the first place? Want to know how many people I know personally who have been blatantly and remorselessly screwed on such legit arrangements, this while adhering perfectly to it's stated guidelines?
Or maybe you have heard of the "robo-signers", or bank employees who signed of on foreclosure paperwork en masse while reading none of it? If you still don't get it I can post a dozen related articles I have saved because I have been involved with real estate for some time, but if you have been paying attention I really shouldn't have to do that.
It's not an issue of allowing someone a free pass, it's an issue of legitimate accountability and fairness. To make it into something else is reminiscent of the way a liberal deems a firearm inherently evil. Right is right and wrong is wrong, regardless of anyone's personal viewpoints.
Well for starters, have you read the OP's article referencing the "canceled" although previously accepted modification? One that if adhered to as promised by his lender would have eliminated his problem in the first place? Want to know how many people I know personally who have been blatantly and remorselessly screwed on such legit arrangements, this while adhering perfectly to it's stated guidelines?
Or maybe you have heard of the "robo-signers", or bank employees who signed of on foreclosure paperwork en masse while reading none of it? If you still don't get it I can post a dozen related articles I have saved because I have been involved with real estate for some time, but if you have been paying attention I really shouldn't have to do that.
It's not an issue of allowing someone a free pass, it's an issue of legitimate accountability and fairness. To make it into something else is reminiscent of the way a liberal deems a firearm inherently evil. Right is right and wrong is wrong, regardless of anyone's personal viewpoints.
I've read the original article, but I don't think that you understand the idea of a trial loan modification. Basically, the bank is allowing the client to take a lower interest rate while they evaluate the eligibility for a lower rate / refinance. The bank is under no obligation to accept the refinance application and the client is charged the difference if the application is denied. Thus, the article appears to be distorting the picture to create a better sob-story by making it appear that the bank had reneged on an approved refinance. In the article's cited case, I'm not surprised that the bank denied the refinance application since both the husband and wife had ZERO income.
As for the robo-forclosures, that is an example of the mistakes that I referenced in my last post. However, understand that these were the minority of cases. The majority of finalized forclosures were legit and done on people / institutions who had no business taking on the debt.
I've read the original article, but I don't think that you understand the idea of a trial loan modification.
That would be incorrect. Not the smartest fellow in the world, but this topic I am well versed on.
Basically, the bank is allowing the client to take a lower interest rate while they evaluate the eligibility for a lower rate / refinance. The bank is under no obligation to accept the refinance application and the client is charged the difference if the application is denied. Thus, the article appears to be distorting the picture to create a better sob-story by making it appear that the bank had reneged on an approved refinance.
Sounds good from your perspective, but you are omitting the many thousands who made payments in accordance with their agreements only to be sent into foreclosure regardless and sometimes without warning. Payments that were either unaccounted for for months or payments that dept A was supposed to process for dept B, yet somehow dept C got involved. But maybe that just another sob story also?
You see you think you have it all figured out in your ideologically sound way, but you are oversimplifying to make yourself and your beliefs right. Personally I like FOX news a great deal, but when the have the likes of Jonathan Hoenig yapping about how it's all a big misunderstanding and the banks are just practicing good business I start to wish there were a better independent party option.
Sounds good from your perspective, but you are omitting the many thousands who made payments in accordance with their agreements only to be sent into foreclosure regardless and sometimes without warning. Payments that were either unaccounted for for months or payments that dept A was supposed to process for dept B, yet somehow dept C got involved. But maybe that just another sob story also?
You see you think you have it all figured out in your ideologically sound way, but you are oversimplifying to make yourself and your beliefs right.
It appeared to me that you were not familiar with trial loan modifications when you made this statement:
Well for starters, have you read the OP's article referencing the "canceled" although previously accepted modification? One that if adhered to as promised by his lender would have eliminated his problem in the first place? Want to know how many people I know personally who have been blatantly and remorselessly screwed on such legit arrangements, this while adhering perfectly to it's stated guidelines?
This is a rather misleading statement if your understanding is as you say. First, you claim that the bank had accepted Mr. Whitmire's modification which is not true. In addition, there is no evidence in the article that a finalized modification would have saved Mr. Whitmire's home since both he and his partially disabled wife (another red flag for those of us familiar with SSDI fraud) are now unemployed.
Finally, I'm not omitting any of the cases of bank error and malfeasance that you mention. I'm just saying that they represent a minority of the ~2-3 million homes that are repossessed every year since 2008. I also can't find anywhere in the article that suggests Mr. Whitmire is a victim of robo-forclosure or clerical errors. So, tell me again why you bring up these red herrings in the context of this article?
Like it or not, most people who are threatened by foreclosure have missed more than a couple of payments and made plenty of mistakes along the way. I'm just saying that there is a problem when these people feel that they share a minority of the blame in their predicament.
I also can't find anywhere in the article that suggests Mr. Whitmire is a victim of robo-forclosure or clerical errors. So, tell me again why you bring up these red herrings in the context of this article?
Ok, I will try to explain it one more time briefly. While I can't confirm this gentleman's reason for cancellation specifically based upon the information provided, it fits a pattern I have seen myself repeatedly.
This being that a temporary arrangement is established and a lesser payment is required as a result. From that point, if the borrower makes 6 months of payments on time, they are usually told they will be accepted into a permanent arrangement.
They make the reduced payment as required and make them on time, only to find out after 3-4 months that the payments are not being accounted for properly and foreclosure proceedings have begun. On top of that, despite having paid what they were supposed to on time, their credit is destroyed because the new reduced payments aren't being reported to the 3 bureaus. As far as they can tell, the borrower has made no payments during that time, when in fact they have paid exactly what they were supposed to according to the arrangement.
You seem to think that just because someone has slipped into foreclosure they can be sodomized by their lender at will. The lender is the one who establishes the program that they themselves disregard or mismanage, usually wasting countless hours of the borrowers time trying hopelessly to fix the mess the lender made. Then to compound that they often wind up in a far worse situation than they were in before, all while doing exactly what the lender assured them it was ok to do in writing.
Forget about the robo-signers, which are yet another aspect of the massive problem. What I describe above is not just bad business and it's not just unethical. It is by definition illegal misrepresentation of fact and/or procedure. It is flat out wrong and no one anywhere should be defending these disgraceful abuses of power.
Here are a couple of interesting articles that explain trial loan modifications for those who would like a more objective perspective:
http://www.mortgageloan.com/overcoming-problems-trial-loan-modification
http://www.bankrate.com/finance/mortgages/want-to-modify-mortgage-get-a-trial-run-2.aspx
Note that the second article provides a good explanation of the effects on credit reports (the reality is a little different than previously described). The bottom line is that most loans that are delinquent going into a trial period have a slim chance of emerging with a lower rate at the end of the three months - duh. Of those that fail, a majority are due to incomplete paperwork and the article lists some interesting reasons for this such as missing signatures, erroneous income reports, etc. Granted, there are reports of banks repeatedly requesting and loosing paperwork, so I'm sure that some deserving people get the shaft. Another 30-40% of failures are due to missed payments within the trail period.
The best way to maximize the chances of success is to approach the lender about a trial loan modification before the account is delinquent on any payments. This also minimizes the chances of any adverse credit reports while within the trial period since accounts that are not delinquent should not have a negative impact on credit scores. However, this strategy requires some level of personal responsibility and forward thinking that is a minority perspective in the foreclosure population.
The bottom line is that most loans that are delinquent going into a trial period have a slim chance of emerging with a lower rate at the end of the three months - duh.
There is no faster way to derail a thread than have it go private, so this will be it for me here. But think of the ridiculousness of what you wrote above. Why offer the friggin lower rate as part of the solution to a borrower who is struggling financially and behind in payments if it will be declined because you are behind in payments? If that's the case, then stop offering modifications to those that are behind while passing them off as a viable remedy.
Of those that fail, a majority are due to incomplete paperwork and the article lists some interesting reasons for this such as missing signatures, erroneous income reports, etc. Granted, there are reports of banks repeatedly requesting and loosing paperwork, so I'm sure that some deserving people get the shaft.
Far more than just "some". Minimizing it is a means to justify.
Another 30-40% of failures are due to missed payments within the trail period.
Missed payments or unapplied payments? There is a huge difference and the latter has been a huge issue in trial modifications.
These are links that tell the real story...
http://www.examiner.com/article/obama-s-mortgage-modification-fraud
http://www.cbsnews.com/stories/2011/07/18/national/main20080533.shtml?tag=stack
http://www.msnbc.msn.com/id/35062033/ns/business-mortgage_mess/
http://www.msnbc.msn.com/id/40571573/ns/business-us_business/
http://www.nytimes.com/2010/10/14/business/14mortgage.html?_r=1&hp
How about we stop micro analyzing trial modifications and loan terms and return to the premise of the thread, hmmm? We can discuss personal responsibility in another thread. :)
Those banks and mortgage companies had a fiduciary obligation to their stockholders and customers to deny those sub-prime loans. When they failed that test, they claimed no personal responsibility and begged for a bailout. Banks that were more responsible got tarred & feathered along with the bad ones and were then forced to participate in the bailout debacle. The politicians pandered to the lowest common denominator and took the cowards way out, which didn't work. The press failed to hold anyone accountable or explain the who, what, where, how and why of the problem. All they did was trade on emotions for ratings and ad revenues.
These three institutions failed spectacularly. Since they've held themselves up as paragons of American society and integrity, they deserve to be pilloried as pariahs now. :mad:
Spurholder
04-24-12, 14:23
People want institutions they don't belong to, don't participate in, and only half-trust, to take care of them COMPLETELY, never let them down, all while THEY never lift a finger to help, volunteer, or participate. :rolleyes:
Don't vote? DON'T trust the gummint then. Don't go to church? DON'T believe in Jesus then. Don't volunteer? DON'T believe the Boy Scouts/Elks/Masons/4-H/Red Cross/Woodmen of the World/Toastmasters/Kiwanis/Rotary/Lions/Knights of Columbus/et.al. will be there to help you in YOUR hour of need then. Pretty easy to see the self-fulfilling FAIL! in that attitude!
BY age 40, MEN used to step up across the country, and fill the leadership ranks of all the organizations of their community, and sometimes beyond. You did it, because to NOT do it, marked you as selfish, cowardly, and UN-trustworthy in your community.
Now we market Viagra to retirees around the clock; Grandpa is too busy humping Grandma to take little Billy fishing and tell him war stories, and little Billy is too busy playing some damn electronic game, to know the difference between a fish, and a microwave fishstick. He has no IDEA of the notion of "civic responsibility" - NO one's teaching him, because NO one KNOWS, anymore.
Furthermore, nobody still in these organizations KNOWS the doubters, because they're too busy DOING, and the doubters are too busy BITCHING. But they do make a CURE for that. Shuffle your bitching ass down the street, STEP up, and BE a MAN.
Or keep bitching. I DON'T know you, and DON'T hang out with your type, and I really don't CARE to hear you bitch about stuff you CHOOSE not to take any control over. :rolleyes:
Dude, I see what you're talking about every day.
My oldest turned 7 last fall, and so far he's only wanted to be involved in two things - baseball, and trying Cub Scouts. Accordingly, I'm an assistant coach on my son's baseball team and the Tiger Cub Den Leader.
Tiger Cubs have mandated parent involvement. One Tiger Cub = one parent with him at every juncture throughout the whole year - den meetings, pack meetings, field trips, etc. Yeah, sometimes I have to do a lot of pulling to get the parents interested in doing something together for the boys, but by and large they're ponying up and getting involved in their kids' world.
Contrast that to baseball. We had a chilly and windy practice day yesterday - all ten of the boys out on the field playing their little 7 and 8 year old hearts out, doing amazing things and having a great time. Too bad that not a single parent (other than the coaches) wanted to watch practice, let alone get involved. Only one other family member of a player was behind the backstop watching practice...a sixteen year old sister who stayed on her iPhone the entire time.
Everyone else? Running errands or waiting on the other side of the field, in their cars, talking on their cell phones. Very sad.
Those banks and mortgage companies had a fiduciary obligation to their stockholders and customers to deny those sub-prime loans. When they failed that test, they claimed no personal responsibility and begged for a bailout.
Now this is just more misinformation and simplification. Obviously I'm not here to defend the banks, but they lent monies along federally established guidelines. Sure they could have bucked the trend and should have, but then they would have been deemed non-competitive and lost tremendous amounts of business to other banks.
You may say "Well, so what? They would have looked great after the fact and have far fewer foreclosures to deal with now." This is true, but what would the share-holders, many of whom refused to believe there was a housing bubble at the time, have thought of them?
I don't blame the banks for lending according to federal guidelines, I blame them for horribly misleading borrowers while mismanaging their troubled loans. And many of these troubled loans are only troubled because of the bank errors, not necessarily a lack of personal responsibility.
People want institutions they don't belong to, don't participate in, and only half-trust, to take care of them COMPLETELY, never let them down, all while THEY never lift a finger to help, volunteer, or participate. :rolleyes:
Don't vote? DON'T trust the gummint then. Don't go to church? DON'T believe in Jesus then. Don't volunteer? DON'T believe the Boy Scouts/Elks/Masons/4-H/Red Cross/Woodmen of the World/Toastmasters/Kiwanis/Rotary/Lions/Knights of Columbus/et.al. will be there to help you in YOUR hour of need then. Pretty easy to see the self-fulfilling FAIL! in that attitude!
BY age 40, MEN used to step up across the country, and fill the leadership ranks of all the organizations of their community, and sometimes beyond. You did it, because to NOT do it, marked you as selfish, cowardly, and UN-trustworthy in your community.
Now we market Viagra to retirees around the clock; Grandpa is too busy humping Grandma to take little Billy fishing and tell him war stories, and little Billy is too busy playing some damn electronic game, to know the difference between a fish, and a microwave fishstick. He has no IDEA of the notion of "civic responsibility" - NO one's teaching him, because NO one KNOWS, anymore.
Furthermore, nobody still in these organizations KNOWS the doubters, because they're too busy DOING, and the doubters are too busy BITCHING. But they do make a CURE for that. Shuffle your bitching ass down the street, STEP up, and BE a MAN.
Or keep bitching. I DON'T know you, and DON'T hang out with your type, and I really don't CARE to hear you bitch about stuff you CHOOSE not to take any control over. :rolleyes:
I don't think Viagra is the problem so much as entitlement parents raising entitlement children. If the parents have no sense of accountability or responsibility, it is extremely unlikely their children will. It will only get worse.
Now this is just more misinformation and simplification. Obviously I'm not here to defend the banks, but they lent monies along federally established guidelines. Sure they could have bucked the trend and should have, but then they would have been deemed non-competitive and lost tremendous amounts of business to other banks.
You may say "Well, so what? They would have looked great after the fact and have far fewer foreclosures to deal with now." This is true, but what would the share-holders, many of whom refused to believe there was a housing bubble at the time, have thought of them?
I don't blame the banks for lending according to federal guidelines, I blame them for horribly misleading borrowers while mismanaging their troubled loans. And many of these troubled loans are only troubled because of the bank errors, not necessarily a lack of personal responsibility.
Attitudes like that are part of the reason for our socio-economic collapse. Guidelines are exactly that, guidelines. The investors are pissed because you're not willing to dive the business into the ground while dumping cash at them? Fine! Go invest in something else. Long term investors will fill the gaps!
Yes the feds bought low income votes by relaxing mortgage requirements and pressuring banks to do stupid shit, but that was just a convenient cop-out for the banks to grab as much cash as they could while lining up their excuses for the pending disaster.
America is institutionalizing stupid and giving it legal protections in the process. That goes for business, government and consumers! :mad:
America is institutionalizing stupid and giving it legal protections in the process.
And has been for a long time.
The entire mortgage problem could have been fixed if they simply foreclosed and evicted everyone who bought a house they couldn't afford.
Those people could then simply become "renters" like they should have been all along and there would be plenty of cheap houses for those who have the income to buy such things.
But instead we rewarded fiscal irresponsibility by letting people stay in those homes and then had the tax payer shoulder the burden which dumped the entire economy.
All because a bunch of dipshits who make 30k a year decided they should buy a 300k house.
The entire mortgage problem could have been fixed if they simply foreclosed and evicted everyone who bought a house they couldn't afford.
Maybe I'm the dope, but clarify if you will and tell us what you would have done, this with the privilege of today's hindsight, back in 2005 if you were running the Wells Fargo home lending division? What specifically would you have done differently under the circumstances possessing the infinite knowledge you appear to have acquired?
There obviously was a better way, so please take just a moment to enlighten us.
Maybe I'm the dope, but clarify if you will and tell us what you would have done, this with the privilege of today's hindsight, back in 2005 if you were running the Wells Fargo home lending division? What specifically would you have done differently under the circumstances possessing the infinite knowledge you appear to have acquired?
There obviously was a better way, so please take just a moment to enlighten us.
The problem is not with the lending institutions but with the people who bought things they cannot afford.
If I wanted to I could easily finance a Ferarri. But I cannot afford a Ferarri. There is a huge difference between qualifying for financing and being able to afford something.
If a person only makes 30k a year, but qualifies for a 300k mortgage (especially an adjustable rate) and actually buys the damn thing it is not the lenders fault. It is the buyers fault for buying something they should know they can't afford.
And as soon as it is demonstrated that they actually cannot afford their 300k house, they should be foreclosed on, evicted and go get a rental like I said earlier. Wells Fargo then gets stuck with the house as a result of providing loans they should know will get defaulted on and then the house goes on the market cheap.
The only reason those corrective things haven't happened is because 7 years later people are still living rent free in their 300k foreclosures.
Maybe I'm the dope, but clarify if you will and tell us what you would have done, this with the privilege of today's hindsight, back in 2005 if you were running the Wells Fargo home lending division? What specifically would you have done differently under the circumstances possessing the infinite knowledge you appear to have acquired?
There obviously was a better way, so please take just a moment to enlighten us.
I'll help you. I would not have jumped head first into mortgage securitization or distributed the risk through mortgage-backed securities that led to credit default swaps. These practices were creations of the banks and were instrumental in hiding risk rather reducing it. This practice played a significant role in the mortgage meltdown along with shady behavior from the government and GSEs, Fed, and consumers.
It seems that many of us agree that responsibility for the mortgage crisis is shared by the government and GSE's, banks including the Fed, and consumers. On the other hand, I'm having a hard time determining where you stand when it comes to the last category, consumers, and their role in this mess. It seems that you are absolving them of most if not all responsibility based on your comments so far in this thread. My concern about such an attitude is that it propagates the next debt crisis be it student loans, credit card debt, etc.
I'll help you. I would not have jumped head first into mortgage securitization or distributed the risk through mortgage-backed securities that led to credit default swaps. These practices were creations of the banks and were instrumental in hiding risk rather reducing it. This practice played a significant role in the mortgage meltdown along with shady behavior from the government and GSEs, Fed, and consumers.
You left out the rating agencies, which rated the POS MBS's as if they were gold plated.
The_War_Wagon
04-25-12, 06:57
Maybe I'm the dope, but clarify if you will and tell us what you would have done, this with the privilege of today's hindsight, back in 2005 if you were running the Wells Fargo home lending division? What specifically would you have done differently under the circumstances possessing the infinite knowledge you appear to have acquired?
There obviously was a better way, so please take just a moment to enlighten us.
I'd of built a time machine, gone back to 1977, and smacked Jimmy Carter vigorously about the head. :mad:
It was HIS "Fair Standards in Housing Act (the name may be off a bit, but that's where it started)," that set this crap in motion. Rever'ruhnds Jackson & Sharpton merely leaned on (blackmailed - pardon the pun... :rolleyes: ) the FIRST black President - KLIN - TON I - to diminish the criteria for home ownership FURTHER under that Act, and - VOILA! Welcome to the 21st housing bubble.
Cover Jimmeh's No-balls Prize in peanut butter, and make the dunderninny EAT IT! :mad:
I'll help you. I would not have jumped head first into mortgage securitization or distributed the risk through mortgage-backed securities that led to credit default swaps. These practices were creations of the banks and were instrumental in hiding risk rather reducing it. This practice played a significant role in the mortgage meltdown along with shady behavior from the government and GSEs, Fed, and consumers.
It seems that many of us agree that responsibility for the mortgage crisis is shared by the government and GSE's, banks including the Fed, and consumers. On the other hand, I'm having a hard time determining where you stand when it comes to the last category, consumers, and their role in this mess. It seems that you are absolving them of most if not all responsibility based on your comments so far in this thread. My concern about such an attitude is that it propagates the next debt crisis be it student loans, credit card debt, etc.
I'll give you my perspective. Secondary responsibility was government. Government has more authority than all the other categories. They misused that authority in order to appease and buy votes. They relaxed the rules, then sent the "Dept of Just US" in to intimidate those banks who knew it was foolish to award sub-prime loans for being racist in not giving out enough minority loans.
Tertiary responsibility was the lending institutions. They had the knowledge and capacity to understand that it was a bad idea. They could've sent their lobbying organizations in to spread some cash and get the rules reinstalled. However, the .gov had just handed them a golden egg. They could do stupid shit, get away with it and claim "it's the government's fault!". When someone hands you a printing machine for cash, it's hard to say no.
Further tertiary responsibility is the consumer. They are stupid and uneducated and believed all the .gov and mortgage broker's horseshit because they wanted a fancy new home.
The primary responsibility doesn't lie with the consumer, banks or the government, it lies with the voters. They failed to live up to their responsibility in holding elected officials accountable. It all starts there. :(
The primary responsibility doesn't lie with the consumer, banks or the government, it lies with the voters. They failed to live up to their responsibility in holding elected officials accountable. It all starts there. :(
Rather than try to rank all of the responsibilities, I'll focus on this last statement because it goes to what I see as the heart of the article. We need to remember that all of the institutions that fail us are organizations created by and composed of our fellow citizens. These institutions have a collective moral compass that largely points in the direction of their employees and leaders. Thus, as the quality of the "average American" declines, so does the institutions that are composed of our neighbors. Vital to this decline is a overall lack of personal responsibility in our society that undermines any sense of institutional responsibility.
Take the Catholic priest sex abuse scandals as an example. A few bishops have admitted to shuffling and hiding problem priests due to a fear of what might happen to the Church's reputation should the issue go public. However, I'd maintain that the larger fear among these bishops was the threat to their own personal power and prestige from having a pedophile within their fold. We now see the combined effect of several leaders abdicating their personal responsibility (along with a significant minority of pedophile priests) to shift the moral compass of an entire organization in the wrong direction.
If you want to fix the problem, teach your children to also ask, "How could I have prevented this" when confronted with failure rather than seek a scapegoat. This characteristic will help insure that future generations don't reflexively surrender the moral authority to do the right thing when confronted with adversity. Over time, the quality of our institutions will return as we replace the dead wood with people of character.
You left out the rating agencies, which rated the POS MBS's as if they were gold plated.
You are correct. I also think that Glocktogo's notion of voter responsibility is also largely correct. Although, I suppose that I lump voters in with consumers since I see a correlation between spending/consumptive behavior and voting trends across large populations.
On the other hand, I'm having a hard time determining where you stand when it comes to the last category, consumers, and their role in this mess. It seems that you are absolving them of most if not all responsibility based on your comments so far in this thread. My concern about such an attitude is that it propagates the next debt crisis be it student loans, credit card debt, etc.
Ok, fair enough as maybe I didn't address that aspect of the problem adequately. Of course there are deadbeats and dopes out there who created their own issues. Many are 100% to blame for their delinquency and I would never try to state otherwise.
That said, just as we advocate personal responsibility for ourselves it would seem hypocritical to give the banks a free pass. If a borrower screwed-up and they are to blame, fine. But if a bank establishes a program and then offers that program to borrowers who either are delinquent or are headed there due to loss of income, then obviously the bank should be obligated to handle the arrangement they endorse professionally and effectively.
The critical factor here is what level of credence one gives the latter circumstance. You can dismiss it as a minimal issue or understand it for the very real and large problem that it is. It is also important to remember that many foreclosures were themselves generated by these same bank errors.
No, not all or even most, but I'd say that anything less than 0% is an unacceptable number. Considering this, data that I saw about a year ago showed that as many as 40%-60% of loan modifications go into default as a direct result of bank error or have other complications as a result. Surely you would agree that if it is even anywhere near that figure then there is a serious problem in need of addressing.
Ok, fair enough as maybe I didn't address that aspect of the problem adequately. Of course there are deadbeats and dopes out there who created their own issues. Many are 100% to blame for their delinquency and I would never try to state otherwise.
That said, just as we advocate personal responsibility for ourselves it would seem hypocritical to give the banks a free pass. If a borrower screwed-up and they are to blame, fine. But if a bank establishes a program and then offers that program to borrowers who either are delinquent or are headed there due to loss of income, then obviously the bank should be obligated to handle the arrangement they endorse professionally and effectively.
The critical factor here is what level of credence one gives the latter circumstance. You can dismiss it as a minimal issue or understand it for the very real and large problem that it is. It is also important to remember that many foreclosures were themselves generated by these same bank errors.
No, not all or even most, but I'd say that anything less than 0% is an unacceptable number. Considering this, data that I saw about a year ago showed that as many as 40%-60% of loan modifications go into default as a direct result of bank error or have other complications as a result. Surely you would agree that if it is even anywhere near that figure then there is a serious problem in need of addressing.
OK, we probably agree more than we disagree. I just want to point out that there is no such thing as a 0% error rate in any industry. We cull the heard in the hospital every day with unforced errors and plenty of planes fall out of the sky. So, you may want to rethink this number since it will never happen. Personally, I don't know what the error rate should be as this is not my area of expertise.
Having said that, I do have some real problems with the notions of trial loan modifications and the whole Home Affordable Modification Program. I see this as yet another example of unconstitutional federal over-reach that is going down the path of unintended consequences as very few people are actually helped by this program (20% of applicants actual get their loan modified in a meaningful way). If eliminated, I suspect that the error rate would decrease to an acceptable level or be uniform across the industry as the signal-to-noise ratio improves.
Personally, I'd rather the banks proceed with foreclosure in accordance with state laws and the terms of the mortgage on accounts that become delinquent like Steyr described in his previous posts. That means no robo-forclosures and criminal prosecution for false affidavits for violators in states with judicial foreclosure requirements. It also means that deadbeats hit the road in states that allow more rapid proceedings. This would allow a more rapid unwinding of the market rather than delay the inevitable.
Personally, I'd rather the banks proceed with foreclosure in accordance with state laws and the terms of the mortgage on accounts that become delinquent like Steyr described in his previous posts. That means no robo-forclosures and criminal prosecution for false affidavits for violators in states with judicial foreclosure requirements. It also means that deadbeats hit the road in states that allow more rapid proceedings. This would allow a more rapid unwinding of the market rather than delay the inevitable.
Two big problems with this. First, foreclosed homes have already had a very negative effect effect on the housing market. Especially in areas like FL and NV, but also here in NJ. To essentially give up on everyone who is delinquent would flood the market with even more short-sales and foreclosures, thus causing home prices to plummet even further. If homes can't retrieve some of their lost values now, as it is, we will never escape this recession. To lower values even more is essential suicide no matter how practical it may seem.
Second, you give up on many good borrowers who are capable of making a lesser payment. What is the point of doing this if you don't have to, especially considering the current economy? Why not just handle the sensible modifications properly, like you would any other business matter?
Two big problems with this. First, foreclosed homes have already had a very negative effect effect on the housing market. Especially in areas like FL and NV, but also here in NJ. To essentially give up on everyone who is delinquent would flood the market with even more short-sales and foreclosures, thus causing home prices to plummet even further. If homes can't retrieve some of their lost values now, as it is, we will never escape this recession. To lower values even more is essential suicide no matter how practical it may seem.
Second, you give up on many good borrowers who are capable of making a lesser payment. What is the point of doing this if you don't have to, especially considering the current economy? Why not just handle the sensible modifications properly, like you would any other business matter?
Let me restate that: banks MAY proceed with foreclosure. In some cases, they may choose to work with the borrower and negotiate a lower rate. What I'm opposed to is a federal program to mandate or even incentivize one option over the other - especially when that program is proving to be a colossal failure. It goes back to individual vs collective responsibility that I've previously mentioned.
Finally, I'm not seeing HAMP as being a bulwark against market collapse. While painful, I doubt that a further decline in the housing market will be the catastrophe that you describe. In fact, I suspect that the markets (housing, stocks, etc) are already factoring in another round of foreclosures on the horizon from failed attempts at loan modification, stalled foreclosures due to judicial requirements, and persistently high unemployment. Thus, we are approaching, but have not yet hit the bottom of this adjustment. Just my opinion - no way to prove or disprove...
If a person only makes 30k a year, but qualifies for a 300k mortgage (especially an adjustable rate) and actually buys the damn thing it is not the lenders fault. It is the buyers fault for buying something they should know they can't afford.
How did everyone who slipped into foreclosure know their loans were destined for failure? Where was the overt warning sing they missed? Maybe Peter Schiff could have saved them, but at the time he was the laughing stock of FOX's financial advisers. Remember that?
Yes, there were no-doc loans available. But they were not the majority, they were the exception. Most borrowers showed that they earned an income, they had good credit and that they met the lending guidelines in place at the time. They didn't see the coming storm and neither did most of the financial brainiacs still running the show today.
Sorry but the blame game just doesn't work here when it comes to a substantial percentage of the borrowers who slipped into default. In fact the whole mindset is, in my opinion, a discredit to the conservative mindset that I generally am otherwise in lock step with.
How did everyone who slipped into foreclosure know their loans were destined for failure? Where was the overt warning sing they missed? Maybe Peter Schiff could have saved them, but at the time he was the laughing stock of FOX's financial advisers. Remember that?
Yes, there were no-doc loans available. But they were not the majority, they were the exception. Most borrowers showed that they earned an income, they had good credit and that they met the lending guidelines in place at the time. They didn't see the coming storm and neither did most of the financial brainiacs still running the show today.
Sorry but the blame game just doesn't work here when it comes to a substantial percentage of the borrowers who slipped into default. In fact the whole mindset is, in my opinion, a discredit to the conservative mindset that I generally am otherwise in lock step with.
I think you are searching very hard for an argument that probably doesn't even exist.
I never said everyone, I specifically identified the people who are to blame.
If you bought a house you could afford, you will not be in foreclosure through any fault of your own.
If you bought a house that is 10 times your annual salary and has an ARM or I/O then it IS your fault and you shouldn't be surprised to be in foreclosure.
They are the same people who buy cars they can't afford, but can finance, can't keep up with the maintenance and / or payments so they park them in a canal and report them stolen. And everyone else pays higher insurance rates as a result.
In 2005 the same irresponsible people graduated to quarter million dollar homes.
Whether the banks are responsible for any additional complicity by catering to them is simply one more thing. I personally blame those who buy things they cannot afford more than any institution and I have identified a solution.
If they evict them from their foreclosure they don't get to live "rent free" in a quarter million dollar home and they lose their down payment and any paid portion of the mortgage. The bank then has to eat the loan and try and sell cheap to recover the loss which resulted from providing loans to those who they should have known couldn't afford them in the first place.
Everything was based upon what they expected the home to be worth and not what they expected the borrower could pay. They were actually giving 125% loans in FL.
I think you are searching very hard for an argument that probably doesn't even exist.
Nope, I'm supporting an extremely legitimate argument and I fully understand your position.
If you bought a house you could afford at the time, you could still wind up in foreclosure despite any fault of your own.
Fixed it for you.
If you bought a house that is 10 times your annual salary...
This was by far the exception and not the norm, in fact I'd know of no such ratios ever accepted by any institution without substantial liquid assets. And even without the assets, people making $30K per year may have had the credit score to qualify for a no doc, but they would have been very unlikely to have the 20% plus down payment. Remember, "gifts" are not allowed on conforming loans.
They were actually giving 125% loans in FL.
They did it all over the country. An extremely bad practice indeed, and in those cases I blame the borrower as much as the lender also.
Nope, I'm supporting an extremely legitimate argument and I fully understand your position.
Let me try it one more time. I do not believe any significant argument exists between our positions.
Fixed it for you.
If you carefully re read what I said before you "fixed" it you will see we are actually in agreement. This is what I meant by "you are searching very hard for an argument that probably doesn't even exist."
This was by far the exception and not the norm, in fact I'd know of no such ratios ever accepted by any institution without substantial liquid assets. And even without the assets, people making $30K per year may have had the credit score to qualify for a no doc, but they would have been very unlikely to have the 20% plus down payment. Remember, "gifts" are not allowed on conforming loans.
It was the norm in South Florida. And we have the foreclosures to prove it. I strongly suspect it was the norm in other places like CA which were similarly wiped out. And I know plenty of people who earned little more than 30k who qualified for mortgages of 300k.
Bottom line is prices didn't keep going up, the bubble burst and mortgage payments adjusted accordingly. This took out the first group who were barely managing their original payments (because they couldn't actually afford them). Then the economy tanked and people didn't get raises or even lost jobs. This was the second group to learn they couldn't "afford" the house they bought.
Like I said, I can finance a Ferarri right now. But I can't afford a Ferarri.
Like I said, I can finance a Ferarri right now. But I can't afford a Ferarri.
Understood. Appreciate the insightful discussions.
Sounds to me like the original topic has fallen by the wayside. Banks and loans may be part of the issue, but mainly as a symptom of things going badly wrong.
American institutions in general have been running on fumes for a long time now; even in the 1950s when I was a kid things weren't good. A big part of it has been lousy leadership. One writer I like breaks it into three components: a moral compass, a vision of where he wants to go; and the ability to forge compromises that work.
To work at all institutions must inspire a certain degree of faith, confidence, whatever you want to call it. If they have it then that institution has "legitimacy". It takes years to acquire it, and minutes to lose it. (Google "Secret Service Cartagena) Lacking that, all that's left is habit, inertia, or coercion.
After decades of involvement with government (law enforcement), church, schools, and you name it, "Trust us" is a hollow joke. I wish I didn't think that way, but I can't afford to act otherwise.
It's funny how "we the People" are supposed to trust these institutions and those who run them, yet they refuse to trust us or even recognize us as grownups.
Time for a big reset.
Moose-Knuckle
04-25-12, 23:24
Sounds to me like the original topic has fallen by the wayside. Banks and loans may be part of the issue, but mainly as a symptom of things going badly wrong.
American institutions in general have been running on fumes for a long time now; even in the 1950s when I was a kid things weren't good. A big part of it has been lousy leadership. One writer I like breaks it into three components: a moral compass, a vision of where he wants to go; and the ability to forge compromises that work.
To work at all institutions must inspire a certain degree of faith, confidence, whatever you want to call it. If they have it then that institution has "legitimacy". It takes years to acquire it, and minutes to lose it. (Google "Secret Service Cartagena) Lacking that, all that's left is habit, inertia, or coercion.
After decades of involvement with government (law enforcement), church, schools, and you name it, "Trust us" is a hollow joke. I wish I didn't think that way, but I can't afford to act otherwise.
It's funny how "we the People" are supposed to trust these institutions and those who run them, yet they refuse to trust us or even recognize us as grownups.
Time for a big reset.
Sound logic and spot on.
The problem is that many fail to see how the world really works. . .an international banking cabal is what we all toil to serve unknowing.
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