Sounds like a government buy-out to me.

Sounds like a Liberal thing to do to me. Thanks George, you fucker.

i am as a big a commie as the next fellow but i do not support this. I think it will only lead to the inflation of an already inflated housing market..

QUESTION FOR THE FINANCE-SAAVY TYPES ON HERE --


Did those people getting APR loans with no money down, usually get a lower interest rate (and better deal) on their loans than someone who took out a fixed-rate loan over the same amount of time? Aren't fix rate loans always subject to higher interest rates than the interest rate given to APR loans simply to entice people into APR's?

If APR's got a lower interest rate and better advantages (initially) yet Bush's proposal now freezes those APR loans the same way a fixed-rate loan is locked in, than it seems unfair to those who took out fixed-rate loans at a higher percentage rate. (Hope I'm explaining myself right.)

Califchris

i think people who got the no money down variable interest rate deals deals were all expecting their mortage rates to increase substantially after a period of time --the big sell was,if i remember correctly, was that their houses would gain value quicker than their mortgage would increase, so that they could then refinance their house to pay off the mortgage. The problems stated happening when the price of housing leveled off and started to fall.

CC, my understanding is that they paid on interest only; not priciple. I don't feel sorry for anyone losing their home under this plan, as it was nerver their's to start with.

Did those people getting APR loans with no money down, usually get a lower interest rate (and better deal) on their loans than someone who took out a fixed-rate loan over the same amount of time?

Yes. Which means they got larger and nicer homes than the financially wise consumer. So what is happening here is that Uncle Sugar is subsidizing stupid people and allowing them to stay in homes outside their price range while we fiscally prudent homeowners live in lesser homes.

Hurray for Uncle Sugar! Ignorance does pay!

DOEM

I know the reasons why people took out subprime loans. But did those people get a better advantage when initially taking out their subprime loans than those who initially were made to take a higher interest rate in return for their loan being guaranteed to be a fixed rate? If so, then Bush guaranteeing these subprime borrowers a fixed rate for the next 5 years on their loans sesems unfair to those fixed rate loan borrowers who paid a slightly higher interest rate. Seems Bush is leveling the playing field unfairly.

CORRECTION

The word "MORTGAGE" in the title is misspelled.
Should, of course, be "MORTGAGE"

(Rcade -- can you fix it? Thanks.)

CC
if it turns out that way, then you would be correct

Did those people getting APR loans with no money down, usually get a lower interest rate (and better deal) on their loans than someone who took out a fixed-rate loan over the same amount of time?

-- CalifChris

^^^

which is why i do not support this
besides what it would do to the housing market, the people who took this deal were taking a calculated risk--and for one reason or another, they miscalculated
i instead support a top to bottom re-evaluation of how the realestate market is regulated

i instead support a top to bottom re-evaluation of how the realestate market is regulated

Though I generally oppose government intervention and regulation, I think this is a good idea. Stupid people must be protected from themselves when it comes to the largest financial decision most of them will ever make.

^^^

i will also say that, at least in california, this type of thing worked for many years. May people who would not normally be able to afford a home were able to "invest" their way into a home under this system

Carter in the making, wow, now where is the reporighties.

goatman
its not that i think people need to be protected from themselves, but from what i have read people like real-estate agents can fast talk people into these sort of deals with little or no financial risk to themselves.
a real estate agent will try to upsell a family into a home 100,000 more than it is feasible for them to afford, collect the commission, and walk away scott free from the deal even if the family defaults.

You know... this might be the one thing that just maybe we can praise Bush for.. stay with me.

Not for saving the as goatman put it, the ignorant.

But.. given that the ignorant are so widespread as to cause this big fallout in the industry, maybe just as a matter of saving the rest of us this needs to be done.

But so many foreclosures and such has ripple effects. Personally I have alot of buddies in construction, or in some way involved with construction that are now out of jobs.

There's going to be some push-back from the Wall street and the financial markets on this. All these subprime loans were bundled and sold as bonds. While this move is probably the only thing that can save some of these borrowers (limited sympathy here), the investors, mutual funds and institutions that bought the mortgages via these bonds are going to get screwed (also, limited sympathy here). It won't make foreign investors that happy either, at a time when "Buy American" isn't exactly as it used to be.

Besides, since the scheme will evaluate the loans based on the borrower's ability to pay, not the terms of the loan, it will be possible for one family to get it's rate frozen at 6% while someone else ends up paying 11% - essentially, getting screwed for being able to pay their bills.

But hey! It's the Bush administration! I'm sure they know what they're doing. It'll be fine.

Hey, Sounds like Carter all over again.

Now maybe he can do the same with Gas.

Where do we draw the line??

This FC is a correction for the many who are speculating--just look at Flip This House..

There have been about a dozen lenders who have already gone under because they gave out the subprime loans to people who had no business getting a loan. Or they got a loan on tooo much house when the housing prices were inflated.

Now they are offereing 10 year interest only loans--That is bad practice too.

The gov't is stepping in and appears as usual--that they will make the problem worse.

Again--where is the line drawn?

Murphy

You guys on the right need to take a breather on this one, for several reasons.

First, a lot of mortgage companies (180 publicly-traded firms at last count) are now bankrupt, and have no say in the matter now. Two, the Collateralized Debt Obligations (CDO's) which are tranches of similar mortgages from all over the country, are completely illiquid because of plunging home prices, not necessarily because of the borrowers' ability to repay. Third--and this won't be discussed much because of how boring it is--most of the ARM's were scheduled to reset to the LIBOR, the London Interbank Offered Rate. But LIBOR, for the first time in a generation, has not followed down US rates--the European Central Banks have tightened rates, and the LIBOR has risen. Which means that the US money markets and the Europeans are at cross purposes; no matter how stimulative the Fed becomes, it wouldn't have helped these borrowers. This has never been the case in the past. Most of all, though--it's frankly good policy. I defer to absolutely no one in my love of the free markets, and letting the markets work out a solution. But this is a free-market solution, as evidenced by the fact that no enabling legislation is necessary. The lenders are happy because rates are falling anyhow, and they're able to pocket a juicier spread than they had anticipated. The borrowers are happy, for obvious reasons, as they won't see their payments shoot up on homes that have fallen in value. This gives the lenders AND the borrowers a lot of breathing room, and hopefully the real estate market will gain enough traction between now and five years that we can put this all behind us. And in the future, you'll start to see lending contracts written to base the loans on the Federal funds rate, rather than LIBOR; also, we're already seeing a collapse in subprime lending--if you have marginal credit and you don't have a mortgage, don't expect to be able to get one anytime soon. But with this policy change, it'll happen sooner than it otherwise would have.

Look for financials to have a great day tomorrow. Still way too early for homebuilding stocks, but, coupled with a fed rate cut on December 11th, it's already shaping up to be a very strong 2008 in the equities markets.

But I suppose this plan is better than Barney Franks plan--which is to turn the whole thing over to plaintiff attorneys to sue the lender because they gave the Homeowner a loan.

Now this is really bad--tooo much gov't intervention.

BTW--folks who foreclose--do so within two years of getting the loan. About 95%.

Murphy

I am sure glad bankrupcy is no longer a problem with making people so responsible with taking out loans.

Apparently giving out bad loans doesn't require responsibility and it is protected because it is business corporations not people.

I see how the republicanneoliberals all think now. Save the corporation but fuck the individual. It is no longer about people but surely we should give corporation individual status when it protects them.

this might be the one thing that just maybe we can praise Bush for

Not a chance. This is a government bailout of stupid people at the expense of people who made sound financial decisions. The market should be allowed to deal with this issue. In time, the glut of foreclosed houses will continue to drive prices down and provide more affordable housing for everyone.

There's going to be some push-back from the Wall street and the financial markets on this. All these subprime loans were bundled and sold as bonds. While this move is probably the only thing that can save some of these borrowers (limited sympathy here), the investors, mutual funds and institutions that bought the mortgages via these bonds are going to get screwed (also, limited sympathy here). It won't make foreign investors that happy either, at a time when "Buy American" isn't exactly as it used to be.

Posted by argh
* * * *

You are 100% wrong. Overseas markets are already surging on the announcement; US financials trading in the afterhours market are up 2.5%. The buyers of the CDO's have already gotten screwed--it's a long way back to par when you're down 80%. But at least they'll have a secondary market again.

So, the only real PRODUCTION going on in this country is building homes so we certainly don't want our labor market going to the dumpers.

But this freetrade of labor to foriegn lands is so so great!

Seems these righties like RIR are just not seeing the picture until our only production labor left available is being hit with our stupid economic policies but they are really happy because their stock is still making them good money.

Apparently, government is affecting more than they actually think but like it when it makes them money but don't when it limits for the good of the nation.

U.S. government measures ``will stop their poor people from becoming homeless, halt the drop in property prices and help prop up spending.''

What, so this will stop those who least can afford it from becoming homeless?

You mean the problem is with our poor and having too much money?

Well, if the problem is with our poor and it is affecting our economy one should look and see WHY we have so many poor.

Oops, I think we have been saying this for the last 6 years but RIR has been defending the economic policies that have created this mess, using the exact thing as being proposed as an evil demon but now is in support because his large financial institution will be hurt hurting his bottom line.

And guess what, who is going to take it in the butt again, the poor.

You're confused, as usual. It staggers the imagination to read the article, and conclude that the poor are going to take it in the butt. Are you sure you're not supposed to be on the gay bishops thread?

You're confused, as usual. It staggers the imagination to read the article, and conclude that the poor are going to take it in the butt. Are you sure you're not supposed to be on the gay bishops thread?

No, that is your poking ballyhoop!

Yes, it staggers the imagination that they are making these policies to protect the U.S. poor, the poor that makes up less than 10% of the encome in the nation.

Seems you just can't seem to be honest about the baiting and switching going on to get the rest of the poors money while protecting those rich risk takers.

Yes, your posts do stagger the imagination, but gecko could careless about the poor.

This is not a bailout of the homeowner. The marginally qualified borrowers that bought way overpriced homes will for the most part get a few years breathing room to either get a better paying job, hit the lottery, or hope the housing market turns around and they can sell their house for close to what they owe on it.

These people will still not be accumulating equity because they are paying interest only and some are actually upside down on the mortgage so they will be worse off in 5 years. Not exactly a 'liberal welfare program' by any stretch of the imagination. That this somewhat benefits the average schmoe is probably very galling to Chimpy and his handlers.

This helps the lenders quite a bit, which it the real reason Washington is puhing it. Instead of foreclosing on homes that they probably can't sell, they get to keep collecting interest, albeit at a lower rate than the planned. The fewer homes being sold by lenders at fire-sale prices, the better the overall outlook for the housing market. The benefits to the economic well being for corporate America is the only bottom line that matters to any politician, Rethug or Democratic.

Yes, your posts do stagger the imagination, but gecko could careless about the poor.

Posted by moneywar
* * * *

I think you meant to say that I couldn't care less about the poor. You're mistaken, though. I do care about you.

I think you meant to say that I couldn't care less about the poor. You're mistaken, though. I do care about you.

Now you want to draw this to a personal arena, I can go there but I am afraid your personal relationships would get the better of you.

I also make just as much money as I need, more doesn't necessarily mean better but I do know you will never in your life understand this.

Lightning strikes, sparks flash, and in one blink of your eyes, you missed it!

If you immediately know the candle light is fire the meal was cooked a long time ago.

republicanneoliberals

I say! I like the sound of that. A new word has been added to the DR vocabulary I think.

Well done.

Regards,
etc.

Now you want to draw this to a personal arena, I can go there but I am afraid your personal relationships would get the better of you.
* * * *

You'll have to be more specific. I've had a lot of personal relationships.

Bob Newhart used to say that real estate brokers those who were too dishonest to sell used cars.

You'll have to be more specific. I've had a lot of personal relationships.

You da man! You da man!

But it staggers the imagination that the poor are going to be hurt by this.........LOL!

Please tell us how this is going to help our poor more than by far than help those financial rich corporate greedy bastards.

Tell us how this will not help you but help those poor?

It helps the poor who have borrowed money on subprime credit, who would have seen their monthly payments shoot up hundreds of dollars a month.
Most of these subprimes were offered to people with spotty credit, i.e.: poor. Some have had recent divorces, job layoffs, death in the family, bad history of debt repayment. And the rates were set low for the first couple of years of the loan, and scheduled to shoot up after 2, 3, or 5 years--then the loan payment would fluctuate, based on several things. Of course, the borrowers would assume they would refinance out of those mortgages, and with an additional two years of good credit and payments, there would be no problem getting a conforming loan.

Except, the housing prices started to fall. And since there isn't now enough equity in the homes to refinance to a conventional loan, they have three very bad choices: pay a far higher monthly payment, or try to sell their home that is plunging in value, or just walk away and get foreclosed on.

This is a good solution for them. Read the threads above yours, and you'll see most of the right wingers on this site going to bat for the banks, not the homeowners. But it's actually a good deal for the bankers too, as Wall Street will attest at 9:30 tomorrow morning, as soon as trading begins.

Pussy.

The Bush administration has hammered out an agreement to freeze interest rates for certain subprime mortgages for five years to combat a soaring tide of foreclosures, congressional aides said Wednesday.

What's next? maybe Bush can freeze all layoffs in the private sector for the next five years as well. I mean, if government is going to control the free-market then it might as well go all the way.

How about having the government cover any losses in the stock market any investors incurr over the next five years too...oh yeah, and how about covering any losses in Vegas or at the track -- that would be nice.

Most of these subprimes were offered to people with spotty credit, i.e.: poor. Some have had recent divorces, job layoffs, death in the family, bad history of debt repayment.

RiR, if lenders engaged in any illegal activity or misled the borrowers when they gave them the mortgage then the proper place for the homeowners to go is the courts for resolution.

But if they didn't, then I don't know why lenders have to incurr financial loss because of the borrowers life choices, or simply bad luck.

RiR, if lenders engaged in any illegal activity or misled the borrowers when they gave them the mortgage then the proper place for the homeowners to go is the courts for resolution

"IF"?

Yer fuggin' kill Spud, ya know that?

"The Courts"?

Sure, if they can get a lawyer to do it pro bono.

Be Well.

RightisRight-

Would it be accurate to say that you favor government intervention in the marketplace as long as it boosts the stock market?

Government should not be interfering with the mortgage "crisis." Both the banks and the borrowers that made stupid decisions need to suffer the consequences of that decision in order for any real correction to take place. I also don't feel very sorry for the vast majority of people being foreclosed upon, and neither should anyone else. They bought way more of a house than they could afford, and either didn't read what they were signing or didn't care about what it meant for their future.

Furthermore, most of these people had "interest-only" mortgages for the first few years, meaning that they had absolutely no equity in their home when it was "taken" from them. They didn't own anything, so they are not "losing their homes." They most likely would have paid the same amount to rent a home for as long as they had it that they paid for their "interest only" loan. It's time to cut through the emotional bullshit and see this for what it is - a fucking bailout that will only lead to repeated stupid behavior down the road.

Most of these subprimes were offered to people with spotty credit, i.e.: poor.

LOL!

I can't help but wonder what you think is poor.

Spotty credit is not limited to the amount of money one earns, but it seems you don't think so.

This is far more global than you let on, and the fact that wall street will sail tomorrow truely explains who this is going to help.

Sure, if they can get a lawyer to do it pro bono.

Oh please spud, if these lenders hoodwinked the borrowers, lawyers will be lining up to cash in on the 33% of the huge settlement they would be getting -- I'm sure this whole mortgage crisis has ambulance chasers salivating.

Joe, excellent post at 1:19.

The worst part about this whole thing is that, like most bleeding-heard legislation, it rewards all of the wrong people. Picture two houses next to each other that are both worth $200K. One family moves in and takes out an ARM loan, no money down, 5% interest for the first 2 years and then an increase based on the current LIBOR rates. Another family moves in next door with the same loan.

Then the value of the houses goes down to $180K. Realizing that rates are rising and the threat of foreclosure is looming, one homeowner goes out and gets a second job, puts together some money for principal and closing costs and refinances his mortgage at a much higher fixed rate. The homeowner next door sits on his ass and waits...for a government bailout. His loan, under Bush's program, is now frozen at a lower rate than that of his neighbor.

The homeowner next door sits on his ass and waits...for a government bailout. His loan, under Bush's program, is now frozen at a lower rate than that of his neighbor.

Who says it doesn't pay to procrastinate and be irresponsible.

Oh please spud, if these lenders hoodwinked the borrowers, lawyers will be lining up to cash in on the 33% of the huge settlement they would be getting -- I'm sure this whole mortgage crisis has ambulance chasers salivating

People have left lending institutions over this scandal.

They've admitted to seeing lenders fake credit aps, misrepresent the terms of the loan to naive home owners and the like and still Spud hasn't seen this lineup of lawyers you speak of.

Time will tell.

Be Well.

Joe,

As much as I understand your position and keep government hands off the market it is not in the country's interest because this has far greater effects than just those finance agencies and the effected home owner.

I eluded to the production woes, and the housing market, its one of the biggest for this nation. All others is pretty much just paper numbers with no validity.

As much as I agree with RIR and the reasoning behind this government intervention it does nothing to correct the global protection of the corporations that really created this problem.

Bankrupcy enters this mix too, and nothing is done to correct this influence in lending procedures.

Moneywar-

So what's your position? Are you for or opposed to the bailout, and why?

How does this rate freeze protect "corporations?" Are you alluding to the corporations that made the loans? Because I'm sure most of them would rather foreclose and sell the house to a more responsible buyer than be stuck giving a fixed rate to someone who never deserved it.

You're right, the housing market is a real problem. And it's going to get worse when the government interferes rather than better. Not everyone bought a house during the "boom." There are plenty of people who might have been waiting till now to buy a home. The rate freeze creates an artificial shortage in the market at a time when there should be more houses available for new purchasers, and all to protect people who never paid more than they would have to rent a house in the first place, and who have no equity in their homes.

BOWA,

I find you post interesting, for once you speak without political postering of your affiliation. Good on ya!

The real question is what is good for the nation and its people. Does the economy out weigh the people or should the economy benefit the people.

As much postulation as laissez faire is for a true capitalistic society it does nothing in the fact that our nations needs economic help.

One just needs to look farther into our last 6 years and the economic policies created and what contributions they created for the majority of our population and one can clearly see the reasons for war.

Don't fix this financial wall street problem and watch the real fall, high unemployment, reduced wages and low production.

Ta fer the link, Bowa!

Interesting stuff. News to Spud

D&O? Wasn't that a Railway property in Monopoly?

Spud kids!

Spud only figured out a coupla years ago that Reading Railroad was pronounced like Otis "Redding" not like "Reading" a book.

But Spud is digress. Ta agin.

Be Well.

PS: And on that off topic note, the tater o' doom, the DR's one and only dethspud, is take his leave of blogworld, exiting as ya do,
stage left.

The real question is what is good for the nation and its people. Does the economy out weigh the people or should the economy benefit the people.

I believe that individual freedom and liberty and individual responsibility go hand in hand. You can't have one without the other.

And a nation which tells it's citizens that the government take away the responsibility for their choices, is telling their citizens that they are taking away their freedom and liberty.

The real question is what is good for the nation and its people. Does the economy out weigh the people or should the economy benefit the people.

I believe that individual freedom and liberty and individual responsibility go hand in hand. You can't have one without the other.

And a nation which tells it's citizens that the government is taking away the responsibility for their choices, is telling their citizens that they are taking away their freedom and liberty.

Joe,

Something must be done, this is far more global than most seem to realize.

These finance agencies are invested in far more than just giving out loans, they are global in scope and in actions effecting all realms of the economic market.

If these agencies go down just the direct flow will reduce the production of houses which is one of the last bastions of what Americans actually produce on their own. Now a reduction here means reduction in all our forestry production, ceramic production, and all the other add on industries that stay here in this country.

In directly were do these finance companies have all their investments? Over sea? Pension funds? OIL? Other finance institutions? They all decline or fall by doing nothing and who suffers, the American people.

Pussy.

Posted by Apocalypto

Wrong thread, Dude!

You want the "Ladies, Wot does yer Man Want fer Christmas?" thread.

No need to thank Spud!

Be Well.

PS: Okay, really gone this time.

Spud's giving up such risque and salacious jokes come New Years.

Honest! ^_^

So what? Are you saying that every time a giant bank's stock takes a hit, the government has to step in and save them? How much can we let the giant corporate banks fall before government has to come to the rescue? We aren't seeing any negative impact yet from the decline of citicorp other than in a few millionaires' stock portfolios. Boo hoo.

BOWA,

As much as I agree with your post it is no answer to the problems at hand.

Do we protect our nation and help our people or not.

Not doing anything will be a very tough road to go down, and millions upon millions of Americans will be affected/effected with not doing anything and not in a good way.

I am not sure protection of the corporation is the proper fix, protection of the actual people is a far better avenue. Protection of all the people not just effected, meaning give all the benefit of lower interest rates to all people. It will spark economic spending for those who benefit greatly keeping the housing market in production.

Further, Moneywar, these banks made the stupid decision to buy up every nickel and dime subprime mortgage because they were greedy. They knew that they could earn a higher interest rate off those loans than the other investments the bank was tied up in. Unfortunately for them, they gained too much of a share in the subprime market right when the housing boom ended. So after they were greedy and made stupid decisions, the government has to step in and intervene? I say, screw that. Let them fall. It's the only way we won't see this happen again. If corporations know that the government will prevent them from ever realizing the wrath of their own mistakes in judgment, they'll never be afraid to to make decisions that ultimately hurt society.

Joe,

Yet! yes that is the real term but when the fallout begins it will not be a small thing and I know you can see the globalness of this.

I understand the idea of letting those fall that made bad decisions, it effects me known. I work for a globally large foriegn bank which will benefit greatly by the reduced competition but that does not mean we should abdicate from helping our fellow citizens.

Most of the problem didn't come from those who took the loans, it came from finance agencies who thought they had nothing to risk, bankrupcy gave them this filling.

How high are you willing to go in unemployment before we should begin to help?

Moneywar, the stock market, banking and financial sector is constantly changing and morphing to respond to global market pressures and open up new revenue producing areas -- and there have been many times in which the practices of the business community must be reigned in by government because they are just too risky for the overall economy.

But I believe in those times when such a thing happens, and this may be one of those times -- what is required is a change in the overall business infrastructure -- not a governemnt bail out of either the immediate lenders or borrowers who took the risk under the current structure and lost. That seems to me to be the best way to preserve our individual freedoms and liberties while at the same time acknowledging that the government has right to put a "speed limit" on the free market to avoid a financial catastrophe that would unfairly involve a significant portion of the population that is not even directly involved in the affected industry.

I mean, Nobody bailed out investors who lost their shirts when the stock market crashed in 1929 -- but what the government did do was restructure the rules governing the market so it would not happen again.

That's what they should do here.

Don't bail out the borrowers, but change the laws governing subprime lending so a similar crisis does not happen again.

Joe,

Part of me agrees with you, let them fall but it will carry a heavy price to our way of life in the near future.

For Bush to take this on I can assure you that there is large sums of this money invested in the oil and military industry which will have devastating effects to the country in all segments of the economy, not just housing.

I mean, Nobody bailed out investors who lost their shirts when the stock market crashed in 1929 -- but what the government did do was restructure the rules governing the market so it would not happen again.

Apparently you don't understand what really happened during this time and the situation is very similar but just a different product venue.

Not gold this time.

but that does not mean we should abdicate from helping our fellow citizens.

At what point is government helping" citizens actually oppressing them?

Treating adults like children and not holding them responsible for their actions doesn't seem like much "help" at all.

That's not to say the government shouldn't help people -- the poor, children, the ill, the elderly, those suffering some natural disaster or catastrphe.

But we are talking about able bodied adults who bought homes. There is no reason that they should not be responsible for any financial consequences that come from the legal contract they entered into with the lender.

Apparently you don't understand what really happened during this time

I understand enough to know that those who lost money in the stock market crash of 1929 were not reimbursed for their losses by the US Government.

Bowa,

Yes, you understand enough to know they were not reimbursed but who were the gainers? Those same gainers were the same people who created it.

I am sure you would like to see another 29 era economic event......right.

But we are talking about able bodied adults who bought homes. There is no reason that they should not be responsible for any financial consequences that come from the legal contract they entered into with the lender.

Bowa,

You're ignoring previous posts about how global this can become.

You not thinking about the globalness of who all will be effected by doing nothing, and let me tell you it will be far more than just those poor decision makers taking out loans.

I find it a little concerning that you seem to think this is so closed in market effect.

Joe,

We aren't seeing any negative impact yet from the decline of citicorp other than in a few millionaires' stock portfolios. Boo hoo.

Really! What do you think is going on right now?

I am sure you would like to see another 29 era economic event......right.

Wrong. Very wrong.

I am very pro-american, and pro- the american economy. I want us to prosper as only the way capitalism, private industry and the free-market can prosper.

And that means supporting a government that allows its citizens the freedom to make choices without government intervention.

As I said, if those choices in one market area create an instability in the overall economy -- then the government might need to change the laws governing that market -- but that doesn't mean that us taxpayers should be responsible for bailing out those borrowers, lenders, and investors who took a financial risk and lost under the current laws.

Moneywar-

Prove it.

Prove to me that there is a downturn in the economy, and that it is somehow related to large banks like Citicorp booking losses for once in a lifetime.

You and I both know that Wall Street Whiners have more to do with the pressure on our government to react to this mortgage "crisis" than does the desire to help the little guy. As shown in my example above, this sort of legislation benefits all the wrong people.

You and I both know that Wall Street Whiners have more to do with the pressure on our government to react to this mortgage "crisis" than does the desire to help the little guy. As shown in my example above, this sort of legislation benefits all the wrong people.

Yes, you and I agree on this.

Give me a little time in searching out the investments, but I think you will be surprised as to how global this really be.

You not thinking about the globalness of who all will be effected by doing nothing, and let me tell you it will be far more than just those poor decision makers taking out loans.

Moneywar, I'm getting a little tired of you accusing people who disagree with you of being stupid or not thinking or some other comment to denigrate the intelligence of those who dare hold a different view from yours.

You've made your point..I understand it...I disagree. I do not think that this "mortgage crisis" will come anywhere near the stock market crash of 1929. I think it may force the government to restructure subprime loans and the bundling of mortgages, and I support that. But having government bail out the borrowers and essentially nullifying the terms of legally binding contracts goes to far.

I'll read you response tommorow. I'm off to bed.

Citibank, Federal Savings Bank, San Francisco,
California, and Citicorp Securities Inc., New York, New York, and to retain certain
nonbanking subsidiaries of Travelers, including Travelers Bank & Trust, fsb,
Newark, Delaware, and Salomon Smith Barney Inc., New York, New York.

Court Square Capital Partners (formerly Citicorp Venture Capital) is courting technology and manufacturing companies. Spun off from Citigroup in 2006, the private equity and venture capital firm specializes in leveraged buyouts of middle-market companies. It manages approximately $6 billion of capital commitments. (In order to avoid potential conflicts of interest with its customers or its other investment funds, Citigroup no longer has any equity invested the company.) Court Street Capital owns stakes in enterprises such as specialty chemicals firm MacDermid, telecommunications services provider NTELOS, and information technology management company CompuCom Systems (acquired in 2007).

Moneywar, I'm getting a little tired of you accusing people who disagree with you of being stupid or not thinking or some other comment to denigrate the intelligence of those who dare hold a different view from yours.

You've made your point..I understand it...I disagree. I do not think that this "mortgage crisis" will come anywhere near the stock market crash of 1929.

LOL!

You show your ignorance with this post, I have not come close to saying anything as to the 29 crash but you seem to think this.

You seem to think through your posts that the only industry effected is those poor mortgage loaners. How myopic is that.

BOWA,

What you don't seem to understand is I work for a BANK, and yet I do heavy maintenance on AIRCRAFT.

The largest heavy maintenance company in the United States.

Hope this gives you a clue as to how global this can get.

Subsidiaries/Affiliates Covered By Hoover's
Grupo Financiero Banamex, S.A. de C.V.
Citi Commerce Solutions
Citibank
CitiFinancial
Citigroup Global Markets Holdings Inc.
Citi Capital Strategies
Citigroup Global Markets Limited
Citigroup Private Bank
CitiMortgage, Inc.
CitiStreet LLC
Court Square Capital Partners
Hoover Materials Handling Group, Inc.
Ecount, Inc.
Egg Banking plc
InterFirst Wholesale Mortgage Lending
Lava Trading Inc.
Nikko Citigroup Limited
Primerica Financial Services, Inc.
Quilter & Co. Limited
Remy International, Inc.
The Student Loan Corporation
ZAO Citibank


Now each of these citigroup holdings have financial investments in other areas of trade which will all be hurt. This is just one financial institution which is #8 on the fortune 500.

Citigroup Global Markets represents the corporate banking and capital markets arm of Citigroup's broader Corporate and Investment Banking group (CIB). The investment banking behemoth, which often has a hand in some of Wall Street's biggest deals, provides advisory services regarding mergers and acquisitions, divestitures, and financing. It is also involved in the underwriting and trading of debt, equities, and derivatives. The unit has a presence in approximately 100 countries. Another segment of the CIB, Transaction Services, offers cash management, securities lending, custody, and clearing services.

You show your ignorance with this post, I have not come close to saying anything as to the 29 crash but you seem to think this.

maybe I think this because you said:

"Apparently you don't understand what really happened during this time (the 1929 crash) and the situation is very similar but just a different product venue." -- Moneywar at 2:17 AM

"I am sure you would like to see another 29 era economic event......right." - Moneywar at 2:26 AM

Citigroup is the number one credit card issuer in the world and guess what, shell oil the number one gasoline seller runs the citigroup card.

The effect is global, the large amount of these finacial falls and their other investments has more magnification than just those loans.

BOWA,

Read and comprehend what was said, not assume the direction you want it to go.

I respect what you are trying to hold on to but can't help but wonder if you have not looked at the surrounding effect of all the other industries by doing nothing. Your posts suggest just this, not trying to be condescending as such but question whether you have really looked at the global arena of what you suggest.

These finance agencies that are falling have investments in all segments of our economy and they will all be effected, and as I understand it, you don't care and I say that is just putting ones head in the sand.

Joe is far more in line with how I sit here, fix the peoples problems but let those corporate entities fall and make far better protective laws which support our nation and not the corporations.

BOWA,

An easier way to say this is it is not that I don't agree with you, it is I think you are being short sighted. Why.........see above posts!

I respect what you are trying to hold on to but can't help but wonder if you have not looked at the surrounding effect of all the other industries by doing nothing. Your posts suggest just this

That's not true. I have said numerous times that I support the laws being changed regarding subprime loans and also bundling mortgages which would restructure the entire industry. So how can you say I advocate "doing nothing"?

I just think that a government bail out, by freezing the interest rates and thereby nullifying the terms of legally binding contracts, on the existing borrowers goes too far.

And because I believe that, you accuse me of wanting to see another "crash of 1929".

And then you say that you never came "close to saying anything as to the 29 crash". So it seems to me you are all over the place.

But based on what I know about your ideology, you are basically anti-corporation, pro-government regulation of the private sector, and more socialism in general. So it would make sense that you would support having government force corporate lenders to incurr losses while at the same time taking away "personal responsibilty" from adults who entered into legal contracts thereby reducing them essentially to children in the eyes of the state.

It is an extrememly demoralizing precedent to set in a nation that prides itself on the liberty and freedom of the individual to make life choices without government intervention.

Some 2 million homeowners hold $600 billion of subprime adjustable-rate mortgage loans, known as ARMs, that are due to reset at higher amounts during the next eight months. Subprime loans are those made to people with poor credit. Not all these mortgages are in trouble, but homeowners who default or fall behind on payments could cause an economic shock of a type never seen before.

Some of the nation's leading economic minds lay out a scenario that is frightening. Not only would the next wave of the mortgage crisis force people out of their homes, it might also spiral throughout the economy.

The already severe housing slump would be exacerbated by even more empty homes on the market, causing prices to plunge by up to 40 percent in once-hot real estate spots such as California, Nevada and Florida. Builders like Chicago's Neumann Homes, which filed for bankruptcy protection this month, could go under. The top 10 global banks, which repackage loans into exotic securities such as collateralized debt obligations, or CDOs, could suffer far greater write-offs than the $75 billion already taken this year.

Massive job losses would curtail consumer spending that makes up two-thirds of the economy. The Labor Department estimates almost 100,000 financial services jobs related to credit and lending in the U.S. have already been lost, from local bank loan officers to traders dealing in mortgage-backed securities. Thousands of Americans who work in the housing industry could find themselves on the dole. And there's no telling how that would affect car dealers, retailers and others dependent on consumer paychecks.

Based on historical models, zero growth in the U.S. gross domestic product would take the current unemployment rate to 6.4 percent. That would wipe out about 3 million jobs from the economy, according to the Washington-based Economic Policy Institute.

Joe is far more in line with how I sit here

Really Moneywar, Joe's position sounds nothing like yours:

"Government should not be interfering with the mortgage "crisis." Both the banks and the borrowers that made stupid decisions need to suffer the consequences of that decision in order for any real correction to take place. I also don't feel very sorry for the vast majority of people being foreclosed upon, and neither should anyone else. They bought way more of a house than they could afford, and either didn't read what they were signing or didn't care about what it meant for their future." - Joe at 1:19AM

But based on what I know about your ideology, you are basically anti-corporation, pro-government regulation of the private sector, and more socialism in general. So it would make sense that you would support having government force corporate lenders to incurr losses while at the same time taking away "personal responsibilty" from adults who entered into legal contracts thereby reducing them essentially to children in the eyes of the state.

yes, that's the damn problem with you, it is not what you know, it is what you assume.

You lack the ability to actually read and comprehend what is being said and write before you think.

The finance institutions are still giving out these stupid loans even in the mist of failure, why would that be and yet you feel the need to trounce on millions of Americans because they took loans to achieve the American dream, not realizing the other economic policy effects of the future economy.

There are a few of us who saw this problem years ago and said it will be global and the fact that it rose through the financial mortgage lending is not a surprise. Chasing the high profit greedy gain at the expense of our population and nation is who's problem, corporations.

I agree that rules and laws need to be changed, I have been saying this for 6 years here to consternation from the likes of people like you.

RIR and I have butted heads many many times but apparently we both have a little agreement here as to what needs to be done for the nation as a whole.

Narrow minded thoughts like yours got us into this entire mess, it will take far greater open thoughts to get us out of this mess.

This will effect our labor market, wage market, production market, and not one in a good way. All industries will be effected and it will take very thoughtout long term solutions to fix this, not bandaids handed out by this losing falling administration that is far too stubborn to think about actual Americans.

Get a clue and stop assuming you know when it is apparent you clearly don't understand the globalness of this problem.

I think it just may be that its impossible to know exactly what's going to happen more than a few weeks out. Economics is great at explaining why things happened, it's not that great on predicting what will happen.

I will hand this to Bush - he's trying something. Or rather, someone in his administration is, and he's going along with it. It may not have much real effect in the long run, but I see no reason not to try. As has been pointed out, this mess can spread to affect a lot more than just the principals.

Just a small example of what the market has a possibility of falling into

A small example? That doomsday example does not come close to reflecting what almost every article on the subject I;ve read has said. All of them suggest thereis aa problem -- but a much smaller one then your article descibes.

There is no doubt that laws governing bundling and subprime mortgages need to be restructured. And freezing the interest rate doesn't fix the problem it just buys the borrowers more time on the lenders dime.

What I think should happen is that laws regulating these loans should be changed as quickly as possible to minimize risk to both lender and borrower -- and then let the houses which are going to foreclose -- foreclose -- flooding the market with houses with much more conservative mortgages.

Really Moneywar, Joe's position sounds nothing like yours:

Really! Joe seems to be open minded enough to ask what I think and contributes to the conversation in asking for more data as to the global economic effect.

I don't see you even thinking about the actual global effect and what this intales to our nation.

Like I said, I work for the largest bank of a nation and I keep you flying around the globe in heavy aircraft maintenance. Do you understand what I am trying to say here?

The financial institution failed in 29 and that certainly was not global was it. But you go ahead and think this will only effect those who made poor financial decisions.

Like I said, I work for the largest bank of a nation and I keep you flying around the globe in heavy aircraft maintenance. Do you understand what I am trying to say here?

Not really Moneywar -- I gathered that you work for some banking conglomerate that has a subsidiary that handles aircraft maintenance-- and you work for that subsidiary. I imagine that you are relating your job secuirty to the subprime crisis because if the banking division loses its shirt , then the entire corporate entity will also be threatened -- all the subsidiarys and divisions, as well as vendors too. Your job of course, and on and on down the line.

Is that what you are saying.

There is no doubt that laws governing bundling and subprime mortgages need to be restructured. And freezing the interest rate doesn't fix the problem it just buys the borrowers more time on the lenders dime.

Wow! Why do you think I was crossing words with RIR.

And for your information the bundling of the loans just bought more time in hopes that the industry would correct itself, but that just created a more aggressive loaning policy. Thank those corporations and their greed for this.

Not really Moneywar -- I gathered that you work for some banking conglomerate that has a subsidiary that handles aircraft maintenance-- and you work for that subsidiary. I imagine that you are relating your job secuirty to the subprime crisis because if the banking division loses its shirt , then the entire corporate entity will also be threatened -- all the subsidiarys and divisions, as well as vendors too. Your job of course, and on and on down the line.

Is that what you are saying.

Posted by Bowa at 2007-12-06 04:29 AM | Reply | Flag

Like I said, you just prove my point. You assume and don't read and understand. It is just making an ass out of you!

I said earlier in this thread that I will not be effected but in fact said those financial institutions going down will benefit me and my company.

Can you read and actually comprehend what you read?

Lokisfur getting snizzled bwhahahahahahaha Gotta love it.

Larry Mohr

Wow, look, business week is saying the same thing but BOWA you must apparently read news from the goody goody network were reality and truth is only news for you.

The problem I have with both articles is that what they are essentially calling a crisis is the move in the housing industry from a sellers market to a buyers market. And they focus on the impact to homeowners who bet that the price of the home would appreciate dramatically in order to structure an equity loan to offset the higher rates on the subprime when they came due. They took the risk and lost. I am sure that there are a lot buyers, with better sctructured mortgages, picking up some real deals right now. I bet they aint complaining.

Personally, I was hoping to buy a house for dirt cheap as a result of all this. Looks like that house might not be as dirt cheap as I was envisioning.

I spoke with a mortgage company a few years ago when everyone was buying and the market was going through the roof. They were willing to write an ARM with up to 55% load. I said no thanks.

I've probably never been happier to rent than in the past year or so. While the housing market roils and churns, my rent went up twenty five bucks.

BOWA,

I bet they aint complaining.

Wow! You're clearly showing you don't understand the globalness of this issue.

This issue is not about the foreclosiers, it just started the problem. Where is the investment money of those institutions that are going to fail? What industries will those investments effect? The direct effect of the failings is tragic enough, consumer buying for millions of people who have failed will not be spending in order to keep this Bush economy flowing.

Those indirectly effected will in our future not be consuming either further sending the economy in a decline.

I said earlier in this thread that I will not be effected but in fact said those financial institutions going down will benefit me and my company

Stop with the condescedning attitude -- I understand everything I read (with the exception of Buffalo Bob)and it is not like you are the clearest writer here -- I had to go 50 posts to cobble together that you beleive the imminent failure of certain financial institutions in the subprime crisis will benefit you very large bank by reducing competition. Not sure exactly what is wrong with that. If Mortgage lenders go under for making bad loans -- then so be it.

The bottom line is that those that got stuck in the mud have to get out themselves -- the best the governemnt can do is to make laws which clean up the mud, or allow lenders and borrowers to avoid the mud entirely.

Frankly, after doing the research to write posts on this thread-- I think I;m going to look into buying a home -- seems like this would be a great time to do it.

Moneywar, you posted the same AP article four times from four seperate papers.

Shame on you!

Wow! You're clearly showing you don't understand the globalness of this issue.

I do understand it Moneywar -- I also know that these lenders are diversified-- and ultimately only a very small portion of the housing pie is affected by the subprimes. So you'll have to excuse me if I don't set my "mortgage crisis" alarm clock to red alert just yet.

Shame on you!

Snoofy, good on you! At least I know you can read and understand.

I just did a global search and chose the four different papers posting the subject to make a point to BOWA about none of his media news he reads posts such things.

Just wondering BOWA, you seem to think you know alot about this, tell use just exactly the effect that will happen.

The housing market will become much more regulated - especially in the area of subprimes and bundling.

borrowers will have an easier time suing lenders in civil court.

A lender will sue the governemnt to protest it setting interest rates contrary to those agreed to by two parties in legally binding contracts. Even though I think the Lender should win -- they will lose the case,

Houses will be cheaper and loans harder to get. Interest rates will go down.

There will be a booming rental market for years to come.

and of course millions of people will be forced to live in pup tents because their house got taken away. (that was a joke)

BOWA,

First honest answer and not too bad at that.

Now, what will be the indirect effect?

I also know that these lenders are diversified-- and ultimately only a very small portion of the housing pie is affected by the subprimes. So you'll have to excuse me if I don't set my "mortgage crisis" alarm clock to red alert just yet.

Subprime woes is about 15% of subprime industry which is about 300 billion.

The diversified area is being ignored by all but a few.

The subprime woes is the hole in the dam, and plugging the hole doesn't fix the problem just delays it. It has been delayed for a few years now and the hole just seems to be getting bigger and bigger.

The indirect industry just expands the problem and the subprime is already effecting some of the foriegn markets too.

Realestate today is traded like the stock market. Say you buy a house valued at $200,000 and a low intrest rate. The market dropes. Now the house is valued at $125,000. Net loss of $75,000. You still owe $200,000. The bank knows this. Intrest rates rise. Your payment goes up. Effectively, you could owe, over the life of the loan $300,000 to $450,000. You have made a bad investnment. Then what do you do. Cut your losses and transfer the liablity to the bank. Just like in the market. The money is still there. It's in someone elses pocket. It's only o problem if yours are empty. This isn't about Harry Homeowner.

I think I may start manufacturing pup tents.

Stir,

Nice post, it has been a post I have stated in the past as to this problem.

The only winners in this whole case will be the finance institutions at the expense of the home buyers. It will be a surprise too for alot of those buyers used up large amounts of their pensions to get into the home.

Lots of money changing hands in a thieving way and to no surprise most of the financial institutions are not linked to the federal reserve.

Gives one a hmmmm!

The worst part about this whole thing is that, like most bleeding-heard legislation, it rewards all of the wrong people. Picture two houses next to each other that are both worth $200K. One family moves in and takes out an ARM loan, no money down, 5% interest for the first 2 years and then an increase based on the current LIBOR rates. Another family moves in next door with the same loan.

Then the value of the houses goes down to $180K. Realizing that rates are rising and the threat of foreclosure is looming, one homeowner goes out and gets a second job, puts together some money for principal and closing costs and refinances his mortgage at a much higher fixed rate. The homeowner next door sits on his ass and waits...for a government bailout. His loan, under Bush's program, is now frozen at a lower rate than that of his neighbor.

Posted by JOE
* * * *

I guess I went to bed too early. In your example, the homeowner who goes out and gets a second job and refinances his mortgage doesn't really exist. Neither does the first guy, because this isn't a government bailout. No taxpayer money is going to be used; these aren't government-guaranteed loans, like the S&L's depositors in 1991 and 92.
Here's the problem with your example: it's not what's really happening around the country. These subprimes are resetting all at once, all over the place. The fact that Homeowner #1 was able to buy some time while his rates stayed steady also benefits homeowner #2: his next-door neighbor's house isn't being foreclosed on; his own property values are now holding firm, allowing for equity to build; the fact that there is now an active, secondary market again in these mortgages means he can refinance AGAIN at a lower rate than present.

This is not a government bailout. And, trust me, the bond investors are 100% on board--they're getting burned as much as the homeowners are.

This is an actual example. I have a client who owns a business, and he phoned my two weeks ago about his mom--can I go visit with her, and fix her investments?

I agreed. When I looked over her statements, I learned she had bought $240,000 worth of these mortgage-backed bonds. It represented about 60% of her retirement money at the time, and was purchased through Morgan Keegan. Problem is, the value is now less than $90,000--it had dropped by almost two-thirds in less than a year, even though she had told the advisor she couldn't tolerate any portfolio risk. Well, the bonds were AAA--the same as if she had bought bonds from General Electric or the federal government--you can't get any better than that. So the advisor seems to be in the clear. Problem was, most of the loans inside her investment were Florida-based loans, most not even subprime.

She transferred the account to me, and I managed to sell most of it, and it's now making some money. Today it will bounce about 15%, because we were told there would be a compromise coming that would create value again in the bonds, so I bought some floaters and covered calls to get some juice back when the market recovered after the announcement.

Point is this: retirees all over the country bought these investments, and they've just cratered in value. Worse, many of them can't be sold, at ANY price.

This isn't a permanent fix and, I'll grant you, many of the loans shouldn't have been made in the first place. But this isn't Chrysler or the S&L bailouts, which required Congressional intervention and taxpayer funding--this is just an overhaul of millions of existing mortgages, allowing a functioning market to return.


It's good all around. And this is why, lately, the best Treasury Secretaries seem to come from Goldman Sachs, as Paulson and Rubin (Clinton's 2nd SecTreas) did. It'll work. You righties need to realize that just because the liberals are happy about something, doesn't necessarily mean that you're getting screwed somehow. You ain't.

WTF happened to the free market and all that crap the right likes to prattle on about?

If you were too stupid to make sure your financial house is in order that is your fault! Why in the name of sweet baby jesus should the gubment be meddling in the process?

Maybe because the problem exposes just how vulnerable our "strong" "really strong" and "extra really strong" economy really is.

I am surprised he didn't add in a mandate that every American spend an extra $5000 this holiday season ya know to defeat the terrawrists.

As the house of cards Shrub created for us collapses the BushCo fuckers moved their investments overseas ahead of everyone.

But late is better than never. For Shrub the question is how do you contradict yourself without anyone noticing. Its easy when everyone has a short term memory.

"Sounds like a government buy-out to me."

That is what I think. Why does the government need to be involved in this at all?

It is in the best interest of the lenders to freeze rates. Unless they want to go into the real estate business while creating a glut in the supply side of the market, they have to freeze these loans. They know this.

The only reason for government involvement would be some kind of incentive/corporate welfare scheme.

"If you were too stupid to make sure your financial house is in order that is your fault! "

But that goes for everyone involved. The borrowers aren't any more stupid than the people who lent them the money and who bought the loans. No money down, no documentation loans for low credit score/no documentation loans? Absolutely ridicilous. It is in the best interest of the lenders to ease up a bit on the rates and avoid having to forclose on all these homes all at once. They'll lose more money if they don't freeze the rates.

Why the government needs to be involved is a mystery.

Sully,

You do not understand the rules:

1. The superrich always deserve a bailout, paid for by working schmucks.
2. The hungry and homeless can eat shit and die.

Nutcase if you think this is a bailout, you're just being deliberately ignorant.

Google can solve that, if you care. But you're funnier this way.

I have to agree, I would not call this a buyout. From the text it seems more like a controlled crash via a tier'd system of desparity.

And its not hard to understand why the government would get involved. Next year are the elections, and next year a whole crap load of people will be losing they're homes as things stand today. And whether or not that has anything to do with Bush or republicans, they will in fact take the heat for it.

With this going into effect, that will break it out over the next 5 years. And yeah maybe some will be able to keep they're homes. But it does not seem to me that there is anything here that will accomplish that. Income needs to be greater than Expenses is the bottom line. And this not only does not fix that, but puts it off for another few years... Just about the time the presumably democratic president would be up for election. Note the 5 year nature of this plan. Or to put it another way, nothing in this is going to fix stupid. Just band-aid it.

I think its pretty obvious to most:

The govt doesnt give a rats ass about the broke homeowner.

Traditionally loans were only made for up to 70-80% of a homes value so that the home could be liquidated by the bank quickly in case of foreclosure of the loan. the bank takes there 70% to settle the loan and what is left goes back to the prior homeowner.

What lead to this crisis was the unsound lending practices to unqualified buyers. This is entirely the fault of the lending industry

The govt only interest is to bail out unsound lenders who stupidly gave out 95% - 100% loans to hugh risk individuals. Since the individual has likely only paid mostly interest in the last few years, the bank is still left with over 90% of principal unpaid. In this case the investment lended is recouped and the loser is the homeowner.

= No Bailout


However, now the banks can not sell these homes for the amount loaned, not to mention the banks have no interest in becoming real estate owners in upside down homes.


govt interference to protect the investment class at the expense of honest hard working citizens

This is a bailout for corp. america. This allows them to artificialy prop up the values of the security instruments, since the market can now not know, for another five years, the true value of that real estate.
But it wont work. At the current level of foreclosures and near term projections, this will maybe help 1/100 of those whom face possible foreclosure over the next five years, on an annual basis.
We will still see foreclosures skyrocketing, and could easily quadruple within that same five year period.
The run up in value of all real estate has defied the fudamentals of the market. Very much like pump and dump, but the players get money on both ends.

At the current level of foreclosures and near term projections, this will maybe help 1/100 of those whom face possible foreclosure over the next five years, on an annual basis.

why would you say that? why only 1/100 benefit from this?

why do so many face forclosure in the first place?

It is in the best interest of the lenders to freeze rates.

Absolutely, there was no need for the govt to intervene. Now we are going to subsidize a bank so they can get 3 or 4 more points on a mortgage they approved in the first place.

Hey nutcase like in the S+L crisis!?!? You don't know jackshit about finance or economics......

Now what was wallstreet guilty of here, providing low cost financing to substandard credit's? Think about it, wallstreet helped people get money at a reasonable rate. That's EXACTLY what John Kerry, Al Sharpton, and HRC wanted. Now the douchebag goes to the Nasdaq, and tells us how bad things are and how WS has dirty hands. God help us all if the hildabeast gets elected.

She's the worst kind of scum........

Well eberly exactly whose rate will be frozen? The servicer's, or the mortgage owner? By what legal rite can they change a contract?

If you purchased property thinking you could afford the payment, with an IO mortgage, and now the rate floats higher TOUGH. Property flippers were looking for the cheapest financing, thinking they could just sell out for a profit in 3-5 years.

The only hypsters out there were real estate agents pretending the growth would never end without a correction.

ANYONE who purchased RE without a fixed rate 15-30 yr conventional mortgage was an idiot. Rates hit 4.75% on 30 years, if that wasn't low enough what the fuck where they thinking...or is that smoking?

I think what Bush is really doing is pretending to do something. I think he knows that few will qualify for the program and those that will probably have some other options anyway. I think it is his way of saying to all the people losing their homes that he's real sorry and is doing everything he can for them. We knew this was going to happen years ago when the interest rates were held so low for so long and real estate prices were rising at a ridiculous rate. Hell, it made the Bush economy run and that was all that he really cared about. In actuality nothing would make Bush happier than to bequeath a struggling economy in recession and with inflation showing itself as well for an incoming Democratic president to deal with. IT just underscores what I have thought for a long time about the Bush family and the Republican Party, they don't give a crap about the American people, never did, never will. It's just business to them. American's losing homes doesn't concern them. I notice reading some of the posts right here how pompous some of y'all are about folks who have, perhaps irresponsibly, bought too much house for their budget. I understand that they will have to pay for their mistake but I feel no joy in that like some of you really do seem to. I really don't understand that kind of coldness. I'm glad I'm not like some of you.

What would you do danni, just complain some more and offer NO SOLUTIONS AS USUAL????

BTW How did you finance your condo that you were complaining about not selling. Why did you buy it? Why can't you sell it? Who's fault is THAT?

What solution did HRC offer? I heard her complaining at the Nasdaq, and Marie B. on CNBC blasted her. It's funny how someone's to blame for providing access to capital.

Isn't that EXACTLY what John Kerry insisted the fannie Mae do???????????? Remember he was against "red lining"

Now what was wallstreet guilty of here, providing low cost financing to substandard credit's? Think about it, wallstreet helped people get money at a reasonable rate. That's EXACTLY what John Kerry, Al Sharpton, and HRC wanted. Now the douchebag goes to the Nasdaq, and tells us how bad things are and how WS has dirty hands. God help us all if the hildabeast gets elected.

She's the worst kind of scum........

Posted by DavetheWave at 2007-12-06 06:10 PM | Reply |

Not exactly Dave... Thats like saying we went to Iraq to go after the WMD.. then upon finding none decarling thats exactly what Bush wanted.... LOL.

I do see your point though. But lets also be real. Wall street isn't exactly lined with the followers of Mother Theresa. Economics changed, and WS saw a means for making a buck in a previously untapped market. Took some risks, and lost the bet.

Davethewave 06:10 entry is dead on.
If you couldn't afford a fixed locked
rate you should not own a home. Cheap
easily accessable money is what ran up
housing market and now is in correction.

Very, very true KH, about wallstreet. What I don't get is why the investment bankers took such risks, while warning everybody about the sub prime time bombs. It's started the worst kind of scare, a liquidity/asset valuation spiral that's going to be a long term huge problem.

BTW HRC would be even worse IMO....

= no bailout

Actually after looking at the details of the plan I take back my assertion its any sort of govt bailout. I fail to see how its a subsidy of any sort.

I don't see how the government is involved at all.

It simply seems like the loan industry agreeing to extend low rates for 5 more years in order to avoid defaulting loans. The government just basically agreed and shouldn't have had much to say about it in the first place.

Its a private market correcting itself. The bonds for these loans would seem to absorb the loss. Someones money isn't going to grow as fast as it should, as the bond market is not immune to risk.

Very, very true KH, about wallstreet. What I don't get is why the investment bankers took such risks, while warning everybody about the sub prime time bombs. It's started the worst kind of scare, a liquidity/asset valuation spiral that's going to be a long term huge problem.

BTW HRC would be even worse IMO....

Posted by DavetheWave at 2007-12-06 06:54 PM | Reply |

Top that off with Greenspan in his last days telling congress people should sign up for variable APR as much as possible.

People, incl. bankers and homeowners, took a lot of risks, they ratched up their risks, driven by fantasies of huge gains. The risky loans have not paid off and now they get a federal bailout.

Investment Banks, and the Asset-Backed Security
If the housing market had only been dealt a decent hand - say, one with low interest rates and rising demand - any problems would have been fairly contained. Unfortunately, it was dealt a fantastic hand, thanks to new financial products being spun on Wall Street. These new products ended up being spread far and wide and were included in pension funds, hedge funds and international governments.

And, as we're now learning, many of these products ended up being worth absolutely nothing.

Tell us how this will not help you but help those poor?

Posted by moneywar at 2007-12-06 12:21 AM | Reply |

For the record, this isn't only about the poor. If your living in a $500,000 house, driving matching 4x4's, and watching the homeless line up at the mission on your 54 inch plasma, and face the real possibility of losing it all, you are not poor. Living well beyond your means though? quite possibly.

If you were in the 10% group, this whole housing thing probably passed you by in the first place.

This is bigger than it looks.

Collateralized Debt Joins the Fray
The ability to borrow more prompted banks and other large investors to create collateralized debt obligations (CDO), which essentially scooped up equity and "mezzanine" (medium-to-low rated) tranches from MBSs and repackaged them yet again, this time into mezzanine CDOs.

By using the same "trickle down" payment scheme, most of the mezzanine CDOs could garner an 'AAA' credit rating, landing it in the hands of hedge funds, pension funds, commercial banks and other institutional investors.

Residential mortgage-backed securities (RMBS), in which cash flows come from residential debt, and CDOs were effectively removing the lines of communication between the borrower and the original lender. Suddenly, large investors controlled the collateral; as a result, negotiations over late mortgage payments were bypassed for the "direct-to-foreclosure" model of an investor looking to cut his losses. (For more, read Saving Your Home From Foreclosure.)

However, these factors would not have caused the current crisis if 1) the real estate market continued to boom and 2) homeowners could actually pay their mortgages. However, because this did not occur, these factors only helped to fuel the number of foreclosures later on.

Wall street corporate crooks nothing more, taking advantage of people for the advent of greed. This is what unregulated laissez faire does to the capitalistic market.

Teaser Rates and the ARM
With mortgage lenders exporting much of the risk in subprime lending out the door to investors, they were free to come up with interesting strategies to originate loans with their freed up capital. By using teaser rates (special low rates that would last for the first year or two of a mortgage) within adjustable-rate mortgages (ARM), borrowers could be enticed into an initially affordable mortgage in which payments would skyrocket in three, five, or seven years. (To learn more, read ARMed And Dangerous and American Dream Or Mortgage Nightmare?)

As the real estate market pushed to its peaks in 2005 and 2006, teaser rates, ARMs, and the "interest-only" loan (where no principle payments are made for the first few years) were increasingly pushed upon homeowners. As these loans became more common, fewer borrowers questioned the terms and were instead enticed by the prospect of being able to refinance in a few years (at a huge profit, the argument stated), enabling them to make whatever catch-up payments would be necessary. What borrowers didn't take into account in the booming housing market, however, was that any decrease in home value would leave the borrower with an untenable combination of a balloon payment and a much higher mortgage payment.

A market as close to home as real estate becomes impossible to ignore when it's firing on all cylinders. Over the space of five years, home prices in many areas had literally doubled, and just about anyone who hadn't purchased a home or refinanced considered themselves behind in the race to make money in that market. Mortgage lenders knew this, and pushed ever-more aggressively. New homes couldn't be built fast enough, and homebuilders' stocks soared.

The CDO market (secured mainly with subprime debt) ballooned to more than $600 billion in issuance during 2006 alone - more than 10-times the amount issued just a decade earlier. These securities, although illiquid, were picked up eagerly in the secondary markets, which happily parked them into large institutional funds at their market-beating interest rates.

Wall street corporate crooks nothing more, taking advantage of people for the advent of greed.

Who is getting screwed?

Widening the Margins
Thanks to an exploding real estate market, an updated form of the ABS was also being created, only these ABSs were being stuffed with subprime mortgage loans, or loans to buyers with less-than-stellar credit. (To learn more about subprime, read Subprime Is Often Subpar and Subprime Lending: Helping Hand Or Underhanded?)

Subprime loans, along with their much higher default risks, were placed into different risk classes, or tranches, each of which came with its own repayment schedule. Upper tranches were able to receive 'AAA' ratings - even if they contained subprime loans - because these tranches were promised the first dollars that came into the security. Lower tranches carried higher coupon rates to compensate for the increased default risk. All the way at the bottom, the "equity" tranche was a highly speculative investment, as it could have its cash flows essentially wiped out if the default rate on the entire ABS crept above a low level - in the range of 5 to 7%. (To learn more, read Behind The Scenes Of Your Mortgage.)

All of a sudden, even the subprime mortgage lenders had an avenue to sell their risky debt, which in turn enabled them to market this debt even more aggressively. Wall Street was there to pick up their subprime loans, package them up with other loans (some quality, some not), and sell them off to investors. In addition, nearly 80% of these bundled securities magically became investment grade ('A' rated or higher), thanks to the rating agencies, which earned lucrative fees for their work in rating the ABSs. (For more insight, see What does investment grade mean?)

As a result of this activity, it became very profitable to originate mortgages - even risky ones. It wasn't long before even basic requirements like proof of income and a down payment were being overlooked by mortgage lenders; 125% loan-to-value mortgages were being underwritten and given to prospective homeowners. The logic being that with real estate prices rising so fast (median home prices were rising as much as 14% annually by 2005), a 125% LTV mortgage would be above water in less than two years.

Right & Dave,

The most obvious similarity between the S&L collapse and subprime mortgage mess is they were both opportunities to commit fraud following DEREGULATION. In this sense, they were like Enron et al. The beneficiaries were highly concentrated in the S&L mess and diffuse in the subprime case.

The S&L collapse benefited mostly rich criminals who made loans to themselves based on phoney appraisals and never made a single payment. The rule change which the Industry bribed Congress to pass permitted S&L Officers to make loans to themselves. The State of Texas endured the heaviest loses and the Bush Family was directly involved. For this reason Bush Senior fired 50 prosecutors that had been working on bringing fraud indictments (including Neil) and the taxpayers picked up the tab.

The subprime fiasco benefited mortgage brokers first and had the benefit of getting people started in houses that would normally not qualify. Those able to hang in there got a lucky break. Another important indirect beneficiary was Bush and his den of thieves. Without the building boom, driven by subprime lending there would have been no economy and he would never have gotten re-elected, no matter how much bullshit Rove spewed. Greenspan is a loyal Republican and principal instigator. Stupid maybe, but hardly criminal.

Later, it reverts back to criminality, but since it involves Corporations and rich people, it hardly warrants investigation, and prosecution is not politically feasible. The packaging and reselling of subprime mortgages was a massive fraud apon little old ladies with much of the phoney paper peddled overseas. The long term effects of this fraud cannot be good for our economy.

It is a good thing that Bush has frozen rates on these mortgages. It will save some families. More importantly it will give our manipulated markets time to stabilize.

Shrub's move is inconsistent with his public philosophy. His secret philosophy is that he will break any rule for the right amount of money. He's done it for Sock Manufactures, Big Farm and Pharma to name a few. Clinton would do the same thing. What else is new?

I'm not sorry for saying this, I'm calling BULL SHIT!!!

I bought a 320K house in the Baltimore-Washington corridor because it was what I could afford. We are living in 1800 square feet, in a marginal+ neighborhood, but again, it was what I could afford. I have peers who make what I do, but were willing to take interest only loans and bought 450K+ houses in better areas. The reason why we chose to buy where we did (smaller house, less desirable area), was that we could afford the mortgage payment and didn't have to take an interest only or ARM. Now we are using MY tax dollars to bail out those folks who bought on margin under an ARM and now cannot afford their house payments?!?!? How many of these 100K plus income "welfare" homeowners do we need to bail out before we realize they are sticking it to the system?????

Unbiased, please explaiin how your tax dollars are being used. What's more, please explain how giving the folks who bought on margin--as you say--a little more time harms you at all.
BTW--an interest only loan is still interest only--except now they'll be paying interest-only for seven years instead of five.

RIR,
Simple, I bought what I could afford. These folks bought above what they could afford and have since tanked the housing market because they cannot afford to adhere to the conditions of their loans. Now we are looking at a Federal bail out (aka my tax dollars) paying to buy them more time to find a better interest rate or more time. I'm sick of this culture of victimology..."its not my fault I bought a 550K house even though I was only approved for a 320K mortgage."

BS, if you have been living off the whitecaps of a high-wave housing market and now you are crashing into the sand. Deal with it, but don't expect someone who bought within their means to bail you out.

RIR,
Simple, I bought what I could afford. These folks bought above what they could afford and have since tanked the housing market because they cannot afford to adhere to the conditions of their loans. Now we are looking at a Federal bail out (aka my tax dollars) paying to buy them more time to find a better interest rate or more time. I'm sick of this culture of victimology..."its not my fault I bought a 550K house even though I was only approved for a 320K mortgage."

BS, if you have been living off the whitecaps of a high-wave housing market and now you are crashing into the sand. Deal with it, but don't expect someone who bought within their means to bail you out.

Darned double posting...sorry.

RiR,
I would ask what region you live in. The BW corridor has become extremely expensive for its employees; to the point that I know folks that live on the Eastern Shore, Pennsylvania, or West Virgina in order to be able to afford their (non interest only) mortgage.

There's not going to be any federal tax dollars used--no tax dollars whatsoever.
I live on the Gulf of Mexico. Between the hurricanes, the soaring insurance premiums, the quadrupling of property taxes, and the ability of out-of-town borrowers to buy at subprime rates coming to an abrupt end--home prices are cratering. Not too bad where I am, actually, because we've got a lot of heavy industry that is doing very well. But fifteen miles east, going for the entire state of Florida---it's a disaster.

For the tenth time now, this is not a bailout. I would oppose that too.

Who's fault this is doesn't really matter now. I don't like the gov getting involved in market matters either, but Bushes plan may really help things from getting worse. The housing slump isn't over yet. If your neighbor lost 100k in equity and doesn't want to make his payments. He could sell for less than the current value. If he sells for 20k less he gets out from under that debt with a net loss of 120K. Guess what your house is comparable to his. Say two more of your neighbors do the same. You just lost 20K in equity. Some people can afford that. It may just push some over the edge.

who said bush ain't a dictator?

The govt only interest is to bail out unsound lenders who stupidly gave out 95% - 100% loans to hugh risk individuals. Since the individual has likely only paid mostly interest in the last few years, the bank is still left with over 90% of principal unpaid. In this case the investment lended is recouped and the loser is the homeowner.


Don't all banks require PMI if more than 80% of the appraised value of the home is financed?

"Don't all banks require PMI if more than 80% of the appraised value of the home is financed?"

Ah, yes...for conventional loans. However...there are government VA (read "taxpayer") guaranteed loans and FHA government insured loans. That means the government (read "taxpayer") reimburses the lenders for any losses. So who is the REAL loser here. (Hint, not the lender and not really the borrower as he had a home for some period of time paying below market and probably not paying at all for the last six months or so.)

It is very nice to know that most "so called" intelligent people are really just blind and ignorant. Most of the post on here are so one sided. I purchased my home when the housing market prices were inflated. I guess I am the "STUPID" one many are talking about. It was always my dream to own a home and got suckered into this great promise. My home is very modest but was way over priced. The Mortgage payments were and continue to be made on time. I recently went through a separation/divorce and retained custody of my son. I got screwed with no child support for a long time. My son got sick and medical bills have been through the roof. I am still making the payments on time but it is a battle each month. Will I be able to if my rate goes up a percent? NO! Do I want your sympathy? HELL NO, just open your eyes a little and see that this will help some honest hard working people. There are too many people that take advantage of the system but others that truly need it. I am not on Welfare or any other assistance. I thought of bankruptcy but am trying my best to avoid it. I am not looking for an easy way out just a break.

Goatman:
"Yes. Which means they got larger and nicer homes than the financially wise consumer. So what is happening here is that Uncle Sugar is subsidizing stupid people and allowing them to stay in homes outside their price range while we fiscally prudent homeowners live in lesser homes.

Hurray for Uncle Sugar! Ignorance does pay!"

For the first time ever, I completely agree with GOATMAN. This a shameless pandering to those who were stupid and bought more house than they could afford.

"It was always my dream to own a home and got suckered into this great promise. My home is very modest but was way over priced."

If you KNEW that, you made a poor decision.

"I recently went through a separation/divorce and retained custody of my son. I got screwed with no child support for a long time."

Been there, done that...with FOUR teenagers. Child support, what's that? I can certainly empathize with you on this one.

"I am still making the payments on time but it is a battle each month."

You are to be respected for that. Many times you can work something out by meeting with the lender and negotiating a solution. Have you tried that? The major problem with this mortgage crisis is the government (what a surprise!) The government should never have gotten into guaranteeing and insuring these risky loans that are now crashing. Without that underwriting from Uncle Sam, the lenders would NEVER have made those loans. It was just another way of buying votes and now it has backfired.

Yes I did make a poor decision and we as humans do that. I have learned a lot from this decision and am taking steps to correct it. And yes, I am in the process of negotiating a solution with my lender. I am just saying not all of us deserve a post slap in the face.

"I am just saying not all of us deserve a post slap in the face."

People like you are not part of the problem. Looks to me like you have taken responsibility for your decision, are taking steps to solve your situation and I think you'll come out of it on top. Good on you!

Don't all banks require PMI if more than 80% of the appraised value of the home is financed?

Posted by katieberry

Yes, that is supposed to be what happens and that is an insurance premium where it protects the lender if a home with little equity goes into foreclosure.

However, the greedy folks they are, the lenders showed people how to get around that by having them take out 2nd mortgages to cover the 20% down payment and thus avoid the PMI.

Extremely irresponsible and I hope they get their hands slapped for that practice and stop it.

"It was always my dream to own a home and got suckered into this great promise. My home is very modest but was way over priced."

Uhh, no, it's not over priced. If it were, it would still be on the market. the fact that someone (you) decided that your assests were best allocated by purchasing this property indictate to me, the casual observer, that your house was, in fact, nominally priced. Keep in mind, as rational consumers we always want to maximize value, or pay as little as possible. In our role as sellers, we maximize value by charging as much as the market will bear.

"I recently went through a separation/divorce and retained custody of my son. I got screwed with no child support for a long time. My son got sick and medical bills have been through the roof. I am still making the payments on time but it is a battle each month. Will I be able to if my rate goes up a percent? NO! Do I want your sympathy? HELL NO, just open your eyes a little and see that this will help some honest hard working people."

No. It will help you. At the expense of other, hardworking people with whom you willingly entered into a legal contract under known terms. If you are no longer able to afford your home, the onus is on you to correct the problem. It is not the responsiblity of the lender to suffer because your conditions have changed. After all, would you be willing to incur an arbitrary mortgage increase as a means of helping out a mortgage company that had fallen on hard times? Probably not. You shouldn't really expect them to do so for you.

Goatman:
"Yes. Which means they got larger and nicer homes than the financially wise consumer. So what is happening here is that Uncle Sugar is subsidizing stupid people and allowing them to stay in homes


Again - a complete misconception - this is not a subsidy or a bail out. No tax dollars are being allocated to the mortgage companies.

There is absolutely nothing wrong with a private mortage company renegotiating the rates of a loan to its costumers as long as both parties are in agreement.

The idea that Bush had something to do with this plan is a good laugh.

Stupid people must be protected from themselves when it comes to the largest financial decision most of them will ever make.

Posted by goatman at 2007-12-05 10:23 PM | Reply | Flag: Flag: (Choose)
FunnyNewsworthyOffensiveAbusiv
e




wow goat, you seem to be coming around to the darkside, welcome, pick up your latte and birkenstocks at the door.

"No. It will help you. At the expense of other, hardworking people with whom you willingly entered into a legal contract under known terms. If you are no longer able to afford your home, the onus is on you to correct the problem. It is not the responsiblity of the lender to suffer because your conditions have changed. After all, would you be willing to incur an arbitrary mortgage increase as a means of helping out a mortgage company that had fallen on hard times? Probably not. You shouldn't really expect them to do so for you".

Point taken and I agree. I am really starting to see the bigger picture here as I read more and more post. I will do my best to correct my own ignorant decisions.

RR,

You and Dave do not acknowledge my primary point, that deregulation triggers unethical behavior when it narrows the definition of crime. An elite group made a ton of money off this situation, through fraud. The ones' that are so rich they never have to take risks, like when Soros bet against the Bank of England.

Rampant market manipulation by the superrich coupled with a tight money supply triggered the last depression. Another prelude???????? No matter, since Shrub should be out of office by the time things are completely unglued. Then the Republicans can blame the Democrats and 25% will immediately believe that story.

My secondary point is that this very correct decision is contrary to Bush's publically stated philosophy. Bush is not a conservative. He pretends to be, but its just another lie.

govt interference to protect the investment class at the expense of honest hard working citizens

~Repugnant

Strewth!

Uncle Sugar is subsidizing stupid people

Wot part of fraudulant practises on the part of unscrupulous lenders are you not getting, Goat?

Lenders who will not be going to jail over this but instead will be rewarded fer their misdeeds by a government bailout.

This was fraud plain and simple and while the case can be made that these naive homebuyers shoulda done more due diligence it's coming out that they were deliberately lied to in order to make these loans happen and that the cover-up goes all the way to the top.

You point to the responsibility of the homebuyers w/o pointing to the responsibilities of the lenders when it was their deliberately unsound and illegal practises on a massive scale that have led us all here.

Spud realises that this is the traditional knee jerk response from the right and the current RT sound byte du jour but seriously man, give yer head a shake and rethink this.

Be Well.

Lenders who will not be going to jail over this but instead will be rewarded fer their misdeeds by a government bailout.


Then explain how this is a bailout, or how the government is involved in any way, other than basically giving private lending institutions the legal right to extend their ARM for 5 more years, because they would rather get lower interest than default on their loans.

it's coming out that they were deliberately lied to in order to make these loans happen and that the cover-up goes all the way to the top.

I gotta go but I would like to see some proof of that.

No spuds it was the people whom took out the loans, who deceided to play the rate game who are at fault. NOT the lenders. EVERYONE had a chance at below 5% 30 year conventionals, and anyone who thought they could do a 5 yr IO then roll into another BLEW IT. Plain and simple. Besides rates are in the 5% range now, and if they don't qualify, they should have forseen that chance. It's not anyones fault but the saps who gambled with bad judgment.

I do except some of what nutcase is saying about deregulating, but not all. Face facts, BOTH parties were knee deep in the S+L crisis, there was a huge exposure to democratic interests, and to say otherwise clearly shows you do NOT know much about the banking failures of the 80's and early nineties.

it's coming out that they were deliberately lied to in order to make these loans happen and that the cover-up goes all the way to the top.

Still waiting for this proof.

In any case, the people who, IMO, are guilty of ethics violations are the realtors who represented these people. they are the licensed professionals who claim to represent their clients and they failed to advise them appropriately.

REPEAL THE CURRENT LAWS SO BUSH CAN HAVE A THIRD TERM.

AMERICA WILL NOT SURVIVE WITHOUT HIM AND HIS INNOVATIVE IDEAS.

YALE MUST BE PROUD!

"Wot part of fraudulant practises on the part of unscrupulous lenders are you not getting, Goat?"

Oh me, oh my, BogApple:
Thou knowest not of lenders, regulations, or government involvement in loans. The lenders would absolutely NOT HAVE MADE THESE LOANS had they not been guaranteed or insured by the government. These were GOVERNMENT backed programs which means they are underwritten by the AMERICAN taxpayers. I know it's chic for you Canadians to avail yourselves of your extensive welfare programs, but here in the U.S. they are designed to buy votes and frequently become burdens on the average citizen. Keep your opinions up there in Vancouver, will ya'?

Keep your opinions up there in Vancouver, will ya'?

No, spud is ranking up there with buffalo bob and his rants. I need a laugh now and then.

I only hope that I don't start hating Canadians. The Canadians I have met in person have been great.

In any case, the people who, IMO, are guilty of ethics violations are the realtors who represented these people. they are the licensed professionals who claim to represent their clients and they failed to advise them appropriately.

Posted by eberly at 2007-12-07 06:28 PM | Reply |

I agree with this. My own lender has been telling me to stay far far away for the last 2 or 3 years. She was on the money, although even being uninformed I could see the trouble brewing. I probably mentioned it before, but I bought a 75k house that I turned around and sold 2 years later for 180k... it was then I knew shit was not right. Hell I sold that property in worse condition than which I found it even. And the neighborhood sucked ass.

If only now I realized I could of been pulling that shit for another 2 years before the downturn.. but even then I thought it was too good to be either true or last very long. I underestimated the delusion of the market.