Momma, let your babies grow up be executive management

It's cool, that's what I figured. I do the same thing more often than I'd like.

 

Of course.


*Liar Loans - look it up if you don't know what they are - created by lending
community

*Approving loans to persons clearly ill-fit to handle the financial responsibility of a $500k mortgage - responsibility of lenders

*Creating piggyback loans - where a second loan is the downpayment for the first - responsibility of lenders

*Creating neg am, Option ARM and all the other daffy, goofy, shitty loan products - responsibility of lenders

*Pie in the sky fraudulent appraisals - created by lending community

*Move all the risky shit into Structured Investment Vehicles, and off the balance sheet - a joint move by the lending community, CPAs and SEC

*Pyramid scheme of leverage - responsibility of bankers and investment bankers

*Slice and dice the loans so that nobody, not bankers, judges, - nobody, knows who the true owner of the property is - responsibility of bankers and investment bankers

I am not defending Idiot Nation - they are, as a whole, dumber than rocks. But clearly, the responsibility of this shitstorm is at the hands of the people who created it.

And Idiot Nation isn't begging the goverment for a handout - it's the asshats collecting the million dollar bonuses for their "performance".

 

If you told him that it was a functional NES when you knew it wasn't, then it'd be fraud and he should be able to sue you. That's a proper role of government -- to protect people from fraud, or give them an arena to make their grievances and recouperate their losses.

If you told him that it was a broken NES and he still bought it, that was an honest trade.

If you sold it to him "as is" and he didn't make the effort to make sure it was functional, it was probably unethical on your part to do so, but the onus rests with him. Buyer beware. Buyer suffers the loss for not being diligent with the purchase.

I don't really understand the arguments about the lenders "knowing" that people wouldn't make their loan payments. That's how the lender makes money--by loaning money to borrowers who can *repay* the loan. Some loans are more risky than other loans. Default is always a possibility. The subprime lenders got nailed by taking on too much risk. But to think that they loaned money to people they thought couldn't repay? I don't think that makes sense.

it's all about risk vs. reward. The lenders took on too much risk to try to gain that higher reward. Bailing them out would only encourage more companies to take those risks. Part of a free market is allowing businesses to fail. Even huge ones that employ lots of people, or provide important functions in the economy. You must let them fail or you have huge inefficiencies to deal with, and you end up stealing from the good guys to help the bad guys.

 

A $750,000 mortgage to a strawberry picker making $14k a year. I am sure the lenders had no idea they wouldn't repay.

http://hollisterfreelance.com/news/contentview.asp?c=213141

 

You have zero idea of what you are talking about on this thread. None whatsoever.

Lenders had EVERY idea people couldn't pay. They got their hefty fees at loan origination. And packaged up the loan into a big stink pile, and sold it to investment bankers, who sliced it, diced it, and sold it to suckers from here to Madrid.

Stop with this thread, SigR. You are embarrassing yourself. You literally have no clue of what you are talking about.

 

I see a really poor business decision and a really poor personal finance decision.

It just doesn't compute in my head that it is the lender's fault that the individual taking the loan couldn't repay it. It's boneheaded optimism on the part of the lender, but really, if the lender wants to throw their money away, why should we stop them? They won't be in business very long, that's for sure.

Personal responsibility. Where is it?

Oh, and if you read the article the whole way through, they secured the loan on 80,000 dollar salary of several cosigners, one of whom made 14,000. But don't let the facts get in the way of the sensationalism.

 

I tap out.

This is just a complete waste of time.

 

Sig --
I hope your not arguing that government's only role is to provide remedies after the fact of the fraud and/or the swindling and/or the con.
Surely, government has a pro-active role to prevent this from happening.

 

I think we'd probably disagree by a large margin on how pro-active the government should be in preventing fraud, but yes, there is defintely room for a role for prevention. The thing I'd stress is that poor decision making does not equal fraud.

There may well have been fraud in the mortgage lending crisis. I'd defer to others who know more about it, and admit that I don't know the exact mechanism for fraud that they may have used. I do know, however, that taking on too much risk is not a fraud. Selling someone a product that they are later unsatisfied with is not a fraud, unless at the time of initial sale the consumer was deceived. And not being able to predict the future is not a deceit.

 

The increasing lack of a social conscience, collectively or individually, has become very damaging to our society.

 

But they didn't do any of these things. What they did is the equivalent of selling someone a broken NES, but telling them that it's not THAT broken, and that if you blow on the cartridge and hit the console a couple of times, it'll work, AND telling them that in five years, when the NES gives up for good, you'll have gotten tired of your PS2 and will be willing to sell them that for 25. All the while, of course, you don't mention that the PS2 will almost certainly be broken by then, too.

 

Do you think that guy signed an application saying he only made $14K? He committed the fraud when he signed an application showing the proper amount of income to qualify.

And Thornburg was a good one. They aren't going down the tubes because of bad loans. Thornburg is going down because they portfolio all the loans, borrow against the asset and have had the assets diminish because mortgage-backed securities are flooding the market at low prices. When the value of the assets dropped, the margin calls occurred.

Thornburg has a meager default rate.