Forum Post: But no one made them take the home loans? Should not the consumer share reponsiblity?
Posted 12 years ago on March 13, 2012, 3:30 a.m. EST by Ray1
(22)
from Chardon, OH
This content is user submitted and not an official statement
I saw this in Cleveland and Rochester hoods..There were morgage companys on almost every block...There push was to get renters(mostly black) out of renting and into there own homes via subsidised. Granted they gave loans to people who did not have the IQ to figure out the fine print but no one took a gun to there head and made then take the loans...So help me here what am I missing?
Ray, I can see your point. Geo makes some great points too. Here's my human perspective: When President Bush gave his ' state of the union' addressing the need to put more Americans into homes and that he was going to make it possible for every American to have the opportunity to live the American dream of home ownership, those who had never even considered home ownership began to reconsider their fate. When a person is plagued with poverty, they are most always in a desperate state and very vulnerable to being preyed upon by those who will gain from using them. There were others who were like me...not poor but couldn't qualify for a home due to lack of income. I didn't take the bait because I knew what GWB was up to having grown up in the real estate and mortgage business but I could have purchased a home anyway thanks to George. George and his cronies were all about short term gains and profits for themselves and it worked. Although I tend to think that the bubble burst a year sooner than expected. They knew exactly what they were doing. During his entire administration, they constantly encouraged us to spend more and buy bigger things and travel more. Americans purchased Hummers ( gas guzzlers) for pennies on the dollar, bought expensive homes, were issued immense amounts of credit for anything they wanted. The entire 8 years reminded me of a very codependent parent who bought the love of their children by spoiling them. George didn't do any of us any favors. But, there were those who wanted so desperately to believe that just maybe this was their only opportunity to get out of poverty and there were those who wanted to believe that hey, this America truly is the land of opportunity. Woweee! This is great! This is exactly why none of us should ever listen to authority without questioning it's motives first.
A lot of these high interest loans were sold with lies....'make 6 months worth of payments and you can refinance to a lower interest rate and lower monthly payments'. And of course there would be no way to refinance.
ARM's were bundled into CDS/CDO's, and sold off to investors. As such the securities had minimum investment returns that had to be met from the monthly mortgage payments or the CDS's would default... which means that banks had no incentive to renegotiate loans. But the consumers were never told this.
Consumers do indeed have some responsibility in this mess. But the banks and mortgage brokers and real estate agents who committed fraud on loan applications to get unqualified buyers loans, have far more responsibility. They are the experts in the field that the consumer relied on for truth and fairness. Mortgages are complex financial instruments.
Predatory lending laws were in effect in every state for almost 60 years until banking deregulation took place.
I think consumers and really all homeowners are sharing the responsibility for what happened in the housing maket that was the result of mortages that allowed many to get into homes that cost a great deal more than the person's income level should ahve allowed. Real estate values plummeted for almost all property. Mine fell by 30%. Across the country others fell far more. The decrease in tax revenues by, for example, school districts has affected students and teachers directly. They are paying for this. Children sharing responsibility for the decisions of adults; adults who didn't consider the education of children in considreing risk factors when taking the real estate market where they led it.
Our fathers fought for this land, and won, and now the children are forever renting this land from the 1%.
We used to call it truth in advertising...
so robbery by deceit is OK... go fly a kite... and that is the least to worry about. You have no clue about the FEDERAL CRIMINAL BANK that prints counterfit money... removing the "...redeemable in silver upon demand..." from the paper money... and so much more... go tot he web site mentioned below and educate yourself, it is much bigger than the real estate fraud.
9th and 10th amendments NULLIFICATION of unconstitutional legislation by claiming Sovereignty. 38 States have filed bills to claim Sovereignty. One of the best compilation of the current events is a w w w d o r m a n t i d e a s c o m It puts everything that is currently happening in a connect the dots approach that spells it all out. It put everyone on the same page, ready to answer any questions from the troll who come to debunk you as idiots and post on the NET to embarrass you.
This is what happens when you dont let Capitalism do its job. The banks should have been forclosed on by the Feds and there assets sold off. The S&L crisis in the 1980s were the Savings and Loans were taken over and sold off under the Resolution Trust Company should have happened and people like Charles Keating went to jail.I know many of you are too young to know what happened but then you have google...You will find that the white house BJ was the tip of the Iceberg known as Whitewater and the S&L Crices in Arkansaw
My Mayor- Mike White and Bill Clinton are also responsible. Here in Cleveland there were new houses being built and old ones being torn down. Neighboorhood Revtilization was in. Problem is that the rust belt never fully recovered from the trade wars. People in Cleve,PGH,Detroit,Buffalo did not have the 15.00 a hour jobs anymore with benifits in the steel mills. Every president has supported free trade since Reagan. Both Rep and Dems wanted to look good with voters and get them into housing and fix up the decaying inner city. The morgage bond idea seemed to be sound at first and in many ways it was. But rules were relaxed on red lining and politions put pressure on the bank to make these sub prime mortages....However the bond holders and those that took out the mortgages should have read the fine print and they had every right too under SEC and Common Law. No one made them take out the loans or invest there money. Greed on all sides won the day.
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The Idea of creating bonds out of pools of mortgages sounds sound at first. Banks only have X number of money to lend out via despositers. But if you could pool your mortgages together and sell them as bonds on the stock exhange you can look good and meet your community lending requirements. Banks became agents for those that wanted to invest in these new bonds(Lehman,Drexall,The Asians). New federal programs wanted minorities out of subsidized housing into owner occupied housing,Banks Made loans and made money via service fees,wraped morgages into bonds,Investers traded them back and forth like stocks and made money. Everyone happy. Federal Housing Happy and Blacks Voters Happy(Bill Clinton who started welfare "reform") Banks Happy(dont have to rely on depositors and FDIC limits on redlining),Investors Happy(Have new "safe" bonds backed by real estate). It was a good idea at first. and in some ways it still is a good example of creative thinking and breaking the ol stodgy stingy banking model.....But the bailout did not help the banks......It helped the investors who took the risk in the first place who also should of known better. The bonds were long term had banks elected to hold off on forclosures the housing market would have rebounded as it is doing now. Over 30 years real estate is a solid investment. But the shit hit the fan in 2008 and thats only 4 years of out 30. Somebody here is not very patient. The Idea of a bond is a long term safe investment. Had we done nothing this would have fixed itself.