A very scary thing the whole subprime fiasco…

Mornin’ Christy.

Christy!

Uff da.

My hometown in southwestern Ohio has seen a large increase in the number of foreclosures. I have to believe this will only increase in the next year or so.

There is a special place in hell for the guy that came up with the balloon payment on a variable interest rate mortgage.

Next step: a Republican-sponsored immunity bill for subprime mortgage lenders will be rammed through Congress over the token objection (and with the quiet approval) of Democrats.

Cramer, the financial guy, has said he predicts 50 million foreclosures by next year…50 million!!!

This is from the NYTimes yesterday:

High-cost subprime mortgages have often been framed as loans that catered to people with blemished credit records or little experience with debt.

There has been less attention paid to the concentration of these loans in neighborhoods that are largely black, Hispanic, or both. This pattern, documented in federal loan records, holds true even when comparing white middle-income or upper-income neighborhoods with similar minority ones.

Bustednuckles @ 6

There is a special place in hell for the guy that came up with the balloon payment on a variable interest rate mortgage.

There are laws against this -many still in place – but with the Rethugs, the banks were allowed (encouraged) to overlook them.

Bustednuckles @ 6

There is a special place in hell for the guy that came up with the balloon payment on a variable interest rate mortgage.

I remember having that on my first house (condo) purchase. I think it was a seven year balloon payment. We got out of that one before the seven years were up. This would have been in 1992…

So redlining has morphed into a new method of keeping black home ownership to a low?

The Limbo should be the new national dance.

Biodun @ 9

This is from the NYTimes yesterday:

High-cost subprime mortgages have often been framed as loans that catered to people with blemished credit records or little experience with debt.

There has been less attention paid to the concentration of these loans in neighborhoods that are largely black, Hispanic, or both. This pattern, documented in federal loan records, holds true even when comparing white middle-income or upper-income neighborhoods with similar minority ones.

And, from what I have read, minorities were specifically singled out because they were assumed to be ignorant on these issues. Seeing how hard it is for many to get loans (red lining and all) I imagine in a number of cases that this also took the form of pressure to take particular types of loans.

I read this week Guiliani will use Nixon’s Southern Strategy.

bg at 12 — That’s how I have been reading all the reseaerch on this. The truly slick aspect of this is that a lot of it morphed into micro-targeted telemarketing redline-downplay salespitches to african-american and hispanic communities via a “pay off your credit cards” salespitch and an overleveraged amount, often foisted on the elderly regardless of color as well.

It is an enormous mess. And one that we are going to be dealing with for quite a while.

“but Bush Administration action only began when big-money investors started being imperiled,…”

But…but…He seemed so compassionate when I voted for him twice?”

It looks as if the Thugs are going to take a page from George Wallace’s campaign play-book. I think it was George who said, after an election loss, (where he ran a “moderate” campaign) that he would never be out “N’d” again.

Sounds as if Rudy is going to run on his record of keeping brown and black people in “their place” while he was mayor.

And this tidbit:

But the Fed study also suggests that a big part of the reason may have to do with the lenders that minority borrowers do business with. The biggest home lenders in minority neighborhoods are mortgage companies that provide only subprime loans, not full-service banks that do a range of lending.

That’s like the seedy liquor stores in inner-city neighborhoods that sell oodles of malt-liquor beer.

(Same link as my 9.)

I read an article from the NY Times yesterday (can’t access it right now) that mentioned that many college-towns are less affected by the crisis as their populations stayed away from the subprime loans. It noted that possibly college professors are more educated to the pitfalls, but also opined that college faculties may be more conservative with their money and not inclined to take risks. I got a laugh out of that, after all the demonizing of “liberal” college profs….

And, btw, I’ve been trying to do some research on the elderly and the subprime mess, but haven’t found a lot of solid information on this. I know it’s happened, because we know several people who were cold-called with marketing pitches on bad loans in the last few years, as well as folks who have had mortgage difficulties with balloon payments and the like. If anyone knows of good resource information on this, I’d love to see it.

Anyone interested in the mortgage meltdown should check out Calculated Risk. Fair warning, it makes learning about mortgage underwriting practices strangely addictive…

Don’t forget the ripple effect: when that $500K faux château goes into default and is abandoned (possibly trashed) by its occupants, it will deteriorate very quickly, bringing down the property values of its neighbors. Even if someone buys it, the price will undoubtedly be drastically lower, lowering the resale value of nearby comparabiles. Your neighbor’s subprime loan doesn’t just hurt him and his bank; we all lose.

Well, the African American community has not been fooled at the polls. Thus the importance of strategeries to keep them from voting.

What is really infuriating is that it shows how incredibly far we still have to go, and how much farther behind we are.

Has anyone read “The Earth without Humans?” We are really in a World of Trouble, which should be the true WOT we fight. On this, we are truly in it together.

NZ Expat — When Mr. ReddHedd and I started house hunting a few years ago, we did a number of calculations to determine what we felt we could reasonably afford based on our income projections and potential house payments with rate increases and such, and we looked for a house within a range we felt was do-able as a result. When we started looking for a loan for said house, we were getting these enormously inflated money offers — in the hundreds of thousands of dollars more than we thought was remotely sane sort of range.

We knew not to trust those figures because we are attorneys and inherently mistrust anything like that. But how many people fell for the marketing pitch? It was insane…absolutely, completely insane, based on our own calculations. But how many people trusted the banks and their calculations?

A little OT
I thought this was really funny in a sad sort of way. She’s making a smart business decision, but it’s a sad reality check on the ’strength’ of the dollar

The world’s richest model has reportedly reacted in her own way to the sliding value of the US dollar – by refusing to be paid in the currency.
Gisele Bündchen is said to be keen to avoid the US currency because of uncertainty over its strength.

http://news.bbc.co.uk/1/hi/business/7078612.stm

The Bankruptcy Bill took many years to mature; the stink grew as it came to fruition, and our elected representatives still continue to walk around with a huge smile on their collective, bought-off asses (maybe I should say faces – but I see very little difference)…

I did BR Law for a while, and saw a grand total of ONE case of consumer credit-card abuse…

Catastrophic, unexpected medical bills, however – 80% of my practice.

Sleep well, ya fuckin’ whores…

edit: I respect an honest, hard-workin’, working girl much more, and shouldn’t have demeaned them…

NZ Expat, now in KS @ 19:

This is from the NYTimes article:

The list of metropolitan areas with the smallest percentage of high-cost home loans is dominated by small cities with big colleges, including Ithaca, N.Y.; Iowa City; Madison, Wis.; Morgantown, W.V.; and State College, Pa.

Is it because their educated residents were so much smarter than the rest of us, and foresaw the folly? Is it because baby boomers, coughing up tuition for their children, are enriching those economies — with dollars often borrowed on refinanced houses back home? Or is it because aging boomers themselves are relocating with big down payments in hand and retirement in mind?

NZ Expat, now in KS @ 19

I read an article from the NY Times yesterday (can’t access it right now) that mentioned that many college-towns are less affected by the crisis as their populations stayed away from the subprime loans. It noted that possibly college professors are more educated to the pitfalls, but also opined that college faculties may be more conservative with their money and not inclined to take risks. I got a laugh out of that, after all the demonizing of “liberal” college profs….

Here you go!

I note, however, that while SF appears on the list of towns least affected by the sub-prime meltdown, they are high on the list of places where foreclosures are on the increase. People bought at the edge of their financial resources, often with adjustable rate mortgages (regular, not sub-prime), and now can’t deal with the hike in rates and payments.

Ward Connerly a pro bono client of Zogby polls

Banking corruption seems to be a family disease. Anyone recall the S&L debacle under daddy bush.

And Christy, this one’s for you…*g*:

“We’re like what middle-class America used to be,” said Barbara Alexander, a real estate agent in Morgantown, home of West Virginia University. “We’re insulated from what happens in other places, and the lenders and buyers are more conservative. I can’t remember the last time we had a recession in Morgantown.”

(Same link as my 27.)

Peterr @ 28:

Scooped you yet again!…*g*

Christy Hardin Smith @ 24

NZ Expat — When Mr. ReddHedd and I started house hunting a few years ago, we did a number of calculations to determine what we felt we could reasonably afford based on our income projections and potential house payments with rate increases and such, and we looked for a house within a range we felt was do-able as a result. When we started looking for a loan for said house, we were getting these enormously inflated money offers — in the hundreds of thousands of dollars more than we thought was remotely sane sort of range.

We knew not to trust those figures because we are attorneys and inherently mistrust anything like that. But how many people fell for the marketing pitch? It was insane…absolutely, completely insane, based on our own calculations. But how many people trusted the banks and their calculations?

I’ve run into that too. I refinanced a couple of times in the last decade to lock in lower rates. Floated a few ARM’s, waited till I thought the time was right and locked in a nice low 30 yr. I had to beat back the banks with a rusty nail studded stick to get them to shut up about taking out equity, oversized loans and so on and on and on and on. It was ridiculous.

RealWorld @ 30

Banking corruption seems to be a family disease. Anyone recall the S&L debacle under daddy bush.

Small adjustment.

Christy Hardin Smith @ 15

bg at 12 — That’s how I have been reading all the reseaerch on this. The truly slick aspect of this is that a lot of it morphed into micro-targeted telemarketing redline-downplay salespitches to african-american and hispanic communities via a “pay off your credit cards” salespitch and an overleveraged amount, often foisted on the elderly regardless of color as well.

It is an enormous mess. And one that we are going to be dealing with for quite a while.

So how DO we deal with it? I hear a lot whinging from all over the political spectrum and I see some legislation in progress to prevent it in the future, but I’ve yet to see what I’d consider a viable solution.

Best solution I’ve heard so far is to force the companies to restructure at their cost the abusive mortgages into conventional mortgages. But I’m not enough of an accountant to know if the companies could survive that hit without a federal bailout. I want to companies to survive (well, most of them), but I’m sure NOT in favor of bailing them out of their own greed.

CHS, you’ve been through the math. Your thoughts?

Boxturtle (Is it time make a BIG federal push to increase home ownership? $$$$$$$)

As I said in the last thread, Robert Rubin is being made chairman of Citigroup a banking and investment group that got hit hard by the subprime meltdown. Rubin is a former Secretary of the Treasury. The current Treasury Secretary is Henry Paulson from Goldman Sachs. In other words, Treasury is not much more than an extension of the American financial community. These folks don’t notice ordinary Americans at all or only view them as chumps to be taken advantage of. Whose interests do you think Henry Paulson is representing? Yours or big investors?

I would be in favor of some type of program that let the folks with the bad mortgages restructure their mortgage into something more sensible, with another bank. Then let the ones that DID put out these loans sink or swim.

Won’t happen, though. It will be the other way around. *fume*

Since you all are talking about a subject near and dear to my heart, FDL should also look into the subject of Mortgage Servicing Fraud.

I got a taste of it a while ago at Calculated Risk when they said your Mortgage Servicer can charge you $9.99 a minute to talk to them to straighten out a problem they created. At that rate a 10 minute conversation or hold could cost $100 bucks! I thought that was incredible, but apparently some of the stories get much much worse.

http://www.msfraud.org

I think the fire pups and in particular CHS could do a lot to flush some of this out in the open.

I think this is particularly egregious because you can’t choose your mortgage servicer. The loan holder chooses the servicer and you have no recourse except to get a lawyer before it is too late!

Thanks for the Blog! Go Kucinich! Go Edwards!

Hugh @ 36

As I said in the last thread, Robert Rubin is being made chairman of Citigroup a banking and investment group that got hit hard by the subprime meltdown. Rubin is a former Secretary of the Treasury. The current Treasury Secretary is Henry Paulson from Goldman Sachs. In other words, Treasury is not much more than an extension of the American financial community. These folks don’t notice ordinary Americans at all or only view them as chumps to be taken advantage of. Whose interests do you think Henry Paulson is representing? Yours or big investors?

Don’t forget that Rubin raised taxes on the rich & brought the federal budget into surplus.

We’ve always run our finances on a very different model than the norm. We bought our house from someone who kept saying “At our age, we should be further up the ladder from where we are.” She seemed anxious and unhappy.

We have a philosophical approach that we should live as if we never need the next few paychecks to keep our home, as it allows my husband to make ethical choices that he can live with.

He’s been fired for one job for insisting on ethical environmental behavior (he was the first environmental inspector on the pipeline from Fairbanks to Prudhoe Bay, but what he failed to understand was that his role was to be ceremonial. When he actually did his job, it wasn’t pretty). He also has been instructed to alter data, and when that happens, he walks. So, our finances are frugal and conservative so that we can live with ourselves.

But I also hate to clean. A smaller place is better for me. And, coming back from overseas, it all looks pretty palatial. What I want is running water (which I didn’t have in our place in Alaska), a toilet (which I didn’t have in Alaska), and heat (which I didn’t have in NZ). I’m pretty happy right now!

Hugh @ 36

As I said in the last thread, Robert Rubin is being made chairman of Citigroup a banking and investment group that got hit hard by the subprime meltdown. Rubin is a former Secretary of the Treasury. The current Treasury Secretary is Henry Paulson from Goldman Sachs. In other words, Treasury is not much more than an extension of the American financial community. These folks don’t notice ordinary Americans at all or only view them as chumps to be taken advantage of. Whose interests do you think Henry Paulson is representing? Yours or big investors?

Hey – that’s a rhetorical question, right?

(Can’t fool me – I was edumacated before GWB got around to makin’ our chillen’ book-smart. heh-heh, (doin’ my best Jon Stewart impersonation).

Poor and lower middle class Americans have always been ripped-off by wall street, which is why the two Americas theme resonates in my rural Iowa community.

The subprime fiasco was predictible and there were regulatory impediments in place… No one enforced them(sound familiar)

Disaster Capitalism= the Chairman of the federal Reserve saying “irrational exhuberance” after the carcass has been ravaged. The Banks will receive a bailout while more American Dreams are ruined.

Way off the topic of money. I’m sooo sorry!

But here is an update from the waterboarding demonstration in DC. It’s really HORRIBLE to see it in action.

http://www.dailykos.com/story/2007/11/5/93729/5043

eCAHNomics @ 39

Hugh @ 36

As I said in the last thread, Robert Rubin is being made chairman of Citigroup a banking and investment group that got hit hard by the subprime meltdown. Rubin is a former Secretary of the Treasury. The current Treasury Secretary is Henry Paulson from Goldman Sachs. In other words, Treasury is not much more than an extension of the American financial community. These folks don’t notice ordinary Americans at all or only view them as chumps to be taken advantage of. Whose interests do you think Henry Paulson is representing? Yours or big investors?

Don’t forget that Rubin raised taxes on the rich & brought the federal budget into surplus.

I think bringing in Bob Rubin shows what deep shit Citi is in. The $16-18 billion write offs are probably just the beginning. Haven’t heard much from Bank America who also received permission to use 30% regulated money to prop up the”investment” side of business.

peanutbutter @ 37

I would be in favor of some type of program that let the folks with the bad mortgages restructure their mortgage into something more sensible, with another bank. Then let the ones that DID put out these loans sink or swim.

Won’t happen, though. It will be the other way around. *fume*

We’ll see. A lot of Southern Republicans got caught in this too. A lot of elderly voters as well. I think this is going to become a bipartisan issue in the next congress and the real fight will be over what proportion of the costs is carried by each of the businesses, borrowers & taxpayers. The lenders will be busy buying congresscritters between now and then.

One thing I am hearing is that the leaders think they’d get a better deal with the current congress (there’s a shock)and may make a push to solve this sooner rather than later.

BoxTurtle (Sooner is better, regardless of the motives)

Just adding…I’m shaking just reporting on this. Who was it who said it was just a little surfing?

Steve-AR
Agree Citi bringing back Rubin is a sign of desperation. I’ve always thought of him as a solid citizen (as opposed to flake, in one of life’s great binaries), but my record on choosing good guys is mediocre (as opposed to picking bad guys, when I’m almost always right). It’s hard to tell from the outside how deep the problems go. However, the existence of all the traps for poor people on the underlying mortgage makes one think that all the derivatives might be close to worthless.

So what part of SUBprime did they not understand?

NZ Expat, now in KS @ 19

I read an article from the NY Times yesterday (can’t access it right now) that mentioned that many college-towns are less affected by the crisis as their populations stayed away from the subprime loans. It noted that possibly college professors are more educated to the pitfalls, but also opined that college faculties may be more conservative with their money and not inclined to take risks. I got a laugh out of that, after all the demonizing of “liberal” college profs….

And… (sadly) very few are minorities

eCAHNomics @ 39

Hugh @ 36

As I said in the last thread, Robert Rubin is being made chairman of Citigroup a banking and investment group that got hit hard by the subprime meltdown. Rubin is a former Secretary of the Treasury. The current Treasury Secretary is Henry Paulson from Goldman Sachs. In other words, Treasury is not much more than an extension of the American financial community. These folks don’t notice ordinary Americans at all or only view them as chumps to be taken advantage of. Whose interests do you think Henry Paulson is representing? Yours or big investors?

Don’t forget that Rubin raised taxes on the rich & brought the federal budget into surplus.

I am not sure that Rubin was well known for raising taxes on the rich. He favored low interest rates and budget discipline. My impression is that Clinton’s policies continued and did not reverse the practice of taxing the wealthy lightly.

Then there is this little nugget from wiki:

Later, affirming his career-long interest in markets, Mr. Rubin joined Citigroup. He serves as a Director and Chairman of the Executive Committee, and remains there to this day. He sparked controversy in 2001 when he contacted an acquaintance at the Treasury Department and asked if the department could convince bond-rating agencies not to downgrade the corporate debt of Enron, a debtor of Citigroup. Rubin wanted Enron creditors to lend money to the troubled company for a restructuring of its debt; a collapse of the energy giant might have serious consequences for financial markets and energy distribution. The Treasury official refused. A subsequent congressional staff investigation cleared Rubin of any wrongdoing, but he was still harshly criticized by political opponents.

It rather sounds like he would like to do now with subprime mortgages what he previously wanted for Enron, and in both cases for Citigroup’s benefit.

OT..

The House Judiciary Committee will file paperwork for a criminal contempt resolution vote against Harriet Miers, former White House counsel, and Josh Bolten, the White House chief of staff, within the next few hours, according to a Democratic insider.

It does not mean there will necessarily be contempt votes on Miers and Bolten, but the contempt resolutions have to be filed with Lorraine Miller, the House Clerk, before any floor vote takes place.

Politico

Steve-AR @ 50

OT..

The House Judiciary Committee will file paperwork for a criminal contempt resolution vote against Harriet Miers, former White House counsel, and Josh Bolten, the White House chief of staff, within the next few hours, according to a Democratic insider.

It does not mean there will necessarily be contempt votes on Miers and Bolten, but the contempt resolutions have to be filed with Lorraine Miller, the House Clerk, before any floor vote takes place.

Politico

Snort. What the hell took them so long?

NZ Expat, now in KS @ 40

But I also hate to clean. A smaller place is better for me. And, coming back from overseas, it all looks pretty palatial. What I want is running water (which I didn’t have in our place in Alaska), a toilet (which I didn’t have in Alaska), and heat (which I didn’t have in NZ). I’m pretty happy right now!

Ugh. Nothing worse than seeing your breath in the shower when its snowing outside. Welcome home.

Biodun @ 27

NZ Expat, now in KS @ 19:

This is from the NYTimes article:

The list of metropolitan areas with the smallest percentage of high-cost home loans is dominated by small cities with big colleges, including Ithaca, N.Y.; Iowa City; Madison, Wis.; Morgantown, W.V.; and State College, Pa.

Is it because their educated residents were so much smarter than the rest of us, and foresaw the folly? Is it because baby boomers, coughing up tuition for their children, are enriching those economies — with dollars often borrowed on refinanced houses back home? Or is it because aging boomers themselves are relocating with big down payments in hand and retirement in mind?

In regards to Iowa City…. It’s because the ‘general’ population isn’t stupid enough to fall for the gimmick. Another reason is because, economically, we’re behind much of the country and don’t typically follow national trends. Our economy rolls and no-one wants to chance things. Maytag has just recently shut down here (Ok, they’re technically over in Newton, but … around here that’s only 1/2 hour drive, so same place). Many of us save for ‘rainy’ days.

I’ve read stats where 90-95% of the population in Iowa are just one generation off the farm. I think it’s not that high any longer, maybe 80% (I’m second generation off the farm with first cousins back on the farm). I think that that has something to do with us not falling for the scams.

Despite the overall population in the Cedar Rapids / Iowa City corridor not being stupid enough to fall for the scams, there are more than enough that it will make things ‘interesting’. There are 3 houses on my street that have become rentals, with one of them having been on the market on and off for 5 years. I’m not sure if I like that trend. My neighborhood is literally 5 minutes from Rockwell Collins International Headquarters on a busy day. There will eventually be a fall out of the sub-prime around here, but it may take a little longer to show up and not cut as deeply as other places.

yellowsnapdragon @ 52

NZ Expat, now in KS @ 40

But I also hate to clean. A smaller place is better for me. And, coming back from overseas, it all looks pretty palatial. What I want is running water (which I didn’t have in our place in Alaska), a toilet (which I didn’t have in Alaska), and heat (which I didn’t have in NZ). I’m pretty happy right now!

Ugh. Nothing worse than seeing your breath in the shower when its snowing outside. Welcome home.

The idea of not having running water or indoor plumbing in this day and age just makes my brain bleed.

EvilDrPuma @ 51

Steve-AR @ 50

OT..

Politico

Snort. What the hell took them so long?

If true, I hope it indicates that prolonged arm twisting has payed off. (Magical thinking or projection?)

christine @ 53

Biodun @ 27

NZ Expat, now in KS @ 19:

This is from the NYTimes article:

In regards to Iowa City…. It’s because the ‘general’ population isn’t stupid enough to fall for the gimmick. Another reason is because, economically, we’re behind much of the country and don’t typically follow national trends. Our economy rolls and no-one wants to chance things. Maytag has just recently shut down here (Ok, they’re technically over in Newton, but … around here that’s only 1/2 hour drive, so same place). Many of us save for ‘rainy’ days.

I’ve read stats where 90-95% of the population in Iowa are just one generation off the farm. I think it’s not that high any longer, maybe 80% (I’m second generation off the farm with first cousins back on the farm). I think that that has something to do with us not falling for the scams.

Despite the overall population in the Cedar Rapids / Iowa City corridor not being stupid enough to fall for the scams, there are more than enough that it will make things ‘interesting’. There are 3 houses on my street that have become rentals, with one of them having been on the market on and off for 5 years. I’m not sure if I like that trend. My neighborhood is literally 5 minutes from Rockwell Collins International Headquarters on a busy day. There will eventually be a fall out of the sub-prime around here, but it may take a little longer to show up and not cut as deeply as other places.

What? There’s another Iowa Citian here? Or did I know that and forget?

Banks (like credit card issuers) make their profits off the interest they collect. Of course they want you to borrow more, buy more, use more credit.

As for the real-estate agents: they make their money from the fees they charge, which are a percentage of the sales price. Never tell them the absolute maximum you can afford, because many of them will show you nothing below that limit. (Tell them ‘no pool’, and you’ll probably see every house they have that has a pool.)

If the housing bubble has supposedly now popped, what will happen next year when the value of millions of overpriced McMansions plunge in the face of 2-7 million mortgage defaults?

What’s going to happen to municipal property tax bases as whole suburbs lose a third or half of their property value?

What’s going to happen to housing when huge corporations scoop up millions of defaulted homes for a third of original value and then rent them to their former owners?

EvilDrPuma @ 51

Steve-AR @ 50

OT..

Politico

Snort. What the hell took them so long?

It sort of reminds me of the Entmoot in the Lord of the Rings where it takes them all day and into the evening to say “Good morning”.

Steve-AR @ 55

EvilDrPuma @ 51

Snort. What the hell took them so long?

If true, I hope it indicates that prolonged arm twisting has payed off. (Magical thinking or projection?)

Note the caveat about it not automatically meaning a vote. I’m holding out on actual praise until I see that much spine out of the weasels.

We have a government of, for, and by the corporations. Which Democratic presidential candidate is most likely to change that? Which is least likely? What are their relative rankings in the polls? ’nuff said.

peanutbutter @ 37

I would be in favor of some type of program that let the folks with the bad mortgages restructure their mortgage into something more sensible, with another bank. Then let the ones that DID put out these loans sink or swim.

Won’t happen, though. It will be the other way around. *fume*

I’m soooo with you on that.

And while Pelosi, Schumer, Barney Frank, Bernanke, Paulson, and Rahm were doing the circle jerk, Country Wide, WaMu, and other bankrupt banks and mortgage houses were borrowing a couple of hundred $billions from the Home Loan Bank System.

The HLBS was established in 1932 to help people keep their homes, not bail-out banks.

The big New York banks, financial houses, and most hedge funds are broke. Lets freeze the paper, keep people in their homes, and start over.

Steve-AR at 50 — You’ll get more complete info. from the committee itself. Try here, and I’m told this is just for starters, FYI.

EvilDrPuma @ 60

Steve-AR @ 55

If true, I hope it indicates that prolonged arm twisting has payed off. (Magical thinking or projection?)

Note the caveat about it not automatically meaning a vote. I’m holding out on actual praise until I see that much spine out of the weasels.

Caveat on the caveat..It is still just a rumor.

EvilDrPuma @ 60

Sounds like they have definitely decided that they may decide at a later date.

EvilDrPuma — Floor scheduling. For example, SCHIP, budget continuing resolutions, etc., etc. Pelosi and Hoyer control the floor, not Conyers.

Steve-AR @ 64

EvilDrPuma @ 60

Note the caveat about it not automatically meaning a vote. I’m holding out on actual praise until I see that much spine out of the weasels.

Caveat on the caveat..It is still just a rumor.

This Congress has burned us too many times. I’m just going to withhold any well wishes until I see results.

Evil Dr Puma,

I bought in Phoenix on a teaser 3-2-1 buydown and lost it during the McCain-Keating Savings and Loan scam of the 1980’s

This Iowa boy bought the next time at a fixed 6%

Fool me once… Iowans are educated sometimes the hard way

EvilDrPuma @ 56

christine @ 53

In regards to Iowa City…. It’s because the ‘general’ population isn’t stupid enough to fall for the gimmick.

What? There’s another Iowa Citian here? Or did I know that and forget?

Not technically an Iowa Citian…. work at UIHC and live in CR. email me at christinenotes (at) gmail (dot) com

Christy Hardin Smith @ 64

Steve-AR at 50 — You’ll get more complete info. from the committee itself. Try here, and I’m told this is just for starters, FYI.

Thanks for the link to a more “primary reference”.

My daughter bought her first house a few years ago with zero down. I helped her to do the deal. She had two loans- one for 80% of the price and one for 20%. Both had interest rates fixed for a few years and were then variable.

Within two years, her home had appreciated enough that she was able to refinance with a 30 years fixed rate loan at a still very low rate.

Without such an arranement, she would have been unable to buy a home. She now has a couple of hundred thousand dollars in equity.

Such loans can be very useful in helping people to get started as home owners provided that they recognize the risks and manage them effectively. If they are unable to live with the worst case scenario, they should pass.

Taking away a tool for many because it may be abused by a few is a poor strategy in my opinion.

Bustednuckles @ 6

There is a special place in hell for the guy that came up with the balloon payment on a variable interest rate mortgage.

Q: What do you call 1,000 predatory sub prime mortgage brokers in Hell?

A: Satan’s family reunion — high fives and double shots of brimstone for everyone!!!

-ck- @ 72

Q: What do you call 1,000 predatory sub prime mortgage brokers in Hell?

A: A beginning.

CHS:

I’d like to remind your readers that FDL has been right on top of this issue by doing fundraising for Donna Edwards in her primary against plutocrat puppet Al Wynn, who represents a district that includes Prince George’s County, seat of the Washington metro area’s suburban black middle class, where the foreclosure issue is big.

Re: Citi..Rut..Roh:

BOSTON (MarketWatch)
Citi ) in a quarterly regulatory filing Monday said its so-called level 3 assets as of Sept. 30 were $134.84 billion. Level 3 assets are holdings that are so illiquid, or trade so infrequently, that they have no reliable price, so their valuations are based on management’s best guess.

link

rwcole @ 72

Taking away a tool for many because it may be abused by a few is a poor strategy in my opinion.

I agree that they can be useful; I made use of them myself. However — it clearly has been abused by way more than “a few” — or we wouldn’t BE in this mess. It’s also clear that the problem is not in thoughtless individuals demanding these sorts of things, but in the predatory practices of the companies. So something needs to be done to eliminate the predation. That doesn’t necessarily mean getting rid of the tools.

rwcole at 71 — Not the same tool, necessarily, according to all the reading that I’ve done. A lot of these were secondary loans, not primary ones, and were targeted specifically to people who either (a) had no realistic other credit options available to them or (b) were considered to be “poorly informed/low information” targets (i.e. racial minorities and.or the elderly, and I’m not even going to get into the whys and wherefores of that).

Using variable interest on an excellerated payment plan strategy is one thing. A secondary mortgage in an amount that is designed to likely be above what is feasible for an elderly couple on a fixed income with limited access to advice or understanding and a wholesale use of strongarm and pressure tactics to close the deal is another thing entirely.

EvilDrPuma @ 68

Steve-AR @ 64

Caveat on the caveat..It is still just a rumor.

This Congress has burned us too many times. I’m just going to withhold any well wishes until I see results.

So true.

Where are the e-mails?

christine @ 53

Biodun @ 27

NZ Expat, now in KS @ 19:

This is from the NYTimes article:

In regards to Iowa City…. It’s because the ‘general’ population isn’t stupid enough to fall for the gimmick. Another reason is because, economically, we’re behind much of the country and don’t typically follow national trends. Our economy rolls and no-one wants to chance things. Maytag has just recently shut down here (Ok, they’re technically over in Newton, but … around here that’s only 1/2 hour drive, so same place). Many of us save for ‘rainy’ days.

I’ve read stats where 90-95% of the population in Iowa are just one generation off the farm. I think it’s not that high any longer, maybe 80% (I’m second generation off the farm with first cousins back on the farm). I think that that has something to do with us not falling for the scams.

Despite the overall population in the Cedar Rapids / Iowa City corridor not being stupid enough to fall for the scams, there are more than enough that it will make things ‘interesting’. There are 3 houses on my street that have become rentals, with one of them having been on the market on and off for 5 years. I’m not sure if I like that trend. My neighborhood is literally 5 minutes from Rockwell Collins International Headquarters on a busy day. There will eventually be a fall out of the sub-prime around here, but it may take a little longer to show up and not cut as deeply as other places.

This should not be framed as “stupid people” versus others. With red lining there is generally no choice. It also is more of the blame the victim thinking – as in “in you get cancer it is your own fault because you don’t exercise.” In short let’s not support government solutions to egregious behavior.

What worries me is that Bush will find the money to bail out the Mortgage lenders and the Hedge funds who bought the loans but he still won’t fund healthcare!

Professor Foland @ 21

Anyone interested in the mortgage meltdown should check out Calculated Risk. Fair warning, it makes learning about mortgage underwriting practices strangely addictive…

Other econo-blogs that decipher the BS:

NakedCapitalism.com

Money Matters

Economic Dreams

As a residential real estate appraiser, and back in August I started feeling like a deck hand on the Titanic. “You’re holding a first class ARM ticket, sir? This way to the lifeboats — best refi now, before the undertow from sinking equities closes the window of opportunity.”

STTP in Ohio @ 79

EvilDrPuma @ 68

This Congress has burned us too many times. I’m just going to withhold any well wishes until I see results.

So true.

Where are the e-mails?

CHS gave a link that provides more info..to me sounds like more of the same..

link

From one of the slimeball subprime lenders:

We say yes to 92% of all applicants!

92 percent indeed…(Not to worry: I won’t tempt you by linking that…*g*)

brendan — One of the many reasons I love Donna is that she’s been on top of this issue for a while. And yes, her district has been feeling the crunch on this one…

Things Come Undone @ 80

What worries me is that Bush will find the money to bail out the Mortgage lenders and the Hedge funds who bought the loans but he still won’t fund healthcare!

And maybe he’ll tack on another fifty billion or so for his war while he’s at it.

Richmond @ 80

christine @ 53

In regards to Iowa City…. It’s because the ‘general’ population isn’t stupid enough to fall for the gimmick. Another reason is because, economically, we’re behind much of the country and don’t typically follow national trends. Our economy rolls and no-one wants to chance things. Maytag has just recently shut down here (Ok, they’re technically over in Newton, but … around here that’s only 1/2 hour drive, so same place). Many of us save for ‘rainy’ days.

I’ve read stats where 90-95% of the population in Iowa are just one generation off the farm. I think it’s not that high any longer, maybe 80% (I’m second generation off the farm with first cousins back on the farm). I think that that has something to do with us not falling for the scams.

Despite the overall population in the Cedar Rapids / Iowa City corridor not being stupid enough to fall for the scams, there are more than enough that it will make things ‘interesting’. There are 3 houses on my street that have become rentals, with one of them having been on the market on and off for 5 years. I’m not sure if I like that trend. My neighborhood is literally 5 minutes from Rockwell Collins International Headquarters on a busy day. There will eventually be a fall out of the sub-prime around here, but it may take a little longer to show up and not cut as deeply as other places.

Let me try this again:
This should not be framed as “stupid people” versus others. With red lining there is generally no choice. It also is more of the blame the victim thinking – as in “in you get cancer it is your own fault because you don’t exercise.” In short this leads one to think one should not support government solutions to egregious behavior.

Professor Foland @ 21

Anyone interested in the mortgage meltdown should check out Calculated Risk. Fair warning, it makes learning about mortgage underwriting practices strangely addictive…

second that recommendation. i’ve even started reading comments on some of the threads. ‘course, to begin with about 95% of it was over my head… but now it’s only about 90% – so i think i’m making progress *g*

Christy Hardin Smith @ 85

brendan — One of the many reasons I love Donna is that she’s been on top of this issue for a while. And yes, her district has been feeling the crunch on this one…

IIRC, Donna Edwards district has the highest percentage of “middle class” A-A’s in the US. From CHS’s post, a group that was targeted.

Richmond at 86 — Yep. Redlining has existed for years, in any number of forms. And it is insidious. But there is also an element of assumptions of lack of education and/or desperation from some of the marketing micro-targeting on some of these loan strategies that shows up in the research as well. It’s a double whammy — you target the weak and/or the likely to fall for your pressure tactics, and you target the unable to get financing any other way at the same time.

If people could refianace at a lower rate without to much effort that would slow this crisis down a lot. But Banks would have to show losses then as money expected from these high loans disappeared.
Of course Merille Lynch and Citibank have already lost CEO’s because of the losses they already have thanks to this.
Homeowners are the foundation of this problem helping Banks, Mortgage lenders and hedge funds is like fixing the roof of a building whose foundation is sinking so much that the roof is sagging.
Until you fix the foundation the roof will keep sagging.

As has been pointed out over at calculatedrisk, putting disadvantaged groups at disproportionate rates into subprime loans is not the only effect. In the majority of cases, the borrowers of the subprime loans would have qualified for normal, fixed, GSE-type loans at much lower APRs.

Legally, mortgage brokers are not required to have their clients’ fiduciary interest foremost. So no small number of brokers preferred to put clients into subprimes, which generated high fees to the broker, rather than more normal products, which generate lower fees to the broker.

Putting some effort into closing this little legal loophole might be a good way to start.

Things at 91 — It’s a short term bottom line report versus a long-term health of the company problem. And in the business climate of gaming the system that built up the last few years of little-regulation Bush strategery? It’s a fine mess, isn’t it?

Hey – it’s November – time to start brushing up on my lyrics to “Alice’s Restaurant”!!.

(the twenty-seven 8 x 10 color glossy photographs, with circles and arrows, with a paragraph on the back of each one, explainin’ what each one is, to be used as evidence against us:)…

okay – I need a little work – used to be able to be able to do the whole thing- front-to-back – and so could my little sister…

(and now she’s married to God’s own Evil-Winger) *s* – I miss her…

Things Come Undone @ 91

If people could refianace at a lower rate without to much effort that would slow this crisis down a lot. But Banks would have to show losses then as money expected from these high loans disappeared.
Of course Merille Lynch and Citibank have already lost CEO’s because of the losses they already have thanks to this.
Homeowners are the foundation of this problem helping Banks, Mortgage lenders and hedge funds is like fixing the roof of a building whose foundation is sinking so much that the roof is sagging.
Until you fix the foundation the roof will keep sagging.

Gee, we were told that cutting taxes always fixes everything. Shouldn’t Bush be leading the way for more of those?

Prof. Foland at 92 — I believe that is a big aspect of the legislation that Barney Frank, Mel Watt and others are working on in the Finance regs. committee, if I read the legislation information correctly.

CHS, Funny how money underlies everything. . .so much is pinned on it, top to bottom.

EvilDrPuma @ 86

Things Come Undone @ 80

What worries me is that Bush will find the money to bail out the Mortgage lenders and the Hedge funds who bought the loans but he still won’t fund healthcare!

And maybe he’ll tack on another fifty billion or so for his war while he’s at it.

Just like the S&L crisis the big guys will get bailed out and the little guys will lose money.
Bush 2 is making the same mistakes Bush 1 made and even though the MSM didn’t cover that story much the S&L bailout did help cause Bush 1’s defeat. Well that and Comedy Centeral’s nonstop Qualye jokes.
But thanks to 9/11 Bush 2 is not getting half the mockery Qualye did.

Let’s boil this down by class

With all due respect rwcole and Richmond,
the person in the lower class who is being “sold” the “American Dream” of home ownership does not have the options or choices that others have. It’s we can take this big risk or stay in the same rental runaround.

Isn’t the American Dream not only to take risks for one’s children in the hope that they will have a better future?

In legal terms we call them Adhesion contracts.
Benefits to the seller but risks to the buyer.

Completely OT, and probably already discussed here, but do we knew more about this?

‘PESHAWAR: The takeover of key government installations including police stations by Al Qaeda-linked militants, and the “surrender” of paramilitary soldiers in Swat district, has brought regular troops closer to action, officials said on Sunday.

http://www.dailytimes.com.pk/d…..007_pg7_46

The prevailing subprime practice of the past half-dozen years?

Book a loan, then promptly sell it (as part of a “securitized debt bundle”). Lotta handsome fees to be made all around.

We called it “churn and burn” when I worked in risk management in subprime VISA/MC.

I had to quit. Our Lexus-driving execs actually laughed at our customers for their financial gullibility.

Sux.

But, yeah, now Bu’ush will come to the rescue of the Big Paper houses.

Sux.

Professor Foland says
November 5th, 2007 at 9:49 am

I really wish Valerie Plame/Wilson would have answered your question the other day – I thought it was the best question of the day – …..

Hey Joe – if you’re reading – it’s me – (the guy you don’t like)….

I’d love to see the Prof’s question answered…

jackie @ 100

Completely OT, and probably already discussed here, but do we knew more about this?

‘PESHAWAR: The takeover of key government installations including police stations by Al Qaeda-linked militants, and the “surrender” of paramilitary soldiers in Swat district, has brought regular troops closer to action, officials said on Sunday.

http://www.dailytimes.com.pk/d…..007_pg7_46

Uh, oh.

bg — Mr. ReddHedd is the money management guru in our family — and we spend a lot of time analyzing where things are with our budget, staying carefully within our means to the extent we possibly can on a month to month basis, trying to save scrupulously for retirement, etc. — and we still worry on a day-to-day basis about college expenses for The Peanut, economic downturns, various investments and savings options, etc. I come from a family where living on the edge was pretty common for a lot of the folks in it, so I know exactly what it is like to have two packs of ramen noodles and not much else in the cupboard for the rest of the month without someone else giving you a hand (my parents were often the family hand-givers because we had a garden and homecanned a lot of it for the winter).

I’ve seen a lot of folks who were family — and clients — over the years work their butts off to run in place. And it is a difficult thing to watch. Personal responsibility and personal choices are a part of it, but some folks begin so far behind the starting line that the rest of us saw when we were born, that just catching up to that is a lifetime’s work. There are no easy choices on any of this — but outright fraudulent business practices in some instances with this ought not be rewarded with a bail-out while the folks who were defrauded head to the local homeless shelter with what remains of their lives and family.

Many are caught in the web of refinancing to pay medical bills and to pull money out of equity to live on while sick. We did it. In two years we will probably have to move cause our sub prime loan payment will go up $1000 a month. And if we refi we have to pay $18,000 in prepayment penalties. Usufuckery

Minorities aren’t going to figure in the upcoming elections because, in case you haven’t heard the latest Bush appointee talking points, Hispanics are going to die first, and African Americans only use their IDs at the check cashing store.

Jim Clausen @ 99

Let’s boil this down by class

With all due respect rwcole and Richmond,
the person in the lower class who is being “sold” the “American Dream” of home ownership does not have the options or choices that others have. It’s we can take this big risk or stay in the same rental runaround.

Isn’t the American Dream not only to take risks for one’s children in the hope that they will have a better future?

In legal terms we call them Adhesion contracts.
Benefits to the seller but risks to the buyer.

And, of course there is usury. The sad fact is that certain people (neighborhoods) have no other options even if they have the money for different types of loans. And as a nation, we should be SUPPORTING house loans to those in these contexts because studies show that people who own their houses are more concerned about things such as neighborhood improvement, well being etc. What is happening now makes no sense on many fronts. Just because one can buy a car that goes 110 MPH doesn’t mean that one should be able to risk other’s lives by going that fast on our highways.

marymccurnin @ 105

Many are caught in the web of refinancing to pay medical bills and to pull money out of equity to live on while sick. We did it. In two years we will probably have to move cause our sub prime loan payment will go up $1000 a month. And if we refi we have to pay $18,000 in prepayment penalties. Usufuckery

I am so sorry for your misfortune.

1,649 DAYZ AND THE KILLIN’ GOEZ ON AND ON AND..

Citizen Hardin Smith and the Firepup Freedom Fighters:

Thanx for the post though it’s like a couple a hard shots ta the forehead with a ballpeen hammer (”thank you, may I have another”). I would like to call all the firepups ta read Naomi Klein’s book and think about our political economy since 1981 within the context of the McCain-Keating savings and loan scam, the ENRON theft and the stock market con job of 2001-2002. A common thread through all a these and the dismantlin’ of the security and exchange laws and regulations durin’ that period was the active complicity of the leadership of the Democratic Party. Bill Clinton was able ta get a Democrat inta the White House by playin to the banks and corporate money speculators in return for campaign contributions and made the Democrats completely dependant on bankin’ and A*P*c money which of course further removed the party apparachiks and leadership from the party base and set ‘em up for the kill in the 1994 congressional elections.

We are now left with the shell of completely compromised congressional leadership in direct confrontation with the party political institutions lead by Howard Dean, so we hafta move to direct confrontation with Democratic politicians and organize grassroots demonstrations aimed at the Democratic Party to prepare the infrastructure for mass demonstrations at the ‘08 convention. The fascist movement that has metastasized in the coup of 2000 has it’s origins in the antebellum South and the relationship of northern banks to the slavocracy which was re-formalized in 1877. The modern incarnation began in 1933 with the America First crowd and folks like Herbert Walker and Henry Ford underwriting Adolph Hitler and of course Prescott Bush and his buddies who actually profited from their Nazi investments after the war.

It’s here, we have a fascist government, supported by a completely corrupted bankin’ and corporate structure that has taken control of the Congress and the Federal judiciary with the active complicity of the Democratic Party establishment. No corrective action is possible until the mass of folks hit the streets and scare the shit outta Democratic politicians…that shouldn’t be tough considerin’ that Karl Rove and Dick Cheney scared ‘em back into last week without a shot bein’ fired in their direction.

Politics right now is not about “momentum” or caucuses or electoral votes…it’s about raisin’ up the Democratic Party base and findin’ a politician who’s willin’ to get elected with that support.

KEEP THE FAITH AND PASS THE FUCKIN’ AMMUNITION, OUR CHOICES HAVE BEEN MADE FOR US!!

mary at 105 — Hugs, hon. Big, big hugs.

In the majority of cases, the borrowers of the subprime loans would have qualified for normal, fixed, GSE-type loans at much lower APRs.

Not necessarily a majority, but a significant percentage of sub prime borrowers could have qualified for better rates and terms they were given.

The deciding factor was low information vs high information borrowers, not racial and/or neighborhood red lining.

The difference is that first time buyers and sub prime borrowers were easy marks for predatory lenders — I was victimized more than once, and I’m a real estate professional. You trust what the mortgage loan officer says, and without insider knowledge of how the industry works, you assume they are looking out for you.

In the prime A paper and FHA world that may be true, but sub prime lending was dominated by used car salesmen turned mortgage loan officers. The YSP (yield spread premiums) that were paid out on some sub prime loans were obscene — but people wanted to believe, and that made them easy marks.

Re; the reference to the S&L thingy.
Are not some/a lot of those folks still playing? Maybe it’s time for a who’s who’s and who’s where list..anyone?

Christy Hardin Smith @ 93

Things at 91 — It’s a short term bottom line report versus a long-term health of the company problem. And in the business climate of gaming the system that built up the last few years of little-regulation Bush strategery? It’s a fine mess, isn’t it?

“Gaming the system ” I knew I forgot something!
The Hedge funds borrowed money from the banks to buy these loans at 10 through 14 to 1 levels.
Meaning for every 1 dollar the Hedges had they borrowed anywhere from $10 to $15 to buy these loans now that the value is dropping a $1 loss can becomes a $14 loss to the banks.
Hedge funds do not have to report their finances so we have no way of knowing how big the problem is.
The Banks obviously do not want to press the Hedge Funds to open up their books because they are afraid of what they will find.
We are in a ” Fine Mess ” everybody here should pull their money from Hedge Funds, Banks, home builders and the stock of Financial firms now.
I fear that at the end of the year when firms HAVE to report income and losses to the government for taxes we will get alot more bad news.

50% of military supplies to Afghanistan comes through Pakistan – per CNN

Mary, I am sorry. Your situation suggests the Rethug double wammy – no national health insurance and invidious lending practices.

Once Biden, Schumer, and Clinton passed their Bankruptcy Bill, forever screwing most mortgage and credit card holders, it was off to the races.

Get out of the way, people. The is a financial tsunami headed our way.

Things Come Undone @ 113

Christy Hardin Smith @ 93

Things at 91 — It’s a short term bottom line report versus a long-term health of the company problem. And in the business climate of gaming the system that built up the last few years of little-regulation Bush strategery? It’s a fine mess, isn’t it?

“Gaming the system ” I knew I forgot something!
The Hedge funds borrowed money from the banks to buy these loans at 10 through 14 to 1 levels.
Meaning for every 1 dollar the Hedges had they borrowed anywhere from $10 to $15 to buy these loans now that the value is dropping a $1 loss can becomes a $14 loss to the banks.
Hedge funds do not have to report their finances so we have no way of knowing how big the problem is.
The Banks obviously do not want to press the Hedge Funds to open up their books because they are afraid of what they will find.
We are in a ” Fine Mess ” everybody here should pull their money from Hedge Funds, Banks, home builders and the stock of Financial firms now.
I fear that at the end of the year when firms HAVE to report income and losses to the government for taxes we will get alot more bad news.

Yup this is also a big one here. Bankers make their money on the resales of loans.

marymccurnin @ 105

Many are caught in the web of refinancing to pay medical bills and to pull money out of equity to live on while sick. We did it. In two years we will probably have to move cause our sub prime loan payment will go up $1000 a month. And if we refi we have to pay $18,000 in prepayment penalties. Usufuckery

Please see my #26, above – and you’ll know where I stand….

Sometimes I can’t decide who to hate more…

but maybe that’s unhealthy in itself…

So I’m just gonna hate ‘em all, if that’s all right with you…

marymccurnin @ 105

Many are caught in the web of refinancing to pay medical bills and to pull money out of equity to live on while sick. We did it. In two years we will probably have to move cause our sub prime loan payment will go up $1000 a month. And if we refi we have to pay $18,000 in prepayment penalties. Usufuckery

So sorry for what you’re going through!!

Christy – my eldest, when she was going to grad school in NJ, worked for a community development financial intermediary. She said that one of the biggest problems and issues in urban areas is that there really are NO banking services at the neighborhood level. In other words, the reason that there are things like check cashing services and pawn brokers, etc. in the neighborhoods is that there are no bank branches there and people have no experience working with banks, having relationships with them and so on. So, in other words, for them to even pay their bills, they have to go to someone and pay a fee to get a money order or whatever.
So, it’s easy for large banking institutions to take advantage – there are large groups of people in this country who have no experience. What we need is one of those organizations like the ones in India who help people save, etc.

Yes, the “bank” mess is all about how they gamed up their “value” based on jacking up the rates as the sub-prime mortgages “ripened.” The smaller financing operations sold off to bigger then those to even bigger money institutions. And everyone was looking at all that money “on paper.”

They knew it was risky, and HOW did they not see where it would go? Yet, we, the ones scraping by, and the mary mcs above (((mary))) are the ones who will pay, just like always. And Forever.

Goddess help us all.

Badwater @ 95

Things Come Undone @ 91

If people could refianace at a lower rate without to much effort that would slow this crisis down a lot. But Banks would have to show losses then as money expected from these high loans disappeared.
Of course Merille Lynch and Citibank have already lost CEO’s because of the losses they already have thanks to this.
Homeowners are the foundation of this problem helping Banks, Mortgage lenders and hedge funds is like fixing the roof of a building whose foundation is sinking so much that the roof is sagging.
Until you fix the foundation the roof will keep sagging.

Gee, we were told that cutting taxes always fixes everything. Shouldn’t Bush be leading the way for more of those?

What and help the little people? No little people bail out the big people’s investing mistakes just like Bush 1 and the Bin Ladens bailed out Bush 2 when his business failed.
After all it was those (snark) sneaky African Americans and poor people who suckered smart Bank managers into giving them loans they couldn’t afford.

Hmmm….”usury”….that would make a hell of a wedge issue…considering the New Testament and all…just a thought.

Mary @ 105 –

FHA has new programs, designed to help homeowners get out of bad sub prime loans. You should check them out. Also, some of the more enlightened sub prime lenders have realized that it’s better to convert ARMs to fixed rate loans than to lose 20-50% of the principal balance by taking the home back through foreclosure.

As sympathetic as I am to the people who were hoodwinked into taking a crappy mortgage or a mortgage they couldn’t afford, what we don’t need is another bailout!

Just like the Telcos that broke the law, the bad actors from both lenders, buyers and wallstreet should not get a bailout!

By bailing out the crooks all you are doing is setting the stage for this kind of thing to happen again. See S&L crisis. Roubini over at RGEmonitor has some great posts up about this. The pitfall is called Moral Hazard.

All you are going to do by bailing folks out is keep the price of housing artificially high and keep folks like me who have been saving for a house and waiting for prices to go down to the true inflation adjusted price!

So basically I get penalized for not being stupid enough to take out a mortgage I can’t afford, pull all the equity out and then running for the hills! Wow, then again maybe I am the stupid one for not doing it!

Oh see also http://www.mortgagefraudblog.com/
for an unending list of folks that are being prosecuted for mortgage fraud. I say yeah to that. My sister who works in mortgage backed securities told me they wouldn’t prosecute. I was livid. Looks like she was wrong. Oh happy day!

PLovering @ 116

Once Biden, Schumer, and Clinton passed their Bankruptcy Bill, forever screwing most mortgage and credit card holders, it was off to the races.

Get out of the way, people. The is a financial tsunami headed our way.

It was my man Grassley who ramrodded that bill. I call him twice weekly and never to fail to mention that 50% of bankruptcies are tied to medical or loss of income family issues. ASS!

Aw Jeez. OT (or at least EPU’d). So about a 1/2 hour ago I went up to Chuck Schumer’s office to join the protest re: Mukasey. Not much going on. A few people and someone handing out flyers. People just walking by not paying much attention. No wonder. Which protest makes the cover of the NYT website?

This one.

The TV writer’s strike. With a pretty picture of Tina Fey.

Helen @ 127

Aw Jeez. OT (or at least EPU’d). So about a 1/2 hour ago I went up to Chuck Schumer’s office to join the protest re: Mukasey. Not much going on. A few people and someone handing out flyers. People just walking by not paying much attention. No wonder. Which protest makes the cover of the NYT website?

This one.

The TV writer’s strike. With a pretty picture of Tina Fey.

I know I’d rather look at Tina Fey than Mukasey or Schumer.

More good econ. news:

The bloodbath in credit and financial markets will continue and sharply worsen
Nouriel Roubini | Nov 05, 2007

It is now clear that the delusional hope that the severe credit and liquidity crunch that hit US and global financial markets would ease has been shattered by the events of the last few weeks. This credit crunch is getting much worse and its financial and real fallout will be severe.

The amount of losses that financial institutions have already recognized – $20 billion – is just the very tip of the iceberg of much larger losses that will end up in the hundreds of billions of dollars. At stake – in subprime alone – is about a trillion of sub-prime related RMBS and hundreds of billions of mortgage related CDOs. But calling this crisis a sub-prime meltdown is ludicrous as by now the contagion has seriously spread to near prime and prime mortgages. And it is spreading to subprime and near prime credit cards and auto loans where deliquencies are rising and will sharply rise further in the year ahead. And it is spreading to every corner of the securitized financial system that is either frozen or on the way to freeze: CDOs issuance is near dead; the LBO market – and the related leveraged loans market – is piling deals that have been postponed, restructured or cancelled; the liquidity squeeze in the interbank market – especially at the one month to three months maturities – is continuing; the losses that banks and investment banks will experience in the next few quarters will erode their Tier 1 capital ratio; the ABCP and related SIV sectors are near dead and unraveling; and since the Super-conduit will flop the only options are those of bringing those SIV assets on balance sheet (with significant capital and liquidity effects) or sell them at a large loss; similar problems and crunches are emerging in the CLO, CMO and CMBS markets; junk bonds spreads are widening and corporate default rates will soon start to rise. Every corner of the securitization world is now under severe stress, including so called highly rated and “safe” (AAA and AA) securities.

link

I think Bernake has been given his marching orders..”Print as much money as needed to delay the depression so the Dems take the blame.”

Maybe there will be some coverage of the waterboarding. . .

http://blog.washingtonpost.com…..v=rss_blog

More on Pakistan for those who are watching it.

I can remember two other times in my life when ranlk and file DOJ lawyers were disgusted and demoralized because of someone named Bush.
1) Iran Contra Pardons

2) When Neil Bush did not get indicted during the S & L crisis.

WHat’s happening with the predatory mortages reminds me of the latter.

What is it with people named Bush and dissing the rule of law? There is a reason so many folks call them the Bush Crime Family

A close friend of mine works forthe Homeless Coalition. This is something she wrote for her director a few months ago. I’m sure she’ll want me to share it:

Critical Mass of Clients and Housing Resources

In recent months, the attrition of job loss and labor flight in specific markets due to globalization, the wave of foreclosures from sub-prime rate mortgages, the saturation of rental housing stock and transitional housing and homeless shelters, all have created a critical mass of clients and housing resources. This condition in turn has had material effects with the following ramifications for the Information Resource Room:

Clients with clear signs of abject poverty, with no horizons and nothing to lose and engaged in a desperate end game, come in looking for increasingly scant resources, even though I continue to research and expand new ones. And I can’t make resource copies fast enough as these are quickly exhausted as the week wears on Some clients are rude, speaking on cell phones as they come in (despite the “no cell-phone” sign in the lobby), and in some instances using vulgar swear words (N- and F-words and so on). Especially heart-rending are the small children who come in with their (polite) parents. Accompanying a few Homeless Coalition staff on a visit to a homeless shelter two years back, I remain haunted by the words of the executive director who was guiding us through the shelter: “We cannot afford to raise another generation of homeless kids.”

The ecology of the subsidized housing situation is the worst I’ve seen from the perspective of the Information Resource Room. I get calls from people about to have their house foreclosed. I even get calls from real-estate agents looking for resources for their own clients! As I indicated above, an array of social and economic issues have contributed to this almost untenable situation, including ancillary side effects. And the demographics are daunting. Something needs to happen soon to relieve these conditions. For my part, one way is to begin 2009 with a different administration in Washington DC.

The American Dream has left some people behind a long time ago.

Hugh @ 59

EvilDrPuma @ 51

Snort. What the hell took them so long?

It sort of reminds me of the Entmoot in the Lord of the Rings where it takes them all day and into the evening to say “Good morning”.

ah, but once they got going they were a force to be reckoned with. let it be so.

Richmond @ 115

Mary, I am sorry. Your situation suggests the Rethug double wammy – no national health insurance and invidious lending practices.

…and no bankruptcy protection.

It will be interesting to see how far the federal government bends over to help the big lenders who are headed for trouble. We can rest assured that they will try to foist off a lot of that bad debt onto we the taxpayers.

Steve-AR @129:

One of the commenters at Roubini’s post said Bernanke “governs by applause meter”.

Things Come Undone @ 113

Christy Hardin Smith @ 93

Things at 91 — It’s a short term bottom line report versus a long-term health of the company problem. And in the business climate of gaming the system that built up the last few years of little-regulation Bush strategery? It’s a fine mess, isn’t it?

“Gaming the system ” I knew I forgot something!
The Hedge funds borrowed money from the banks to buy these loans at 10 through 14 to 1 levels.
Meaning for every 1 dollar the Hedges had they borrowed anywhere from $10 to $15 to buy these loans now that the value is dropping a $1 loss can becomes a $14 loss to the banks.
Hedge funds do not have to report their finances so we have no way of knowing how big the problem is.
The Banks obviously do not want to press the Hedge Funds to open up their books because they are afraid of what they will find.
We are in a ” Fine Mess ” everybody here should pull their money from Hedge Funds, Banks, home builders and the stock of Financial firms now.
I fear that at the end of the year when firms HAVE to report income and losses to the government for taxes we will get alot more bad news.

Some of those hot dollars were leveraged 60 to the dollar.

There are $trillions upon $trillions worth of derivatives coming due with nothing but hot air to back them up.

LS @ 123

Hmmm….”usury”….that would make a hell of a wedge issue…considering the New Testament and all…just a thought.

New Testament? Republicans?

Sorry – doesn’t compute…

Isn’t there somebody we can stone to death?

New thready goodness from Miss Christy upstairs.

PLovering @ 116

Once Biden, Schumer, and Clinton passed their Bankruptcy Bill, forever screwing most mortgage and credit card holders, it was off to the races.

Get out of the way, people. The is a financial tsunami headed our way.

You need to put Edwards at the top of the list with Joe Biden.

link

Watch Rudy blame African Americans for causing this problem. Watch the GOP scream we need to save the financial system. Watch the white middle class will they look to blame scapegoats like they did in the 70’s for the problems that GOPers caused.
Regeans Chicago welfare mom cheat didn’t exisit. We have to watch Rudy if he tries to pull a Regean especialy after he lied about English healthcare cancer survial rates.
Me I’m hoping that after several years of lies that never panned out the GOP has no credit of trust left with voters.
hmm Pulling a Regean to lie about minorites to get votes, to scapegoat others for problems you cause. I like it!

Redd

Yeah- I’m probably confused about specifically what practices are being discussed and which should be excluded.

I have seen the following eat people alive:

1) Zero down loans

2) Variable rate loans

3) no “doc” loans (where people don’t really have to prove that they are qualified)

4) loans given on properties in excess of their value due to sloppy appraisal work.

I don’t know about “hard sale” practices.. Usually the people who request these loans really WANT them and don’t have to be sold.

In the neighborhood I just moved out of, tons of thirty somethings were “upgrading” houses every two years or so- using paper equity to move up to a more expensive home and then putting lines of credit on the damned things to get new cars. Scared the holy shit out of me to see it. These were mostly well educated people with good jobs who making some damned stupid decisions.. This is what created the housing bubble.

Now that the bubble is losing air- many of these same people are upside down and giving their McMansions back to the bank.

Who caused this?

There are lots of people to blame.

OT But I’m still fulminating over the whole Mukasey torture thing.

I can’t comprehend why we have ever allowed this stuff to continue, knowing that it has, historically, given so many “false confessions” and erroneous information (going back to the Inquisition- confessions of being demons, devils, and witches; conversions of Muslims and Jews to Christianity),

I think it has continued simply because many of those performing it are entrenched sadists who don’t really care about accurate information. And that fact may be keeping the CIA and other intelligence agencies from moving ahead. I recall the words of the interrogators at Nuremberg who spent long hours gaining the trust and confidence of the Nazis in their charge. Much of the material they used were obtained in playing games of chess.

Many ideologues are more than willing to try and convince you of the righteousness of their inhumanity…look at the great effort that the apologists for torture go to in order to create complex scenarios that justify their actions. The Nazis at Nuremberg did the sme. Fanatical and misguided Islamists also want to show that heir cause was righteous and the activity fully justified. But violence makes them clam up or lie…not talk.

There is poorly funded research which suggests a better, more ethical, way. Just as a god interrogator can use body language, voice inflection, and other behaviors to determine when a suspect is attempting to misdirect or lie…there are neurological methods that can detect changes in brain activity that suggests responses that may be false, or truthful but producing emotional stress, etc.

The irony is that these methods actually requires the suspect to be treated very well, both to obtain a baseline brain pattern while being truthful (and one can ask questions that one knows the suspect is being honest) followed by questions which elicit false or erroneous answers, and then questions that become increasingly stressful or irritating, etc. The interrogations can take weeks but, because they do not require stress or pain can be sustained for much longer.

Ultimately far more, and more nuanced, information can be obtained…since physical stress and deprivation actually impairs memory…or reshapes it. One wants an individual to give information as they acquired it BEFORE interrogation…not reshaped by the process of interrogation. We know that hard interrogation can make individuals reshape their memory…people actually begin to think they are guilty of a crime if they are repeatedly told as much; children will refashion experience to please the authority figure; Stockholm Syndrome settles in, etc.

We really should be looking into the use of PET SCAN, CAT SCAN, and MRI technology to acquire such information. Such methodology will never “read the mind” a la Vulcan mind melds…but will tell whether someone is using neural networks that are heavily “trafficked” and “natural” vs. one that might require some suspension and conscious re-networking. It could tell us when someone finally tells a stressful “truth” vs. a practiced prevarication.

And it will require a new type of interrogator, more of a counsellor and sympathiser, who asks those difficult questions without appearing at all judgemental.

And unlike the torture methods or bullying that is used in traditional interrogations with their high level of false confessions…these techniques would allow those who are truly innocent of a criome or lack information to go free almost immediately. Falsely accused would be exonerated, and those involved but in lesser roles would not be misleadingly placed as Al Qaida #2.

Two people who are doing a lot on this science are DanLangleben and Paul Wolpe

The New Science Of Lie Detection

We’ve likely been going the wrong direction all through the Bush era…one more example of how his “War on Science” has affected the nations progress. indeed the methods would likely produce far more subsidiary benefits that relate to improving mental health

Richmond @ 117

Things Come Undone @ 113

“Gaming the system ” I knew I forgot something!
The Hedge funds borrowed money from the banks to buy these loans at 10 through 14 to 1 levels.
Meaning for every 1 dollar the Hedges had they borrowed anywhere from $10 to $15 to buy these loans now that the value is dropping a $1 loss can becomes a $14 loss to the banks.
Hedge funds do not have to report their finances so we have no way of knowing how big the problem is.
The Banks obviously do not want to press the Hedge Funds to open up their books because they are afraid of what they will find.
We are in a ” Fine Mess ” everybody here should pull their money from Hedge Funds, Banks, home builders and the stock of Financial firms now.
I fear that at the end of the year when firms HAVE to report income and losses to the government for taxes we will get alot more bad news.

Yup this is also a big one here. Bankers make their money on the resales of loans.

We need to highlight these proffits. Homeowners will scream as banks make big bucks off their misery.
However with home prices dropping so much maybe the banks out smarted themselves this time? We need numbers!

Christy –

Back in September, I told Mark Udall’s staff that Congress should enact a two year moratorium on ARM resets — that would put the brakes on the foreclosure crisis, and allow the new administration and Congress time to work out long term solutions.

The economic news of the weekend suggests that the global financial crisis is just beginning — it’s time for Congress to save the system from the crisis of it’s own making.

Can FDL lobby Barney Frank to support an ARM reset moratorium?

FDIC Chairman Sheila Blair called for a voluntary freeze on ARM resets — but we’ve all seen how well the markets regulate themselves. It’s time for Congress to take action, and save the American Dream.

LS @ 123

Hmmm….”usury”….that would make a hell of a wedge issue…considering the New Testament and all…just a thought.

Any Bible quotes on this subject we can use?

I bought my first house two years ago and when I went to sign the papers it turns out the aggreement was for a 6 MONTH ARM! If it hadn’t been for the girl doing the closing going slowly, I would have never caught the error. The mortgage lender who drew up the contract didn’t show up for the closing so I ended up leaving, refusing to sign the contract. I tried numerous times that evening and night to get ahold of her with no luck. I was literally frantic as I had already boxed everything up, transfered my utilities and mail and vacated my rental! So, I ended up getting the mortgage company my seller was using and they put me on a 5 year ARM, which I felt I could live with. People are assuming this is a problem that mostly affected sub-prime people. At the time of the loan approval I was at a 745 credit rating, I’m white and have been employed with the same company for over 5 years. I qualified for a great rate and believed I was being dealth with honestly. Just wonder how many other people found themselves victim to the realtor/mortgage lender I had. Scares the shit out of me when I think how close I came!

It is not just about the subprime market, though… The imposition of service fees and “late” fees (even though you aren’t really late), extraordinarily high interest rates — once the banks get someone into a credit card, it is like the gift that never quits giving. You can protest the “late” fees and they will usually take them off of your account, but it is an awful lot of money that is pure profit for the banks and credit card lenders. State laws allow for various ‘grace’ periods after the due date before an account can be considered delinquent, but these weasels have contracted around those laws.

It does not matter who the borrower is — everyone is at their mercy!

looseheadprop @ 132

I can remember two other times in my life when ranlk and file DOJ lawyers were disgusted and demoralized because of someone named Bush.
1) Iran Contra Pardons

2) When Neil Bush did not get indicted during the S & L crisis.

WHat’s happening with the predatory mortages reminds me of the latter.

What is it with people named Bush and dissing the rule of law? There is a reason so many folks call them the Bush Crime Family

And yet the damn congress still sits silently by. Have the bushies so much on them that they are afraid to act? What can be so bad that you are willing to let America go to bloody hell rather than be “outed” somehow?

It is not surprising that those who have devoted their lives to the law should be just seething at these crooks.

jayt @ 26,
Thanks for saying that in your edit.

Our community has had several ‘working girls’ whose remains have been found in the last few months.
The latest was last week. She had gone to school with my oldest son. Very sad.

jayt @ 139

LS @ 123

Hmmm….”usury”….that would make a hell of a wedge issue…considering the New Testament and all…just a thought.

New Testament? Republicans?

Sorry – doesn’t compute…

Isn’t there somebody we can stone to death?

Surely, evangelicals are getting caught up in the housing bubble too…I guess that is my point, if you know what I mean.

PLovering @ 138

Things Come Undone @ 113

“Gaming the system ” I knew I forgot something!
The Hedge funds borrowed money from the banks to buy these loans at 10 through 14 to 1 levels.
Meaning for every 1 dollar the Hedges had they borrowed anywhere from $10 to $15 to buy these loans now that the value is dropping a $1 loss can becomes a $14 loss to the banks.
Hedge funds do not have to report their finances so we have no way of knowing how big the problem is.
The Banks obviously do not want to press the Hedge Funds to open up their books because they are afraid of what they will find.
We are in a ” Fine Mess ” everybody here should pull their money from Hedge Funds, Banks, home builders and the stock of Financial firms now.
I fear that at the end of the year when firms HAVE to report income and losses to the government for taxes we will get alot more bad news.

Some of those hot dollars were leveraged 60 to the dollar.

There are $trillions upon $trillions worth of derivatives coming due with nothing but hot air to back them up.

Please tell me you have a link. I just can not keep up with how bad and how fast Bush is destroying the economy! :(

Things Come Undone @ 153

PLovering @ 138

Some of those hot dollars were leveraged 60 to the dollar.

There are $trillions upon $trillions worth of derivatives coming due with nothing but hot air to back them up.

Please tell me you have a link. I just can not keep up with how bad and how fast Bush is destroying the economy! :(

Link.

http://www.prudentbear.com/ind…..;Itemid=57

Things Come Undone @ 147

LS @ 123

Hmmm….”usury”….that would make a hell of a wedge issue…considering the New Testament and all…just a thought.

Any Bible quotes on this subject we can use?

http://www.tentmaker.org/lists…..eList.html

LS @ 8

Cramer, the financial guy, has said he predicts 50 million foreclosures by next year…50 million!!!

In the United States alone??? Or globally? After all, we only have 300 million people. Or is he talking about the number of people who will be impacted by foreclosure?

There is simply no way that even a fraction of these can be sustained. There will have to be some system of renegotiation of the mortgage, or allow the people to rent the home at reduced rate leases.

The Sacramento area also has seen a huge jump in foreclosures in the second and third quarters of this year. whole developments are now only half occupied with downstream impacts like local shopping centers and schools closing, shops being vacated, local employment plummeting, and oddly larger companies having worker issues because their staff can no longer afford to live in the proximity of the industrial plant.

Apparently the “Big Five” Mortgage houses (Chase Manhattan, MSNB, Citibank, Wachovia, BankAmericorp) have conspired to create a fund that will allow them to pull homes that have foreclosed “off the auction block” where they will sit empty until the market conditions improve. This was all arranged at the USTreasury under the watchful eye of Secretary Henry Paulson!!! Thus they have the Bush Administrations approval to fix prices and restrain competition, artificially keeping housing prices high. Funny, I thought the “free market” was supposed to help consumers.

Of course, under most other Administrations this sort of TRUST would be busted wide open and the perps fined and sent to jail. Teddy Roosevelt, Woodrow Wilson, and a host of other “progressives” railed against such big-business practices as Anti-American!

Maybe it’s time for a squatters movement!

Steve-AR @ 17

It looks as if the Thugs are going to take a page from George Wallace’s campaign play-book. I think it was George who said, after an election loss, (where he ran a “moderate” campaign) that he would never be out “N’d” again.

Sounds as if Rudy is going to run on his record of keeping brown and black people in “their place” while he was mayor.

Are you suggesting that when he said that the NYPD used “enhanced interrogation methods”…that he actually INTENDED for people to think ABNER LOUIMA? That this was “Southern Strategy” as much as the Willie Horton ad was? WOW!

cinnamonape @ 156

LS @ 8

Cramer, the financial guy, has said he predicts 50 million foreclosures by next year…50 million!!!

In the United States alone??? Or globally? After all, we only have 300 million people. Or is he talking about the number of people who will be impacted by foreclosure?

There is simply no way that even a fraction of these can be sustained. There will have to be some system of renegotiation of the mortgage, or allow the people to rent the home at reduced rate leases.

The Sacramento area also has seen a huge jump in foreclosures in the second and third quarters of this year. whole developments are now only half occupied with downstream impacts like local shopping centers and schools closing, shops being vacated, local employment plummeting, and oddly larger companies having worker issues because their staff can no longer afford to live in the proximity of the industrial plant.

Apparently the “Big Five” Mortgage houses (Chase Manhattan, MSNB, Citibank, Wachovia, BankAmericorp) have conspired to create a fund that will allow them to pull homes that have foreclosed “off the auction block” where they will sit empty until the market conditions improve. This was all arranged at the USTreasury under the watchful eye of Secretary Henry Paulson!!! Thus they have the Bush Administrations approval to fix prices and restrain competition, artificially keeping housing prices high. Funny, I thought the “free market” was supposed to help consumers.

Of course, under most other Administrations this sort of TRUST would be busted wide open and the perps fined and sent to jail. Teddy Roosevelt, Woodrow Wilson, and a host of other “progressives” railed against such big-business practices as Anti-American!

Maybe it’s time for a squatters movement!

He was talking about America. I heard him say it during an interview, but I can’t find a source to back it up. It was something I heard him say a couple of months ago.

silence is complicity @ 46

Just adding…I’m shaking just reporting on this. Who was it who said it was just a little surfing?

You guys are heros for even trying this. Be prepared to here the apologsts say “They’re just acting”. Tell them “try it yourself…do it for two minutes…but only if you sign health waivers”.

Government regulation is a good thing in a country that values greed above all else.

I want Americans to be protected from the unscrupulous assholes who care more about the bottom line of their companies than the general welfare.

George Simian @ 106

Minorities aren’t going to figure in the upcoming elections because, in case you haven’t heard the latest Bush appointee talking points, Hispanics are going to die first, and African Americans only use their IDs at the check cashing store.

Well let’s consider the effect of foreclosures on the election process. On the one hand these folks will likely want to vote Democrat, especially if Bush and the Republicans in Congress don’t act to assist those being made homeless.

OTOH Homeless and displaced people are far less likely to have their voter registrations up-to-date, have the necessary home address generally required, and are extremely mobile from residence to residence. The PUGS are going to go challenge crazy!!!

Plus, many of these minority voters were moving into suburban or rural areas which were previously white districts….and with Republican Congressmen. Thus prosperity for minorities posed a threat to the PUGS, if not immediately, then down the road 10 or 15 years. While I don’t think the mortgage crisis was intentional in this respect it would ot behoove the Republicans in these Districts to help those in foreclosure. They aren’t the correct Party, class or race.

So there is really going to need to be voter registration and assistance drives to get themse victims of foreclosure to the polls. It needs to be a targetted population…and laws should be passed that assures that they will be allowed to vote, either in the district of their original home…or in their recent place of occupation.

CalGeorge @ 160

There’s a problem, because the law requires that corporate managment put the good of shareholders before the good of customers (as if they aren’t the same people in most cases).

When hogs trade garbage.
Like the mafia, Wall Street whets their beak every time a paper asset is made, packaged, sold or traded and traded and sold and repackaged and retraded.
This system allows the hogs to pay themselves twenty five billion dollars in bonuses for 2007.
CITICorp and Merrill are taking a combined hit of around $20Bil.
So, who gets to replace the incompetently wasted or stolen Billions in financial institutions’ capital now evaporated?
Hey. The public. You!

Then there’s “Embezzlement by Salary” which is quite the rage with CEO’s and Corporate Board members.
Nicely ironic is the fact that if the top 10 percent wealthiest own pretty much all of the shareholder stock assets, then, embezzling from corporation treasuries via salary and bonuses means they are stealing from themselves.
No, “but your Honor” amongst these thieves!

Great thread — Lots of stuff going on here that will continue to make history seem…repetitious.

The sub-primers who bought houses with 100% mortgages did not do that badly. They are inconvenienced in that eventually they have to move, but their investment was minimal. By the time they are evicted, they get several months rent free depending on the efficiency of their state’s foreclosure procedure. They may have a deficiency judgment against them, but if their only other asset is their job, their wages can be garnished. That is unlikely. If it happens they may be able to change jobs without notifying the creditor or have the amount to be taken from their pay reduced to a quite small number.

The gross aspect of the debacle is the Fed easing the credit crunch whiich is another name for bailing out the banks and hedge funds. The belief is that if the banks fail the impact on the economy is too great, but if the banks fail, the government’s contribution goes to the depositors through the FDIC rather than to the bank owners and operators. Home prices will come down, but that effects lenders, not home owners who have little or no equity.

The game kept the economy going. Not all sub prime lending dealt with minorities or low end real estate. Subdivisions were built and sold with no down payment financing and forclosures impact those values. Again the home owner’s investment is minimal, but if anyone is bailed out, it should be the homeowners, not the banks and hedge funds. Unfortunately that is not how it is going to go down.

Thanks for the post and links, Christy. Today over at Naked Capitalism, Yves Smith has an article exploring some of Henry Paulson’s conflicts in dealing with the mortgage and broader credit market crises, especially considering half-baked attempts at bailout/coverups like the super-SIV on the one hand, and Paulson’s vocal opposition to Barney Frank’s assignee liability bill on the other.

Signs of Backlash Against Paulson

Please continue reporting on this. Not enough liberal blogs are addressing this issue. Why not advocate for some kind of bailout for the homeowners themselves, rather than the banks? Such a bailout would save neighborhoods and communities, which would in turn save the banks in the long run.

Also, democratic candidates should be asked about it at every opportunity.

bg @ 12

So redlining has morphed into a new method of keeping black home ownership to a low?

The Limbo should be the new national dance.

Thug policies are generally more dangerous than that. Considering their previous policies towards Blacks, aimed at keeping them away from the voting booths, consider what lack of home ownership will do to them at the polls?

Will Repugs use this in some way to deny them the vote?

peanutbutter @ 37

I would be in favor of some type of program that let the folks with the bad mortgages restructure their mortgage into something more sensible, with another bank. Then let the ones that DID put out these loans sink or swim.

Won’t happen, though. It will be the other way around. *fume*

Chris Dodd was supposed to have put out some legislation to help with this. But, I haven’t heard of it coming up for a vote and I have heard some mortgage lenders have options to refinance, but are refusing to.

Apparently some people are going to make money off the misery of others.

Jim Clausen @ 69

Evil Dr Puma,

I bought in Phoenix on a teaser 3-2-1 buydown and lost it during the McCain-Keating Savings and Loan scam of the 1980’s

This Iowa boy bought the next time at a fixed 6%

Fool me once… Iowans are educated sometimes the hard way

If it comes down to the Dean v. Kerry race again, how will Iowans vote?

Clinton v. Obama v. Edwards?

Will they learn or will they still fall for the ‘more electable’ line?

What if there’s a smear campaign on t.v. the last couple of weeks before the caucus? Will that miraculously change their opinions?

Steve-AR @ 76

Re: Citi..Rut..Roh:

BOSTON (MarketWatch)
Citi ) in a quarterly regulatory filing Monday said its so-called level 3 assets as of Sept. 30 were $134.84 billion. Level 3 assets are holdings that are so illiquid, or trade so infrequently, that they have no reliable price, so their valuations are based on management’s best guess.

link

Doesn’t make Rubin et al look so brilliant, now does it?

Things Come Undone @ 81

What worries me is that Bush will find the money to bail out the Mortgage lenders and the Hedge funds who bought the loans but he still won’t fund healthcare!

Apparently that industry has yet to feel the full force of the cold steel blade the Bush family wields so well. Right to the back, works every time. Just ask their former business partners (Noriega, Saddam, bin Laden).

PLovering @ 116

Once Biden, Schumer, and Clinton passed their Bankruptcy Bill, forever screwing most mortgage and credit card holders, it was off to the races.

Get out of the way, people. The is a financial tsunami headed our way.

part of a ‘perfect storm’ of domestic Constitutional alarm, domestic financial calamity, foreign military chaos and political shock

If this isn’t the perfect kind of environment for an ‘outsider’ Progressive Dem to win in, then I don’t know what would be.

Still, the work to repair damage after taking office would be tremendous, like walking through NOLA with a shovel and pail.

cinnamonape @ 156

Apparently the “Big Five” Mortgage houses (Chase Manhattan, MSNB, Citibank, Wachovia, BankAmericorp) have conspired to create a fund that will allow them to pull homes that have foreclosed “off the auction block” where they will sit empty until the market conditions improve. This was all arranged at the USTreasury under the watchful eye of Secretary Henry Paulson!!! Thus they have the Bush Administrations approval to fix prices and restrain competition, artificially keeping housing prices high. Funny, I thought the “free market” was supposed to help consumers.

Should you pass this way again, cinnamonape, where’d you hear a thing like this? Is this perhaps the so-called M-LEC, or what I above called a “super SIV?” Those banks and Paulson were involved in something like that, that actually seems to have leaked out prematurely, perhaps by a whistleblower. No one is sure, but the idea might be dead. It met with a lot of disapproval and derision, including from people who might have been expected to support it.

The M-LEC would not have bailed those banks out from direct holdings of repossessed real estate. It would have served as a backstop to allow them to get second- and higher-order bundles of loans and related products out of their lives without having to take the things onto their own balance sheets, without selling them out in the open where everyone could see how little others were willing to pay for them (forcing those Level 3s to mark to a revised model), and without their having to clog up the credit markets (or their own llending resources if they still have any) in order to pay off the investors who are supposed to get the cash flows from the things (from which cash might not be flowing as planned.)