Everyone is a victim to their own choices for the most part.....smokers, drinkers, gamblers, adult 'bookstore' goers, ignorance etc etc......
I can make more money if I choose to....I can go to school, work more hours, work another job, gamble(legal and illegal), cheat on my taxes, etc etc......
whatever we find palatable is usually what we choose....Mr.Vick chose dog fighting, the Gambino clan made their choice, Mr.Lay made his choice, Ms.Lohan made her choice, Martha Stewart made her choice, Mr.Marotta made his choice and the list is endless......
the only time we are not is when we are put into a place, time, season of not our own devising and at that point it becomes deemed necessary to find out culpability and depth of ignorance----for all intense purposes,, we are not prophets.......however, sometimes I feel like life has me by the collar of my shirt and I'm being dragged around by a truck
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
There’s no denying that the subprime mortgage mess is threatening the health of the U.S. housing market, which is in turn threatening the health of the U.S. economy. Two weeks ago, the Federal Reserve helped banks that have gotten stuck with large numbers of non-performing loans (by lending tens of billions of dollars at discounted rates), and now there’s a move afoot in Congress — led by New York Sens. Charles Schumer and Hillary Clinton, among others — to help consumers faced with sharply higher mortgage payments when their short-term teaser rates expire. Indeed, something will probably have to be done to keep them from defaulting, too, but it’s important that the help doesn’t become a full-scale bailout. The default rate so far this year is roughly double that of a year ago, and the problem is likely to get worse before it gets better. That’s because interest rates on most remaining problem loans haven’t even been adjusted upward yet, according to a story in Tuesday’s New York Times, and about $400 billion in subprime loans are scheduled for rate increases of 30 percent or more by the end of next year. Keeping these loans from defaulting isn’t going to be easy. Ideas circulating in Congress include raising the threshold for federally insured loans (so more homes would qualify for normal loans and refinancings instead of “subprime” ones; prohibiting early payment penalties on subprime loans (a scheme used by banks to make refinancing impractical); and creating a billion-dollar fund for states to assist problem mortgage holders. While these solutions aren’t without their own problems, they’re worth pursuing if they help keep the subprime crisis from damaging the rest of the U.S. housing market — and the economy — quite severely.
“Banks should not be offering these loans and sucking more New York homebuyers and homeowners into taking on more debt attached to a sky high interest rate,” Schumer told a news conference.
Schumer is pandering to yet another group by suggesting that homebuyers were somehow misled into taking these subprime mortgage loans.
The government passed Regulation Z, the Truth in Lending law, in 1968 to protect consumers from predatory lending practices. The law mandates disclosures of the costs associated with mortgage loans. The details of the nearly 40 year old law are available at the link below:
The documentation that is required to be provided by the lender (mortgagee) to the borrower (mortgagor) is extensive. For example, for an ARM (Adjustable Rate Mortgage), one type of subprime mortgage, the documentation defines the initial interest rate, the index (e.g., 1 year treasury bill rate), the margin, the annual and lifetime interest rate caps, the APR, initial monthly payment, and many other terms of the loan. For Schumer to suggest that the lenders are not disclosing the terms of the mortgage loans is inaccurate. Additional legislation, as proposed by this irresponsible politician, is merely pandering to those voters who have claimed that they are merits. If lending institutions are violating the federal requirements mandated by Regulation Z, then they should be fined and/or have their license as a mortgage banker/broker rescinded by New York State.
As stated in several other posts on this forum, the consumer also bears responsibility when agreeing to have a mortgage (lien) placed on property in exchange for financing to purchase. ARM mortgages are popular with those who: are "flipping" properties (buying and reselling to make a quick profit), those who intend only to own property for a short period of time, and those who cannot afford the payments at a fixed market rate. I have no concern for the "flippers" as the loss of money is a risk of the practice in which they are engaged. Those who cannot afford a fixed rate mortgage should act responsibly and consider, before agreeing to the mortgage, the various scenarios associated with an adjustable rate mortgage loan. Personal financial responsibility and accountability is required.
The political pandering by the elected representative in the Democratic party is blatantly obvious. With Schumer attacking mortgage companies, Spitzer threatening to sue the federal government so that he can expand medical coverage to thousands more children in New York State, and our County Legislators using Metroplex to award those who are politically allied, the taxpayers (those of us who work for a living) are left with the bill.
It is time that our elected officials work to secure votes by their actions on behalf of ALL New Yorkers not buy votes with entitlements that are paid for by the middle class.
If my memory is correct I thought that it was the Dems who fought to allow mortgages to people who would not normally be approved by most lending institutions so that the lower income families could share in the American Dream and buy a home with almost nothing down. I also know personally of credit card companies giving credit cards to people who had just filed bankruptcy and couldn't get credit from a bank or credit union. These predatory lending companies gave money to people who they knew would default on their mortgage and now they want the government to bail them out of debt.
These predatory lending companies gave money to people who they knew would default on their mortgage and now they want the government to bail them out of debt.
I would agree that both the lenders and the borrowers bear responsibility for lending decisions. To your point, the lenders are pressured by the government to relax qualifying guidelines to provide financing for home purchases by those who are of lower income.
A question comes to mind ... generally there are insurance premiums (Private Mortgage Insurance (PMI) or Mortgage Payment Insurance (MPI)) that are included in the monthly payments and paid for by the borrower to protect against default of mortgage loans for which there is less than a specified percentage of equity in the property (LTV). The media has inundated the public with reports of banks being impacted by the default rate of subprime mortgage loans. To the best of my recollection, I have heard nothing of the insurers of these loans (e.g., Federal Housing Authority (FHA) for federally insured loans, private insurers for conventional loans). Why should the banks be impacted by the defaults if the loans are insured?
sheep look down when eating and just move along as the sheep in front move along, no matter what the direction, here in this statement is the overhanging cliff that all will fall off.......
lesson digested, understood and learned.....pass it on......
And YES, it was the Dems who touted reaching those unable to 'own the American Dream'......as this statement alone is VERY shortsighted.....you dont have to own a home to have and follow the American Dream---unless these leaders are short-termed.......
and dont think for a minute they didn't catch the windfall in their own portfolios too.........dont just listen to the leaders---HEAR THEM...... >
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
And you are correct senders...the American Dream does not hinge soley on home ownership.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Makes sense that they are responsible for fueling the mortgage foreclosures as these real estate speculators can walk away from bad investments. Those who reside in the homes that they purchased have a greater incentive to keep payments current.
Makes sense that they are responsible for fueling the mortgage foreclosures as these real estate speculators can walk away from bad investments. Those who reside in the homes that they purchased have a greater incentive to keep payments current.
So we're going to blame the people that clean up all the problems now because it adds value to the property? It's not the fault of the person who spens outside their budget to buy the property? These people actaully help add to the tax base wherever it is (and yes, I realize that the tax base is different everywhere.) They help to bring up property values so that other residents don't have to shoulder the burden, or can make extra money when they decide they can't afford to stay where they are.
What's the problem with buying something to improve it to sell it to make a profit? That's just one person's way of making the American dream, by getting RID of the slums, one house at a time by bringing in people who can and will pay more for better properties.
It's the mortgage that the person gets, not the person who fixed up the property in the first place that's the problem.
What's the problem with buying something to improve it to sell it to make a profit? It's not the fault of the person who spens outside their budget to buy the property?
The entreprenuerial spirit is what makes our nation the greatest in the world. I would contend that the "flippers" are among those who spend beyond their means. They should have sufficient financial resources to satisfy their obligations including holding property for longer than they had anticipated when they agreed to the terms of the mortgage loan.
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What's the problem with buying something to improve it to sell it to make a profit? That's just one person's way of making the American dream, by getting RID of the slums, one house at a time by bringing in people who can and will pay more for better properties.
Rehabilitation of real property with the effect of raising the values of the homes and bringing a "better" class of residents to an area is certainly a positive thing. However, borrowers must be financially responsible for their spending decisions. The "flippers" plan on a quick sale and thus often do not allow for sufficient reserves. The lenders are complicit in this situation.
Quoted Text
It's the mortgage that the person gets, not the person who fixed up the property in the first place that's the problem.
I agree with you BIGK, that the terms of the mortgage are what lead to the foreclosures. However, both the lender and the borrower are culpable.
Rehabilitation of real property with the effect of raising the values of the homes and bringing a "better" class of residents to an area is certainly a positive thing. However, borrowers must be financially responsible for their spending decisions. The "flippers" plan on a quick sale and thus often do not allow for sufficient reserves. The lenders are complicit in this situation.
???Metroplex??? VanDyke???
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
Senders, point well made. I should have been more precise in my statement. I was referring to residential rehabilitation, not urban renewal wherein funds are directed based on cronyism and political reciprocity.
Ya know, this entire housing mess is out of control. First, the banks are ALLOWED to issue Subprime Mortgages. And the people are ALLOWED to choose one. I'm sorry, but people have to be pretty stupid to NOT know that the interest rate will, in fact, go up eventually. I have an adjustable mortgage and have for 21 years. I KNEW that the interest rate would fluctuate. It was MY choice. I know people who have a subprime mortgage and they were told many times by friends and family NOT to do it. But they CHOSE to. Now if we want to blame the government for our stupidity, go right ahead. They will just place more government oversite into our lives.
I like what shadow says....'you can't cure stupid'.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Logged
Senders, point well made. I should have been more precise in my statement. I was referring to residential rehabilitation, not urban renewal wherein funds are directed based on cronyism and political reciprocity.
