http://www.timesunion.com

Quoted Text

Subprime ethics
First published: Monday, June 30, 2008

When it was flying high, Countrywide Financial was aggressively approving subprime mortgages that have contributed to today's housing crisis. Now it turns out that Countrywide was also making loans to VIPs at favorable terms, including two senators who sit on committees that are trying to cope with the subprime meltdown.
How's that for apparent conflicts of interest?

The Senate Ethics Committee has begun to look into the matter, which is a start. The inquiry must be thorough and credible.

According to The Washington Post, Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee and a member of the Finance Committee, received a $1.07 million loan from Countrywide to refinance his Delaware beach house, at a discount of $10,500 in fees normally charged for such a loan.

The reason? Sen. Conrad had contacted Countrywide's chief executive officer, Angelo Mozilo, on the advice of James Johnson, the former chief executive of Fannie Mae. That introduction also helped Sen. Conrad to refinance, at $96,000, an eight-unit rental property through Countrywide, even though the company's policy sets the limit on apartment loans at four units.

Special influence? Or just a case of one connected friend helping out another?

Those questions can also be asked of Sen. Christopher Dodd, D-Conn., chairman of the Banking Committee, which oversees the mortgage industry. He received two loans from Countrywide, one for $506,000 at 4.25 percent to refinance a Capitol Hill town house, and one for $275,042 at 4.5 percent to refinance a home in Connecticut. According to the Post, Mr. Mozilo ordered subordinates to waive three-eights of a point, or $2,000 on the townhouse loan, and a quarter point, or $700, on the Connecticut home. Countrywide also contributed $15,000 to Mr. Dodd's failed run for the Democratic presidential nomination.

Once again: Special influence, or just connected friends helping out one another?

Sen. Dodd claims he knew of no special favors extended by Countrywide, and Sen. Conrad has donated the $10,500 waived by Countrywide on his beach house to Habitat for Humanity.

Predictably, both senators claim they have done nothing wrong. They are tone deaf. Hopefully, the Ethics Committee is not.

ISSUE:Two senators got favorable deals from a mortgage giant.THE STAKES:The transactions raise questions of ethical improprieties.

They ALL know and profit----if even indirectly via other 'banking schemes'.......sorry, I dont buy that just 2 were involved.....what are the profession backgrounds/family names of most senators-----realestate moguls, lawyers, superintendents, union leaders, banking execs, etc etc.......

whitewater anyone????? any other government bailouts??? what a farce......the top of the pyramid is falling.....and where is the straw for the bricks???????

http://www.dailygazette.com

Quoted Text

Group of Eight
leaders face
economic woes
    SAPPORO, Japan — Between surging oil prices, food inflation and a credit crunch that’s depressed global growth, leaders from the Group of Eight economic powers face the gravest combination of economic woes in at least a decade when they gather next week.
    The outlook has darkened dramatically since last year’s summit in Germany, when the leaders declared the global economy was in “good condition” and oil cost $70 a barrel — which seemed high at the time.
    Since then, the U.S. subprime mortgage crisis has erupted, roiling markets and battering major financial firms. Oil has doubled to above $140 and food prices have jumped, hurting the poor in particular and raising the threat of political instability.
    “Things have changed for the worse across the board,” said Robert Hormats, vice chairman at Goldman Sachs (International) Corp. in New York.

http://www.dailygazette.com

Quoted Text

Subprime loan victims: Who are they?
BY MAURA REYNOLDS Los Angeles Times

    WASHINGTON — Vicki Miller bought her childhood home in Altoona, Pa., from her mother’s estate for $32,000, using a nice, traditional mortgage from the local savings and loan.
    Seven years later, her debt has more than doubled, her once-significant equity has shrunk to zero and she’s behind on her payments. The lender has begun to threaten foreclosure.
    “I grew up here. My son grew up here. And I had hoped my grandchildren would grow up here,” Miller says woefully.
    Miller says she was persuaded to refinance her mortgage twice into subprime loans she didn’t really understand, along with taking out a second mortgage. As such, she reflects what experts say is the true face of the subprime mortgage debacle.
    Discussion of the problem often focuses on first-time home buyers who stretched to buy homes they couldn’t afford. But experts who’ve crunched the numbers say 90 percent of people who took out subprime loans from 1998 to 2006 were already homeowners.
    Many, like Miller, had conventional, prime loans that were well within their means. What often got them into trouble was that they refinanced their mortgages without really understanding the terms and without realizing that the sales pitches and loan documents were sometimes deliberately opaque to snare the unwary.
    The result is thousands of cases like Miller’s, in which the damaging outcome is clear but in which it’s difficult to figure out how it happened or who’s to blame.
NOT MORTGAGE SMART
    “I should have just stayed with the loan I had. I realize that now,” says Miller, who earns a modest income as an office worker. “I’m not mortgage smart. I’ve since become mortgage wiser.”
    Lawmakers debating a mortgage rescue bill have spent a great deal of time trying to make sure they don’t reward careless or greedy mortgage holders. But lawyers working with troubled borrowers say few of them were trying to finance outrageous lifestyles.
    Most were like Miller, they say, existing homeowners who found themselves in need of money and responded to aggressive advertising for refinancings.
    “There’s this myth out there that this was a bunch of people overreaching,” says Patrick Cicero, a lawyer with MidPenn Legal Services in Harrisburg, Pa., who represents low income homeowners facing foreclosure.
    “But the vast majority of these loans were refinancings,” he says. “These were elderly people trying to fix up their homes. These were people lured in by promises of lower monthly payments and the consolidation of their debts who didn’t understand they were putting their homes at risk.”
    When lenders ramped up subprime lending in the mid-1990s, it was touted as a way to expand homeownership among people with low incomes or shaky credit histories. And many have pointed to the modest growth of homeownership — from 64 percent of households in 1994 to 69 percent of households by 2005 — as evidence that subprime lending had genuine benefi ts.
    But Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies, notes that most of that expansion in homeownership occurred in the late 1990s, before subprime lending exploded.
    Elizabeth Renuart, a housing attorney with the National Consumers Law Center in Boston, says that many subprime lenders and brokers targeted neighborhoods of people like Miller.
    They were promised cash, based on the equity in their homes. And the solicitations were rarely clear about the fees and interest rates, advocates for homeowners say.
    Moreover, subprime loans always charged higher interest rates. That meant bigger commissions for the loan agents and brokers who sold the loans, and provided higher returns to investors who bought securities that were composed of bundled subprime loans.
    “It was push marketing,” Renuart says. “As the engine revved up from Wall Street to invest in these things, the pressure was on the brokers to make these loans.”
    Miller is typical of many who ended up with such loans.
    As a 52-year-old single mother working in the accounts payable office of a local lighting manufacturer, Miller was making about $26,000 a year. Though the cost of living is lower in Altoona — a town of 47,000 in central Pennsylvania — than it is in major metropolitan areas, the housing boom largely passed Altoona by. Home prices appreciated just 2 percent to 3 percent a year for the past decade.
    Miller moved into her mother’s modest brick and siding house in 2001. It had become somewhat run-down in her mother’s fi nal years, and Miller quickly piled up debt on repairs. By 2004, she was having trouble paying off about $15,000 in credit card and other debt.
    When she began to seek fi nancial help, she began getting phone calls from Ameriquest Mortgage Co., the big subprime lender that has since collapsed. The sales agent suggested that she could pay off her debts by refinancing her mortgage.
    In June 2004, her sister was flown to Pittsburgh with a lifethreatening brain aneurysm. As a distraught Miller sat in the hospital, she called Ameriquest and said yes to the refinancing.
    “My mind wasn’t on it,” she recalls. “I thought I was getting a good deal, but obviously, I wasn’t.”
FINANCIAL PRESSURES
    Like many others, Miller’s goal was not profit but relief from fi - nancial pressures.
    “People equate subprime lending with people getting homes. But I think more of it had to do with access to credit,” Harvard’s Retsinas says. “This is the way people were trying to make ends meet.”
    Miller, who discussed her situation in extended interviews and provided a thick bundle of fi nancial records, says she thought her new loan was a fixed-rate mortgage at 7.5 percent interest. Records show it was an adjustable-rate mortgage with an 8.9 percent interest rate.
    The outstanding principal on her old mortgage had been $32,000. The new mortgage was for $60,000, which covered the cost of the new loan and allowed Miller to take out about $23,000 cash to pay off debts and make home repairs. But her monthly payment nearly doubled, to $559
a month.
    Months later, a man knocked on her door and said it looked like she needed a new roof. He promised to help her get a loan, and she wound up taking out a second $13,000 mortgage from a different lender to pay for it.
    Then in 2006, faced with rising heating bills, Miller decided to spend $5,000 for more energyefficient windows.
    By this time, her mortgage had been sold to Countrywide Financial Corp., and every payment notice suggested she refinance again.
    “Your estimated home equity: $24,818,” stated one of many letters and e-mails Countrywide sent her. “You may be able to GET CASH from your home equity.”
    Countrywide employees in California whom she talked to by phone sent her forms suggesting that by refinancing her home, she could take out $5,000 in cash and her payments wouldn’t change. She mulled over the documents for a month, she says, and then one day a notary public showed up at her workplace with what he said were her new mortgage papers. Miller was taken by surprise. The documents didn’t looked quite the same as the ones she’d received in the mail, Miller says, but the visitor assured her that Countrywide would correct any error.
    Miller signed the documents. “I’m a Christian. I’m a trusting person. I believed him,” she says.
    “I called and called and called and never heard from Countrywide again,” Miller says. “I was stuck with the mortgage.”
    Her monthly payments, now more than $700 a month, constitute more than half her take-home pay. This winter, as her heating bills topped $3,000, Miller fell behind on her mortgage. She’s now three months in arrears. Countrywide is offering a “loan modification” that would raise her payments to $1,165.
    “How can I afford that?” she asks. “I have asked if I can make partial payments, and they say no. It’s all or nothing.”
    Yet each mortgage notice she receives from Countrywide still includes this message:
    “If you need cash for your fi - nancial needs, now may be a good time to apply to refinance and tap into the equity in your home. Call Countrywide today!”

There is absolutely nothing wrong with the word NO.......I dont think it has been used properly over the past few decades, unless it is being used to deflect personal responsibility and self control......

there is the "they told me...." issue at work again.......I'm not the shapest tool in the shed but if the "they" tells me anything my first response is  almost ALWAYS---- NO...until I can research it......and then if it passes, too bad.......there are just way too many boats out there.......

say no to drugs
say no to 3rd helpings(all you can eat buffets)
say no to credit cards to save 15% now
say no to using the house to buy a lawnmower/pool/deck etc
say no to any politicians sign on your lawn

the list is endless........but,

always say yes to a glass of wine or beer with good company........

I tell you, I think the latest news the past couple days is rather scary.  Most of us living today don't know the depression, and/or our parents/ grandparents were only children.  I seem to remember learning in school that protections were put into place after the depression to prevent the same thing from happening again.  

On the otherhand, given that this is only a small percent of banks that exist overall, maybe it's just that it makes the headlines that makes it seem more serious.

Oh well, remember, we can all do our banking at Walmart, after all, they have wanted to serve the unbanked, if we lose, we turn to them  (roflmao   NOT)

http://www.dailygazette.com

Quoted Text

Blame politicians of all stripes for mortgage mess
Froma Harrop

Banning complicated and abusive loan terms would seem an obvious job for Democrats. But did Democrats rise up during the bubble’s thrill ride to demand stricter consumer protections? They did not.

    To borrow a Barack Obama line, “There’s not a liberal America and a conservative America, there’s a United States of America.” That’s true — and everyone in it tried to make a quick buck off the housing bubble.
    Since Ronald Reagan, Republicans have demonized government oversight as a liberal plot to dampen the animal spirits of America’s entrepreneurs. Let the market do the regulating, conservatives said. The market will punish those who make bad choices.
    But guess what. Republicans are not letting the market bring the housing bubble to its bloody finale. The Bush administration is working feverishly to bail out mortgage giants Fannie Mae and Freddie Mac, in addition to investment banks. Were the officials true free-marketeers, they would have let Bear Stearns go splat. They’d have stayed aloof to the panic surrounding Fannie and Freddie. They’d just let market forces do their job — and then usher in another Great Depression.
    So Treasury Secretary Henry Paulson had no choice but to engineer a rescue of Fannie and Freddie. The two companies hold or guarantee over half of America’s mortgages. And lawmakers of both parties have no option but to go along.
    It was funny to hear Obama’s economic spokesman say last week that “the Bush administration’s willful neglect of warning signs in housing, in financial markets and in the job market have compromised the nation’s housing finance system.”
    Funny because a mere month ago, Obama had chosen, of all people, former Fannie Mae CEO James Johnson to help pick his running mate. Johnson has played a significant role in compromising the stability of the housing market. (He left the VP-vetting job because of another controversy.)
    Fannie Mae is government sponsored and subsidized but owned by shareholders. Its mission is to inject money into the housing market by buying mortgages and selling them to investors in the form of mortgage-backed securities. (The smaller Freddie Mac performs a similar function.)
    You can imagine the money to be milked from a corporate beast that lets its private owners, especially its senior executives, scoop the profits while sticking taxpayers with the risk. Johnson left Fannie Mae a rich man.
    Under Johnson in the ’90s, Fannie began the controversial practice of holding on to more mortgages and securities as its own investments. The Washington Post reported that then-Federal Reserve Chairman Alan Greenspan feared “a sudden meltdown” in Fannie and Freddie “could bring down the financial markets with it — an argument that Johnson and his successor Franklin D. Raines (another Democratic power broker) fought at every opportunity.”
    Johnson had hired lobbyists of both parties to kill any idea of regulating Fannie’s sweet deals. As one lobbyist told the Post, “Politicians of both parties were afraid to give it proper oversight.”
    On the Republican side, John McCain’s economic adviser, former Texas Sen. Phil Gramm, pushed through a bill in 2000 that forbade federal agencies to regulate the financial derivatives that greased the skids for passing along risky mortgage-backed securities to investors.
    What about regulating the dodgy mortgages themselves? Banning complicated and abusive loan terms would seem an obvious job for Democrats. But did Democrats rise up during the bubble’s thrill ride to demand stricter consumer protections? They did not.
    The Congressional Hispanic Caucus listed Countrywide Financial — an aggressive pusher of subprime mortgages to minorities —as a “trusted friend” on its housing literature and Website. Countrywide had paid $50,000 for the favorable mention.
    There’s no ideology here. Just politicians taking care of the monied interests. Conservatives, liberals — everyone was in on creating the conditions that led to the mortgage collapse. The bill for it all now goes to the taxpayers, party affiliation unimportant.

Are some of these foreclosures?


http://www.dailygazette.com

Quoted Text

That's a lot of sales in a short time

Nobody is leaving Schenectady just ask the County Council they think raising taxes will bring people to this area.

Get off the home sales for a moment.

Anyone see some really good deals by the auto dealers in order to sell of their 2008 models?  Maybe 0 financing AND a $2500 rebate on a price below the manfucaturing cost, with guaranteed low gas price for X years?   This fall may be the time to buy a car (NOT an SUV)

Quoted from mikechristine1

Get off the home sales for a moment.

Anyone see some really good deals by the auto dealers in order to sell of their 2008 models?  Maybe 0 financing AND a $2500 rebate on a price below the manfucaturing cost, with guaranteed low gas price for X years?   This fall may be the time to buy a car (NOT an SUV)

au contraire ... now is the BEST time to buy an SUV.  I'm looking at a full size Chevy Pickup - they're willing to make just about ANY offer on it.

The auto dealers are almost giving away large pickups/suvs, they're giving people way below book on a trade-in of a big pickups/suvs and they've raised the prices on all vehicles with small motors and good gas mileage. MT you're right now is the time to buy a pickup and you'll get a great deal on one.

I agree. They are practically giving them away. And I would absolutely buy and SUV! We live in upstate NY where the winters can be brutal. I won't compromise safety for gas milage!! I've owned all types of vehicles both large and small...and a 4WD SUV surpasses anything I've owned so far.

I dont blame the politicians or the capitalists......I blame the facists that removed the 'direction book' from the schools----let me say it again,,,though we may not be able to tell the future....there is a perfectly good direction book on what to do in the 'now'.....however, some decided to remove our conscience.....we reap what we sow.....capitalism is not dead, although if we cry to the government for regulation it will be......the only thing that has died is our society's conscience.....just become something is not deemed illegal doesn't mean that it is righteous.......capitalism used by those with SOLID foundations rings true......capitalism hijacked by those without solid foundations brought us here........