Lower Middle Class: OH HAI! I CAN HAS HOUS?
Bank: I HAS A SUBPRIME MORTGAGE OFFR 4 U. LET ME SHOW U IT.
Lower Middle Class: KOOL. LOL!
Couple years later...
Lower Middle Class: U MEANS I HAS TO PAY MORE EVERY MONTHS? FAIL
Bank: OH NOES! WE WERE COUNTIN ON UR PAYIN US
Lower Middle Class: NO, THEY BE TAKIN' MAH HOUS
Bank: ALL UR HOUSES ARE BELONG TO US. BUT NO ONE BUYIN'! FAIL
10 comments:
I blame the LOLcrats...
John
Dude, you nailed it!!!
Several years ago, LOLcrats said:
Oh noes! It not fair that only people wif jobz can by houz! We make bank give lone to evrybody!
The banks said:
Oh noes, we need to akshuly get paid back for teh lones!
LOLcrats said:
You teh racist! Give dem lone! Fannie and Freddie cover teh lone!
A few years later, the interest rates went up...
The fast food worker living in the 300K house said:
Oh noes, I can't pay teh morgij!
The bank said:
Give us back teh houz.
LOLcrats said:
Dis Bush's fault!
Andy
I find it sad that congress is pointing fingers. This is entirely THEIR doing.
They mandated that loans be given to people who had no business getting loans (under the redline).
They blocked oversight of Fannie and Freddie in 2005.
Now, they act surprised and are frantic to assign blame to anyone but themselves.
In November, remember who brought you this, and remember who predicted it.
McCain co-sponsored the oversight bill and predicted the fall of Freddie and Fannie if it didn't pass.
Biden and Obama voted against oversight.
In 152 days in the senate, Obama has collected more money from Frannie and Freddie than any other politician, except one.
The head of Frannie (the guy that cooked the books so his bonuses would kick in) is Obama's chief economic adviser, as we speak.
You want more economic collapse? Vote Obama. He's got the architect on payroll.
I give McCain for the foresight on this issue, but two points of contention with the previous post:
1) "Biden and Obama voted against oversight."
Patently false. The bill in question never came to a vote on either floor of Congress. It was introduced on January 26th by McCain, Hagel, Dole and Sununu, and died in committee on July 28th, 2005.
2) While the Democratic faction certainly played a role in the stalling of the bill, remember that at the time, Republicans enjoyed an 11 seat advantage in the Senate, and a two person advantage in the committee. There was complicity on both sides of the aisle, and it's naive to accuse with such a broad stroke.
Not to get all bookish on ya, though. I just thought the LOLCats treatment was funny.
Not really the issue, anyway. The press is trying to argue that the mortgage industry collapse is fault of BUSH's economic policy. Talk about patently false! It isn't. Congress did this one.
Actually, the assertion that Obama and Biden "voted against oversight" assertion is far less silly than "McCain voted with Bush 90% of the time". Last I checked, the President doesn't have a vote in the Senate.
John
Ummm...speaking as someone working in the mortgage industry, there are lots of reasons for the current situation.
Underwriting guidelines *were* loosened to allow more leniency towards credit challenged borrowers. But just as many were denied, as were approved.
There was no mandate, no law/rule or regulation, forcing Lenders to give unqualified candidates home loans.
The ARM program (adjustable rate mortgage) really *was* a good program in theory. Allowing these people to get into their first home for low payments.
The crux was, they were supposed to work on cleaning up their credit issues over the next few years and then refinance to a standard long term fixed rate, BEFORE their payments hit balloon proportions and they could no longer afford them.
Yes, there were predatory lenders out there who did not fully disclose these programs and the repercussions. Those lenders were just in it for the big bucks they charged those borrowers up front. Those lenders are, for the most part, no longer in operation. The shysters and fly-by-nighters don't make it very long before they get caught by the regulatory agencies.
There were also plenty of companies that *did* properly disclose the program parameters to their borrowers, along with the agents telling them & the closing attorneys telling them.
It turns out, a properly done mortgage has at least 3 different entities explaining the legalities of the loan to the borrower.
Personal responsibility. Crazy concept I know.
I know the default rate for my company when it comes to any ARM loans we've done in the past few years. It's not actually that high -- 7%.
Of that 7%, the majority of the borrowers sited job loss as the #1 reason for defaulting on their loan.
91% of the 7% had, indeed, refinanced their mortgages after the first few years and no longer held an ARM.
Of the 9% that did not refinance, well, their credit scores had dropped severely due to overspending, late payments and so on.
The majority of our defaults had done what the needed to do in order to keep their homes, but they still lost them.
The minority of those borrowers did not and they also lost their homes.
In my companies situation -- it's not the "mortgage industry" or "Fannie Mae/Freddie Mac" or "the politicians" at fault -- it's an "economy" issue. Losing their jobs or getting laid off and not finding suitable work was the biggest factor in losing their homes.
Yes, our #'s are just a drop in the bucket considering the enormity of the "sub-prime fallout", but at least it's a view from the mortgage industry's side of things that can provide food for thought.
Just my 2 cents (or given the length of my response: $10) worth.
Cheers,
kitty
I love it when I'm offered two cents and get twenty bucks out of it! Thanks for the in-depth and insightful response, kitty. There's a net of blame that can be cast upon almost everyone in Congress as well as the industry at large... and of course, the people who signed the mortgages and didn't keep up their end of the bargain. I get tired of people casting ALL the blame on the Dems, or ALL the blame on the Reps... when the reality is neither one have their hands clean.
It's time for a third party to come in and slap 'em around a bit.
I am writing in
WALKEN '08
Because America Needs More Cowbell
Andy
One of the sad consequences of the ARM scam is the destruction of good neighborhoods.
Because of the lax standards, formerly good neighborhoods got an infusion of crime, due to the new ability of bad people to buy homes.
The people that have lived in the neighborhood for 20 years and never seen a police car are suddenly calling the police on a regular basis because their homes are getting broken into and gang grafitti is all over the place.
Nothing has changed except that one family that moved in after old man Johnson died...
The good thing about this mortgage crisis is that the undesirables are getting evicted and the neighborhoods are coming back to their natural state.
Water is seeking it's own level, again. Normal folk live amongst normal folk, dirtbags live amongst dirtbags.
Andy
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