Originally Posted By Kar2oonMan >>Anyone who signed on to such foolishness deserves what they get, because it is idiotic to the extreme.<< But the Ameriquest case shows that people were subjected to bait and switch tactics. Told one thing and sold another. You can be as morally superior as you'd like, but when someone is swindled like this (and I'm not saying EVERYONE was swindled, just that many were) I think a little understanding is in order.
Originally Posted By Mr X **I'm just saying that some people were swindled by clowns like this. Not everyone, but a lot.** In the spirit of fairness, I will say that people who were ACTUALLY DECEIVED, as in not shown the proper paperwork or told outright lies...are victims. But, if you look at what went on, I have a feeling that there aren't all that many out there really...they ALL received "the small print", or most of them...they just didn't read it.
Originally Posted By Kar2oonMan >>And I don't really care for the attorney generals getting involved, because in my humble opinion all those greedy stupid idiots should taste the medicine.<< Yes, let's let people who have been swindled be ruined. That'll show 'em.
Originally Posted By Kar2oonMan >>In the spirit of fairness, I will say that people who were ACTUALLY DECEIVED, as in not shown the proper paperwork or told outright lies...are victims<< Okay. That's all I'm talking about.
Originally Posted By Mr X Yeah...totally eye to eye on that stuff K2M... I'm not talking about people who were out and out screwed...but the BULK of the dotted line signers SHOULD have understood the fairy tale they were signing up for, but chose not to. Sorry it took a few posts to clear that up though.
Originally Posted By Mr X I certainly don't consider myself "morally superior" to anyone, by the way. It just angers me that so many people contributed to the "too good to be true" model, which I think is irresponsible, and on the lenders' side too, which leaves us with a mess in which you or I or whoever else can NO LONGER enjoy flexible options because everyone abused them so much. It's just like back in school. I ALWAYS got pissed off at the kids who screwed up so back that the principal "must punish the entire school".
Originally Posted By Mr X And beyond flexible mortgages (those are nice, if used correctly)...I'll be HORRIBLY angry if this irresponsibility on ALL sides leads us into a recession eventually (as I'm guessing it might, eventually)... But, we can blame George W. Bush, anyway. ;D
Originally Posted By Mr X By the way, K2M, I wrote ALL of that (up to and including the "people who were ACTUALLY DECIEVED" part) before I read any of your Ameriquest info. Just so you know that I didn't write that stuff IN RESPONSE to your info, but rather I wrote that stuff at the same time as you, because we are actually in agreement on the true swindler/criminal stuff.
Originally Posted By fkurucz >>The kind of home buyers that drove prices up with exotic loans and liar loans are essentially shut out of the market right now. Mortgage brokers are panicked trying to figure out how to qualify customers for conventional loans -- which is nearly impossible given the ridiculous prices in the market vs. the average income of home buyers. Even re-fi's are not being approved right now based on the tightening lending standards. Watch the home sales continue to decline as buyers are shut out of the market when they can't get loans.<< This is precisely why I don't believe that there will be a "housing rebound" anytime soon.
Originally Posted By fkurucz <<which is nearly impossible given the ridiculous prices in the market vs. the average income of home buyers.>> This is the clincher. I have read too many horror stories of people in California who make 60K buying a 500K house with no money down. Thats about $3200 per month just for P&I. Add taxes and insurance and its about $4000 per month. By "old paradigm" conventions, the borrower would need a monthly income of $12,000 to qualify for such a loan. Even in California the percentage of households with that sort of income is small.
Originally Posted By davewasbaloo >>>>But I do know that in most of the country first time buyers cannot afford to buy houses at the current price/wage ratio.<<<< Sadly that is global. Here in the UK the average salary is about $44,000, but the average home is $340,000. We had to save for 8 years to get our deposit together. It's crazy!
Originally Posted By davewasbaloo >>>p.s. not all bald people are bad (or egomaniacs ).<<< Yes we are
Originally Posted By Mr X Dave, lol... At least, you did the smart thing by putting your money down as it should be... SO many in the U.S.A. did not, and thus the problems! (part of the problems, anyway) Fkurucz, you are preachin to the choir here buddy!
Originally Posted By Mr X Meanwhile, at the hall of justice... **For immediate release The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent. Economic growth was moderate during the first half of the year. Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing. Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy. Readings on core inflation have improved modestly in recent months. However, a sustained moderation in inflation pressures has yet to be convincingly demonstrated. Moreover, the high level of resource utilization has the potential to sustain those pressures. Although the downside risks to growth have increased somewhat, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the outlook for both inflation and economic growth, as implied by incoming information.** Bad news for the lenders, imo...although short term they rebounded (why, I dunno...the news doesn't strike me as positive for a rate cut).
Originally Posted By davewasbaloo You can buy a house in the US without a deposit???? Here in the UK, there are a few lenders that do that, but in most cases you need to put 10 - 20% down (we put down 15%). At least the US doesn't have a large flexible mortgage structure. Here in the UK during the Thatcher years, the interest rates went from 6% to 18% in 3 years - needless to say several people lost their homes (including my professional parents). Not cool.
Originally Posted By davewasbaloo Interesting news Mr X. Again, here in the UK we have had 5 interest rate rises of .25% increments this year. Retail is down 10% and the share value for my company is also tumbling on exchange as we speak (and our main customers are governments!!!).
Originally Posted By Mr X I want to get back to the K2M conversation a bit here. While I'm all for going after LEGITIMATE FRAUD...I wonder if some of this stuff isn't just the buyer not doing their research and getting stuck in a home they can't afford and can't sell. I mean, there is some VERY basic math you can do, even putting the confusing interest rates thing aside. Okay, I make $60,000 a year. Okay, the house costs $500,000. Does it make sense that I'm only paying $1000 a month here? Does that not add up? Should I really be paying for this house for FIVE HUNDRED MONTHS? That's around 42 years...and that's ONLY principle. It does NOT take a rocket scientist to see that this is fishy stuff, and that they are playing games with negative amortization (because remember, we haven't even INCLUDED the interest yet!). How can ANYONE be so STUPID?
Originally Posted By davewasbaloo >>>How can ANYONE be so STUPID?<<< But many are. They look at the dream, and hear the payment they are told, and consider "Can we aford X per month?". If so, they then go for it. It's very common. So many people do not understand APR, indexes, amortisation, inflation etc. And companies pray on these people. Just like people that treat Credit cards as additional "Cash" rather than insurance aids and enablers. I really think basic finance should become a part of core school curriculems to try to improve these situations - they certainly are not a part of the syllabus in the UK, but we are now trying to rectify that.
Originally Posted By Mr X Dave, google "80-20 loans" and see what Countrywide has to say about "no money down". (they are the biggest lender in America, I believe). I am SHORT Countrywide shares, just right after that announcement came out above...slightly down at the moment, but she'll tank...I'm quite sure of it (scumbags!).
Originally Posted By Mr X >>I really think basic finance should become a part of core school curriculems to try to improve these situations - they certainly are not a part of the syllabus in the UK, but we are now trying to rectify that.<< Lord, YES. And to think I sufffered through "cooking class" (we called it "home economics", how dumb is that? I sure didn't learn any economics there (I learned that you can still eat the cheese even if part of it gets moldy...that's about the extent of what that class imparted me with). I actually learned quite a bit working at a bank as an assistant to an underwriter...but EVERYONE should learn that stuff!
