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ORIGINAL: UncleNasty

Be careful or folks will label you a conspiracy nut.

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I don't worry about that, most people here know I am crackers

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ORIGINAL: Aneirin

Yeah, just what is going on in the world today,all these financial troubles. I understand as much as to know it was the greed of the few that has created this mess, but why were they allowed to create this mess. Was everyone so wrapped up in the easy credit that they could not see there has to be an end somewhere, or was it no one was thinking of the future past the next thing bought on credit ? But is it the consumer's fault beyond the spending, I mean if the credit was not available, the money could not be spent, was this also part of the greed of the few?

Here in the UK, another lending organisation has been taken over by the country, but I ask why, personally all these risky lenders should take what happens to any other business that makes poor judgement, why are they exempt ? House prices and purchasing, the thing our economy seems so wrapped up in, I hear houses are not homes anymore, but the word 'property' is being bandied about, many seek to buy, just to turn a quick profit. House prices were before all this through the ceiling. My own place which is 25 square metres in total ( one room plus bog and kitchen) is tax banded for the purposes of  council tax at 40 k, yet one sold last year for 165k and more recently in this current struggle for 98k, like wtf, how come homes are so expensive, beyond the reach of many, including the newly wed. My place is the lowest of the low, a studio apartment, six years ago, my pal bought one for 26k and my neighbour five years ago for 28k.

So, what is going on, the suspicious me just cannot help thinking there is a master plan at work here.

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I'm so tired of hearing this "greed" crap. Understand this, we're in a financial mess because billions of dollars were lent to bad risks and because of that, that money is now vaporized. No private person in their right mind lends money to a person or business that doesn't have the ability to pay. Enter the US government, in order to "promote homeownership across a greater range of the us population" they enacted regulations to pursue this goal. If banks didn't comply they were hit with huge fines. So we saw the birth of zero down and no documentation loans because the only way the banks could make enough loans to people and the areas the government *mandated* (and avoid crippling fines) was to create these loans. Now the same people that insisted on these regulations in the first place call banks predatory for obeying those regulations.

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ORIGINAL: slaveboyforyou

Nope, no master plan.  Greed is part of the human condition.  If you're honest with yourself, you know this to be true.  We all want to live the good life.  Of course, we all have different definitions of what that means.  But we all know that money makes achieving our goals a lot easier.  A favorite hypothetical question of mine that has been used in fiction for years is this:  If you're walking along and you come upon a large bag of money, do you turn it in or keep it?  Be honest, what would you do? 

Speaking for myself, I'd keep it. 

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ORIGINAL: bamabbwsub

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I'm so tired of hearing this "greed" crap. Understand this, we're in a financial mess because billions of dollars were lent to bad risks and because of that, that money is now vaporized. No private person in their right mind lends money to a person or business that doesn't have the ability to pay. Enter the US government, in order to "promote homeownership across a greater range of the us population" they enacted regulations to pursue this goal. If banks didn't comply they were hit with huge fines. So we saw the birth of zero down and no documentation loans because the only way the banks could make enough loans to people and the areas the government *mandated* (and avoid crippling fines) was to create these loans. Now the same people that insisted on these regulations in the first place call banks predatory for obeying those regulations.

Arizona, where do you get your information about the government's regulations in the mortgage industry? I won't even try to pass myself off as one who follows these things very closely, but I had never heard of that.

I, for one, believe that the big banks/lending companies did, indeed, get greedy -- and also took advantage of people's financial ignorance and desire for bigger and more expensive things. In order to sell more mortgages, they offered very attractive zero-down mortgages and variable interest rates to entice people to try to live the American dream. They also approved them for more than most people could afford. The risk? Foreclosure. The bank owns the house and can always re-sell it if the owner defaults. However, I think that they didn't envision that so many people would begin defaulting all at the same time, and it came back to bite them in the butt.

The financial ignorance comes into play when you consider that many Americans don't know how to save money to buy something anymore; they simply put it on credit. The credit card companies are just waiting for people to make that ONE late payment, and -WHAM!- they charge a late fee penalty, then escalate the interest rate to 25% or more. That's how they make the majority of their money.

The whole thing is a domino effect -- people have large credit card debt, they buy a house that's outside of their realistic range of payment, they need stuff for their house, so they charge more on the card, their mortgage payment goes from $800/month to $1000 per month when the interest rates rise (variable rate, remember?), they can't make their credit card payment OR their mortgage payment, and they default on their loans and perhaps even declare bankruptcy, so their debts are cancelled. Problem is...too many people are defaulting, and the banks didn't foresee this. In addition, I've even heard that banks are more willing to give a loan to a person who has declared bankruptcy in the past, since they can't declare it again within 7 years, so they know the person can't go that route. How smart is that?

The economy may very well plummet into depths that we haven't seen since the Depression. And yet, it may also teach us and our children to better run our finances in the future. Corporations may very well be greedy, but we as Americans need to be smarter with our money.

Just my opinion.

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ORIGINAL: bamabbwsub
I, for one, believe that the big banks/lending companies did, indeed, get greedy -- and also took advantage of people's financial ignorance and desire for bigger and more expensive things. In order to sell more mortgages, they offered very attractive zero-down mortgages and variable interest rates to entice people to try to live the American dream. They also approved them for more than most people could afford. The risk? Foreclosure. The bank owns the house and can always re-sell it if the owner defaults. However, I think that they didn't envision that so many people would begin defaulting all at the same time, and it came back to bite them in the butt.

The financial ignorance comes into play when you consider that many Americans don't know how to save money to buy something anymore; they simply put it on credit. The credit card companies are just waiting for people to make that ONE late payment, and -WHAM!- they charge a late fee penalty, then escalate the interest rate to 25% or more. That's how they make the majority of their money.

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Ok I agree with you to a certain extent, but how come the lenders are greedy and devious, but the borrowers are just ignorant victims? I think there was an equal amount of dishonesty and ignorance and greed on both sides.