"Subprime bust forces families from homes"

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Vendaval -> "Subprime bust forces families from homes" (3/26/2007 1:10:32 PM)
"Subprime bust forces families from homes" By ADAM GELLER, AP National Writer Sun Mar 25, 12:17 AM ET " Buying a home is the American dream and a record number of Americans — nearly 70 percent — are living it. Many families, though, likely never would have become owners if not for the tremendous growth over the past decade of a new kind of mortgage business called subprime lending. It long seemed like a winning proposition for all parties. Now the costs are becoming apparent — and they are very unsettling. Subprime lenders peddle new kinds of mortgages, often requiring no money down and made at "teaser" interest rates that soon rise. They target marginal borrowers with weak credit or questionable incomes who previously might not have gotten a loan at all. By last year, subprime loans made up 20 percent of the market for new mortgages. But as the housing market cools, thousands of subprime borrowers are struggling to keep their homes. A number of subprime lenders, saddled by failed loans and a shortage of cash, have folded or staggered. In some particularly hard-hit neighborhoods in Denver's suburbs — one of a few metropolitan areas where the problem is especially grave — home after home sits dark. Clearly, this isn't how the American dream is supposed to play out, but who's to blame? The experience of families like the Snearys show how the squeeze created by questionable lending can quickly be compounded by family economic crises, a lack of planning and knowledge, and the rapid shifts in a real estate market that once seemed unstoppable. "You were set up to fail," one real estate agent told them. It's a sobering thought for anybody who shares the American dream. After all, it hits so close to home. " http://news.yahoo.com/s/ap/20070325/ap_on_bi_ge/house_of_cards_6

popeye1250 -> RE: "Subprime bust forces families from homes" (3/26/2007 1:35:29 PM)
How are people supposed to be able to afford houses if good-paying jobs are out-sourced? Or if people have to get jobs that pay less than their old ones?

Vendaval -> RE: "Subprime bust forces families from homes" (3/26/2007 2:01:56 PM)
I have no idea, Popeye. Makes no sense to me either. [&:]

Lordandmaster -> RE: "Subprime bust forces families from homes" (3/26/2007 2:12:14 PM)
You know, that headline is exactly wrong. It should have read: "Families forced from homes cause subprime bust." The subprime bust hasn't caused foreclosures (that would be nonsensical); it's exactly the other way around. Banks don't want to foreclose on you, especially not in a buyer's real-estate market; they do it because they have no other recourse when you stop paying your mortgage. So what has caused all the foreclosures? Well, a host of things, including a crappy economy, and loans that never should have been made in the first place. And another thing: it's not just those poor families who are suffering. As banks take more and more hits, we're all going to feel some pain from this. quote: ORIGINAL: Vendaval "Subprime bust forces families from homes"

UtopianRanger -> RE: "Subprime bust forces families from homes" (3/26/2007 5:38:56 PM)
quote: And another thing: it's not just those poor families who are suffering. As banks take more and more hits, we're all going to feel some pain from this. That's an understatement if there ever was one. Both sides of the lending bubble are hurting all the hardworking, common sense, prudent property owners across the land. On one side, the lending agencies who've engaged in predatory practices-- by turning everybody and their brother into a mortgage broker working out of their car--- targeting the ill-equipped with delusions of grandeur, have taken-on a new slimy identity far worse than that of any used car salesman with cheap shoes and a fake cashmere sweater. Then you have the non-pragmatic, dopey people, who ''bet on the come'' as if it was race horse in a race with a bunch of other horses with broken legs. These people have zero ability to be pragmatic, read the fine print and access their true capabilities beyond that of a year or two. They don't believe in hard times or rainy days, and they don't understand or see how our whole world let alone the US economy are changing. What's really sad is that if you look at all the campaign contributions delivered to these politicians from the lending agencies, brokerage houses, etc, you know that at the very end the government, ala the prudent and hardworking tax payers, will bail out the whole industry when it should actually be left alone to die a horrible death. -R

KatyLied -> RE: "Subprime bust forces families from homes" (3/26/2007 5:39:55 PM)
In another thread we were talking about adjustable rate mortgages and how these mortgage loans were bad business. Many buyers misunderstood that the adjustable rate was only for a few years, not the duration. Many did not refi when they had the opportunity. Many now have little or no equity and their mortgage payments are increasing by hundreds of dollars each month. Many were greedy and bought houses way beyond their means.

Griswold -> RE: "Subprime bust forces families from homes" (3/26/2007 6:13:17 PM)
quote: ORIGINAL: popeye1250 How are people supposed to be able to afford houses if good-paying jobs are out-sourced? Or if people have to get jobs that pay less than their old ones? The argument is set up to fail. People make bad decisions. Consistently.

Griswold -> RE: "Subprime bust forces families from homes" (3/26/2007 6:16:39 PM)
quote: ORIGINAL: KatyLied In another thread we were talking about adjustable rate mortgages and how these mortgage loans were bad business. Many buyers misunderstood that the adjustable rate was only for a few years, not the duration. Many did not refi when they had the opportunity. Many now have little or no equity and their mortgage payments are increasing by hundreds of dollars each month. Many were greedy and bought houses way beyond their means. Well said Katy...I'm currently negotiating for a 5.9% jumbo mortgage. The current rate for most is 6.125%. Those that prepare and plan for tomorrow can do well ("well" is defined by the market...that being "better than what could have been"). Plan.

Lordandmaster -> RE: "Subprime bust forces families from homes" (3/26/2007 7:23:24 PM)
You expected otherwise? The Bush family was one of the major beneficiaries of the old Savings & Loans bail-out. Funny how people don't seem to remember that. quote: ORIGINAL: UtopianRanger What's really sad is that if you look at all the campaign contributions delivered to these politicians from the lending agencies, brokerage houses, etc, you know that at the very end the government, ala the prudent and hardworking tax payers, will bail out the whole industry when it should actually be left alone to die a horrible death.

UtopianRanger -> RE: "Subprime bust forces families from homes" (3/26/2007 10:05:10 PM)
quote: You expected otherwise? Nah... I live in the real world. Really. But I'm talking to people every single day who are from California who moved up here who actually think the market down there will ''come back'' in a few years. And the crapy, side by side trac homes that now fetch 900k will all be worth 1.3 million within the next ten years. To put it lightly.....I think those folks all need to check in to their nearest mental health clinic as soon as possible ; because they are ultra delusional. And to take it one more step..... I actually think California will eventually experience what's known as ''Reverse-Gentrification'' within the next fifteen to twenty years. quote: The Bush family was one of the major beneficiaries of the old Savings & Loans bail-out. Funny how people don't seem to remember that. Yes... besides the yahoo who's currently in office, the ''Bush Family'', ala the Brown-Harriman Bank, is essentially a form of very liberal republican bankers much like the Rockefeller’s. And they most certainly did benefit from the S&L crisis. George H. Bush is the guy who instituted the Brady commission report and it's practice of up-drafting by infusing the market with tax payer funded, Federal Reserve money whenever a sell-off happened and they couldn't predict the end of it. They now have a very fancy and political correct name tag : '' The President's working group on Financial markets'' - kinda reminds me of the very influential / studious ''Iran / Iraq study group'' [8\|] - R

popeye1250 -> RE: "Subprime bust forces families from homes" (3/26/2007 11:47:59 PM)
quote: ORIGINAL: UtopianRanger quote: You expected otherwise? Nah... I live in the real world. Really. But I'm talking to people every single day who are from California who moved up here who actually think the market down there will ''come back'' in a few years. And the crapy, side by side trac homes that now fetch 900k will all be worth 1.3 million within the next ten years. To put it lightly.....I think those folks all need to check in to their nearest mental health clinic as soon as possible ; because they are ultra delusional. And to take it one more step..... I actually think California will eventually experience what's known as ''Reverse-Gentrification'' within the next fifteen to twenty years. quote: The Bush family was one of the major beneficiaries of the old Savings & Loans bail-out. Funny how people don't seem to remember that. Yes... besides the yahoo who's currently in office, the ''Bush Family'', ala the Brown-Harriman Bank, is essentially a form of very liberal republican bankers much like the Rockefeller’s. And they most certainly did benefit from the S&L crisis. George H. Bush is the guy who instituted the Brady commission report and it's practice of up-drafting by infusing the market with tax payer funded, Federal Reserve money whenever a sell-off happened and they couldn't predict the end of it. They now have a very fancy and political correct name tag : '' The President's working group on Financial markets'' - kinda reminds me of the very influential / studious ''Iran / Iraq study group'' [8\|] - R Ranger, one of the problems is where are the jobs that can support $900k for a crappy tract house in Calif? They're vanishing. If we're going to become a nation of service industry workers and $12 an hour wage slaves the price for your "average" house is going to reflect that! I think you're absolutely right Ranger, in 10 years those tract houses will be going for $149k, not a Million dollars! One of my neighbors bought one of these condos here 2 years ago and moved here from San Diego because the prices out there were insane and the quality of life sucked. Traffic, illegals everywhere, crime, drugs, etc. She sold a 1 br 1 bath 750 sq. ft. condo there for $320k and bought one of these, 3 br, 2 baths, 1300 sq ft on a golf course for $139k. She's a Banker so she could see it comming and she told me prices out there passed realistic value about 8 years ago. Do you have any idea what I could buy here in Myrtle Beach for $900k? Oh, and what do you mean by "reverse gentrification?"

Mercnbeth -> RE: "Subprime bust forces families from homes" (3/27/2007 6:59:49 AM)
Yes I've seen this frequently especially here in LA. A nice young couple with their 2.2 kids pulls up to a little small house in the valley ready to buy and an fast talking shady looking character whispers in their ear; "Hey man - you don't want this house you can afford. I have a big house with a view of the ocean I can get for you; 5 bedrooms, pool, jacuzzi and a butler's house." The couple first says no, but on the shady Realtor gives them her card, winks, and leaves them with the thought; "well, your kids would really love it - think about it." On the way home, the wife giggles thinking about the "crazy idea". The husband shakes his head and laughs at the thought of going over their price budget by a factor of 5. The next day, on the way home from her job, the wife drives by the house proposed by the Realtor. "Oh MY God!" she reports back to her husband - "you HAVE to see this place! It even has a gate". The Realtor is called back and an appointment made to see the place. Throughout the walk through the wife's eyes are large and wide like a child's on Christmas morning. The gourmet kitchen, the 4 fireplaces, the panoramic views, and the clincher - the bathroom jacuzzi tub for two. The kids run around picking out their bedrooms. The husband just shakes his head and says; "Its nice, but no they can't afford it." The Realtor winks at the wife and says OK - go home and think about it. That night the husband gets his first blow job since the night he got engaged. He wakes up to another, with hot coffee waiting on his night stand. Somehow the conversation migrates back to the "dream house". Somehow the come to an agreement that "you only live once" and next thing you know they're in escrow. The evil mortgage broker tells them they don't qualify for a traditional mortgage, but they can get one of the interest only products. Of course there may be a negative amortization involved, but they're young, they'll eventually make more money, it will be tight at first, but though it all they'll be living in their "dream house". Besides - it's Los Angeles, California; in 5 years the house with be worth double and they'll then qualify for a nice 30 year fixed mortgage. The deal is done - they move it. But hell - our furniture is too small. After a stop at the furniture store offering "Zero percent down and no payments until 2010" they fill up the empty space. A few months later reality enters the picture. Wow - the cost of water is 4 times expected. It takes a LOT of gas to heat a 24,000 gallon pool. Those little lights in the trees and up the driveway must be using a bunch of electricity because - SHIT that utility bill is huge! Business gets slow. A second job is taken. More and more "discussions" end with the term of endearment - "FUCK YOU!". Interest rates rise - all of a sudden it's 2010 and furniture payment come due. Its the Realtors and the mortgage bankers fault that their marriage is over, and they have to declare bankruptcy. Yup, our college educations didn't prepare us to deal with a sales pitch. Our high school never required that we were able to do simple math and calculate a budget or balance a check book. Let's call the newspaper and tell them how we are victims of the evil Realtor and the 'devil in the flesh' mortgage banker. The government should protect us from these people. "We need our Nanny!"

Lordandmaster -> RE: "Subprime bust forces families from homes" (3/27/2007 7:30:23 AM)
I was thinking of Neil Bush and the Silverado S & L, actually. I think that cost us a nice billion, right? quote: ORIGINAL: UtopianRanger quote: The Bush family was one of the major beneficiaries of the old Savings & Loans bail-out. Funny how people don't seem to remember that. Yes... besides the yahoo who's currently in office, the ''Bush Family'', ala the Brown-Harriman Bank, is essentially a form of very liberal republican bankers much like the Rockefeller’s. And they most certainly did benefit from the S&L crisis.

popeye1250 -> RE: "Subprime bust forces families from homes" (3/27/2007 10:51:50 AM)
There were a lot of people involved in that S&L scam. I hope the govt. doesn't bail these people out with our Taxdollars this time.

Mercnbeth -> RE: "Subprime bust forces families from homes" (3/27/2007 12:10:19 PM)
I had some first hand knowledge of the days of Charles Keating. I ran a convention at the Phoenician right after Keating turned it over to the government. Heard some great stories. My favorite was the $40,000 worth of 'Silly String' for the grand opening. That's a LOT of "silly string"! After the place opened it quickly came under control of the Federal Government. The Trustee in charge told me to break even the resort would have to have 100% occupancy for 358 days of the year. But Mr. Keating had the prayers of Mother Theresa and he sent a bunch of what ultimately were tax payer dollars to the Catholic Church. (See below) There were a lot of hands out in the S&L deal because there was a lot of money involved, and a stadium full of lobbyists. No party and few politicians were spared. Belief what you want, here is a nice summary of that history. quote: Special interest groups and savings and loan lobbyists produced a climate for the S&L debacle long before Charles Keating was involved. They persuaded Congress to keep interest rates low and deposit rates high, to increase S&L insurance coverage, and to allow S&Ls to take bigger risks with money. Mother Teresa called him Charlie, as in, "How is my friend Charlie Keating?" That was the Calcutta matron-saint's first question to Senator Dennis DeConcini when they met. To her, Keating was the devout Catholic who had given her a $1.4 million donation. To most Americans, Charlie is a crook. Keating's abuse of his Lincoln Savings and Loan--and the favors he purchased from DeConcini and four other senators--provoked a $2.5 billion taxpayer-financed bailout: 10 dollars from every man, woman, and child in America. Keating personifies the rank thievery that characterized the savings and loan crisis, the largest financial disaster since the Depression. It has already cost at least $110 billion--a figure that could more than triple by the time we finish paying. This debacle made it more difficult for Americans to buy homes. And it left the country deeply cynical about the failure of its political system. Much of this you can blame on greedy rogues like Charles Keating. On March 31, 1980, President Carter signed the Depository Institutions Deregulation and Monetary Control Act into law. The next day in California, newspaper ads featured a grinning Bob Hope. "$100,000," the ads screamed. "Now California Federal gives you two-and-a-half times more insurance on your savings." Some estimate that the deposit insurance increase trumpeted by Hope boosted the cost of the bailout by a third. Source: http://www.encyclopedia.com/doc/1G1-16947718.html

Lashra -> RE: "Subprime bust forces families from homes" (3/27/2007 12:31:19 PM)
Change the roles to the husband wanting the house and me saying No we cannot afford it and this is pretty much what happened to my ex and myself. He wanted to keep up with the guys he worked with and so when we went house hunting he wanted to look at houses costing more then I knew we could afford. At first he was nice about it saying between my raises and your company we can afford this baby!. I wouldnt give in then he turned demanding saying Don't you want nice things for us and the baby? (I was pregnant at the time) I finally heard enough of his shit and signed the papers. We got the big house in the nice neighborhood with a big pool out back etc etc. I came home one day to find a nice new BMW sitting in the driveway. he had to have it, his friends at work at them. [:@] Things were fine until I went into labor and had a stroke. Instead of bringing my baby home, my Mother had to and I spent a year in the hospital. In that year he charged every charge card we had to the max and got new ones in his name so he could charge those babies up too. He couldnt pay the mortgage so he paid for his car because he just couldnt bare to loose it. By the time I got home from the hospital the bank was ready to foreclose on our house and take back my truck. It took me a long damn time to straighten that mess out and our credit. Divorcing him was the happiest thing I have ever done. Hence while I'll never go back to a vanilla relationship style[:)] When I say "No" I mean it and my sub doesn't complain. ~Lashra

UtopianRanger -> RE: "Subprime bust forces families from homes" (3/27/2007 6:17:06 PM)
quote: I was thinking of Neil Bush and the Silverado S & L, actually. I think that cost us a nice billion, right? Lam... While I agree with you, Silverado is pittance when compared to the house cards they've engineered in the stock market. Have you ever wondered why Bush and the team proposed the plan to let people invest their social security money in the stock market? If that’s their proposal why not revert back to the days when social security was a voluntary program instead of a mandatory tax? Why not let people have true freedom of choice with their money? That program they wanted everyone to buy into was their new bottle of Mr. Bubble; complete with the little plastic wand with holes on both sides so you can use one end to blow small bubbles and the larger end to blow the big ones. quote: Ranger, one of the problems is where are the jobs that can support $900k for a crappy tract house in Calif? They're vanishing. If we're going to become a nation of service industry workers and $12 an hour wage slaves the price for your "average" house is going to reflect that! Lota my argument is centered right there, Popeye. If you go back to some of the past recessions /draw backs in the economy and see where it’s recovered, it’s always been technology moving us forward.....but the chiefs have gotten real greedy lately, and even those higher paying tech jobs are now being targeted for both in-sourcing with skilled, new immigrant labor {willing to work for a lot less} and your conventional outsourcing. Can't remember who, but another poster here brought up ''Greenspan's recent speech'', and I think that poster even copied a few excerpts from it. And they were good mind you....but if I remember right that poster left out the excerpts of the speech where Greenspan noted that ''skilled labor '' and ''professionals'' were vastly overpaid in America. Now when Greenspan talks about ''skilled labor'' and ''professionals'' that doesn't mean CEO's or management hierarchy like some seem to think; that means the folks who have an advanced education and went to school to specialize in something – We’re talking the heart of middle America, brother! So for me, the ominous part of Greenspan's speech wasn't the fact that he said we're headed for a recession {that writing was already on the wall} the ominous part is his contention that middle-class America is overpaid. In essence, brother.... if the sentiment from those like Greenspan think that those who own the crapy 900k tact homes are over-paid, what does that do for the longevity of them? - R

kiyari -> RE: "Subprime bust forces families from homes" (3/27/2007 6:39:27 PM)
Refreshing it is that some do recall Neil and the former Bush in Oval Office... followed by that Taxpayer Bailout and RTC (Resolution Trust Corp) recuperation (barf) of taxpayer proceeds by giving away... erm, ... selling off the failed institutions' portfolios... where is that short line... ?!?!?

kiyari -> RE: "Subprime bust forces families from homes" (3/27/2007 6:45:32 PM)
Spot On. Short-Sighted R Us, in good ole' USA [:(] Golden parachutes for the CEO's of companies that fail. An incredible incapacity for cause-and-effect reasoning.... incomprehensible Ah well... must reside in that 'not MY problem' box

Lordandmaster -> RE: "Subprime bust forces families from homes" (3/27/2007 7:06:33 PM)
Ummm...yeah, I agree with all of that. quote: ORIGINAL: UtopianRanger quote: I was thinking of Neil Bush and the Silverado S & L, actually. I think that cost us a nice billion, right? Lam... While I agree with you, Silverado is pittance when compared to the house cards they've engineered in the stock market. Have you ever wondered why Bush and the team proposed the plan to let people invest their social security money in the stock market? If that’s their proposal why not revert back to the days when social security was a voluntary program instead of a mandatory tax? Why not let people have true freedom of choice with their money? That program they wanted everyone to buy into was their new bottle of Mr. Bubble; complete with the little plastic wand with holes on both sides so you can use one end to blow small bubbles and the larger end to blow the big ones.

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