I think you are. People are generally greedy and self serving. Look at all of the abuse our bankruptcy system has taken.

Post #867563.......Happy has it exactly right!

Just more politicians and governmental meddling.

OK. I'll be seeing you all down the trail. BB - Out.

I thought the hope was that the housing market would improve within 5 years so these people could sell their homes at a profit and get out of their ARM's. In which case, I would think the investors should share in the equity that they helped create.

Anyway, I agree that people should be responsible for their own decisions. I certainly don't see any plans to help those of us who got traditional fixed rate loans in the last few years!

That is because most of us were smart, and in a strong financial position to not fall for the gimmicks, set our payments limits, knew what we could and could not afford, knew our housing timeframes, were not greedy, and took advantage of great fixed rates.

Except me, I am in an ARM.

is there any culpability on the part of financial institutions in knowing that they entered into terms that they know the customers couldn't handle?

That is a broad statement, Ron. To the extent a lender knowingly committed fraud, or did not properly disclose the loan terms to the customer, yes.

However, as I stated earlier, the people around here trying to seek relief are not meeting the requirment of showing they didn't understand what they got themselves into. They understood, but can't handle it for many reasons, which include values that have not only stopped appreciating, but have declined. People bought homes at the height of the market with 100% or more financing. There was nowhere to go but down.

"Bush said 1.2 million people could be eligible for help. But only a fraction will be subject to the rate freeze. Others would get assistance in refinancing with their lenders and moving into loans secured by the Federal Housing Administration, Bush said."

Hopefully, this is a far as this fiasco will go - anyone renting should now continue to rent with home prices artificially inflated, once again, by this action.

The politicians, who will run to the microphones and proclaim how compassionate they are, are probably the winners here.

The rest of us, losers at some level.

Huge Ron - are you starting to wake up? It's the financial institutions that have created this mess, each directly or by funding mortgage banking operations. A high percentage of sub-prime paper was generated directly to the market, not through financial institutions - that fact is possibly the most troubling in that there are apparently no underwriting standard, if they can see breathe on a mirror, you are now living in a 1/2 Million house!

I’m just wondering if the sum-primers have all received their property tax bill.

The FHA Secure program being thrown out there is all bark, no bite. Too many people are or will be upside down in their mortgage and unable to refi.

You are finally right on the money - this entire program is all smoke and mirrors - no money is being transferred. Lending standards must be kept in place, especially when quasi-government agencies are involved.

An interesting thing is that even those that secure a refi more than likely paid too much in the first place - but, let's say they can secure a refi somehow - they still paid to much and years down the road they will not see appreciation. Hopefully, they really like the house and don't end up having to move (and sell it).

Of course, not necessarily off-point, what's the deal with the appraisal industry? Appraisals are now practically useless.

To the extent that there is or was (and I have no doubt that some of this happened), those instititutions should be prosecuted to the fullest extent of the law. I would even be willing to lend the services of NJ's attorney, Christopher Christie. I don't think he's lost an indictment yet.

However, in a lot of cases with these loans, the lender never verified income: they were stated income loans. So the lender probably couldn't know whether or not the applicant could handle the payments (a troubling thought in itself).

I find it more than a little ironic that some of the affected borrowers could have stated their income in such a way while applying for the loan that they could handle the payments, and now those same borrowers might be getting ready to state their income to whomever is empowered to grant them relief that they can't handle the payments.

I believe there is--properly--an income verification requirement for relief consideration. If there had been an income verification requirement to obtain the original mortgage, in many cases perhaps the troubled homeowners would not not be troubled, because they would not have gotten the loan or the home in the first place.

A lot of appraisers have always been practically useless.

"Appraisals are now practically useless."

I'm not sure about "now" - I don't think they ever really were valuable.

ever read any underwriting guidelines Ron?

Institutions don't lend money to people that can't pay it back, it is a very bad business model!

Chees!!! I thought you were in an MBA program!!!!

Pale-

People like Ron feel it is the big bad bank that should know what is right for the customers, kind of like the government. No responsibility on the borrowers...Those greedy lenders. No doubt there was some fraud at all levels, there always is. The subprime and non traditional products, like all loan products, arise from a need, serve the purpose, and oftentimes get twisted and abused.

Watch it Sox...

To put a different opinion on this a real real contributor to the problem,in this fiasco of greed, is the Credit Scoring system. When a system rates 1 out of 100 who may get a late notice or be late with a payment it lowers the score for 99 people that may never get a notice or be late. Its just that the score system can't say which p[erson out of the hundred will be the one that gets the notice or be late.

So 99 people who my never be late get stuck with sub-prime lending rate and terms. Guess who benefited from that.

Why didn't any lender factor in how an increase in payment amount would effect an applicants ability to pay? Such a simple process to do. Could it be the rejection rates would have been very high and the income stream much less if that was done?

Even the Federal Reserve applauded sub prime lending as a way to get more poor people onto home ownership. They even used the term under banked to apply to illegal aliens.

Nope plenty of blame to go around. But I sure hope the American Tax payer is not going to take it in the ear again.

I also agree that the bail out by the government is awful. The people that stuck the money in their pocket who knew full well the implications of what they were doing,should not escape their responsibility in causing this.

You are such a Huge Pale, Pale - banks are greed merchants - they participate in the mezzanine collateralized debt obligations, or CDO market - those are the securities that have gone south, along with and because of the underlying loans. Therefore, banks indirectly don't even have lending standards, the greedy basXXXXs. Of course, Wall Street is behind and at the bottom of this entire mess, along with the rating agencies that allowed most of these highly speculative securities to be turned into gold.

How is lead turned into gold? CDO's are turned into a collateral pie and that pie into slices, turning CDO's lousy underlying credit into gold-plated (AAA) bonds. At least on the surface. They encourage the U.S. housing bubble by helping supply credit to extremely suspect customers. In this case they've been abused - especially when morphed into more complicated versions.

A CDO squared, for example, invests not directly in pools of mortgages or other loans, but rather in certain tranches of other CDO's. For example, a CDO might own the middle tranches of a large number of other CDO's.

These tranches are typically rated A or thereabouts, but again, through the alchemy of risk restructuring, lead becomes gold.

So, it's not just China that's putting lead in stuff and selling it as toys or securities.

CDO's are owned by large banks - in the Billions.

I do not blame the financial institution in these cases. I have a lot of experience in this area. I actually blame the brokers or the Mortgage Companies. Banks set up programs that MC's can conform with in order to get the bank to buy the loan. The broker and the MC who is feeding the customer "misinformation" and falsely disclosing their program is the one to blame. The bank just bought a product that met conforming standards and is then reconverting the loans into a security.

I am guessing that R-tard Mexico is opining on something else he knows little to nothing about and you guys are going to make him remember why he had to cheat his way through school and could not get a job at a law firm.

Totally agree, especially when the bank orders it and tells the appraiser how much is needed to make the loan. If the appraiser wants to do business with the bank, he best not come short.

Banks write the check for the home, not stipulate the terms of the deal. The broker and MC gets the customer into the "deal" that they can make the most off of the customer for. The bank just funds it and packages it.

Great minds...

According to Bush this is not a "bail out" because the government is not putting out any money for it?

You cannot give the financial institutions are free pass on this, they are losing billions - they are responsible in a big way for buying the securities or directly as lenders - also, a huge responsibility to the shareholders - that's why the head of Citi was fired.