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#931498 - 03/27/08 03:48 PM Re: CBS Busts Hillary About Outright Lie on Bosnia straw
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do you think that i disagree?!

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#931505 - 03/27/08 03:51 PM Re: CBS Busts Hillary About Outright Lie on Bosnia Hated By Some
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No I think you believe that the government should just take over mortgage lending to get it all fixed up.

I have a question. With all the regulations currently in place, and all the government oversight over lenders, how could all these consumers have been so tricked into horrible loans?

Wasn't the government asleep at the switch? After all, if the government is seen as the solution and savior, why weren't they there to protect the consumers?

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#931510 - 03/27/08 03:54 PM Re: CBS Busts Hillary About Outright Lie on Bosnia straw
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Quote:
No I think you believe that the government should just take over mortgage lending to get it all fixed up.

huh? why would you say that?!

Quote:
With all the regulations currently in place, and all the government oversight over lenders, how could all these consumers have been so tricked into horrible loans?

how about an anaolgy? "let's just build a wall on the border. that will fix things!"

Quote:
Wasn't the government asleep at the switch?

perhaps. especially if they should've realized the degree to which underwriting standards flew in the face of prudence.

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#931520 - 03/27/08 03:58 PM Re: CBS Busts Hillary About Outright Lie on Bosnia straw
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Straw-you are right on. There are plenty of regulations in place which if followed, would have educated the borrower as to what they were getting into. Were there lenders and brokers not following the regs? Yes. Were borrowers given loans that shouldn't have been? Yes. Isn't the borrower also responsible to know what they are getting into, and to also figure out for themselves if they can afford the payment? What the banks says I can qualify for and what I feel I can handle for a payment are 2 different things.

Like many issues now, if current laws are enforced, it would reduce the problems. Piling on new regulations only add to the cost and burden to both borrowers and lenders. If you peek at the proposed RESPA changes, your head will spin. I am all for revising regs as needed, but there is a limit.
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#931526 - 03/27/08 04:02 PM Re: CBS Busts Hillary About Outright Lie on Bosnia Hated By Some
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Originally Posted By: Ronzilla
Quote:
No I think you believe that the government should just take over mortgage lending to get it all fixed up.

huh? why would you say that?!

Quote:
With all the regulations currently in place, and all the government oversight over lenders, how could all these consumers have been so tricked into horrible loans?

how about an anaolgy? "let's just build a wall on the border. that will fix things!"

Quote:
Wasn't the government asleep at the switch?

perhaps. especially if they should've realized the degree to which underwriting standards flew in the face of prudence.



Forgive me. I just thought you believed that the government was the solution for all problems. So, if you don't think the government should take over mortgage lending, and the regulations they had in place to protect the consumer failed to protect the consumer, your government solution is what? More regulations that will fail to protect the consumer?

As far as the analogy, how about you actually answer the question. How did the government allow this to happen?

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#931528 - 03/27/08 04:04 PM Re: CBS Busts Hillary About Outright Lie on Bosnia TB 12
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Originally Posted By: Sox in 07
Straw-you are right on. There are plenty of regulations in place which if followed, would have educated the borrower as to what they were getting into. Were there lenders and brokers not following the regs? Yes. Were borrowers given loans that shouldn't have been? Yes. Isn't the borrower also responsible to know what they are getting into, and to also figure out for themselves if they can afford the payment? What the banks says I can qualify for and what I feel I can handle for a payment are 2 different things.

Like many issues now, if current laws are enforced, it would reduce the problems. Piling on new regulations only add to the cost and burden to both borrowers and lenders. If you peek at the proposed RESPA changes, your head will spin. I am all for revising regs as needed, but there is a limit.


My current mortgage closing package is between 100 and 115 pages long, depending on product. Does anyone actually read it and would they understand it even if they read it?

More regulations will simply create more forms that a consumer will sign where told to.

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#931553 - 03/27/08 04:16 PM Re: CBS Busts Hillary About Outright Lie on Bosnia straw
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Quote:
would they understand it even if they read it?

i think that is the key. myself and people like james dimon think that that is why a lot of the popular criticism of the consumers' role in this is overstated.

the underwriting has already changed significantly since the meltdown. can we mandate it to stay that way or is that, as some argue, the place where the market needs to dictate? i would say that, based on what just happened, this is exactly where the government should step in with regulations. they can regulate capital requirements to protect the system, we have seen what the business side within those requirements can do to the economy.

the government allowed this to happen by a mixture of lack of appropriate regulations to address real problems. but who is going to tell the market to scale back on their activities in a boom only to have people (mostly conservatives ) claim that they are hurting the market by 'telling us how to lend and do business; we already have too many regulations!'

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#931562 - 03/27/08 04:25 PM Re: CBS Busts Hillary About Outright Lie on Bosnia Hated By Some
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You mean like the Basel regulations of the early 70's that required increased captial for long term assets i.e. mortgages so the market developed CMO's and MBS's that transferred the risks off balance sheet and eventually led to the bubble that just burst.

You mean more regulations like that?

Do you understand that the market will always looks for ways around the regulations and these ways create unintended or unforseen consequences?

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#931565 - 03/27/08 04:27 PM Re: CBS Busts Hillary About Outright Lie on Bosnia Hated By Some
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There are 2 different regulatory questions. First, which you're all beating into submission, surrounds the mortgage itself. Second, the creation of and trading in 'exotic' mortgage derivatives.

Bear Stearns didn't fail because it wrote shady mortagages, it failed because elaborate securities that separated (grossly oversimplified) the debt, the debt obligation and the real property underlying the debt.

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#931567 - 03/27/08 04:29 PM Re: CBS Busts Hillary About Outright Lie on Bosnia Hated By Some
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I agree straw. It can be completely overwhelming. However, the reason the packages are so large is over the years, more and more regulations (whether they are Federal, State or product) were tacked on either as a CYA for the lender, or additional disclosures to the borrower, or both. The more we try to regulate and make it easier/clearer to the borrower the worse it gets. I am not saying revisions aren't needed. Instead of adding new regs, lets work with and enforce the ones on the books.
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#931569 - 03/27/08 04:29 PM Re: CBS Busts Hillary About Outright Lie on Bosnia Hrothgar Geiger
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Yes but those mortgage derivatives allowed credit standards to be lowered, as there was a ready market to "offload" the debt and risk from the lenders' balance sheet.

And of course, Ron has not even considered that.

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#931573 - 03/27/08 04:31 PM Re: CBS Busts Hillary About Outright Lie on Bosnia straw
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no, i mean like mandating limits to ltv and "fico-only" loans. stuff like that. but as far as the transferred risk goes, perhaps those people who purchased the risk should pay the price! no free lunch! the issue then is if they are punished too much does it destroy the market in general?

i understand that everybody is always looking to get ahead. but if enough of the market is apparently disregarding something that is meant to protect it, perhaps that needs to be revised.

i certainly do not have a problem placing the burden on those who should understand economic and finance better in the vast majority of the deals: the financial institutions.

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#931575 - 03/27/08 04:32 PM Re: CBS Busts Hillary About Outright Lie on Bosnia straw
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I agree that the two fed off each other. I would suggest that the mortgage derivative securitization side of the feedback loop is, overall, less regulated than the mortgage-writing side of the feedback loop.

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#931578 - 03/27/08 04:35 PM Re: CBS Busts Hillary About Outright Lie on Bosnia Hrothgar Geiger
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Bear Stearns didn't fail because it wrote shady mortagages, it failed because elaborate securities that separated (grossly oversimplified) the debt, the debt obligation and the real property underlying the debt.

i don't think i missed this issue at all. investors in these things should be like any other investor--accept the risk of failure! the issue here is what do we do after we didn't protect investors from themselves?

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#931580 - 03/27/08 04:37 PM Re: CBS Busts Hillary About Outright Lie on Bosnia TB 12
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Instead of adding new regs, lets work with and enforce the ones on the books.

those regs on the books aren't necessarily the reason for this failure.

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#931582 - 03/27/08 04:39 PM Re: CBS Busts Hillary About Outright Lie on Bosnia straw
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Originally Posted By: straw
Yes but those mortgage derivatives allowed credit standards to be lowered, as there was a ready market to "offload" the debt and risk from the lenders' balance sheet.

And of course, Ron has not even considered that.

or have i but you just didn't recognize it when i referredt to it?

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#931585 - 03/27/08 04:39 PM Re: CBS Busts Hillary About Outright Lie on Bosnia Hated By Some
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Originally Posted By: Ronzilla
no, i mean like mandating limits to ltv and "fico-only" loans. stuff like that. but as far as the transferred risk goes, perhaps those people who purchased the risk should pay the price! no free lunch! the issue then is if they are punished too much does it destroy the market in general?



Would this also apply to the individuals who are now asking to be saved from their irresponsible behavior? Do I have to pay for them also?
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#931589 - 03/27/08 04:40 PM Re: CBS Busts Hillary About Outright Lie on Bosnia Hrothgar Geiger
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I would suggest that the mortgage derivative securitization side of the feedback loop is, overall, less regulated

more importantly, it isn't truly understood by those who invested and set these things up!!

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#931590 - 03/27/08 04:41 PM Re: CBS Busts Hillary About Outright Lie on Bosnia Hated By Some
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Originally Posted By: Ronzilla
Quote:
Instead of adding new regs, lets work with and enforce the ones on the books.

those regs on the books aren't necessarily the reason for this failure.


Tell that to those who "didn't understand what they were getting into" that Obama and Clinton are pandering to. Have you looked at the proposed RESPA changes?????
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#931614 - 03/27/08 05:03 PM Re: CBS Busts Hillary About Outright Lie on Bosnia TB 12
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i have not seen any of the respa changes. i do agree with the notion about not knowing what they were getting into. technically knowing and practically knowing are quite different things here.

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#931650 - 03/27/08 05:28 PM Re: CBS Busts Hillary About Outright Lie on Bosnia Hated By Some
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Originally Posted By: Ronzilla
Originally Posted By: straw
Yes but those mortgage derivatives allowed credit standards to be lowered, as there was a ready market to "offload" the debt and risk from the lenders' balance sheet.

And of course, Ron has not even considered that.

or have i but you just didn't recognize it when i referredt to it?


Please show me the reference in this thread and we'll see if you referred to it.

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#931652 - 03/27/08 05:29 PM Re: CBS Busts Hillary About Outright Lie on Bosnia Hated By Some
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Originally Posted By: Ronzilla
Quote:
I would suggest that the mortgage derivative securitization side of the feedback loop is, overall, less regulated

more importantly, it isn't truly understood by those who invested and set these things up!!


No, it is understood, but just like consumers, everyone was operating under the premise that real estate prices would always go up.

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#931655 - 03/27/08 05:30 PM Re: CBS Busts Hillary About Outright Lie on Bosnia Hated By Some
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Originally Posted By: Ronzilla
no, i mean like mandating limits to ltv and "fico-only" loans. stuff like that. but as far as the transferred risk goes, perhaps those people who purchased the risk should pay the price! no free lunch! the issue then is if they are punished too much does it destroy the market in general?

i understand that everybody is always looking to get ahead. but if enough of the market is apparently disregarding something that is meant to protect it, perhaps that needs to be revised.

i certainly do not have a problem placing the burden on those who should understand economic and finance better in the vast majority of the deals: the financial institutions.


So you want the government to mandate what the downpayments and underwriting should be?

Hasn't the market already made those adjustments?

Isn't this closing the barn door after the horse has escaped?

Pandering?

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#931670 - 03/27/08 05:48 PM Re: CBS Busts Hillary About Outright Lie on Bosnia straw
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Thats my problem, Ron. People are not taking responsibility for their actions. Not all, but many. Here is one example.

A couple months back, there was a story on the local news (Boston) about a single black mother, who was on the verge of losing her home. The sad story...the American Dream, the big bad lender said she could afford it, promised to refinance her, now there isn't enough equity and she is about to lose the house. They interviewed a person from the local neighborhood advocacy group who railed on the lenders, and wanted the government to step in. She was on every station. Very sad story. Turns out that this woman is a licensed real estate broker, who had sold over 35 homes last year. Am I supposed to believe a licensed real estate broker didn't understand? When this little tidbit became public, she didn't show her face in public.

I know many people didn't understand what they were getting into, but don't they need to accept responsibility as well as the lender?

Straw is right. Anyone in the industry knows all the changes that are coming over daily. Huge price bumps on LTV's, FICOS and many locations around here are considered "declining markets" and get a 5% hit on the max LTV. The pendulum is swinging the other way.
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#931740 - 03/27/08 07:01 PM Re: CBS Busts Hillary About Outright Lie on Bosnia TB 12
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certainly she seems more culpable than others. she should be held to a higher standard.

i totally think that borrowers are responsible, too. lenders and the market don't want to see mass foreclosures/bankruptcies. the fed is truly engaged in a "trickle down" as it is allowing the finance industry to continue to do business. borrowers certainly can't be relieved of duties so banks must make new loans to recoup as much value as possible.

but for the instruments/investment part of this deal is that there must be losers. hard core. that's how you force the market. believe me, with the fed window open, there are plenty of players available to start turning these lemons into lots of lemonade.

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