Mortgage Mess

[Partial]

Looking 5 years down the road, what is going to be the end result of this massive mess of variable interest rate mortgages and crooked lenders taking advantage of people and idiots not having any know-how or ability to manage to money?

[SkinBasket]

The same as it was earlier this year before they dropped the rates back down.

[Tyrone Bigguns]

Sheep were far from innocent.

[Jimx29]

We/government will bail them all out. Not the poor creditors :|, but the people in trouble

[LL2]

We/government will bail them all out. Not the poor creditors :|, but the people in trouble

They need to bail themselves out.

[Freak Out]

We/government will bail them all out. Not the poor creditors :|, but the people in trouble

They need to bail themselves out.

In case you hadn't noticed....we (the tax payers) have already bailed out the big lenders/investment banks (Rich Folk) by borrowing money from the Chinese to give to them.
This is todays American capitalism....no risk because we will always supply the money to bail them out but they get all the rewards when they succeed.

[the_idle_threat]

Dirty, filthy, evil corporations. :o

If you can't beat 'em, join 'em. :satan: And if you own stock, you already have. :idea:

[Freak Out]

Just keep borrowing and buying people....everything is going to be fine.

[Bretsky]

As a lender for a bank I don't buy for one minute the government should bail everybody out.

If the banks/mortgage brokers made bad decisions they should feel the pain. And for the most part customers know exactly what they are getting into. Some of them were just not smart. I always counsel borrowers on debt to income ratios, and the fact that just because you can get approved does not mean you should be comfortable at that purchase price.

If the government bails out the bad deals, the good customers will probably be the ones to suffer with rates quite possibly going up.

[Freak Out]

As a lender for a bank I don't buy for one minute the government should bail everybody out.

If the banks/mortgage brokers made bad decisions they should feel the pain. And for the most part customers know exactly what they are getting into. Some of them were just not smart. I always counsel borrowers on debt to income ratios, and the fact that just because you can get approved does not mean you should be comfortable at that purchase price.

If the government bails out the bad deals, the good customers will probably be the ones to suffer with rates quite possibly going up.

I agree completely. Read the fine print and if the deal is to good to be true then it is....

Greenspans philosophy of letting the markets regulate themselves does not work all the time and solid mortgage lending rules should have been put in place when he was first supposed to oversee the writing of them.

[Bretsky]

Looking 5 years down the road, what is going to be the end result of this massive mess of variable interest rate mortgages and crooked lenders taking advantage of people and idiots not having any know-how or ability to manage to money?


Point 1- On a personal note, I hope all these mortgage brokers go out of business. My job would be easier and my income situation would improve

But in the bigger picture, the theme you lay out in this thread seems to be the general picture that America and the media has painted and believes.

I don't buy it for a second. It's not like these brokers made stuff up and tricked the people into signing the papers. Even for a mortgage broker, every bit of information that outlines all of the terms and conditions is mapped out for the customers.

They've signed the disclosures and agreed to the terms.

I truly feel bad for the people losing homes due to divorces one party can't make the monthly payment and the other will no longer help out.

I empathize with people struggling to get by in our challenging economy.
That includes people who are struggling on their job, with their social stresses in life, and with their mortgage.

But people make choices. Even the most crooked brokers out there still had to disclose everything that their programs entailed. And their customers agreed to it.

I have issues with how the media passes all the buck of this crises solely to the "crooked" mortgage industry. People also made bad decisions.

[MJZiggy]

Absolutely. Anyone who signs an adjustable rate mortgage and doesn't think about what the "adjustable" part means is a fool. It's not like after 3 or 5 years, the mortgage company is going to LOWER your rate. Same thing with balloon payments. You think you're suddenly gonna have $10k laying around when that balloon comes due?

Every now and again, I have mortgage brokers call me with their AMAZING rates, or even better the ones who offer me a GREAT monthly payment--even better than what I have now. They change their tune when I say "that's fixed for the life of the loan, right?"

[Scott Campbell]

Same thing with balloon payments. You think you're suddenly gonna have $10k laying around when that balloon comes due?


And just where the hell were you and your great advice when Shermy signed Wahle to that ridiculous contract?

[Cheesehead Craig]

Plenty of blame to go around on this one. Thing is, the sub prime market was so profitable that some banks saw the gravy train and just rode it as far as they could. People who had no business getting a loan got one and others simply had eyes bigger than their wallets.

It really would be a shame if the govt made us all pay for a bunch of idiots mistakes,

[Bretsky]

Plenty of blame to go around on this one. Thing is, the sub prime market was so profitable that some banks saw the gravy train and just rode it as far as they could. People who had no business getting a loan got one and others simply had eyes bigger than their wallets.

It really would be a shame if the govt made us all pay for a bunch of idiots mistakes,

Absolutely true about the gov; they should stay out. Freezing the rates of these ARM's is an insane idea IMO and will hurt the current buyers with good credit.

Two days after George Bush opened his mouth about this plan the Fixed Rates had gone up three eighths of a percent.

If this plan happens, the end result is the fixed rates will get pushed up harder, resulting in home sales going further in the toilet than they already are.

Rough times to be a realtor right now.

[Freak Out]

Now it's Automobile loans.....and to top it off they keep buying the least fuel efficient vehicles! At least 4-5 suckers are born every minute in this country.

http://www.latimes.com/business/la-fi-autoloans30dec30,0,4058852,full.story?coll=la-home-center

[Freak Out]

This is a nice parting gift....

I could have sworn I read something before about him dumping stock while the house of cards was coming down.

Mozilo could reap $115 million
The Countrywide CEO's potential pay if his company is acquired rankles critics.
By Kathy M. Kristof
Los Angeles Times Staff Writer

January 11, 2008

Countrywide Financial Corp. founder Angelo Mozilo, one of the nation's highest-paid chief executives, stands to reap $115 million in severance-related pay if his troubled company is acquired by Bank of America Corp., regulatory filings show.

Free rides on the company jet are also included in Mozilo's departure deal, and the company will pick up his country club bills until 2011.

Other executives, including Home Depot Inc.'s jettisoned CEO, Robert Nardelli, have garnered bigger going-away packages. But critics say Mozilo's arrangement is especially nettlesome given the losses that Countrywide investors have suffered in the last year. Company shares rallied Thursday to $7.75, up $2.63, but that's still down 82% from their high last year.

"This is a failed chief executive -- a failed and overpaid chief executive -- who has driven his company to the brink of bankruptcy," said Daniel Pedrotty, director of the office of investment at the AFL-CIO. "I think shareholders are going to be especially outraged if he walks away with another pay-for-failure package."

Neither Mozilo nor Countrywide officials returned calls for comment.

Bank of America is in talks to acquire Countrywide and a deal could be announced as early as today, according to people with knowledge of the talks.

If Countrywide is acquired, Mozilo could potentially stay on with the company. But he could probably make more money by leaving, compensation experts say.

For one thing, Bank of America is unlikely to pay Mozilo more than its own chief executive, Kenneth Lewis.

Lewis, whose company has a market capitalization of $174 billion, earned $27.9 million in 2007, according to regulatory filings. Mozilo earned $48.1 million last year, and Countrywide's market capitalization is $4.5 billion.

If Mozilo is fired or resigns voluntarily, his employment contract guarantees him three times his base salary, plus a cash payment equal to three times the amount of whichever is greater: his average bonus over the last two years or his bonus from the previous year.

That combined total would be $87.9 million, according to Countrywide's most recent proxy statement.

In addition, Mozilo has two pensions that his severance pact gives him the right to receive as a lump sum upon his departure. Those pensions were worth $24 million as of December 2006, the last time the company was required to report their value.

Finally, Mozilo would be eligible for accelerated payment of stock options and stock grants if the buyout goes through. Those are worth at least $3 million at current market prices, estimated Richard Ferlauto, director of pension and benefits policy at the American Federation of State, County and Municipal Employees.

Add it all up, and the severance package is potentially worth $115 million.

"He has driven the stock price into the ground and the company has been destroyed," Ferlauto said. "Their customers have lost their homes and he is potentially walking away with more than $100 million. For us, that's unconscionable enrichment."

In the past, Countrywide has defended Mozilo's pay, saying that shareholders had reaped vast riches thanks to the leadership of the company's founder, who has served as its chief executive since 1998. Until it was struck by rising loan defaults last year, the company had been profitable and its stock price had handily beaten market averages.

Mozilo has also defended his sale of company stock options, which are now the subject of an inquiry by the Securities and Exchange Commission.

The Times reported last year that Mozilo made changes to his stock-trading arrangements that allowed him to ramp up his sales of company stock before Countrywide shares went into a tailspin.

In October 2006, shortly before the severity of the mortgage crisis became understood to investors, Mozilo adopted a stock-trading plan allowing him to sell 350,000 shares of Countrywide stock each month.

He launched a second trading plan in December 2006 and then revised it in February, when the stock was at a 52-week high, to vastly increase his stock sales. Those changes helped enable Mozilo to sell $145 million in Countrywide stock between Nov. 1, 2006, and Oct. 12, 2007. Although executives are allowed to trade shares in their companies under so-called 10b(5) agreements, industry experts said it was highly unusual to revise and add plans in short succession.

SEC officials will not discuss continuing investigations, but people within the agency have confirmed that Mozilo's stock sales are being scrutinized.

Combining those sales with pay and previous gains on the sale of stock, Mozilo has taken more than $650 million out of Countrywide over the course of the last 10 years, Ferlauto said. Add in potential severance payments and the Calabasas-based company would have enriched Mozilo to the tune of three-quarters of a billion dollars.

"Compensation abuse has been a recurring travesty with this company," said William Patterson, director of CtW Investment Group in Washington. "The company has been run into the mud. Should Mozilo be able to walk away with this additional cash? Clearly not. I think it becomes the latest in a series of outrages."

[packinpatland]

As a lender for a bank I don't buy for one minute the government should bail everybody out.

If the banks/mortgage brokers made bad decisions they should feel the pain. And for the most part customers know exactly what they are getting into. Some of them were just not smart. I always counsel borrowers on debt to income ratios, and the fact that just because you can get approved does not mean you should be comfortable at that purchase price.

If the government bails out the bad deals, the good customers will probably be the ones to suffer with rates quite possibly going up.

I agree completely. Read the fine print and if the deal is to good to be true then it is....




Greenspans philosophy of letting the markets regulate themselves does not work all the time and solid mortgage lending rules should have been put in place when he was first supposed to oversee the writing of them.

Then you have to love what Hilary is proposing...

http://www.msnbc.msn.com/id/22611923/

[Bretsky]

As a lender for a bank I don't buy for one minute the government should bail everybody out.

If the banks/mortgage brokers made bad decisions they should feel the pain. And for the most part customers know exactly what they are getting into. Some of them were just not smart. I always counsel borrowers on debt to income ratios, and the fact that just because you can get approved does not mean you should be comfortable at that purchase price.

If the government bails out the bad deals, the good customers will probably be the ones to suffer with rates quite possibly going up.

I agree completely. Read the fine print and if the deal is to good to be true then it is....




Greenspans philosophy of letting the markets regulate themselves does not work all the time and solid mortgage lending rules should have been put in place when he was first supposed to oversee the writing of them.

Then you have to love what Hilary is proposing...

http://www.msnbc.msn.com/id/22611923/


Completely idiotic

[Freak Out]

As a lender for a bank I don't buy for one minute the government should bail everybody out.

If the banks/mortgage brokers made bad decisions they should feel the pain. And for the most part customers know exactly what they are getting into. Some of them were just not smart. I always counsel borrowers on debt to income ratios, and the fact that just because you can get approved does not mean you should be comfortable at that purchase price.

If the government bails out the bad deals, the good customers will probably be the ones to suffer with rates quite possibly going up.

I agree completely. Read the fine print and if the deal is to good to be true then it is....




Greenspans philosophy of letting the markets regulate themselves does not work all the time and solid mortgage lending rules should have been put in place when he was first supposed to oversee the writing of them.

Then you have to love what Hilary is proposing...

http://www.msnbc.msn.com/id/22611923/

Unemployment insurance is one thing...helping someone heat their home/apartment in a time of need, but the mortgage house of cards needs to come down. Its to bad that some real scum made out while some hard working people got fucked but thats life sometimes. I wonder if anyone is thinking about that bankruptcy rewrite a few years ago......?

[Cheesehead Craig]

Countrywide tried to buy their way towards the top of the mortgage industry by giving tons of shitty loans then turning around and saying how great they were giving all those loans out. And now they are no more with the B of A buyout.

I'm in the mortgage business too and these guys were an embarrassment to the industry. Unfortunately they were not alone.

[Bretsky]

Countrywide tried to buy their way towards the top of the mortgage industry by giving tons of shitty loans then turning around and saying how great they were giving all those loans out. And now they are no more with the B of A buyout.

I'm in the mortgage business too and these guys were an embarrassment to the industry. Unfortunately they were not alone.


:bclap: :bclap: :bclap: :bclap: :bclap:





:laugh: Da Great Countrywide