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.

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

[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]

Re: Mortgage Mess

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.