Game Over

[WatertheTree]

Bottom Line - As home prices fall, more borrowers walk away

Here comes the correction Ron Paul has been talking about for the last 20 years. The game is over. The path we are on cannot be sustained. All gains in walstreet recently is inflation taking hold from the trillions of dollars printed. People cant afford to live in the states anymore.

As home prices fall, more borrowers walk away

John Brecher / msnbc.com

David Martin, 68, in his home in north Seattle, Washington. He and his wife are facing retirement within five years, but their retirement income won't cover their mortgage.
By John W. Schoen, Senior Producer

When David Martin and his wife bought their north Seattle condo five years ago, they figured they had plenty of time to downsize if they needed to before they retired.

Now, with the property worth roughly $60,000 less than the balance of their mortgage, Martin, 68, has been giving serious thought to just walking away, a process lenders call "strategic default."

"Guilt and morality are one side, and objective financial analysis are on the other side," Martin said. "They're coming to two opposite conclusions. I wonder how many other people are struggling with the same question."

This next election cycle is going to bring huge changes with it in our standards of living, and stability as a nation. We can either choose strong leadership that understands the problems with the economy and we can move to control the correction, or we can continue on the same path of more debt and wait untill it collapses in an uncontrollable slide that history shows will more then likely end in dictatorship.

Freedom or fascism. You decide.

 

[dblack]

Freedom or fascism. You decide.

Hmmm decisions decisions...

Are the fascists offering cake?

 

[Douger]

Zillow - Real Estate, Homes for Sale, Recent Sales, Apartment Rentals
Have fun.

 

[occupied]

An investment industry free to inflate bubble after bubble is a tyranny that you would call freedom, a people with faith in our investments by strict fraud oversight is a freedom you call tyranny. You have it backwards, these corporate persons must be held accountable for their deliberate ruination of the mortgage industry or we will never again have the confidence to risk our hard earned money with those thieves.

 

[dblack]

An investment industry free to inflate bubble after bubble is a tyranny that you would call freedom, a people with faith in our investments by strict fraud oversight is a freedom you call tyranny. You have it backwards, these corporate persons must be held accountable for their deliberate ruination of the mortgage industry or we will never again have the confidence to risk our hard earned money with those thieves.

What are you saying is 'backwards', exactly? I don't think any libertarians defend the freedom to defraud.

 

[WatertheTree]

An investment industry free to inflate bubble after bubble is a tyranny that you would call freedom, a people with faith in our investments by strict fraud oversight is a freedom you call tyranny. You have it backwards, these corporate persons must be held accountable for their deliberate ruination of the mortgage industry or we will never again have the confidence to risk our hard earned money with those thieves.

I agree. No more compromise. The rule of law and the constitution will be restored. Accountability is what the people demand, and it is what they are going to get.

 

[occupied]

An investment industry free to inflate bubble after bubble is a tyranny that you would call freedom, a people with faith in our investments by strict fraud oversight is a freedom you call tyranny. You have it backwards, these corporate persons must be held accountable for their deliberate ruination of the mortgage industry or we will never again have the confidence to risk our hard earned money with those thieves.

I agree. No more compromise. The rule of law and the constitution will be restored. Accountability is what the people demand, and it is what they are going to get.

You are saying libertarians are going to regulate the banking industry and prosecute fraud? doesn't that run counter to their often quoted philosophy of hands off private business?

 

[boilermaker55]

An investment industry free to inflate bubble after bubble is a tyranny that you would call freedom, a people with faith in our investments by strict fraud oversight is a freedom you call tyranny. You have it backwards, these corporate persons must be held accountable for their deliberate ruination of the mortgage industry or we will never again have the confidence to risk our hard earned money with those thieves.

I agree. No more compromise. The rule of law and the constitution will be restored. Accountability is what the people demand, and it is what they are going to get.

You are saying libertarians are going to regulate the banking industry and prosecute fraud? doesn't that run counter to their often quoted philosophy of hands off private business?

Absolutely correct. They want and desire less regulation. Less regulation = more corruption. They, however, have not understood that in any manner.

 

[dblack]

You are saying libertarians are going to regulate the banking industry and prosecute fraud? doesn't that run counter to their often quoted philosophy of hands off private business?

Well, 'regulate' is a loaded term - but libertarians are adamantly in favor of prosecuting fraud.

The thing is, the larger portion of the problem isn't fraud. It's the moral hazard created by the assumption that the regulatory state has 'got you covered'. Add to that, government policies that actively encourage debt and its easy to see how so many people got in over their heads.

The banksters that indulged in risky loans (whether they were goaded by government policy or not) should be held accountable for their idiocy. And the best way to do that is to let them fail. Unfortunately, the corporate collusion of both Bush and Obama prevented that from happening, instead pushing off the banks losses on the rest of us.

 

[occupied]

You are saying libertarians are going to regulate the banking industry and prosecute fraud? doesn't that run counter to their often quoted philosophy of hands off private business?

Well, 'regulate' is a loaded term - but libertarians are adamantly in favor of prosecuting fraud.

The thing is, the larger portion of the problem isn't fraud. It's the moral hazard created by the assumption that the regulatory state has 'got you covered'. Add to that, government policies that actively encourage debt and its easy to see how so many people got in over their heads.

The banksters that indulged in risky loans (whether they were goaded by government policy or not) should be held accountable for their idiocy. And the best way to do that is to let them fail. Unfortunately, the corporate collusion of both Bush and Obama prevented that from happening, instead pushing off the banks losses on the rest of us.

The point of regulation is to provide a legal framework under which fraud can be prosecuted in the first place. Our regulatory framework is spread over a half dozen agencies with differing jurisdictions. They are undermanned and outgunned, on purpose. The charge that we have too much regulation is silly when you look at just how much of a paper tiger our government is to fight these people at their own fixed game.

 

[thereisnospoon]

An investment industry free to inflate bubble after bubble is a tyranny that you would call freedom, a people with faith in our investments by strict fraud oversight is a freedom you call tyranny. You have it backwards, these corporate persons must be held accountable for their deliberate ruination of the mortgage industry or we will never again have the confidence to risk our hard earned money with those thieves.

Had the federal government not involved itself in the real estate/home buying market, none of this would have happened.
I will admit that my original loan was FHA...But I was held to the same high credit standards with verifiable income and of course a high credit score in order to be approved. Plus we had to make a minimum 3% down payment.
IMO the Community Reinvestment Act was horrible legislation. Laws and regulations that allowed previously unqualified applicants to receive approval were a major part of the problem.
Those who approved Fannie/Freddie believed home ownership to be a "right".
Huge error!
The home market was fine the way it was before all this crap was forced upon it.
BTW, for comparison's sake, have a look at Canada. That nation did not experience a housing market crisis. That is because the Canadian federal government stayed out of the marketplace.

 

[dblack]

The point of regulation is to provide a legal framework under which fraud can be prosecuted in the first place. Our regulatory framework is spread over a half dozen agencies with differing jurisdictions. They are undermanned and outgunned, on purpose. The charge that we have too much regulation is silly when you look at just how much of a paper tiger our government is to fight these people at their own fixed game.

I can't say for sure we have 'too much' regulation. But I know we have lots of bad regulation: regulation that ensures corporate profits at our expense, regulation that prevents healthy competition, regulation that papers over real risk and gives consumers a false sense of security.

I think libertarians would be well served to drop the "less regulation is always better motif", because it's not necessarily what we mean. Rules that enforce transparency and honest dealings are a necessity of a sane market. The point is to get rid of regulations that support corporatism and little else.

 

[occupied]

An investment industry free to inflate bubble after bubble is a tyranny that you would call freedom, a people with faith in our investments by strict fraud oversight is a freedom you call tyranny. You have it backwards, these corporate persons must be held accountable for their deliberate ruination of the mortgage industry or we will never again have the confidence to risk our hard earned money with those thieves.

Had the federal government not involved itself in the real estate/home buying market, none of this would have happened.
I will admit that my original loan was FHA...But I was held to the same high credit standards with verifiable income and of course a high credit score in order to be approved. Plus we had to make a minimum 3% down payment.
IMO the Community Reinvestment Act was horrible legislation. Laws and regulations that allowed previously unqualified applicants to receive approval were a major part of the problem.
Those who approved Fannie/Freddie believed home ownership to be a "right".
Huge error!
The home market was fine the way it was before all this crap was forced upon it.
BTW, for comparison's sake, have a look at Canada. That nation did not experience a housing market crisis. That is because the Canadian federal government stayed out of the marketplace.

Every time someone gives the CRA as the primary cause of the mortgage bubble it lets the banking industry off the hook to do it again. The primary cause was the mountain of new gullible money coming from India and Asia hungry to invest in our already saturated mortgage securities market, the solution? Make more mortgages. Ask yourself, if the CRA was so culpable then why was the most damaging and expensive wave of foreclosures on short term 5 year notes on investment property?

 

[thereisnospoon]

I agree. No more compromise. The rule of law and the constitution will be restored. Accountability is what the people demand, and it is what they are going to get.

You are saying libertarians are going to regulate the banking industry and prosecute fraud? doesn't that run counter to their often quoted philosophy of hands off private business?

Absolutely correct. They want and desire less regulation. Less regulation = more corruption. They, however, have not understood that in any manner.

You and occupied should stop wringing your hands.
Of course the banking/lending industry needs to be regulated. However, there should not be ANY government interference in lending and credit standards which LOWER the lending qualifications. That is how we got into this mess in the first place.
Credit SHOULD be difficult to obtain. Credit is man's trust in man to repay a debt per the conditions of the contract.

 

[dblack]

Every time someone gives the CRA as the primary cause of the mortgage bubble it lets the banking industry off the hook to do it again.

The primary cause of the mortgage bubble is debatable. But bailing them out is what lets them off the hook to do it again.

 

[occupied]

You are saying libertarians are going to regulate the banking industry and prosecute fraud? doesn't that run counter to their often quoted philosophy of hands off private business?

Absolutely correct. They want and desire less regulation. Less regulation = more corruption. They, however, have not understood that in any manner.

You and occupied should stop wringing your hands.
Of course the banking/lending industry needs to be regulated. However, there should not be ANY government interference in lending and credit standards which LOWER the lending qualifications. That is how we got into this mess in the first place.
Credit SHOULD be difficult to obtain. Credit is man's trust in man to repay a debt per the conditions of the contract.

There never was any pressure by the government to lower lending standards, that came from management wanting more mortgages to bundle and sell to the rubes in Asia wanting to invest.

 

[dblack]

There never was any pressure by the government to lower lending standards, that came from management wanting more mortgages to bundle and sell to the rubes in Asia wanting to invest.

In any case, government did lower lending standards. And the problem with government dictating the standards is that they are then, in part, culpable for the results. Both the banks, and their customers can complain: hey, we were just following the standards set by the government! - and while we shouldn't. we'll often use that as an excuse to bail everyone out.

The prudent thing to do is let the banks and their customers agree on how much risk they want to take on, and then let them suffer the repercussions when they make the wrong call.

 

[tenthertoo]

Had the federal government not involved itself in the real estate/home buying market, none of this would have happened.
I will admit that my original loan was FHA...But I was held to the same high credit standards with verifiable income and of course a high credit score in order to be approved. Plus we had to make a minimum 3% down payment.
IMO the Community Reinvestment Act was horrible legislation. Laws and regulations that allowed previously unqualified applicants to receive approval were a major part of the problem.
Those who approved Fannie/Freddie believed home ownership to be a "right".
Huge error!
The home market was fine the way it was before all this crap was forced upon it.
BTW, for comparison's sake, have a look at Canada. That nation did not experience a housing market crisis. That is because the Canadian federal government stayed out of the marketplace.

Absolutely correct!

I'd prefer, however, lend not more than 90% of an independent appraisal, payments not more than 20% of stable income (regular income for the past two years). Fixed rate loans only.
No reliance on the "Credit Score" scam.

 

[occupied]

There never was any pressure by the government to lower lending standards, that came from management wanting more mortgages to bundle and sell to the rubes in Asia wanting to invest.

In any case, government did lower lending standards. And the problem with government dictating the standards is that they are then, in part, culpable for the results. Both the banks, and their customers can complain: hey, we were just following the standards set by the government! - and while we shouldn't. we'll often use that as an excuse to bail everyone out.

The prudent thing to do is let the banks and their customers agree on how much risk they want to take on, and then let them suffer the repercussions when they make the wrong call.

CRA simply said that location alone could not be used as a reason to deny loans or redlining, it had nothing to do with lowering any income standards. The problem with just letting the banks fail was that they held the bulk of pension plans and retirement savings hostage. Bailing them out was the right move but it should have come with a reform or be broken up condition.

 

[WatertheTree]

I agree. No more compromise. The rule of law and the constitution will be restored. Accountability is what the people demand, and it is what they are going to get.

You are saying libertarians are going to regulate the banking industry and prosecute fraud? doesn't that run counter to their often quoted philosophy of hands off private business?

Absolutely correct. They want and desire less regulation. Less regulation = more corruption. They, however, have not understood that in any manner.

The banking industry doesnt need regulated, except by the investors who invest in those banks. The federal reserve however needs regulated/abolished.

People who want more regulation are simply ignorant to the fact that regulation suffocates commerce, and freedom. They are same people who think the solution to any problem is to expand government, when in reality they need to get off there ass regulate the industry themselves.

Justice will come in the form of bankruptcy, and all the investors aswell. It is only just that it is this way, as they have profited immensely in the past by there greed. Greedy home buyers who neglected common sense will recieve justice in the form of 'being underwater'

It is impossable to send people to jail for this fiasco, atleast for common people. However there is a need for accountability on the government side of things that encourage more and more lending. Government that protects the banks, and the federal reserve.

I hope that clears the confusion up. Occupy's original post is rather vague, and I think thats where I misunderstood what he was saying, if he even knew.