Propublica wins a Pulitzer

[Claudette]

The Vast majority of the blame lies squarely with the people who ran these lending institutions.

They were supposed to be the professionals and they turned out to be criminals

As I said. No one put a gun to anyones head to sign on the bottom line dummy. The lendee is as culpable as the lender in my book.

 

[Truthmatters]

http://www.usmessageboard.com/general-discussion/79891-new-debt-elimination-techniques.html


You were on the band wagon fella

 

[Truthmatters]

The Vast majority of the blame lies squarely with the people who ran these lending institutions.

They were supposed to be the professionals and they turned out to be criminals

As I said. No one put a gun to anyones head to sign on the bottom line dummy. The lendee is as culpable as the lender in my book.

Even when the lender lies to the borrower?

 

[Claudette]

Even if the borrower lies to the lender?? You bet.

 

[g5000]

How stupid and unthinking would you have to be to take it knowing full well that there is no way in hell you can afford the payments??

I can explain that, by the way.

Did I mention the Pick-A-Payment loan earlier?

The way a Pick-A-Payment loan worked was like this. You had four choices of payment each month. One payment was really, really low. Almost anyone could afford it.

The second payment was a little higher. The third payment higher still. The fourth payment was the highest.

Guess which payment 80 percent of all Pick-A-Payment customers paid every month?

That's right. The lowest payment.

When I saw a Wachovia internal memo a few years ago about their wildly popular Pick-A-Payment program and their plans to ramp it up and put it on steroids, that is the exact moment I discovered our financial planet was well and truly fucked.


What was not being carefully explaind to the borrowers was that the lowest payment was a negative amortization payment.

I will pause now while some readers google "negative amortization".

(cue elevator music)

Okay. Understand?

If a borrower was making the lowest payment, they were not even covering the amount of interest owed on their loan every month.

Let's say you borrowed $250,000 at 5 percent API.

The lowest payment in a Pick-A-Payment loan might be, ohhh, let's say $512.23 a month.

The second lowest payment would be $638.64.

The third level payment would be $1,654.55

The fourth level payment would be $2,289.48

You can understand why 80 percent of the borrowers would make that $512.23 payment, yes?



All right. The first payment doesn't even cover the interest. The second payment is an interest-only payment. It does not pay down any principal. The third payment would pay off the loan in 30 years. The highest payment would pay off the loan in 15 years.

So at a minimum, just to avoid falling behind, you should be at least making the second highest payment of $638.64.

But if you make the $512.23 payment (which 80 percent did) then you are short $126.41 every month.

And that $126.41 gets added to your principal every month.

At the end of the variable period of your loan, which can be three to five years, you have accumulated from 10 to 25 percent more debt.

Instead of $250,000 you now owe $275,000, best case scenario. And your monthly payment now resets to $1,788.76.

So there you were, paying $512 dollars a month, happy as a lark in your new home. Now you have to cough up $1788 a month.

Good luck with that!

 

[Avatar4321]

Even when the lender lies to the borrower?

Why are you borrowing money you can't repay?

 

[Truthmatters]

Even if the borrower lies to the lender?? You bet.

so those cases where the lenders defrauded the borrower are the borrower fault?


REALLY?

 

[g5000]

The lenders knew all the ins and outs and pitfalls of Pick-A-Payment.

The borrowers? Not so much.

 

[Truthmatters]

Even when the lender lies to the borrower?

Why are you borrowing money you can't repay?

You were every bit as silly as claudia is and I provided a thread you started at the time to prove it.

so your response is to LIE about me personally.

Thank you for helping prove what a liar you are.

 

[g5000]

Even when the lender lies to the borrower?

Why are you borrowing money you can't repay?

Because the lender and the real estate agent and the appraiser and all the AM radio talk shows and all the Fox News commentators are telling you that house prices will go up forever. And so if something happens and you can't afford the payments, just sell your house for a huge profit!

But don't worry. That won't have to happen. You can just refinance for a new variable interest rate loan in three years!

 

[Avatar4321]

Even if the borrower lies to the lender?? You bet.

so those cases where the lenders defrauded the borrower are the borrower fault?


REALLY?

So you think you bear absolutely no responsibility for knowing everything you can before making a deal? You think you have no responsibility to honor your word?

 

[Avatar4321]

Even when the lender lies to the borrower?

Why are you borrowing money you can't repay?

You were every bit as silly as claudia is and I provided a thread you started at the time to prove it.

so your response is to LIE about me personally.

Thank you for helping prove what a liar you are.

And how am i lying about you by asking a question?

 

[Claudette]

I would never go for that and I assume at least some of those who were buying had a couple of brain cells that worked.

One has to also assume that every lender out there was following your scenario.

Don't think so.

 

[Avatar4321]

Because the lender and the real estate agent and the appraiser and all the AM radio talk shows and all the Fox News commentators are telling you that house prices will go up forever. And so if something happens and you can't afford the payments, just sell your house for a huge profit!

But don't worry. That won't have to happen. You can just refinance for a new variable interest rate loan in three years!

Well, they weren't. But for arguments sake, let's say you are correct.

You are seriously suggesting that because someone told you that house prices will go up for ever, you are absolved of all responsibility of thinking and using common sense to realize that that can't possibly be true?

If you don't know enough about something, don't get involved in it.

 

[Truthmatters]

Why are you borrowing money you can't repay?

You were every bit as silly as claudia is and I provided a thread you started at the time to prove it.

so your response is to LIE about me personally.

Thank you for helping prove what a liar you are.

And how am i lying about you by asking a question?

By pretending it was me who was in on of these loans..

awwwe Im sure you will now pretend that was NOT your intention of phrasing it that way?

You were on the "its sthe little guys fault" bandwagon.

You at least at one time were one of the idiots like claudia

 

[Truthmatters]

Blaming the victim gets you where you fools?

 

[del]

Now how does this square with the right wing meme that poor people caused the crash?

you = idiot

 

[Avatar4321]

Blaming the victim gets you where you fools?

How exactly are you a victim if you borrow money and dont pay it back?

 

[AmericanFirst]

Now how does this square with the right wing meme that poor people caused the crash?

Clinton,dodd and frank caused the crash.

 

[Amelia]

fools

idiots

You're so cute, TM.

Missed you when you were away.