Discussion in 'Economy' started by Mr.Conley, Mar 15, 2007.
The Lending Blame Game
Posted by Julia A. Seymour on March 14, 2007 - 16:47.
Last night, ABC "World News with Charles Gibson," and CBS "Evening News" both blamed increased foreclosures on lending companies and mentioned tightened regulation instead of discussing the issue of personal choice. NBC "Nightly News" was the only network to bring individual choice into the story on March 13.
"Mortgage companies were lending to people with questionable credit," said ABC's David Muir.
But it is not as if lending companies run around just handing out money to bad credit risks, people actually have to apply for home loans because they want to buy a home. Both ABC and CBS missed that.
Instead Muir's "World News" report pitied one couple "fighting to hold on."
CBS "Evening News" quoted Iowa's attorney general who called high-risk subprime loans "unfair" as well as "unwise and unsafe" on March 13. CBS reporter Anthony Mason also included the worries of an analyst who described the worst-case scenario of a housing-led recession.
"But at the very least, Josh Rosner [the analyst] says the housing market has 12 to 36 months of difficult times ahead," Mason stated.
But NBC "Nightly News" was much more accurate.
"Remember, we've had a very easy lending environment for several years now. People took out loans who probably couldn't afford them," explained CNBC's Maria Bartiromo.
Lenders have been emboldened to take greater risks on home loans due to the Bush Administration's rework of the bankruptcy laws. In turn, they gave credit to anyone with a pulse.
Now, due to lenders' lack of diligence (and their glossy ads which more or less said, "No money? No Credit? No Job? Barely A Pulse? WE HAVE A HOUSE FOR YOU!") they opened people up to the American Dream knowing full well that what they were really selling were ARMs these people wouldn't be able to keep up with.
Despite all the braggadicio by President Bush about an "ownership society" all he has brought us is a "debtor society."
Seconded, these lending companies were making stupid loans. Heck, it's built into the name: subprime loans. These companies went out and offered the most reckless loans imaginable to the desperate. Now everyone, customer and company, is screwed, and worse, the slowdown they're creating is urting the economy.
I certainly have no love for sub-prime lenders, and even less for payday-loan lenders (a related, but different story). But no one forced these people to buy more house than they could afford. If they suddenly can't afford the house payments which they knew would be coming (since lenders have to make full disclosure of such things), it's their fault.
You mean it ISN'T Bush's fault?
Your going to really piss off some Dem's.
The lenders have the most responsibility here. They pimp these loans to inexperienced buyers knowing that they'll get most of the interest and some payments and then the house when it all goes downhill. Hate to say it, but a good chunk of these buyers who are in trouble were rubes... people who wanted to touch that American Dream so bad they'd have bought anything the lender sold them.
"I can own a house?!?!?"
"Yes, you can own your very own home!"
"But, isn't that expensive?"
"Well, not if we do the financing right, it'll be more or less what you'd pay in rent!"
"Well, you are planning on bettering yourself over the upcoming years aren't you?"
"Of course! I'm planning on going from burger station to the pick-up window next month even!"
"Well, then if you keep on that course of success, you'll be able to make these payments when they correct themselves. Unless you're lazy or something..."
"I'm not lazy! I can do it!"
"Oh, we're sure you can *wink*"
In the meantime, the Bush Administration slipped what little protection this inexperienced home buyer had out from under him when he and The Party changed the bankruptcy rules. No longer would the lender need to have some sort of criteria in place... they'd simply stick it to them when the borrower tried to escape from what he could no longer afford. Those rule changes were supposedly going to bring us all lower credit card rates remember? Raise you hand if you've gotten a letter from your bank telling you that your credit card rates were going down now that people can't "run from their debt" anymore.
When you can show me a company that forced someone to get a loan with them, then I'll show you a company that deserves the lion's share of the blame for a foreclosure.
In other words... "There's a sucker born every minute, and they deserve to be suckered."
What nerve! Lenders expecting people to pay back the money they borrow. Have they no shame?
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