qdognj: "They are not embedded on page 46 of a 50 page document.Term and rate are as simplistic as it gets.."

And...your evidence that term and rate was not embedded, obscured, stated incorrectly etc. in all of the millions of mortgage documents in question is what?

One more time qdognj, as you seem to be missing/ ignoring/not comprehending the crucial info in the document in front of you...

1) Once again I will ask: please provide some sort of documentation that you have that proves all of the mortgage docs for all of the sub prime loans were written properly, in terms that were clear and forthright. Please also provide documentation on how many sub prime loans originated on a bait and switchand how many were originated based upon the exact terms presented.

2) Info regarding the FDA and its abject ineffectiveness as a regulatory authority as well as lawsuits about drugs is all over the place. One does not even have to be able to READ to hear it on the newsand/or to see the reports on TV. However, I notice how you have conveniently ignored/did not read/ dismissed that main point..which was and is indeed my whole point.

You hold the buyers in contempt for not reading their docs (which you apparently dont even know how they were worded)why would you give a pass to someone who ignores or fails to act on blatant information that can be had simply by turning on the radio or TV?

Why the double standard?

When you can address the above issues directly and fully, without cherry picking the parts you like and discarding the rest, we'll talk.

Until then please realize that you are guilty of the exact same thing that you lambaste the borrowers to be guilty of...ignoring the written word that they does not suit your terms, and acting only on the aspect of the written word that fulfills your particular needs.

Pot. Kettle. Black.

Personified.

Berniek, I did find your story amusingin its truthbut even more amusing was qdognj's responseadvocating asking Mr. Brokerman to explain the terms.....without explaining how the buyer would know if Mr. Brokerman explained them properly...or correctly...or ethically.

mfbenson, if a mortgage company was indeed victimized, I would say that blaming them is not fair...however, as they are SUPPOSEDLY the professionals, the experts...who get paid for what they know, it's not clear exactly how they were victimized....unless you are referring to the office people who file, answer phones, etc who were not mortgage pros..aka the companys execs/owners/management etc.

Of course if I was qdognj, I would rant that they should have KNOWN, they work there...but, I believe in giving those back office folks the benefit of the doubt.

chispa, your comment "You have to be 20 or younger to use this excuse!!" brings up a good point.

Perhaps that is the answer in a nutshell.all those involved in this debacle were under 20 years old....as that is the only way that they could not have known that what goes up, must come down as evidenced with the last RE boom in the late 80's that tnake din the early 90's..but the garbage was packaged and sold by the Wall St MBA's none the less..

I suppose then they all must be child prodigies....trading/investing billions at the ripe old age of 19!

Mystery solved. LOL!

I wonder how someone who worked in the mortgage industry got into this mess. (gotta feel sorry for the kids)

Nancy, thank you for your post.

I think that's the best explanation of how people could get into this mess.

And yes, they may have been a little greedy--but isn't that basically capitalism, to want to get ahead, to want to make their money work for them?

And they're in "optimistic" mode.

I'm with all of you I blame everyone.

The individual is responsable for their actions. In my area its customary to have an attorney. They review everything. My attorney was an idiot, thankfully I understood what I was signing. They rushed me through closing I signed 100 things, but I read 1 copy of each. Maybe not for nuances, but I got the gist of everything. If you don't understand what you are getting into, you have no business buying. If you're not planning on fulfilling your obligations you're a deadbeat, the people on 60 minutes were scum. I understand circumstances, but if you're employed, and you didn't get seriously taken advantage of, you should take the hit or continue the payments.

There was preditory lending going on. Banks were giving loans to people who shouldn't be allowed to buy houses at least on other people's money. This drives me crazy, it probably cost me $100K on my purchase price, people driving up the price of my home with all these interest only, nonamortizing loans.

I BLAME THE FED. consistantly droping rates to fuel the fire. If rates weren't so cheap, we wouldn't have such high prices, which happen to be falling. INFLATION

There needs to be a summary doc, cover page simple language on loans. There need to be higher standards for borrowing, and a more effective appraisal system.

And for you people saying the banks haven't taken responsability, multiple banks have written off billions in loans. Doesn't help the situation, but they are licking their wounds and those securitizing mortgages are having trouble finding jobs.

And...your evidence that term and rate was not embedded, obscured, stated incorrectly etc. in all of the millions of mortgage documents in question is what?

Logic, I can tell you the that the term and rate is not embedded or obscured. I have several ARM mortgages. For each loan I receive a Federal Regulation Z notice handbook explaining ARM's and straightforward docs in bold print naming the basic terms of my loan. It really is not hidden for anyone.
It clearly shows the year and month my rate adjusts, my cap, it is not a mystery.

geez, Did i ever say there were NO circumstances were someone got taken by a broker? NO!!! What i have stated, but Logic seems to ignore, is that people who sign a legal document should KNOW what they are signing, period. You can't be fleeced without your own ignorance. And, if you sign, you owe,period..
Big Government does NOT need to hold people's hands and guide them. Big Government is a very bad concept..

Cmarlin20, since you seem to not have noticed, we are not discussing the mortgages that YOU obtained...obviously through a reputable broker. Odd "mistake" for someone who has denigrated others for either not reading or not comprehending.

That established, when you can provide any evidence whatsoever that all the sub primes were given with proper docs like your ARM's, fully disclosing the terms, with no bait and switchget back to me.

And.......also, get in touch with the FBI who is investigating that very issue as well as a myriad of other illegalities involving the mortgage scam.

Ormaybe you should call the FBI right nowsince you seem to actually believe that since your mortgages were executed in accordance with the rules, all of those issued throughout the country were as well.

Gee...think theyll call off the investigations?

Good luck with that.

Ohand qdognj?

Im waiting (foot tapping).

The FBI investigates every type of business in existence at one time or another; that's not proof of anything at all.

It's interesting what has happened to these "victims" of conniving and predatory mortgage lenders:

1. They got to live in a house beyond their means for a period of time.
2. Then, when they decide not to pay for it, they get to live there absolutely free for three to six months (more in states with aggressive pro-consumer laws).
3. Then, when they leave, they tear the living you know what out of it, taking fixtures, etc., because the evil mortgage company is taking their home.
4. Finally, they walk away and little or nothing happens to them.

Interesting "victims."

Logic; your holier than thou attitude is really becoming tiresome!

You make it sound like anyone who doesn't agree with your exact point of view has questionable moral values. I take strong exception to this comment:

" Honesty and responsibility these days seems to be all but passé...and those of us who still embrace and practice such concepts are fast becoming the dinosaurs of yesteryear....and are often riduculed (such as Mrs. Ummel of the buyer suing the REA thread) for expecting others to act responsibly and honestly as well. "

I absolutely expect people to behave responsibly and honestly. However I just don't agree with much of what you say!! I won't rehash it here - I've said my piece on that thread, but just because I think you are looking at it from an extremely one sided point of view, does not mean that I think that honesty and responsibility are passe. Far from it in fact.

I also find it amusing that you accuse qdognj of protesting too much when it seems to me that you have posted more on this subject and that of the Ummels more than almost anyone else without actually ever saying anything new!! You repeat the same things over and over again and seem incapable of assimilating any of the information that others present to you. Then you accuse others of being blinkered - it makes no sense.

On this subject I again disagree with much that you say. I read this comment of yours:

" Berniek, I did find your story amusingin its truthbut even more amusing was qdognj's responseadvocating asking Mr. Brokerman to explain the terms.....without explaining how the buyer would know if Mr. Brokerman explained them properly...or correctly...or ethically. "

I do have one question; you have fixated on the dishonesty of mortgage reps. I am absolutely certain that there were people who had their mortgages 'bait and switched' by disreputable reps. I think jail time is in order for those people for what they have put innocent families through.

My question to you is this; are you saying that if a buyer asked the mortgage rep; What is my monthly payment? What will it change to after the ARM? Are you suggesting that the mortgage rep outright lied? Said $500 instead of $2000?

Or what is it that you are expecting the rep to explain properly, ethically and correctly?

It is so strange to me that everyone on this board seems to think that everyone has to take a piece of the blame - except you, who thinks that the people facing foreclosure are victims with no personal responsibility. Why is that you are unable to see any other side of an argument?

I think it is very clear here that many are suffering including the victims of foreclosure, the mortgage reps, realtors and even the banks who are writing off enormous amounts of debt and loosing money hand over fist. This hasn't been a walk in the park for anyone and the blame can be spread around a lot. It doesn't all rest in one place. People who make large purchases of any kind nees to make sure that they are financially able to support those decisions. To not do so is plain irresponsible.

Qdognj; please don't tell me that you think Al Gore is way off on global warming! lol.

A few facts:

-Mortgages are legal documents, subject to more federal supervision than most other financial transactions in which consumers take part.
-These mortgages were sold as investments to large financial institutions, and in order for that to be done, they had to have been executed properly.

The loosening of mortgage lending standards should have been a boon to consumers: A chance to own a home even if you have had some financial problems or don't make all that much money. And it was to many families who bought homes that were within their means, and who now have great interest rates and nice places to raise their kids and stay in as they grow old.

But a lot of other people decided, no, they don't want the modest home, the fixer-upper, the home in the average rather than glittering new neighborhood, they over-extended themselves, and now they can't pay.

How is this the fault of a mortgage broker who basically cut them a break by making it easier for them to buy a home? People who are in the business of selling things (homes, mortgages, etc) cannot be expected to act as financial consultants who send people away if they feel they can't afford what's being sold. That runs counter to human nature. If you are selling something and someone walks into your door to buy it, you want to help them buy it. Expecting anything else is just naive.

Logic
I'm not saying, neither is anyone else on this thread, that every single borrower has been given (and signed) every required legal doc. Of course, none of have the docs to review, but I will bet, that the vast majority received and signed the required legal docs. You and I will continue to disagree just who is the "victim" in all this. Then again, I can challenge you to provide the same documents that all the sub primes were NOT given proper docs disclosing the terms, why do you insist on believing one option.
I must agree with the recent poster, your moralizing and immoralizing those that disagree with you is very tiresome.
Why are you holding people to different standards, shouldn't everyone have the same standard of honesty and responsibility?
Don't keep telling other's not to jump to conclusions, then do it yourself.

I want to pipe in on this one; I have owned three houses and due to re-financing have probably taken out eight mortgages, the first in 1993.

Because I have done it before, I assumed I knew what everything meant. I probably read less and less with every re-finance. I could have been totally taken advantage of on my last two transactions because I thought I was a saavy purchaser.

Now in my case, I have reviewed my docs (recently) to be sure I am OK - and I am fine. However, I asked way fewer questions and read way quicker than I might have a decade ago. Someone commiting fraud could have got me.

Further, as I bought my first house in 1993 when I had to document everything about 50 times, I really did think that a lender wouldn't lend more than you could manage. (afford may be a matter of perspective) but I did think they paid attention to guidelines. I had no idea that had changed.

I don't see this thread as a discussion about broker, lenders committing fraud. I am discussing people that applied for and received a mortgage that they now don't want to or cannot afford to pay. Some have decided it is not a good investment, the old good money after bad, mortgage payment, some are crying they never should have received their loan. I am talking about people that received documents spelling out their loan terms, they signed all the docs and are now saying they are "victims" of loan sharks. True victims of fraud should not be a part of this, we already have laws regarding fraud, companies already have the proper guidelines they must follow. A company trying imposing terms that are not in the borrowers signed loan docs, then the borrower is not required to comply. We already have laws and penalties for companies that commit fraud.
Being caught up in the American Dream is not a defense for bad judgement

For those of you who find me to be tiresome and/or holier than thou and/or who can't seem to grasp that my issue is not with mortgage reps per say but the entire engineered sub prime pyramid scheme, there is a very simple solution......ignore me. :-)

Or.if you wish to disagree with me...that is fine...but it will be meaningless to me unless you can provide at least some basis and/or documentation in fact.aside from your own personal assessment. If that is a problem for anyone..so be it.

However, in the end, although shooting the messenger may make one feel better...it does not change the facts.

Oh, BTW, hobokenkitchen? Remember the last time you took issue with me for stating that not too many REA's choose it as a first career, and I mentioned that most REA's whom I know did not choose it as their first career?

You might find the following article to be on interest..or not. Your choice (warning, you may also find it to be "tiresome").

A few excerpts regrding the FBI/Sec investigations.....for ky114 and cmarlin20...our "laws" at work...for now.

"....Fourteen Companies
Are Investigated
For Possible Fraud

January 30, 2008; WSJ
By EVAN PEREZ and KARA SCANNELL

WASHINGTON -- The Federal Bureau of Investigation has opened criminal inquiries into 14 companies as part of an investigation of the subprime-mortgage crisis, FBI officials said. The probe is focusing on accounting fraud, securitization of loans and insider trading, among other areas.

The FBI wouldn't identify the companies under investigation but said it is looking into allegations of fraud in various stages of the mortgage process, from companies that bundled the loans into securities to the banks that ended up holding them.

As previously reported, federal prosecutors in Brooklyn, N.Y., as well as the Securities and Exchange Commission are looking into the collapse of two Bear Stearns & Co. hedge funds. The SEC and Justice Department also are investigating insider stock sales and accounting at New Century Financial Corp., a mortgage lender in bankruptcy proceedings.....FBI officials say the bureau is working with the SEC, which has opened more than three dozen investigations in the subprime-mortgage business, including the role of mortgage brokers, investment banks and due-diligence companies involved in the underwriting and securitization of loans.

The SEC is also reviewing the procedures of credit-ratings companies that rated mortgage-backed debt. In recent weeks, the SEC has sent subpoenas to some companies involved in the underwriting and securitization process, people familiar with the matter say....

...On Jan. 17, the Florida Attorney General issued a subpoena to Countrywide. Among other things, the subpoena asks Countrywide to describe the standards it used to determine whether borrowers qualified for a prime, subprime or Alt-A mortgage and for no and low documentation loans. The subpoena -- which covers the period from Jan. 1, 2005, to the present -- also asks the company to explain how its underwriting standards may have changed over time. It also asks Countrywide for copies of "promotional advertisements, literature, booklets" and other materials aimed at subprime customers as well as for copies of any scripts or instructions given to Countrywide employees...

...In addition to the Florida investigation, Countrywide also faces investigations of its lending practices by attorneys general in California and Illinois as well as lawsuits by shareholders, borrowers and employees. Bank of America Corp. agreed earlier this month to acquire the big home-mortgage lender....

Man, I haven't been here in a while, but this place is better then hot topics.

I never read the fine print, that is what my lawyer is for. I don't know why people don't use a r/e attorney. The cost is not that significant but the piece of mind you get in return is. We have bought land outside the US in two different countries and both countries mandated the use of an attorney by both parties. Maybe that is what should be required here, especially if its your first home purchase. Of course, that still will not prevent people from buying something they can't afford. But that responsibility should rest solely with the individual making the purchase.

kitchneshock: I don't know why people don't use a r/e attorney

IMO..because NAR has been very successful in convincing buyers that REA's are basically just as good...

That brings up an interesting question...offhand, without actual research, it seems to me that the states with the most foreclosures are also those where buyers rarely utilize an attorney..

On the flip side, in NJ where just about everyone uses an attorney, the foreclosure rate is supposedly (according to RealtyTrac) I believe 0.9%...

Perhaps in the end, one of the outcomes of this mess will be that buyers and sellers will be required to utilize an attorney for RE transactions...

" Oh, BTW, hobokenkitchen? Remember the last time you took issue with me for stating that not too many REA's choose it as a first career, and I mentioned that most REA's whom I know did not choose it as their first career?

You might find the following article to be on interest..or not. Your choice (warning, you may also find it to be "tiresome"). "

Logic - oooh - miaoww!!!
Why would this be tiresome to me? I'm afraid this isn't really news and is to be expected. Probably a lot more of it moving forward too. Good thing too - clears out the chaff. Sad that there isn't enough business to go around, but it is what it is - supply and demand.

BTW it's tough to ignore someone who posts more than anyone else! : ) I'll try to follow your advice in future though - I tried this time, but you just keep going on... and on.... and on.

It would be ok if you ever said anything new and didn't keep accusing other people of things that you do yourself. It becomes intolerable to read after the 20th posting.

Re your 'proof of FBI investigations' may I say YET AGAIN, that yes, most of us believe there was wrong doing on the side of some mortgage reps/ companies. ok. We get what you are saying. We understand. We have heard. The only person who doesn't understand anyone else's point is you.

Kitchenshock " I never read the fine print, that is what my lawyer is for. I don't know why people don't use a r/e attorney. The cost is not that significant but the piece of mind you get in return is. "

Absolutely - as a realtor in New Jersey I couldn't agree more. We always use a good attorney personally when we buy and sell and it helps to have a non biased opinion on all paperwork including mortgage items.
In New Jersey you don't HAVE to use an attorney by law, but all the agents that I know very strongly recommend that our clients do so, and I would recommend the same thing no matter what state I was in.

Merrill Lynch Accused of Fraud
By MARK JEWELL 02.01.08, 4:13 PM ET

BOSTON -
Massachusetts' top securities regulator on Friday accused Merrill Lynch & Co. of fraud and misrepresentation, a day after the world's largest brokerage agreed to reimburse the city of Springfield $13.9 million in a dispute over an investment that soured.

An administrative complaint by Secretary of State William Galvin alleges Merrill Lynch made unsuitably risky investments on behalf of Springfield without the western Massachusetts city's permission - investments that dwindled from $13.9 million to $1.2 million amid deterioration of the subprime mortgage market.

The complex securities were collateralized debt obligations tied to the subprime market. Merrill Lynch's underwriting and sales of such investments became lucrative in recent years, but the securities lost nearly all their value after mortgage delinquencies accelerated last summer.

Merrill Lynch failed to properly disclose to the city the risks of the investments, "even though these risks were well known to Merrill Lynch," Galvin's complaint alleges. The complaint also says city officials never authorized the specific investment purchases.

************************************************************

Notice to All Merrill Lynch Customers Who Invested in Norma CDO I Ltd. From the Securities Law Firm of Klayman & Toskes, P.A.
February 01, 2008: 01:33 PM EST

NEW YORK, Feb. 1, 2008 (PRIME NEWSWIRE) -- The Securities Law Firm of Klayman & Toskes, P.A. ("K&T")(http://www.nasd-law.com) announced today that it is investigating the damages sustained by institutional and retail customers in a collateralized debt obligation ("CDO") called Norma CDO I Ltd. ("Norma"). Norma, brought into existence by Merrill Lynch (NYSE:MER), bet heavily on the success of the sub-prime market. Just nine months after it sold about $1.5 billion in securities to its investors, the value of Norma has been decimated in the collapse of the housing market and is reported to be worth only a fraction of its original value.

"That brings up an interesting question...offhand, without actual research, it seems to me that the states with the most foreclosures are also those where buyers rarely utilize an attorney.."

I think it would give you more credibility, if you had done some research before making such an "observation". You obviously did not think that statement through.

berniek: "I think it would give you more credibility, if you had done some research before making such an "observation".

Perhaps..however, as evidenced on this thread alone, that is not always the case.

That said, I did admit I had not done the research...and did not present my opinion as fact. :-)

Articles about fraud in the sale of mortgage securities relate to the risk of prime versus subprime mortgages. Investors are running to the government and whining because they thought they could make these big returns on risky mortgage investments without any chance of losing any money. Now, with these investments going sour, they want heads to roll.

You don't buy a house you can't afford. If you do, it's your fault. If you invest in mortgages taken out by people who are overextended, you will probably collect big returns for a while, but you may lose money.

I did not read most of your comments but I do know that area very very well. It use to be farm land, low income housing, and has been a drug haven for years. Drugs and gangs did control the area and still do. Those houses if left empty will be trashed very soon.
Most of the people in that area do work in the Oakland/San Fran area and make big big bucks, have several brand new cars. Lots of latch key kids and when we drive up interstate 5, we DO NOT stay at any motel in the area-- In fact if we have to stop for gas, we lock the car after we fill our tank and if I am in the car by myself, the car is locked.

ky114: "You don't buy a house you can't afford. If you do, it's your fault"

If only life was actually as black and white as you seem to believe, what a happy, happy place this would be. :-)

The most risky loan products were sold to the least sophisticated borrowers. This ticks me off the same way that it does when unscrupulous people target the elderly. It's legal, but it's still wrong.

I think the whole subprime mortgage business is complicated and there are many victims and as others have pointed out enough blame to go around.
However, there was an interesting documentary a couple of years ago about credit cards and the effect degulation has had on them and how the deliberatly go after people with poor credit because they know they will make the most money on them and can charge them outrageous, unfair fees.
One professor in the doc talked about a GRADUATE class she taught with over 50 students at an Ivy legue college (maybe Harvard?). She had the students in class examine the insert we all get in our CC bills which talk about the terms and rates etc. They were not able to figure it out, working on it for over 2 hours.
Yet we expect average people without graduate degrees to read 50- 100 pages of documents at a signing for their mortgage and understand it and know all of the terms, conditions and nuances?

Should only very educated, smart people be able to buy houses or should we help out people who need to have a place to live the same as everyone else and make the process a little easier to understand, a little less complicated?

I agree 60 Minutes choose controversial people for it's story, otherwise we would not have this post. I am not sure they are the average person caught up in this debacle.

Logic: Generalizing to the absurd is not a use of logic, it's a logical fallacy. Who said "life" was black and white? Certainly not me. We're not talking about "life." We're talking about whether you do or don't sign on the dotted line for a payment your income is not sufficient to make.

What is the alternative to people deciding what they can afford? Do I tell you what you can afford? Do you tell me what I can afford? I hope not. Some people want to spend more on a house, for it's their pride and joy, a place where they want to spend most of their spare time. I'm glad that many of these types of people were extended home-owning opportunities by the mortgage lenders of the early 2000s. A friend of mine who owns his own business and makes about $25,000 a year now owns a home because of these "easy credit" practices, and he's proud of it.

I guess I should feel sorry for people who bought $400,000 homes, lived in them and often trashed them out for a few years, and are now walking away with impunity, but I think there are other people in the world who are far more deserving of my sympathy.

quandary and theresafic......thanks for your input. You renew my faith in human nature.

ky114: Who said "life" was black and white? Certainly not me. We're not talking about "life."

Hello?? I never said that YOU said that life is black and white. I merely made my OWN observation about life....in general....within which...newsflash... is everything we do.....or don't do...including signing on dotted lines......or not....and all the possibilities therein.

Oh.....and lets not forget.......it takes at least two signatures to tango... that established who ALSO signed on the dotted line...who ALSO knew full well that the buyer's income could not support the ARM reset? Who was ALSO the undisputed professional, knowledgeable party...sometimes even regulated party?

If you guessed the lender.....you guessed correctly.

That said, lenders who know people can't pay back the loan do not belong loaning them money to begin with (and they didn't up until about 10 years ago until acting unethically became hugely profitable for them). It's that simple.

But, nonetheless they did so, with zero "exit strategy" other than to foreclose and abandon the homes by the thousands .....now screwing over the entire system...negatively impacting EVERYONE via the economic affects which are negatively impacting all those who had nothing at all to do with signing on that dotted line.
Despicable does not even begin to describe such wanton recklessness.

ky114: "I guess I should feel sorry for people who bought $400,000 homes, lived in them and often trashed them out for a few years, and are now walking away with impunity, but I think there are other people in the world who are far more deserving of my sympathy."

I agree 100%.....those who deserve sympathy are not those who are trashing homes......and walking away........ (the minority); however, IMO, those who DO deserve sympathy, are the vast majority of basic decent people who were screwed by this scheme and are doing all they can to hold on....and not vacating their property by their own decision (in other words, they get kicked out do to foreclosure)...and not trashing the place.

That said, I'm interested in hearing your opinion on all of the lenders who have foreclosed, forcing people to vacate the property, with no plan to care for the properties left standing empty in droves... and are therefore allowing the homes to sit empty and to deteriorate.

The "lenders" abdication of responsibility is further driving down property values, dragging down the housing market even further, exacerbating and already bad situation, making the homes MUCH harder to sell, and negatively impacting the communities by failing to pay property taxes on the homes that they foreclosed upon.

They are claiming ownership that allows them to foreclose (especially when they can't even equivocally prove they OWN the loan)...but then feel that "ownership" does not require them to be responsible for the maintenance and property taxes on those foreclosures.....
....... instead of doing what would seem to be the more intelligent thing...allowing buyers to stay put.......and working out a plan by which they would see financial return.

So......the original buyers of the homes are now gone...and the new "owners" are everyone's worst nightmare as a neighbor.

Perhaps we need to now focus on what to do about the present owners ......who are clearly a new and far more worthy target for contempt....to say the least.

You're absolutely right. The friend I mentioned above, who bought the home due to the "easy credit" policies of a few years back, his home looks great, but now he has to look at many houses nearby that are abandoned and in various states of disrepair. Many of the people trash them when they leave, taking what they can carry and simply destroying the rest. Others turn them into rent-to-buy properties, and in that case the destruction is just as inevitable but it occurs over a longer period of time, as one renter after another exacts damage on the home, often turning it into a flophouse occupied by people from three or four different families, usually with a minimum of one to two motor vehicles per human occupant, which ensures that the driveways and streets around the houses are littered with running and non-running cars. The Homeowner's Association rules forbid this, of course, but the HOA tells my friend that fewer than 50 percent of residents pay their dues, much less follow the rules. This is a bad situation that was created by allowing too many people to have mortgages, no doubt about it, and the residents of these areas with high foreclosures should be able to legally compel mortgage companies to take care of these properties, although in many cases the mortgage companies in question are probably bankrupt.

But where I fail to see your point is when you say, "the vast majority of basic decent people who were screwed by this scheme and are doing all they can to hold on."

I just don't see that many people struggling to hang on. Those I see just take advantage of several months' free lodging when they quit making the payments, then eventually leave the house a wreck and move on. If people ARE struggling to hang on, it's because of some change in their circumstances -- loss of job, health issue, divorce, etc. -- and not generally because of anything a mortgage company did.

But I can't sit here and write that no one in the mortgage business ever did anything wrong. That would be naive and stupid. Of course, some did. But I did business with several mortgage companies during the time period in question, and all I could see were opportunities for consumers: Tons more mortgage products, flexible credit, easy qualifications, low/no verification, etc.

I don't know what the remedy is for people who won't research what they're getting into, ask questions, or do some reading to learn about what these options like ARM mean. I have a whole folder full of booklets, checklists, and flyers explaining all of these terms, telling the ins and outs of the different mortgage products, etc. Many were issued by government agencies, so it would appear the mortgage companies had been compelled by regulations to hand them out. So there were no secrets being kept from people, not by and large, anyway.

I'm more on the side of cmarlin and qdog. To focus almost entirely on the "predatory" practices of lenders and those in the financial industry gives too much of a pass to the people who obtained these now-troublesome loans. Anyone contemplating a large loan for a home ought to realize that it's vital to understand what you're signing. Logic seems to repeatedly respond that many people were misled. Posters have already said, logic, that they agree that any lender (or anyone else in the business world) who engaged in fraud ought to be held accountable. But many of these mortgage recipients seemed foolishly quick to sign up for loans the terms of which they did not understand. People who signed something they did not understand might deserve a little sympathy, but do not deserve a bailout. Just because you (and by "you" I mean an adult that is not insane or mentally impaired) are naive does not mean you should not be accountable for your actions. It's the same principal as "ignorance of the law is no excuse." In fact, they are less deserving of sympathy than someone who was not aware of a law that is relatively obscure because it's common sense that a home purchase and huge mortgage are complicated and ought to be thoroughly understood (or at least reviewed by an attorney or other expert who represents the BUYER'S interests). I strongly suspect that many of these people who signed for these foolhardy loans do not even deserve much in the way of sympathy.
They are part of what a previous poster accurately described as an increasing mentality in our nation marked by a sense of entitlement and materialism. Now, don't jump in and say "What about corporate greed?? Do you give them a pass? Hasn't corporate greed gotten out of hand?" Yes, there are many examples of corporate greed run amok, and yes, those responsible should be punished. Both are true. Back to the Enron example, those Enron executives who were guilty of white collar crime should have been punished to the full extent of the law. But were those employees who had the bulk of their retirement nest eggs in Enron stock foolish? Yes! You can get plently of good financial advice for free from the web or the library that will tell you that you should not have so many of your financial eggs in one basket. Same is true of advice on mortgage loans -- information is readily available. People need to do a much better job of watching out for themselves and not expect a bailout (by all the rest of us who are not acting in a foolhardy manner).

Then there's the whole issue of what this mortgage mess means to people who now find it hard to get a loan. People who would behave as good consumers and would pay back their loan. I feel badly for them.

Ky114 and beware, below is a link to a story about Cleveland....which may help you see the point I am trying to make.

Yes...I fully agree that there were buyers who should have known better....but, that is nothing new...and has always been the case.

There have always been foreclosures...for reasons beyond a buyers control (loss of job, illness, divorce, etc.)

However, the fact remains is that those who are MOST responsible (now, realize I am not absolving every single buyer form responsibility) gave financing to those whom they KNEW could not afford to pay it back.

Then, the buyers...deceived or not...in the end got their "punishment"...they no longer own a home...and have zero to show for it.

On the other hand, all those who KNEW the score...but carried on none the lessaka lenders, Wall St, etc...walked away with millions.

And.you do know that hedge funds...which have no oversight at all, fed, SEC or otherwise, are at the center of this mess...right?

So much for "oversight".

This is an extremely complex problem, and while those at the bottom of the pyramid may hold some minor amount of responsibility in some respect, it is a drop in the ocean compared to the real problemwhich, apparently, most wish to ignore.because instead of having to acknowledge just how corrupt and broken the system has become...its easier to believe this kind of stuff only happens to the stupid and/or naive.

".....Cleveland got hammered because lax governmental oversight from the state allowed Wild-West lending. "No one was watching," he said. "There was no sheriff in town. The state legislature was dominated by banking interests."

Cleveland tried to enact local anti-predatory lending ordinances in 2002, but national lenders then abandoned the market, according to Mark Wiseman, who heads the Cuyahoga County Foreclosure Prevention Program, which is part of the county treasurer's office.

One bank representative, speaking under condition of anonymity, said the ordinances would have put local lending criteria well above and beyond the national standards. The lenders wanted no part of that.

Wiseman said banking lobbyists got the state legislature to nullify the local ordinances. Until this year, Ohio was one of only two states that did not include mortgage borrowers in their consumer protection statutes. And when the state passed anti-predatory lending laws in 2006, the punitive damages part of the law was gutted during the lame duck legislative session at the end the year.."

Your Cleveland example raises in interesting tangential issue. When the government regulates an industry the result is usually a restriction in supply (i.e. in this case, lenders who won't do business in that geographic area). This results in potential "good" mortgage customers facing fewer, less favorable loan options. If potential loan customers made more wise decisions, read their agreements and didn't get into a financial mess, there would be much less, or no, impetus for government regulation that hurts "innocent" consumers.

Logic, I read the article you referenced carefully. You quoted some parts of it, but here is one quote you did not pull out:

"According to Mark Seifert, executive director of the East Side Organizing Project, which provides foreclosure prevention services, his staff used to look out the window just before groups of troubled home owners were due in to attend counseling sessions.

'We'd see Escalades, Range Rovers, Cadillacs out in the parking lots,' he said."

Obviously you can see this from different vantage points, but I just don't think you have any data to support your statement that MOST current foreclosures are due to predatory lenders. I would offer that MOST are due to a "real estate boom" mindset that held that homes would never do anything but go up in value -- a mindset that was fostered not only by the mortgage business but also by home builders, real estate agents, and the media.

Also, your statement that these buyers are suffering the penalty of not having a home and having zero to show for it is misleading and in many cases false: Many buyers (according to the 60 Minutes story) took out big home equity loans on their properties, allowing them to buy fancy home electronics, luxury vehicles, etc., and now they still have those things. Also, many of these buyers put essentially no money down on their homes, so they had no investment to begin with, and therefore didn't lose anything.

Logic, do you feel the homeowners that got the easy no down loans that did sell at a profit before the collapse should pay back their "ill-gotten gains"?
Are you proposing that their application docs be reviewed to see if they lied about their income or assets? Are you advocating their prosecution?

ky114... Granted...some folks have a bunch of pricey toys worth nothing...and pricey vehicles that if not leased will soon be worth nothing anyway..however, they did not develop, engineer, enable and/or execute the grand scheme....all which was done by those who knew what would happen..but saw an opportunity to get filthy rich quick and run leaving the rest of us holding the bag...

As you are apparently committed to focusing on only part of the picture (the little fish in the vast ocean of sharks)..as opposed to the whole, there is nothing more that I can say...only that time will tell.

cmarlin20: "Logic, do you feel the homeowners that got the easy no down loans that did sell at a profit before the collapse should pay back their "ill-gotten gains"?

Are you proposing that their application docs be reviewed to see if they lied about their income or assets? Are you advocating their prosecution? "

The first..no..not if they legitimately qualified for the loan.

The second yes. Anyone who commits fraud should be held legally accountable.

beware: "If potential loan customers made more wise decisions, read their agreements and didn't get into a financial mess, there would be much less, or no, impetus for government regulation that hurts "innocent" consumers."

LOL! In a perfect worldyes. Howeverlegislators exist to pass lawsand their pockets are lined with money from special interests to do soso its a moot point.

That said, attend some legislative committee hearings in your stateand then let me know if your opinion remains the same.

Nowabout those "Ifs"..I love to play "Ifs..such as:

"If everyone in the country could direct deposit all of their income to the Caymans with zero tax liability, such as is currently allowed for the earnings of hedge fund managers..we could ALL buy homes with cash.

Problem solved! ;-D

Logic, I feel it is you who are only focusing on part of the picture. You have a mental image of conniving mortgage companies setting up and "engineering" the whole "grand scheme." That sounds like the stuff I read about the "conspiracy" to kill our kids with vaccinations. And legislators, of course, were duplicitous, because their "pockets are lined" with special interest money. All this based on your say so, with scant evidence.

If you want to take the financial services industry to task, why don't you focus on the biggest consumer ripoff in history -- the new bankruptcy law. After getting this passed, the industry immediately headed down the war path and imposed higher fees, penalties, and interest rates for consumers who had then lost (in most cases) the protection of the bankruptcy law.

This isn't an industry for which I have any affection. But why do you apparently feel the only answer is more laws, penalties, regulations and such? All that is going to do is make mortgages less accessible to ordinary people -- those for whom you apparently think you're advocating. Some people, I guess, believe people are better shielded from mistakes than being allowed to take a risk and possibly accomplish something good, even if there is the risk of a mistake.

ky114: "You have a mental image of conniving mortgage companies setting up and "engineering" the whole "grand scheme."

Please read my more than prolific posts again.. I repeatedly cite lenders, WallSt and the hedge fund folks as the group that engineered the scheme...with the fed et all, looking the other way...as do almost all of the published reports on this issue.

...and, as the saying goes, "All that is necessary for the triumph of evil is that good men do nothing"...

The yuppie couple on 60 minutes were pretty despicable and clearly knew what they were getting themselves into. I would also prefer not bailing out people like that, but I think this is one of those times in our nations history where we will have to look at the greater good. I would love to be able to say that if people and companies were foolish, irresponsible, and unethical, I shouldn't have to pay the price for fixing the problems they created, but standing on principle will result in alot of collateral damage to communities, schools, local governments, our national economy, etc. I've come to the conclusion that perhaps the best we can do to salvage this situation is to force not only individual companies, but all of Wall Street, and the federal and state regulators to implement mandatory changes and tougher oversight and internal controls. This whole situation ticks me off, but I don't think we can afford to stand on principle because it will end up damaging the nation and people who have been financially responsible and are the type of people that quietly do the right thing. I'm going to hold my nose because doing the right thing for the country still stinks.

Enough! Enough! Logic, hush!

Well said, chase zone7....well said.

"I repeatedly cite lenders, WallSt and the hedge fund folks as the group that engineered the scheme..."

I really hate generalizations. My DH is a Wall street guy and I know folks who have started their own hedge funds and they had nothing to do with what is going on.

Just like not all borrowers are stupid/greedy and not all lenders are predatory/corrupt. Wall street is a big place and you can't just lump everyone as "WallSt and hedge fund folks". I have to bite my tongue every time these comments are made.

I have close friends and family that are Wall St guys/girls.....in a variety of positions and functionsback office..tradersanalystssenior management, etc.

In general, they all readily admit that when you have a system that has no oversight...at all.such as hedge funds.there is no way to know who is culpable.and who is not culpable. And.when a system is allowed where worthless garbage is bundled with worthy instruments, with no way to discern the difference...allowing plausible deniability.all involved know the risk. Finance is all about risk...it is the basis of the businessand there is tremendous pressure to make a profit.or out one goes.

That said, while it is unfortunate that not all those who work for these companies were involved in the scam...the companies were in deed at fault.and unfortunately as well, when one is employed by a company, the company reputation rubs off...in good ways.such as being a major plus on ones resume and enabling one to get a job offer and/or salary offer that they would not have otherwise...to taking some heat when their employer acts improperly.

It is reality. With the good, comes the bad.

beachlily-Enough! Enough! Logic, hush!

Enough what?

Your a retired bank examiner and your husband worked with the RTC and routinely sold bank holdings: GNMA and FREDDIEMAC participation certificates, junk bonds (really junky ones), and CMO's (collateralized mortgage obligations). .

What exactly is it about Logic's posts that you would like to hush?

How interesting.

Chase zone 7, Yes, the couple depicted was a poor example if they were trying to elicit sympathy. There are plenty of buyers who would've been a better example of a "victim of fraud." When I read reader comments at the end of news articles it seems plain that the majority of people do not want any sort of govt bailout to rescue anyone who bought more than they could afford, nor do they want the govt to rescue anyone in the industry. It seems people are smart enough to have figured out that it took two to tango, the industry being the party that was necessary in order to pull it off. The buyers were in many cases just suckers.

Logic, I find this topic very interesting and welcome your links and comments. Can't recall if it was this thread or another that someone jokingly compared you to John Edwards and made reference to ambulance chasers. But it seems everyone hates trial lawyers--until they need one! Too bad more people don't question the tort reform stuff and research the other side before deciding all trial lawyers are evil. I've seen quite enough evidence that corporate fraud is the greater evil if one has to choose.

fathen: "I've seen quite enough evidence that corporate fraud is the greater evil if one has to choose."

Agreed....and as long as those at the top of the corporate food chain continue to reap huge ill-gotten profits to the tune of millions... if not billions... with minimal if any consequence for their actions...which if any, usually amounts to nothing more than the cost of doing business..chances are it will continue to proliferate.