qdognj: "Putting zero down in the faint hopes that it'll "work itself out" and then when it doesn't look for help????"

Which is exactly what Wall st. did...only worse..as they KNEW that they were creating financial instruments built on a fallacy.....but continued to hawk them to investors regardless...even though the Bush administration was warned years earlier about what was going on...and they are getting BILLIONS...and still, tax payer bailed out BofA cuts of the line of credit which would enable the Chicago window factory to pay the employee TAXPAYERS who are footing the bill for that very bailout their due.

Most buyers who got caught up in an option arm could not reasonably understand how it works (see above)...and were understandably accepting of the what was told to them...that by the time higher payments are due (little did they know HOW high) they could refinance as their house would be worth so much more. Only having the housing market to look at, where indeed prices kept skyrocketing, they believed it...unlike Wall St and their financial engineers who created computer models that purposely downplayed the huge risk that they had created..the old skyscraper of debt on a foundation of sand...and the rating agencies that rated toxic waste tranches as triple A...

That said, all of the folks who invested in stock also bought the Wall St BS lock stock and barrel...which is how THEY lost so much money.

EVERYONE bought Wall St's crap....not just the mortgage borrowers.

How else do you think the Dow hit the false 14K mark??? However, by comparison, the mortgage borrowers so far are not getting much of a bail out... if any.

And just as GM, Chrysler and Ford were horribly mismanaged (Ford perhaps a little less so over the last couple of years), so indeed was Wall St. ...much more so...as it was a purposeful Ponzi scheme to line their greedy huge pockets with obscene sums contrived out of thin air.

It is virtually impossible to have a LASTING healthy economy based upon rampant fraud in the financial sector.

See Below:

Government warned of mortgage meltdown
Regulators ignored warnings about risky mortgages, delayed regulations on the industry.
December 1, 2008: 6:38 AM ET
WASHINGTON (AP) -- The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.
"Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in

January 2006, about one year before the housing implosion cost her a job.
Bowing to aggressive lobbying -- along with assurances from banks that the troubled mortgages were OK -- regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.

"These mortgages have been considered more safe and sound for portfolio lenders than many fixed-rate mortgages," David Schneider, home loan president of Washington Mutual, told federal regulators in early 2006. Two years later, WaMu became the largest bank failure in U.S. history.
The administration's blind eye to the impending crisis is emblematic of its governing philosophy, which trusted market forces and discounted the value of government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s.

Many of the banks that fought to undermine the proposals by some regulators are now either out of business or accepting billions in federal aid to recover from a mortgage crisis they insisted would never come. Many executives remain in high-paying jobs, even after their assurances were proved false.
In 2005, faced with ominous signs the housing market was in jeopardy, bank regulators proposed new guidelines for banks writing risky loans. Today, in the midst of the worst housing recession in a generation, the proposal reads like a list of what-ifs:
--Regulators told bankers exotic mortgages were often inappropriate for buyers with bad credit.
--Banks would have been required to increase efforts to verify that buyers actually had jobs and could afford houses.
--Regulators proposed a cap on risky mortgages so a string of defaults wouldn't be crippling.
--Banks that bundled and sold mortgages were told to be sure investors knew exactly what they were buying.
--Regulators urged banks to help buyers make responsible decisions and clearly advise them that interest rates might skyrocket and huge payments might be due sooner than expected.

Those proposals all were stripped from the final rules. None required congressional approval or the president's signature.

"In hindsight, it was spot on," said Jeffrey Brown, a former top official at the Office of Comptroller of the Currency, one of the first agencies to raise concerns about risky lending.

Federal regulators were especially concerned about mortgages known as "option ARMs," which allow borrowers to make payments so low that mortgage debt actually increases every month. But banking executives accused the government of overreacting.
Bankers said such loans might be risky when approved with no money down or without ensuring buyers have jobs but such risk could be managed without government intervention.

"An open market will mean that different institutions will develop different methodologies for achieving this goal," Joseph Polizzotto, counsel to now-bankrupt Lehman Brothers, told U.S. regulators in a March 2006.
Countrywide Financial Corp., at the time the nation's largest mortgage lender, agreed. The proposal "appears excessive and will inhibit future innovation in the marketplace," said Mary Jane Seebach, managing director of public affairs.
One of the most contested rules said that before banks purchase mortgages from brokers, they should verify the process to ensure buyers could afford their homes. Some bankers now blame much of the housing crisis on brokers who wrote fraudulent, predatory loans. But in 2006, banks said they shouldn't have to double-check the brokers.

"It is not our role to be the regulator for the third-party lenders," wrote Ruthann Melbourne, chief risk officer of IndyMac Bank.
California-based IndyMac also criticized regulators for not recognizing the track record of interest-only loans and option ARMs, which accounted for 70% of IndyMac's 2005 mortgage portfolio. This summer, the government seized IndyMac and will pay an estimated $9 billion to ensure customers don't lose their deposits.
Last week, Downey Savings joined the growing list of failed banks. The problem: About 52% of its mortgage portfolio was tied up in risky option ARMs, which in 2006 Downey insisted were safe -- maybe even safer than traditional 30-year mortgages.

"To conclude that 'nontraditional' equates to higher risk does not appropriately balance risk and compensating factors of these products," said Lillian Gavin, the bank's chief credit officer.
At least some regulators didn't buy it. The comptroller of the currency, John C. Dugan, was among the first to sound the alarm in mid-2005. Speaking to a consumer advocacy group, Dugan painted a troublesome picture of option-ARM lending. Many buyers, particularly those with bad credit, would soon be unable to afford their payments, he said. And if housing prices declined, homeowners wouldn't even be able to sell their way out of the mess.
It sounded simple, but "people kind of looked at us regulators as old-fashioned," said Brown, the agency's former deputy comptroller.
Diane Casey-Landry, of the American Bankers Association, said the industry feared a two-tiered system in which banks had to follow rules that mortgage brokers did not. She said opposition was based on the banks' best information.

"You're looking at a decline in real estate values that was never contemplated," she said.
Some saw problems coming. Community groups and even some in the mortgage business, like Welch, warned regulators not to ease their rules.

"We expect to see a huge increase in defaults, delinquencies and foreclosures as a result of the over selling of these products," Kevin Stein, associate director of the California Reinvestment Coalition, wrote to regulators in 2006. The group advocates on housing and banking issues for low-income and minority residents.
The government's banking agencies spent nearly a year debating the rules, which required unanimous agreement among the OCC, Federal Deposit Insurance Corp., Federal Reserve, and the Office of Thrift Supervision -- agencies that sometimes don't agree.
The Fed, for instance, was reluctant under Alan Greenspan to heavily regulate lending. Similarly, the Office of Thrift Supervision, an arm of the Treasury Department that regulated many in the subprime mortgage market, worried that restricting certain mortgages would hurt banks and consumers.

Grovetta Gardineer, OTS managing director for corporate and international activities, said the 2005 proposal "attempted to send an alarm bell that these products are bad." After hearing from banks, she said, regulators were persuaded that the loans themselves were not problematic as long as banks managed the risk. She disputes the notion that the rules were weakened.
In the past year, with Congress scrambling to stanch the bleeding in the financial industry, regulators have tightened rules on risky mortgages.

Congress is considering further tightening, including some of the same proposals abandoned years ago

Logic and qdog, Do you have mutual fund investments and have you had them for the last 6,7,8 years? 401ks or IRAs? Just curious.

yes

I asked that question because I think many people who are super outspoken in 2008 about the effect of past home loan practices are total hypocrites.

I'm one who has saved money in a 401k, IRAs and in other savings plans for the last 20 or so years. Some of my money has been in mutual funds and those funds have owned stock in FNMA, mortgage bonds issued by FNMA, FHLMC and/or various of the large investment banks. During the early part of the 2000s, I was extremely happy to have the higher rates of return on my personal investments. I'd guess that most other pension and retirement funds were just as happy.

Did I know at the time the specifics of how individual mutual fund investments were performing and why they were performing so well? Nope. But I sure did like those returns. Now that these investments have gone sour, I have no right to gripe and moan and I believe it's hypocritcal for anyone in the investing world to take on a sense of arrogance about this all.

Yes, it's absolutely correct to wish the downside didn't happen and that regulators had done a better job to prevent the losses which have occurred. However, slightly educated investors who possess only as much info as the latest headline prints are also part of the greed cause and are hypocrits as well IMO. Blame ourselves as well as all the others who have fingers pointing at them.

sorry patser, not buying it..Have invested for the last 20+ years and realize that the stock market is at it's simplest form a supply-demand driven...When all the people were chasing the market higher it was due to "easy money",demand outstripping supply..Now there is very little demand(read-easy money) and the market is declining..I am of the opinion we are reverting back to the norm, and hence lower returns in the market going forth..

And getting back to the original topic, if there weren't suckers foolih enough to play the "mortgage game" then a lot of what is happening now would NOT be...A scheme/con always needs participants,without them it doesn't work..
so we can't be blaming the government/wall street,et al without 1st condemning those who took out mortgages they could ill afford to begin with

qdog, On the original topic, I don't blame Wall St alone for the mess. There's responsibility to be shared by many.

and I stand by what I said in my last post. Difference of opinion as it applies to the total picture - stocks and bonds.

Yes on the MF's and a SEP. Hubby invested in the MF's..despite my ongoing argument that investing in anything controlled by Wall St....even when times were good.... was like playing the slots in AC. Against my better judgment, the SEP was necessary in order for me to have some form of a retirement plan as I am self employed.

That said, what other options did people have other than investing in Wall st. controlled financial instruments...especially since few if any pension plans still exist that do not involve the stock market?
If Bush had his way and had privatized SS, and those recipients were also now crap out of luck, would you say they were wrong to complain because of their SS was invested in a manner which was something that was beyond their control?

Please.

qdog: ""A scheme/con always needs participants,without them it doesn't work..
so we can't be blaming the government/wall street,et al without 1st condemning those who took out mortgages they could ill afford to begin with.."

Despite the mortgage terms that even the Office On Responsible lending states are almost impossible to understand?

Despite the fact that the regulatory authorities were warned years ago that this was a house of cards that was wholly unsustainable?

Despite the fact the many foreclosures are now due to lay-offs, and not risky mortgages?

Despite the fact that when they ran out of people to take out the fraudulent mortgages, they created them from thin air??

Hardly.

*Despite the mortgage terms that even the Office On Responsible lending states are almost impossible to understand?

Don't get involved in something you don't understand..There was a time,not long ago, where it was 15/30 yr fixed or a very simple ARM..None of this other nonsense..KISS(Keep It Simple Stupid)..

*Despite the fact the many foreclosures are now due to lay-offs, and not risky mortgages?

What happened to having $$$$ set aside for emergencies? You should NOT lose your home due to a layoff, unless of course it goes on for better then 1 year...Recent layoffs should not push families over the brink..

The problem was/is people living beyond their means..FWIW, i don't know anyone unemployed or any foreclosures of properties nearby...

Add yet another thing to the list of things that make ordinary, responsible people end up in dire financial straights: major medical expenses and/or nursing home care. Many people who are hardly deadbeats, many who are elderly, are losing their home to this and also to mortgage fraud scams that they're ill informed about because they're not online looking for that kind of information. Shame on the mainstream media for glossing over the entire housing bubble, mortgage fraud, etc, issue that has been building for years. Had the media warned of this when it was first happening, I doubt so many Americans would've fallen for the toxic loans and the sales persons hype in the first place.

I still blame the industry far more than buyers because buyers didn't invent complex loans or mortgage fraud schemes. Buyers didn't approve their own loans, nor did they sell those loans to investors with bogus ratings indicatign they were sound investments. Nope, buyers were in many cases victims of fraud or deception, or at least of their own ignorance. Few buyers had the knowledge to actually commit the acts of fraud that the industry insiders did. The industry has no excuse. There are many in these industries who should be held accountable for criminal acts. But the law did virtually nothing to stop this trend until it took out the banks. I can assure you consumers were complaining about mortgage fraud even by large well known co's, years ago. They were told it wasn't the govt's problem.

*Despite the mortgage terms that even the Office On Responsible lending states are almost impossible to understand?

qdognj: "Don't get involved in something you don't understand..There was a time,not long ago, where it was 15/30 yr fixed or a very simple ARM..None of this other nonsense..KISS(Keep It Simple Stupid)"

Perhaps it is you who does not understand, that buyers were duped into option arms, not told the truth about the perils..which were purposely obscured in extremely difficult to understand written terms.

That said, they were fraudulently led to believe that an option ARM was a better "option" than a 15 or 30 year fixed.

They were also told that as the housing market continues to increase in value, they could easily refinance in a few years when the house was worth more. Millions of Wall St, investors also believed that which is WHY they bought the crap to begin with...but you only want to blame the borrower who was duped.

Wall St. is the poster child for living beyond their means to an astronomical level...they were KNOWINGLY over leveraged six ways through Sunday...yet, you continue to harp on the buyers.

In addition to all that fathen said, cost of living has outpaced wages; that said, what one could afford, with the suggested 3 month "cushion" is no longer relevant...as the cushion was used by many just to keep up as wages stagnated, and costs increase in terms of energy bills, food, etc.

You seem to expect the average person to be able to have predicted and adequately prepared for the Armageddon of Wall St..when Wall St itself, replete with financial engineers and enough MBA's to choke a herds of horses, and billions in earnings, not only created it, but refused to plan for the known outcome..and now are rewarded with billions from those who got screwed the most..including those who took option ARMS that are still employed..as they are taxpayers as well.

To quote you, perhaps you should not get involved in what you clearly don't understand..or, more likley don't wish to understand.

OMG Logic!!! You really must be kidding that an average person doesn't know how an ARM works or the difference between a fixed rate...

Blaming Wall Street is always easy after the fact..I'll bet you wern't complaining when the market was giving you double digit returns in the late 90's...

Consumers have long stretched to live a life they couldn't afford...I harbor no ill will to those that can afford so-called luxuries,but it is comical that people who are waiting for food stamps are listening to their Ipod or talking on their Iphone..

I went to my church which has a "giving tree" for those in need during XMAS..I pulled off a tag and it was for a 12 yr old boy who asked for a Ralph Lauren Polo sweatshirt....Now it is a time for giving but do you think a $125 sweatshirt is really necessary?

and the quip about "not understanding or don't wish to understand" makes me laugh..People need to be reponsible for their own business,whether understanding mortgage products or financial products,ie mutual funds/stocks/bonds..If you don't understand,don't get involved with it..sheezzz

qdognj: "You really must be kidding that an average person doesn't know how an ARM works or the difference between a fixed rate...

Yes...but Option ARMS are an entirely different story..recently created, and couched in such terminology that experts from the Office of Responsible Lending state one would need an MBA degree in mathematics to truly understand how they worked from the written material provided.

qdognj: "If you don't understand,don't get involved with it..sheezzz"

Try telling that to the perpetrators...Wall St.

Good luck with that..

From Investor Place Blogs:by Tom Armistead

Excerpt:

"Readers are familiar with my concerns about "naked" CDS, that is, CDS that are not supported by an insurable interest. I believe these deals may create moral hazard. Eric Dinallo, NY State Superintendent of Insurance, in an effort to bring some degree of regulation to the CDS market, determined that CDS are insurance when supported by an insurable interest. "Naked" CDS in his analysis fall into two classes, grey area cases where there might be some social benefit, and unregulated gambling.

MBIA will not be providing future protection in CDS form, and from the tone of the above I doubt they will provide any form of credit insurance in the absence of an insurable interest, going forward. As an investor, I am sorry that they got involved in the zero sum game, but I have been hopeful that in the absence of collateral requirements they can wait this one out.

But the 100 billion from one company, at stake in a zero-sum game, with no direct impact in the real economy, got me thinking: what is this stuff, how much of it is there, and what if it does have an impact in the real world economy? What was the involvement of other companies in the financial sector? Then I went on to other interests.

Today in the WSJ we learn that AIG had about 10 billion of this stuff. The Maiden Lane III facility, which is supposed to buy the assets underlying AIG's troubled Super Senior CDO portfolio, has a problem: the insured party does not own them - the exposure was in synthetic form. The WSJ article mentions "Abacus" and Goldman Sachs: a search of the terms reveals the following from a Moody's downgrade announcement: "Abacus 2005-CB1 is a synthetic collateralized debt obligation (CDO) that closed on Dec. 7, 2005 created to enter into credit default swaps with Goldman Sachs Capital Markets."

Making bets with Goldman Sachs hasn't been profitable to anyone, as far as I can see, it's like betting against the house, the odds are in their favor. Why it would be a suitable investment for anyone is beyond me.

Personally, I prefer to take my exposure to certain asset classes in natural form: "no synthetic, please."

Logic:
Yes...but Option ARMS are an entirely different story..recently created, and couched in such terminology that experts from the Office of Responsible Lending state one would need an MBA degree in mathematics to truly understand how they worked from the written material provided

If a person acquiring a mortgage has no clue what they are getting into,then perhaps they deserve the consequences..I can't imagine someone with a partial HS education not asking a few very simple,basic questions.Such as, What is my current rate,if//when will the rate adjust,what can it adjust to...If you don't ASK these questions,my guess is you don't want to KNOW the answers...

As PT Barnum said...

qdogNJ: I can't imagine someone with a partial HS education not asking a few very simple,basic questions.

Have you been sleeping through all of the stories about mortgage fraud? Newsflash; the answers one receives from someone planning fraud are a crock of bull doody.

I can't imagine that someone such as yourself who must have some HS education would be totally clueless regarding that fact. Just a bit of research would have provided that info to you.

Next will you suggest each borrower arrive at the lender with a lie detector machine? Perform criminal background checks to see who was already a convicted felon for fraud?

Or...would it not just be better for the regulators on the state and federal level to have done their job?

More people took on a mortage product they didn't understand or couldn't afford, then those who allegedly got ripped off..

And the fraud to which you speak is NOT 100% related to simple mortgages sych as FR or basic ARMs, it is the option arms and other hybrid loans that people should NEVER have taken.However, they wanted the American dream of homeownership,and whatever means it took them to get there,thats what they did..And there were many shysters around to help them..

qdog-"I went to my church which has a "giving tree" for those in need during XMAS..I pulled off a tag and it was for a 12 yr old boy who asked for a Ralph Lauren Polo sweatshirt....Now it is a time for giving but do you think a $125 sweatshirt is really necessary?"

Church? Sounds like the church of Goldman sachs, lol! Maybe you can use some of your cronie's bailout money to purchase this 'underpriviledged' lads sweater....lol!

logic-qdog is far more interested in resting his foot on the necks of those who borrowed money from subprime lenders then he is in pointing the blame where it BELONGS. At those so called 'financial genius's who were SUPPOSED to know what the hell they are doing and did what they wanted (tanked our economy with mystery notes) anyway.
Some people think they can have it all. At everyone else's expense.

Figures hmm?

my cronies? LOL...They should be held as accountable as those who purchased these toxic products,BUT they alone are not responsible..People need to be held accountable for their actions,period...I'd be the 1st to help someone who thru no fault of their own,got into financial problems..someone who defaults on their mortgage because they took a loan they couldn't afford,or spent their $$$ on "luxuries" they couldn't afford,i'd walk right by..

qdognj, again, you continue to rant about the smallest part of the problem...and although you claim to place equal blame on all...perform a search on your own posts...and you will see the same theme...your primary issue is with the small percentage of homeowners who were irresponsible...who are merely a symptom...and NOT the root cause.

I have relatives, friends and acquaintances that hold all sorts of positions on Wall St...some of them sing your same tune...and I attribute it to the fact that they are in denial that they are part of a profession that has done so much across the board horrendous financial damage.

That said, blaming the small percentage of borrowers who were irresponsible in the respect that they full well knew they were taking on more than they could afford is like blaming the blood from a gun shot wound as being the cause of the problem, but ignoring the actual bullet that caused the damage in the first place.

Even someone without any HS education would surely know the difference.

Logic, blame who you want, and apparently it is the establishment,a very common theme by the liberal front,lol...And don't forget guns don't kill people,people kill people...and following that "logic" issuers of loans don't bankrupt people,people bankrupt people..lol

Logic:
I have relatives, friends and acquaintances that hold all sorts of positions on Wall St...some of them sing your same tune...and I attribute it to the fact that they are in denial that they are part of a profession that has done so much across the board horrendous financial damage.

You must be a real ball of fun to be around this year, whacking friends and family because they don't drink the same kool-aid as you...buzzkill,lol..

qdognj, what is your deal? Why do you continue to defend the lending institutions? That's a lonesome stand to take, kiddo.

Why don't you latch onto some other issue to become obsessed about? You're becoming a bore.

qdognj: "You must be a real ball of fun to be around this year, whacking friends and family because they don't drink the same kool-aid as you...buzzkill,lol.."

Ad hominem attack. As expected.

Lol, I love all you people solely laying blame on the lending institutions for this debacle...Same type of people who get involved in pyrimid scheme,knowing it isn't legal or ethical,but fast riches are just around the corner..But when the game collapses ,blame everyone but YOURSELVES,..what a joke...and fwiw, i have no pity for the institutions that are going bankrupt from their actions either,i just see BOTH sides as guilty, with more blame on those who try to play in the Jones' sandbox,when they can't afford even the sand in the box

qdognj wrote: "I went to my church which has a "giving tree" for those in need during XMAS..I pulled off a tag and it was for a 12 yr old boy who asked for a Ralph Lauren Polo sweatshirt....Now it is a time for giving but do you think a $125 sweatshirt is really necessary?"

Perhaps he'll grow up to be a corporate CEO, make many stupid, greedy, irresponsible decisions, run his industry into the ground, then ask for a government bailout of tens of billions of dollars, like the banking, building, real estate, and other industries are now doing! Or, maybe he'll grow up to be a politician, who will grant his corporate pals the above bailout for their irresponsible behavior!

I am w/logic on this; the industry perpetrated this scam and whether you loathe the victims or suckers who got pulled into it, consumers did not engineer it. The various relevant industries DID.

You can lead a horse to water,but you can't make him drink...Without willing participants,there is no bigtime,large scale problem...

Logic, Saying that you have loads of relatives and friends that work for Wall St firms AND then attributing any type of behavior to all of your friends and relatives is about as valid as saying that because you have all these friends/relatives, you are to blame, too.

Not every single solitary person that works for a brokerage firm had responsibility for creating mortgage backed securities!!!! In fact, and I say this because I've been a brokerage firm employee for most of the last 30 yrs, very very very few employees have responsibility for creating mortgage backed securities. And then, of those bankers who did create them, a relatively small percentage of the securities initially had problems. And now that prime loans are going bad (possibly from overextended homebuyers as qdog says), you can't blame the firms either.

Generalizing about Wall St is baloney and flat out wrong.

patser:
"Saying that you have loads of relatives and friends that work for Wall St firms AND then attributing any type of behavior to all of your friends and relatives is about as valid as saying that because you have all these friends/relatives, you are to blame, too."

Check again. I never said "loads". In addition, I never said anything about attributing any type of behavior to "all" of my friends and relatives.....only some..and of those, only some of those who work in the Wall St. sector, which is a small portion of "all" of my friends and relatives.

That said, I also never said that every single person on Wall St. was part of this debacle. The term "Wall St." describes an entity...as the term "Main Street" describes an entity. Only a fool would think to blame the back office folks who were the backbone of these companies but who were royally screwed by the actions of the head honchos.

Get a grip.

If anyone is generalizing it is you.

Now..for some educational reading...

Madoff reportedly told employees Ponzi scheme lost billions for customers

Excerpt:
NEW YORK - Bernard Madoff, a longtime fixture on Wall Street, was arrested and charged on Thursday with allegedly running a $50 billion Ponzi scheme, U.S. authorities said.

qdognj wrote: "You can lead a horse to water,but you can't make him drink...Without willing participants,there is no bigtime,large scale problem..."

The difference between culpability of consumers vs industry insiders is: The professionals knew what they were doing was wrong and often illegal, and they knew or should've known it could damage the economy. They knew what they were doing would damage someone down the line, whether it was the home buyer, the lender, the banks, the investors, or the entire country, and knew it was deception, but they did it anyway. Consumers were more duped, defrauded, suckers, but usually not criminals. Fortunately there is a cure for ignorance, it's called education. And uneducated is not illegal or unethical. Had the public been educated the scheme would not have worked at least not on such a massive scale. There would've been far fewer toxic loans to repackage as investments, rate too highly, and resell.

Make no mistake I do not support consumers who were going along with fraud. I'd like to see the criminals all go to jail but I bet very few will, and I'll be downright surprised if any large corporate CEO's do.

Yes, I used the word loads. If it's not appropriate, so be it. But if it isn't appropriate, anything you say decreases in relevance because you have less and less insight gained from smaller numbers, leaving you with an opinion and only an opinion.

It's no secret that mortgages are legal agreements, represented by a number of documents/contracts. I agree with qdog that ANYONE who enters into any legal agreement has responsibility to both themself and to the other party that they know and understand what they have agreed to when signing the contract. Read the documents and get your questions answered. And if one doesn't, let the consequences happen. Even those folks, logic, that only have a bit of that HS education you keep referring to should know that.

Please be specific, fathen - who are the professionals you are referring to? EXACTLY what were they doing that was wrong? And whose responsibility is it to educate that consumer?

paster wrote: "ANYONE who enters into any legal agreement has responsibility to both themself and to the other party that they know and understand what they have agreed to when signing the contract. ... (and) who are the professionals you are referring to? EXACTLY what were they doing that was wrong? And whose responsibility is it to educate that consumer?"

I think you already know the answer, but for the benefit of others who may be interested here are a few good sources.

www.mortgagefraudblog.com
www.hadd.com
www.hobb.org
www.flippingfrenzy.com
www.businessweek.com/magazine/content/08_47/b4109070638235.htm

Google News: search for mortgage fraud.

FBI, 2006: www.fbi.gov/publications/financial/fcs_report2006/financial_crime_2006.htm Scroll down to Mortgage Fraud: "Based on existing investigations and Mortgage Fraud reporting, 80 percent of all reported fraud losses involve collaboration or collusion by industry insiders."

FBI is now involved in "Operation Malicious Mortgage" and has arrested hundreds of people, the tip of the iceberg, and the majority of them were working in the mortgage industry. Google it.

CONTRACTS: re: not signing documents one does not understand. I agree. And professionals who created and signed the same predatory and sometimes illegal documents had to know what THEY were doing, too. Should professionals be held to a lower standard than their customers? What about the professionals duty to their customers?

EDUCATION: our school system does a very poor job of teaching financial and legal literacy. Even at the college level nothing like this is required, at least not last I was in college. Perhaps instead of requiring certain other electives that are less critical, school systems could install a required financial and legal literacy class, that outlines responsible, ethical, legal ways of using credit, buying a house or car, and basic legal reality such as ones rights and responsibilities. One caveat; never let the industry teach the class.

Ignorance of these issues is curable. Im not sure theres a cure for a habitual criminal who justifies their crime by blaming their victims.

While I dont think we should legislate everything under the sun, I DO think the law should be enforced and industries that are trusted with significant amounts of money should not be allowed to police themselves. This economic meltdown could not have happened had our govt been awake and involved instead of too busy taking campaign donations from industry lobbyists. Now instead of less govt and lower taxes, we will get more govt and higher taxes, thanks to these industries.

Forgot one other good source of info on this: Center for Responsible Lending: www.responsiblelending.org

I really think there is a limit to how much help the gov, banks or anyone else can give to "at risk" home owners. I just don't see any type of sweet deal happening for those folks. There have already been so many foreclosures...

Right now, the "help" available involves 40 year loan terms (among other things) and a sharing of any future appreciation with the government. These modifications may be helping people stay in their homes but it will be a long, long time before those people have any real equity (ownership) in their homes.

It seems their choices are: 1) Go to foreclosure and wreck their credit and possibly their future job opportunities. 2) Sign a deal with the devil and stay in "their" home.

Qdog - your reward for being responsible is not having to make one of those choices.

Tough choices,indeed..However,if they were dilgigent in their choices and actions,they possibly wouldn't have to make the choice either...Helping some,while not helping others is a terrible policy...

busymom I think you are right, (you wrote: "I really think there is a limit to how much help the gov, banks or anyone else can give to "at risk" home owners. I just don't see any type of sweet deal happening for those folks.").

If the govt couldn't handle nipping this problem when early warnings indicated it should step in, it sure isn't competent enough to sort out who deserves help and who doesn't. And even if it had a good program in place, it would move slowly; many would lose their homes and trash their credit waiting. Fears of a homeowner bailout are unfounded for this reason, but also because the industries crying for a bailout have a lot more people in Washington than homeowners do. Regardless of how any bailout is presented to the public, the money is coming out of tax payers pockets, and going into corporate pockets. I'm opposed to bailing out the industry, and would only support a bailout of homeowners who can show they were victims of fraud or deception. There is no way I'd favor bailing out corporations or consumers who simply made bad decisions. It's the sheer volume of this crash that hurts us all, but maybe it takes that kind of shock to wake people up.

patser:"...leaving you with an opinion and only an opinion."

I never stated that my opinion was fact. You are certainly fond of generalizing...aren't you? Perhaps in the future you will attempt to make your case without doing so...as it marginalizes any point you are trying to make.

That said, your statements are also merely your opinions. Therefore, your point is moot at best.

patser: "Read the documents and get your questions answered. And if one doesn't, let the consequences happen. Even those folks, logic, that only have a bit of that HS education you keep referring to should know that."

And if one reads the documents and they are purposely written in such a way that make it very difficult to determine that the real terms have been worded specifically as to obscure and obfuscate the scam?

So...one asks questions...and then they are lied to regarding the terms...then what? How are they to know that they are being defrauded?

Last but not least, I've noticed that both you and qdognj have made sure not to comment on or even acknowledge the up to now highly esteemed and respected former NASDAQ honcho Madden's arrest and his $50 billion Ponzi scheme.

Care to explain how all of those "investors" were duped?

Why are you not ranting about their stupidity, lack of responsibility, etc.???

Or..is it only the disadvantaged borrowers that are worthy of your disdain?

lol, Madden should be jailed...But....

I'll wait until further details come out before i give investors a complete free pass on accountability..I'll bet they were very happy when they "thought" the high returns they received,when the returns for other investments were low..Greed on both sides

For Qdognj & patser...look at all of these (by your yardsticks) stupid and irresponsible investors!!!!
Do you think they did not read documents provided?????

After all, most are probably college educated..some probably even have MBA's in business no less!!!

Did they not understand what they were "investing" in? With all their wealth, why didn't they hire an attorney to explain it to them? Why did they ignore the Wall St. whispers questioning Madoff's hedge fund?? After all, they, unlike many borrowers, were fortunate enough to get a whiff of scam that said it was too good to be true...but ignored it.

I guess they are even more stupid and more irresponsible than any mortgage borrower..right?

Do tell!!

That said, IMO as I've said before, the fish stinks from the head down.

MSNBC.com

Credit crunch unmasks Madoff

Investors lost billions in Madoff's alleged 'giant Ponzi scheme'
By Matthew Goldstein
Business Week
updated 1:41 p.m. ET, Fri., Dec. 12, 2008

For years there were whispers on Wall Street about Bernard Madoffs hedge fund. The cynics said the returns were too good, too steady and Madoffs operation always looked too slim for the tens of billions of dollars it was managing. But given Madoffs more than four decades of experience as trader and past service as chairman of the Nasdaq stock market, the wealthy kept giving him their money.

Well, it looks like those concerns were right all along now that federal prosecutors have charged the 70-year-old Madoff with securities fraud in what could amount to one of the biggest Wall Street scams ever. Securities regulators, in a civil complaint, say Madoffs scheme may have cost investors up to $50 billion. At a minimum, it appears the $17 billion Madoff was managing earlier this year may be gone.
The allegations against Madoff describe a classic Ponzi scheme, in which money is taken in from new investors to pay out money to earlier investors. Madoff, authorities allege, even told his sons earlier this week that the hedge fund was nothing more than "a giant Ponzi scheme.

It didnt take long for investors in Madoffs fund to begin crying foul. Hours after the news of Madoffs arrest broke, investors were contacting lawyers to determine how they can get their money back assuming there is any money left over. The Securities and Exchange Commission is moving to appoint a receiver to take control of the Madoff fund to protect whatever assets remain.

Its way too soon to know how long the alleged scheme had been going on, although authorities allege it began years ago, after Madoff tried to cover up for past losses. But it appears Madoff ultimately was unmasked by the worst financial crisis since the Great Depression. Just like many hedge fund operators, Madoff received a wave of redemption notices in recent months, from investors looking to preserve cash. Authorities say investors sought to pull out some $7 billion from the fund money Madoff apparently did not have. In the end, most Ponzi schemes collapse when too many investors seek to pull their money out at the same time, and the operator doesnt have the cash on hand.

But the financial crisis appears to be hastening that unwinding process, as it has dried-up all sources of liquidity. Banks are unwilling to lend and investors are fleeing hedge funds, stocks, bonds, commodities and other asset classes for the safety of cash. In September, another alleged Ponzi scheme collapsed, when federal prosecutors arrested Minnesota businessman Tom Petters. Federal prosecutors allege that much of Petters empire, which consisted of buying up distressed businesses, was based on a series of lies. Hes been charged him with bilking some six dozen hedge funds out of $3 billion. Petters alleged scheme came undone when some of the hedge funds that lent him money had gotten redemption requests from their investors and began asking Petters to pay off his debt. Just like Madoff, Petters apparently couldnt come up with the cash.

A lack of liquidity may have been behind the bizarre scheme involving New York attorney Marc Dreier. Earlier this week, federal prosecutors charged the high-profile attorney with allegedly scamming several hedge funds into giving him up to $100 million by selling shares in what appears to be a fraudulent real estate venture. It appears Dreiers 250-lawyer firm was running low on cash and had failed to make payments on a bank loan.

As the financial crisis deepens, dont be surprised if other scams get flushed out in the coming weeks and months.
Copyright © 2008 The McGraw-Hill Companies Inc. All rights reserved.
URL: http://www.msnbc.msn.com/id/28196739/

Logic, you are a real downer..The economy is spiraling to depths unknown...Wall Street and everything associated with it is a scam..Save people from themselves..Put your money in your mattress..Grab a gun or 2...stock up on water and canned goods...I believe if we did all your "logic" subcribes to we'd all live in Cuba or perhaps Russia...

Then we'd all have gray painted homes on 50 x 100 ft lots,with 1200sf of living space...There'd be no stock market scams,and we'd all draw the same paycheck..What'ya think comrade?

Greed is blinding in the Madoff case

qdognj: Logic, you are a real downer..The economy is spiraling to depths unknown...Wall Street and everything associated with it is a scam..Save people from themselves.....Then we'd all have gray painted homes on 50 x 100 ft lots,with 1200sf of living space...There'd be no stock market scams,and we'd all draw the same paycheck..What'ya think comrade?

I'm the downer?? LOL! How about those who caused the debacle to begin with? As you are actually quoting headlines...and not my statements, you are clearly a tad confused, to say the least....and/or shooting the messenger in an attempt to avoid acknowledging the real problem.

And, with the govt nationalizing banks and businesses we may not be too far off....with Wall St. being ground zero.

Here are some of the greedy, stupid and irresponsible investors in the Madoff fund, and Madoff was a past chairman of the board of directors of the Nasdaq Stock Market as well as a member of the board of governors of the National Association of Securities Dealers and a member of numerous committees of the organization, according to his firm's Web site.

That said, I am still waiting for the rants and raves from those who still want to believe that this economic tsunami was all about "stupid, greedy, irresponsible" mortgage borrowers. (foot tapping)

Notice how all of these wealthy, highly educated folks did not understand they were being scammed.

Where is the outrage on THEIR lack of due diligence. Hmmmm?

"...New York Mets owner Fred Wilpon, GMAC LLC Chairman J. Ezra Merkin and former Philadelphia Eagles owner Norman Braman were among the dozens of seemingly sophisticated investors who placed money on what could prove to be history's largest financial scam.
Giant French bank BNP Paribas, Tokyo-based Nomura Holdings Inc. and Neue Privat Bank in Zurich are also exposed, according to people familiar with the matter.
And at least three funds of hedge funds -- which raise money from investors and farm it out to hedge funds -- may have significant losses. Fairfield Greenwich Group and Tremont Capital Management of New York placed hundreds of millions of their investors' dollars into funds overseen by Mr. Madoff. On Friday, Maxam Capital Management LLC reported a combined loss of $280 million on funds they had invested with Mr. Madoff.
"I'm wiped out," said Sandra Manzke, Maxam's founder and chairman. The Darien, Conn., fund of hedge funds will have to close as a result of the losses, she said.....
.....The alleged fraud has "swept up some of the most prominent and wealthy Americans, along with many people who thought they were embarking on a comfortable retirement and have now been left destitute," says Brad Friedman, a lawyer at Milberg LLP, which with Seeger Weiss LLP represents more than 30 investors with losses they believe could total more than $1 billion......
.....Details emerged Friday of how Mr. Madoff ran the alleged scam, fostering a veneer of exclusivity and creating an A-list of investors that became his most powerful marketing tool. From New York and Florida to Minnesota and Texas, the money manager became an insider's choice among well-heeled investors seeking steady returns. By hiring unofficial agents, tapping into elite country clubs and creating "invitation only" policies for investors, he recruited a steady stream of new clients.
During golf-course and cocktail-party banter, Mr. Madoff's name frequently surfaced as a money manager who could consistently deliver high returns. Older, Jewish investors called Mr. Madoff " 'the Jewish bond,' " says Ken Phillips, head of a Boulder, Colo., investment firm. "It paid 8% to 12%, every year, no matter what."
As his reputation grew, Mr. Madoff gained the trust of prominent businessmen, including ex-Eagles owner Mr. Braman, who owns a chain of Florida auto dealers. A voicemail message left with Mr. Braman's office was not immediately returned.
Mets owner Mr. Wilpon, who also owns real-estate investor Sterling Equities, often raved about Mr. Madoff's investment prowess and invested tens of millions of dollars of both his own money and the team's with his company, say financiers who have worked with him. Mr. Madoff handled investments for the Judy & Fred Wilpon Family Foundation, which distributed about $1 million a year in 2005 and 2006 to charities, according to its most recent federal tax returns.....
.....Mr. Merkin, the chairman of former General Motors Corp. financing arm GMAC, is also a money manager at Ascot Partners LLC in New York. Ascot, which had $1.8 billion under management as of Sept. 30, had substantially all of its assets invested with Mr. Madoff, according to a letter to Mr. Merkin sent to clients Thursday night. Mr. Merkin said as one of the largest investors in Ascot, he believed he had personally "suffered major losses from this catastrophe."
Mr. Merkin could not be reached for comment.
Mr. Madoff tapped social networks in Dallas, Chicago, Boston and Minneapolis. In Minnesota, he attracted investors from Hillcrest Golf Club of St. Paul and Oak Ridge Country Club in Hopkins, investors say. One of them estimated that investors from the two clubs may have invested more than $100 million combined.
One of the largest clusters of Madoff investors was in Florida, where losses could be substantial. Mr. Madoff relied on a network of friends, family and business colleagues to attract investors. According to investors and agents, some of these agents were paid commissions for harvesting investors. Others had separate, lucrative business relationships with Mr. Madoff.
"If you were eating lunch at the club or golfing, everyone was always talking about how Madoff was making them all this money," one investor says. "Everyone wanted to sign up."
Jeff Fischer, a top divorce attorney in Palm Beach, says many of his clients were also Mr. Madoff's clients. "Every big divorce that came through my office had portfolio positions with Madoff," he says.
Two of his investors said that among his clients, Mr. Madoff was considered a money-management legend; they would joke that if Mr. Madoff was a fraud, he'd take down half the world with him....
...Richard Spring, a Boca Raton resident and former securities analyst, says he had about $11 million -- or 95% of his net worth -- invested with Mr. Madoff. "That's how much I believed in him," Mr. Spring said.

if you read the link i provided,it would have shed some light on the people who invested with Madoff...And while Madoff should be sent to prison,as well as his whistleblower sons(ya think for a minute that they ALL realized they were close to be "caught" in the scheme, and decided Daddy should bear the brunt?)

Investors had NO IDEA what he was investing THEIR $$$$ in...BUT it was generating BIG returns,so why question it...Until of course,it failed, then they blame everyone but themselves..BUT, i place significantly more blame on the Madoffs,surprised Logic? lol

qdognj: "BUT, i place significantly more blame on the Madoffs,surprised Logic? lol"

Hardly. I knew there would be a double standard. Par for the course...you did not disappoint.

double standard,please explain,lol...sheez...

qdognj: "double standard,please explain,lol...sheez..."

No point.

Some things that bother me about all this in addition to the regular
outrage.....
1) "these guys" (all inclusive of wall street, enron types) get to use their ill gotten gains to hire teams of well connected lawyers to (a) give them a few years out and about enjoying their life while the courts drag on (b) finally when they've used up a lot of their ill-gotten gains they get some schmuck that works below them to take the brunt of the hit and get a lighter sentence now that the media and public have moved on and (3) that the taxpayers pay for the jail time.
All a travesty.
I saw on a blog where someone opined that Madsen (and others) be tried under the Homeland Security Act for financial treason as they've done more damage to national security than any terrorist attack - now that idea I LOVED.

When I was in college (back in the 80's) you could be expelled (no degree 4 u) for even participating in a pyramid scheme - much less master minding one. The message and the consequences were very loud and very clear.

It seems there has indeed been a massive lapse in professional ethics on Wall Street. I'm sure there will be some pretty dire consequences for those involved - financial treason sounds about right to me. It'll be interesting to see how all this unfolds...

busymom2006: "financial treason sounds about right to me.."

Agreed. If Osama Bin Laden & fellow terrorists somehow managed to pull this off, everyone would be screaming financial terrorism. However, Wall St does it...and they get billions in hand outs.

That because Osama would not be greasing the right palms.....