Messages By: angel111999

We do have commissions in congress that  were in charge of overseeing the banking industry, but for whatever reason they chose to ignore the problems with Freddie Mac/ Fannie Mae.

Unfortunately this problem is not limited to Freddie and Fannie, it is industry wide which is why we now have our government bailing out these Wall St. companies.  Lots and lots of mortgages that plain and simple should never have been written.  These things were garbage on day one but the brokers writing them didn't care.  No fiduciary responsibility at all.  Give them their fee and they were happy, didn't care about the fool who wouldn't be able to afford the house in a few years.  They bundled these loans up, sold them to investors on Wall Street who had found a new way to make lots of money fast, until the housing market came tumbling down.  Either they had never heard that song the goes "what goes up, must come down...." or they just didn't care as long as they got paid, got the house or made some big money off of it.

In addition you throw in the people that bought a house, the loan wasn't a bad one, they have good credit and they even seem to be able to afford the place.  Real estate prices climbed at an unbelievable rate and they are buying at the peak.  All of a sudden a house that appraised for $200,000 is now worth $125,000 but the bad news is that you owe $175,000.  Can't sell, can't refinance, so they hold on as long as they can.

So prices go down, rates readjust on these crappy loans and the good ones and since the property is now worth less then what they owe they can't refinance and they can't afford the new rate and off to foreclosure we go.  The mortgage broker has no job, the fool has no house and the investor are losing their shirts. 

Banks are currently regulated by the government, they are supposed to be audited for loan quality and lending practices but no one was paying attention until things went bad.  No one yelling foul at the start.  And if something can potentially bring down the economy of the country I think that a whole hell of alot of people need to start paying some more attention.  I don't want everything regulated, just the things that end up costing every single one of us a lot of money.  My husband is of the mind set that the best way to end bad lending practices is to make the penalty for going outside prescribed guidelines severe enough (like prison time) that it will cure part of the problem.  Coupled with increasing education and possibly adding licensing requirements for lenders, brokers and bankers to raise the bar on the quality of those in these industries.  In most states the bar for mortgage brokers is pretty darn low and does not include much in the way of education standards.

Our elected officials have failed us. They spend more money than they take in, they care more about the people who fund their campaign than for the people they represent. I agree there is greed on wall street, but there is just as much on capital hill.
I agree with this statement, it is truly sad and it is across the board, both parties.  And regarding greed on Capital Hill, I think there is also a real greed for power as well.

We do have commissions in congress that  were in charge of overseeing the banking industry, but for whatever reason they chose to ignore the problems with Freddie Mac/ Fannie Mae.

Unfortunately this problem is not limited to Freddie and Fannie, it is industry wide which is why we now have our government bailing out these Wall St. companies.  Lots and lots of mortgages that plain and simple should never have been written.  These things were garbage on day one but the brokers writing them didn't care.  No fiduciary responsibility at all.  Give them their fee and they were happy, didn't care about the fool who wouldn't be able to afford the house in a few years.  They bundled these loans up, sold them to investors on Wall Street who had found a new way to make lots of money fast, until the housing market came tumbling down.  Either they had never heard that song the goes "what goes up, must come down...." or they just didn't care as long as they got paid, got the house or made some big money off of it.

In addition you throw in the people that bought a house, the loan wasn't a bad one, they have good credit and they even seem to be able to afford the place.  Real estate prices climbed at an unbelievable rate and they are buying at the peak.  All of a sudden a house that appraised for $200,000 is now worth $125,000 but the bad news is that you owe $175,000.  Can't sell, can't refinance, so they hold on as long as they can.

So prices go down, rates readjust on these crappy loans and the good ones and since the property is now worth less then what they owe they can't refinance and they can't afford the new rate and off to foreclosure we go.  The mortgage broker has no job, the fool has no house and the investor are losing their shirts. 

Banks are currently regulated by the government, they are supposed to be audited for loan quality and lending practices but no one was paying attention until things went bad.  No one yelling foul at the start.  And if something can potentially bring down the economy of the country I think that a whole hell of alot of people need to start paying some more attention.  I don't want everything regulated, just the things that end up costing every single one of us a lot of money.  My husband is of the mind set that the best way to end bad lending practices is to make the penalty for going outside prescribed guidelines severe enough (like prison time) that it will cure part of the problem.  Coupled with increasing education and possibly adding licensing requirements for lenders, brokers and bankers to raise the bar on the quality of those in these industries.  In most states the bar for mortgage brokers is pretty darn low and does not include much in the way of education standards.

Our elected officials have failed us. They spend more money than they take in, they care more about the people who fund their campaign than for the people they represent. I agree there is greed on wall street, but there is just as much on capital hill.
I agree with this statement, it is truly sad and it is across the board, both parties.  And regarding greed on Capital Hill, I think there is also a real greed for power as well.