Project Lifeline - More Mortgage Welfare

the scam deals are a thing of street vending gypsies. Dont belong in our financial institutions..

The qualification should have been, can this home buyer afford a 30year loan. If the answer was yes then lay out the options on loan terms. If the answer was no then that buyer should have been denied.

Also if a buyer was convinced into a 5year ARM over a 30year loan due to lack of knowledge thats also wrong. in the retirement and investment industry we were licensed to be ethical and follow specific rules including quoting historical results and explaining risks. Why is that not the case in the mortgage industry?

buying a mortgage is not like buying a car. Its not a place that should be open for scamming people.
 
If you are a victim of fraud then you should go to court and collect the damages that you are owed. This is a bailout and it will keep prices of homes artificially high which is what irks me about the plan.
 
they have all the data. should be protection to those who were duped into into a sub prime over a 30year when they could afford the 30 year. In these cases the banks should refinance the the rates at todays prevailing 30year loans. those that cant afford it should be foreclosed on.
 
i remember clearly. i refinanced 3times over a 2year period. Every single time i had some scum bad trying to convince me to do a 5year arm.. ill save so much money.. bla bla bla.. It was like they were making more money on me if i did a sub prime then if i did a conventional.
 
Chapdog said:
i remember clearly. i refinanced 3times over a 2year period. Every single time i had some scum bad trying to convince me to do a 5year arm.. ill save so much money.. bla bla bla.. It was like they were making more money on me if i did a sub prime then if i did a conventional.
Click to expand...

I am not sure how much they make on a 5 yr arm vs. 30 yr. But I would be willing to bet I know the reason they wanted people who could afford the 30 yr to go to an ARM. They knew interest rates were at historic lows. They knew eventually rates would go back up and the people who took the ARMs instead of the 30 would have to refi again. Just a guess.
 
well point is that the average joe is an idiot when it comes to finances. There are SEC laws in place to protect the average idiot in the securities arena. That same protection should be available to home investing as its such a major cog in this country.
 
This is the nature of business and profit. There were profits to be made for some by enguaging in these loans. No one regulated it in the way it needed to be so things got out of hand. Society needs police and laws wether its on the streets on in the market. Given a chance to make money a certain percent of people will cheat. Their cheating will effect even the honest people.

This whole problem could have been avoided if we had adults in charge at the time.
 
Desh said:
This is the nature of business and profit. There were profits to be made for some by enguaging in these loans. No one regulated it in the way it needed to be so things got out of hand. Society needs police and laws wether its on the streets on in the market. Given a chance to make money a certain percent of people will cheat. Their cheating will effect even the honest people.

This whole problem could have been avoided if we had adults in charge at the time.
Click to expand...

the main changes in regulations that caused this to happen occurred under clinton.. BUT i dont think its fair to blame this on any presidential administration.

I think its more of a lack of experience/understanding in what the outcome.. Like a growing pain. We will fix it and move forward.
 
Superfreak said:
I am not sure how much they make on a 5 yr arm vs. 30 yr. But I would be willing to bet I know the reason they wanted people who could afford the 30 yr to go to an ARM. They knew interest rates were at historic lows. They knew eventually rates would go back up and the people who took the ARMs instead of the 30 would have to refi again. Just a guess.
Click to expand...


Yield spread premiums are the more likely culprit.
 
Dungheap said:
Yield spread premiums are the more likely culprit.
Click to expand...

Again, I am not informed on all the ways the brokers get paid, but isn't the YSP only on the "no-cost" loans? Or do they get in on any type of loan?

Also, why would they get more on an ARM than on the 30 with a YSP?
 
LadyT said:
http://www.cnn.com/2008/POLITICS/02/12/foreclosures/index.html

"The plan, called Project Lifeline, will allow overdue homeowners to suspend foreclosures for 30 days while they try to work out more affordable terms with lenders. "

Retarded. Its called renting people.
Click to expand...

"Project Lifeline" - WTF! It is NOT a life and death situation, just an emotionally charged headline. I just about want to puke. I've been reading some so-called 'financial experts" and I conclude that the majority of them are (capital A) - Assclowns.

OMG - the newest financial piece of shit to come down the road--- a debit card that taps directly into your 401(k). Are you kidding me? Anybody else with sense see this as a bad thing? Liz Weston Pulliam, a now confirmed Assclown, thinks there might be some positives to this. LOL, one of the links embedded in her article on the positives of gutting your own 401(k) - "Top five mistakes people make with their 401(k)." Hey Liz, #5: Taking loans from the 401! Hello? (If anybody knows her, please grasp her shoulders and pull really hard - do her a favor and pop her head out of her ass, please.) Get her editor a fresh cup of coffee, too; that idiot is asleep.

Personally, I think Suze Orman and her advice are both pretty much idiotic and simplistic. Even she would not go for this obviously horrible idea.

I read some article yesterday about 'new, tougher' lending standards. These ' new "tough" standards would be that the borrowers mortgage payment should be limited to not more than 36% of after tax monthly income.** What a fucking joke! Yes, yes, 'tougher' than the subprime 50% of gross guideline.... but

Years ago, way before the 'reforms,' I was told that my TOTAL debt payments - mortgage PLUS credit cards, student loans and cars) should not exceed 33% of monthly after tax. I was told that I would be considered 'marginal' if that number was 36%; I would be able to get a loan with more than 10% down, and I was unlikely to be able to qualify if it was higher than 36%, even with more money down.

Our 'new' standards are not tough at all. But they are a step away from being ridiculously lax.


**"after tax," not "take home" (i.e., gross minus Fed, state and SS / medicare taxes).

Sorry for the rant, but I am tired of idiots and politicians catering to idiots because it screws people who have a clue.
 
Last edited:
Chapdog said:
the main changes in regulations that caused this to happen occurred under clinton.. BUT i dont think its fair to blame this on any presidential administration.

I think its more of a lack of experience/understanding in what the outcome.. Like a growing pain. We will fix it and move forward.
Click to expand...


IT WAS LACK OF OVERSITE AND ENFORCEMENT!

Go ask any of the people who are now getting dicked by this situation wether its the home owner or the people who bought the packaged loans.

You dont make a law to prevent things until a problem presents its self. This is more than just that these loans exsisted. IT WAS THE OVERUSE OF THEM. These loans exsisted for years. Once the market conditions provided a way for someone to Make a killing by providing them then they were abused. In a normal market these types of loans dont present a problem.
 
Desh said:
IT WAS LACK OF OVERSITE AND ENFORCEMENT!
Click to expand...

i agree. and it needs to be addressed. but its not because of administration. What did Clinton do to protect the 65yo investors dumping money into NASDAX high tech stocks with 150PE ratios during the late 90's?
 
Desh said:
IT WAS LACK OF OVERSITE AND ENFORCEMENT!

Go ask any of the people who are now getting dicked by this situation wether its the home owner or the people who bought the packaged loans.

You dont make a law to prevent things until a problem presents its self. This is more than just that these loans exsisted. IT WAS THE OVERUSE OF THEM. These loans exsisted for years. Once the market conditions provided a way for someone to Make a killing by providing them then they were abused. In a normal market these types of loans dont present a problem.
Click to expand...

It was the dismantling of the regulations that led to this occuring. These deals have been around a long time. Yes, the packaging of these loans made it easy for lenders to reduce risk by loaning the money and then selling the loans. But bottom line Desh.... the mortgages would never exist if the lender and borrower hadn't made the deal.

The people who borrowed more than they could afford are just as culpable as the people that loaned them the money. PERIOD.

If you do not understand the terms of a contract... you should not sign the contract. It is your responsibility. Just as those that bought the loans from the lenders are responsible for knowing what they are buying. Just as the lenders are responsible for lending money only to those that qualify. They are all at fault.

The reason these loans escalated was not due to some sudden change in the amount of money that could be made. IT was due to the fact that interest rates dropped to 40 year lows, allowing more people to buy homes based on the low rates. Couple that with the refi's done and that is why you had a boom in the lending. The profits did not change. They were always very lucrative.

But bottom line, you are correct in that the politicians are also to blame. There is plenty of that to go around.
 
Troglodyte27 said:
"Project Lifeline" - WTF! It is NOT a life and death situation, just an emotionally charged headline. I just about want to puke. ...........
Click to expand...


Hey! I like Suzie Orman!

But I do agree 99% of the media attention to this is just over emotional bull$hit. You're right. Its not life or death. It comes down to renting or owning. I'm personally tired of all the "sob" stories on the major news networks showing stupid 6 low six figure couples in trouble because they bought a home that costs $800K+. Its just like, ummm.....helloo......McFly....you can't afford it!

http://money.cnn.com/2008/02/08/real_estate/who_can_refi/index.htm?iref=werecommend

But at least the banks are finally smartening up and they stopped giving loans to anyone with a heart beat.
 
Desh said:
IT WAS LACK OF OVERSITE AND ENFORCEMENT!

Go ask any of the people who are now getting dicked by this situation wether its the home owner or the people who bought the packaged loans.

You dont make a law to prevent things until a problem presents its self. This is more than just that these loans exsisted. IT WAS THE OVERUSE OF THEM. These loans exsisted for years. Once the market conditions provided a way for someone to Make a killing by providing them then they were abused. In a normal market these types of loans dont present a problem.
Click to expand...

that was the stupidity of the banks and the people taking out the loans. again, if someone was the victim of fraud, they should get retribution for their losses from the institution that defrauded them. Otherwise, if you got an ARM that scheduled to reset now and you can't afford it now, like you couldn't afford it then, you're an idiot period.

Now, there are cases where people have become sick and/or injured and can't work, but that's what SS and unemployment is for and I think the banks should make an effort to help them out which should be standard practice imo.

But if you were making $60K and bought a $500K house with an ARM, and your in essentially hte same financial position you were in before, you're a fcking retard.
 
Superfreak said:
It was the dismantling of the regulations that led to this occuring. These deals have been around a long time. Yes, the packaging of these loans made it easy for lenders to reduce risk by loaning the money and then selling the loans. But bottom line Desh.... the mortgages would never exist if the lender and borrower hadn't made the deal.

The people who borrowed more than they could afford are just as culpable as the people that loaned them the money. PERIOD.

If you do not understand the terms of a contract... you should not sign the contract. It is your responsibility. Just as those that bought the loans from the lenders are responsible for knowing what they are buying. Just as the lenders are responsible for lending money only to those that qualify. They are all at fault.

The reason these loans escalated was not due to some sudden change in the amount of money that could be made. IT was due to the fact that interest rates dropped to 40 year lows, allowing more people to buy homes based on the low rates. Couple that with the refi's done and that is why you had a boom in the lending. The profits did not change. They were always very lucrative.

But bottom line, you are correct in that the politicians are also to blame. There is plenty of that to go around.
Click to expand...


If home prices had not skyrocketed these loans would not have been used. People saw home prices soaring and you could buy a house with an interest only loan .Then you refi in a year or so and have equity or then turn arround and sell the house or outright and have a downpayment on a more modest home making it more affordable for you. Many people did this and it worked fine. There were people who saw this happen and wanted in to do the same. Then the market went bad because these entities were scrambling for the last few bucks to make and not warning gullible people who didnt see it coming. These people are for the most part just people trying to find a way to buy the American dream of home ownership.
 
Last edited:
LadyT said:
that was the stupidity of the banks and the people taking out the loans. again, if someone was the victim of fraud, they should get retribution for their losses from the institution that defrauded them. Otherwise, if you got an ARM that scheduled to reset now and you can't afford it now, like you couldn't afford it then, you're an idiot period.

Now, there are cases where people have become sick and/or injured and can't work, but that's what SS and unemployment is for and I think the banks should make an effort to help them out which should be standard practice imo.

But if you were making $60K and bought a $500K house with an ARM, and your in essentially hte same financial position you were in before, you're a fcking retard.
Click to expand...

BUT.. ill stand up for the buyer.. when your talking to mortgage company and they are not disclosing the risks of interest rate fluctuation while selling you an AMR when you could get a 30year fixed at historic lows (which would be the correct thing to sell) just so they could make a better commission.. its unethical in my opinion. the ONLY time you should buy an arm is when you plan to pay off the mortgage within the ARM period. Handy for people who flip houses, or move frequently.
 
You must log in or register to reply here.
Back
Top