The Unintended consequences of Project Lifeline.

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2. We didn't just "deregulate" we required banks to change their rules and forced them to give loans to those they otherwise wouldn't. This was the beginning of stupidity. Congress/Senate has no ability to run banks at that level. They are not qualified.

Extending that program so they could continue to say "More <insert group here> own homes than ever before!" they then added deregulation to stupidity.
 
Damocles said:
2. We didn't just "deregulate" we required banks to change their rules and forced them to give loans to those they otherwise wouldn't. This was the beginning of stupidity. Congress/Senate has no ability to run banks at that level. They are not qualified.

Extending that program so they could continue to say "More <insert group here> own homes than ever before!" they then added deregulation to stupidity.
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The loans given out... just weren't clear at all. I'm not saying that there's no responsibility on the homeowners fault, I'm just saying that there's more responsbility to toss around than you guys want to.

One guy, for instance, signed papers for a fixed rate mortage. Then the guys came back the next days, and told him he needed to resign them because of some errors. The new papers changed the agreement to adjustable rate. Maybe he's partially responsible, but that is just goddamned shady. He's now being forclosed on, and project lifeline isn't going to do shit to change that.
 
Epicurus said:
If your mind really really works like that, you should turn off the computer and hit the books.
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There's nothing wrong with my mind, only those who sit at the computer and condemn easily and comfortably rather than doing the hard thing and trying to take a walk in others shoes.
 
Watermark said:
The loans given out... just weren't clear at all. I'm not saying that there's no responsibility on the homeowners fault, I'm just saying that there's more responsbility to toss around than you guys want to.

One guy, for instance, signed papers for a fixed rate mortage. Then the guys came back the next days, and told him he needed to resign them because of some errors. The new papers changed the agreement to adjustable rate. Maybe he's partially responsible, but that is just goddamned shady. He's now being forclosed on, and project lifeline isn't going to do shit to change that.
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I toss it everywhere. However, foreclosures do not just "punish" the homebuyer (they don't own it yet) the real punishment is on the idiot holding the hot potato. This is more government welfare for companies.
 
Watermark said:
There's nothing wrong with my mind, only those who sit at the computer and condemn easily and comfortably rather than doing the hard thing and trying to take a walk in others shoes.
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It isn't hard to walk in another's shoes. However, renting is just not that bad. You pretend that these people are going to immolate or something. They don't die because of a foreclosure. In fact, in less than 3 years their credit can be fixed if they are smart about it and they can buy an affordable home.

This isn't to save those people, it is welfare for the companies that would get caught holding the bad debt.
 
Damocles said:
I toss it everywhere. However, foreclosures do not just "punish" the homebuyer (they don't own it yet) the real punishment is on the idiot holding the hot potato. This is more government welfare for companies.
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If it is as you say, and they were forced to give out the loans, then I apologize, and the legislation needs to be changed.
 
Epicurus said:
You're just being stupid now.

If you enter a contract that you cannot reasonably expect to meet payments on, then it is obviously, unquestionably no one's fault but your own.
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I disagree. Because the same holds true for the lender. If the lender knowingly gives a loan to someone that cannot reasonably be expected to make the payments then the lender should not be loaning the money to the individual.

They are both to blame and THEY should pay.

IF there was fraud, then prosecute. Otherwise it is in the best long term interest of the country to avoid bailing out the lenders and borrowers.
 
Watermark said:
If it is as you say, and they were forced to give out the loans, then I apologize, and the legislation needs to be changed.
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It began that way, then was expanded into truly epic proportions. They weren't forced any longer, but were allowed to sell them as a bundle to reduce risk... It all flowed from the first step where they set risk factors for banks rather than letting banks set those factors.
 
Damocles said:
It isn't hard to walk in another's shoes. However, renting is just not that bad. You pretend that these people are going to immolate or something. They don't die because of a foreclosure. In fact, in less than 3 years their credit can be fixed if they are smart about it and they can buy an affordable home.

This isn't to save those people, it is welfare for the companies that would get caught holding the bad debt.
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Coporate welfare, yep.
 
Superfreak said:
I disagree. Because the same holds true for the lender. If the lender knowingly gives a loan to someone that cannot reasonably be expected to make the payments then the lender should not be loaning the money to the individual.

They are both to blame and THEY should pay.

IF there was fraud, then prosecute. Otherwise it is in the best long term interest of the country to avoid bailing out the lenders and borrowers.
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OK, I guess I can see reason in that.

There's no easy way to save this now, and the best thing to do would be to let it fail, change the legislation that caused the problem, and hope it doesn't happen again.
 
Superfreak said:
I disagree. Because the same holds true for the lender. If the lender knowingly gives a loan to someone that cannot reasonably be expected to make the payments then the lender should not be loaning the money to the individual.

They are both to blame and THEY should pay.

IF there was fraud, then prosecute. Otherwise it is in the best long term interest of the country to avoid bailing out the lenders and borrowers.
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My point is not that only the homeowners were responsible for the situation, but they did choose to enter the agreement.

If there were fraud by lenders on the level that Watermark described, that could and should be prosecuted under current regulations.
 
Watermark said:
Why do conservatives think that the human mind is like that of a dog?

If it was truly just the "stupid people" "being irresponsible", then we should see massive mortage failures all the time, to everyone, not ONLY WHENEVER WE DEREGULATE THE INDUSTRY. Use some fucking common sense. Cause and effect. One thing led to the other. There's a reason we had banned this kind of a loan before. If we keep on allowing it, there will always be massive mortage failures. THis isn't just stupid people, this is regular people. Everyday people, like you and me.
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It is NOT the TYPE of loan water.... the ARMs and interest only loans have been around a lot longer than the deregulation period.

You are correct that the dismantling of Glass Steagall led to this becoming as big of a problem as it is. It culminated when interest rates dropped to 40 year lows. This low interest rate environment is what allowed so many people to think they could afford a home.
 
Watermark said:
OK, I guess I can see reason in that.

There's no easy way to save this now, and the best thing to do would be to let it fail, change the legislation that caused the problem, and hope it doesn't happen again.
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you are correct. That is the best solution. Prosecute fraud where it occured. Let the rest take the hit. The main hit will come to the corporations who hold the bad debt. Not the homeowners. (yes, they will lose some too, but typically very few being foreclosed on have much if any equity left in their homes)
 
Epicurus said:
My point is not that only the homeowners were responsible for the situation, but they did choose to enter the agreement.

If there were fraud by lenders on the level that Watermark described, that could and should be prosecuted under current regulations.
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I agree that the responsibility lies at the feet of both lender and borrower. As Damo has pointed out, it also lies at the feet of the idiots in DC. There is plenty of blame to go around.
 
I'm actually trying to buy a house right now.

Wish I could get a mortgage I can't afford and have the gov't bail me out.

That would kick ass, even if I totally didn't deserve it.
 
Epicurus said:
I'm actually trying to buy a house right now.

Wish I could get a mortgage I can't afford and have the gov't bail me out.

That would kick ass, even if I totally didn't deserve it.
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The thing is, that these mortages were presented to the person as if they could afford it. They usually were middle class, or upper middle class, and well established, and just looking to buy a home, like most people in that area.
 
Yeah I'm in total agreement there.

Project Lifeline is a dog-and-pony show, after which the banks will still foreclose on the people after 30 days.

Like the homeowners hadn't thought of negotiating with the bank... WTF?
 
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