Posted on 09/14/2007 9:16:11 AM PDT by SirLinksalot
This article is kind of a dog’s breakfast.
Just a nation of victims, we are.
Even if you're illiterate and don't understand the meaning of the word "adjustible", all you have to remember is the folksy aphorism "If something seems too good to be true, it usually is."
Great idea. After all, they are guaranteed to be completely impartial and have absolutely no motivation to lie to get back at their former employers.
Let's face facts: plenty of people borrowed more money than they should have and plenty of banks lent unworthy creditors more money than they should have.
This isn't criminal activity - this is simply a large group of people getting carried away and making poor financial decisions.
You can stop reading right here.
L
Milken got in trouble for selling high yield bonds too profitably. I wish I was joking, but that is literally what happened. He sold bonds to buyers who were not forced to buy them and who freely agreed to pay the selling price.
Kozlowski stole money from the company of which he was CEO.
What Milken's shrewd trading and Kozlowski's theft have to to do with subprime mortgages, I have no idea.
I’m not up to speed on derivatives but understand they could present a serious problem in our financial system.
The suthor of this article has no idea what he's talking about. The first major mortgage bonds (collateralized mortgage obligations, or CMOs) were developed back in the 1980s to address a basic inefficiency in our nation's banking system -- i.e., the imbalance between banks in older regions like the Northeast and Rust Belt that had a lot of cash but were underwriting fewer mortgages and banks in fast-growing regions like the Southeast and West that had small cash reserves but a lot of demand for new mortgages.
A Real Estate expert explained this to me this way:
“Not too many years ago, if you borrowed money to buy a house or a car, you visited your local bank. Assuming you were approved, the money came from your bank and the follow-up (the “servicing”) was handled by that same bank. If you had a problem, you knew who you could speak with and where to find him or her. The system worked pretty well. But only greed could cause a seemingly good system to go awry. And the heart of all greediness is Wall Street, of course.
Realizing that these loans were a good investment for the banks, Wall Street decided to figure out how to take a piece of the pie.
Translation: this unnamed "real estate expert" is angry because real estate lending was once a largely-closed shop with little competition. He enjoyed having a near-monopoly in which customers had few choices in borrowing. He loved selling 15% mortgages back in the 1970s.
Then evil Wall Street types got involved, confused consumers with all these different options, and the fat mortgage margins he enjoyed fell as consumers were deceived into paying only 6 or 7 or 8% on their mortgage instead of twice as much.
I'm fully up to speed on them and know for a fact that they present no problems to our financial system whatsoever, and have actually been instrumental time and time again in solving many potential problems with our financial system.
My take is that this article would be about Free Silver or some other populist crap if published 100 years ago.
Is the author Danny Schechter your “News Dissector” from the old WBCN-FM In Boston, MA?
LOL! Very astute observation. You win the Henry George prize.
You both appear to know more in your gut than most people posting here on FR. Mortgage scams, mortgage servicing scams, and illegal foreclosures are all interlinked. Watch the great DVD “In Debt We Trust.” If you really want to learn something about the lending industry and credit card industry. Most people just want to stay blissfully ignorant.
A good post and a good tagline.
I was not in default and had all the documents to prove it. After one year of the mortgage company’s refusal to correct their accounting errors, I was forced to file a law suit to protect my home from an illegal foreclosure.
For the next seven (7) years (costing me more than $2 million in legal expenses and lost wages), I watched the court[s] repeatedly grant judgments in favor of the mortgage companies. These errant judgments were granted without either mortgage company presenting a scintilla of evidence to support their allegations and in stark contrast to my preponderance of evidence and material facts."
He spent $2 MILLION in legal fees? How much was his house worth? And if the courts truly ignored his mortgage payment receipts, he should have hired better lawyers. There's something more to this case than one man being abused by "the system."
Jim Sinclair of JSMineset has been ranting about these derivatives for some time now.
Most people should simply read before signing, and not borrow beyond their means. (My two cents worth.) Maybe they should start teaching basic finance in the public skrool system.
Great post. The packaging of mortgages has pushed borrowing costs down for borrowers, which is a good thing. Was subprime crap packaged and sold? Absolutely, but that doesn’t mean such packaging is inherently bad.
Reading columns like this just reinforces my opinion that most “journalists” can’t be trusted to either understand the issue they are writing about or to give an accurate assessment if they do understand.
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