Current banking crisis

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sylvan -> Current banking crisis (7/15/2008 6:17:21 PM)
I was glad to see an institution like IndyMac go down, but I worry about their customers. This reminds me a lot of the S&L scanal back in the late 80's. http://rationalrevolution.net/war/bush_family_and_the_s.htm

HighPlainsDrifter -> RE: Current banking crisis (7/15/2008 6:55:31 PM)
List out the other institutions you want closed up, send it to Senator Chuck Schumer and he can go to work on creating a crisis/run on another one.

sylvan -> RE: Current banking crisis (7/15/2008 11:27:28 PM)
Chuck didn't create anything. Haaaaa, that's funny - funny how corruption, scandal, mismanagement, and deception abounds - yet, ONE PERSON mentions it and everyone is upset at him. Haaa. I only like it because it exposes the corruption. It is we the taxpayers that have to bail the scam artists out...just like S&L (yet another Bush-Venture). Ahhhh, America is slipping into the abyss - the sad part is, Americans are so divided and partisan, they can't see the robbery.

Sophie11 -> RE: Current banking crisis (7/16/2008 8:32:02 AM)
quote: ORIGINAL: sylvan Chuck didn't create anything. Haaaaa, that's funny - funny how corruption, scandal, mismanagement, and deception abounds - yet, ONE PERSON mentions it and everyone is upset at him. Haaa. I only like it because it exposes the corruption. It is we the taxpayers that have to bail the scam artists out...just like S&L (yet another Bush-Venture). Ahhhh, America is slipping into the abyss - the sad part is, Americans are so divided and partisan, they can't see the robbery. There is corruption everywhere, sad to say. I would not however go around hoping for a disaster and "liking it" just because it exposes the corruption to those who have their head in the sand. And based on your comments, I would guess that you also are a part of the partisanship and divisiveness.

Apparition -> RE: Current banking crisis (7/16/2008 10:26:51 AM)
Banks deserve to go under, especially the ones that consumed themselves to greed when it comes to their mortgage lending practices.

Leon_Figg3 -> RE: Current banking crisis (7/16/2008 11:58:37 AM)
sylvan. This thread and topic would tend to be more interesting and worthy of contributions if it wasn't so anti-Bush, and anti-Republican. We already have a one stop thread for comments about President Bush. We also have a sub-grouping for comments about conspiracies theories. If you want to talk about the banking crisis, let's talk about the banking crisis. Let's talk about how both parties are responsible for the situation we are in because it is the Congress who is suppose to be taking care of our money. It is the Congress who is suppose to be regulating and overseeing business in this country espeically those businesses that the government had a part in creating-Fannie Mae's, from what I understand. Let's talk about all the things Congress is suppose to be doing but can't seem to find the time or the guts to do because they are too busy doing all kinds of other things, and pushing all kinds of other pet projects on behave of their special interest groups. Let's talk about the state of our politial system and our news media that is making us so divided.

GroupW -> RE: Current banking crisis (7/16/2008 12:08:34 PM)
quote: ORIGINAL: HighPlainsDrifter List out the other institutions you want closed up, send it to Senator Chuck Schumer and he can go to work on creating a crisis/run on another one. It's possible NDE would have failed anyway, but that really was a bonehead thing for him to say. Nothing like being the one to add a nail to someone else's coffin.

bob97 -> RE: Current banking crisis (7/16/2008 1:37:52 PM)
It was Congress that made loans available to those who could not afford the homes that they purchased and it was banks in their ignorance’s who loaned the funds. It is Congress who has steadfastly refused to open up off shore drilling and drilling in other places that have places this country in a position to send $700 Billion each year into the hands of OPEC (a black hole) which has weakened our economic and the value of the dollar. It was not Bush or big oil, its government in general and it was done through stupidly and greed. These things for the most part didn’t just happen during the last 8 years; they occurred long before that, just as any solution will require several years to take effect. Once again people need to understand the facts and not be so quick to make rash judgments, which is what created these problems in the first place (government not thinking through the issues). Bob

relady -> RE: Current banking crisis (7/17/2008 1:05:06 AM)
quote: It was Congress that made loans available to those who could not afford the homes that they purchased and it was banks in their ignorance’s who loaned the funds. Banks did nothing in ignorance. They knew exactly what they were doing because they lobbied (and got) just about all regulatory oversight repealed so they could sell such predatory junk. Banks are in this up to their eyeballs and I have NO sympathy for them whatsoever. Regulations need to be replaced that will regulate the types of loans that can be offered. Option ARMS & interest only loans should be against the law because they are predatory in nature. Loan sharks would be proud.

rlj -> RE: Current banking crisis (7/17/2008 12:29:41 PM)
quote: Banks did nothing in ignorance. They knew exactly what they were doing because they lobbied (and got) just about all regulatory oversight repealed so they could sell such predatory junk. Banks are in this up to their eyeballs and I have NO sympathy for them whatsoever. Regulations need to be replaced that will regulate the types of loans that can be offered. Option ARMS & interest only loans should be against the law because they are predatory in nature. Loan sharks would be proud. I agree except for the part about the loan shark. Why keep loan sharking when it is illegal and you can change your name, do it legally, and have a majority of everyone on CW praise you for your capitalistic work ethic? Everyone let's high five and praise Michael Perry for all of that big money he earned and deserves. :D

relady -> RE: Current banking crisis (7/17/2008 2:58:44 PM)
quote: I agree except for the part about the loan shark. Why keep loan sharking when it is illegal and you can change your name, do it legally, and have a majority of everyone on CW praise you for your capitalistic work ethic? ha ha, lol, no kidding. Are there actually still loan sharks around? I'd go to one of them before I'd go for some of the "legal" loans being offered. Payday loans are just another offshoot of the same tree. Bad. Bad. Bad.

Sophie11 -> RE: Current banking crisis (7/18/2008 12:36:23 AM)
quote: ORIGINAL: relady quote: I agree except for the part about the loan shark. Why keep loan sharking when it is illegal and you can change your name, do it legally, and have a majority of everyone on CW praise you for your capitalistic work ethic? ha ha, lol, no kidding. Are there actually still loan sharks around? I'd go to one of them before I'd go for some of the "legal" loans being offered. Payday loans are just another offshoot of the same tree. Bad. Bad. Bad. Yes, see this is my problem. I know these loans are ridiculous, so do you, so do many others. So do many who took these loans. It was the homebuyers greed that got them into the situation. The banks had fault yes, but IMO it comes down to the responsibility of the buyer to know what they are buying.

GroupW -> RE: Current banking crisis (7/18/2008 12:45:56 AM)
quote: ORIGINAL: relady Regulations need to be replaced that will regulate the types of loans that can be offered. Option ARMS & interest only loans should be against the law because they are predatory in nature. Loan sharks would be proud. For the record, I am a senior manager in a firm that does the kind of structured finance deals the market is currently worried about. I price the loans that go into these deals (commercial, though, not residential) structure the securitizations, model it, and manage it. There is nothing intrinsically wrong with an interest only loan. I have one. I have one because my salary is small relative to my bonus. Having the interest only loan allows me to manage my expenses and keep them in line with the pattern of my income - I pay the interest most of the year and pay down principal aggressively when bonus time is near. In lean years, I pay little principal. Most years, I pay a lot of principal. It's a good product for me. Same with the option arms. I've had one of those as well. Now, we had the income to absorb changes in the rates as they occured, but the same principal applied - having the payment option allowed me to match the pattern of my expenses to the pattern of my income. Much like investment products - there are very few "bad" investment products. Not all products, however, are suitable to all investors. Some level of judgement is required on the part of the loan officer to market products that are suitable for each person's situation. Some level of judgement is required on the part of the borrower to know if a product may not be right for them. Both borrower and banker need to get their homework done. Neither can rely on the other one to do it for them. (End of rant. Y'all can carry on now.)

GroupW -> RE: Current banking crisis (7/18/2008 12:49:33 AM)
quote: ORIGINAL: relady Payday loans are just another offshoot of the same tree. Bad. Bad. Bad. They are a big ripoff. It's one reason the Fed is pushing banks to figure out how to offer some more effectively priced alternatives. There are a couple of credit unions on the west coast that have already figured it out and are currently out there trying to do business in that space. The problem is that the people who use those kinds of loan products typically don't have bank accounts and rely on firms like this for help. It's not an easy problem to fix, but at least someone is starting to look at it. That's a good thing.

Leon_Figg3 -> RE: Current banking crisis (7/18/2008 1:17:41 AM)
GroupW, Thank you for speaking from experience. I believe that in the rush to assigning blame people may very well be manipulated to assign blame to people and organizations caught in the middle. It is amasing that in this Information Age, information is so easily manipulated to mis-direct people's attention away from the real issues and people truely responsible.

GroupW -> RE: Current banking crisis (7/18/2008 2:02:08 AM)
quote: ORIGINAL: Leon_Figg3 GroupW, Thank you for speaking from experience. I believe that in the rush to assigning blame people may very well be manipulated to assign blame to people and organizations caught in the middle. It is amasing that in this Information Age, information is so easily manipulated to mis-direct people's attention away from the real issues and people truely responsible. The truth is that no one particular group is fully responsible. Everyone made mistakes. That's the thing about a crisis - it's the compounded effect of lots of little mistakes that end up creating one big problem. Breaking it down into who's to blame becomes very tough. Assigning blame, though isn't all that productive - like you say, it directs folks' attention away from what the real fixes should be.

relady -> RE: Current banking crisis (7/19/2008 3:18:52 AM)
quote: It was the homebuyers greed that got them into the situation. The banks had fault yes, but IMO it comes down to the responsibility of the buyer to know what they are buying. I disagree because most of these loans were not properly explained to the borrowers. And if you've ever read and of the promissory notes for these loans, the language is so confusing and is purposely that way. Banks and lenders have a responsibility to be honest and forthright with their clients ( or they should have) but they don't see it that way. Hopefully this will bring about some badly needed changes and reinstitute some regulation that is obviously also badly needed. GroupW, I do see your points and you make good ones. However, I would say that because of your line of work, you probably understand more about such products than the average consumer will ever know. I strongly feely that the lenders had, or should have had, a responsibility to better explain these loans before they were issued. As a Realtor who has had to work with LOTS of different banks, I can tell you that most loan officers really don't do a very good job of really making it clear what the pitfalls of such loans might be. I don't think that it is too much to expect that the average consumer be able to trust that their loan officer is being truthful with them. And if banks cannot be responsible enought to do that on their own....well, then I say using the force of law to make it so is a minimum of what should be done to remedy the situation for the future. I do know that when I started in real estate (2001) all these exotic loan products did not exist. They flourished during the following 2-4 years. I'm just wondering why they didn't exist before and if the lenders' ability to offer these types of loans coincides with some banking bill that loosened the rules even more.

Sophie11 -> RE: Current banking crisis (7/19/2008 8:23:17 AM)
quote: ORIGINAL: relady quote: It was the homebuyers greed that got them into the situation. The banks had fault yes, but IMO it comes down to the responsibility of the buyer to know what they are buying. I disagree because most of these loans were not properly explained to the borrowers. And if you've ever read and of the promissory notes for these loans, the language is so confusing and is purposely that way. Banks and lenders have a responsibility to be honest and forthright with their clients ( or they should have) but they don't see it that way. Hopefully this will bring about some badly needed changes and reinstitute some regulation that is obviously also badly needed. I agree that the lenders should explain in full detail exactly what the loan is and how it is to function, but at the same time what happened to the buyer reading before he signs? And so many people who bought houses that cost 5,6 or 7 times their annual income, they surely knew the payment was not going to be affordable. That's why many got into these loans, they knew the payment would jump but thought that in 3 or 5 years they would be more financially able to deal with such a payment. Then they weren't. That is of course not the case for everyone, I'm sure there are some folks who had no clue, but I find it hard to believe that is the majority.

rlj -> RE: Current banking crisis (7/19/2008 9:01:09 AM)
quote: Yes, see this is my problem. I know these loans are ridiculous, so do you, so do many others. So do many who took these loans. It was the homebuyers greed that got them into the situation. The banks had fault yes, but IMO it comes down to the responsibility of the buyer to know what they are buying. Many time the buyer does read. However I do find it absolutely hilarious that you are saying a bunch of college educated, salaried, with multi-million dollar ceo type banks got hoodwinked by a bunch of Joe six-packs. That's absurd. Anyone with common sense would know that those loans were a disaster waiting to happen ever since energy prices started to take off. The banks made the loans, no one put any guns to anyone's head. You can blame the homeowners for losing their homes but don't blame them for the collapse of the banks. If anything praise the Joe Six-Packs for electing the spineless whelps from Congress up to the President that are going to bail out the banks. Than you can lock up and throw away the key on everyone who so meanly took advantage of those poor poor banks! All of that college education, all of those years experience with loans, all of that infinite wisdom and a bunch of mean old Joe Six-Packs robbed them blind! /rant off Funny isn't it? Joe Six Pack 1 Rich, College Educated, Decades of Morgage Lending Experience Banks 0

Sophie11 -> RE: Current banking crisis (7/19/2008 9:13:41 AM)
quote: ORIGINAL: rlj quote: Yes, see this is my problem. I know these loans are ridiculous, so do you, so do many others. So do many who took these loans. It was the homebuyers greed that got them into the situation. The banks had fault yes, but IMO it comes down to the responsibility of the buyer to know what they are buying. Many time the buyer does read. However I do find it absolutely hilarious that you are saying a bunch of college educated, salaried, with multi-million dollar ceo type banks got hoodwinked by a bunch of Joe six-packs. That's absurd. Anyone with common sense would know that those loans were a disaster waiting to happen ever since energy prices started to take off. The banks made the loans, no one put any guns to anyone's head. You can blame the homeowners for losing their homes but don't blame them for the collapse of the banks. If anything praise the Joe Six-Packs for electing the spineless whelps from Congress up to the President that are going to bail out the banks. Than you can lock up and throw away the key on everyone who so meanly took advantage of those poor poor banks! All of that college education, all of those years experience with loans, all of that infinite wisdom and a bunch of mean old Joe Six-Packs robbed them blind! /rant off Funny isn't it? Joe Six Pack 1 Rich, College Educated, Decades of Morgage Lending Experience Banks 0 What on earth are you even talking about? When did I ever say it was the fault of homebuyers for the collapse of banks? You are the one that is being absurd. The people were stupid to take out loans they couldn't afford, but the banks were stupid to give them because they have more to lose in the long run if they give those type of loans to too many people. Blame for this situation falls in the laps of many, not just one part of it. However I never said it was the fault of the homebuyer for banking collapse nor did I say anything about them "hoodwinking" the banks. It seems you read about as well as those homebuyers, eh? [;)]

Peter_Gunn -> RE: Current banking crisis (7/19/2008 9:33:17 AM)
I believe both parties equally share the blame. And yes, the language is confusing, but that why you need an attorney if you're not confident in your understanding of "legaleese". For the consumers, it's just comes back to the need for immediate gratification. "I want what I want and I want it now." There is no such thing, anymore, as saving for a house, car or anything else. And no price is too high to meet that "give it to me now" mentality! As for the lending institutions, I think it was just a big, greedy gamble. They were playing the odds. They thought they could get enough money out of the consumer...and it would all be interest...then, when the consumer had to forclose, the bank would sell off the property and just start the cycle all over again...still making buckets of money off it. They did make a lot of money but never thought about the market falling apart. But the guys that got us here? Think "golden parachute". They're long gone, with money in hand. It's my opinion that the lending institutions and the average consumer deserve each other.

Sophie11 -> RE: Current banking crisis (7/19/2008 9:42:55 AM)
quote: ORIGINAL: Peter_Gunn It's my opinion that the lending institutions and the average consumer deserve each other. Quite right! [:D]

rlj -> RE: Current banking crisis (7/20/2008 9:19:31 AM)
I wouldn't even go so far as to say they deserve each other. Whatever the result the CEO's got their golden parachutes and we the people got the bill.

rlj -> RE: Current banking crisis (7/20/2008 12:53:40 PM)
quote: I believe both parties equally share the blame. And yes, the language is confusing, but that why you need an attorney if you're not confident in your understanding of "legaleese". As far as the situation of the banks- the banks made the loans. That's where the buck stops. No one forced, held guns to anyone's head or in anyway made the banks make those loans. The banks wanted to look good for the investor's and they did. Now we'll reap the fruit of bailing out the banks. Great system isn't it? I'm terribly sorry but the banks have no one to blame but themselves for what happened. As for those who lost their homes in the end they signed the dotted line. Although I think it's terrible this happened, the homeowners were the one's responsible for fulfilling their obligation.

Sophie11 -> RE: Current banking crisis (7/20/2008 4:53:01 PM)
quote: ORIGINAL: rlj quote: I believe both parties equally share the blame. And yes, the language is confusing, but that why you need an attorney if you're not confident in your understanding of "legaleese". As far as the situation of the banks- the banks made the loans. That's where the buck stops. No one forced, held guns to anyone's head or in anyway made the banks make those loans. The banks wanted to look good for the investor's and they did. Now we'll reap the fruit of bailing out the banks. Great system isn't it? I'm terribly sorry but the banks have no one to blame but themselves for what happened. I agree entirely. But if you are speaking of the homebuyers you can say the same as well. No one held a gun to their head and forced them into a risky loan either. So the blame as far as the folks losing homes is a mix of both. Anyway, I think it is ridiculous that the taxpayers are now going to be footing the bill for all of these stupid decisions. Unbelievable.

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