Quote from jonbig04:
uhh no.
I'm in the real estate business and I was a mortgage broker and I can tell you right now what caused the housing bubble: Wall street. The lenders didn't care about the borrowers because the over leveraged secondary market was buying up everything in sight. 90% of the loans I funded were sold BEFORE WE EVEN CLOSED. More borrowers more buyers, more demand. Its not frickin rocket science. If you think it wasnt facilitated by lack of regulation you are simply an idiot.
Quote from jonbig04:
uhh no.
I'm in the real estate business and I was a mortgage broker and I can tell you right now what caused the housing bubble: Wall street. The lenders didn't care about the borrowers because the over leveraged secondary market was buying up everything in sight. 90% of the loans I funded were sold BEFORE WE EVEN CLOSED. More borrowers more buyers, more demand. Its not frickin rocket science. If you think it wasnt facilitated by lack of regulation you are simply an idiot.
Quote from cuz69:
And you know what, I DON'T GIVE A RATS ASS about regulation, you can't afford... YOU DON'T BUY... PERIOD!!!!!!!
lol oh YOU SHOULD BE IN CONGRESS. It's true though, a lot of buyers ARE at fault. A lot of them aren't, but I won't get into that. first of all "afford" is different for everybody. You may not mind if your mortgage payment takes up 50% of your monthly income, or you may want it to only be 10%. There is no black and white "afford" and "cannot afford". The calculation we used back in the day was Debt-to-income ratio. Usually lenders didn't want to the borrowers total monthly debts (including new house payments) to be more than 45%. some were more, some were less. Sometimes if the credit score was high enough, they didnt even look. My point is that sure you can blame the average joe's for playing their parts...but have you ever met an average joe? Most people can't explain to you what a bond is, let alone calculate their DTI's. Even if you want to blame them who cares! This crisis is affecting everybody, not just irresponsible borrowers.
Noone twisted the lenders arms to sell these properties. The ignorant buyers showed up!
Actually something did twist their arms..its called GREED. They made boatloads with these policies. How many people do you know that bought a house they couldnt afford? 1? 2? 0? How many people do you know who made a lot of money as a direct result of the secondary markets over leverage? 1? 2? 0? Now how many people do you know who have been negatively affected by this whole crisis? Everyone. Its the greed and yes the ignorance of few that got us into this mess. Since we can't regulate how smart you have to e to buy a house, I guess were going to have to stick to regulating large public companies whos bad fiscal policies can apparantly bring down our whole economy.
Unless you feel lenders went door to door trying to sell a fabulous deal.... Please!
Pretty much, yea. You really know nothing about how the mortgage market works. Ignorant borrowers don't pool together and say "pleassssse give us a loan". No. Lenders would send me (and thousands of other brokers and loan officers) flyers everyday (still do) about their new no doc, or no income-no asset loans and how they can do what other lenders can't. Every day.
Quote from canyonman00:
I would ask you just a general question. How many of the loans that you put through, shouldn't have gone through? And would the regulation that you speak of stopped you from submitting the packages?
Quote from jonbig04:
Quote from cuz69:
And you know what, I DON'T GIVE A RATS ASS about regulation, you can't afford... YOU DON'T BUY... PERIOD!!!!!!!
lol oh YOU SHOULD BE IN CONGRESS. It's true though, a lot of buyers ARE at fault. A lot of them aren't, but I won't get into that. first of all "afford" is different for everybody. You may not mind if your mortgage payment takes up 50% of your monthly income, or you may want it to only be 10%. There is no black and white "afford" and "cannot afford". The calculation we used back in the day was Debt-to-income ratio. Usually lenders didn't want to the borrowers total monthly debts (including new house payments) to be more than 45%. some were more, some were less. Sometimes if the credit score was high enough, they didnt even look. My point is that sure you can blame the average joe's for playing their parts...but have you ever met an average joe? Most people can't explain to you what a bond is, let alone calculate their DTI's. Even if you want to blame them who cares! This crisis is affecting everybody, not just irresponsible borrowers.
Noone twisted the lenders arms to sell these properties. The ignorant buyers showed up!
Actually something did twist their arms..its called GREED. They made boatloads with these policies. How many people do you know that bought a house they couldnt afford? 1? 2? 0? How many people do you know who made a lot of money as a direct result of the secondary markets over leverage? 1? 2? 0? Now how many people do you know who have been negatively affected by this whole crisis? Everyone. Its the greed and yes the ignorance of few that got us into this mess. Since we can't regulate how smart you have to e to buy a house, I guess were going to have to stick to regulating large public companies whos bad fiscal policies can apparantly bring down our whole economy.
Unless you feel lenders went door to door trying to sell a fabulous deal.... Please!
Pretty much, yea. You really know nothing about how the mortgage market works. Ignorant borrowers don't pool together and say "pleassssse give us a loan". No. Lenders would send me (and thousands of other brokers and loan officers) flyers everyday (still do) about their new no doc, or no income-no asset loans and how they can do what other lenders can't. Every day.
John, IMO you totally twisted what I was trying to point out.
Yes, I/we all get those flyers in the mail, BUT, it's up to the borrower to follow through on it.
If you are walking by a store with $5 in your pocket and the deli man is going to sell you a sandwhich for $3 thats normally priced at $6. Are you going to buy it because it is $3 cheaper. Or are you going to buy it because you are hungry?
I don't come from a family of traders and thats how I think you are looking at this. As a trader. And as traders we don't know what we will earn. It varies. It varies every day.
I grew up in a hard working, struggling household, and what I have, has been earned on my own.
That is why I can see it the other way, because I didn't forget where I came from. So the answer to your question about how many people that lived beyond their means, is zero.
Point is, if you are an average citicizen(which most are) and you know your monthly expenses = $5,000... you don't go and buy a house that will bring your expenses to $6,000. Or even worse, buy a house and not know what your expenses will be due to fluctuating interest rates. It's called "LIVING WITHIN YOUR MEANS".
And 1 more thing, when I bought my house in 99, the debt-income ratio was 33%, and I had excellent credit. So I don't know if things have changed regarding that.
Quote from cuz69:
John, IMO you totally twisted what I was trying to point out.
Sorry if I did.
Yes, I/we all get those flyers in the mail, BUT, it's up to the borrower to follow through on it.
If you are walking by a store with $5 in your pocket and the deli man is going to sell you a sandwhich for $3 thats normally priced at $6. Are you going to buy it because it is $3 cheaper. Or are you going to buy it because you are hungry?
True and I agree that the small percentage of borrowers have themselves to blame. However people will always be irresponsible. This thing could blow over and I wouldn't surprise me to see us in the same mess in 10 years all over again. The reason why I tend not to focus on the stupidity of those people is that its never ending and can never be controlled. We can't tell a person they can't ver extend themselves because usually their actions only hold consequences for themselves. Public companies, however, have the responsibility to shareholders and we CAN step in and tell them to keep there shit straight. Also, this meltdown isn't due to just sub prime loans or even mortgages or real estate. Its simply been caused by the excessive (and predictable) grred of wall street. Having debt to pay off debt only to buy more debt. Consider this: the credit-default swap )just another form of a debt derivative) is larger than that of the entire global economy. wtf?
I don't come from a family of traders and thats how I think you are looking at this. As a trader. And as traders we don't know what we will earn. It varies. It varies every day.
I grew up in a hard working, struggling household, and what I have, has been earned on my own.
That is why I can see it the other way, because I didn't forget where I came from. So the answer to your question about how many people that lived beyond their means, is zero.
Unfortunately, not everyone thinks that way. You think the borrowers were bad? These corporations were leveraged 50:1. Imagine someone walking into a bank and handing the teller 10,000 in cash for collateral and then asking for a cash loan for 500,000. Even the most stupid borrower isn't able to get himself into the kind of over leveraged pickle these large public companies have...and they had billions. The funny thing is, in my example at least we know the guy had 10,000. The assets of these companies aren't so easily valued so who knows what they have.
Point is, if you are an average citicizen(which most are) and you know your monthly expenses = $5,000... you don't go and buy a house that will bring your expenses to $6,000. Or even worse, buy a house and not know what your expenses will be due to fluctuating interest rates. It's called "LIVING WITHIN YOUR MEANS".
True, but all people are never going to be that sensible. We can't control them, but we can curb the large companies who are putting a gun in their hand and making huge profits in return.
Quote from jonbig04:
Quote from cuz69:
John, IMO you totally twisted what I was trying to point out.
Sorry if I did.
Yes, I/we all get those flyers in the mail, BUT, it's up to the borrower to follow through on it.
If you are walking by a store with $5 in your pocket and the deli man is going to sell you a sandwhich for $3 thats normally priced at $6. Are you going to buy it because it is $3 cheaper. Or are you going to buy it because you are hungry?
True and I agree that the small percentage of borrowers have themselves to blame. However people will always be irresponsible. This thing could blow over and I wouldn't surprise me to see us in the same mess in 10 years all over again. The reason why I tend not to focus on the stupidity of those people is that its never ending and can never be controlled. We can't tell a person they can't ver extend themselves because usually their actions only hold consequences for themselves. Public companies, however, have the responsibility to shareholders and we CAN step in and tell them to keep there shit straight. Also, this meltdown isn't due to just sub prime loans or even mortgages or real estate. Its simply been caused by the excessive (and predictable) grred of wall street. Having debt to pay off debt only to buy more debt. Consider this: the credit-default swap )just another form of a debt derivative) is larger than that of the entire global economy. wtf?
I don't come from a family of traders and thats how I think you are looking at this. As a trader. And as traders we don't know what we will earn. It varies. It varies every day.
I grew up in a hard working, struggling household, and what I have, has been earned on my own.
That is why I can see it the other way, because I didn't forget where I came from. So the answer to your question about how many people that lived beyond their means, is zero.
Unfortunately, not everyone thinks that way. You think the borrowers were bad? These corporations were leveraged 50:1. Imagine someone walking into a bank and handing the teller 10,000 in cash for collateral and then asking for a cash loan for 500,000. Even the most stupid borrower isn't able to get himself into the kind of over leveraged pickle these large public companies have...and they had billions. The funny thing is, in my example at least we know the guy had 10,000. The assets of these companies aren't so easily valued so who knows what they have.
Point is, if you are an average citicizen(which most are) and you know your monthly expenses = $5,000... you don't go and buy a house that will bring your expenses to $6,000. Or even worse, buy a house and not know what your expenses will be due to fluctuating interest rates. It's called "LIVING WITHIN YOUR MEANS".
True, but all people are never going to be that sensible. We can't control them, but we can curb the large companies who are putting a gun in their hand and making huge profits in return.
I understand your point and I agree, the companies were way over leveraged and not only us/wall st/the people, they didn't even know how far below water they were.
On the other point, I guess we will have to agree to disagree. I will always go back to the consumer, not the lender. People are irresponsiblie, but not all. And the ones who are, should suffer. It sucks, but it is what it is. That and the companies overleveraging had a coupling effect.