Prime not Subprime
Posted By: sm on 2009-02-09
In Reply to: You don't do your argument any good - sm
Check out the mortgage failures.
Tell me which failed more, prime or subprime
Tell me what is the rate of failures under the CRA or even Bush's ADDI (which i attack alll the time)
Once again, REALITY AND THE DATA doesn't fit ya'lls claims.
Basically what happened was.. we reformed bankruptcy laws.. so that people who ran into dire straights could not restructure.
We packaged the loans into commodity derivatives. These are sorta mirror bets on the loans. Sorta..as the same loan will be sold many times in many derivative packages.. that's why the housing derivatives are worth more than all the real estate in the US. Derivatives are actually not that bad.. when a market is stable and only has to deal with natural forces. The housing market was bubbled.. partially due to low interest rates that encouraged everyone to buy, even the rich, and partially due to the CRA and the ADDI.. which did add customers to the market (helping form the bubble was the extent the CRA and the ADDI had in this mess)
All it took was a few failures to pop the bubble..and make real estate prices drop,. and mind you, it was mainly prime loans (READ not loans given to poor people and not loans under the CRA) that failed. The derivative market.,.which like I said, is really mirrors of the same loans.. cause the defaults to explode with ten times the ferocity, because one loan could effect the price of dozens of derivatives.
Really the poor and even irresponsible people .. simply did not have the economic ability to cause this mess. Pool all their money together and waste it on hookers.. it would have zero effect without help from the rich elites and their magnifying packaged derivatives.
THE CRA and ADDI both had stricter requirements than loans you got from normal banks.. both required income data.. where many prime loans did not.. they also greatly limited you on how much home you could purchase..whereas private banks did not care if you tried to buy something you could not afford.
Don't believe me?.. Look in the phone book.. call your own housing authority - you can get a loan for 106% the purchase price of a home even today.. if you're poor enough.
Ask to hear the red tape and hoops you must go through.. Heck, it is probably easier to just get a real job and earn real money than go through the FHA.
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The subprime mess sm and iraq too
Really started about 5 years ago when the mortgage brokers were given money incentives to sign on subprime even to people who qualified for conventional loans. They fraudulently did not offer the conventional loans to people who didn't even need subprime. It was all about the commissions. And your precious GW is the one who kicked off the loans with NO DOWN PAYMENT...!!! He saw this mess coming and he figured SS dollars going into wall st, which he TRIED TO DO in 2005 but got voted down... he figured our SS money would bail out Wall St.
Yes, so I do blame him. I also blame him for pretending this Iraq war was for our security when it was about oil and cheney getting richer and oil men getting richer. $350 million a day and thousands of young people's lives lost. For what? He pretended there were WMD which there were not. He pretended it was related to 911, which it was not. Bunch of dips following him, waving a flag, when he has dragged our beautiful country way down.
Regular people with a subprime mtg
We have owned 2 homes in our married life...never missed a payment for 25 years, not even one day late. I was MTSO of my own service, and suddenly the hospitals were taking longer and longer to pay my invoices. I had 8 subs working for me who I continued to pay before I paid myself. Then I had to have emergency surgery which took a while to recover from so I had to give up my business. Then I went to work for a local service, who did not pay, even while she was building a 3000 sq foot $300,000 house. In the meantime my son was a senior who wanted to go to a private college and his scholarships did not cover everything. We had used our savings so pay our bills so refinanced our house. Our credit rating had gone down some due to being late on credit cards (but never on mtg) so our rate was higher but we were supposed to get enough money to pay off all our bills including car payment but we get there and oops interest rate is higher and not enough money to pay off all our bills. We should have walked away but what were we going to do our son was already at the college and we had no other way to pay for it. Got another job, oh they didn't have enough work, picked up part time work job, they lost the account and before you ask, I looked for work outside this field but could not find anything more than $10/hour even with my skills (Exec secretary at that fortune 500 company and all my transcription skills and customer service skills) so we ended up having to file Chapter 13 bankruptcy. We pay our mtg but if I have 1 bad month (and you know how this business is) we are in danger of losing our house all over again. We always tried to do what is right and pay our bills...we did not get more house than we could afford but when you lose your job (not once but 3 times), then in our industry the hospital personnel thinking because you work at home you don't need the money and don't pay you for weeks and weeks, have to have major surgery, etc. things just snowball out of control. Oh last year I finally did get a job outside this field making pretty good money a year managing a multiuse building with arts and crafts but after less than a year when the owners weren't making a million dollars a month they lost interest and closed it. Believe me my husband and I never thought we'd be the ones to be in this mess, not in a million years. Just thought I'd let you know that not everybody in this mess was trying to get more house than they could afford or pull one over on anyone, things just snowballed.
And you are a prime example of the dem's overwhelming IGNORANCE!
XX
Ageed. Your post is a prime example.
x
She just wasn't ready for prime time.
Seriously.
GMAC Resumes Sub-Prime Loans In Order To Sell Cars
So, let's see. I know that I have been known to lapse into a coma from time to time, but haven't we been here before - making subprime loans in order to stimulate sales and to hell with what happens next?
Someone correct me if I'm wrong, please, but I'm having such a strange sense of deja vu here.
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