Fast Talk

The federal government is the mortgage crisis!

Home loan rates are the highest they've been in five years. Jobs are disappearing, we can expect another couple hundred thousand losses in the months to come. Fannie Mae and Freddie Mac may not remain standing without serious intervention, or infusion of funds. We're already in a crisis, what matters now is not sinking farther. Many blame the Fed for this crisis, and it's hard to disagree. The low interest rates beginning after the dotcom bubble burst, the complicated investments tied to mortgages, the speculative capital, wonton lending. I mean, the Fed really dropped the ball on this one. The gov'ment has hurriedly put together a relief package for Fannie and Freddie, with voting in the Senate to take place this week. This has unnerved investors to be sure, but the gov't has no choice but to intervene. If Fanny and Freddie can remain standing, the federal government may help to see us out of this mess. If not, recession here we come baby.

This is a question that's at least two years too late. The short answer is no, because the mortgage crisis is already upon us. With little in the way of regulatory oversight of the mortgage lenders who were giving money away like candy, to the i-bankers bundling these loans into investment pools, to the credit rating agencies rubber-stamping these poor quality pools with investment-grade ratings, this ship has already sailed. The questions to ask are: 1) "how messy is this going to be?", 2) "how is the federal government going to reform the oversight mess that created this quagmire?", and 3) "are they going to make a good-faith effort to prosecute the people who propagated this hysterical investment bubble upon US and international investors?". Too many people walked away from this mess laughing all the way to the bank and leaving American taxpayers to foot the bill for their malfeasance.

If it can't, we're going to have a LOT of people living under bushes - thanks to the irresponsible actions of people living under a Bush.... It seems like a black-humor joke that there's tons of deregulation and letting the children play however they will - until their play results in huge financial messes, at which time, all the deregulators run - not stroll - to get the federal government to take over and make everyone play nice in the sandbox...

So I don’t get it. Would someone please explain this to me in words we can all understand? No equations, no acronyms, no stats or predictions that are unsupported. Ground rules accepted? Here’s what I don’t understand: Where is the mortgage crisis? Why is it a crisis? Why is it a problem?
I grew up in CA. Over the past 9 years I’ve watched the prices of homes triple, quadruple, etc. I wasn’t able to buy 9 years ago (still in college), but now that I’m out and working, I find myself priced out of the market. Lots of my peers have purchased during the past couple years. I’ve chosen to sit back and wait. They signed up for loans that were 1%, 2%, etc. Lenders were clear to specify that they would vary after a certain date… Lenders may not have said it, but it’s in the loan documents my friends all signed.
So, here’s my confusion. I sat out because I didn’t feel I could afford the payments. Others felt differently. Fine. Now that people are defaulting on their loans because they aren’t able to pay for their homes, why is the government using tax money to “repurchase foreclosed homes” or help banks continue to offer low interest rates to keep these people in their homes? If you can’t afford a home, shouldn’t they do what I did? Rent. And the tax monies… since I’m a renter, I don’t have the option to write off my housing interest expenses, prop taxes, etc… I would venture to guess that I pay more tax than most home owners… isn’t it a bit unfair that renters, who pay more taxes than home owners, are not being helped (continued to be pushed out of the market) where home owners are reaping the benefits of renters tax monies?

no sharing ideas

Instead of writing off the losses, banks should let their employees "work-to-own" the foreclosed homes. Any takers?

I have a family member who works as an attorney for mortgage companies in DC. He/she tells me that the 'unpublished' news from the financial sector is very bleak and will remain so for several more years regardless of what policies are enacted to 'fix' this crisis. With the high level of fraud taking place during the happy hour of deregulation, things won't change for the better until it gets too painful for us not to do the right thing. [repeat theme for environment, disaster responses, energy policy, etc...] Hopefully by then, we will have people in government more willing to make the better (more representative) choices for the people of this nation.

Pickens is right about wind energy and congress. But he is self-serving all the way. He will have no wind turbines on his ranch because they are ugly! And folks in the Panhandle do not want water pumped from the Panhandle of Texas to Dallas. Pickens plans to use the transmission right of way to build a water pipeline to Dallas.

No. The fed should stay clear away from this. Why should the fed (reality check: ME, my taxes and money coming from me) bail out people who KNEW what they were getting into.

If you disagree, then are you implying that people are stupid? People dont KNOW that variable means VARIABLE. It means it will change. Not CAN change but WILL change.

Aside from MAYBE 1/10th of 1% of the lenders out there who were hacks and took advantage of people, the rest of these people KNEW what they were getting into. They saw visions of grandeur and huge homes and things they could NEVER probably afford in this lifetime. Now, they have a tiny mortgage payment and they lease (because why buy when you can throw it away) an SUV and have 3, 4, 5 kids when who told them to?

And you want ME to bail them out? Can you fill in the blanks here? F____ That. I think it will do these people very well to be thrown into the streets with their bratty kids and all their toys and learn a damn hard lesson. Maybe they can live out of their SUV until that is taken back.

Maybe what the government can do is go after idiots like Angelo Mozilo who most certainly bent the rules way too far and BROKE OUR ENTIRE SYSTEM. These people need to be rounded up and given to Jesse Jackson so he can castrate them. Interesting info:
http://en.wikipedia.org/wiki/Countrywide#.22Friends_of_Angelo.22_VIP_pro...

You do the math. Bail out these people or find the responsible parties and sue the crap out of them and give the proceeds to those they people they screwed. The rest, well, they deserve the lesson of being foreclosed.

Life IS NOT a television show as most of these people seem to think it is.