Whose Fault Is This?

occums razor's says it's the fault of the FEDERAL RESERVE

any naysayers are welcome. just remember who gives credit to banks to loan out. remember who slashed interest rates to 1% in 2003. just remember who endoresed the villified neg-am, int-only, arm.

like i say. occums razor says it was the fed, and you idiots want them to bail everyone out. how is that even logical. the creators of the problem are the ones that people look to for a fix. no criminal charges will come of this. wall street turned your home into a cash stream for investors that live in china, hooray for financial engineering/inovation. you turned my home into a piece of paper, tradable to the greediest bidder.

I feel for Seay, but she will experience, first hand, the exact lack of sympathy that employees of WorldCom and Enron felt during their scandals. The media and the public could care less for the white collar employee that pushes paper for these companies, never having a say in what caused the scandal, but they will forever be branded as crooks by association. I know this from personal experience.

It's a shame that the media and homeowners themselves all collectively point the finger of blame at lenders and mortgage brokers. Yes there are some dishonest people in the industry, as in all industries, however most are honest and did what their clients asked. The blame is more so everyone's fault equally ; from the homeowners who either mis managed their debt or used their homes as atms for cash

I am a mortgage banker and my main job is determine the fair value of the loans that banks and mortgage companies carry on their balance sheet. We warned several companies to stay away from purchasing those risky loans from mortgage brokers. We wondered why UBS, Merrill Lynch, JP Morgan and other wallstreet firms encourages the likes of Countrywide to originate those loans. We understood the risks involved with those loans and I believe that greed and quick profits for wall streets firms made this mess.

It is so sad and disgusting to keep reading comments where the 'buyer' feels taken. No one forced you to sign loan documents or overextend yourself. The society we live in is too busy trying to keep up with the "Joneses" that they never realize that just because you CAN, doesn't always mean you SHOULD. I have seen many of my relatives go through foreclosures and I dont feel a bit sorry for them. I wondered in the beginning how they got a house in the first place. One of my relatives was straight out of Chapter 13 bankruptcy. Couldn't even pay his bills on time, but because he could get it, went and got a home. Oh yeah, his employment was seasonal too. I, too, could have qualified for all of these loans, but looking at the bigger picture, I knew it would be the WORST decision I could ever make. Unless you have CONSISTENT high income and a very secure job, ARM are not for you. Find a fixed and if you can't qualify...it's not your time. Mortgage lenders did not seek out these buyers...the buyers went and sought out what they could get. Deal with the repercussions of your greedy actions. You knew it wasnt your time, but because you wanted to be like the rest of the folks who owned houses...you took a huge gamble...and LOST.

Mortgage brokers milked billions and billions of dollars from what will end up being taxpayer pockets (who will end up holding the burden of paying the eventual bailout) for basically doing nothing. They took a few calls a day from people who should not have been buying homes, filled out a few forms, told a few lies and most used unethical practices to close deals. Even the laziest of mortgage brokers were making 100k+ a year with many making 250k+. I have been watching these people jumping ship on the mortgage industry and taking sales jobs at my company (business to business sales) over the past year and 1 person has stayed out of about 50 or so because they don't want to work, they are too used to the pretty much free 100k+ a year they made while handing out houses to people who should not have been owning houses in the first place.

I agree with the sentiment that there were/still are predatory lending practices. I.E. Negative Amortization loans (which I have never written). However, there are plenty of people who took these loans, even though they had been fully educated on the in's and out's of the terms because they had no other choice. They had 2 options, file bankruptcy on their credit card debt or refinance and save a ton of money on a monthly basis. What would you do? These are the people who are now crying about their situation. I wonder if, JUST MAYBE, the $75,000.00 in credit card debt was the catalyst for them needing these so-called, predatory loans in the first place. They're lucky they ever had the opportunity to own a home with their spending habits and questionable payment histories. These lenders gave them a chance to change their habits and own a piece of the american dream. Just like every other aspect of their financial life, they blew it, and it's still everyone else's fault. If these "predatory loans" hadn't bailed you out, this article would be discussing the high interest rates and unfair practices of the credit card industry, since naturally, it's never your fault.

Not all loan officers, mortgage brokers or any one else in the industry are crooks but yes they are out there. Yes there should be blame placed on those who took advantage of the people trying to get a loan and weren't educated on the loan they were getting however, it is not just the people in the industry to blame. There should be some blame placed on those who signed thier names on those notes, yes I mean the borrowers. If you went to buy a car are you going to sign without understanding the terms of your loan? I don't think so... Granted it isn't fully the same as buying a home but you are giving it back to the bank the same as a house. I find it hard to believe that people with adjustable rates had no idea they were going to adjust causing the payments to inflate. So yes people in the industry who took advantage and did a poor job of educating their clients should be blamed but not 100% - The clients who signed the notes should be partially blamed...

Not all loan officers, mortgage brokers or any one else in the industry are crooks but yes they are out there. Yes there should be blame placed on those who took advantage of the people trying to get a loan and weren't educated on the loan they were getting however, it is not just the people in the industry to blame. There should be some blame placed on those who signed thier names on those notes, yes I mean the borrowers. If you went to buy a car are you going to sign without understanding the terms of your loan? I don't think so... Granted it isn't fully the same as buying a home but you are giving it back the same as a house. I find it hard to believe that people with adjustable rates had no idea they were going to adjust causing the payments to inflate. So yes people in the industry who took advantage and did a poor job of educating their clients should be blamed but not 100% - The clients who signed the notes should be partially blamed.

Buyers: you bought houses you COULDN'T afford. It doesn't take a brain surgeon, a mortgage expert or an attorney to figure that out. Banks: you made loans to people who couldn't afford the houses they were living in, and/or, had bad credit. Bad credit means there's a high risk of the borrower not paying. You're both to blame and now we will all pay. Next time use your head!

This article seems to make it personal. I understand why the writer would do this, because blaming the industry doesn't make sense without a story. However, I think the focus should shift to lending practices, not individuals. By underwriting both Jumbo and subprime mortgages, the mortgage industry produced an unsustainable shift in the demand curve for houses. This competition to make sure no application went un-underwritten was the pressure that produced the newest version of irrational exuberance. Morgage industry practice changed fundamentally from bygone years when bankers were more frugal about how much and for whom they wrote loans. Individual lenders are not to blame, but the mortgage system and governments role in the mortgage industry certainly are to blame. I hope we create new regulatory laws in the vein of those laws that followed the stock market crash and great depression. With new laws in place, we may be able to figure out who is real estate's version of Milliken, Stewart, Lay, and Ebbers. As it now stands, individual mortgage lenders were just playing fair in an unregulated game.

reading this article was a total waste of time, may I please have those two minutes of my life returned? ? ? 37Mil for driving your company into the ground? man, how-do-they-do-it?!?!?

It's kind of hard for me to sympathize with poor Ms. Seay. It really must be hard when you have to pull your daughters out of ballet and horseback riding. Try pulling your kids out of your home because of predatory lenders and see how you feel. Yes, you should read the fine print on all documentation you put your name on, however, these lenders created an environment that led to this mess and all for the love of the dollar, not their neighbor.

Wall street is to blame. They asked for the products for them to profit on. They rated sub-prime loans as AAA for each other so as to increase profits. Now they are losing billions and we are paying for it with tighter credit. After losing billions, they still kicked out millions in bonuses to each other while laying off the workers ( with out severance packages ) that they help make them billions.

Obviously newsweek has contributers from the National Association of Real Estate Agents. They are the ones who control the buyers, the seller and everything else. They guard all the doors, and hold all the keys. They also make 3 to 6% commission. They are the ones who flooded the market with homes for sale, and thus are driving down prices as they cut and undercut each other to make a sale. Newsweek knows all this, but says nothing about it.

Let's look at this mortgage mess. Do the research and this will be proven correct after you do a little pondering. Way back when in the 90's and earlier...America knew one had to have good credit, a job, a fair down payment and documentation to back all this up. But...certain segments of American society traditionally and historically failed to pay their bills, save money and didn't care about credit scores. Solution to their problem...class action lawsuits against mortgage companies to lower standards for those that couldn't even qualify for a secured Providian bank card. THese people had FICO scores well below 600 or even 500 yet they cornered the mortgage industry into giving these groups a a mortgage to increase percentages of "Disadvantaged" home owners and to quell any suits aginst red lining. To cover the risk the lenders were forced into, they tried to cover their risk by charging higher interest and ARMS, etc. A good business practice becasue the risk was great that these people would not pay their mortgages...can't pay off a credit card or light bill...not going to pay a mortgage. So now the mortgage industry is the bad guy because thay tried to increase diversification in the homeowner pool. Any first year business student could have seen this one coming. THese people defaulted and now...get this...various cities like Baltimore, MD are suing mortage companies for a new thing called "Reverse Redlining". This is so called setting up buyers in known minority areas with abusive loans. If people would just work, pay bills and build credit like the rest of the nation, then this would not have happened. THis goes for ALL races and groups. Many banks and mortgage lenders stuck with the good business practices, payed the class action fines and still made obscene profits by using the fundamentals. So who is to blame??? The individual idiot that can't pay bills and can't read past the 7th grade level to look over a loan package.

Let's look at this mortgage mess. Do the research and this will be proven correct after you do a little pondering. Way back when in the 90's and earlier...America knew one had to have good credit, a job, a fair down payment and documentation to back all this up. But...certain segments of American society traditionally and historically failed to pay their bills, save money and didn't care about credit scores. Solution to their problem...class action lawsuits against mortgage companies to lower standards for those that couldn't even qualify for a secured Providian bank card. THese people had FICO scores well below 600 or even 500 yet they cornered the mortgage industry into giving these groups a a mortgage to increase percentages of "Disadvantaged" home owners and to quell any suits aginst red lining. To cover the risk the lenders were forced into, they tried to cover their risk by charging higher interest and ARMS, etc. A good business practice becasue the risk was great that these people would not pay their mortgages...can't pay off a credit card or light bill...not going to pay a mortgage. So now the mortgage industry is the bad guy because thay tried to increase diversification in the homeowner pool. Any first year business student could have seen this one coming. THese people defaulted and now...get this...various cities like Baltimore, MD are suing mortage companies for a new thing called "Reverse Redlining". This is so called setting up buyers in known minority areas with abusive loans. If people would just work, pay bills and build credit like the rest of the nation, then this would not have happened. THis goes for ALL races and groups. Many banks and mortgage lenders stuck with the good business practices, payed the class action fines and still made obscene profits by using the fundamentals. So who is to blame??? The individual idiot that can't pay bills and can't read past the 7th grade level to look over a loan package.