Subprime Suspects

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  • Posted By: Tgo01 @ 10/08/2008 12:01:38 PM

    Was the whole point of this article to make those who lived beyond their means feel better about themselves or something? It's the trend we as a society have been heading towards for decades now, the "It's not my fault!" mentality. People of all social and economic levels are to blame for this and it's stupid a newspaper article is endorsing the 'it's always someone else's fault' mentality.

    • Posted By: YLDROVER @ 10/08/2008 12:26:04 PM

      I completely agree with Tg001. The problem is the people who insisted on living outside their means, whether they are minorities or not and whether they earn $20K, $200K or $2M a year. We have turned into a culture of enjoy today and worry about tomorrow never. What does it say about us as a society that we need the government to "babysit" our financial decisions in order to prevent self-destruction?

  • Posted By: gtktkt @ 10/08/2008 12:23:24 PM

    I hear most people saying that the crisis we are in is because of poor and minorities. But, has anyone really looked at the people who were and are losing their houses? If you look at it, most of the people losing out are the middle class folks who had pretty good credit and decided that they would take advantage of the market and purchase 2-3 and even 4 houses. They hoped that they would be able to sell these houses for profit.

  • Posted By: scottjudy @ 10/08/2008 12:19:33 PM

    Blaming the poor or even the typical middle-class homebuyer for this debacle is a lie. These are people that buy homes and actually live in them, as opposed to greedy speculators and "flippers" who were trying to take advantage of the artificially inflated housing market that was created by greedy financial managers and a lack of government oversight. I know a lot of people who saw housing costs grow to a point where they believed that if they didn't extend themselves now and buy, that they would never be able to achieve the American dream of owning their own home. They weren't buying gaudy McMansions or Park Avenue penthouses -- they were buying typical suburban homes that had inflated to prices that were ridiculous. To blame average people pursuing the American dream for this is akin to fraud. Our lawmakers, government overseers, and the powerful financial leaders who's greed knows no end are the people who are responsible for this, and the worst part is that they are smart enough to know exactly where this was going. Shame on all of you...

    • Posted By: Ohboy1 @ 10/08/2008 12:22:46 PM

      "they were buying typical suburban homes that had inflated to prices that were ridiculous." All the more reason not to buy!!!

  • Posted By: Le Cycliste @ 10/08/2008 12:21:15 PM

    Daniel wrote:
    "Let me get this straight. Investment banks and insurance companies run by centimillionaires blow up, and it's the fault of Jimmy Carter, Bill Clinton, and poor minorities?"
    You just now figuring out the main GOP Modus Operandi, Sparky? EVERYTHING is always Bill Clinton's fault.wonder how hard Krauthammer would be on these poor boro



    EVERYTHING

  • Posted By: LinuxLars @ 10/08/2008 12:21:01 PM

    Definitely the mortgage companies share most of the burden here. They are, after all, running a business, and making "sound" business decisions. Otherwise, I think I'll ask for 20 million - that should do just fine in Costa Rico.

  • Posted By: A New York fan @ 10/08/2008 12:18:57 PM

    Eagle575 that also applies to a lot of people who bought homes over their heads they were going to find somebody to finance them if the loans were available.

  • Posted By: tbspirit @ 10/08/2008 12:18:12 PM

    Look, both CEO's and some "poor" are to blame. I saw many sob stories about these "poor" people loosing their homes. Yet when the stories continue they talk about the income of these people and the cost of their home. All of the stories I saw were of people making a quarter of what I make yet there homes were 3x the cost of mine---often more than I could afford. I saved and saved and calculated and calculated to make sure I could live with the payment. I also chose to borrow less than what I was able. The crooked CEOs made money from the greedy borrowers who dicided to live way above their means. In the case of the adjustable arms, this should have been a monthly review by the borrower so a lock in rate could have been refinanced.

  • Posted By: mdvulpio.rtmtg@juno.com @ 10/08/2008 12:18:03 PM

    This article lumps Fannie and Freddie with subprime lenders. The subprime guys had a choice about lending to the credit and income impaired but Fannie and Freddie were FORCED by Congress to do so. Their portfolio was, at worse, slighltly worse than prime (ALT-A loans) but the mark to market rule turned it toxic. Obviously the writer knows nothing about the mortgage market just like the windbags in Congress.

  • Posted By: Iakavous @ 10/08/2008 12:14:22 PM

    Bravo!! What an outstanding article!! The notion that poor minorities have buying power that totals 3 trillion dollars (the combined assets of Freddie and Fannie) is absolutely garbage.....compare 3 trillion dollars of 13% of the population of the US with what the GDP is for the US. Yeah you guessed, it doesn't pan out. Three trillion dollars is larger than the GDP of Germany which has one of the largest economies in Europe. themeamess is ca

  • Posted By: Iakavous @ 10/08/2008 12:10:50 PM

    Bravo!! What an outstanding article!! The notion that poor minorities have buying power that totals 3 trillion dollars (the combined assets of Freddie and Fannie) is absolutely garbage.....compare 3 trillion dollars of 13% of the population of the US with what the GDP is for the US. Yeah you guessed, it doesn't pan out. Three trillion dollars is larger than the GDP of Germany which has one of the largest economies in Europe. This meamess is ca

  • Posted By: zen16 @ 10/08/2008 11:33:36 AM

    The credit crisis is the fault of both bad business decisions AND of homeowners (who are clearly not limited to poor minorities, but include anyone who borrowed above their means, rich and poor.) I blame the overwhelming attitude of irresponsibility in this country for the mess we're in: People bought homes that they couldn't afford and now blame foreclosures on the government and banks (as if anyone MADE these people buy their homes); and the banks are too irresponsible to accept their bad business decisions and instead us hardworking taxpayers are forced to bail them out to the tune of $700+ billion.
    The overwhelming majority of my family and friends were smart enough NOT go out and buy a home with no money down/adjustable interest rates/mortgage payments beyond their means; so why should we be all up-in-arms, fighting to "keep people in their homes" when those people were obviously too stupid/ignorant/irresponsible to live within their means and make smart personal finance decisions in the first place. We'd probably all like to go out and buy that 'dream' house and not have to put any money down,, but it's unfair for some people to do that and now the rest of us are paying for it.
    And while I'm not a Republican (and I'm sure not a Democrat), I think it's unfair for the author of this article to paint Republicans as racists, when I haven't heard a single person blame the credit crisis on the color of anyone's skin.

    • Posted By: Boulder Sue @ 10/08/2008 12:09:09 PM

      My Dad is the retired president of a small savings and loan in a small town in Ohio. It has existed snce well before the Depression and has had precisely three presidents in all that time, my Dad being the second. I am largely operating on what he tells me from his own experience, the night classes he started taking as soon as he was offered the job (he previously owned his own drug store, complete with an old fashioned soda fountain wher I began work as soon as I was old enough) until the big chains (rexall was the first) came in and drove him out of business since they were able to sell for less than he could buy products. He this was in the late fifties and early sixties. He is extremely proud of the fact that during his tenure at the savings an loan, ther was only one foreclosure, and that was because someone repeatedly refused to even come in to talk to my Dad about why he was having difficulty paying his mortgage, after a year of my Dad's attempts to get him to do so. He frequently spoke up for lendees having a bad time to the board of the s&l and never lost a dime because he was always ready to give someone a fair chance at making good. Also that s& l made it through the depression based on the same philosophy: mutual trust. He is a Goldwater Republican, and I was a Goldwater Girl. and he hasn;\' voted for a Dem since FDR. I am now an Obama supporter, and srangely, my Dad and I, though we generally avoid politics in conversation, agree a lot on some of the stuff FDR did. By the way, our was a farm town/ bedroom community for wright Patterson AFB. There were lots of Latinos, mostly Mexicans, around to work the farms who borrowed for cars, babies and sometimes houses. We also had plenty of Air Force short term residents who bought and sold as fas as they were tranferred, and plenty of farmers who needed to make short term loans to get the crops planted, harvested, pay back their loans and live on the rest. I t wasn't a very stable suburban market. What my Dad found was that the vast majority of borrowers wanted to do the right thin, and that in difficult times, things could usually be worked out. Just a little maggot ...

  • Posted By: ploughman @ 10/08/2008 12:07:43 PM

    Good article. Republicans are trying to play off peoples' gullibility by blaming minorities and poor people who got in over their head. The only reason it might work is because it plays to prejudices and is a simpler explanation than what really happened. As the article points out, how many people buying pricey properties in forclosure capitals like Miami, Las Vegas and L.A. were minorities? How many "flippers" were? (Or, for that matter, how many flippers were NOT white males?) It's also hard for the average person to understand hoe Lehman or Bear Stearns were different from regular banks, but trying to blame presidents Carter or Clinton seems ridiculous.

  • Posted By: john9652 @ 10/08/2008 12:05:25 PM

    This makes sense. In my community, flipping is (was) huge. Contractors buying a house a week. They are now stuck with a huge inventory of empty houses. People I know, do whatever they have to do, to keep their homes. Mortgage 1st, groceries 2nd. On my road, there are 33 houses for sale. I'd say 70 percent are flips.

  • Posted By: A New York fan @ 10/08/2008 12:04:07 PM

    veer5 the programs were the programs if Fannie and Freddie didn't allow everyone to benefit regardless of income a lot of this could have been contained but the fact is if you create rules to benefit low income families you can't not allow others to qualify. The end result still is the government allowed the rules to become lax and never set up any oversight.

  • Posted By: Scott42 @ 10/08/2008 10:54:41 AM

    this aricile mixes fact and fiction and tries to make the fiction fact. I am a senior loan officer for a highly regulated mainstream bank. There was tremendous pressure on us to make loans, not by the management of my bank, but by the very groups you defened in your article. I had to preapprove people who did not have 20% to put donw on a house and had modest incomes. This was not a black or whte issue. Most of the loans I made were to white people (I am African American) and msot of the preapproval for amounts that they could barely make the payments on. I wnet out fo my way to explain the details fo the loan and for those that accepted an ARM type product, I went to great lenghts to help them understand it, and in some cases begged them not to do it. This is a personal responsiblity problem with the government being the chief enabler. the last thing my bank wnated is for someone to play the race card or call our bank racist for not reasonably offering loans to all people, not jsut black and hispanic people. In my community, 60% of the loans in forclosure are the mniority neighborhoods followed by 20% in new development in which younger white couples pruchsed over their heads. 5% were those fools who thought that they could flip, and the final 5% were part fo the normal business and anticipated defaults. So to make a point, 60% of the laons in my metro are of 1.1 million people were the poorest group if we rank them by average annual income. many of the 60% in the minority are should not have been givne a loan. Most of the white young couples who purchased at max approval, should not have received a loan. I mke over 250K a year. I was approved for 750K loan. I purchased a house for $197 because that was what I could afford. I never forced anyone to take a loan and did not beg people to take them. Most bankers and lenders that I know feel the same way I do

    • Posted By: tbetz @ 10/08/2008 12:01:37 PM

      Responsible bankers like you are not the problem. The problem was the fly-by-night mortgage brokers who pushed bad mortgages, even filling out the applications themselves with phony information, and then sold them off bundled into securities, collecting the money and washing their hands of them afterwards.

      This activity has been well-documented at companies like Countrywide, and nobody is paying the price for it.

      These fraud artists are the true criminals in this story.

    • Posted By: Tgo01 @ 10/08/2008 11:19:49 AM

      Sense, facts and reasoning have no place in a serious discussion, sorry.

  • Posted By: A New York fan @ 10/08/2008 12:01:02 PM

    habitforming if we reject credit completely I am afraid to say we will all be out of work, thanks to manufacturing going overseas we have become an economy that survives because of credit. Without it there will be very little anyone will be able to buy and that will not solve the problem.

  • Posted By: john9652 @ 10/08/2008 12:01:00 PM

    this is the simplest explanation I have heard. Mostly what I see in my area, are the flippers, that are in trouble. Most people will do anything to not lose their homes. Mortgage 1st, groceries 2nd.

  • Posted By: AmericanMan63 @ 10/08/2008 11:23:07 AM

    wow... Mr. Gross- horrible article. A little bias maybe?

    • Posted By: NJ to Miami @ 10/08/2008 11:59:26 AM

      I agree, article is useless. Contains few facts. Where are the statistics, percentages, numbers so I can formulate my own opinion.

  • Posted By: A New York fan @ 10/08/2008 11:58:43 AM

    seatown2008 you really sound like you don't fully understand the problem, do some reading first and learn then join the party


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