American Dream Rant.....

[riptides]

So, let me see....... Banks and Lenders raise rates, some lenders put people on the edge (stretch to get that dream!). Now a lot of people cannot make it, property taxes, insurance rates, adjustable rates, so foreclosure rates are rocketing.

Are the banks and lenders greedy? They are bringing this in themselves.
Unreal.

-Mike Z.

 

[MikePA]

Are the banks and lenders greedy?

At least as greedy as the people taking out the loans. Just because lenders offer easy money, doesn't obviate the need for borrowers to assume personal responsibility for how much debt they get into.

 

[cp1969]

It is because all these bankers lack imagination and the guts to invest in other areas besides houses. They are all tripping over themselves to get into the mortgage business...I hear advertisements that they will loan you 125% of appraised value on your house. Same way with cars...you can walk into a dealership and buy a new car today with $0 down. How looney is that?

But go talk to them about starting a business or buying some vacant land if you want to see the purse strings snap shut.

It is a copycat business model. Do what the other guy is doing. That's how we ended up with All in the Family, The Jeffersons, and Maude. One would have been plenty.

 

[MikePA]

In real estate markets where prices are rising, the lenders know they can sell a house for more in the future, it makes good business sense to get into the mortgage business, unlike loaning money for unimproved land. With a business loan, what assets will they have if the business flops?

 

[cp1969]

In real estate markets where prices are rising, the lenders know they can sell a house for more in the future, it makes good business sense to get into the mortgage business, unlike loaning money for unimproved land. With a business loan, what assets will they have if the business flops?

What goes up, must come down if there is no underlying economic explanation for the rise.

The same as they'll have if the real estate market crashes, thanks to idiotic loans these Johnny-come-lately mortgage (subprime, I think they're called) are making.

50 cents on the dollar--tops.

 

[kenmac]

In real estate markets where prices are rising, the lenders know they can sell a house for more in the future, it makes good business sense to get into the mortgage business, unlike loaning money for unimproved land. With a business loan, what assets will they have if the business flops?

Have you seen some of these houses/assets that are repod by the bank/ lenders ?
I've worked on some of these repos & b-4 the people move out they trash everything from the plumbing, heating & a/c systems to the electrical wiring . I've seen & charged thousands of $ to put these assets back together so that the lenders can sell them just so they can re-coupe some of their money. The rest of us pay for what they don't re-coupe

 

[MikePA]

The rest of us pay for what they don't re-coupe

How do I pay for what a bank in your area doesn't re-coup?

As long as banks have been lending money, there have been people who default and banks reserve funds to handle them.

Lenders don't put people 'on the edge'. Many people put themselves there.

 

[Bob_Skurka]

So, let me see....... Banks and Lenders raise rates, some lenders put people on the edge (stretch to get that dream!). Now a lot of people cannot make it, property taxes, insurance rates, adjustable rates, so foreclosure rates are rocketing.

So, let me see...... Our parents and grandparents saved before they spent, went to the banks for the least amount they needed, they kept some set aside for a rainy day, and they didn't extend themselves to the limit.

Today people want everything now. They over extend themselves on credit without thinking about the consequences of any sort of downturn in their personal finances. They lease cars instead of buying, they trade them every few years and are always behind. The average house today is twice the size of a home build in the 1960s but families are smaller. Typical homes have 3 to 5 TV sets and a cable bill that averages over $80 per month. Typical families have a home phone + 2 or 3 cell phones with average monthly bills over $100.

Is it the banks that are greedy or is it the people who buy houses that are too expensive and live lifestyles that are beyond their means???

They are bringing this in themselves.
Unreal.

-Mike Z.

Unreal.

Yup, the people are bringing this upon themselves. The banks are providing a service to these people who demand it and if the banks didn't lend the money then the customer would probably sue them.

 

[kenmac]

How do I pay for what a bank in your area doesn't re-coup?



many banks went out of business in the 80's ? because of so many bad loans. the fed. government bailed out some of these banks/ lenders, FHA loans etc, for making these bad loans. Fed. gov = tax dollars

 

[Kendall69]

A banker named David Hannum in 1869, said it best, "There's a sucker born every minute."
HistoryBuff.com -- P. T. Barnum Never Did Say "There's a Sucker Born Every Minute"

For longer than that, people have been suckers for all kinds of "deals". I don't blame the Bankers, as they were clever enough to find a way to screw millions of people legally.

No one forced these people to dive into these ludicrous loans. Read the paper work. I just got an offer on a credit card with ZERO percent for 6 months, then I read the paper work, and it said ( paraphrasing here) even though we just said we would give you 0% for six months, we may not really do that, in fact we have the right to change an of these offers at any time and raise th percentage points to whatever we feel like. Seriously my paraphrasing is not too far off from what they really said in the fine print.

Think about it it's a win win for the bank, there is no down side for them. You pay the interest, the value of the house goes up, now you can't pay the interest, and the bank gets your home, it's brilliant.

Do I like it, absolutely not, but am I going to profit oon some foreclosures, you bet.