US home loans. Do they all work like this?

[turbo36]

Hi Scott,

The regulations were changed in the Clinton administration in order to be able to pander to one of their constituent groups, "We're allowing more people to become home owners. No more 'redlining'." Well, some areas and some people were redlined and denied loans for good reasons. Now we know what those reasons were.

Actually he was pandering to McSames econominc advisor Phil (this country is just a bunch of whiners) Gramm.



Subprime crisis

As chairman of the Senate Banking Committee, Gramm was instrumental in pushing major banking deregulation in 1999 that critics say has contributed to the current mortgage crisis.

The bank deregulation law, known as the Gramm-Leach-Bliley Act, was the most important update in banking laws since the New Deal. Its most important feature: breaking down walls between commercial banks, investment banks and insurance companies.
Gramm's critics say the deregulation of commercial banks contained in the law made it easier for banks to push risky subprime mortgages on lower-income customers.
"His fingerprints are all over a lot of pretty serious economic fallout from deregulation he championed and continues to do so," said Obama adviser Jared Bernstein, an economist with the liberal-leaning Economic Policy Institute.
But Wayne Abernathy, staff director of the Senate Banking Committee under Gramm, said the exact opposite is true.
"The current financial difficulties would be worse if there had not been Gramm-Leach-Bliley in place today," he said.
Peter Van Doren, an economist at the libertarian Cato Institute, said Gramm simply modernized outdated Depression-era banking laws that had contributed to the savings and loan crisis of the '80s.
Gramm says he fought consistently against the kind of risky practices that led to the subprime mess.
"Nobody in the past quarter-century has argued louder against making downpayments lower and making (mortgages) riskier," Gramm said.

 

[DocHeb]

Actually he was pandering to McSames econominc advisor Phil (this country is just a bunch of whiners) Gramm.



Subprime crisis

As chairman of the Senate Banking Committee, Gramm was instrumental in pushing major banking deregulation in 1999 that critics say has contributed to the current mortgage crisis.

The bank deregulation law, known as the Gramm-Leach-Bliley Act, was the most important update in banking laws since the New Deal. Its most important feature: breaking down walls between commercial banks, investment banks and insurance companies.
Gramm's critics say the deregulation of commercial banks contained in the law made it easier for banks to push risky subprime mortgages on lower-income customers.
"His fingerprints are all over a lot of pretty serious economic fallout from deregulation he championed and continues to do so," said Obama adviser Jared Bernstein, an economist with the liberal-leaning Economic Policy Institute.
But Wayne Abernathy, staff director of the Senate Banking Committee under Gramm, said the exact opposite is true.
"The current financial difficulties would be worse if there had not been Gramm-Leach-Bliley in place today," he said.
Peter Van Doren, an economist at the libertarian Cato Institute, said Gramm simply modernized outdated Depression-era banking laws that had contributed to the savings and loan crisis of the '80s.
Gramm says he fought consistently against the kind of risky practices that led to the subprime mess.
"Nobody in the past quarter-century has argued louder against making downpayments lower and making (mortgages) riskier," Gramm said.

If you're going to post material that is probably copyrighted, you should at least list the source.

 

[reb]

I am also going to stir the pot a little and say that some of the blame has to go on the homeowners that brought without thinking.

....

Some practical education in financial matters at the high school level would help. I have a 30 year old niece who just lost a house she couldn't afford. I think she truly does not know how to handle money.

 

[MikePA]

Actually he was pandering to McSames econominc advisor Phil (this country is just a bunch of whiners) Gramm.

Clinton pandering to Gramm? Hardly.

If you're going to post material that is probably copyrighted, you should at least list the source.

There was no citation because of the source. Time Magazine and 2 other left wing web sites.

 

[HappyCPE]

FWIW everyone is getting the shaft over this.

I played the game correctly; I put almost 1/3 down on my little farm. With the crash of real estate values my property, which I actually got a good deal on 3 years ago, is worth 20-25% less. Even if I wanted to refinance [I don't] I couldn't because I don't have enough equity. Most of that third I put down was 10 years of sweat equity on previous properties as well as a decade of self-denial and frugality, and it's gone now.

On the other hand, I could have put 5% down, had a leased Escalade and BMW in the driveway, and instead of spending weekends trying to improve this farm, I could write letters to [insert party name here] politicians demanding that the situation I put myself in get relief from the Gummint.

Looks like that's going to happen... the US is supposed to borrow $700 billion [that's $700,000,000,000 folks] to provide relief for irresponsible mortgage takers, sleazy bankers, greedy Wall Streeters, and a legion of oinkers all across the world who got on this gravy train. Who pays for this? The government can just print more money? Like we haven't mortgaged our entire nation already?

Where's the relief for the responsible?

 

[alchemysa]

A small percentage of mortgage loans are in default. No and no.

So why is everything going belly up?

 

[pennwalk]

the US is supposed to borrow $700 billion [that's $700,000,000,000 folks

No Matter how it is represented I can't seem to get a grip on those amounts. It doesn't seem real.

Like we haven't mortgaged our entire nation already?

I have an unpleasant idea who is going to have to pay for all this. It wouldn't surprise to see us try to push it off on our kids and grand kids. Maybe we'll will be known as the generation of deadbeats.

I saw an upsetting interview today wondering if this was the end of Americas greatness. Why would anyone want to be President. If it were me I would have my doctor find something wrong with my heart and regretfully bow out. I'm afraid no matter who gets it they are screwed.

Chris

 

[tallyho8]

Not everyone who got a subprime loan on a home they were unable to afford was duped or ignorant of what could happen.

I have a friend who very intelligently got a subprime loan on a home he couldn't afford. He had been paying $1200 a month rent on a house for years when he got a chance to buy an equivalent home with a subprime loan for no money down and $600 a month. He has been living there for 5 years using the $600 a month he has been saving on notes for new cars, dining out in fancy restaurants, fancy clothes, etc.

Now that his note was raised to $1600 a month he says that he will abandon the home and move back into the rental home if the gov't doesn't pony up and give him lower interest or other incentives.

He will have lost nothing and got to live like a king for the last 5 years.(at our expense)

Is he dumb or just taking advantage of a broken system?

 

[pennwalk]

A couple of years ago I saw a web site that estimated that each taxpayers share of the national debt was around $33,000. Wonder what it is going to be now?

Chris

 

[turbo36]

Clinton pandering to Gramm? Hardly.


There was no citation because of the source. Time Magazine and 2 other left wing web sites.

Look at the name of the act; Gramm are you blind to the truth just because you don't like it?

 

[MikePA]

So why is everything going belly up?

Everything is not going belly up.

 

[turbo36]

the US is supposed to borrow $700 billion [that's $700,000,000,000 folks

No Matter how it is represented I can't seem to get a grip on those amounts. It doesn't seem real.

Like we haven't mortgaged our entire nation already?

I have an unpleasant idea who is going to have to pay for all this. It wouldn't surprise to see us try to push it off on our kids and grand kids. Maybe we'll will be known as the generation of deadbeats.

I saw an upsetting interview today wondering if this was the end of Americas greatness. Why would anyone want to be President. If it were me I would have my doctor find something wrong with my heart and regretfully bow out. I'm afraid no matter who gets it they are screwed.

Chris

What's ironic is that 700 billion is the cost of the Iraq war so far.