Maybe, maybe not. Perhaps not ACORN. Perhaps not many community groups, but it is pretty hard to deny that there are special interest groups that were consistently and publicly wanting to know what the government was doing to get more of the people that they serve into their own homes. What we got was a relaxation of mortgage requirements. What we got from that is our current debacle. I really appreciate that. It is refreshing to see somebody say that a person they disagree with politically is a good guy. There simply isn't enough of this anymore.
Well I think that almost everyone can agree on this. I think that if you look at the $10's if not $ hundreds of billions made on these sub-prime mortgages, it was the motivation due to this huge profit making, not some folks representing poor folks who wanted to be owners, that caused this historic collapse. Most of the "sub-prime" mortgages were probably made to middle to upper income folks and real estate investors who did no documentation loans, lied on their applications or bought investment houses with no money down as urged by infomercials. I think the burden of proof should be on those who are all of a sudden claiming some relatively unknown community organizations representing aspiring poor homeowners completely dominated Wall Street the big banks and Congress to create this mess.
first of all full disclosure, I was saying this also but its really not true. foreclosures aren't at an epidemic rate. we got into this mess because there was someone willing to buy these loans from banks and mortgages companies. the paper is the problem. the paper is either backed by shaky loans that devalue the overall paper, and the mortgages are also risky because the homes that collateralize the mortgages are overvalued. but the problem isn't the loans failing overall, not yet, that's not why wall street is in a bind. the fact that they may fail is more of the problem.
also not saying that subprime lending isn't the problem because it is, but its still on the lender to make sound loans. i'll keep saying this, if you put your money in a bank and the bank goes under, you're not blaming the person who stopped paying the loan. loan officers make good money to make good loans.
LOL - if you think you have comprehended the issues behind the bailout of 08 with these two sentences..............well..........yeah.
Nothing says "sickening display of selfish hypocrisy" like a group of wealthy message board posters lamenting the inclusion of a community organization in a MULTI BILLION DOLLAR WALL STREET BAIL OUT as socialist and unamerican. That's ****ed up.
'No Money Down!' Loans! What a novel idea...that will bridge the gap in home ownership! I've NEVER stated that Wall St. was not the giant sucking sound that perpetuated this whole situation. Wall St. is GUILTY AS CHARGED! Thousands have lost their jobs, retirements, banks have gone out of business. I just don't get why you can't understand that the idea of 'mandating' to bridge the gap in home ownership contributed to this problem. Its a really peachy idea, but the way it occured was through ideas like no-money down, alternative financing and subprime loans. This is a majority of what is defaulting and causing these investments to be illiquid. The banks have been HAMMERED. I think the housing advocacy groups that pushed banks and increased fannie mandates to crappy loans to fuel a nice, peachy idea are to blame as well. And YES, I also blame people who take out loans that they don't intend or can't pay back. I blame more the banks MORE for leaving out the cheese, but I also blame the mouse for eating it. The fact that you don't even blame someone for taking a loan with no intent of paying it like the loans that defaulted within 3 months of purchase is just silly. Lay the blame at ALL PARTIES INVOLVED. And realize that groups like Acorn that push for the government to get involved in bridging the gap in issues like home ownership contributed to the skyrocketing delinquency and default rates in the housing market. Renting is not a bad thing. I honestly think that housing especially the McMansion approach is a waste of assets. Invest in appreciating assets unless you like that 0% real estate rate of return thats subsidized by taxpayers by allowing mortgage deductions. This isn't even a benefit as it increases the benefit of owning a home thereby increasing demand with x supply, so prices rise! Of course I'll look at reality and understand how markets work and not worry about the Candyland approach of making the whole world fair!
no, when you back up claims you don't back them up with concepts. i don't know if you know this, but sub prime isn't about income, its about credit. so you can have a sub prime borrower who makes $100,000 a year. you have in no way proved that housing programs for poorer people has led to this crisis. you haven't proved that these loans are subprime. you haven't proved that the subprime loans went mostly to these type of groups. you are just stating your opinion as fact. please back up your claims with FACTS
the subprime mess is built on bush flooding the economy with cheap money to banks, and wall street having no oversight on the purchasing of these securities, and the foolish idea these houses would continue to inflate in value. do you understand how many people bought second homes because they wanted to "flip" these homes who are now just walking away from them. people who bought $200K homes on $50K salaries. there all kinds of dynamics to this mess and you have just taken another opportunity to argue for keeping poor people in their place.
I agree with gifford, though I disagree with many of your positions, I think you are probably a great guy in your personal life. I mean, anyone with your sig can't be THAT bad.
The definition of sub-prime is someone who failed to meet an obligation within a specific time. I don't care what you make if you failed to pay something you owe. I'm not saying anything LED to this crisis, i'm saying it contributed. I'm sorry if you can't understand these concepts.
i do understand them but you haven't backed it up, its just a concept. acorn has been around forty years, low income initiaties have been around at least two decades, back up your claim that they have just now led to this crisis which started in 03. exactly, it has nothing to do with low income housing or trying to get low income people into home ownership
I can't believe that nobody in this thread has differentiated between low income loans and subprime loans/bad credit. Of course there is overlap, but the problem here is subprime mortgages for people with poor credit histories. There are plenty of low income individuals who are fastidious in paying all their bills and meeting their obligations, just as there are plenty of relatively wealthy defaulters. Again the problem is loans to people with poor credit, not loans to poor people.
this is what i have been trying to explain, there are a broad range of homes that have risky mortgages funding them, from low income, to second homes for the purpose of making money. edit: khan's point is that low income initiatives have led to laxing of lending standards. this subprime mess has nothing to do with that, bush flooded the market with cheap money starting in 03 combined with less regulation of lending instutions, combined with wallstreet buying this paper combined with an over exuberant housing market is the cause of this mess. there really isn't a default epidemic yet
So are they still giving out ACORN loans? Thanks to ACORN they stuck me in some classes with some poor people and made me run to San Antonio to do some paperwork. But they did get me into my nice condo in West Austin
This is not what I have seen either representing debtors or mortgage servicers. I had debtors in my office that, more often than not, had two or three houses when they couldn't afford one of them. All of the mortgages were high escalation ARMs. I couldn't agree with you more. About six months ago, I saw a report that estimated that 4% of all mortgages were in some stage of default. Actually, although there have been sales of blocks of paper, much more commonly the mortgages are bound together as a single asset and asset backed bonds are sold with the mortgages the asset. You would have to be a complete dolt to take a simple post as the beginning, middle, and end of the story. Or you'd have to be entirely snarky. You pick. I really don't feel like taking the limited spare time I have to write a mini-treatise on the mortgage secondary market and mortgage backed bond market. I'll leave that to you...fire away. Much, much appreciated. We probably agree on more than you think though.
I noticed two types of people who applied for ACORN Loans since I got me one of them.. Professional singles and Really poor families So I'm guessing all the loans they gave to the poor families they shouldn't have given out a good portion of them. I'm assuming alot of these loans went belly up. However the professionals who got the loans bought really nice houses and condos, they probably are still with that loan since its such a good deal (i fall in this category) So it didn't really do what it was intended to do, but I was happy I got such a good loan.
