Home foreclosures

[sokinwet]

"Sokinwet, one thing I know from my line of work, data does not lie."
You are correct RIJ, data doesn't lie, however data can be misinterpreted intentionally or otherwise. I wasn't going to respond any further to this thread but since you've called me out. For 32 years I've worked as the housing director for a local gov. Planning & Community Development office. I am a member of a gov. taskforce charged with study of the foreclosure issue and I'm the contact person for the MA Foreclosure Initative and Neighborhood Stabilization Program (the fed. program providing the $$ to address the problem) Just like you may have insights into the investment business because of your line of work, on a weekly basis I see data pertaining to the wide range of issues that have contributed to this problem, industry and gov. efforts to try to stem the tide, concerns of lenders and housing developers, predatory lending problems, (Calif. by no small coincidence is one of a few states with no regulations concerning predatrory lending), the demographics of people impacted by foreclosure, etc. I could go on but I'm sure you get the picture. Spouting stereotype bias or making gay jokes about Barney Frank (Nebe!)doesn't help peoples understanding of what is a very serious problem for everyone.

[spence]

Sokinwet, you should know by now that there's no place for credibility in this forum! I'm afraid you need to take your resume and go.

What I found interesting about the map, that nobody picked up on is how many decent sized urban areas seem lightly effected compared to the mean.

-spence

[detbuch]

Originally Posted by sokinwet

"Sokinwet, one thing I know from my line of work, data does not lie."
You are correct RIJ, data doesn't lie, however data can be misinterpreted intentionally or otherwise. I wasn't going to respond any further to this thread but since you've called me out. For 32 years I've worked as the housing director for a local gov. Planning & Community Development office. I am a member of a gov. taskforce charged with study of the foreclosure issue and I'm the contact person for the MA Foreclosure Initative and Neighborhood Stabilization Program (the fed. program providing the $$ to address the problem) Just like you may have insights into the investment business because of your line of work, on a weekly basis I see data pertaining to the wide range of issues that have contributed to this problem, industry and gov. efforts to try to stem the tide, concerns of lenders and housing developers, predatory lending problems, (Calif. by no small coincidence is one of a few states with no regulations concerning predatrory lending), the demographics of people impacted by foreclosure, etc. I could go on bet I'm sure you get the picture. Spouting stereotype bias or making gay jokes about Barney Frank (Nebe!)doesn't help peoples understanding of what is a very serious problem for everyone.

I am a bit flumoxed by the phrase "predatory lending." I get the image of Iago demanding his pound of flesh, or of 19th century English debtor prisons. Are unscrupulous banks or, if not the bank itself but the bankers who write up the loans, intentionally selling homes to buyers who really can't afford them? And, if so, what are they gaining?

[spence]

Originally Posted by detbuch

Are unscrupulous banks or, if not the bank itself but the bankers who write up the loans, intentionally selling homes to buyers who really can't afford them?

Yes, they were.

And, if so, what are they gaining?

Easy, they were "gaining" the high fees charged to process the loan to a sub-prime borrower.

A key factor in this mess was the process by which a loan was given, then sold to a third party. The liability on this loan was often then off-loaded to yet another third party.

And here you have different markets. One focused on making money from the initial loan transaction, and the other focused on profit from a variety of derivitave loan products.

The system evolved to a point where it was very profitable (with little to no risk to the loan originator) to extend credit to an unworthy borrower.

This combined with other factors, the Fed's money policy, Government (both sides here) pressure to increase home ownership and rising home costs all contributed greatly to the current mess we're in.

-spence

[detbuch]

Originally Posted by spence

Yes, they were.



Easy, they were "gaining" the high fees charged to process the loan to a sub-prime borrower.

A key factor in this mess was the process by which a loan was given, then sold to a third party. The liability on this loan was often then off-loaded to yet another third party.

And here you have different markets. One focused on making money from the initial loan transaction, and the other focused on profit from a variety of derivitave loan products.

The system evolved to a point where it was very profitable (with little to no risk to the loan originator) to extend credit to an unworthy borrower.

-spence

So, in the end, who is the loser in this process? If the borrower can't make payments, he defaults, doesn't "lose" the home cause the "bank" (or the final holder of the lien) owns it. Is it some "third party" who now owns the home the loser? Who is the "predator" and who is the victim?

[spence]

Originally Posted by detbuch

So, in the end, who is the loser in this process? If the borrower can't make payments, he defaults, doesn't "lose" the home cause the "bank" (or the final holder of the lien) owns it. Is it some "third party" who now owns the home the loser? Who is the "predator" and who is the victim?

There's plenty of blame on all sides.

Certianly people took loans they couldn't afford, or extended themselves assuming their income would continue at personal risk.

Certianly banks and mortgage brokers took advantage of the situation and loaned money to anyone and everyone, putting pressure on the government to ease restrictions so they could come up with all sorts of creative loan products.

Certianly government assumed increased home ownership was good for all political interests.

Certianly there were crooks who took advantage of the situation and made a mint via mortgage fraud.

Certianly Alan Greenspan kept investment in the US Treas. so unattractive that offshore investors were itching to find a better place to park their money.

Certianly investment houses packaged and traded these loans like they were AAA investments.

Certinaly a lot of MBA's were having a field day at their weekend retreats coming up with new schemes to make millions off of the trillions in notional value flowing through the system.

Certianly the SEC was out to lunch.

But hey, it's a lot easier to blame everything on Barney Frank. He is gay after all...

-spence