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In Reply to: RE: I'm sitting in the Redondo Beach, California main library pondering . . . posted by psgary on April 01, 2008 at 15:44:12
>If a mortgage company deceived people about terms, that is fraud and people deserve the help of the government, since the law is part of the government, in dealing with that.>
Ok.
>On the other hand, people who took out interest-only loans or variable rate mortgages that were liable to increase beyond their means to pay are low on my "sorry" scale.>
Part of the problem is that people who could not qualify were given loans they could not afford.
The mortgage companies qualified anyone with a heartbeat.
Everyone figured that homes would continue to appreciate at double digit rates - rising water covers lots of stumps.
Then the risky mortgages were packaged and sold to investment houses as 'derivitives' who bought them without looking at the underlying risk.
When the house of cards collapsed, it took a whole lot of people and businesses with it.
Follow Ups:
But because of sheer greed they were in some cases blinded by the apparent endless growth of the housing market, and in others simply willing to ride it as long as they could and take the commissions and fees.
The sheer shortsightedness of the upper management is staggering though. These aren't stupid people in theory - they went to colleges and did lots of math and stuff, did courses on basic economics. One can only hope that they've all learned a lesson from this. I'm not holding my breath though, as the same mentality drove the dot com crisis.
Cheers
to believe that the housing market would continue to appreciate at double-digit rates deserve some sort of smack up side the head from reality? Who could believe such nonsense? Could anyone actually think that the general public could afford houses that averaged $400-600K or more? I was a teacher and made decent money, yet it was clear such prices were beyond my reach. Didn't people know they couldn't afford the loan? Oh, wait. I forgot. This is the country that made Britney Spears a star.
(nt)
I think this is how it works...
You get $1,000,000 worth of mortgages. You use the million to buy on the "margin" like 10 to 15 million other investments. Great! Now you wait for the $$$$$ to roll in...unless the note holder makes a "margin call" and demands immediate payment!!! *%^&^(@$%(^)_+}@ Busted!!! Now you owe millions and millions borrowed on VERY suspect mortgages....
Pete [I leveraged a sub-prime leveraged investment derivative that was leveraged against my leveraged buy-out bid]S.
Disturbed is a life style...deal with it.
such as stocks bought "on the margin" before October of 1929? Scary, ain't it?
They still are!
"Man is the only animal that blushes - or needs to" Mark Twain
Yep, the same.
Pete [Margin Call; Send money NOW]S.
Disturbed is a life style...deal with it.
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