Sub-prime lenders were hit by this recession too!

[Mini D]

http://money.cnn.com/2008/03/31/news/economy/copes/index.htm?cnn=yes

Something needs to be done to save these poor victims. They've already lost their gardener!

[Airhead]

We need a bailout to save the sub prime lenders. After all, it's not their fault the real estate market collapsed, and they have always played a vital role in our economy.

[Mini D]

If anything... this article proves they truly believed everything they were telling their customers.

[Hornet33]

That's what people get when they try and live beyond their means. The whole sub prime contracts, interest only morgages, variable rate morgages, all caused the current situation. The folks in this artical caused the problem and now they're complaining. Tough.

I don't know how many people I know that bought a house WAY out of their price range and did it with an interest only morgage. Then when the time came to start paying on the principle and their payments tripled they don't understand what happened. I have no sympathy for them at all. Take their house and kick them to the curb and maybe they'll learn a lesson.

When I bought my house I was preapproved for $200,000. That price was outside what I could afford on a month to month basis so I bought a house for $98,000 with a fixed rate morgage at 5.9% at the time. Since then I've refinaced down to 3.2% fixed and I still own my home that's worth just over $145,000 now. It's not a big house, nor is it a new home, but it's mine and now I can afford to make some upgrades to make it nicer.

I just don't understand why people can't look at their finances and realize what they can and can't afford. Anyone stupid enough to get sucked into one of those deals deserves everything they get. Life is hard and it's even harder when you make a bad decision. The fact that the government is talking about using my tax money to bail these idiots out pisses me off. I did the right thing and now I'm going to end up paying for the rest of the idiots out there who didn't.

[bcadoo]

Although its not explicitly written in the constitution, I think its implied that people have a right to be stupid.  Stupid people pay stupid tax.  There is a reason people have bad credit, and loaning money to them is......stupid, (or at least very risky).  They were making obscene profits and should have been putting some of there 'six-figure' incomes away for a rainy day.  Its not the governments responsibility to bail out people who get into a mess over bad decisions.

[Thruster]

I'm waiting to see if there's any effort made to prosecute. My guess is there's a high percentage of first time non-conforming loans involving some kind of structuring if not flat out fraud. I've been involved in real estate transactions for 20 years and I've watched the snake oil guys coming out of the woodwork the last 5 years or so.

I've walked out of more than a few closings due to attempted monkey business of one sort or the other. And it's from all quarters. If it's not a misrepresentation from a loan officer it's a patently false disclosure or dummied up qualifiers.

It seems that after the dot com bust we went looking for another venue in which to create fast unearned wealth. Everybody in the food chain was perfectly content as long as there was another rube in line willing to play along. The last few years I've met an odd cross section of people who are now real estate "players", Dentists developing condo's, Waiters flipping houses, and such. And most all of them made decent if not spectacular money. Now we're surrounded by obscenely over leveraged, poorly built properties and the well's run dry. Where I live a home buyer needs $40-$60k in the bank to START looking for a conventional loan on a single family home. That's just stupid.

But it's the product of a mentality that tolerates stupidity and greed as long as "everybody" is doing it. Unfortunately it seems the Fed agrees. I can only hope the costs of rewarding this behavior soon become unsustainable and the market returns to a value based as opposed to cost based environment. And I really want to see those that made this mess pay the price.

[Maverick]

Although its not explicitly written in the constitution, I think its implied that people have a right to be stupid.  Stupid people pay stupid tax.  There is a reason people have bad credit, and loaning money to them is......stupid, (or at least very risky).  They were making obscene profits and should have been putting some of there 'six-figure' incomes away for a rainy day.  Its not the governments responsibility to bail out people who get into a mess over bad decisions.

I think what you are referring to is the bit about "life, liberty and the pursuit of happiness". It should be noted that in any pursuit there is no guarantee you will catch what you are chasing. Particularly if you chase it in a stupid and thoughtless manner.

[Charon]

Only $1,800 to cover $10,000 in bills

Their home equity line, mortgage, health and life insurance premiums alone cost about $10,000 a month. Still, they are trying to hang onto what they call their dream home with a view of the Pacific Ocean where they live with Mysti's 11-year old son.

My family had the option to make many of these bad choices, but we chose not to do so. My idea of a dream house is one that I don't get kicked out of if one of life's many setbacks comes along. If anything we live a bit too under our means, and have too much cash in savings (but where is a good place to even maintain capital today -- not that the devalued dollar helps with savings). We could live on $1800 if we had to, and we could find supplemental grunt work to fill in some of the holes while we looked for a better job if we had to. No real sympathy for THESE folks.

Charon

[Hornet33]

I liked the part were it talked about them letting their gardener go, and trading his corvette in for a suburban. Yeah big sacrifice there dummy. Went from a $50,000 car to a $40,000 SUV that sucks gas. How am I supposed to feel sorry for these idiots????

[Bodhi]

My family had the option to make many of these bad choices, but we chose not to do so. My idea of a dream house is one that I don't get kicked out of if one of life's many setbacks comes along. If anything we live a bit too under our means, and have too much cash in savings (but where is a good place to even maintain capital today -- not that the devalued dollar helps with savings). We could live on $1800 if we had to, and we could find supplemental grunt work to fill in some of the holes while we looked for a better job if we had to. No real sympathy for THESE folks.

Charon

Charon, my wife and I live the same way.  Our goal is to have our home paid off within the near future.  At that point, we could easily live on less than $10k in a year.  The rest would be pure gravy.  If one of life's set backs pop up, we could easily get a job at the labor pool or any of the multitude of minimum wage jobs due to our great work ethic. 

It constantly amazes me how people still seem to think that credit cards and loans are like free money.  They spend with no foresight into actually paying things back... 

Stupid if you ask me.

[EvlPrsn]

i say let em all go under and starve, less stupid ppl in the world for the rest of us to deal with.

[john9001]

the sky is not falling, only one percent of mortgages are in default.

i put the blame on real estate speculators/house flippers, they have driven up housing prices 15% per year. That is not sustainable, you run out of customers and then the bubble bursts and prices return to normal.

[Bodhi]

the sky is not falling, only one percent of mortgages are in default.

i put the blame on real estate speculators/house flippers, they have driven up housing prices 15% per year. That is not sustainable, you run out of customers and then the bubble bursts and prices return to normal.

Where did you get the 1% figure?

[Eagler]

the day credit became a right instead of an earned priviledge is the day we were all hosed...

we are reaping what they sowed is all ...