The Glade 4.0

You know, I had a rebuttal I was working out for Xeq, but this is more succinct. I'll just go with a "this" and let it be.


^This.

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“The duty of a patriot is to protect his country from its government.” - Thomas Paine

I actually enjoyed that - if I'm going to pay a cent for closing costs, I'm going to get my money's worth. The agents and title people can sit around and talk shop while I read every last word, and talk about it with my wife, and that's exactly what they did. We spent easily half a day going through it all, but we knew exactly what we had signed.

Then perhaps there's a market for loans with simpler, more concise terms. They may be a little more legally loose, but it sounds like it's quite possible that there's some balance in which the slightly reduced "iron-clad"ness of the contract is countered and offset by the reputation and increased consumer interest in a more hassle-free lending experience.

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

You've got to be kidding me. This is the most pathetic and weak argument I've read in a while.

Why did private primary lending agencies get into subprime? Because of the securitization industry which existed only because of a secondary market completed funded by Fannie and Freddie.



You have to give them your ear first to be ****. Your fault for giving them your ear.

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

This thread is the perfect example of Liberalism vs Conservatism.

Liberalism: People are far too stupid and weak, easily pressured and dominated. So I must protect them! Even from themselves, I can keep them safe because I know better.

Conservatism: Serves them right if they invested poorly. They should do more research or accept their losses. Hope this toughens them up and they learn!

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"Life isn't divided into genres. It's a horrifying, romantic, tragic, comical, science-fiction cowboy detective novel. You know, with a bit of pornography if you're lucky."
— Alan Moore

I fixed it for you.

Then why did everything else collapse? Fannie and Freddie got bailed out. They are still paying their debts. The merits of government bailouts aside, if Fannie and Freddie's securitization agreements really were the glue holding everything together, there would have been no collapse, as Fannie and Freddie are still paying their obligations.

I fixed your fix for you.

Meta

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Fixed it for ya.

Everything collapse because even the most dense people saw right in front of their face that the system is not sustainable.

So Fannie and Freddie getting taxpayer funds and political protection (remember 2 months before Fannie how the banking queen was defending their books, and for 6 years before that refused to have their methods audited? I do) to the point of collapse so MORE taxpayer money has to be sunk into them to pay off the things that wouldn't have happened if taxpayer money was never lent out in the first place?

Seriously this is your defense? Dude. Srsly, dude.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Fixed it for ya.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Because bailout or not, the equity bubble (real estate prices) burst and all those leveraged trades ended up unwinding, leaving primary market oriented entities hollowed out. Fannie and Freddie didn't have obligations to pay. No idea where that came from. They owned the obligations. Secondly, the banks did hold many subprimes as "bedrock" assets that defaulted when the price bubble burst with the intention of unloading them. Of cuorse they held some of these instruments at the time these trades were unwinding, it's foolish to think otherwise. But they wouldn't have been a primary lending entity (or sold loans intended for subprime debt brokered through larger lenders) without the secondary market.

That's like blaming a stab victim for occupying the same space that a knife "happened" to be at a certain time.

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

/facepalm

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The Dude abides.

Heh, Elmo makes me laugh.

I am sure in your bizzarro world what actually happens in our real world looks comedic. I assure you its exactly the same when you try to explain your bizzarro world to us.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Hate to tell you Elmo, but I'm not the one with a reality crisis.

Oh I know but you can always hang out with Monte. Xeq seems to be taking his recovery meds so it might get a little lonely.

*pat pat*

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Fannie and Freddie bought mortgages from banks. Sometimes they paid cash, sometimes they provided the bank with a guaranteed security in exchange for the loan and an additional fee. When the bubble burst, that debt became worthless as the homeowners defaulted. However, the banks that sold them these loans didn't get hit. They'd either already been paid, or the government bailout of F&F ensured that they'd keep receiving payments on their securities as scheduled. Of course Fannie and Freddie's existence is not good for the market, as it's essentially printing money to give to low-income people so they can buy homes, but they didn't kill any private industries.

The investment banks collapsed because they did something much worse. They borrowed money to buy loans from smaller banks, packaged them into securities and tried to get investors to buy them. When investors became apprehensive over the quality of these securities, they went to other banks and insured the securities so they'd get high ratings. When the bubble burst, the securities held by the banks became worthless, and they were unable to pay their loans. The other banks who insured already-sold securities also died as they suddenly had to pay out billions in claims.

The government didn't cause any of that, however. No one forced the investment banks to enter that market. Noone forced them to buy up subprime loans to repackage. Noone forced investors to buy the securities from them, noone forced private companies to insure high-risk securities, and noone forced the ratings agencies to rate these securities highly. None of that was the government's fault. I mean, F&F are inefficient organizations that don't help, but they didn't kill any private industry just by existing. You could also argue that by buying bad loans from banks, F&F was enabling them to make even more bad loans, but again, nobody forced the banks to make the bad loans in the first place.

By your own logic Xeq since the banks are run by people the people couldn't help resist the ability to make instant money with very little risk to themselves that the taxpayer backed protection scheme of fannie and freddie offered. Not to mention they were being compelled by law to make loans that they wouldn't have.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Yes, actually, these people are idiots. You do not enter into contracts you do not understand. You do not buy products you cannot afford. Credit is not income. Risk is a necessary component of the system. You will lose money. All of these things are incontrovertible truths that the current system, by which I mean government and public education, have taught people are false.I honestly do not care who's put out by me doing my due diligence to protect myself. If knowing what's going on is such a burden to everyone else, that's their problem for being stupid, foolish, and generally irresponsible.Not fair? It's not fair to expect someone to accept the consequences of their own actions? What are you smoking? Better yet, what entitles you to some standard of fairness that dictates you cannot and SHOULD not be held responsible for your own choices? I'm sorry, but this is just asinine, no matter what your "liberal" ideology tells you.Then hire a lawyer like anyone else with a remote sense of responsibility to negotiate and vet the terms for you.And, yet, the regulations being proposed protect against none of this; they just let you take the bad outcome to the underwriter or reporting agency the sales rep has no clue exists. Even then, it's still YOUR FAULT for choosing to do business with someone. It is YOUR CHOICE to enter into a contract you don't understand. I'm not footing the bill for your IDIOCY. It's really that simple, Xequecal. People who fail to do due diligence get **** precisely because they behaved irresponsibly. And the best part is that they continue to get **** in the future for repeating the same mistake because this system will protect and enrich them for being irresponsible and stupid.

Fairness has nothing to do with people trying to live outside their means. Fairness does not entitle you to a house you cannot in good faith afford. Fairness does not entitle you to anything anyone else has. And fairness does not entitle you to a good outcome for taking a risk or entering into a contract in bad faith.
Ahh, yes, your agenda is showing. You don't like freedom of choice. You cannot abide the thought that someone should be responsible for the negative outcomes of their choices. It has nothing to do with fair; it has everything to do with you being unprepared for the long term consequences of choices you make.

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I'd just like to take this opportunity to restate my extreme distaste (and anger, when it's perpetrated against me) at putting text in quotes attributed to others, without a clear indication of what you have changed or added. Merely indicating that you've done so may cover your ***, but it's still damn confusing, begging for somebody to inadvertently misattribute some gross mischaracterization of what the original person actually believes or says, and is a pain in the *** to read through to spot what you're actually trying to say by snidely "fixing" somebody else's post with no editing marks.

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

It has nothing to do with not accepting consequences or an agenda. It has more to do with the fact that you can't get blood from a stone. When a person defaults on a mortgage and the home is worth nowhere near the mortgage balance, they can't pay the bank off. They have no money, it's impossible for them to "fulfill their obligations" or "accept the consequences." The bank will always be left holding the bag, and we will continue to get problems like this recession. The only way to solve this from a conservative angle is to literally reinstitute debtor's prisons and impose years of slavery on all those mortgagees to force them to repay the bank with their labor. In the case of a particularly high interest rate, they could be slaves for life.

Or, you know, we can add regulations that prevent the banks from making those loans that caused these people to default to begin with.

There are already mechanisms in place to protect people from fraud and criminal activity. However, the change in standards from Knowingly and Recklessly to Gross Negligence means that people are protected against bad outcomes, not criminal activity.If only that were the case, you might have a point. Unfortunately, your self-delusional opinion of conservatism and individual responsibility undermines your efforts. The current standard of Knowingly and Recklessly elevates financial and contract fraud to the criminal level. You must demonstrate, beyond a reasonable doubt, that the offending party actually intended and attempted to cause you financial and obligatory harm through their actions. The suggested standard of Gross Negligence would mean that if you can prove a reasonable individual possessing all the facts would not have made the same choice you did, then you are not at fault for your decision; rather, the "offending party" is responsible for your bad outcome. Indeed, Medical Malpractice was separated into categories based on those standards. Criminal Malpractice still requires Recklessly and Knowingly; Civil only requires the bad outcome position of Gross Negligence.

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The mortgage balance at any given point in time will be less than the insured value of the house as contained by the mortgage (minus any nominal fees). You are confused if you think the full term payment value of the mortgage is secured by the property. The full term payment value is an investment risk the bank takes, knowing that in 90% of good faith mortgages the loan will be repaid before going its full term.Debtor's Prisons are not necessarily bad; that said, they're an appeal to emotion. The immediate consequences of being fired, incapable of finding a job, and homeless will suffice for "accepting the consequences" of their decision.The bank has the property which retains real and permanent value. The irony here is that banks, like Bank of America, used subsidiaries and underwriters to create a Colortyme model of home lending. They want to foreclose on the property after 10% of the contract term. If they can secure loans against a house 10 times over 30 years, they make more money off that property than they lose in real estate and community depreciation. Funny how the results of government pressure to ease credit result in a perfectly legal and predatory market system.You mean the loans they were pressured to make through Second Party Government Entities? The markets that were created by the government in the first place for easy credit? That's a rather amusing suggestion, by the way, since it was firmly and resolutely denied in all versions of this bill by the Democratic Party of the United States of America.

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The way I see it, is that the laws are attempting to deal with the reality of unethical behavior, which is different than criminal behavior.

I agree, that straight out criminal behavior is more or less dealt with already in the laws.

However, there is a lot of unethical behavior going on out there, which is what these changes appear to be trying to address. I expect that what we'll see is some reduction in predatory lending, and upstanding companies going through more detail in educating their customers on the pros/cons of any product offering they present.