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  • Lehman Bros. Folds, Brothers come together

    WHAT THE ?


    http://www.breitbart.tv/?p=175023
    Northern Kentucky Plumbers Twitter Feed | Plumbing Videos

  • #2
    Re: Lehman Bros. Folds, Brothers come together

    Originally posted by DUNBAR View Post
    That was sic, but at least they weren't giving the finger. Lot of people getting hurt as a result of all this, I hope that AIG doesn't go under as well.

    Comment


    • #3
      Re: Lehman Bros. Folds, Brothers come together

      Cheese, I hope AIG doesn't go under also. Our Governor just gave them permission to borrow 20 billion from themselves. I am a long way from an accountant but it seems the handwriting is on the wall with AIG. There is a regulation that precludes one segment of a business from borrowing against another segment of the business so that if one segment fails the other will be insulated against failure. Now our Governor has allowed the regulation to be skirted and I bet both segments will fail. I can see New York State bailing out AIG, with taxpayer money of course.

      Comment


      • #4
        Re: Lehman Bros. Folds, Brothers come together

        This all starts with a presidential term that wanted everyone to have the ability to have the american dream.


        Enter Fannie Mae and Freddie Mac, Credit Cards forced by hand (of course they knew the score of gain) to lower the standard of lending


        Now,


        Do some digging and find out who appointed the top brass in those affiliations with their 26+ million dollar salaries.



        You want a house? No problem! We'll lend you 120% loan to value

        Don't worry about no money down

        Credit score? Don't need no stinkin' credit score!


        We want to make sure everyone gets the ability to afford a house, no matter what.


        That's why the bubble is bursting, plain and simple. I remember this starting just a few years after this "idea" played in to make poor joe schmoe get the ability to open a door to house they can't say the landlord owns.


        This sort of situation needs to happen, it's a cleansing of the system and with successes comes failures, bottom line.


        There's numerous ways to look at this, blame the person, blame the system to be allowed to so easily afford a home.

        Now, by default, it has to be strict, enforced, nearly impossible for the credit flake or chronic non-bill payer to get their own home.


        You put people in situations they can't handle, they'll prove to you every time that the risk far outweighs the honor of giving nonsense a chance.


        There's a thread on another site right now that's amazing what happened to florida in the past few years. In essence, it's predictable on so many fronts.



        I'll be the first one to stand up and say that I wouldn't want a taste of something a elected member says I can have when I know darn right well that I couldn't take care of what sits before me now.


        Otherwise "foreclosure" wouldn't be such a common word these days. Credit that easy has recourse, always.
        Northern Kentucky Plumbers Twitter Feed | Plumbing Videos

        Comment


        • #5
          Re: Lehman Bros. Folds, Brothers come together

          Originally posted by DUNBAR View Post
          This all starts with a presidential term that wanted everyone to have the ability to have the american dream.


          Enter Fannie Mae and Freddie Mac, Credit Cards forced by hand (of course they knew the score of gain) to lower the standard of lending


          Now,


          Do some digging and find out who appointed the top brass in those affiliations with their 26+ million dollar salaries.



          You want a house? No problem! We'll lend you 120% loan to value

          Don't worry about no money down

          Credit score? Don't need no stinkin' credit score!


          We want to make sure everyone gets the ability to afford a house, no matter what.


          That's why the bubble is bursting, plain and simple. I remember this starting just a few years after this "idea" played in to make poor joe schmoe get the ability to open a door to house they can't say the landlord owns.


          This sort of situation needs to happen, it's a cleansing of the system and with successes comes failures, bottom line.


          There's numerous ways to look at this, blame the person, blame the system to be allowed to so easily afford a home.

          Now, by default, it has to be strict, enforced, nearly impossible for the credit flake or chronic non-bill payer to get their own home.


          You put people in situations they can't handle, they'll prove to you every time that the risk far outweighs the honor of giving nonsense a chance.


          There's a thread on another site right now that's amazing what happened to florida in the past few years. In essence, it's predictable on so many fronts.



          I'll be the first one to stand up and say that I wouldn't want a taste of something a elected member says I can have when I know darn right well that I couldn't take care of what sits before me now.


          Otherwise "foreclosure" wouldn't be such a common word these days. Credit that easy has recourse, always.
          Good post. Problem as I see it is the folks who gave the loans and got the loans somehow went their separate way once things got bad, leaving you and I to pick up the pieces and pay for the mistakes or crimes.

          Comment


          • #6
            Re: Lehman Bros. Folds, Brothers come together

            Yep, my mother sold one of her houses a couple years ago. The real estate agent made the deal look as though the house actually cost $10,000 more than the selling price so it would appear to the bank as though the purchaser had more money down.

            In my day - I sound like my father - 20% down to buy a house and you had to sign an affidavid to the effect that you had not borrowed the 20%. Cars were 20% down for a new car and 30% down for a used one.

            Now me, and plenty more like me who played by the rules, see the value of our stock portfolio declining because of the stupidness.

            -Tom

            Comment


            • #7
              Re: Lehman Bros. Folds, Brothers come together

              It's truly unfortunate, IMHO. But, I know far too many folks who have borrowed way beyond their means to pay it back. The how and why of getting the loan approval seems to be based on the theory that real estate will always be worth much more within a matter of months and thus a very good investment by the banking and loan institutes.

              In far too many cases the whole real estate deal is based on such speculation. All you have to do is watch programs similar to "Flip that House" and you can quickly see that there's a problem.

              I also know that there's a common practice to borrow against the perceived market value of your home and too many people almost take this as "free money". Perhaps it's driven by the loan institutes, but adding "equity" loans to enhance a lifestyle that you can't adequately support with your income is extremely foolhardy. Such new found riches are way beyond any sense of responsibility that our parents and grandparents once had, and now many of these "speculative" folks are just walking away... long gone is the sense that you have a responsibility that you have willingly and enthusiastically taken on.

              Certainly this isn't always the case and perhaps it's even a minority of home buyers; but even then, it's the average working folks that get caught.

              CWS

              Comment


              • #8
                Re: Lehman Bros. Folds, Brothers come together

                Originally posted by CWSmith View Post
                It's truly unfortunate, IMHO. But, I know far too many folks who have borrowed way beyond their means to pay it back. The how and why of getting the loan approval seems to be based on the theory that real estate will always be worth much more within a matter of months and thus a very good investment by the banking and loan institutes.

                In far too many cases the whole real estate deal is based on such speculation. All you have to do is watch programs similar to "Flip that House" and you can quickly see that there's a problem.

                I also know that there's a common practice to borrow against the perceived market value of your home and too many people almost take this as "free money". Perhaps it's driven by the loan institutes, but adding "equity" loans to enhance a lifestyle that you can't adequately support with your income is extremely foolhardy. Such new found riches are way beyond any sense of responsibility that our parents and grandparents once had, and now many of these "speculative" folks are just walking away... long gone is the sense that you have a responsibility that you have willingly and enthusiastically taken on.

                Certainly this isn't always the case and perhaps it's even a minority of home buyers; but even then, it's the average working folks that get caught.

                CWS
                Good points. Flip this house and similar shows get on my nerves. For decades it's been shown that you NEVER get 100% out of anything you do to a house. The most you can get out of any improvement is from kitchen/bath and no matter what you would always lose on the money end. Now with these shows and what I call the "false runup" on real estate pricing, they make it seem like you would be crazy not to flip houses. Now it's biting some in the a$$ and when it's not easy they want to be irresponsible and just walk away.

                I saw a program recently where the couple living in a small house in CA. decided to stop mortgage payments because their house was declining in value. They thought it would continue to go up at the false value it had been in the past. When it began to rebalance and start showing more true value, these college educated people just thought it was ok not to care about their agreement in the mortgage contract. When things were going in their favor, they were happy to pay. When values changed, they literally didn't care and were planning to just abandon the house.

                On another note, nothing has value until the people participating in that economy "give" it value. There has been a false run upwards on the real estate that the people have given it. In short, real estate has been way overvalued in many areas and now is simply rebalancing. It's not normal for real estate to go up 50% or more a year. And now all the problems associated with that are coming to a head.

                If it were up to me, I would have no mercy on all participants. I would literally let them live in their cars. (I know someone will want to post a heartfelt story rebuting this. ) No government should force the responsible to take up the slack for the irresponsible because the cycle will just repeat.

                People just can't live within their means. Look at the average size of housing these days as opposed to 40 years ago. People have less children and more sq. footage!

                I applaud the gov't for NOT bailing out Lehman Bros. Somebody has to grow up and pay for the baseball through the window.

                J.C.

                Comment


                • #9
                  Re: Lehman Bros. Folds, Brothers come together

                  I like to simplify complicated problems to make it easier to look at.
                  I often do it to a fault, so correct me, anyone.

                  A salesman ( R.E, mort brokers...etc) makes a commission, often via embellishment.
                  Embellishment is fine, until it crosses the line of dishonest or immoral behavior.

                  Right now, it appears the American public will be footing the final bill for the ARM/Sub-prime fiasco.

                  Ironically, there are an awful lot of salespeople that have made alot of commision that is eventually paid for by us.

                  After watching the DOW drop over 500 points yesterday, then hearing there could be potentially devastating ramifications across the world over it...the possible idea of government intervention on public trading of oil just sounds a little better each time I hear it.

                  Comment


                  • #10
                    Re: Lehman Bros. Folds, Brothers come together

                    I think its time to take away the golden parachutes & put some CEO's in the slammer for letting this happen. If not they will keep robbing us blind. Yes some people are dumb for going over their heads but the people at the top knew what they were doing. They relaxed the rules to let this happen. CEO's are over paid. They only care about themselves they could care less about a companies long term future. Why would they when they get to be millionaires in 1 or 2 years.
                    Last edited by JWMustang; 09-16-2008, 10:04 PM.

                    Comment


                    • #11
                      Re: Lehman Bros. Folds, Brothers come together

                      I really don't know how all that sub-prime stuff works or was supposed to work but here is a story. A guy at work bought a house a few years ago, I don't know how many. His payments at the time were $900.00 a month. His mortgage was sold three times and in the end his payments were $2,300.00 a month. His wife experienced health problems and could no longer work. He couldn't make the $2,300 payments along with the added health expenses incured by his wife so he lost the house.

                      I thought if you got a mortgage that was a contract between you and the bank. If the bank wanted to sell the mortgage OK. But they took the hit. If the mortgage was 7% and the bank sold it to another institution for 6 1/2% well, too bad for the bank. How could the bank/lending institution unilaterally void a contract, the mortgage, and sell it to another institution and the new mortgage holder raise the percentage rate? It doesn't seem legal to me but apparently it is because it is happening.

                      Can someone explain to me how this works. I really don't get it.

                      Thanks,
                      Tom

                      Comment


                      • #12
                        Re: Lehman Bros. Folds, Brothers come together

                        Originally posted by Tom W View Post
                        I really don't know how all that sub-prime stuff works or was supposed to work but here is a story. A guy at work bought a house a few years ago, I don't know how many. His payments at the time were $900.00 a month. His mortgage was sold three times and in the end his payments were $2,300.00 a month. His wife experienced health problems and could no longer work. He couldn't make the $2,300 payments along with the added health expenses incured by his wife so he lost the house.

                        I thought if you got a mortgage that was a contract between you and the bank. If the bank wanted to sell the mortgage OK. But they took the hit. If the mortgage was 7% and the bank sold it to another institution for 6 1/2% well, too bad for the bank. How could the bank/lending institution unilaterally void a contract, the mortgage, and sell it to another institution and the new mortgage holder raise the percentage rate? It doesn't seem legal to me but apparently it is because it is happening.

                        Can someone explain to me how this works. I really don't get it.

                        Thanks,
                        Tom
                        The selling has nothing to do with his rate changing. My mortgages were both sold, but nothing in the original terms can change. The contracts are always transferable, because otherwise they would be worth far less to the lender.

                        He probably had an adjustable rate mortgage, interest only, or even an Option ARM (which lets you pay less than the interest for a while). If he got a fixed rate mortgage he wouldn't have been in such trouble.

                        Comment


                        • #13
                          Re: Lehman Bros. Folds, Brothers come together

                          AIG was just lent 85 billion from the feds, holding 80% stake



                          The government is starting to own, everything.
                          Northern Kentucky Plumbers Twitter Feed | Plumbing Videos

                          Comment


                          • #14
                            Re: Lehman Bros. Folds, Brothers come together

                            I agree with cpw. Mine was sold 3 or 4 times. Everything stayed the same. I know someone who got an ARM, no down payment and interest only and when the rates went up they could not keep up. So they lost the house & are back to renting. They got a house they never should have been able to get. Sooner or latter its going to bite you in the a$$. The rest of us did not make you buy it so we should not be helping you get out of it.

                            Comment


                            • #15
                              Re: Lehman Bros. Folds, Brothers come together

                              Originally posted by Tom W View Post
                              I really don't know how all that sub-prime stuff works or was supposed to work but here is a story. A guy at work bought a house a few years ago, I don't know how many. His payments at the time were $900.00 a month. His mortgage was sold three times and in the end his payments were $2,300.00 a month. His wife experienced health problems and could no longer work. He couldn't make the $2,300 payments along with the added health expenses incured by his wife so he lost the house.

                              I thought if you got a mortgage that was a contract between you and the bank. If the bank wanted to sell the mortgage OK. But they took the hit. If the mortgage was 7% and the bank sold it to another institution for 6 1/2% well, too bad for the bank. How could the bank/lending institution unilaterally void a contract, the mortgage, and sell it to another institution and the new mortgage holder raise the percentage rate? It doesn't seem legal to me but apparently it is because it is happening.

                              Can someone explain to me how this works. I really don't get it.

                              Thanks,
                              Tom
                              The original terms of the contract did not change unless he changed them. His payment would have risen to $2300.00 if his mortgage would have never been sold.

                              He was probably under a 1-3-5 etc. year ARM (Adjustable Rate Mortgage). He could afford the first terms but when the mortgage went into the adjustable rate, he couldn't. An ARM is, or should I say WAS a tool, that if you knew what you were doing and had finances if the worst came, which could be useful. But very few know what they're doing or pay attention to all of the paperwork.

                              So with "creative financing" people could go stated income or have an ARM to live beyond their means.

                              People say I'm cheap. It's probably warranted to a certain degree. But there's another side to that. Maybe I look cheap because alot of other people are truly living above their means.

                              J.C.

                              Comment

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