What caused the mortgage system to collapse? - Page 2

PiZdETS · 09-28-2008, 11:21 PM

Quote:

Originally Posted by OneSickPsycho

BS... Housing prices started to go up as much as 10% per year in the late 90's due to the abundance of 'newly qualified' (re: NOT QUALIFIED) homebuyers...

However, I agree 100% with the notion that it's a personal responsibility issue.

Let's just agree to blame it all on the gypsies, alaskans and jewish run liberal media.
We gotta quit letting this political horseshit get between us osp, we used to be like this baby!

OneSickPsycho · 09-28-2008, 11:47 PM

Now we're like this:

Dave · 09-29-2008, 02:29 AM

talk about a "stranger"

Gunther1000 · 09-29-2008, 02:20 PM

Man, That thing is like a Pringles Can! I bet he has some very happy ladies on his list! When in dbout finger bang it out...

smileyman · 09-29-2008, 06:43 PM

I can tell you what happened...GREED. The mortgages were bad to begin with. The mortgage originator gets paid commission so they don't care who the fuck ends up servicing the loan, they do whatever they have to do to get it approved and booked. The appraisal people, the title company, closing agent, and realtor all get their share so they are onboard with whatever needs be done to get these done pronto and in volume.

The investment firms had no firm clear cut method for guaranteeing the quality of a portfolio, they just knew the portfolio had to grow or the bottom line would look bad. Keep it growing and hope the bottom end floats the losses. As long as home prices went up from the demand there was always someone ready to take over a defaulting loan or an easy market to sell it in. One mans origination fees and interest payments are just like anothers so the banks were on board. Just make sure everyone qualifies and no one gets hurt (save whoever gets stuck with the overvalued property)

And here you go, too many folks getting squeezed by adjustable rates decided that the property really wasn't worth it and it was cheaper to let it go back than to service the debt. They couldn't refinance or sell it so back to the bank it goes. Suddenly there is an oversupply, banks selling at auction prices in order to get these properties off the books rather than letting them sit until prices could rebound.

That was the subprime mess, then the crash there bled into the prime markets due to lower property values and lack of lending options for anyone but grade AAA customers. Then the investment companies on Wall Street that couldn't buy enough of these morgtgage based assets had to come clean and take the losses they knew they had bought into. When losses exceed capitol you beg someone (investor, other bank, government) to buy you for pennys on the dollar before you have to file bankruptcy and shareholders lose all.

Captain Morgan · 09-29-2008, 11:04 PM

I've spoken my mind...

Today was so much fun for me. I took call after call after call of people wanting to know what happened or what was going to happen or what should they do. I'm so glad I have the rest of this week off because I don't really care to discuss this shit anymore for a little while.

I'm stuck smack dab in the middle of history and I'll have some stories for my grandchildren.

smileyman · 09-30-2008, 11:06 AM

By the way I forget to mention in my diatribe yesterday that after 15 years of dealing with federal banking regulators I can agree with Piz that the CRA Act did nothing in the way of regulate banks. There have been lax enforcements of that regulation and it really isn't good to start with. I can personally vouch for the banking industry having free rain to exploit their lending areas for YEARS...

6doublefive321 · 09-30-2008, 12:16 PM

First rule of economics: if it sounds too good to be true, it is.
5 years ago: I can buy a $300,000 home with a mortgage less than my apartment rent? Sign me up!
Today: Doh.

smileyman · 09-30-2008, 12:38 PM

RIP - the American Dream...
http://money.cnn.com/?cnn=yes
This is kinda timely.

Gunther1000 · 09-30-2008, 01:06 PM

Quote:

Originally Posted by smileyman

By the way I forget to mention in my diatribe yesterday that after 15 years of dealing with federal banking regulators I can agree with Piz that the CRA Act did nothing in the way of regulate banks. There have been lax enforcements of that regulation and it really isn't good to start with. I can personally vouch for the banking industry having free rain to exploit their lending areas for YEARS...

I Owned my vary own Mortgage Brokerage office in MI for 4 years and was in that biz a long time before that. We never cared one bit about anything past the first payment being made so if it was closed on a Warehouse line it would be sold off after that. Shit most just had to close and it was funding check time. Every hand involved was working to get the loan not kill it. Now Almost every Bank I delt with as A Jumbo and Super Jumbo loan specialist are the same who went under... I have to think I wasn't the only one seeing this trend. Most of my over extended credit cows for customers thought there home was going to keep going way up in value and there simple interest or neg. Am. Loan was the best thing since sliced bread.

Good thing I saw the down swing coming and bailed before losing more years of my life riding that cash cow. But Shit it was EASY money while it lasted. Nothing like $120,000 a year and only really do about 2 days worth or real work!

09-29-2008, 02:29 AM	#13
Dave Chaotic Neutral Join Date: Feb 2008 Location: Cherry Hill NJ Moto: GV1200 Madura, Hawk gt Posts: 13,992	talk about a "stranger" __________________ TWF Post whore #6

09-29-2008, 02:20 PM	#14
Gunther1000 Jesus Christ! Join Date: Jul 2008 Moto: (The Chi's lover) Posts: 801	Man, That thing is like a Pringles Can! I bet he has some very happy ladies on his list! When in dbout finger bang it out... __________________ FTP

09-29-2008, 06:43 PM	#15
smileyman White Trash Hero Join Date: Mar 2008 Location: NW Arkansas Moto: Buell 1125R Porco Rosso Edition Posts: 4,895	I can tell you what happened...GREED. The mortgages were bad to begin with. The mortgage originator gets paid commission so they don't care who the fuck ends up servicing the loan, they do whatever they have to do to get it approved and booked. The appraisal people, the title company, closing agent, and realtor all get their share so they are onboard with whatever needs be done to get these done pronto and in volume. The investment firms had no firm clear cut method for guaranteeing the quality of a portfolio, they just knew the portfolio had to grow or the bottom line would look bad. Keep it growing and hope the bottom end floats the losses. As long as home prices went up from the demand there was always someone ready to take over a defaulting loan or an easy market to sell it in. One mans origination fees and interest payments are just like anothers so the banks were on board. Just make sure everyone qualifies and no one gets hurt (save whoever gets stuck with the overvalued property) And here you go, too many folks getting squeezed by adjustable rates decided that the property really wasn't worth it and it was cheaper to let it go back than to service the debt. They couldn't refinance or sell it so back to the bank it goes. Suddenly there is an oversupply, banks selling at auction prices in order to get these properties off the books rather than letting them sit until prices could rebound. That was the subprime mess, then the crash there bled into the prime markets due to lower property values and lack of lending options for anyone but grade AAA customers. Then the investment companies on Wall Street that couldn't buy enough of these morgtgage based assets had to come clean and take the losses they knew they had bought into. When losses exceed capitol you beg someone (investor, other bank, government) to buy you for pennys on the dollar before you have to file bankruptcy and shareholders lose all. __________________ Arkriders.com To be the best you must first be willing to risk the worst!

09-30-2008, 11:06 AM	#17
smileyman White Trash Hero Join Date: Mar 2008 Location: NW Arkansas Moto: Buell 1125R Porco Rosso Edition Posts: 4,895	By the way I forget to mention in my diatribe yesterday that after 15 years of dealing with federal banking regulators I can agree with Piz that the CRA Act did nothing in the way of regulate banks. There have been lax enforcements of that regulation and it really isn't good to start with. I can personally vouch for the banking industry having free rain to exploit their lending areas for YEARS... __________________ Arkriders.com To be the best you must first be willing to risk the worst!

09-30-2008, 12:16 PM	#18
6doublefive321 Resident Droog Join Date: Mar 2008 Location: Northern burbs, Atlanta Moto: 625 SMC, '08 Tuono R Posts: 471	First rule of economics: if it sounds too good to be true, it is. 5 years ago: I can buy a $300,000 home with a mortgage less than my apartment rent? Sign me up! Today: Doh. __________________ I'm sick and tired of being bored.

09-28-2008, 11:47 PM	#12
OneSickPsycho Ride Like an Asshole Join Date: Feb 2008 Moto: nothing... Posts: 11,254	Now we're like this:

09-29-2008, 11:04 PM	#16
Captain Morgan Let's do another U-turn Join Date: Feb 2008 Location: Indiana Moto: 2009 V-Strom Posts: 3,816	I've spoken my mind... Today was so much fun for me. I took call after call after call of people wanting to know what happened or what was going to happen or what should they do. I'm so glad I have the rest of this week off because I don't really care to discuss this shit anymore for a little while. I'm stuck smack dab in the middle of history and I'll have some stories for my grandchildren.

09-30-2008, 12:38 PM	#19
smileyman White Trash Hero Join Date: Mar 2008 Location: NW Arkansas Moto: Buell 1125R Porco Rosso Edition Posts: 4,895	RIP - the American Dream... http://money.cnn.com/?cnn=yes This is kinda timely. __________________ Arkriders.com To be the best you must first be willing to risk the worst!