Some Editorial Cartoons Are Tooooooo Accurate!

[tt11758]

Help me if I am wrong here, but I heard a bit on the news the other day about a memo being leaked. If I understand this right Obama wants to forgive the loans for people who are underwater. Meaning if you owe more than your house is worth, you just get let off the hook. (some fees and conditions may apply) So, again we are rewarding stupidity, and reckless behavior.

Would this be considered a form of class warfare? I mean, if you were stupid, and bought a house that was more than you could afford, and no it's underwater, you get forgiven. Basically a clean slate. Of course if you did it right, and put money down, and have paid on your loan, now paying a mortgage on a house that is still (barely) worth what you paid, you're S.O.L.

I know I would be looking at a few of my neighbors and wondering..... Not to mention fuming.

Democrats, the party of the working man.

[billt]

Help me if I am wrong here, but I heard a bit on the news the other day about a memo being leaked. If I understand this right Obama wants to forgive the loans for people who are underwater. Meaning if you owe more than your house is worth, you just get let off the hook. (some fees and conditions may apply) So, again we are rewarding stupidity, and reckless behavior.

Would this be considered a form of class warfare? I mean, if you were stupid, and bought a house that was more than you could afford, and no it's underwater, you get forgiven. Basically a clean slate. Of course if you did it right, and put money down, and have paid on your loan, now paying a mortgage on a house that is still (barely) worth what you paid, you're S.O.L.

I know I would be looking at a few of my neighbors and wondering..... Not to mention fuming.

I haven't heard that yet, but it doesn't surprise me in the least. Hussein believes the government should pick up the tab on most everything, reckless borrowing and spending among them. After all he wrote the book on it. Besides, realistically there is no way these people are going to pay back what they lost. If they could do that they would have had money for a reasonable and proper down payment in the first place. None of them had a pot to piss in.

You're going to start hearing a word in the lending community you haven't heard in a while. It is called "Collateral". What do you have of value to back up this large sum of money you wish to borrow? If you have none you'll be shown the door. And believe me they aren't going to give a damn about political correctness when they show whatever minority that door. As always money talks and bull$h!t walks. Especially after these lending institutions lost their shirts lending to these nit wits the first time around. There won't be a next.  Bill T.

[ericire12]

Right now the mortgage forgiveness thing is just rumor.... but where there is smoke there is fire.

[PegLeg45]

I'll give you another example of the crazy business practices that led to this mess. And this is first-hand knowledge as it was experienced by me.
When my wife and I were making plans to get married in 2001, I was told (as he looked me straight in the eye, no kidding) by a loan officer (after doing a quick credit check) that his supervisors gave him the green light to loan us the money even if we were both unemployed.
Yep....I was thinking WTF?

[fightingquaker13]

What irritates me is that we are bailing the lenders out. They should have thought of this before writing these bad loans. Its not just housing either. When I was in grad school (for a liberal arts degree, not med school), I was making $9k a year on a fellowship. Not a week went by that that folks weren't offering charge cards with $3-5k in unsecured debt. The banks got the bankruptcy laws changed to "hold irresponsible borrowers accountable'. What about dumbass greedy lenders who never should have issued those cards if they'd been sober? I do have some sympathy for the homeowners. I have zero for the guys who wrote the note in the first place, hoping they could sell it before the bubble burst and someone else would end up holding the bag.
FQ13

[Sponsor]

[billt]

Remember, a lot of these lenders were pressured by the government to give these loans out to financially unacceptable minorities. This allowed regular white folks to jump on this run away government gravy train. They cannot discriminate on which idiot they are going to loan to, and they certainly did not. Who applied this pressure to these mortgage companies to loan these people money they were always in danger of never paying back? Obviously it was someone in the government. The government is supported by us, the taxpayers.

So as is always the case we will pay one way or the other. Tax dollars that will have to bail out, clean up, wipe off the slate, or however you wish to put it, make this go away instead of using it for what it was originally intended for. The government is getting real good at "deflecting" tax money from it's original intent. The cost could come close to a trillion dollars by the time all of these people tank on all of these millions of home mortgages. I don't even want to talk about commercial property. Many malls around here are less than half occupied.  Bill T.

[fightingquaker13]

Remember, a lot of these lenders were pressured by the government to give these loans out to financially unacceptable minorities. This allowed regular white folks to jump on this run away government gravy train. They cannot discriminate on which idiot they are going to loan to, and they certainly did not. Who applied this pressure to these mortgage companies to loan these people money they were always in danger of never paying back? Obviously it was someone in the government. The government is supported by us, the taxpayers.

So as is always the case we will pay one way or the other. Tax dollars that will have to bail out, clean up, wipe off the slate, or however you wish to put it, make this go away instead of using it for what it was originally intended for. The government is getting real good at "deflecting" tax money from it's original intent. The cost could come close to a trillion dollars by the time all of these people tank on all of these millions of home mortgages. I don't even want to talk about commercial property. Many malls around here are less than half occupied.  Bill T.

Bill, that's about a 10th of the story. Don't buy this, its all the government's fault. Yes HUD and fannie Mac contributed. But, banks in the 1990s were running over with money and made bad calls because they were underregulated in terms of derivatives. "Mortgage brokers", ie banks weren't regulated as banks in terms of capitalization. "Gurantors" eg insurance companies like AIG were similarly underregulated and didn't require capitalization. Essentially, you could write a worthless loan, have it "guaranteeded" by an undercapitalized insurance company, call it Grade A and sell the paper which made money as long as real estate values went up. The whole thing was a ponzi scheme. Government failed partially by playing along, but mostly by not regulating brokers as banks. We learned this same lesson in the S@L crisis, we just ignored it throught two presidencies. It wasn't, due respect to Rush, minority loans that caused this. It was not regulating Wall Street in the sense that A: Lenders and insurors must have a certain percentage of capital in reserve to cover potential shortfalls. They can't be allowed to have all the balls up in the air at once. and B: Investors must be given full disclosure as to whether an "insured" assest really is insured. Hardly socialism, just transparency.
FQ13

[billt]

Don't buy this, its all the government's fault.
FQ13

When borrowed money doesn't get paid back, the blame lies at the feet of only one person, The person who borrowed it.  Bill T.

[tt11758]

When borrowed money doesn't get paid back, the blame lies at the feet of only one person, The person who borrowed it.  Bill T.

C'mon Bill, this is AMERICA, the land of the formerly free and the home of the abdication of personal responsibility.

[fightingquaker13]

When borrowed money doesn't get paid back, the blame lies at the feet of only one person, The person who borrowed it.  Bill T.

Incomplete answer. They do get the blame. But, so does the guy who made the loan knowing it wouldn't be repayed, but didn't care because he planned on selling it to some other schmuck who, was planning on selling it to another schmuck so they wouldn't take the hit. Blame also attaches to the guy who "insured" it, without enough capital to cover even 1/10th of outstanding liability so the huckster could gold plate the turd. Blame also hits the Congress critters who green lighted this shell game despite what we learned in the S@L crisis. You want a simple answer? Big money gamed the system so that the lessons in prudent bank, insurance, accounting and brokerage regulation we learned from the Great Deppression and the S@L crisis weren't applied. Its what happens when people think they'll get rich by trading paper rater than producing something of value. it always winds up being a ponzi scheme. And it always hits those who do produce something of value, but wind up footing the bill. We've been taught this lesson three times in the last hundred years. We're surprised why?
FQ13