Housing: 2007 Thread.

[dullard]

Originally posted by: Vic
Nah, let's just keep blaming the go-betweens. Wall Street was happily buying subprime loans just a few months ago, demanding more and more, then they suddenly stop buying them and start shorting. But oh no! it's those evil subprime lenders who caused all this!

When something bad happens, who is to blame? I'm certainly not calling this criminal, but I like this analogy:

People pay money to download video of rapes of scantilly clad women walking in bad areas of town. So who is to blame?
(A) The people with the money (businesses buying the videos from rapists) or (people buying these videos)?
(B) The go-betweens who collected the money to rape the girl?
(C) The stupid girl who was scantilly clad in a bad part of town?

I like to put partial blame on all three groups. People should not buy those videos. Businesses should not sell the videos. People should not rape. And girls should protect themselves and not put themselves in a vulerable position. The degree of blame is not the same in all groups, but every single one of them could have stopped this horrible deed. Also, in this analogy the go-betweens probably deserve the most blame which isn't true in the case of mortgages. But they still all deserve some blame.

Just because people are willing to pay money for something, does NOT mean it is ok to sell it. Just because Wall Street demanded subprime loans does not mean it is ok to broker one.

 

[Vic]

Originally posted by: dullard

Originally posted by: Vic
Nah, let's just keep blaming the go-betweens. Wall Street was happily buying subprime loans just a few months ago, demanding more and more, then they suddenly stop buying them and start shorting. But oh no! it's those evil subprime lenders who caused all this!

When something bad happens, who is to blame. I'm certainly not calling this criminal, but I like this analogy:

Buisnesses pay money to show rapes of scantilly clad women walking in bad areas of town. People pay money to download this videos. So who is to blame?
(A) The people with the money (businesses buying the videos from rapists) or (people buying these videos)?
(B) The go-betweens who collected the money to rape the girl?
(C) The stupid girl who was scantilly clad in a bad part of town?

I like to put partial blame on all three groups. People should not buy those videos. Businesses should not sell the videos. People should not rape. And girls should protect themselves and not put themselves in a vulerable position. The degree of blame is not the same in all groups, but every single one of them could have stopped this horrible deed.

Just because people are willing to pay money for something, does NOT mean it is ok to sell it.

Your "analogy" is a straw man in the extreme. Or are you arguing that helping poor people acquiring the financing to buy a house is akin to encouraging rape?

And yeah, LK started spouting off nonsense yesterday that mortgage lenders should go up on criminal charges. He said (and I quote), "This is why many in your industry will be wearing white/black/orange." Yet you peel back the onion, and what do you see but many in his industry creating this problem and profiting from it. I have friends who work in subprime (I don't) who have recently lost their jobs solely because the Wall Street houses that were demanding their loans a few months ago suddenly stopped buying. Dig deeper and you see those same Wall Street houses started shorting about the same time! So yeah, you bet I'm pissed. And rightfully so.

 

[dullard]

Originally posted by: Vic

When something bad happens, who is to blame. I'm certainly not calling this criminal, but I like this analogy:

Your "analogy" is a straw man in the extreme. Or are you arguing that helping poor people acquiring the financing to buy a house is akin to encouraging rape?

I see you failed to see the bolded part above. It is an analogy, it isn't a 1-for-1 copy. And you fail at understanding what a straw man argument is.

Mortgage problem:
(A) Wall street wants to pay money for something that shouldn't be done.
(B) Mortgage brokers allow that act to be done.
(C) People get in over their heads and are vulerable do doing something that shouldn't be done.

My analogy:
(A) People pay money for something that shouldn't be done.
(B) People allow that act to be done.
(C) People get in over their heads and are vulerable to something that shouldn't be done.

You can't get much closer to that for an analogy.

Helping poor people obtain financing that they cannot possibly afford in any realistic situation is flat out morally and ethically wrong. It isn't rape, but it isn't right either. Not all subprime loans should end. But there should have been a heck of a lot less of them. There should have been MORE restraint on all parties, (A), (B), and (C) above.

I don't like the idea of passing laws to outright ban these loans - as laws are usually never the answer. But the free market clearly isn't working as well as it could in this situation. The governement can and should help set guidelines and infrastructure so that these situations can be avoided as best as possible.

 

[Vic]

Originally posted by: dullard

Originally posted by: Vic

When something bad happens, who is to blame. I'm certainly not calling this criminal, but I like this analogy:

Your "analogy" is a straw man in the extreme. Or are you arguing that helping poor people acquiring the financing to buy a house is akin to encouraging rape?

I see you failed to see the bolded part above. It is an analogy, it isn't a 1-for-1 copy. And you fail at understanding what a straw man argument is.

Mortgage problem:
(A) Wall street wants to pay money for something that shouldn't be done.
(B) Mortgage brokers allow that act to be done.
(C) People get in over their heads and are vulerable do doing something that shouldn't be done.

My analogy:
(A) People pay money for something that shouldn't be done.
(B) People allow that act to be done.
(C) People get in over their heads and are vulerable to something that shouldn't be done.

You can't get much closer to that for an analogy.

Helping poor people obtain financing that they cannot possibly afford in any realistic situation is flat out morally and ethically wrong. It isn't rape, but it isn't right either.

Well, aren't we elitist. Screw those poor, eh? Keep them in those rented apartments where they belong!

Look, you don't understand what's actually happened/happening here. That's more than obvious.

edit to your edit:

I don't like the idea of passing laws to outright ban these loans - as laws are usually never the answer. But the free market clearly isn't working as well as it could in this situation. The governement can and should help set guidelines and infrastructure so that these situations can be avoided as best as possible.

And this proves it. The mortgage industry is not a free market right now. It is tightly regulated and controlled from guidelines (ever heard of a "conforming" loan?) and infrastructure (HUD, hello?) right down to the lowest allowed gross revenue margins of any industry in America. Get a clue.

 

[dullard]

Originally posted by: Vic
Well, aren't we elitist. Screw those poor, eh? Keep them in those rented apartments where they belong!

See my edit. And that is an example of a straw man argument. I want to give the poor or the bad credit people mortgages if there are reasonable expectations that they can be paid off. Your statement of my intentions couldn't be any further from the truth.

Look, you don't understand what's actually happened/happening here. That's more than obvious.

The exact same is true if spoken to you, Vic. Goodbye for now.

In the mean time, I hope you take a look at yourself and your personal attacks recently.

 

[Vic]

Originally posted by: dullard

Originally posted by: Vic
Well, aren't we elitist. Screw those poor, eh? Keep them in those rented apartments where they belong!

See my edit.

Look, you don't understand what's actually happened/happening here. That's more than obvious.

The exact same is true if spoken to you, Vic. Goodbye for now.

I responded to your edit. You're just making a fool of yourself now.

edit to your continuing edits:

In the mean time, I hope you take a look at yourself and your personal attacks recently.

Really? So you think that the lies and mischaracterizations that you have been doing are not personal attacks then? At least I'm not deceitful about it.
Hey, go ahead... spread your ignorance and FUD and pretend that you're helping people. Protect the short-sellers who manipulated this situation. Just keep telling yourself you're on the moral high-ground as you encourage chaos. Ain't you the man!

 

[LegendKiller]

Originally posted by: Vic
Blah blah blah is that all you ever do? I know exactly how subprime mortgages are funded up to secondary, thank you very much. You don't need to bore us with technical details in an attempt to obscure who is really controlling the purse strings. In the meantime, your Wall Street buddies just pulled one of the biggest pump-and-dump scams in history. But no worries, they'll have plenty of apologists like you and plenty of money left over to buy as many talking heads and politicians as needed.

Ahh, more blame shift, gotta love it.

First off, please provide quantitative and verifiable evidence that I-banks, such as Credit Suisse, Goldman, or Lehman shorted LEND or NEW or other stocks. Furthermore, please provide any evidence at all that i-banking directly communicated with investing. I would be very interested in the 2nd piece, as that would be a violation of numerous laws and the SEC would love to see the direct evidence, so by all means, show it.

Second, as Dullard stated, what party is ultimately at fault for writing loans they know cannot be reasonably paid? The person who funds those loans, or the person who writes them? You and your ilk have to interview the people, check applications, find problems, but you refused to do so because you wanted money. Your greed lead you down this path and now those who were taken avantage of have to suffer.

 

[LegendKiller]

Originally posted by: Vic

Your "analogy" is a straw man in the extreme. Or are you arguing that helping poor people acquiring the financing to buy a house is akin to encouraging rape?

And yeah, LK started spouting off nonsense yesterday that mortgage lenders should go up on criminal charges. He said (and I quote), "This is why many in your industry will be wearing white/black/orange." Yet you peel back the onion, and what do you see but many in his industry creating this problem and profiting from it. I have friends who work in subprime (I don't) who have recently lost their jobs solely because the Wall Street houses that were demanding their loans a few months ago suddenly stopped buying. Dig deeper and you see those same Wall Street houses started shorting about the same time! So yeah, you bet I'm pissed. And rightfully so.

So, because WS saw that the market had gone too far down-credit and saw weakness and thus pulled funding means that they are culpable for your ilk's woes? Please, that's like saying that a gun manufacturer is at fault for you pulling the trigger to shoot your own foot off. THEY made the concious decision to underwrite those loans. THEY took in apps, fuzzed numbers, and accepted people they KNEW couldn't pay. THEY are ultimately at fault and will be put to the fire to find out justifications for their own lack of morality.

Don't blame this on some type of over-arching conspiracy, like people like DMcowen do, all that turns you into is somebody who doesn't want to face reality and only wants to shift blame. You and your ilk loved the bankers, because you were making money and times were good. However, when people caught onto your scheme and the funding got pulled, subprime people start whining and crying like babies who got their candy taken away.

As far as putting people into houses and being elitist. Nice try sparky, but when it comes down to it, stated income "liar loans", no-doc, and fudging numbers, are the responsability of the underwriter who actually takes the application. If your friends can't discern good credit from bad, liars from not, and payers from defaulters, it's nobody's fault but their own when credit gets pulled.

You guys had loose lending practices and took advantage of the suceptible, don't lie like they did on their apps.

 

[dullard]

Originally posted by: LegendKiller
Second, as Dullard stated, what party is ultimately at fault for writing loans they know cannot be reasonably paid? The person who funds those loans, or the person who writes them? You and your ilk have to interview the people, check applications, find problems, but you refused to do so because you wanted money. Your greed lead you down this path and now those who were taken avantage of have to suffer.

Legend, at least you can see the point I am trying to make.

Just because something can happen (there is funding, and it meets government requirements) doesn't mean it should be done. I'm not sure what is hard to understand about that statement, but I'm not going to press it either.

I hope Vic's buisness does well and that he is following high ethical standards. He is a smart guy and I like when he posts (in any type of thread). But his recent posts concern me. I'm going to lay off of him for now and won't reply for a while to his posts.

LegendKiller, I see your arguments, and many I agree with. However, I don't agree with your doom scenario either, it'll be a bit better than you are predicting. But I hope that you too will lay off the personal attacks. "You and your ilk". "Your greed". I beg for you to please leave that type of talk to PMs.

 

[LegendKiller]

Originally posted by: Vic

Really? So you think that the lies and mischaracterizations that you have been doing are not personal attacks then? At least I'm not deceitful about it.
Hey, go ahead... spread your ignorance and FUD and pretend that you're helping people. Protect the short-sellers who manipulated this situation. Just keep telling yourself you're on the moral high-ground as you encourage chaos. Ain't you the man!

This is what you *STILL* don't get. A market that goes up TOO MUCH, GOES DOWN. Mortgage guys over-heated the market and now it will go down. I know that they like to ignore reality, but regression to the mean is something that happens regardless of whether people will say it happen or not. Hence my tide analogy.

They hide their head in the sand and refuse to acknowledge that the tide HAS to come in, regardless of when or how or who says it will, it WILL come in. They think that stiffling bearish talk will stop the tide? Do you think that the cycle can be stopped?

Many in that industry are those people who think that eToys.com and all of those other trash companies were going to succeeed, eventually. That's essentially what they are saying, that no matter what, no matter how rediculous house prices got, that the market won't revert to the mean.

Man, no wonder why many mortgage businesses are tanking.

 

[Vic]

Right, LK.... let's remember that you're the one who felt the need to bring up the whole blame issue the other day. Obviously the go-betweens need to go to jail, right? I mean, it's not like Wall Street guys dictated terms. It's not like they poured over each and every single loan before the bought them. Oh no, they were lied to when paid back 3 basis points on loans that they knew were no-income verification. I mean, Lehman Bros. themselves were totally deceived when their very own mortgage company (Aurora) offered loan programs that encouraged borrowers (and lenders) to leave the employment and income sections of the application BLANK. Oh yeah, lenders were just "fuzzing" numbers there.

What a crock of sh!t....

 

[Vic]

Mortgage lender business plan:

1. Invest in high-risk subprime mortgages that lend money to poor/bad credit people to buy homes.
2. Subprime mortgages fail to perform, resulting in foreclosure, sale at loss, bankruptcy for lender, and everyone loses their jobs.
3. ???
4. Profit!

 

[LegendKiller]

Originally posted by: Vic
Right, LK.... let's remember that you're the one who felt the need to bring up the whole blame issue the other day. Obviously the go-betweens need to go to jail, right? I mean, it's not like Wall Street guys dictated terms. It's not like they poured over each and every single loan before the bought them. Oh no, they were lied to when paid back 3 basis points on loans that they knew were no-income verification. I mean, Lehman Bros. themselves were totally deceived when their very own mortgage company (Aurora) offered loan programs that encouraged borrowers (and lenders) to leave the employment and income sections of the application BLANK. Oh yeah, lenders were just "fuzzing" numbers there.

What a crock of sh!t....

I never said anything about the lending arms of full-service banks and I think all parties involved in the shady originations should be investigated and held accountable. However, you are confusing FUNDING with ORIGINATION, two significantly different businesses.

They don't pour over every loan, they take statistical samples and judge the underwriting process of the originator, who may or may not be telling the whole truth and can be hiding much ofi t.

 

[Vic]

Whatever, man. My long-time GF is a secondary manager at a subprime wholesaler and deals directly with selling lending pools up to the big Wall Street houses. I know EXACTLY what happened here, but I'm done dealing with your insults, accusations, lies, and FUD. Hope you made a lot of money on your short-sells! And I'm sure all that money will help you sleep at night.

 

[Slew Foot]

Originally posted by: Vic
Or are you arguing that helping poor people acquiring the financing to buy a house is akin to encouraging rape?
.

You werent helping poor people BUY houses. You helped put them into an infinite cycle of indentured servitude and refinances by placing them into interest only loans they couldnt afford.

Of course, and endless stream of refinances can only be good for your own business.

 

[Vic]

Originally posted by: Slew Foot

Originally posted by: Vic
Or are you arguing that helping poor people acquiring the financing to buy a house is akin to encouraging rape?
.

You werent helping poor people BUY houses. You helped put them into an infinite cycle of indentured servitude and refinances by placing them into interest only loans they couldnt afford.

Of course, and endless stream of refinances can only be good for your own business.

You're confused. I don't make the rates, I don't set the programs, I don't negotiate home values. People come to me, say they want to buy a home, refinance a home, whatever, and I help them arrange the financing, all of their own accord and with complete upfront and lawful disclosure. All of my customers are referrals and repeats, meaning that they recommend me to their family and friends, and come back to me should they decide to move and buy a new home. Some just call me every once in a while for advice.

You need to take your little FUD-stricken attitude and shove it up your ass. You might unaware of this, but turning down a self-motivated and otherwise qualified borrower simply because you don't feel in your opinion that it would be right for them to buy a house is a violation of federal lending laws.


edit: BTW, I think this is getting far too out of hand. For example, Slew Foot here (I am told) is an anesthesiologist. Now we know that it occasionally happens that someone dies under an anesthesiologist's care due to carelessness, negligence, stupidity, or whatever. Suppose I suddenly said that Slew Foot was one of those anesthesiologists who had done such a thing and that he did such things on purpose. That IMO is exactly what he libeled me of right here. And I think that sh!t should end.

 

[Slew Foot]

By saying "you" I was referring to the mortgage industry in general, not necessarily your own practice. And its been very well disclosed that predatory lending, has fooled many people into thinking they can buy a home, when they really cant.

 

[Vic]

Originally posted by: Slew Foot
By saying "you" I was referring to the mortgage industry in general, not necessarily your own practice. And its been very well disclosed that predatory lending, has fooled many people into thinking they can buy a home, when they really cant.

Very well, fine. You certainly didn't come off that way.

And you're wrong again too. Predatory lending is defined, by multiple local, state, and federal laws, as high cost loans, meaning loans that cost by some standard in excess of what is considered reasonable. And this was a credit bubble, meaning that loans cost too little and were too readily available at too loose of lending standards. That's exactly the opposite of predatory high cost lending. In fact, this whole crisis could have been mostly avoided had interest rates (read: borrowing costs) gone up in mid-2003 as I (and many others in the industry) had expected that they would.

So "in general" you should stick to medicine.

 

[Slew Foot]

If you guys in the mortage industry did your job, there wouldnt be a record number of foreclosures that are continuing to rise. Youre supposed to put people into loans they can afford, and if they cant afford it, dont give it to them. That's why people look to you as a supposed professional. I dont give my patients what they ask for, I give them what they need.

 

[Vic]

Originally posted by: Slew Foot
If you guys in the mortage industry did your job, there wouldnt be a record number of foreclosures that are continuing to rise. Youre supposed to put people into loans they can afford, and if they cant afford it, dont give it to them. That's why people look to you as a supposed professional. I dont give my patients what they ask for, I give them what they need.

You just don't get it (and I doubt you ever will). Tell ya what, take your complaints to the Fed. They make the rules. We just sell their money.

In the meantime, you just go ahead and keep telling yourself that "predatory lending" is exactly the opposite of what it is actually defined as by law. Gotta love knee-jerkers who get all their knowledge from the sensationalistic media!

 

[Vic]

OMG those evil lenders the cost of mortgage borrowing continues to be at its lowest in 36 years!

Now... for those of us who actually do understand economics and finance, compare that data to home price data over the same period. I guarantee you that you will see a direct correlation. How predatory of the mortgage industry "in general" to make mortgage costs so cheap that housing markets bubbled over in exhuberence and overspeculation!

 

[LegendKiller]

Originally posted by: Vic
OMG those evil lenders the cost of mortgage borrowing continues to be at its lowest in 36 years!

Now... for those of us who actually do understand economics and finance, compare that data to home price data over the same period. I guarantee you that you will see a direct correlation. How predatory of the mortgage industry "in general" to make mortgage costs so cheap that housing markets bubbled over in exhuberence and overspeculation!

Because they are desperate to keep their businesses afloat. Not to mention that inflation is still pretty dang low. What matters are spreads, not the overall rate.


For those of you not stupid enough to buy into the hype and would rather look at factual statistics on the condition of the lending industry, take a look at this research paper. It breaks down originations utilizing actual data and paints a pretty bleak picture.


http://www.billcara.com/CS%20Mar%2012%202007%20Mortgage%20and%20Housing.pdf

 

[Vic]

Originally posted by: LegendKiller

Originally posted by: Vic
OMG those evil lenders the cost of mortgage borrowing continues to be at its lowest in 36 years!

Now... for those of us who actually do understand economics and finance, compare that data to home price data over the same period. I guarantee you that you will see a direct correlation. How predatory of the mortgage industry "in general" to make mortgage costs so cheap that housing markets bubbled over in exhuberence and overspeculation!

Because they are desperate to keep their businesses afloat. Not to mention that inflation is still pretty dang low. What matters are spreads, not the overall rate.


For those of you not stupid enough to buy into the hype and would rather look at factual statistics on the condition of the lending industry, take a look at this research paper. It breaks down originations utilizing actual data and paints a pretty bleak picture.


http://www.billcara.com/CS%20Mar%2012%202007%20Mortgage%20and%20Housing.pdf

Oh yeah, they were desperate to keep their business afloat during the biggest boom in history! :roll:

You need to STFU with your personal attacks. Seriously. There's message board fantasies and then there's crossing the line, which you have done and have been warned about. Say "you and your ilk" (or some other such comment implying I am criminal and/or professionally unethical) one more time to me again here and you'll find out that you're really not anonymous here.

 

[LegendKiller]

Originally posted by: Vic

Originally posted by: LegendKiller

Originally posted by: Vic
OMG those evil lenders the cost of mortgage borrowing continues to be at its lowest in 36 years!

Now... for those of us who actually do understand economics and finance, compare that data to home price data over the same period. I guarantee you that you will see a direct correlation. How predatory of the mortgage industry "in general" to make mortgage costs so cheap that housing markets bubbled over in exhuberence and overspeculation!

Because they are desperate to keep their businesses afloat. Not to mention that inflation is still pretty dang low. What matters are spreads, not the overall rate.


For those of you not stupid enough to buy into the hype and would rather look at factual statistics on the condition of the lending industry, take a look at this research paper. It breaks down originations utilizing actual data and paints a pretty bleak picture.


http://www.billcara.com/CS%20Mar%2012%202007%20Mortgage%20and%20Housing.pdf

Oh yeah, they were desperate to keep their business afloat during the biggest boom in history! :roll:

You need to STFU with your personal attacks. Seriously. There's message board fantasies and then there's crossing the line, which you have done and have been warned about. Say "you and your ilk" (or some other such comment implying I am criminal and/or professionally unethical) one more time to me again here and you'll find out that you're really not anonymous here.

No need to toss around implications of litigiousness or other threats. Perhaps I did step out of line with the "ilk" comment and I apologize for that. My last post had nothing to do with you nor any implication of such.

Sometimes assigning intent to internet postings is like trying to wring water from rock, although I am still saying that I did go to farr in that one post.

 

[Vic]

Originally posted by: LegendKiller

Originally posted by: Vic

Originally posted by: LegendKiller

Originally posted by: Vic
OMG those evil lenders the cost of mortgage borrowing continues to be at its lowest in 36 years!

Now... for those of us who actually do understand economics and finance, compare that data to home price data over the same period. I guarantee you that you will see a direct correlation. How predatory of the mortgage industry "in general" to make mortgage costs so cheap that housing markets bubbled over in exhuberence and overspeculation!

Because they are desperate to keep their businesses afloat. Not to mention that inflation is still pretty dang low. What matters are spreads, not the overall rate.


For those of you not stupid enough to buy into the hype and would rather look at factual statistics on the condition of the lending industry, take a look at this research paper. It breaks down originations utilizing actual data and paints a pretty bleak picture.


http://www.billcara.com/CS%20Mar%2012%202007%20Mortgage%20and%20Housing.pdf

Oh yeah, they were desperate to keep their business afloat during the biggest boom in history! :roll:

You need to STFU with your personal attacks. Seriously. There's message board fantasies and then there's crossing the line, which you have done and have been warned about. Say "you and your ilk" (or some other such comment implying I am criminal and/or professionally unethical) one more time to me again here and you'll find out that you're really not anonymous here.

No need to toss around implications of litigiousness or other threats. Perhaps I did step out of line with the "ilk" comment and I apologize for that. My last post had nothing to do with you nor any implication of such.

Sometimes assigning intent to internet postings is like trying to wring water from rock, although I am still saying that I did go to farr in that one post.

That's fine. Accepted. It's not a threat though. You crossed a legitimate line. And I do think it was in more than one post, but I won't argue that point. It just needs to stop, and I'll pretend it never happened.

All I have been doing in these threads is encouraging people not to panic, while IMO you have been intent on inciting as much panic as possible. That (intentionally inciting panic) is something BTW which I do consider to be unethical. I have repeatedly told you here (and encouraged even to search my posts for yourself) that during the boom I encouraged people not to be overexhuberent nor to buy more house than they could afford. You have continued to pretend as though I have acted exactly the opposite.

I have no doubt (and have even said as much) that some people in some markets are going to get burned. I have said this repeatedly, even bringing up Slew Foot's market of Sacramento more than once as a prime example. I would appreciate if you would quit pretending that I am saying the opposite, simply because you feel the need to incite panic. No one has been saying that the boom would continue forever. OTOH inciting panic does not help anyone and will only make things worse. As I told you the other day, your plan of "helping" the housing market by not having anyone ever buy a home again is clearly flawed.