GolfHos

Link (http://www.businessweek.com/bwdaily/dnflash/content/jan2008/db20080129_728982.htm?chan=top+news_top+news+index_businessweek+exclusives)

I have to wonder if this is going to turn into this decade's S&L scandal.

what?  multi-billion $ korprations wurkin' to screw over average 'merkans ?   no way!   viva tax cuts for the rich!  viva korprit tax breaks!  viva 'merkan capitalism !

http://www.slate.com/id/2182709/  oopsy

So the lenders brought this mess on themselves by lobbying against laws that might have saved their own asses.

And look (http://online.wsj.com/public/article/SB119906606162358773-dS0qdqo9bQaGuByo9gfRP5DAkz8_20081230.html?mod=rss_free) who was getting his palms greased in the process.


Of course, Bush is probably going propose a bailout of these companies (although it's too late for Ameriquest since they've already gone belly-up).

That article is an obvious lie.  Everyone knows that the Republicans are the party of smaller government and less federal intrusion.

those were the good old days. :tears:

Something I've been wondering, wouldn't most of these sub-prime mortgages have required PMI? If so, wouldn't it be the insurance companies holding the bag instead of the people holding the mortgages?

PMI kicks in after foreclosure and the lender sells the property. PMI covers the lenders--not the borrowers. Yet it's the borrower that has to pay the premiums.

that will be the next  :airquotes: crisis :airquotes:

I understand how PMI works.  By "people holding the mortgages," I meant lenders.

So, aren't the lenders covered?  Why would they be the ones suffering the loss in this mess?  Unless, for some reason, they didn't require PMI or they're self-insured.

I would think that for these high-risk loans, the lenders paid for the mortgage insurance themselves if they didn't require that the borrowers carry the insurance. Big companies like Citigroup do self-insure in the sense that they operate their own mortgage insurance companies.

6-month charts for two companies that insure asset-backed securities created from sub-prime mortgages:

(http://chart.finance.yahoo.com/c/6m/a/abk)

(http://chart.finance.yahoo.com/c/6m/m/mbi)

IIRC, a lot of subprime lending involved creative ways around having to pay PMI and still buy with no money down.  Much of the crisis, AFAIK, stems from the fact that a lot of available capital  emboldened lenders to loan money to people who didn't really have the financial resources to own homes.

For example, Borrowers would take an 80% first mortgage and a 20% second, using the later has down payment to secure the first.  And both loans would be ridiculously low teaser rate ARM's.

I don't have a lot of sympathy for either the lenders or (defaulting) homeowners. 

I myself sold a home to a couple early in this boom who really had no business buying a home.  They rented from me and then offered to buy it.  He had a bankruptcy on his record, with no regular income, and she a relatively low paying job.  They were sort of a mess as renters in terms of fulfilling their obligation to pay rent in a timely fashion.  I had to call them early in the month on several occasions to get the rent.

Still, they somehow managed to get a loan, bought the home, and then defaulted within two years.

That graph is what my index is supposed to look like when I buy Dr. Bob Rotella's Practice Like A Pro System.

I would have thought these would be exactly the people to require PMI of.

Sweet!  Did you ever get to intimidate them Mafia style?

"You get that mother *fudge*in' money in my hand by tomorrow, or I swear on my *fudge*in' kids, I will break every bone in your *fudge*in' body.  You gonna get me that *fudge*in' rent money? You're *fudge*in' right you are, I swear you don't wanna not have that *fudge*in' money.  etc., etc."

but if they had to pay PMI, they couldn't afford the monthly home cost..it would have priced them out

Sort of, but not exactly.

I remember one time I caught the lady on the phone, which was rare....and remember, she was the responsible one of the two.  The husband didn't mind lying and bull*feces*ting, but she wouldn't stoop to that.  After telling her I needed the money tonight, she said something like, "Well, I'm gonna have to just say a prayer and get some help from the Lord and he'll take care of me and I'll be right over."

So you can just imagine how well that one went for me.

screw that.  buy a set of Callybaby x-forged irons.  I cut my index in half by just ordering the bitches!!!

Cool.  I'll give 'em a shot.

Screwing over others for money is not the exclusive domain of 'rich' folks.  Its clearly a universal phenomenom that knows no income range or association.

of course, but are we going to argue poor people or even middle class people are the ones who are poised to benefit financially from this 'screw over'  ?
 :)

You been assimilated!

(http://inlinethumb25.webshots.com/19992/2990141550101688296S600x600Q85.jpg)

THIS screw over - no, no argument at all.  But your rant cast a wide net and I wanted to call you on it  ;)

Capitalism is good - 'pure' capitalism is dangerous, but that is not what we have.

You nail him on economics, and I'll cover your flank on HDTv

Gang bang!!!

Well,did she come over with the rent money(Yes the dear lord helped her ;D)..........or did she offer you something else. ;D

Is there anything the FBI won't try to probe??   ;)

I'm not on to exploit evident authority in such ways. 

It's much more fun for me when they think I am their prey.  In this way, I am not unlike Richard Gere.

You haven't answered my question. ;D

I answered your question.

And even if I had, gentlemen never tell

So, the thinking was "Borrower A can afford this loan, let's make him pay PMI, but Borrower B can't so let's skip it"?

No wonder this such a cluster*fudge*.