Home foreclosures

[spence]

This is interesting...



http://www.motherjones.com/mojo/2009...0-foreclosures

-spence

[RIJIMMY]

hmm, seems the areas with the most foreclosures have the highest amounts of spanish speaking people?

[JohnnyD]

Originally Posted by RIJIMMY

hmm, seems the areas with the most foreclosures have the highest amounts of spanish speaking people?

It's called Spanglish.

[buckman]

Originally Posted by JohnnyD

It's called Spanglish.

Only if they know little English.

[EarnedStripes44]

Some of those places are also McMansion central....Fulton and Fayette Co. GA immediately spring to mind and Miami was on a condo construction binge. I heard their are some 40,000 condos currently on the market.

[JohnnyD]

Originally Posted by buckman

Only if they know little English.

¿Que?

[sokinwet]

I won't even dignify this with a detailed response but suffice to say there are many factors related to the incidence of foreclosure...none of them relating to the language spoken. Your true colors are showing.

[Nebe]

Its not that those areas are heavily populated by spanish speaking folks, its that congress- headed by barney fwank pushed banks to loosen rules to allow illegal aliens access to mortgages... or more specifically, people who were un able to show a steady income- (payed under the table, jobless, self employed- like myself, etc..) If someone could come up with a deposit and had good credit, they were easily eligible for a no income verification mortgage.

Also, add to the fact that those areas are some of the most densely populated areas in the country.

[RIJIMMY]

Originally Posted by Nebe

Its not that those areas are heavily populated by spanish speaking folks, its that congress- headed by barney fwank pushed banks to loosen rules to allow illegal aliens access to mortgages... or more specifically, people who were un able to show a steady income- (payed under the table, jobless, self employed- like myself, etc..) If someone could come up with a deposit and had good credit, they were easily eligible for a no income verification mortgage.

Also, add to the fact that those areas are some of the most densely populated areas in the country.

THANK F"IN GOD!!!!!!!! NEBE IS 100% CORRECT!!! This is the greatest day in the political forum!!!!
Yes Sokinwet, COMMON SENSE IS MY TRUE COLOR!!!!!!!!!!!!!!!!!!!!
Sokinwet, one thing I know from my line of work, data does not lie. LOOK AT THE MAP!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[PRBuzz]

Bottom line on foreclosures: here's a subprime loan with NO money down. There was nothing risked therefore when not making payments nothing lost, just walk away.

Anyone qualified (or not) got a loan irregardless of race, ethnicity, religion, alien status, etc.

[Nebe]

Originally Posted by RIJIMMY

THANK F"IN GOD!!!!!!!! NEBE IS 100% CORRECT!!! This is the greatest day in the political forum!!!!
Yes Sokinwet, COMMON SENSE IS MY TRUE COLOR!!!!!!!!!!!!!!!!!!!!
Sokinwet, one thing I know from my line of work, data does not lie. LOOK AT THE MAP!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Did you not get the memo? I am right all the time. This is just are rare instance where YOU have chosen to be right.

[buckman]

Originally Posted by Nebe

Did you not get the memo? I am right all the time. This is just are rare instance where YOU have chosen to be right.

[sokinwet]

"Sokinwet, one thing I know from my line of work, data does not lie."
You are correct RIJ, data doesn't lie, however data can be misinterpreted intentionally or otherwise. I wasn't going to respond any further to this thread but since you've called me out. For 32 years I've worked as the housing director for a local gov. Planning & Community Development office. I am a member of a gov. taskforce charged with study of the foreclosure issue and I'm the contact person for the MA Foreclosure Initative and Neighborhood Stabilization Program (the fed. program providing the $$ to address the problem) Just like you may have insights into the investment business because of your line of work, on a weekly basis I see data pertaining to the wide range of issues that have contributed to this problem, industry and gov. efforts to try to stem the tide, concerns of lenders and housing developers, predatory lending problems, (Calif. by no small coincidence is one of a few states with no regulations concerning predatrory lending), the demographics of people impacted by foreclosure, etc. I could go on but I'm sure you get the picture. Spouting stereotype bias or making gay jokes about Barney Frank (Nebe!)doesn't help peoples understanding of what is a very serious problem for everyone.

[spence]

Sokinwet, you should know by now that there's no place for credibility in this forum! I'm afraid you need to take your resume and go.

What I found interesting about the map, that nobody picked up on is how many decent sized urban areas seem lightly effected compared to the mean.

-spence

[detbuch]

Originally Posted by sokinwet

"Sokinwet, one thing I know from my line of work, data does not lie."
You are correct RIJ, data doesn't lie, however data can be misinterpreted intentionally or otherwise. I wasn't going to respond any further to this thread but since you've called me out. For 32 years I've worked as the housing director for a local gov. Planning & Community Development office. I am a member of a gov. taskforce charged with study of the foreclosure issue and I'm the contact person for the MA Foreclosure Initative and Neighborhood Stabilization Program (the fed. program providing the $$ to address the problem) Just like you may have insights into the investment business because of your line of work, on a weekly basis I see data pertaining to the wide range of issues that have contributed to this problem, industry and gov. efforts to try to stem the tide, concerns of lenders and housing developers, predatory lending problems, (Calif. by no small coincidence is one of a few states with no regulations concerning predatrory lending), the demographics of people impacted by foreclosure, etc. I could go on bet I'm sure you get the picture. Spouting stereotype bias or making gay jokes about Barney Frank (Nebe!)doesn't help peoples understanding of what is a very serious problem for everyone.

I am a bit flumoxed by the phrase "predatory lending." I get the image of Iago demanding his pound of flesh, or of 19th century English debtor prisons. Are unscrupulous banks or, if not the bank itself but the bankers who write up the loans, intentionally selling homes to buyers who really can't afford them? And, if so, what are they gaining?

[spence]

Originally Posted by detbuch

Are unscrupulous banks or, if not the bank itself but the bankers who write up the loans, intentionally selling homes to buyers who really can't afford them?

Yes, they were.

And, if so, what are they gaining?

Easy, they were "gaining" the high fees charged to process the loan to a sub-prime borrower.

A key factor in this mess was the process by which a loan was given, then sold to a third party. The liability on this loan was often then off-loaded to yet another third party.

And here you have different markets. One focused on making money from the initial loan transaction, and the other focused on profit from a variety of derivitave loan products.

The system evolved to a point where it was very profitable (with little to no risk to the loan originator) to extend credit to an unworthy borrower.

This combined with other factors, the Fed's money policy, Government (both sides here) pressure to increase home ownership and rising home costs all contributed greatly to the current mess we're in.

-spence

[detbuch]

Originally Posted by spence

Yes, they were.



Easy, they were "gaining" the high fees charged to process the loan to a sub-prime borrower.

A key factor in this mess was the process by which a loan was given, then sold to a third party. The liability on this loan was often then off-loaded to yet another third party.

And here you have different markets. One focused on making money from the initial loan transaction, and the other focused on profit from a variety of derivitave loan products.

The system evolved to a point where it was very profitable (with little to no risk to the loan originator) to extend credit to an unworthy borrower.

-spence

So, in the end, who is the loser in this process? If the borrower can't make payments, he defaults, doesn't "lose" the home cause the "bank" (or the final holder of the lien) owns it. Is it some "third party" who now owns the home the loser? Who is the "predator" and who is the victim?

[spence]

Originally Posted by detbuch

So, in the end, who is the loser in this process? If the borrower can't make payments, he defaults, doesn't "lose" the home cause the "bank" (or the final holder of the lien) owns it. Is it some "third party" who now owns the home the loser? Who is the "predator" and who is the victim?

There's plenty of blame on all sides.

Certianly people took loans they couldn't afford, or extended themselves assuming their income would continue at personal risk.

Certianly banks and mortgage brokers took advantage of the situation and loaned money to anyone and everyone, putting pressure on the government to ease restrictions so they could come up with all sorts of creative loan products.

Certianly government assumed increased home ownership was good for all political interests.

Certianly there were crooks who took advantage of the situation and made a mint via mortgage fraud.

Certianly Alan Greenspan kept investment in the US Treas. so unattractive that offshore investors were itching to find a better place to park their money.

Certianly investment houses packaged and traded these loans like they were AAA investments.

Certinaly a lot of MBA's were having a field day at their weekend retreats coming up with new schemes to make millions off of the trillions in notional value flowing through the system.

Certianly the SEC was out to lunch.

But hey, it's a lot easier to blame everything on Barney Frank. He is gay after all...

-spence

[sokinwet]

Kind of a "cliffnotes" version! You want to by a home. A "predatory" lender; usually an " XYZ Mortgage Co" offers you a "deal" mortgage; generally an ARM that you probably will have a hard time affording but...(the hook) you will be able to refinance to a more affordable fixed 30 yr. once you get in the house. The lender sells the loan on the secondary market to investors who buy it at a discount. They will resell it again or hold it hoping for the long term profit over the loan term. You don't get your 30 yr. fixed because the Predatory lender is long gone with his profit and the new holder of your mortgage isn't about to give you a new loan because your credit score is "0" or perhaps the value of your home isn't what it was. Add in bundled mortgages and mortgage backed securities a depreciating housing market and we here we are today. Plenty of blame..starting with the uneducated borrower, greedy finance industry, government regulators alseep at the wheel or in bed with those they were "regulating". So in the end the loser is us.

[detbuch]

Originally Posted by sokinwet

Kind of a "cliffnotes" version! You want to by a home. A "predatory" lender; usually an " XYZ Mortgage Co" offers you a "deal" mortgage; generally an ARM that you probably will have a hard time affording but...(the hook) you will be able to refinance to a more affordable fixed 30 yr. once you get in the house. The lender sells the loan on the secondary market to investors who buy it at a discount. They will resell it again or hold it hoping for the long term profit over the loan term. You don't get your 30 yr. fixed because the Predatory lender is long gone with his profit and the new holder of your mortgage isn't about to give you a new loan because your credit score is "0" or perhaps the value of your home isn't what it was. Add in bundled mortgages and mortgage backed securities a depreciating housing market and we here we are today. Plenty of blame..starting with the uneducated borrower, greedy finance industry, government regulators alseep at the wheel or in bed with those they were "regulating". So in the end the loser is us.

Sounds like the secondary market investors, by buying unworthy loans and then not giving the new loan that was promised by the original "predatory" lender, is stuck with the bad loan and by stupidity becomes the predator against himself. Can there be that much stupidity in this convuluted process, or are the parties depending on some invisible hand to come to the rescue? The Government, perhaps? And if so, how in the world did the government get involved in such a mess to begin with? Did it have something to do with beginning the process? If the government did not, even with the best intentions, insert itself into the housing market beyond the most basic regulatory necessity, would we be at this place now?

[spence]

Originally Posted by detbuch

Sounds like the secondary market investors, by buying unworthy loans and then not giving the new loan that was promised by the original "predatory" lender, is stuck with the bad loan and by stupidity becomes the predator against himself. Can there be that much stupidity in this convuluted process, or are the parties depending on some invisible hand to come to the rescue? The Government, perhaps? And if so, how in the world did the government get involved in such a mess to begin with? Did it have something to do with beginning the process? If the government did not, even with the best intentions, insert itself into the housing market beyond the most basic regulatory necessity, would we be at this place now?

The problem was that the risk was so obfuscated nobody really understood what was a good loan and what was a bad loan. I don't think for a second the market bet on this scheme because they thought the Government would back them up, quite simply, they never thought the housing market would fail and the money was too good to be true.

Had there been less government regulation the problem would likely be even worse. We don't have a barter and trade system...our markets rely on paper and credit. i.e. you can't have it both ways...

-spence

[detbuch]

Originally Posted by spence

The problem was that the risk was so obfuscated nobody really understood what was a good loan and what was a bad loan. I don't think for a second the market bet on this scheme because they thought the Government would back them up, quite simply, they never thought the housing market would fail and the money was too good to be true.

Had there been less government regulation the problem would likely be even worse. We don't have a barter and trade system...our markets rely on paper and credit. i.e. you can't have it both ways...

-spence

It just seems that the obfuscated system, didn't appear full blown. Otherwise, the massive failure would have happened long ago. The buying and selling of mortgages to secondary and tertiary sources, the bundling, the lowering of standards, ESPECIALLY the lowering of standards that wooed major lending institutions from time tested lending practices, surely, didn't JUST HAPPEN. Every disease begins with a germ. A massive, complex system has to be developed. It has to evolve from something simpler. I don't know the history of these phenomena, but I recall a time when it was much more difficult to get a mortgage loan. Then I recall government programs that made it easier. It seemed to be a good thing. But the culture of home buying was radically changed, and, as in every evolutionary process, no one could predict what new paths would be taken. Is it possible that if the more solid lending practices, which banks used to regulate themselves, were not tampered with, the housing market would have found more natural ways to provide affordable housing? Where there is money to be made, enterprising entrepeneurs will find a way to earn it. And if, say, a government makes it easier by changing banking standards, why struggle, just follow the new path.

[Nebe]

excuse me but when did I call Barney Frank a pickle smootcher?

I said barney fwank.. thus comenting on is silly accent.

that is all.. carry on

[Mr. Sandman]

Originally Posted by Nebe

Its not that those areas are heavily populated by spanish speaking folks, its that congress- headed by barney fwank pushed banks to loosen rules to allow illegal aliens access to mortgages... or more specifically, people who were un able to show a steady income- (payed under the table, jobless, self employed- like myself, etc..) If someone could come up with a deposit and had good credit, they were easily eligible for a no income verification mortgage.
.

BINGO !! we have a winner.

"Also, add to the fact that those areas are some of the most densely populated areas in the country "

not exactly, There are a lot of other densely populated areas that are not so blue.

[spence]

Originally Posted by detbuch

It just seems that the obfuscated system, didn't appear full blown. Otherwise, the massive failure would have happened long ago. The buying and selling of mortgages to secondary and tertiary sources, the bundling, the lowering of standards, ESPECIALLY the lowering of standards that wooed major lending institutions from time tested lending practices, surely, didn't JUST HAPPEN. Every disease begins with a germ. A massive, complex system has to be developed. It has to evolve from something simpler. I don't know the history of these phenomena, but I recall a time when it was much more difficult to get a mortgage loan. Then I recall government programs that made it easier. It seemed to be a good thing. But the culture of home buying was radically changed, and, as in every evolutionary process, no one could predict what new paths would be taken. Is it possible that if the more solid lending practices, which banks used to regulate themselves, were not tampered with, the housing market would have found more natural ways to provide affordable housing? Where there is money to be made, enterprising entrepeneurs will find a way to earn it. And if, say, a government makes it easier by changing banking standards, why struggle, just follow the new path.

You keep trying to drag this back to the government like some socialistic parasite is at the root of the problem, but it simply is not, there is no clear chicken and egg here.

You are right to say that lending used to be different. A significant component of this is that in years past the government didn't allow commercial, investment banks and insurance houses to mingle. A repeal of this law in 1999 dramatically changed the way financial products were offered and traded as the banks now had the ability to profit from multiple facets of the same investment.

These changes weren't made for purely idiological reasons. Industry lobbied hard for changes and influence the actions of our politicians. They argued that more flexibility would allow them to better serve their customers. I'm sure there were some legitimate reasons, but hindsight is 20:20.

Was this the only reason? Heck no, as I stated above there are many pieces to this pie. If you want to place blame, place it on our continued inability to learn from past mistakes.

-spence

[RIJIMMY]

Sokinwet, I'm not syaing that is the ONLY problem, but you think its a conicidence that the states with the highest level of illegal immigration have the highest levels of foreclosures? Spence, the reason that urban areas do not have as high foreclosure rates IMHO is due to the rental population.

Its OK, it looks like it was our old friend once again the issue. Thats right ladies and gentlemen, racism caused the problem!
http://news.yahoo.com/s/ap/20090313/...discrimination

[sokinwet]

Jim - I do think that it is coincidence. If you said lower income and minority borrower concentrations I would be somewhat agreeing with you but I don't think the illegal question factors into this at all. If you look at MA data (notice that MA is pretty blue on the map) you'll see that the highest rates of foreclosure are in cities with the lowest avg. income...Worchester, Brockton, etc. Interesting enough in the Weymouth/Quincy area (both in the top 20 in MA) we have plotted data and obtained info. from Banker & Tradesman to see where and who are impacted and we have found that there don't appear to be concentrations in the lower income block groups nor is it a predominently low income problem. In fact the foreclosed properties are scattered and many are higher priced refinances, condo's and newer high end properties. Both of these communities have been involved in first time buyer programs for people <80% of median income since the early 90's. These programs generally require fixed rate, 30 yr. financing and "certified" homebuyer counseling. With hundreds of people assisted under these programs there have been almost no foreclosures. This tends to reaffirm the belief that educated buyers regardless of income or ethnicity don't fall prey to predatory lending.

[Raven]

the city is called woostah... and over there the things that hold your
shirt togetha are called BUTT .........INN's

[EarnedStripes44]

Originally Posted by spence

You are right to say that lending used to be different. A significant component of this is that in years past the government didn't allow commercial, investment banks and insurance houses to mingle. A repeal of this law in 1999 dramatically changed the way financial products were offered and traded as the banks now had the ability to profit from multiple facets of the same investment.

BINGO!!!! I believe you maybe referring to the Gramm-Leach-Bliley Act, which peeled back some restrictions put in place in early 30s.

I couldnt agree more with the learning from history part. My old man used to tell me all the time when I was teenager that "you kids think your 1st to ever do it".

[RIJIMMY]

Originally Posted by EarnedStripes44

BINGO!!!! I believe you maybe referring to the Gramm-Leach-Bliley Act, which peeled back some restrictions put in place in early 30s.

I couldnt agree more with the learning from history part. My old man used to tell me all the time when I was teenager that "you kids think your 1st to ever do it".

That was why Clinton was on Time's "people to blame" list.
Although its Bush getting all the deregulation blame.