The Housing Crash Recession of 2007

[MAC1]

Gee, out of the woodwork once again with doom and gloom. I remember when this thread was first posted. Suddenly all became quite once it was realized that the doom and gloom predictions concerning loss of jobs, inflation, recession, and on and on, turned out to be nothing but a pipe dream.

"Here we go again"--to quote Ronald Reagan. Like a nightmare that won't go away, here come the Libs once again. They can't wait to jump on even the slightest indication that the economy may be cooling. All the hype about a depreciating housing market has the Libs jumping up and down in celebration. At last they have some bad economic news to blame on President Bush and republicans. Now, they can only hope the economy crashes so they have the best chance to win in 2008--They hope. You Libs are a sick bunch. They hope we loose the War in Iraq and hope our economy crashes.

James Madison said "If tyranny and oppression come to this land, it will be in the guise of fighting a foreign enemy." If he had known Harry Reid, Nancy Pelosi, and the democrat party of today, he would have realized that worse than a foreign enemy are traders within.

 

[TheDude]

Regardless of what you think, the "Libs" are thinking, what if the economy crashes (to an extent) and it isn't just a "cooling"? Will you blame that on the magical powers of the Liberals? Because there's a lot of new/newer home owners who can't pay their mortgage right now; that's a fact.

 

[fossten]

Regardless of what you think, the "Libs" are thinking, what if the economy crashes (to an extent) and it isn't just a "cooling"? Will you blame that on the magical powers of the Liberals? Because there's a lot of new/newer home owners who can't pay their mortgage right now; that's a fact.

And what are the causes of that? Taking on too large a mortgage, not living within their means, taxes, layoffs, etc.

Economies strive toward equilibrium; that is why you will see booms and recessions. People start buying houses, so builders, realtors, and lenders get all geared up to meet demand, and eventually they overproduce, which causes supply to overshoot demand and then the market cools. So they attempt to compensate, and they again overcompensate by undershooting the demand, and the market heats up again. This has gone on since the beginning of this country. It's called economics. But you have idiots like Phil who don't know the first thing about economics who try to fill the pages of this forum with a bunch of moonbat nonsense borne out of an acute case of BDS, and that is what this thread is all about.

 

[MAC1]

Regardless of what you think, the "Libs" are thinking, what if the economy crashes (to an extent) and it isn't just a "cooling"? Will you blame that on the magical powers of the Liberals? Because there's a lot of new/newer home owners who can't pay their mortgage right now; that's a fact.

OK...it's a fact people can't afford their mortgage. Who fault is it when people spend more than they can afford. Most likely most of the foreclosures are due to 5-year ARMs or other adjustable rate mortgage instead of a 30-year fixed rate. As far as new home owners being foreclosed on, it's likely due mostly to poor financial decisions, namely, buying a home that they can't really afford. With unemployment at 4.5% (which is considered full employment) you can't blame it on job loss.

 

[Marcus]

OK...it's a fact people can't afford their mortgage. Who fault is it when people spend more than they can afford. Most likely most of the foreclosures are due to 5-year ARMs or other adjustable rate mortgage instead of a 30-year fixed rate. As far as new home owners being foreclosed on, it's likely due mostly to poor financial decisions, namely, buying a home that they can't really afford. With unemployment at 4.5% (which is considered full employment) you can't blame it on job loss.

For all of our lives we've been taught that banks won't loan you money for a house unless you've got a large down payment and a sterling credit record. And when we do go to the bank to ask for that loan, we've been conditioned to expect a lengthy and possibly humiliating process where the bank looks into every aspect of your financial history. Owning a home was the "American Dream", considered to be a true mark of accomplishment, something to be proud of. It was something people actually had to work hard for, and it was out of reach for many.

Then one day some mortgage company calls, telling you "congratulations!", you can have that dream home for no money down and a low introductory rate. After all, they should know what I can afford, and since they're also taking the risk, they must know what they're doing, right? Well not exactly.

As explained in one of the posts above, these unscrupulous companies just sold the mortgages off as securities, and kept the fees they charged you up front. Little risk on their part, at least as long as they kept new clients coming in and paying the fees. But the problem was that in order to keep making money, they needed to make more loans. It's like some twisted pyramid scheme. So a feeding frenzy occurred. Now the well has run dry and it's time to pay the piper. And this is the homeowners' fault?

I mean, I suppose every one of them should have paid a lawyer and accountant to go through the loans line by line, but when you have a new home dangled in front of your face, can you blame people for jumping? And since the LENDER KNEW DAMNED WELL YOU COULDN'T AFFORD IT, whose fault is it really?

The short-sighted schemes of the mortgage companies are to blame for this mess, NOT the home buyers. That, and the deregulation that allowed the schemes to be created.

I guarantee we've only seen the tip of the iceberg on this disaster. This will make the S&L scandal and the dot com bubble look like minor glitches.

By the way, notice I didn't mention George Bush's name once. Well except for the previous sentence.

 

[fossten]

By the way, notice I didn't mention George Bush's name once. Well except for the previous sentence.

I'll bet that was really difficult.

 

[Joeychgo]

And whose fault is it that consumers are borrowing too much money?

One answer is (not the only answer) - The Mortgage companies who are making the loans.

When I bought my house, I put 20% down. My own money I saved up. Many people put 3% down, and friggin borrow that!

Then they buy a house that is quite grand, and more then they can afford. I set a budget range for myself, and bought a house on the low end of that range.

I saw this alot when I owned a pizza place. We would deliver to a house that was maybe $700k. Beautiful, new. There would be a BMW or Mercedes in the driveway. They door would open and you would see no furniture. Toys, but no real furniture. Why? They spent it all on the house. Then they would tip terribly. Again, spent on the house I assume.

Who gives these people all that money? Do they not look at the people and ask - WTF will you do when the interest rate goes up? Your tapped now!

 

[fossten]

One answer is (not the only answer) - The Mortgage companies who are making the loans.

When I bought my house, I put 20% down. My own money I saved up. Many people put 3% down, and friggin borrow that!

Then they buy a house that is quite grand, and more then they can afford. I set a budget range for myself, and bought a house on the low end of that range.

I saw this alot when I owned a pizza place. We would deliver to a house that was maybe $700k. Beautiful, new. There would be a BMW or Mercedes in the driveway. They door would open and you would see no furniture. Toys, but no real furniture. Why? They spent it all on the house. Then they would tip terribly. Again, spent on the house I assume.

Who gives these people all that money? Do they not look at the people and ask - WTF will you do when the interest rate goes up? Your tapped now!

You are exactly right. And who bails them out when they have all those defaults - that's right, the American taxpayer. There are a bunch of banks in trouble right now for defaulted loans. Guess what's gonna happen.

 

[Marcus]

I ask again: WHOSE fault is it? The unscrupulous mortgage companies (not to be confused with banks) made loans on houses they knew very well these people couldn't afford, all in the interest of making a quick buck up front. This is a massive change from the past, when banks took all of the risk, and therefore getting a house was much harder for people.

The vast majority of the people defaulting on their loans should never have been given the loans in the first place. So while you can blame people for not reading the fine print, it was still the mortgage companies giving away money hand over fist who bear the primary responsibility.

If somebody asked you for a loan and you knew very well he couldn't possibly pay you back, but you gave it to him anyway, whose fault is it that you don't get your money back?

But you're right, it'll be the taxpayers who will end up bailing the mortgage companies out, even though they really deserve prison time for the massive defrauding of the American people and destabilization of the economy.

 

[MonsterMark]

WHOSE fault is it?

Typical liberal response. It is never the individual's fault. You know, the guy that bought the house.

You guys kill me.

It's all the mortgage companies fault.

And it takes a village to raise a kid too.

 

[Marcus]

Typical liberal response. It is never the individual's fault. You know, the guy that bought the house.

You guys kill me.

It's all the mortgage companies fault.

And it takes a village to raise a kid too.

Typical right-winger response. It's never the fault of big-business. You know, the guys who gave him the money without checking his credit rating first.

Read the article posted earlier. These companies knew they were giving money away to people who couldn't possibly pay it back, but all they cared about were the fees they collected up front. The mortgage itself was just passed on to someone else to worry about. So YES they bear at least as much of the blame as the borrower, if not the majority of it.

 

[fossten]

I have to agree with you Tommy, there is blame on both sides. And we should really let the market fix its own problems here. Banks that lend irresponsibly should be allowed to either sink or swim, and people that bite off more than they can chew should go bankrupt. It's called the market policing itself. I hate it when the government automatically tries to get involved every time there is a market crisis.

 

[97silverlsc]

More doom and gloom predictions. It must really suck to wake up and be Phil every day, upset at the world.

Isn't this the same website that predicted Karl Rove's indictment?

:bowrofl:

Still "doom and gloom" Fossie?

 

[fossten]

Still "doom and gloom" Fossie?

Read my comment right above yours, necro-boy. Seems I was quite prescient.

How's that Karl Rove doing these days? I guess they let him out of prison, because he's been on TV a lot, and he looks quite happy for a jailbird.