Posted by jba/fl on 11/15/07 10:41am
Msg #221407

Who's responsible for the mortgage mess

one opinion, I'm inclined to agree.

http://articles.moneycentral.msn.com/Investing/CompanyFocus/WhosToBlameForTheMortgageMess.aspx?page=1

Reply by pan/nd on 11/15/07 10:58am
Msg #221409

When you trace the dominoes back to the first one, you find it's the government.

Reply by Philip Johnson on 11/15/07 11:00am
Msg #221411

How many dominoes would that be? n/m

Reply by PAW on 11/15/07 11:13am
Msg #221415

He missed the #1 offender in this whole mess - the consumer. How many times does a consumer have to be reminded to "ask questions" and "read ... read .... read"? IMO, there is no single or small group of players to blame. It's the whole team and a snowball. I do agree that someone (of the named culprits) probably should have raised and vigorously waived a big red flag, but they didn't. Are they to blame for the mess? Partially. Don't look for a scapegoat, but find a productive way out of the mess without fueling the flames.

Reply by Carole Breckbill on 11/15/07 11:26am
Msg #221418

Nevertheless, it's the same greedy corporate philosophy that has resulted in mfg jobs moving overseas, the recent Chinese recalls, and ultimate squeezing of the middle class. I agree that we as a society need to find a way out of this mess and help those homeowners who have been victimized by sleazy lenders to avoid foreclosure. Hopefully that will mean more business for us, too.

Reply by ReneeK_MI on 11/15/07 11:32am
Msg #221420

As always, Paul - totally agree ...

It is a dynamic at play, a complicated interplay of factors, but I too grow weary of the consumer being left off the long list of 'factors'.

Identifying what changes could be made with EACH factor and plugging along towards a better day would be far more productive than this media/social game of finding one scapegoat to blame.

Reply by LisaWI on 11/15/07 11:36am
Msg #221423

Right on Paul. I also believe there are many who need to re-evaluate their positions and practices, whether it be a Lender, Investors, Mortgage Broker, Title Comp, Signing Agent, etc. The changes need to come from all sides including the Consumer. The time is now to become more aware of the whole process and where you fit in. Because it does matter in the end result. There are going to be major changes in the mortgage industry that affect all of us and where will you be?

Reply by Michael/FL on 11/15/07 1:17pm
Msg #221448

It's always leading back to the government for the cause. Though everybody involved including the consumer add up to the whole mix. Main reason, greed for MORE money! When things were hott in 2003 people were making way more money then they needed to. Honestly a mortgage broker is not supposed to come near the profit that a Realtor makes in the same deal and guess what, they were getting darn close to it. Next issue was having deals get closed that SHOULD NOT have closed. Countless companies are now being audited for this problem and are being shut down! I say good riddens.

As Lisa stated, with all the changes going on where will you be? Hopefully on the right side I've seen plenty of Realtors, MB, and TC go down recently and my favorite part is that when you check license information 90% of them received their license back right around 2003; the boom. Now let's see who knows there stuff and can hang on and roll with the punches.

Things are improving everyday, don't listen to the media.

Reply by Nancy M. Misenar on 11/15/07 1:28pm
Msg #221459

This goes way deeper than the government. This balloon bust was predicted a while back, and when everyone was busy making money, spending money, the man behind the curtain was laughing all the way to the bank...

Reply by Julie Williams on 11/15/07 2:04pm
Msg #221463

That's in interesting take, which I had not thought of but I don't spend my time analyzing the reasons for the bubble.

That said, I think credit card debt is a huge factor. Althought in the title business since 1983, on the title end, there was not pulling out equity to pay off credit card debt. Nor was the might FICO and reason for folks to use their equity to pay them off. Then the bk laws were revamped so I don't think it's one factor in particular, but we need to teach our children to not have credit cards and to use a mortgage except to buy a home.

It all boils down to personal responsibility and saving money for a rainy day and not carrying debt.

Reply by Pat/IL on 11/15/07 7:13pm
Msg #221517

Re: Let Me Add Another Factor

The lawyers who drafted all of those documents have to take their share of the lumps. Writing in 100 words of legalese, that which could have been written in 10 words of English. Maybe the people who claim they were deceived would have read a shorter stack of documents and understood what they were reading. This does not excuse the hapless consumer from his own due diligence, even as the documents are now written. Legal representation was always available for those who did not understand the documentaton.

I spent 2003 through 2005 preparing HUDs and closing and disbursing loans. I saw too many people paying off a dozen credit cards, with thousands in cash-out on top of it all. More than once, I had received calls from currency exchanges to verify the authenticity of checks in excess of $10,000.00. The greed of the borrower looking to convert his equity onto free money should definitely be at, or at least near, the top of the list of factors.

Reply by Todd/OH on 11/15/07 7:47pm
Msg #221530

Gotta agree with Paul

The consumer has the ultimate choice. They have the power to say "No". If they say "Yes" on a bad deal, they lose and the broker wins. These people need to read what they sign. A co-worker recently mentioned she was in danger of foreclosure. I asked her what her note says. I got the response, "I have no idea !!" What do ya do ??

Reply by JanetK_CA on 11/16/07 2:21am
Msg #221575

Re: Gotta agree with Paul

Yep!!! I agree, too, but I'd take it one step further. I think it reflects the overall values of major portions of our current society. Naturally, there are exceptions, but as a whole, I think this is a symptom of our "instant gratification" culture. Everyone is constantly bombarded with images and advertising that say "buy now and pay later" or "no interest for a whole year" etc., so they look for the near term easy way out and expect the future will take care of itself. Like Todd/OH says, how many times do we start to point out the key features of the Note only to have the borrowers skim right over it, not really wanting to know? And often these are the same people who have run up their credit cards.

Even corporate decisions are based on short term profit vs. the long term best interests of companies - at least those that are pubicly held. And earnings of those at the top have become obscenely disproportionate to that of average workers and to the benefit their leadership provides. I'm a believer in the profit motive, but it seems like it has gotten out of control. Many segments of our society (or individuals) have lost their yardstick and are really worshipping the almighty dollar. Without oversight at the top, I guess this is bound to happen. Maybe we should re-examine the boundaries of acceptable behavior we collectively have established in relation to our fiscal practices. There must be a way to do this without stifling creativity and incentives.

I'd better stop this ramble here before I really get political...

Reply by MichiganAl on 11/15/07 8:53pm
Msg #221541

What about Ameriquest?

They perfected the slimeball, underhanded, lying, cheating, that's not really your interest rate, no this loan isn't adjustable even though it says so, anything to get a loan through tactic. They're top of list in my opinion.

Reply by pan/nd on 11/15/07 10:52pm
Msg #221557

Re: What about Ameriquest?

I'm not an Ameriquest fan.

And, I'm sure you're characterization of the former company is accurate in your area.

But my experience is different.

Most of the ones I did originated out of the Twin Cities and most of the borrowers that I came in contact with were happy with them.

So, either they were genuinely happy...or they were so scammed they thought they were happy.

I remember one out of California that was as you describe. But that was the exception rather than the rule.

However, I know the vast majority of people around the country would agree with your point of view.