Editor Calls Bullsh*t On “Architects of Misery”

Boy, whatever happened to the duty of someone who signs a contract to READ what they’re signing? And if your answer is that they wouldn’t/couldn’t understand what they were signing, then my response is that they shouldn’t have signed it anyway. Nobody ever put a gun to anyone’s head and forced them into buying more home than they could afford. The idea that somehow the government is at fault for an individual’s DECISION to contract for a loan blows my mind.

Even though I wasn’t a sub-prime borrower, I bought a house with a loan package that has an ARM after several years of a fixed rate. I know that at a date certain, I better have a plan to sell or, have already sold it, re-finance it or I’ll pay more money. Its not all that complicated. If I fail to plan, then I could end up paying more than what I pay now for the same house.

And Sugg’s idea that deadbeats who didn’t plan for the circumstances that they agreed to when they signed a contract and now aren’t paying back the loans they commited to pay back should get protection from the government from being booted out of a house they’re not paying for is insane. To quote Ty Webb in Caddyshack: “Is this Russia? This isn’t Russia, Danny, is it?” The government doesn’t owe people who make committments to pay loans back who fail to keep their word anything.

I will say, however, that policies that allow borrowers to borrow more than they could afford are bad. Policies that allow people with 400 credit scores to borrow money at 36% are bad policies. That being said, this isn’t Russia–we are free to make bad decisions in this country. However, when we make those destructive choices, the nanny-staters shouldn’t be looking for Uncle Sam to help you out.

Even a populist D like Trafficant, if not in the pokey, would be on the House floor hollering his famous “beam me up” routine.

The market brings us lead based toys and credit polices that threaten to taken down the economy. A little regulation can be a good thing

Seems like I remember a reference in another recent thread about protecting morons from themselves.

Screw John Sugg. He’s a communist anyway, at least that’s what I gather from reading his stuff.

And Jsm, you might be surprised, but I still believe the same thing in this case as well. I particuluarly take issue with this comment by Sugg:

In California, there is talk among legislators of declaring a moratorium on foreclosures. That should be an absolute must-do here in Georgia.

Huh? We’re going to allow people to take out loans, not pay them, and not allow the lender to repossess? What sort of interest rates would responsible borrowers have to pay as a result of taking that action?

As Mark Taylor once said, “Cry me a river.” If you can’t afford the payments …. rent!

Bless your pretty little head

Indeed, Spacey? Maybe I’ll give you that. A girlfriend I had in DC worked for Charlie Rangel, so she might as well have been a communist. But did she drop me for a fellow-traveller Democrat boy? No. In fact she told me she didn’t really like them, too arrogant and always bitching about us Republicans. Whereas we Republican boys would actually go out and talk about something besides politics, making us automatically a better draw for Dem girls.

Dogs and cats, living together. Mass hysteria!

Walraven, I agree with you. I want to back up to one thing you said though and get your take.

You said “if your answer is that they wouldn

Absolutely a lender has a duty to produce information to the borrower, such as that required by the Truth In Lending Act. If the terms are in plain English and explained by a lawyer at closing and by a loan officer during the sales process and the borrrower defaults, its not for a lack of information. Most folks just put their heads in the sand and didn’t refinance.

All of the information about rates, payments, the trigger date for the adjustable rate–every major detail that plays into the monthly payment amount, is in the TIL statement. Willful blindness and refusal to deal with reality is at the root of the problem. Back to my example, I’m screwed if I don’t plan for a transaction, either a refi or a sale of the land, before a date certain.

The fact that the market has tanked and that folks who bought houses with ARMs that are now triggering can’t sell for their loan amount is a tough spot to be in, no doubt. However, it was spelled out to them what the rates and payments would be (or how they’d be calculated).

Who brings a lawyer to the payday loan store?

I just came here to say “It’s the biggest no-brainer in the history of earth.”

The more I read of Spacey’s stuff, the more I’m convinced she thinks money DOES grow on trees and everyone should have an equal right to an equal amount; that is, as much as they want to spend on anything they want to spend it on.

Spacey probably celebrated all those videos of people in New Orleans looting the stores and stealing stuff. Yeah, Spacey dreams of the day when everything can be declared “free” and no one needs to earn a living to afford anything.

To her comment on “forget the sex trade,”..yeah, let’s just forget all about those sleazy adults who traffick in child prostitution, eh?

So, Spacey, when are you going to put your daughter up for services with whomever, eh? Or, perhaps you already do…

Bill Simon,

That was low, even for Republican bathroom pickeruppers.

Which you are not!

Reading through this thread, I’m not sure which side individual posters are on, other than SpaceyG.

I see the underlying issue as being very, very clear.

The market mechanisms have been voided by the reselling of mortgage paper. IF the mortgage lender were properly holding loans that they originated, meaning they could not shift the risk, then they would have an incentive to take only reasonable and prudent risks with capital.

I’ve heard it called Moral Hazard as well as unintended consequences.

“A moral hazard arises if lending institutions believe that they can make risky loans that will pay handsomely if the investment turns out well but they will not have to fully pay for losses if the investment turns out badly. Taxpayers, depositors, other creditors have often had to shoulder at least part of the burden of risky financial decisions made by lending institutions.”

When the mortgage originator has no liability, there’s the hazards of immoral lending.

Or, if lenders have no liability, everyone suffers from the increased risk taking behavior.

Also known as the law of perverse incentive.

Lenders under the current “sell the paper fast” system have a perverse incentive to make horrible loans, as many as possible, as rapidly as possible.

Some examples from …. the CIA and wikipedia

“In CIA jargon, “blowback” describes the unintended, even undesirable consequences of covert operations. Examples include:

* Operation Ajax, which contributed to the 1979 Iranian Revolution & the Iran hostage crisis
* Covert funding of the Contras in Nicaragua, which lead to the Iran-Contra Affair
* Covert funding of the Mujahideen, which led to the rise of the Taliban”

Bill, am I making some sense to you?