Maggie's Farm

We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.

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Wednesday, January 16. 2008

Bad loans? Suck. It. Up.

Bad loans discussed vigorously by Michelle.

Who is to blame if you take out a fraudulent loan, or a loan you doubt you can pay off? Sovereign funds from the Middle East might help rescue Citibank's liquidity, but they will extract a heavy price for that investment. If you gamble, you're on your own. When you win, you win. When you lose, don't come crying to me.

And please don't claim that you are a victim because you didn't read the terms of the loan. Basic literacy is assumed in financial transactions, as is the assumption of risk. As we can see, your lender also assumes his share of risk.

But don't listen to me. I think the stock market is a gambling enterprise unless you have a 20-year time horizon. Blue Chip US stocks have not moved an inch in 8 years - other than downwards recently.

Posted by Bird Dog in Our Essays, Politics at 14:33 | Comments (12) | Trackbacks (0)

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Jesse Jackson and the mayor of Cleveland beg to disagree. See Cleveland mortgage lawsuit.
#1 buddy larsen on 2008-01-16 15:29 (Reply)
it seems to be the pattern here in America. suppose people just do not know what is good for them. suppose they can't read either. If the Democrats have their way everyone will be caged and let out for a walk in the afternoon. no one wants to be responsible for themselves. new orleans is an example and this mtg crisis will be another. i guess you shouldn't buy a house if you only haver debt........duh!
#2 opie on 2008-01-16 16:27 (Reply)
Two parties are to blame.
1. You, the moron who borrowed more money than you can repay.

2. The lender, the idiots who did insufficient research to determine if you could repay the loan, or have such lax lending standards, they loaned you money anyhow.

Both deserve the consequences of their stupidity.
#3 NJSoldier on 2008-01-16 16:51 (Reply)
Blue, blue windows behind the stars,
Yellow moon on the rise,
Big birds flying across the sky,
Throwing shadows on our eyes.
Leave us

Helpless, helpless, helpless
Baby can you hear me now?(helpless, helpless, helpless)
The chains are locked and tied across the door(helpless,helpless, helpless)
Baby, sing with me somehow.(helpless, helpless, helpless)

Blue, blue windows behind the stars,
Yellow moon on the rise,
Big birds flying across the sky,
Throwing shadows on our eyes.
Leave us

Helpless, Helpless, Helpless (repeat and fade)

*****
(from Neil Young song, "Helpless")
#4 buddy larsen on 2008-01-16 16:52 (Reply)
And the bulk of those borrowers, who would not have qualified for another loan but found a way to keep afloat on this one? Are we going to cheat that sort of person by not allowing them to borrow in the future?
#5 Assistant Village Idiot (Link) on 2008-01-16 19:40 (Reply)
Lenders, in a position of knowing, owe it to the uneducated. But what do they care - they sell the mortgages. I feel for the 'less intelligent' who believe they can trust such august authorities as banks and willingly sign on to the American Dream. Agree, the borrower should know better, but the fine print may be beyond them. I sound liberal on this,.... am not. But am looking at the human nature aspect of greed vs. trust of fellowman. It's a bad situation all the way around.

Of course, enterprising Mexicans buy a house and five families move in. This has happened in several nice neighborhoods here , and needless to say, the home values of the neighborhood dropped precipitously. They're not all that 'dumb'...those people who can't read the fine print. They're just clever and work their butts off.

Greed and hope.... what a sorry combination.
#6 Meta on 2008-01-16 20:04 (Reply)
I'd like a show of hands... how many here have EVER read every SINGLE word they have signed on too, at a mortgage signing. Come on... be honest. Doesn't count if you had a lawyer do it for you.

I'll go first... I tried, one time, I believe. I think I gave up after a half hour.

Well said Meta.
#7 Luther McLeod on 2008-01-16 20:53 (Reply)
good idea to have an actual person holding your note -- like small town bankers traditionally -- rather than the 'securitized' bundles of mortgages that end up held by a hedge fund on Mars.

"Spread the risk" my happy ass.
#7.1 buddy larsen on 2008-01-16 21:20 (Reply)
LUTHER, MY LAST EXERCISE WAS A YEAR AND TWO MONTHS AGO, WHEN I WAS IN BEST BUY AND SIGNED UP FOR INTERNET AND DIDN'T GET PAST PAGE TWO.
#7.2 TOM on 2008-01-24 22:32 (Reply)
Back in the days of the Great Depression, there was a bit of folk wisdom that asserted, "there ain't no free lunch." Americans learned this the hard way. Somewhere in the ensuing years of ease and instant fame for the untalented, and wealth for the unworthy, we've forgotten it.

Both parties in one of these sub-prime loans are guilty ... the borrowers for thinking they could afford to buy a $275,000 house on a salary of $30,000 or less a year, and the bankers, who are skilled in basic math and mortgage economics, for being immoral enough to loan them the money anyway, knowing the borrowers would default.

Those who are being unfairly screwed are the poor taxpayers, who were smart enough to not get themselves in that kind of situation but are still having their hard-earned taxes used to bail out the foolish and the immoral.

Just one more example of not taking responsibility for one's own life and one's mistakes. Don't worry. Good old Uncle Sugar will take care of us. In the words of Pogo, "we have met the enemy and he is us."

Marianne Matthews
#8 Marianne Matthews on 2008-01-16 22:04 (Reply)
Luther - I don't read every word of a mortgage, but I damn sure know what my payments will be and how that payment amount may vary during the life of the loan.
#9 NJSoldier on 2008-01-17 09:43 (Reply)
Me too, NJS. I was just riffing off the "read the terms of the loan" as mentioned in the post. I think there are many who may become confused with the more complex loan structures... no interest, balloons, etc. Not the taxpayers fault though, no disagreement there.
#9.1 Luther McLeod on 2008-01-17 10:21 (Reply)

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