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RE: Where does Personal Responsibility come into play? - 8/20/2008 9:20:15 AM
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iluvatar
Posts: 1921
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quote:
ORIGINAL: P31W
quote:
a license
All that does is give the government more money. It's a form of taxation.
Speaking in general terms (I don't know enough about this industry to say whether licensing is good or bad), it's also a way to regulate the industry and to set some minimum standard of behavior and competence for those individuals conducting these transactions. Just like with driving a car, if you don't know what you're doing or you behave recklessly, you have the potential to hurt a lot of people. I'm all for personal responsibility, but where is the responsibility of the corporations when they're allowed to make risky loans and then get bailed out by the feds? I think it's pretty clear that many industries are poor at regulating themselves and need some level of oversight in order to maintain the continued operation of the industry and to ensure the safety and well-being of the public.
-Dan.
_____________________________
Well, I've been to one world fair, a picnic, and a rodeo, and that's the stupidest thing I ever heard come over a set of earphones.
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RE: Where does Personal Responsibility come into play? - 8/20/2008 9:37:13 AM
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P31W
Posts: 2955
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quote:
I'm all for personal responsibility, but where is the responsibility of the corporations when they're allowed to make risky loans and then get bailed out by the feds?
I am not for a bail out.
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Speaking in general terms (I don't know enough about this industry to say whether licensing is good or bad), it's also a way to regulate the industry and to set some minimum standard of behavior and competence for those individuals conducting these transactions.
I think it should come into play when you have the ability to harm others. The example of a drivers licenses is a good one. One is going to be on "public streets" driving.
A licenses to hunt/fish should be optional. If one deisres to hunt/fish their own land there is not reason for them to have to 'pay" for that right. If one wants to hunt/fish on "public property" then one should be required.
If I want to have my hair cut I should be able to choose between one who has been to "beauty" school and passed the licenses test or not. The choice should be up to me the consumer.
If I want to go to an unlicensed dentist who passed schools with all A's that should be my right. If I want to go to a licensed one that was at the bottom of their class that should be my right. If I want my friend to pull my tooth that should be my right.
One time a friend of mine and his wife were running a boys home. They had been living and running it for the state for several years when the local colleges decided that to do that someone must be licensed and to be licensed they must have a degree in Social Work.
After 2 years of these people living on next to nothing trying to get their 4 year degree in an area they were more experienced in than their professors they decided to give up the home and go get jobs they could live on. Nine times out of ten these things are politically motivated.
It took several years for the home to find houseparetns who could meet all the requirements to be licensed and who cared about the boys.
< Message edited by P31W -- 8/20/2008 10:58:35 AM >
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RE: Where does Personal Responsibility come into play? - 8/20/2008 12:14:51 PM
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NoShow
Posts: 459
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I don't see how licensing\regulating is suppose to be the answer to anything. All of the people that I personally know, that bought and are in trouble now, "blame" their realtor more than their lender\broker; in that they (the realtor) said things that "implied" and encouraged them, that it was a good idea.
And realtors are licensed\regulated.
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RE: Where does Personal Responsibility come into play? - 8/20/2008 6:41:42 PM
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relady
Posts: 1281
Joined: 4/11/2005
From: Greater St. Louis Metro
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quote:
"blame" their realtor more than their lender\broker; in that they (the realtor) said things that "implied" and encouraged them, that it was a good idea.
And realtors are licensed\regulated. Boy, that figures. Blame the guy who has nothing at all to do with the lending. As a Realtor it is my job to sell houses - of course I encourage my buyers! But I'd be the first to let them know if I thought they were getting a bad deal from their lender. Most of my buyers don't tell me any more than I need to know to be able to write the contract and make sure their interests are covered from the contractual perspective. Which IS what my job is, LOL.
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RE: Where does Personal Responsibility come into play? - 8/20/2008 6:51:47 PM
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relady
Posts: 1281
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From: Greater St. Louis Metro
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quote:
And if someone does not know a defect exist how far "should" this risk go back? I can only speak for Missouri, since that is where I am licensed but sellers are only required to disclose KNOWN items. If a seller does not know something exists they are not responsible to disclose it.
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I also take it that you have a huge umbrella policy and desire to see it required to hold by law. Actually, I believe here it is required by law for my broker to carry E & O insurance. I pay $375 a year for my portion of the coverage.
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Does that mean that your commission is never truly "yours" to keep if each buyer has some right to get their money back on a deal when an unknown defect occurs? Should a lawyer hold your commission in "trust" for seven years or longer inorder to ensure NOTHING goes wrong for the buyer? Not sure what you're getting at here, but the limit is 5 years on real estate lawsuits and they happen all the time. Sometimes realtors & brokers are held liable for things, sometimes not. It's all part of that contractual fiduciary relationship thingy. I simply believe lenders should be held to the same standard. They wanna give out all this money and advice but not be held responsible for what they tell people. That's just wrong on so many levels I don't even know where to begin.
I mean, seriously, would you say that about a lawyer giving bad advice? After all, his clients should be sufficiently self educated to understand the area of law they are consulting him about, right? I mean, personal responsibility and all. No. He has a responsibility to protect his clients' interests. All I'm saying is that lenders should have the same responsibility toward their clients.
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It needs to stop with the individual. Nope, I disagree. Especially in today's market. Mortgage lending is sufficiently complicated that the average buyer can self-educate to a point but they need to be able to trust that their lender is telling them the truth about the products he's selling them. They need to able to feel confident that together with what they do know, that they are doing what's right for them. That responsibility currently does not exist in the lending world in any legal sense of the things. It should.
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RE: Where does Personal Responsibility come into play? - 8/21/2008 7:40:53 AM
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P31W
Posts: 2955
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quote:
Mortgage lending is sufficiently complicated that the average buyer can self-educate to a point but they need to be able to trust that their lender is telling them the truth about the products he's selling them
Like they can trust their realitor? ROFL
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Actually, I believe here it is required by law for my broker to carry E & O insurance. I pay $375 a year for my portion of the coverage.
I am talking "personal" here. What you as an individual are doing. Not a business policy - that as you say is required by law. I am talking about your "personal responsibility" to people. I wonder if you do on your own something the law does not "require" of you because you know you can "do better" than what is required by law.
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Sometimes realtors & brokers are held liable for things, sometimes not. It's all part of that contractual fiduciary relationship thingy
Notice the word "contractual". It has to do with what is in the contract not what you "said" to them. I have had too many dealing with RE who flat out lie to people but in the "contract" you can bet your sweet bippie it's correct. 
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They wanna give out all this money and advice but not be held responsible for what they tell people.
Life 101.......that's what most salespeople do in any industry. Ever read an ad for a house for sale from a RE company? Those can be so very misleading. Wasting alot of people's time and money.
What everyone needs to know about is the contract they sign. I don't give a hoot if it's for a brokerage account, marriage contract, credit card or buying a piece of property. 101 - it's about the written noterized/ witnessed most of the time ---contract.
Only fools sign contracts they don't understand. You cannot make enough laws to protect a fool from their own stupidity.
< Message edited by P31W -- 8/21/2008 8:06:48 AM >
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RE: Where does Personal Responsibility come into play? - 8/21/2008 8:19:38 AM
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wordsnpic
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It has been shown that many large players in the industry colluded to market poor loans that would protect them in the face of a market downturn. Lenders like Countrywide and Bank of America, it has been show, had a sense that these loans would not be solvent when they contracted them. That's why hedge funds were leveraging huge amounts of money on the housing crisis. Sure personal responsibility is a good thing, but so is corporate integrity. I think there are many people out there that didn't know the consequences of an arm until the last couple of years when some unfortunate homeowners got caught in the web. As for taking personal responsibility and knowing what you are getting into, what would a closing be like if we stopped and read every document you signed, and how many have done that. It's easy to fault the homeowners that have fallen on hard times, and yes, there are instances where people were just stupid, but for every one of those, there are 9 others, I promise you, that wanted to get into a home for their families and were provided a rate that would put them there. I think if there were a few people who got into loans and didn't understand the concept of the adjustable rate, that would be one thing. But when thousands -- maybe several million -- Americans are in the situation, you certainly have to understand that there were some unscrupulous practices going on to make this happen. Countrywide, for one, has admitted to their violatins of ethics here. It's easy to throw stones and say "they should have known better" (honestly, some of the posts here!) but I am a college grad and in the industry and I often have trouble understanding some of the lingo in the contracts.
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RE: Where does Personal Responsibility come into play? - 8/21/2008 8:23:15 AM
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P31W
Posts: 2955
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quote:
As for taking personal responsibility and knowing what you are getting into, what would a closing be like if we stopped and read every document you signed, and how many have done that.
My lawyer charges me about $125.00 to help me with the contract. Small price to pay don't you think? As far as the contract reading goes that occurs before the closing. We examine them before the deadline. Who in their right mind would buy something as expensive as a house and not read the contract?
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I am a college grad and in the industry and I often have trouble understanding some of the lingo in the contracts.
My husband is a HS grad who made it out by the skin of his teeth. His reading level is worse than mine. We are both smart enough to know that if you don't understand something or about to take on a 15-30 year mortage you need to seek a professional for help who is on your side and not just listen to the "salesman".
< Message edited by P31W -- 8/21/2008 8:29:37 AM >
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RE: Where does Personal Responsibility come into play? - 8/21/2008 11:39:47 AM
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relady
Posts: 1281
Joined: 4/11/2005
From: Greater St. Louis Metro
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quote:
Notice the word "contractual". It has to do with what is in the contract not what you "said" to them. I have had too many dealing with RE who flat out lie to people but in the "contract" you can bet your sweet bippie it's correct. When I sign a contract to represent a client is what I'm talking about, not the house contract. I am contractually required to represent my clients bests interests and that contract creates a fiduciary responsibility on my part. I take that very seriously. Perhaps you have had dealings with less than honest Realtors, there are some out there. But because it's a contractual relationship (IF you signed a contract for them to represent you) you can report them if they violate that relationship. Now, if you declined to have them represent you and your interests and just "used" them for their knowledge or information? Well, that's a whole different animal...yah, you're on your own, as you should be. And if you've ever done that - USED a Realtor - you probably deserved what you got, which I'm sure was NOT good service. We don't work for our health ya know. Just like you don't.
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I wonder if you do on your own something the law does not "require" of you because you know you can "do better" than what is required by law. Again, not actually sure what you're getting at here. I try to run my business with the utmost integrity. But I will tell you this. EVERYONE I talk to knows that until they sign a buyer agency with me or a listing contract with me that I am not working for them. I am legally working for the seller. In any case, I am responsible by my Code of Ethics to be honest and fair. If I don't do that, I can lose my license.
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My lawyer charges me about $125.00 to help me with the contract. Consider yourself lucky. But does he attend building inspections, advise you what repairs to ask for, advise you on coordinating utilities, go with you to the closing, go over the title work with you, advise you whether or not you should get a survey, make sure everyone on both sides meets all the deadlines and stays in contract, and help with all the myriad details that are involved in a real property transaction? Did he spend his gas and his time showing you homes and getting you in them? Or did you just "USE" a Realtor's services for free for that? I run into people like you everyday. And I run for the door as fast as I can. People who think they should get Realtor services for free are not worth my time or my gas, and in that case I agree with you...they better have a LOT of personal responsibility. It's funny, but it is very often those exact people who end up in court in a lawsuit, LOL. If your lawyer does all this for you, he's worth his weight in gold.
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RE: Where does Personal Responsibility come into play? - 8/21/2008 11:46:36 AM
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P31W
Posts: 2955
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So you don't have a personal unbrella policy. You only do what is required of you by law.
quote:
Consider yourself lucky.
The person asked about reading the contracts at the closing. I replied that I read them before the closing and have a lawyer (who yes goes with me most of the time to the closing). You went off saying that's luck. It's not luck. It's called hiring a lawyer. No luck involved. Then you went off on what a lawyer does not do? No reason to twist a simple honest answer into a "commercial for RE agents".
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But does he attend building inspections, advise you what repairs to ask for, No we don't need building inspectors. We build ourselves. We know what to look for "if" the RE has a building on it.
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advise you on coordinating utilities, Heck no. We would not pay ANYONE to do that.
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go with you to the closing, go over the title work with you,
Yep he does that.
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advise you whether or not you should get a survey, Sometimes we ask his opinion.
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make sure everyone on both sides meets all the deadlines and stays in contract, Goodness no. We have phones!
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and help with all the myriad details that are involved in a real property transaction?
Myriad of details. ROFL give me a break. You do realize we are in the business.
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Did he spend his gas and his time showing you homes and getting you in them? Or did you just "USE" a Realtor's services for free for that
Why would we hire a lawyer to show us RE or a home? And we don't use RE agents for this stuff either.
< Message edited by P31W -- 8/21/2008 12:13:35 PM >
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RE: Where does Personal Responsibility come into play? - 8/21/2008 12:21:21 PM
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NoShow
Posts: 459
Joined: 5/10/2005
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quote:
ORIGINAL: wordsnpic
It has been shown that many large players in the industry colluded to market poor loans that would protect them in the face of a market downturn. Lenders like Countrywide and Bank of America, it has been show, had a sense that these loans would not be solvent when they contracted them. That's why hedge funds were leveraging huge amounts of money on the housing crisis.
But the loans were poor due to the credit of the borrowers, those buying the houses.
quote:
Sure personal responsibility is a good thing, but so is corporate integrity.
No one's denying that multiple parties contributed to the situation.
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I think there are many people out there that didn't know the consequences of an arm until the last couple of years when some unfortunate homeowners got caught in the web.
Then in reality, some people just truly aren't smart enough to get involved with such things as a loan. Or they simply need to only get involved with one that they can understand.
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As for taking personal responsibility and knowing what you are getting into, what would a closing be like if we stopped and read every document you signed, and how many have done that.
Once again, ignorance isn't an excuse. They needed to find a situation that they could understand. Whether it be a simplier, but more expensive loan or renting.
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It's easy to fault the homeowners that have fallen on hard times, and yes, there are instances where people were just stupid, but for every one of those, there are 9 others, I promise you, that wanted to get into a home for their families and were provided a rate that would put them there.
And of the nine, how many had to take such a loan due to prior being less than responisble with their finances? Wrapping it in the "family blanket" doesn't all of a sudden make it right. Probably most of those nine, had questionable personal finance habits coming in. Meaning, they weren't ready to take on buying a house.
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I think if there were a few people who got into loans and didn't understand the concept of the adjustable rate, that would be one thing. But when thousands -- maybe several million -- Americans are in the situation, you certainly have to understand that there were some unscrupulous practices going on to make this happen.
Americans are in this situation due to not being able to distinguish between needs and wants. And not being able to control their wants impulses.
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RE: Where does Personal Responsibility come into play? - 8/21/2008 3:29:53 PM
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stellaluna
Posts: 4205
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I tend to put the responsibility on the buyer. No one is twisting anyone's arm to borrow money. Sub-prime loans were offered to buyers who had already proven to be irresponsible with money. What did people think was going to happen?
_____________________________
Who should be allowed to attend church?
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RE: Where does Personal Responsibility come into play? - 8/21/2008 6:01:07 PM
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GroupW
Posts: 2903
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
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quote:
ORIGINAL: wordsnpic
As for taking personal responsibility and knowing what you are getting into, what would a closing be like if we stopped and read every document you signed, and how many have done that. ...
...
I think if there were a few people who got into loans and didn't understand the concept of the adjustable rate, that would be one thing. But when thousands -- maybe several million -- Americans are in the situation, you certainly have to understand that there were some unscrupulous practices going on to make this happen.
On the first point - It's the biggest financial transaction most of us will ever get ourselves into. And we don't want to read the fine print ?????? I'm sorry, I don't get that. I get copies in advance and I read them. I compare the copy at the closing to the advance copy. I'm not going to borrow a few hundred thousand dollars without reading the document! Period.
On the second - It's the biggest financial transaction most of us will ever get ourselves into. And we don't want either spend the time to understand it or find someone who can explain it to me & take my back?????
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Where does Personal Responsibility come into play? - 8/21/2008 6:15:47 PM
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pastorhawk
Posts: 3
Joined: 8/21/2008
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So if I buy a Porsche but then a year or two later realize I can't afford it because I didn't really understand the contract then I can have the govt. buy it for me? Or I can just give it back without any penalty?
Where do I sign up?
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RE: Where does Personal Responsibility come into play? - 8/21/2008 9:52:10 PM
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blessedinnyc
Posts: 1949
Joined: 10/12/2007
Status: online
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quote:
ORIGINAL: pastorhawk
So if I buy a Porsche but then a year or two later realize I can't afford it because I didn't really understand the contract then I can have the govt. buy it for me? Or I can just give it back without any penalty?
Where do I sign up?
I think the root problem with the credit crunch is something that many people don't notice- moral hazard. With the structure we had in place, loan officers made money when loans were originated- not when those loans were paid. Banks made money when they sold bonds- not when the borrowers made the payments. And borrowers got to get into a nice house that they couldn't afford with $0 down. Everybody won, except the people doing the bail-outs.
If the feds are forced to do a bail-out (and I think there should be some sort of guarantee of 90-95% of the par value on agency-issued bonds), we need to do two things:
1.) Eliminate agencies that aren't heavily regulated.
2.) Reinstate the depression-era wisdom of Smoot-Hawley, which prevents deposit-taking banks from engaging in riskier investment banking.
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RE: Where does Personal Responsibility come into play? - 8/21/2008 10:43:11 PM
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NoShow
Posts: 459
Joined: 5/10/2005
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quote:
ORIGINAL: pastorhawk
So if I buy a Porsche but then a year or two later realize I can't afford it because I didn't really understand the contract then I can have the govt. buy it for me? Or I can just give it back without any penalty?
Where do I sign up?
No I think they're saying you should be able to keep the car and the government should subsidize you by helping you make your payments.
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RE: Where does Personal Responsibility come into play? - 8/21/2008 11:04:28 PM
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NoShow
Posts: 459
Joined: 5/10/2005
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quote:
ORIGINAL: blessedinnyc
I think the root problem with the credit crunch is something that many people don't notice- moral hazard. With the structure we had in place, loan officers made money when loans were originated- not when those loans were paid.
That's common in a number of long-term arrangements. Here's an example: let's say you're a leasing rep for a big shopping mall. The spaces\locations with the most traffic are most desirable, so you can get more rent for them. So you find the latest current new "hot" store and get them to sign a seven year lease. You get a commission based on the rental income over the seven year lease. And you get your commission up front. If the new tenant doesn't pay their rent for the life of the seven years, it's legal issue (i.e. your companies legal department can sue the tenant). After a few years, the company fizzles out and is no longer hot. The tenant eventually starts closing stores and eventually closes the one at your mall (they're broke so there's no point in suing them). You as the leasing rep, get your high traffic space back, a few years early to now lease to the next current "hot" company.
So do you see the leasing reps motive not to put in a tenant that will stay for it's full lease term?
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RE: Where does Personal Responsibility come into play? - 8/22/2008 8:21:29 AM
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P31W
Posts: 2955
Joined: 6/13/2005
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quote:
That's common in a number of long-term arrangements. Here's an example: let's say you're a leasing rep for a big shopping mall. The spaces\locations with the most traffic are most desirable, so you can get more rent for them. So you find the latest current new "hot" store and get them to sign a seven year lease. You get a commission based on the rental income over the seven year lease. And you get your commission up front. If the new tenant doesn't pay their rent for the life of the seven years, it's legal issue (i.e. your companies legal department can sue the tenant). After a few years, the company fizzles out and is no longer hot. The tenant eventually starts closing stores and eventually closes the one at your mall (they're broke so there's no point in suing them). You as the leasing rep, get your high traffic space back, a few years early to now lease to the next current "hot" company.
So do you see the leasing reps motive not to put in a tenant that will stay for it's full lease term?
Thanks for the lesson. I will remember that.
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RE: Where does Personal Responsibility come into play? - 8/22/2008 9:42:23 AM
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blessedinnyc
Posts: 1949
Joined: 10/12/2007
Status: online
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quote:
ORIGINAL: NoShow
quote:
ORIGINAL: blessedinnyc
I think the root problem with the credit crunch is something that many people don't notice- moral hazard. With the structure we had in place, loan officers made money when loans were originated- not when those loans were paid.
That's common in a number of long-term arrangements. Here's an example: let's say you're a leasing rep for a big shopping mall. The spaces\locations with the most traffic are most desirable, so you can get more rent for them. So you find the latest current new "hot" store and get them to sign a seven year lease. You get a commission based on the rental income over the seven year lease. And you get your commission up front. If the new tenant doesn't pay their rent for the life of the seven years, it's legal issue (i.e. your companies legal department can sue the tenant). After a few years, the company fizzles out and is no longer hot. The tenant eventually starts closing stores and eventually closes the one at your mall (they're broke so there's no point in suing them). You as the leasing rep, get your high traffic space back, a few years early to now lease to the next current "hot" company.
So do you see the leasing reps motive not to put in a tenant that will stay for it's full lease term?
True, but in mortgages, the loan officer's obligation is to also do DD on the home for the lender. The loan officer is more than just a salesman- in the old days, he was the bank employee who made sure the loan was a safe bet- and likely got paid by the hour.
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RE: Where does Personal Responsibility come into play? - 8/22/2008 10:21:52 AM
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NoShow
Posts: 459
Joined: 5/10/2005
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quote:
ORIGINAL: blessedinnyc
True, but in mortgages, the loan officer's obligation is to also do DD on the home for the lender. The loan officer is more than just a salesman- in the old days, he was the bank employee who made sure the loan was a safe bet- and likely got paid by the hour.
Okay, now you're doing "if's" and "buts".
The volume was so high, work got "sloppy". The process was often streamlined and the "comps", at that time, supported giving the loan.
It's not the old days. Most get a commission now.
Let's put the shoe on the other foot; all the bank did was grant the request of the borrower. They loaned them the money to fullfill the American Dream. To help them buy a house that the borrowers family could call a home.
And now that it turns out the borrower mislead the bank, in regards to their ability to pay the loan, the thank you to the bank for being patriotic and motiviated by family values is a simple "screw you"?
Now you may say that's all BS, but intent has to be proven on both sides. and since we'll never know the true intent of all parties on both sides, it and emotions need to come out of the equation. Meaning what "needs" to be done to help fix the problem, may not necessarily be the "right" thing to do.
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RE: Where does Personal Responsibility come into play? - 8/26/2008 1:17:39 PM
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GroupW
Posts: 2903
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
Status: offline
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quote:
ORIGINAL: blessedinnyc
quote:
ORIGINAL: pastorhawk
So if I buy a Porsche but then a year or two later realize I can't afford it because I didn't really understand the contract then I can have the govt. buy it for me? Or I can just give it back without any penalty?
Where do I sign up?
I think the root problem with the credit crunch is something that many people don't notice- moral hazard. With the structure we had in place, loan officers made money when loans were originated- not when those loans were paid. Banks made money when they sold bonds- not when the borrowers made the payments. And borrowers got to get into a nice house that they couldn't afford with $0 down. Everybody won, except the people doing the bail-outs.
If the feds are forced to do a bail-out (and I think there should be some sort of guarantee of 90-95% of the par value on agency-issued bonds), we need to do two things:
1.) Eliminate agencies that aren't heavily regulated.
2.) Reinstate the depression-era wisdom of Smoot-Hawley, which prevents deposit-taking banks from engaging in riskier investment banking.
#2 isn't a huge issue - there's several times the magnitude of risk in the whole derivatives counterparty system than there is in the deposit taking subsidiaries of the major I-banks. Add to that, the deposit taking franchises are legally separated from the I-bank activities. Further, the I-banks are taking part in the monetary system through their lending transactions, funded with non-depository interbank borrowings.
My solution is slightly different - as long as the I-banks act as quasi-banking institutions, then bring them under federal supervision like any other bank. Provide access to the Fed window in exchange. I think it would be better to update the modern regulatory structure to account for changes in the financial industry than to try to take the financial industry back in time to earlier days in order to fit it into our current regulatory structure.
You're correct on your moral-hazard statement being the root cause. It goes further than just the parties you listed. Add the ratings agencies into that equation as well. Folks bought nominally AAA securities, but those AAA ratings were in part the result of ratings agencies needing to bid for the business. The agency with the lowest subordination levels got paid to rate the deal. There was a lot of ratings-shopping going on, and that drove subordination levels to unrealistically low levels.
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“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Where does Personal Responsibility come into play? - 8/26/2008 1:19:26 PM
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GroupW
Posts: 2903
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
Status: offline
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quote:
ORIGINAL: NoShow
Meaning what "needs" to be done to help fix the problem, may not necessarily be the "right" thing to do.
I'm glad to see there are some folks out there that understand that.
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“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Where does Personal Responsibility come into play? - 8/27/2008 12:12:55 AM
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relady
Posts: 1281
Joined: 4/11/2005
From: Greater St. Louis Metro
Status: offline
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quote:
But the loans were poor due to the credit of the borrowers, those buying the houses Uh, no, they weren't. They were predatory loans that 25 years ago were illegal, and should still be so.
quote:
Myriad of details. ROFL give me a break. You do realize we are in the business. No, I didn't know you were in the RE business. Not everyone IS "in the business". Some people DO need help and if you can't at least be respectful of my profession, we have absolutely nothing else to say to each other. I'm just so glad you know it all....
quote:
all the bank did was grant the request of the borrower. Ahhh, but that's not all the bank is required to do. They are required to do something called "UNDERWRITING" which is the process by which they determine whether or not the borrower is worthy. When you aren't even asking for documntation of employment, nor are verifying the employement I guess that's the fault of the borrower too? Give me a break. The banks are in this mess, some of it quite fraudulently, and they are very busy trying not to get caught.
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RE: Where does Personal Responsibility come into play? - 8/27/2008 8:13:47 AM
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P31W
Posts: 2955
Joined: 6/13/2005
Status: offline
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RElady,
repeat because you don't seem to understand the "topic".
The person asked about reading the contracts at the closing. I replied that I read them before the closing and have a lawyer (who yes goes with me most of the time to the closing). You went off saying that's luck. It's not luck. It's called hiring a lawyer. No luck involved. Then you went off on what a lawyer does not do? No reason to twist a simple honest answer into a "commercial for RE agents".
I think it was upsetting to you because when people know how cheaply they can do these things themselves by hiring professionals without a middle man it harms your ability to make a couple thousand dollars off the deal and in some cases the RE does not make a couple of hundred grand.
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if you can't at least be respectful of my profession
It's your profession with it's lobbiest who try to keep people such as myself from saving the consumer thousands, tens of thousands and in many cases hundreds of thousands of dollars. Of course as of yet your profession has failed to pass the law that closes the door on my ability to do what we do so well.
Sorry but I don't repect your profession. You are only trying to protect your middleman interest in a RE deals and if it were up to your group none of us would be able to buy or sell without giving "your group" a cut.
< Message edited by P31W -- 8/27/2008 8:19:51 AM >
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RE: Where does Personal Responsibility come into play? - 8/27/2008 8:25:18 AM
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NoShow
Posts: 459
Joined: 5/10/2005
Status: offline
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quote:
ORIGINAL: relady
quote:
But the loans were poor due to the credit of the borrowers, those buying the houses Uh, no, they weren't. They were predatory loans that 25 years ago were illegal, and should still be so.
Some were predatory, but you're painting with to wide of a brush. The facts show that the percentage of loans that were predatory was less than the ones that were subprime.
quote:
all the bank did was grant the request of the borrower. Ahhh, but that's not all the bank is required to do. They are required to do something called "UNDERWRITING" which is the process by which they determine whether or not the borrower is worthy. When you aren't even asking for documntation of employment, nor are verifying the employement I guess that's the fault of the borrower too? Give me a break. The banks are in this mess, some of it quite fraudulently, and they are very busy trying not to get caught.
First off, you are completely misusing the word underwriting. Underwriting is the process used to evaulate the risk. It's to serve the lender, not the borrower. The banks, did do underwriting and assigned higher interest loans to compensate for taking on the riskier loan.
I'm not saying that banks aren't partially at fault. They're at fault, many of the borrowers are at fault, some realtors are at fault, moreso a lot of brokers are at fault and the credit agency are one of the biggest guilty parties for allow the loans to find a place to go. You keep blaming the banks like drug dealers get blamed. And the war on drugs showed us that the demand (i.e. lack of personal responsibility) is the bigger "problem", but one that there is little that can be done.
But many of the people knew what they were getting into. They were taking a loan, that none of their friends or family would touch, because it would get them into a house now. Their strategy, if you call it that, was to wait "X" number of years, hoping the house would appreciate enough that they had equity in the house, so they can get a "better" loan. Even though the numbers didn't push out that they would be able to service the new loan. They weren't going to worry about it, because they "needed" to get into a house now, if they were ever going to be able to get into one (thoughts driven by the frenzy). In hindsight, waiting would have gotten a much better deal.
Most of the predatory borrowers have walked away from their houses already. There are blocks of low-income, minority neighborhoods that have become deserted due to people walking away from their predatory loans.
Most, not all, of the people currently still looking for a work through fall into the former group, not the latter.
But that's all moot, because when it comes to a solution, the government is going to see that it's best to bail out Fannie and Freddie, than to bail out the Johnsons, Wilsons, Millers....
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