published Sunday, February 12th, 2012

Foiled Again!

about Clay Bennett...

The son of a career army officer, Bennett led a nomadic life, attending ten different schools before graduating in 1980 from the University of North Alabama with degrees in Art and History. After brief stints as a staff artist at the Pittsburgh Post-Gazette and the Fayetteville (NC) Times, he went on to serve as the editorial cartoonist for the St. Petersburg Times (1981-1994) and The Christian Science Monitor (1997-2007), before joining the staff of the ...

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blackwater48 said...

PEOPLE DO THE RIGHT THING WHEN YOU MAKE THEM

It’s nice to see Obama ‘persuade’ Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial to cough up $25 billion to American homeowners, although federal officials admit the ultimate benefits provided could top $45 billion

And it’s only the beginning. According to the agreement, the government prosecutors and regulators still have the right to pursue investigations into the causes of the housing bubble. Practices like bundling sub prime mortgages into securities that were sold to investors, insurance fraud and tax fraud. The government is pursuing any and all allegations of criminal wrongdoing. It’s about time. I’m still waiting for handcuffs.

February 12, 2012 at 12:04 a.m.
Salsa said...

Tell Obama to save a pair of those handcuffs for his pal Barney Frank.

February 12, 2012 at 12:41 a.m.
fairmon said...

The investigations should not end until everyone committing a criminal act is identified and aggressively prosecuted. Those doing things not criminal but irresponsible would also become known. However, those in that category have an incentive to settle. I wish I had the tapes of Barney Franks and others reaction to secretary Snow and Bush encouraging more regulation and restraint on Fannie and Freddie.

February 12, 2012 at 1:10 a.m.
EaTn said...

If they started prosecuting Washington insiders related to housing financing, the Iraq war, drug and energy legislation,etc they would have to build more federal prisons, which would probably be built by insider connected contractors and lead to more prosecutions.

February 12, 2012 at 6:22 a.m.
whatsthefuss said...

Really Clay? Is that supposed to be a nervous banker? What is that popcorn looking stuff over him and why is his tongue hanging out. Did I hear that homeowners that lost their homes will be paid $2,000 each? Now that sure will be a life changer for those folks!!!

AIG has been on of the most profitable companies this past year. Any questions? This is as funny as the government talking about taking away tax breaks from big oil. Oil companies get their money one way or another. It won't be difficult to demonstrate this in the coming year. And yes it will be brought to your attention because you feel the financial pressure directly. No nervous banker there! But it will involve the same Wall St. friends you have come to know and love.

There is no right thing happening here. They all know who the bad guys are that have been involved in this fleecing of America. It's the "Friends & Family Plan." All the government Federal Reserve heads past and present are former Market Street whores. So was our good friend Bernie M. And all the while taxpayers have been told that only these well schooled thieves could understand such a complicated system. The average American just isn't capable of such a task. HA!!! My 7 year old couldn't have F'ed it up that bad if he tried.

Look at stock prices. This has been the other fleecing of Americas hard working slobs. Citigroup & Bank of America are fine examples, Citigroup being the most notorious with their 10:1 reverse split that took a $4 stock and made it a $40 stock overnight and then watched it become a $20 stock in just weeks. And remember where it traded at before it became a $4 dollar bargain! Then we are given reasons such as Greece is about to default, bla, bla, bla. Our government wouldn't do the right thing unless there was something in it for the players and my current White President is no exception. It really doesn't matter which winner you back come election day. Rest assured there will be little to nothing in it for you! Welcome to the reinvented New Deal. The sign reads, "FOR SUCKERS ONLY."

February 12, 2012 at 8:25 a.m.
AndrewLohr said...

"I'm sorry, Mr Bennett, you're incurable"--my wife's caption for the shrink cartoon contest. The only one I laughed at was You can't afford Vol-fan therapy.

"Yes, Mr Obama, you're a genius, but no, this does not qualify you to dictate health care, light bulbs, and investment banking for 300 million other people."

"Yes, Mr Obama, you're a genius, but Solyndra needed an idiot."

Housing? Our government is to protect freedom, NOT, to force on people what it considers best outcomes. Only to punish crime. Laws need to be simple so they can be kept--try the 10 commandments--not so complicated they make most everyone guilty of something or force people to spend fortunes defending themselves. The government forced some mortgages, let bankers play roulette with taxpayers stuck for the losses, and let Fannie and Freddie execs keep fat bonuses (is it making them give those back?)

February 12, 2012 at 8:46 a.m.
MTJohn said...

harp3339 said...The investigations should not end until everyone committing a criminal act is identified and aggressively prosecuted.

Agreed. But, don't hold your breath. I'm still waiting for prosecutions of everyone who committed criminal acts related to the S&L crisis.

harp3339 said...I wish I had the tapes of Barney Franks and others reaction to secretary Snow and Bush encouraging more regulation and restraint on Fannie and Freddie.

Add to that all of the tapes of conversations related to the repeal of Glass-Steagall.

February 12, 2012 at 8:55 a.m.
MTJohn said...

Andrew - the problem with your brand of libertarianism is that it spawns a bunch of Shylocks. It gives freedom to the wealthy, powerful and influential. But, it makes victims of the rest of us.

February 12, 2012 at 9:01 a.m.
jesse said...

does the 25 billion they have to cough up come out of the bail out bucks the govt.gave them?? i'm confused!

February 12, 2012 at 9:26 a.m.
miraweb said...

I have to admit, I'm wanting whatever made the tire tracks to back up a couple of times and do it again.

It seems like a lot of our regulations are process based instead of outcome based.

Watching the system play itself out looks like a very bad game of clue (General Mustard in the kitchen with the lead pipe. Wrong - it was the candlestick! General Mustard gets a bailout!).

I could vote for making "crashing the world economy" a criminal offense of its own - however those idiots got there.

February 12, 2012 at 9:55 a.m.
joneses said...

So the banks are being forced by this pathetic president to give irresponsible home owners $2,000.00 each. How much should we get for being responsible and living within our means? Another example of the dummycrats implementing a victim mentallity. Pathetic.

February 12, 2012 at 9:59 a.m.
miraweb said...

I agree, Jonesie, it isn't fair. The banks directors should be facing jail time and a seizure of their assets but nobody really wants to push 7 million mortgage fraud cases through the courts.

Some of the smaller players (HR Block's mortgage unit 'Option One' for example) are being sued for fraud.

The best answer is still voting with your wallet. I've moved all of my retirement funds away from large-cap money market accounts, I use cash instead of a debit card as much as I can, and I bank at a community bank.

And HR Block will not be doing my taxes this year.

The big banks can play "funny money" all day if they want - but I don't have to put my dough in their game.

Option One - HR Block

Statement of Other Charges Filed

February 12, 2012 at 10:22 a.m.
BigRidgePatriot said...

The Wart apparently thinks banks are in business to hurt people, ant that people who take on ridiculous levels of debt should be bailed out by the tax payers so they can stay in houses that they cannot afford. And the most laughable part, that the latest move by the Obama administration has done anything to solve the problem.

I suppose Obama is winning lots of support from voters that are benefiting from his give aways and violations of the concepts of contract law. He does not care about the long term negative consequences of his manipulation of the housing market and mortgage industry. All that matters is his power and his reelection.

February 12, 2012 at 11:03 a.m.
jesse said...

hey brp! the banks are in buis.to rip off as much as they can no matter who's it is and the govt.is standin by to see that they git away w/it! 25 billion? ain't a drop in the bucket AND the bail out seen to it that it's not their money anyhow! it's a 3 card monte game and the taxpayer is the loser!

February 12, 2012 at 11:26 a.m.
mountainlaurel said...

MtJohn said: "Andrew - the problem with your brand of libertarianism is that it spawns a bunch of Shylocks. It gives freedom to the wealthy, powerful and influential. But, it makes victims of the rest of us."

Well stated, MTJohn. When it comes to the powerful wall street, banking, and financial investment sectors where fraud and theft are rampant, Andrew would have us believe a simple sign stating “thy shall not steal” is more than suffiecient to eliminate corruption, but when it comes the voting booth where fraud and theft are rare, Andrew would have us believe that nothing less than photo IDs, fingerprints, and criminal background checks of every single member of the voting public will do.

February 12, 2012 at 11:37 a.m.
jesse said...

andrew lives in the twilight zone!

why give credence to his posts?

of course he 's got lots of co.out there!!

February 12, 2012 at 11:46 a.m.
carlB said...

The site below gives us a review of a good discussion we had on 2010/nov/28/wishbone.
There appears to still be a flaw in the judgment of the opponents of President Obama and the people who want to diminish the role of all of government, leaving everything to the private enterprise systems. It appears that they have forgotten what would occur if this Republic went into another great depression and are sticking to their policical agendas and personal ideologies to put us into another depression.

http://www.timesfreepress.com/news/2010/nov/28/wishbone/?opinioncartoons

February 12, 2012 at 12:36 p.m.
MTJohn said...

joneses said...So the banks are being forced by this pathetic president to give irresponsible home owners $2,000.00 each.

joneses - would you also pardon every murderer who killed an unarmed victim? If you weren't carrying a gun, it's your own fault that you're dead!

February 12, 2012 at 12:44 p.m.
onetinsoldier said...

Banks are only in the business of making your money, their money. That banker is only interested in what he can get for the rope.

February 12, 2012 at 1:03 p.m.
mountainlaurel said...

Blackwater48 said: “The government is pursuing any and all allegations of criminal wrongdoing. It’s about time. I’m still waiting for handcuffs.”

I agree, Blackwater48. What’s the point of having a set of rules and a set of penalties if no one is enforcing the rules and imposing the penalties on the criminals and the violators?

February 12, 2012 at 1:27 p.m.
fairmon said...

I am slow and a skeptic. I am still trying to figure out what would have been wrong or different if those poorly managed businesses had been allowed to bankrupt? The FDIC would have covered deposits of $250,000 or less but bankruptcy does not mean those would have been lost. Some say they wouldn't be available to make loans, they are not now making loans now except to a select few getting low rate loans that could have obtained loans elsewhere. The big money folks would have lost on their investments and bonds, so what, that is the risk of investing. Those the banks owed money would not have been paid all they were owed, who would that have been? Those with a unique relationship and interest in the large banker/brokers said their failure would have resulted in a serious depression, would it have been a worse economic depression than we have or their own mental depression from no longer having their personal wealth? Too big to fail? why are they still too big? Why are they still allowed to have their conflict of interest by being both broker and banker? Why was Goldman Sachs allowed to switch from being a broker to being a bank so they could get TARP money? What would have been the result if 100% of the TARP money had gone to real job creation activities such as infrastructure upgrade projects?

February 12, 2012 at 1:29 p.m.
fairmon said...

Who is benefiting most from the latest bail out plan the banks that avoid having to take possession of more under water houses or those that are keeping an under water house they can't pay for and that they really would not object to the bank having? People think they should do everything possible and live frugally to meet a commitment to repay a loan they should not have had in the first place, are the banks taking advantage of credible people? If they can pay for an under water house they could live better in a rental or lower cost house. There is a reason banks are willing to pay a fine and support the effort to have people keep a house the banks don't want.

Is short term pain better than long term nagging misery so large banks can, with government/tax payer help, recover from their poor management and greedy fraudulent behaviour? Why are financially healthy well managed regional banks and credit unions being punished to save the larger national and international poorly managed banks?

February 12, 2012 at 1:46 p.m.
BigRidgePatriot said...

jesse said... “ the banks are in buis.to rip off as much as they can no matter who's it is and the govt.is standin by to see that they git away w/it! 25 billion? ain't a drop in the bucket AND the bail out seen to it that it's not their money anyhow! it's a 3 card monte game and the taxpayer is the loser!”

I know, I know, all private enterprise is in the business of screwing their customers. Customers have no accountability for limiting the amount of debt they take on an have no responsibility for honoring the contracts that they sign.

I do agree with you that 25 billion is a drop in the bucket and is only a feel good move so some people can be fooled into continuing their love affair with Obama. The tax payer is the looser every time the government buys favor with a segment of voters at the expense of the rest of us. It is all about buying votes. We don’t need to be concerned about the debt, nothing to see hear, move along…

February 12, 2012 at 2:03 p.m.
shifarobe said...

I have no problem at all with my bank. I have a checking account with them, a savings account and I make mortgage payments to them. As long as I make my house payments on time there's no problem. That's how it should be. Banks are not the problem, the federal government is. Banks are held accountable, the federal government is not.

February 12, 2012 at 6:08 p.m.
blackwater48 said...

Conservative Chic: blame the victims.

February 12, 2012 at 6:31 p.m.
dude_abides said...

Concerned about alprova, no posts since the 8th. Hope he's okay.

timbo, on the other hand, has been AWOL for a bit too... hope he's in the Poconos getting raped by a Sasquatch wearing a Penn State jersey. Just kidding... I hope it's consensual.

February 12, 2012 at 7:03 p.m.
carlB said...

Of course banks are in the business of making money. They "make money the old fashion way, they make it by handling investors money and charging them for doing it" When we open a CD account, the interest rate is low but the banks can use that CD money to make a higher interest rate than they are giving. Is there any government regulations on what the limit a CEO/manager makes off of the people's CD accounts? Do or can we expect the Banks to loan money to people that have not any means of paying the money back? NO, we do not. Why are we not discussing the conditions of why the people are already maxed out on their credit, not able to get jobs to pay the off their loans and others are nor able to borrow money even if the interest rate on the money is really low? Would putting people back to work in the USA on long-term jobs by the private enterprise sectors, making the goods that we now buy as imported goods help put more money in circulation?

February 12, 2012 at 7:16 p.m.
alprova said...

harp3339 wrote: "I wish I had the tapes of Barney Franks and others reaction to secretary Snow and Bush encouraging more regulation and restraint on Fannie and Freddie."

Why? At the time those hearings took place, there was no evidence whatsoever that Fannie Mae and Freddie Mac were in trouble. They were very much a victim as well in all of this. Both institutions were operating as purchasers of mortgages underwritten by banks or mortgage brokers, and used as pawns in the nationwide scheme that began with the passage of the Gramm-Leach-Bliley Act, the single piece of legislation that is at the core root of what caused the housing market to topple.

"Why are financially healthy well managed regional banks and credit unions being punished to save the larger national and international poorly managed banks?"

Where did you get that idea from? The settlement is between those already foreclosed upon or who are in the midst of being foreclosed and with the five largest mortgage lenders. Those lenders are Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.

On another note, all this crap being spewed about this settlement being a ploy to buy votes is nothing more than stupidity being expressed by the usual anti-Obama idiots.

The $2,000 checks in question, will go to approximately 750,000 former homeowners who were illegally foreclosed upon by the five lenders named above. Each were guilty of rushing through foreclosures on properties they serviced, that they didn't own and/or by processing foreclosures without verifying documents. Some employees signed papers they hadn't read or used fake signatures to speed foreclosures, also known as robo-signing.

$2,000 won't give them back the houses they lost, but there are houses out there on the market with lending programs available to the public that can be purchased for that amount down.

February 12, 2012 at 8:29 p.m.
alprova said...

harp3339 wrote: "Who is benefiting most from the latest bail out plan the banks that avoid having to take possession of more under water houses or those that are keeping an under water house they can't pay for and that they really would not object to the bank having?"

Your question needed to be broken up into two or three separate questions, but the simple answer to it is that there are individual families who will benefit from the latest attempt to penalize mortgage lenders that wrote tainted mortgages, causing housing prices to plummet.

"People think they should do everything possible and live frugally to meet a commitment to repay a loan they should not have had in the first place, are the banks taking advantage of credible people?"

You're like a lot of people who are guilty of being woefully misinformed. The vast majority of people who walked away from mortgages on homes, were those who were purchasing homes to make money off of when they sold them, or "flippers," as they were known. When housing prices dipped, these people bailed on loans right and left.

The second highest category of people who have had to walk away from mortgages, are those who have lost jobs and have had to relocate for a job or those who have had to relocate due to their employment and have been unsuccessful in selling an existing home.

The least likely to walk away from an existing mortgage are those who intend to stay in their homes for life, or who are desperately trying to keep up payments on homes with adjustable rate mortgages, sold to them by unscrupulous mortgage brokers.

"If they can pay for an under water house they could live better in a rental or lower cost house."

What the heck does that mean?

"There is a reason banks are willing to pay a fine and support the effort to have people keep a house the banks don't want."

In a perfect world, no bank would benefit from foreclosing on any property. But we don't live in a perfect world. The five banks above are guilty of making more to foreclose on properties in which they have no financial stake in whatsoever.

These banks serviced mortgages held by others. They make more in foreclosure fees than they do in fees for servicing the mortgages and working to keep people in those homes.

February 12, 2012 at 8:50 p.m.

My oh my are liberals twisted. The government forces and threatens banks to give out risky loans for decades and banks are the vilains????? Yeah, and if by adding more debt you help reduce the debt. Dodd and Frank should be in prison.

February 12, 2012 at 10:58 p.m.
fairmon said...

harp3339 wrote: "I wish I had the tapes of Barney Franks and others reaction to secretary Snow and Bush encouraging more regulation and restraint on Fannie and Freddie."

Why? At the time those hearings took place, there was no evidence whatsoever that Fannie Mae and Freddie Mac were in trouble. They were very much a victim as well.

That is BS and you know it. Apparently secretary Snow and Bush had some idea they were out of control as he said. Bush may not have but was supporting a good secretary of state that soon after being called a racist in those hearings by the brilliant Maxine waters and others for his position on this issue resigned. By the way wasn't she sanctioned for attempting to get her husbands bank TARP money? F&F had managers that were responding to congressional pressure to help people with poor credit and low incomes buy homes. They knowingly were buying CDSs and getting big bonuses for their work. They were serving as the major outlet for those high risk loans with the full support of congress, especially, thank God he is gone, Franks. F&F are just as guilty as the banks you site as involved in robo loans and should all be prosecuted and would if a thorough and objective investigation were held.

I do wonder why Franks and Dodd were so anxious to pass their bill and assure the everyone the problem was solved, the issue addressed and congress could move on to other critical issues, no further investigation was needed etc. with both retiring at the end of their current term.

February 12, 2012 at 11:55 p.m.
joneses said...

This mortgage mess is a perfect example of dummycrats arriving at a rediculous solution to an impossible problem they created. As long as this pathetic president continues to offer solutions things will get worst.

February 13, 2012 at 6:55 a.m.
joneses said...

Behold socialism's full maturity! It's a godless system that rewards the guilty (lazy) by taking what should be the rewards of the hard working, all so that the corrupt ruling class can buy corrupt votes with the unsustainable giveaways.

February 13, 2012 at 7:11 a.m.
fairmon said...

Alprova...

Do you wonder why there have been no hearings and investigation of those forging loan documents, submitting of inflated appraisals or false incomes and other fraudelent behaviour with no criminal charges filed? Could it be the stinch may get on those responsible for encouraging the granting of high risk loans that should not have been made? Those attempting to "flip" houses have been assisted as well which is rediculous. Any investor in a high risk investment should be prepared to take a loss up to 100% of the investment. Those buying Fannie and Freddie stock were baled out when the government stepped in and prevented them from bankrupting and restructuring. The implied loan guarantees by F&F contributed as much to the housing bubble as the corrupt banks with the banks and those with F&F over sight not suffering the deserved consequences.

February 13, 2012 at 9:26 a.m.
MTJohn said...

harp3339 said...Alprova...Do you wonder why there have been no hearings and investigation of those forging loan documents, submitting of inflated appraisals or false incomes and other fraudelent behaviour with no criminal charges filed?

Harp - I agree that there should be investigations, prosecutions, convictions and sentences that include compensation of the victims of theft. But, I don't wonder there have been no hearings or investigations - given that the perps "own" the regulators.

What I don't understand is why so many folks buy the rhetoric that defends the perps by blaming the victims.

February 13, 2012 at 9:34 a.m.
mountainlaurel said...

BigRidgePatriot said: “The Wart apparently thinks banks are in business to hurt people, ant that people who take on ridiculous levels of debt should be bailed out by the tax payers so they can stay in houses that they cannot afford."

Please, BigRidgePatriot. Surely, you’re not arguing that these bankers are poor innocents, and it’s the fiendish homeowners who are actually behind all of the problems like the housing bubble, predatory loan practices, junk mortgages, and fraudulent foreclosures.

February 13, 2012 at 9:56 a.m.
blackwater48 said...

HERE'S A BRIEF HISTORY

Bankers committed massive fraud in originating and packaging sub prime mortgages and selling them as so-called AAA rating securities. They sought out potential buyers who couldn't afford expensive homes and convinced them that real estate value would only increase. Sure, they lied, you can't afford a $1 million home today, but in three months that property's value will double. The banks made billions until the bubble burst, the banks went broke, the criminal bankers walked away with billions, taxpayers supplied a bail out to cover the theft, and the economy tanked.

You might think the greedy bastards would be happy with their con but the banks were not done. The second phase occurred later when those same banks committed more massive fraud by improperly charging homeowners fees and other costs, initiating unjustified foreclosures, and knowingly and intentionally filed false documents in court to foreclose on people when they didn’t know – and didn’t bother to verify – if they actually owned the mortgages they were trying to foreclose on.

The $25 billion Obama got from five of the biggest banks is only the beginning. You might argue that it's only a political con because financial stock values were not affected, but this deal is different than, say, the Tobacco settlement, because this is not a one time payment. The $25 billion might actually grow to $45 billion and prosecutors are still free to pursue criminal charges.

It's a drop in the bucket but at least it's a start.

Republicans argue that the original banking fraud scandal was the result of TOO MUCH GOVERNMENT REGULATION. That is a lie.

If republicans gain the white house and congress one thing is for sure. They'll give back the $25 billion, drop all further investigations, and issue a trembling heart felt apology.

February 13, 2012 at 10:21 a.m.
BigRidgePatriot said...

mountainlaurel said... "Surely, you’re not arguing that these bankers are poor innocents, and it’s the fiendish homeowners who are actually behind all of the problems like the housing bubble, predatory loan practices, junk mortgages, and fraudulent foreclosures."

No, I do not think the banks are poor innocents, but I do not think the recent settlement will do anything to solve our housing problems, except that it puts the litigation hammer behind them so they can proceed with foreclosures. I can promise you, the banks will find a way to recoup the money from the settlement from their customers.

I don't have much empathy for people that bought houses speculating on continued rampant housing price value appreciation. They were speculators making a terrible gamble that did not work out. It is another example of overconsumption on the part of Americans. Now they want a get-out-of-jail-free card. Obama is undermining rule of law and promoting an entitlement mentality. I guess Americans are now even "entitled" to stay in houses they could never afford?

February 13, 2012 at 10:39 a.m.
alprova said...

harp3339 wrote: "Do you wonder why there have been no hearings and investigation of those forging loan documents, submitting of inflated appraisals or false incomes and other fraudelent behaviour with no criminal charges filed?"

No, I don't wonder at all. The biggest problem in most of those cases is that those responsible for submitting falsified paperwork weren't even licensed to write mortgages. Gramm-Leach-Bliley opened up the market to anyone and everyone to be able to underwrite mortgages and to bundle them as investments.

"Could it be the stinch may get on those responsible for encouraging the granting of high risk loans that should not have been made?"

High risk loans, as you call them, did not collapse the housing market. At the height of this mess in 2008, 94% of all sub-prime mortgages were being paid on time every month. Sub-prime loans represented no more than 20% of the entire mortgage market at any given time.

A 6% default rate on 20% of the mortgage market did not begin to collapse the housing market.

"Those attempting to "flip" houses have been assisted as well which is rediculous. Any investor in a high risk investment should be prepared to take a loss up to 100% of the investment."

Which most of them did lose.

"Those buying Fannie and Freddie stock were baled out when the government stepped in and prevented them from bankrupting and restructuring. The implied loan guarantees by F&F contributed as much to the housing bubble as the corrupt banks with the banks and those with F&F over sight not suffering the deserved consequences"

You're still not understanding that Freddie and Fannie buy mortgages from banks, so that banks can write more mortgages. This has been standard practice for both firms since the 1970's. Freddie and Fannie's contribution to this mess stems only from the fact that they purchased so many of those fraudulently written loans. It most certainly was not their fault.

Banks and the unscrupulous mortgage brokers guilty of underwriting and accepting those tainted mortgages, knew what was going to happen eventually. Once they were sold or placed up for investments, their hands were washed of them.

Fannie and Freddie had to be saved. There are no other mortgage clearing house institutions to assist banks in being able to turn more loans.

Will there eventually be a vetting of all who violated the law? Maybe, maybe not. Licensed individuals probably are not among those who wrote the bad mortgages. Mortgage brokers used at the time, included so many unlicensed people, that it is not funny.

Tracking them all down would be an effort in futility.

February 13, 2012 at 10:40 a.m.
BigRidgePatriot said...

Leftists don’t make any sense to me. You know, the biggest problem facing this planet is human population growth and the overconsumption of resources, right? What will the world look like when the population doubles again?

How does it make sense for government to subsidize or encourage over-consumption? How does it make sense to be encouraging unnatural consumption fueled by debt during an economic crisis? Is this not an opportunity to let consumption make a natural correction? Why do you want to continue to fuel an economy on debt? It seems to me that the uncontrolled use of Keynesian economic policy does nothing but accelerate us towards a precipice!

February 13, 2012 at 10:59 a.m.
MTJohn said...

BigRidgePatriot said...I don't have much empathy for people that bought houses speculating on continued rampant housing price value appreciation. They were speculators making a terrible gamble that did not work out. It is another example of overconsumption on the part of Americans.

Neither do I. But, what is your basis for concluding that this description applies to the average family home buyers who were hurt by the housing crisis or the average family who might be helped by the recent agreement?

BigRidgePatriot said...Leftists don’t make any sense to me.

And, it doesn't make sense to me that you would come to the defense of Syndley Whiplash.

February 13, 2012 at 11:19 a.m.
BigRidgePatriot said...

MTJohn said... "And, it doesn't make sense to me that you would come to the defense of Syndley Whiplash."

And, that would be the problem from taking your intellectual cues from a cartoonist. Am I to understand now that you have simplified your understanding of the banking industry to "Snidely Whiplash"?

February 13, 2012 at 12:06 p.m.
BigRidgePatriot said...

MTJohn said... "what is your basis for concluding that this description applies to the average family home buyers who were hurt by the housing crisis or the average family who might be helped by the recent agreement?"

I think it is fair to say that the average American home buyer buys much more home than they actually need. When you overextend you are more vulnerable to every bump in the road. Do you not agree?

February 13, 2012 at 12:09 p.m.
jesse said...

when you walk into a bank wantin to finance a $200.000 LOAN AND THE BANKER TELL YOU "WITH YOUR PROFILE WE CAN GO UP TO $350.00 ! the average dude is gonna RESHOP! like 'HEY I CAN HAVE A POOL OR A TENNIS COURT?" THEY suckerd IN A LOT OF FOLKS TO over extend AND THEN THE BOTTOM FELL OUT!

February 13, 2012 at 12:43 p.m.
BigRidgePatriot said...

jesse said... "when you walk into a bank wantin to finance a $200.000 LOAN AND THE BANKER TELL YOU "WITH YOUR PROFILE WE CAN GO UP TO $350.00 ! the average dude is gonna RESHOP! like 'HEY I CAN HAVE A POOL OR A TENNIS COURT?" THEY suckerd IN A LOT OF FOLKS TO over extend AND THEN THE BOTTOM FELL OUT!"

Yes, I think I heard a similar pitch every time I bought a home. It was poor advice and was not in the best interest of the home buyer unless you believed that "your home is your biggest investment" and "home value appreciation will create your equity". Funny, I never fell for that. Does that make me a genius? I don't think so. Does it make the banker a demon? I don't think so.

The obsession with a "consumption based economy", whatever that is, seems to be the real problem in my mind.

Everybody needs someone to blame when they get caught doing something dumb.

February 13, 2012 at 12:51 p.m.
jesse said...

hey brp? how old were you when you bought your first house!50? 30 year old newly married ,both workin .knockin down $150.000 a year, no kids ,got the world by the a$$ and the banker suckers them into a $500'000 mort.! the broker GOT HIS,he don't care if the loan tanks! THEN the recession hits!who's left out hangin to dry?it ain't the broker and it ain't the bank! IT'S THE TAXPAYER!(and the poor slob that got suckerd to start with!)

February 13, 2012 at 1:12 p.m.
fairmon said...

alp said...

You're still not understanding that Freddie and Fannie buy mortgages from banks, so that banks can write more mortgages. This has been standard practice for both firms since the 1970's. Freddie and Fannie's contribution to this mess stems only from the fact that they purchased so many of those fraudulently written loans. It most certainly was not their fault. [I DIDN'T REALIZE THEY HAD NO CHOICE? WHY IS THEIR MANAGEMENT PAID SO MUCH IF NO DECISION MAKING OR INDIVIDUAL LOAN EVALUATION IS REQUIRED]

I understand perfectly what F&F role had been prior to the CDS era and since. I simply don't agree they are essential to enabling banks to make more loans and over leverage as they were encouraged to do so more people could realize what some in congress called the "American dream" without realizing they were creating a nightmare for many. I do recall when a loan application that did not qualify for a conventional 20% down loan being submitted for an FHA approved loan with many denied and those let required mortgage insurance until the loan reached 80% of appraised value. Are the banks not able to borrow from the FED at low rates and leverage that to make loans with their profit being the spread between the borrowing rate and the loan rate?

I still think the buyer or investor has the responsibility to know the details of the contract and the risk they are taking before entering into the contract. I can't imagine making a loan to anyone with no skin in the game such as at least 20-25%. You and I will never agree congress and those with over sight responsibility and the FED were not just as responsible for the housing bubble and collapse as the banks. Where were the late to the party regulators Dodd/Franks to prevent the abuse by the banks and F&F?

You recently said you were starting a new business which means investing your time and money or borrowing it. You are intelligent enough to evaluate the risk/reward. Do you think the rest of us should bail you out if the unexpected happens?

Who was responsible for the Madoff victims? Should they be baled out? If you want more of something reward it and you are likely to get more of it. That includes stupid decisions by the rich and greedy and stupid decisions by the ignorant.

February 13, 2012 at 1:23 p.m.
News_Junkie said...

There is an in-depth analysis of who is actually benefited by the very recent settlement of the dispute relating to "questionable" mortgage foreclosures that was entered into by (1) mortgage lenders and servicers as well as (2) the Attorney Generals of 49 States at: http://www.latimes.com/business/realestate/la-fi-hiltzik-20120212,0,7852934.column

February 13, 2012 at 1:32 p.m.
jesse said...

DO F&F get a pass for BEING STUPID enough to buy all these bad loans?? is that why all the WHEELS there get ALL these BIG paydays?for being DUMBER than a box of hammers??

this whole thing is like a shell game! the blame is under a walnut shell and if you move them around enough NOBODY knows where the pea is at!!!

February 13, 2012 at 1:52 p.m.
MTJohn said...

BigRidgePatriot said...I think it is fair to say that the average American home buyer buys much more home than they actually need. When you overextend you are more vulnerable to every bump in the road. Do you not agree?

I agree but I do not think those are the home buyers at the core of the mortgage crisis. I think the bigger problem is lenders who 1) maneuvered borrowers into loans that they knew the borrowers could not service; 2) fudged the numbers to disguise the fact that the loans were fraudulent; and, 3) knew that they could package fraudulent loans were backed by the federal government and would be sold to a third party. The problem was compounded because the loans were bundled into junk investment instruments. I guess you can blame borrowers for not being more diligent, but it was the lenders who loaded the dice and tilted the craps table.

February 13, 2012 at 2:29 p.m.
mountainlaurel said...

BigRidgePatriot said: “No, I do not think the banks are poor innocents, but I do not think the recent settlement will do anything to solve our housing problems.“

But nobody has made the claim that the “settlement” is a solution to the housing problem, BRP. As both Alprova and Blackwater48 have suggested, the recent “settlement” is a penalty action aimed at some of these shoddy and arrogant bankers who don’t want to be be held accountable and don't seem to be concerned about their reckless screw-ups and their wrongful foreclosures.

BigRidgePatriot said: “I can promise you, the banks will find a way to recoup the money from the settlement from their customers.”

Lets not forget, there are honest and prudent bankers out there, BRP. If these shoddy banker types get too carried away, I suspect they will be losing even more customers.

BigRidgePatriot said: “I don't have much empathy for people that bought houses speculating on continued rampant housing price value appreciation. . . It is another example of overconsumption on the part of Americans.”

I agree on some levels, BRP. But I also recognize these people were being cheered on by many of our so-called experts like Ayn Rand fan, Alan Greenspan, who failed to recognize the housing bubble. . . And, then, of course, there was the sleazy banking factor that was making tens of millions a year peddling predatory loans to these folks who didn’t understand them.

BigRidgePatriot said: “Now they want a get-out-of-jail-free card.”

But you do want to give a get-out-of-jail-free card to the arrogant bankers who continue to conduct themselves in a sleazy manner – the same group of bankers who were peddling all of those predatory loans a few years ago because as economist, Dean Baker, so aptly puts it: “because they knew they could dump them into the secondary market where securitizers would peddle them off to suckers all round the world.”

BRP said: “Obama is undermining rule of law and promoting an entitlement mentality.”

No, I think Obama is enforcing the rule of law and promoting accountability.

February 13, 2012 at 2:47 p.m.
adolphochs said...

The main catalysts for our financial meltdown were Fannie Mae and Freddie Mac enabled by a host of elected officials but primarily Barney Frank in the House and Christopher Dodd in the Senate. The three largest beneficiaries of Fannie and Freddie's political contributions in order: Dodd Obama John Kerry. The most impressive of the three was Obama who recieved over $100,000 in less than four years. All were cheer leaders for reducing even minimal requirements for mortgages.

It's difficult to feel sorry for homeowners who lost houses that they never put a dime of equity in. They should have never been able to qualify save for Freddie and Fannie enabling them.

February 13, 2012 at 2:54 p.m.
alprova said...

harp3339 wrote: "I DIDN'T REALIZE THEY HAD NO CHOICE? WHY IS THEIR MANAGEMENT PAID SO MUCH IF NO DECISION MAKING OR INDIVIDUAL LOAN EVALUATION IS REQUIRED"

Both enterprises are Government Sponsored, and their choices in what they take on are and have always been limited.

"I understand perfectly what F&F role had been prior to the CDS era and since. I simply don't agree they are essential to enabling banks to make more loans and over leverage as they were encouraged to do so more people could realize what some in congress called the "American dream" without realizing they were creating a nightmare for many."

Freddie Mac and Fannie Mae did not create any nightmares. You can blame the Gramm-Leach-Bliley Act. You can blame the Community Reinvestment Act, which for sure added to some of what went wrong.

"Are the banks not able to borrow from the FED at low rates and leverage that to make loans with their profit being the spread between the borrowing rate and the loan rate?"

Sure they are, but the trend has been for several years now to sell mortgages to Fannie and Freddie for slim profits, and wipe them off a bank's books completely. Rinse and repeat.

"I still think the buyer or investor has the responsibility to know the details of the contract and the risk they are taking before entering into the contract. I can't imagine making a loan to anyone with no skin in the game such as at least 20-25%."

I'm not sure what you are trying to state, but the simple fact is that many people were never informed properly at the time of signing such mortgages, the terms as they truly were.

Brokers were known to not disclose the terms of adjustable rate mortgages, or to misinform people of the drawbacks to entering into such a mortgage. Still others misled people into thinking that if rates did rise, they could easily convert their mortgages to that of a traditional loan.

"You and I will never agree congress and those with over sight responsibility and the FED were not just as responsible for the housing bubble and collapse as the banks."

Congress is at the core root, with them passing Gramm=Leach-Bliley.

"Where were the late to the party regulators Dodd/Franks to prevent the abuse by the banks and F&F?"

As you should recall, many mortgages contained time bombs in them, which did not start exploding until 2007-2008, years after they were written, bundled, and filed as investments.

"You recently said you were starting a new business which means investing your time and money or borrowing it. You are intelligent enough to evaluate the risk/reward. Do you think the rest of us should bail you out if the unexpected happens?"

Number one, that will never be a factor. It's off to a much better than expected start. However, if any of my businesses were to fail sometime down the road, I would not be seeking anyone to bail me out.

February 13, 2012 at 3:03 p.m.
jesse said...

hey al? BUT if someone offered to bail you out WHAT would your responce be? "gimmie the bucks asap!"

February 13, 2012 at 3:20 p.m.
mountainlaurel said...

Adolphochs said: "The main catalysts for our financial meltdown were Fannie Mae and Freddie Mac."

Get serious, Adolphochs. Fannie Mae and Freddie Mac didn’t cause the housing bubble and they didn’t cause the subprime madness. As economist Dean Baker says, “this train had already left the station.” At the most, they were dumb followers, not leaders.

February 13, 2012 at 3:52 p.m.
joneses said...

Obama the liar. I would bet you people that still think him your god feel pretty stupid now.

"This is big," wrote White House director of new media Macon Phillips in a February 23, 2009 blog post , "the President today promised that by the end of his first term, he will cut in half the massive federal deficit we've inherited. And we'll do it in a new way: honestly and candidly." Indeed, President Obama did make that promise that day, saying , "today I'm pledging to cut the deficit we inherited in half by the end of my first term in office. This will not be easy. It will require us to make difficult decisions and face challenges we've long neglected. But I refuse to leave our children with a debt that they cannot repay - and that means taking responsibility right now, in this administration, for getting our spending under control." The 2013 budget the president submitted today does not come close to meeting this promise of being reduced to $650 billion for fiscal year 2013.

February 13, 2012 at 4:24 p.m.
BigRidgePatriot said...

jesse said... "hey brp? how old were you when you bought your first house"

I was 24. I bought that house for 2/3 of my annual income at the time with a 10% down payment. Anyone that would spend 3 times their annual income on thier home is overextending, IMHO.

February 13, 2012 at 5:16 p.m.
BigRidgePatriot said...

mountainlaurel said... “Lets not forget, there are honest and prudent bankers out there, BRP. If these shoddy banker types get too carried away, I suspect they will be losing even more customers. “

Mostly those honest and prudent bankers are the smaller banks. The bigger banks have the ear of their government lackeys and will find a way to maintain a government provided advantage that will allow them to recoup their income.

February 13, 2012 at 5:31 p.m.
whatsthefuss said...

No money down, Negative Amortization, Adjustable Rate Mortgages, No Income Verification. 4 Things that never existed before the flood. Alan Greenspan repeating over and over, "The markets will regulate themselves." Yes the banks sold their wares as AAA but let's not forget the likes of S&P that continued to rate them day after day as AAA for a fee of course. Everyone involved was very aware that this was not going to last forever. Mortgage Brokers were as common as house flies in the summer. Being paid 1% of the loan amount only encouraged them to defraud by making the loan as large as possible. Keep your mortgage for a few years and then you can refinance. Sound familiar? I wonder whose best interest that was in??? And all for the cool sum of another 8% of the loan amount. And the beautiful thing was they were allowing homeowners to incorporate their unsecured credit card debt into the mortgage loan and walk away from the table with cash in hand. I'll bet the banks just loved that. They collect the % from the retailer and some interest from the borrower. And then they can count on their customers running up their credit cards once again and perhaps they would again recover 100% at the expense of investors. Yes I too have a savings and checking account and a mortgage. But that doesn't make the banks members of the clergy. Then we moved to $8,000 first time homeowner credit. "IN CASH" And never forget Cash for Clunkers. Oh, one more, GM bailout so they wouldn't file for bankruptcy so they could file for bankruptcy. Chrysler? Kodak? Health care reform is no reform at all. We simply cannot afford the system as it exists today. So sad,,,,, Stay healthy. The financial security you save just may be your own! Whooze Yo Daddy?

February 13, 2012 at 5:34 p.m.
fairmon said...

mountainlaurel said... Adolphochs said: "The main catalysts for our financial meltdown were Fannie Mae and Freddie Mac."

Get serious, Adolphochs. Fannie Mae and Freddie Mac didn’t cause the housing bubble and they didn’t cause the subprime madness. As economist Dean Baker says, “this train had already left the station.” At the most, they were dumb followers, not leaders.

You can't be serious. Why did they follow? F&F enabled the rouge bankers which is like essentially being in conclusion with them. Is there no one at F&F capable of detecting the weakness and vulnerability in a loan. We pay them well for them to be so incompetent. Congress compensation is not bad either, they were encouraging and cheering them on with accolades and big bonuses. They gambled just like the vulnerable investors. Would you sign and enter into a contract you could not read and understand? Would you pay someone you trusted, if you can find a trustworthy real estate lawyer, to evaluate it and explain it to you?

F&F were the incentive for the bad banks to bundle as many loans as possible and sell them to F&F. I have a financial advisor that predicted more than a year with F&F stock going up that they were approaching a situation that could and probably would render them bankrupt. I admit I did make money on their demise with long term put options. He also predicted GM would bankrupt which was obvious with their burn rate, yes I was one of those hated short sellers and almost paniced out when the stock run up but later took a profit too early.

F&F had people in their organizations warning management but no one was listening. All the pressure to continue and big money coming their way made them deaf.

February 13, 2012 at 6:50 p.m.
rick1 said...

F&F is currently under investigation by the SEC for fraud associated with the mortgage crisis. It is being reported that F&F failed to disclose $1 trillion in risk to investors.

http://news.investors.com/Article.aspx?id=600811&p=1&ibdbot=1

February 13, 2012 at 7:10 p.m.
rick1 said...

The above article also exposes the cover up in the intial investigation of F&F

February 13, 2012 at 7:14 p.m.
fairmon said...

alpro posted....

Gramm-Leach-Bliley opened up the market to anyone and everyone to be able to underwrite mortgages and to bundle them as investments.

I have repeatedly posted allowing bankers to be brokers and insurers was a major mistake. This first occurred in late 1998 when the FED temporarily approved Citibank buying Smith-Barney and Travelers. Then the bill to allow it was passed and signed by Clinton the next year. I think Clinton, possibly Reagan first used percent of Americans owning homes as a measurement of success. Bush continued it and many in congress adopted it also.

I don't agree most of the real crooks cannot be located and prosecuted. I think the concern about what a thorough and complete investigation would reveal prevents it. It would require an independent investigation with no member of congress participating.

February 13, 2012 at 7:16 p.m.
mountainlaurel said...

Harp3339 said: "F&F enabled the rouge bankers which is like essentially being in conclusion with them."

I believe you’re attempting to our direct attention away from the sleazy and irresponsible banking sector, Harp3339. The reality is the rogue banking sector had been issuing and dumping bad loans and mortgages into secondary markets quite some time before Fannie Mae and Freddie Mac got involved. Having said this, I agree with you in that Fannie Mae and Freddie Mac should have been more aware of the housing bubble and should have had enough savvy not to get suckered into the junk market business.

February 13, 2012 at 9:43 p.m.
fairmon said...

mountainlaurel said... Harp3339 said: "F&F enabled the rouge bankers which is like essentially being in conclusion with them."

I believe you’re attempting to our direct attention away from the sleazy and irresponsible banking sector, Harp3339. The reality is the rogue banking sector had been issuing and dumping bad loans and mortgages into secondary markets quite some time before Fannie Mae and Freddie Mac got involved.

I don't think you can find where I have ever defended the banks behaviour. I don't like the theme that no one in government has similar accountability it is all those terrible banks. I don't think many bad loans were being dumped as CDSs before F&F lit the fuse at the urging of some in congress. I don't have sympathy for anyone that will enter into a contract of that amount without a good understanding and a copy of all the paper work with signatures. The banks and real estate people handling the closing failed miserably.

BRP said: “Obama is undermining rule of law and promoting an entitlement mentality.” ML responded... No, I think Obama is enforcing the rule of law and promoting accountability.

How do you conclude that? Would promoting accountability not be more evident if instead of an agreement with bankers and other schemers identification of those participating in and promoting the scam with prosecution, fines and confinement? Is the former CEO of country wide one of the worst offenders not still walking around free and living well? What about those in Washington Mutual the administration urged BAC to buy? I feel confident there is an effort to take the easy road while allowing the public to see only the tip of the iceberg to protect some that don't deserve protection. After all, how much lower can congress's approval and trust rating drop? The FED may not be as pristine clean as some like to believe. There is no audit or report of what the FED has loaned or owes to whom as they hide behind their cloak of independence.

My impression is that Obama is reading bad advice from the teleprompter with no idea of what he speaks or that he is passing up an opportunity to clean up a mess. Do you really think the banks won't recover the cost by increasing their margin in other ways? They really have no choice if they stay in business, surely Obama knows that. They were labeled too big to fail but they are no smaller now with no initiative to change that. Someone needs to let him know nothing is free regardless of how it is packaged. Birth control free, what a crock, anyone paying a premium including Catholic entities will pay for it. Not to say it should not be provided but don't treat me like an idiot by telling me anything of value is free.

February 14, 2012 at 12:08 a.m.
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