mortgage bro's (slight return)

[substitute]

Finally pushed over the limit by this asshole (youtube video):

The talk radio mouths and the right-wing press have locked on to their version of the financial crash, and why foreclosed homeowners should not receive help.

The problem, they say, is that "political pressure" forced lenders to make bad loans to those who didn't deserve them qualify. Many of these people were clearly n... ni... ne... NE'ER-DO-WELLS. Everyone knows those people can't keep a mortage. If the government had let these experienced bankers use their own judgment, none of this would have happened. So we definitely don't want to spend money—OUR money—helping these people out any more!

The subprime and alt-A mortgages were largely written by people I saw daily over the last decade, our famous local "Mortgage Bros." These guys bought leads from cold-call telemarketers and sold refinancing to anything with a pulse, lying constantly about the risks. They upsold every potential loan, pushed the limit with interest-only ARM on subprime and alt-A garbage loans. They had no reason to care if the bank ever got the money or if their customers kept their houses. They used the system as it was presented.

The idea that these were stolid, cautious men in pinstriped suits, sworn to the fiduciary duties of their banks, who were somehow forced by dashiki'd oppressors in the Federal bureaucracy into giving money away to the NE'ER-DO-WELLS would be funny were it not such a repulsive lie.

Make no mistake. The financial industry made loans that could not be paid, knowing they were bad loans. They pushed those loans hard on their customers. And they knowingly mislead their customers into taking on impossible obligations. Thousands of these brokers committed criminal fraud.

If this was an attempt to redistribute wealth to the NE'ER-DO-WELLS, it backfired. The result was a lot of Harleys and speedboats and cocaine and blowjobs provided to the grinning, empty-souled asshole Fonzies of Orange County. If you don't want their customers to be saved from eviction, let's use the money to build them a very unpleasant jail.

Comments

[eris-devotee.livejournal.com]

Oh - don't forget about the real estate agents and the general contractors. Both of them knew they were selling at ridiculously inflated prices.

YEAH

[microbie.livejournal.com]

Thank you for saying this.

[skepticle.livejournal.com]

HULK SMASH

[jamie-miller.livejournal.com]

Every news story I have seen about families facing foreclosure has featured greedy white people who were unbelievably overpaid in ethically questionable industries. I'll never forget the one story about a power couple who both worked in the mortgage industry (oh the irony!) -- when the shit fell in on their heads they said they had to trade in their GIANT SUV for a lesser SUV, and they might have to move into a 3 bedroom house instead of their current 6 bedroom house (they have no kids). I spent hours and hours weeping for their plight. I can totally understand the right wing ignoring these people and focusing on the REALLY big problem of, uh, ne'er-do-wells receiving shitty mortgage loans.

[tangaroa.livejournal.com]

Somebody ran (http://www.sadlyno.com/archives/11958.html) the numbers (http://www.ourfuture.org/blog-entry/mythbusting-rights-subprime-excuses) and found out that loans under the Community Reinvestment Act, which forced banks to lend to redlined neighbourhoods, fared much better than the market average.

[miss-geek.livejournal.com]

I had a little debate this morning in a class that sounded very much like this post. I have to admit that it was at least a little fun to describe the typical "mortgage bro" to a class of bright eyed 20yr old econ & rhetoric majors.

[autodidactic.livejournal.com]

I am 36 years old and I will never have a house. Everything I've seen seems like it would be a gigantic racket.

[switchstatement.livejournal.com]

my history teacher watches bill o'reilly and then comes to class and regurgitates a lot of what he heard on the show. several times he's given a speech about how the "economic crises," was manufactured by democrats because, "they are socialists and think everyone should own their own house, even if they can't afford it. and now they want all of US [uh, all the wealthy college students, i guess] to pay for the poor people's homes."

he also told us that the conspiratorial democratic socialists knew their Everyone Gets His Own Football economic policies would damage the economy, but that they wanted that to happen so that they could, "socialize all traditionally strong money-making industries and re-distribute the wealth further."

well, okay

[perich.livejournal.com]

Replace "I object to bailing out NE'ER DO WELL's mortgages" with "I object to bailing out shitty mortgage broker's bad choices."

[feisty-robot.livejournal.com]

I agree with you. HOWEVER:

Make no mistake. The financial industry made loans that could not be paid, knowing they were bad loans. They pushed those loans hard on their customers. And they knowingly mislead their customers into taking on impossible obligations. Thousands of these brokers committed criminal fraud.

is not quite true. One of, or maybe THE, prominent causes of Our New Depression was that normal, greedy individuals were packaging financial instruments in entirely legal ways that ended up making it harder for the buyers to really understand the risk. It was, to borrow a metaphor, like playing hot potato with sealed box. What's inside? Nobody knows, but as long as you can pass it on, you're safe. When people started defaulting on bad loans, and all the leverage birds came home to roost, it became obvious that inside some of these boxes were piles of shit, or bombs, but by then it was too late. In many ways, it is a textbook case of why regulators should make transactions they don't understand illegal, and deregulate later, rather than Greenspan's idea of allowing everything that wasn't provably awful.

[pilarcruz.livejournal.com]

This rant is A+

[mcfnord.livejournal.com]

Oh yes, it's truly time to tell those fucks to stfu. Just cuz he finished Atlas Shrugged does not make him some genius.

Stupid people need to finally take responsibility!!!

[detcarguy.livejournal.com]

It takes two to tango. Yes there are greedy bankers and financiers who packaged risky mortgages. But there are also the greedy buyers (of all races, creeds and demographics) who whipped the house prices into a frenzy by flipping property at absurd profits. Once that price train stopped, these greedy people who had to have their status expensive home with 110% mortgage on a price (not value), are now crying that they can't afford it. Well, if you are stupid enough to buy a house where the payments are a huge chunk of your income, then you get to reap the rewards of your greed.
It didn't have to be that way. When we bought our home, we bought with common sense toward our budgeting of payments. We declined to spend what the mortgage companies said we "qualified for" and bought a house that cost HALF of that! We improved our home a little every year as we could afford it and refinanced from a 30 to a 10 year mortgage. The long term result is that we will own our home in less then 5 years from now. We were not greedy, didn't care about a status address and bought in a quiet inner suburban city, where city goverment runs in the black and keeps property taxes low and services high (without corruption).
I have no sympathy for selfish greedy short-sighted people who didn't use any common sense. Who now want to blame everyone else but themselves for trapping themselves into an over valued house they CHOSE to buy and knew they couldn't afford if they couldn't keep flipping it. No one made them make bad stupid choices!
Oh yeah, I like the way the republicans (before W left office) gave their banker buddies billions of our money (with no strings attached, unlike the auto industry assistance)to pay themselves millions in salary(plus bonuses) and finance more bank mergers/buy-outs of each other. I don't see any of this money helping their customers or the economy!

[loose-joints.livejournal.com]

If the government had let these experienced bankers use their own judgment, none of this would have happened. So we definitely don't want to spend money—OUR money—helping these people out any more!

I know you were being sarcastic, but you hit the nail on the head. The people railing about 'personal responsibility' of defaulting debtors seem to be wearing blinders. Sellers of sub-prime financing had almost no accountability for the way their transactions turned out. Mortgage brokers and sellers, in every lending institution I worked in - all of which no longer exist - were done with transaction as soon is it was signed off by an underwriter and went to closing. A whole separate group of people closed the loan. Then another group of people audited the transaction and bundled it for resale on the securities market.

The guidelines for selling, underwriting, closing and auditing *were* created by the allegedly cautious fiduciaries in pinstripe suits. And the guidelines were virtually non-existent. They mostly consisted of complying with the bare minimum required by state and federal law dealing with amounts of closing fees and interest in a given state and a debt to income ratio not to exceed fifty percent at the time of closing.

If the alleged unscrupulous buyers are at fault then their percentage of fault is dwarfed by the well-informed folks who decided that it was okay to loan millions of dollars to people who provided no income verification and other brilliant ideas.

Then we get into the really well-informed people who dreamed up the plan of bundling these greasy transactions into securities and selling these bundles on the securities market. These bundles were bought and re-sold as investment tools by powerhouse investment banks like Lehman and Meryll Lynch etc. I know, because I watched their representatives come in and buy them. Talk about high risk.

Admittedly, I don't have a lot of sympathy for people who chose an ARM over a 30 year fixed, but I'm assuming that the choice was even offered to them. For all I know, it wasn't. Also, selling an ARM or an interest only is like dangling the American Dream in front of buyers. Everyone wants to believe they are going to do better and get richer and be able to make those higher payments. (Why do you think so many people want to repeal the Estate Tax?) The way the economy was rolling in the late 1990s that wasn't entirely unreasonable.

Now my disconnected rant is over.

[dmlaenker.livejournal.com]

My father was trying to pull this one on me at the funeral reception. It was awful. I reminded him of the facts, which are those things that caused him to stop forwarding right-wing chain emails to me.

The topic returned to the memory of the deceased and committing his body to rest.