SKIN IN THE GAME? WHO? HOME BUYERS or WALL STREET?

Jim.  During the Great Depression we didn't have MIP, PMI, VA guarantees, mortgage insurance, title insurance etc., etc.,

Mark.  I agree completely.  If the government doesn't look out for the little guy, the little guy is apt to put in a new government.

Gabe.  Indeed.  The executive pay, which is often obscene, is sacrosanct.

JL.  It doesn't matter anymore anyway. 

They spend all they could get their grubby deficit hands on and could print.

Gene.  Thanks.  When tax money is in the hands of the consumers, we all win.  When tax money is spent by government to manipulate the economy, it never bodes well for the citizens.

Myrl.  Thanks for stopping by.  You are absolutely right.  They made big money every step along the way and when their house of cards came tumbling down, the government bailed them out with our money.  What did they do with that money?  HA!

John.  No one has argued against the FDIC.  That's the one shining exception to the perfidy of government financial market manipulation and power grab.  Agents didn't lower rates to a point where almost anyone could qualify for a mortgage loan, Greenspan did.  Agents didn't approve buyers with 75 debt ratios, lenders designed instruments that permitted it.  Agents didn't sell off balance sheet instruments to investors at obscene profits backed by mortgages that were destined to fail. 

One of my banks didn't have to take $7.5Billion of TARP money to buy another bank.  If a bank becomes insolvent, they should go out of business.  If a home owner is insolvent, they lose theri home.  FDIC will protect depositors.  We don't prop up home owners who can't pay resetting ARMs, why should we prop up banks when they make bad investments. 

We'll be lucky if the mess is over in 5 years. 

John.

Many of us advocate for tighter lender standards regularly.  For myself and many others with good experience, we make sure our buyers are sensible about price ranges and examine loan types recommended by lenders. 

We don't design the loan, we sell homes.  My buyers aren't going to be suckered by bad loan instruments and I know many other agents who are the same. 

Agents can't police the ethics of loan officers and mortgage companies.  That's something they've got to do themselves. 

Attempts to "spread the blame around" won't help.  If that's the route, then the Wall Street Gangs and the regulators that failed us will simply start all over with another round of investment vehicles that will fail to be identified as happened this time.  Get to the bottom of this mess, identify the failed institutions and regulartors and clean the mess up.  This mess was Wall Street driven and that can't be denied.  That's where the clean-up has to start because they still have the ability to do the same thing again.  These are very smart guys and they won't be easy to control.  If we dilute what they did by spreading the blame around, they'll just slip through with more ways to make money off the backs others who don't understand what they do.

Esko.  Indeed.  Without the perfidy of the Wall Street Gangs, I don't believe that the mortgage or banking crisis would ever have happened. 

Sure, the market would have slowed, prices may have fallen.  The BOOM had to come to an end, but without the Wall Street Gangs peddling their worthless securities to the world and the pressure to design more exotic loans, buyers wouldn't have been sucked into the mess and the mortgage failures wouldn't have happened. 

"We can see clearly now!"

"Yet, the problem was so systemic, that doing nothing would have sent this country and much of the globe into a economic dark ages."

I disagree Myrl.  About 15,000,000 of our citizens with upside mortgages are in economic dark ages.  The Wall Street gangs used the American housing industry and the underlying mortgages as collateral for their securities, they knew that the securities were under secured.  There is evidence that the risky mortgages that were sold to unqualified buyers, were encouraged to be sold by Fannie/Freddie, who knew that the failure rate would be high.  Further, they knew that the securities were backed by risky paper.  The head of Fannie was a crook who was milking the very entity that was designed to protect the American mortgage borrower.  The Wall Street gangs demanded more and more MBS to sell around the world with the full knowledge that they were backed by worthless paper. 

AIG insured the worthless credit default swaps through their shadow divisions that were hidden from public view. 

What has happened has already crippled the American economy a lot worse than folks know and the government is willing to admit.  Many judge the American economy by the stock market.  The stock market is not the American economy.  The American citizens are and they have not profited from the mortgage mess, nor have they any control over the government playing favorites in which entity to save. 

What the government did was elect to save their Wall Street Gangs, banks, etc. with money they took from the American citizens. 

IMO, it could not have been worse if the entities that designed and executed this rape of the American tax payer were permitted to shut their doors and the perps sent to jail.  Justice is always better for the country than expediency.  It would have been ugly, but no uglier than the picture of the American home owners moving into the homes of family or renting apartments after losing their homes. 

I do not believe the politicians and their Wall Street gangs are honest when they give us a dooms day description of the chaos that would result if insolvent investment and commercial financial houses and banks closed their doors.  FDIC would have protected depositors.  The only ones who would have lost is the cabals that caused the mess.  That course would also have shed some light on the corrupt practices of the securities markets who use "off balance sheet" instruments to sell worthless paper, insured by another "off balance sheet" division of a corrupt insurance company. 

The regulatory arms of our government should have some light shed on them too.  The SEC has become worthless when they ignore warnings of the Madoff catastrophe.  Fannie Mae, Treasury, the Federal Reserve, HUD officials that strong armed banks to make worthless loans, and all of them should be turned out, put in jail or otherwise stripped of their ill gotten wealth and influence at the expense of the American home owners and tax payers that they used for their own personal gain.  Things are so corrupt that a criminal enterprise funded by taxpayers are permitted to play a role in elections.  There is sufficient evidence that ACORN is a criminal enterprise, yet it continues to receive tax payer money. 

Of course, what I would like to see would require the perps prosecuriting themselves. 

Not likely to happen, is it?

Mark.  The government saving banks and financial instutions is the ultimate in cronism.  They saved their own and let the rest of us eat cake. 

Myrl.  You are right about the retirement funds.  Everyone has lost there. 

There is no way to pick and choose winners and losers in this debacle. 

However, in the coming years I see more harm to families, the economy and the wealth of our citizens through the loss of home equity than through loss of retirement funds.  I can't focus on an anecdote.  There are just too many folks who would have lost if the Wall Street perps had been let to fail.  There are also millions of home owners who have lost all of their wealth too. 

There are not winners except the executives who perpetated this fraud on the American economy.