Sorry about the "RANT!" But after reading this LA Times Article, I had to let out some steam...
Unfortunately, the folks who made hand-over-fist-money during the boom will be the only ones laughing when it all finishes falling down. (ie, the ULTRA-RICH lending tycoons who are the only ones TRULY being protected financially by our government's "Mortgage Crisis Fixes"...this is probably because many of them ARE OUR GOVERNMENT leaders.)
Even the responsible poor schmuck who simply wanted to own a slice the "American Dream" is going to have his dreams, and life savings, buried in the financial avalanche, because the home of his dreams has fallen so much in value it will take too long to make up the difference.
Predatory and sub-prime lenders should be ashamed. You were supposed to be 'the experts' for your borrowers, guiding them down a safe financial path. Yet you were the very ones telling poor 'Joe-Schmo', "Yes, you qualify for that loan even though you have NO downpayment, NO job, NO income, NO assets, you just bought a $55,000 car and owe another $40,000 on your jet-ski...YOU BET we will lend to you!" I have heard of the huge signing bonuses many of you made on these sub-prime loans. I have heard that there was an upfront payoff for many of you originating this type of loan. With that type of 'incentive', why would you tell Joe to go and sell his car and boat and save some money and come back to you in a year when he got his finances in order??? FOR SHAME!!!
Additionally, it seems everyone is focused primarily on purchase loans...no one seems to be paying any attention to the fact that a huge % of the other folks who saw their equity rise dramatically opened a HELOC on an ARM and drained their equity to buy depreciating assets like boats, cars and RV's. Or, worse, they vacationed on their equity, leaving it all in Cabo San Lucas, Mexico. Sure hope the memories were worth dilluting your financial future. Sure hope the RV can accomodate the whole family comfortably.
Many folks are in the unenviable position of losing not ONE but TWO or MORE homes because they did the 'buy and borrow equity' trick to continue buying...leapfrogging from investment home to investment home, never having the intention of living in or renting any of them, stacking up little vacant houses and condos like cord-wood. This created a housing crunch that was entirely built on an invisible and non-existant population. The perception to the builders was that we actually did not have enough housing to go around, so, hey! We need to BUILD FAST! So, lucky us. We have a glut of poor-quality, thrown-together, subdivisions to try to pawn off before they all come apart in the first windstorm. This is not just a 'house of cards', this is whole "subdivisions of cards".
Do you ever wonder where all those 'get rich quick on real estate' guys are now??? They certainly are not touting their 'can't lose systems' on the infomercial circuit anymore!
I saw this coming a long, long, long time ago.UGH!
Hopefully it will be all fixed by the time my daughter wants to buy a home.
Still living good, and being happy in Bellingham's wonderful SAFE REAL ESTATE HAVEN!
Live good. Be happy.
-Mimi
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