I CALLED THE GOLDMAN CHARGES IN ONE OF MY RECENT POSTS; THE WHOLE STORY FOLLOWS:

By
Real Estate Agent with Douglas Elliman Real Estate 30HA0800896

I CALLED THE GOLDMAN CHARGES IN ONE OF MY RECENT POSTS; THE WHOLE STORY FOLLOWS:  I wrote this post 3 weeks ago after seeing the tragic results of what the banks are now doing to troubled homeowners---people who are suffering from what the banks created in the first place; the whole subprime mess was created by them as their "Hedge Funds" were all betting on a housing collapse!!!

Don't you ask yourself: "What is going on here?"....I have; I have asked as homeowners here in the Hamptons are being affected as never before by this massive failure of the housing market. I watch as solid citizens are threatened by foreclosure. This only reinforces the feeling I have that the banks have no intention to help homeowners keep their homes. 11 MILLION AMERICANS ARE IN FORECLOSURE!!!How Many Homeowners Losing Their Homes Will It Take??? Why does the Federal Government Not See What the Banks Are Doing?...Or Is It That They Just Don't Care Either?

  Bowling for Dollars

IT'S A LITTLE LIKE BOWLING FOR DOLLARS: KNOCKING THEM DOWN ONE BY ONE FOR THE MONEY!!

It has been recognized in this market that the  banks, who got money from the Feds to help out with the underwater mortgages have no desire to help out the troubled homeowners with modifications--too bad since the properties here have a better chance to regain their former value and since houses are starting to sell at a good clip again.

Housing prices are beginning to increase35% increase in foreclosures this quarter!!!

WHAT THE BANKS ARE DOING NOW IS WHAT THEY DID WITH THE HOUSING BUBBLE; FORCING HUGE NUMBERS OF FORECLOSURES, SELL SHORT AND THEN COLLECT THE MONEY FROM THE FEDS!!! 

THE banks do not see the benefit to their bottom line through modifications and are, as a result, forcing the homeowners to short sell sooner rather than later.  It is counter productive to the banks to act quickly to modify; instead they sell short, collect the subsidies from the government and then go after the homeowner for what they were behind in missed payments --- they can see a greater return on their efforts from that than from a good solid re-working of the original loans in order to keep the person in their home!!! The old "boot" of the property owner is the goal here and it is clear there is no genuine intention to really help anyone but themselves---it is shameful to watch retired people, elderly and young families all, to be so impacted by what the banks did in the first place.

LET'S TAKE A LOOK AT WHAT HAPPENED: (please keep in mind that I am not a banker so this may seem naive; it is basically what happened as I watched it unfold)

  • In their efforts to make the idea that home ownership was a possibility for all Americans the government made it a requirement through the Community Re-investment Act of 1992 that all banks were required to give loans out to any and all who had an income and in some cases, some who did not.
  • The banks provided these loans as required but then had to create a way of selling these "questionable loans". So they packaged them with good loans into blocks of investment paper known as Mortgage Backed Securities. In other words, they literally "hid" the bad with the good and then sold them, in pieces called derivatives to investors from accross the globe. Fortunes were made on these investments.
  • Then Hedge Fund's started betting on these derivates, betting that they would fail; buying them short--betting that they would lose value--just as the whole idea was beginning to unravel; this pushed the MBS to the bottom of the list of desirable investments at a very critical time....and just as the whole financial world started to recognize the fragility of the entire derivative concept...the bottom dropped out from under all the funds that were made up of this investment paper...WHY? This is why:
  • Most of these loans were sold as Adjustable Rate Mortgages in order for the buyer to be able to afford the payments--the adjustment periods being 1 to 5 years on most of these loans. As these loans began adjusting, we saw the first layer of loan failures happen. More and more began to adjust as time went on and it snowballed into what we now see as a total collapse of the entire housing market at ALL price levels; that in combination with the money market fund "breaking" the dollar for the first time in history, then the Lehman Bros. failure and the stock market crashing...

 

The Burden Of Home Ownership

 

 

And there you have it!!! That is a shortened version of just how it unfolded; so, who is to blame you ask??? I think it is clear that the Government and the banks share the blame on this one. There is no question that if the banks were not told to give loans to a lower income population, this never could have happened---but it did and therefore it is  my opinion that this is the reason that we are all affected now; We all must be concerned about property values, even if we are not in a postion to lose our own homes! This chaos will affect ALL of us soon!!

 

WHAT HAPPENED TODAY WITH GOLDMAN SACHS IS JUST ONE OF THE STORIES THAT WILL SURFACE, OF THAT I AM QUITE SURE!

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Lenn Harley 04/17/2010 12:00 AM
  2. Harry F. D'Elia 04/17/2010 02:28 AM
  3. Kristen Correa, Broker 04/17/2010 05:43 AM
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Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Dave: How about personal responsibility? Do you honestly think that the average person who took their hard earned money and bought a home, thinking they were making a good investment for their future can even be compared to the conniving swindlers that put these ingeneous, smelly packages of garbage together with the pure intention to swindle every living human being who was involved from the ground up in the investments??? That is rediculous to make that comparison and is purhaps why we are all in trouble now---with that thinking, the people who Bernie maydoff swindled out of their last dime were also part and parcel of the "personal responsibility" you talk about!

This "sociopathic" thinking makes it easy for all those who were knowingly involved to feel less guilty for the scam they pulled and the people they harmed beyond anything else in history. Notice I do not say "financially" harmed because there are people who, pushed to the wall have done unbelieveable things to themselves and their families because of the monsters who ruined their lives!!! Get real...and until you understand what GREED really is there is nothing to talk about here.

Apr 18, 2010 06:27 AM #82
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Will: I agree fully with your comments! Isn't it a great irony now that we have an administration in the White house that is trying at every turn to balance the wealth by re-distribution....for all we know the plan has been in place for so long that it can't really be traced---the goal: to preserve the wealth for a few at the top and to create an evenly distributed amount of money, just enough to keep people from starving...and those, the greater numbers will be forever in service to the select few at the top!!

I know what they call that  but I don't want to mention the word here! Thanks for reading and making your valuable comments and sharing the links that you have here.

Apr 18, 2010 06:34 AM #83
Rainer
130,836
Andrew Martin
REMAX Accord - San Ramon, CA

Paula,

What you said in the response to me  "The novice does not know how adjustable rate mortgages can affect their situation" is exactly my point. The novice never should have gotten in the game. Just like I'm a novice at buying oil, or corn, or sugar futures, or puts or calls on the open stock market, I would never be talked into it if I don't know how it works. And if someone can talk me into making a stupid investment that I don't understand at all, then the fault is mine. I'm being greedy for buying something I don't understand. Not the stock market or the bank. They do what they do, but it was me that chose to play or not. Why don't people get that? Seriously, is personal responsibility that much of a foreign concept in this country now. What has changed in our thinking to always make it someone elses fault?  Really, I'm stumped.  Can't anyone look themselves in the mirror and say they messed up?

Great post though!!!!

Apr 18, 2010 06:48 AM #84
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Dave, Andrew and Barrie:I just have to come back and say that I welcome your comments even though you are  not in full agreement of my post. I need to hear everything else that is on the table where this subject is concerned.....however, the idea that the huge numbers of people who take their small amounts of money (even though it is a life's savings--it is small in comparison to the huge sums invested in the CDOs!)and invest it in a small piece of property or,  as good friends of mine who personally knew Bernie, did when they took their $2Million dollars of retirement savings and entrusted it to him to invest for their retirement, are operating from the Greed that was the driving force in the housing scam---you have lost your moral compasses!!! Can't you see the difference??? Or do you all believe that the very idea of investing in something is a greedy thing to do???

....please; take some time and think about what you are saying and what you are missing here. If you have some verifiable proof that the folks who were harmed the most were initially driven by greed, I would love to hear it--or see it if you have a link or video or something showing these "little Folks" scheming and plotting in the backrooms of their offices or their homes on how they could trick the system...please show them to all of us!!!

Apr 18, 2010 06:52 AM #85
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Missy: Sorry it took me some time to respond to your comment---I got a little way-laid as you can read above.....Thank you in advance for re-blogging this post! I love the input that is coming over the wires! and you are always someone I watch and listen to when it comes to the business--maybe it's because I am from Michigan originally and can see your point most of the time! My brother, bless his heart, is a retired cop from Flint and he is still there; he is literally "holding down the fort" in these unbearable times--no one really knows how very bad it is there--houses are being burned to the ground---crime is rampant and there he is trying to protect his property which he can't even give away now!!! Thanks again for commenting and I will watch for your posts!

Heidi: Thank you so much for the comment! You have been on the trail too I see---since 2006; that would be when we kept hearing how the housing market was going to crash big-time. Even the markets that were not affected by the first round of failures, could see it was coming---but look what happened: we had our biggest year in 2007--so people were not buying the concept, at least here in the Hamptons...tahnks again for reading and commenting.

 

Apr 18, 2010 07:07 AM #86
Rainer
130,836
Andrew Martin
REMAX Accord - San Ramon, CA

Paula,

Didn't Madoff promise higher than market interest? Almost like they were too good to be true?

Funny how that worked out. And greed is an internal feeling, not documentable. (I think).

Anyway,

Apr 18, 2010 08:12 AM #87
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Hi Andrew: Madoff was giving high interest rates--higher than normal because these were his best "friends". My ex played golf with him every summer weekend at the Atlantic out here in the Hamptons--they knew each other since college and he was a "trusted" friend to all who invested with him...if you knew the numbers of people he has ruined--people who were retired--people who now have to go back to work in their late 60's. There is a 78 year old man about town who never worried about where his money was going to come from---he invested frequently with Madoff in the 80's and was a dynamo in his former business; he now is penniless and senile---a major loss for him--he can't even go into a nursing home; he is indigent now and a burden to his other friends who also lost every last penny--like $1million they had saved for their retirement!  These were not greedy people!!! How do you identify greed anyway---anyone who wants to get ahead????

Apr 18, 2010 08:42 AM #88
Rainer
45,820
Dave Henson
Zimmerman Realty - Lakeview, OH

Paula, No need for a lecture on moral compasses and personal responsibility here. Go back and read your blog and you may see my point or maybe not. You state why does  the federal gov't not see what the banks are doing or is it they just don't care. You are right on both points. They see what banks are doing and yes, they do not care. It was the gov't that created the problem in the first place. The banks also recognize the benefit to their bottom line. They have a mortgage that is insured by the gov't. No need to work with a home owner to modify a loan that is insured. Collect from the gov't on an insured loan re-sale property and collect on new mortgage loan. How sweet for the banks, but can you blame them when the gov't created the problem to start. Yes I do feel for those who lost everything from the likes of Madoff, Enron, and the junk bonds. Those crooks were all previously inspected by the SEC (gov't) and allowed to continue until it got out of control. To me Paula it is not the banks, but our own gov't at fault. When they keep out of the free market and let it work the market will correct itself. Until then it is only going to get worse. Look at social security, medicare, medicaid and all the other services provided by gov't. Most are broke or going bankrupt. To think the gov't wants to control my healthcare now. Heaven forbid.

Apr 18, 2010 01:20 PM #89
Rainer
130,836
Andrew Martin
REMAX Accord - San Ramon, CA

Paula,

They "lost every last penny"?  Really?

You just made my point in your argument. they invested every penny because he paid higher interest than normal. Didn't they once stop and ask themselves how that could be possible. That's being greedy.

Seriously, if they invested every penny in one investment avenue and didn't spread things around, then that is just stupid, and as sad as it is, they semi-deserved what they got.

And if people sunk every dollar into a house, and didn't spread things around, then that is just stupid, and as sad as it is, they semi-deserved what they got.

Anyway, great post. Playing the blame game should become part of our countries constitution.

Hey, it's not my fault!!!!  My computer just typed this stuff.  :)

How do I define greed?  Making an investment in something you don't 100% understand and not being able to handle the risk of that investment.

Finally, as in the Madoff case, didn't some home buyers have to stop and ask themselves, "how can I buy a $500K house when I make $30K per year?"

 

Apr 18, 2010 01:56 PM #90
Rainmaker
118,112
Barrie Clulow
My Time Is My Own - Uxbridge, ON

Paula - we seem to be at odds even though we appear to agree

 

I have not lost my moral compass -

I said

"I certainly don't condone what has happened and continues to happen and I think it is a sad day when one takes advantage of an others situation. My heart goes out to those who are now loosing their homes due to no fault of their own."

 

the problem with putting everyone in the same basket as Dave did my references were to the lobbyists and your elected officials who, as you implied created the situation

 

"In their efforts to make the idea that home ownership was a possibility for all Americans the government made it a requirement through the Community Re-investment Act of 1992 that all banks were required to give loans out to any and all who had an income and in some cases, some who did not."

 

This is where it started everyone after this was acting in their own best interest,  

When I worked in construction we were told there was no such thing as an accident when someone got hurt, what we had was an incident due to human failure or human error, accidents don't happen people cause them. The same applies here. Fraudulent acts aside, the real estate agent, the mortgage company/broker, the banks, the investors, everyone involved acted in what they thought was their own best interest. Some gave poor advice, others acted on that advice with out seeking a second or third opinion and still others took advantage of the situation, they all acted out of a personal desire to get ahead. They all played a part and now unfortunately are suffering the consequences. The sad part is the number of other people they have affected and who are suffering those same consequences even though they did nothing to bring them about.

 

My problem is with those who created the scenario where this could happen, and those who worked the scenario to the detriment of others. Ultimately it is up to your legal system to see that any Fraudulent or illegal acts are dealt with . Unfortunately many more will suffer the consequences of acts of others, acts they did not commit or even know were being committed

 

In the meantime to all the little people who are now suffering from the fallout of this failed scheme, I repeat myself

> My heart goes out to those who are now loosing their homes due to no fault of their own,.

Apr 18, 2010 02:33 PM #91
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Dave: So glad you came back in--it is clear that we all agree and the only difference that I see now is that the more than the "little guy" has been the real victim in all this and the gov't and the banks could really care less---why did the gov't want the "little guy" to own a home even if he could really not afford it? I now think it is part a much larger plan and may even have more to do with re-distribution of wealth than we ever  knew...as we watch our money being taken and spread to those who do not work for it and as we watch our gov't take over the companies that used to be the backbone of our economy and as they dictate the salaries of the heads of  large companies...it is time to recognize what is really going on here. Why not have the masses supply homes for the "little guy"? If you mix up these poorly financed loans in with the good loans, viola! A perfect way to even the playing field!...ONlY it went so BADLY WRONG!  It is frightening to think that more of this kind of trickery could be coming at us from other places as "they" form our country into a socialistic one......OMG!

Apr 18, 2010 03:13 PM #92
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Andrew, I see what you are saying, I think: Greed is the underlying feeling you have when you look at the goodies, knowing you can' t really afford them and then you dive in and buy those babies anyway!!! How did I do? Is that close? ....cause, that I get. Very good! I have to agree with you on that basis...now, how do we get the hell out of here?, because this country is going down. I can't see how we are ever going to be able to climb out of the pit we are in and get our real lives back after all this stuff that is going on the gov't!...can you?

Apr 18, 2010 03:20 PM #93
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Now, Barrie: I have an apology for you; I included you in the wrong place--I put you in there with the guys who were talking about personal responsibility and I did not mean to. You made it clear in your comment that you were truly bothered by the gov'ts action and the banks part in all of it too....but I am glad it made you come back and say again what you felt so deeply---that is a very kind thing for you to say and feel---it is encouraging that there are people still who have the understanding as you do of the way others lives have been so negatively affected by this mess. Thanks for clarifying!

Apr 18, 2010 03:30 PM #94
Rainer
130,836
Andrew Martin
REMAX Accord - San Ramon, CA

Paula,

This country started to go down the minute they opened the first Wal-Mart. But, that's another topic for another time and another forum. Not Real Estate.

 

Apr 18, 2010 05:14 PM #95
Rainmaker
81,702
Vanessa Calhoun
PalmerHouse Properties & Associates, LLC - Atlanta, GA
Your Greater Atlanta Marketing Guru!!

Finally! Someone has spoken the truth about one of the largest factors to contribute to our mortgage meltdown! Excellent Post! Well done!

Apr 19, 2010 05:40 AM #96
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Coweta- Well it took some time for the investigation to start but at least it has begun! Thanks for reading and commenting....

Apr 19, 2010 06:09 AM #97
Rainer
45,820
Dave Henson
Zimmerman Realty - Lakeview, OH

Paula, Had to re-visit your blog in light of the recent revelations of how much our wonderful leaders in congress received in campaign donations from Goldman, Jp Morgan and Citi Group. Plays a huge role into why goverment doesn't care. I will bet they don't return those donations.

Apr 21, 2010 12:42 AM #98
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Dave: Thanks for coming back to bring that point out...how can we all go forward now, knowing that the money grubbing members of congress are also a big part of this fraud? It looks more and more like a common practice by the whole mess of 'em. They could not have been more successful at turning the American people against them if they tried!....I keep hoping that come November, our votes WILL count---

Apr 21, 2010 01:53 AM #99
Rainer
264,127
Bill Travis
Captain Bill Realty, LLC - Gilbert, AZ
Broker/Owner

Real estate agents are there to help people buy and sell homes.

It is not the agents job to be a financial advisor to buyers and sellers. A real estate agent is not qualified to advise a buyer on whether or not they should buy a home.

So I don't feel that agents can be blamed. They were helping the buyer to faciliate the purchase of a home.

The decision to buy a home was made by the buyer prior to contacting the agent.

Apr 24, 2010 07:17 AM #100
Rainmaker
494,549
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...The Most Informed Agent In The Hamptons!

Bill: You can say that again! I don't know how many people really feel like the agents were responsible for the whole subprime mess--but if they do they probably just add that to the list of reasons why they hate us!!...And you know that certain people have a very deep seated dislike of agents!

Apr 24, 2010 09:05 AM #101
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Rainmaker
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Paula Hathaway, REALTOR, LBA

...The Most Informed Agent In The Hamptons!
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