The people in charge of these banks which did this should be killed
and their property confiscated to pay off any debt.

This is the only true way to handle these on-going bank frauds and
stock market swindles.

But the bankers work in extended crime families. It is necessary to
arrest all of the bankers, CEOs and Board members as well as their
entire extended families and business associates.

Put them on trial for grand larceny and treason, and confiscate
everything that they have swindled. This would erase the National Debt
and give every American and Englishman their own home free and clear
of debt.

All bankers are criminals and should be treated as such.
Reply With Quote

"St Georges Day April 23rd"  wrote in 
message 
news:c3128b1e-a9d9-4feb-9879-73746e8999da@z66g2000hsc.googlegroups.com...
> The people in charge of these banks which did this should be killed
> and their property confiscated to pay off any debt.
>
> This is the only true way to handle these on-going bank frauds and
> stock market swindles.
>
> But the bankers work in extended crime families. It is necessary to
> arrest all of the bankers, CEOs and Board members as well as their
> entire extended families and business associates.
>
> Put them on trial for grand larceny and treason, and confiscate
> everything that they have swindled. This would erase the National Debt
> and give every American and Englishman their own home free and clear
> of debt.
>
> All bankers are criminals and should be treated as such.
> Reply With Quote

Over the top.
They should simply have their 'proceeds of crime' confiscated & made to live 
on a pittance, by actually having to work for a living.
They could always get McJobs at McDonalds, for instance.
Regards   Mike.

In article 
,
 St Georges Day April 23rd  wrote:

> The people in charge of these banks which did this should be killed
> and their property confiscated to pay off any debt.
> 
> This is the only true way to handle these on-going bank frauds and
> stock market swindles.

Can you articulate what the swindle is?

From what I see, what happened is that banks loaned money
for people to buy houses.  The banks then packaged these
loans and resold them to investors.  That allowed the banks
to make more loans so more people could buy houses.  This
was working great until a bunch of people were unable to
pay their house payments.

So, if anyone is guilty here, it is the homeowners that
failed to make their house payments.  If you want to blame
anyone, that is where the blame should go.  Following your
logic, we should kill all people with home loans because
they are criminals and swindlers.

-john-

-- 
====================================================================== 
John A. Weeks III           612-720-2854            john@johnweeks.com 
Newave Communications                         http://www.johnweeks.com 
======================================================================

On Wed, 17 Sep 2008 02:15:08 -0700, St Georges Day April 23rd wrote:

> The people in charge of these banks which did this should be killed and
> their property confiscated to pay off any debt.

So you want it to be like China and maybe the criminals get their organs 
"harvested". Oh wait, Gordon Brown wants to push thorough a law that will 
take organs from dead people without their consent. I guess the UK is 
getting like China after all.

"John A. Weeks III"  wrote in message 
news:john-74ABF8.07285617092008@comcast.dca.giganews.com...
> In article
> ,
> St Georges Day April 23rd  wrote:
>
>> The people in charge of these banks which did this should be killed
>> and their property confiscated to pay off any debt.
>>
>> This is the only true way to handle these on-going bank frauds and
>> stock market swindles.
>
> Can you articulate what the swindle is?
>
> From what I see, what happened is that banks loaned money
> for people to buy houses.  The banks then packaged these
> loans and resold them to investors.  That allowed the banks
> to make more loans so more people could buy houses.  This
> was working great until a bunch of people were unable to
> pay their house payments.
>
> So, if anyone is guilty here, it is the homeowners that
> failed to make their house payments.  If you want to blame
> anyone, that is where the blame should go.  Following your
> logic, we should kill all people with home loans because
> they are criminals and swindlers.
>
So you think that reckless lending without regard to the risk, followed by 
hiding that risk using complicated financial devices, is blame free 
activity, do you?  The home owner who fails to keep up payments on his house 
is guilty of only one thing - failing to keep up payments on his house.  And 
he will have already paid for that by losing his house.  Those who lent the 
money and then covered up their risk taking bear the responsibility for the 
severe dislocations in the economy.

In article ,
 "Colonel Colt"  wrote:

> > So, if anyone is guilty here, it is the homeowners that
> > failed to make their house payments.  If you want to blame
> > anyone, that is where the blame should go.  Following your
> > logic, we should kill all people with home loans because
> > they are criminals and swindlers.
> >
> So you think that reckless lending without regard to the risk, followed by 
> hiding that risk using complicated financial devices, is blame free 
> activity, do you?  The home owner who fails to keep up payments on his house 
> is guilty of only one thing - failing to keep up payments on his house.  And 
> he will have already paid for that by losing his house.  Those who lent the 
> money and then covered up their risk taking bear the responsibility for the 
> severe dislocations in the economy.

The terms of the loans were clearly stated.  Perhaps if the home
owner had any consequences at stake, such as prison time, perhaps
they would have read the loan contract, understood the costs, and
been a little wiser about what they were getting into.  As it is
now, these homeowners are stealing money at the tune of $100k to
$300K at a time from the lenders, and getting away scott free.
If you stole that money from a bank or casino, they would put
you in jail.  Why not put the home mortgage thieves in jail, too?
When there are no consequences to an action, such as skipping
house payments, then you will get more of that behavior.

-john-

-- 
====================================================================== 
John A. Weeks III           612-720-2854            john@johnweeks.com 
Newave Communications                         http://www.johnweeks.com 
======================================================================

John A. Weeks III wrote:
> In article ,
>  "Colonel Colt"  wrote:
> 
>>> So, if anyone is guilty here, it is the homeowners that
>>> failed to make their house payments.  If you want to blame
>>> anyone, that is where the blame should go.  Following your
>>> logic, we should kill all people with home loans because
>>> they are criminals and swindlers.
>>>
>> So you think that reckless lending without regard to the risk, followed by 
>> hiding that risk using complicated financial devices, is blame free 
>> activity, do you?  The home owner who fails to keep up payments on his house 
>> is guilty of only one thing - failing to keep up payments on his house.  And 
>> he will have already paid for that by losing his house.  Those who lent the 
>> money and then covered up their risk taking bear the responsibility for the 
>> severe dislocations in the economy.
> 
> The terms of the loans were clearly stated.  Perhaps if the home
> owner had any consequences at stake, such as prison time, perhaps
> they would have read the loan contract, understood the costs, and
> been a little wiser about what they were getting into.

Circumstances change, especially over the long periods of time involved 
in repaying a mortgage.

>  As it is
> now, these homeowners are stealing money at the tune of $100k to
> $300K at a time from the lenders, and getting away scott free.

How are they doing that?

> If you stole that money from a bank or casino, they would put
> you in jail.  Why not put the home mortgage thieves in jail, too?
> When there are no consequences to an action, such as skipping
> house payments, then you will get more of that behavior.
>

On 17 Sep, 14:31, Ar  wrote:
> On Wed, 17 Sep 2008 02:15:08 -0700, St Georges Day April 23rd wrote:
>
> > The people in charge of these banks which did this should be killed and
> > their property confiscated to pay off any debt.
>
> So you want it to be like China and maybe the criminals get their organs
> "harvested". Oh wait, Gordon Brown wants to push thorough a law that will
> take organs from dead people without their consent.

Well, it IS a bit tricky getting a dead person's consent..

"John A. Weeks III"  wrote in message 
news:john-6B36CF.09161817092008@comcast.dca.giganews.com...
>> >
>> So you think that reckless lending without regard to the risk, followed 
>> by
>> hiding that risk using complicated financial devices, is blame free
>> activity, do you?  The home owner who fails to keep up payments on his 
>> house
>> is guilty of only one thing - failing to keep up payments on his house. 
>> And
>> he will have already paid for that by losing his house.  Those who lent 
>> the
>> money and then covered up their risk taking bear the responsibility for 
>> the
>> severe dislocations in the economy.
>
> The terms of the loans were clearly stated.  Perhaps if the home
> owner had any consequences at stake, such as prison time, perhaps
> they would have read the loan contract, understood the costs, and
> been a little wiser about what they were getting into.  As it is
> now, these homeowners are stealing money at the tune of $100k to
> $300K at a time from the lenders, and getting away scott free.
> If you stole that money from a bank or casino, they would put
> you in jail.  Why not put the home mortgage thieves in jail, too?
> When there are no consequences to an action, such as skipping
> house payments, then you will get more of that behavior.
>
Tough tittie.  The bankers knew the law, they knew the risks and they lent 
the money anyway.  If you were an investor and you choose to invest in high 
risk stocks, and those stocks lost their value, you have no right to blame 
the employees of those companies.  No one forced you to invest and no one 
forced the bankers to lend to high risk borrowers.  It is the behaviour of 
the bankers that is far more worthy of criminal censure.  They sold on debts 
so that risk of those debts became lost, thus the eventual holders of the 
debt had no way of assessing the risk of their exposure.  That is tantamount 
to fraud.

John A. Weeks III  wrote:
> In article
> ,
> St Georges Day April 23rd  wrote:
>
>> The people in charge of these banks which did this should be killed
>> and their property confiscated to pay off any debt.
>>
>> This is the only true way to handle these on-going bank frauds and
>> stock market swindles.
>
> Can you articulate what the swindle is?

> From what I see, what happened is that banks loaned money
> for people to buy houses.  The banks then packaged these
> loans and resold them to investors.  That allowed the banks
> to make more loans so more people could buy houses.

Correct so far.

> This was working great until a bunch of people were unable to pay their house payments.

That mangles what actually happened.

> So, if anyone is guilty here, it is the homeowners that failed to make their house payments.

The system has always been designed to be able to handle defaults.

> If you want to blame anyone, that is where the blame should go.

Why arent those who knowing lent to those who couldnt make the repayments when the ARM rates
hiked dramatically, as set out in the original loan agreement, ALSO responsible for only lending to those
who can demonstrate incomes that can cover the much higher premiums when the interest rates hike ?

And why arent the ratings agencys ALSO responsible for adequately rating those loans that were
absolutely guaranteed to see huge levels of default so that no one with a clue would actually be
stupid enough to by those loans when they were packaged and resold (securitized) ?

> Following your logic,

There is no 'logic' in the original mindless rant. There's only a microscopic percentage
of what has got lost thats ended up in the pockets of those he wants to kill.

> we should kill all people with home loans because they are criminals and swindlers.

Plenty of those were stupid enough to buy some sales arsehole's line
that the loan could be replaced by another before the ARM rates hiked.

Certainly those who allowed some sales arsehole to lie about their repayment capacity bear some responsibility.

John A. Weeks III  wrote:
> In article ,
> "Colonel Colt"  wrote:
>
>>> So, if anyone is guilty here, it is the homeowners that
>>> failed to make their house payments.  If you want to blame
>>> anyone, that is where the blame should go.  Following your
>>> logic, we should kill all people with home loans because
>>> they are criminals and swindlers.
>>>
>> So you think that reckless lending without regard to the risk,
>> followed by hiding that risk using complicated financial devices, is
>> blame free activity, do you?  The home owner who fails to keep up
>> payments on his house is guilty of only one thing - failing to keep
>> up payments on his house.  And he will have already paid for that by
>> losing his house.  Those who lent the money and then covered up
>> their risk taking bear the responsibility for the severe
>> dislocations in the economy.
>
> The terms of the loans were clearly stated.  Perhaps if the home
> owner had any consequences at stake, such as prison time, perhaps
> they would have read the loan contract, understood the costs, and
> been a little wiser about what they were getting into.  As it is
> now, these homeowners are stealing money at the tune of $100k to
> $300K at a time from the lenders, and getting away scott free.

No they arent. The absolute vast bulk of them have lost all
the payments they have made, and dont have a house either.

> If you stole that money from a bank or casino, they would put
> you in jail.  Why not put the home mortgage thieves in jail, too?

Because they havent actually stolen any money in the sense that they get to keep any money.

> When there are no consequences to an action, such as skipping
> house payments, then you will get more of that behavior.

Yes, but thats an entirely separate matter to whether they
end up with anything except having got shafted themselves.

In article ,
 Maria  wrote:

> John A. Weeks III wrote:
> > In article ,
> >  "Colonel Colt"  wrote:
> > 
> >>> So, if anyone is guilty here, it is the homeowners that
> >>> failed to make their house payments.  If you want to blame
> >>> anyone, that is where the blame should go.  Following your
> >>> logic, we should kill all people with home loans because
> >>> they are criminals and swindlers.
> >>>
> >> So you think that reckless lending without regard to the risk, followed by 
> >> hiding that risk using complicated financial devices, is blame free 
> >> activity, do you?  The home owner who fails to keep up payments on his 
> >> house 
> >> is guilty of only one thing - failing to keep up payments on his house.  
> >> And 
> >> he will have already paid for that by losing his house.  Those who lent 
> >> the 
> >> money and then covered up their risk taking bear the responsibility for 
> >> the 
> >> severe dislocations in the economy.
> > 
> > The terms of the loans were clearly stated.  Perhaps if the home
> > owner had any consequences at stake, such as prison time, perhaps
> > they would have read the loan contract, understood the costs, and
> > been a little wiser about what they were getting into.
> 
> Circumstances change, especially over the long periods of time involved 
> in repaying a mortgage.
> 
> >  As it is
> > now, these homeowners are stealing money at the tune of $100k to
> > $300K at a time from the lenders, and getting away scott free.
> 
> How are they doing that?

The lender put up the money to buy a house.
The borrower failed to make the payments.
The house is now worth less.
Lender gets the house back, sells it at a loss.
The lender is now out that money from the loss.
Lender is also out his/her potential profit.
Homeowner caused this loss just as sure if they had torched the place.
Homeowner does not get fined or put in jail.
Homeowner walks away scott free.

In contrast, a bank robber who gets 1/10 that amount by sticking
up the bank goes to prison for 20 years.

-john-

-- 
====================================================================== 
John A. Weeks III           612-720-2854            john@johnweeks.com 
Newave Communications                         http://www.johnweeks.com 
======================================================================

In article ,
 "Rod Speed"  wrote:

> Plenty of those were stupid enough to buy some sales arsehole's line
> that the loan could be replaced by another before the ARM rates hiked.
> 
> Certainly those who allowed some sales arsehole to lie about their repayment 
> capacity bear some responsibility. 

I am in a rare agreement with Rod Speed here.  There is enough blame to
go around on both sides.  Had lending restrictions not been relaxed,
this situation probably would have never happened.

-john-

-- 
====================================================================== 
John A. Weeks III           612-720-2854            john@johnweeks.com 
Newave Communications                         http://www.johnweeks.com 
======================================================================

On Sep 17, 8:28 am, "John A. Weeks III"  wrote:
> In article
> ,
>  St Georges Day April 23rd  wrote:
>
> > The people in charge of these banks which did this should be killed
> > and their property confiscated to pay off any debt.
>
> > This is the only true way to handle these on-going bank frauds and
> > stock market swindles.
>
> Can you articulate what the swindle is?
>
> From what I see, what happened is that banks loaned money
> for people to buy houses.  The banks then packaged these
> loans and resold them to investors.  That allowed the banks
> to make more loans so more people could buy houses.  This
> was working great until a bunch of people were unable to
> pay their house payments.
>
> So, if anyone is guilty here, it is the homeowners that
> failed to make their house payments.  If you want to blame
> anyone, that is where the blame should go.  Following your
> logic, we should kill all people with home loans because
> they are criminals and swindlers.

The banks pulled a "bait and switch" selling unstable loans to people
with the promise that rates were "going down." Granted, the people
were stupid for buying that; I've been on this Earth for over 50 years
and I've never seen anything actually go down more than temporarily.
But the banks were frankly almost criminal in their exploiting
people's ignorance.

>> John A. Weeks III wrote:
>> >  As it is now, these homeowners are stealing
>> > money at the tune of $100k to $300K at a time
>> > from the lenders, and getting away scott free.
>>
> Maria wrote:
>> How are they doing that?
>
"John A. Weeks III" wrote
> The lender put up the money to buy a house.
> The borrower failed to make the payments.
> The house is now worth less.
> Lender gets the house back, sells it at a loss.
> The lender is now out that money from the loss.
> Lender is also out his/her potential profit.
> Homeowner caused this loss just as sure if they had torched the place.
> Homeowner does not get fined or put in jail.
> Homeowner walks away scott free.

Not true!!  The homeowner still owes the lender the
difference between the mortgage loan amount and
the (lower) price obtained when the house was sold.

So the homeowner certainly does
NOT "walk away scott free"...

In article 
,
 Disneygeek  wrote:

> On Sep 17, 8:28 am, "John A. Weeks III"  wrote:
> > In article
> > ,
> >  St Georges Day April 23rd  wrote:
> >
> > > The people in charge of these banks which did this should be killed
> > > and their property confiscated to pay off any debt.
> >
> > > This is the only true way to handle these on-going bank frauds and
> > > stock market swindles.
> >
> > Can you articulate what the swindle is?
> >
> > From what I see, what happened is that banks loaned money
> > for people to buy houses.  The banks then packaged these
> > loans and resold them to investors.  That allowed the banks
> > to make more loans so more people could buy houses.  This
> > was working great until a bunch of people were unable to
> > pay their house payments.
> >
> > So, if anyone is guilty here, it is the homeowners that
> > failed to make their house payments.  If you want to blame
> > anyone, that is where the blame should go.  Following your
> > logic, we should kill all people with home loans because
> > they are criminals and swindlers.
> 
> The banks pulled a "bait and switch" selling unstable loans to people
> with the promise that rates were "going down." Granted, the people
> were stupid for buying that; I've been on this Earth for over 50 years
> and I've never seen anything actually go down more than temporarily.

You are new, here, aren't you?  Ever hear of consumer electronics?
Don't computers, memory, and TV's go down in price every year?
Isn't the cost of food compared to personal income dramatically
smaller today than 100 years ago?

> But the banks were frankly almost criminal in their exploiting
> people's ignorance.

If a person says that they understand, and then signs a paper
that says that they understand, how is the bank criminal?  I
don't know what more the banks could have done, other than
demand that stupid people wear a tattoo on their forehead.
These same stupid people buy SUV's and monster trucks that
are far more expensive than what they can afford, but I don't
hear anyone saying that GM or Ford is criminal.

-john-

-- 
====================================================================== 
John A. Weeks III           612-720-2854            john@johnweeks.com 
Newave Communications                         http://www.johnweeks.com 
======================================================================

Tim  wrote:
>>> John A. Weeks III wrote:
>>>>  As it is now, these homeowners are stealing
>>>> money at the tune of $100k to $300K at a time
>>>> from the lenders, and getting away scott free.
>>>
>> Maria wrote:
>>> How are they doing that?
>>
> "John A. Weeks III" wrote
>> The lender put up the money to buy a house.
>> The borrower failed to make the payments.
>> The house is now worth less.
>> Lender gets the house back, sells it at a loss.
>> The lender is now out that money from the loss.
>> Lender is also out his/her potential profit.
>> Homeowner caused this loss just as sure if they had torched the
>> place. Homeowner does not get fined or put in jail.
>> Homeowner walks away scott free.

> Not true!!

Correct, the homeowner has lost what was paid.

> The homeowner still owes the lender the difference between the mortgage loan amount and the (lower) price obtained 
> when the house was sold.

Not with non recourse loans they dont.

> So the homeowner certainly does NOT "walk away scott free"...

Correct, but not for the reason you claimed.

John A. Weeks III  wrote:
> In article ,
> "Rod Speed"  wrote:
>
>> Plenty of those were stupid enough to buy some sales arsehole's line
>> that the loan could be replaced by another before the ARM rates
>> hiked.
>>
>> Certainly those who allowed some sales arsehole to lie about their
>> repayment capacity bear some responsibility.
>
> I am in a rare agreement with Rod Speed here.
> There is enough blame to go around on both sides.

3 sides actually. If the ratings agencys had rated those very high
risk loans properly, the whole charade wouldnt have been possible
because no one would have been stupid enough to buy those loans.

> Had lending restrictions not been relaxed, this situation probably would have never happened.

The lending restrictions werent relevant to fools that were stupid enough to
allow the sales arsehole to lie about their repayment capability to get the loan.

Disneygeek  wrote:
> On Sep 17, 8:28 am, "John A. Weeks III"  wrote:
>> In article
>> ,
>> St Georges Day April 23rd  wrote:
>>
>>> The people in charge of these banks which did this should be killed
>>> and their property confiscated to pay off any debt.
>>
>>> This is the only true way to handle these on-going bank frauds and
>>> stock market swindles.
>>
>> Can you articulate what the swindle is?
>>
>> From what I see, what happened is that banks loaned money
>> for people to buy houses. The banks then packaged these
>> loans and resold them to investors. That allowed the banks
>> to make more loans so more people could buy houses. This
>> was working great until a bunch of people were unable to
>> pay their house payments.
>>
>> So, if anyone is guilty here, it is the homeowners that
>> failed to make their house payments. If you want to blame
>> anyone, that is where the blame should go. Following your
>> logic, we should kill all people with home loans because
>> they are criminals and swindlers.
>
> The banks pulled a "bait and switch" selling unstable loans to people
> with the promise that rates were "going down." Granted, the people
> were stupid for buying that; I've been on this Earth for over 50 years
> and I've never seen anything actually go down more than temporarily.

You're lying now. The cost of manufactured goods
has gone down significantly with the imports from china.

> But the banks were frankly almost criminal in their exploiting people's ignorance.

That isnt illegal, so it cant be criminal.

On Wed, 17 Sep 2008 at 07:34:31, parris_k@yahoo.com wrote in 
uk.politics.misc :
>>
>> > The people in charge of these banks which did this should be killed and
>> > their property confiscated to pay off any debt.
>>
>> So you want it to be like China and maybe the criminals get their organs
>> "harvested". Oh wait, Gordon Brown wants to push thorough a law that will
>> take organs from dead people without their consent.
>
>Well, it IS a bit tricky getting a dead person's consent..

Grin.
-- 
Paul Hyett, Cheltenham

>>>> John A. Weeks III wrote:
>>>>>  As it is now, these homeowners are stealing money...
>>>>
>>> Maria wrote:
>>>> How are they doing that?
>>>
>> "John A. Weeks III" wrote
>>> The lender put up the money to buy a house.
>>> The borrower failed to make the payments.
>>> The house is now worth less.
>>> Lender gets the house back, sells it at a loss.
>>> The lender is now out that money from the loss.
>>> ...
>>> Homeowner walks away scott free.
>
> "Tim" wrote:
>> Not true!!
>> The homeowner still owes the lender the difference between the mortgage
>> loan amount and the (lower) price obtained when the house was sold.
>
"Rod Speed" wrote
> Not with non recourse loans they dont.

This thread was posted in UK newsgroups.  We
aren't stupid enough to have "non recourse loans" here!

> "Tim" wrote:
>> So the homeowner certainly does NOT "walk away scott free"...
>
"Rod Speed" wrote
> Correct, but not for the reason you claimed.

No, for *exactly* for the reason I claimed.

Tim  wrote:
>>>>> John A. Weeks III wrote:
>>>>>>  As it is now, these homeowners are stealing money...
>>>>>
>>>> Maria wrote:
>>>>> How are they doing that?
>>>>
>>> "John A. Weeks III" wrote
>>>> The lender put up the money to buy a house.
>>>> The borrower failed to make the payments.
>>>> The house is now worth less.
>>>> Lender gets the house back, sells it at a loss.
>>>> The lender is now out that money from the loss.
>>>> ...
>>>> Homeowner walks away scott free.
>>
>> "Tim" wrote:
>>> Not true!!
>>> The homeowner still owes the lender the difference between the
>>> mortgage loan amount and the (lower) price obtained when the house
>>> was sold.
>>
> "Rod Speed" wrote
>> Not with non recourse loans they dont.

> This thread was posted in UK newsgroups.

It was posted to more than JUST british newsgroups.

> We aren't stupid enough to have "non recourse loans" here!

Pig ignorant lie.

>> "Tim" wrote:
>>> So the homeowner certainly does NOT "walk away scott free"...
>>
> "Rod Speed" wrote
>> Correct, but not for the reason you claimed.

> No, for *exactly* for the reason I claimed.

Wrong, as always.

John A. Weeks III  wrote:
> In article
> ,
> Disneygeek  wrote:
>
>> On Sep 17, 8:28 am, "John A. Weeks III"  wrote:
>>> In article
>>> ,
>>> St Georges Day April 23rd  wrote:
>>>
>>>> The people in charge of these banks which did this should be killed
>>>> and their property confiscated to pay off any debt.
>>>
>>>> This is the only true way to handle these on-going bank frauds and
>>>> stock market swindles.
>>>
>>> Can you articulate what the swindle is?
>>>
>>> From what I see, what happened is that banks loaned money
>>> for people to buy houses. The banks then packaged these
>>> loans and resold them to investors. That allowed the banks
>>> to make more loans so more people could buy houses. This
>>> was working great until a bunch of people were unable to
>>> pay their house payments.
>>>
>>> So, if anyone is guilty here, it is the homeowners that
>>> failed to make their house payments. If you want to blame
>>> anyone, that is where the blame should go. Following your
>>> logic, we should kill all people with home loans because
>>> they are criminals and swindlers.
>>
>> The banks pulled a "bait and switch" selling unstable loans to people
>> with the promise that rates were "going down." Granted, the people
>> were stupid for buying that; I've been on this Earth for over 50
>> years and I've never seen anything actually go down more than
>> temporarily.
>
> You are new, here, aren't you?  Ever hear of consumer electronics?
> Don't computers, memory, and TV's go down in price every year?
> Isn't the cost of food compared to personal income dramatically
> smaller today than 100 years ago?
>
>> But the banks were frankly almost criminal in their exploiting
>> people's ignorance.

> If a person says that they understand, and then signs a paper
> that says that they understand, how is the bank criminal?

The bank is criminal if it allows their sales arsehole or
agent to lie about the borrower's repayment capability.

> I don't know what more the banks could have done,

Dont sell ARMs, check whether the borrower is lying about their claimed
repayment capability, refrain from lying to the borrower about the possibility
of being able to get a new loan before the interest rate on the original loan hikes.

> other than demand that stupid people wear a tattoo on their
> forehead. These same stupid people buy SUV's and monster
> trucks that are far more expensive than what they can afford,
> but I don't hear anyone saying that GM or Ford is criminal.

That particular activity isnt illegal so isnt criminal.

Lying about the borrower's repayment capability is illegal and so is criminal when the
banks dont check the borrower's claim or allows their sales arsehole to lie about that
when they know that the loan will be securitized so the risk is passed on to someone else.

John A. Weeks III wrote:
> In article ,
>  Maria  wrote:
> 
>> John A. Weeks III wrote:
>>> In article ,
>>>  "Colonel Colt"  wrote:
>>>
>>>>> So, if anyone is guilty here, it is the homeowners that
>>>>> failed to make their house payments.  If you want to blame
>>>>> anyone, that is where the blame should go.  Following your
>>>>> logic, we should kill all people with home loans because
>>>>> they are criminals and swindlers.
>>>>>
>>>> So you think that reckless lending without regard to the risk, followed by 
>>>> hiding that risk using complicated financial devices, is blame free 
>>>> activity, do you?  The home owner who fails to keep up payments on his 
>>>> house 
>>>> is guilty of only one thing - failing to keep up payments on his house.  
>>>> And 
>>>> he will have already paid for that by losing his house.  Those who lent 
>>>> the 
>>>> money and then covered up their risk taking bear the responsibility for 
>>>> the 
>>>> severe dislocations in the economy.
>>> The terms of the loans were clearly stated.  Perhaps if the home
>>> owner had any consequences at stake, such as prison time, perhaps
>>> they would have read the loan contract, understood the costs, and
>>> been a little wiser about what they were getting into.
>> Circumstances change, especially over the long periods of time involved 
>> in repaying a mortgage.
>>
>>>  As it is
>>> now, these homeowners are stealing money at the tune of $100k to
>>> $300K at a time from the lenders, and getting away scott free.
>> How are they doing that?
> 
> The lender put up the money to buy a house.

And hence acquired a legal interest in it, as well as earning a lot of 
interest on the capital lent.

> The borrower failed to make the payments.

A risk both the borrower and lender knew was possible, and decided to 
mutually take.

> The house is now worth less.

Nothing to do with the borrower - maybe something to do with the lender 
if due to offering loans to hapless people prices were escalated and 
then fell back when the mortgagors defaulted. Which is exactly what 
seems to have happened.
Borrower - how much can I borrow? Lender - based on your income,$x. It's 
not hard is it? Surely the lender must take some responsibility for 
lending more money than the borrower can afford to pay back? Borrowers 
don't always borrow higher than they can afford because they are greedy, 
but because they need somewhere to live, and can't afford the prices 
which have been over-inflated by reckless lending. What a nasty vicious 
circle...

> Lender gets the house back, sells it at a loss.

The lender is under no obligation to sell the house - he now owns the 
house. He could keep it until the prices increase again, or rent it out. 
That's we borrowers are supposed to do if we make a loss on a house.

> The lender is now out that money from the loss.

And I'd guess that if it was the borrower who had lost, you would say it 
was tough shit, and that maybe they should have kept it until the prices 
increased again or rented it out.

> Lender is also out his/her potential profit.

Yes. But he now has an asset which he can dispose of as he wishes. He 
hasn't 'lost' in the way that the borrower loses - the borrower has lost 
  the home and also all the money has has paid so far, unless you want 
to consider that as a kind of rent.
Just out of interest, would you be saying the same things if the lender 
had actually purchased a property and rented it to someone who 
defaulted, leaving them with a property that was worth less than what 
they paid for it?

> Homeowner caused this loss just as sure if they had torched the place.

Are you saying that they had the criminal intent to deprive the lender 
of something?
And I presume that none of these lenders have any mortgage indemnity 
insurances against these kind of losses, like those in the UK do? Note 
that only lenders can insure against losses, not borrowers...

> Homeowner does not get fined or put in jail.
> Homeowner walks away scott free.

In the UK, they pursue you for the money for up to 12 years afterwards, 
even if they had mortgage indemnity insurance.

> 
> In contrast, a bank robber who gets 1/10 that amount by sticking
> up the bank goes to prison for 20 years.

I don't understand why you think the defaulters had criminal intent. Has 
someone ripped you off or something?

Tim wrote:
>>>>> John A. Weeks III wrote:
>>>>>>  As it is now, these homeowners are stealing money...
>>>> Maria wrote:
>>>>> How are they doing that?
>>> "John A. Weeks III" wrote
>>>> The lender put up the money to buy a house.
>>>> The borrower failed to make the payments.
>>>> The house is now worth less.
>>>> Lender gets the house back, sells it at a loss.
>>>> The lender is now out that money from the loss.
>>>> ...
>>>> Homeowner walks away scott free.
>> "Tim" wrote:
>>> Not true!!
>>> The homeowner still owes the lender the difference between the mortgage
>>> loan amount and the (lower) price obtained when the house was sold.
> "Rod Speed" wrote
>> Not with non recourse loans they dont.
> 
> This thread was posted in UK newsgroups.  We
> aren't stupid enough to have "non recourse loans" here!
>

What is a non-recourse loan?

Rod Speed wrote:
> John A. Weeks III  wrote:
>> In article ,
>> "Rod Speed"  wrote:
>>
>>> Plenty of those were stupid enough to buy some sales arsehole's line
>>> that the loan could be replaced by another before the ARM rates
>>> hiked.
>>>
>>> Certainly those who allowed some sales arsehole to lie about their
>>> repayment capacity bear some responsibility.
>> I am in a rare agreement with Rod Speed here.
>> There is enough blame to go around on both sides.
> 
> 3 sides actually. If the ratings agencys had rated those very high
> risk loans properly, the whole charade wouldnt have been possible
> because no one would have been stupid enough to buy those loans.
> 
>> Had lending restrictions not been relaxed, this situation probably would have never happened.
> 
> The lending restrictions werent relevant to fools that were stupid enough to
> allow the sales arsehole to lie about their repayment capability to get the loan. 
> 
> 
Last time we applied for a mortgage, we were told we could have up to 
£240,000, which we were amazed by since we were only earning £15k/year!
Thankfully we were not tempted (even though we really really need a 
bigger house), and borrowed the same amount that we already owed.
I'm rather glad of that now...

In uk.finance Colonel Colt  wrote:

> So you think that reckless lending without regard to the risk,
> followed by hiding that risk using complicated financial devices, is
> blame free activity, do you?

Everyone volunteered to the trades of their own free will.

> The home owner who fails to keep up
> payments on his house is guilty of only one thing - failing to keep up
> payments on his house. 

They signed a contract to make these payments. Their reneging on them
has caused this chaos.

> And he will have already paid for that by
> losing his house. 

Nope, if the house has fallen in value, they may still owe money over
and above the reposession of the house.

> Those who lent the money and then covered up their
> risk taking bear the responsibility for the severe dislocations in the
> economy. 

They were reckless, but they did keep their end of the deal.

FoFP

--
"They say there are no atheists in a foxhole.  Well, there are no
libertarians in a financial crisis, either."

                                 --Harvard economist Jeffrey Frankel

In uk.finance Maria  wrote:

>> The terms of the loans were clearly stated.  Perhaps if the home
>> owner had any consequences at stake, such as prison time, perhaps
>> they would have read the loan contract, understood the costs, and
>> been a little wiser about what they were getting into.

> Circumstances change, especially over the long periods of time involved 
> in repaying a mortgage.

It's up to the debtor to prepare for contingencies through insurance or
savings to ensure they can hold up their end of the contract.

FoFP

-- 
"They say there are no atheists in a foxhole. Well, there
are no libertarians in a financial crisis, either."

                                 --Harvard economist Jeffrey Frankel

M Holmes wrote:
> In uk.finance Maria  wrote:
> 
>>> The terms of the loans were clearly stated.  Perhaps if the home
>>> owner had any consequences at stake, such as prison time, perhaps
>>> they would have read the loan contract, understood the costs, and
>>> been a little wiser about what they were getting into.
> 
>> Circumstances change, especially over the long periods of time involved 
>> in repaying a mortgage.
> 
> It's up to the debtor to prepare for contingencies through insurance or
> savings to ensure they can hold up their end of the contract.
> 

OTOH it is acknowledged that this is not always possible, which is why 
there is a standard clause in the contract that the property may be 
repossessed in the event of non-payment. Both parties know what they are 
getting into - the homeowner is not getting away with anything, since he 
has lost his home and therefore paid his price for breaking the terms of 
the contract.

St Georges Day April 23rd = nutjob

Maria  wrote:
> Tim wrote:
>>>>>> John A. Weeks III wrote:
>>>>>>>  As it is now, these homeowners are stealing money...
>>>>> Maria wrote:
>>>>>> How are they doing that?
>>>> "John A. Weeks III" wrote
>>>>> The lender put up the money to buy a house.
>>>>> The borrower failed to make the payments.
>>>>> The house is now worth less.
>>>>> Lender gets the house back, sells it at a loss.
>>>>> The lender is now out that money from the loss.
>>>>> ...
>>>>> Homeowner walks away scott free.
>>> "Tim" wrote:
>>>> Not true!!
>>>> The homeowner still owes the lender the difference between the
>>>> mortgage loan amount and the (lower) price obtained when the house
>>>> was sold.
>> "Rod Speed" wrote
>>> Not with non recourse loans they dont.
>>
>> This thread was posted in UK newsgroups.  We
>> aren't stupid enough to have "non recourse loans" here!
>>
>
> What is a non-recourse loan?

When you default on the loan, they cant come after you for
the difference between what you owed when you defaulted
and what they can get for the property on the market.

Maria  wrote:
> John A. Weeks III wrote:
>> In article ,
>>  Maria  wrote:
>>
>>> John A. Weeks III wrote:
>>>> In article ,
>>>>  "Colonel Colt"  wrote:
>>>>
>>>>>> So, if anyone is guilty here, it is the homeowners that
>>>>>> failed to make their house payments.  If you want to blame
>>>>>> anyone, that is where the blame should go.  Following your
>>>>>> logic, we should kill all people with home loans because
>>>>>> they are criminals and swindlers.
>>>>>>
>>>>> So you think that reckless lending without regard to the risk,
>>>>> followed by hiding that risk using complicated financial devices,
>>>>> is blame free activity, do you?  The home owner who fails to keep
>>>>> up payments on his house
>>>>> is guilty of only one thing - failing to keep up payments on his
>>>>> house. And
>>>>> he will have already paid for that by losing his house.  Those
>>>>> who lent the
>>>>> money and then covered up their risk taking bear the
>>>>> responsibility for the
>>>>> severe dislocations in the economy.
>>>> The terms of the loans were clearly stated.  Perhaps if the home
>>>> owner had any consequences at stake, such as prison time, perhaps
>>>> they would have read the loan contract, understood the costs, and
>>>> been a little wiser about what they were getting into.
>>> Circumstances change, especially over the long periods of time
>>> involved in repaying a mortgage.
>>>
>>>>  As it is
>>>> now, these homeowners are stealing money at the tune of $100k to
>>>> $300K at a time from the lenders, and getting away scott free.
>>> How are they doing that?
>>
>> The lender put up the money to buy a house.
>
> And hence acquired a legal interest in it, as well as earning a lot of
> interest on the capital lent.
>
>> The borrower failed to make the payments.
>
> A risk both the borrower and lender knew was possible, and decided to
> mutually take.
>
>> The house is now worth less.
>
> Nothing to do with the borrower - maybe something to do with the
> lender if due to offering loans to hapless people prices were
> escalated and then fell back when the mortgagors defaulted. Which is
> exactly what seems to have happened.
> Borrower - how much can I borrow? Lender - based on your income,$x.
> It's not hard is it? Surely the lender must take some responsibility
> for lending more money than the borrower can afford to pay back?
> Borrowers don't always borrow higher than they can afford because
> they are greedy, but because they need somewhere to live, and can't
> afford the prices which have been over-inflated by reckless lending.
> What a nasty vicious circle...
>
>> Lender gets the house back, sells it at a loss.

> The lender is under no obligation to sell the house - he now owns the
> house. He could keep it until the prices increase again, or rent it out. That's we borrowers are supposed to do if we 
> make a loss on a house.

Depends on the rental market. The reality is that there is
no one to rent most of the defaulted houses to, because
there are so many houses that are the result of defaults.

>> The lender is now out that money from the loss.
>
> And I'd guess that if it was the borrower who had lost, you would say
> it was tough shit, and that maybe they should have kept it until the
> prices increased again or rented it out.
>
>> Lender is also out his/her potential profit.
>
> Yes. But he now has an asset which he can dispose of as he wishes. He
> hasn't 'lost' in the way that the borrower loses - the borrower has
>  lost the home and also all the money has has paid so far, unless you
> want to consider that as a kind of rent.

> Just out of interest, would you be saying the same things if the
> lender had actually purchased a property and rented it to someone who
> defaulted, leaving them with a property that was worth less than what
> they paid for it?

>> Homeowner caused this loss just as sure if they had torched the place.

> Are you saying that they had the criminal intent to deprive the lender of something?

> And I presume that none of these lenders have any mortgage indemnity
> insurances against these kind of losses, like those in the UK do?

Almost all of them did. Doesnt help if the insurer goes bust tho.

> Note that only lenders can insure against losses, not borrowers...

Thats not correct, most obviously when you become disabled etc.

>> Homeowner does not get fined or put in jail.
>> Homeowner walks away scott free.

> In the UK, they pursue you for the money for up to 12 years
> afterwards, even if they had mortgage indemnity insurance.

And the bulk of the US loans are non recourse loans.

Stupid, I agree.

>> In contrast, a bank robber who gets 1/10 that amount by sticking up the bank goes to prison for 20 years.

> I don't understand why you think the defaulters had criminal intent.
> Has someone ripped you off or something?

He just believes that there is blame on both sides, not just the lenders.

Maria  wrote:
> Rod Speed wrote:
>> John A. Weeks III  wrote:
>>> In article ,
>>> "Rod Speed"  wrote:
>>>
>>>> Plenty of those were stupid enough to buy some sales arsehole's
>>>> line that the loan could be replaced by another before the ARM
>>>> rates hiked.
>>>>
>>>> Certainly those who allowed some sales arsehole to lie about their
>>>> repayment capacity bear some responsibility.
>>> I am in a rare agreement with Rod Speed here.
>>> There is enough blame to go around on both sides.
>>
>> 3 sides actually. If the ratings agencys had rated those very high
>> risk loans properly, the whole charade wouldnt have been possible
>> because no one would have been stupid enough to buy those loans.
>>
>>> Had lending restrictions not been relaxed, this situation probably
>>> would have never happened.
>>
>> The lending restrictions werent relevant to fools that were stupid
>> enough to allow the sales arsehole to lie about their repayment
>> capability to get the loan.

> Last time we applied for a mortgage, we were told we could have up to
> £240,000, which we were amazed by since we were only earning £15k/year!

Yeah, and that sort of thing is a large part of the reason for the current fiasco.

In spades with the ratings agencys stupid enough to give loans like that securitized AAA ratings.

Securitized mortgages are loans packaged/bundled up and sold by the original lender to investors.

> Thankfully we were not tempted (even though we really really need a bigger house), and borrowed the same amount that 
> we already owed. I'm rather glad of that now...

In spades with those who borrowed for house purchases that they did
relatively recently, only to see significant drops in the value of those houses.

On Wed, 17 Sep 2008 17:10:33 GMT, Paul Hyett <pah@invalid.invalid>
wrote:

>On Wed, 17 Sep 2008 at 07:34:31, parris_k@yahoo.com wrote in 
>uk.politics.misc :
>>>
>>> > The people in charge of these banks which did this should be killed and
>>> > their property confiscated to pay off any debt.
>>>
>>> So you want it to be like China and maybe the criminals get their organs
>>> "harvested". Oh wait, Gordon Brown wants to push thorough a law that will
>>> take organs from dead people without their consent.
>>
>>Well, it IS a bit tricky getting a dead person's consent..
>
>Grin.
Maybe links with the devil help him? Just a thought.

On Thu, 18 Sep 2008 09:02:35 +1000, B J Foster 
wrote:

>St Georges Day April 23rd = nutjob
Sorry, that's not an anagram. You have failed. 0/10. You have however
won a place at a UK university of your choice - provided of course you
are not white.

In article ,
 "Rod Speed"  wrote:

> >> Lender gets the house back, sells it at a loss.
> 
> > The lender is under no obligation to sell the house - he now owns the
> > house. He could keep it until the prices increase again, or rent it out. 
> > That's we borrowers are supposed to do if we 
> > make a loss on a house.
> 
> Depends on the rental market. The reality is that there is
> no one to rent most of the defaulted houses to, because
> there are so many houses that are the result of defaults.

To reinforce Rod's point (eek, we agreed twice today), lets say
you have a house that sold for $450,000.  It is worth $300,000
on the market today.  The best rent that you can get for a unit
in my area is about $1400 a month.  That will support a loan
of about $175,000.  So, by renting, the owner is still going
backwards each month.  They also have to keep up the taxes
and utilities.  Plus now there is a renter in there who is
putting a lot of wear and tear on the place.  A years worth
of rental will likely reduce the value even further, down
to maybe $250,000, and it doesn't even cover the costs to
carry the unit.

-john-

-- 
====================================================================== 
John A. Weeks III           612-720-2854            john@johnweeks.com 
Newave Communications                         http://www.johnweeks.com 
======================================================================

In article ,
 Maria  wrote:

> > Lender gets the house back, sells it at a loss.
> 
> The lender is under no obligation to sell the house - he now owns the 
> house. He could keep it until the prices increase again, or rent it out. 
> That's we borrowers are supposed to do if we make a loss on a house.

Actually, they are.  Here in the US, a bank has to keep certain
reserves in order to make new loans.  If they don't make loans,
they don't stay in business very long.  Bank owned real estate
counts against this reserve amount, so repo'ed houses reduce
the banks ability to make new loans.  In our current market,
houses simply are not selling, so a bank that is stuck with a
house either has to dump the real estate for pennies on the dollar
or cut back on their ability to make new loans, which means they
cannot pay interest on their CD's.  The bottom of the spiral is
a cash crunch and the bank goes under.

-john-

-- 
====================================================================== 
John A. Weeks III           612-720-2854            john@johnweeks.com 
Newave Communications                         http://www.johnweeks.com 
======================================================================

In article , 
john@johnweeks.com says...
> In article 
> ,
>  St Georges Day April 23rd  wrote:
> 
> > The people in charge of these banks which did this should be killed
> > and their property confiscated to pay off any debt.
> > 
> > This is the only true way to handle these on-going bank frauds and
> > stock market swindles.
> 
> Can you articulate what the swindle is?
> 
> From what I see, what happened is that banks loaned money
> for people to buy houses.  The banks then packaged these
> loans and resold them to investors.  That allowed the banks
> to make more loans so more people could buy houses.  This
> was working great until a bunch of people were unable to
> pay their house payments.

They (not necessarily banks, but mortgage companies) repackaged the 
mortgages and got a bond rating company to stamp AAA on them, when 
they were certainly AAA worthy.  As you allude to above, this 
allowed the bank (read, "mortgage company") to loan that money 
again, up to 30 times.  That means, there is only $3 in "money" 
backing $100 in loans.  It doesn't take much of a downturn to have 
that bundle of mortgages have a negative value.  The house of cards 
was leveraged right off a cliff.

> So, if anyone is guilty here, it is the homeowners that
> failed to make their house payments.  If you want to blame
> anyone, that is where the blame should go.  Following your
> logic, we should kill all people with home loans because
> they are criminals and swindlers.

No, the mortgage companies are at fault for leveraging mortgages 
that far, the ratings companies are at fault for stamping AAA on 
financial instruments that were certainly *NOT* AAA worthy, and most 
importantly Congress for deregulating the whole mortgage business, 
for allowing Fannie and Freddie to run amok. 

-- 
Keith

In article , 
thecolonel@noneofyourbusiness.org says...
> "John A. Weeks III"  wrote in message 
> news:john-6B36CF.09161817092008@comcast.dca.giganews.com...
> >> >
> >> So you think that reckless lending without regard to the risk, followed 
> >> by
> >> hiding that risk using complicated financial devices, is blame free
> >> activity, do you?  The home owner who fails to keep up payments on his 
> >> house
> >> is guilty of only one thing - failing to keep up payments on his house. 
> >> And
> >> he will have already paid for that by losing his house.  Those who lent 
> >> the
> >> money and then covered up their risk taking bear the responsibility for 
> >> the
> >> severe dislocations in the economy.
> >
> > The terms of the loans were clearly stated.  Perhaps if the home
> > owner had any consequences at stake, such as prison time, perhaps
> > they would have read the loan contract, understood the costs, and
> > been a little wiser about what they were getting into.  As it is
> > now, these homeowners are stealing money at the tune of $100k to
> > $300K at a time from the lenders, and getting away scott free.
> > If you stole that money from a bank or casino, they would put
> > you in jail.  Why not put the home mortgage thieves in jail, too?
> > When there are no consequences to an action, such as skipping
> > house payments, then you will get more of that behavior.
> >
> Tough tittie.  The bankers knew the law, they knew the risks and they lent 
> the money anyway.  If you were an investor and you choose to invest in high 
> risk stocks, and those stocks lost their value, you have no right to blame 
> the employees of those companies. 

Unless the employees failed to disclose pertinent facts.  As long as 
the risks are known, you're right.  In this case, the seller sold 
the CDOs as AAA rated, when they never should have had such a 
rating.  

> No one forced you to invest and no one 
> forced the bankers to lend to high risk borrowers.  It is the behaviour of 
> the bankers that is far more worthy of criminal censure.  They sold on debts 
> so that risk of those debts became lost, thus the eventual holders of the 
> debt had no way of assessing the risk of their exposure.  That is tantamount 
> to fraud.

Right.  It's worse than that.  The seller of those obligations sold 
them as prime meat, when what was really sold was the equivalent of 
poisoned Chinese dog food (there is a reason they've been known as 
"toxic CDOs" for some time).  This didn't just happen this week.

-- 
Keith

In article , 
oldwoman@theshoe.com says...
> Rod Speed wrote:
> > John A. Weeks III  wrote:
> >> In article ,
> >> "Rod Speed"  wrote:
> >>
> >>> Plenty of those were stupid enough to buy some sales arsehole's line
> >>> that the loan could be replaced by another before the ARM rates
> >>> hiked.
> >>>
> >>> Certainly those who allowed some sales arsehole to lie about their
> >>> repayment capacity bear some responsibility.
> >> I am in a rare agreement with Rod Speed here.
> >> There is enough blame to go around on both sides.
> > 
> > 3 sides actually. If the ratings agencys had rated those very high
> > risk loans properly, the whole charade wouldnt have been possible
> > because no one would have been stupid enough to buy those loans.
> > 
> >> Had lending restrictions not been relaxed, this situation probably would have never happened.
> > 
> > The lending restrictions werent relevant to fools that were stupid enough to
> > allow the sales arsehole to lie about their repayment capability to get the loan. 
> > 
> > 
> Last time we applied for a mortgage, we were told we could have up to 
> £240,000, which we were amazed by since we were only earning £15k/year!
> Thankfully we were not tempted (even though we really really need a 
> bigger house), and borrowed the same amount that we already owed.
> I'm rather glad of that now...

I didn't ask and they didn't say.  I just told them what I wanted to 
borrow and what I wanted to put down.  The mortgage sailed through  
in days.  

-- 
Keith

John A. Weeks III wrote:
> In article ,
>  "Rod Speed"  wrote:
> 
>>>> Lender gets the house back, sells it at a loss.
>>> The lender is under no obligation to sell the house - he now owns the
>>> house. He could keep it until the prices increase again, or rent it out. 
>>> That's we borrowers are supposed to do if we 
>>> make a loss on a house.
>> Depends on the rental market. The reality is that there is
>> no one to rent most of the defaulted houses to, because
>> there are so many houses that are the result of defaults.
> 
> To reinforce Rod's point (eek, we agreed twice today), lets say
> you have a house that sold for $450,000.  It is worth $300,000
> on the market today.  The best rent that you can get for a unit
> in my area is about $1400 a month.  That will support a loan
> of about $175,000.  So, by renting, the owner is still going
> backwards each month.  They also have to keep up the taxes
> and utilities.  Plus now there is a renter in there who is
> putting a lot of wear and tear on the place.  A years worth
> of rental will likely reduce the value even further, down
> to maybe $250,000, and it doesn't even cover the costs to
> carry the unit.

But so what? To reinforce my point, as I said, that's what we would be 
expected to do!
The fact is that when the market plummets, both mortgagors and 
mortgagees are in the mire. Both stand to lose a lot of money. The best 
thing would be for a measure of co-operation between them in the 
short-term. I don't know how it works in the US, but back in the 1980's, 
we had lenders repossessing after a single month's missed payment. There 
was no negotiating, no extension of the debt, or lowering of the 
repayments even temporarily. Not only that, but when I was in negative 
equity for 10 years, due to contractual terms in my mortgage, I was not 
allowed to sell unless I could make up the shortfall, and I was not 
allowed to rent it out, and I was not allowed to transfer the negative 
equity to a different property. I had to just sit there and wait. Which 
I did. I defaulted several times because due to lack of mobility, I 
ended up on state benefits, but given that the lender had put these 
conditions on in the first place, they tolerated it and I eventually 
caught up. The simple fact was that they did not want responsibility for 
a house that they would make a loss on any more than I did, but I was in 
no position, even when I took out the mortgage, to make the T&C - it was 
take it or leave it. Borrowers do not set the T&C, the lender does.
So the lender did the right thing - in the end, I sold for a profit and 
paid my mortgage off. There was no blame apportioned because the whole 
thing occurred due to a serious economic downturn. What's the point in 
blame under these circumstances?
The other lenders who zoomed in and repossessed made a loss. The thing 
is not to panic, and people do, and moneylenders do, as we have seen 
over the past few months. If people could just hold their nerve, the 
economy might see a bit more stability...

Rod Speed wrote:
> Maria  wrote:
>> John A. Weeks III wrote:
>>> In article ,
>>>  Maria  wrote:
>>>
>>>> John A. Weeks III wrote:
>>>>> In article ,
>>>>>  "Colonel Colt"  wrote:
>>>>>
>>>>>>> So, if anyone is guilty here, it is the homeowners that
>>>>>>> failed to make their house payments.  If you want to blame
>>>>>>> anyone, that is where the blame should go.  Following your
>>>>>>> logic, we should kill all people with home loans because
>>>>>>> they are criminals and swindlers.
>>>>>>>
>>>>>> So you think that reckless lending without regard to the risk,
>>>>>> followed by hiding that risk using complicated financial devices,
>>>>>> is blame free activity, do you?  The home owner who fails to keep
>>>>>> up payments on his house
>>>>>> is guilty of only one thing - failing to keep up payments on his
>>>>>> house. And
>>>>>> he will have already paid for that by losing his house.  Those
>>>>>> who lent the
>>>>>> money and then covered up their risk taking bear the
>>>>>> responsibility for the
>>>>>> severe dislocations in the economy.
>>>>> The terms of the loans were clearly stated.  Perhaps if the home
>>>>> owner had any consequences at stake, such as prison time, perhaps
>>>>> they would have read the loan contract, understood the costs, and
>>>>> been a little wiser about what they were getting into.
>>>> Circumstances change, especially over the long periods of time
>>>> involved in repaying a mortgage.
>>>>
>>>>>  As it is
>>>>> now, these homeowners are stealing money at the tune of $100k to
>>>>> $300K at a time from the lenders, and getting away scott free.
>>>> How are they doing that?
>>> The lender put up the money to buy a house.
>> And hence acquired a legal interest in it, as well as earning a lot of
>> interest on the capital lent.
>>
>>> The borrower failed to make the payments.
>> A risk both the borrower and lender knew was possible, and decided to
>> mutually take.
>>
>>> The house is now worth less.
>> Nothing to do with the borrower - maybe something to do with the
>> lender if due to offering loans to hapless people prices were
>> escalated and then fell back when the mortgagors defaulted. Which is
>> exactly what seems to have happened.
>> Borrower - how much can I borrow? Lender - based on your income,$x.
>> It's not hard is it? Surely the lender must take some responsibility
>> for lending more money than the borrower can afford to pay back?
>> Borrowers don't always borrow higher than they can afford because
>> they are greedy, but because they need somewhere to live, and can't
>> afford the prices which have been over-inflated by reckless lending.
>> What a nasty vicious circle...
>>
>>> Lender gets the house back, sells it at a loss.
> 
>> The lender is under no obligation to sell the house - he now owns the
>> house. He could keep it until the prices increase again, or rent it out. That's we borrowers are supposed to do if we 
>> make a loss on a house.
> 
> Depends on the rental market. The reality is that there is
> no one to rent most of the defaulted houses to, because
> there are so many houses that are the result of defaults.

Indeed, but all these things are forseeable - they are not unknown 
unknowns:). The poor condition of the underlying economy has been known 
for at least 10 years, and still they took the risk. Borrowers always 
need somewhere to live, whether the economy is poor or not, so they are 
always going to need to borrow money.

> 
>>> The lender is now out that money from the loss.
>> And I'd guess that if it was the borrower who had lost, you would say
>> it was tough shit, and that maybe they should have kept it until the
>> prices increased again or rented it out.
>>
>>> Lender is also out his/her potential profit.
>> Yes. But he now has an asset which he can dispose of as he wishes. He
>> hasn't 'lost' in the way that the borrower loses - the borrower has
>>  lost the home and also all the money has has paid so far, unless you
>> want to consider that as a kind of rent.
> 
>> Just out of interest, would you be saying the same things if the
>> lender had actually purchased a property and rented it to someone who
>> defaulted, leaving them with a property that was worth less than what
>> they paid for it?
> 
>>> Homeowner caused this loss just as sure if they had torched the place.
> 
>> Are you saying that they had the criminal intent to deprive the lender of something?
> 
>> And I presume that none of these lenders have any mortgage indemnity
>> insurances against these kind of losses, like those in the UK do?
> 
> Almost all of them did. Doesnt help if the insurer goes bust tho.

Not the fault of the borrower.
So can you get indemnity insurance for the borrower in the US?

> 
>> Note that only lenders can insure against losses, not borrowers...
> 
> Thats not correct, most obviously when you become disabled etc.

IIRC these things are time limited. And I personally cannot get many 
insurances that other people take for granted because I am self-employed 
now.

> 
>>> Homeowner does not get fined or put in jail.
>>> Homeowner walks away scott free.
> 
>> In the UK, they pursue you for the money for up to 12 years
>> afterwards, even if they had mortgage indemnity insurance.
> 
> And the bulk of the US loans are non recourse loans.
> 
> Stupid, I agree.
> 
>>> In contrast, a bank robber who gets 1/10 that amount by sticking up the bank goes to prison for 20 years.
> 
>> I don't understand why you think the defaulters had criminal intent.
>> Has someone ripped you off or something?
> 
> He just believes that there is blame on both sides, not just the lenders. 
> 
> 
I would agree with that. Nobody forces the lender to lend - they assess 
the risk to try and make a profit - in this case they have been overly 
generous, I suppose that they believed they would make more money by 
lending to more people, and now they remember why they had strict 
lending criteria previously. Even more amazing is that businesses that 
didn't grant the loans in the first place (and so I presume have no idea 
of the risk involved) thought they would also make a profit on them and 
so they purchased them! This is entirely their fault, and nothing to do 
with the borrower IMV, as by this time, the borrower has become 
completely detached from the process...
At the end of the day, nobody choses to lose their jobs - it has just 
happened and so there is no intent to default except perhaps in a small 
minority of cases where the borrower is just taking the p. (Thinking of 
those people who borrow and think they will get away with not paying a 
penny back, even if they have the money to pay it back...)

John A. Weeks III wrote:
> In article ,
>  Maria  wrote:
> 
>>> Lender gets the house back, sells it at a loss.
>> The lender is under no obligation to sell the house - he now owns the 
>> house. He could keep it until the prices increase again, or rent it out. 
>> That's we borrowers are supposed to do if we make a loss on a house.
> 
> Actually, they are.  

Legally?

>Here in the US, a bank has to keep certain
> reserves in order to make new loans.  If they don't make loans,
> they don't stay in business very long.  Bank owned real estate
> counts against this reserve amount, so repo'ed houses reduce
> the banks ability to make new loans.

I thought they counted as assets?

>  In our current market,
> houses simply are not selling, so a bank that is stuck with a
> house either has to dump the real estate for pennies on the dollar
> or cut back on their ability to make new loans, which means they
> cannot pay interest on their CD's.  The bottom of the spiral is
> a cash crunch and the bank goes under.

Or the banks that were stupid enough to buy these loans from the 
original lender.

>>>>>> John A. Weeks III wrote:
>>>>>>>  As it is now, these homeowners are stealing money...
>>>>>>
>>>>> Maria wrote:
>>>>>> How are they doing that?
>>>>>
>>>> "John A. Weeks III" wrote
>>>>> The lender put up the money to buy a house.
>>>>> The borrower failed to make the payments.
>>>>> The house is now worth less.
>>>>> Lender gets the house back, sells it at a loss.
>>>>> The lender is now out that money from the loss.
>>>>> ...
>>>>> Homeowner walks away scott free.
>>>
>>> "Tim" wrote:
>>>> Not true!!
>>>> The homeowner still owes the lender the difference
>>>> between the mortgage loan amount and the
>>>> (lower) price obtained when the house was sold.
>>>
>> "Rod Speed" wrote
>>> Not with non recourse loans they dont.
>
> "Tim" wrote:
>> This thread was posted in UK newsgroups.
>> We aren't stupid enough to have "non recourse loans" here!
>
"Rod Speed" wrote
> Pig ignorant lie.

Well - can you point to *any* UK non recourse loan??

Rod Speed wrote:
> Maria  wrote:
>> Rod Speed wrote:
>>> John A. Weeks III  wrote:
>>>> In article ,
>>>> "Rod Speed"  wrote:
>>>>
>>>>> Plenty of those were stupid enough to buy some sales arsehole's
>>>>> line that the loan could be replaced by another before the ARM
>>>>> rates hiked.
>>>>>
>>>>> Certainly those who allowed some sales arsehole to lie about their
>>>>> repayment capacity bear some responsibility.
>>>> I am in a rare agreement with Rod Speed here.
>>>> There is enough blame to go around on both sides.
>>> 3 sides actually. If the ratings agencys had rated those very high
>>> risk loans properly, the whole charade wouldnt have been possible
>>> because no one would have been stupid enough to buy those loans.
>>>
>>>> Had lending restrictions not been relaxed, this situation probably
>>>> would have never happened.
>>> The lending restrictions werent relevant to fools that were stupid
>>> enough to allow the sales arsehole to lie about their repayment
>>> capability to get the loan.
> 
>> Last time we applied for a mortgage, we were told we could have up to
>> £240,000, which we were amazed by since we were only earning £15k/year!
> 
> Yeah, and that sort of thing is a large part of the reason for the current fiasco.

It was not benign either - even though we are not credit-worthy in the 
sense that we have no credit history to speak of, we were offered 
countless credit cards and loans, every time we went in the bank to pay 
money in or pay a bill. My best friend has acquired £25k of debt 
(Barclays) even though she has had no income but state benefits for the 
past 16 years. Have another loan, would you like another loan etc. They 
said it was because she had never been overdrawn - that was good enough 
for them. That is where I will apportion 100% of the blame on the lender 
- to shove what is claimed to be cheap money in the faces of the 
desperate is just bloody stupid. Caveat emptor must apply in both 
directions, since the lender is meant to get something in return...who 
would offer a tramp £250 for a bed and a meal and expect to get it repaid?

> 
> In spades with the ratings agencys stupid enough to give loans like that securitized AAA ratings.
> 
> Securitized mortgages are loans packaged/bundled up and sold by the original lender to investors.

What kind of investors would buy them?

> 
>> Thankfully we were not tempted (even though we really really need a bigger house), and borrowed the same amount that 
>> we already owed. I'm rather glad of that now...
> 
> In spades with those who borrowed for house purchases that they did
> relatively recently, only to see significant drops in the value of those houses. 
> 
>

Rod Speed wrote:
> Maria  wrote:
>> Tim wrote:
>>>>>>> John A. Weeks III wrote:
>>>>>>>>  As it is now, these homeowners are stealing money...
>>>>>> Maria wrote:
>>>>>>> How are they doing that?
>>>>> "John A. Weeks III" wrote
>>>>>> The lender put up the money to buy a house.
>>>>>> The borrower failed to make the payments.
>>>>>> The house is now worth less.
>>>>>> Lender gets the house back, sells it at a loss.
>>>>>> The lender is now out that money from the loss.
>>>>>> ...
>>>>>> Homeowner walks away scott free.
>>>> "Tim" wrote:
>>>>> Not true!!
>>>>> The homeowner still owes the lender the difference between the
>>>>> mortgage loan amount and the (lower) price obtained when the house
>>>>> was sold.
>>> "Rod Speed" wrote
>>>> Not with non recourse loans they dont.
>>> This thread was posted in UK newsgroups.  We
>>> aren't stupid enough to have "non recourse loans" here!
>>>
>> What is a non-recourse loan?
> 
> When you default on the loan, they cant come after you for
> the difference between what you owed when you defaulted
> and what they can get for the property on the market. 
> 
> 
That seems reasonable if they have indemnity insurance. I don't suppose 
people expected insurers to go bust also...
There is some annoyance in the UK that lenders can pursue the borrower 
for the defecit even if their indemnity insurer paid out - ISTR that 
there is some obligation on the lender to do this to repay the insurer...?

On 18 Sep, 08:35, Maria  wrote:

> > When you default on the loan, they cant come after you for
> > the difference between what you owed when you defaulted
> > and what they can get for the property on the market.
>
> That seems reasonable if they have indemnity insurance. I don't suppose
> people expected insurers to go bust also...
> There is some annoyance in the UK that lenders can pursue the borrower
> for the defecit even if their indemnity insurer paid out - ISTR that
> there is some obligation on the lender to do this to repay the insurer...The settlement of a debt through indemnity insurance does exonerate
the debtor  the loan  being  passed onto the insurer just as be
acquires ownership of the wreckage of a motor car written off in an
accident.

All insurers attempt to recover or reduce their losses. It could be
therefore that the debt will be sold at a discount onto the debt
market frequented by debt collectors even for  a few pennies in the £.
Upon enquiry, a debt collector might find that it is possible to
recover all or part of the debt through changed circumstances and thus
achieve a profit.

"Maria" wrote
> There is some annoyance in the UK that lenders can pursue the borrower for 
> the defecit even if their indemnity insurer paid out - ISTR that there is 
> some obligation on the lender to do this to repay the insurer...?

Of course - why should the insurer pay out, when the borrower can afford to?
The insurance is only there for the cases when the borrower can't pay...

Tim wrote:
> "Maria" wrote
>> There is some annoyance in the UK that lenders can pursue the borrower for 
>> the defecit even if their indemnity insurer paid out - ISTR that there is 
>> some obligation on the lender to do this to repay the insurer...?
> 
> Of course - why should the insurer pay out, when the borrower can afford to?

Depends on the definition of 'afford to'. You can make a court order 
against someone to pay x per week, but if they haven't got it, they 
haven't got it.

> The insurance is only there for the cases when the borrower can't pay...

So is there a time lag for the insurance to pay out? I was under the 
impression that it paid out after the loss was identified and then the 
lender pursued the borrower, not the other way around. I'm probably 
wrong as it was so long ago I was reading these things (20 years!)

On 18 Sep, 09:11, Maria  wrote:
> Tim wrote:
> > "Maria" wrote
> >> There is some annoyance in the UK that lenders can pursue the borrower for
> >> the defecit even if their indemnity insurer paid out - ISTR that there is
> >> some obligation on the lender to do this to repay the insurer...?
>
> > Of course - why should the insurer pay out, when the borrower can afford to?
>
> Depends on the definition of 'afford to'. You can make a court order
> against someone to pay x per week, but if they haven't got it, they
> haven't got it.
>
> > The insurance is only there for the cases when the borrower can't pay...
>
> So is there a time lag for the insurance to pay out? I was under the
> impression that it paid out after the loss was identified and then the
> lender pursued the borrower, not the other way around. I'm probably
> wrong as it was so long ago I was reading these things (20 years!)

Indemnity insurance is taken out by the lender and covers him not the
borrower against default subject to certain conditions e.g. the lender
is in work, good credit, record, lived at the same address for a
period of time etc . etc.

When a lender defaults the the insurance buys the debt from the lender
at the cost of the default.

The insurance company then has the right to sell that debt on to a
debt collecting agency at a discount. They will try to recover the
debt and hence make a profit. The discounts applied are so generous
that even if only say 1 in 10 of the debts are recovered the there is
a profit in it. Debts not recovered by the collection agencies will in
turn be sold on at even bigger discounts by the agencies.

Are you sure you are not thinking of payment protection insurance?

On Wed, 17 Sep 2008 at 09:16:18, John A. Weeks III  
wrote in uk.politics.misc :
>
>The terms of the loans were clearly stated.  Perhaps if the home
>owner had any consequences at stake, such as prison time, perhaps
>they would have read the loan contract, understood the costs, and
>been a little wiser about what they were getting into.

But where do you draw the line  :

http://news.bbc.co.uk/1/hi/wales/7621251.stm

Even if they did read the contract they signed, it is not necessarily 
legal for lenders to do certain things.
-- 
Paul Hyett, Cheltenham

"John A. Weeks III"  writes:

> Bank owned real estate
> counts against this reserve amount, so repo'ed houses reduce
> the banks ability to make new loans.  In our current market,
> houses simply are not selling, so a bank that is stuck with a
> house either has to dump the real estate for pennies on the dollar
> or cut back on their ability to make new loans, which means they
> cannot pay interest on their CD's.

So why did they repossess the houses? As I understand it, a major
'problem' was with loans which started at an low 'introductory' interest
rate (and hence repayments) where the borrower was keeping up with
payments at the initial rate but fell into arrears when the rate (and
hence repayment) increased after the introductory period. So rather than
be saddled with properties which they could not resell (and hence are
generating no income and being a liability), would it not have been to
the banks' advantage to allow the borrower to continue with the same
(affordable) repayments either by not increasing the interest rate or by
extending the loan period?

Banking is an international organized criminal conspiracy. It derives
its wealth through swindles and frauds on a massive scale. All bankers
are aware of the swindle or they wouldn't be - couldn't be - bankers.

Bankers loan out at interest 22 times more money than they have on
deposit. Thus, the rate of inflation is ALWAYS hig