Demonstration at Bank of America 500 Griswold 12 Noon- Moratorium on all Foreclosures

[Gistok]

I absolutely agree with you, banks do not always want to work with the borrower. Unfortunately, the folks who get the best treatment are the people with the most money.

As far as being blindsided by a bank, or , having the rug pulled out from under you goes, if you make your payments, it isn't going to happen.

True dat... we have banking laws to thank for that... it's the gray areas where they don't always play fair...

[13074Glenfield]

I don't think there are any good guys or bad guys in this story. I think that all the parties acted with reasonable interests, not bad motives, but simply didn't see how everything could and did go wrong. The politicians and bureaucrats who required that the banks make more home loans to low income people did so with the object helping more people buy houses, which they presumed was a good thing. The buyers either thought they could make their payments, but fell behind when they lost a job or something like that, or they thought they could refinance when house prices went up, as they had been for years. The lenders were, in part required to make the loans, but also, if they could charge a rate of interest that they thought would cover any losses, why would they not make the loans? If they didn't, people would call for it discrimination. The investment bankers found that investors would not buy these mortgages at the prevailing rate, feeling they were too risky, [[here was a big sign that was missed), so they packaged them into structured securities that most felt would spread the risks of this sub prime paper in a way that it met investors risk tolerances.

Sure, some politicians were in cahoots with the lobbyists for the housing industry [[which is the group that gained the most from this whole episode but it rarely mentioned). Some homeowners have intentionally defaulted on their mortgages even though they could make the payments, as a financial strategy. States like Florida where the foreclosure process takes a long time have seen this and it's been reported in the New York Times as a financial strategy. Some mortgage bankers were helping people fake loan docs so they could collect the commission, and some investment bankers created securities that later collapsed, or sometimes not that much later.

But by and large, though there were bad actors in every part of the story, what happened was that when the stream or new buyers and leveraged buyers taking on more than one property to flip ended, the prices collapsed and the game came to and end.

Most parties behaved reasonably and, given the circumstances, fairly responsibly. Now we are all still sorting out the mess. This view doesn't help those who are looking for someone to get angry with. For some, it's the faceless, greedy bankers, for others the irresponsible homeowners who repeatedly refinanced in order to take vacations and buy big screen TVs. The truth is, as always, a lot murkier. Everyone involved bought into the idea that house prices would continue to rise, and got burned when they didn't.

[Hermod]

Glen, you are right. Everyone, buyers, real estate agents, mortgage brokers, banks, and buyers of mortgage based bonds were all basing their actions on the premise that housing prices had no where to go but up.

When the music stopped, not everyone could find a chair.

[Scottathew]

Like I said, banks do bear some responsibility. That which you quoted is their portion of responsibility. And they are punished for it by losing money on every single one of these defaulting transactions.

Yup!

It sucks to lose your home, but if you don't pay for it you can't live there. Foreclosure is an opportunity to get into lower payments in a rental situation. That's better for the families that can no longer afford their homes.

[MikeM]

I knew the end was in sight when coworkers, in a totally unrelated industry, were getting into the mortgage broker business on the side.

[canuck]

Only prom is conrads, the guys at the top did not suffer one bit. I am not talking about the lowly paid tellers, but the bank administrators who designed the fancy maneuvers that extracted higher interest at a moment's notice on uneducated consumers. Just look at the damage they brought on the american economy. They plundered the wealth and managed to undermine the US's position vis-à-vis China, a country with a system they probably wish they had going for them, since the money class in China doesnt have to contend with Occupy Tienanmen very much.

The fact is all lending institutions knew the risks involved and used this high risk game for profit not for loss. The small fry were losing in order for the big fish to prosper. The only problem is when this kind of scheme gets out of control and too many folks end up in the frying pan; then the handle becomes too hot for even the best chef to hold. My opinion.