Anyone want to talk about the mortgage crisis?

I want to open up some discussion here. You see, I have reason to believe that the current mortgage crisis was either intentionally planned or a colossal mistake the likes of the stock market crash. Allow me to elaborate:

Years back, a new and wonderful thing came about in the world of mortgages, the 閳ユ笧efi閳? which we have come to know as the refinance. For those of you out there familiar with this, people where allowed to refinance into adjustable rate mortgages and get cash out against equity. This program was signed off on by the powers that be that oversee the mortgage and banking industry, a key player is the Federal Reserve Board (to be referred to as FRB forward)

Anyone want to talk about the mortgage crisis?

I agree the Fed is partially responsible for the mess (Greenspan - not Bernake) . . . but what kind of moron did you have to be to not know that rates would eventually go up . . . it%26#039;s not hard to figure out monthly payments on an interest only loan. The Fed (hindsight being 20/20) probably lowered interest rates too much to compensate for the dot.com bust - thus creating an emotional real estate market (euphoria). However, again how big of a moron do you have to be . . . when every news caster in the country professes %26quot;historic lows%26quot; for interest and %26quot;historic highs%26quot; for home value then you must be willing to accept the inverted statement for it to be true. Simple logic.

Anyone want to talk about the mortgage crisis?

While I love a good conspiracy theory, I have to disagree. Allow me to explain.

What is the driving force behind the current mortgage crisis we can agree upon. That is GREED! The greed I am speaking of doesn%26#039;t rest squarely in the laps of the Trilateral Commission, the Iluminati, The Counsil of Forigen Relations, the World Bank, the Fed or any of them.

The primary reason for the crisis is Wall St and the secondary mortgage market. You see, when a lender funds any type of loan other than FNMA it is immediately sold on Wall Street. Then it is re-sold, and sold again, split and devided into so many forms and fashions that by the time it%26#039;s made the rounds investors don%26#039;t even know what they are buying. What drives this? Greed, pure and simple. Everyone sees dollar signs. %26quot;I can make a ton of money selling this%26quot; or %26quot;I can triple my money buying this%26quot;

Well guess what. The reaper has come to collect. Now these big money investors and brokers are loosing big time. They cry to the Fed and the World Bank %26quot;Pleae help us! These big, bad, mortgage brokers are ruining us!%26quot; Ans big brother bails them out. Now what do they do with the bailout money? FUND MORE LOANS! Can you beleive it?

Now let us take a step back and look at where it all begins. Is it the fault of the mortgage broker for writing the loan to begin with. I beleive they have to take some of the responsibility but keep in mind that a loan officer can%26#039;t approve a loan. The lender has to have the program in place to begin with. Why? GREED!

Now, let%26#039;s look back a bit more. The poor homeowner. The slob in foreclosure that can%26#039;t afford his payments because he bought a $400,000 home and he only makes $29,000 a year. He wants to blame everybody and everything. He wants someone to step up and take the blame so he%26#039;s got someone to sue. Do you know what he doesn%26#039;t want to do? He doesn%26#039;t want to admit that he knew he couldn%26#039;t afford the home to begin with. He doesn%26#039;t want to admit he was counting on hitting the lottery to cover him past the first year of payments. He doesn%26#039;t want to take any responsibility for anything. Why? GREED!

So, who really IS to blame for the mess we are in right now? How about everybody, all of us! Let%26#039;s stop pointing fingers and taking responsibility for out actions!

Sorry for the rant, but you asked.

Anyone want to talk about the mortgage crisis?

I don%26#039;t claim to understand all the inter-workings of finance. But I disagree with eliminating the interest rate. If you did that, would they just call it something else?

As for those folks losing their homes today, well it really is a combination of things, mostly that the loan companies used poor business judgment in approving some for loans that had bad credit or poor credit history. They weren%26#039;t approved on a full blown mortgage amount, only on the initial rate, some on an interest only loan. So in my mind, those lenders should be help accountable. And I think they should cancel all adjustments to these loans and make them fixed rates at the current rate of the mortgage. Those that are interest only should also be converted to current market rates and fixed. And I%26#039;m talking only those borrowers who are still current on their mortgage payments. Unfortunately, we can%26#039;t save the world, and all of those folks that have already lost their homes, the debt should be forgiven and written off by the originator of the loan in the beginning, and no marks on thier credit histories. As for future mortgages, people need to be fully qualified before being approved. They should have to demonstrate good money management skills, good credit history. It is not a %26quot;right%26quot; to own your home, it is a %26quot;privilege%26quot;.

And that is my 2 cents.

Anyone want to talk about the mortgage crisis?

I started to post an answer for you, but this problem is much more complex than you believe.

It is not the Federal Reserves fault this is happening.

It is not the mortgage companies

and it surely is not interest.

It is a combination of loss of good paying American jobs, theft of corporate profits by the upper management, the law of gravity and finance (what goes up, must come down), and Americans never ending pursuit of things they cannot afford and utter lack of personal responsibility. (Oh, you mean you want me to PAY for the things I bought?)

Blaming FRB and interest only puts band-aids on symptoms instead of fixes to true problems, which is also the American way.

I just posted a new blog entry, if you care to read it, come on over. But I bet you won%26#039;t, as real change requires real work.

Something a lot of Americans have forgotten.

Anyone want to talk about the mortgage crisis?

I think people shouldn%26#039;t try to live beyond their means. If you have shitty credit and are irresponsible, WHO CARES if you have this burning desire to own a home. Don%26#039;t go begging lenders to give you money, knowing full well that you can%26#039;t afford your ARM once the rate adjusts. Ignorance is NOT bliss.

You can%26#039;t blame the sheer stupidity of the American public on congress.

Anyone want to talk about the mortgage crisis?

I think the mess we are in is the result of %26quot;poor management%26quot;. I think all sides (Fed, lenders, and consumers) contributed to the mess. The federal government lowered the interest rates to historic lows to revive the economy but fails to guard the flood gate. It%26#039;s like the Fed invites everyone to attend an all-you-can-eat buffet but doesn%26#039;t care how the foods are prepared in the kitchen. Some guests may eat too much while others may get sick by eating bad food.

People who refinanced, including myself, should know what they are doing and are responsible for their decisions. Those choosing ARM should know this is a gamble. When you are gambling, you take the risk! I, too, feel sorry for those who lost their houses.