Protecting the Stupid is NOT the State's Job!
"Brad Cottrell was a paramedic when a friend introduced him to the high-rolling world of sub-prime mortgage lending.Within three years of landing a job with Ownit Mortgage Solutions Inc. in Agoura Hills, his salary had tripled. His wife quit working and they bought a 3,000-square-foot house in Camarillo."
"But late last year, defaults on risky loans began to rise. By December, Ownit was out of business, and the 35-year-old father of three was out of a job."It was a nightmare," he said. "I felt like I got hit by a Mack truck."
'"There's a lot of that going on. When Irvine-based New Century Financial Corp. on Monday became the latest mortgage company to file for bankruptcy protection, it handed 3,200 employees their walking papers."
"In California, mortgage industry job losses soared 367% in the first quarter. In California, the 3,679 mortgage industry jobs lost in the quarter pales compared with the 70,000 construction jobs that economists figure could disappear over the next two years."
By the way...
In March the number of houses on the market in the Bay Area jumped by more than 12,000 percent to just over 24,000. (??? 12,000% really??? who is their fact checker? 12,000 units maybe?)
News from Oregon...
"Now that many subprime lenders are going belly-up and causing jitters on Wall Street, housing advocates decided the time was ripe to seek new consumer protections for would-be customers. On Wednesday, the Senate Business Committee rolled out Senate Bill 965, which would enact new safeguards for home buyers against so-called "predatory lending."'
"Nearly one-third of all Oregon mortgages issued in 2005 required interest-only payments, according to the Oregon Center for Public Policy. Those buyers are banking on rising property values to boost equity in their homes. Many people are taking out negative-amortization loans, in which their loan principal grows rather than shrinks with each payment."
"Sen. Larry George, R-Sherwood, panned the bill. "If someone is being deceptive, I'm with you," George said. But it's not the state's role to "protect people from being stupid," he said."
posted by Athena @ 9:46 PM
7 Comments:
Oh god,thank you.THE STATE is not going to protect the stupid.that is so funny, on so many levels that i nearly did myself an injury.maybe grey davis could make a comeback by promising to save the homeowners.i'm sure he'd get some nice contributions from countrywide etc,who would do so out of their profound sense of civic duty and christian love.
it's not the state's role to "protect people from being stupid,"
God I wish we had more politicians like him.
"...the high-rolling world of sub-prime mortgage lending."
And even smart people are making bad choices. A neighbor of mine recently quit his secure job here as a systems analyst and took up an "executive" position at Countrywide in Thousand Oaks--just before the subprime alert.
Since he was so confident* of his new position and the state of the real estate industry, I wasn't about to point out weaknesses in the industry. After all, if a Ph.D can't figure it out himself...let it be instructive to to him.
"Sen. Larry George, R-Sherwood, panned the bill. "If someone is being deceptive, I'm with you," George said. But it's not the state's role to "protect people from being stupid," he said."
I hate it when I agree with Republicans.
"I hate it when I agree with Republicans"
The problem is, has even ONE Democrat come out against this totally repugnant (and criminally deceptive in that it only helps the lenders) bailout idea?
The Dems have been getting on my last nerve since Bill aka Republican lite Clinton.
I am so ready for these bozo Dems to just be gone.
And I have so much respect for any politician who'll come out and say it: "It is NOT the State's role to protect people from being stupid".
BTW, I've been trying to talk to people about this RE burst for a couple years now. Typical reaction: their eyes glaze over. They don't even want to hear about it, let alone ask questions that would help them understand.
Interestingly, mention the bailout and they're all ears. In fact, they're in incensed! They ask questions, etc! There is no support for this idea as far as I can tell. Apparently, Americans are not as "compassionate" (smirk) as the Dems believe.
Try it, broach the subject of bailing out fools who lied on mortgage apps. to buy way too much house with some of your tax paying friends. Or fools who HELOCed themselves out of house and home. Or were just too freaking stupid to read a loan doc. See what the reaction is. You may be pleasantly surprised.
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For all the talk of bailouts, I never actually see a FB being interviewed. I see politicians and talking heads. Which makes me wonder if the FB's know a bailout isn't in their best interests.
What if someone lied on their stated income loan? Not that anyone did, of course-); Who wants to open that can of worms and get charged with mortgage fraud?? Would they be entitled to a bailout? What if someone owns multiple houses and claims they are all primary residences? What if someone has HELOC'd all the equity out of their house and refinanced into a suicide loan?
And how many of these yoyo's even WANT these houses for the next 10 or 20 years, if they're just a financial noose around their neck with no hope of quick flip and financial gain? Who wants to keep feeding that alligator?
Lisa,you make agood point,there was fraud in the vast majority of exotic loans,probably 75-80%.personally i would much rather get a 1099 for $100k than spend years in jail.I have done volunteer work in jails,they are NOT NICE PLACES.as i hope some realtors and loan brokers of my acquaintance will discover.
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