And just think about what this is doing to gay wealth? I know 'girls' who are now having to book appointments at Supercuts, god forbid.

NDRU said:

That's a falicy. Banks are losing BIG TIME with all of these loans. Not just home loans...ALL loans. They project out years ahead what income will be based on loans. Just because they have the house, they don't have the loan...and no one is buying homes these days.

Don't get me wrong, banks have and will always have money, but it doesn't mean they are not suffering.

Imago said:

ANd we wouldn't wnat you to get one of those Emo Mullet Poodle Hairdoos!

superspaceboy said:

superspaceboy said:

well, then banks and people were both irresponsible to get into these situations!
It's no wonder we're all fucked!

Here is what we need to do:

1. Get loans into hands of people like me. I will buy portfolios at a discount
2. I will adjust peoples' loan amounts into something they can afford
3. Congress needs to make debt forgiveness on mortgages non-taxable

Everybody wins, except the banks. And they are the ones that should lose.

I am happy to discuss this in more detail if anyone cares to.

JustErin said:

Good lord.
Who do you think sub-prime mortgages were DESIGNED for?

RodeoSchro said:

Can you lend me £100?

how much longer before the inventible for this thread?

ehuffnsd said:

I promise not to veer it off into a "Night Ranger rocks!" thread, if that's what you mean.

RodeoSchro said:

"MJ is still beautiful?"

RodeoSchro said:

Yay! Except for then I am out of a job. Why should the banks lose? I think managing your money should be your responsibility. Besides without banks do you think anyone could afford a home?

NDRU said:

Oh, no, the banks are losing big time in all this. Most of these loans were in effect for less than 5 years. Consider that the loans were sold repeatedly so each lender got their money up front but whoever's left holding the bag expected to recoup over the next 30 years, which of course is not happening. Couple all that with the fact that it costs money in lawyers' fees, court fees, etc to handle foreclosures/bankruptcies. PLUS after the bank gets the house back guess who must pay the property taxes, association dues, realtor fees, insurance, extra insurance cuz the house is vacant, plus the risk of having squatters, burglars, and vandals. Nobody is winning on this except those who can afford to buy properties now or got out the game two years ago.

ButterscotchPimp said:

The middle class. ( Which really no longer exists.....)

Genesia said:

True and accountability though I would say a lot instead of "some"

SCNDLS said:

That's true, but the banks are also losing big time because these mortgage notes, receivables, and recouped foreclosed homes are considered assets under current banking laws when in fact they are actually liabilities. That's because under banking laws, banks are allowed to make loans up to eight dollars for every dollar they have in liquid reserves. By law, they are required to have at least 10% of all operating assets in liquid reserves to cover loans and other expenses. Because bank-owned (i.e., foreclosed) real estate is illiquid by nature, these "assets" and related expenses related to the upkeep of those assets is drawn against the bank's reserves, thus reducing the amount of money available to lend to borrowers. It was because banks like IndyMac made so many subprime loans which went bad, forcing them to take back properties they lent money on, and causing them to deplete their liquid reserves, that the Feds had to move in and take over the failed bank. Other banks like Countrywide, Wells Fargo and the like are writing off huge losses by frantically short selling the properties they took back just so they can have some funds to lend out. This is great for people who have money to buy but horrible for the banks and homeowners because these short sales ultimately lower the value of property of the people who are actually making their mortgage payments.

728huey said:

Correctamundo on all this. I used to work for Countrywide, Bank of America, Capital One, AND Experian so I KNOW it's ALL fucked up. Not to mention I own four rental properties which I bought brand new all at the same time so they've all got mortgages on them. There are so many foreclosed houses in the neighborhood the lenders are willing to do a short sale for 60 cents or less for each dollar left on the mortgage. BUT there are NO buyers. Some houses have been on the market for 12 months with NO offers. Plus they're sitting empty which attracts all kinds of trouble including people stealing AC units, appliances, copper, etc or just plain ol' vandalizing. This situation is going ot get MUCH worse in the coming months and years unfortunately.
[Edited 7/17/08 19:10pm]

SCNDLS said:

How could you work for the DEVIL (Experian)???? I hate them....

dustysgirl said:

That was actually my LAST non-contract job 7 years ago. They were less than 2 miles from my house so it was an easy decision. But that place was fuckin' nutty. When they offered layoff packages I was the first in line even though I was only there 1 1/2 years. But I tell ya, my credit is cleaner than a muthafucka.

In 1994, we bought our first house for $69,900.

Sold it in 2005 for $106,000 (we were asking $103,900). It sold in two months.

Less than a year later, the woman who bought it, put it up for sale again (got married, I heard and moved). She started renting it and earlier this year I suppose she just quit paying on it, and it went into foreclosure and is now a HUD house. The asking price is $54,900!!!!!

My old neighbors told me that the inside is trashed. All the 70+ years old oak woodwork throughought the house was destroyed, wood floors slashed to pieces, Solid oak front door has a giant whole sawed into it. I guess somebody was mad.

Anyway, we have an ARM mortgage now and can't get refinanced. We've had a couple of late pays in the last 12 months, so no lender will give us a convential loan until 12 months goes by that we are not late, and also because of the late pays, we don't qualify for an FHA loan. Since we're not in danger of foreclosure, we don't qualify for any of the state help that Michigan has now either.

Thankfully we can still afford our payments, but I really want to refinance.

And the reason I mentioned my mother-in-law earlier with all her credit cards and home equity loan, is because she is a poor, old, uneducated (quit school after 8th grade), black woman. I don't think her race made her a target for predatory lenders, but her age and lack of education made it easy her for to get fall for anything.

dustysgirl said:

This is happening all over the place and you're right the key is education. Not formal education per se, moreso education on what mortgages are, how they work, and all the costs associated with homeownership. Some may say that minorities were not targeted which I think is mostly true. However, like others said IMO socio-economic (class) factors probably played a larger role in why minorities and the working poor were disproportionately impacted by this fiasco.

MOST of these people had never owned a house before and relied on their realtor and mortgage broker to have their best interests at heart. They were naive perhaps but because they weren't educated about the process they placed their faith/fate in the hands of people that were in it for the commissions. There's enough blame to go around from the top to the bottom.

As for banks loosening lending restrictions the worst thing they ever did was allow folks to buy a house without ANY down payment whatsoever. This, IMO, was the beginning of the end. Saving up for a down payment shows that a buyer has some fiscal responsibility and restraint and helps prepare them for the cost of owning a house. By removing that element, I think banks did a huge disservice to all buyers but especially to those getting subprime loans. It's all a shame really.

A housing rescue nears – but for whom?

Washington - As Congress heads into a critical week of votes on how to relieve America's home-foreclosure crisis, one of the toughest issues will be how to deal with the racial and ethnic dimensions of the problem. Minorities will be watching closely to see who gets the help.

There's broad support on Capitol Hill for shoring up government-sponsored home-mortgage giants Fannie Mae and Freddie Mac: They're too big to fail, many say. But there's much less consensus over what to do about people who are losing their homes, especially in poor, inner-city neighborhoods – or even over how to understand their plight.

The racial overtones of the foreclosure crisis are taking on a higher profile as Congress wrestles with the shape of a fix this week.

At issue is a proposed $3.9 billion in block grants to help states or local governments buy and demolish or rehabilitate foreclosed properties to try to stem urban blight. The money is expected to flow to minority neighborhoods, in particular.

While there are big gaps in available data, industry analysts expect that black and Hispanic homeowners will bear the brunt of the foreclosure crisis. But is it because they overextended and should not have been in the housing market to begin with? Or were they the unsuspecting victims of predatory lending?

"Black and Hispanic families have gotten a disproportionate share of subprime lending, and subprime loans are the driving force behind the foreclosures," says Katheen Day, spokeswoman for the Center for Responsible Lending, a nonprofit research and policy group based in Durham, N.C. "We know that black and Hispanic communities are hardest hit."

Subprime loans – loans made to homebuyers with less-than-perfect credit – were responsible for a large share of the foreclosures that started last year. And minorities received a hefty share of those loans. Just over half of African-Americans and 4 in 10 Hispanics who got a mortgage in 2006 had a subprime loan, according to a 2007 analysis by the Center for Responsible Lending.

Also, the areas hardest hit by home-loan crisis are heavily Hispanic. In seven of the 10 metro areas with the highest foreclosure rates last month, they represent at least one-third of the population; in two of them – Merced and Salinas-Monterey, Calif. – Hispanics make up more than half of the population. Their rates of home­ownership are also high: More than half of Hispanic households owned their home in eight of the top 10 foreclosure cities, according to the latest census data.

African-Americans are also hit hard by the crisis, although they aren't concentrated in cities with the highest foreclosures. In only two of the top 10 metro areas – Fort Lauderdale, Fla., and Vallejo-Fairfield, Calif. – did they make up more than 10 percent of the population. Their homeownership rates also trailed those of Hispanics in all but Vallejo-Fairfield.

Still, African-Americans made up more than 20 percent of the population in metro Detroit, No. 13 on the list of top foreclosure cities by RealtyTrac, and in Miami, No. 15.

It is cities such as these – along with Cleveland, which felt the brunt of the housing crisis early – where the pressure is building for local politicians to come up with a solution.

Activist groups say this racial dimension to the problem puts a special responsibility on the federal government to relieve distress in these neighborhoods.

"The subprime lending debacle has caused the greatest loss of wealth to people of color in modern US history," says Amaad Rivera, lead author of a 2008 report by United for a Fair Economy. The Boston-based research group estimates that black/African-American borrowers will lose between $71 billion and $92 billion in the current foreclosure crisis, while Latino borrowers will lose between $75 billion and $98 billion.

"The difficulties have been concentrated in 'subprime' loans, which generally go to borrowers with limited or damaged credit, although there is evidence that some borrowers are shifted into the subprime category because they are African-American or Hispanic," said Rep. Barney Frank (D) of Massachusetts, who chairs the House Financial Services Committee, in a statement last week.

House Democrats say a new $3.9 billion federal program to help state and local governments buy up foreclosed properties would be part of the solution. The Bush administration has opposed such block grants on the grounds that "the principal beneficiaries of this type of plan would be private lenders – who are now the owners of the vacant or foreclosed properties – instead of struggling homeowners who are working hard to stay in their homes."

Still, House Speaker Nancy Pelosi said last week she doubts Mr. Bush will veto the housing-rescue package, which contains a separate provision he wants to strengthen the financial positions of faltering mortgage companies Fannie Mae and Freddie Mac. The disputed funds enable communities to buy up properties once on the revenue rolls that are now "taking the value of their neighbors' homes," she said.

Conservative Republicans worry that Democrats and the Bush administration are trying to resolve today's foreclosure crisis at too high a cost – now and in the future.

"Everyone realizes that it would be calamitous for Fannie and Freddie to fail, but give me a legislative package to ensure we're not here with a bigger bailout five years later, and I haven't seen that," says Rep. Jeb Hensarling (R) of Texas, who chairs the Republican Study Committee, the conservative wing of the Republican caucus.

In a bid to address the race-based fallout of the subprime mortgage crisis, the Federal Reserve Board is working with community groups to help stabilize neighborhoods where foreclosure rates are high. Home-vacancy rates increased sharply in 2006 and hit 2.9 percent in the first quarter of 2008, according to the US Census Bureau, diminishing the value of nearby homes and adding to the burden of local governments dealing with the fallout.

Graycap23 said:

yep AND played again since taxpayers will foot the bill for the billion dollar bailout of Fannie Mae and Freddie Mac. meanwhile, the CEO of fannie mae made what? 2 million dollars last year???!!

Graycap23 said:

Those who control the game.....got paid!

thepope2the9s said:

They always do.....on BOTH sides of the transaction.

Im seeing this happen to whites in our area as well, not just blacks.

toots said:

The author of the article was speaking from his perspective.

Graycap23 said:

I was speaking for my perspective

toots said:

I dig it.