The first legislative crackdown you'll soon see in the US will be against toxic loans and unregulated mortgage clerks, which by the time our bought-and-sold-NAR/NAHB-purchased-Senate gets around to it will be a moot point anyway, because the market will already have taken care of the issue by cutting off access to funds.
For the housing wonks out there, here's Sen. Sarbanes laying it on the line against predatory lending in this video which preceded the economist panel discussion I posted earlier.
For the housing wonks out there, here's Sen. Sarbanes laying it on the line against predatory lending in this video which preceded the economist panel discussion I posted earlier.
You know the NAR and NAHB must be plenty pissed their $$$ haven't shut him up, being the #1 and #4 Senate PAC contributors last year. Maybe he didn't get his check in the mail?
Bottom line folks is that corrupted mortgage brokers steered clueless and greedy homedebtors into toxic loans to earn bigger commissions, when those homedebtors would have been much better off with a different debt instrument, namely the 30-year fixed (which if you remember Greenspan told people to get out of too.. hmmm...).
Those toxic loan proceeds then helped drive up home prices to insane levels, and now the loan holders will default to the tune of over $1 Trillion, leaving the bagholders (China, hedge funds, etc) of the commoditized loan bundles in a world of hurt, and the prices of US homes collapsing to pre-bubble levels.
Too bad the Senate didn't get involved when it could have helped. Instead they're the CSI team showing up to zip open the body bag and start the investigation.
Bottom line folks is that corrupted mortgage brokers steered clueless and greedy homedebtors into toxic loans to earn bigger commissions, when those homedebtors would have been much better off with a different debt instrument, namely the 30-year fixed (which if you remember Greenspan told people to get out of too.. hmmm...).
Those toxic loan proceeds then helped drive up home prices to insane levels, and now the loan holders will default to the tune of over $1 Trillion, leaving the bagholders (China, hedge funds, etc) of the commoditized loan bundles in a world of hurt, and the prices of US homes collapsing to pre-bubble levels.
Too bad the Senate didn't get involved when it could have helped. Instead they're the CSI team showing up to zip open the body bag and start the investigation.
13 comments:
Where the hell where these lawmakers 2 years ago? This is so ridiculous.I can see these brainiacs killing the housing market with more bullsh@t legislation.Let the market play out.
Unfortunately, the government is never proactive, it is only reactive.
When the hearings begin on the hill then I suspect housing will take a bigger hit as the fallout finally makes the MSM.
Where's my share of this $1 trillion?!
F*ck! Every time there is a good scam, I'm just too late.
Gotta go invent the next Beanie Baby so bored housewives will have something to do with their husband's money, like put it in my pocket.
I'll sell stuffed animals made in China for 4 cents and sell them for $4 here!
Of course, the default on, say, one trillion dollars worth of loans does not mean a loss of one trillion dollars. The underlying properties are still there to take back and resell for something, even as housing values decline and it costs money to restore and resell the properties. So, perhaps, defaults on that much in loans will probably not cost more than a mere half a trillion dollars or so. Half a trillion in fiat-electronic-dollars disappearing and deflating the money supply. Sounds nice to me...at least until Bernacke starts dropping all those dollars from helicopters to try to bail out the debtors. Hmmm, would the deflation all be in dollars? Or possibly also in some foreign currencies of the countries of the citizens who purchased the mortgages? Probably a mixed bag, but foreigners probably mostly used their piles of dollars to purchase with. Hard to tell with all the foreign held dollars and dollars credits used to inflate other currencies.
They need to regulate the appraisers most of all. Maybe make a pool where appraisers are randomly chosen so that the mortgage broker and realtor has no contact with the appraiser.
It's all just talk for sheeple consumption. Congress doesn't have any power or backbone. Anything they do will only make things worse. Let them make their windbag speeches, nothing to worry about, CONgreffs works for the banker man, you think they're actually going to do anything to help people who don't have enough money to bribe them?
Right, that Securities Act of 1933 really killed off the stock market permanently.
Politicians only have to appear to be "doing something" about the housing crash. Due to the ignorance of the public, actually doing anything helpful is unnecessary for re-election.
hey kieth,
You need to focus your hate on the corrupt real estate appraisers more than the realtors.
Without their complicity, the entire scam comes to a screeching halt.
focus on the appraisers? Hell, they are all in bed together. The whole industry.
The only whistleblower I have seen so far from the industry was an appraiser on a Realtors blog. He called them out so hard that I am surprised that they havent deleted the comment or the whole thread in fact.
They are leaving smoking guns all over the internet for the astute observer to see. Most people aren't looking though.
To all anon posters re: appraisers
Appraisal fraud is indeed a problem however it pales in comparison to the amount of fraud in the no doc, no money down, toxic loan swindle. Countrywide has closed a few branches here in SoCal based on the amount of NOD's emanating from them.
The banks buying mortgages from loan broker shops were complicit with the inflated values. They employ or sub contract "staff appraisers" whose job it is to sniff out the BS. In an area like So Cal (tract homes, high density) it is not difficult to see inflated value versus true comparables. The banks knew what they were getting in most cases and just wanted the fees, origination's, etc. ,and all was well on the ride up. They are now reaping what they've sowed. How about the "buyers" agents that let their clients put in offers $35k -75k over the recently closed com parables? These useless used house salesmen are returning their Benz leases by the droves - check out Fletcher J's deals on lease returns now.
The early to mid nineties will seem like a boom compared to what is coming down the road this time!
NAR Honors Maryland Senator Paul Sarbanes as Legislative Leader
http://www.mdrealtor.org/govaffairs_sarbanes.asp
"Since his first day on the job, Senator Sarbanes has been deeply committed to virtually every legislative issue that affects REALTORS® and has relentlessly championed the best interests of homebuyers and consumers. His efforts have made homes more affordable for millions," said Adam Cockey, MAR president
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