[Rhodes22-list] Economics

[TN Rhodey]

Dave,

Although I think Bush has been a terrible President I can't begin to blame 
him for the looming housing mess.  Plus they couldn’t do anything to cool 
down real estate because that was driving the economy. Most of the sub-prime 
lending was well within the law. There were a few exceptions and these were 
huge. You may remember Ameriquest running SuperBowl ads a couple of years 
ago.. At one point they actually were the "Official Lender of the Rolling 
Stones"....pretty funny when you think about it. They suffered their second 
huge loss in a class action lawsuit (over $500 million) and shut down their 
retail division over a year ago. Basically loan fraud. Although this is part 
of the problem now it is not the real problem. Dumb ass consumers are the 
problem.

The laws that cover lending costs for the most part are HOEPA and RESPA. 
RESPA is the good faith disclosure stuff that includes the "Good Faith 
Estimate" and "Truth in Lending" that every mortgage lender is required to 
send within 72 hours of application. HOEPA covers predatory costs and APR. 
Many states have their own laws that go beyond the Federal standards. I 
don't think we need new laws. People should read their closing documents. 
All loan details are disclosed. If the loan has an adjustable rate, balloon 
payment, or negative amortization it is fully disclosed. People are in 
denial and greedy for a home they can't afford.  For the right person in the 
right market these loans make sense. For some they mean foreclosure…..buyer 
beware but we should have the choice.

Admittedly pushy lenders “sell” these loans but it wasn’t like they had to 
break any legs to get people at the closing table. Let the chips fall and 
.no bailout! For those with cash and good credit there is going to be a 
booming real estate market in a few years.

Wally

>From: "Brad Haslett" <flybrad at gmail.com>
>Reply-To: The Rhodes 22 mail list <rhodes22-list at rhodes22.org>
>To: "The Rhodes 22 mail list" <rhodes22-list at rhodes22.org>
>Subject: Re: [Rhodes22-list] Economics
>Date: Mon, 26 Mar 2007 18:54:53 -0600
>
>Dave,
>
>Our rental apartment in Beijing is currently rented, but, perhaps we could
>kick the current tenant out so you can live in a socialistic fantasy land.
>On the other hand, we demand the rent on time and we don't care about your
>whiney ass excuses.  The Chinese are adapting to capitalism and have quit
>trying to control every little nit-noy detail of  life.  That's probably a
>good approach when you have 1.3 billion (billion with a B) to worry about.
>You amaze me with your ability to discern every little persons needs in 
>this
>country and what they need to protect themselves from themselves.  Dave, I
>feel a need for a bowel movement.  Should I wipe tonight or will the 
>gubment
>take care of that for me tomorrow? If I do need to wipe, could you give me 
>a
>heads up on the density level of paper to use?
>
>Brad
>
>On 3/26/07, DCLewis1 at aol.com <DCLewis1 at aol.com> wrote:
> >
> >
> > Wally,
> >
> > While there are times I'm tempted to agree with your assessment that 
>both
> > political parties suck, I  think it's worthwhile to try  to identify the
> > problem
> > - and from my perspective, that leads straight to  Bush.
> >
> > I think there are at least 2 offices in the Dept of Treasury that have
> > cognizance over mortgage lending practices: the Office of Thrift
> > Supervision
> > (OTS), and the Office of the Comptroller of the Currency (OCC).
> > Additionally,
> > there may be offices in HUD and the Federal Reserve that are  supposed 
>to
> > regulate/oversee banks, lending,  and especially mortgage  lending ( I
> > think the Fed
> > has an Office of Bank Regulation).  I believe OTS  and OCC issue bank 
>and
> > credit union  lending guidelines, renew charters,  request legislation,
> > inspect as
> > needed, and act as a bully pulpit to be sure the  financial institutions
> > don'
> > t get too far out of line as they try to make a  buck.  Either office
> > could
> > have called a conference with lending  institutions and made it clear 
>that
> > if
> > lending practices weren't tightened  bank/credit union renewal charters
> > were at
> > risk - it's that simple.    The public (you and I), and hence I assume 
>OTS
> > and
> > OCC,  have known of  NoDoc, NINA, negative amortization, etc  loans for 
>a
> > long time.  The  OTS and OCC choose to do nothing about the sub-prime
> > lending
> > abuses - this is  not why they get paid.  I think Dept of Treasury 
>screwed
> > up -
> > surely they  saw the problem evolving, to my knowledge they did nothing 
>to
> > stop
> > it.  The  Directors of the OTS and OCC, and the Sec of the Treasury are
> > political  appointees.
> >
> > Also, if the current sub-prime/ARM mortgage issue came out of nowhere, 
>you
> > might excuse the current administration and it's appointees for being
> > blind-sided by it, but that's not the case.  The NoDoc/NINA issue
> > has  developed in an
> > industry that is prone to problems.  You may recall the  S&L mortgage 
>mess
> > (I
> > think in the 80s?) - that cost the taxpayer many  billions of
> > dollars.  Given
> > the history of problems in the mortgage  industry, I'd expect a 
>competent
> > administration to be alert and actively  monitoring the mortgage 
>industry
> > to be
> > sure it was following sound lending  practices - but clearly that is not
> > the
> > case. The current mortgage mess is  different from the S&L mess, but it 
>is
> > about
> > mortgages, mortgage companies  that are chasing profits as hard as they
> > can
> > with "innovative" products, and  oversight agencies that are asleep at 
>the
> > wheel.  There's really no excuse  for the Bush administration not to 
>have
> > been
> > aware of the developing problem,  the issues were well publicized and 
>the
> > industry has a history of  problems.
> >
> > I think the Bush administration should have been aware of the evolving
> > problem and taken clear positive action to prevent excesses - that's 
>part
> > of  what
> > the OTS and OCC directors get paid to do and it's what Sec Treas gets
> > paid  to
> > do.  I think this is just another example highlighting the lack of core
> > competency in the Bush administration.
> >
> > As I recall, the S&L bail out cost we taxpayers many 10's of billions  
>of
> > dollars.  Let's see what the sub-prime/ARM fiasco is going to cost us
> > -  it may
> > cost us nothing from the Treasury, it may just tank our net worth
> > and  trigger
> > a recession.
> >
> > JMO
> >
> > Dave
> >
> >
> >
> >
> >
> >
> > ************************************** AOL now offers free email to
> > everyone.
> > Find out more about what's free from AOL at http://www.aol.com.
> > __________________________________________________
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>__________________________________________________
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