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View Diary: Closely-Watched Court Decision Breaks Bad for Wall St. Has A Day of Reckoning Arrived? (154 comments)

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  •  When underwriters signed off (9+ / 0-)

    on sketchy subprime loan products that they knew were not even close to "best practice", I'd say the "blame the borrower" CONSERVATIVE meme is fallacious on its face.

    As is your commentary. Again.

    The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

    by ozsea1 on Wed Feb 06, 2013 at 08:19:46 AM PST

    [ Parent ]

    •  I think Blame the Borrower is rediculous (7+ / 0-)

      in most circumstances (sub-prime). It would have to be.

      I too have a serious problem with that meme:

      1. The borrower got foreclosed on. The Lender? Rewarded.

      2. They did not have to foreclose on the borrowers. (see laws that kept the country afloat, banks can do HAMP mods on their own, they saw it coming- could have done a mod, Deed in Lieu etc).

      3. Lenders are not but should be Fiduciaries

      4. I don't think any borrower would enter a loan expecting to be foreclosed on so it is safe to say they were taken advantage of. Most people want to live in a house they can afford so they can keep it.

      •  Re (4+ / 0-)
        Recommended by:
        Keninoakland, FG, Paper Cup, soros
        1. The borrower got foreclosed on. The Lender? Rewarded.
        BS. Who rewarded them and how? Where did the money to 'reward' them come from (other than possibly bank bailouts that I oppose). The borrower who was supposed to repay them now won't.
        2. They did not have to foreclose on the borrowers. (see laws that kept the country afloat, banks can do HAMP mods on their own, they saw it coming- could have done a mod, Deed in Lieu etc).
        So? The bank has a legal right to foreclose. That's all that matters.
        3. Lenders are not but should be Fiduciaries
        Fiduciary to who? The borrower? The banks weren't even fiduciaries to themselves given the massive losses involved. How do you expect banks that threw away massive amounts of money to defend the interests of their borrowers? Also, I generally am not sure I agree with the paternalistic attitude here.
        4. I don't think any borrower would enter a loan expecting to be foreclosed on so it is safe to say they were taken advantage of
        "I don't think any business goes into business to lose money, so it's safe to say they were taken advantage of."

        Sometimes things just go south. It sucks, but it happens.

        Homeowners who bought in 1995 and sold in 2005 made massive profits. Were they crying in their beer about how awful the bubble was?

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Wed Feb 06, 2013 at 09:36:26 AM PST

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        •  Seriously? OK (0+ / 0-)

          1. Who rewarded the Lenders?
          The system was stacked. I am sure they made gobs of money. I am not talking about your average good borrower, I am talking about when banks started looking for the guy who holds a cup on wall-street to package a junk asset and win either way. Yes they got bailed out. No they didn't go to jail. If you sold junk bonds like that the FBI would be on your ass. At worst it was a zero gain at the end for the Lender but during they made hand over fist and probably still do.

          2. They didn't have to foreclose- you say it's a legal right. True- would you prefer that if that were to happen again they do and sink AIG? I wouldn't I'd rather they in-house modify and take care of their stuff instead of assume they will make money now betting they lost in the what 60 billion dollar collection industry? My point is yes you may have a legal right- but I don't tell every client to sue because someone broke a promise- better to work it out, especially when you are going to crash the economy. Seriously? That's like saying everyone signed a note due tomrrow for 1 million dollars. Every American. None of us can come up with it. The past 20 years they extend it. They decide not to. They bet against us paying. They call Every American's note in. Do they have the legal right? Sure if we breached. Should they HELL NO?

          3.) Borrowers even before this mess have argued this and I see no reason why they should not be. I am a fiduciary to my client, an accountant is. If Lenders had a Fiduciary duty this would not have happened because they would have breached that duty and each been absolutely burned and continue burning. The Frank-Dodd act already gives some uncertainty as to brokers, I think it safe to say experts guiding how you pay for your (for many) biggest asset should owe you a duty of the utmost good faith. Why shouldn't they? They'd still make money? Do you work for a bank? I am a fiduciary someone comes in and shows me two loans I am in a position where I have to tell them or advise them of the truth. Why the hell wouldn't a lender be? What happened exemplifies exactly why they should . . . because it wouldn't happen.

          4.) My point was implicitly I don't think someone on unemployment goes to a bank thinking "I am going to get a 300k house today". So I am not looking at him, if he is a banker maybe, but most are UNSOPHISTICATED, enter fiduciary duties that SHOULD apply and I hope are pressed as extensions of law.

      •  Borrowers sign contracts with lenders. Why (2+ / 0-)
        Recommended by:
        Sparhawk, Paper Cup

        shouldn't they be responsible? Or do you think that everyone is such an idiot that they can't possibly understand what they are signing?

        •  They have gotten so good at writing contracts (4+ / 0-)
          Recommended by:
          cotterperson, BYw, Woody, lostinamerica

          that not even a team of the best lawyers in the country can understand them in many cases.

          You have watched Faux News, now lose 2d10 SAN.

          by Throw The Bums Out on Wed Feb 06, 2013 at 01:19:40 PM PST

          [ Parent ]

          •  Then people shouldn't sign them. (2+ / 0-)
            Recommended by:
            Paper Cup, soros
            •  The problem is that the contract will appear (5+ / 0-)

              to say one thing but thanks to clever wording actually end up meaning something completely different.  That used to be considered theft by fraud, scheme, or device to deliberately make a deceptive contract but I guess that is just the way it is nowadays.

              You have watched Faux News, now lose 2d10 SAN.

              by Throw The Bums Out on Wed Feb 06, 2013 at 04:43:06 PM PST

              [ Parent ]

              •  Sorry I was the ONE attorney in (1+ / 0-)
                Recommended by:
                FG

                a Commercial loan to spend 10 hours going through about 1000 pages to figure out that someone should not have been foreclosed on.

                Back in the day you had an argument. We inherited that idea. That you had equal bargaining power. You don't like the terms, you go elsewhere. Today? Not so much. They are what the law calls Adhesive. You are stuck with it because nomatter what you'll get the same. . . .

                Even if you're taking out a 20 million dollar loan you have no bargaining power.

                You think anyone actually reads everything they sign? Another fallacy the law should do away with.

                Bargaining power is flat out not what we have from English Common Law.

                Can you go into Macy's even and say "I think this shirt is worth 1/2" I'll take it? That's the idea those contract principles are based on. And that they'll listen not laugh. Maybe in 1812, not in 2013.

              •  It does happen. But most of the time the contract (0+ / 0-)

                terms are fairly clear. If you have a balloon loan, you can see it. People just thought they would flip a house a few years later.

          •  Then don't sign it (2+ / 0-)
            Recommended by:
            Sparhawk, soros

            It's as simple as that. You want to absolve people for being too stupid to understand what they're signing, and foist the blame onto someone else? Seriously?

            •  So only the rich and (9+ / 0-)

              those who are capable of reading legal documents designed to be confusing to the layperson are allowed to buy homes? How very American of you.

              "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

              by bryduck on Wed Feb 06, 2013 at 03:23:21 PM PST

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              •  You don't get it (0+ / 0-)

                If you don't understand what's written in a document, ask for clarification. That's why people hire lawyers. And if some of these people didn't have the good sense to engage an attorney for advice on the "confusing" words.... well I won't go so far as to say they got what they deserved, but yeah, it's a possibility.

                •  Ok, so only the rich. (0+ / 0-)

                  I don't know anybody of less-than-serious wealth that can afford to hire a lawyer unless they are faced with prison, and even then, most people get a PD. And how very presumptuous of you to think that people didn't/don't "ask for clarification--most likely from "their" agent, who has not one iota of incentive to dissuade anyone from paying their commission.
                  Buying a house/piece of land is the central facet to "The American Dream", and restricting it in any way other than the cost of the house/land itself runs counter to our nation's entire history.  You don't get it, I'm afraid.

                  "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

                  by bryduck on Thu Feb 07, 2013 at 09:12:00 AM PST

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            •  You appear to have no problem with contracts (4+ / 0-)

              written in such a way to appear to say one thing but mean something entirely else then.  I don't know about you but I consider that fraud when you deliberately design a contract just so you can twist the wording later.

              You have watched Faux News, now lose 2d10 SAN.

              by Throw The Bums Out on Wed Feb 06, 2013 at 04:42:09 PM PST

              [ Parent ]

              •  Not at all (0+ / 0-)

                The contract means exactly what it says. If there are hidden traps in there then the responsibility to recognize that fact rests CLEARLY with whoever is asked to sign it. Blindly accepting the other party's explanation of terms and the fine print is a recipe for disaster in ALL contracts.

                People who don't hire a lawyer to scrutinize these binding multi-year obligation contracts are just asking for trouble. It appears many of them found it.

                Nobody put a gun to anyone's head and said, "Sign it." I'm sorry, I have little sympathy for people who don't have the common sense they were allegedly born with.

                •  You don't get it. It is entirely possible to bury (0+ / 0-)

                  traps so well that even the best lawyers won't be able to find it even if they are looking for them.  Oh, and don't forget things like invisible ink or the digital equivalent using Javascript code and such to change a contract (as a PDF file) based on pre-calculated md5 collisions so that it can be "edited" later without invalidating the digital signature.

                  You have watched Faux News, now lose 2d10 SAN.

                  by Throw The Bums Out on Thu Feb 07, 2013 at 05:50:47 AM PST

                  [ Parent ]

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