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View Diary: Rubio's big lie: Government created the housing crisis (85 comments)

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  •  I believe that the Housing Crisis (3+ / 0-)
    Recommended by:
    annominous, Mr MadAsHell, JerryNA

    was caused by greed and stupidity, about 50-50%.

    The banks were obviously greedy.  They loaned money on a large scale to people who had no verifiable way of ever paying it back.  "They" didn't care, because "they" were the individuals that were getting commissions and bonuses for their metrics of selling loans.  For the most part, they would have their money and be moved on before the shit ever hit the fan (as far as they knew).  I watched a lot of people, who I know could not afford their houses, buy houses that they shouldn't have been approved for.  This is clearly the banks' fault.

    The buyers bare 50% of the responsibilty for this as well.  They sell cigarettes.  They warn you that they can kill you.  But, it's up to you to decide whether you are dumb enough to light up.  I believe that people have a responsibility to know what they can and cannot afford.  Admit it, deep down, we all know.  I know that I can't afford a $100,000 Mercedes S-Class,...but I could get approved for the payment, and the dealer will sell it to me.  Who's fault is that if I buy it?  Those buyers, who took on ridiculous junk-terms mortgages had to know deep down that they couldn't really afford it.  But, they went into denial, and rationalized that if their neighbor up the street could do it, so could they.  This phenomenon was never worse than in CA, FL, and Las Vegas, paradises where everybody has to keep up with the Joneses.

    And, don't tell me that these people were uneducated, naive, or "taken advantage of".  All had the terms of their loans explained to them (ever been to a closing?), and lit up anyway.  In fact, it's not really poor, undereducated, vulnerable people who were losing their homes who's deflated property values blew up the market.  It was middle and upper-middle class people who did it.  The market can survive a lot of $90,000 purchases suddenly being worth $50,000.  What it can't survive is a lot of $1,000,000 purchases suddenly being worth $300,000.  Poor people weren't buying $900,000 condos in Las Vegas, I  don't care what mortgage terms were offered.

    As for Rubio, I actually thought he did very well for the first half of the speech. He seemed to get off schedule, and start to rush about midway through.  That caused him to get nervous and sweat and have to take a drink.  But, on presentation, he seemed sincere and earnest.  His speaking style is A LOT better than McCain, Romney, or Ryan.  And, he has that middle class immigrant back-story for cover.  He's still a relative rookie on the national stage.  I expect that if they keep him front and center for the next three years, he'll get better and the nervousness will be gone with time.

    That said, the idea that Fanny and Freddie and forced loans to minorities alone caused the crisis just doesn't hold water, no matter how nervous or sweaty you get.  

     

    •  ARMs and no interest loans were pushed (2+ / 0-)
      Recommended by:
      Russycle, JerryNA

      People could afford no interest loans or 5 year arms and they were told they were financially savvy to take out such loans.  For most people it was not greed.  It was the desire to own a home. They followed the wisdom being spewed on the financial talk shows.  The common wisdom at the time was “oh…most people only own their first home for seven years so take out a no interest loan and let the house appreciate. When you sell in five years you can take all the appreciation and put it into your next house.  The market always goes up.”  Remember all the house flipping shows.  Most people thought that house prices would never fall so if you got into trouble you could just sell.

      While I am sure some people were greedy most people were living within their means at the time of purchase.  They could make an interest only payment on time every month.  

    •  I agree about Rubio... (1+ / 0-)
      Recommended by:
      JerryNA

      He did OK at first, lying like a dog but doing it well, then kind of jumped the tracks.

      Not so much about the mortgage thing.  Everyone wants to own a home, and when wages are flat but home values rocketing, the longer you wait to get in the worse off you are.  So when a nice, smart person offers you a plan to get into a house and use its ever-increasing equity to help you afford it, it isn't greedy or stupid to take them up on it, especially if everyone else is doing.  Most of us are amateurs when it comes to home buying, when the pros are telling you this is how it's done, what do you do?

      Sure, in hindsight it's easy to blame the buyers, but they got sold a bill of goods by an aggressive, well funded machine.  I'd lay the blame 90/10, the bankers knew exactly what they were doing, that's why they sliced and diced the mortgages and sold them off.

      I don't know what's been trickling down, but it hasn't been pleasant---N. Pelosi

      by Russycle on Wed Feb 13, 2013 at 10:25:01 AM PST

      [ Parent ]

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