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View Diary: Ending the Flood of Foreclosures:  Reform Financial Regulation (132 comments)

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  •  I see; you're talking about unconscionable (11+ / 0-)

    fees and practices during the life of the loan rather than fraud in the creation of the loan.


    •  Gawd forbid we actually hold (1+ / 0-)
      Recommended by:
      burrow owl

      the borrowers responsible for their decisions.

      After all, the lenders broke into their homes, held guns to their heads and forced the borrowers to sign the loan and take the mortgage.


      "Just because I don't care doesn't mean I don't understand" -- Homer Simpson

      by USAFguy on Mon Feb 15, 2010 at 08:36:55 AM PST

      [ Parent ]

      •  they didn't represent the loan they were agreeing (5+ / 0-)

        to in a very honest way...they told people who got adjustable rates that there was little chance of the rate going up...two years later the rates doubled...they also said things like..if the rates do go up we can refinance you down to lower payments...something else that ended up not to be true...people have been told for decades that one step to financial security is to own a it's hard to blame people for wanting to own a home...true more homework should have been done...but the lending practice was WAY out of control.

      •  Borrowers were dumb and irresponsible, (7+ / 0-)

        but as long as we're reality-based we have to acknowledge that and devise regulatory mechanisms to account for that fact and to mitigate the systemic harms that can come from that.  

        That said, snackdoodle was talking about shitty practices in the servicing of the loan, and I've heard enough horror stories to think s/he's right that those practices need to be policed more carefully.

        •  In fact, very few borrowers (3+ / 0-)
          Recommended by:
          opinionated, blueoasis, snackdoodle

          were "dumb and irresponsible." The first wave of foreclosures were based primarily on deceptions by mortgage brokers and steering people into ticky loan vehicles. The problem is that mortgages aren't like the old days when you went to your local bank and if you had a steady job, they would issue you are straightforward mortgage you could understand. I know I can't possibly understand my mortgage, it's so complicated (even though I do have a simple, fixed-rate, low-interest mortgage). The second wave of foreclosures here is related to job losses — and with a real unemloyment rate close to 20%, I don't see how that's the result of someone being "irresponsible."

          Stop Rob "The Job Outsourcer" Portman. Jennifer Brunner for Senate

          by anastasia p on Mon Feb 15, 2010 at 10:06:56 AM PST

          [ Parent ]

          •  No, one does have to be pretty dumb (2+ / 0-)
            Recommended by:
            USAFguy, skymutt

            to be "steered" into a product that one won't be able to afford.  That may as well be the dictionary definition of dumb.  To take the word of a mortgage lender and not read the document oneself?  Dumb.

            •  Or, if that's too harsh-sounding, (2+ / 0-)
              Recommended by:
              skymutt, snackdoodle

              then let's just say they weren't smart enough to read the documents themselves and not wise enough to get an independent person to do it for them.

              So, I'll continue to say "dumb," and when you see that you can substitute in "not smart and not wise."

              •  You would probably have to hire a lawyer (0+ / 0-)

                among all the other expenses, and would still have no way of knowing if a lawyer who was expert in real-estate deals was working for you or for the industry. There is no reason why a striaghtforward transaction like this should require expensive legal assistance. In addition, some factors of mortgage broking simply aren;t in the document, for instance, steering people into riskier or higher interest vehicles than their credit status would have qualified them for because the mortgage brokers are getting paid by how expensive a vehicle they can put a potential homeowner into. How would you EVER find that out? Here in Cleveland, it turns out that there is evidence that a vast number of minority home owners were steeered into high-interest vehicles when they would have qualified for better deals. There are now lawsuits.

                Stop Rob "The Job Outsourcer" Portman. Jennifer Brunner for Senate

                by anastasia p on Mon Feb 15, 2010 at 10:41:54 AM PST

                [ Parent ]

                •  You know what I do when I have to read a (1+ / 0-)
                  Recommended by:

                  complicated document?  I sit in front of the computer with it, and when I come to a term I don't understand, I put it into google and read until I understand it.

                  That takes work, which is probably why people don't do it.

                  That said, please note that I agree that we should start from the assumption that people aren't very bright and/or willing to work to understand mortgages, and should tailor our regulation to that assumption.  eg, I agree w/ you: we should idiot-proof this stuff.

            •  The vehicles are so complex (0+ / 0-)

              and the fast-talking mortgage brokers so slick thta you would have no idea you couldn't afford it. I know I wouldn't and I have two college degrees and an IQ of 150. I have tried to read my 38 page mortgage document and it's hopeless. I don't understand half the terms and much of it seems to be contradictory. Even a friend of mine who is a real estate agent says many things in these current documents escape her. One of the reforms I support is shortening these deals and putting them in plain English. YOU may be brilliant when it comes to understanding long, complex legal documents. Bully for you. Most of us don't and can't.

              Stop Rob "The Job Outsourcer" Portman. Jennifer Brunner for Senate

              by anastasia p on Mon Feb 15, 2010 at 10:39:24 AM PST

              [ Parent ]

          •  The alrgest number of foreclosures are not from (0+ / 0-)

            subprime loans. But people are also losing their homes because of bad book keeping practices by loan servicers. Everyone needs to check their statements because at least 80% of all homeloans have errors in billing.

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