BS: Sub-prime lending

Subject: BS: Sub-prime lending
From: Riginslinger
Date: 27 Mar 07 - 10:24 AM

Has anyone considered what the combination of last years bankruptcy legislation and this years foreclosure on people with sub-prime mortgages is going to be?

Subject: RE: BS: Sub-prime lending
From: Amos
Date: 27 Mar 07 - 10:26 AM

No going to about it. There are foreclosures popping up all over the place and major lending firms going down because of the sub-prime lending orgy.

In another three to six months or so you will be able to make plenty of dough off these poor bastards, if you want to, by buying up foreclosure REO from banks.

A

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 27 Mar 07 - 10:59 AM

The thing that got me wondering was, now that the people who are squeezed out can't file bankruptcy, it looks to me like the lender can just sell the property in a "distressed sale" situation, and the exact a judgement for the balance against the original buyer.
       That buyer will be stuck with the balance, because all he/she will be able to do is file a Chapter 13 reorganization, and make payments for the rest of his life to the lender. He'll never be able to buy or do another thing until that's all paid off.

Subject: RE: BS: Sub-prime lending
From: heric
Date: 27 Mar 07 - 11:24 AM

And he should pay it off.

Subject: RE: BS: Sub-prime lending
From: artbrooks
Date: 27 Mar 07 - 11:32 AM

According to this, a person isn't required to get into the Chapter 13 process unless his income is over the median for his state. I guess I can sympathize, but it seems to me that you shouldn't borrow money unless you can afford to pay it back.

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 27 Mar 07 - 12:14 PM

Okay, but the people pulling the strings, that is the folks who led the borrower into the trap of a sub-prime mortgage, are the same folks who are now manipulating the market to put him into an unescapable bind. It looks like entrapment to me.

             I guess it just seems like one more disaster brought on by the insanity of "supply side economics."

Subject: RE: BS: Sub-prime lending
From: Amos
Date: 27 Mar 07 - 12:51 PM

Pulling the strings? A borrower who fails to read the fine print, fails to stay within his means, and fails to know what he is signing is not having his strings pulled. He is blinding himself with false hope. It is an historic fact of life that borrowing entails risk, and often entails shady operators; no-one in their right mind would fail to be alert for these things.

Unless he is explicitly told false information about the terms, and the falsity is documented, he has no case against those who persuaded him. The first obligation of any buyer or consumer is to be proof against blandishment. That's the 21st century equivalent of the law of the jungle. No-one who is selling something, whether a loan or a whizzbang gewgaw, is under any code that says he must care for the buyer as he would care for his brain-damaged little sister.

A

Subject: RE: BS: Sub-prime lending
From: GUEST,whathisname
Date: 27 Mar 07 - 01:06 PM

Americans have been duped into overborrowing. The stocks listed on the stock exchanges are hand-picked winners, so those numbers are always optimistic; food and fuel were removed from inflation calculations after the highly-inflationary Carter administration; television tells you the economy's just fine, dandy and growing. So people take out a second mortgage without knowing their jobs are about to be outsourced to India and their pension funds raided. One of the U.S. Senators demanded an investigation a while back, but he was stonewalled by his criminal colleagues, so there won't be any investigations and no legislation to change things, it seems. The govt benefits from having debt slaves, so the govt will allow the practices to continue. Gotta fill those prisons somehow, and simple debtors will make better workers than psychopaths.

The sub-prime situation is going to lead to 2-3 million evictions over the next year, I think I remember reading.

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 27 Mar 07 - 02:21 PM

"Guest, what... --I think that was what I was trying to get at, but you stated it better.

         What happens now, to those 2 to 3 million families? The lucky ones will be illegal immigrants, and can just go back where they came from. The others will be working for the company store for the rest of their lives.

         I think the people who championed the pro-capital bankruptcy legislation were well aware of the fact that they were going to spring this trap after they got the bankruptcy thing in place.

Subject: RE: BS: Sub-prime lending
From: Donuel
Date: 27 Mar 07 - 03:30 PM

On the bright side, its a wonderful time to be a foreclosure bank manager or a bankruptcy lawyer!

They will be able to buy that extra vacation home AND a new yacht.

Subject: RE: BS: Sub-prime lending
From: GUEST,meself
Date: 27 Mar 07 - 03:36 PM

AND they won't have to borrow!

Subject: RE: BS: Sub-prime lending
From: Donuel
Date: 27 Mar 07 - 03:51 PM

Riginslinger,

Thats the beauty of a think tank that can organize the legislators and write the law for their corporate clients.

Its like one stop shopping for world class crooks.

Subject: RE: BS: Sub-prime lending
From: GUEST,heric
Date: 27 Mar 07 - 03:59 PM

I have paid off massive debt (from hospital bills), debt which set me back a decade or more. Without it I could probably have lived a lifestyle like Donuel's. Now I sit amidst a ridiculous housing bubble generated by greed all around me. Greed of rich people getting richer; greed of the less creditworthy looking to get rich. All setting house prices beyond what I will risk to live in a "normal" home. When the bubble deflates, I will get hit in the generalized recession. I'm not crying about it - but I will continue to pay my debts while many other people who wanted to be rich sing the blues. Our society is bloated and spoiled by excessive credit. Our grandparents would be ashamed of us.

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 27 Mar 07 - 04:38 PM

Donuel -- I agree with all of your comments.

And Guest,heric--I guess it depends on what period your grandparents lived in. It looks to me like we have been re-creating the 1920's.

       Tomorrow is October 28th, 1929.

Subject: RE: BS: Sub-prime lending
From: Stringsinger
Date: 27 Mar 07 - 06:05 PM

A meltdown of our economy and perhaps an ensuing depression. The US is overextended.
The sub-prime defaults are growing and sending shock waves that reach Wall Street.

Tighten your belts, folks, it's going to be a bumpy ride.

Frank Hamilton

Subject: RE: BS: Sub-prime lending
From: Richard Bridge
Date: 27 Mar 07 - 06:48 PM

I don't understand how any society could have blocked the route to personal bankruptcy. Particularly a society that created Chapter 11 so that corporations could swindle creditors and licensors.

Subject: RE: BS: Sub-prime lending
From: artbrooks
Date: 27 Mar 07 - 07:15 PM

The "route to personal bankruptcy" has not been blocked. It has just had a few big orange cones put in the middle of it in order to make it more difficult and less attractive.

Subject: RE: BS: Sub-prime lending
From: GUEST,meself
Date: 27 Mar 07 - 07:42 PM

Attractive?

Subject: RE: BS: Sub-prime lending
From: Bobert
Date: 27 Mar 07 - 07:43 PM

There is little doubt that the Republican bankruptcy bill has set back the working folks in this country... It was a terrible piece (of sh*t) bill that was tilted in favor of the fat cats who make big donations to the Republicans....

I was not aware, however, that it contained "deficiency judegments" as part of real estate mortagages... If that is true then there are gonna be a lot of folks hurting worse than just losing their homes because these folks will be paying for losing their homes for perhaps the rest of their lives...

But, like I said, I'm not positive that the deficiency judgment is attached to mortagages... It didn't use to be but then again lenders didn't use to take on such high risk mortgages...

Bobert

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 27 Mar 07 - 07:53 PM

I don't think "deficiency judgments" have anything to do with the bankruptcy bill. They've always pursued deficiency judgments since I've been involved in mortgages out on the west coast. It might be different in other places. I just assumed it was the same every place.

Subject: RE: BS: Sub-prime lending
From: Bobert
Date: 27 Mar 07 - 08:00 PM

Well, this is where I must plead ignorance, Rig.... I've kinda alsways felt, but didn't know, that defiecincy judgments were a state thing and not a federal thing??? I know that Reg Z (Truth in Lending) is federal...

Still not too sure how the lousy bankruptcy bill passed a couple years ago ties into the sub-prime loans or forclosures???

Need more info...

Bobert

Subject: RE: BS: Sub-prime lending
From: GUEST,whathisname
Date: 27 Mar 07 - 08:07 PM

The old-timers I know are dazzled by their "wealth," and they're spending like everyone else. Seems they've forgotten the depression. Sad. The piece of property I bought 2 years ago has now doubled in market value. It's not worth more, the dollar's worth less.

The old ones try to reassure me that "during the depression, the banks didn't want the property back. They just wanted people to pay the interest on the loans." May be, but that's not the way it is now.

Subject: RE: BS: Sub-prime lending
From: Rapparee
Date: 27 Mar 07 - 08:36 PM

Consider those with decent credit who took out "interest only" mortgages. Pay the interest only, defer the principal. Those chips are going to be called in also.

Then, if China decides that IT wants the money back that it's lent the US the EU will also want to cash in while it can...

...and the US goes bankrupt. Not even the money to help the poor slobs who've been evicted because they were "sub-prime" borrowers, or those who can't pay the principal AND the interest now due on their mortgage.

What happens when an entire nation can't pay its bills?

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 27 Mar 07 - 09:32 PM

"'The old ones try to reassure me that "during the depression, the banks didn't want the property back. They just wanted people to pay the interest on the loans." May be, but that's not the way it is now.'"

       For those of us who got our education about the Great Depression by reading "The Grapes of Wrath." That's not the way it was. They wanted the property because if they could consolidate all of the little farms into big farms, they could attract some Donald Trump kind of guy who could buy them up for pennies on the dollar, and that would be enough to keep the bank(s) solvent.
       Of course, that's not the way it worked out. The Trumpesque people ended up with the land, and the banks went broke anyway.

Subject: RE: BS: Sub-prime lending
From: GUEST,meself
Date: 27 Mar 07 - 09:37 PM

My mother told me plenty of stories about relatives and neighbours being thrown off their farms, and the farms standing empty and unfarmed for years ...

Subject: RE: BS: Sub-prime lending
From: heric
Date: 27 Mar 07 - 09:39 PM

. . . the banks went broke anyway.

Yes, this will be very different than a simple-minded scenario of "rich screwing the poor" who just wanted shelter.

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 27 Mar 07 - 09:53 PM

"My mother told me plenty of stories about relatives and neighbours being thrown off their farms, and the farms standing empty and unfarmed for years ..."

    meself--was any explanation offered as to why they did this? Did somebody benefit?

Subject: RE: BS: Sub-prime lending
From: GUEST,meself
Date: 27 Mar 07 - 10:31 PM

I asked my mother the same thing. She said the banks just kept thinking there would be somebody else to buy the farms. I don't know if she fully understood it herself ... But now that I think about it, maybe it was to make object lessons of those who couldn't pay their mortgages - "If you fall too far behind in your payments, this is what will happen to you." If that was the idea, it worked to some extent - my mother talks about the desperation in the way the family - particularly her father - worked during the Depression years, to keep from losing the farm - a threat that was always hanging over their head, and, as I say, something they saw happening to the people around them. She said that her father emerged from the Depression with a kind of bitterness that had not been there before. He had become involved in politics, and though did well for himself in the ensuing years, and was by no means a leftie, he always harbored a resentment for the city slickers, whom he collectively associated with the bankers and lawyers who had seemed to make the farmers' lot so tough during the Depression.

This was in Prince Edward Island.

Subject: RE: BS: Sub-prime lending
From: Rapparee
Date: 27 Mar 07 - 10:55 PM

In Illinois a resentment against banks and Republicans lasted for years. "The Democrats care about the working man," was the mantra I was brought up with.

Subject: RE: BS: Sub-prime lending
From: Ebbie
Date: 28 Mar 07 - 12:49 AM

Tonight NBC News did a piece on the issue, detailing mostly what is already happening in Ohio. Maybe Catspaw will come along and give us more information.

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 28 Mar 07 - 07:50 AM

meself--that's an interesting story, an angle that hadn't occurred to me.

Subject: RE: BS: Sub-prime lending
From: Richard Bridge
Date: 28 Mar 07 - 06:50 PM

So, heric, what's the skinny on this "reform" of personal bankruptcy law?

Subject: RE: BS: Sub-prime lending
From: Becca72
Date: 28 Mar 07 - 07:00 PM

"that is the folks who led the borrower into the trap of a sub-prime mortgage"


These people weren't misled into borrowing in the sub-prime market...that's all they qualified for because of poor credit ratings. Had they waited, improved their credit and saved a solid 20%down payment they would have qualified for a conventional loan and wouldn't be in the trouble they are. I'm not sure if you're confusing "sub-prime" with "adjustable-rate" mortages.   The brokers and Loan Officers SHOULD have advised all these people how to buy a house correctly, but they aren't going to turn anyone away who say "I want it NOW" and the American people love instant gratification. The real estate law office I used to work in was doing almost as much business performing foreclosure sales as they were regular sales when I left in January.

Subject: RE: BS: Sub-prime lending
From: Greg F.
Date: 29 Mar 07 - 09:33 AM

Americans have been duped into overborrowing...

Duped?

The brokers and Loan Officers SHOULD have advised all these people...

The BROKERS should have advised them???

Here's someone making $1800 a month, who has somehow managed to rack up
$100,000 in Credit Card debt, who goes & refinances his mortgage to the tune of a payment of $2,000 a month.

What ya got here is IDIOTS, not dupes.

Its an unfortunate situation, but c'mon.

Subject: RE: BS: Sub-prime lending
From: Alaska Mike
Date: 29 Mar 07 - 10:44 AM

For the past 4 years we have been debt free. No mortgage, no car payments, no finance charges, no interest paid out to any entity in 4 years. This has allowed my wife and I to take several fabulous vacations, buy new computers and other toys whenever we want, produce my own music CDs and has reduced our overall stress levels considerably.

Last fall I suffered a major health crisis, but fortunately, our insurance paid almost all of the half million dollar plus bills that insued. We continue to put money aside into various CDs, savings accounts and investments so that when retirement arrives in 3 years, we can leave the working world forever.

I realized many years ago that debt is the modern form of slavery. No one can be free to do the things they want to do if they owe money. I have tried to instill these habits in my 5 children with mixed results. It always amazes me to see so many advertisements for credit cards, 2nd mortgages, and other means of going into debt, but no commercials that try to instill thrift or saving money for a rainy day or waiting to buy something until the time you can afford it.

Mike

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 29 Mar 07 - 11:14 AM

"Last fall I suffered a major health crisis, but fortunately, our insurance paid almost all of the half million dollar plus bills that insued."

          But what it you hadn't had insurance, or like the people in New Orleans, the insurance company simply refused to pay, and you weren't able to put together a "financial war chest" with enough money to sue them, or, like many of the modern pension funds, the company just said, "Sorry, we're broke. We just paid our CEO 150 million dollars and there's nothing left over for you?"

Subject: RE: BS: Sub-prime lending
From: GUEST,meself
Date: 29 Mar 07 - 11:27 AM

About five minutes ago, a financial analyst was on a regional radio program out of Charlottetown, PEI, warning about sub-prime mortgages, talking about people in the region having lost their homes ... Then another talking head came on saying that so far it hasn't really been a problem here, and has enabled some people to buy homes ...


???

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 29 Mar 07 - 01:10 PM

And there is a headline on Yahoo announcing that the foreclosure epidemic is hitting $1,000,000.00 homes as we write.

Subject: RE: BS: Sub-prime lending
From: Donuel
Date: 29 Mar 07 - 01:35 PM

"donuel's lifestyle"? maybe you mean bobert :)

We may not have a mortgage but everything else is month to month just like 98% of the working poor. Putting off a new car or putting off extensive dental work as well as skipping vacation trips is part of our new downsized American middle class experience. True enough we feel fortunate to have a little split level in the DC suburbs which if sold could cover the cost of a mansion in Ohio due to the ridiculously inflated prices here.

Everyone in the US middle class is just one huge medical bill disaster away from bankruptcy or even worse...foreclosure.

I think it is fair to say that over 90% of Americans are completely ruined after 30 to 100 days without any income.

--------------------------

As for the looming 2 to 3 million foreclosures - not all of those are families, many of them are apartment/condo speculator properties...
so while it is bad, its not as bad as 3 million families tossed out on the street.

Subject: RE: BS: Sub-prime lending
From: GUEST,heric
Date: 29 Mar 07 - 02:14 PM

Hi Richard:

I don't know much about it, of course (I need a thread on reinsurance). However, the reform act (google "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" or simply "BAPCPA"), is very large. It has been in place for more than a year without making front page news since then. It looks generally as one might expect creditors' organizations to lobby from the Bush administration. As people have said above, fewer people will be allowed to file Chapter 7 liquidations and more will be forced to file Chapter 13 and propose repayment plans from future earnings for a minimum of five years. The thing is very large, but here are some highlights of interest:

The most interesting part to us here is the effect on principal residence (and loss thereof), but I haven't found a lot about the subject. What I do see is that debtors may elect the state homestead exemption in the state in which they have lived for the approximately 2 years immediately prior to a bankruptcy filing. Regardless of the level of state exemptions, the debtor may only exempt up to $125,000 in monetary amount in a homestead that was acquired within the approximately 3 years and four months prior to filing. However, as to secured property generally, and potentially very important here (I don't know), debtors may no longer retain secured property without reaffirming the debts owed to secured creditors which are secured by the mortgaged property.

More generally, the Act requires debtors to seek consumer credit counseling before they can file for bankruptcy. (In order for the court to grant a Chapter 13 discharge to an individual, the debtor must not only make all payments required under his or her plan, but also must complete an educational course on personal financial management.) It imposes responsibility on bankruptcy lawyers to engage in meaningful "due diligence" investigations into their clients disclosures. (The cost of filing will increase.) The debtor's income will be subject to a two-part "means" test. First, the debtor's income will be compared to his or her state's median income; if it is above the state's median income, then the debtor is facially ineligible for Chapter 7 relief. The second test is a "needs" test - to determine how much the debtor needs to deduct from his net income as reasonable living expenses to arrive at an amount of "disposable income" with which the debtor may fund a Chapter 13 plan. If the disposable income is above a certain amount (in accordance with the specific situation), the debtor does not qualify for Chapter 7 discharge relief and can only file a Chapter 13 repayment case.

It is now easier to file a motion to dismiss for "abuse" of the bankruptcy system (and easier to have your particular claim exempted from the automatic stay of such proceedings in other courts). A trustee or creditor is permitted to bring a motion to dismiss for "abuse" if the debtor's income is above the state median. The presumption of abuse may only be rebutted by demonstrating special circumstances, such as a medical condition, and documentation of extraordinary expenses, together with a detailed explanation of the special circumstances that make the extraordinary expenses reasonable and necessary, or where the debtor can demonstrate that his or her "disposable income" does not meet the "needs" test: the debtor cannot produce sufficient "disposable income" to pay the lesser of $10,000 or 25% of his or her general unsecured claims (but no less than $6,000).

Lawyers cannot advise a debtor to incur more debt in contemplation of bankruptcy.

One may not file a new Chapter 13 bankruptcy case within four years of obtaining a discharge in a Chapter 7 bankruptcy case, and may not file a new Chapter 13 case, if an old Chapter 13 case was filed within the two previous years. A debtor may not receive a discharge of a new Chapter 7 bankruptcy case, if he received a discharge in a prior Chapter 7 or 13 bankruptcy case within the prior eight years.

Certain debts that were broadly discharged in Chapter 13 have now been excepted from such discharge. These include taxes for returns that were never filed (or were filed late), child support and alimony, student loans, and damages for drunk driving.

The number of consumer debts not subject to a Chapter 7 discharge has been expanded. For instance: non-support domestic debts, e.g. from community property separation agreements; student loans have been extended to cover loans made by for-profit and nongovernmental entities; debts incurred to pay non-dischargeable taxes, as well as to pay fines or penalties under federal election laws; assessments owed to homeowners associations; and debts owed to tax-qualified retirement plans.

The automatic stay which arises upon the filing of a bankruptcy petition will no longer prevent a landlord who has a pre-petition judgment of possession from evicting a debtor who fails to pay the rent due within 30 days after the bankruptcy is filed.

The debtor must remain current on all domestic support claims after filing a Chapter 13 bankruptcy case. Failure to remain current on such support claims may result in dismissal of the case.
----------------------------

>>>>>As for the looming 2 to 3 million foreclosures - not all of those are families, many of them are apartment/condo speculator properties...
so while it is bad, its not as bad as 3 million families tossed out on the street.<<<<<<<<<<<<<<<

Agreed. There are a lot of low(ish) income real estate speculators out there (with the others), just as there were in 1989 before the last "crash" which in this region took ten years to resolve.

Subject: RE: BS: Sub-prime lending
From: Stringsinger
Date: 29 Mar 07 - 04:30 PM

I think that the "sub-prime" market is taking advantage of poor people who don't have the economic savvy to understand that the lender doesn't have the lendee's best interest at heart. This is the ruthless part of capitalism that punishes those who are not informed as to economic survival in a country that for the most part contains business people that care only about themselves and are willing to exploit those with limited understanding about finances. The corporations and banks and the credit card industry has rigged the system to extract the last bit of monetary blood they can from the working poor. They've gutted the bankruptcy protection for these people. It's a class war, no doubt in my mind about it.
Punishing people who don't have access to financial information (such as inside trading) has become an American precedent. Reagan gutted the unions, put homeless people on the streets and filled the pockets of the rich in a new "gilded age". Ultimately Reagan punished the working and middle class of this country and the "sub-prime" racket is part of the destructiveness of "supply-side economics". When a country's main source of revenue is tied up with lending, buying credit card debts, and exploiting confused poor people with higher rates for prime lending, then that country has turned its back on the working people who are the engine of its success.

Frank Hamilton

Subject: RE: BS: Sub-prime lending
From: GUEST,meself
Date: 29 Mar 07 - 05:00 PM

There is also a popular notion that it is your economic duty to yourself to invest in a house, rather than rent. The other side of the "only a fool borrows more than he will be able to pay back" coin is "only a fool doesn't borrow a hundred thousand so he can invest in a house and thus get himself ahead financially."

I had always understood that willingness to incur debt - that is to say, take financial risk - in order to get ahead was a great American virtue. Certainly it seems to be part and parcel of many of the great American success stories. And in many of those stories, you find a bankruptcy or two along the way, before the ambitious entrepreneur hits the jackpot. I'm a little surprised at the kind of scorn expressed in some these posts for those who sink over their heads in debt.

There seem to be some "mixed messages" out there.

Subject: RE: BS: Sub-prime lending
From: Richard Bridge
Date: 29 Mar 07 - 05:59 PM

Thank you heric. In many respects that is simply despicable. It is in one respect (if I grasp it right) superior to UK law in that in the UK a secured creditor may rely on his security, with the result that your house does not become mortgage free (assuming nobody bothers to take it because of the collapse in house prices) as a result of your bankruptcy. The creditor cannot sue for the secured debt, but he can (all other things being equal) for 6 years (that being the UK contract limitation period) contract interest, and he does not have to release his charge until he is paid in full the prinsipal and interest.

Lots of people who went broke in the 90s over here, but kept their houses because they were worth zip, are no waking up to that one.

Banks! They bring out the Watts rioter in me. Burn baby burn.

Subject: RE: BS: Sub-prime lending
From: Donuel
Date: 29 Mar 07 - 08:23 PM

Man, I don't know... after heric explained the new "neocon" bankruptcy rules there doesn't seem to be any room for recovery left if people owe over 200K.

When this new law was proposed the banks repeated the mantra that people were starting over without suitable penalty and were actually prospering after declaring bankruptcy.

Sounds like a black hole now.

--------------------

(typical donuel polemic rant below)

What next, the proposed Newt Gingrich federal orphanage will buy destitute children of backrupt families for eventual military service?

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 29 Mar 07 - 11:16 PM

I think if I were in the position of the "sub-prime" borrow, I would object to being described as "uninformed" or not being aware of what I was doing before I got into one of these mortgage traps. It seems to me that the interest rates were forced so low by the FED, that it appeared to be a once-in-a-lifetime opportunity for these underpaid folks to grab a piece of the DREAM.
          The fact that once they were in place to take the fall, and interest rates started going up, is less an event of chance, I submit, than a result of design.

Subject: RE: BS: Sub-prime lending
From: Bobert
Date: 30 Mar 07 - 09:09 AM

Well, one thing the new bankruptcy bill doesn't addrss and that is "preditory lending" practices that many banks, loan companies, credit card companies and payday loan companies are engaged in and guess what???

Rich folks don't know nuthin' about these things because they aren't the ones who are living so close to the bone that they have to resort to financing their very survival by having to deal with preditory lenders...

What ever happened to the concept of "usary" where interst was capped??? There are so many holes in the Truth In Lending Act that there might as well not be an act... I mean, you have payday loan copnaies charging crazy interest... Oh, sure, they may be $100 loans but the interest is astoundingly high...

And what about the credit card companies who are quick to get credit cards in the hands of teenagers without the parents signing on as guarteers??? That, in my book, is preditory lending and I can't hink of one moral reason in the world, with what these companies charge for interest and late fees, why they should be exempted from the list of creditors who can be charged off in a Chapter 7, while the mom and pop stores, who have the most to lose, get stuck...

(But, Bobert, the mom 'n pop's didn't thrown millions on dollars into the Bush campaign to get this bill "on the books"...)

And as for my buddy, Alaska Mike, I'm sure gald to have you on the mend and glad that your health isurance company paid the half mil to keep you here 'cause yer worth every bit of it... But so is everyone else who pays into a health insurance pool yet there is no law on the books that forces a health insurance company to keep you if you get sick...

So here's what we have gotten and not gotten under Bush:

1. A bankruptcy bill that protects the cats and preditory lenders on one hand and...

2. No legislation toward creating a safety net for folks who suffer from a catastropic illness...

No wonder the Repubs lost in '06... It's not all aoyut Iraq...

Bobert

Subject: RE: BS: Sub-prime lending
From: Richard Bridge
Date: 30 Mar 07 - 05:22 PM

Any economic historian will tell you that the truth that came out of the South Sea Bubble was that there had to be forgiveness of debt, otherwise the rest of the economy went down with the debtors. But it's a bit much to ask the shrub to see that (and indeed some contributors above)

Subject: RE: BS: Sub-prime lending
From: katlaughing
Date: 30 Mar 07 - 07:07 PM

A lot of folks going into debt to buy a home have decent paying jobs. It is not stupid or anything else. IF they lose their job for whatever reason, then they may be in trouble. I think some of the posts in this thread might do well to remember that and not be so judgemental. Likewise when talking about poorer folks not knowing much about economics. How about working for more of such subjects in schools, boys and girls clubs, etc., instead of deriding them?

Subject: RE: BS: Sub-prime lending
From: GUEST,meself
Date: 01 Apr 07 - 10:30 AM

Probably your creditors claimed your posts. You're not still owing on your student loan, are you?

Subject: RE: BS: Sub-prime lending
From: Donuel
Date: 02 Apr 07 - 09:17 AM

I said that given enough forecosures and the banks start to lose.

It seems that this is what is happening in Ohio which has the highest foreclosure rate in the US.

This may be the reason that Ohio has just created a $100 million refinance program to put qualified ARM mortgage owners into a 6.75% fixed rate loan.

This may only be like restocking 100 tuna fish after corporate ships have trawled the oceans to death but it is a band aid other states could use.

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 03 Apr 07 - 08:42 AM

"What ever happened to the concept of "usary" where interst was capped??? There are so many holes in the Truth In Lending Act that there might as well not be an act... I mean, you have payday loan copnaies charging crazy interest... Oh, sure, they may be $100 loans but the interest is astoundingly high..."

   It seems to me like usary laws, Truth in Lending, and anti-trust legislation were incompatable with what the Republicans like to call "A Free Market Economy." Those things all went away when whoever was running Ronald Reagan came up with Supply-Side Economics.

   That's were it started, and the Bush II administration made things worse, a lot worse.

Subject: RE: BS: Sub-prime lending
From: artbrooks
Date: 03 Apr 07 - 10:27 AM

It really isn't a Republican issue. New Mexico has some of the most rapacious pay day loan operations in the country. Legislation to rein them in a bit was overwhelmingly defeated by the Democratic-controlled state legislature, and not aggressively pushed by our Democratic governor.

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 04 Apr 07 - 10:35 AM

The NAACP, La Raza, and a number of other organizations are now trying to get a blanket moratorium placed on "sub-prime forclosures." Those are all usually left leaning groups.

          I guess that's different than Pay-Day Loan activities, though.

Subject: RE: BS: Sub-prime lending
From: Alaska Mike
Date: 04 Apr 07 - 07:29 PM

In 1978, the US Supreme Court decided a case where two different states had differing usury laws. The case involved a consumer in California who obtained a credit card from a bank homebased in South Dakota.

The SC found that the usury laws of the state where the bank was located were the ones that took precidence. Many states quickly eliminated their usury laws in order to attract more credit card business to their states.

This effectively abolished usury laws in the US. Although our federal government has had many opportunities to correct this situation, neither Democrats nor Republicans have bothered to help the poor consumer who must deal with these modern day "loan sharks."

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 06 Apr 07 - 05:37 PM

"This effectively abolished usury laws in the US. Although our federal government has had many opportunities to correct this situation, neither Democrats nor Republicans have bothered to help the poor consumer who must deal with these modern day "'loan sharks.'"

       AM--Another good argument if favor of a strong third party.

Subject: RE: BS: Sub-prime lending
From: Riginslinger
Date: 08 Apr 07 - 10:43 AM

Anti-trust legislation seems to have become a thing of the past as well. In fact, one almost needs to be a piece of a monopoly in order to surrvive in today's global economy.

Subject: RE: BS: Sub-prime lending
From: GUEST,whathisname
Date: 08 Apr 07 - 01:01 PM

How come all credit cards are issued out of Delaware? Answer, they allow usury. Used to be the case. Has that changed?