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Old 11-24-2008, 04:34 PM   #253
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Yes, the technology is there and, you don't have to pay a whole lot extra either~!
The range of prices is "acceptable"
YouTube - smart car crash
I found this to be very, very interesting..
Even the windshield survived~!
ciao
53FC
Did you hear what they said about how the other little econobox faired better than the smart car? Did you also hear them at the end when they said the smart car might have faired okay but the passengers certainly would not have. Also those were not true head on collisions both were from an angle to allow the car to carom off to the side. Can you imagine if there was another car hitting the smart car from behind. What if you were struck from the side with just that flemsy 3 or 4 inch door between you and whatever is hitting you. That car has a long way to go before I would consider it safe in comparison to larger cars. There simply isn't enough crush zone room to protect you from the energies being released.
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Old 11-24-2008, 04:40 PM   #254
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Unhappy Acres

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Originally Posted by Larry in MO View Post
Well, Gene, I'm going to have to respectfully disagree. I have more than a little problem w/ the idea that people were "screwed". If it were me it probably would have occurred to me that I would not have qualified for a house because:
a. I didn't have a job
b. I didn't have any savings
c. I didn't have any down payment
d. I'm up to my neck w/ credit card debt
e. I owe money to the check cashing places and pawn shops
f. My car has been repossessed
g. I never could afford a house before, why can I now?

Or some combination of the above--lots of people were simply
not qualified for home ownership never mind the idea of home
ownership for everyone.

I think people should be more aware, act for themselves, and look out for themselves w/out waiting for the government to do every single thing for them.
Larry, what seems obvious to you is not obvious to lots of less sophisticated people. Your example does not cover everyone who got a subprime or Alt-A loan. It probably is a very, very small group that resembles the guy you describe to make your point (no, I don't have the statistics and I'm not sure anyone does).

Mostly they are people who believed what they were told by people pushing loans to satisfy their bosses at crazy companies like Countrywide. If someone who works in the industry tells you that you are qualified, why wouldn't lots of people believe it? Obviously they did and does that make them bad people? This could be criminal or civil misrepresentation or fraud; there are lawyers starting to take this on, but it's only a piecemeal approach. Some may have been told the terms of the mortgage were different than they actually were (how many people can understand all that paper at a closing), and perhaps something was changed just before closing (all that really did happen to some people). Maybe they were dumb, maybe they were lied to, maybe they just believe what people tell them when they appear to be honest (but aren't). Some were people trying to flip houses. That latter group took their chances and it's ok with me if they got caught in it. But for most, they are victims of their lack of knowledge who were trying to have the American Dream, encouraged by the gov't (remember the "ownership society"?).

So what do we do? If you, as a smart guy with a 20% down payment, bought a house in "Happy Acres" and about 25% of the people there paid too much a year later for a house because values kept increasing, and another 25% got loans they thought they could afford, but couldn't for any number of reasons, what would happen? Some people will want to move (Americans are always moving generally at the rate of 20%/year) and have to sell at a loss. Maybe they'll just walk away, maybe their corporate employer will take the house and sell at a loss, maybe they'll list it cheap, but can't sell it, or can. Others will default because the interest payment goes up or they lose their jobs or they are maxed out on their credit cards or their just kinda dumb. Some will cut back on food, medications or landscaping.

Pretty soon there are some houses that look uncared for because of the landscaping problem. Others are abandoned or taken back by mortgagees who don't keep the property up. Some teenagers break into one and have parties there; maybe it burns down because they started a fire in the fireplace and left it. Now you have been offered a job in another city at a big raise, but can't sell your house because it now looks like Unhappy Acres, or because your house is worth less than your mortgage and you can't afford to make up the difference. The whole neighborhood starts to look bad—only 5 or 10% of empty houses has a big effect. A lot of "for sale" signs tend to lower prices too. The local gov't has two choices because property tax revenues (maybe sales tax too) are dropping—raise the millage and you pay more, or cut services. Maybe they close the nearest fire station (no wonder that party house burned down), or lay off 10% of the cops, or close the nearest school or don't fill the potholes or don't clear the snow as often. Then Happy Acres is even less desirable. You did all the right things, but now you are a victim. Your only way out is to buy flood insurance and blow up the dam just upstream.

Solving the mortgage crisis is not easy and parts are hard to swallow. Some people who do not deserve to be bailed out, would be bailed out because it can cost more to distinguish who's bad from who's dumb. Whole communities will suffer because a relatively small number of people were wrong or dumb or foolish. But we are all in this together. It is a community and what happens in one part, affects the neighbors. I have to pay for this too. I'm not only advocating spending Hampstead's tax money and yours, but mine too, because I think it's the only way out of this without much worse consequences. I'm also angry that we are in this mess, but we may be angry at different people or groups. But whomever we are angry at, the problem and the consequences are the same.

So, Larry, I respectfully disagree, and I hope you don't live in Unhappy Acres.

Gene
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Old 11-24-2008, 06:21 PM   #255
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Larry, what seems obvious to you is not obvious to lots of less sophisticated people.
Ouch!

And, no, I don't live in Unhappy Acres. I live on the corner of a cow pasture where there are no county services but we do have a volunteer fire department. I do not, however, have sirens, people screaming for help, gunshots, boom boxes, and crime. I like my pasture and Earl, Abby, and Otis, the Golden Retrievers can chase the deer. Never caught one but they still try. I'm as happy as if I had good sense! The only "for sale" sign is up the highway and is owned by a builder that builds a house and moves in and tries to sell it. It's been a little slow lately.

The new thing around in the big city which I try to avoid at all costs (to lend a little support to your theory) is that the thrifts have slowed down the foreclosures when folks are behind or have walked away. They figured out that they become responsible once it is back in their possession so it is up to them to cut the grass, etc., or face the wrath of the codes crazies. "Not our house, ma'am, and, no, I don't know where Mr. and Mrs. Smith are," is the current mantra.

I certainly respect your opinion but I think there were just as many larcenous hearts in the home buyer business as the home loan business, if not more. Some more of something for nothing. There are assistance groups for the folks that need legal help, medical help, free ambulance rides, college tuition, groceries, school lunches, school breakfasts, cab rides, etc., everywhere around here. They use the free deals like they have to use them or they will lose points or something. (Wanna start a thread about abuses of the social system?) It was there for the asking.

I see the point of helping out the banking system--it is involved in literally everything and makes it all run. I didn't like it and I don't want to pay for it but they did it so I'll end up paying like any other person w/ a job. The auto industry? They made their own bed. I'm certainly sorry for the individual workers' families but I don't want to pay for them either but I bet I will. Financing the current theory of spreading the wealth will not come from the people that don't work.

The problem, as I see it, is that the leaders of the government caused this mess and they are the ones that have decided they should fix it. After all, a politician only has one job once he's elected and that is to get reelected. (Grease the palms, rake in the earmarks, and act like you care unless you're emailing dirty things to pages or trying to meet a new friend in the crapper or get caught with bundles of money in your freezer.) There has to be some money in it for them. Well, that usually means way more problems than they solve. Next time you go to the DMV watch what goes on. That is the gov't in action. The gov't has pretty well ruined Social Security by financing every feel good, hold your hand out program since I can remember. Lessee--The New Deal, The Great Society, and now Spreading the Wealth. I'm not sure I can finance many more gov't plans. They do put together a pretty good military, however. Anything else the gov't does well? Anybody?........Anybody?

Anyhow, I hope your blood pressure has gone down. I know I'm going to have to pay for it but I don't have to like it!
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Old 11-24-2008, 07:04 PM   #256
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Originally Posted by Larry in MO View Post
Or some combination of the above--lots of people were simply
not qualified for home ownership never mind the idea of home
ownership for everyone.
Larry, the problem is that they were qualified for loans. We know they were qualified because they were loaned money!

The qualifications for buying a loan were dropped to almost nothing by the lenders... and that's the fault of the consumer? That's a little hard to swallow. Especially when the average mortgage consumer isn't very well educated in finance or economics to begin with. They take their pay stubs to the lender, and the lender says "here's your mortgage". Never mind that it has a 72 month balloon, and that if you can't make the balloon, it refinances at an interest rate 10% higher? And the lender says, "no problem, it'll be worth more then, so you'll have the equity to show a down payment for a conventional refinance loan... don't worry about it..."

And the consumer doesn't know who to get advice from, or even what "predatory lending" means.

I have to agree with Gene... I don't like the options any better than anyone else, but in the short term, in order to preserve what's left of our economy, we need the infusions of cash.

In the long term, we need to take back control of the oversight and lax regulation that has allowed business to make the stupid decisions we've seen in the interest of trying to make a killing instead of being happy with a more reasonable rate of return.

Roger
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Old 11-24-2008, 07:32 PM   #257
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The qualifications for buying a loan were dropped to almost nothing by the lenders... and that's the fault of the consumer? That's a little hard to swallow.
Do you people ever wonder how these people make it to the bathroom on their own? These people aren't 12, are they? Do their moms still walk them to the bus? If they fail a course in school, is it the teacher's fault. I'm guessing those are the cases. Hard to swallow is accepting that no one is responsible for his/her own actions anymore. Where is the individual accountability? No where, that's where. The government will take care of you! A dependent society is where we're going where no one will move or breath w/out government assistance. And you don't mind paying for it?

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Never mind that it has a 72 month balloon, and that if you can't make the balloon, it refinances at an interest rate 10% higher?
I guess I missed the part about someone pointing a gun at them and making them sign up.

What I do know is that we've moved this fairly far afield of the original post. My apologies!
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Old 11-24-2008, 07:45 PM   #258
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No apologies necessary Larry. We're burnt out on GM, so we move onto mortgages. I do think there should be accountability. How do we deal with the predatory lender who has taken advantage of the unsophisticated borrower? Who is more accountable? Tough questions to answer, but I'd go after the predatory lender and try to solve the borrower's problems for the benefit of society as a whole.

I knew you didn't live in Unhappy Acres, just an story to illustrate a point. We too live in a rural area. No sirens, not much crime, very quiet. Well, last year the crazy neighbor shot up my mailbox (frontier injustice), but he died a few months later, so a guess the wheel of karma turned.

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Old 11-24-2008, 08:22 PM   #259
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Originally Posted by Larry in MO View Post
Do you people ever wonder how these people make it to the bathroom on their own? These people aren't 12, are they?
Every day, Larry, every day! I'm a cop.

My point was that the lender is responsible for determining who's a good risk and who's not; it's not the borrower's role to say "I'm a bad risk, I shouldn't take your money". Granted there was greed on both sides, but the lenders have more culpability than the borrowers (at least IMHO).

Roger
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Old 11-24-2008, 10:48 PM   #260
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[quote=CrawfordGene;641649] We're burnt out on GM, so we move onto mortgages. I do think there should be accountability. How do we deal with the predatory lender who has taken advantage of the unsophisticated borrower? Who is more accountable? Tough questions to answer, but I'd go after the predatory lender and try to solve the borrower's problems for the benefit of society as a whole.


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Originally Posted by 85MH325 View Post

My point was that the lender is responsible for determining who's a good risk and who's not; it's not the borrower's role to say "I'm a bad risk, I shouldn't take your money". Granted there was greed on both sides, but the lenders have more culpability than the borrowers (at least IMHO).

Roger
Hi, I would like to say a few things about the above comments, loans, and car dealers; How many times have you seen adds stating that "We finance anyone, bad credit, bankruptcy, no money down, upside down on your current vehicle," Etc. Etc. Etc? To me, this is really asking for it, begging to loan or finance someone who is a very bad risk. This also teaches people that it's Ok not to pay on time, or not pay at all, and that you can trade in your old car for half of what you owe on it and drive off with a brand new car. Gee that works swell, maybe I'll buy a house now!
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Old 11-25-2008, 09:20 AM   #261
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Every day, Larry, every day! I'm a cop.My point was that the lender is responsible for determining who's a good risk and who's not; it's not the borrower's role to say "I'm a bad risk, I shouldn't take your money". Granted there was greed on both sides, but the lenders have more culpability than the borrowers (at least IMHO).Roger
Well, that's the way it's supposed to work anyway.

Let's go to the root cause of the problem shall we. The Congressional Oversight Committee forced FannieMae and FreddyMac to accept what were called "Sub Prime Loans", or else. On top of that, ACORN was busy taking lenders who did not offer these loans to court. Then Fannie and Freddy were forced to buy up those bad loans, which led to our current financial mess. Add to that the high gas prices last summer and you can include the auto industy in the mix.

I have two children who are homeowners because of this. In one's case they were offered a low interest rate (which of course was an ARM), and allowed to buy a home. I don't begrudge them a home, as they have two very sweet little children. Problem is, neither has a JOB!!! Their credit rating was as low as it could be. In a few months their interest rate is programed to go up beyond their ability to pay.

When we heard of it, my wife, (who by the way Gene, is a Lawyer), wanted to assist them. We were told to butt out! They and their lenders and their realtor all knew what we would tell them. YOU CAN'T AFFORD IT! With no one to co-sign, no down payment, no jobs, they got the house!

Another child used the easy credit to buy an old house to fix up and rent. She has it all fixed up very nicely. Well, now she's having a tough time renting it. It's in a bad neighborhood and no one wants to live there, and perhaps if the lenders had been doing their jobs, they might have told her that before giving her the money.

Now as it turns out, our son and his family could possibly get bailed out by the governement. If they can refinance at a lower rate they may be able to keep their home, which they have a lot of sweat equity in by now. Of course, the home is worth a lot less than they paid for it, but they could never qualify for another new loan.

In the end the blame has to go all the way to the top. It was the government that was forcing the lenders to make these loans, and if the lenders didn't, they were penalized. A lot of people were very nerveous about this for a long time, but no one could get it stopped. See, the politicians were buying votes!!!

Fannie and Freddy in turn, sold at a discount I might add, these bad loans to the very Insurance comanies that are now in line for the bail out. Of course they in turn were using investors money to buy up these really good deals, guaranteed by the US Government no less, and that's what dried up the consumer credit and broke the stock market. We have lost a lot of money in the latter by the way.

Who should be prosecute? Well, I could name several Congressman and women! They should be the first!!!!
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Old 11-25-2008, 09:22 AM   #262
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My point was that the lender is responsible for determining who's a good risk and who's not; it's not the borrower's role to say "I'm a bad risk, I shouldn't take your money". Granted there was greed on both sides, but the lenders have more culpability than the borrowers (at least IMHO).

Roger
First of all, it was President Carter followed by President Clinton that forced lending institutions to lower the standards for loans. The theory was that everyone should be able to own a house. My theory: only those that can afford it.

Lessee, here, Roger. With that philosophy it appears that it would be the bank's fault if they had the doors unlocked and the money inside and not the fault the guy w/ the gun who robs the place? How about Budweiser being culpable when a drunk driver puts himself out of service against a tree? Or maybe that becomes the responsibility of the city of Tipton because they knew, or should have known, some drunk would run into it?
**Here it comes: how about blaming S&W for making a gun that some moron uses to shoot his soon-to-be exwife?

I still believe we are (or should be) responsible for our own actions. I have, many years ago, grown weary of the defenses of coming from a broken home, not having enough toys when they were little, HoHos, or having watched too much TV.
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Old 11-25-2008, 10:31 AM   #263
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This guy Bob goes to the bank for a home loan. They tell him he qualifies for a loan where the initial payments are 1300.00 per month. Bob thinks to himself my monthly bills are already 1400.00 per month and I bring home 2500 per month. This leaves me in the negative by 200.00. The bank loan officer goes on to explain that in 5 years your parment will be 2100.00 per month. Bob thinks to himself well I was already in the negative with the initial payment and this would put me 1000.00 in the negative. Bob thinks man this doesn't sound to good. The loan officer says you can cut some corners somewhere to make the payment and then in 5 years your house sould be worth more and you can sell it before the balloon payments. Bob thinks to himself this guy is absolutely bonkers, he says I can buy a house I know I can't make the payment on and then take a chance that the house will be worth more and then take a chance I can sell it before my family and I are starving. Bob tells Mr. loan officer, you are crazy I know I can't pay more than 1,000.00 a month, see ya.

A sane person should never enter any contract they don't understand. Unless a loan officer stuck a gun in their mouth and forced them to sign then it is the buyer's fault if they got into something they either didn't understand or couldn't afford. Remember these words of wisdom, "Caveat Emptor", "let the buyer beware".
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Old 11-25-2008, 10:49 AM   #264
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Guys, this thread is about General Motors, not General Mortgages.
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Old 11-25-2008, 10:52 AM   #265
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Well, believe it or not, its all tied together! GM is only a small part of the mess we're in.
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Old 11-25-2008, 10:59 AM   #266
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Gm

Motorhomes for sall ONLY $1000 a month?ONLY $1000 a month is a lot to me.
What ever became of the good old red blooded American?
The one that worked HARD ,was HONEST,PAID is bills at the store every pay day,was first in line to FIGHT and DIE for this country,made his own way in life,never ask for help from his Government,did not have to have a union to help keep his job,did not live on his cradit card or buy more house than he could pay for.
He sure is not running any of the BIG 3 auto maker or any other big US company that is in trouble.
GREED,GREED,GREED,ME,ME,ME That is all to many Americans live by now.
No more what can I do for my countery,No ROTC in MY school,No more lets join the Army,No more lets save some money to buy a house or car,No more lets save so the kids can go to collage.ONLY Lets spend are $ on us today.
All you hear now is honey what do you mean the credit card is maxed out.
Well they are getting a lesson in life now and they do not like it.All they can say is where is the Government to get me and/or my BIG ass company out of this mess I made.The little guy will have to make it on his own.
God bless them,But let them all sink or swim on their own.They made their bed let them sleep in it.
Good night GM sleep tight.
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