By Get in the Game

October 11, 2008 10:21 PM | Link to this

‘Lying Rides Upon Debt’s Back’

By OverTaxed

October 12, 2008 8:01 AM | Link to this

“On average, the borrowers’ income in the pool of loans had been misstated by 200-300%”

Isn’t that interesting. That explains how an area with a 50K median income had a 400K median home price! :) Without the gross fraud and psychotic lending, there is NO way that an area can support a nearly 10X relationship between income and home prices.

We need to fall back in line with the historic ratios; between 3 and 4X median income to median home price. That puts our median home price ~150-200K, or >50% loss from the peak (which is almost a foregone conclusion now).

Only through systemic overstating of incomes can the housing market get so out of control. Looks like VB is learning that lesson. It would be very helpful if others would learn that lesson as well.

By JaRomey

October 12, 2008 9:02 AM | Link to this

PB Post needs to look at mortgage brokers who had people just sign the docs and then the broker filled in the blanks. The buyer just wanted the house and were happy to get financing. They probably did not they lied.

By G

October 12, 2008 10:01 AM | Link to this

Anyone who goes into a contract for anything a substantial as a house should, certainly, read and understand everything they are signing up for. If they don’t understand it then they should take the papers to a lawyer or someone they know who can explain it to them. To blindly sign papers and just think life is grand is only asking for trouble. Does JaRomey know someone who actually signed papers and let someone else fill in the blanks? Someone who would do this is not responsible enough to take on the responsibilities of home ownership. There is room for blame for a vast number of people and organizations but sometimes people should just belly up and take responsibility for their own actions.

By Get in the Game

October 13, 2008 7:20 AM | Link to this

Well whose fault is it?

If you have a pre-K teacher that gives a bunch of candy, playdoo, and markers to the class and states…

“I am leaving. Do NOT touch anything for 6 hours.”

The teacher comes back in 6 hours and the classroom is a mess.

Now, is it the teacher’s fault for giving the candy or the kids’ fault for eating the candy and wrecking the classroom?

With these houses you also have a jailable offense of the appraisers.

They have stated these non cash-flowing, used structures have been appreciating at a 25% clip per annum.

Does this make any sense?

Should have disclaimers and JAIL, just like cigarette companies, for misleading the public by offering items toxic to your health. Yes, this includes ‘banks’, RE agents, and any group that advertises these new and used houses as anything but quiet use and enjoyment.

I like what I read with margin calls in the stock markets.

You must place at least 50% down AND have other assets to back up at least an additional 1/3 of the remainder.

AND when you cannot fulfill your obligation, the brokerage houses are authorized to liquidate (not wait 12 months, via a Lis Pendens).