• I think the loaners and loanees have equal blame here.

    Shouldn’t take a loan you can’t payoff.

    Shouldn’t give a loan they can’t payoff.

    Both are ignorant, but I almost want to tip the scales of stupidity in favor of the bank or mortgage company.  They could have said no or denied the loan.  Research who your money is going to.

  • '18 '17 '16 '11 Moderator

    I misheard.

    Still, 91,000 foreclosures.

    Now, homes for sale in Chicago and the collar cities, according to Realtor.com,  is 659,478

    Now, if you figure that’s a very small percentage of the total number of homes because it does not include the Suburbs, the Quad City area, the Joliet area, the Peoria area, the St. Louis area (we have suburbs of the city, but not the city itself) the Bourbonaise area, the Champaign area or the Moline area; you know, the other major civilian centers of the state, you can EASILY see how pitiful that number really is.

    Best I can guestimate from Realtor.com - because you cannot just to a state search - we have roughly 6,381,686 homes at any given time.  I’m taking that number by taking a 10 mile radius around major metropolitan area, multiplying by 10 and dividing by the number of metropolitan areas to get an average.  (For very large areas like Chicago, I took major areas and averaged those for the city, like Gurnee, Schaumburg, Elgin, Wilmette, Chicago, Chicago Heights, etc.)

    91,000 foreclosures / 6,381,000 homes = 1.4%

    Wow.  So like 1% of people give or take a few percent in my UNscientific population, in Illinois, lost their home to foreclosures.  We need to change THE ENTIRE banking system, expand government at the highest rate since FDR and give them unprecedented power over our lives to protect 1%?

    What’s the High School Graduation Rate in Illinois?  According to the US Dept of Education only 72.2% of Illinois citizens graduate from High School.

    Perhaps if the SAME government that screwed up education fixed THAT, the 1% of home owners who can’t do simple arithmetic and thus are losing their homes wouldn’t be in that situation?


  • In the article I linked to the right most column tells you the % of households.


  • @Smacktard:

    Whatever happened to personal respbsility? did these people have guns to their heads when they signed their mortgage papers? The rest of us shouldnt be punished by higher taxes for the stupidity of others.

    And I should not be penalized becaused I, as a good faith borrower who is paying their mortgage FASTER than agreed, bought a house in a neighborhood where banks improperly loaned money to people with NO ability to repay their loans.  Those foreclosures take money away from ME be devaluing my home.

    STANDARDS of lending are what is required.  And since the banks have chosen to ignore the standards they held for 200+ years in order to gain a quick buck thorugh loopholes in the various debt laws passed by Congress, then it is indeed Congress’s responsibility to FIX those holes they created AND to protect my home value from negative valuation caused by their previous actions that were designed to create fraudulaent short term gains by banks.

    Congress passed the laws that allowed this to happen.  Congress therefore is stuck with fixing their own mistake, preferably NOT at my expense…

  • '19 Moderator

    I agree, not to mention the fact that greedy bankers, investors etc, will tell Joe Shmuck - this ARM is the way to go for you!  Your payment is only going to be $5 for the next year guaranteed!  There is some chance that the payment will increase at some point, but the economy is so great you won’t have to worry about that!  This kind of deception is reprehensible to me.  The reason we have rules, laws and regulation is to protect those that don’t have the knowledge experience or ability to protect themselves.

    Just to clarify I am one of those people that will most likely profit from the hosing down turn, When I decide that it looks like we’ve hit the bottom I am going to start buying.  We’re not there yet…


  • @ncscswitch:

    And I should not be penalized becaused I, as a good faith borrower who is paying their mortgage FASTER than agreed, bought a house in a neighborhood where banks improperly loaned money to people with NO ability to repay their loans.  Those foreclosures take money away from ME be devaluing my home.

    Yeah, but the loaner doesn’t like paying off early - they want to make as much interest off you as possible.

  • '18 '17 '16 '11 Moderator

    @ncscswitch:

    STANDARDS of lending are what is required.  And since the banks have chosen to ignore the standards they held for 200+ years in order to gain a quick buck through loopholes in the various debt laws passed by Congress, then it is indeed Congress’s responsibility to FIX those holes they created AND to protect my home value from negative valuation caused by their previous actions that were designed to create fraudulent short term gains by banks.

    A) I agree that law abiding citizens that did NOT violate their contractual obligations to the banks and thus are not causing strain to the body republic should NOT be forced to pay for the ones who did violate their contractual obligations to the banks.

    B)  I disagree that Congress has to fix anything.  The banks made their own choices.  “You made your bed, now you have to lie in it.”  Anyone with a brain that decided to engage it would have told you half a decade ago that these interest only loans are a very bad idea.  And for generations we’ve known that balloon payments and points and ARMs are bad ideas!  This is not Congress’ fault, it is the consumer’s fault and the bank’s liability.

    C)  If we were to get legislation from Congress in this regard, it better be as either an amendment to the constitution giving them the right to even make laws in this regard; or to protect the federal government from the stupid decisions of the people and the banks.  But then, I’m not entirely happy with FDIC.  I’d prefer if banks just gave you the option of more interest or FDIC protection through a private insurance agency.

    D)  I still say the best solution to the “housing crisis” (which is barely 20% of the unemployment crisis, which isn’t even a crisis since we have statistical full employment in this nation) is to sit back and watch what happens.  Maybe even raise the federal interest rate to about 6 or 7% so people could invest and make some money.  You cannot earn a return on your money at 1% or 2% (or for savings accounts, I think we are all the way up to 0.005% APR now.  That’s 0.00005 for those who don’t realize the percent sign moves the decimal two spaces to the left.)

    If the Fed raised the rates to 7 or 8%, which is NOT that bad really, it’s still WAY lower then the 20-some% we were paying under President Carter, people could invest in US Savings Bonds, US Treasury Bonds, get better rates at the banks for savings and checking accounts, etc.

    Today’s Mortgage rates have been fluctuating between 5.5% and 6.5% for about a year.  Meanwhile, the Federal Prime Rate (according to the AP 8 hours ago) is 3%.  That means we can pretty much assume that there’s about a 2.5-3.5% markup on mortgage interest.  So if the Prime was raised to 5% we’d be looking at 8.5-9.5% APR on Mortgages (with zero points, 30 year fixed, no balloon, and not a jumbo loan.)

    What’s the difference in monthly between 6.5% and 9.5% (the two upper limits)?

    According to Realtor.com, if you have 20% down on a $495,000 home (which is mid range in Chicagoland) at 6.5% APR you will pay $2,503 per month.

    and

    According to Realtor.com, if you have 20% down on a $495,000 home (which is mid range in Chicagoland) at 9.5% APR you will pay $3,330 per month.

    That’s $800 more.  However, your Savings interest, your commercial and governmental bonds will also rise in rates from 1 or 2% to 6 or 7% as well and will make up the difference easily.


  • Just FYI:

    Fidelity Investments announced their second round of layoffs yesterday…

    One of the biggest and most solid financial companies out there… and they have done their second set of layoffs, with the first being effective New Years eve.

    Angel is holding on by her fingernails…  Not likely to survive a third round of layoffs…

    Nationally, instead of job growth, we lost 14,000 jobs last month according to our own government stats.

    Yes, all is Rosy, Bush’s economic Policy is nirvana…  :roll:

  • '18 '17 '16 '11 Moderator

    Congress controls economic policy.  The liberals promised to take America in a new direction - they accomplished it!

    As for Fidelity, I have not been with them for a LONG time because their analysts, in general, do a poor job.  When I was with them, I was getting 5-8%.  Now that I’m with American Funds, I am getting closer to 22-25% annual returns.  And no, it is not all in the pacific, I have a lot of domestic funds as well.

  • 2007 AAR League

    i agree, his economic policy has worked in times of great instability at home politically and in the world.  usually those two together tank economies, but now everyone depends on each other.

    democrats scare the hell out of companies who worry they are going to be taxed more.  which means more jobs leave, which means more people rely on government b/c times are bad, which means democrats cackle with delight.  some uber-democrats want to raise the coroporate tax to 42%.  thats insane.  we’ll lose all jobs. which of course means more government handouts.  i sense a sinster plot.

    i agree with jen, the president isnt to blame for the economy at the moment.


  • Personal opinion follows…

    I think that President Bush’s administration levied heavy pressure on specific industries to help keep the economy moving after 9-11.  Starting with the auto industry and “zero/zero/zero” programs in the immediate aftermath of 9-11, then the mortgage loan standard reduction, the reduced interest rates, etc.  Add in the changed bankruptcy laws that were passed while the Admin was pushing like hell to get people to spend themselves into oblivion…

    But it is now more than 6 years later.  GM is bordering on bankruptcy itself, the home mortgage situation is a catastrophe, and the banks in general are posting record losses (after 25 years of record profits).

    We robbed Peter to pay Paul these past 6+ years.  We spent ourselves into oblivion on both a personal level with mortgage and credit card debt, and at a national level with 20% per year increases in non-discretionary spending as well as 40% of our annual spending being “off-budget” in order to help hide the fact that we have been spending nearly 4 TRILLION DOLLARS a year with a deficit of 1.5 trillion instead of the mere .4 trillion deficit that is “on the books”

    You can’t keep that up forever.  And Paul has shown up with a court order for payment…

  • '18 '17 '16 '11 Moderator

    I don’t think the government did it.  I think the auto industry, seeing falling numbers, made their own decisions.  Likewise, banks saw that the standards they were using could be lessoned for potential huge wins.

    It’s like going to Vegas and realizing that if you play Poker you have a chance to win a lot more money then if you play Roulette.  However, in Roulette you have a 48% chance to win, in Poker you have a much, MUCH lower chance. (In Roulette you may bet on Red or Black which is 48/100 possible results, assuming two green squares.)

    Well, they gambled, ON THEIR OWN, WITHOUT HELP, and lost.  Now, as with the gambler that mortgaged his home to gamble more, they are on their own and should be.  This will help weed out the lesser banks so that the strong banks can grow and prosper.  It’s almost Darwinian.


  • THe problem with that perspective Jen is that it ignores the White House claims that were made over the past 6 years.  Each of the steps along the way, President Bush touted as a victory for his administration:  growing car sales, record home ownership, increasing consumer spending…

    President Bush TOLD us to go out and “shop” after 9-11.  The biggest ticket items in the economy suddenly had super-cheap financing that anyone with a heartbeat could qualify for.  Credit cards were presented to anyone with a pulse… including children and PETS (Clark Howard who has a financial radio program syndicated out of WSB in Atlanta has made repeated remarks about his own 9 year old daughter getting pre-approved credit cards, including Platinum AMEX; as well as pointing out the pre-approved Visa offer his dog received…)

    That is too much of a coincidence to ignore.

    Then, while everyone is handing away “free credit”, President Bush helps push through Congress a law that tightened the Bankruptcy laws to make more than half of the people ineligible to have their debts wiped clean…

    When you ask people to spend, and when the finance entities all open up the flood gates of credit, and when Congress at Presidential request quietly changes the bankruptcy laws… sorry, that is a bit too much Deus Ex Machina for me to believe unless there was Administrative planning behind the multiple actions.

  • '18 '17 '16 '11 Moderator

    Presidents have claimed responsibility for everything good for all times.  If they could get away with it, they’d claim they made the sun rise every 24ish hours and that it was they that brought the rain.

    Realistically, it was the banks that lowered financing on autos, homes and later credit cards and it is THEIR bed they are now lying in.

    I, honestly, don’t feel sorry for them.  If they had just held to their OWN testing procedures instead of opening up the floodgates in hopes of making a quick buck and cashing out on their stocks for early retirement, they wouldn’t be in this mess.  And, you know what, not every bank and mortgage firm IS in this mess.

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