Oct 13, 2008

someone's policies or everyone's responsibility?

Read this over on another blog - great insights.

Our banks aren't failing because of Bush's economic policies. Actually stronger links have been made to a Carter decision, which was morphed by Clinton into federal prodding of banks to make loans to unqualified applicants. But even those policies aren't completely to blame. We're in an economic mess because of our national greed.

Our appetite for more and better no matter the cost has led us to an empty trough. Our capacity for spending enormous amounts of money that we don't have via our own personal decks of credit cards has finally brought the house down.


irreverend fox said...

it's ALL of the above in a sickness mix.

I was a mortgage loan officer from like 2002-03 and I though I can't say "yeah, I totally saw this coming" I can say that I was always baffled by the things I saw and heard. I guess I can always pull the "I was young and naive" card...but I signed people up for CRAZY loans myself. I never lied or anything, just offering programs the various banks offered. but I always felt like needing a shower several times a week.

-we'd sign people up "no-doc" which of course meant they didn't have to prove anything. it was also called "stated income" programs. these loans were harder to get than normal loans, but, if I ran someone’s credit and they had above, say, 500 or 550, and if they had some equity in their home in the case of a re-fi or cash to put down in the case of a purchase, we'd ask them to write down how much they made a year on a piece of plain white paper and then that was it. occasionally we'd need to see bank statements...but...a self employed carpenter or whatever would show CRAZY deposits because he would be running his company through his account so the numbers were fine.

it was crazy!

one of the KEY things to pumping out these loans was having them appraise “right”...this is what I believe led to the crazy run up and over inflation of home values. behind MANY closed doors...MANY...I had bosses tell appraisers what they needed to come in at. of course the appraiser didn't have to meet that number if they couldn't justify it...and of course our company didn't need to call them next time either...there were a hundred appraisers to choose from in our area and everyone knew it.

I remember I had a loan fall through one time cause the appraisal came in "too low". My boss grabbed my paper work and stormed into his office and shut the door. my desk was directly in front of his window so I could easily hear him yell at the appraiser, "THIS IS THE WRONG MOTHER -------- APPRAISAL! NO...NO...YOU'RE NOT HEARING ME! THIS IS THE WRONG APPRAISAL! SEND ME THE RIGHT ONE BY THE END OF THE DAY DO YOU UNDERSTAND ME!" and he SLAMMED the phone down. a minute later he walked out and didn't even look at me as he tossed the folder on my desk and said, "they got mixed up and are faxing over the right appraisal...set up the closing."


I was naive but not that naive...I began looking for a new job and ended up in a new mortgage company which had FAR higher standards (well...let's just say the simply complied with Freddy and Fanny which at this point might not sound like much).

anyway...it was an ORGY of greed on the banks part, the brokers, the loan officers, the appraisers and the borrowers! people taking CRAZY loans they couldn't afford. Why were people buying the type of houses it took their parents twenty years to afford? Greed. We all wanted those nice new houses in Medina or wherever…not one of the old ones in Montville Township. politicans were buying votes by supporting these "programs" and the opposing party had no guts to truly stand up to this lest they be branded as oppressing the poor. lenders reassured these people that "hey...in two years come back, the home will be worth more and we'll redo this loan into a fixed rate. think of this as a band-aid loan..." I said that line often; it's what they told me to say and seemed to work so I said it all the time. I made better money back then than I do now as a planter I can tell you that much.

so ALL the way around it was one big time, fabulous orgy of greed. but when you dance the dance never forget...you always have to pay the piper sooner or later.

Tony Myles said...

Wow, dude. I hope one thing to pass to the next generation is a great sense of reaping and sowing. This exemplifies it!