About ARMs and legs

[cryowizard]

http://fe3.news.re3.yahoo.com/s/afp/20070325/bs_afp/useconomypropertypolitics
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/22/AR2007032201973.html

What is up with people worrying about "lending practices" and "sub-prime mortgages" to the point of trying to get the government involved?

What I don't get is why should anyone give a shit about people who can't read fine print.

If you are taking out a mortgage, especially an ARM, and dont know how it is going to go payment-wise -- you fucked up!

If you have shitty credit and people just all of a sudden give you a mortgage at a lower-than-normal rate, and you don't bother wondering what's up -- you fucked up!

Two million people apparently fucked up. Bad for them, I agree. So what are we going to do -- have taxpayers compensate them for their own stupidity?

Same goes for the lending companies -- if they were giving money to people with flimsy financials, they were wading into risky waters. They deserve to go under like a fucking rock -- it's just a result of bad business.

What I really don't want to hear is "bailout". It's sad to see people lose their homes, but one should know about the origins of free cheese. If it looks too good to be true -- it probably is, and as sad as losing one's home may be, no other person should have to give up his own money to bail out someone who made a financial mistake.

Comments

[cryowizard.livejournal.com]

Come on now.

We're not in the depression.
We don't have famine.
We are not at war (not here anyway).
We dont have any grand social unrest in the country.

We are talking specifically about that 1.19% of "sub-prime" mortgages that may fail.

Sub-prime means there is more risk involved than usual, mostly on the side of lenders. But the lenders went greedy. They played the game and lost. In this (http://www.cbsnews.com/stories/2007/04/03/earlyshow/contributors/daveramsey/main2641252.shtml) article the host says he had a guy who makes $7,000 a year and they still qualified him for a mortgage. What do you expect??

The people who played also lost -- they either wanted free cheese, or didn't realize they were walking into a financial trap. In both cases it is their responsibility to deal with the consequences, not the taxpayers.

This thing will hurt the housing market a little bit -- slightly less buyers and slightly more homes on the market. So what? The housing prices have been rising like crazy for years. If there will be a correction - so be it, this is the market.

There is nothing catastrophic about this. Read this (http://knowledge.wharton.upenn.edu/article.cfm?articleid=1691&jsessionid=a830674255da2b701aa1): this is a subprime lending industry crisis and the market is already correcting itself.

No matter what, the bailout is the worst option, since it sends a message that you can be completely careless with your finances and then the Good Uncle Sam will bail your stupid ass out with other people's money.

If the government wants to enact a law that makes the fine print bigger so that people understand better what they are getting themselves into -- I'm all for it. If they want to investigate the subprime business practices -- be my guest.

But dont ask the taxpayers to chip in to cover someone else's folly.

[(Anonymous)]

i will respond in a few days - it's been crazy at work.