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Ouch - subprime mortgage foreclosures in a dope image
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[QUOTE]Originally posted by 93PONY: [QB] Then you have stuff like this going on: http://www.marketwatch.com/news/story/lawsuit-claims-kb-home-countrywide/story.aspx?guid=%7B14A0DC4F-7F3D-49ED-9D1C-67CEE8B09C73%7D It's a system problem IMO. A system that is setup to reward inflating the price of a home. Brokers & agents are paid a percentage of the home....reguardless of price. If I were in Realty, I would rather sell 1 $500K home, than 5 $100K homes. Less work, same $$$. Same goes for the mortgage companies. The higher the price of the home, the more actual dollar profit they get off the loan. Same percentage as a lower priced home, but more actual dollars profit. 10-12 years ago it would take 3-4 loans to pay the same dollar profit as 1 home today. & lets face it.....when you have a 30, 40, or 50 year loan (yeah, some people actually got 50 year loans), that's a shit-load of profit over the life of the loan. Then throw in the greed of Wallstreet.... (They are a Key player in all of this) They're always looking for ways to make money. Anytime you move $$$ (investments), someone takes a cut. The more money you move, the more cuts you take. Wallstreet started trading loans as *investments*. After all, one mans debt is technically another's asset. They'd then turn around and borrow off the 'asset' (home loan), or go in with another company as partners.....then the partner could borrow on that 'asset'....the more the 'asset' was moved & borrowed against, the more $$$ someone got in their pockets for 'moving' the 'asset'. This happened in bulk. One $300K loan could easily have 10 times that borrowed against it. (one companies debt is another's asset & therefore a one mortgage creates a chain of borrowing). This made huge profits for trading loans.....which in turn ment it was more profitable to give loans...which ment looser requirements for loaning $$$ to everybody that wanted to buy a house, which in turn drove home prices sky high. (How many of you got a notice in the mail that your mortgage was 'bought' by another company? A buddy of mine had his mortgage sold to 3 different mortgage companies in 1 year.) Then shit hits the fan.......when one link in the chain breaks (Bear Stearns), it creates a chain reaction. Those holding Bear Stearns *notes* for loans/assets looked to the next company in the chain to have thier (Bear Sterns) debt paid. It's a giant web of links.....too many to even think about trying to grab ahold of. That is why the Feds stepped in & saved Bear Stearns. By doing so they prevented the entire banking system from collapsing.... Not they've got to *fix* the problem. Our individual foreclosures are low on the priority list when they've got to deal with the Banking system as a whole...not to mention the impact on the entire economy. What do you think would happen if one after another major bank failed? Nope.... IMO the responsibility for the home mortgage 'crisis' lies at the feet of those trading & borrowing on our mortgage notes. The greed of WallStreet & the Banking comunity to make an extra buck at our expense. My opinion is that we should all have our homes appraised & force the mortgage companies to renegociate our loans at the 'corrected' market value. They've made enough $$$ of the backs of the American People. [/QB][/QUOTE]
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