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In his state of the nation speech last night, when discussing the sources of our current financial crisis, President Obama uttered the oft repeated notion that Americans “got mortgages that they couldn’t afford” - suggesting that individual Americans, collectively, were a responsible factor in creating our current economic crisis. Even though I was a banker in the past, I wouldn’t have to be to understand that that’s just bunk.

As Americans we too frequently love to blame the victim. When a woman is raped we infer that she somehow invited her attack. When someone is mired in poverty we suggest that they just need to “make better decisions”. Now, when unregulated corporate greed dismantles the soundness of our financial system we blame the people being put out on the street as their homes are foreclosed. Does that make any sense whatsoever?

Last time I checked, when someone applies for a mortgage they produce their financial information and the bank tells them what they can and can’t afford. People don’t walk in and “take” a mortgage that’s too big for them - like they are selecting from a range of products on a shelf. Financial institutions create the criteria to determine what and with whom they will lend. To be sure, consumers didn’t either create or force ‘subprime loans’ down banks’ throats. It was their greed that caused them to stretch their lending criteria, but while they get billions to be bailed out - millions of Americans suffer.

We live in a society where we are encouraged to consume - to buy, buy, buy. Is it really a surprise when someone accepts a mortgage that their lender tells them they qualify for? Is it really fair to blame the consumer when s/he consumes what is put before them - particularly when they are the ones now bearing the overwhelming brunt of the problem?

I’ve always been told that the first step in confronting a problem is honesty. Blaming people who were merely striving for the American Dream (that is thrust upon them by our rapacious brand of consumerism) is not only dishonest, it has no choice but to sustain the real problem.

© MBM

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quote:
Originally posted by MBM:
Is it really fair to blame the consumer when s/he consumes what is put before them - particularly when they are the ones now bearing the overwhelming brunt of the problem?



Yes it is fair. These contracts are made with adults not children. Look deeper into this situation and you will see that most of these cases are not old mother hubbards losing their home and being put out on the street. Just becuase somebody puts a plate infront of you doesn't mean you are not responsible if you eat it and get sick.
I'm torn. I remember in 2004 & 2005 specifically thinking, "Why are these dumb-asses paying these super-inflated prices?!?" And "I can't wait 'til these clowns start foreclosing en masse, so I can finally afford to buy a house!"

I was looking once, and found a place. Because of the taxes, it looked like I was really pushing to the edge of what I could afford. Then the bank preapproval letter came. It was more than twice the amount I was going to buy the place for. When I would tell people about this, I was surprised by how many people responded, "Well, the bank's not gonna approve u for a mortgage they don't think you'll be able to make."

I knew what I could or couldn't afford. The bank was wrong, and I knew it. But I understand that so many people have that sentiment, that the bank has the experience and insight to know what to approve.

The problem is due to banks getting greedy. But it's also due to our terrible education system. Ever since I was little kid, I've been hearing how bad America's schools are compared to other countries. Well, a lot of these kids who were educated in the substandard schools of the 70s and 80s are grown now, taking out adjustable rate mortgages at a time when rates were at historic lows, to buy houses they could never have afforded.

Rather than bemoan the fact that some people blame "the victim," what we need to be doing is waking up to the reality of what this society's more lackluster aspects is having on the minds -- both the priorities and the intelligence -- of the people of this country.
quote:
Originally posted by MBM:

As Americans we too frequently love to blame the victim. When a woman is raped we infer that she somehow invited her attack. When someone is mired in poverty we suggest that they just need to “make better decisions”. Now, when unregulated corporate greed dismantles the soundness of our financial system we blame the people being put out on the street as their homes are foreclosed. Does that make any sense whatsoever?


I think the definitions of the words "blame" and "responsibility" too often get skewed, intertwined and misused when talking about subjects like this.

Buying more house (or anything else for that matter) than one can afford is irresponsible. Period. And any and all adults should be held responsible for any decisions they make ... especially if others, like a family, will be affected.

You may be able to place *blame* on the mortgage companies for intentionally preying on the temptation that they know most Americans have for home ownership. It's just wrong to exploit somebody like that.

But the ability to choose what is right or wrong, good or bad, beneficial or harmful lies solely and completely with s/he who is making the decision. Period.

No one forced anybody to get themselves in the financial bind they find themselves in today. The deal was 'too good to be true' from the get-go. I mean, that's obvious, considering that the problems that we're looking at today.

At some point, there was a "Yes, I will do this / No, I will not do this" choice. And there's a lot of people that made the wrong one.

However, I do not believe that *blaming the victim* has the same meaning as *holding someone to responsible* for a responsibility of choice that was clearly theirs .. and nobody elses.

Most people know nothing about buying a house ... especially the first time around. But, it's not like such vital information is not plentiful nor easily accessible and widely available.

Unfortunately, I attribute a good portion of this mess to the prevalent mindset of a large sector of the American population today which is primarily set at a *I want it now/give me immediate gratification and deal with whatever consequences later* way of thinking that tends to fast-foward past obtaining imperative knowledge or any potential pitfalls in favor of self-satisfaction with as much limited self-involvement and interaction as possible.

Knowledge is power. That is one saying/phrase what will ALWAYS remain true no matter what. And can't be fast-tracked. And needs to be heeded to MORE often, not LESS.
quote:
Originally posted by EbonyRose:

No one forced anybody to get themselves in the financial bind they find themselves in today.


No one forces anyone to eat tainted food. No one forces anyone to breath unclean air. No one forces anyone to do anything. Right?

There's a LONG history of companies doing anything and everything to make money. I don't see how this mortgage mess is any different.
I began to notice about a year ago, that the mortgage situation was being attributed to MINORITIES who couldn't afford homeownership defaulting on their loans. The media repeated it so frequently that MORTGAGE CRISIS = IRRESPONSIBLE MINORITIES became a sort of shorthand.

I couldn't fall for that, knowing that many african americans are not actually homeowners, but rather, renters and that our homes and property was not valued in the hundreds of thousands of dollars....appraisers did not valuing our homes in the $350K and up range. We were lucky to get $50k - $100K

so i began reading up and listening to other discussions about this - because nobody was refuting the automatic association of the bad economy with blacks and other minorities specifically. It was accepted point blank and frequently repeated by not only FOX, but also CNN, MSNBC, and all over talk radio etc. A papable level of anger toward minorities could be detected as callers and commenters expressed how horrible it was that banks were forced to lend to blacks and now everybody else would have to pay for it. Even now, we have people repeating the same line from sean hannity and rush limbaugh about irresponsible people and how the rest of america shouldn't pay for their bad choices Roll Eyes

Largely it's white americans who viewed their home as something other than a home. They treated their home as ATM's and celebrated gleefully when homes were OVERVALUED (essentially pricing blacks and other minorities out of the McMansion neighborhoods) They also flipped the hell out of neighborhoods and extracted the value from multiple homes...

meanwhile the banks, and other lenders, profitted from the overvaluation done by appraisers that they hired. Then they "securitized" the whole thing and profitted some more from selling bundles of mortgage payment obligations. There was no incentive to stop the madness. And now, with the TARP funds, we are pouring more taxpayer money into the same institutions.


people don't seem to understand that a huge chunk of WHITE AMERICANS are losing their homes left and right. They were told they were approved for a $600K home, they could move in with no money down, they didn't have to make payments for years, they could refinance before the price rose, yada yada yada. And now they are shocked to find themselves crying atop a heap of belongings piled in the streets or at the courthouse crying while their home is auctioned off. The media has been complicit in obfuscating the true picture of the situation. I can only assume that was done to avoid a national panic and violence in the streets?

I am instantly suspicious when i hear ANYBODY repeating that "irresponsible home buyers" schlock. That is only a small part of the picture.
I think the banks and the mortgage holders are both responsible. There was a news story here about a single mother with 3 kids who made a living as a daycare provider "buying" a $300,000 home. Of course, she was facing foreclosure; but how did she manage to qualify for the mortgage in the first place? Should she be bailed out? Or should she be educated on how to purchase an affordable home?
quote:
Originally posted by negrospiritual:

Here's a link to a pretty good discussion of the situation. Kweli and Ac9311 are quite knowledgable


http://africanamerica.org/eve/...571092644#3571092644


I agree - from that thread:
quote:
Originally posted by Kweli4Real:

As you've [via the article] mentioned, 100s of thousands of working class people are trapped in sub-prime loans and are now experiencing back-breaking, or better, budget breaking payment increases. They were roped into 2/28 loans [2 years at a low interest, low payments rates, followed by 28 years at a substantially higher rate] not because they were foolish or unsophisticated borrowers; but because they were told, "take this low rate for the 2 years, get your credit together and with the house's appreciation as increased equity, re-fi before the 28 year rate kicks in." [I know this is what I was told] The industry and the media worked over-time to show that houses were appreciating at unheard of rates [30-40% in 2 years, so the deal seemed like a smart move.

But all of this was based on continued housing appreciation and a loose credit market. Sadly, this is exactly what didn't happen.

Now the secondary banking markets are saddled with securities backed by assets [the notes and ultimately, the houses] that are losing value.

But everyone is being hurt be the banking industry's "Get paid today, damn tomorrow" business model. You and I, through our pension plans, are heavily invested in these securities, just like we were in Enron because its bust.
quote:
Originally posted by nuggyt:
quote:
Originally posted by MBM:

No one forces anyone to eat tainted food. No one forces anyone to breath unclean air. No one forces anyone to do anything. Right?


Those examples are not even on the same map. Just because the bank says, is no reason to sign your life away.



that's true, people have to be more informed about such a major decision, but it can't be denied that there was a major almost unbreakable loop where overvaluation and securitization drove banks/lenders/security companies to entice people into incredibly dicey situations strictly for profit
quote:
Originally posted by MBM:
quote:
Originally posted by EbonyRose:

No one forced anybody to get themselves in the financial bind they find themselves in today.


No one forces anyone to eat tainted food.
Do you think most people would eat tainted food with a big sign that said "TAINTED" on it before they put it in their mouths? Confused

Most people who ate tainted food did not know and could not have reasonably known beforehand that the food was bad.

Knowing you are about to buy a property with an over-inflated value for an amount of money that in all probability you can't afford to pay for when added with other living expenditures and unforeseen emergencies is not rocket science. Nor do you need to depend on somebody else to obtain that knowledge.

quote:
No one forces anyone to breath unclean air.


This isn't necessarily true. The ONLY way to avoid breathing unclean air is to live in an environment where the air is clear ALL THE TIME. Otherwise if you don't breathe, then you die. People DO have the choice to live or to die (kill themselves so they don't have to). But, really ... isn't that more God's determination than our own? Confused

quote:
No one forces anyone to do anything. Right?


Absolutely! tfro

quote:
There's a LONG history of companies doing anything and everything to make money. I don't see how this mortgage mess is any different.


From the companies standpoint, I see no difference either.

However ... if I strung a tightrope between two 40-story buildings and I told you to walk across .. that I KNEW you could do it .. scores of other people before you have .. and you can too!! Just put one foot in front of the other until you get to the other side (which, in fact, IS the correct instruction to do that) and the building is yours!!

Do you trust me (who, by the way is telling you the truth and on both a sub- and conscious level you know that!) .. or do you trust the fact that you've never been on a tightrope before, you have no net to catch you, no experience, you probably won't make it, and if you fall, you will be dead? 19

And if you DO get to steppin' .. and plunge 40-stories to your death ... is it really MY fault that your life ends so soon? Confused
Last edited {1}
Last time I checked, when someone applies for a mortgage they produce their financial information and the bank tells them what they can and can’t afford.---MBM

Check again.

In recent years, banks have been telling clients with concern about ability to pay, 'Not to worry. We can take care of that. No down payment? No Problem..

Banks were accepting clients UNSUPPORTED STATEMENT OF INCOME.


Since we are talking about the 'spin about the mortgage mess'....

A part of that mess is the refusal of any responsible person or agency to acknowledge the 'Mortgage Moratorium Proposal' that was advertised in...not one...but two...full-page ads in the Congressional Newspaper!!!!

And...every member of both The Senate and The House of Representatives received personal copies of the plan.

That's part of the lie...the spin....

Why not cut that????

PEACE

Jim Chester
quote:
Originally posted by James Wesley Chester:
Last time I checked, when someone applies for a mortgage they produce their financial information and the bank tells them what they can and can’t afford.---MBM

[i]Check again.

In recent years, banks have been telling clients with concern about ability to pay, 'Not to worry. We can take care of that. No down payment? No Problem..


That's my point exactly.
quote:
Originally posted by James Wesley

Check again.

In recent years, banks have been telling clients with concern about ability to pay, 'Not to worry. We can take care of that. No down payment? No Problem..

Banks were accepting clients UNSUPPORTED STATEMENT OF INCOME.



But who were the people getting these "no doc" loans?. During my search for a townhome, I was never offered a no doc loan, but I could have gotten a mortgage that was just too steep for me to pay. I wouldn't have had any breathing room left over at the end of the month. Needless to say, i wound up home-less Big Grin (still renting) And none of the people I know who bought a home in the last 2-5 years was offered a no doc loan? Who were they given to?
quote:
Originally posted by MBM:
In his state of the nation speech last night, when discussing the sources of our current financial crisis, President Obama uttered the oft repeated notion that Americans “got mortgages that they couldn’t afford” - suggesting that individual Americans, collectively, were a responsible factor in creating our current economic crisis. Even though I was a banker in the past, I wouldn’t have to be to understand that that’s just bunk.

As Americans we too frequently love to blame the victim. When a woman is raped we infer that she somehow invited her attack. When someone is mired in poverty we suggest that they just need to “make better decisions”. Now, when unregulated corporate greed dismantles the soundness of our financial system we blame the people being put out on the street as their homes are foreclosed. Does that make any sense whatsoever?

Last time I checked, when someone applies for a mortgage they produce their financial information and the bank tells them what they can and can’t afford. People don’t walk in and “take” a mortgage that’s too big for them - like they are selecting from a range of products on a shelf. Financial institutions create the criteria to determine what and with whom they will lend. To be sure, consumers didn’t either create or force ‘subprime loans’ down banks’ throats. It was their greed that caused them to stretch their lending criteria, but while they get billions to be bailed out - millions of Americans suffer.

We live in a society where we are encouraged to consume - to buy, buy, buy. Is it really a surprise when someone accepts a mortgage that their lender tells them they qualify for? Is it really fair to blame the consumer when s/he consumes what is put before them - particularly when they are the ones now bearing the overwhelming brunt of the problem?

I’ve always been told that the first step in confronting a problem is honesty. Blaming people who were merely striving for the American Dream (that is thrust upon them by our rapacious brand of consumerism) is not only dishonest, it has no choice but to sustain the real problem.


Ignorant victims need assistance with restoration and taught, in a reasonable manner, how to mine life better...

Predators need to be punished and removed from society...

that's all..
quote:
But who were the people getting these "no doc" loans? ... none of the people I know who bought a home in the last 2-5 years was offered a no doc loan? Who were they given to?


NS, you don't have to ask that question ... Do you? Well, as I talked about in that thread where Leart was acting like this mortgage meltdown was a Black thing ... It was [primarily] white investors getting the no doc loans, followed by middle aged white folks wanting to move into nice [read: no/few Blacks] areas, followed by connected white folks, followed by, [far, far in the distance] connected minorities.
quote:
Originally posted by Kweli4Real:
Well, as I talked about in that thread where Leart was acting like this mortgage meltdown was a Black thing ... It was [primarily] white investors getting the no doc loans, followed by middle aged white folks wanting to move into nice [read: no/few Blacks] areas, followed by connected white folks, followed by, [far, far in the distance] connected minorities.


Absolutely! And everyone knows this, but people of color took the fall for this meltdown. I'm still angry about how it was spun. 6
quote:
Originally posted by shulamite:

I'm still angry about how it was spun. 6



yeah

me too and i noticed yesterday CNN still had some crazy poll question about whether President Obama's proposed mortgage assistance plans were fair to those who played by the rules... But note, they did not ask whether sinking trillions of taxpayer money into corrupt wallstreet firms was fair to those who played by the rules

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