Personal Responsibility? Nah.

"At this festive season of the year, Mr. Scrooge," said the gentleman, taking up a pen, "it is more than usually desirable that we should make some slight provision for the Poor and Destitute, who suffer greatly at the present time. Many thousands are in want of common necessaries; hundreds of thousands are in want of common comforts, sir."

"Are there no prisons?" asked Scrooge.

"Plenty of prisons," said the gentleman, laying down the pen again.

"And the Union workhouses?" demanded Scrooge. "Are they still in operation?"

"They are. Still," returned the gentleman, "I wish I could say they were not."

"The Treadmill and the Poor Law are in full vigour, then?" said Scrooge.

"Both very busy, sir."

"Oh! I was afraid, from what you said at first, that something had occurred to stop them in their useful course," said Scrooge. "I'm very glad to hear it."

Not much personal responsibility on the parts of the lenders, hmmm?

Cycloptichorn

That would be corporate responsibility. I believe the main goal of a business is to turn a profit, not hold the hands of their customers. If the customer doesn't like that, they are free to no longer do business with that company and the company goes out of business due to lack of profit.

No one twisted anyone's arm to take out a mortgage they would not be able to afford. Yet, here we are, having to bail out the the people that saw only the end of their nose instead of what might lay beyond it.

I feel bad for people that can not afford homes, I really do. However, I do not feel people should be bailed out every time they get in over their heads.

I have lots of debt too. 6 months of no mortgage payments would go far for me in getting out of that debt, yet somehow I doubt I will qualify to get any relief.

Why? These are not children. These are adults who made poor financial choices. Are poor people less responsible for the results of their decisions than people who are better off? Or, maybe the reason that they ARE poor is because they are inefficient managers of their money. At any rate, I see no reason why companies are obliged to bail them out.

It seems McG is unfamiliar with the shenanigans and outright fraud often associated with sub prime mortgages.

Subprime lenders have been known to not provide the promised rate when it comes time to sign the paperwork.

Did you read everything you signed at your closing McG?

http://www.stopmortgagefraud.com/

Good one, Joe . . . er, i mean General . . . always one of my favorite passages . . .

No, but my lawyer did.

So, you didn't read everything at your closing McG. Thanks for confirming that. You are like 90-99% of other people.


Subprime borrowers don't bring a lawyer to their closings. They are often subprime because they can't afford things like lawyers. Yes, they are adults but adults can be easily hoodwinked by unscrupulous people out to make a buck. It happens all the time. Should we as a society just say, so what? They were adults. If they weren't smart enough to protect themselves, too bad.

That isn't how our social compact works.

I dunno. -I- always read the whole contract before signing. (I get plenty of funny looks. "Hey, if you like, I can put a statement at the bottom saying I haven't read it and don't actually agree to the terms." "No, no, don't do that!" Read the whole thing, always.)

On a more serious note, the real problem you run into here is the theory of moral hazard. Essentially, if the government acts to remove the risk involved in risky behavior, it encourages more risky behavior. Here, the risk is by people who signed home loans that they can't continue to pay for - not, I hate to say it, a really wise move. But if people can sign a mortgage without really having to worry about their ability to pay for that mortgage - because they'll get bailed out by the government, never fear - that's just going to cause more people to get into mortgages that they can't afford, and drive housing prices up even higher (not a positive consequence in this already-overheated market!)

If, as the original article stated, there are indeed plenty of affordable loans that these people qualify for, then they should go ahead and refinance - doubtless the re-fi companies would be happy to have the business. I suspect, however, that the reason that these people couldn't get those loans in the first place is precisely because they couldn't qualify for them. Either they don't have the income to sustain the payments, or the price they're paying is too high relative to the value of the property.

Think of it like this - you can say "I signed a car loan at too high of a rate, and I really need a car, so I need to refinance that loan!" Some people will be able to, sure. But if you are driving a Lexus SUV on a McDonald's salary, you have -bought too much car-. There is nothing you can do with respect to financial rearrangements to cover the basic problem, which is that you have purchased something that you cannot afford.

If you want the lenders to bleed, don't worry, this will happen shortly. If there's a wave of foreclosures, these properties will again be hitting the market, which will almost certainly be the last straw as far as home prices go; if you've lent out $800k for a property and its price goes down to $300k before you can sell it again, yeah, you'll have taken a bath. I seriously doubt anybody will be crying for the lenders then...

I'd be interested to see exactly what constitutes "predatory lending." Anyone have an explanation of that term?

I cannot over-emphasize, though, that we must, must, MUST emphasize that people are responsible for their contracts. Read the whole thing, ask questions if you don't understand, and if you're told something that doesn't seem to jive with the written text of the contract, -get the contradiction resolved and that writing in the body of the contract-. Don't just sign it because you're impatient - someone dealing honestly with you will be happy to fully explain the contract, and if they're not intending to deal honestly with you, then you shouldn't sign anyway!

I agree with most all of this, though I will say that massively relaxed standards amongst Lenders (NINJA Loans? WHAT THE F*CK were they thinking!) combined with the Bankruptcy Bill passed a few years ago (Thanks Biden, D-MBNA) has lead to a much worsened situation from what most of us would expect.

Even if the people did make the bad choices - and should be responsible for them - the effects of these losses will hurt all of us in society. It might make sense to come up with some sort of mitigating plan rather than just ride it out and pretend that nothing's wrong.

Cycloptichorn

Well, apparently micky g proves my point that conservatives have the ethical values and social conscience of cannibals.

"Why," he asks "should those who are prey to the unscrupulous and cannibalistic denizens of our society be protected by our government?"

Of course for those with degenerate social values who refer to themselves as conservatives "government" is merely what protects their own private property and fu*k the very basis of government itself which is classically believed to be the social means to protect those who can not do it themselves.

There is no doubt that there are unscrupulous people out there. If a lender has broken a law, he should be punished. What I object to is the concept that some adults cannot fend for themselves, and that the "nanny" government is obliged to bail them out when they make a poor financial decision.

There are plenty of people who are better off who have been hoodwinked by dishonest financial advisors, shady lawyers, etc. One never hears an uproar about how those folks should be helped out of their predicament.

Is there a double standard for citizens? Are what people really saying is that there are some people who really cannot care for themselves, and need the government to watch over them?

Ehem, yes.

Mostly, at least.

I mean, this is considered here as consumer protection, without any double standard at all, equal for all (in the EU).
(We've got in Germany - and similar most other European countries - a Federal Ministry [besides those on state level].)

There is a difference between making poor financial decisions and being taken advantage of.
Sure you do. People go to jail for hoodwinking rich people. The rich have more access to the law. They sue to get their money back. They get laws passed to protect themselves. If you don't know that then you aren't paying much attention. I am presently a class member in 2 suits against companies for fraud aimed at the investors who bought their stock while being lied to by the company.

Why do we have any laws then? Shouldn't people be adult enough to fend for themselves. Why does the government watch over my property rights? Shouldn't I be adult enough to defend my property myself?