Who Do We Blame for the Mortgage Crisis?

[JacMac]

"With a prospect of returns that would exceed 2000 percent, 96 individual bankers invested in LJM (a subsidiary of Enron) and Americas major banks put up as much as $25 million each."

"It's sort of the who's who of Wall Street, J. P. Morgan Chase, C.S. First Boston, Citibank, Merrill Linch, Deutsche Bank -- these are some of the premier investment banks in the world."


"It's just amazing how skilled Enron and Randy Fastow (former Chief Financial Officer) were at working Wall Street, playing on Wall Street's GREED in order to get money out of them."

"To Quote Lenon, they were, the investment bankers: USEFUL IDIOTS."


"As disturbing as Enron's own conduct, is the growing evidence that leading U.S. financial institutions, not only took part in Enron's deceptive practices but at times designed, advanced and profited from them."

"The Enron fraud is the story of synergetic corruption. There are supposed to be checks and balances in the systems, lawyers are supposed to say no, the accountants are supposed to say no, the bankers are supposed to say no, but no one who was supposed to say no, said no. They all put took their share of the money from the fraud and put it in their pocket."

"Everyone had their hand out at the table. They were all being paid. And as long as Enron continued, they received their fees. They were a part of the process, so it's hard now to say, oh, we didn't know anything."
"On August 14th, 2001 Jeff Skilling abruptly resigns, that made me angry, it made loads of employees angry. There was a real sense of betrayal by the employees. This was Jim Jones feeding us the Kool Aid and deciding not to drink it himself."

"I've thought about this and thought about this and it couldn't have been a few executives at Enron that made this happen, if you think of the banks involved, Chase, Morgan, Citibank, the billions in loans, Arthur Anderson -- what about Vincent and Elkins, the lawyers that represented us? THEY HAD TO BE COMPLICITY ACROSS THE BOARD BECAUSE IT WAS ALL TOO EASY . . . ALL TO EASY."

~from the Documentary ENRON: The Smartest Guys in the Room

Who Do We Blame for the Mortgage Crisis:

EVERYONE -- every single entity who profitted on the origination side, who turned a blind eye and said and did nothing about the massive fraud being committed in the real estate housing market.

I can't wait to read the REAL STORY behind Mozillo's abrupt resignation from Countrywide, the unraveling of the method behind the madness and the billions the top executives pulled out of the companies who have failed BEFORE they failed.

[Moe Bedard]

Great post Jac Mac! This will be the BIGGEST thing to hit our criminal justice system, EVER!

[Moe Bedard]

Great post Jac Mac! This will be the BIGGEST thing to hit our criminal justice system, EVER! Stay tuned.......

[JacMac]

I agree Moe -- have you seen the documentary ever, Enron: The Smartest Guys in the Room -- it might give you some ideas of where you want to go with your project. I kept thinking how closely related what happened with Enron is to what is happening now, to this industry.

[SoCalGal]

I'm looking for the posts/advice for homeowners who juiced their properties of all its equity by cash out refinancing 1, 2, 3 times, spent the money on a vacation to the Bahamas and a new wide screen TV, "forgot" that their rate may adjust, and are now trying to figure out how to hang on.

What about them? Aren't they victims, too?


BANNED FOR BEING A SUPREME JERK!!!

[mreedlaw]

Hey SoCal - are you a mortgage broker or a lender? Just curious...

Anyway, the people that you described would not necessarily be victims, and are not the typical poster on this forum - so what is bothering you?

Banned for supreme Jerkdom......

[Moe Bedard]

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SoCalGal..... You are out of here!!

[CaughtintheMiddle]

The homes that are foreclosing in my neighborhood are not foreclosing because they had ARMs. They are foreclosing because people have to move for various reasons: job changess/relocations, medical reasons, retirement, family reasons. I am "Caught in the Middle" because I and people like me are innocent victims of having to sell a home at a bad time. I am facing foreclosure, being treated like a criminal by the lender, being treated as stupid for spending my retirement to stay afloat, all while in cancer treatment. I and thousands like me are innocent victims.
And let's not forget that the lenders advertise(d) for you to get a home equity loan to pay off your bills, take a vacation, etc. In my case, most of the second went into home repairs and upgrades, but the loan was conditioned on paying off one car and a couple credit cards--it is stated in the contract! The lenders wrote bad loans, and everyone up the chain made fees every time the loans changed hands. Home prices in CA are inflated because every time a home changes hands, the commissions and fees are outrageous. And let's not forget skyrocketing utility and gas prices at the same time people can no longer afford their homes.

[JacMac]

The homes that are foreclosing in my neighborhood are not foreclosing because they had ARMs. They are foreclosing because people have to move for various reasons: job changess/relocations, medical reasons, retirement, family reasons

People move, change jobs, relocate and retire all the time, and the next step is not usually foreclosure so I have to believe there were other elements in those different equations that caused the foreclosure to become the only option.

NOt speaking to every one individually we'd never know the true answer I don't think.

The lenders wrote bad loans, and everyone up the chain made fees every time the loans changed hands.

This is definitely true.

Home prices in CA are inflated because every time a home changes hands, the commissions and fees are outrageous. And let's not forget skyrocketing utility and gas prices at the same time people can no longer afford their homes.

And these are valid points as well.

That being said, I'm sorry to hear you're ill and of course, facing this issue while being ill is heart breaking. The best thing to do is to find out what is the best recourse for YOU in your particular situations.

This site can help you figure that out.

[CaughtintheMiddle]

On the first point, the homes in my neighborhood (Meadowview, Temecula) are all horse properties carrying jumbo loans, so it is doubtful they had ARMs and had their rates go up. People had to move for whatever reason and the homes are sitting on the market for months; people can't afford to carry the payments indefinitely and they are foreclosing. My house has been on the market since October 14th. It is listed with the best price per square foor as compared with the other listings. We had only one offer and the buyers pulled out of the sale after the lender counter offered. The only two homes that sold in the neighborhood in January were foreclosure sales. Any possible buyers are now circling like vultures waiting for the foreclosure sale, because why should they offer more money now?
On your last point, yes, in the "Tell Your Story" forum, everyone has advised me to obtain a good RE attorney to negotiate with the lender. The information on the site has been very useful.

Caught....you do not have to justify your problems, this forum is not a place where anyone is judged. It is what it is and that is the fact plain and simple, we will ban the jerks and idiots that want to point fingers and have that smug holier than thou attitude.

So consider this a safe place where you do not need to explain yourself, are not judged and most certainly have the support of others who are in the same place through no fault of their own.

Jerks are Banned for good reason, we will catch them and Ban their sorry @sses.

[JacMac]

Any possible buyers are now circling like vultures waiting for the foreclosure sale, because why should they offer more money now?

As this becomes more and more of a problem, this is the type of scenarios that I see a lot of people facing. It's so sad . . . .

Whether it's an ARM, a loan that was affordable and now isn't, I think we are all facing unique situations and we all need help. Mortgage brokers like to lump us all together as dead beats but that just isn't the case.

[RecentHomeBuyer]

Originally Posted by Mary Salzer

Banned for supreme Jerkdom......

Hi friends! I just found this site and think its great theres someone out there to help people in trouble. That being said, I'm a bit concerned when I start reading forums where people are banned for voicing an opinion you don't like... Doesn't it say in this category "Feel free to contribute your thoughts or debate mine" ?? The way I see things, if you are on the correct side of an issue then logic should be enough to win a debate, no need to silence people.

As for the thread title, I personally lay blame accordingly: 20% negligent homeowners, 40% greedy loan officers, 30% investment banks/ratings agencies, 10% government institutions.

That's my opinion anyways, I hope it doesn't get me banned!

Those people weren't banned fo voicing an opinion. One was banned for totally different reasons(Mary Salazar) and the other person just came on the forum and posted negative things with out asking for help on their mortgage. This forum is to HELP homeowners avoid foreclosure regardless of how they got to that point.

[Andrew]

Ranjen is right people are banned for various reasons. Especially Mary Salazer like Ranjen stated. You are entitled to voice your opinion.

[mtg2008]

We are human belings, we do make mistakes, if none of us bought our houses, I think we would never join this forum, would never need modify our loans, .... So we are here help each other to go through the most difficult time in our lives, to save our homes, to make the best for our children and family. We learn from each other and we learn from our lessons. We hope we will not do it again in our rest of the lives.

[frankthetank]

Here is my opinion on the subject, I strongly beleive this to be proven fact but I know that different people have different opinions.


There is only one common source of all major economic bubbles,swings, and problems, and that is ofcorse the FEDERAL RESERVE.

One major way that the federal reseve controlls the money supply and therefor its value is by lowering or raising interest rates. This system of controlling money is doomed for constant failure just as it has been failing for almost 100 years since its beginnings. It greatly worsened and caused the great depression, it caused the tech bubble, many market crashes and resessions and most recently the housing bubble.

When the fed makes interest rate decisions it is never for the future it is always to fix a problem caused in the past. In other words when the fed makes its moves it is to attempt to solve a problem that it caused by its last move and in doing so will cause another problem in the future.

Follow my logic here:

1) the fed lowers interest rates and increases the money supply, which causes prices to rise, becaue each dollar is worth less. This causes massive inflation.

2) Then in an attempt to controll inflation they have no choice but to raise interest rates significantly to contract the money supply, this causes an economic slow down.

3) In an attempt to "stimulate the economy" the fed now has to lower interest rates to increase the money supply and once again causing mal investment and massive inflation and "bubbles".

4) the process started in 1913 and has continued till the present, right now we are in the phase of lowerd interest rates in an attempt to stimulate the economy and within a few years will be in the phase of high interest rates in an attemt to solve the problems we are currently causing by trying to solve another problem. (I predict 18% and higher mortgage rates within 7 years) it happend in the eighties under similar circumstanses.

The reason why the fed will never work no matter who runs it or makes the decisions is because it does not work under the principle of supply and demand. Interest rates should raise naturally as demand for loans increase and lower naturally as demands for loans decreses, this ensures the perfect interest rates at all times.

So some may point the blame of the housing bubble at individual people or companies, but they are just working in the system that allows such things.

Its like if all the police in NY city handed their guns over to prizon immates and then released them, then went on vacation, sure it was the criminal who robbed you at gun point but is that the sole person who should get the blame?

another reason why the fed is doomed for constant failure is because it forces the entire country to abide by one central interest rate,
for example it may have been best for florida and california to have higher interest rates at a certain time but whould have been bad if those same interest rates were in nebraska.

Supply and demand must controll everything, from car prices to gas prices to interest rates to phone service and so on.

I can go on and on and on lol this is just the tip of the iceburg when it comes to the fed and all its failings and corruption and most importantly its by default systems of failure.

[HappyHome]

This Whole thread is has been a really good read for me.. I've been outta the LoanSafe LOOP for a bit and so glad to be back around. Hi Moe Hi *** & Mary & all you guys/gals..! Anyway I just wanted to say I was promised Practically The Moon & Stars ..3 years ago.. I COULD Def. re-fi in 18 Months.. blah... blah Blah.. all devilish LIES..~>> and Things WERE Kept from Me and so Oh So Twisted .. I am Not considered Dumb Stupid or whatever BUT Even If I was Either Less Educated or Naive or whatever as Some People who trusted the wrong people as were ALL were NO MATTER WHAT OUR BACKGROUNDS This Was The Big REAL ESTATE MOGUL (sp.) MAFIA/Financial RAPE(excuse me) of THE CENTURY! Okay?!Hurting Non Just only Financially but also Emotionally.. on and on and on.. it's really rather a disgusting way to treat fellow Americans( trusting and being bascially stabbed in the back..!) With so many victims That couldn't even think of Vacations!??? or Oil for their Furnace ( ie: ME none No Oil for two Years now ..heck I've got little ol' electric heaters..!) so as to stay on Point here (( b/c this makes me really Upset..) That being WE WERE SCAMMED & LIED TO DECEIVED and TRICKED with whatever means that they ((banks,lenders,RE ppl, InFlated Appras.Closed Attys..))<< I Call 'em the "snakes" THE Predatory Patrons ( who Support their OWN Cause!) could to Profit and get us in agreement to a Basic Lie(s)
Glad to See SoCalGal was kicke d outta here! thanx ***..!

[frankthetank]

Maby that is all true but dont forget about the feds massive role in all of this.

When they artificially create fake money and give it to anyone and everyone for low interest it is like begging the banks to somehow and someway loan all this cheap money out, and its no surprise that banks and brokers had to get creative to loan out all this cheap money.

Thats why they were able to create such shaddy sub prime loan methods to people who they normally wouldnt give loans to, it becaue the fed made money artificially low.

Its like if the fed had control over oil prices and they lowered the price to .15 a gallon, dont you think the use and mis-use of oil would skyrocket?

Americal will be eventually destroyed by the federal reserve

[mtg2008]

Hi all,

I think the government is not helping too much now. We do not know what went wrong, but we are in ressesion for sure.

I don't want to talk about the politics here, but I just wonder if we think the next president will help and clean some of the mess here.

I am thinking we are American here is really suffering everyday. I just hope everything will be getting better soon.

By the way, i will become US citizen in 2 days. I am really excited. I will vote this year.

Thank you all.

[CaughtintheMiddle]

I have my doubts whether either candidate will do the right thing. All politicians are so out of touch with the common man. Let's hope they listen to some good economists. The country needs to get itself out of its own deficit and its own trade imbalance. I'm ticked off that Bear Stearns gets bailed out while individuals are left hanging.
All said, we still have the greatest country in the world and I am so glad you are becoming a citizen! Welcome to our country. We complain and call and write our representatives because we are a government OF THE PEOPLE, BY THE PEOPLE. Congratulations on your citizenship and I am sorry you are going through tough economic times, too. We have to count our blessings and stay positive!

[frankthetank]

None of the candidates are good for the economy especially in housing, in fact one will make it worse and the other will make is even worse.

one wants to have more government control of the economy and the other wants even more government control lol

The only way to fix our economic problems, is to start taking away inefficiant and corrupt government institutions like the federal reserve, medicare, welfare, FDA, and so on, and neither candidate is even comming close to talking about that.

As far as houseing and the economy goes, I think nothing less than a Ron Paul kind of president would make and meaningfull difference.

Just my two cents..

[mtg2008]

Thank you CaughtintheMiddle. I am going to LA convention center tomorrow to join the oath ceremony for the citizenship. I am excited. I know sometime we all hate politics. Why can't they just do the right things for the people? I will vote anyway to exercise my right. We hope next one will be better than the president we have. At least make something better for us. It is going to be tough for anyone to take over the mess.

Thank you.

[CaughtintheMiddle]

World economy is pretty interesting this week, huh? Let me see, all the world markets are crashing because a few families in the US took out some ARMs???!!!! (Energy costs can't possibly have anything to do with it!)
Pretty interesting theory, that one. Funny to see people still pointing fingers. Still trying to figure out why I'm going to BK 13 court on Monday because I decided to move out of state. Know who the number one, priority creditor is? You got it, the IRS, because they have to bail out everyone on wall street. Number two of course is Ditech/GMAC who should be told to go to h - e - double toothpicks because they do not deserve to get the money back on a house with half it's appraised value.
When did the laws change so that the person taking out the loan was the only one taking a risk, while the lender now takes NO risk, because he knows the government will bail him out?????
The crash/mess will be talked about for years, but I wonder if real, intelligent solutions will ever be made.