Comments on: Soothsayer of Sub-prime Scandal Says It’s Not Over http://spencerspeaks.com/2007/08/31/soothsayer-of-sub-prime-scandal-says-its-not-over/ Here are my thoughts; share yours Tue, 06 Jan 2009 10:50:13 +0000 http://wordpress.org/?v=2.1 By: LHKMAN http://spencerspeaks.com/2007/08/31/soothsayer-of-sub-prime-scandal-says-its-not-over/#comment-251 LHKMAN Fri, 31 Aug 2007 16:25:38 +0000 http://spencerspeaks.com/2007/08/31/soothsayer-of-sub-prime-scandal-says-its-not-over/#comment-251 Sorry, Jim, but this one is not up to your usual standards. Mr. Head is not necessarily wrong, but he sure is superficial - and by extension, so are you on this subject. Studies show that most foreclosures occur in houses purchased for investment purposes, with very few owner-occupied houses falling into default and foreclosure. Yes, there have been a lot of bad decisions made - throughout the entire real estate chain. By the way, let's not perpetuate the myth of "subprime" mortgages. Let's call them what they really are and always have been - high-risk loans. Too many real estate agents were happy to earn a commission by putting people into houses they could not afford with mortgages they could not handle. Too many mortgage brokers (unregulated in Colorado) were only too happy to put poeple into mortgages they knew could not be serviced, knowing that there was no way the system would come back to them. Too many appraisers were only too happy to "affirm" that a house was worth considerably more than it was just to get a fee and to qualify the poor sap buyer for a deal he should never have been in. As for Wall Street, my economics textbook says there are supposed to be penalties for failing in a capitalistic society. I haven't seen any of those who succeeded volunteering to give back the money they got as rewards. Well, they can pay the penalties of failure, too. Sorry, Jim, but this one is not up to your usual standards. Mr. Head is not necessarily wrong, but he sure is superficial - and by extension, so are you on this subject. Studies show that most foreclosures occur in houses purchased for investment purposes, with very few owner-occupied houses falling into default and foreclosure. Yes, there have been a lot of bad decisions made - throughout the entire real estate chain. By the way, let’s not perpetuate the myth of “subprime” mortgages. Let’s call them what they really are and always have been - high-risk loans.

Too many real estate agents were happy to earn a commission by putting people into houses they could not afford with mortgages they could not handle. Too many mortgage brokers (unregulated in Colorado) were only too happy to put poeple into mortgages they knew could not be serviced, knowing that there was no way the system would come back to them. Too many appraisers were only too happy to “affirm” that a house was worth considerably more than it was just to get a fee and to qualify the poor sap buyer for a deal he should never have been in. As for Wall Street, my economics textbook says there are supposed to be penalties for failing in a capitalistic society. I haven’t seen any of those who succeeded volunteering to give back the money they got as rewards. Well, they can pay the penalties of failure, too.

]]> By: no idea http://spencerspeaks.com/2007/08/31/soothsayer-of-sub-prime-scandal-says-its-not-over/#comment-254 no idea Sat, 01 Sep 2007 01:46:38 +0000 http://spencerspeaks.com/2007/08/31/soothsayer-of-sub-prime-scandal-says-its-not-over/#comment-254 Jim, Your column is right on the mark...that being said, you surely should feel some sort of outrage at John Edwards for his involvement in Fortress (an offshore hedgefund that was heavily invested in Greentree and other subprime entities known for predatory lending practices). Any talk that he was not aware of their activities either makes him an idiot, a liar, or incompetent. Nobody invests that type of money without knowing where it is coming from or going. Not to mention his postion at the fund. The outrage should be two-fold, one for his recent denouncement of the subprime mortgage industry from which he and his campaign have greatly benefited, and two for his b.s. talk of two Americas when he is parking $16M in an off shore company for tax reasons. Look it up. Jim,

Your column is right on the mark…that being said, you surely should feel some sort of outrage at John Edwards for his involvement in Fortress (an offshore hedgefund that was heavily invested in Greentree and other subprime entities known for predatory lending practices). Any talk that he was not aware of their activities either makes him an idiot, a liar, or incompetent. Nobody invests that type of money without knowing where it is coming from or going. Not to mention his postion at the fund.

The outrage should be two-fold, one for his recent denouncement of the subprime mortgage industry from which he and his campaign have greatly benefited, and two for his b.s. talk of two Americas when he is parking $16M in an off shore company for tax reasons. Look it up.

]]> By: usersuz http://spencerspeaks.com/2007/08/31/soothsayer-of-sub-prime-scandal-says-its-not-over/#comment-256 usersuz Mon, 03 Sep 2007 21:10:24 +0000 http://spencerspeaks.com/2007/08/31/soothsayer-of-sub-prime-scandal-says-its-not-over/#comment-256 John Edwards, like so many others, simply acted on the advice of professionals. Everyone thought this was a great idea a couple of years ago, and don't forget, Jim, in your list of perps, the builders who overbuilt and dumped their product on the market knowing it was not worth the appraised value. Even after everyone else took their cut, there was plenty of sugar left for the construction industry (and now Home Depot is teetering on the brink). They still can't believe it's over: the fix-and-flipper seminars are still signing people up; the fly-by-night mortgage companies are still advertising insane rates; and the builders are still breaking ground on yet another development, all in the face of the grim figures on housing sales. I think they all knew how stinky these loans were (they even put illegal immigrants into subprime mortgages) because look how fast they passed the burden on to someone else and how the PR people sold investors on the packaging of the good with the bad. Even if the refinancing provisions of Bush's FHA programs help some folks, or even the promises of Congress to come up with something broader come true, the bitter truth is that most foreclosures will go through because the value of the house is less than the value of the loan, and no one will touch that situation now. It's going to be grim. A lot of those McMansions are not even suitable as rental properties. John Edwards, like so many others, simply acted on the advice of professionals. Everyone thought this was a great idea a couple of years ago, and don’t forget, Jim, in your list of perps, the builders who overbuilt and dumped their product on the market knowing it was not worth the appraised value. Even after everyone else took their cut, there was plenty of sugar left for the construction industry (and now Home Depot is teetering on the brink). They still can’t believe it’s over: the fix-and-flipper seminars are still signing people up; the fly-by-night mortgage companies are still advertising insane rates; and the builders are still breaking ground on yet another development, all in the face of the grim figures on housing sales. I think they all knew how stinky these loans were (they even put illegal immigrants into subprime mortgages) because look how fast they passed the burden on to someone else and how the PR people sold investors on the packaging of the good with the bad. Even if the refinancing provisions of Bush’s FHA programs help some folks, or even the promises of Congress to come up with something broader come true, the bitter truth is that most foreclosures will go through because the value of the house is less than the value of the loan, and no one will touch that situation now. It’s going to be grim. A lot of those McMansions are not even suitable as rental properties.

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