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I've never understood why people like Texas. Its citizens alone drive me away.

Richmond is a city? And I don't see a fundamental problem with a city attempting to help out it's citizens, but the method bothers me.

And then part of me wants to tell everyone with a bad loan to deal with it themselves.

I think everyone thinks Texas will be like "King of the hill"

 hotsauceman1 wrote:
I think everyone thinks Texas will be like "King of the hill"

Yep that is how Texas is. Everybody stands outside sipping bear and just saying yep!

 Aerethan wrote:
A fair enough point that the homeowners shouldn't have bought houses they couldn't afford, but the banks who gave them money knew damn well the risk they took when they gave that money.

But they weren't taking a risk. That's where credit default swaps came in. Until the system entirely collapsed, the bank made out either way. Homeowner pays on the mortgage, the bank makes money. Homeowner defaults on the mortgage, the 'insurance policy' the bank took on the mortgage covers their loss.

 hotsauceman1 wrote:
I think everyone thinks Texas will be like "King of the hill"

Nah... it's a narly place.

Colorado is also pretty cool to. (My folks live there now, so I'm biased). They see this out their window:

I think of Texas as my Purgatory. I lived there for 5 years. And as added insurance, I did Basic Training there. That should have atoned for all of my sins.

And just in case that didn't, the 2 years I spent in Louisiana more then makes up for it.

 djones520 wrote:
I think of Texas as my Purgatory. I lived there for 5 years. And as added insurance, I did Basic Training there. That should have atoned for all of my sins.

And just in case that didn't, the 2 years I spent in Louisiana more then makes up for it.

Where does living in St. Louis rank with those two places?

 whembly wrote:

 djones520 wrote:
I think of Texas as my Purgatory. I lived there for 5 years. And as added insurance, I did Basic Training there. That should have atoned for all of my sins.

And just in case that didn't, the 2 years I spent in Louisiana more then makes up for it.

Where does living in St. Louis rank with those two places?

St. Louis wouldn't be so bad. Living on the Illinois side of the river drops it quite a bit. Certainly not the worse place the Air Force has sent me, but no where near the top of the heap either. I'd put it around 2.7 out of 5.

 djones520 wrote:

 whembly wrote:

 djones520 wrote:
I think of Texas as my Purgatory. I lived there for 5 years. And as added insurance, I did Basic Training there. That should have atoned for all of my sins.

And just in case that didn't, the 2 years I spent in Louisiana more then makes up for it.

Where does living in St. Louis rank with those two places?

St. Louis wouldn't be so bad. Living on the Illinois side of the river drops it quite a bit. Certainly not the worse place the Air Force has sent me, but no where near the top of the heap either. I'd put it around 2.7 out of 5.

I'd say that's fair...

I tried to stay in Colorado and San Antonio for a bit... you wanna know I missed about St. Louis, MO? The TREES!

And I have no fething idea why I would miss having trees. Maybe I go some sort of elvish blood coursing through my veins.

 Frazzled wrote:
Don't worry though, no one in that district will be able to get a mortgage in the future if they actually do it. Or if they do so, it'll make credit card interest look like a loan from the Pope.

No, it means that banks won't be interested in lending an amount to a homeowner that is likely to be more than the house is worth outside of a temporary real estate bubble. This means banks will either start requiring a decent amount of equity from homeowners, or will become much more conservative in their house valuations. Which is a good thing.


Now, I don't like this as a piece of law, and I think its a really dubious practice for government to set about correcting economic injustice through retrospective legislation like this, legislative security and all that, but let's be honest about the particulars of the loans the banks are losing out on here - they were gak loans on overpriced properties with insuffiicient equity. When banks make a loss on those loans it gives them a direct incentive to stop making those kinds of loans... which is how it is supposed to work.

It's just a shame that it's being attempted through a dodgy practice like this, instead of through the development of proper, forward thinking regulation.

 Polonius wrote:
Right or wrong, the litigation costs are going to be fierce.

And I'm not sure "allowing people to keep their homes" is going to fly for eminent domain. Nobody is comfortable with New London (the case holding or the real life economic aftermath).

For real. I still think it was a bad call. I think you disagreed with me though. I forget.

 whembly wrote:
Colorado is also pretty cool to. (My folks live there now, so I'm biased). They see this out their window:

My cousin moved to Colorado a few years ago. Bought some mega-home on the lake, just an amazing place. I'll get the name of the lake if you're interested.

I have a few objections to this.

1. I oppose virtually any expansion of eminent domain laws.
2. I oppose any government entity "choosing a winner" placing imprimatur of any kind on one private firm over another.
3. What Herbert Spencer said: "The ultimate result of shielding men from the effects of folly, is to fill the world with fools".
4. Government helped create the mess that they are now trying to "rescue" us from by requiring lenders to write high-risk loans. Banks, goverment and borrowers should now suffer the consequences of bad decisions. Banks lose money; borrowers lose homes; govt. deals with negative market impact/loss of population tax base etc.

 Doomsdave wrote:
I have a few objections to this.

1. I oppose virtually any expansion of eminent domain laws.
2. I oppose any government entity "choosing a winner" placing imprimatur of any kind on one private firm over another.
3. What Herbert Spencer said: "The ultimate result of shielding men from the effects of folly, is to fill the world with fools".
4. Government helped create the mess that they are now trying to "rescue" us from by requiring lenders to write high-risk loans. Banks, goverment and borrowers should now suffer the consequences of bad decisions. Banks lose money; borrowers lose homes; govt. deals with negative market impact/loss of population tax base etc.

1) Yeah, I think outside of extremely narrow areas (installation of major new infrastructure like a rail line or an airport) eminent domain is a bad, bad thing.

3) Yes, and no. I think it's quite naive to consider that if we all become completely exposed to the risks of any home loans we take, then we will all become experts in the housing sector and in the risks of long term financing. And what's more, it isn't just individuals but banks who need to be exposed to their practices, but the lendors themselves - when the next bubble happens, why wouldn't the banks happily repeat their lending practices, letting people borrow more than the long term value of the house, when they have little equity to cover any move in market price?

4) There was no 'requirement' to make high risk loans. There was an effort made to reduce government restrictions on lending practices, as it was deemed these prevented loans to low income people that banks would otherwise be willing to lend to, but there was never any push by government to make these loans. The banks themselves made those loans, because the housing bubble led to unreasonable optimism that future price increases would cover the risk, and because they were able to shift the loans on to third parties through mortgage tranching.

 Doomsdave wrote:
2. I oppose any government entity "choosing a winner" placing imprimatur of any kind on one private firm over another.

But the government is already choosing winners by bailing out the banks. Or do you think that the banks would have made so many high-risk loans if they weren't confident that they could keep the profits while passing the losses on to someone else (preferably taxpayers)?

3. What Herbert Spencer said: "The ultimate result of shielding men from the effects of folly, is to fill the world with fools".

The problem with this is that ignores the problem of deliberate dishonesty. A person taking a high-risk loan doesn't deserve full responsibility for it when the person offering the loan did everything they could to convince the customer that it was a safe bet. And no, it isn't reasonable to expect the average person to see through layers of market manipulation and dishonesty that even so-called financial experts didn't fully understand until it was too late.

4. Government helped create the mess that they are now trying to "rescue" us from by requiring lenders to write high-risk loans. Banks, goverment and borrowers should now suffer the consequences of bad decisions. Banks lose money; borrowers lose homes; govt. deals with negative market impact/loss of population tax base etc.

Except you're skipping the "banks lose money" step, since they're all "too big to fail". The question now is whether the borrowers should lose their homes, or if protection from consequences should extend to more than just major corporations.

 Peregrine wrote:
But the government is already choosing winners by bailing out the banks. Or do you think that the banks would have made so many high-risk loans if they weren't confident that they could keep the profits while passing the losses on to someone else (preferably taxpayers)?

Actually, I think you're probably both wrong in your thinking on that issue, because you're both making the mistake of thinking of a bank as individual decision making entity. Instead, the bank is made up of lots of individuals, all making their own decisions.

I mean consider just the CEO - if the bank goes under, he loses his job, and walks away. The outstanding liabilities aren't his, and he's still set up thanks to the salary he's commanded while running the bank. Then consider if the bank is saved, odds are the CEO is getting fired anyway. As such, his motivation to protect the bank's risk is going to be born out of a sense of duty, an idea that that's what he's supposed to do, and not out of some personal risk/reward assessment.

And then consider some random loans officer. He's going to write loans based on the lending practices he's given, and whatever bonus scheme he's on to ensure he produces as many loans as possible. If that scheme encourages him to write some loans that maybe he shouldn't... well his actions aren't going to sink the bank, if it goes under it'll happen whether he's personally got $5 million in bad loans out there or not.

 sebster wrote:
born out of a sense of duty

Oh how I laughed and laughed.

Way to early to laugh my butt off.

Sense of gree....eerrr duty

That's a diamond in a rough colorful description

 sebster wrote:

 whembly wrote:
Colorado is also pretty cool to. (My folks live there now, so I'm biased). They see this out their window:

My cousin moved to Colorado a few years ago. Bought some mega-home on the lake, just an amazing place. I'll get the name of the lake if you're interested.

Sure... whenever I visit, I drive all over that fething place.

Even after driving through the plains for 13 hours.

 Aerethan wrote:


Which is why the bailout should have been handled very differently. The banks still got their money, but they also kept all the houses that money was covering losses on. Why should I have to pay taxes to pay back a loan I didn't approve, to companies who were reckless with their own money and ended up losing it all? I'd much rather have given that money to Larry to pay off his house so that he could continue a decent life and his 3 kids didn't have to share a room in a crappy apartment.

I like this idea, but it's too sensible for government to do it.
I mean the home owner would end up paying the tax payer back via rent. And that would never do, best just give money to the banks.

That was what blew my mind. They took(not asked for) taxpayer money and gave it to the people who were screwing taxpayers out of their houses, so they could then sell that same house to another taxpayer.

Instead, there should have been a service set up for people who were upside down / under water on their loans, and for those who qualified then paid off those loans with said bailout money, perhaps with caveats like said homeowner paying a reasonable monthly mortgage to the Federal Government directly. The bank gets ALL the money they loaned out, and break even on it as opposed to foreclosing and taking a loss, and Larry gets to keep his house, and can now afford those heavier taxes because his mortgage is now in a range he can afford.

Heaven forbid everyone walk away from the event in one piece. No, screw that, Larry can live in a studio apartment with his 3 kids.

I should specify that my last sentence was sarcasm. Chet the VP can suck it.

We have to help failed businesses, those poor things.

People in financial trouble? Well I guess they aren't pulling on their bootstraps hard enough.

Larry needs to live in that studio apartment so that Chet, the VP that bought and sold all the bad bundles, can think about what he did wrong in his summer house after he got done landing thanks to his golden parachute paid for by us.

 Ahtman wrote:
We have to help failed businesses, those poor things.

People in financial trouble? Well I guess they aren't pulling on their bootstraps hard enough.

Larry needs to live in that studio apartment so that Chet, the VP that bought and sold all the bad bundles, can think about what he did wrong in his summer house after he got done landing thanks to his golden parachute paid for by us.

Why do you think they are helping people in finanical difficulty?
-If they aren't making their mortgage payments and are actually homesteading (ie its a residence) its one thing. By why are taxpayers having to pay for it? Why are people who prudently took a proper loan and paid it off getting rochambeau'd for people gaming the system (and there were many in California, many indeed).
When my parents lost their house no one gave a gak, but we indeed tightened our belts and recovered, bought a tiny house years later and were happy. This plan would make them pay for losers who feel they are owed a handout. feth them.
-On the flipside if they are homeowners and were induced into mortgages they didn't realize the interest would kill them, then go after those mortgage agents. But not if the mortgage is merely "under water." Thats utterly and completely fething irrelevant if people are trying to actually live there. You buy a home to live. Anything else is an investment and if it goes down, well thats on you fucknuts.

-If they did it for an investment you're just helping rich people stay rich while beneifting some other corporation who's getting a sweetheart deal on the mortgages. Meanwwhile taxpayers take it in the shorts and anyone who wants a mortgage in the future is royally ed.

And for the record, shouldn't have helped the banks either. You feth up, again its on you. Pay off the depositors and close that puppy up.

 Frazzled wrote:
Why do you think they are helping people in finanical difficulty?
-If they aren't making their mortgage payments and are actually homesteading (ie its a residence) its one thing. By why are taxpayers having to pay for it? Why are people who prudently took a proper loan and paid it off getting rochambeau'd for people gaming the system (and there were many in California, many indeed).
When my parents lost their house no one gave a gak, but we indeed tightened our belts and recovered, bought a tiny house years later and were happy. This plan would make them pay for losers who feel they are owed a handout. feth them.
-On the flipside if they are homeowners and were induced into mortgages they didn't realize the interest would kill them, then go after those mortgage agents. But not if the mortgage is merely "under water." Thats utterly and completely fething irrelevant if people are trying to actually live there. You buy a home to live. Anything else is an investment and if it goes down, well thats on you fucknuts.

-If they did it for an investment you're just helping rich people stay rich while beneifting some other corporation who's getting a sweetheart deal on the mortgages. Meanwwhile taxpayers take it in the shorts and anyone who wants a mortgage in the future is royally ed.

And for the record, shouldn't have helped the banks either. You feth up, again its on you. Pay off the depositors and close that puppy up.

This was one topic that I was on the fence with, and was starting to side with Cali on. But I think Frazz pretty much hit the nail on the head. The people who gambled on real estate and lost should not be bailed out, unless we also start bailing out people coming away with losing tickets from horse tracks

 Dreadclaw69 wrote:

This was one topic that I was on the fence with, and was starting to side with Cali on. But I think Frazz pretty much hit the nail on the head. The people who gambled on real estate and lost should not be bailed out, unless we also start bailing out people coming away with losing tickets from horse tracks

But as a nation you all baled out the banks, The banks gambled on the stock market, and lost. and you know you won't get that back.
Why not bale out the people, and charge them rent.? At least you will get some back.
A lot of people bought a home, and lost there jobs later.

 loki old fart wrote:

 Dreadclaw69 wrote:

This was one topic that I was on the fence with, and was starting to side with Cali on. But I think Frazz pretty much hit the nail on the head. The people who gambled on real estate and lost should not be bailed out, unless we also start bailing out people coming away with losing tickets from horse tracks

But as a nation you all baled out the banks, The banks gambled on the stock market, and lost. and you know you won't get that back.
Why not bale out the people, and charge them rent.? At least you will get some back.
A lot of people bought a home, and lost there jobs later.

One wrong decision does not justify making another.

 loki old fart wrote:
But as a nation you all baled out the banks, The banks gambled on the stock market, and lost. and you know you won't get that back.
Why not bale out the people, and charge them rent.? At least you will get some back.
A lot of people bought a home, and lost there jobs later.

Pretty sure that the UK bailed out the banks too. And also Greece. Is the UK doing something similar to what is happening in Cali, or are you pontificating?

Now if you're in favour of the government bailing out a homeowner and then charging rent;
- who collects the rent money?
- how much does it cost the public purse to run this entity that collects rent?
- how does it compare legally with private renters?
- how does it compare to current public bodies responsible for collecting rent from publicly assisted housing?
- on what basis is the rent calculated? The current value? The value of the mortgage that was taken out?
- how will this affect the banks' willingness to issue mortgages?
- will banks drive up fees etc. to cover their losses/potential losses?
- many private landlords prefer having people who pay their rent on time. How do you reconcile this with people who have an obvious history of not paying?
- what happens in the event of eviction? Can new individuals rent the property even though they had nothing to do with the mortgage that was bought out?

 Dreadclaw69 wrote:

 loki old fart wrote:
But as a nation you all baled out the banks, The banks gambled on the stock market, and lost. and you know you won't get that back.
Why not bale out the people, and charge them rent.? At least you will get some back.
A lot of people bought a home, and lost there jobs later.

Pretty sure that the UK bailed out the banks too. And also Greece. Is the UK doing something similar to what is happening in Cali, or are you pontificating?

By that do you mean is the English government as stupid as your government? YES they are.

 loki old fart wrote:
By that do you mean is the English government as stupid as your government? YES they are.

Bailing out failing financial institutions wasn't exactly "stupid," unless you're perfectly okay with the accumulated retirement savings of millions of people simply vanishing into thin air overnight, not to mention seeing a completely crippled worldwide economy. If you wanted to return to the dark ages, basically, then not bailing out the banks would have been a good call.

 Seaward wrote:

 loki old fart wrote:
By that do you mean is the English government as stupid as your government? YES they are.

Bailing out failing financial institutions wasn't exactly "stupid," unless you're perfectly okay with the accumulated retirement savings of millions of people simply vanishing into thin air overnight, not to mention seeing a completely crippled worldwide economy. If you wanted to return to the dark ages, basically, then not bailing out the banks would have been a good call.

If you read the entire piece, you may have some idea what your talking about.