Comments on: Baltimore vs. Wells Fargo, cont’d

By: Anonymous Attorney

Anonymous Attorney — Tue, 27 Apr 2010 14:55:42 +0000

And don’t forget, MF, that everyone seemed to be in on it, including the Bush administration, which took a “No Renter Left Behind” approach to home ownership. Nobody ever provided a counterpoint to the silly idea that ‘everyone in America should own their own home’ — that would have just been too mean.

It all makes “From Each According to His Ability, To Each According to His Need” look like a flexible and pragmatic economic policy. Instead of, you know, something Karl Marx said.

By: MF

MF — Mon, 26 Apr 2010 19:17:44 +0000

Not that this is the point of this thread, but the real cause of the housing bubble and subsequent mortgage indurty collapse was that we had our brilliant Congress mandating laws that required banks to lend to greater percentages of various minority groups. (It’s the old problem of looking at equality of outcome instead of equality of opportunity.) By being forced to make loans to more and more people who were really incapable of paying, that drove up the prices due to supply and demand – more buyers meant prices go up. When interest rates go up, the loans that people were taking that were adjustable rate in order for the people to be able to afford their loans originally suddenly go up, and those borrowers can no longer make their payments. Pop! goes the bubble.

After all, buying a house should be a RIGHT, right? (Just like health care coverage…) No one should have to suffer the ignominy of renting… Or something like that.

By: William Nuesslein

William Nuesslein — Mon, 26 Apr 2010 12:15:31 +0000

Anonymous Attorney makes a great point about individual responsibility. But we should also keep in mind that properties were miss-priced. A bubble is a collective phenomenon and it is harsh to blame it on individual lenders. A big black hat is Ralph Nader who got government to outlaw prepayment penalties. That put an instability in the mortgage market that allowed individuals to over leverage through house refinancing. But the main driver of the over pricing was the excessive savings in the world economy.

By: Anonymous Attorney

Anonymous Attorney — Fri, 23 Apr 2010 15:04:14 +0000

Damned if you lend, damned if you don’t. You’re either a “redliner” or a “predatory lender.”

By the way. Does anybody think it’s a little weird that the mortgage crisis — the incendiary device for the Great Recession — is viewed by the media and the politicians as exclusively the fault of the lenders and repackagers?

I mean, call me financially naive, but wasn’t a big part of it THE FAILURE OF BORROWERS TO PAY IT BACK?

Who were these people? Why didn’t they pay back their loans? Was it circumstances beyond their control? Or good old-fashioned failure to assess ability to repay?

The media doesn’t spend much time looking at them, because it really hates to hold individuals responsible for anything. The Undeviated-From Media Narrative is that “greedy banks” or “lax government supervision” is always the bad guy. It’s never an illegal alien who somehow qualified for a $400,000 home loan through Bank of America.

And all this yimmer and yammer on NPR about “Congress must do something” to increase oversight: excuse me, but of what? What could the possible result of any such regulation BE but to simply make it tougher to borrow? Not that I disagree with that, but how complicated is that? Part of me suspects that the ethnic undercurrents of this whole issue make it un-examinable, but stories like the one about Wells Fargo sure make it hard to ignore.