Congress to approve 300Billion for people who bought houses they couldn't afford.

[Nocturnal]

http://www.reuters.com/article/newsOne/idUSN2328043420080624?rpc=92

God damn this pisses me off. It was these assholes that just had to have that McMansion TM that drove housing prices up so much in the first place (and out of the reach of people like me...ie just getting into the market) and now they want to cry for help? Fuck them. My home value has dropped a bit, but because we can actually afford our mortgage I'm not getting shit.

WASHINGTON (Reuters) - The Senate was expected to approve as soon as Wednesday the biggest government program yet to tackle a deep housing market slump feared to be dragging the economy into recession.

The legislation would create a $300 billion fund to help up to 400,000 troubled homeowners refinance costly, exotic mortgages into more affordable, government-backed loans. It easily cleared a Senate test vote by an 83-9 vote on Tuesday.

The bill is opposed by the White House but supported by Democrats and many Republicans. It would also overhaul regulation of Fannie Mae and Freddie Mac, the government-sponsored enterprises that are the largest U.S. mortgage financing companies.

If the Senate approves it, the bill would have to be reconciled with a similar measure already passed by the House of Representatives. Lawmakers hope to send a final package to President George W. Bush by mid-July.

The two main Democratic authors of the legislation, Massachusetts Rep. Barney Frank and Connecticut Sen. Christopher Dodd, met face-to-face on Tuesday.

The White House signaled on Tuesday that it could support the bill if lawmakers trimmed certain spending provisions.

"The most significant concern that we have with the bill is that it would provide for $4 billion to states to purchase already foreclosed homes," Bush administration spokeswoman Dana Perino told reporters. "And our concern is that that just helps the banks, that doesn't the consumers."

Treasury Secretary Henry Paulson said some part of the Senate bill are objectionable and the Bush administration wants them changed. He declined to say whether the White House would veto the bill.

[pinger]

http://www.reuters.com/article/newsOne/idUSN2328043420080624?rpc=92

God damn this pisses me off. It was these assholes that just had to have that McMansion TM that drove housing prices up so much in the first place (and out of the reach of people like me...ie just getting into the market) and now they want to cry for help? Fuck them. My home value has dropped a bit, but because we can actually afford our mortgage I'm not getting shit.

What a retard Perino is.

All the Bush admin did was bailout the banks. They gave no measure of comfort to those who lost their homes.

Forget they sold dodgy loans to people they KNEW could not afford it.

If the Bush admin actually regulated financial institutions to protect customers, rather than let financial advisers/credit card companies/banks rape everyone without fear of reprisal, this situation may not have occured.

[Nocturnal]

What a retard Perino is.

All the Bush admin did was bailout the banks. They gave no measure of comfort to those who lost their homes.

Forget they sold dodgy loans to people they KNEW could not afford it.

If the Bush admin actually regulated financial institutions to protect customers, rather than let financial advisers/credit card companies/banks rape everyone without fear of reprisal, this situation may not have occured.

I agree on that point, but we didn't have a choice but to bail the banks out. Now I'd like to see them hit with actual oversight, and to see their CEOs and Boards fired and barred from working in banking.

[chrisvet]

Stealing 300 Billion from Responsible Americans who lived within their means to pay the debts of Irresponsible Americans does nothing but reward people for fucking up creating further 'dependent' / 'entitlement' mindsets.

Fuck that, & ditto to corporate welfare.

[Mojoe77]

Stealing 300 Billion from Responsible Americans who lived within their means to pay the debts of Irresponsible Americans does nothing but reward people for fucking up creating further 'dependent' / 'entitlement' mindsets.

Fuck that, & ditto to corporate welfare.

Took the words right out of my mouth. The nanny state strikes again.

[GhostJang]

I doubt it was done because they felt bad for the people. It was probably because of the toll the situation was having on our society and economy as a whole.

[chrisvet]

I doubt it was done because they felt bad for the people. It was probably because of the toll the situation was having on our society and economy as a whole.

I would argue its another short term bandaid to solve problems previous governent bandaids created in the first place.

We wouldn't be in the same economic shit if excessive corp taxes / regulations forced outsourcing. But given the context of your statement, I agree they see it as a necessary fix to an economy hanging from a thread.

[American Infidel]

http://www.reuters.com/article/newsOne/idUSN2328043420080624?rpc=92

God damn this pisses me off. It was these assholes that just had to have that McMansion TM that drove housing prices up so much in the first place (and out of the reach of people like me...ie just getting into the market) and now they want to cry for help? Fuck them. My home value has dropped a bit, but because we can actually afford our mortgage I'm not getting shit.

Hold on a minute, now. Aren't you Democrats in full support of spending federal money and taxing the citizens of the US, so as to compensate for the "welfare" of those in need?

Don't get me wrong. I'm with you. We Americans have been complacent and have assumed the idea that, "Dammit, I want something and I want it NOW! It's my right, as an American citizen!!!" Free-thinkers and educated individuals and even the less-fortunate all seem to mitigate to the same arena of uncontrollable debt. Take a look, for example, at the advertisements of television, that promise no credit checks, as long as you have a bank account, and you can own a BRAND NEW COMPUTER! But wait...there's more! If you act now, we'll throw in a printer and a digital camera, free!!! And, if you are ardent in paying the debt, on-time, you'll end up with a computer and printer and digital camera, for about 8X the amount you could have paid, if you were to buy it with cash.

I know this guy I used to work with, that "bought" a PlayStation 3, on "credit", from a rental store. He figured out that his credit charges would ultimately amount to around $1200. That didn't stop him from "buying it", though. Stupid!!! Stupid...stupid...stupid. "But the graphics are amazing, dude!". Stupid! And, I hope you're reading THIS POST, STUPID!

So, as far as I'm concerned, idiots like this shouldn't be a burden on the nation's "welfare" system. Let them stew in their idiocy and learn to balance their budget, while living in a cave without their daily cable TV intake and a diet of leaves and pond water.

And, speaking of that, here in WV, we're one of the highest taxed citizens of the United States, thanks to illegitimate career do-nothings in our state, who then teach their children how to sign up for "Welfare" and earn a check, every month, by sitting at home and getting stoned and drunk and pregnant, at the taxpayer's expense. It's ridiculous! These people are breeding children, making even more money (as a result), and teaching them how to exploit the system, by becoming career welfare recipients.

Absolutely ridiculous...

[chalupa]

Hold on a minute, now. Aren't you Democrats in full support of spending federal money and taxing the citizens of the US, so as to compensate for the "welfare" of those in need?

Don't get me wrong. I'm with you. We Americans have been complacent and have assumed the idea that, "Dammit, I want something and I want it NOW! It's my right, as an American citizen!!!" Free-thinkers and educated individuals and even the less-fortunate all seem to mitigate to the same arena of uncontrollable debt. Take a look, for example, at the advertisements of television, that promise no credit checks, as long as you have a bank account, and you can own a BRAND NEW COMPUTER! But wait...there's more! If you act now, we'll throw in a printer and a digital camera, free!!! And, if you are ardent in paying the debt, on-time, you'll end up with a computer and printer and digital camera, for about 8X the amount you could have paid, if you were to buy it with cash.

I know this guy I used to work with, that "bought" a PlayStation 3, on "credit", from a rental store. He figured out that his credit charges would ultimately amount to around $1200. That didn't stop him from "buying it", though. Stupid!!! Stupid...stupid...stupid. "But the graphics are amazing, dude!". Stupid! And, I hope you're reading THIS POST, STUPID!

So, as far as I'm concerned, idiots like this shouldn't be a burden on the nation's "welfare" system. Let them stew in their idiocy and learn to balance their budget, while living in a cave without their daily cable TV intake and a diet of leaves and pond water.

And, speaking of that, here in WV, we're one of the highest taxed citizens of the United States, thanks to illegitimate career do-nothings in our state, who then teach their children how to sign up for "Welfare" and earn a check, every month, by sitting at home and getting stoned and drunk and pregnant, at the taxpayer's expense. It's ridiculous! These people are breeding children, making even more money (as a result), and teaching them how to exploit the system, by becoming career welfare recipients.

Absolutely ridiculous...
Now that you've ranted, what is your solution?

[rand0m]

Let them hit rock bottom, somethings gotta teach them how to live their lives.

[droogsteve]

What's next, another $300 billion to pay off the credit cards of idiots who bought vacations and plasma TVs they couldn't afford? Is it really any different?

These people lived beyond their means, is that a "crisis"? Now, millions of people who would love to have a nice home of their own, but were responsible enough not to take the money the banks were throwing around because they knew they might not be able to afford it, get to pay for the irresponsible idiots. The government just told them: "Suckers! You should have grabbed the EZ money and waited for the nanny state to bail you out like everyone else!"

There used to be debtor's prisons. Now instead of the imprisoning you for running up bad debts, the government bails you out.


I don't understand how people live. Last week my wife's brother (who made at least $100k last year) hit me up for $500. His daughter is in Catholic school, and they wouldn't give her her final report card or allow her to register for next year unless the balance of the tuition was paid off. It wouldn't have bothered me as much had he not spent the last two weeks telling me about the great new SeaDoo wave runner he just financed. How the fuck do you take on 10k in new debt for a fucking WAVE RUNNER when you can't pay for your daughter's school? We're in NY, you can only use the fucking thing 4 months a year! 10 grand in new debt for something you only take out on summer weekends and that sits in the fucking garage the other 8 months a year! WTF is wrong with people?!


I gave him the money because the kid shouldn't suffer because her Dad is an idiot, not really expecting to get it back. If things are that tight, where is he gonna get a spare $500 to pay me back? Not wanting to cause family tension, I didn't even mention repayment. But he did, saying he'd pay me on June 29. I asked what happens on June 29 and he said "I get my government Economic Stimulus Check!"

God Bless America. :banghead:

[Nocturnal]

Hold on a minute, now. Aren't you Democrats in full support of spending federal money and taxing the citizens of the US, so as to compensate for the "welfare" of those in need?


Sometimes.

Large difference in levels of need. People don't NEED to own a large house, they only need a roof over their heads, food, and medical care.

These people that are at risk of losing their homes are perfectly capable of doing the unthinkable and (gasp) renting another home.

What's next, another $300 billion to pay off the credit cards of idiots who bought vacations and plasma TVs they couldn't afford? Is it really any different?


Sounds about right, we are just about finished knuckling down and paying our CCs off.

[chrisvet]

Now that you've ranted, what is your solution?

Ron Paul? :lmao:

The Repulicrats seek to substitute ones potential to master his own life with endless handouts that ultimately create voter blocks of mindless victims. History & common sense teach us a good smack in the ass is the most effective way to create responsible people.

Instead, we're left with short term solutions / freebees for political power resulting in devastating long term effects.

[American Infidel]

Now that you've ranted, what is your solution?

Stop it! (http://www.youtube.com/watch?v=BYLMTvxOaeE). Stop it now!

The Repulicrats seek to substitute ones potential to master his own life with endless handouts that ultimately create voter blocks of mindless victims. History & common sense teach us a good smack in the ass is the most effective way to create responsible people.

Instead, we're left with short term solutions / freebees for political power resulting in devastating long term effects.

I agree. The RINO Congress members we've loved and admired, for the last eight years are even more hideous than a true Liberal, who actually has the backbone to admit his malcontent.

[ric]

Now that you've ranted, what is your solution?

There should be no sacred cows here. All that BS crap has to go if we’re going to balance the books. You can’t have just a little socialism. It always grows and grows like cancer.

Look what the Soviet Union looked like after the wall fell.

The government has made an obligation to all of these various demographics to kick back tax dollars to them. At a point in the not too far future, the country will fucking crumble under the weight of this finical obligation.

[chalupa]

Stop it! (http://www.youtube.com/watch?v=BYLMTvxOaeE). Stop it now!


I'm gonna bury you in a box.



I'm serious, AI, you say the liberals suck, you say the conservatives suck, what do you propose?

[chrisvet]

There should be no sacred cows here. All that BS crap has to go if we’re going to balance the books. You can’t have just a little socialism. It always grows and grows like cancer.

Look what the Soviet Union looked like after the wall fell.

The government has made an obligation to all of these various demographics to kick back tax dollars to them. At a point in the not too far future, the country will fucking crumble under the weight of this finical obligation.

Parallels Roman Empire. 1 civil servant per 1 worker. no money, implosion from within, weakened to outside forces.

End of Rome.
Socialism & cancer go hand in hand.

[Jenovah]

You can’t have just a little socialism.

Europe called to say that she disagrees with you.

[kevinsmith]

While a lot of it does need to rest on the shoulders of the typical American trying to live beyond their means, as other alluded to, the mortgage companies took advantage of a lot of people by letting them believe they COULD afford those homes. The mortgage companies needed to keep making those unrealistic numbers and in their desperation to keep them up, got more and more creative with loans, and less and less cautious to whom they would loan. They are just as much at fault.
While I hate to see the government bailing people out, it would be worse on the economy, worse on crime and so forth to not.

[shade]

No one put a gun to their head and made them buy a house.

Some actual fraud was committed (forgeries etc) but other than that, there should be no government involvement. And the only government involvement for the forgeries should be through the justice system - criminal and civil.

We don't have $300 billion. We especially don't have it to give to irresponsible people.


Nocturnal: The way you feel about this (you being responsible etc) is how I feel about almost every single social program and redistribution of wealth in this country. So maybe you have some perspective now about how and why I feel disgusted about so much of what the government does.


Parallels Roman Empire. 1 civil servant per 1 worker. no money, implosion from within, weakened to outside forces.

End of Rome.
Socialism & cancer go hand in hand.

Excellent point. One of my friends made an analogy of comparing the government to an HR department at work. The HR department's job is just to make sure human issues are working smoothly, such as staffing, payroll, behavior, etc. If the ratio of HR people to actual workers gets too high, the company fails.

Compare that to the government. If the ratio of government workers (who produce nothing) gets too out of whack, then you don't have enough production to sustain the populace and you collapse.

You are better off having a bunch of unemployed government people eating in soup lines than you are giving them "jobs". Because it costs less to feed and clothe someone than it does to waste a full salary on them. Then, once they find a job, it will be for actual production of goods for society.

We need the ratio of production to people to increase.

[YouEnjoyMyself]

Wow, that's really disheartening. Almost makes me wish I was irresponsible enough to be taken care of.

[Riley]

That is just sad. What the mortgage companies tell some people what they can afford doesn't mean they can actually afford it. It is so typical of so many people, they want something bigger and better than what they need and can afford. Now Congress is going to bail them out? Hell no, we are.

[chalupa]

*opens self up for insults and attack*

The ONLY politician out there right now talking about fixing this bloated system for real is Ron Paul.

Say what you want about some of his views, but he has it right that we cannot keep feeding this beast.

[chrisvet]

*opens self up for insults and attack*

The ONLY politician out there right now talking about fixing this bloated system for real is Ron Paul.

Say what you want about some of his views, but he has it right that we cannot keep feeding this beast.

Don't be afraid to support Ron Paul, who gives a fuck what other people think. Hes the only solution to this mess.

[chalupa]

Don't be afraid to support Ron Paul, who gives a fuck what other people think. Hes the only solution to this mess.

I'm not afraid to support him, and I talk about him all the time. However, there are people here who resort to name-calling and I didn't want to derail the thread.

[droogsteve]

While a lot of it does need to rest on the shoulders of the typical American trying to live beyond their means, as other alluded to, the mortgage companies took advantage of a lot of people by letting them believe they COULD afford those homes.


I have a problem with the term "letting them believe". These weren't children. The numbers were all in the contract. If they didn't understand the contract, they should have taken it to a real estate lawyer and asked "What's the worst case scenario as far as payments? What's the very most I could be asked to pay if my rate adjusts?" If you can't afford the worst case payments, you can't afford the loan. It's that simple. It was their responsibility to find out, and they didn't. They didn't know because they didn't WANT TO know. When you choose deliberate ignorance, don't expect others to bail you out.


And before someone says "Maybe they didn't have the money for a lawyer", if you can't afford to pay a lawyer for something as simple as explaining a real estate contract, it's probably a pretty good indicator that you can't afford the house.

[Pajman]

The ONLY politician out there right now talking about fixing this bloated system for real is Ron Paul.

Yeah. He's all talk, isn't he? j/k, couldn't resist :-)

[chrisvet]

Yeah. He's all talk, isn't he? j/k, couldn't resist :-)

Socialist! :lol:

Edit: Damn your white text too.

[Pajman]

I have a problem with the term "letting them believe". These weren't children. The numbers were all in the contract. If they didn't understand the contract, they should have taken it to a real estate lawyer and asked "What's the worst case scenario as far as payments? What's the very most I could be asked to pay if my rate adjusts?" If you can't afford the worst case payments, you can't afford the loan. It's that simple. It was their responsibility to find out, and they didn't. They didn't know because they didn't WANT TO know. When you choose deliberate ignorance, don't expect others to bail you out.


And before someone says "Maybe they didn't have the money for a lawyer", if you can't afford to pay a lawyer for something as simple as explaining a real estate contract, it's probably a pretty good indicator that you can't afford the house.
You're right on the money. How many of these people actually bothered to do any DD? I'm thinking not many.

[chalupa]

Yeah. He's all talk, isn't he? j/k, couldn't resist :-)

Damn you and your white text!

I wrote up a whole good retort, and then I went to insert your quote...

You bastard!

[Pajman]

Haha, suckers! :lol:

[UsUcEggs]

I personally know someone who bought a house in the m f'n ghetto innocently enough and started initial affordable payments of $800 including insurance. But soon after the two year mark his payments jumped to $1,700 a month, which considering the house, was completely unreasonable. He lost his house long ago and his credit is screwed and likely won't be able to ever take out another loan ever again.

I think some reparations should be set for people already given the shaft. At least cleared of the debt and bad credit marks.

[Nocturnal]

I personally know someone who bought a house in the m f'n ghetto innocently enough and started initial affordable payments of $800 including insurance. But soon after the two year mark his payments jumped to $1,700 a month, which considering the house, was completely unreasonable. He lost his house long ago and his credit is screwed and likely won't be able to ever take out another loan ever again.

I think some reparations should be set for people already given the shaft. At least cleared of the debt and bad credit marks.


That payment jump was in his contract.

[evilmittens]

Well, I am a democrat, but do not bleieve in welfare.

I bleieve in taxes to pay for the stuff we need. Things like education, healthcare for ALL, and roads are what we should be paying for. THings that allow those less fortunate to pull themselves up.

No to helping idoits out on their houses, and credit cards.
No to someone with 5 kids getting money for free.
No to corporate welfare.
No to this.


I would gladly pay higher taxes for good universial insurance, a free education beyond High School for those who will keep up grades, and finally, decent infrastructure (and maybe some good science programs)

[shade]

I personally know someone who bought a house in the m f'n ghetto innocently enough and started initial affordable payments of $800 including insurance. But soon after the two year mark his payments jumped to $1,700 a month, which considering the house, was completely unreasonable. He lost his house long ago and his credit is screwed and likely won't be able to ever take out another loan ever again.

I think some reparations should be set for people already given the shaft. At least cleared of the debt and bad credit marks.

Do you know what the point of a credit score IS??

It is to tell lenders if you are a good person to lend money to or not.

Apparently your friend is NOT a good person to lend money to. Get it?

Your friend did not get screwed. The lender got screwed because your friend did not pay them. So you are saying his record should be cleared so he can go screw another lender by taking out a loan and not paying on it? Sounds brilliant.

[MelL]

I have a problem with the term "letting them believe". These weren't children. The numbers were all in the contract. If they didn't understand the contract, they should have taken it to a real estate lawyer and asked "What's the worst case scenario as far as payments? What's the very most I could be asked to pay if my rate adjusts?" If you can't afford the worst case payments, you can't afford the loan. It's that simple. It was their responsibility to find out, and they didn't. They didn't know because they didn't WANT TO know. When you choose deliberate ignorance, don't expect others to bail you out.


And before someone says "Maybe they didn't have the money for a lawyer", if you can't afford to pay a lawyer for something as simple as explaining a real estate contract, it's probably a pretty good indicator that you can't afford the house.

Well, you also need to know what questions to ask and who to go to. If you have a professional in front of you saying everything looks dandy and nothing really looks odd, why would someone delve deeper? At first glance, buying a home seems really easy. It's only after this whole mess that it's far more complicated than I thought.

[shade]

Well, you also need to know what questions to ask and who to go to. If you have a professional in front of you saying everything looks dandy and nothing really looks odd, why would someone delve deeper? At first glance, buying a home seems really easy. It's only after this whole mess that it's far more complicated than I thought.

That person lacks common sense.

Keep in mind that the professional standing in front of you saying everything looks fine is going to get a commission check as soon as you sign it. The realtor will get 3-6% ($3000-6000 per 100k) and the loan officer will get a big payout depending on how badly you negotiated (think car dealer here). Even the closing company will get a cut, usually a few $100.

Now would be a good time to talk to someone who is not dying to take your money (friends/family) or someone who is dying to take your money but does not have a vested interest in you buying the house (lawyer).

There is no excuse. Like I said in my post in some other thread, my real estate agent and loan officer assured me I could afford about $50-80k more house than I was looking to spend. I decided "Nah.... I really would rather just have easy payments and less stress in my life".

See how easy that was?

[UsUcEggs]

Do you know what the point of a credit score IS??

It is to tell lenders if you are a good person to lend money to or not.

Apparently your friend is NOT a good person to lend money to. Get it?

Your friend did not get screwed. The lender got screwed because your friend did not pay them. So you are saying his record should be cleared so he can go screw another lender by taking out a loan and not paying on it? Sounds brilliant.


I agree with you that he's not the best candidate to lend money to... However I can't fathom why the lenders considered it in their interest to initially set reasonable rates that he could afford to draw him in and then just try and screw him as hard as possible. I believe that the lenders screwed themselves.

Should have he better read and understood the terms in which the lenders were screwing him? Sure, but the lenders knew that he didn't understand it and decided to screw him and themselves any how. Go figure...

[MelL]

That person lacks common sense.

Keep in mind that the professional standing in front of you saying everything looks fine is going to get a commission check as soon as you sign it. The realtor will get 3-6% ($3000-6000 per 100k) and the loan officer will get a big payout depending on how badly you negotiated (think car dealer here). Even the closing company will get a cut, usually a few $100.

Now would be a good time to talk to someone who is not dying to take your money (friends/family) or someone who is dying to take your money but does not have a vested interest in you buying the house (lawyer).

There is no excuse. Like I said in my post in some other thread, my real estate agent and loan officer assured me I could afford about $50-80k more house than I was looking to spend. I decided "Nah.... I really would rather just have easy payments and less stress in my life".

See how easy that was?


See, you know the pitfalls because you are clearly educated on the subject of housing and know things are far more complicated than they appear. Clearly, not everyone has that same depth of knowledge as recent events show. As I said, if you don't possess that knowledge, you have no idea what to look into or even what questions to ask. Which means a lot of people are relying on that person in front of them to guide them through the process. Common sense would lead one to believe that the banker would not move the process forward if the buyer did not have the means to sustain payments. I mean, who would be crazy enough to believe the professionals would set someone up for such failure? And yet it happened. But who would have thought that years before all of this began to snowball? I doubt the buyers imagined it.

[shade]

See, you know the pitfalls because you are clearly educated on the subject of housing and know things are far more complicated than they appear. Clearly, not everyone has that same depth of knowledge as recent events show. As I said, if you don't possess that knowledge, you have no idea what to look into or even what questions to ask. Which means a lot of people are relying on that person in front of them to guide them through the process. Common sense would lead one to believe that the banker would not move the process forward if the buyer did not have the means to sustain payments. I mean, who would be crazy enough to believe the professionals would set someone up for such failure? And yet it happened. But who would have thought that years before all of this began to snowball? I doubt the buyers imagined it.

Still comes down to common sense. How do you think I learned about the mechanics of real estate transactions?

I decided that before I made a 30 year commitment and put myself over $100,000 in debt that maybe I should see how the whole process works. Then I researched it and was able to make a smart choice and not get duped.

I dealt with 5 or 6 lenders before I found the person I wanted to work with. Lots of them rubbed me the wrong way and tried to rush things along.

As you can imagine, I can really work over a car salesman too.



Anyone have a link to the actual details of the bill in plain english?

[chrisvet]

Well, I am a democrat, but do not bleieve in welfare.

I bleieve in taxes to pay for the stuff we need. Things like education, healthcare for ALL, and roads are what we should be paying for. THings that allow those less fortunate to pull themselves up.

No to helping idoits out on their houses, and credit cards.
No to someone with 5 kids getting money for free.
No to corporate welfare.
No to this.


I would gladly pay higher taxes for good universial insurance, a free education beyond High School for those who will keep up grades, and finally, decent infrastructure (and maybe some good science programs)

Why is it I run into the most liberty minded guys on the internet, whether dems / reps, many believing welfare / handouts are a crock.

Oh yes, becasue they're guys who know what its like standing on their feet. Then I quickly remember women voters always want moar :boink: That is BTW their biologial purpose, to ask, demand, and bitch for moar 'free' things.

[KeyboardPatriot]

This is BS, money that could be paying off debt or doing some more imporant is going to some idiots who bought a house to big for themselves.

"I only make $45,000/year, but I think im going to buy this 4,000 square foot home on the water, and buy a boat and 2 mercedes because I can sign my name on the dotted line!"

Then a few months down the line

"What, the rates went up? Now I can't afford this house let me go cry to the government because its all their fault."




Will anyone learn now a days that sometimes its the persons fault, it's like everyone believes the excuses now. Like when you were a kid and you blamed something on your sister/brother but your parents in the end knew it was you. Imagine that situation, but your sister/brother still got the blame for it even though your parents KNEW it was your fault. That's why this liberal/republican shit pisses me off because NO ONE wants to point the blame at themselves anymore.

It's the same reason as to why everyone we have in office sucks right now, and is taking away our rights because the american people are fucking idiots and elected them into office. And they don't do ANYTHING about it either, so they just point the blame at everyone else.

[bergshadow]

The situation was often thus: poor person gets hit with huge rent increase, tight market. In desperation, they go to the nearest bank - the one they have an account with, being a responsible porr person who can maintain a checking balance and hold a job - and is told that yes, there is a way he can afford a house, especially in the undesirable neighborhood he can tolerate.

The bank will loan him up to the appraised value of the house, including the closing costs, everything, at a low initial rate, FHA approved under the new rules (banks were deregulated, jsut like the S&Ls under Reagan, in the late 90s. Regulations were further loosened, and enforcement cut way back, in IIRC 2001). After a couple of years, an equity payment will be due and the rate will "adjust" - but after a couple of years the guy's credit will be much improved by his good payment history, and he can qualify for refinance at a fixed rate.

The bank shows him what his refinance would be if he had done this three years ago, and made payments. They tell him that would have been him. He would have made a lot on appreciation of the house, too.

It's a gamble, but the new rent is actually more than this house payment will be. He goes for it.

The bank sends their pet appraiser around - the appraisal comes in higher than the asking price, so FHA approves lending the closing costs too. The loan is approved.

The bank bundles the loan and resells it as FHA approved and fully collateralized - the guy is now sending his house payments to Texas, and has no relationship with his local bank except his checking account. The bank makes money on the sale of the loan, and has no more financial relationship with the house in the neighborhood. The people in Texas have no knowledge of the real estate involved - its condition, location, nothing.

About 30 months later, the adjustment is due, the guy goes back to the only bank he knows. He is now trapped - if the bank is honorable, he will be OK. But this bank is not: new rules have come down, and he no longer qualifies for a low fixed rate mortgage loan on his remaining balance. But they can refer him to another affiliated lender who handles this situation.

The only thing the referred lender can offer him, they say, is an adjustable rate mortgage starting at a slightly higher rate than he is paying, and including a share of the increased value of the house (they use the same appraiser, who finds increased value) to collateralize their costs.

If he had started shopping for a bank a year before, and was sophisticated and alert, he could have lined up fixed rate elsewhere. But he does not know this, and the crunch time is come. He signs.

The referred lender kicks back a couple thousand to the bank for the referral, bundles and sells the new loan, and pockets more thousands in fees.

The stage is set.

A couple of years ago there were laws being considered in more than thirty states, by worried cities against banks and other lenders who were risking whole neighborhoods by such practices. The W administration blocked them, declaring all such banking offf limits to state regulation.

[chalupa]

The situation was often thus: poor person gets hit with huge rent increase, tight market. In desperation, they go to the nearest bank - the one they have an account with, being a responsible porr person who can maintain a checking balance and hold a job - and is told that yes, there is a way he can afford a house, especially in the undesirable neighborhood he can tolerate.

The bank will loan him up to the appraised value of the house, including the closing costs, everything, at a low initial rate, FHA approved under the new rules (banks were deregulated, jsut like the S&Ls under Reagan, in the late 90s. Regulations were further loosened, and enforcement cut way back, in IIRC 2001). After a couple of years, an equity payment will be due and the rate will "adjust" - but after a couple of years the guy's credit will be much improved by his good payment history, and he can qualify for refinance at a fixed rate.

The bank shows him what his refinance would be if he had done this three years ago, and made payments. They tell him that would have been him. He would have made a lot on appreciation of the house, too.

It's a gamble, but the new rent is actually more than this house payment will be. He goes for it.

The bank sends their pet appraiser around - the appraisal comes in higher than the asking price, so FHA approves lending the closing costs too. The loan is approved.

The bank bundles the loan and resells it as FHA approved and fully collateralized - the guy is now sending his house payments to Texas, and has no relationship with his local bank except his checking account. The bank makes money on the sale of the loan, and has no more financial relationship with the house in the neighborhood. The people in Texas have no knowledge of the real estate involved - its condition, location, nothing.

About 30 months later, the adjustment is due, the guy goes back to the only bank he knows. He is now trapped - if the bank is honorable, he will be OK. But this bank is not: new rules have come down, and he no longer qualifies for a low fixed rate mortgage loan on his remaining balance. But they can refer him to another affiliated lender who handles this situation.

The only thing the referred lender can offer him, they say, is an adjustable rate mortgage starting at a slightly higher rate than he is paying, and including a share of the increased value of the house (they use the same appraiser, who finds increased value) to collateralize their costs.

If he had started shopping for a bank a year before, and was sophisticated and alert, he could have lined up fixed rate elsewhere. But he does not know this, and the crunch time is come. He signs.

The referred lender kicks back a couple thousand to the bank for the referral, bundles and sells the new loan, and pockets more thousands in fees.

The stage is set.

A couple of years ago there were laws being considered in more than thirty states, by worried cities against banks and other lenders who were risking whole neighborhoods by such practices. The W administration blocked them, declaring all such banking offf limits to state regulation.

And yet, nowhere in that equation does the person have actual, real money. It is all imaginary, hypothetical, and possible. I still feel no sympathy for that person.

Gramma told me, "If it looks too good to be true, it probably is."

She also made good spaghetti.

[avix123]

This is just horrible. If I would have known this, I would have bought a bigger house!

[chalupa]

This is just horrible. If I would have known this, I would have bought a bigger house!

I know, right? I was approved for $250,000 more of a mortgage than I ended up getting, but lo and fucking behold, I DID THE MATH AND SAW THAT IT WAS NOT AFFORDABLE. Had I just been an irresponsible douchebag about the biggest purchase I have ever made to date, I'd be able to save some of the tax dollars (or at least have them returned to me) that these fuckers are stealing out of my pockets.

To wit: corporate year end is June 30th. My bonus is taxed at 38% by the Feds, not to mention all the vultures that pick off more of it on the way down to me. Given that we had a great year, let's just say I'm losing tens of thousands of dollars to the tax man. Good thing we get to spend it in Iraq and on housing retards.

[evilmittens]

I know, right? I was approved for $250,000 more of a mortgage than I ended up getting, but lo and fucking behold, I DID THE MATH AND SAW THAT IT WAS NOT AFFORDABLE. Had I just been an irresponsible douchebag about the biggest purchase I have ever made to date, I'd be able to save some of the tax dollars (or at least have them returned to me) that these fuckers are stealing out of my pockets.

To wit: corporate year end is June 30th. My bonus is taxed at 38% by the Feds, not to mention all the vultures that pick off more of it on the way down to me. Given that we had a great year, let's just say I'm losing tens of thousands of dollars to the tax man. Good thing we get to spend it in Iraq and on housing retards.

Ditto.

I was approved for a $560,000 loan. I was like WTF??? I only earn just under 100k a year. The banker was trying to pressure me into buying bigger. Fuck that. I ended up in a nice $130, 000 home...that has NOT gone down in price unlike that expensive peice that they wanted me to buy.

[Henkie]

I made this point already in the other thread, but if you (as expected) always end up paying for people who loan money they can't pay back, is there any positive side to letting those people loan irresponsible amounts of money? This is especially relevant, since this decision means that it's no longer a matter of personal responsibility, since the state is paying for it.

[Bo Jackson]

Ok, hold on. I'm not sure I'm reading it the same as most of you. Isn't Congress wanting to pass a bill that will back up $300 billion worth of loans? Not spend $300 billion. They're not wanting to pay people's mortgages for them. I read a NY Times article that said the cost to taxpayers would be $4.7 billion.

[Yuseke]

Ditto.

I was approved for a $560,000 loan. I was like WTF??? I only earn just under 100k a year. The banker was trying to pressure me into buying bigger. Fuck that. I ended up in a nice $130, 000 home...that has NOT gone down in price unlike that expensive peice that they wanted me to buy.

How long ago did you buy? $130,000 will get you shit these days...

[PsiRedEye22]

How long ago did you buy? $130,000 will get you shit these days...

That depends completely on where you live.

[shade]

The situation was often thus: poor person gets hit with huge rent increase, tight market. In desperation, they go to the nearest bank - the one they have an account with, being a responsible porr person who can maintain a checking balance and hold a job - and is told that yes, there is a way he can afford a house, especially in the undesirable neighborhood he can tolerate.

The bank will loan him up to the appraised value of the house, including the closing costs, everything, at a low initial rate, FHA approved under the new rules (banks were deregulated, jsut like the S&Ls under Reagan, in the late 90s. Regulations were further loosened, and enforcement cut way back, in IIRC 2001). After a couple of years, an equity payment will be due and the rate will "adjust" - but after a couple of years the guy's credit will be much improved by his good payment history, and he can qualify for refinance at a fixed rate.

The bank shows him what his refinance would be if he had done this three years ago, and made payments. They tell him that would have been him. He would have made a lot on appreciation of the house, too.

It's a gamble, but the new rent is actually more than this house payment will be. He goes for it.

The bank sends their pet appraiser around - the appraisal comes in higher than the asking price, so FHA approves lending the closing costs too. The loan is approved.

The bank bundles the loan and resells it as FHA approved and fully collateralized - the guy is now sending his house payments to Texas, and has no relationship with his local bank except his checking account. The bank makes money on the sale of the loan, and has no more financial relationship with the house in the neighborhood. The people in Texas have no knowledge of the real estate involved - its condition, location, nothing.

About 30 months later, the adjustment is due, the guy goes back to the only bank he knows. He is now trapped - if the bank is honorable, he will be OK. But this bank is not: new rules have come down, and he no longer qualifies for a low fixed rate mortgage loan on his remaining balance. But they can refer him to another affiliated lender who handles this situation.

The only thing the referred lender can offer him, they say, is an adjustable rate mortgage starting at a slightly higher rate than he is paying, and including a share of the increased value of the house (they use the same appraiser, who finds increased value) to collateralize their costs.

If he had started shopping for a bank a year before, and was sophisticated and alert, he could have lined up fixed rate elsewhere. But he does not know this, and the crunch time is come. He signs.

The referred lender kicks back a couple thousand to the bank for the referral, bundles and sells the new loan, and pockets more thousands in fees.

The stage is set.

A couple of years ago there were laws being considered in more than thirty states, by worried cities against banks and other lenders who were risking whole neighborhoods by such practices. The W administration blocked them, declaring all such banking offf limits to state regulation.

This is how it worked:
http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true&pli=1


Also, nice jab at the evil deregulation. I personally benefited from the deregulation. I did 0 down..... but I did so in a way I knew was sound.

As usual, when you remove padded walls, some stupid people will hurt themselves. But why punish responsible people?

[chrisvet]

As usual, when you remove padded walls, some stupid people will hurt themselves. But why punish responsible people?

Because the needs of the few outweigh the needs of the many: Kirk

Or if your a Spock fan like me:

The needs of the many outweigh the needs of the few.

Safety nets taken for granted are why people fail, give up, slack away at life.
Real winners never remotely consider someone to catch their fall. Thats why they succeed.

[evilmittens]

How long ago did you buy? $130,000 will get you shit these days...

9 years ago. I must admit that in St. Cloud, MN, the market is not exactly huge. Nice 3 bedroom rambler on 1/2 acre of land with a 4 car garage.

[Yuseke]

That depends completely on where you live.

Very true. I know here in Maryland $130k will get you about half a townhouse.

9 years ago. I must admit that in St. Cloud, MN, the market is not exactly huge. Nice 3 bedroom rambler on 1/2 acre of land with a 4 car garage.

Nice. What makes it even better is that I'll be staying in your attic like the woman in Japan did.

[Quick_Draw21]

Ditto.

I was approved for a $560,000 loan. I was like WTF??? I only earn just under 100k a year. The banker was trying to pressure me into buying bigger. Fuck that. I ended up in a nice $130, 000 home...that has NOT gone down in price unlike that expensive peice that they wanted me to buy.

Prison guards make that much? wow...

[avix123]

I got mine for 128k when tax value was 135k back in 2005 here in NC. 1600sq ft, almost an acre of land, and in middle of the city. I was being told to get something in the 200k range, but why? I like to actually feed my investments.

[Yuseke]

I got mine for 128k when tax value was 135k back in 2005 here in NC. 1600sq ft, almost an acre of land, and in middle of the city. I was being told to get something in the 200k range, but why? I like to actually feed my investments.

What part of NC are you in?

[droogsteve]

9 years ago. I must admit that in St. Cloud, MN, the market is not exactly huge. Nice 3 bedroom rambler on 1/2 acre of land with a 4 car garage.

Here in NYC, 130K wouldn't even buy the garage.

[bergshadow]

As usual, when you remove padded walls, some stupid people will hurt themselves. But why punish responsible people? When you remove the "padded walls', the cynical bankers will take advantage of the stupid people to trash your entire economy for their profit.

And who's the stupid person really? You were just as naively trusting of the moneylenders as anyone who overbought a house. What, you read in some econ book that the market always finds its true equilibrium ? There are a lot of equilibriums for an economy - most of them you don't want to live in.

And yet, nowhere in that equation does the person have actual, real money. It is all imaginary, hypothetical, and possible. I still feel no sympathy for that person. Do you have any sympathy for the person who can't afford a house because those appraisers and moneylenders are bidding up the real estate in a bubble all around them ?

For the stupid person trapped in a rent spiral and the smart person trapped in that same spiral who both lose their jobs when the business loans dry up as that bank finally hits its the wall (the bankers themselves, of course, unless they drank their own koolaid as many did, will be rich in an economy in which servants are suddenly affordable. Happy days for them, barring severe inflation ).

All borrowing carries risk. When the risk is boosted by permitting manipulations and frauds of this kind, the cost of that risk will be incorporated into the cost of borrowing money. Historically, on the planet earth, that cost has run about 18 - 20%. Do you want to live in an economy where a standard house loan carries 18% interest rates ?

[chalupa]

When you remove the "padded walls', the cynical bankers will take advantage of the stupid people to trash your entiure economy for their profit.

And who's the stupid person really? You were just as naively trusting of the moneylenders as anyone who overbought a house. What, you read in some econ book that the market always finds its true equilibrium ? There are a lot of equilibriums for an economy - most of them you don't want to live in.

Usually I agree with you on some level, but here I'm 100% opposed. If you are not responsible enough to read and understand a contract, then you should suffer the consequences of that contract.

Salesman: "How about I let you in on something every home owner needs: VOLCANO INSURANCE! Now, I have an uncle that knows a lot about volcanos, and he says a volcano is coming THIS WAY."
Peter: "But we've never had any trouble with volcanos."
Salesman: "Well don't you think we're due for one?"
Peter: Touché, salesman. I too have an uncle....come in.

About it wrecking the economy -- I'm eager for this housing correction, so that the excess capital that is flooding the commodities markets can be erased. That way oil (and foodstuffs) speculation can slow and the price will come down, and the construction of all those McMansions end and people will move back closer to the cities, relieving even more pressure on the cost of fuel. On top of that, the cities are in need of revitalization anyway...

[chrisvet]

When you remove the "padded walls', the cynical bankers will take advantage of the stupid people to trash your entire economy for their profit.

And who's the stupid person really? You were just as naively trusting of the moneylenders as anyone who overbought a house. What, you read in some econ book that the market always finds its true equilibrium ? There are a lot of equilibriums for an economy - most of them you don't want to live in.

?

Berg, without giving it more than 10 seconds thought, here's your free market equilibrium to prevent situations like this in the future:

Third party consulting firms who for a small fee will determine what exact debtload you can 'handle.'

This tragic situation creates an excellent opportunity for a new industry norm where homebuyers consult financial advisers prior to purchasing their home. The idea goes hand in hand with a home inspections; the concept of protecting ones investment/home.
Home inspections by the way were almost non existant 25 years ago; now most people get them.

When market victims learn a lesson, new private industries form to prevent shit like this from happening again. When gov't bails them out, they don't learn a damn thing. The free market will always remidy situations like this.

[shade]

When you remove the "padded walls', the cynical bankers will take advantage of the stupid people to trash your entire economy for their profit.

And who's the stupid person really? You were just as naively trusting of the moneylenders as anyone who overbought a house. What, you read in some econ book that the market always finds its true equilibrium ? There are a lot of equilibriums for an economy - most of them you don't want to live in.


Profit? You check the news lately? They are losing hundreds of billions of dollars. Yeah, real profitable :lmao:

Naively trusting of the money lender? Uh.. nope. You might want to re-read my story. They wanted me to buy bigger and I decided not to.

And if there is no interference then markets are always in equilibrium with some occasional "noise".

Most people who wanted to buy houses did. They are living in those houses now. If someone wants to sell, part of the reason they have a hard time is that there aren't as many people looking to buy. For example, I am content with my house and not looking to buy. The value of houses on the market now are lower because there is not buying support for them. Thus, they go down in price because that is the equilibrium. More supply than demand = downward price pressure.

Here in NYC, 130K wouldn't even buy the garage.

$100k can get you 2000 sqft in (cheap) parts of north texas. $130k can get you 3000 sqft. But that is the cheapest of the cheap new construction in cheap land parts mostly on the outskirts of Fort Worth.

In more expensive areas of DFW, $130k will easily get you a decent 1500 sqft 3 bed house.

If you ever want to cash out your equity, do it by selling your house in NYC and buying one free and clear in TX.

[bergshadow]

Profit? You check the news lately? They are losing hundreds of billions of dollars. Yeah, real profitable Who's "they"? Sure a lot of people are getting hit hard. But the billions in fees and bonuses and cashed stock options and hedge fund payoffs and so forth and so on went into some pretty deep pockets.

"They" enjoyed enormous tax breaks on those "earnings". Banks may lose money; bankers ? Not the same thing.

People do make money on bubbles, Shade.

And the trashing of your economy, by deregulated bankers and unregulated financial geniuses who launched this bubble, is undeniable, no?
Berg, without giving it more than 10 seconds thought, here's your free market equilibrium to prevent situations like this in the future:

Third party consulting firms who for a small fee will determine what exact debtload you can 'handle.' Yet another layer of unregulated middlemen, providing yet more opportunities for fleecing the economy by deceiving the incompetent, increasing costs for us all. How wonderful.
When market victims learn a lesson, new private industries form to prevent shit like this from happening again. We are all "market victims" of this debacle in phony free markets. And we should indeed learn our lesson, which we were fools not to have learned long ago from previous lessons: moneylenders and financial pros will act in their own interest. They will game the system if they can. They will crash the entire system, through greed and shortsighted scheming and cynical self-enrichment, if not prevented from doing so.

->Market forces do not work unless you have an actual market <-
Usually I agree with you on some level, but here I'm 100% opposed. If you are not responsible enough to read and understand a contract, then you should suffer the consequences of that contract. So the stupid are legitimate prey for the moneylenders. And their children ? Their neighbors ? The prudent impoverished through no fault or contract of their own ?

About it wrecking the economy -- I'm eager for this housing correction, so that the excess capital that is flooding the commodities markets can be erased. That way oil (and foodstuffs) speculation can slow and the price will come down, and the construction of all those McMansions end and people will move back closer to the cities, relieving even more pressure on the cost of fuel. On top of that, the cities are in need of revitalization anyway... Depression is indeed a cure for high prices, if things swing that way, Hyperinflation also cures many ills, if things break that way. We will no doubt all appreciate the revitalization of our cities sure to result from, for example, the sale of controlling interests in our major financial institutions and productive establishments to the Chinese, the Saudis, and other sovereign funds, as well as the impoverishment of the rural communities and the flight of great piles of capital to more secure lodgings in better managed economies.

[shade]

Who's "they"? Sure a lot of people are getting hit hard. But the billions in fees and bonuses and cashed stock options and hedge fund payoffs and so forth and so on went into some pretty deep pockets.

"They" enjoyed enormous tax breaks on those "earnings". Banks may lose money; bankers ? Not the same thing.

People do make money on bubbles, Shade.

And the trashing of your economy, by deregulated bankers and unregulated financial geniuses who launched this bubble, is undeniable, no?


Here is "They"

Every major retail bank
Every major investment bank
Most hedge funds (many have gone bankrupt, managers going to jail, "evil rich people" gone broke etc)

Yes, they banked a ton of cash during the highs. They are going bankrupt now during the low.

There is even speculation now that Bank of America may go bankrupt over this. Check the yahoo stock message board for them http://messages.finance.yahoo.com/mb/BAC. I have been tempted by their high dividend yield now for a few months but have not bitten yet due to the risk that they may actually fold over this - and their stock price keeps coming down, proving my caution to be warranted.

Have execs lost their jobs? Yup. Did they have golden parachutes? Yup, but such is the nature of corrupt mega corps that screw ignorant share holders and corrupt mutual funds (who's only goal is to enrich insiders by funding their options payouts). Did some get major options awards during the highs such that they don't care about performance? You bet. I don't invest in those companies, thanks to my buddy Albert who has long warned me over that: http://articles.moneycentral.msn.com/Investing/CompanyFocus/MakeABuckByShunningFatCats.aspx

PS, if you want a mutual fund that avoids corrupt management and has a good mix of international stocks to hedge against the dollar's decline etc, check out MIRZX. I can personally endorse this fund. This guy is a genius and I know him personally. I may work for him one day. Here is a comparison of his fund vs the market: http://finance.yahoo.com/echarts?s=MIRZX#chart2:symbol=mirzx;range=1y;compa re=^dji+^ixic+^gspc;indicator=volume;charttype=lin e;crosshair=on;ohlcvalues=0;logscale=on;source=und efined


Here is some more subprime write-down news. These are rich corps taking it in the ass: http://news.google.com/news?hl=en&ned=us&q=subprime+write-down&ie=UTF-8

[bergshadow]

Here is "They"

Every major retail bank
Every major investment bank
Most hedge funds (many have gone bankrupt, managers going to jail, "evil rich people" gone broke etc)

Yes, they banked a ton of cash during the highs. They are going bankrupt now during the low. Some are. Some aren't. Some got caught in their own bubble, some did not.

Meanwhile, you make my case: a few unregulated financial operations are quite capable of wrecking even a large, sophisticated economy, and will in fact do that if not prevented.

Market forces do not curb these people. Market forces have never curbed these people, in the history of money and markets. You might as well depend on market forces to curb piracy.

[shade]

Some are. Some aren't. Some got caught in their own bubble, some did not.

Meanwhile, you make my case: a few unregulated financial operations are quite capable of wrecking even a large, sophisticated economy, and will in fact do that if not prevented.

Market forces do not curb these people. Market forces have never curbed these people, in the history of money and markets. You might as well depend on market forces to curb piracy.

For every lender was a borrower. The very people that are going to be bailed out by this are 50% to blame for the problem itself.

You say the financial institutions are to blame. I say the borrowers and lenders are both to blame for entering into bad deals.

And I can prove you wrong very simply on your last statement. JP Morgan was the least hurt by this crisis. Long before this crash, people chastized JP Morgan for not being as profitable as they could because they refused to participate in CDOs much etc. Now they are buying out the "sophisticated" banks like Bear Stearns. So it is an observable fact that financial institutions with foresight were able to act responsibly and cautiously and not get sucked up into the allure of a quick buck.

[rochainskool]

Help the banks, not the people...

[Sketcher]

$100k can get you 2000 sqft in (cheap) parts of north texas. $130k can get you 3000 sqft. But that is the cheapest of the cheap new construction in cheap land parts mostly on the outskirts of Fort Worth.

Connecticut is too damn expensive. A 1000 sqft house here costs about $100k. If it's new construction, it'll be more like $150k.

[chrisvet]

Yet another layer of unregulated middlemen, providing yet more opportunities for fleecing the economy by deceiving the incompetent, increasing costs for us all. How wonderful.
Absolutely ridiculous notion to suggest financial advisers would fleece / decieve home buyers while increasing costs for all, vs the hundreds of billions in tax payer bailout funds. The former is a drop in the bucket that creates responsible informed consumers, the latter creates massive debt / inflation & dependent people. Would you suggest a home inspecters job is to protect the homeowner? Then why would a financial adviser be different?

We are all "market victims" of this debacle in phony free markets. And we should indeed learn our lesson, which we were fools not to have learned long ago from previous lessons: moneylenders and financial pros will act in their own interest. They will game the system if they can. They will crash the entire system, through greed and shortsighted scheming and cynical self-enrichment, if not prevented from doing so.

The money lenders are only reactionary to how available money they can loan out. ITs their job to sell product (loans etc) and make money. Bailouts to not solve problems, learning harsh lessons do. Greed is good. Greed, Ambition, challenges drive the market, create jobs, and create new technologies, ultimately increasing living standards. The government is never the solution to combat greed, competition is. (Gov'ts help create/maintain monopolies via regulations often lobbied for by the very big businesses they benefit.)