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The 1% will own more than the 99% by 2016, report says

whysoserious said:
And you don't accredit any of it to predatory lending either?
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"Predatory lending" was a problem but I don't consider it to be the key problem because predatory lending as "the problem" really only applies to those that were tricked into taking ARM's that, when they ballooned, would be unaffordable. It turned out most of the defaults of these hybrid ARMS happened before the rate reset, which means that the defaults weren't due to the mortgage broker tricking the homeowners into balloon mortgages. If it weren't for all the "strategic defaults" by people that actually COULD afford to make their payments, it would have been a big bump in the market, but not the crisis we saw that went global.

Nearly a year after the Obama administration unveiled its ambitious housing rescue program, foreclosure tallies continue to break records. Foreclosure filings were reported on more than 2.8 million properties in 2009, up 21 percent from the previous year and 120 percent from 2007, according to RealtyTrac. With nearly 10 percent of mortgages now delinquent--which is also a new record--even more homeowners appear headed for foreclosure this year. "A massive supply of delinquent loans continues to loom over the housing market," RealtyTrac CEO James J. Saccacio said in a statement. "Many of those delinquencies will end up in the foreclosure process in 2010 and beyond."

[See Tips for Selling a Home in the Off-Season.]

Homeowners have found themselves in foreclosure for a number of reasons. Some purchased properties they could never really afford. Others lost their jobs--the national unemployment rate remains in the double digits--and had no way to make mortgage payments. But as the crisis rumbles forward, an additional driver of home foreclosures has become clear: Many borrowers have the means to keep paying the mortgage but are simply walking away because they believe it's best for their finances.

The number of so called "strategic defaults" more than doubled, to 588,000, from 2007 to 2008, according to a study by Experian and Oliver Wyman. A separate 2009 survey found that more than a quarter of all existing defaults were strategic. Meanwhile, a growing number of academics are touting the financial benefits of walking away. "Homeowners should be walking away in droves," Brent T. White, a University of Arizona law school professor, said in a recent paper. "The financial costs of foreclosure, while not insignificant, are minimal compared to the financial benefit of strategic default."
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And I blame people like Brent T. White (who sounds like your typical liberal professor) who urged people to walk away from their loans if they owed more than the house was worth in the market at the time. That's classic liberal contempt for personal responsibility with the call to just go ahead and let others pay for one's bad decisions. The fact that homeowners DID walk away in droves when they could actually afford to make their mortgage payments was contemptible. They stuck everyone else with their bad debts and in the end, the entire global economy paid for it.
 
JasperL said:
Hilarious. I'd love to work for a bank run by you. After I made a bunch of loans to known deadbeats, collected my production bonus, spent it, you promoted me, and then the loans all started defaulting, I'd blame the deadbeats for not paying back the loans I BEGGED them take, and you'd believe ME!
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Unless you lied when putting together the loan for approval, you're not the one to blame here. If the lending standards are such that you can make the loan honestly and we sell it to Fannie Mae in accordance with government regulations there's no wrongdoing. This goes back to the CRA which you like to hold blameless in all of this. If you lied when you submitted the mortgages for approval, however, you'd be in jail because I'd have you prosecuted for fraud. And since I'm pretty sure you'd be one of the guys lying and cheating, I figure you wouldn't be nearly as happy to be working for a bank I'd be managing as you think you would be. Just sayin'.

Meanwhile, let's get back to discussing the "strategic defaults" which, in my opinion, were the most unforgivable aspect of all the unethical things that caused the crash. That's where people who could have made good on their obligations just decided they'd rather take the damage to their credit rating than make good on the obligations they signed up for in good faith.
 
mpg said:
Can you please elaborate on the comment that I enlarged? Thank you.
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Go thru the thread- it has been posted a number of time. Your welcome.
 
whysoserious said:
And you don't accredit any of it to predatory lending either?
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You want to go after true "predatory lending"? Do something about the 'pay day lenders', and the 'title loan places'.... These parasites go after the poorest of society with APR's that can top 300% annually....But I don't see anyone going after them.
 
ludin said:
this folks is liberal logic at it's finest.

nope not making stuff up at all. if liberals spent less time ranting about the 1% and more time working and doing stuff then they would be in the 1% as well.
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That is impossible by definition.

The world can't afford the 1% we have now.

Twice as many would be 2%.
 
What if...? said:
That is impossible by definition.

The world can't afford the 1% we have now.

Twice as many would be 2%.
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see what I mean folks? no clue about what they are talking about.
 
Papa bull said:
"Predatory lending" was a problem but I don't consider it to be the key problem because predatory lending as "the problem" really only applies to those that were tricked into taking ARM's that, when they ballooned, would be unaffordable. It turned out most of the defaults of these hybrid ARMS happened before the rate reset, which means that the defaults weren't due to the mortgage broker tricking the homeowners into balloon mortgages. If it weren't for all the "strategic defaults" by people that actually COULD afford to make their payments, it would have been a big bump in the market, but not the crisis we saw that went global.



And I blame people like Brent T. White (who sounds like your typical liberal professor) who urged people to walk away from their loans if they owed more than the house was worth in the market at the time. That's classic liberal contempt for personal responsibility with the call to just go ahead and let others pay for one's bad decisions. The fact that homeowners DID walk away in droves when they could actually afford to make their mortgage payments was contemptible. They stuck everyone else with their bad debts and in the end, the entire global economy paid for it.
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I do agree that the people who could afford their mortgage but walked away were a problem, but I disagree with that argument for two main reasons:

1) It seems hard to blame people for the mortgage crisis, when they were underwater because of the mortgage crisis. They piled on top, for sure, but these people came after the collapse unlike the defaults on mortgages, losses in mortgage-backed securities, and total meltdown of credit-default swaps.

2) He may be "your typical liberal" professor, but I can think of nothing more conservative than that ideal. That's the "free market" in motion. It's a bad investment, it's value has been reassessed, so **** it, right?

What's weird is that you give the free market a pass to value someone at $7.00 an hour, but you force personal responsibility on a personal level when walking away from a mortgage. Both are value related. Both impact the economy negatively. Both impact others negatively. But one you think is normal and correct, and the other you find morally reprehensible (so of course it's liberal).
 
Papa bull said:
And I blame people like Brent T. White (who sounds like your typical liberal professor) who urged people to walk away from their loans if they owed more than the house was worth in the market at the time. That's classic liberal contempt for personal responsibility with the call to just go ahead and let others pay for one's bad decisions. The fact that homeowners DID walk away in droves when they could actually afford to make their mortgage payments was contemptible. They stuck everyone else with their bad debts and in the end, the entire global economy paid for it.
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If that was a bankruptcy attorney advising a corporate client, he'd be sued for malpractice and he'd lose if he didn't give that EXACT advice to his client.

It's unclear to me why an individual has a moral obligation to repay a loan, but you'd demand that a corporation you held an interest in default if that was 1) legal, and 2) maximized shareholder return. Does corporate America also have a "liberal contempt for personal responsibility" or are you just applying one set of rules for the proles and another for businesses and plutocrats? I'm guessing the latter.
 
Papa bull said:
Unless you lied when putting together the loan for approval, you're not the one to blame here. If the lending standards are such that you can make the loan honestly and we sell it to Fannie Mae in accordance with government regulations there's no wrongdoing. This goes back to the CRA which you like to hold blameless in all of this. If you lied when you submitted the mortgages for approval, however, you'd be in jail because I'd have you prosecuted for fraud. And since I'm pretty sure you'd be one of the guys lying and cheating, I figure you wouldn't be nearly as happy to be working for a bank I'd be managing as you think you would be. Just sayin'.
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I'm the one who would be lying and cheating? What gives you that idea. If I was happy lying and cheating, I'd be a stockbroker or annuities salesman, not a tax accountant.

And for the rest of your points, you're conflating all kinds of things and I don't have the interest in untangling it all. Bottom line is lenders are responsible for making good loans - that is step one of "How to run a lending institution." Step 2 is maintain adequate reserves to protect your institution WHEN loans go bad. They fail step one and two, massively, pay themselves like kings while the going is good, and you blame the borrowers when the crap hits the fan. It's funny.

Meanwhile, let's get back to discussing the "strategic defaults" which, in my opinion, were the most unforgivable aspect of all the unethical things that caused the crash. That's where people who could have made good on their obligations just decided they'd rather take the damage to their credit rating than make good on the obligations they signed up for in good faith.
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Addressed elsewhere. Lenders operate exclusively to maximize profits, but you expect borrowers to repay a loan when the profit maximizing choice is to default? Hahaha....
 
j-mac said:
You want to go after true "predatory lending"? Do something about the 'pay day lenders', and the 'title loan places'.... These parasites go after the poorest of society with APR's that can top 300% annually....But I don't see anyone going after them.
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No **** man. And rent-to-own places. The worst...
 
JasperL said:
I'm the one who would be lying and cheating? What gives you that idea. If I was happy lying and cheating, I'd be a stockbroker or annuities salesman, not a tax accountant.

And for the rest of your points, you're conflating all kinds of things and I don't have the interest in untangling it all. Bottom line is lenders are responsible for making good loans - that is step one of "How to run a lending institution." Step 2 is maintain adequate reserves to protect your institution WHEN loans go bad. They fail step one and two, massively, pay themselves like kings while the going is good, and you blame the borrowers when the crap hits the fan. It's funny.



Addressed elsewhere. Lenders operate exclusively to maximize profits, but you expect borrowers to repay a loan when the profit maximizing choice is to default? Hahaha....
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Well, clearly you have no interest in addressing the main point, which was that deadbeat jerks were walking away from bad investments and sticking the banks with their bad investment decisions by CHOICE. Over 25% of all defaults were these "strategic defaults", which went through the roof increasing in triple digit percentages. You apparently don't see anything wrong with that and that tells me everything I need to know about your integrity and it's why I suspect you'd be one of the people "fudging" applications for commissions.... after all, you're just "sticking it to the banks" when you do that and you clearly see no problem with people "sticking it to the banks".
 
JasperL said:
If that was a bankruptcy attorney advising a corporate client, he'd be sued for malpractice and he'd lose if he didn't give that EXACT advice to his client.

It's unclear to me why an individual has a moral obligation to repay a loan, but you'd demand that a corporation you held an interest in default if that was 1) legal, and 2) maximized shareholder return. Does corporate America also have a "liberal contempt for personal responsibility" or are you just applying one set of rules for the proles and another for businesses and plutocrats? I'm guessing the latter.
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Yeah, that's sort of the problem right there. It's why you are how you are about all this. The moral obligation to fulfill the obligation you accepted in good faith to repay money you borrowed is unclear to you and probably most liberals. It's about personal responsibility and, like all diehard liberals, you have no use for such silly ideals.
 
ludin said:
see what I mean folks? no clue about what they are talking about.
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Everybody can't be rich.

That's not how it works. Its not how ANY of it works.

We wouldn't need capitalism without scarcity.

And if everybody was "the 1%" it would be the 100%.

So I was right and you are spouting nonsense.
 
Papa bull said:
Well, clearly you have no interest in addressing the main point, which was that deadbeat jerks were walking away from bad investments and sticking the banks with their bad investment decisions by CHOICE. Over 25% of all defaults were these "strategic defaults", which went through the roof increasing in triple digit percentages. You apparently don't see anything wrong with that and that tells me everything I need to know about your integrity and it's why I suspect you'd be one of the people "fudging" applications for commissions.... after all, you're just "sticking it to the banks" when you do that and you clearly see no problem with people "sticking it to the banks".
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Of course I have a personal problem with defaulting on debts. I've never failed to pay a debt in my life, and as we speak I have none. No mortgage, no car loans, no personal loans no nothing. Monthly credit card, paid off each month. It's weird you have to attribute a personal weakness or personality flaw onto everyone who disagrees. It would be easy for me to make up some for you, but I don't see the point in accusing you of having no integrity. Resorting to personal insults is what children do. It's petty and childish.

What shouldn't surprise a corporate lender who has a duty to maximize profits using all legal methods available is that its customers behave in an IDENTICAL fashion and don't ELECT to pay off loans which it is in their best interests to default on. It's the common assumption in any business loan, which is why things like collateral, loan covenants, remedies in case of default, and all the rest of that 18 or 62 page agreement we all sign when we get a mortgage or just a new credit card are there. It's to maximize profit for the lender, and to shift the game in its favor at the FIRST opportunity. Miss one payment - your rate goes to 97%! No morality involved - just profits. I don't operate my own life that way but I understand defaulting on a mortgage when it is a good BUSINESS decision, and a loan is a BUSINESS transaction - not a moral one.

And blaming the other side of a loan transaction for behaving EXACTLY like the lender would behave in similar circumstances is just pathetic whining of losers wanting to shift blame for their failures onto others. They begged those deadbeats to take loans and paid themselves handsomely, until the shiat hit the fan. They made their bed.
 
Papa bull said:
Yeah, that's sort of the problem right there. It's why you are how you are about all this. The moral obligation to fulfill the obligation you accepted in good faith to repay money you borrowed is unclear to you and probably most liberals. It's about personal responsibility and, like all diehard liberals, you have no use for such silly ideals.
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That was a two-part statement and you ignored the second part:

It's unclear to me why an individual has a moral obligation to repay a loan, but you'd demand that a corporation you held an interest in default if that was 1) legal, and 2) maximized shareholder return.
 
Papa bull said:
Yeah, that's sort of the problem right there. It's why you are how you are about all this. The moral obligation to fulfill the obligation you accepted in good faith to repay money you borrowed is unclear to you and probably most liberals. It's about personal responsibility and, like all diehard liberals, you have no use for such silly ideals.
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There was a 'but' there.

No one here who is engaged in the market at any level believes the 'market' expects or demands businesses repay loans when electing NOT to would maximize shareholder value. Good gosh - business entity planning 101 is to isolate risk with various legally distinct entities for the express purpose of preventing losses in one "division" from bleeding into another and to isolate "business" loans from personal assets - it's a strategy on how to default on debt and maximize personal profits. Corporations are formed to shield owners from having to repay the debts of the company they own. Same with LLCs, LLPs, limited partnerships, and S Corps. It's why no one with any loss exposure does business as a sole proprietorship. There is no "morality" involved in these decisions - I've been part of many of them. It's how to protect individuals from losses, and they do so using EVERY LEGAL MEANS AVAILABLE TO THEM, as we all expect.

Anyway, spare me from the faux morality. I'm not buying it. That mortgage holder has no more "moral obligation" to repay a loan than a member in an LLC or a shareholder in GE has a "moral" obligation to repay a business loan.
 
whysoserious said:
That was a two-part statement and you ignored the second part:

It's unclear to me why an individual has a moral obligation to repay a loan, but you'd demand that a corporation you held an interest in default if that was 1) legal, and 2) maximized shareholder return.
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Exactly.

BTW, sorry I keep stepping on your posts. I'm drafting my responses while you're posting yours. Not trying to just repeat your points, we're just thinking along the same (rational) lines.
 
JasperL said:
Exactly.

BTW, sorry I keep stepping on your posts. I'm drafting my responses while you're posting yours. Not trying to just repeat your points, we're just thinking along the same (rational) lines.
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Not a problem with me. There is nothing worse than when I am debating a topic and I am getting attacked by four or five different posters, and that seems to happen a lot on this board.
 
What if...? said:
Everybody can't be rich.

That's not how it works. Its not how ANY of it works.

We wouldn't need capitalism without scarcity.

And if everybody was "the 1%" it would be the 100%.

So I was right and you are spouting nonsense.
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I never made any of these claims so therefore you have no idea what you are talking about.

if you spent half the time working on something rather than complaining then you could be in the top 1% as well.
 
What I continue to see here is class envy and jealousy about what someone else has. What has this country come to? I never cared about what someone else had or paid in taxes for that never affected me and my family in anyway. In fact it in some ways motivated me to do better and become part of that group. Doesn't seem to be that way today as so many want to take from those who produced and give it to others which in some way is supposed to motivate them to better themselves and not expect continued handouts. Talk about being naïve

I have also heard that the Middle class is shrinking. Question, where are they going? Wonder if any of them have moved up to the upper class by taking advantages of the opportunities that they have in this country. Naw, that couldn't be it, they just dropped off the face of the earth.
 
Conservative said:
What I continue to see here is class envy and jealousy about what someone else has. What has this country come to? I never cared about what someone else had or paid in taxes for that never affected me and my family in anyway. In fact it in some ways motivated me to do better and become part of that group. Doesn't seem to be that way today as so many want to take from those who produced and give it to others which in some way is supposed to motivate them to better themselves and not expect continued handouts. Talk about being naïve

I have also heard that the Middle class is shrinking. Question, where are they going? Wonder if any of them have moved up to the upper class by taking advantages of the opportunities that they have in this country. Naw, that couldn't be it, they just dropped off the face of the earth.
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I'm so jealous. You got me. I'm basically like Gollum.

FYI, I call bs on the part I quoted in bold.
 
whysoserious said:
I'm so jealous. You got me. I'm basically like Gollum.

FYI, I call bs on the part I quoted in bold.
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Then explain it to me, how does what someone else makes or pays in taxes affect you or your family?
 
Conservative said:
Then explain it to me, how does what someone else makes or pays in taxes affect you or your family?
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I'm not sure what you mean. We all live in a society and have entered into a social contract within that society. We have elected officials who make decisions and policies for us. Our elected officials and its constituents have, for the time being, decided that a progressive tax bracket makes the most sense and is the most beneficial.

Why does what someone else makes or pays in taxes matter to you? You argue it more passionately than most.
 
whysoserious said:
I'm not sure what you mean. We all live in a society and have entered into a social contract within that society. We have elected officials who make decisions and policies for us. Our elected officials and its constituents have, for the time being, decided that a progressive tax bracket makes the most sense and is the most beneficial.

Why does what someone else makes or pays in taxes matter to you? You argue it more passionately than most.
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It means nothing to me as I control my own destiny and always did. That social contract you are talking about means exactly what and isn't it different for everyone. I don't care what someone else makes, someone else has, or what someone else pays in taxes. I do care how much our Federal Govt. spends and more importantly their over reach and what they waste. The question is why don't you? Why would you throw more money into a bloated Federal Bureaucracy that has yet to solve a social problem and was never charged with that responsibility?
 
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