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Market Panic |
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Huan Yi Member Ascendant
since 2004-10-12
Posts 6688Waukegan 
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. Watching recent events I get the sense that if someone, especially from the media, were to yell “Fire!” to those offshore neck deep in the sea some good portion of those very wet people would rush terrified out of the water. . |
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| © Copyright 2007 John Pawlik - All Rights Reserved | |||
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Balladeer
Administrator
Member Empyrean
since 1999-06-05
Posts 25505Ft. Lauderdale, Fl USA |
Amen... |
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nakdthoughts Member Laureate
since 2000-10-29
Posts 19200Between the Lines |
the news and the media~~ always so negative M [This message has been edited by nakdthoughts (08-17-2007 07:04 PM).] |
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TomMark Member Elite
since 2007-07-27
Posts 2133LA,CA |
The Fed has put its leg in. Think about it!! |
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Huan Yi Member Ascendant
since 2004-10-12
Posts 6688Waukegan |
. "the news and the media~~" There's no good news but bad news . . . I hate the arrogance behind the urge to manipulate; as if we are actually idiots . . . . |
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TomMark Member Elite
since 2007-07-27
Posts 2133LA,CA |
Huan, you have perfect judgement on what you are watching and reading. What is the difference between poem and news? 2% truth 4% dream the left are all illusions for entertaining the brain. right? so, good or bad, a matter of taste. Such as different saying on Katrina and earthquake and WWII too. |
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nakdthoughts Member Laureate
since 2000-10-29
Posts 19200Between the Lines |
everything has become a "doom's day attitude", John. This is not being about the media or news but an example: trying to get someone hired to do my roof and not pay double what one has offered has brought me almost to the thought to just let the roof cave in. The insurance company I checked with gave me all situations of the possibility of being sued. What if he falls off my roof ( well make sure he at least has health insurance), what if a piece of shingle gets blown off the roof into a passing car, what if a child riding a bike or walking on the sidewalk gets hurt because of debree( We would block the sidewalk during the reroofing)what if etc etc etc...I know they get paid to tell you the worst to protect you...so I asked what is the worst that could happen even after a disclaimer if he got hurt, a lawyer would find a way to get around it and sue anyway. He said they probably would cancel my insurance. I said well after paying in for over 34 years of my life if that happened too bad. I told him I can't live my life thinking every day something bad is going to happen because in real life I have enough to worry about. And that is just like the media, always stating the worst another example: to make the gas prices go up because there may be a hurricane...or there is going to be a bad winter( well maybe in one part of the country) but no matter what the heat bills will go up ahead of time. Anyway just another rant. I guess we begin to see more as we age, than those willing to spend when younger just to have wants, when we have to make sure we have at least the necessities. I know a bit off-topic  M |
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iliana Member Patricius
since 2003-12-05
Posts 13434USA |
The market reflects real matters and the news is reporting the changes in the market. In this case, I do not believe the news is manipulating the market. Those bankruptcies are real and supported by Court filings. This time it is what Peter begged from Paul that has finally caught up with the financial industry. For several years, financial analysts have been blogging about the potential for serious market problems without the backup by the Fed. If anyone manipulates the markets, it's the Fed. When the real economy in the U.S. reflects pages after pages of bankruptcies in the newspapers, there was bound to be a reflection in the market and market jitters because of the instability. Now the Fed has come in to put a bandaide on -- how long will that last, is the question? |
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Huan Yi Member Ascendant
since 2004-10-12
Posts 6688Waukegan |
. http://www.foxnews.com/story/0,2933,292780,00.html . |
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iliana Member Patricius
since 2003-12-05
Posts 13434USA |
If you want to belive that, John, go ahead. I don't. This article does not take into account the coming foreclosures due to the changes affected in baloon rates, etc., which the government is currently trying to head off. It also does not take into account all the other defaults which are occurring. Take a look at your newspaper, man. Things are not healthy and the market knows this. The market will keep going up and down with the Fed fixes, but there are major economic problems in this country. Our infrastructure reflects the true health of this nation and it is crumbling. What the last 20 or so years of government has produced is a nation where the rich are richer and the poor and middle class are poorer -- the disparity between the rich and middle class/poor is ever expanding. |
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Ron
Administrator
Member Rara Avis
since 1999-05-19
Posts 8669Michigan, US |
quote: Cool. I wonder if Jerry Bowyer, the author of that article, will loan me a few million dollars and then let me pay back only 86 percent of it? The difference, after all, is "Not very big at all."  The current mortgage problem has nothing to do with infrastructure, in my opinion, nor anything to do with the disparities between the rich and not-so-rich (sorry, I'm not going to call people who buy homes "poor"). The problem, frankly, is stupid people who think the only criteria for getting a loan is finding someone equally stupid enough to give it to them. Just because someone is willing to finance a house (or car) doesn't necessarily make it affordable for the individual. More succinctly, just because "you can" doesn't mean "you should." And don't even get me started on "Zero down" mortgages. Grrr. |
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iliana Member Patricius
since 2003-12-05
Posts 13434USA |
The current mortgage problem has nothing to do with infrastructure, in my opinion, nor anything to do with the disparities between the rich and not-so-rich (sorry, I'm not going to call people who buy homes "poor"). The problem, frankly, is stupid people who think the only criteria for getting a loan is finding someone equally stupid enough to give it to them. Just because someone is willing to finance a house (or car) doesn't necessarily make it affordable for the individual. More succinctly, just because "you can" doesn't mean "you should."....Ron Ron, I didn't say that it did. What I said was fairly clear I thought. I said that the problems with our infrastruction and the growing disparity between the rich and poor reflected the problems with our economy (not the current mortgage problem). And I do agree with you about the problems with the subprime lenders for the most part. Not long ago I reported a case here in Texas, however, where a poor, Black woman needed to make repairs on her house in Nacogdoches and a subprime lender was advertising loans at a very low interest rate. She bought it, being heavily pressured to do so. Later that lender bundled her loan into a package and sold it to another lender. The terms changed along with the sale and then the rates went way up. She lost her home. What brought about the problem was not the terms of the original loan but what happened down the chain when the loan was sold. Banking and lending practices are wildly unregulated in this area and I believe that currently Patrick Leahy is trying to put some brakes on the illegal practices that suckered many people into the subprime market landslide. Below is my case report on the lawsuit. ***** Nacogdoches, 145th, Cause No. C18,445- 2002, Judge Hon. Campbell Cox, II, Case Style: Margie A. Murray vs. John C. Carlisle, Jr., Individually and d/b/a Champion Renovators, and New Century Mortgage Corporation Fraud on Home Repair & Mortgage Loan Facts & Allegations: Plaintiff, Margie A. Murray, was an elderly African American woman. She sued the contractor and mortgage broker, Defendant John C. Carlisle, Jr., who had agreed to renovate her house and told her he could get financing for her as a mortgage broker in the amount of $100/month. He ended up being convicted in federal court on an unrelated matter (as to the facts of this case). His conviction arose as a result of fraud involving federally insured funds under HUD - he had been qualifying and assisting people who should not have been qualified to get HUD loans by doctoring documents (like W2s or bank statements) - they would default on their loans and the federal government was having to pay the lender. He is currently in Beaumont federal prison. In Ms. Murray's case, it was not a HUD loan and there was no insurance other than title insurance. The only Defendant at trial was New Century. The Plaintiff contended that the Defendants collaborated to ensnare her into taking out a loan for worthless home repairs, the amount of the loan being $33,362 (over time the loan would have cost her in excess of $123, 000). There was evidence from an expert that not only did the repairs not enhance her home but actually decreased its value. Ms. Murray found Carlisle's service through a newspaper ad that advertised low-cost loans for people that needed home repairs. The loan charged the Plaintiff 13% APR when the prime lending rate was 6%. Champion Renovators was an outfit run by John Carlisle out of Houston (one of about a dozen different entities he had over a 10-year time frame). Carlisle was on probation at that time from incarceration out of the Southern District of Texas for fraud and conspiracy. The allegations in this case were that Mr. Carlisle told Ms. Murray he would do a good job in his renovations and that he could get financing for $100/month. He assisted the Plaintiff in getting a loan through New Century Mortgage Corp., which took a lien on her house, but the payments ended up being over $300/month. Ms. Murray said that the workmen for the repairs came to her house and started working before she ever signed anything, and then in a 'Snidley Whiplash' fashion, after the work had commenced, a gentleman showed up at her home with loan papers from New Century that required her to pay $343 a month. She refused to sign and the gentleman told her it was a done deal because they had already started work, standing over her and kind of banged his fist on the table and told her she had to sign. He also got her to sign a document that falsely showed that those loan papers had been closed at a title company in Houston when they had been signed at her home and not notarized until later. Plaintiff's theory against New Century was that any corporation acts through its agents, and that the lien that New Century took and then later sold on the secondary lending market was invalid. Plaintiff contended New Century's agent/salesman, Michael Buckley, and John Carlisle were "running buddies" and that they were such good buddies that New Century should have known that Mr. Carlisle was a shyster and a swindler. Mr. Buckley testified at trial that he did know Carlisle was in trouble with the law but did not know what it was about. Facts & Allegations He said that every deal he had with Carlisle had worked out to the satisfaction of the customer and that this was the first one that did not. Various evidence was allowed to support the shady nature of Carlisle, however, some evidence was excluded. The Plaintiff claimed that rather than conduct the closing of the loan at a title company or some more official location (like a lawyer's office), one of the contractor's cohorts went to the Plaintiff's house and intimidated her into signing the papers and then took the closing papers back to the office. The contractor's wife notarized the papers after the fact. Defendant New Century, based in California, argued it did not have knowledge of the lien's invalidity, and would have never given a loan had it known about Carlisle's history. It had a title insurance that insured the title and because this was a contractor the title insurance had to ensure that the contractor lien that Carlisle was assigning to New Century was valid. New Century argued that it relied on the title company to verify the validity of Carlisle's contractor lien. New Century claimed it sent a good faith estimate out within 72 hours to verify what anticipated payments would be to Ms. Murray. Two weeks later, New Century sold the note on the secondary market in a large batch of loans, but retained service rights. Ms. Murray was unable to complete paying off the loan. When Ms. Murray first filed the lawsuit there was a promissory note for over $30,000, and New Century had a lien on the property. New Century said that it eventually found that the lien was invalid. A claim was made against the title policy. The title company paid the policy limits, which was the amount of the loan. So once the loan was paid off, the lien was forgiven. New Century's view of the litigation was that it should have been dropped from the lawsuit once the lien was paid off. Defendant argued that the secondary market is a limited market and it would not intentionally make a bad lien because it would get a bad name in the market if it did this kind of thing and also it only makes about 60 cents on a dollar when it has to foreclose on the property. Also, the Defendant presented evidence that it gave good-faith disclosures indicating the loan was going to be $270. The loan ended up being $330 a month because she owed about $7,000 in back taxes and New Century paid that off. A board certified real estate appraiser filed a report in the loan file indicating the property had been completed, in other words indicating the contractor had done his job. New Century contended it relied on that completion report in making its decision. Defendant used a blow- up of this completion report. The Defendant said it relied on the facts it had: 1) a title company saying it was a good lien; 2) an appraisal report said the work was done; and 3) and a title company making it look like the closing was done correctly at a title company. Damages: The Plaintiff claimed she paid about $15,000 on the note before it was forgiven by New Century. She also contended she suffered mental anguish as a result of the whole ordeal. Verdict: The trial was bifurcated. The jury found no fraud on the part of New Century, but did find that Defendant Carlisle committed fraud. Awarded: $ 9,700 out-of-pocket expenses $ 65,000 mental anguish $450,000 punitive damages $524,700 Total Award A high/low settlement agreement with New Century was reached just prior to the jurors going into deliberations of $40,000/$15,000. Verdict Date: 03-04-2005 Sidelights: Plaintiff's attorney reported that Carlisle's criminal convictions did not come into evidence in the trial until the second phase for punitive damages. He was convicted twice. This evidence was excluded during the first phase because typically prior bad acts are not permitted, in this case particularly because the cases were not related in that they were HUD cases, although had Carlisle been at trial as a witness, then Plaintiff would have used this evidence to impeach him. As it turned out, after New Century won its portion of the trial, counsel for New Century left the Courthouse. The jury then began to hear evidence with regard to punitive damages and Plaintiff's counsel brought in all the evidence about Carlisle's convictions at that time. That information did get in because there was no counsel present to object for Carlisle. Carlisle was the subject of much negative media attention over the years including Prime Time Live on ABC, 20/20 with Diane Sawyer, and local Channel 13 ran a series on him, as well, for federal crimes on the HUD Title I insurance. Defense counsel said that the Nacogdoches jury was not skewed in any one way; it was a fairly bright, very diligent jury. The Plaintiff's attorney did not ask for attorney's fees as it is a legal aid program representing low-income folks. It falls under the legal services corporation, a private corporation federally funded to provide funding for legal aid programs. Plaintiff's attorney said that there is a trend of predatory mortgage lending in so-called sub- prime lending today. He said the trend is for these companies to target poor people and people with bad credit and make high-cost loans that in most cases cannot be paid. They sell the loans off but retain service rights, get a discounted amount of money, but then charge enormous fees for collection efforts. This is a growing trend with some credit card companies, as well. ********** Sorry for the long post. |
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Not A Poet Member Elite
since 1999-11-03
Posts 3885Oklahoma, USA |
Kinda reminds you of the Penn Square Bank debacle don't it? You want a loan/ Ok, don't matter to me. I'm gonna sell it upstream to some other dumb sucker anyway. |
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iliana Member Patricius
since 2003-12-05
Posts 13434USA |
NAP -- exactly. |
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Christopher
Moderator
Member Rara Avis
since 1999-08-02
Posts 8296Purgatorial Incarceration |
The problem is that the financial institutions had their heads in the dirt just as much as the buyers. It seemed that most had an inability to realize the old addage that "what goes up, must come down." It seemed to make sense to loan someone enough money to buy a home, when it will have appreciated 5+% in 6 months. If things had continued that way (which is impossible, as the current down cycle indicates), it would have been fine for the institutions lending money as well as those borrowing it. It doesn't matter if you put no money down if your house is making you money from the day you borrow. |
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TomMark Member Elite
since 2007-07-27
Posts 2133LA,CA |
The Market where does the money come from As loaner? 1. bank where you put your own money 2. not directly, low rate certral bank, 3. bank borrowed from other banks Are the amount of monay going to grow? 1. see the price of Gas, egg and milk. they ask for more money so you will have less money in bank. 2.central bank...the war where does money come from as borrowers? Jobs. Is borrowers money going to grow? 1. the out off jobs rate 2. the increase of life expense 3. the morgage (yes, the 3,5,7years fixed or balooned is close to end. They all have to have new rate. pay it or lose the house. to keep the house, then one has empty the pocket. http://biz.yahoo.com/ap/070822/banks_fed_window.html?.v=7 why Four Major Banks Borrow From Fed? How much money does Fed have? none or infinit...the Machine can always print out more sheet...which means inflation...not mention those are also world market related. But one shall never lose hope because once America, alwasy America. |
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Balladeer
Administrator
Member Empyrean
since 1999-06-05
Posts 25505Ft. Lauderdale, Fl USA |
I may be wrong but I have little sympathy for the forclosure people. They were given pie in the sky promises - no money down, microscopic interest rates - they had to know, with any thought applied, that they would be paying somewhere down the line. Instead, they just went out and grabbed it...and now they are paying. Correction - I DO sympathize with those not smart enough to know better....but not the others. |
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iliana Member Patricius
since 2003-12-05
Posts 13434USA |
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53350 http://www.canadafreepress.com/2006/cover121406.htm http://www.humanevents.com/article.php?id=15017 |
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rwood Member Elite
since 2000-02-29
Posts 3793Tennessee |
quote: Amen. I'll second that motion/notion and add that everyone financing their home or A home at 120-150% of its value should know the term UPSIDE DOWN on a mortgage, and it may NEVER BE RIGHT SIDE UP. That's also how many of the foreclosures are setup from the get go, and bankruptcy is, more often than not, the next option. sighs, I wish Money Management was as mandatory as English and Math in School. I realize bad things happen that can wipe out anyone's nest egg, but some people don't ask questions, don't read the terms, don't care about anything but signing away their name on docs that will put them under. We have "Disclosure Laws" here in Tennessee. If loans are not prepared properly with proper disclosure of each and every term, believe it or not, the loan can be "Forgiven" by the State. You bet your badunkadunk I gave a full disclosure (ex-Mort Offcr. here) even when the client said, "You don't have to. I don't care." I cared. |
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Christopher
Moderator
Member Rara Avis
since 1999-08-02
Posts 8296Purgatorial Incarceration |
That's the thing, Mike - with the market as it was, you DIDN'T have to pay later down the line, because your house was appreciating so rapidly that the equity more than covered the lack of a down payment or unreasonable interest rates. Some of our projects here in northern Cali we appreciating more than $20,000 a month in 2005. If you see that, it seems like a good gamble to do anything you can to get into a home, since you start making money even before you close. I sympathize with them, though only to a degree. Some people made what amounted to smart choices during the recent rush. Others who made the same choices didn't fare so well due to their timing. |
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Balladeer
Administrator
Member Empyrean
since 1999-06-05
Posts 25505Ft. Lauderdale, Fl USA |
Yep, that's right, chris. Can you say "dot.com"? |
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