By Poppy ( 30 year mortgage industry veteran and senior underwriter)
What you have failed to glean from my editorial is that we are all in this boat together, we are our neighbor if this is allowed to free fall, you homeowner or renter are going to be in the proverbial toilet whether you believe it or not, you are your neighbor.
That toilet is not just your house, it is your 401(k), your taxes, your employers continued ability to employ you, your overall expenses…..it is a domino effect to your life and directly impacts the quality of life you would like to maintain. We can not blame the consumer for what we demanded that he/she have, we spoon fed him/her this toxic mixture. We told him/her that it was a healthy diet……
Yesterday the World Markets gave us a resounding vote of extremely STUPID. Today our markets are in deep “stuff”, we are in horrible shape as far as the confidence of World Markets are concerned, and that should with the globalization of the World’s Economy worry you.
Our markets are seriously impaired and will continue that trend.
You are young I suspect, and your heritage and expected opportunities that you should be able to run with, have been sold down the river, you my friend are being sold down the river. Your future is being sold down the river – I would be angry to. Please sit down for a minute and examine the situation and determine just whom you should be angry with, put all prejudice and hostility aside, for me or any others that you might feel are easy to rail at, make an independent and informed decision. Quickly please – come to the table with solutions and open discussion without the anger, we all need solutions, not the anger.
Again we can not blame our neighbor, for truly in the long run he/she is us, they really did not make up the framework for this disaster, they just came to the party like good invitees and partook in the party favors – did not want to disappoint the host…..
My post was directed to the greater picture – the homeowner who obtained these products was offered product that heretofore had never and I do mean never had been offered before en mass. The model had no trial period, the guidelines were non-existent in that they were nothing we had ever predicated risk decisions on in the past (let alone the guidelines allowed for utter non accountability for credit, capacity and collateral issues), again no tested models. We had done Sub-Prime in the mid 90’s, but with entirely different models, nothing ever within the scope of this free for all.
We were dealing money like drugs, the borrower has been “sold” the advertising model that their home is an ATM that anyone, anyone could own a home. Just look at the continuing advertisements on the idiot box for credit products. This nasty, complicated toxic product with non-existent support to the risk model has devestated our markets. Now we can cheerfully just say that it was Sub-Prime, but it was not, it was Alt-A, then FNMA & FHLMC decided to try and compete – take at look at their losses to date. Fraud was rampant, the models supported it and actually condoned it, rewarded it with approval for everyone.
Then there were the investors, true real estate investors stayed their rational course, but the others who were wooed into the morass, they were either crooks or dupes, and I lean more to the dupes side of the equation (fuzzy logic, would rather believe that the consumer whom I have worked with for years was ignorant and uneducated not criminal), however there were too, a lot of crooks out there feeding off the frenzy of easy money and non-accountability allowed by the guidelines.
The talking heads are diverting our interests as usual, if they don’t talk about it, it don’t exist. Well today they are talking about it, even they can not ignore this Market. Where this all goes, anyone’s guess, but I am not guessing with the impulsion of the World Markets lack of confidence and anger at our duplicity, that it is going in a “good” direction. Yes they are holding us accountable, as we are indeed accountable. We can only shore this mess up for just so long with the interest rate reductions and economic stimulus packages, more smoke and mirrors.
Now please let us all arrive at some consensus and solutions, factor out the blame for guy down the street, he/she is the one that needs our solutions, as such he/she is us, we need the solutions.
{ 3 comments… read them below or add one }
Man, did I use my house as an ATM and they let me. Oh well, at least you tell it like it is and many people seem to take offense to that. I say fugem and tellem to take a flippen leap off the first bridge they see.
I’m going to buy some guns because it’s going to get fuggen crazy fast…
Poppy,
In order to deal money like drugs there should be clients that treat it like drugs. You can’t have one without the other.
As far as anger, tell it to wailers and whiners who are so angry with everyone but themselves for the mess they are in. There are few exceptions like Tom who are rational about how they got there but the rest of the field is just like spoiled brats. When they start to behave like adults taking responsibility for their actions you will see transformation of the debate. Until then, please, stop the lectures.
They’re rushing them through because they don’t own them any more. They’re double-selling them. It’s pure profit.