mortgage & foreclosures?

Question

Am I the only person who has put together that the current mortgage & foreclosures crisis that our WHOLE nation is seeing is the fault of the current administration bankruptcy reform?

Bankruptcy reform changed a year and a half ago. The main change is unless you are low income you can't file bankruptcy chapter 7. That is the one that removes your debt. Even in the old days you could not claim bankruptcy on a mortage. And let me help you dimwits who think only lossers claim bankruptcy. The number one reason a person in the past claimed bankruptcy is because of health problems. Not beacuse they did not want to pay.

Answer 1

Sorry, but I must disagree.

This has been caused by several different things none of which relates to the new bankruptcy laws.

First you have the lenders who made tons of loans to people that did not qualify for them simply due to greed.

Then you have the people that took out the loans betting that they could flip the homes before the rates went up.

Then you have the housing market that tanked which meant the customers could not sell because they owed more on the homes then they were worth.

Then you have to appraisers that swore that the homes were worth more then they actually were so the customers could qualify for 100% ffinancing.

And finally you have the people that bought trade lines to up their credit scores so they could get qualified for loans that they really did not deserve.

Add all of this together and the result is the sub-prime mess we are seeing right now.

Answer 2

No other people have noticed too but it's difficult to explain and you need a course in basic banking to understand what has happened. So it doesn't make a good sound bite.

For the last five years the mortgage industry has had several major regulations repealed and this has been the least regulated mortgage market since the 1920's. Also government backed programs like FHA and VA have not been allowed to keep up with changes in the market making private mortgages more attractive than before. In addition private lenders were allowed to make loans to people who did not qualify and then lie about the quality of those loans when they were sold to other investors. In the end many people are going to get screwed before this is over.

Un-regulated markets go through cycles of boom and bust. From the Civil War until WW 1, financial markets in the US regularly went through one of these cycles every 7-10 years. FDR's New Deal made the Federal Government a manager in the nation's economy and that lion's share of the growth and prosperity from 1938 to 78 was due to those reforms (such as real income and GNP quadrupling during those years)

Many of the Neo-cons have openly talked for years about dismantling the New Deal. They have been partially successful and the current mortgage crisis is a fruit of their labors.

Answer 3

No!! It's these idiot bankers trying to tell people that the Neg Am Mortgage product they got is a really good decision and not explainging the consequences or the lows of the product. If people were more educated they would have understood that it's a horrible product to be in. Plus the collateral market all over the US has declined and now people are struggling because the house is not worth as much as it did 2 years ago.

Answer 4

The root of the problem is that high schools don't teach people anything about personal finances. People are uneducated about credit and loans (and no one takes the time to educate themselves), so they end up being suckered into a mortgage that they can't afford.

I partially blame the lenders for getting people into such scummy deals, but it's also the consumer's responsibility to know what they are getting themselves into.

I think high schools should offer a course about personal finances. They could cover budgeting, using credit wisely, taxes, mortgages, etc. So many people don't know even the basics about these topics, and this message board is evidence of that.

Answer 5

The number one reason people claim BK is because they can't pay their bills. They don't make enough to cover the debt they created. BK should not be an easy way out, too many were using it as a tool, I saw people claim BK two and three times.
So to answer your question yeah I guess you are the only person who put it together. Remember there is usually not a need of reform when things are working the way they were meant too. Abuse of the system is why reform was needed.

Answer 6

You're wrong. Cheap money with low interest rates in 2002-2003 are what caused this mess. Loan-to-value of up to 100% with no down payment are a problem too.

Answer 7

They say this is to help the homeowner but it's really to protect these greedy swindler banks.

I wish the chips were left alone to fall where they may because the housing market would be a lot better off when it bottoms out.

Answer 8

So Congress passed a law and it's the President's fault? The executive branch of the govt doesn't make laws. They can suggest, they can veto, but only Congress makes bankruptcy statutes and laws.

Did anyone at all pass their Civics or Government class in high school?

Answer 9

This has to do with a change in law. Previously it was against the law to buy a house with no money down and that law was repealed. Secondly it has to do with greedy morgage lenders and lendees who have now falsely inflated the housing market. Do a little research...Do you have a habit of blaming all of your problems on others?

Answer 10

People should consider bankruptcy as a standard option.