Saturday, September 20, 2008

Have you paid off your Subprime Mortgages?

Subprime Mortgage.
Subprime Mortgages.
The Subprime Mortage crisis.


That's one of those politically correct phrases that adds a scent of respectability to gambling. The phrase "loaning your savings and insurance money to unqualified people at higher interest rates for houses they can't afford" just seems too harsh.
What would happen if the print, TV, radio, and online journalists started referencing the "Government guaranteed loans to shiftworkers so they can buy McMansions" crisis?
Would that change our perception of the current problems?
Would we be less charitable about the ongoing bailout?

I admit that I can barely allocate my 401K funds properly, but here's the problem as I understand it:

Joe Bob wanted a McMansion. He couldn't afford a McMansion. But we were in the middle of a housing bubble, where prices were doubling every 6 years. Plus, the bank was going to charge him higher Mafia-style interest rates. Prices were going up so fast that if Joe Bob couldn't make the payments the bank would still own a house that was worth far more than its value when Joe Bob moved into it. They could always find someone else to sell it to.

Then everyone woke up and realized that there were too many McMansions on the market, and they weren't worth the asking price. Oops.

I have a lawyer friend in Mississippi who recently got into trouble for falsifying documents on subprime mortage deals - it didn't matter if Joe Bob had never held a job for more than 3 months. It didn't matter if his only job was pulling Curly Fries out of the grease when the timer went off. My lawyer buddy would fix the paperwork so that Joe Bob's employment record could at least fit the "subprime" standard for a Mississippi McMansion Mortgage. When the loan invariably went into default, my friend had his sales commission, Joe Bob had partied his ass off in a new house for 6 months, and the bank was stuck with a devalued house in Crotch Rot, Mississippi.

Because of this scam, my friend has lost his license to practice law, and he's lost his real estate broker's licence. He's now avoiding prison by playing Hannibal Lecter to the FBI's Clarice Starling. Agent Starling comes to his house a couple of times a week with files from mortgages gone bad. My buddy, after putting Miggs in the back yard and offering Agent Starling some Fava Beans and a nice Chianti, looks through the mortgage files and tells Clarice whether they were legit subprime loans or fraudulent subprime loans.

At the time when my friend got into trouble, the bank was responsible for the legitimate loans that went bad, and criminals were responsible for repaying the fraudulent ones.

As of this week, you're responsible for all of them.

And you're still going to keep voting for Democrats and Republicans, aren't you?

7 comments:

Anonymous said...

מחשבון משכנתא

Anonymous said...

עורכי דין - פלטפורמה חברתית לעורכי הדין, קהילתית ופרסומית, המאפשרת אינטרקציה בין חבריה ובין לקוחות פוטנציאלים וקיימים.
תוכניות שותפים
דיו
כתיבה יוצרת
מונדיאל

Anonymous said...

המרכז לזכויות רפואיות
המרכז למימוש זכויות
המרכז למימוש זכויות רפואיות 2
זכויות רפואיות
מימוש זכויות
מימוש זכויות רפואיות
המרכז זכויות רפואיות
לוק
ווינר ליין
מחליק שיער
נושמים מזרחית שירים להורדה

Anonymous said...

המרכז לזכויות רפואיות
המרכז למימוש זכויות
המרכז למימוש זכויות רפואיות 2
זכויות רפואיות
מימוש זכויות
מימוש זכויות רפואיות
המרכז זכויות רפואיות
לוק
ווינר ליין
מחליק שיער
נושמים מזרחית שירים להורדה
אלכוהול לחתונה

Anonymous said...

אופציות בינאריות

תפילת הדרך

משקאות חריפים בסיטונאות

התקף לב סימנים

תזונה נכונה

המלצות ווינר

Anonymous said...

אופציות בינאריות
תפילת הדרך
משקאות חריפים בסיטונאות
התקף לב סימנים
תזונה נכונה
המלצות ווינר

Anonymous said...

משכנתאות
מחשבון משכנתא
ביטוח משכנתא
מחזור משכנתא