Do you buy into the notion that morgage fraud is the chief reason for record mortgage foreclosures?

Question

or do you believe as I do that politicians and especially the Bush administration are trying to point the finger and everything they can except the real reason?

http://news.yahoo.com/s/ap/20080619/ap_on_go_ca_st_pe/mortgage_fraud

Answer 1

We are about to suffer the long term effects of short term greed. It is not only the dihonesty of the mortgage underwriters that will continue to plague this country's economy for the next 5 years, but the willingness of the people who got these loans to allow the mortgage bankers to lie so they could maintain that "upward mobility". We have not yet seen the results of those who are still paying those loans whose homes now are worth way less than their loans. According to a bankruptcy attorney I know the fit won't entirely hit the shan until 2011.

Answer 2

The Corporate US Government has to blame it on someone or something. When was the last time that they admitted that something went wrong because of their own actions or non-actions.

Answer 3

It stands to reason if you offer someone "the American dream" they are going to take it and as we are now seeing pay dearly later. The 3 kinds of loans that were being offered were hard to turn down for those who had wanted to be home owners and the Realtors and bankers took full advantage. I think that when a contract was signed by the buyer agreeing to a variable rate they honestly felt in 5 years when the payment goes up  they would be able to afford it. The responsibility lies with the loaning inst. They are suppose to be the ones that show the consumer red flags, I thought that was part of their job, deciding if someone truly could afford a home loan. Whatever regions you have found that foreclosures are not prevalent must have been the only places were there was "truth in lending" and i would like to know where that is.

Answer 4

no....but let's not place the blame on politicians either...

in fact, any student of international business knows that one of the biggest faults of the American business model (and, cultural model, for that matter) is the need to place blame rather than finding solutions.

the fact is that the basis of our economy went from "producing" to "spending"....and this happened years ago....Much of Clinton's mythical "great economy" was bought, not earned....No economy based on spending can endure; that's just real life.

Answer 5

It is not just that. It was the ARM loans and investment speculators.

You can't tell me that a home in my neighborhood which was selling for $180,000 2 years ago is now worth $490, 000.

I have seen it too many times down here. I know the condo I live in was worth $170,000 in 2005  and last year the owner wanted to sell it for $290,000.  This is the insanity and on top of that having people who earn less than $40,000/year somehow qualifying for a $0 down on a $$400,000 home.

Answer 6

Doesn't anyone understand what happened in the late 1970's? The Liberals were screaming at the top of their lungs to force banks to loan money to everyone! They called it discrimination, and now they want to point the finger at the banks that loaned money to everyone!

This country has no memory, and the young people in college are only being taught one side of the story.

http://www.townhall.com/columnists/Walte...

Answer 7

Absolutely!

Answer 8

I believe that the fraud exists to the extent that is reported in this article.  But it would never have happened if the SEC hadn't allowed these mortgages to be bundled and sold as commodities.

Answer 9

No, most foreclosures resulted from individuals greed.  House prices went up, and many refinanced to take equity out of there homes.  Now that housing prices have tanked, people are upside down in their mortgages, many having balloon payments and/or mortgage "resets"

Answer 10

I think the real reason is because they let a person that works at McDonald's flipping burgers buy a 300K house...

EDIT: The reason for all the forclosers is people bought houses they could not afford on the ARM loans...plain and simple and since in the late 90's they told banks to make these loans...if a person makes less than 75K a year they can not afford a 300K house...I just bought a house...I sat down and decided what I wanted my monthly payment to be...I went to the bank and gave them the figure...they told me my max price of a house...and then I found one I like and could afford...I am sure they probably would have loaned me as much as I wanted...but why buy something it takes you whole pay check to pay for...I really do not feel sorry for these people...

Answer 11

The consumer is at fault.  They signed the papers and did not read the contract.  Buyer Beware!!!