Wisconsin vs Total Recall

[Bob Gray]

Re: Wisconsin vs Total Recall

If you want a "fair" mortgage market, look to Canada's system. When a person walks away from a mortgage in the USA, that person walks away free and clear. The banks take a loss on that mortgage, the difference between the outstanding value of that mortgage and whatever it can get by reselling the foreclosed property. In Canada, they weren't hit with a giant housing bubble and crash the way we were here. Up there the person purchasing the home will have to repay the bank for the complete mortgage even after foreclosure. Such a policy creates a more responsible home buyer, one who won't over extend his/her ability to repay the mortgage, and therefore won't take great risks that lead to foreclosure. Thus we would have no artificial bubble and subsequently no bust of said bubble.

Sounds good to me. IMHO, it's far to easy for someone to walk away from a house and you're right, it does contribute to the boom-bust scenario.

 

[Tiggsy]

Re: Wisconsin vs Total Recall

I got it! Increase the capital gains tax to 80% because those people making money in the market are obviously doing something illegal and don't deserve to make all that money. Plus with such a high rate it will keep most of us common folk out of the private market so those greedy bankers don't get their hands on our money. Perfect solution for everyone.

 

[St. Clown]

Re: Wisconsin vs Total Recall

Sounds good to me. IMHO, it's far to easy for someone to walk away from a house and you're right, it does contribute to the boom-bust scenario.

And it'll save Scooby from crying his 96 Tears. Cry, cry, cry...

 

[FadeToBlack&Gold]

Re: Wisconsin vs Total Recall

If you want a "fair" mortgage market, look to Canada's system. When a person walks away from a mortgage in the USA, that person walks away free and clear. The banks take a loss on that mortgage, the difference between the outstanding value of that mortgage and whatever it can get by reselling the foreclosed property. In Canada, they weren't hit with a giant housing bubble and crash the way we were here. Up there the person purchasing the home will have to repay the bank for the complete mortgage even after foreclosure. Such a policy creates a more responsible home buyer, one who won't over extend his/her ability to repay the mortgage, and therefore won't take great risks that lead to foreclosure. Thus we would have no artificial bubble and subsequently no bust of said bubble.

Wow, and I thought the canucks were a bunch of commies!

 

[ScoobyDoo]

Re: Wisconsin vs Total Recall

Do you even know what T F your point is? I sure as hell don't, except that you are pizzed that you lost money in the market crash and seem to hang all responsibility on "banks."

Nope. That's not what I'm upset about at all. As I usually do I have a very distinct and specific point. And as usual most missed it.

And for the record, I'm not upset.

 

[geezer]

Re: Wisconsin vs Total Recall

And for the record, I'm not upset.

Certain statements, from certain people, make it all worthwhile. My work here is done.
Scooby, I actually sympathize with your situation and I'm sorry we were so harsh. But you make it awfully fun to push those buttons.

 

[Kepler]

Re: Wisconsin vs Total Recall

The worst outcome of the financial crash is that the banks who failed were rewarded for it by the federal government bailout. So again, government stepped in to prevent capitalism from happening at all. If there were actual working capitalism, a lot of crooks would be out of business and in the poorhouse right now.

I doubt the latter. The whole idea of incorporating is to insulate you from your business' failure. A lot of banks would have gone out of business, but how many of their board members would have actually gone broke? The worst that would have happened to them is they didn't get a bonus.

That would still have been preferable if it were not for "too big to fail." If finance is re-regulated enough that no small group of companies can trigger a catastrophe, then by all means let bankruptcy ring.

 

[geezer]

Re: Wisconsin vs Total Recall

I doubt the latter. The whole idea of incorporating is to insulate you from your business' failure. A lot of banks would have gone out of business, but how many of their board members would have actually gone broke? The worst that would have happened to them is they didn't get a bonus.

well, if "criminal" violence wasn't so over-regulated by the jack-booted union goons, I could have put my pitchfork and torch to good use making free markets work.

 

[Craig P.]

Re: Wisconsin vs Total Recall

How is investing in mortgage backed securities illegal?

Are you truly ignorant of the fact that there was quite a bit of outright fraud, that the fraud played a significant role in the expansion and popping of the bubble, and that relatively few of the perpetrators of the frauds have been prosecuted?

It's true that a lot of the crash was not due to fraud and should have produced only economic and not criminal consequences. That doesn't change the fact that there WAS fraud and it has not been prosecuted as aggressively as some people would like.

 

[Bob Gray]

Re: Wisconsin vs Total Recall

Nope. That's not what I'm upset about at all. As I usually do I have a very distinct and specific point. And as usual most missed it.

And for the record, I'm not upset.

You are always upset.

 

[St. Clown]

Re: Wisconsin vs Total Recall

Are you truly ignorant of the fact that there was quite a bit of outright fraud, that the fraud played a significant role in the expansion and popping of the bubble, and that relatively few of the perpetrators of the frauds have been prosecuted?

It's true that a lot of the crash was not due to fraud and should have produced only economic and not criminal consequences. That doesn't change the fact that there WAS fraud and it has not been prosecuted as aggressively as some people would like.

No, I'm not ignorant of that fact at all. But when a person talks about the market or an industry at large, you can't assume that the majority of the players are in on the crime. Most - the vast majority of - large investors were acting in good faith. They just also happened to be wrong.



Scooby, if you're making a specific point that oh so many of the clueless drones miss, then you're not making a very good case for your point. Try actually stating your point. It's a novel idea, I know, but it just might work.

 

[ScoobyDoo]

Re: Wisconsin vs Total Recall

No, I'm not ignorant of that fact at all. But when a person talks about the market or an industry at large, you can't assume that the majority of the players are in on the crime. Most - the vast majority of - large investors were acting in good faith. They just also happened to be wrong.

So, they were wrong about fraud?

That's one of the things I find so disturbing about this conversation. You admit the fraud, but then state that others were wrong about it. How could they be wrong when they didn't have the proper information to begin with? The book, "The Big Short" highlights this fact very well.

 

[St. Clown]

Re: Wisconsin vs Total Recall

So, they were wrong about fraud?

That's one of the things I find so disturbing about this conversation. You admit the fraud, but then state that others were wrong about it. How could they be wrong when they didn't have the proper information to begin with? The book, "The Big Short" highlights this fact very well.

The people committing the fraud are not the market at large. Those committing the fraud should be punished. Talk to your representative and ask them why they've not been. Is there are lack of evidence to get a conviction? Can they get the evidence but don't know who to prosecute? I don't know the particulars.

When I said 'They just also happened to be wrong," I'm talking about the market players in total - the ones not committing crimes, the thousands upon thousands of people who were innocent and making decisions due to having bad data.

 

[LynahFan]

Re: Wisconsin vs Total Recall

The people committing the fraud are not the market at large. Those committing the fraud should be punished. Talk to your representative and ask them why they've not been. Is there are lack of evidence to get a conviction? Can they get the evidence but don't know who to prosecute? I don't know the particulars.

When I said 'They just also happened to be wrong," I'm talking about the market players in total - the ones not committing crimes, the thousands upon thousands of people who were innocent and making decisions due to having bad data.

The only ones with bad data were willfully ignorant. I predicted the crash in 2005 when I moved from TX to CA and saw people treating their homes like ATMs. The only thing I didn't know was the timing, but the fundamentals of what was going on were clearly obvious.

 

[ScoobyDoo]

Re: Wisconsin vs Total Recall

When I said 'They just also happened to be wrong," I'm talking about the market players in total - the ones not committing crimes, the thousands upon thousands of people who were innocent and making decisions due to having bad data.

You honestly don't see the contradiction in that statement? Cause that's the problem.

 

[SJHovey]

Re: Wisconsin vs Total Recall

If you want a "fair" mortgage market, look to Canada's system. When a person walks away from a mortgage in the USA, that person walks away free and clear. The banks take a loss on that mortgage, the difference between the outstanding value of that mortgage and whatever it can get by reselling the foreclosed property. In Canada, they weren't hit with a giant housing bubble and crash the way we were here. Up there the person purchasing the home will have to repay the bank for the complete mortgage even after foreclosure. Such a policy creates a more responsible home buyer, one who won't over extend his/her ability to repay the mortgage, and therefore won't take great risks that lead to foreclosure. Thus we would have no artificial bubble and subsequently no bust of said bubble.

This is simply an incorrect statement of the law, at least in some states. Let's take Minnesota, for example.

If a borrower defaults in Minnesota, the bank has a choice. They can foreclose by "advertisement" (those notices you see in the paper) or they can foreclose "by action" (starting a real lawsuit). It's entirely up to the bank. However, if the bank wants to get a "deficiency judgment" (the difference between what is owed and the amount they can actually sell the house for) I believe they must proceed with a foreclosure by action. This results in a situation where a judgment is actually entered against the borrower, and that judgment is then only partially satisfied by the proceeds from the sale of the home by the bank, exactly what you have described in Canada.

Most banks just decide to proceed with foreclosure by advertisement. It's faster, cheaper, and has other benefits to the bank. They also probably take the position that you can't get blood out of a stone, and getting a judgment against some deadbeat probably isn't worth the time and effort and expense involved.

 

[Bakunin]

Re: Wisconsin vs Total Recall

I invested properly and according to all the rules and advice that everyone had. It didn't matter. It's a scam, just like everything else is. They lied to us then, and they're lying to us now.

First off, "everyone" doesn't give the same advice. You chose which advice to follow, which advice to ignore, and which things to buy.

Whether or not bankers/lenders get prosecuted en masse for fraudulent lending does not change the fact that there was a bubble and then a crash. It does not prevent future bubbles and crashes. These things have been part and parcel of the business cycle for centuries because human beings are irrational creatures driven by greed and fear.

If you do the simple thing and invest in the entire market and make no effort to time the swings and wait 30 years, you'll finish far ahead of where you started in all likelihood. In life there are no guarantees, but there certainly is a thing called probability. I choose to side with the odds whenever possible, even if I fall short in the near term.

 

[unofan]

Re: Wisconsin vs Total Recall

If you want a "fair" mortgage market, look to Canada's system. When a person walks away from a mortgage in the USA, that person walks away free and clear.

...in roughly half of the states, he forgot to add. (i.e., those states which are "no recourse")

The banks take a loss on that mortgage, the difference between the outstanding value of that mortgage and whatever it can get by reselling the foreclosed property.

Then maybe the banks should've been more careful about the underlying collateral, eh? Rather than trying to get everyone and everything into a 5/1 ARM with a balloon payment that they expected to be refinanced every 3 years or so so they could keep collecting fees...

Point being, there is plenty of blame to go around, and the banks deserve plenty of it. I don't really feel sorry for the homeowners, especially those who saw their home as a sure-thing investment rather than merely a place to live.

 

[Bob Gray]

Re: Wisconsin vs Total Recall

Point being, there is plenty of blame to go around, and the banks deserve plenty of it. I don't really feel sorry for the homeowners, especially those who saw their home as a sure-thing investment rather than merely a place to live.

We don't agree often, but I agree with this.

 

[Kepler]

Re: Wisconsin vs Total Recall

The only ones with bad data were willfully ignorant. I predicted the crash in 2005 when I moved from TX to CA and saw people treating their homes like ATMs. The only thing I didn't know was the timing, but the fundamentals of what was going on were clearly obvious.

Everybody on all the Crameresque shows missed it, too.