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I'm watching it on my DVR now. It's funny that people are blaming the media for this mess. 60 minutes is usually ahead of the game, but like the rest of the media, they're months behind.
"They were getting loans in excess of 100% of the property... so many were putting money in their pocket at the close of escrow."
"Really?!"
"Yes."
"So they were getting paid to buy it?"
"They were getting paid to buy a house, yeah."
Geezus m-f-ing christmas. I mean seriously, this still blows my mind. It's like a government sanctioned Poniz-scheme.
yep watching it right now...
Everyone that bought in the past few years that wants to move at some point and saw this episode of 60 Minutes will talk with their spouse tonight about walking away. It's not 60 Minute's fault, but this will likely motivate people to walk out.
This is the biggest scandal in US history.
60 minutes only scratched the surface... fake doc loans was mentioned.. but not fake appraisals or other fraud tactics in the market used even today.
There's not much new here that hasn't been printed in the press or on the internet already. What broils my blood is the fact that the VIPs got rich even when they were fired, but that is the status quo for large companies. The Golden Parachute protects a lot of sleaze balls!
60 minutes knew about the mess created by the subprime months and months ago and chose not to air the segment until now. Perhaps one of their sponsors is a responsible party? In the long term, everyone will suffer through higher taxes in 2008.
They did get fired... several CEOs left in disgrace and many of their staff who handled the mortgage wing were laid off.
The fact is the many little guys/gals in town across the US who were realtors / mortgage brokers are to blame. They are the ones that benefited from comissions.
Do you think that Wall Street would even touch all these loans had
they known the mortgages were contaiminated. Thats not how it works.
"Do you think that Wall Street would even touch all these loans had
they known the mortgages were contaiminated. Thats not how it works."
I think the question is how could they not have know if it was intuitively obvious two years ago to someone like me who is only a casual observer to this situation.
make that "known" (too much wine tonight)
You hear the part about the fired CEO's responsible for the biggest losses riding off into the sunset w/ free money of their own - Citigroup's Prince w/ 29 mil and Merril Lynch's O'Neal w/ 161 mil wow, just wow.
"So they were getting paid to buy it?"
"They were getting paid to buy a house, yeah."
I've been hearing that garbage from these scam artists for something like 25 years, and everytime I hear another one, I just wonder "am I the only person who realizes that they are not being given money, they are borrowing it and have to pay it back with interest?" How do they not see what seems so obvious?
IO - I dont think WS knew. Their credibility on the line for future deals. Thats just bad business.
The shift in reponsility is on local realtors and loan brokers who sold these mortgages to wall street firms. Thats why WS is paying the price and taking the losses. On a national level the NAR is to blame for the propaganda they have been pumping out for the past 10 years. The NAR need to be called in questioning. But the NAR are politically connected to Washington in many ways.
what do you expect the pay for a CEO of Citi IBM or any multibillion to be paid?
being a CEO today carries a ton of responsibites.... Barry Bond hits a ball and gets
paid $100M WOW !!! Which one is overpaid?
Now Barry only got 90 mil for his just ended 5 yr. deal.
It wasn't the CEOs getting overpaid part, it was the getting fired part, the ok, you blew it big time so take these mils and ride off into the sunset. Seems some stockholders should be questioning the severance packages. And I suppose they will via Wall Street.
I think quite a few people on Wall Street knew going in that these loans were tainted. But if they didn't take them, the next guy would. And they wanted to get paid NOW.
It's called "Plausible deniability". They learned well from Congress and Presidential administrations. They figured we were so wrapped up with Brittney Spears and Paris Hilton that we would never know until it was too late. And the sad part is, that for the most part, they were - right.
60 Minutes had to know what was going on. Had. To. They interviewed Greenspan. The media is as much a part of the coverup as the Wall Street profiteers and the predatory lenders - they are all contributors. Why? Get real. It's an election year! This means legerdemain - watch the right hand, watch the right hand - never mind the left one. Emotion instead of facts, wide-mouthed gullible admiration or disdain instead of honest appraisal of the fiscal situation. Keep the populace unenlightened and uninformed, and maybe they won't realize that they are nothing but consumers, passing the same dollars around, until de gummint prints more. Again, the sad part is that they were right... and the empty houses prove it.
What angers me about ceo pay is that while asking their employees who help run the company at every level to go without cost of living adjustments or proper health insurance or even laying thousands off to help their bottom line all they needed to do was pay their ceo less and they could have treated these people better. They spend so much on their ceo who most of the time are stupid and incompetent (and evenif they are not nobody deserves to be paid that much money ) it just makes me sick... What could they spend all that money on? What do they need it for? Unbelievable greed.
Lisa
Nice post Jessamine. Right on.
Ron: ""am I the only person who realizes that they are not being given money, they are borrowing it and have to pay it back with interest?" How do they not see what seems so obvious?" ------ Only if they keep paying the mortgage instead of walking away. There is NOTHING to prevent these people from walking away - WITH THE EXTRA CASH.
Space_acer, love the new avatar!
I think it is hilarious how the NAR and folks who are in the biz try and say the media is making it look worse and perpetuating the myth that real estate is a bad deal right now..........uh, last I looked the media simple reports on murders they don't commit them and YellowJessamine is right about the media ignoring it when it was okay to ignore it.
So many homeowners sat back and felt rich because of all the equity they had in their homes.......too happy and content at that to realize that inflation was sucking all their discretionary income and some of them felt okay with tapping the home ATM to maintain the status quo cause well.....they could. In the last 7 years our household income has gone up quite a bit, but when I factor in inflation and the cost of homes and other such essentials we actually haven't made any more money, hard to feel like you are doing well when an above average income doesn't even afford you anything average (unless you get yourself in debt and take on a suicide loan).
Can't complain about CEO's pay, our capitalist society makes that possible and okays it, otherwise you are leaning toward socialism. Do they NEED 36 million, no way, do they deserve it, they think so and apparently someone else does and pays them......but to help out a company wanting to file bankruptcy or negotiate pay and benefit decreases for their employees when the top tier are making 1000X more than the avg employee I say deny it and make them fork over some $$ to help the company and not someone like the avg taxpayer who doesn't even work for that company.
I wonder how many people were inspired by that 60 minutes segment to walk away. Of course, that would be the media's fault, just as this whole mess it.
LOL Klarek.
This sounds awful, but I kind of hope that "inspiration" does occur. I will be renting for 2 more years at least if people are left to their own devices to straighten this crap out where I am. Now....if we can only get the banks off of their a$$es.......
What will inspire them is the fact that walking away will hurt way less than trying to sell the property and pay the difference at closing. Not all of these walkers are created equally: there are those who bought at the height, so they get spanked for being foolish and naive to think that prices would continue to skyrocket. Then you have those who bought before the boom and tapped the house ATM out and re-fid and now need to sell and can't sell to pay off the note, but they sure enjoyed that money and spent it on themselves and now are not willing to ante up....I see the later as the lesser of the two evils.
Advising people to tap into home equity to pay for college and other such stuff is foolishness, and some of these REAs are trying to sell people on the idea of homeownership based on this concept of being able to borrow on that equity!!!!!
I'm wondering where all these folks that walk away from their homes are going to live? They won't be able to buy another home. Even most apartment leases require a credit check. Where are they going?
Exactly. In fact, some of them go on to buy another house. They just don't default on their current house until after they get their credit check and rates locked.
K101 is right on, they will be just fine.........some of them may even pay slightly more if the credit got bruised, but they always manage to find a place.
There is a used car dealership in town, huge banner that reads "if you have a job you can buy a car".......perhaps it should be changed to pulse instead of job.
A house a few doors down went up for rent for $2K a month, was rented in one week, new family moved in, meanwhile the house next door is on market for $590K..........with no takers.......gee that needs no explaining eh.
Geez. That says a lot. Now's the time to rent, huh? =)
... and, it's free and anonymous
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Anybody else catch 60 minutes "House of cards" tonight?
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http://www.cbsnews.com/stories/2008/01/25/60minutes/main3752515.shtml#
Wow, nice summary of what we're facing. Especially how greed @ all levels played into it IMO.
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