09-26-2008, 11:03 AM
While I think it's a great concept, it isn't plausible. If everyone got the alluded to $425,000, the price of goods and service would skyrocket and inflation would be out of control, just ask the Russians after the collapse of communism.
As for the original question, I think it's going to get worse still before it gets better, but I don't see a depression coming from it, IMO.
At first they wanted to blame all of the "sub-prime" loans but it goes much deeper than that. It was ARM's and Interest Only loans that people were sold because they could "afford the payment" not realizing that it would adjust or realizing that it would and taking the risk anyway. Well, when you are at the bottom of a market and selling those style of loans, the only way the rate can go is up which spells doom for your future. I was actually in the mortgage industry 5 years ago and could see this coming. I never sold an ARM, IO, or anything other than a fixed 30 or 15 year. Of course we were incentivized to sell the ARM's and IO's and I refused hence I'm not in the industry anymore. I knew that if the folks who were taking out those loans would run into credit problems in the future, they wouldn't be able to refi when their payments/rates adjusted and they would be SOL. The industry is corrupt and this bailout, while necessary, shouldn't allow any of the CEO's any luxuries. They should have to pay back the loans out of their own pockets or be drawn and quartered in the middle of Time Square.
The other thing that erks me are companies like Arbor Mortgage, Quicken Loans and Rock Financial. They are simply middle men and don't service their own loans so they are getting off scott free even though they are some of the biggest offenders of selling these crappy loans. Every time one of their commercials comes on I have to change the channel because I can feel my blood pressure start to boil!
As for the original question, I think it's going to get worse still before it gets better, but I don't see a depression coming from it, IMO.
At first they wanted to blame all of the "sub-prime" loans but it goes much deeper than that. It was ARM's and Interest Only loans that people were sold because they could "afford the payment" not realizing that it would adjust or realizing that it would and taking the risk anyway. Well, when you are at the bottom of a market and selling those style of loans, the only way the rate can go is up which spells doom for your future. I was actually in the mortgage industry 5 years ago and could see this coming. I never sold an ARM, IO, or anything other than a fixed 30 or 15 year. Of course we were incentivized to sell the ARM's and IO's and I refused hence I'm not in the industry anymore. I knew that if the folks who were taking out those loans would run into credit problems in the future, they wouldn't be able to refi when their payments/rates adjusted and they would be SOL. The industry is corrupt and this bailout, while necessary, shouldn't allow any of the CEO's any luxuries. They should have to pay back the loans out of their own pockets or be drawn and quartered in the middle of Time Square.
The other thing that erks me are companies like Arbor Mortgage, Quicken Loans and Rock Financial. They are simply middle men and don't service their own loans so they are getting off scott free even though they are some of the biggest offenders of selling these crappy loans. Every time one of their commercials comes on I have to change the channel because I can feel my blood pressure start to boil!
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