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Nate Nagel

Nate Nagel wrote:
wrote:
On Sep 27, 10:11 am, Nate Nagel wrote:
Stormin Mormon wrote:
Exactly! Let the market adjust itself. But in the meantime, quit
passing
legislation that coerces banks to write loans to unreliable people.
yes that is one point that I see people glossing over. they blame
Republicans for allowing deregulation (which is fair) but they also need
to blame to some extent those on both sides of the aisle those who
supported legislation that encouraged "increased homeownership" among
those who wouldn't have been qualified under the "old rules" - when the
"old rules" were what kept the housing market stable. So of course the
financial institutions were playing hot potato with those loans, they
knew that they sucked and so should we have.

nate

If everyone at these institutions knew so much, why did they get stuck
holding the sub-prime loans. For example, if they knew the loans
were going to go into default, Lehman Bros and Bear Stearns could have
sold them all off to less sophisticated buyers.

I doubt that Lehman and BS were the originators of these loans. They
likely ended up holding the bag after they'd been repackaged 3 or 4
times into "AAA" securities and nobody dug too deep (or else they knew
what they were getting into, figured on getting out before it hit the
fan, and misjudged.)

nate

Forgot to mention, in the interest of full disclosure - I did buy a
house with only 10% down, which isn't the "traditional" way to do it.
Why? Because I live just outside of DC, so a 20% down wasn't happening
- it could take decades to save up that much cash while still paying
rent. So there are cases where "nontraditional" loans do help out
responsible people. I did, however, insist on a 30 year fixed and am
paying off my HELOC ahead of schedule before it blows up in my face.

nate

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