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The Mushy Fear Of Rick Santelli

By Big Tent Democrat, Section Media
Posted on Wed Oct 19, 2011 at 11:14:08 AM EST
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Kevin Drum continues to project his fear of Rick Santelli on to the rest of us:

[T]he Republican responses are a grim reminder of just how bad the politics of housing are. Voters may say they hate bailing out the banks — and they do! — but they hate bailing out the profligate next-door neighbors even worse. No politician in America seriously wants to risk voter wrath by doing that.

Drum has trotted out this nonsense consistently since Santelli called for "a thousand tea parties." He's been consistently wrong on this throughout. Obama and Dems gain no votes from the Tea Party - who are merely the same right wing Republicans that we all know. This is the type of Third Way/DLC thinking we thought had already been thoroughly discredited. Drum's thoughts lead to the path of Dem defeat - half baked policies like HAMP.

Speaking for me only

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    The Mushy Fear Of Rick Santelli | 53 comments (53 topical)

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    I'm pretty sure if they are writing down (5.00 / 1) (#1)
    by Militarytracy on Wed Oct 19, 2011 at 11:25:26 AM EST
    everyone else to what the home is really worth, they will also renegotiate with me to prevent me from walking away.  I think you are wrong though, there will be some anger about it.  Will it be substantial?  I don't know.

    I think they could manage the anger by (none / 0) (#5)
    by ruffian on Wed Oct 19, 2011 at 12:02:28 PM EST
    administering the write-downs in the form of a penalty to the banks that inflated the price bubble in order to create the high risk loan pool for CDS purposes. It should be possible to identify the markets where that was rampant. Say to the holders of those loans - you are rewriting this loan with a new principal value as your penalty for manipulating the market. If the borrower truly cannot qualify for the loan even with the new principal value, then foreclosure is the only option - and the banks lose even more money through foreclosure than they do with a write-down.  

    I truly don't see what is objectionable about a scheme like that.

    Parent

    I'll add...that is the kind of thing I wish the (none / 0) (#6)
    by ruffian on Wed Oct 19, 2011 at 12:04:18 PM EST
    state AGs were going for, not making the banks pay a fine.

    Parent
    It's worse that just making the banks (5.00 / 1) (#9)
    by Anne on Wed Oct 19, 2011 at 12:13:03 PM EST
    pay a fine - the fine is really just cover - cheap cover - for giving the banks/lenders immunity on a much broader level than was originally proposed - and the Obama administration is really hot for this to happen.

    From Marcy (my bold):

    Back when the foreclosure fraud settlement was purportedly only going to cover robo-signing abuses, the price tag was going to be $17 billion.

    Now that the Obama Administration is desperately trying to craft a settlement deal to include origination problems, the price tag has grown to $25 billion.

    Under the proposed terms of the settlement -- which could total $25 billion -- banks would get broad legal immunity from state lawsuits in exchange for refinancing underwater loans, those mortgages where borrowers owe more than their homes are worth, the sources said.

    The deal could provide some relief to the battered U.S. housing market and clear up some uncertainty about banks' legal exposure that has been a drag on their shares.

    Banks have been holding out on a multi-billion-dollar settlement because they wanted broader legal immunity than state attorneys general were prepared to offer.

    Originally, the states were only considering immunity for shortcuts taken during mortgage servicing and foreclosures, including the so-called "robo-signing" of documents to evict people behind on their mortgages.

    In recent days, the state attorneys general agreed to release major banks from claims that they made legal errors when first originating the loans, such as approving loans for borrowers without verifying any income, according to two people familiar with the talks.

    That means for all the additional things the banks would get immunity for-at the very least, the liars loans and the predatory lending, all the things they're getting hammered for in reps and warrants suits, though the language might well immunize securitization failures-banks would pay just an additional $8 billion.

    That, in spite of the fact that FHFA filed lawsuits against the banks that might be worth $40 billion, with $11.5 billion from Bank of America alone.

    So basically Obama wants to fund HAMP 2.0 by letting banks out of at least 80% of what they stand to lose in court.

    And people wonder why the Occupy movement isn't going away...

    Parent

    Yup (5.00 / 1) (#10)
    by ruffian on Wed Oct 19, 2011 at 12:34:27 PM EST
    The root of all evil

    Parent
    The banks paying a fine helps nobody (none / 0) (#8)
    by Militarytracy on Wed Oct 19, 2011 at 12:09:16 PM EST
    and isn't even a consequence that fits or suits their actions that brought all of this about. It is really nothing more than silliness, like sitting them in the corner as if they were four year olds.  They are adults, there are consequences for their actions too and until their consequences are an equal moral obligation to their actions they will continue to act like children.

    Parent
    I think that is a fair idea (none / 0) (#7)
    by Militarytracy on Wed Oct 19, 2011 at 12:05:30 PM EST
    And it is actually how all this used to work.  If you made loans that had no chance of being repaid there used to be consequences for that.  That is what kept the whole system healthy and vibrant and properly priced risk and property value.

    Parent
    Exactly. And people buying homes (5.00 / 2) (#12)
    by ruffian on Wed Oct 19, 2011 at 12:36:44 PM EST
    could trust that the market was working that way. They trusted banks to act like banks with something to lose from making bad loans, not something to gain by investing in bad loans. That's why the "well the borrower should not have bought that house in the first place - he knew what he was getting into" argument has no validity.

    Parent
    Exactly, to you, too. (none / 0) (#21)
    by Towanda on Wed Oct 19, 2011 at 04:16:45 PM EST
    Not that long ago, when I had to fight to get my first mortgage, it was quite a fight, because bank after bank turned down this single mother without job security (a good job but without security then) and student loans and the like.  This was for a wee, one-bath bungalow that needed a lot of work, had been on the market for months, etc.

    Only a few years later, apparently I could have walked into almost any bank around here and could have been handed a lot of money to get myself too deeply in debt buying some lakefront mansion.

    I think that this total switch in the behaviors of so many banks may have been part of the reason why so many of us could not quite grasp at first the extent of the problem.  And perhaps why many today still do not do so, if they also are from the days when banks behaved as banks ought to do.

    Parent

    One year ago (none / 0) (#27)
    by chrisvee on Wed Oct 19, 2011 at 04:50:34 PM EST
    I bought my first home in late 2010. I was shocked by the mortgage amount for which I qualified.

    Parent
    Not in my lifetime (none / 0) (#22)
    by Rojas on Wed Oct 19, 2011 at 04:20:58 PM EST
    And 50 is a gnat's a$$ away.
    We charged through the 90s like the S&L debacle never happened.
    Soap sellers motto... suds, rinse and repeat.

    Parent
    I think we need.... (5.00 / 4) (#2)
    by kdog on Wed Oct 19, 2011 at 11:27:26 AM EST
    another offshoot of the occupy movement...OFH, Occupy Foreclosed Homes.

    That is intriguing isn't it? (5.00 / 0) (#11)
    by christinep on Wed Oct 19, 2011 at 12:35:58 PM EST
    And not without precedent, kdog. Squatters, homesteaders, easements, etc.

    Parent
    Already happening (none / 0) (#13)
    by Towanda on Wed Oct 19, 2011 at 12:37:42 PM EST
    or so I read in some other blog.  If I find it again, I'll post it.

    Parent
    Because the schadenfreude of seeing (5.00 / 3) (#3)
    by Anne on Wed Oct 19, 2011 at 11:45:25 AM EST
    your profligate neighbor put out on the street for getting in over his or her head far, far outweighs the negatives of having to live next to an empty house that is allowed to fall into disrepair, possibly be vandalized, increase the possibility of your own home being vandalized, decrease the value of your own property below where it has already fallen and ensure that, if you fall victim to job loss or a medical situation you can't afford, that you won't be able to sell your house to get yourself out of the hole.

    It's all well and good for that scenario to be taking place in other people's neighborhoods, but make it happen right next door, and I don't think most people would find it as objectionable as they think to see someone get some help to be able to stay in their home.

    Such nonsense. My next-door neighbors (5.00 / 3) (#4)
    by Towanda on Wed Oct 19, 2011 at 11:45:48 AM EST
    and the rest on the block, I'm glad to help out, because their home values affect mine.  Does he think that so many homeowners are so stupid that we don't see that?  That we didn't buy because of our neighborhoods aka location, location, location?

    Silly Drumboy must mean those darn profligates in the next town!

    <Seriously:  Even in my rather well-off 'hood, we all are getting hit so hard in this economy nationally -- and especially in my state, with cuts in take-home pay specific to the workplaces of a lot of us here -- that we are having to do what we can to cope with foreclosures on our block, fighting slum landlords try to spread their slum ways to us.  Foreclosures are occurring in numbers unseen in neighborhoods that never had foreclosures at all, and the impact is evident with such slum landlords even if not evident in plywood over windows.  It's horrible.>

    It's responsible renters.... (none / 0) (#15)
    by kdog on Wed Oct 19, 2011 at 02:26:21 PM EST
    who have a right to be miffed, but I'm over it:)  Just help somebody, anybody!, making less than 6 figures.  Sh*t 7 figures.

    Parent
    no kidding (5.00 / 1) (#17)
    by CST on Wed Oct 19, 2011 at 02:41:23 PM EST
    I rent, I'm sort of young, I would maybe like to buy a house someday.

    But much more important than all of that is seeing this country turn around.   I would gladly face the next 20 years as a renter in a good economy than as a homeowner in a $hitty one.  And frankly, every time you kick someone out of their home they become competition in the rental market which is raising those prices too.  Driving up rent prices also means saving less to buy that forclosed upon house anyway.

    Keeping people in their homes helps out the "responsible renters" too.

    Parent

    Exactly. We're working for the renters (5.00 / 1) (#20)
    by Towanda on Wed Oct 19, 2011 at 04:10:54 PM EST
    even if they don't know it, and they don't, because these slum landlords are taking advantage of the young (it's that sort of neighborhood).

    I know that these landlords are packing in the kids past the zoning limit, putting them in basements and on third floors that lack egress, etc.  I've become quite the neighborhood expert on codes -- thus terms such as "egress" -- and am the one who most often heads to City Hall to head off these slum landlords seeking exceptions to code.

    I've gotten quite polished at my impassioned speech, which is not about us but about the renters and their safety.  I could not face myself if one of them was caught in a fire without egress.  It has happened, in the next neighborhood over.

    Oh, and I also make sure that we invite the renters to our block parties, where I have at the ready brochures from our local Tenants' Rights Organization and the url's to the lists of bad landlords and the like.  Why so many parents do not check this stuff and just pay the deposits, I dunno.  So many of these kids are in their first home away from home -- and legally are still kids.

    Parent

    Kinda torn... (none / 0) (#48)
    by kdog on Thu Oct 20, 2011 at 08:15:01 AM EST
    when it comes to that code violation stuff.  We have some similar issues here, though more with immigrants and low income people.

    Yes, packing in renters in illegal apartments or over-crowded single family homes can be unsafe, but otoh it's all some people can afford.  I've read stories here where neighbors drop dimes over ilegal apartments. What happens to the tenant?  Eviction.

    No easy answers there considering the lack of affordable housing.  Sh*t if I didn't stumble upon my sweetheart deal I might be in one of those illegal basement jams with one entry/exit.

    Parent

    really? serially? (5.00 / 2) (#19)
    by cpinva on Wed Oct 19, 2011 at 03:52:28 PM EST
    the profligate next-door neighbors

    which "profligate neighbors" would those be, exactly? would they be the "profligate neighbors" who were talked into buying a house they could ill afford, AND given a mortgage to do so, by the very same people who knew they couldn't possibly repay it? you know, those really, really, really smart bankers, who gave them a mortgage, knowing they couldn't possibly repay it, but also knew it would be sold to some other banks, so it wouldn't be their problem, but they made a killing off of origination fees? those bankers?

    or, would the "profligate neighbors" be the people with good jobs, who bought houses they could well afford, who woke up one morning to find themselves, through no fault of their's, unemployed, with a house worth less than what they owed on it? yep, they were "profligate" alright. how dare they act all uppity, by being educated, employed and buying a house within their means? just who do those people think they are?

    yeah, i believe i've about heard enough BS about "profligate neighbors". how about some personal & corporate accountability for the "profligate banks", who supposedly were the "professionals", yet lent money to people who they knew, at the time, couldn't pay it back? oh, right, they're the "gods of wall street", they never make dumba** mistakes, it must be the rest of us, the "peons".

    screw them.

    Profligate neighbors (none / 0) (#28)
    by chrisvee on Wed Oct 19, 2011 at 04:53:50 PM EST
    Today's urban legend a la welfare queens.

    Parent
    Headline is confusing. (none / 0) (#14)
    by oculus on Wed Oct 19, 2011 at 02:03:29 PM EST


    Way out instead of a way in. (none / 0) (#18)
    by Addison on Wed Oct 19, 2011 at 02:41:37 PM EST
    It's the result of a default disposition to retrench politically and save the safest instead of being proactive with policy measures, which may or may not be perceived as "partisan" but will live or die based on their success not their alignment.

    Drum can pretend that the predominant propagandized concern of people is their "the profligate next-door neighbors" getting a break. Barring polling or other well-constructed studies I'm not sure if we can actively disprove him.

    But looking for a way to develop hope-based arguments for policy instead of fear-based arguments for retreat, we find many. For instance: people will concoct negative fantasies about their neighbors less if their home ownership status is secure. And there's always the argument, when we're talking about neighbors, that for immensely personal economic and social reasons no one wants their community to be full of foreclosed homes.

    Drum is looking for a way out not a way in.

    So you are saying that I should (none / 0) (#23)
    by coast on Wed Oct 19, 2011 at 04:27:49 PM EST
    feel sorry for my neighbor who has not paid on his mortgage since January 2010 but did find the cash to join a boat club, hire a personal trainer for his wife (who does not work), pays extra for curb side pick-up at the grocery store (I didn't even know that existed)and the list goes on?  If anything he is the poster child for the profligated neighbor to which Drum is refering.

    You don't have to feel sorry for him (5.00 / 1) (#24)
    by ruffian on Wed Oct 19, 2011 at 04:33:02 PM EST
    but if he got a mortgage for the cost of a house that was inflated due to shady banking practices, the bank should get punished by writing down his mortgage. I don't care what he spends his money on.

    Parent
    He bought his house long before me and (none / 0) (#26)
    by coast on Wed Oct 19, 2011 at 04:43:40 PM EST
    the housing bubble.  His situation is due to pure irresponsibility on his part, playing with the equity in his house.  Its called living within your means, and some people just don't know how to do it.

    Parent
    Then no, the bank/mortgage industry would (none / 0) (#30)
    by ruffian on Wed Oct 19, 2011 at 05:07:36 PM EST
    have no responsibility under my plan.

    My plan would have made the banks use their TARP money to undo their manipulation of the market.

    Parent

    tar and feather (5.00 / 1) (#25)
    by CST on Wed Oct 19, 2011 at 04:38:41 PM EST
    him all you want.

    But don't let your anger at him make you turn your back on the rest of the country.  You are crazy if you think this is the average case.

    Parent

    I know he is not the average case. (none / 0) (#29)
    by coast on Wed Oct 19, 2011 at 05:04:02 PM EST
    I would say my situation would be considered more on the average.  I bought just as the housing market was starting to take off.  The banker told me I could afford a house worth about 1 1/2 times what I wanted and I would be paying less each month with because I could get a ARM loan.  Would this allow me to buy the house that I always wanted, definitly.  Did I do it?  No, because I knew I was basically gambling with an ARM loan.  So I settled on a smaller house and a 30 yr mortgage that I knew I could afford.

    So now fast forward 6 years and you basically want me to be comfortable with the following: My house value has gone down, but I'm still paying on the same mortgage that I took out.  But the guy down the street who took the risk by taking out the ARM loan should get to keep the home that I would have loved to have bought myself and his mortgage should be modified and basically now have the same principal balance due as mine current mortgage.  Sorry, but I have a very, very, very hard time thinking that is good policy.  Exactly what lesson does that teach me or the guy who bought more than he could afford?

    Parent

    Was the price you paid for your house (5.00 / 1) (#31)
    by ruffian on Wed Oct 19, 2011 at 05:10:14 PM EST
    jacked up because the mortgage industry in your area was trying to fill quotas of high risk loans that they could sell to investors?  If so, you were cheated.  To me it is as simple as that.

    I would not expect people to keep paying into the Madoff funds even if they had signed a contract with him.

    Parent

    That's (5.00 / 2) (#33)
    by Ga6thDem on Wed Oct 19, 2011 at 06:18:13 PM EST
    what I'm thinking. I mean I bought my home at the wrong time and bought it for what the going rate was at the time. Now I could buy my house for way less. Now the people who have been foreclosed on in this neighborhood have only hurt me not helped me. The fact that some idiot gave them a loan is now my problem whether the government does anything or not.

    Parent
    The bottom line is that no one in the 99% (5.00 / 1) (#40)
    by ruffian on Wed Oct 19, 2011 at 08:10:14 PM EST
    wins until this gets solved somehow. It is impossible for the economy to recover with this housing situation sucking out all the consumer spending. So we can either make sure all the bad borrowers get punished, or we can fix the economy.

    Parent
    you know when i was a kid (5.00 / 2) (#32)
    by CST on Wed Oct 19, 2011 at 05:24:21 PM EST
    I would complain about stuff like "how come my friend X gets to take home $10 for a B but I get A's and I don't get anything?"

    to which my parents would respond "life isn't fair".

    We have a choice in front of us - do we punish people for the sake of punishing them - or do we let go of our egos and make necessary changes so that this country can recover?

    Say your neighbor is forclosed upon.  So the bank takes back the house, boards up the windows, and it sits vacant for the next 5-10 years.  You think that's going to help you?

    Parent

    So the "you got yours so I want (none / 0) (#36)
    by coast on Wed Oct 19, 2011 at 07:43:40 PM EST
    mine mentality works against companies (see that whole OWS thing) but doesn't work when its my neighbor?  Its amazing how people are all for corporate responsibility but look the other way when it come to personal responsibility.

    Will a foreclosure help me in any way, no.  But will it be a valuable lesson for him?  I think so.
    Maybe he might learn that "life isn't fair".

    Parent

    He'll get foreclosed eventually (5.00 / 1) (#38)
    by ruffian on Wed Oct 19, 2011 at 08:03:22 PM EST
    Perhaps he would not qualify for a loan even if they reduced the principal.  If he was on an ARM loan to begin with, that seems likely.

    In the meantime the bank is losing money and letting him live rent free, so I guess they are getting some punishment.

    Parent

    no (5.00 / 2) (#50)
    by CST on Thu Oct 20, 2011 at 12:37:10 PM EST
    that's a collective "we as a country need ours so that this economy can function better for everyone".  It will actually help people not just hurt someone, that's what you're missing from all this.

    Also, there is a scale here, personal responsibility - we're talking about a house, that maybe someone spent at a maximum, 1-2 million on, probably way less than that, but I don't know where you live.  In the meantime, you have CEOs who make hundreds of millions of dollars for ruining companies, and banks ripping off billions of dollars.  Millions of people are out of work, homeowners that didn't do anything wrong but got laid off are losing their houses, and government is talking about cutting medicare instead of raising taxes???  It's a completely different scale than "I'm pissed off at my neighbor".

    Parent

    I think someone is always going to get over (5.00 / 1) (#34)
    by Militarytracy on Wed Oct 19, 2011 at 07:06:38 PM EST
    In every system.  Do I think that once anything is settled and reality based concerning your neighbors house that he has the strength of character to begin to make his mortgage payments again and live within his means?  No

    He had no incentive to do so before, and when it becomes a requirement for everyone and the legalities and responsibility are reality based again I don't think anything can go well for him long term.  He obviously has crazy irresponsible habits.  I don't think he's capable of paying off any mortgage.  He will become a lost house statistic if he isn't one of those odd people who ends up granted their house by the courts due to bank fraud.

    Parent

    if you know (5.00 / 1) (#35)
    by cpinva on Wed Oct 19, 2011 at 07:30:46 PM EST
    he's not the average case

    then why did you bring him up to begin with? do you have a cadillac driving "welfare queen" you'd like to bring up next? oh wait, reagan already made that one up! and tell me, how do you know so much about your neighbor's financial situation, do you two hang out over the backyard fence and have fiscal heart-to-hearts? probably not.

    frankly, i think you just pulled a "reagan", and made this person up.

    Parent

    I wish I did make him up, but (none / 0) (#37)
    by coast on Wed Oct 19, 2011 at 07:49:10 PM EST
    unfortunately he is real.  And while the specifics of his case are not the norm, I do think that on average that the amount of misconduct commited by the banks is probably balanced out by the amount of misconduct and irresponsibilty by many borrows.  The lack of responsibility flowed from all directions.

    Parent
    It is mathematically impossible for it (5.00 / 2) (#39)
    by ruffian on Wed Oct 19, 2011 at 08:05:39 PM EST
    to balance out. Every misbehaving borrower was enabled by a bank, by definition.

    Parent
    you haven't answered my question. (none / 0) (#43)
    by cpinva on Wed Oct 19, 2011 at 11:10:59 PM EST
    in fact, you've ignored it entirely in your response. this leads me to believe your whole story is utter hogwash, just like reagan's welfare queen.

    i do love how people make up the worst possible case, with specific "facts" so it sounds plausible. then, when they get called on it, they change the subject.

    just another concern troll coast.

    Parent

    CP (none / 0) (#45)
    by coast on Thu Oct 20, 2011 at 07:33:55 AM EST
    You can believe the guys exist or doesn't exist, I really don't care.  Short of giving out his name (which I won't do)I'm not really sure what sort of "proof of life" you're looking for?

    Parent
    If we can all agree that not every (none / 0) (#44)
    by Anne on Thu Oct 20, 2011 at 06:58:16 AM EST
    mortgage loan made during the boom years has failed, then what do you say to those people who did "the right thing," didn't borrow more than they knew they could afford, are still making payments, and who still may not be able to prove chain of title because their loans were securitized and the lenders/services failed to properly see that process through?

    "Oh, gee, too bad, but...?"

    I can tell you, because my daughter and her boyfriend met with a lender who is working with their real estate agent, that lenders are still pushing people to borrow up to the meximum amount possible.  They came home from their meeting and told me the rep said they could afford a mortgage payment of $X dollars - both of them said they thought that amount was insane.  My advice to them was to figure out what they knew they could afford, to take into consideration the possibility of unforseen circumstances, and not to allow themselves to be talked into borrowing more on the basis of mortgage interest deductions or appreciation of the property.

    Yes, there were people who stretched themselves financially to buy overpriced homes during the bubble, but on the other side of that were lenders who lied to and misrepresented the terms of the loans, who lied to get around underwriting standards, and gave loans to people who should not have ever qualified - because of the high demand for loans to be sold and securitized.  And that demand was coming from Wall Street.

    That demand pushed home values way beyond where they should have been, and kept driving them up; banks are now getting a return on performing mortgages based on those inflated values, the homes are secured by mortgages far in excess of their current value, which means banks won't refinance them, and they have no incentive to authorize short sales.

    And that is true no matter whether someone acted responsibly or not.

    That people have always done dumb things, and that they will no doubt continue to do them, does not make what the banks and WS did okay.  It just doesn't.  

    And that the solutions to the problem all seem centered on making sure that the banks don't suffer is, in my opinion, reprehensible.

    Parent

    I totally agree with everything you (none / 0) (#46)
    by coast on Thu Oct 20, 2011 at 07:58:37 AM EST
    say (as usual).  I never said anywhere that the banks were not complicite in this.  They made their bed and need to be punished for their part.  My problem is that the fact that there were also more than a few people who took advantage of the system (mind you a system that the bank fully created themselves) seems to just get glossed over.

    I live in an area that saw values take off.  People were not only flipping houses, but flipping contracts before closings (totaly insane).  I had friends who had no contracting experience and who maintained there regular jobs but decided it was smart to start building spec homes because it was seen as "can't miss" money.  And there were plenty of people who took advantage of the "No Doc" loan process (again another banking supported program that should never have existed).

    As I have said before, it come back to taking responsibility for your actions.  The banks must do it and individuals must do it as well.

    As for your advice to your daughter and her husband, its spot on.

    Parent

    The overwhelming (none / 0) (#54)
    by cal1942 on Fri Oct 21, 2011 at 12:01:41 AM EST
    number of cases were encouraged by a bank or, more directly, by a mortgage broker.  The mortgage broker was encouraged by the bank which offered higher commissions for trick mortgages.

    Some developers put up signs that read - no money down, bad credit no problem, etc.

    When offered a low monthly payment many people  never considered the selling price.

    The banks certainly know this.  A perfect example is auto sales.  Many people ask about the monthly payment while ignoring the price of the car.

    The fault, as always, is at the top not the bottom.


    Parent

    Sometimes it is better to focus (5.00 / 2) (#42)
    by christinep on Wed Oct 19, 2011 at 09:06:50 PM EST
    on ourselves...and not on our neighbors.  You know, the mote in our own eye, etc.  Why is it necessary to be so concerned about the putative neighbor when the issue involves each of us and all of us?  Does it make us feel better (or superior) to say that we are more moral than our neighbor?  (From my read, anyway, your concern--coast--seems to be more focused on what your neighbor may or may not be doing as compared to yourself.  If so, that is the essence of "divide & conquer.")

    Parent
    Knock me over with a feather (none / 0) (#51)
    by sj on Thu Oct 20, 2011 at 01:00:22 PM EST
    I am ALL IN with what you just said.  :)

    Parent
    The moon must be blue, huh (5.00 / 1) (#53)
    by christinep on Thu Oct 20, 2011 at 08:13:02 PM EST


    Parent
    To defend coast a bit... (none / 0) (#52)
    by kdog on Thu Oct 20, 2011 at 01:49:17 PM EST
    some people sacrifice a lot not to put themselves in such a precarious position, and to see those sacrifices be all for naught has gotta sting.  

    My parents come to mind, they slept on a god damn fold-out couch in the living room for years so their children could have the bedrooms, until they could afford to buy a home the right way.  Should they have gotten an ARM with no money down?  Were they fools?  

    And there is such a thing as moral hazard.

    But like I said upthread, at this point I will settle for anybody on Main St. getting some help, even if they were a moron, as opposed to bailouts for billionaires only...seen enough of that, tyvm.  

    Hopefully the last few years of underwater livin', sweating the sheriff comin' to evict, having no money, etc. has taught them the lesson that when you're dealing with banksters you best be on point, or don't deal with them at all.  They're not your friends.

     

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    What if some or all of the unpaid interest ... (none / 0) (#41)
    by cymro on Wed Oct 19, 2011 at 08:14:00 PM EST
    ... was added to any revised principal amount, so that a non-payer did not actually get to live rent-free when they were not making payments. I say "some ... of the interest" because the interest amount due could be calculated based on the revised principal amount, as opposed to being the original interest charged by the bank at the time of non-payment.

    Would that seem more fair to you? Or are you just unhappy  about the principal amount of your own mortgage?

    Parent

    That would be a plan that seems much more (none / 0) (#47)
    by coast on Thu Oct 20, 2011 at 08:06:17 AM EST
    reasonable than simply writing the principal down.

    I'm completely fine with my mortgage.  I'm better off today than when I moved in because I bought what I could afford then, and rates have only gone down since.  My mortgage payments have actually have decreased by more than 15% since we first bought our house.

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    This makes sense to me because ... (none / 0) (#49)
    by cymro on Thu Oct 20, 2011 at 11:53:53 AM EST
    ... it corrects for the falsely inflated market created by the banks while requiring that borrowers who benefit from that correction do eventually pay all the interest they would have owed on the corrected principal amount.

    However, I just came up with this idea, and I don't know if something like this is actually part of anyone's proposal.

    Parent

    The Mushy Fear Of Rick Santelli | 53 comments (53 topical)

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