Mortgage crisis inflicts collateral damage

[Pale Blue Dot]

Source: MSNBC

The national surge in mortgage defaults is claiming more victims than just the thousands of subprime borrowers facing the prospect of losing their homes.

Social service agencies say homeless rates are on the rise not only as families lose their own homes to foreclosure but also as renters are evicted after their landlords default. Financial analysts warn that state and local governments will soon feel the pinch of sharply reduced property tax revenue. And counselors say divorces and reports of abuse are rising as families burdened by impending foreclosure take their stress out on one another.

The ripple effect illustrates the wide-ranging impact the subprime mortgage crash has had not only on the U.S. economy but on society at large, said Robert Reich, who was labor secretary during the Clinton administration.



Read more: http://www.msnbc.msn.com/id/22246203 /

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As a teacher of children, I'm very worried about the effect this will have on our young people.

[Lost4words]

1. the mortgage situation is due to the loss of JOBS!

G*D IDIOTS! Cheep labor poloticians DEMS as well as pukes! Its all connected.

repukes couldnt have done all this shit without the democrats. Be prepaired the election '08 may change nothing.

8643

[MadHound]

2. The mortage crisis is due to one thing, and one thing only

Greed. Plain pure and simple greed. Greed on the part of the borrowers, thinking that they could get something on the cheap, greed on the part of the lenders thinking that they could make some quick money by selling paper.

This whole thing is simply a reflection of America's greediness in action, and now that people are getting burned they are wanting to be bailed out.

Did politicians contribute to this, assuredly, but in a more peripheral way. They stood by and watched the train wreck coming, and did nothing.

But the main instigator of this mess is human greed.

Hopefully we can survive this, it's going to get a lot uglier before it gets better.

[JuniorPlankton]

4. You are SO right

People tend to find one party to blame, either the stupid borrowers or the sleazy lenders.
It is really everybody's greed to blame!

[MadHound]

6. Thank you,

As the old saying goes, it takes two to tango, and the lenders couldn't have done it without the borrowers who couldn't have done it without the lenders.

However there has been a bipartisan effort over the past decade or so to weaken laws and regulations that allowed this to come to this point. Repeal of part of the Glas Steagal Act, approval of various forms of lending, approval of various bundling schemes that actually made mortgages a hot, trade worthy commodity, etc. Both parties sadly danced to the tune played by their corporate masters in the finance industry and allowed for a market and investment climate that hasn't been seen since the Roaring Twenties(and we know how that wound up).

But sadly, once again it is indeed all about mutual greed. Frankly I don't think that there should be a bailout for either group, lenders or borrowers. But too many people are screaming, and once again we who have played by the rules, made smart decisions and didn't let our greed take over are going to be paying out major tax dollars to bail out those who were blinded by dollar signs. Worse yet, were all going to pay a heavy price as our already shaky economy plunges over into the abyss.

You think that people would learn, but sadly it seems not. My mother and step father were warning about this mess a few years back and where it would lead, but then again they saw the Great Depression shape up and know the warning signs. Sadly, too few people learn the lessons of history, perhaps because it has been neglected in our schools the past couple of decades or so. Of course the rich are going to make out like bandits, times like this are considered to be buying opportunities for them.

[Myrina]

7. Greedy builders, greedy lenders ...

...seeing quick profits from the starry-eyed-but-not-too-financially-educated public who wanted a part of 'the American dream' -- predators really, who violated ethics by putting people into houses that by all rights, they couldn't afford & shouldn't have been financed for.

I don't blame the buyers so much because 'home ownership' is touted as the foundation and bedrock of all things American/family ... although definitely in some cases people knowingly went for the gusto rather than staying solidly within their means (even if it meant not buying at all) ...

[Xenotime]

8. Agreed. Its going to take a dem in the WH to get things right

[MadHound]

10. Hell, a Dem in the WH helped get us into this mess.

This has been building for awhile. During the ninties, Clinton started tearing down financial and lending regulations that had been in place since the Great Depression(for a reason). Bush came in and sealed the deal, and here we are. The blame belongs on both parties because both have been bought and paid for by the financial sector.

[flamin lib]

13. Close, but not quite.

In 1999 the Republican controled Congress wrote bank de-regualtion into law and Clinton signed it.

Read the details here: http://journals.democraticunderground.com/flamin%20lib/...

[MadHound]

16. "and Clinton signed it." Exactly.

And that wasn't the only thing that Clinton signed and supported. Hell, Clinton's biggest political backers were the financial crowd, and believe me, Clinton gave them their money's worth. We were in the midst of a "boom" back then, and these measures didn't seem to matter, until the whole mess collapsed. Did Clinton set up the collapse, no, but he sure set the stage for it.

[Tempest]

14. Not true at all

The regulations that allowed for banks to bundle and sell loans were allowed by the Repug controlled Congress under Bush.

And the low interest rates during the first 5 years of the Bush administration made it easy for the greed to compound.

[MadHound]

17. Yes, but deregulation and the partial repeal of Glas Steagal, among many other things

Certainly loosened the legal binds and set the stage for this mess we find ourselves in. Blame lays with lots of people, and it isn't a simple black/white deal. Politicians from both parties have screwed us over, and it is past time that we wake up to that fact and take the appropriate action.

[Xipe Totec]

9. Unregulated Greed

Unregulated because of a flawed Republican belief that "Markets take care of themselves", so we don't need government oversight.

You want to talk about greed? Look around and see who has the money and who doesn't.


Let the "invisible hand of the market" work it's magic and see where the money ends up.

[JuniorPlankton]

3. Not at all

The number of foreclosures has little to do with the job situation. All sort of people have been drunk on money for too long.
Some of the worst RE markets are in CA and FL; it has nothing (well, little) to do with the destruction of the manufacturing sector in this country.

[Wcross]

5. The market in Michigan & Ohio has tanked as well.

This can be attributed to job loss.

[Lost4words]

21. Its not just the manufacturing sector, IT is professional, or at least it was

but what do I know only being out of any real employment for 7 years now, my wife is in the same boat.

From 6 figures per year (and I earned every penny practically living on airplanes) to zero future in the blink of a NAFTA.

[Lost4words]

22. self delete

[melm00se]

11. finances

are in the top 3 causes of marital problems.

Money issues directly attack most people's vision of themselves as providers and that creates high level of shame and embarrassment and that can cause people to lash out in lots of ways.

[neohippie]

12. I spent last weekend helping my friends move

It's not just new construction, some landlords are failing too... Here in North Carolina, lots of folks with rental properties are losing them as well.

I was sick with a cold, but I spent my entire weekend last week helping good friends move from their house, that they had been renting for 5 years. Their landlord had fallen behind on his loans, and he lost several properties, the bank only gave the tenants 10 days to move out, and they first learned of this two weeks before Christmas.

They didn't have any money saved to prepare them for having to move, and the house they were renting originally belonged to the couples grandparents, so they had to evacuate a place that they had known and loved since childhood. It was tragic. Luckily, friends and family helped them avoid homelessness, with loans and hard work. But I am sure not everyone is fortunate enough to find help.

These are the same folks who when I was without electricity for 3 weeks, while I was rewiring my house, let me stay with them, so I was happy to return the favor.

Their landlord is the worst example of the haves,not worrying about the have nots, because he continued to accept the rent money from his tenants for months, even though he apparently wasn't paying his mortgages

[mikelgb]

15. bush years are catching up to us

[Rockerdem]

18. Some justice in the whole thing.

The two people that I know who got caught holding the bag were flippers. They smirked at me during the runup for being too cautious. I warned them.

Greed. The posters above are correct.

[Doctor_J]

19. You're right to worry - we're basically turning into a 3rd world country

which is just what the BFEE have been hoping/planning for for 30 years.

[Pale Blue Dot]

20. Did you read "The Shock Doctrine"?

If not, I strongly recommend it. The coming months will be a feast for the neocons unless we recognize what they're trying to do, and are prepared to stop them.

[flashl]

23. This guy got it right

A Massive Bank Fraud that Calls for Jail Terms

By Jim Freeman

Not a Mortgage Meltdown, Not a Sub-Prime Crisis

‘Tis the season to be jolly, but no one said it was a time to bail out criminals who properly belong in jail.

...

The balloon that has not yet gone up is public (and media) recognition of the extended and complicit fraud committed by lenders, mortgage packagers, hedge funds and others who, for purposes of personal greed, created a whole class of liar-loans. They were even called that in the trade—liar-loans. That complicity does not necessarily (but may well) include either outright collusion or a creative blind-eye on the part of federal regulating agencies

...

The public is confusing (and being encouraged to confuse) the housing bubble of the last half-dozen years with the sub-prime mortgage fraud. They are different animals and the criminals of the latter are trying mightily to cover themselves with the blanket of the former.