Monday, March 23, 2009

Our shitty Economy...And me going OFF about it.

First before I bitch and say "I told you so.." I want to thank god! that someone in NJ came to their senses!

From Yahoo News:
NJ scraps plans to ban genital waxing

The state on Friday decided to reverse course on the proposal after angry salon owners complained about losing business ahead of swimsuit season.
Yeah, you stupid lawmakers... Quit trying to mess up whats left of your economy. Get back to REAL work.

On MSNBC today, I found some of the best explanations for why were are in the mess we are in:

Answer Desk: Why can't we just let AIG go under?

This is seriously the best explanation for our current problems that I have seen to date. You can actually understand the article. My favorite line for explaining the Credit Crunch:

It’s a little like someone offering you 10 glasses of water with a warning that one of them is poison — but they’re not sure which one. No matter how thirsty you are, you’re probably not going to take a drink.
The article is worth the read.
Also from MSNBC, This headline sums up the problem wonderfully! And anyone who has in that past heard me bitching about this, knows that I have been calling Countrywide the ghetto bitch of the mortgage industry for years. Mostly for bad loans they made and their constant refusal to accept payments if they weren't to the exact penny. I have never had a countrywide loan.

'If you had a pulse, we gave you a loan'
Inside the fiasco that led to the mortgage mess and Countrywide's collapse

But the system became so lax that nearly anyone could qualify for a loan. And it reached the point where lenders did not ask for a down payment at all. They were willing to lend 100 percent of the purchase price, usually split into two loans: one for 80 percent of the value; the second for 20 percent.
Next to an Adjustable Rate Mortgage, this is the dumbest mortgage you could get.
Keep reading the article. You'll see that they gave a $300,000 loan to a person who didn't even make $25,000 a year, who had no stable place a residence, and failed to step and say, "My income on that application was wrong." or "I can't honestly afford $300,000 condo."

Countrywide issued her two mortgages to cover the full purchase price: $259,900. The first mortgage was for $194,925 with an initial interest rate of 8.625 percent, fixed for two years, then adjustable. The second mortgage, in the amount of $64,975, had a much higher interest rate: 11 percent.

The combined monthly payment for both loans was more than $2,100, well above her average monthly income of $1,600.

HOW DID SHE THINK SHE WAS GOING TO PAY THAT??? Did she not look at the documents showing her estimated payments. And look, for those keeping score, she now has 2 mortgages that are both f&^%ing ARMs.

Taylor acknowledged she didn’t really look closely at the loan documents and said she never noticed the amount until NBC News pointed it out to her.
She is kidding right? You know damn well you really can't afford a $300,000 condo when you can't make a monthly RENT payment. And you are signing a 30 YEAR contract! How do you not look at the damn PAPERS??!!! Do you see it coming? Imagine this on the scale for $300 billion dollars worth of loans. Oh it gets better:

Countrywide also became a purveyor of loans that many consumer experts contend were a bad deal for borrowers, with low introductory interest rates that later could skyrocket.
Paula Taylor’s primary loan was set to adjust in two years.
She knew she could not really afford the place on her own, she said. She invited her sister to move and pay rent. But Taylor’s sister did not stay long.

Taylor defaulted in only seven months.

Seven f*&%ing months. Why get the damn loan if you can't even rent an apartment? WHY?

In retrospect, she was willing to blame herself “a little bit,” but put most of the onus on Countrywide. “Why would they tell me as the lender that I can afford this,” she asked, “if they know they're not going to get their money back?”With foreclosure rates at an all-time high, it is a reasonable question.
Equally reasonable is why so many borrowers did not heed common sense and pay closer attention to the terms and conditions of their loans.
A little bit my ass. Countrywide is just as much to blame as she is. These were a Stated Income Loans. This means I could have written down that I was the CEO making 1 million a year and I could have gotten a loan for ANY house. Nobody was actually CHECKING these applications. Banks Are morons for writing them and people are morons for getting loans with payment amounts 3 times their monthly income.

As home prices were soaring, Muolo said, Wall Street ignored the true risk of the loans they were buying and packaging. “It looked like it was going to be limitless for Wall Street. They thought it was going to go on forever and ever.”
Of course they did. They were morons sucked in by the big $$$.

(Analyst Karen Weaver) discovered that lenders were encouraging borrowers to plan to refinance adjustable mortgages within two years or so. In other words, before borrowers defaulted, the underwriters reasoned, they could pay off their risky loans with yet other risky loans. “They were saying that essentially the problems could roll off down the line,” Weaver said
Of course! It would be someone ELSE's problem. That is awesome (shitty as hell) logic.

The beginning of the end came in 2007, when borrowers like Paula Taylor found themselves unable to meet the mortgage payments. A community group in Boston tried to help Taylor stave off eviction, but failed. Taylor, who said she is still embarrassed about what happened to her, lost her condominium.
Really? She lost the condo? I am SHOCKED! (see the sarcasm there?) I bet Paula is back to living with random friends and family like she was before the loan she had no business getting.

You know the rest. Foreclosures, Execs with insane pay and bonuses, job and business losses. Which leads to more foreclosures. Nice work by the financial industry. And the Government for making is all possible.

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