I know we’re talking a lot of politics/economy around here these days, but, like, this is super-duper important, especially this close to an election, and my conversation with my sister last night really alerted me to the fact that a lot of U.S. voters have no clear idea what’s going on here. (And it has a huge impact on folks overseas as well!) However you feel about it, and however you’re voting, it’s just generally useful to understand what went wrong and why.
A girlfriend sent along a very easy to understand (and funny!) PowerPoint presentation explaining this “sub-prime mortgage crisis.” It’s a term you hear thrown around a LOT these days, but what does it mean? What went wrong? I uploaded the presentation for you guys. You can download it here.
I am a realtor in California, and I am feeling the effects like everyone else. We are ALL suffering from this and everyone had their hand in the pot when this all went down. We have to remember that it was the banks (lending institutions) themselves that allowed for these loans and it’s very lenient guidelines… no income, no assets, no problem! Well, now it’s a big problem. Granted, homeowners did get greedy in refinancing their homes to buy flips, new cars, flat screen tv’s and a plethera of Coach handbags. Those flimsy guidelines to getting a refinance, or buying a home, were so easy, you basically needed a pulse to qualify… literally. And the sad thing is that the banks that so easily gave you the loan on your home (fixed for only 3 years) are totally NOT working with you at all to keep it. I list bank owned forclosures now, and it’s just so sad to see all of these hard working people losing their homes and telling me that the banks will not help them by lowering their rate or continuing to allow them to pay their original mortgage payment before their rate adjusted. I have the lovely task of telling families that their home is now foreclosed and they’ve got 15 days to vacate. Not fun at all. Thanks for posting this video Beet! I really do appreciate it and I hope that everyone not only watches the video, but gets their asses to the polls this coming November… Now, can you please start posting Shia pics again? Yummy, yummy!
That was awesome! The big bad mortgage/banking institutions absolutely need to be held accoutable and not profit from this anymore! Yes, some homeowners were greedy, but the blame doesn’t lie with them, it lies with everyone from the mortgage consultant alllll the way. Oh yeah sure, we will qualify you…. Screw bailing wallstreet out, let’s help the backbone of this country, the American people.
oops – alll the way *up*
Holy crap that’s infuriating…the PowerPoint, that is. To think of how cushioned these assholes were, bringing in ridiculous commissions, bonuses, etc., all the while lying to little ‘ol us. And now, WE are supposed to cover their fuck-up?
I would like to politely ask the Republicans what they think about the fact that McCain was/is all for deregulation of the industry. Does this seem safe? Honestly, I would like to know how Republicans view these goings-on. It’s easy for me, fed by the liberal media, to point at deregulation as a HUGE culprit in this mess. Can any Republican posters set me straight on that?
I suppose I am one of those “greedy” homeowners so many of you speak of – only the truth is, I was never greedy. I worked my ass of to be able to buy my home in the Silicon Valley and I can assure you greed had nothing to do with it. I listened to what the BANK said when they PRE-APPROVED my loan – my ADJUSTABLE RATE MORTGAGE loan that the honest banking people didn’t even bother to fully explain to me the terms of.
I don’t know how things are in other parts of the country, but in California if you don’t have kids or own property you get totally screwed at tax time – so it benefits you greatly if you can save your money, work your ass off and put money down on your own home – the banks know this and gave millions of people these shitty loans. They made billions of dollars off of these shitty loans – and now that there are so many forclosures, the banks are not collecting all those mortgage payments and now they want to be bailed out –
I never asked for any of this – I’ve spent many hours over these last few months fighting with my mortgage company trying to get some help and they simply don’t care. I don’t even know what bank has the actual note on my home because the mortgage company won’t give me that information – that is how screwed up things are right now. I suppose that since I’m one of MILLIONS of people in this situation, they don’t have to care.
So greedy? I don’t think so. Unless you are in this situation, you can’t really appreciate just how fucked up things are right now.
This country has been run by rich white men for way too long and things need to change.
Just a note from someone close to the trucking industry, everything started going down when gas prices started skyrocketing. When people could afford to drive to work, they could afford their mortgages, and the foreclosure rate was lower.
Sorry, I’ll get off my soapbox.
i really can’t appreciate the situation. i came to the US of A when I was 18 and graduated with two degrees, while earning scholarships, working part time and full time, sometimes two, sometimes three jobs. as of this month i will have no debt. paid off. my car is paid off, i rent an affordable apartment in a great part of town and it’s well below my means… i could rent something that is twice as much and i’d still get approved but i don’t because i don’t need it. i drive a toyota even though most my peers went for audis and bmw’s. i could have gotten approved for an audi. why would i want it?
there are things that you need.. and then there are things that you don’t. one needs a car, but does anyone need an audi? no. nobody needs an audi. nobody needs a luxury car that they can barely afford and when that car breaks the repairs will come at luxury prices as well.
when i first came here, i remember seeing trees planted in these in-ground holes that had a small diameter. i remarked that the trees would overgrow their assigned spots very soon, to which my american friend replied “well, they’ll just cut them and plant new ones.” not two years have passed, and those trees were cut down.
actions have consequence. people need to put some forethought into their actions. i don’t understand how can people think that they can get away with owning something they can’t afford?
Thanks for the power point Beet. It’s much clearer now.
Yo, that powerpont presentation kicked ass! I done learned somethin!
It’s still amazing to me how dumb people are and how they can never take any blame for the messes they’re in. I live in San Francisco where housing is incredibly expensive and knew even before this mess started, when loans were easy to come by, that there was no way I could buy a home. I was saving diligently to buy but knew I couldn’t afford anything…even with all those fancy ARMs, you know, the ones that are DESIGNED to adjust (payments WILL fluctuate) that everyone is complaining about now. Granted, I know little about financing but ARMs scared me enough not to want one. So I sat on the sidelines and watched this all happen. I knew things were too good to last. And what do I get for having half a brain…a bailout for a bunch of whiners. How does this help me? It doesn’t. I still have to deal with the same shit economy and be unable to get a loan even though I make good money and have zero debt. Thanks, America.
Thanks for the Powerpoint, Beet. Very helpful. I wonder if I’ll ever be able to afford a house, here in the UK? As Anon said – thanks, America.
I love how no one in Congress seems willing to place some of the blame on themselves. “Everyone in America should own a home” sounds nice, and I’m sure it wins votes, but not everyone can sell Treasury bonds to raise capital when they run out of money. Also, if you went with an ARM: you may be an idiot. Did you really think the rates wouldn’t go up?
@jelena–very well put. Too many of us think we need things that we really don’t, we’re encouraged to spend and we spend willingly. It’s crazy and this crisis we’re in is a huge reality check, and an opportunity for us to stop living so wastefully. The only good thing about the economy going bad is that if things get bad enough, people just might use their ingenuity to figure out how to live well and simply. (I, too, saw trees being cut down to be replaced with smaller trees, when I lived in Florida.)