Banks don't give a fuck about Marines. They don't make enough money to be of any interest

He he he said "interest" in a banking thread...he he

"Debt" and "interest" is how new money is created.

fxashun wrote:The articles are NOT about weaseling out of a debt; they are about ownership.

The article is also about foreclosure. Which is failure to pay debt. The ownership wouldn't be in question if the loans weren't in foreclosure status.

CNN — LOU DOBBS TONIGHT — Aired November 23, 2007 - 19:00 ET

KITTY PILGRIM, CNN CORRESPONDENT: Greedy banks are not the only ones to blame for a rising tide of home foreclosures around the country. Some mortgage brokers are also cashing in by tricking middle class Americans into mortgages they cannot afford. In return for pushing homeowners into higher interest rate brackets, they get a kickback from the lender. The practice is known as yield spread premium.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: The formal living room.

PILGRIM (voice-over): Thought mortgage brokers worked for you, the homebuyer, not exactly. If a broker can steer a mortgage applicant into a higher interest rate loan that broker sometimes collects a fee or a rebate from the bank or mortgage company lending the money.

ALLEN FISHBEIN, CONSUMER FEDERATION OF AMERICA: Brokers, I think, borrowers feel have some legal requirement to represent their best interests, in most states, this is not the case. Their incentive is to make the most they can from that transaction, even if it means placing a borrower into a more expensive loan than they qualify for.

PILGRIM: The fee the broker gets is called a yield spread premium. Consumer groups say it's a kickback for the broker that the buyer usually doesn't know about. Here's how it works.

A bank or a mortgage company quotes loan prices to a mortgage broker. A mortgage broker then delivers those prices to borrowers. If a broker can talk a borrower into a higher interest rate loan, they are paid the yield spread premium from the bank or mortgage company. A borrower may pay lower fees initially but end up paying more in interest over time.

JACK GUTTENTAG, THE MORTGAGE PROFESSOR: What a lot of mortgage brokers do is to tell the borrower, I'm not charging you anything for my services. My services are not going to cost you anything because they collect their payment from the lender. That is a very common practice.

PILGRIM: It is perfectly legal and according to the Consumer Federation of America, has occurred in 85 to 90 percent of all sub prime mortgages.

UNIDENTIFIED MALE: By putting people into more expensive loans than they qualify for, it's actually making it more difficult for many of these borrowers to continue to be able to successfully repay their loans and sustain home ownership, and it's certainly contributed to the foreclosure problem that we're witnessing now.

KITTY PILGRIM, CNN ANCHOR: A consumer watchdog group called the Center for Responsible Lending says yield spread premiums cost 1.5 million families 2.6 billion dollars in higher interest rate charges in 2005.

Harvard Professor Elizabeth Warren is an expert on how some mortgage brokers are fueling the rapid rise of home foreclosures. She wants to stop the fleecing of America's middle class.

PROF. ELIZABETH WARREN, HARVARD UNIVERSITY: This is an important thing to understand right now. We're talking about the sub prime mortgage meltdown and almost every sentence that describes this trouble in the mortgage industry right now starts out by saying people buying homes they couldn't afford. Well, that's one version of what's gone wrong, but the yield spread premium has given us a second version of what's gone wrong and that is there are home owners right now today who are in trouble on their mortgages who qualified for 6.5 percent and would be current on their mortgages at 6.5 percent, but got sold a much worse product, like a 228 that escalated to 9.5 percent, and now they can't make their mortgage payments at all. So we have people ...

PILGRIM: Solidly middle class people who have jobs and who have not had any kind of financial upset, correct?

WARREN: That's exactly right. People who have impeccable credit records, who have jobs, who work hard, who pay their bills on time, and who could in the lousy mortgages where they were destined to fail and the reason they were put there was because there was a mortgage broker who could make a lot more money from selling that product instead of the product that would have been the one that kept the family in their homes.

PILGRIM: You know, you talk about this sort of propensity to blame the victims over this issue, but in fact, is it a problem that government should have addressed earlier than this?

WARREN: You know, this is one of the fallouts that no one wants to talk about. When you deregulate a market and you say to home buyers, for example, hey, you're on your own out there, and it's a complex product that's very difficult to understand, that is a home mortgage, and it's gotten harder and harder with 228s and negative amortization and other kinds of creative financing, and it's expensive to find out.

Doing a full-fledged mortgage application so that you have a real legitimate quote, costs time and costs money. So that means it's not like you go to one store and look at a shirt and you go to the next store next door and look at a shirt and you do some comparative shopping. This is a market where it is hard for a home owner to do comparative shopping, and look, let me be frank with you. Even when you try to do the comparative shopping, you think you've done it, you think you've gotten the lowest quote, it turns out that, when you talk to the brokers, if they're not honest brokers, they can give you a song and dance, a razzmatazz on why, well, yes, it appears this one is more expensive but this is one's really cheaper for this reason and this reason and this reason and frankly, for a non-professional, it's really hard to make a straight up apples to apples comparison, and get the best product.

That means it's a place where we need some kind of protection, some kind of regulation, where the government, where an independent regulatory body, has to say, hey, look, you don't get to cheat people in this particular way. You can sell your products, you can price your products the way you want, but we have to make this market work, and the way you make this market work is you make these brokers be honest and up front, and tell people, if I'm going to take a bribe of $8,000 to put you in a worst mortgage, I have to tell you that and I have to tell you that on the first day, when you walk in here to apply for the mortgage.

PILGRIM: That seems straightforward to me and seems like the only way to do business in this country. Let's see if we can manage to do that in the future. Elizabeth Warren, thank you very much for explaining a very complicated situation to us, Elizabeth Warren.

Elizabeth Warren points out the indirect compensation for mortgage brokers is not clearly disclosed on loan applications often and most often goes unexplained to the borrower and mortgage specialists say home buyers should educate themselves on these YSPs and ask brokers up front, state in writing all fees and payments for borrowers and lenders.

Columnist Bob Herbert wrote for the New York Times 24 November 2007:
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I’ve been visiting some of the people who have been most affected by the subprime mortgage debacle. It’s a largely bewildered, frightened group that includes people like Dorothy Levey, a 79-year-old widow who sits alone inside the small house she has lived in for 41 years, afraid to answer the telephone or the door.

She has every reason to be worried. The monthly note on her house in the city of Markham, just outside Chicago, is approximately 100 percent of her meager monthly income. Broke and behind in her payments, Ms. Levey expects a foreclosure notice to show up any day, followed by a visit from “the sheriff, or whoever they send to tell you to get out of your own home.”

While the media coverage has focused on the high rollers who created the subprime frenzy (“If you can breathe, we’ll give you a loan”), the hapless victims have remained in the shadows, condemned to economic ruin.

After faithfully making mortgage payments for decades, Ms. Levey and her husband, Dan, were persuaded to take out a new loan, ostensibly for debt consolidation, in 2002. It was like plunging into quicksand. Dan was seriously ill at the time and he died two years later.

To this day Ms. Levey does not understand what she and her husband of more than half a century had agreed to. The terms might as well have been written in Sanskrit.

But she kept trying to meet her obligation. She exhausted her savings. She lost her car. She stopped buying clothes and cut back on food. But there was no way to keep up with the payments.

“I had to go to the state and tell them I was hungry,” she said.

I heard the same story again and again — decent people enticed, sometimes fraudulently, into loans they never understood and couldn’t afford.

For years redlining and other discriminatory practices served as roadblocks to homeownership in neighborhoods with significant numbers of poor and working-class residents, many of them black and brown. Making affordable loans available to such residents was important.

But we have since moved to the opposite extreme. Over the past several years mortgage lenders recognized that there were big bucks to be made in those neighborhoods, and they pounced.

They weren’t satisfied to offer reasonable loans at reasonable rates to customers who could handle them. They went far beyond that. They took advantage of a poorly regulated landscape to exploit unsophisticated home buyers and homeowners with mortgages and refinancing schemes that were all but guaranteed to result in a tragic explosion of foreclosures.

Thousands of poor people like Dorothy Levey, who worked for years to build modest amounts of equity in their homes, have been hammered — wiped out. The most unscrupulous of the mortgage lenders, and there were many of them, swooped in and sweet-talked their targets into signing contracts designed to squeeze them for everything they had in the world.

The fact that this is often legal doesn’t make it right. As insane as it sounds, Ms. Levey is still getting offers to refinance her mortgage.

There is some truth to the assertion that a lot of buyers signed up for deals they should have known they couldn’t afford. But it won’t do for the fat cats to fall back on empty phrases like “buyer beware.”

The subprime mortgage frenzy was a shameful, highly-charged phenomenon, motivated by greed and played out on a field of rampant exploitation. The victims deserved more protection than they got. As Paul Leonard, director of the California office of the Center for Responsible Lending, told me this week: “You shouldn’t have a marketplace that’s a ‘buyer beware’ marketplace for the most important financial transaction of most people’s lives.”

It’s not too much to ask that when Americans of modest means put their economic futures on the line, we have regulations in place to see that they are not ripped off.

If you think this is a small matter, consider that the center reported a year ago that subprime loans represented roughly a quarter of all home loans in the U.S., and that an estimated 2.2 million households in the subprime market would ultimately face foreclosure.

We ignored the subprime frenzy and its predictable consequences until it was too late. Now we are ignoring the plight of families caught in the tidal wave of foreclosures, and the long-term consequences that will flow from that.

There is a desperate need for government and corporate leaders to step in with a broad plan to modify existing loans and stave off foreclosure wherever possible. It is both the humane and the economically responsible thing to do.

Don’t hold your breath.
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But she kept trying to meet her obligation. She exhausted her savings. She lost her car. She stopped buying clothes and cut back on food. But there was no way to keep up with the payments.

“I had to go to the state and tell them I was hungry,” she said.

There are so many people who want YOUR money, it is astounding. And, when shit like this happens to people - nobody cares.

Who is gonna protect people from themselves though? If these easy to get loans weren't available, there would be another lobby saying that the banks are discriminating against the elderly and poor.

No good deed goes unpunished.

You can't write rules that cover each and every situation.

So they make rules that require more documentation and income proof. The ACLU comes in and says that these laws are discrimating against such and such.

So they relax the rules...Then the vultures come and and make victims out of the people the ACLU was trying to "protect". In both cases, they blame the banks. That's bullshit. When do the people that actually are responsible for reading the contracts and understanding what they are signing start to get responsible for what they are doing?