Comments on: Housing Crisis: “Project Lifeline” Dead On Arrival http://national.teambio.org/2008/02/12/housing-crisis-project-lifeline-dead-on-arrival/ National News the Bring It On! way. Fri, 25 Jul 2008 14:12:10 +0000 http://wordpress.org/?v=2.5 By: Jet Netwal http://national.teambio.org/2008/02/12/housing-crisis-project-lifeline-dead-on-arrival/#comment-5607 Jet Netwal Thu, 14 Feb 2008 18:29:50 +0000 http://national.teambio.org/2008/02/12/housing-crisis-project-lifeline-dead-on-arrival/#comment-5607 I'll interject that Doyle is just one story out of many. Framing the argument that he is the typical sub prime sob story is unsupported. The fact is the majority of sub prime loan failures fall disproportionatly on single women and lower middle class borrowers. I wrote on this earlier, in a post called Sub-Prime Primer. When I was a realtor in the 1980's, the debt ratio was 35 -38%. Lending based on a 50 -55% debt raio is irresponsible and lenders who did so knew it. They just hoped they''d get the paper sold before it started to smell. I’ll interject that Doyle is just one story out of many. Framing the argument that he is the typical sub prime sob story is unsupported. The fact is the majority of sub prime loan failures fall disproportionatly on single women and lower middle class borrowers. I wrote on this earlier, in a post called Sub-Prime Primer.

When I was a realtor in the 1980’s, the debt ratio was 35 -38%. Lending based on a 50 -55% debt raio is irresponsible and lenders who did so knew it. They just hoped they”d get the paper sold before it started to smell.

]]> By: Dusty http://national.teambio.org/2008/02/12/housing-crisis-project-lifeline-dead-on-arrival/#comment-5603 Dusty Thu, 14 Feb 2008 17:52:17 +0000 http://national.teambio.org/2008/02/12/housing-crisis-project-lifeline-dead-on-arrival/#comment-5603 Manapp..you can't regulate stupidity..or common sense. What happened to Mr. Doyle is sad and depressing but he is a victim of this debacle..as are many others. Some folks, by their own hand of course. Regulating industry standards is a no-brainer but our brand of Reaganomics says let the market be free to do as it pleases with as little regulation as possible..which provides the framework for fraud and greed, which we are seeing unfold now. Biggie..I don't need your lecture Dude..save it for someone that actually gives a hoot about your logic..thanks and have a great day! Btw..are you aware of paragraphs and how to utilize them? They are your friend ;) Manapp..you can’t regulate stupidity..or common sense. What happened to Mr. Doyle is sad and depressing but he is a victim of this debacle..as are many others. Some folks, by their own hand of course. Regulating industry standards is a no-brainer but our brand of Reaganomics says let the market be free to do as it pleases with as little regulation as possible..which provides the framework for fraud and greed, which we are seeing unfold now.

Biggie..I don’t need your lecture Dude..save it for someone that actually gives a hoot about your logic..thanks and have a great day! Btw..are you aware of paragraphs and how to utilize them? They are your friend ;)

]]> By: manapp99 http://national.teambio.org/2008/02/12/housing-crisis-project-lifeline-dead-on-arrival/#comment-5602 manapp99 Thu, 14 Feb 2008 17:45:57 +0000 http://national.teambio.org/2008/02/12/housing-crisis-project-lifeline-dead-on-arrival/#comment-5602 Bigstuff: "the vast majority of the subprime loans were underwritten at a 50-55% debt to gross monthly income ratio." If the "vast majority" of these loans were such as you state, how do you account for the fact that the vast majority of subprime loan holders are paying the note. 75% are NOT in default. That is the 'vast majority" Bigstuff:

“the vast majority of the subprime loans were underwritten at a 50-55% debt to gross monthly income ratio.”

If the “vast majority” of these loans were such as you state, how do you account for the fact that the vast majority of subprime loan holders are paying the note. 75% are NOT in default. That is the ‘vast majority”

]]> By: mr bigstuff http://national.teambio.org/2008/02/12/housing-crisis-project-lifeline-dead-on-arrival/#comment-5601 mr bigstuff Thu, 14 Feb 2008 17:18:48 +0000 http://national.teambio.org/2008/02/12/housing-crisis-project-lifeline-dead-on-arrival/#comment-5601 dusty, the vast majority of the subprime loans were underwritten at a 50-55% debt to gross monthly income ratio. try to follow this math. $3000 in gross monthly income leaves approx. $1500 to cover house payment, taxes, insurance and all other debts reported on the credit report. this leaves around $500-$600 for everything else, now, at $1.19/ gallon for gasoline most people were spending $100/month to travel to and fro daily. at $3.29/gallon that expense goes to $300/ month. this $200 loss in spending power can be absorbed for a few months, but after a year or so it's bye bye house. before you blame the subprime industry for allowing 50-55% debt ratios, understand that a conventional conforming loan will allow a 65% debt ratio with good enough credit. how is this so hard for you to understand? is your calculator broken? the people who bought homes with these subprime loans deserved to be homeowners. what they didn't deserve was to be betrayed by that goddamned fool w who destroyed this economy by invading iraq and made a purchase of anything of substantial value impossible for those with incomes below $7000/month. the housing industry and many americans ability to buy and maintain homes are not the only things decimated by the sordid alleged administration of that damn fool w. go to a car lot and ask them how sales have been since gas hit $3.00/gallon. how much for a gallon of milk? how bout that pizza delivered to your house. the boating industry sure is kicking ass under w's alleged administration. every business in america and every american is suffering because of that damn fool w's idiotic policies. how fucking hard was it in 1999 after hearing that fool w try unsuccessfully to string three words together to understand that he would be the worst president in american history? all the other alleged reasons for this mess that w has created are just a bunch of bullshit by those who voted for that fool to place the blame elsewhere. if you voted for that fool w, you are to blame for the problems that idiot has caused. furthermore, if you voted for w, you are dumber than w, as impossible as that may seem. so dumb in fact, that i wonder how you can remember to breathe when you wake up in the morning. is there a sign above your bed with the message "don't forget to breathe"? dusty,
the vast majority of the subprime loans were underwritten at a 50-55% debt to gross monthly income ratio. try to follow this math. $3000 in gross monthly income leaves approx. $1500 to cover house payment, taxes, insurance and all other debts reported on the credit report. this leaves around $500-$600 for everything else, now, at $1.19/ gallon for gasoline most people were spending $100/month to travel to and fro daily. at $3.29/gallon that expense goes to $300/ month. this $200 loss in spending power can be absorbed for a few months, but after a year or so it’s bye bye house. before you blame the subprime industry for allowing 50-55% debt ratios, understand that a conventional conforming loan will allow a 65% debt ratio with good enough credit. how is this so hard for you to understand? is your calculator broken? the people who bought homes with these subprime loans deserved to be homeowners. what they didn’t deserve was to be betrayed by that goddamned fool w who destroyed this economy by invading iraq and made a purchase of anything of substantial value impossible for those with incomes below $7000/month. the housing industry and many americans ability to buy and maintain homes are not the only things decimated by the sordid alleged administration of that damn fool w. go to a car lot and ask them how sales have been since gas hit $3.00/gallon. how much for a gallon of milk? how bout that pizza delivered to your house. the boating industry sure is kicking ass under w’s alleged administration. every business in america and every american is suffering because of that damn fool w’s idiotic policies. how fucking hard was it in 1999 after hearing that fool w try unsuccessfully to string three words together to understand that he would be the worst president in american history? all the other alleged reasons for this mess that w has created are just a bunch of bullshit by those who voted for that fool to place the blame elsewhere. if you voted for that fool w, you are to blame for the problems that idiot has caused. furthermore, if you voted for w, you are dumber than w, as impossible as that may seem. so dumb in fact, that i wonder how you can remember to breathe when you wake up in the morning. is there a sign above your bed with the message “don’t forget to breathe”?

]]> By: manapp99 http://national.teambio.org/2008/02/12/housing-crisis-project-lifeline-dead-on-arrival/#comment-5600 manapp99 Thu, 14 Feb 2008 16:55:58 +0000 http://national.teambio.org/2008/02/12/housing-crisis-project-lifeline-dead-on-arrival/#comment-5600 From a NYT's article: http://www.nytimes.com/2008/02/12/business/12credit.html An example of the spreading credit crisis is seen in Don Doyle, a computer engineer at Lockheed Martin who makes a six-figure income and had a stellar credit score in 2004, when he refinanced his home in Northern California to take cash out to pay for his daughter’s college tuition. Mr. Doyle, 52, is now worried that he will have to file for bankruptcy, because he cannot afford to make the higher variable payments on his mortgage, and he cannot sell his home for more than his $740,000 mortgage. “The whole plan was to get out” before his rate reset, he said. “Now I am caught. I can’t sell my house. I’m having a hard time refinancing. I’ve avoided bankruptcy for months trying to pull this out of my savings.” Do you think we should have not allowed Mr. Doyle to borrow against his house? Should we bail him out? He gambled and lost. Also this: About 7.1 percent of auto loans were in trouble, up from 6.1 percent. Should we regulate auto loans? My question is what is the role of government in regulating consumer borrowing? Perhaps we should not allow a person to own more than one credit card and have limits set to $1000. Maybe we should not allow a family of four to have more than one car loan at a time? From a NYT’s article:

http://www.nytimes.com/2008/02/12/business/12credit.html

An example of the spreading credit crisis is seen in Don Doyle, a computer engineer at Lockheed Martin who makes a six-figure income and had a stellar credit score in 2004, when he refinanced his home in Northern California to take cash out to pay for his daughter’s college tuition.

Mr. Doyle, 52, is now worried that he will have to file for bankruptcy, because he cannot afford to make the higher variable payments on his mortgage, and he cannot sell his home for more than his $740,000 mortgage.

“The whole plan was to get out” before his rate reset, he said. “Now I am caught. I can’t sell my house. I’m having a hard time refinancing. I’ve avoided bankruptcy for months trying to pull this out of my savings.”

Do you think we should have not allowed Mr. Doyle to borrow against his house? Should we bail him out?
He gambled and lost.

Also this:

About 7.1 percent of auto loans were in trouble, up from 6.1 percent.

Should we regulate auto loans?

My question is what is the role of government in regulating consumer borrowing? Perhaps we should not allow a person to own more than one credit card and have limits set to $1000. Maybe we should not allow a family of four to have more than one car loan at a time?

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