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America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

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Re: America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

#71

Post by GavinMcG »

conanbatt wrote: post #42
blurbleblurble wrote: post #36

Earlier quoted context omitted.

So when are you and your fellow investors gonna stick to being human beings? This game has gone on long enough. We're talking about peoples' lives. We're talking about an entire generation of people who can't afford to buy houses because the generation before them gave in to bad credit. We're talking about entire generations of people who are going into a personal debt based economy of fear and coercion. Is that the…

Nonsense.

I downvoted you because that's not a substantive response.

Re: America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

#72

Post by rm_-rf_slash »

blurbleblurble wrote: post #36
naspinski wrote: post #28

As a real estate investor, I lick my chops when I see news like this. But as a human being it's so terrible to see happen over and over again. Watch "The Big Short" if you haven't - everything will crash again.

So when are you and your fellow investors gonna stick to being human beings? This game has gone on long enough. We're talking about peoples' lives. We're talking about an entire generation of people who can't afford to buy houses because the generation before them gave in to bad credit. We're talking about entire generations of people who are going into a personal debt based economy of fear and coercion. Is that the…

"Buy when there's blood in the streets" has always been good advice, but you can't blame a single person - or even a single class of person, in this case a real estate investor - on the immense scale of complexity that has put so many people in such a lousy situation.

A lot of people in this category have jobs, families to support, and so on. It's not like every investor is The Businessman from "The Little Prince."

Re: America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

#73

Post by Spivak »

blurbleblurble wrote: post #36
naspinski wrote: post #28

As a real estate investor, I lick my chops when I see news like this. But as a human being it's so terrible to see happen over and over again. Watch "The Big Short" if you haven't - everything will crash again.

So when are you and your fellow investors gonna stick to being human beings? This game has gone on long enough. We're talking about peoples' lives. We're talking about an entire generation of people who can't afford to buy houses because the generation before them gave in to bad credit. We're talking about entire generations of people who are going into a personal debt based economy of fear and coercion. Is that the…

When being a human being is more profitable than not. If the incentive structure does not tie individual reward to societal reward then it's the system that's broken, not the people.

Re: America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

#74

Post by maverick_iceman »

mikeash wrote: post #19
rch wrote: post #2

OK - The 'web' search/link isn't working for me anymore. Maybe it's time to start rethinking WSJ submissions. Based on the first paragraph, this is the exact same article: http://www.msn.com/en-us/money/realestate/loan-boom-echoes-s...

It should work if you use the "web" link in an incognito window. WSJ remembers if you visited it directly and then shows the paywall even with a Google referer, but incognito mode defeats that. I agree it's getting to be something of a pain. Thankfully this article seems to be republished in many places.

Incognito mode doesn't work anymore.

Re: America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

#75

Post by djrogers »

FireBeyond wrote: post #68
roymurdock wrote: post #23

Earlier quoted context omitted.

> We're going to keep going from crisis to crisis because banks can't say no, and the government(s) deems them too big to fail Consumers can say no, and if they had better financial education and/or financial prospects, maybe they would. The elderly woman in the article initially refused the $50k renovation to her 5 bedroom home, but then agreed because she thought the government was going to subsidize it for her. Th…

"blame during the financial crisis of 2007-08 as many consumers took on home loans they had no intention of ever making good on" Citation needed - for the number of consumers who "took a mortgage they never had any intention of paying" (your example), versus "people who took on a mortgage they couldn't keep paying (after the ARM bubble, which, let's not forget, all the banks were promising would be a matter of "refin…

> people who took on a mortgage they couldn't keep paying (after the ARM bubble

Citation needed - most of the indexes used for anchoring ARM rates either dropped or stayed steady leading up to and through the sub-prime mortgage crisis. An ARM fixed to LIBOR for example would have dropped in rate when it adjusted.

Problems did occur with non-standard loan types - Interest only, balloon payment mortgages, etc. however the biggest problems occurred because many people had borrowed too much $$ to have any equity in their homes if the values dropped at all. These borrowers found themselves 'upside-down' on their mortgages, unable to sell their homes to move as they owed more than they'd get from the sale. Some of those owners walked away from their homes, some ran in to balloon payments or the end of their interest-only terms and some rode it out. The ones that didn't ride it out got foreclosed on and we're still recovering from the mess.

Re: America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

#76

Post by JumpCrisscross »

snarfy wrote: post #31
rch wrote: post #2

OK - The 'web' search/link isn't working for me anymore. Maybe it's time to start rethinking WSJ submissions. Based on the first paragraph, this is the exact same article: http://www.msn.com/en-us/money/realestate/loan-boom-echoes-s...

From the FAQ: > Are paywalls ok? > It's ok to post stories from sites with paywalls that have workarounds. What about sites that don't have workarounds? The workaround for WSJ no longer works.

Note that the Wall Street Journal always works for me, without subscription, through the Tor browser [1].

[1] https://www.torproject.org/projects/torbrowser.html

Re: America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

#77

Post by jedberg »

lllr_finger wrote: post #26
Bartweiss wrote: post #21

Earlier quoted context omitted.

Changed within the last hour.

Even with blue-green deployments and a separate AMP solution, it's unlikely that they did a during-business-hours release just to prevent paywall workarounds for a tiny subset of their pageviews.

The WSJ is more agile than you think, and some of their devs read HN. It wouldn't surprise me at all that they built code specifically to break the workaround just for things posted to HN.

Re: America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

#78

Post by retube »

John23832 wrote: post #10

The title made me think that this was going to be about subprime auto loans, which are definitely in "crisis" territory. This whole mess (subprime auto, renovation, and home loans) comes from the increasingly rent seeking nature of Wall Street. It used to be that fortunes were both made and lost on Wall Street. Now, for large investors ("whales"), it's 3.5% or I take my money to another fund. If I don't have a consis…

> It used to be that fortunes were both made and lost on Wall Street.

They still are. Hedge Funds lose money and/or go bust all the time. Firms go bust. The stock market has only just recovered levels last seen over a decade ago.

> it's 3.5% or I take my money to another fund

When has any investor ever said "I want to lose money" ?

Re: America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

#79

Post by aswanson »

intrasight wrote: post #53
roymurdock wrote: post #39

Earlier quoted context omitted.

I'm not blaming the victim, I'm appealing for a more nuanced viewpoint than "fuck Wall St." There are at least 2 sides to every loan - the originator and the borrower - and it helps to examine dynamics on both sides of the table. Is the book in the US generally stacked towards originators? Certainly, as I argue, with financial literacy being so low, most home-owners wanting to do anything to avoid moving, and family/…

I think you've hit the nail on the head when it comes to houses - people form irrational sentimental attachments to their real estate.

Buying a home is a massive bet on the local employment market (in your niche) staying fungible over decades. At the rate of creative destruction happening in business these days and the associated deterioration of the employee/employer (implied) social contract since at least the 80s...this just doesn't make sense.

Re: America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis

#80

Post by BlackjackCF »

roymurdock wrote: post #23
John23832 wrote: post #10

The title made me think that this was going to be about subprime auto loans, which are definitely in "crisis" territory. This whole mess (subprime auto, renovation, and home loans) comes from the increasingly rent seeking nature of Wall Street. It used to be that fortunes were both made and lost on Wall Street. Now, for large investors ("whales"), it's 3.5% or I take my money to another fund. If I don't have a consis…

> We're going to keep going from crisis to crisis because banks can't say no, and the government(s) deems them too big to fail Consumers can say no, and if they had better financial education and/or financial prospects, maybe they would. The elderly woman in the article initially refused the $50k renovation to her 5 bedroom home, but then agreed because she thought the government was going to subsidize it for her. Th…

Agreed here. It's kind of a dog-eat-dog world when it comes to finances. Everyone has to watch their own backs, because big banks are going to do what is most advantageous to them, even if that means screwing over other people.

There's a wealth of information out there for people to self-educate. Unfortunately, people just don't seem to know where to look. It's a travesty that we don't teach basic finances in high school to students about to graduate and go into the real world. We can sacrifice mandatory PE for a semester or a year to make space in the schedule for everyone to learn how credit, loans, and taxes work.

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