Natter 53: We could just avoid making tortured puns
Off-topic discussion. Wanna talk about corsets, duct tape, or physics? This is the place. Detailed discussion of any current-season TV must be whitefonted.
It's not stupidity, it's misinformation or outright lying. I put probably 90% of the blame for owner-occupied forclosures on companies looking to close a bunch of loans quickly without giving their buyers the information they need.
I don't think it's stupidity. And certainly many subprime lenders are simply taking advantage of the fact that so many people are so clueless about money. I'm really trying to budget to be able to pay off my ginormous student loans and I've been listening to a lot of Dave Ramsey on the radio. The number of people that call up with $500/month car payments, or that can't believe the rate on their "adjustable" mortgage is going up is just astounding.
Loans terms are complicated and I feel very sorry for people that were outright deceived by lenders, but there is also a culture here of living way beyond your means and I think that plays a very important role in what's going on.
ETA: Or what Stephanie said.
Oh, hey Aimee! Reading through messages I see that we did work on a Countrywide Option Arm Loan. Happy ending though.
[Counselor] convinced Countrywide to modify her loan to a 30 year fixed rate at 5.25%!!! By doing this, she is going to save $500 a month!
But many of the things we are talking about to me simply sound risky. And risky is something you are allowed to do. Of course, you should know the risks going in and it doesn't make you stupid if your gamble fails. But neither should it be a surprise to you if your gamble fails when the odds were stacked against you to begin with. Which doesn't mean that it doesn't suck hard when it fails.
It's not explained to them as a gamble or a risk. It's "we do this all the time no problem" which is what they're hearing from all over the place- like Kathy's friends telling her she needs to buy; its a sure thing.
I dealt with Countrywide once looking into a 2nd mortgage line of credit. I could not believe what they were trying to tell me was a "good deal". And the guy was slimy.
This reminds me of the whole "minimum payment" credit card thing. Until recently, a lot of credit card companies would have a monthly minimum payment that would just barely cover interest. So if you only made the minimum payment every month, you'd end up taking 30 years or whatever to pay off your balance. So the govt. passed a law saying the minimum payment had to be higher (4% now?)
I dunno - I think it'd be nice to at least have the option to only make a small minimum payment. So normally you'd make a 4% or more payment, but if you were low on money one month you could pay 2% (which is I think what the minimum often was). Of course, if you always pay 2%, you're screwed. But credit card holders should know that. I wonder if this law is just to protect people who are not smart with their money.
The number of people that call up with $500/month car payments, or that can't believe the rate on their "adjustable" mortgage is going up is just astounding.
For $500 a month that car had better give good road head while I'm listening to my books on tapes on the long drives
Except for, I already had some debt when I started, so I got *slammed* when they did that.
In theory, it makes sense, but doesn't everything?
I meant it, but not twice!
I've keep reading articles about this and it seems like a lot of people were just outright deceived. I don't know how it's legal either. One couple in a CNN article (I think it was CNN, I can't find it now) said that after they signed all the paperwork they discovered that the paperwork had been changed and they had signed for a different, more riskier, loan than what they had agreed to. They didn't read through the paperwork as they signed it, they described it as a "mountain" of paperwork and I'm sure they never imagined that someone would do something like that without telling them.
Then in a print article I read about a woman who remortgaged her house and her payments skyrocketed and she discovered her monthly income was listed as double what it was in reality.
I think I'm fairly smart and I would never guess that paper work I'd previously read through and was getting ready to change had been altered in such a drastic way without anyone saying anything.
There's a whole continuum that goes from just careless stupidity when it comes to money all the way up to "The Space Station Landed on Me and My Employer and My Dog and I'm Screwed" . Financial difficulties != stupid. I didn't mean to imply that, and I realize from my phrasing that could seem implied.
I don't think that the gov't bailing out someone like megan's example is a good plan , and sometimes it is going to be hard to figure out where a situation lies on the continuum, and thus how much responsibility the consumer bears. If there was wrongdoing on the banker/whoever's part, go after them to fix that. But I also think a fair bit is on the consumer to make a good faith effort to inform and protect themself.
I'd make a lousy commie, I think.
