by Pops » Sat 16 Oct 2010, 13:44:32
Personally I don't think there is a Cabal somewhere pulling the strings. There are people/institutions which benefit from this law, that loophole, a certain regulatory oversight (or oversight) and on and on. Just like there are regular people who benefited from RE appreciation and from the same lax standards everyone else did except the people left without a spot when the music stopped. Granted, the vested interests in a particular area will certainly work the angles as much as possible to their benefit.
But what it boils down to is, if you aren't careful you get gypped, it's just that simple.
I'm kind of a bleeding heart, I think gov needs to make sure everyone gets a fair shake, to some extent see to it that the powerful don't take advantage of the little guy and that we all have an equal ability to take it to the judge. But in the end it doesn't matter how many laws there are in place to protect you, if you don't understand what you are getting into, you have no business signing on the line. If you've never seen the stack of disclosures, endorsements, inspections and forms needed to complete a real estate deal in CA you may not understand the extent government goes to to try to keep people safe from themselves - and it just doesn't always work - obviously.
Back before the S&L Crisis people were taking out negative amortization, adjustable rate loans - the balance goes UP not DOWN for years but they were just happy as clams because they thought they'd never qualify for a home loan! Then a few years later they realized they couldn't make the payment and they owed more than the house was worth. It happened to several people we know.
And this time around too, I know at least two people who were in my opinion guilty of stupidity if not fraud but at the least were complicit in the whole scam. One person used the "stated Income" method, entering the amount he needed to earn (the amount the broker told him to) instead of what he did make; the other entered the amount of income he actually made on the application but when it came back from the broker the amount was higher and he signed anyway. Both are renters today.
It didn't take a big conspiracy to make the whole thing blow up (or crash dow) it just took a whole lot of people looking out for their own interests and wearing their rosy glasses 24/7. The pols had a good economy, stupid; the RE & finance & insurance industry was making a fortune; anybody involved in consumer goods from cars to pools to furniture to vacations was making big bucks; even the people who wound up with the shredded paper suspended their judgement just enough to believe that mortgages were 100% safe and housing prices would, for the first time in history, continue to rise forever - and of course the consumer was right at the center of the whole scam, willingly.
Actually, on second thought, maybe there is a cabal pulling the strings, it's all of us.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)