If we didn't bail a single company out..

[Newbomb]

..would it really be the end of life as we know it, or would a few already rich people simply lose their asses in the stock market? Pardon me, but I did drop economics in college. What's the worst thing that would really happen?

[thesource]

I think it would make certain people / businesses a little more accountable for their actions .

[Newbomb]

I think it would make certain people / businesses a little more accountable for their actions .




Well we certainly can't have any type of accountability around here. That would totally screw up our consequence free new millinium way of living!

[Mr. B]

I was wondering the same thing. Since when are certain people/businesses immune from failure?

[slow99]

There wouldn't be anything to post about in this forum.

[Sean88gt]

I can't imagine it being any worse then what they are setting us up for.

[TexasDevilDog]

The main problem is: until the bad loans are called what they are, bad, there will be no healing.

After Japan real estate bubble popped in 1989, the banks fought for years while not writing down the bad debt. The Japan market went down for 14 years.
http://en.wikipedia.org/wiki/Japanese_asset_price_bubble

So, do you want it fast and kill the bad banks or slow and easy for 10 years.

[AL P]

One of the big things that would happen is banks would be more risk averse and the credit markets would seize up to a near stand still. Much worse than they are now. Essentially no one would be able to borrow for anything even with great credit. That means no student loans, no new cars, no mortgages. If you can find a lender the interest rates will be astronomical. Both the mortgage and car businesses would disappear overnight because they depend on credit to operate. Credit cards could also possibly be rare. Home values would drop like a rock. Consumer credit finance for furniture, electronics and clothes would go away as well.

[TexasDevilDog]

One of the big things that would happen is banks would be more risk averse and the credit markets would seize up to a near stand still. Much worse than they are now. Essentially no one would be able to borrow for anything even with great credit. That means no student loans, no new cars, no mortgages. If you can find a lender the interest rates will be astronomical. Both the mortgage and car businesses would disappear overnight because they depend on credit to operate. Credit cards could also possibly be rare. Home values would drop like a rock. Consumer credit finance for furniture, electronics and clothes would go away as well.


Cliff notes: People would have to live within their means. Good point. I like it.

[Mr Majestyk]

With reduced tax revenue from sales following the drying up of credit Al mentioned, your cities and counties would start looking at significantly raising property taxes to make up the shortfall and the Great State of Texas would probably (gasp!) introduce an income tax.

[Bubbaearl]

you think you can weather a depression ? remember you farm at krogers . :D the fall out is the problem. but i want some real teeth in this thing. fewer alligator shoes in washington. people going to jail or getting fired and sued instead of collecting money. i dont want wimps in washington, i want rabid pit bulls.

[Cooter]

Cliff notes: People would have to live within their means. Good point. I like it.

and their means would constrict greatly due to loss of job availability. We're already very dependant on international goods and labor :(

[Slowhand]

There wouldn't be anything to post about in this forum.

What he said. I still think it would be the right move, but that's also easy to say as I sit on a computer in the middle of class, chatting away on the internet.

[90dfw]

With reduced tax revenue from sales following the drying up of credit Al mentioned, your cities and counties would start looking at significantly raising property taxes to make up the shortfall and the Great State of Texas would probably (gasp!) introduce an income tax.

if i remember correctly it is prohibited by the Texas Constitution...While one could possibly be introduced it would have to be ratified in a statewide referendum to take effect. Not to mention it would most likely be political suicide to the person introducing it.

[MadMax404m]

Cliff notes: People would have to live within their means. Good point. I like it.

Living within their means is one thing, living under a bridge because you cannot get a mortgage with your 80k a yr income for a $120k house is another.

[AL P]

Cliff notes: People would have to live within their means. Good point. I like it.

The side effect would be that a lot of people would lose their jobs in those industries that rely on financing. Then it would have a chain reaction throughout the economy. Unemployment would skyrocket.

While I agree that people should live within their means, only a fool would think we should throw a switch and make them do it overnight.

[88hatch5_0]

The side effect would be that a lot of people would lose their jobs in those industries that rely on financing. Then it would have a chain reaction throughout the economy. Unemployment would skyrocket.

While I agree that people should live within their means, only a fool would think we should throw a switch and make them do it overnight.


I could not have said it better myself!

[Nate]

Ok so we all know the economy is FUBAR'd right now...that a bailout may or MAY NOT be the right answer...and stocks jump 200+ points despite dismal economic future, and GE earnings/profit warning...How the fuck does this happen...I don't quite understand...

http://money.cnn.com/2008/09/25/markets/markets_newyork/index.htm?postversion=2008092510

[Sean88gt]

This entire situation is fucked either way you look at it.

[Vertnut]

Ok so we all know the economy is FUBAR'd right now...that a bailout may or MAY NOT be the right answer...and stocks jump 200+ points despite dismal economic future, and GE earnings/profit warning...How the fuck does this happen...I don't quite understand...

http://money.cnn.com/2008/09/25/markets/markets_newyork/index.htm?postversion=2008092510
Human greed...it's a bitch. :o

[Avery'sDad]

http://fedupusa.com/

[TexasDevilDog]

The side effect would be that a lot of people would lose their jobs in those industries that rely on financing. Then it would have a chain reaction throughout the economy. Unemployment would skyrocket.

While I agree that people should live within their means, only a fool would think we should throw a switch and make them do it overnight.

Japan played hide the losses too and their economy muddled for 14 years. I think for once we could learn from history, but maybe not this time.

[ayzo]

It's simple really, no matter what we do sooner or later the real market value of all that debt is going to be forced onto the market. It cannot be hidden and cannot be ignored because somewhere, somebody is either losing or gaining money (billions) and they aren't just going to sit around and take it up the ass because somebody can't cut the check.

So we are faced with two different options, the first one is a deflationary spiral, 1930's style which leads to jobs losses and collapsing prices and income across the board. The downside is that it's a swift kick to the nuts of American citizens but the upside it's one big hit and then in 3-4 years we can recover from it.

The second option is to try and inflate our way out of this 1970's style which leads to higher prices in the commodities (energy, food, metals) and a spike in interests rates. We still get job losses in some industries but not as many as with option #1. The downside is that it's a long and drawn out squeezing of your balls that you eventually surrender to when you can't keep up with inflation.

This isn't about saving the economy, it's about choosing your medicine so you can receive the cure.

[bcoop]

One of the big things that would happen is banks would be more risk averse and the credit markets would seize up to a near stand still. Much worse than they are now. Essentially no one would be able to borrow for anything even with great credit. That means no student loans, no new cars, no mortgages. If you can find a lender the interest rates will be astronomical. Both the mortgage and car businesses would disappear overnight because they depend on credit to operate. Credit cards could also possibly be rare. Home values would drop like a rock. Consumer credit finance for furniture, electronics and clothes would go away as well.



I was just talking to my mortgage broker earlier about this. He's got a client. Debt to income is next to nothing. No car note, one CC with a limit of $15k, balance is under $1000. Median score of 756. Trying to buy a $180k house, with 10% down. He can't find a bank to finance the guy. Unreal. I mean, I'll be the first to say that lenders need to be more careful about who they lend to, due to the situation "predatory lending" (HA, fucking HA, predatory my pasty white ass!) caused. However, it seems all these non performing sub prime loans have caused banks to go to the polar opposite of the way they've conducted business for the last 5-10 years. I feel bad for the guy.

[Nate]

I was just talking to my mortgage broker earlier about this. He's got a client. Debt to income is next to nothing. No car note, one CC with a limit of $15k, balance is under $1000. Median score of 756. Trying to buy a $180k house, with 10% down. He can't find a bank to finance the guy. Unreal. I mean, I'll be the first to say that lenders need to be more careful about who they lend to, due to the situation "predatory lending" (HA, fucking HA, predatory my pasty white ass!) caused. However, it seems all these non performing sub prime loans have caused banks to go to the polar opposite of the way they've conducted business for the last 5-10 years. I feel bad for the guy.
Well fuck me if I want a house...guess I'll have to get the 20% down...

[bcoop]

Well fuck me if I want a house...guess I'll have to get the 20% down...


My brother and sister are both in the mortgage and housing industry, and both claim that people are even having a hard time with 20% down. Maybe Nate or some of the other real estate/finance guys will chime in.

[Nate]

My brother and sister are both in the mortgage and housing industry, and both claim that people are even having a hard time with 20% down. Maybe Nate or some of the other real estate/finance guys will chime in.
I sent this link to Nate and he said I should just talk to his guy...he'd get me financed.

[Sean88gt]

I was just talking to my mortgage broker earlier about this. He's got a client. Debt to income is next to nothing. No car note, one CC with a limit of $15k, balance is under $1000. Median score of 756. Trying to buy a $180k house, with 10% down. He can't find a bank to finance the guy. Unreal. I mean, I'll be the first to say that lenders need to be more careful about who they lend to, due to the situation "predatory lending" (HA, fucking HA, predatory my pasty white ass!) caused. However, it seems all these non performing sub prime loans have caused banks to go to the polar opposite of the way they've conducted business for the last 5-10 years. I feel bad for the guy.

Same shit happened to us and is the reason we held off on building.

I tried to get a HEL based on roughly 95k of equity to do some improvements (shop building, extension on the current house, etc) and was shut down. My scores currently range from a low 70x to mid 73x depending on the report.

[bcoop]

I sent this link to Nate and he said I should just talk to his guy...he'd get me financed.



Nothing against Nate, but that's what they all say when they are trying to sell something. ;)


My broker is a family friend, and has no reason to lie. He's a stand up guy, and bent over backwards for us to save us a shit ton of money when we were buying. CTX Mortgage tried to fuck me with no lube. :eek:

[exlude]

Yes, life as we know it would change. Companies might learn a lesson and operate responsible and semi-morally. The rest of them would get what they deserve.

[Nate]

Nothing against Nate, but that's what they all say when they are trying to sell something. ;)


My broker is a family friend, and has no reason to lie. He's a stand up guy, and bent over backwards for us to save us a shit ton of money when we were buying. CTX Mortgage tried to fuck me with no lube. :eek:
Well I'm going to look at one home tonight on the way home...so if I realllllllllllly like it I might be able to tell you an answer by next week lo.

[AL P]

Japan played hide the losses too and their economy muddled for 14 years. I think for once we could learn from history, but maybe not this time.

I'm not real sure what your point is since the cause of this entire thing is marking assets to market in a very aggressive manner due to Sarbanes-Oxley. The Japanese problem was because they refused to do it fast enough.

[Avery'sDad]

I wrote to both Senators:

http://cornyn.senate.gov/public/index.cfm?FuseAction=Contact.ContactForm

http://hutchison.senate.gov/contact.cfm

[AL P]

I was just talking to my mortgage broker earlier about this. He's got a client. Debt to income is next to nothing. No car note, one CC with a limit of $15k, balance is under $1000. Median score of 756. Trying to buy a $180k house, with 10% down. He can't find a bank to finance the guy. Unreal. I mean, I'll be the first to say that lenders need to be more careful about who they lend to, due to the situation "predatory lending" (HA, fucking HA, predatory my pasty white ass!) caused. However, it seems all these non performing sub prime loans have caused banks to go to the polar opposite of the way they've conducted business for the last 5-10 years. I feel bad for the guy.

If you think this problem is bad now, just do like the sheeple on this site suggest and let everything fail.

[Vertnut]

Nothing against Nate, but that's what they all say when they are trying to sell something. ;)


My broker is a family friend, and has no reason to lie. He's a stand up guy, and bent over backwards for us to save us a shit ton of money when we were buying. CTX Mortgage tried to fuck me with no lube. :eek:
Is he a "broker", or does he actually work for the mortgage company. "Brokers" are becoming fewer and farther between. Most all mortgage companies are staying in-house with their money now.

[STANGGT40]

Nothing against Nate, but that's what they all say when they are trying to sell something. ;)


My broker is a family friend, and has no reason to lie. He's a stand up guy, and bent over backwards for us to save us a shit ton of money when we were buying. CTX Mortgage tried to fuck me with no lube. :eek:

my mom is buying a house currently and using a mortgage guy that amy has used for quite some time. she has 550ish credit scores, a foreclosure in '03, etc. and she's closing next week without an issue. also, one of my renters that has VERY bad credit was somehow able to close last friday on a new house from dr horton. these are likely fha mortgages, but i'm not 100% certain as i haven't heard all of the details on either of them.

[thesource]

This entire situation is fucked either way you look at it.

It sure is ..........

On a side note , there is a few bucks to be made playing the stocks right now . Its a fucking roller coaster ride right now .

[TexasDevilDog]

I'm not real sure what your point is since the cause of this entire thing is marking assets to market in a very aggressive manner due to Sarbanes-Oxley. The Japanese problem was because they refused to do it fast enough.

If the government pays $200,000 for a bad mortgage the people haven't made a payment in six month, that has a loan value of $200,000 on a house currently worth $150,000, then it will not make the mortgage worth $200,000. I am not sure how you think it will raise the value of the bad mortgages.

Fixing prices does not work. Ask any socialist county. Or just ask Nixon how well the price fixing in the 1970's worked.

[bcoop]

Is he a "broker", or does he actually work for the mortgage company. "Brokers" are becoming fewer and farther between. Most all mortgage companies are staying in-house with their money now.



He's a broker, which means he's not tied to any one company.

[Vertnut]

my mom is buying a house currently and using a mortgage guy that amy has used for quite some time. she has 550ish credit scores, a foreclosure in '03, etc. and she's closing next week without an issue. also, one of my renters that has VERY bad credit was somehow able to close last friday on a new house from dr horton. these are likely fha mortgages, but i'm not 100% certain as i haven't heard all of the details on either of them.
They would almost have to be FHA or maybe VA mortgages. Conventional options are very tough.

[bcoop]

If you think this problem is bad now, just do like the sheeple on this site suggest and let everything fail.



Quite honestly, I think they SHOULD fail. I think instead of multi million dollar parting packages for the fucking idiots that ran these companies in to the ground, we should be handing out prison sentences. I just don't think a bailout is going to fix anything. I am realistic though, and know that no bailout means we're fucked. At the same time, the flip side if we do bail them out is, we're fucked. It's lose/lose, no matter how you look at it.

[STANGGT40]

They would almost have to be FHA or maybe VA mortgages. Conventional options are very tough.

i'm pretty certain that my mom's is an fha deal but i don't know about the old renters...they went through dr horton's mortgage people, so i only know that they were able to close. i was in shock through the entire deal, and they actually told me that their scores were in the 400's...i don't know if that's true or not.

[bcoop]

but i don't know about the old renters...they went through dr horton's mortgage people, so i only know that they were able to close. i was in shock through the entire deal, and they actually told me that their scores were in the 400's...i don't know if that's true or not.



Yeah, I remember your post about it a few weeks back. That's just insane. Maybe that lender isn't one of the ones in shambles, so they haven't learned their lesson yet? Who knows? I'm just glad I bought when I did (2ish years ago), because I'd be fucked if I was trying to buy a house right now.

[STANGGT40]

Yeah, I remember your post about it a few weeks back. That's just insane. Maybe that lender isn't one of the ones in shambles, so they haven't learned their lesson yet? Who knows? I'm just glad I bought when I did (2ish years ago), because I'd be fucked if I was trying to buy a house right now.

the only thing that i can think of is that dr horton is going to hold their mortgage until they can sell it to someone else...i know that they're not moving very many houses, so they might be willing to do something like that to make some sales.

[AL P]

If the government pays $200,000 for a bad mortgage the people haven't made a payment in six month, that has a loan value of $200,000 on a house currently worth $150,000, then it will not make the mortgage worth $200,000. I am not sure how you think it will raise the value of the bad mortgages.

Fixing prices does not work. Ask any socialist county. Or just ask Nixon how well the price fixing in the 1970's worked.

What is this price fixing you are talking about? Nobody is fixing the price of anything. These assets have been marked to market.

And the government is not going to pay face value for the securities. They are going to pay $.20-$.60 on the dollar. So that $200,000 mortgage is going to be bought for $40K-$120K. The fact of the matter is that the securities have taken a hit because there is no market for them, they can't be sold. The future income stream is intact though. It's not like default rates are 30% on mortgages in this country and no one is paying, even in the worst markets in the country you are only seeing 1 foreclosure for every 100 homes. It's a problem with current market value, not present value of future cash flows. Even Dave Ramsey understands this.

[AL P]

Quite honestly, I think they SHOULD fail. I think instead of multi million dollar parting packages for the fucking idiots that ran these companies in to the ground, we should be handing out prison sentences. I just don't think a bailout is going to fix anything. I am realistic though, and know that no bailout means we're fucked. At the same time, the flip side if we do bail them out is, we're fucked. It's lose/lose, no matter how you look at it.

The dickheads are going to get millions of dollars any way this thing goes down. In fact many of them already have millions of dollars and don't give a shit what happens either way. Welcome to the world of elitist high finance.

Buying the debt is a fucking terrible idea. Doing nothing is even worse.

[AL P]

the only thing that i can think of is that dr horton is going to hold their mortgage until they can sell it to someone else...i know that they're not moving very many houses, so they might be willing to do something like that to make some sales.

I'm not sure how much capital DR Horton has but I suppose it is possible that they would do this and become the lender in order to move houses.

[bcoop]

I'm not sure how much capital DR Horton has but I suppose it is possible that they would do this and become the lender in order to move houses.



Especially when you've got tons of houses sitting empty, because financing fell through, or any other number of various reasons. I know as a builder, I'd rather carry the note on a home than let it sit empty and cost me in taxes and upkeep. Fuck it, why not profit the interest?

[AL P]

Especially when you've got tons of houses sitting empty, because financing fell through, or any other number of various reasons. I know as a builder, I'd rather carry the note on a home than let it sit empty and cost me in taxes and upkeep. Fuck it, why not profit the interest?

Well, sure. And if they miss a payment you get the house back.

[AdamLX]

I was just talking to my mortgage broker earlier about this. He's got a client. Debt to income is next to nothing. No car note, one CC with a limit of $15k, balance is under $1000. Median score of 756. Trying to buy a $180k house, with 10% down. He can't find a bank to finance the guy. Unreal. I mean, I'll be the first to say that lenders need to be more careful about who they lend to, due to the situation "predatory lending" (HA, fucking HA, predatory my pasty white ass!) caused. However, it seems all these non performing sub prime loans have caused banks to go to the polar opposite of the way they've conducted business for the last 5-10 years. I feel bad for the guy.

Only reason he's probably getting shot down is because he's trying to go stated income. From what you mentioned he more than meets the usual criteria barring any credit issues in the last 5 years or so.

And a lot of people miss that Texas is backwards when it comes to HEL (Home Equity Loans). You cannot finance more than 80% of your home's value when pulling equity out.

[centexchick]

One of the big things that would happen is banks would be more risk averse and the credit markets would seize up to a near stand still. Much worse than they are now. Essentially no one would be able to borrow for anything even with great credit. That means no student loans, no new cars, no mortgages. If you can find a lender the interest rates will be astronomical. Both the mortgage and car businesses would disappear overnight because they depend on credit to operate. Credit cards could also possibly be rare. Home values would drop like a rock. Consumer credit finance for furniture, electronics and clothes would go away as well.

So, kids would have to work harder to possibly get a scholarship or their parents would have to prepare so the kids could go to college. The multitude of car dealerships would be brought under control. People would have to think smartly before spending money, hey now that is a thougt. Credit cards have ruined too many people anyways. And if the people can not afford to buy your clothes without a credit card then they should just stick to Goodwill.

[Muffrazr]

So, kids would have to work harder to possibly get a scholarship or their parents would have to prepare so the kids could go to college. The multitude of car dealerships would be brought under control. People would have to think smartly before spending money, hey now that is a thougt. Credit cards have ruined too many people anyways. And if the people can not afford to buy your clothes without a credit card then they should just stick to Goodwill.


Your logic is not required here. Back to the dungeon, slave!

[AL P]

So, kids would have to work harder to possibly get a scholarship or their parents would have to prepare so the kids could go to college. The multitude of car dealerships would be brought under control. People would have to think smartly before spending money, hey now that is a thougt. Credit cards have ruined too many people anyways. And if the people can not afford to buy your clothes without a credit card then they should just stick to Goodwill.

I agree about the credit cards. The car business would be a disaster for the overall economy though. Just a total disaster.

[Slammy]

Quite honestly, I think they SHOULD fail. I think instead of multi million dollar parting packages for the fucking idiots that ran these companies in to the ground, we should be handing out prison sentences. I just don't think a bailout is going to fix anything. I am realistic though, and know that no bailout means we're fucked. At the same time, the flip side if we do bail them out is, we're fucked. It's lose/lose, no matter how you look at it.


EXACTLY, the government is not here to protect a PRIVATE business. The job is to serve the PEOPLE, not the corporations. Thats the damn problem now, the corporations now are just as bad as the church was back when this country was founded by having their hands all in the government.

They should let the companies fold since its their fault. Sure alot of people are going to lose money, especially the greedy rich fucks that ran it into the ground. That will teach them a lessson, matter of fact, they need to be investigated for fraud and thrown into prison for life. If there was mass fraud going on then its time for the government to take all these peoples assests to pay the taxpayers back for having to bailout them out in the first place. The idea of the government backing anything up is a very bad idea i bet will only make people take more advantage.

Rich people used to get rich by being good business men, seems the norm nowdays is to get rich by screwing somebody or something, makes me sick. What happened to morals and love for your country? Oh wait, they are pushing this global economy shit now and they make more money in other parts of the world....great news for the country that made them wealthy in the first place. Sellouts.

[AL P]

EXACTLY, the government is not here to protect a PRIVATE business. The job is to serve the PEOPLE, not the corporations. Thats the damn problem now, the corporations now are just as bad as the church was back when this country was founded by having their hands all in the government.

They should let the companies fold since its their fault. Sure alot of people are going to lose money, especially the greedy rich fucks that ran it into the ground. That will teach them a lessson, matter of fact, they need to be investigated for fraud and thrown into prison for life. If there was mass fraud going on then its time for the government to take all these peoples assests to pay the taxpayers back for having to bailout them out in the first place. The idea of the government backing anything up is a very bad idea i bet will only make people take more advantage.

Rich people used to get rich by being good business men, seems the norm nowdays is to get rich by screwing somebody or something, makes me sick. What happened to morals and love for your country? Oh wait, they are pushing this global economy shit now and they make more money in other parts of the world....great news for the country that made them wealthy in the first place. Sellouts.

Preventing a complete breakdown of the credit markets in this country doesn't serve the people's interests?

[TexasDevilDog]

Credit cards could also possibly be rare. Home values would drop like a rock. Consumer credit finance for furniture, electronics and clothes would go away as well.

The credit market is not siezed up yet. I applied for a CC last week to test the market. I got another $12K. Now up to $75K in CC I am not using. :rolleyes:

I'll throw it in the shreader.

[AL P]

The credit market is not siezed up yet. I applied for a CC last week to test the market. I got another $12K. Now up to $75K in CC I am not using. :rolleyes:

I'll throw it in the shreader.

Yes, that's right. Because that is totally what I was saying, that credit card lending was seized up right this very moment.

[bcoop]

The credit market is not siezed up yet. I applied for a CC last week to test the market. I got another $12K. Now up to $75K in CC I am not using. :rolleyes:

I'll throw it in the shreader.



Jesus. He said it "could possibly be rare".


Reading Comprehension>You

[bcoop]

The credit market is not siezed up yet. I applied for a CC last week to test the market. I got another $12K. Now up to $75K in CC I am not using. :rolleyes:

I'll throw it in the shreader.



Jesus. He said it "could possibly be rare".


Reading Comprehension>You

[TexasDevilDog]

Jesus. He said it "could possibly be rare".


Reading Comprehension>You

So we need to screw over the value of the dollar on a rare chance. :rolleyes:

[bcoop]

So we need to screw over the value of the dollar on a rare chance. :rolleyes:



I don't know if you've been paying attention or not, but the value of a dollar has been screwed for some time now. ;)

[tazz007]

So, kids would have to work harder to possibly get a scholarship or their parents would have to prepare so the kids could go to college. The multitude of car dealerships would be brought under control. People would have to think smartly before spending money, hey now that is a thougt. Credit cards have ruined too many people anyways. And if the people can not afford to buy your clothes without a credit card then they should just stick to Goodwill.

Hummmmm. Kinda like the late 70's early 80's? We seemed to have survive that one too.

And I agree. They make the big bucks taking risks, they all took too big of a risk and now there wanting the very people they made the big bucks from (us) to bail them out? Is it just me? Or is there something wrong with this picture? I don't remember the government offering me a helping hand when I fell on hard times 11 years ago.

[FreightTrain]

I agree about the credit cards. The car business would be a disaster for the overall economy though. Just a total disaster.


I find it hard to beleive that anyone with a decent credit score meaning 650+ and 2k cash in their pocket for a down payment can't walk into a dealership tomorrow and buy a new car. Granted the folks with sub 600 credit scores and 9k in negative equity are shit out of luck, but the truth is these bastards shouldn't have ever been given a car loan to begin with. If the car industry based their business model on these dead beat borrowers than the industry deserves to fail. Just like Country Wide and all the other mortgage lenders.


<------Ducks behind the bushes because I just described 80% of the dfwstangs members.

[99_lightning]

Got approved for a credit card today for 19k with 0% for 12mo. People who have taken care of their credit can still get loans.

As for as mortages...you can still have crappy revolving credit and get a loan with 2.25% down with a very good 30yr fixed rate. If you don't have the down payment, get a cheaper home or don't get one at all. Just cause you have good credit doesn't mean you can manage a mortgage.


I'm sure Adamlx can back this....but as little as 12 months ago, when this "crisis" had already started, you could still get SISA (stated income & assets, without verification) or NINA (no income or assets required to be listed at all) home loans with as low as a 660 FICO. This means you could list whatever you wanted to on a 1003 Mortgage Application. In some cases, you didn't have to list anything but your name, social, and employer.

Just 12 months ago, homeowners (not in Texas) could still get a 2nd mortgage up to 100% of their homes value with no income/asset verification or appraisal........that is rediculous under the best economic times IMO.

People are at fault for being irresponsible with their money and credit and gambling on home values...

but keep in mind, the banks typically don't set the underwriting quidelines...Fannie and Freddie do. So who's really to blame??

I'm sorry but credit was way too easy to get for way too long, but that doesn't mean that the tax payers should have to bail out those who gambled or those individuals and companies that miss-managed thier money and cash flow.

Just my .02

[centexchick]

Your logic is not required here. Back to the dungeon, slave!

Logic?? What is this that you speak of? I am all woman, there is no logic between these ears! :D

[AL P]

Good lord, how many times do I have to say it? I'm not talking about credit conditions right now, I'm talking about what will happen with a lack of any sort of government action.

[Nate]

Good lord, how many times do I have to say it? I'm not talking about credit conditions right now, I'm talking about what will happen with a lack of any sort of government action.
What the fuck do you know about markets or credit...god Al...mr know it all.

[46Tbird]

Hey Alan, I got approved for an unsecured $1M loan a couple years back... so you're a stupidhead.

[AL P]

I find it hard to beleive that anyone with a decent credit score meaning 650+ and 2k cash in their pocket for a down payment can't walk into a dealership tomorrow and buy a new car. Granted the folks with sub 600 credit scores and 9k in negative equity are shit out of luck, but the truth is these bastards shouldn't have ever been given a car loan to begin with. If the car industry based their business model on these dead beat borrowers than the industry deserves to fail. Just like Country Wide and all the other mortgage lenders.


<------Ducks behind the bushes because I just described 80% of the dfwstangs members.

Yea, who is going to finance it? The dealership? The car company? You think they are going to tie up capital to make sure someone can buy a car? And even if they were willing, how much money do you think they have?

When I bought my truck from Dodge it was financed by Chrysler. Then Capital One Auto Finance bought that note. What if no one wanted that note from Dodge? Or what if they were willing to buy it but they'd only pay for it if Dodge fucked you for a 13% rate in order to give them some measure of comfort? I'm sure you will laugh and say 13% shit that's not possible. Dig up the prime rate from 1982.

[AL P]

What the fuck do you know about markets or credit...god Al...mr know it all.

Yes, you would think I had borrowed $400 million over the past 5 years or something with the way I talk. But what the fuck do I know, I'm just another jack off who took a few hours at a junior college.

[46Tbird]

I'm sure you will laugh and say 13% shit that's not possible. Dig up the prime rate from 1982.My parents bought an '86 Thunderbird with a 9.5% interest rate, lmgdao.

[FreightTrain]

Yea, who is going to finance it? The dealership? The car company? You think they are going to tie up capital to make sure someone can buy a car? And even if they were willing, how much money do you think they have?

When I bought my truck from Dodge it was financed by Chrysler. Then Capital One Auto Finance bought that note. What if no one wanted that note from Dodge? Or what if they were willing to buy it but they'd only pay for it if Dodge fucked you for a 13% rate in order to give them some measure of comfort? I'm sure you will laugh and say 13% shit that's not possible. Dig up the prime rate from 1982.


The entire sub prime credit markets are toast and that is bringing down alot of lenders, but the fact remains you can still finance a car and house and not get bent over if you have decent credit and money in the bank. Two different couples closed on brand new houses on my street today and there will be other people closing on houses and buying cars tomorrow. The world will not end. This whole notion that people and business' can't or won't be able to get credit is almost commical and brought on by the media. What they forget to tell you is the only folks that won't get credit are the ones that don't deserve it to begin with, but who am I kidding. This is America where everyone is entitled to everything.

[Nate]

The entire sub prime credit markets are toast and that is bringing down alot of lenders, but the fact remains you can still finance a car and house and not get bent over if you have decent credit and money in the bank. Two different couples closed on brand new houses on my street today and there will be other people closing on houses and buying cars tomorrow. The world will not end. This whole notion that people and business' can't or won't be able to get credit is almost commical and brought on by the media. What they forget to tell you is the only folks that won't get credit are the ones that don't deserve it to begin with, but who am I kidding. This is America where everyone is entitled to everything.
Did your union rep inform you everything was going to be ok?

[Nate]

Yes, you would think I had borrowed $400 million over the past 5 years or something with the way I talk. But what the fuck do I know, I'm just another jack off who took a few hours at a junior college.
Jr college ain't shit ...UTA bitch!

[slow99]

*cough*
(regarding the train accident)
Yeah I work in the industry, but I don't know what I'm talking about. :rolleyes: You don't see me posting telling you how to do your job or what practice's go on inside your industry.

[Nate]

*cough*
(regarding the train accident)
Jodi 1
Freightrain 0

[FreightTrain]

*cough*
(regarding the train accident)


Please show me where a person with good credit can't buy a car or house. :rolleyes: Everytime I walk into my credit union I'm asked if I'd like to open a credit card, line of credit, home equity loan, or finance or refinance a car with them.

[TexasDevilDog]

Please show me where a person with good credit can't buy a car or house. :rolleyes: Everytime I walk into my credit union I'm asked if I'd like to open a credit card, line of credit, home equity loan, or finance or refinance a car with them.

I have a friend at work that is buying a house. The seller accepted the offer Friday. He said that he will be closing in two weeks. He contacted the mortgage company today and asked if the loan was going to be funded. They said yes.

[AL P]

The entire sub prime credit markets are toast and that is bringing down alot of lenders, but the fact remains you can still finance a car and house and not get bent over if you have decent credit and money in the bank. Two different couples closed on brand new houses on my street today and there will be other people closing on houses and buying cars tomorrow. The world will not end. This whole notion that people and business' can't or won't be able to get credit is almost commical and brought on by the media. What they forget to tell you is the only folks that won't get credit are the ones that don't deserve it to begin with, but who am I kidding. This is America where everyone is entitled to everything.

I'm not sure if you can't read or what is going on here. I just said that without government action the state of the credit markets will deteriorate. I'm not talking about now or tomorrow, I'm talking about six months from now.

[AL P]

I have a friend at work that is buying a house. The seller accepted the offer Friday. He said that he will be closing in two weeks. He contacted the mortgage company today and asked if the loan was going to be funded. They said yes.

Well, you can count on that! A phone call is as good as a check in his hand.

[5.0_CJ]

Please show me where a person with good credit can't buy a car or house. :rolleyes: Everytime I walk into my credit union I'm asked if I'd like to open a credit card, line of credit, home equity loan, or finance or refinance a car with them.

It's a little more complicated than that. It's not like this crunch is going to specifically effect certain lenders. It impacts the whole industry. The real danger here is not certain lenders dropped, the real risk here is losing consumer confidence. There reaches a point where shareholders simply don't trust the markets anymore and stop buying. Then, regardless of what those companies do, and what wall street does you can't recover in a respectable amount of time. That's why there is all this rushing.

[TexasDevilDog]

Well, you can count on that! A phone call is as good as a check in his hand.

I'll let you know if I don't get paid this week due to my employer not being able to borrow to pay me.

[AL P]

I'll let you know if I don't get paid this week due to my employer not being able to borrow to pay me.

I can tell they won't have any problem making your paycheck.

[FreightTrain]

I'm not sure if you can't read or what is going on here. I just said that without government action the state of the credit markets will deteriorate. I'm not talking about now or tomorrow, I'm talking about six months from now.


The bottom line is banks need to loan money more than borrows need to borrow it. Yeah I said it and most will argue this point, but when shit goes really bad American's aren't going to care about what kind of car they drive or what brand clothes they are wearing. Truth of the matter is I don't owe anyone a penny outside of my mortgage. I have a 30 yr fixed mortgage at 6.25% and I could give two shits if some wallstreet banker has to blow his brains out cause he can't face the music or some idiot loses his house that he couldn't afford. It comes down to me being almost 100% liquid and I have a pile of cash so let the shit fly. I'm ready to roll and I'm looking for some deals.

My great uncle who was a great business man always told me this. In every generation there comes a time when hardships will create millionaires. You just have to be ready when the time comes and play the aces you've been holding.

[TexasDevilDog]

I can tell they won't have any problem making your paycheck.

And seeing how I don't live like a baller, I will be fine. Even if there was a depression and I lost my job, 40% of my investments would pay off my house.

[Nate]

The bottom line is You telling everyone what the bottom line regarding finances (especially to people like Jody and Alp) is like me telling you the bottom line on how to run a train. Stick to shit you know or what your union rep tells you that you know.

[AL P]

And seeing how I don't live like a baller, I will be fine. Even if there was a depression and I lost my job, 40% of my investments would pay off my house.

Good for you, I've compiled this exhaustive list of the people who give a shit about your personal situation:

[AL P]

The bottom line is banks need to loan money more than borrows need to borrow it. Yeah I said it and most will argue this point, but when shit goes really bad American's aren't going to care about what kind of car they drive or what brand clothes they are wearing. Truth of the matter is I don't owe anyone a penny outside of my mortgage. I have a 30 yr fixed mortgage at 6.25% and I could give two shits if some wallstreet banker has to blow his brains out cause he can't face the music or some idiot loses his house that he couldn't afford. It comes down to me being almost 100% liquid and I have a pile of cash so let the shit fly. I'm ready to roll and I'm looking for some deals.

My great uncle who was a great business man always told me this. In every generation there comes a time when hardships will create millionaires. You just have to be ready when the time comes and play the aces you've been holding.

Overnight LIBOR 6.88%

Go look up what LIBOR is, I'm not explaining it.

[TexasDevilDog]

Good for you, I've compiled this exhaustive list of the people who give a shit about your personal situation:

You seem to care, replying to everything I post.

Thanks for caring. :)

[AL P]

You seem to care, replying to everything I post.

Thanks for caring. :)

Care about your personal financial situation? Hardly.

Care about pointing out the ignorance in just about every one of your posts? Absolutely

[Big Thumper]

Maybe that AlP guy isn't so FOS after-all:)

http://news.yahoo.com/s/ap/20080930/ap_on_bi_ge/credit_markets

[AL P]

Maybe that AlP guy isn't so FOS after-all:)

http://news.yahoo.com/s/ap/20080930/ap_on_bi_ge/credit_markets

Nah. I couldn't be. I don't know shit. Anyone can get a loan for anything still right now so all is well. Call the engine room, I want flank speed going into this iceberg.

[FreightTrain]

Overnight LIBOR 6.88%

Go look up what LIBOR is, I'm not explaining it.



I understand that, but come on lets get real. Banks don't make payroll by charging $5 a month for every checking account they have so how long can they last without lending money. Although the over night interest rate is high right now I seriously doubt they will remain that high. Everything happends in waves and right now we are at the trough of the wave. Give it time and everything will settle in a happy medium and things will go up from there. The stock market is already up over 300 pts today and alot of folks are bargain hunting.

[Nate]

I understand that, but come on lets get real. Banks don't make payroll by charging $5 a month for every checking account they have so how long can they last without lending money. Although the over night interest rate is high right now I seriously doubt they will remain that high. Everything happends in waves and right now we are at the trough of the wave. Give it time and everything will settle in a happy medium and things will go up from there. The stock market is already up over 300 pts today and alot of folks are bargain hunting.
ok let me try something...

Do you remember when GM UNION workers went on strike (last year I believe) and GM was ok because of the fact they could sell of the inventory they already had and didn't have to pay wages and could just take in money from the inventory on hand they can sell off...


Banks already have loans out and are receiving payments (correct me if I'm wrong Al/Jody/01WC) but as they receive these payments their cash increases and the less they lend out the more money they have in cash on hand....and cash is key right now with the way the credit crisis goes. It goes MUCH deeper than this very simple point I'm trying to make...so much deeper I don't fully grasp it and there is a better chance of me fucking Jessica Biel tonight than you understanding how this works.

Yes banks will lend eventually but right now the lending pool is drying up, there are SOME loans to be out there, no one said it's completely done forever$!$!@#!$@

[AL P]

I understand that, but come on lets get real. Banks don't make payroll by charging $5 a month for every checking account they have so how long can they last without lending money.

Now you are thinking. How many loans can they can make on those $5 fees?

When a lender makes a loan they turn around and sell it in the debt markets. Much like my example above with my truck. I financed $32,500 on my truck through Dodge. They turned around and sold that note to Capital One at a discount. Let's say Capital One paid $30K for it (I have no idea how much they get). Dodge took the $30K and went on to the next deal, making another loan. That ability to sell the notes is what is in a state of question.

The debt market has gone away on subprime mortgages at the moment. The situation now is that the debt market COULD go away for other kinds of debt. Credit cards, auto loans, the better mortgages, etc. So, basically the bank has to make loans without the benefit of immediately cashing it in on the market and moving on to make the next loan.

You already know the answer to the question of how many loans they will make with their operating income....they aren't going to loan much at all. And that is where the seize up comes into play.

Now someone explain why the buyers of debt wouldn't be buying....

[barronj]

Al, I can't answer that question, but for all the guys running w/ blinders on...

Car dealers face the grim reaper (http://money.cnn.com/2008/09/30/autos/car_dealer_pain/index.htm?cnn=yes)
If you want to see how America's credit crisis is hitting the streets of your hometown, go to your local car dealer. Auto dealers depend on credit. They need it to run their stores and their customers need it to buy their products. From every angle, credit trouble hurts.

"I'm talking to dealers every day who are just hanging on," said Denny Fitzpatrick, Chairman of the California New Car Dealers Association and owner of Fitzpatrick Chevrolet Hummer in Concord, Calif.

There could be 300 to 400 fewer auto dealerships in America by the end of the year, predicted Paul Taylor, an economist with the National Automobile Dealers Association. In an ordinary year of economic growth, the industry adds 75 to 150 dealers, he said.

High gas prices that have turned buyers away from large trucks and SUVs - and all but obliterated Hummer sales - have hurt his business, but Fitzpatrick thinks tight credit is doing even more damage.

"We're seeing people with Beacon scores that are pretty darned good," Fitzpatrick said, "and the finance companies are just looking for reasons to turn them down."

Not every car dealer sees the situation as that dire. John McEleney, president of McEleney Autocenter in Clinton, Iowa and vice chairman of the National Automobile Dealers Association, says he understands that things are hard, but his business is holding up fairly well.

McEleney owns several dealerships and sells several General Motors brands as well as Hyundai and Toyota cars and trucks.

"Probably the most direct effect for me has been availability of retail financing for my customers," said McEleney.

So far his customers can still get auto loans, McEleney said, but they may need a bigger down payment.

"I wouldn't say it's that dramatic, yet," he said.

Fortunately for him, McEleney said, Iowa didn't experience the run-up in home prices other parts of the nation did, including California. That's means it hasn't experienced the home equity crash, either.

In most of the country, the collapse of the housing market has left consumers without the low-cost home equity loans that drove car sales in recent years. Also, the drain of home equity has left potential customers feeling poor, said NADA economist Paul Taylor. That, as much as the actual loss of low-interest credit, has hurt car sales.

[Nate]

Don't worry Freightrain is right...no reason to worry about lending/financing getting tougher to get.

http://money.cnn.com/2008/10/02/markets/bondcenter/credit_markets/index.htm?postversion=2008100212