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budget/dodd-frank


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as if anybody cares

the 2015 potential budget now in the congress has provisions to put the us taxpayer on the hook for failure of the derivitives market.that's right. it will come out your hides when the gambelers on wall street lose thier bets.

this provision was openly written by citi bank.

put another way, the bets that wall street makes will be covered by us. opinions?

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Wait until the last minute to pass a budget bill to get everybody worried.  Then, right before the vote put in a bunch of crap like this and hope it stays buried.  

 

There's also something about increasing the amount either people or corporations can donate to campaigns.  Because more money for them.  

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We're not being sold down the river because we're already hundreds of miles down the river.  Our elected officials on both sides continue to do whatever they please as long as it lines their pockets.  Separate from the budget is a push for both Fannie and Freddie to increase lending to low income would be home owners by requiring just 3% down.  The goal being to help first time home buyers who are strapped for cash to be able to purchase a house.  Pretty sure nothing could go wrong with that.   

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We're not being sold down the river because we're already hundreds of miles down the river.  Our elected officials on both sides continue to do whatever they please as long as it lines their pockets.  Separate from the budget is a push for both Fannie and Freddie to increase lending to low income would be home owners by requiring just 3% down.  The goal being to help first time home buyers who are strapped for cash to be able to purchase a house.  Pretty sure nothing could go wrong with that.  

 

Round 2 of the good ol Community Reinvestment Act put into play by Bill Clinton that wanted to create the same premise by getting lenders to create the exotic mortgage programs that caused the mortgage crisis.

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*** WARNING - OVERSIMPLIFICATION COMING UP ***

 

one of the big reasons for the financial mess in 2008 was guys making $40k a year buying a house for $530k and then defaulting on the mortgage. both the banks/lenders and the guys overextending themselves were at fault. and now with this bill, we're right back there again.

 

this last minute bill is going to screw people.

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so after nearly destroying the entire worlds economic system, wall street continues to be allowed to print thier own money. with absolutely no corporate or personal liability. better yet, the liability for failure is legally transferred to the us taxpayer.

did these people and our government think that what happened in 2009 was ok? 

i truly wish there was some kind of solution i could offer to this out of control greed. will they be satisfied after they steal all our pensions, 401k's and other retirement instruments? probably not.

the only positive (very weak) that i can come up with is that ultimately none of us will have any money left- the governments tax base will be completely destroyed thereby collapsing this system of unchecked greed.

 

apologize for the rant.

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Ironically, with your question about checking from the mortgage crisis it came in the form of the dodd-frank act. It put me out of business overnight. It was new regulations that checked and put the onus on everyone but wall street and the big banks.

im sorry you got put out of business. nobody deserves to lose thier livelyhood.

and dodd/frank itself appeared to me to be nothing more than red tape nonsense that  ( to my great surprize)  kept wall street away from our tax dollars, i guess.  again, sorry for your loss.

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It was a knee jerk reaction and blowback response to the mortgage collapse/financial crisis.

Something of this magnitude, someone or something had to be blamed. There needed to be some recourse and politicians unfamiliar with the industry decided to make changes because they thought a total overhaul was needed instead of fixing the root of the problem....the initial loan programs being allowed to hit the floor.

You can't blame the banks because they line the politicians pocket books and you can't blame the voters, who signed paperwork saying they made 90k a year as a teacher or janitor. So blame the workers facilitating between the two and revamp their process.

It sucked to close down, but it was my choice. Maybe I should have looked for loopholes and ways to make my program work...it was possible, just a ton of work and a lot less money. No need to apologize, my family has been in the industry since I was a kid and knew growing up it's cyclical and definitely not something that should be guaranteed...I actually created the company expecting an end at some point. Not that end, but the market always changes or alters and people need to adjust. This was just too dramatic of a change to adjust to. I will say it was a great run though. I actually made the most during the recession and when everyone closed down because I did business the right way, even adjusting to dodd-frank was some of my highest pay periods for my loan officers, it just wasn't sustainable from an ownership perspective and as a one man show I didn't have the resources to properly adjust like the bigger brokerages nor did I want to with the changes instituted.

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  • 3 weeks later...

*** WARNING - OVERSIMPLIFICATION COMING UP ***

 

one of the big reasons for the financial mess in 2008 was guys making $40k a year buying a house for $530k and then defaulting on the mortgage. both the banks/lenders and the guys overextending themselves were at fault. and now with this bill, we're right back there again.

 

this last minute bill is going to screw people.

 

There was a lender based out of WA State named Millennium Funding Group that during the heyday of the housing bubble would write NINA loans up to 1.5 Mil..   NINA being "No Income, No Assets" -- basically, people put their name, address, and credit score, then BOOM, they got their house after the appraisal.   There were some really crazy lenders out there.

We were strictly an A paper outfit that focused on people purchasing homes rather than the refi market where all the crazy money was...  As such we were sticklers for documentation and our appraisers ran really tight comps... Anyway when it started to get ugly we sold off, closed our warehouse lending lines and called it a day knowing we had done it right.... I think our company's final number of unsold loans on the secondary market was under 2% which was pretty much unheard of in those days..   Now, having said that, I can't tell you how many times I lost potential A paper clients to Sub-Prime lenders and mortgage outfits willing to go with the lax rules of the day.   Were those companies greedy?  You bet, but the consumers more often than not sought out that market.   We often put people into really good loans only to have them come back within a year looking to try to cash out some equity so the wife could get a boob job and the family could go on vacation to Ibiza -- stuff we just wouldn't do....

 

Most annoying thing ever in those days ..  having people we had put in 30 year fixed loans calling me back to tell me we were crooks because they had refinanced out of out loan into a "great new loan where they only had a 2% interest rate".   I wonder how many of those peeps who traded out of the security of a 30 year fixed into a Neg Am loan lost their homes.  

Edited by Inside Pitch
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IMO, putting "the taxpayer on the hook" for failure of the derivatives market means "bail in".  These derivatives are held by the largest banks.  Also, IMO this wouldn't have been brought up as an issue if the derivative market was healthy.  Maybe the Cyprus-bail in was simply a test run.   I believe they are not above raping your bank account if needed.   If a bail-in ever happened the dow would plummet terribly.  In the past few years The BRIC nations have slowly been trying to move away from the dollar  as the world reserve currency. I can see why.

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