personal responsibility

[kimba1]

I hear this term quite alot lately.
in fact alittle too much
the latest is the sub-prime loan situation
notice the nigerian scam actually works in tricking AMERICANS into giving money to them
what I`m getting at is ,it does seem americans are quite vulnerable to scams and tricks
and our culture to let people fall into them is not stopping it
the problem is this latest scam (sub-prime loans) is actually visibly hurting the economy
just saying their their stupid isn`t gonna work anymore.
the rest of the world is saying americans are stupid
we really don`t need to say it also

http://www.msnbc.msn.com/id/11770944/page/3/

this guy loves how stupid americans are

[Amianthus]

what I`m getting at is ,it does seem americans are quite vulnerable to scams and tricks

ARMs are not a "scam" or "trick." The maximum amount of rate change is disclosed before the loan is signed. The people signing failed to plan for the maximum rate change, and were therefore unprepared when the rates went up.

I had an ARM for my first mortgage. The year the adjustable rates into effect, I budgeted for a maximum rate increase, and did so again for subsequent years. Most years the rate change was less than I had budgeted, so it was not a problem. I've had more trouble with the property tax increases - they are not disclosed until just before they're put into effect. I've had one that was nearly $100 a month increase, with a three month notice.

[Xavier_Onassis]

Anyone should be prepared for an ARM to go up at the maximum rate, I agree. People do not read the terms of loans. I bet none of you has actually read the terms of all the credit cards you hold. Most are printed in 1 point type and are quite illegible.

It was only sport of a scam giving loans to people who clearly could not afford them, perhaps, but even more of a scam was packaging these loans into bundles and selling them to investors who were told that these were safe and secure loans when they clearly were not.

[kimba1]

well
you actually knew what your getting into
alot of these folks think they actually can afford to handle these loans
it`s double scam
getting people who shouldn`t get these loans approved and the lending institutions to go for it.
yesterday I heard in the radio of no bail-out for these people
I don`t see how that`s possible ,since this would mean the bank gets no money.
it`s not like these folks are gonna get a better income and be able to afford this

[Amianthus]

alot of these folks think they actually can afford to handle these loans
it`s double scam

But the payment amounts were disclosed to them before they signed. Just because they made a bad choice doesn't mean they were scammed. They were told "the payments might be as much as $X on date Y" and they agreed to it. This is not a "scam."

[kimba1]

thats the beauty of it
these are desperate people trying to get a home and are now more in debt.
ten years ago most of these folks would never been able to get these loans.
just saying "they should know better" is not working anymore.
I may of misspoke it`s a scam but that doesn`t stop the damage
I trying to point out this country has a vulnerbility to lose massive amount of money.
as you point out it this loan is pretty clear cut
but still it happens
a friend of mine said we need to teach street smart
I not sure she`s far off.

[Amianthus]

a friend of mine said we need to teach street smart
I not sure she`s far off.

People need to learn:

a) don't sign anything until you've read AND UNDERSTAND it.

b) how to budget their money.

That's really about it. Most of the people who are whining about being in financial trouble broke one or both of those.

[Xavier_Onassis]

A colleague of mine several years ago got an offer in the mail, saying she could refinance her home and thereby lower her payments and pay her house off sooner.

So she called them and signed the paperwork.

Then she asked me why it was that her payments were higher than before, and she noticed that she would have to make 360 of them.

Bring me the first mortgage papers and the new ones, and I will perhaps be able to tell you, I said. What they tell you is meaningless, only what you signed counts.
 
Of course, she didn't. They told her one thing and the terms on the papers were entirely different, so she screwed herself.

A lot of people just do not understand this. Like the ones that say that my investing in mutual funds is the same thing as their buying lottery tickets, another form of gambling.

[kimba1]

a friend got a e-mail about cutting his debt in half
I looked it up a found it that the service would assume all payments and collect directly from the debtor,but in reality the crook would take the money and the debtor will be left with still owing money with penalties
the promise of cutting debt can be quite alluring and make people careless

[crocat]

This amazes me.  The truth is not that they don't know how to be personally responsible...most choose NOT to be.  Oh yes, I understand there are the few exceptions were people get taken advantage of but for the most part we suffer from taking the easy way.

Teach your kids that the world owes them NOTHING and that if they want something it will take TIME and EFFORT.

It is a wicked spiral...live beyond your means and just get deeper and deeper in debt.  From there you will find that INSTANT gratification takes hold.. can't afford a vacation...well hell go shopping, buy something you don't need and then wrestle credit card debt that will never go away.

[kimba1]

you hit on something
my brother in-law brags about living beyound his means in the 80`s
I think we never out lived that kind of thinking and even made it worst
like people our not afraid of going bankrupt nowadays
in fact wants it,thinking it`s a get out of debt thing.
I mention several times we lost the ability to not spend
ex. if i said too broke to go on a trip
I will be told to charge it.
I don`t recall on tv ,movies,books this situation being address
we`re taught to spend ,but never save
p.s. my brother in-law did learn the error of his ways and is doing quite well now.

[Plane]

If I could predict the onset of high inflation , I could borrow large sums as an investment.

In the late 70's people with large mortgagues were sitting pretty , ARM's were a way for financhial institutions to cope with this.

[crocat]

funny you should mention this.... when we moved to Florida we decided to buy a house because I have to have a garden.  Because of our lifestyle change we no longer qualified for conformingterms (self employment with a brand new business) and went with one of those no doc teaser rates.  It didn't take an Einstein to know that given the regular fluxes in mortgage rates that we could quickly end up in a neg am situation.  True they promise our payment would only go up 7% (of the payment) per year...and that our interest rate would adjust monthly... but not to worry it could only go up 2% per year with a total cap of 9%.  The problem with that scenario is that it is human nature to buy the most they can afford at the time of purchase...in fact years ago it was preached to buy as much as you could afford because you would be paying it back with cheap dollars.  We nearly fell into that trap but common sense prevailed and we bought 1/2 of what we could afford and then made regular 30year am payments.  Luckily we got some time in on the self-employment so that we did qualify for a conforming loan when our adjusted rate mirrored the 30 year fixed rate.

Many people are having problems now and to add to that and because of that... the problem has worsened because the values are dropping and the appraisals in many areas are down 40% of what they were... this has caused many to be upside down on their loans.

Kinda reminds me of the big Savings and Loan stink way back when.  thinking mischievously...o 0 O wasn't there a bush involved in that...

lol.. sorry couldn't resist