i don''t see anything wrong with housing price going down...

[Allisonfaye]

Date: 3/5/2009 5:21:09 PM
Author: purrfectpear

Date: 3/5/2009 5:09:01 PM
Author: Allisonfaye

So where do you go when you get kicked out?

Pretty much any place I want to. Why, are you inviting me over?

FWIW, you don''t get ''kicked out''. That''s media crap you see where people ignored all the signs praying for a miracle. You will get ample notice. The Sheriff''s office will post a notice of sale. In California, from the notice you have 31 days until the auction. Then assuming it actually sells to a new bidder, you would get 30 days notice to vacate after the auction. If you really didn''t feel like leaving, you could wait for a formal eviction which would start after the 30 days, and give you another 21 days before they could legally change the locks.

I''m simply waiting for the sale, and then I''m moving into a nice apartment complex.

Yes, please DO stop by. Maybe you can advise me on my investment portfolio that is pretty much in the toilet.

Mara: Congratuations on your new house and good luck selling the old one.

I want to comment on a couple of things. First of all, I keep seeing many people comment on ''what was being done to THIS country". This housing mess (the stupid loans, the house flipping, the securitization of those mortgages, has not just brought down our country. It has brought down the WORLD. If you think people hated this country before, can you imagine how they feel about us now? I hate us. I hate what we have done to the world.

And in response to Mara''s comments about people who are secure in their jobs and have money in the bank being scared and they shouldn''t be, don''t be so sure. Two years ago, we looked pretty solid...on paper. We were sitting on a nice amount of company options and we watched (due to blackout selling requirements and so forth) our options go to $0 as I am sure that many people did. My husband is in finance and I have watched the stock go from $63 to $15 and IF the company survives, we might be ok but if they don''t, we could lose our home, too.

 

[MaggieB]

I feel your pain Allison. My company rewarded my performance with stock options at $31 per share. Today that stock traded last at .68 per share. My bonuses from an 8 year career are wiped out and so is my 401K. I hope things work out for you.

 

[tradergirl]

Allisonfaye: If your company recovers and your options get repriced, never forget this time and have your broker collar your stock or use some kind of protective strategy such as long puts against it. I had some friends in SValley in the 2000 era whose net worth was entirely in Cisco or Sun or whatever tech company they were with who did that and while it didn''t totally shield the down move, they did escape with some money.

 

[tradergirl]

Maggie: was your stock restricted?

 

[Dancing Fire]

Date: 3/5/2009 5:55:44 PM
Author: tradergirl
Allisonfaye: If your company recovers and your options get repriced, never forget this time and have your broker collar your stock or use some kind of protective strategy such as long puts against it. I had some friends in SValley in the 2000 era whose net worth was entirely in Cisco or Sun or whatever tech company they were with who did that and while it didn't totally shield the down move, they did escape with some money.

put what,where,how ?? too late now if her stock is only trading at 68 cents.

 

[steph72276]

We are in the same boat. Hubby gets restricted stocks every year as part of his compensation. They went from $50 a year and a half ago to $9 today. But it is a strong company and I feel that it will come back. Maybe not quite to that point, but I truly believe it will come up. You haven''t really lost any money until you sell it.

 

[MaggieB]

Date: 3/5/2009 5:56:27 PM
Author: tradergirl
Maggie: was your stock restricted?

Yes it was.

 

[purrfectpear]

Seriously good luck to you both. I can''t imagine the horror of having your 401K reduced by more than half

I had a "feeling" last year and that was all it was (as I''m for sure no financial Wall Street wizard) and I moved my 401K and other savings out of the market Feb 08. It was painful at the time because I was about 15% down and I moved my 401K into a guaranteed fund that was only paying 4 something, and the personal money into HYS. I thought I was being ridiculous, but things just seemed so volatile. Since then my company stock has dropped from $104 in mid 2007 to $29 today. It''s sad. Some of that drop was due to our performance but the majority is the market in general.

Hindsight is 20/20 but I have to say it was less painful taking the small loss, than it would have been to catch falling knives. People that didn''t bail must feel paralyzed now. No one would want to cash out and take a 50-70% loss. On the other hand, what if things get much worse? Will they wish they had cashed out in 2009?

I have a lot of faith in my company and it''s tempting to load up now at $29. Then I look at GM and think to myself, those employees had faith too. I don''t think anyone in America thought you could buy GM stock for less than the price of a gallon of gas.

I''m chicken. I may look back and think about the missed opportunity but I guess I''m more risk adverse than I thought.

 

[Beacon]

Date: 3/5/2009 6:05:18 PM
Author: steph72276
We are in the same boat. Hubby gets restricted stocks every year as part of his compensation. They went from $50 a year and a half ago to $9 today. But it is a strong company and I feel that it will come back. Maybe not quite to that point, but I truly believe it will come up. You haven''t really lost any money until you sell it.

This part of the thread sounds like Silicon Valley circa 2001. Everyone''s options went worthless. Company stocks went from $150/share to 2/share and often to zero! My husband still has many options now underwater that may not ever be worth anything. But we have sold them every year for 8 years, so it is a relief now.

As for the 401K it is down 15% this year so far and only doing that well cause much of it is in money market. Today I bought some SP500 index for it. Just a tiny bit.

There are some great companies for sale in the US stock market at prices that are very fair. On the other hand, maybe it''s all going to zero, in which case the currency won''t be worth much either so I guess it wouldn''t matter one way or the other what I bought or didn''t buy.

 

[Phoenix]

Date: 3/5/2009 8:21:31 PM
Author: purrfectpear
Seriously good luck to you both. I can't imagine the horror of having your 401K reduced by more than half

I had a 'feeling' last year and that was all it was (as I'm for sure no financial Wall Street wizard) and I moved my 401K and other savings out of the market Feb 08. It was painful at the time because I was about 15% down and I moved my 401K into a guaranteed fund that was only paying 4 something, and the personal money into HYS. I thought I was being ridiculous, but things just seemed so volatile. Since then my company stock has dropped from $104 in mid 2007 to $29 today. It's sad. Some of that drop was due to our performance but the majority is the market in general.

Hindsight is 20/20 but I have to say it was less painful taking the small loss, than it would have been to catch falling knives. People that didn't bail must feel paralyzed now. No one would want to cash out and take a 50-70% loss. On the other hand, what if things get much worse? Will they wish they had cashed out in 2009?

I have a lot of faith in my company and it's tempting to load up now at $29. Then I look at GM and think to myself, those employees had faith too. I don't think anyone in America thought you could buy GM stock for less than the price of a gallon of gas.

I'm chicken. I may look back and think about the missed opportunity but I guess I'm more risk adverse than I thought.

That's really great, PP, that you managed to avoid catastrophe. My investment philosophy has always been to "cut short your losses". We sold most of our stock portfolio during 2nd quarter last year and at the time they'd already gone down from their highs and I was feeling a little bit "remorseful", but boy am I glad now (we did actually manage to make profits of some 50-100% on our original purchase prices). For eg, we sold HSBC at abt GBP 8.30 (sold in two lots) and last night they closed at GBP 3.78! We'd have really cried, big time, as this is even less than what we paid for them. What we have left is a fraction of our overall stock portfolio which is making a loss but there's really not much we can do right now. We're prepared for further losses during the course of this year and perhaps next year, but we're hoping they'll go back up eventually, whenever that might be! I watched my brother and SIL "lost" about USD1m from sitting on his stock options for too long during the tech boom. They'd exercised half of his options, decided to sit and wait for the price to go up, except it never did.

Of course, the prices of our houses have gone down too, but ain't much we can do abt that right now. There's absolutely no buyer in the markets we're in.

I still wouldn't buy back in yet, into any market - equity or housing. I personally don't believe the time now or any time soon is right for going back in.

 

[Mara]

Thanks for the positive house wishes AF. Miss Linda, nope no pictures of the new digs...just still getting used to them and things the way we want them.

AF...also I def don''t think that people should not be scared at all. I think everyone is a little freaked...we are saving more too or trying to anyway what with 2 mortgages *cry*.

I am sure there''s a fair amout of stock and options tanked out there. I learned my lesson back in 2000 when we had the bust here in SV, it was horrible here. I am not interested in stock in any way, shape or form as a serious part of my life.

I have options as part of my job and as soon as they vest if they are in the $$ I am buying and selling in same day. If they aren''t worth anything, then oh well. I don''t consider them as part of my overall portfolio at all. If they pan out, it''s a ''bonus''. We treated Greg''s stock at his old company the same way, some gave us money and some didn''t. My Schwab portfolio from 2000 is still at about 1/1000 of what it was then. I almost forget I have it, whats the point?!

My bottom line re: spending is for those more comfortable...def be more cautious. But don''t tighten the purse strings so tightly that you can''t get a penny out. If everyone does that, it will just make it all worse. We still do about 1/2 of what we did before...we just try to be smarter about the spending.

And DF yes... you were a broken record each year. Credit..!

 

[Dancing Fire]

Date: 3/5/2009 8:21:31 PM
Author: purrfectpear
Seriously good luck to you both. I can''t imagine the horror of having your 401K reduced by more than half

I had a ''feeling'' last year and that was all it was (as I''m for sure no financial Wall Street wizard) and I moved my 401K and other savings out of the market Feb 08. It was painful at the time because I was about 15% down and I moved my 401K into a guaranteed fund that was only paying 4 something, and the personal money into HYS. I thought I was being ridiculous, but things just seemed so volatile. Since then my company stock has dropped from $104 in mid 2007 to $29 today. It''s sad. Some of that drop was due to our performance but the majority is the market in general.

you know what PP?
can you imagine the horror of taxpayers picking up your $400K mortgage tab?

sounds like you are very well off financially but you still chose to walk out on your mortgage.

 

[Dancing Fire]

Date: 3/5/2009 10:37:49 PM
Author: Mara

And DF yes... you were a broken record each year. Credit..!

thank you!

i'd give you credit for having the guts to carry 2 mortgages. a friend of mine once said...no guts no glory !! . my guts are somewhere out in the middle of wall st.

 

[TravelingGal]

For the newbies, DF''s thread from 2005.

I remember vaguely reading it a few years ago. It''s a fascinating read now in 2009.

 

[Dancing Fire]

Date: 3/6/2009 12:13:26 AM
Author: TravelingGal
For the newbies, DF's thread from 2005.

I remember vaguely reading it a few years ago. It's a fascinating read now in 2009.

read my replies on this 2005 thread

https://www.pricescope.com/community/threads/buying-a-home-on-interest-only.31679/

 

[TravelingGal]

That''s fascinating DF. You called it for sure. And Nachoman was seriously wrong. This housing bubble bursting has caused exactly that - a recession.

I didn''t think it would be this bad (I didn''t understand all that went on with the banks back then so I wouldn''t have been able to predict so many of them going down), but all I knew is that people were using funky loans to buy homes they could not afford with the crazy idea in their heads that the prices couldn''t come down more than 10%. In our local market, it just could not be sustained.

No doubt about it DF. The market in 2012 in CA will be much more affordable than in 2005. TGuy and I have our sights to buy in the beginning of 2010, but if we choose for sure not to have another child, we will wait a bit longer.

Northrop just announced they are laying off 750 people (not much at 3% of their workfoce, but it still a visible layoff from a high profile company in our area) and more are coming in our area, I''m sure. My own job is in jeopardy, no doubt. 1 of my friends bankrupted his company and walked away. Another got laid off from Indymac and his wife laid off a few short weeks later right after they found out they were expecting their second child (both out of a job at the same time, but fortunately he was able to find one soon). Another couple bought a house in a so so area at the top of the bubble and she is a SAHM, and he just got a commission only job after his magazine failed to sell. She is going through some depression. I could go on, but you get the idea.

My friends were all doing well before the burst. Most weren''t foolish and didn''t buy things the couldn''t afford. But this recession is real, and no amount of positive thinking at the moment is going to change that it will get worse for many many people before it gets better. I''m just grateful that TGuy and I still live in the same crappy apartment with dirt cheap rent and have no debt other than one car. We''re saving, but trying to spend a bit too (like on jewelry! lol)

 

[Dancing Fire]

Date: 3/6/2009 3:14:36 AM
Author: TravelingGal
That''s fascinating DF. You called it for sure. And Nachoman was seriously wrong. This housing bubble bursting has caused exactly that - a recession.

I didn''t think it would be this bad (I didn''t understand all that went on with the banks back then so I wouldn''t have been able to predict so many of them going down), but all I knew is that people were using funky loans to buy homes they could not afford with the crazy idea in their heads that the prices couldn''t come down more than 10%. In our local market, it just could not be sustained.

No doubt about it DF. The market in 2012 in CA will be much more affordable than in 2005. TGuy and I have our sights to buy in the beginning of 2010, but if we choose for sure not to have another child, we will wait a bit longer.

yup, good time to start shopping for a house.

 

[Allisonfaye]

Thanks for the comments, guys. The funny thing is, this was a very conservative (we thought) company so we didn''t think we were flying high with any tech company. We have been sitting on those options for almost 10 years (they expire in 10) and when we were first married, DH explained to me that it would make sense to hold them for 10 years to maximize their value. The first ones expire in 2010. If we had seen anything like this coming, certainly we would have done it sooner, but they will likely never come back to being in the money, at least none of the existing ones. When DH got promoted 1.5 years ago, they laid a big grant on him.....at $55 and $49/share so even in 10 years, I doubt they will ever be worth the paper they are written on. We will get some new ones soon, but my fear at this point is if this companies will even exist in 10 years. We''ll see.

TG: Thanks for the tip on the collars. We will definately approach any gains in the future differently. I held a gun to DH"s head and told him we are seeking the help of a trusted financial advisor. We made some really dumb mistakes, options aside.

 

[Allisonfaye]

Date: 3/5/2009 5:53:24 PM
Author: MaggieB
I feel your pain Allison. My company rewarded my performance with stock options at $31 per share. Today that stock traded last at .68 per share. My bonuses from an 8 year career are wiped out and so is my 401K. I hope things work out for you.

Were the bonuses deferred or did you invest them?

I guess one bright spot for us (insert eye roll here) is that the company had an option of deferring your annual bonus and we never did that. Guess what they did with the deferred money? Invested it in the S&P500. Yeesh.

 

[tradergirl]

You can hedge restricted stock. It''s annoying to spend money that way but even worse to have it tank out from under you.

 

[tradergirl]

DF - I was on the train with you in ''05, even ''03 - 04 on our housing bubble blog. We were called tinfoil hat kooks at the time or haters who were too stupid to participate in this glorious wealth building opportunity. LOL. Remember the radio commercials that said if you didn''t have your equity "working for you" (i.e., "invested" in other houses) you were an idiot?

 

[purrfectpear]

Date: 3/5/2009 11:18:59 PM
Author: Dancing Fire
you know what PP?
can you imagine the horror of taxpayers picking up your $400K mortgage tab?

sounds like you are very well off financially but you still chose to walk out on your mortgage.

you know what DF?

You stay well off financially by reading your contracts and making the best decision for you within the legal confines of said contract. It sounds like you would be much happier if I kept throwing $22K a year down the hole for the next 10 years so you could post your sympathy to my sad, sad, underwater situation. Sorry, I evaluated the cost of your sympathy and it fell short

1 in 5 mortgages are now underwater in the nation (1 in 2 in Nevada) Article Here

Prepare for more to come.

 

[Beacon]

I get where DF is coming from: there is a moral outrage at people breaking promises and taking advantage of the system. But people will do this. The system needs to be changed.

A loan with a 3% downpayment and no recourse is just like the customer buying an option on the house and it is a very underpriced option cause it comes with a put option of 30 years duration back to the bank and that put option is priced at FREE to the buyer/borrower.

DF since you trade stocks, I am sure you understand exactly what I mean here.

It is fantastically stupid. So do I blame PP for taking advantage of a system that mispriced risk and failed to understand the financial metrics that their loan programs were all about? No I don't really blame her. She is one of thousands doing the same thing.

Mara, you are wrong about stocks. All those houses in Atherton were not paid for out of people's wages, let me assure you!

 

[fleur-de-lis]

Date: 3/6/2009 10:13:24 AM
Author: purrfectpear

Date: 3/5/2009 11:18:59 PM

Author: Dancing Fire

you know what PP?

can you imagine the horror of taxpayers picking up your $400K mortgage tab?

sounds like you are very well off financially but you still chose to walk out on your mortgage.

you know what DF?


You stay well off financially by reading your contracts and making the best decision for you within the legal confines of said contract. It sounds like you would be much happier if I kept throwing $22K a year down the hole for the next 10 years so you could post your sympathy to my sad, sad, underwater situation. Sorry, I evaluated the cost of your sympathy and it fell short

1 in 5 mortgages are now underwater in the nation (1 in 2 in Nevada) Article Here


Prepare for more to come.

In defense of PP, DancingFire you and I both know that: (1) taxpayers will not be taking on her "$400,000"; and (2) the declining home equity is not what might actually take the entire system, but only the trigger that showed the problems, breadth, and size of the CDO system-- which *dwarfs* the housing crisis.

(BTW, I didn''t see your threads in 2005, but we must have been seeing the same stuff since I sold all my US real estate holdings in 2005. Also, do you have any websites you find particularly fascinating on these topics you''d be willing to suggest?)

 

[zhuzhu]

Just imagine for a second if everyone who purchases an expensive home end up doing what PP did, what will our social/financial equilibrium look like..

What''s done is already done, but I sure hope those who chose to take advantage of the system(s) at our expense(PP and octo-mom), do not sound so proud of themselves. It sends chills down my spine.

 

[Beacon]

Date: 3/6/2009 1:20:28 PM
Author: zhuzhu
Just imagine for a second if everyone who purchases an expensive home end up doing what PP did, what will our social/financial equilibrium look like..

What''s done is already done, but I sure hope those who chose to take advantage of the system(s) at our expense(PP and octo-mom), do not sound so proud of themselves. It sends chills down my spine.

Totally agree.

 

[fleur-de-lis]

Date: 3/6/2009 1:20:28 PM
Author: zhuzhu
Just imagine for a second if everyone who purchases an expensive home end up doing what PP did, what will our social/financial equilibrium look like..


What's done is already done, but I sure hope those who chose to take advantage of the system(s) at our expense(PP and octo-mom), do not sound so proud of themselves. It sends chills down my spine.

Wait, now-- it is *not* fair to link PP with "Octo-Mom", for goodness's sake!

The mortgage/loan industry is a business, and as a long-standing business there had evolved standards and protections that justified the risk versus profitability of being in the mortgage industry. It wasn't that long ago that a buyer had to prove his fiscal management skills by bringing 20% to the table, and banks were making loans that were capped at 80% of the home value in order to (1) deter people from walking away, and (2) provide a safety cushion for the banks if home values declined. It also wasn't that long ago that (3) loan documentation, income verification, employment verification, credit verification, etc. was de rigeur and QUITE arduous a process for the buyer-- but, once again, it was there to protect the banks. Also, (4) loans either conformed to federal limits (i.e. $417,000, an interesting point to consider if you look at the 3 times rule-of-thumb), or the buyer paid a rather higher interest rate for the higher risk in a JUMBO loan. In total, these factors combined TO PROTECT THE BANK AND REDUCE RISK FOR THE BANK IN THE TRANSACTION.

Beginning in 2004, when wall street became very interested in collateralizing mortgage debt because they deduced that the change in the law in 1999 allowed them to in essence create money out of thin air by participating not only in the 9-to-1 fed rule but also remove items from even that requirement so that some ibanks are now reporting 35-to-1 leverage, banks made a business decision to (foolishly) stop all the contract provisions and business requirements that had been protecting banks for decades because of the vast sums of money debt money creates out of thin air (times 9, no less). The banks entered into contracts that went against ALL the rules that they had determined in the modern era were necessary to be there FOR THEIR PROTECTION. 20% cushion? Years of documented proof of fiscal responsibility by buyers? Jobs by buyers? Giving someone a loan for a million dollars requiring a higher interest rate because of the added risk? Good lenders gave reasonable terms and conditions for making loans, and from a simple contract/negotiation analysis, by bypassing and waiving the conditions that would protect them, the banks were taking on greater and greater risk of default.

PP may have had a duty to fulfill her side of the contract or else face penalties; the bank also had a duty to its shareholders and depositors to perform due diligence in both qualifying borrowers and protecting their investment by having terms that would protect their investment.

If you want to be angry, I think there's a stronger argument to place a greater percentage of shock/awe/anger at a banking industry that went as crazy as a meth addict, and a financial/trading market that exhibited the shallow, aggrandizing, live-for-the-moment-and-this-moment-only philosophy like someone who's coked out. Good contracts have terms, calculations, and penalties to ameliorate risk. PP has reviewed her contract terms and is facing up to the consequences in that contract for the contract being broken; likewise, the other party to the transaction should deal with its negotiated terms that IT agreed to as well. If the banks didn't want her, a buyer, to walk away, they were darn foolish to do away with all of the protections they had been employing to encourage her to stay in the house and protect their interests for hundreds of years.

 

[movie zombie]

Date: 3/6/2009 2:12:50 PM
Author: fleur-de-lis


Wait, now-- it is *not* fair to link PP with ''Octo-Mom'', for goodness''s sake!

The mortgage/loan industry is a business, and as a long-standing business there had evolved standards and protections that justified the risk versus profitability of being in the mortgage industry. It wasn''t that long ago that a buyer had to prove his fiscal management skills by bringing 20% to the table, and banks were making loans that were capped at 80% of the home value in order to (1) deter people from walking away, and (2) provide a safety cushion for the banks if home values declined. It also wasn''t that long ago that (3) loan documentation, income verification, employment verification, credit verification, etc. was de rigeur and QUITE arduous a process for the buyer-- but, once again, it was there to protect the banks. Also, (4) loans either conformed to federal limits (i.e. $417,000, an interesting point to consider if you look at the 3 times rule-of-thumb), or the buyer paid a rather higher interest rate for the higher risk in a JUMBO loan. In total, these factors combined TO PROTECT THE BANK AND REDUCE RISK FOR THE BANK IN THE TRANSACTION.

Beginning in 2004, when wall street became very interested in collateralizing mortgage debt because they deduced that the change in the law in 1999 allowed them to in essence create money out of thin air by participating not only in the 9-to-1 fed rule but also remove items from even that requirement so that some ibanks are now reporting 35-to-1 leverage, banks made a business decision to (foolishly) stop all the contract provisions and business requirements that had been protecting banks for decades because of the vast sums of money debt money creates out of thin air (times 9, no less). The banks entered into contracts that went against ALL the rules that they had determined in the modern era were necessary to be there FOR THEIR PROTECTION. 20% cushion? Years of documented proof of fiscal responsibility by buyers? Jobs by buyers? Giving someone a loan for a million dollars requiring a higher interest rate because of the added risk? Good lenders gave reasonable terms and conditions for making loans, and from a simple contract/negotiation analysis, by bypassing and waiving the conditions that would protect them, the banks were taking on greater and greater risk of default.

PP may have had a duty to fulfill her side of the contract or else face penalties; the bank also had a duty to its shareholders and depositors to perform due diligence in both qualifying borrowers and protecting their investment by having terms that would protect their investment.

If you want to be angry, I think there''s a stronger argument to place a greater percentage of shock/awe/anger at a banking industry that went as crazy as a meth addict, and a financial/trading market that exhibited the shallow, aggrandizing, live-for-the-moment-and-this-moment-only philosophy like someone who''s coked out. Good contracts have terms, calculations, and penalties to ameliorate risk. PP has reviewed her contract terms and is facing up to the consequences in that contract for the contract being broken; likewise, the other party to the transaction should deal with its negotiated terms that IT agreed to as well. If the banks didn''t want her, a buyer, to walk away, they were darn foolish to do away with all of the protections they had been employing to encourage her to stay in the house and protect their interests for hundreds of years.

+1. the banks knew what they were doing when they did it. they made loans they never should have been making.

mz

 

[fleur-de-lis]

Date: 3/6/2009 1:21:25 PM
Author: Beacon

Date: 3/6/2009 1:20:28 PM

Author: zhuzhu

Just imagine for a second if everyone who purchases an expensive home end up doing what PP did, what will our social/financial equilibrium look like..


What''s done is already done, but I sure hope those who chose to take advantage of the system(s) at our expense(PP and octo-mom), do not sound so proud of themselves. It sends chills down my spine.

Totally agree.

So here''s something to chew on: don''t you think the banking system sold shareholders, depositors, investors, and heck, US ALL out by doing away with the prudent standards of "background checking the ability of the buyer to pay", "having a 20% downpayment cushion to both restrict purchasers to those with proven financial management skills and the bank from downturns", and even "approving amounts in line with the proven 28/36 guidelines"?

The question I have is how well did the bank do in protecting ITS interests by its contract terms for all those people who "purchase(d) an expensive home"? Should a bank who gave out a $1.2M for a home that sold for $400K 4 years earlier to a person who says they make 80K/year as a self-employed person yet provides no documentation and even brings $6000 cash (or better yet, a cash advance from a credit card) to the table have to face the consequences of their folly as well? Heck, they''re in THE BUSINESS of numbers and money; they had an even greater knowledge of the risk behind mortgage agreements than 99% of borrowers.

Forget imagining if everyone did what PP did; imagine what would happen if all the banks, who had all the power in the transaction and could offer terms that were in their best interest and would protect their assets, lost their collective minds and made unimaginably and unbelievably bad loans with bad terms for bad interest to bad people with bad downpayments and a bad ability to pay.

Oh wait... they did.

 

[zhuzhu]

I did not know that an imperfect system makes it OK to abuse it.
If Tiffany does not have security guard at the front door, does it make it OK to steal their 10ct solitaire?

If nobody takes financial responsibility for their own action seriously, then perhaps this country deserves to be going into a economic depression.