Are we all just helpless victims?

[stufl]

NY Times headline, Sunday, Feb. 19, 2012...4 years after the greatest worldwide economic collapse since the depression:

"MORTGAGE SECURITIES HOT AGAIN."

&quot Greg) Lippmann, start trader at Deutche Bank is joined by other big money investors riding high on a wave of interest in the same complex loan pools that nearly washed away the financial system.

The attraction is the price. Some mortgage bonds are so cheap that even in the worst forecasts, with home prices falling and foreclosures rising, investors say they can still make money."

Are we to see 30:1 leverage again (for every dollar invested, 30 dollars are borrowed)?

Again, and again and again we ask: Who benefits from these investments beside the big banks? Certainly the world suffered from the last round while others took home $15 million and more per year.

Really, what is going on here. Do we all have to live through this again?

[elleng]

1. No, and I hope this article gets enough notice to help avoid ANOTHER.

After all, mortgage 'securities' not in any way secure, as underlying mortgages so precariously based.
New agency should help avoid another disaster.
http://www.consumerfinance.gov/

[xchrom]

2. we have to live with it until we decide that regulating financial houses is in our own best interest

these wrapped bundles, high risk investments, etc -- all of this stuff needs to be investigated and regulated.

this is NOT what we should be reading now -- and it just indicates a systemic failure -- politically & in our institutions.

[Newest Reality]

3. In answer to the

title of your post:

Yes. That is, in the sense that a significant amount of people realizing just how powerless they are, (or are becoming) could be useful.

Then, knowing where you actually are, something could actually start to happen in a concrete way. You see what is not working and cast off denial and beliefs in the simulation game of media, politicians and corporate influence. There is a "persistence" of vision that still echos from the immediate and far future that leads many to think what is no longer there still is.

It's like that saying that there are none who are more hopelessly imprisoned than those who think they are free.

The system will certainly, out of self-preservation, present a crafted facade of functional equilibrium with dollops of manipulated and delicious good news along with unfounded propaganda to craft something cozy, warm, hopeful and self-sustaining.

What we get though, is what we are willing to open our eyes and see clearly.

[Warpy]

4. Yeah, we do and we will until we raise enough hell

to make Congress more frightened of us than they are of bankers.

[dkf]

5. Until non-Freddie/Fannie mortgages become sellable, the banks don't want to loan.

Right now they only want to do loans if they can sell them to F & F. Try getting a portfolio loan on a non-Freddie/Fannie compliant condo and you'll see what I'm talking about. It's doable if you have pristine credit and are willing to pay more in interest and downpayment, but you aren't going to get the great rates that you see all over the place.

[mbperrin]

6. Why bother with banks? Have the owner finance it to you. Saves a ton

on closing costs, just to begin.

Now an individual has an asset that's making 5% instead of .2% (what Citi pays right now on money markets).

[dkf]

7. Would you honestly like to loan someone the value of your house?

In any case that isn't very smart to leave things so undiversified. If you came to me with that idea I would say "hell no".

[mbperrin]

8. I have bought 3 apartment complexes and 36 houses in the last

2 decades by financing through the owners. They have good income, much better than the bank-gamblers pay them, and I get a great rate (5%) fixed for the 20 year life of the loan.

Total closing costs are normally less than $500 and positive cash flow begins immediately. What's not to like?

[dkf]

9. Well that is diversified. But for one person selling their only house which will probably be their

largest asset, that would be a bad idea.


And you probably did it back in the day when housing went up and up. The banks used to believe real estate only went up too. Look where that got them.

[mbperrin]

11. Bought the most recent house last week. I don't care about the value of the properties.

In fact, we contest their value to the appraisal district every year to keep our taxes low. I have no plans to sell. I care what they rent for, and if there is an immediate positive cash flow. There is in every case. I make money, the former homeowner now has a nice income every month with no worries.

I haven't had a bank account or wondered about my credit rating in decades.

[Owlet]

10. Yes, we are

so long as we have a one-party system with two names, dependent upon Wall Street high-rollers and casino operators to fuel their reelection machines.

[bobbycoxs]

12. Could not agree more.

These "complex" pools of loans were mostly purchased out during the great credit swap heist of 2008 along with pay-outs through HAMP, TARP, and TALF to name a few. What did the homeowner get though? A house worth less than the mortgage and higher taxes and inflation through all the money "our" government gave the domestic & foreign banks, hedge fund managers and corporations that caused this disaster?

-Bobby

Good article on the latest bailout
http://www.andmagazine.com/content/phoenix/11933.html