mortgage bro’s (slight return)

Finally pushed over the limit by this asshole (youtube video):

The talk radio mouths and the right-wing press have locked on to their version of the financial crash, and why foreclosed homeowners should not receive help.

The problem, they say, is that “political pressure” forced lenders to make bad loans to those who didn’t deserve them qualify. Many of these people were clearly n… ni… ne… NE’ER-DO-WELLS. Everyone knows those people can’t keep a mortage. If the government had let these experienced bankers use their own judgment, none of this would have happened. So we definitely don’t want to spend money—OUR money—helping these people out any more!

The subprime and alt-A mortgages were largely written by people I saw daily over the last decade, our famous local “Mortgage Bros.” These guys bought leads from cold-call telemarketers and sold refinancing to anything with a pulse, lying constantly about the risks. They upsold every potential loan, pushed the limit with interest-only ARM on subprime and alt-A garbage loans. They had no reason to care if the bank ever got the money or if their customers kept their houses. They used the system as it was presented.

The idea that these were stolid, cautious men in pinstriped suits, sworn to the fiduciary duties of their banks, who were somehow forced by dashiki’d oppressors in the Federal bureaucracy into giving money away to the NE’ER-DO-WELLS would be funny were it not such a repulsive lie.

Make no mistake. The financial industry made loans that could not be paid, knowing they were bad loans. They pushed those loans hard on their customers. And they knowingly mislead their customers into taking on impossible obligations. Thousands of these brokers committed criminal fraud.

If this was an attempt to redistribute wealth to the NE’ER-DO-WELLS, it backfired. The result was a lot of Harleys and speedboats and cocaine and blowjobs provided to the grinning, empty-souled asshole Fonzies of Orange County. If you don’t want their customers to be saved from eviction, let’s use the money to build them a very unpleasant jail.

48 thoughts on “mortgage bro’s (slight return)

  1. Every news story I have seen about families facing foreclosure has featured greedy white people who were unbelievably overpaid in ethically questionable industries. I’ll never forget the one story about a power couple who both worked in the mortgage industry (oh the irony!) — when the shit fell in on their heads they said they had to trade in their GIANT SUV for a lesser SUV, and they might have to move into a 3 bedroom house instead of their current 6 bedroom house (they have no kids). I spent hours and hours weeping for their plight. I can totally understand the right wing ignoring these people and focusing on the REALLY big problem of, uh, ne’er-do-wells receiving shitty mortgage loans.

    1. I really don’t think there are any racial barriers for being greedy, or stupid, or driving GIANT SUVs. Unfortunately unethical greedy morons come in every flavor and on both sides of the mortgage transaction. It comes from a deep trend in society where people no longer have any manners, any concern for the people around them, and no thoughts of the impact of their behaviour on anyone but themselves. Just look how people drive if you need some proof! Or when was the last time anyone held a door open for you in a public place?

      1. The particular problem the current poster revealed was the news people, who are covering the stories of the people most like themselves rather than the typical people.
        I agree that the last decade has not been kind to the whole idea of public civility or cooperative behavior.

      2. I don’t see any relevance to dividing up the news stories on people in foreclosure into the white yuppies, ne’er-do-wells and “typical people”. People who make bad choices need to live with the repercusions and learn from it. Bailing out idiots of every race, creed, color, religion, lifestyle and so on is just an invitation for them to do it again. The commonality is greed and stupidity.

      3. I assume from the rhetoric you’ve displayed in the comments to this post that you’re one of those chickenheads who thinks that the concept of corporate limited liability is an abomination, and we would all be better off if corporate management were personally and individually liable for the crimes and torts perpetrated by the enterprise under their direction.
        After all, managers— especially managers in financial services businesses— who make bad choices really, really need to be held personally accountable for the consequences of their actions and learn for it.

      4. Well, whatever a chicken head is, it is a meaningless verb to me. But then you seem to only want to make your point of view by insulting people with loaded langauge and put-downs. You offer no facts or new view points here. Plus in your haste to be insulting, you contradict yourself by saying you are for corporate limited liability and then go one to say managers should all be liable?!
        Then you go off topic to cite torts and crimes as if they have anything to do with the discussion as to who is at fault for willingly entering into a contractural agreement where one party defaults. Defaulting has yet to be a crime, it is all part of the possible conclusions of a legal business transaction.
        No one has yet said there was any fraud involved, none has been proven. The whole point is borroweres made bad decisions to over extend themselves by entering legal contracts with financiers. The economy when to shit and they got caught short in their obligations. The logical conclusion is the borrowers took a chance, which turned out to be a bad choice. So why should they be able to go back to the finance companies and cry for a do-over?! People NEED to TAKE responsibility for their own actions.

      5. I wouldn’t have come out the gate with insults if you had treated my friend with more respect in your previous comments.
        He made perfectly clear and persuasive arguments, which you pretended were incomprehensible to you when the credentials you proudly flaunted here would never have been awarded to you if you were as ignorant as you postured. If I were to start lecturing you about matters you should already understand, then I expect you would treat me just the same as you did him.
        He clearly knows you and doesn’t want to hurt your feelings. I don’t know you, and I’m fine with being a little coarse with the obviously disingenuous. Like you.
        So, suck it up: you know perfectly well what I was getting at, and you’re pretending otherwise because it allows you to continue with your absurd posturing about how nobody in your tribe should be held accountable for their rapacious irresponsibility as long as there are poor wogs somewhere you can finger instead. All your rhetoric about people needing to take responsibility for their actions goes right out the window when you’re put in the position to start applying it universally and to yourself. That’s when you discover that that kind of reasoning bites the rich a lot harder than it does the poor. You know it, and so does everyone else here. I’m sure knows it, too, but he’s being nice to you and not pointing out your hypocrisy to your face.
        I’ll apologize to for being a little rude to you, if he wants me to, but at the moment, I think you deserve to have a little pushback.

      6. It is sad and pathetic that you think disagreeing with someone is some sort of personal attack. If substitute has a problem with how I say something that is indeed his business to say so to me, not yours.
        Making excuses for your resorting to name calling instead of an exchange of viewpoints is also sad, pathetic and small minded. If you’re not prepared to be disagreed with, perhaps you shouldn’t participate in a public forum until you are ready and mature enough.

      7. Sir, I don’t think your viewpoints on the economic crisis are worth exchanging for anything of real, lasting value. Hence my rude tone.
        There are too damned many people like you who think they are duty-bound to express their toxic glibertarianism where everyone has already heard it before— from their bosses, from their parents, from the myriad shouting heads on television and radio— and nobody needs to hear it from random authoritarian follower drones that wander in off the street to know it’s bullshit.
        At least the media propagandists are getting paid. You just seem to enjoy it for the sheer bloody-minded pleasure of the work.

  2. I had a little debate this morning in a class that sounded very much like this post. I have to admit that it was at least a little fun to describe the typical “mortgage bro” to a class of bright eyed 20yr old econ & rhetoric majors.

    1. Racket
      Owning a house (or rather, mortgaging one) is an investment. 
      But so are rare baseball cards.  But at least with rare baseball
      cards, you don’t have all your eggs in one basket.
      Also, a house is very illiquid and risky, and neither of
      those are happy-sounding words, given the current US economy.
      Also: Pogs.

  3. my history teacher watches bill o’reilly and then comes to class and regurgitates a lot of what he heard on the show. several times he’s given a speech about how the “economic crises,” was manufactured by democrats because, “they are socialists and think everyone should own their own house, even if they can’t afford it. and now they want all of US [uh, all the wealthy college students, i guess] to pay for the poor people’s homes.”
    he also told us that the conspiratorial democratic socialists knew their Everyone Gets His Own Football economic policies would damage the economy, but that they wanted that to happen so that they could, “socialize all traditionally strong money-making industries and re-distribute the wealth further.”

    1. i have a rhetoric professor that does exactly the opposite. he watches all the liberal commentary and then comes and tries to explain to the rich kids in school how it’s the fault of their republican parents. it’s good fun. today he blamed the mortgage crisis on the war, and he made some pretty interesting points.

  4. well, okay
    Replace “I object to bailing out NE’ER DO WELL’s mortgages” with “I object to bailing out shitty mortgage broker’s bad choices.”

    1. Re: well, okay
      agreed. i doubt any of this financial hemorrhage will have much effect on who gets evicted; it’s another series of golden parachutes for people who deserve golden showers.
      but blaming the borrowers for bad loans… such transparent and nauseating demagoguery! ecch!

  5. I agree with you. HOWEVER:
    Make no mistake. The financial industry made loans that could not be paid, knowing they were bad loans. They pushed those loans hard on their customers. And they knowingly mislead their customers into taking on impossible obligations. Thousands of these brokers committed criminal fraud.
    is not quite true. One of, or maybe THE, prominent causes of Our New Depression was that normal, greedy individuals were packaging financial instruments in entirely legal ways that ended up making it harder for the buyers to really understand the risk. It was, to borrow a metaphor, like playing hot potato with sealed box. What’s inside? Nobody knows, but as long as you can pass it on, you’re safe. When people started defaulting on bad loans, and all the leverage birds came home to roost, it became obvious that inside some of these boxes were piles of shit, or bombs, but by then it was too late. In many ways, it is a textbook case of why regulators should make transactions they don’t understand illegal, and deregulate later, rather than Greenspan’s idea of allowing everything that wasn’t provably awful.

    1. Right. The part I referred to was the original fraudulent mortgage selling. The second part, with the assignment of risk to friendly elves and the obfuscatory math, was also extremely great. It’s a totally killer mashup of the Savings & Loan Fraud of the 80s with the LTCM collapse of the 90s… taken to the NEXT LEVEL!

      1. My favorite part is how after all of the first part and the second part, and the part where the banksters get to walk away without having to suffer the indignity of enduring Bankruptcy Cramdowns, these guys like Santelli still have the unmitigated gall to whine like prissy little private-school girls about how Daddy is being so unfair to them.
        Cuba! Motherfuckers are throwing Cuba! Just kill me now.

      2. Re: Cuba?
        Pardon me, stewardess. I speak jive. They’re drawing an equivalence between our not-quite-liberal-enough economic crisis response policies and the governing regime in Cuba.

      3. Re: Cuba?
        Pardon me, stewardess. I speak jive.
        He means that people like Santelli are rudely drawing an equivalence between the timid and half-baked economic crisis response policies of the Obama administration and the socialist governing order of the Republic of Cuba.

      4. Re: Cuba?
        Oh, then they would
        seethe
        most loudly
        at the Cuba parts of
        <a href=
        “http://torgo-x.livejournal.com/1108635.html”
        >Social Collapse Best Practices!

  6. Stupid people need to finally take responsibility!!!
    It takes two to tango. Yes there are greedy bankers and financiers who packaged risky mortgages. But there are also the greedy buyers (of all races, creeds and demographics) who whipped the house prices into a frenzy by flipping property at absurd profits. Once that price train stopped, these greedy people who had to have their status expensive home with 110% mortgage on a price (not value), are now crying that they can’t afford it. Well, if you are stupid enough to buy a house where the payments are a huge chunk of your income, then you get to reap the rewards of your greed.
    It didn’t have to be that way. When we bought our home, we bought with common sense toward our budgeting of payments. We declined to spend what the mortgage companies said we “qualified for” and bought a house that cost HALF of that! We improved our home a little every year as we could afford it and refinanced from a 30 to a 10 year mortgage. The long term result is that we will own our home in less then 5 years from now. We were not greedy, didn’t care about a status address and bought in a quiet inner suburban city, where city goverment runs in the black and keeps property taxes low and services high (without corruption).
    I have no sympathy for selfish greedy short-sighted people who didn’t use any common sense. Who now want to blame everyone else but themselves for trapping themselves into an over valued house they CHOSE to buy and knew they couldn’t afford if they couldn’t keep flipping it. No one made them make bad stupid choices!
    Oh yeah, I like the way the republicans (before W left office) gave their banker buddies billions of our money (with no strings attached, unlike the auto industry assistance)to pay themselves millions in salary(plus bonuses) and finance more bank mergers/buy-outs of each other. I don’t see any of this money helping their customers or the economy!

    1. Re: Stupid people need to finally take responsibility!!!
      Idiots will always apply for credit they can’t handle. This is usually solved by an advanced technique called “not lending them any money.” They stopped doing that.
      Sure, when said idiots can’t pay off their stuff, the inevitable happens. And they found a way for all of us to pay that disaster off, since they’d stolen all the money and the idiots didn’t have any.
      Pretending that this is somehow the fault of the idiots is ridiculous. No one has to lend money to someone who can’t pay it back.

      1. Re: Stupid people need to finally take responsibility!!!
        “pretending that this is the faults of the idiots” is exactly the point, no need to pretend because it is their fault! Since when did a person’s responsibility for their own actions become ridiculous?! If someone applies for debt they cannot afford and signs the contracts, that is 100% their fault! The process takes weeks and sometimes months to conclude, it isn’t some impulse purchase. These idiots laid out a plan and followed it through of their own free will. It is ALL on them.
        Based on this logic, no one is responsible for anything they do, obviously it was all the fault of someone else?!

      2. Re: Stupid people need to finally take responsibility!!!
        It is entirely the fault of the lender, yes. Your job as a lender is to assess risk and lend to those who can pay back. If you deliberately (yes, deliberately) ignore the risk and lend to those who cannot pay back, you are *entirely* responsible for the result. It is called “fiduciary responsibility.”
        Lending policy and the law do not assume that a borrower knows their own eligibility. If you ask for a loan and are turned down, you may well be very surprised. This does not make you some kind of immoral freeloader for applying for the loan. It means that the banker knows more about your risk than you do.
        Assessing risk on behalf of the bank and its shareholders is their ENTIRE job. Giving out loans to every crackhead who wants money, knowing that it can’t be repaid, and transferring the risk to others, is commercial fraud. What’s so hard to understand here?
        If you want to blame borrowers for this, go ahead, but you’re assuming that lending bankers are incompetent and will lend money to anyone who asks, which is a really weird assumption.

      3. Re: Stupid people need to finally take responsibility!!!
        The ONLY weird assumption is ignoring the FACT that we now are in the midst of the biggest housing collapse and foreclosure rates since the 1930s.
        SO the FACT is that either bankers are incompetent and made BILLIONS in bad loans knowing they would put themselves out of business, or THOUSANDS of people WILLINGLY entered contracts for houses they CANNOT afford.
        When people ACT of their own FREE WILL they should be responsible for their actions. Not anyone else!
        It is stupid ASSUMPTIONS that someone else is always to blame that now gives our goverment the notion to bail these people out and let them keep their house for which the rest of us responsible enough to live within our means will pay for it ALL.

      4. Re: Stupid people need to finally take responsibility!!!
        I know what loan officiers do. I have a Bachelor Degree in Business from MSU. I’ve worked in the business world for 30 years, including as a finance manager writing loans for people buying cars. A loan officier is a salesman, it is his job to get the money out there with as much collateral as he can secure and it is expected a percentage of his loans will fail. A loan officier doesn’t care who you are, what you’re up too, as long as he can write a loan that his supervisors can cross off enough boxes on a form to make it fly to their internal bank officiers. Often these laons are packaged up and resold to other banks and lenders in order to dump the bad loans off on another company along with some good loans. The current problem is the bad loans FAR out-numbered the good loans and our over heated economy collapsed from the upward spiral of inflationary unrealistic housing prices, and other inflated asset prices driven by the cheap price of money. Not values, but prices, true values don’t rocket like the last 10 years of prices have done. The bubble burst and like a game of musical chairs, a lot of people are left without a seat when the music stopped.
        It has all happened before and it will happen again. Last time it happened in the 70’s and 80’s, I was left jobless and homeless fresh out of college. No one bailed me out, I sucked it up and worked my way out. I am stronger and smarter now which is why I’m not caught up in this round of economic woes so far. There is never any guarantees in life, and our goverment should not try to invent any with short term bailouts.

      5. Re: Stupid people need to finally take responsibility!!!
        I don’t think we’re going to agree here. In fact, we don’t seem to agree about anything important. I like you, but our ideas are very different.

      6. Re: Stupid people need to finally take responsibility!!!
        Thanks, me too. It would be a very boring world if we all had the same thoughts and ideas, I mean nothing new would ever happen?! After all, LJ is about exchanging various thoughts and ideas anyway isn’t it?
        Although everyone here in Michigan I think currently agrees that we are tired of winter and job loses but there seems to be no quick solution to either!

  7. If the government had let these experienced bankers use their own judgment, none of this would have happened. So we definitely don’t want to spend money—OUR money—helping these people out any more!
    I know you were being sarcastic, but you hit the nail on the head. The people railing about ‘personal responsibility’ of defaulting debtors seem to be wearing blinders. Sellers of sub-prime financing had almost no accountability for the way their transactions turned out. Mortgage brokers and sellers, in every lending institution I worked in – all of which no longer exist – were done with transaction as soon is it was signed off by an underwriter and went to closing. A whole separate group of people closed the loan. Then another group of people audited the transaction and bundled it for resale on the securities market.
    The guidelines for selling, underwriting, closing and auditing *were* created by the allegedly cautious fiduciaries in pinstripe suits. And the guidelines were virtually non-existent. They mostly consisted of complying with the bare minimum required by state and federal law dealing with amounts of closing fees and interest in a given state and a debt to income ratio not to exceed fifty percent at the time of closing.
    If the alleged unscrupulous buyers are at fault then their percentage of fault is dwarfed by the well-informed folks who decided that it was okay to loan millions of dollars to people who provided no income verification and other brilliant ideas.
    Then we get into the really well-informed people who dreamed up the plan of bundling these greasy transactions into securities and selling these bundles on the securities market. These bundles were bought and re-sold as investment tools by powerhouse investment banks like Lehman and Meryll Lynch etc. I know, because I watched their representatives come in and buy them. Talk about high risk.
    Admittedly, I don’t have a lot of sympathy for people who chose an ARM over a 30 year fixed, but I’m assuming that the choice was even offered to them. For all I know, it wasn’t. Also, selling an ARM or an interest only is like dangling the American Dream in front of buyers. Everyone wants to believe they are going to do better and get richer and be able to make those higher payments. (Why do you think so many people want to repeal the Estate Tax?) The way the economy was rolling in the late 1990s that wasn’t entirely unreasonable.
    Now my disconnected rant is over.

  8. My father was trying to pull this one on me at the funeral reception. It was awful. I reminded him of the facts, which are those things that caused him to stop forwarding right-wing chain emails to me.
    The topic returned to the memory of the deceased and committing his body to rest.

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