Inflation

Wally

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I'll quibble with you on that. Before the 2007 housing crash, there was no short supply of incestuous relationships between mortgage lenders, real estate agents and real estate appraisers. The agent and lender would find people with marginal credit and limited options and inflate a house's price, then they'd have a real estate appraiser in their pocket to inflate an appraisal. Then boom. Overpriced house, underwater mortgage, and massive credit risk. The mortgage gets sold off to some CDO. When the market goes bust, the homeowner is on the street, the CDO explodes, then the the U.S. government backstops it, paid for by you and me.

The mortgage lender, agent and appraiser got their money with no downside. True, no-one forced the homebuyer to do the deal, but that's still predatory lending in my mind.
Those people need to be in jail or executed.
 

Spoofin

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I’d like to lend you money to buy a house. I’ll put up all the money for the purchase of the home. You can pay me a very low variable rate so you can afford the home. If the price of the home goes up, you keep all the equity appreciation.
“predatory”
Ask yourself how those people were able to get the loans that they could never pay back? The answer is - - - the same "guardrails" which you speak of.
You guys have to realize that if Wally graduated HS, it was thanks to “no child left behind”. You are basically debating with a 16-year old.
 


Wally

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You guys have to realize that if Wally graduated HS, it was thanks to “no child left behind”. You are basically debating with a 16-year old.
Your only win is for selfish American of the year. Be best....
 

Spoofin

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Your only win is for selfish American of the year. Be best....
Right - the guy who wishes all unvaccinated dead is going to preach selflessness. What a fucking fraud you are.
 


Wally

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Right - the guy who wishes all unvaccinated dead is going to preach selflessness. What a fucking fraud you are.
I am a fraud, I can admit it. Oh well...

You aren't any better....
 

Ogee Oglethorpe

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You guys have to realize that if Wally graduated HS, it was thanks to “no child left behind”. You are basically debating with a 16-year old.
I've been saying this for quite a while now; I just can't see any way how Wally (and quite honestly a few of the others, with stocker as their big brother) is any older than 16-17 years old, unless it's 100% a troll job. It's just not that possible to be so disconnected and clueless. I choose not to feed it, decided that a long time ago
 

Spoofin

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I've been saying this for quite a while now; I just can't see any way how Wally (and quite honestly a few of the others, with stocker as their big brother) is any older than 16-17 years old, unless it's 100% a troll job. It's just not that possible to be so disconnected and clueless. I choose not to feed it, decided that a long time ago
Yep.
 

Wally

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I've been saying this for quite a while now; I just can't see any way how Wally (and quite honestly a few of the others, with stocker as their big brother) is any older than 16-17 years old, unless it's 100% a troll job. It's just not that possible to be so disconnected and clueless. I choose not to feed it, decided that a long time ago

I was born on the bicentennial.

You don't have the comprehension ability anyways.

Some of it is trolling. But I would venture to say I am one of the most open and honest poster here, about myself and my thoughts. I know its to painful for you so you better stay in your safe space.
 
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Section2

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I'll quibble with you on that. Before the 2007 housing crash, there was no short supply of incestuous relationships between mortgage lenders, real estate agents and real estate appraisers. The agent and lender would find people with marginal credit and limited options and inflate a house's price, then they'd have a real estate appraiser in their pocket to inflate an appraisal. Then boom. Overpriced house, underwater mortgage, and massive credit risk. The mortgage gets sold off to some CDO. When the market goes bust, the homeowner is on the street, the CDO explodes, then the the U.S. government backstops it, paid for by you and me.

The mortgage lender, agent and appraiser got their money with no downside. True, no-one forced the homebuyer to do the deal, but that's still predatory lending in my mind.
How exactly does one “inflate a houses price?” A few isolated instances, sure what you described probably happened. And it was likely illegal as well no?

But Systemically? Absolutely not. EVERYONE thought house prices only went up. Wall st, government, the Fed, everyone. Massive demand for mortgages. Massive demand for houses. Lax credit standards encouraged by government, and importantly, backstopped by government entities like Fannie and Freddie. Everyone bet the same way.
Look, it’s not predatory to lend someone money for a home purchase. That homeowner has low downside and lots of upside. Worst case, they lose the home. But with no money down, they aren’t substantially worse off than before. And if you’re stupid enough to buy a house you have no chance of affording, consider it a helpful lesson.
 

FormerFatOL

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How exactly does one “inflate a houses price?” A few isolated instances, sure what you described probably happened. And it was likely illegal as well no?

But Systemically? Absolutely not. EVERYONE thought house prices only went up. Wall st, government, the Fed, everyone. Massive demand for mortgages. Massive demand for houses. Lax credit standards encouraged by government, and importantly, backstopped by government entities like Fannie and Freddie. Everyone bet the same way.
Look, it’s not predatory to lend someone money for a home purchase. That homeowner has low downside and lots of upside. Worst case, they lose the home. But with no money down, they aren’t substantially worse off than before. And if you’re stupid enough to buy a house you have no chance of affording, consider it a helpful lesson.

Yes. It was systemic. That's why Dodd Frank put strict firewalls between lenders, agents and appraisers. Add title insurance to that list.

And yes, the homebuyers are just as accountable, even though Barney Frank (RIP) often argued with that point.
 



Section2

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Yes. It was systemic. That's why Dodd Frank put strict firewalls between lenders, agents and appraisers. Add title insurance to that list.

And yes, the homebuyers are just as accountable, even though Barney Frank (RIP) often argued with that point.
I’ve not heard that argument before. Any sources to back up that collusion such as you describe was systemic? I know a handful of agents. And they were killing it in 2000-2007. What would the need be to “inflate home prices” and do all kinds of shenanigans for $200k homes?


I knew a handful of shady lenders that actually tried to get me to take equity out and do an ARM. But I wouldn’t consider that predatory.
 

Random Gopher Fan

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I’ve not heard that argument before. Any sources to back up that collusion such as you describe was systemic? I know a handful of agents. And they were killing it in 2000-2007. What would the need be to “inflate home prices” and do all kinds of shenanigans for $200k homes?
The way the scam worked was you would buy a home for say 100k and do nothing to improve it and then get your appraiser to falsely appraise the same house for 200k to the new buyers.

It wasn’t super common but did occur.
 

Wally

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Yes. It was systemic. That's why Dodd Frank put strict firewalls between lenders, agents and appraisers. Add title insurance to that list.

And yes, the homebuyers are just as accountable, even though Barney Frank (RIP) often argued with that point.
Yea I know someone who made a fortune as an appraiser then. Once they blocked agent/appraiser relationships he quit.
 

FormerFatOL

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I’ve not heard that argument before. Any sources to back up that collusion such as you describe was systemic? I know a handful of agents. And they were killing it in 2000-2007. What would the need be to “inflate home prices” and do all kinds of shenanigans for $200k homes?


I knew a handful of shady lenders that actually tried to get me to take equity out and do an ARM. But I wouldn’t consider that predatory.

This old link from the State of Connecticut lays out the predatory lending scheme pretty well, but pretty much every state had lawsuits like this. The fraud I remember off the top of my head from Minnesota didn't actually involve consumers, but lenders and appraisers lining up strawmen to buy/mortgage inflated properties then taking back a cut. The former City of Minneapolis Assessor got caught in one of the schemes and hung himself before trial.

It reminds me of the old Buffet saying, "Only when the tide goes out do you discover who's been swimming naked." Big debt kills.
 

Spoofin

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Yea I know someone who made a fortune as an appraiser then. Once they blocked agent/appraiser relationships he quit.
I still remember getting an appraisal for a mortgage insurance removal and the first thing the appraiser asked me was “what do you need the value to be?” To his credit, he remembered the number exactly.
 

Random Gopher Fan

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I still remember getting an appraisal for a mortgage insurance removal and the first thing the appraiser asked me was “what do you need the value to be?” To his credit, he remembered the number exactly.
This is exactly how it use to be pre 2008. Whatever number you needed it to be the appraiser could make it happen. You would also qualify for about twice the mortgage you could actually afford.
 




MplsGopher

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The way the scam worked was you would buy a home for say 100k and do nothing to improve it and then get your appraiser to falsely appraise the same house for 200k to the new buyers.

It wasn’t super common but did occur.
That's not fraud!! That's just being smart.

Invisible hand! "Free" market!
 

jamiche

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I’ve not heard that argument before. Any sources to back up that collusion such as you describe was systemic? I know a handful of agents. And they were killing it in 2000-2007. What would the need be to “inflate home prices” and do all kinds of shenanigans for $200k homes?


I knew a handful of shady lenders that actually tried to get me to take equity out and do an ARM. But I wouldn’t consider that predatory.
You think you know something about economic theory and economic trends and you claim to not have heard that argument before. Really? It's perfectly fine to disagree with the argument. However, to claim that it's brand new to you is beyond foolish.
 

Wally

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You think you know something about economic theory and economic trends and you claim to not have heard that argument before. Really? It's perfectly fine to disagree with the argument. However, to claim that it's brand new to you is beyond foolish.
Deuce, If a Brink's truck spills its money and it all ends up missing did there have to be widespread collusion for it to happen?

No someone see's someone running away with bags of cash and they want bags of cash too, so they join in.
 

cncmin

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You think you know something about economic theory and economic trends and you claim to not have heard that argument before. Really? It's perfectly fine to disagree with the argument. However, to claim that it's brand new to you is beyond foolish.
No kidding. Choose one: (1) he's terribly uninformed / misinformed; (2) he doesn't know much about economics; (3) he's lying; (4) all of the above.
 

Section2

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You think you know something about economic theory and economic trends and you claim to not have heard that argument before. Really? It's perfectly fine to disagree with the argument. However, to claim that it's brand new to you is beyond foolish.
People committing crimes is not an economic theory or trend. Of course I’ve heard cases of fraud. My objection was that this was a systemic issue and a major cause of the crisis. You really try way too hard at this.
 
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Section2

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This old link from the State of Connecticut lays out the predatory lending scheme pretty well, but pretty much every state had lawsuits like this. The fraud I remember off the top of my head from Minnesota didn't actually involve consumers, but lenders and appraisers lining up strawmen to buy/mortgage inflated properties then taking back a cut. The former City of Minneapolis Assessor got caught in one of the schemes and hung himself before trial.

It reminds me of the old Buffet saying, "Only when the tide goes out do you discover who's been swimming naked." Big debt kills.
Gotcha, thanks. Your link says the victims were in the dozens. That doesn’t really sound like a systemic economic issue to me, even if the exact same dynamic existed in every state. But no doubt the rising tide of home prices attracted lots of unethical people looking to make a quick buck, with the self deception that no one was going to get hurt because prices always rise.

And I would still argue, this dynamic is not predatory lending. This is just outright fraud. We don’t need to invent new terms for illegal acts when old ones do. And the use of the term predatory lending is deceptive and not by acccident.
 

jamiche

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People committing crimes is not an economic theory or trend. Of course I’ve heard cases of fraud. My objection was that this was a systemic issue and a major cause of the crisis. You really try way too hard at this.
To claim that you hadn't heard the argument that it was systemic and, by implication, not to understand the cause and effect of Dodd Frank is disingenuous. Again, you can disagree with it, but your "it's news to me" is silly when you pretend to be an expert.
 

Section2

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To claim that you hadn't heard the argument that it was systemic and, by implication, not to understand the cause and effect of Dodd Frank is disingenuous. Again, you can disagree with it, but your "it's news to me" is silly when you pretend to be an expert.
You don’t even know what we are discussing or you are arguing. You’re trying to dunk and you’re totally lost.
 




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