1. John wrote:

Clueless.

2. Dale J. Thomas wrote:

This was a very good point. Good read.

3. Miss Martin wrote:

As usual on point….my brother

4. Garrett wrote:

Yeah, the people that lied on their mortgage applications about what their income levels were sure did get swindled . . .

5. John wrote:

In these posts, Mumia continually fails to demonstrate any financial literacy whatsoever. He would have the government let Fannie Mae and Freddie Mac fail? Exactly how would that benefit anybody? The chain of destruction ignited by their collapse would be catastrophic for our economy and our society.

In addition, he repeatedly portrays people of color as being ignorant fools completely at the mercy of unscrupulous “white” businesses.

His point of view is not only wrong, it is prejudiced and offensive.

6. james wrote:

garrett, would you lend 300,000 dollars to me without inspecting my ability to repay? well, you might, especially if you are looking to make a quick commission on the mortgage sale, and don’t really care if the person loses their home 5 years later. i sincerely doubt my father, as dumb as he is, and who recently lost his home, lied about anything on his mortgage application.

and my poor, dying mother, lost all of her money to a supposedly reputable financial company which offered exorbitant interest rates on a shady product called “investment notes.” the company, abfs, recently filed for bankruptcy, which means my mother’s money is completely wiped out. she has no recourse. there is a class action suit pending, but she’ll probably be dead by the time that ever gets resolved.

this was, flat-out, a robbery, for which nobody will be indicted. people were enticed by the ridiculously high interest rates and believed it was a pretty solid choice. for a few years, it was. christ, even i had a little money with them, but i pulled out when i began to get suspicious of the company and their much too-good-to-be true product. unfortunately, because the interest was still coming, my mother didn’t heed my advice to remove her money. abfs was a subprime lender.

7. John wrote:

james, ANY investment comes with risk.

The higher the return, the greater the risk. And vice versa.

Losing your money in a high-risk, high-return business isn’t robbery. (And I say this having personally lost money in both Enron and Olympic Financial, two high-risk businesses that went belly-up).

The no-doc loan thing cuts both ways. People complained for years that lenders were too tough on people, that they discriminated or used inproper measures to determine eligibility (such as income or ZIP code).

So the regulations are changed and lenders loosen their requirements, and then people complain that they didn’t screen out people who couldn’t afford their loans.

Which should it be?

8. james wrote:

john, i understand the risks associated with ordinary investments. are you familiar with abfs? there were absolutely no warning signs that the company would be going under. and, in fact, it’s more than likely that abfs shielded it’s true financial status from investors, as well as the extra-risky nature of a product that no other company was offering because it was probably not a sound business model. investment notes were, effectively, an experimental investment, which most of investors were led to believe was as risky as any other investment. in fact, the investment note was a much riskier proposition because it was tied up in subprime lending.

i imagine regulation can meet somewhere in the middle between too much and not enough. and that lenders can act more on behalf of their clients, as financial counselors, rather than potential swindlers.

9. John wrote:

james, I agree with you that regulation should meet in the middle.

And I think — for the most part — that is what happens in the U.S.

The problem is it takes decades to determine the upside and downside of regulation/deregulation, and sometimes individuals get hurt while we learn.

We went from a completely unregulated business environment in the early 1900s to a very overregulated climate after the depression, which corrected some problems but caused others and ultimately stifled growth.

The regs were loosened in the 1970s-90s and we’re beginning to see where people exploited the loopholes. Those will be closed over the next few years, I imagine, and we’ll start all over again.

10. DCI74 wrote:

I agree with your #5 post John. While I find some of maj’s posts interesting whenever he talks about this topic he doesn’t show the complete picture.