[deejjjaaaa]

I was a little surprised at how far US lenders went to give people money who had absolutely no credit worthiness. Unfortunately now the rest of the world has paid the price for their foolishness.

US lenders are no better than US voters

[Rick]

Families here are starting to feel the pinch caused primarily by the US sub-prime collapse. Until the collapse I had no idea how unethical the lending standards of loan providers in the US was.

The loan providers??? And just who held a gun to the heads of people and make them take out mortgages without reading the not-so-fine print? "No money down, chase me around" is a way of life for a lot of people - and if you go broke... hey... declare bankrupcy, shrug off all the debt, and start all over again. Let somebody else take the hit.

There is not one single link in this whole chain of events that is more or less moral than all the others. Blaming the loan providers or anyone else in the whole story is to presume the adults who entered into these financial arrangements are small children incapable of managing their affairs (although many are, come to think of it). I'm amazed at how many people will put more time, effort, and research into buying a car or some other toy than they will into a mortgage or financial investment.

My wife and I took out our mortgage at the height of these subprime mortgages. While shopping for mortgages we looked at these amongst what we were offered - and you didn't have to be a rocket scientist to understand the terms of the mortgage and the inevitability of having to pay sooner or later. Neither of us are lawyers or financial gurus, blue collar all the way; although we did go to a financial advisor just to see if we weren't missing out on a good deal somehow or other - his advice was to go nowhere near them, as the inevitability of where they were leading was indeed as obvious as it looked.

I can remember when I was looking at my first house as a young guy back in the 70's - the mortgages looked too good to be true (as such things usually are) even though everyone was talking about making a fortune flipping houses as real estate prices skyrocketed. I kept my money in my pocket and my greed under check - and watched as interest rates soared to above 20%. Not exactly the same scenario as here, but similar enough in that people who refused to read the fine print inevitably had to face the results of their greed. Same end result - defaulting mortgages, more houses for sale than buyers, financial investors and institutions taking huge losses, etc.

The sub-prime mess is just a larger part of the larger mess that the American economy - and other economies - are in. Canada came close to the edge itself, and other countries have fallen off the edge. However, politicians will do or not do whatever it takes to keep the voters happy and keep their support. The voters in turn don't want to hear politicians like Ron Paul (and a few others) warning that, no, everything will not be all right and the spending has to stop right now. The two contenders for the presidency are talking about spending enormous amounts of money that just ain't there - and if those two weren't, some other contenders from their respective parties would be saying pretty much the same things. Meanwhile, the voters compare the two shopping lists they're being offered as though there's money in the bank to pay for it.

Of course, as voters, it is always much easier to blame the government, or the banks, or the lenders, or the financial houses for our economic woes. They're certainly an accomplice in all of it, but the major culprit in all of this is the voter. Ultimately, governments couldn't do the deficit spending they do and banks couldn't lend money and offer the securities they do without the votes of the citizens and their signatures on legal contracts.

If you want a view of the situation that isn't quite as shallow as the cartoon version, this might be of interest.
YouTube - Glenn Beck on the US Financial crisis

[Lance B]

The loan providers??? And just who held a gun to the heads of people and make them take out mortgages without reading the not-so-fine print? "No money down, chase me around" is a way of life for a lot of people - and if you go broke... hey... declare bankrupcy, shrug off all the debt, and start all over again. Let somebody else take the hit.

The people who gave out the loans *knew* that many of these people could not afford the loans.....ever. That is criminal in my book.

These lenders should be the ones who wear the bankruptcy, not the rest of the world.

These lenders loaned people money that they could *never* afford and therefore never pay off and the only reason that these lenders *thought* they could get away with it is because they were banking on the fact that the home to go up in value due to inflation. So, when these homes started to devalue due to the American economy declining, these people owed more than they had as an asset in their home.

There is not one single link in this whole chain of events that is more or less moral than all the others. Blaming the loan providers or anyone else in the whole story is to presume the adults who entered into these financial arrangements are small children incapable of managing their affairs (although many are, come to think of it). I'm amazed at how many people will put more time, effort, and research into buying a car or some other toy than they will into a mortgage or financial investment.

That's fine *if* these people could understand what they were doing, but most who take out these sort of motgages are in the lower socioeconomic situation and are also below the IQ level to be able to comprehend what they are getting themselves into and thus are incapable of understanding what they were doing. This is why we have laws to protect these people from these sort of charlatans. Yes, some of these people *are* like small children and cannot decipher how these home loans affected them. These charlatans preyed on these vulnerable peole to make a quick buck due to the fact that they were on bonuses to write as many loans as possible *regardless* of the consequences.

My wife and I took out our mortgage at the height of these subprime mortgages. While shopping for mortgages we looked at these amongst what we were offered - and you didn't have to be a rocket scientist to understand the terms of the mortgage and the inevitability of having to pay sooner or later. Neither of us are lawyers or financial gurus, blue collar all the way; although we did go to a financial advisor just to see if we weren't missing out on a good deal somehow or other - his advice was to go nowhere near them, as the inevitability of where they were leading was indeed as obvious as it looked.

I can remember when I was looking at my first house as a young guy back in the 70's - the mortgages looked too good to be true (as such things usually are) even though everyone was talking about making a fortune flipping houses as real estate prices skyrocketed. I kept my money in my pocket and my greed under check - and watched as interest rates soared to above 20%. Not exactly the same scenario as here, but similar enough in that people who refused to read the fine print inevitably had to face the results of their greed. Same end result - defaulting mortgages, more houses for sale than buyers, financial investors and institutions taking huge losses, etc.[/QUOTE]

You obviously can understand what you were getting yourself into, but these people couldn't and these loan charlatans took advantage of people who could not understand their situation. That is criminal in my book. We have laws to protect the weak and innocent and laws should be passed to stop this practice from ever happening again.

The sub-prime mess is just a larger part of the larger mess that the American economy - and other economies - are in. Canada came close to the edge itself, and other countries have fallen off the edge. However, politicians will do or not do whatever it takes to keep the voters happy and keep their support. The voters in turn don't want to hear politicians like Ron Paul (and a few others) warning that, no, everything will not be all right and the spending has to stop right now. The two contenders for the presidency are talking about spending enormous amounts of money that just ain't there - and if those two weren't, some other contenders from their respective parties would be saying pretty much the same things. Meanwhile, the voters compare the two shopping lists they're being offered as though there's money in the bank to pay for it.

Of course, as voters, it is always much easier to blame the government, or the banks, or the lenders, or the financial houses for our economic woes. They're certainly an accomplice in all of it, but the major culprit in all of this is the voter. Ultimately, governments couldn't do the deficit spending they do and banks couldn't lend money and offer the securities they do without the votes of the citizens and their signatures on legal contracts.

If you want a view of the situation that isn't quite as shallow as the cartoon version, this might be of interest.
YouTube - Glenn Beck on the US Financial crisis[/QUOTE]

[Rick]

The people who gave out the loans *knew* that many of these people could not afford the loans.....ever. That is criminal in my book.

So... they must be their brother's keeper? Have some sort of crystal ball that told them that the buyer's business wouldn't succeed like they thought it would, that the auto industry would have a downturn and lay them off, that their parents would default on their co-signing of the loan, etc?

And of course, that the housing market would actually go down instead of continuing to rise. If the market HAD gone up... well, these people would all be looking like financial geniuses right now. And instead of everybody trying to make the mortgage brokers and lenders out to be the spawn of satan, even more people would be lined up asking for a loan so they could get in on the financial killing.

Here's a real crazy thought: maybe many of these people figured that, what the hell, if they couldn't make it, they'd just drop the keys off and walk away, with the benefit of having lived in a home well above their means for as long as it lasted. Better than renting in a six plex, eh - especially when the payments while it lasted were about the same as rent?

Nah... none of them would have ever thought of it in those terms. They aren't smart enough to think of something like that.

Here's another real crazy thought: maybe many of these people thought that, even if it did go sour, some politician in one election year or another might come along with a program to bail them out of their mortgage, so they'd end up having that house above their means anyways. Paid for with the taxes of those who bought within their means, of course.

And whaddya know... some politicians are talking about doing just that.

Why is it these days that personal responsibility seems to be anthema? It always seems to be somebody else's fault - not the person who made the decisions? Everybody wants to talk about their rights - but the fact that rights are accompanied by duties seems to be a dirty little secret these days that nobody wants to admit to.

However, if the bad ol' businessman/capitalist/whatever has to be held responsible if they don't treat their customers like minor children, let's at least be consistent about it to prove we're not cherrypicking.

Let's nail all the vehicle dealers who sell crotch rockets to kids who go out and kill themselves, or expensive SUV's to people who they should know can't make the payments or afford the gas a year or two down the road. They should have known what might happen. In fact, let's just shut down manufacturing any vehicle capable of exceeding the speed limit by more than... say 20 mph.

Let's jail everyone who sells cigarettes, or foods with trans fats, or anything else that they know is bad for your health and shortens your life. After all, a bad decision on a mortage will just take you back to square one financially - a heart attack or diabetes is just a little bit more serious than losing your house. Let's not forget the store that sells a young kid an expensive stereo or bag full of camera gear when he knows that kid should be using that money to go to college instead of working for minimum wage at a local dead end job. My God, they're sentencing that kid to a lifetime of menial labour!

The reality is you'll never be able to trust adults to consume responsibly, nor businessmen to sell only things that are good for that particular customer, so if we want to consistently prevent people from purchasing things that are probably bad for them, we need to put the government in charge of all business. So... when you want something, you just submit your latest annual physical, your bank and employment records, or whatever the government asks for so that they can decide whether what you want is good for you or not. Little on the fat side? Sorry, the local store won't sell you any junk food (assuming we continue to allow it being offered for sale of course). Want a new camera? Sorry, that money would be better spent making an extra mortgage payment on your house this year.

I don't have a problem with the concept of saying that business should be legally obligated to decide whether it is in their customer's best interests to have what they want to purchase or not - as long as you want that for EVERYTHING, not just houses because a bunch of people did the same stupid thing a bunch of other stupid people did thirty years earlier. However, my best guess is that people are all for making the loan guys responsible for guessing whether or not a customer would actually make it - but they don't want somebody telling THEM they can't have a fast motorcycle, or a grocery bag full of junk food, or permission to speculate on future land development by buying that piece of property outside of town.

That's fine *if* these people could understand what they were doing, but most who take out these sort of motgages are in the lower socioeconomic situation and are also below the IQ level to be able to comprehend what they are getting themselves into and thus are incapable of understanding what they were doing.

I wasn't aware that the people defaulting on these mortgages had any sort of study done on them to determine what their mean IQ level was? That's a new one on me; did you read that somewhere or is that just an assumption on your part?

I suspect that they're probably pretty much a microcosm of society - particularly when two of those who defaulted live in our neighborhood and are both self employed with fairly successful small businesses. However, they weren't successful enough businesses to pay for two acres of land near a ski resort with a ridiculously sized house and a bunch of toys parked in the garage. Most of these loans didn't finance little tiny starter homes...

However, if it is true most of these people are incapable of understanding what they are doing, I suppose we need to appoint somebody to have power of attorney over their affairs - that's what we normally do with people who can't fend for themselves. Time to bring in Big Brother again.

This is why we have laws to protect these people from these sort of charlatans. Yes, some of these people *are* like small children and cannot decipher how these home loans affected them. These charlatans preyed on these vulnerable peole to make a quick buck due to the fact that they were on bonuses to write as many loans as possible *regardless* of the consequences.

And here I thought a whole bunch of these people were using these sub prime loans to speculate on the idea that house prices were going to go up and they were going to flip a really big house and cash in big time. To use your words, they were trying to make a quick buck. Which, if memory serves me correctly, is exactly what so many people were doing 30 years ago when house prices suddenly fell and interest rates soared. Most of them lost their shirts as well - the only difference is, back then the concept of personal responsibility for the decisions you make was still lingering on a bit.

The funny thing to all of this is that, as housing prices fall and more and more houses are defaulted on, even more people are lining up - often in front of those same mortgage brokers - to get in on the killing to be made in buying homes being sold for firesale prices. There are financial vehicles being set up in Canada to allow Canadians to cash in on undervalued homes and property down in the US without the usual hassles, and I'm reasonably certain the same advertising can be found in other countries.

Why doesn't somebody step in and prevent all these foreigners from doing this? After all, if things go as expected, they're going to do extremely well financially. However, if lending rates go in the tank back home for them... well then, we'll have to go and curse them bad old mortgage and lending companies again.

People are greedy. It's a human trait, and some people let their greed push aside their common sense. And sometimes they just didn't calculate the odds well enough, or their gamble didn't come through.

You obviously can understand what you were getting yourself into, but these people couldn't and these loan charlatans took advantage of people who could not understand their situation.

I'd sure like to know where you found the survey that was done on these people that determined that in the vast majority they were incapable of making intelligent decisions - as opposed to simply being careless or greedy themselves. I'd REALLY like to know where you came by that information.

That is criminal in my book. We have laws to protect the weak and innocent and laws should be passed to stop this practice from ever happening again.

No problem. Just make sure you ask the government to have an oversight board regulating your consumer access to ALL items that might cause you financial distress - or poor health.

Me, I still like the idea of personal responsibility for your own decisions - and the freedom to make those decisions.

[Lance B]

So... they must be their brother's keeper? Have some sort of crystal ball that told them that the buyer's business wouldn't succeed like they thought it would, that the auto industry would have a downturn and lay them off, that their parents would default on their co-signing of the loan, etc?

Many of these loans were given out at *over 100%* of the house's market value!! Also, many of these people were completely unable to meet the loan repayments and these charlatans knew it. So, they banked on the *hope* that the house prices would go up as they *knew* that these people couldn't repay and would default on their loans and so the *only* way that these loans could be repaid was that their houses would be repossesed. Trouble is, the bottom fell out of the market and you and I have to foot the bill.

Many of these were people would *never* have qualified for a loan with any normal bank, but these cowboys were only interested in short term gain.

And of course, that the housing market would actually go down instead of continuing to rise. If the market HAD gone up... well, these people would all be looking like financial geniuses right now. And instead of everybody trying to make the mortgage brokers and lenders out to be the spawn of satan, even more people would be lined up asking for a loan so they could get in on the financial killing.

Actually, they wouldn't as many of these people could *never* afford the loan repayments in the first place and would have *still* had to default on their loans.

Here's a real crazy thought: maybe many of these people figured that, what the hell, if they couldn't make it, they'd just drop the keys off and walk away, with the benefit of having lived in a home well above their means for as long as it lasted. Better than renting in a six plex, eh - especially when the payments while it lasted were about the same as rent?

That could be right too, but does that make it any better?? The fact *still* remains that these people should *never* have been given the loan in the first place regardless of who ever thought they were going to profit.

Nah... none of them would have ever thought of it in those terms. They aren't smart enough to think of something like that.

Some may have and some may not have, but that doesn't alter the outcome nor avoid it. The point is to stop this sort of thing from happening.

Here's another real crazy thought: maybe many of these people thought that, even if it did go sour, some politician in one election year or another might come along with a program to bail them out of their mortgage, so they'd end up having that house above their means anyways. Paid for with the taxes of those who bought within their means, of course.

That is really drawing a long bow.

And whaddya know... some politicians are talking about doing just that.

That is to save the politicians *rse and the economy rather than any good samaritan act to the loan defaulters.

[QUOTE]Why is it these days that personal responsibility seems to be anthema? It always seems to be somebody else's fault - not the person who made the decisions? Everybody wants to talk about their rights - but the fact that rights are accompanied by duties seems to be a dirty little secret these days that nobody wants to admit to.[QUOTE]

That's exactly my point!! The people who *sold them the loan* should take responsibility, not those who wouldn't know a loan if it bit them. Many of these poor people are not smart enough to add 2 and 2 to come up with 4.

[QUOTE]However, if the bad ol' businessman/capitalist/whatever has to be held responsible if they don't treat their customers like minor children, let's at least be consistent about it to prove we're not cherrypicking.

Let's nail all the vehicle dealers who sell crotch rockets to kids who go out and kill themselves, or expensive SUV's to people who they should know can't make the payments or afford the gas a year or two down the road. They should have known what might happen. In fact, let's just shut down manufacturing any vehicle capable of exceeding the speed limit by more than... say 20 mph.[QUOTE]

Here in Australia they are banning young drivers from having turbo charged cars and no V8's until they have been driving for 3 years.

Let's jail everyone who sells cigarettes, or foods with trans fats, or anything else that they know is bad for your health and shortens your life. After all, a bad decision on a mortage will just take you back to square one financially - a heart attack or diabetes is just a little bit more serious than losing your house. Let's not forget the store that sells a young kid an expensive stereo or bag full of camera gear when he knows that kid should be using that money to go to college instead of working for minimum wage at a local dead end job. My God, they're sentencing that kid to a lifetime of menial labour!

You are now being ridiculous. If the kid is too stupid to *not* buy a stereo and a bag full of camera gear then I hardly think he will be college material. If the kid defaults on his camera repayments, this is hardly going to ruin the US economy like these home defaulters are.

The reality is you'll never be able to trust adults to consume responsibly, nor businessmen to sell only things that are good for that particular customer, so if we want to consistently prevent people from purchasing things that are probably bad for them, we need to put the government in charge of all business. So... when you want something, you just submit your latest annual physical, your bank and employment records, or whatever the government asks for so that they can decide whether what you want is good for you or not. Little on the fat side? Sorry, the local store won't sell you any junk food (assuming we continue to allow it being offered for sale of course). Want a new camera? Sorry, that money would be better spent making an extra mortgage payment on your house this year.

The difference is, there can be laws set into place that would have guidelines to protect people from unscrupulous lenders. We have these laws in Australia and by and large they work. What these lenders did was no different to lying and cheating people out of money. In otherwords it was blatant stealing.

I don't have a problem with the concept of saying that business should be legally obligated to decide whether it is in their customer's best interests to have what they want to purchase or not - as long as you want that for EVERYTHING, not just houses because a bunch of people did the same stupid thing a bunch of other stupid people did thirty years earlier. However, my best guess is that people are all for making the loan guys responsible for guessing whether or not a customer would actually make it - but they don't want somebody telling THEM they can't have a fast motorcycle, or a grocery bag full of junk food, or permission to speculate on future land development by buying that piece of property outside of town.

I wasn't aware that the people defaulting on these mortgages had any sort of study done on them to determine what their mean IQ level was? That's a new one on me; did you read that somewhere or is that just an assumption on your part?

Let's break it down into two parts. Those who are smart enough to realise that they cannot afford the home and those that aren't smart enough.

As you point out, those that are smart enough may have duped the "system" by giving them a house to live in well above their means for a few months or years. Does that make it ok? No, of course not. So, the "system" failed us.

Then there are those that aren't smart enough to know better and were duped by the "system" and lack of guidelines set down to these lenders. Does that make it right also? No, and these people should be protected by guidelines for the lenders.

I can tell you now that I am definitely *no bleeding heart* and own my own multimillion dollar business, but we still have an obligation to protect the weak and stupid as well as we need to protect ourselves from those that try to dupe us. If not, then we are all doomed as a society.

I suspect that they're probably pretty much a microcosm of society - particularly when two of those who defaulted live in our neighborhood and are both self employed with fairly successful small businesses. However, they weren't successful enough businesses to pay for two acres of land near a ski resort with a ridiculously sized house and a bunch of toys parked in the garage. Most of these loans didn't finance little tiny starter homes...

However, if it is true most of these people are incapable of understanding what they are doing, I suppose we need to appoint somebody to have power of attorney over their affairs - that's what we normally do with people who can't fend for themselves. Time to bring in Big Brother again.

And here I thought a whole bunch of these people were using these sub prime loans to speculate on the idea that house prices were going to go up and they were going to flip a really big house and cash in big time. To use your words, they were trying to make a quick buck. Which, if memory serves me correctly, is exactly what so many people were doing 30 years ago when house prices suddenly fell and interest rates soared. Most of them lost their shirts as well - the only difference is, back then the concept of personal responsibility for the decisions you make was still lingering on a bit.

The funny thing to all of this is that, as housing prices fall and more and more houses are defaulted on, even more people are lining up - often in front of those same mortgage brokers - to get in on the killing to be made in buying homes being sold for firesale prices. There are financial vehicles being set up in Canada to allow Canadians to cash in on undervalued homes and property down in the US without the usual hassles, and I'm reasonably certain the same advertising can be found in other countries.

Why doesn't somebody step in and prevent all these foreigners from doing this? After all, if things go as expected, they're going to do extremely well financially. However, if lending rates go in the tank back home for them... well then, we'll have to go and curse them bad old mortgage and lending companies again.

People are greedy. It's a human trait, and some people let their greed push aside their common sense. And sometimes they just didn't calculate the odds well enough, or their gamble didn't come through.

I'd sure like to know where you found the survey that was done on these people that determined that in the vast majority they were incapable of making intelligent decisions - as opposed to simply being careless or greedy themselves. I'd REALLY like to know where you came by that information.

No problem. Just make sure you ask the government to have an oversight board regulating your consumer access to ALL items that might cause you financial distress - or poor health.

Me, I still like the idea of personal responsibility for your own decisions - and the freedom to make those decisions.

I too, like the idea of responsibility for your own actions, but society must also take a step towards responsibility to the weak. You seem to forget that the lenders have a responsibility too and what they did in many cases was to exploit the weak and absolve their responsibility.

[Rick]

Many of these loans were given out at *over 100%* of the house's market value!!

So what? Once again: who put a gun to their head and told them to speculate in real estate by flipping houses? And by the way, you never did tell us where you got the information that these people were of sub normal intelligence. I'd still like to see that.

Of course, as a multi millionaire, you do know that having a mortgage that is over the amount required is not exactly a new idea in mortgages, correct? My wife and I have one ourselves. It makes a lot of sense in a country where your home mortgage is a tax deduction. In our case, it paid out the bills of both my wife and myself's accumulated school bills from going back to university in midlife. Others use it to furnish a home, pay down high interest debt on credit cards at the same time, etc.

So a mortgage. for more than what is required to purchase the home isn't exactly the smoking gun you make it out to be.

As far as that goes, sub prime mortages were a pretty good deal for those who had a pretty good belief their income was going to go up fairly quickly - even if the claimed continued rise in housing costs never did happen. It allowed people to get into a bigger home than they might have otherwise, pay down the mortgage with bigger payments when their income rose, and by the time the normal rates kicked in be sitting in something they couldn't have afforded with normal rates from day one, with monthly payments now about what they would have been from day one with a "normal" mortgage.

Also, many of these people were completely unable to meet the loan repayments and these charlatans knew it.

By "charlatans", you are of course referring to the people who signed an agreement to pay a specific amount per month, knowing even as they signed that they were completely unable to meet those obligations?

You're right - that's not very honest. They're charlatans.

Trouble is, the bottom fell out of the market and you and I have to foot the bill.

Oh? Are you paying US taxes like I do?

Or have charlatans over in Australia made very poor financial investments and now you're stuck with the fallout from that? I'm reasonably certain the Australian government isn't giving the US money to deal with this. And if Australians - or anybody else - bought into the CDO's that came out of these loans and ignored they were buying into high risk hedge funds and private equity investments, I really don't have any sympathy for them. Whether you're speculating in pork belly futures or CDO's made up of sub prime loans, you're accepting risk in the hope of high returns. Of course, if your tastes in speculating go to investing in American stock and bond markets, then you might resent the added effect this has had on the general downturn in your hoped for profits as well. It isn't just buying houses that has financial risks when you're investing and speculating.

Many of these were people would *never* have qualified for a loan with any normal bank, but these cowboys were only interested in short term gain.

You're right of course. Many of those cowboys found out they couldn't flip the houses they purchased above their means at the hoped-for profit before their inability to pay the mortgage caught up with them, while others tried to flip one house too many and ended up ultimately getting stuck with a very expensive house and burned in the end.

Again, no different than thirty years ago, when it wasn't uncommon to see people buying a house in the morning and selling it the same day as the housing market climbed.

Actually, they wouldn't as many of these people could *never* afford the loan repayments in the first place and would have *still* had to default on their loans.

Perhaps they don't do it in Australia, but it's called "flipping a house" here. You don't intend to ever pay the loan in the first place - the house gets sold for considerably more than you bought it for within days or hours of the purchase. If you think that's unusual, you haven't checked some of the Canadian real estate markets lately (house flipping has kind of slowed down in the US these days).

It's not illegal for buyers to speculate by purchasing houses and attempting to flip them. So these "cowboys" as you called them were perfectly legal in attempting to make a killing by flipping homes ridiculously beyond what they would normally have to live in (up to the point where they started committing mortgage fraud, of course).

That could be right too, but does that make it any better?? The fact *still* remains that these people should *never* have been given the loan in the first place regardless of who ever thought they were going to profit.

It's called "freedom". A short word that means not having a nanny state tell you what you should and shouldn't do as far as what is good for you to eat, drink, how to invest your money, what recreational activities you should risk and what you shouldn't, etc. The words say you have the right to the pursuit of happiness - not a guarantee of happiness or success.

What is missing from that equation is that too many people feel some strange obligation to ask the government to come afterwards and save the poor dears after they've been utterly negligent and blase towards the risks they've decided to undertake.

I don't need some government busybody telling me whether I should ever have been allowed to make a financial investment, whether or not I should be allowed to drink beer, eat food with trans fats in it, or skydive in my free time. Throughout history, there's always been some arsehole who just knows what's good for you, and inevitably every time they get their hands on the wheel, personal freedoms and liberties decline. And it's always done "for your own good".

Some may have and some may not have, but that doesn't alter the outcome nor avoid it. The point is to stop this sort of thing from happening.

I don't need the government deciding whether I should have the freedom to invest my money or not because some people acted stupidly with theirs, any more than I need a government deciding to ban all alcohol because it has is an established causal factor in 50% of all violent crime.

The call for more legislation, rules, regulations, restrictions "to stop this sort of thing from happening" is usually the harbinger of more government control over our personal lives, with an attendant loss of freedom. I'll take my freedom over the government nannying me from cradle to grave telling me what I can and can't do to protect me from "risk", thank you very much. Fortunately, Montana is a long way from ever becoming a nanny state.

That is really drawing a long bow.

Sayeth the man who claimed all these people were of sub normal intelligence and thus the poor dears didn't know what they were signing and getting themselves into... all the while pretending or not knowing that there was an incredible amount of borrower speculation and criminal mortgage activity going on.

Once you get beyond the tabloid press, there's a few other things that people like to sweep under the carpet while crying about how these poor low-intelligence people were the victims of predatory lenders. I'm not sure how your version of events squares with the reality that during the five year period at the height of sup prime loans, within the area of subprime mortgages, lender reports to the federal government concerning suspicious mortgage applications increased 10 fold.

Say what? These predatory lenders were detecting a ten fold increase in fraudulent mortgage applications - and reporting it - on the part of these poor dumb people they were fleecing? And let's not forget that occupancy fraud went up 20% within the period of sub prime loans as well. Oddly enough, most of the loan defaults occurred/are occurring in areas where the market was hottest and profits to be made by flipping houses highest. Hmmmm... coincidence? Ya figger?

Now that's the figures for REPORTED mortgage fraud on the part of borrowers. My first degree was in criminology, and there you're taught about "the dark figure of crime" - that which is never detected, if detected never reported, etc. Care to guess at what the dark figure for economic crime is generally estimated to be?

Meanwhile, the Wall Street Journal not too long ago ran a review of builders. It turns out they believed under 10% of their homes were being bought by speculators planning on flipping them when ready for occupancy - now they believe that figure to be 25% or higher, even though those people were signing occupancy agreements. It isn't an accident that many of the defaulted homes that are sitting out there have never had ANYONE live in them. Kind of hurts the image of a poor dumb family being thrown out of their home into the street, kids and all, but there ya go.

And you do know that a review of a large dataset of failed sub prime mortgages found that just over 70% of the mortgage applications had misrepresentations and falsehoods in them, yes? And these are the people who make up your overwhelming class of people victimized by lenders?

Oh yes, all those poor naive, low IQ little lambs were just innocently led off to slaughter by the lenders. There's a very different version of the culprits down in the pits where they actually look at what was going on instead of spreading gallons of ink around in tabloids and campaign fliers.

That is to save the politicians *rse and the economy rather than any good samaritan act to the loan defaulters.

I think it's more about buying votes, but whatever. I do know that if their motivation is to save their ass first, I don't want them given the power to regulate yet another aspect of my life.

That's exactly my point!! The people who *sold them the loan* should take responsibility, not those who wouldn't know a loan if it bit them. Many of these poor people are not smart enough to add 2 and 2 to come up with 4.

The 25% of purchasers speculating in homes,are those the poor people you're talking about? Or maybe the ones lying on their mortgage application? Perhaps the ones responsible for the 20% rise in occupancy fraud? Those the poor dummies you're talking about?

Yeah, somebody flipping homes has obviously never seen a mortgage document before! And they didn't understand the declaration at the bottom where they swore that all the information on their application was true. Missed that part...

That aside, there seems to be some cross cultural confusion here. Your talking about the lenders being responsible for the decisions the borrowers want to make. In North America, "personal responsiblity" does not mean somebody else takes responsibility for your actions and the decisions you make as an adult. No, quite the opposite.

In North America, "personal responsiblity" means YOU take responsibility for your actions - not some businessman, or the government agent, or a regulatory body. That's a nanny state - not the same thing.

Here in Australia they are banning young drivers from having turbo charged cars and no V8's until they have been driving for 3 years.

So what? Do they get a crotch rocket or other vehicle that will exceed the speed limit or not?

Why do you NEED a vehicle that will exceed the speed limit? You could hurt yourself you know - far worse than defaulting on a mortgage you were speculating on. Why do you need beer - remember, alcohol is a causal factor in 50% of all violent crime. Really, shouldn't we just ask the government to get rid of the beer along with sub prime lending so we can all be a little safer and more secure in our lives? True, most of us don't abuse vehicles, investment opportunites, alcohol - but some have proven to not be able to handle it, so better we ask the government to remove access to all those risky things, right?

You are now being ridiculous.

No. You're just being illogical and inconsistent - not the same thing.

If the kid is too stupid to *not* buy a stereo and a bag full of camera gear then I hardly think he will be college material.

Oh... okay... stupid people shouldn't be protected from buying toys they can't afford because they're too stupid to go to school anyways, but stupid people should be protected from buying homes they aren't smart enough to maintain and pay for. Got it.

If the kid defaults on his camera repayments, this is hardly going to ruin the US economy like these home defaulters are.

The US economy was in serious trouble long before the subprime issue, and in fact that economic reality had a lot to do with the subprime issue becoming what it did. The US economy as a whole is going to tank with or without the sub prime issue.

But you do have a point. So if government restrictions will significantly improve the quality of life, whaddya say we get the government to ban booze entirely? How much money in policing, medical, correctional, etc costs will that save the US and Australia each year?

More import than the dollar figure, how much human misery, injury, and death will that prevent each year in Australia closer to your home, never mind the US? How many impaired driving deaths in Australia each year? How many spousal assaults by a drunk, drunken brawls, broken homes due to alcoholism, careers and relationships destroyed by alcohol, deaths due to alcohol related illnesses, etc?

Now I consider the deaths due to drunks, injuries, broken homes, etc to be MUCH more serious than merely walking away from a home you couldn't afford and having to start again - it doesn't get any more serious than dead.

So using your rational and mindset about getting the government to intervene in people's lives to protect themselves and others from their own wanton stupidity, I'm surprised you're so concerned about the US and not busy back in Australia lobbying your government to outlaw booze. After all, that has much more effect on you than the US situation does (unless you're heavily invested in US markets, of course). I just don't see why protecting housing market speculators from their errors in judgement would be more important than trying to end the death and misery due to alcohol use. And after all, people do need some kind of shelter or other - but nobody REALLY needs a beer or a glass of wine. Such a little thing to ask the government to take away from us for the common good, don't you think?

The difference is, there can be laws set into place that would have guidelines to protect people from unscrupulous lenders. We have these laws in Australia and by and large they work. What these lenders did was no different to lying and cheating people out of money. In otherwords it was blatant stealing.

Y'know, I have an ever increasing suspicion that you have absolutely no idea of the amount of mortgage fraud that was going on during this period, speculation in housing, etc. I have yet to see you write one word other than about "unscrupulous lenders". It's as though all the house flipping, occupancy fraud, etc that was going on doesn't even exist in how you perceive this from far across the ocean.

The lenders were lying and cheating these mortgage speculators out of their money. The same purchasers putting in fraudulent mortgage applications, committing occupancy fraud, etc. Yeah, right...

Let's break it down into two parts. Those who are smart enough to realise that they cannot afford the home and those that aren't smart enough.

I have a better idea. Let's have a system where the term "buyer beware" still means something, not a nanny state holding your hand from cradle to grave. A system where the government treats you like an adult and allows you the freedom to make your own choices. I prefer that one.

Or we can have one where the government regulates EVERYTHING that might bring you financial, emotional, or physical harm in your life. No cherrypicking. Financial safety - but no beer, it' leads to too much misery.

As you point out, those that are smart enough may have duped the "system" by giving them a house to live in well above their means for a few months or years. Does that make it ok? No, of course not. So, the "system" failed us.

Then there are those that aren't smart enough to know better and were duped by the "system" and lack of guidelines set down to these lenders. Does that make it right also? No, and these people should be protected by guidelines for the lenders.

Still not a word about the borrower's roll in all of this, despite the fairly well examined role of borrowers in this, in particular the fraud and speculation. Just a suggestion that these people need to be protected from those nasty ol' lenders.

I find that kind of naive call for more government regulation frightening - but not as frightening as the concept that people shouldn't be trusted to think for themselves, and therefore the government should step in and control yet another part of your life and nanny you through life instead.

I can tell you now that I am definitely *no bleeding heart* and own my own multimillion dollar business, but we still have an obligation to protect the weak and stupid as well as we need to protect ourselves from those that try to dupe us.

And still not a word about the fraud on the part of borrowers. Just an assumption that they are the weak and stupid, while the lenders were doing the duping.

There is a difference between protecting the weak and having a nanny state where the government controls aspects of your life and takes away your freedom of choice. What catches my mind on that is those who usually advocate the nanny state are pretty happy with it - as long as the nanny state doesn't do anything that affects their choices and activities, of course. Because they personally don't need nannying, just them other folks.

I too, like the idea of responsibility for your own actions, but society must also take a step towards responsibility to the weak. You seem to forget that the lenders have a responsibility too and what they did in many cases was to exploit the weak and absolve their responsibility.

End of post. And not word of acknowledgement of the amount of actual CRIMINAL wrongdoing and speculation on the part of many of those purchasers. Aside from the denial (or ignorance) of that criminal fraud taking place, there's an important difference here. Except for those lenders who did commit criminal acts in how they presented those mortgages, the vast majority of those loans were perfectly legal. Mortgage fraud is NOT legal and is CRIMINAL. We're talking about the borrowers here being the ones committing the criminal acts here, not the lenders, no matter how much you think their actions SHOULD be criminal.

So I find the continued claim about the borrowers being of sub par intelligence, weak, exploited, etc more than a little bit weak. Maybe what we really should be doing is spending more time on law enforcement towards detecting and jailing borrowers who are engaging in mortgage fraud, occupancy fraud, etc. If we'd done that, perhaps there wouldn't have been around a 25% speculation rate in new homes, less homes flooding the market, and all of this wouldn't have happened in the first place.

You can't argue you're in favour of personal responsibility in the first place, and then turn around and argue that the government should regulate your life so you don't have to accept personal responsibility. The last thing I want is the government continuing to regulate personal behavior more and more as long as some people continue to act stupid and make dumb decisions even when they have normal intelligence and should know better. Take away the consequences and they'll never smarten up anyways.

[Lance B]

So what? Once again: who put a gun to their head and told them to speculate in real estate by flipping houses? And by the way, you never did tell us where you got the information that these people were of sub normal intelligence. I'd still like to see that.

I said in both of my reply posts that *some* maybe of sub par intelligence and that others may have exploited the system. This doesn't make either right, just that the system needs to be changed to stop it happening.

Of course, as a multi millionaire, you do know that having a mortgage that is over the amount required is not exactly a new idea in mortgages, correct? My wife and I have one ourselves. It makes a lot of sense in a country where your home mortgage is a tax deduction. In our case, it paid out the bills of both my wife and myself's accumulated school bills from going back to university in midlife. Others use it to furnish a home, pay down high interest debt on credit cards at the same time, etc.

So a mortgage. for more than what is required to purchase the home isn't exactly the smoking gun you make it out to be.

As far as that goes, sub prime mortages were a pretty good deal for those who had a pretty good belief their income was going to go up fairly quickly - even if the claimed continued rise in housing costs never did happen. It allowed people to get into a bigger home than they might have otherwise, pay down the mortgage with bigger payments when their income rose, and by the time the normal rates kicked in be sitting in something they couldn't have afforded with normal rates from day one, with monthly payments now about what they would have been from day one with a "normal" mortgage.

By "charlatans", you are of course referring to the people who signed an agreement to pay a specific amount per month, knowing even as they signed that they were completely unable to meet those obligations?

You're right - that's not very honest. They're charlatans.

It matter nout who was duped, either the lender or the borrower. What *needs* to happen is to avoid this from happening and a few fail safe laws would largely correct this and avoid the rest of us footing the bill.

Oh? Are you paying US taxes like I do?

Or have charlatans over in Australia made very poor financial investments and now you're stuck with the fallout from that? I'm reasonably certain the Australian government isn't giving the US money to deal with this. And if Australians - or anybody else - bought into the CDO's that came out of these loans and ignored they were buying into high risk hedge funds and private equity investments, I really don't have any sympathy for them. Whether you're speculating in pork belly futures or CDO's made up of sub prime loans, you're accepting risk in the hope of high returns. Of course, if your tastes in speculating go to investing in American stock and bond markets, then you might resent the added effect this has had on the general downturn in your hoped for profits as well. It isn't just buying houses that has financial risks when you're investing and speculating.

Like many Americans you seem to live in a vacuum. The fallout from the subprime market affects the *whole world* market, not just the USA - remember the rest of the world? Every country in the developed world is affected by the ineptness of these charlatans who gave out these loans.

You, me and the rest of the developed world are paying the price for "your freedoms" that you so fondly speak of.

You're right of course. Many of those cowboys found out they couldn't flip the houses they purchased above their means at the hoped-for profit before their inability to pay the mortgage caught up with them, while others tried to flip one house too many and ended up ultimately getting stuck with a very expensive house and burned in the end.

Again, no different than thirty years ago, when it wasn't uncommon to see people buying a house in the morning and selling it the same day as the housing market climbed.

Perhaps they don't do it in Australia, but it's called "flipping a house" here. You don't intend to ever pay the loan in the first place - the house gets sold for considerably more than you bought it for within days or hours of the purchase. If you think that's unusual, you haven't checked some of the Canadian real estate markets lately (house flipping has kind of slowed down in the US these days).

It's not illegal for buyers to speculate by purchasing houses and attempting to flip them. So these "cowboys" as you called them were perfectly legal in attempting to make a killing by flipping homes ridiculously beyond what they would normally have to live in (up to the point where they started committing mortgage fraud, of course).

It's called "freedom". A short word that means not having a nanny state tell you what you should and shouldn't do as far as what is good for you to eat, drink, how to invest your money, what recreational activities you should risk and what you shouldn't, etc. The words say you have the right to the pursuit of happiness - not a guarantee of happiness or success.

What is missing from that equation is that too many people feel some strange obligation to ask the government to come afterwards and save the poor dears after they've been utterly negligent and blase towards the risks they've decided to undertake.

But that's my point. This is done *before* anything gets out of hand, before they do the unscrupulous lending, not afterwards when the damage is done and it is tto late. Prevention is better than cure.

You seem to think that the market is a completely unregulated system *when it is not*, it is *very* regulated, but obviously not regulated enough in this case. If it was not regulated at all, like you would like, then all the wealth would reside with a very select few and you me and just about everybody else would be paupers with no money at all. This is irrefutable no matter what you would *like* to think. Do you really want to go to a completely unregualted system and end up on poor street? Don't give me this garbage that it is an unregulated system and that buyer beware. That is just crap.

I don't need some government busybody telling me whether I should ever have been allowed to make a financial investment, whether or not I should be allowed to drink beer, eat food with trans fats in it, or skydive in my free time. Throughout history, there's always been some arsehole who just knows what's good for you, and inevitably every time they get their hands on the wheel, personal freedoms and liberties decline. And it's always done "for your own good".

But they are not telling *you* how to do anything. They are merely putting in place a system that will ensure that people are not put into debt over their heads. These systems are already in place, just that they need tightening up.

No government is going to stop you eating fatty foods, or drink beer or skydive, but they *will* put in place laws that stop unscrupulous vendors from selling food that has salmonella in it, or arsenic and they will puit in laws that make sure that your parachute opens when you deploy it. The same thing goes for the lending laws. It's no different no matter what you would *like* to believe.

I don't need the government deciding whether I should have the freedom to invest my money or not because some people acted stupidly with theirs, any more than I need a government deciding to ban all alcohol because it has is an established causal factor in 50% of all violent crime.

The call for more legislation, rules, regulations, restrictions "to stop this sort of thing from happening" is usually the harbinger of more government control over our personal lives, with an attendant loss of freedom. I'll take my freedom over the government nannying me from cradle to grave telling me what I can and can't do to protect me from "risk", thank you very much. Fortunately, Montana is a long way from ever becoming a nanny state.

Sayeth the man who claimed all these people were of sub normal intelligence and thus the poor dears didn't know what they were signing and getting themselves into... all the while pretending or not knowing that there was an incredible amount of borrower speculation and criminal mortgage activity going on.

You still miss my point. There were people taking advantage from *both* sides which then impacts on *your* mortgage rates and may push the US into recession. This now impacts on *you*. These people, both the unscrupulos lenders and also some unscrupulous borrowers, have meant that the USA may go into recession and also affect the rest of the worls interest rates. A simple lending guideline would have meant that all this pain could have been avoided.

Once you get beyond the tabloid press, there's a few other things that people like to sweep under the carpet while crying about how these poor low-intelligence people were the victims of predatory lenders. I'm not sure how your version of events squares with the reality that during the five year period at the height of sup prime loans, within the area of subprime mortgages, lender reports to the federal government concerning suspicious mortgage applications increased 10 fold.

Say what? These predatory lenders were detecting a ten fold increase in fraudulent mortgage applications - and reporting it - on the part of these poor dumb people they were fleecing? And let's not forget that occupancy fraud went up 20% within the period of sub prime loans as well. Oddly enough, most of the loan defaults occurred/are occurring in areas where the market was hottest and profits to be made by flipping houses highest. Hmmmm... coincidence? Ya figger?

Now that's the figures for REPORTED mortgage fraud on the part of borrowers. My first degree was in criminology, and there you're taught about "the dark figure of crime" - that which is never detected, if detected never reported, etc. Care to guess at what the dark figure for economic crime is generally estimated to be?

Meanwhile, the Wall Street Journal not too long ago ran a review of builders. It turns out they believed under 10% of their homes were being bought by speculators planning on flipping them when ready for occupancy - now they believe that figure to be 25% or higher, even though those people were signing occupancy agreements. It isn't an accident that many of the defaulted homes that are sitting out there have never had ANYONE live in them. Kind of hurts the image of a poor dumb family being thrown out of their home into the street, kids and all, but there ya go.

And you do know that a review of a large dataset of failed sub prime mortgages found that just over 70% of the mortgage applications had misrepresentations and falsehoods in them, yes? And these are the people who make up your overwhelming class of people victimized by lenders?

Oh yes, all those poor naive, low IQ little lambs were just innocently led off to slaughter by the lenders. There's a very different version of the culprits down in the pits where they actually look at what was going on instead of spreading gallons of ink around in tabloids and campaign fliers.

You are conveniently forgetting that I said that there were the unscrupulous lenders and also the unscrupulous borrowers. It matters nout who duped who, the fact of the matter is that due to the shenanegans of the lenders to make a quick buck, the US economy and the rest of the world has to suffer. What a price for your so called the freedom of choice.

Do you really think it a good thing that these people were duped into signing mortgages they couldn't serve? Are you really that heartless? Do you honestly think that some people could not be duped by lenders with a fast tongue that could baffle them with facts and figures into believing that they *could* afford a home? You really live in a small world indeed if you think that.

I think it's more about buying votes, but whatever. I do know that if their motivation is to save their ass first, I don't want them given the power to regulate yet another aspect of my life.

The 25% of purchasers speculating in homes,are those the poor people you're talking about? Or maybe the ones lying on their mortgage application? Perhaps the ones responsible for the 20% rise in occupancy fraud? Those the poor dummies you're talking about?

Again, you conveniently miss my point. It matters nout who duped who. The result is the same. US recession and high interest rates. Great! Fantastic! Well done! I am sure you're as happy as a pig in sh!t.

Yeah, somebody flipping homes has obviously never seen a mortgage document before! And they didn't understand the declaration at the bottom where they swore that all the information on their application was true. Missed that part...

That aside, there seems to be some cross cultural confusion here. Your talking about the lenders being responsible for the decisions the borrowers want to make. In North America, "personal responsiblity" does not mean somebody else takes responsibility for your actions and the decisions you make as an adult. No, quite the opposite.

In North America, "personal responsiblity" means YOU take responsibility for your actions - not some businessman, or the government agent, or a regulatory body. That's a nanny state - not the same thing.
So what? Do they get a crotch rocket or other vehicle that will exceed the speed limit or not?

Why do you NEED a vehicle that will exceed the speed limit? You could hurt yourself you know - far worse than defaulting on a mortgage you were speculating on. Why do you need beer - remember, alcohol is a causal factor in 50% of all violent crime. Really, shouldn't we just ask the government to get rid of the beer along with sub prime lending so we can all be a little safer and more secure in our lives? True, most of us don't abuse vehicles, investment opportunites, alcohol - but some have proven to not be able to handle it, so better we ask the government to remove access to all those risky things, right?

In your world, there would be no speed limits, no laws governing this. Let people suck it and see the consequences. The very reason these laws are there are not so much to protect the speeding driver, but to protect the unsuspecting innocent person who is killed by their actions. The subprime fallout will affect *you* the unsuspecting innocent 3rd party. Same reason fore having the laws to protect the borrowers.

No. You're just being illogical and inconsistent - not the same thing.

Actually, you are. You want some laws but not others.

Oh... okay... stupid people shouldn't be protected from buying toys they can't afford because they're too stupid to go to school anyways, but stupid people should be protected from buying homes they aren't smart enough to maintain and pay for. Got it.

There is a far bigger difference from borrowing a few dollars for a toy than a major investment like a house that has the ability to cripple the economy.

The US economy was in serious trouble long before the subprime issue, and in fact that economic reality had a lot to do with the subprime issue becoming what it did. The US economy as a whole is going to tank with or without the sub prime issue.

And the subprime fallout will make it better? What a joke. So you're saying that due to the weak US economy that it is ok to have the subprime fallout to add icing on the cake and make *sure* that the US economy falls over and drags the rest of the world with it. That's fantastic. You're an economic giant.

But you do have a point. So if government restrictions will significantly improve the quality of life, whaddya say we get the government to ban booze entirely? How much money in policing, medical, correctional, etc costs will that save the US and Australia each year?

More import than the dollar figure, how much human misery, injury, and death will that prevent each year in Australia closer to your home, never mind the US? How many impaired driving deaths in Australia each year? How many spousal assaults by a drunk, drunken brawls, broken homes due to alcoholism, careers and relationships destroyed by alcohol, deaths due to alcohol related illnesses, etc?

Now I consider the deaths due to drunks, injuries, broken homes, etc to be MUCH more serious than merely walking away from a home you couldn't afford and having to start again - it doesn't get any more serious than dead.

So, what you're saying is that if we limit alcohol consumption that we will save lives and hospital expenses? Would that be a good thing? Sounds pretty good to me.

While they're at it, maybe they should ban heroin, oh wait, that *is* banned. Is *this* an invasion on your civil liberties?

It seems as though you want some laws but not others.

So using your rational and mindset about getting the government to intervene in people's lives to protect themselves and others from their own wanton stupidity, I'm surprised you're so concerned about the US and not busy back in Australia lobbying your government to outlaw booze. After all, that has much more effect on you than the US situation does (unless you're heavily invested in US markets, of course). I just don't see why protecting housing market speculators from their errors in judgement would be more important than trying to end the death and misery due to alcohol use. And after all, people do need some kind of shelter or other - but nobody REALLY needs a beer or a glass of wine. Such a little thing to ask the government to take away from us for the common good, don't you think?

Actually, no, your economy affects the whole world. That is why I think it is a travesty that not only are people duped into taking out loans they should never have taken out, but that it affects *everybody* else in the process. *You* me and everybody else will be paying for your so called freedom to dupe laws.

Y'know, I have an ever increasing suspicion that you have absolutely no idea of the amount of mortgage fraud that was going on during this period, speculation in housing, etc. I have yet to see you write one word other than about "unscrupulous lenders". It's as though all the house flipping, occupancy fraud, etc that was going on doesn't even exist in how you perceive this from far across the ocean.

The lenders were lying and cheating these mortgage speculators out of their money. The same purchasers putting in fraudulent mortgage applications, committing occupancy fraud, etc. Yeah, right....

And this mortgage fraud is a good thing? You have a warped sense of justice and freedom my friend.

I have a better idea. Let's have a system where the term "buyer beware" still means something, not a nanny state holding your hand from cradle to grave. A system where the government treats you like an adult and allows you the freedom to make your own choices. I prefer that one.

Or we can have one where the government regulates EVERYTHING that might bring you financial, emotional, or physical harm in your life. No cherrypicking. Financial safety - but no beer, it' leads to too much misery.

Nobody is saying we need a nanny state. You are taking it to the nth degree which is a stupid argument. They aren't stopping people from taking out a mrotgage, just stopping people from being duped *on both sides*. Your argument would be that due to speeding drivers we will ban cars and this is never going to happen. Laws are put in place so as there is an acceptable risk as to speed versus convenience and functionality.

Still not a word about the borrower's roll in all of this, despite the fairly well examined role of borrowers in this, in particular the fraud and speculation. Just a suggestion that these people need to be protected from those nasty ol' lenders.

I find that kind of naive call for more government regulation frightening - but not as frightening as the concept that people shouldn't be trusted to think for themselves, and therefore the government should step in and control yet another part of your life and nanny you through life instead.

And still not a word about the fraud on the part of borrowers. Just an assumption that they are the weak and stupid, while the lenders were doing the duping.

Here we go again, you conveniently miss that I said that *both* lenders *and* borrowers were guilty. It matters nout who duped who, but the end result is that *we all* are going to pay the price.

There is a difference between protecting the weak and having a nanny state where the government controls aspects of your life and takes away your freedom of choice. What catches my mind on that is those who usually advocate the nanny state are pretty happy with it - as long as the nanny state doesn't do anything that affects their choices and activities, of course. Because they personally don't need nannying, just them other folks.

End of post. And not word of acknowledgement of the amount of actual CRIMINAL wrongdoing and speculation on the part of many of those purchasers. Aside from the denial (or ignorance) of that criminal fraud taking place, there's an important difference here. Except for those lenders who did commit criminal acts in how they presented those mortgages, the vast majority of those loans were perfectly legal. Mortgage fraud is NOT legal and is CRIMINAL. We're talking about the borrowers here being the ones committing the criminal acts here, not the lenders, no matter how much you think their actions SHOULD be criminal.

So I find the continued claim about the borrowers being of sub par intelligence, weak, exploited, etc more than a little bit weak. Maybe what we really should be doing is spending more time on law enforcement towards detecting and jailing borrowers who are engaging in mortgage fraud, occupancy fraud, etc. If we'd done that, perhaps there wouldn't have been around a 25% speculation rate in new homes, less homes flooding the market, and all of this wouldn't have happened in the first place.

You can't argue you're in favour of personal responsibility in the first place, and then turn around and argue that the government should regulate your life so you don't have to accept personal responsibility. The last thing I want is the government continuing to regulate personal behavior more and more as long as some people continue to act stupid and make dumb decisions even when they have normal intelligence and should know better. Take away the consequences and they'll never smarten up anyways.

Personal responsibility only occurs *if* the person involved believes that what they are doing is right. Many of these borrowers were told that they could afford these repayments by unscrupulos lenders and these lenders baffled them with jargon and facts and figures so that they really did *believe* that they could afford the home.

There also were possibly those that thought that they could put one over the lender and duped them into letting them to buy a house that they couldn't afford.

Either way it doesn't matter. The fallout is the same. US recession and high interest rates for you and me. That just makes me feel warm and fuzzy all over knowing that your so called freedom of choice is working for you and me.

I can see that you do not want to see my side of the discussion and I am not going to reply further as I could not really care any more what you think. You are not going to changer my mind and it would seem nor am I going to change yours and frankly, I just don't care any more. *You* will get what you asked for in the form of higher interest rates and inflation.

[Alfisti]

Am I the one that find sit amusing to see an American tell an Australian about house flipping?

Jesus Australia is the home to the highest priced real estate (compared to incomes) ont he face of the planet. It's the sole reason I am living in the rather bland city of Toronto right now, as bland as it may be I can runa mortgage of 300K and live like a king, in Sydney that gets me what .... a cardboard box?

[Mallee Boy]

But people are still sucked in by the age old demon of greed. Yes you have the lenders pushing 'easy' money at one & all, home builders building bigger and more extravagant homes and everyone hell bent on keeping up with the Jones's.

Hell, are we any different with our camera gear?? probably not.

The temptations are huge today, and in your face every second of every day, so it is no wonder so many people get themselves into trouble. Business ethics, and indeed societal ethics, have dropped in the name of profit to satisfy hungry stock market investors.

You have got to be very strong natured to chart a course through all of this today and many people now come from homes that have only ever known constant debt, so they have no ideals or role models to call on.

I wonder what sort of catasrophe the global society will have to endure to learn the lesson. Interesting times we live in.
Cheers.

[straightshooter]

In North America, "personal responsiblity" means YOU take responsibility for your actions - not some businessman, or the government agent, or a regulatory body. That's a nanny state - not the same thing.

I have a better idea. Let's have a system where the term "buyer beware" still means something, not a nanny state holding your hand from cradle to grave. A system where the government treats you like an adult and allows you the freedom to make your own choices.

The last thing I want is the government continuing to regulate personal behavior more and more as long as some people continue to act stupid and make dumb decisions even when they have normal intelligence and should know better. Take away the consequences and they'll never smarten up anyways.

Amen Rick!!!!

It's too bad that personal responsibility is gone. Just like the idiot woman who spilled hot coffee in her lap and then sued MickyD's because the coffee wasn't labeled "HOT". Instead of awarding her huge amounts of money, and thereby encouraging other people to sue for ridiculous reasons, the jury should have found her guilty of "Criminal Stupidity." But it's always someone's fault besides your own and lets make some money off it.

As far as the rest of the argument goes, Rick you're tilting at windmills. You asked for source to be cited and didn't get it. Ignore it.

CW

[Lance B]

Amen Rick!!!!

It's too bad that personal responsibility is gone. Just like the idiot woman who spilled hot coffee in her lap and then sued MickyD's because the coffee wasn't labeled "HOT". Instead of awarding her huge amounts of money, and thereby encouraging other people to sue for ridiculous reasons, the jury should have found her guilty of "Criminal Stupidity." But it's always someone's fault besides your own and lets make some money off it.

This is a different situation. If we were to allow a complete buyer beware system then we would have no laws governing the proper service of food, no laws governing *any* finanical dealings whatsoever. I can tell you that it wouldn't be long before the rich had all the money and *you* had none. If you really think that we live in an unregulated society designed to protect *you* as much as anyone then you are grossly misinformed. The laws I say should be in place to protect these people from themselves and also the *lenders* from unscrupulos borrowers is designed to protect *you* and the economy as much as it is for the borrower and lender.

What do you say about the "lemon laws" you have in the USA? If we are to accept the buyer beware priciple, then you would have to get rid of that law too.

I find it quite astounding that anyone would think that duping people into something due to their ignorance is a good thing.

I also find it intriguing that you think it ok for lenders to be duped by the borrower as well.

The fact is, the outcome is the same in both cases, people borrowing money way over their heads that they could never have a hope of paying back and the rest of us paying the penalty for it.

This is no different from having speeding laws where we say that you can have a car but you must abide by the rules governing the safe use of the road. This is a law to protect those who maybe innocently killed or injured by a speeding or drunk driver. The laws are there to set guidelines for the safe use of the road so that innocents are not hurt. Just the same as it is for the safe lending of money so as the rest of us do not pay the price of over greedy lenders duping ignorant borrowers, and in some cases, borrowers taking advantage of these same lenders greed.

Make no bones about it, you and me will be paying for these lax laws allowing this to happen, but hey, if this is the price *you* want for your so called freedom to choose, then great. Make sure you ask that the laws governing food servicing are also taken away, all the other laws governing the financial institutions, which are there and designed to protect you are taken away, lemon laws are taken away, laws governing doctors ethics and practices etc be taken away, etc etc.

As I said before, there are *many* laws governing the financial institutions and the way they conduct themselves and if you really believe that it is a good thing that these laws were taken away and let buyer beware, then you are living in a dream world.

As far as the rest of the argument goes, Rick you're tilting at windmills. You asked for source to be cited and didn't get it. Ignore it.

CW

A source for what?

[Lance B]

Am I the one that find sit amusing to see an American tell an Australian about house flipping?

Jesus Australia is the home to the highest priced real estate (compared to incomes) ont he face of the planet. It's the sole reason I am living in the rather bland city of Toronto right now, as bland as it may be I can runa mortgage of 300K and live like a king, in Sydney that gets me what .... a cardboard box?

Don't forget that we are not taxed on the capital growth of our own home in Australia, so this pushes our prices up. We can put as much money into our homes and get as much capital growth as we like and it is untaxed. This is the greatest form of superanuation there is, in my book.

[Lance B]

But people are still sucked in by the age old demon of greed. Yes you have the lenders pushing 'easy' money at one & all, home builders building bigger and more extravagant homes and everyone hell bent on keeping up with the Jones's.

Hell, are we any different with our camera gear?? probably not.

The temptations are huge today, and in your face every second of every day, so it is no wonder so many people get themselves into trouble. Business ethics, and indeed societal ethics, have dropped in the name of profit to satisfy hungry stock market investors.

You have got to be very strong natured to chart a course through all of this today and many people now come from homes that have only ever known constant debt, so they have no ideals or role models to call on.

I wonder what sort of catasrophe the global society will have to endure to learn the lesson. Interesting times we live in.
Cheers.

You are correct.

Due to all this greed by *everyone*, there will be a major correction of the market very soon, I should think.

The trouble is, it won't be the rich and influential that will get stung and feel the brunt of it, but the rest of the populace that has to wear the burden. Much of this could have been avoided with a few laws and guidelines designed to limit such speculative ventures and the associated greed.

[Rick]

I said in both of my reply posts that *some* maybe of sub par intelligence and that others may have exploited the system.

That's not true. You didn't, say "some" at all - here, let me help you with what you really said:

That's fine *if* these people could understand what they were doing, but most who take out these sort of motgages are in the lower socioeconomic situation and are also below the IQ level to be able to comprehend what they are getting themselves into and thus are incapable of understanding what they were doing.

I helped your memory by adding a bit of emphasis in the quote of what you said... and you never did find the time to tell me where you read any study or finding that determined that most of these people had sub normal intelligence levels. I think you just made that up as you went along to justify your argument. Am I wrong?

It matter nout who was duped, either the lender or the borrower. What *needs* to happen is to avoid this from happening and a few fail safe laws would largely correct this and avoid the rest of us footing the bill.

If that is your new position, then I can live with that. Up until this point however, your rants about who has been "criminal" and who should be held to account have soley dealt with the lenders while portraying the borrowers as the victims - when the vast majority of the actually criminal behavior was on the part of borrowers.

I would find it rather refreshing, actually, if during the cleanup of this mess all the mortgage applications were reviewed and in those cases where criminal or civil torts were committed by borrowers, the law went after those individuals. Fraud rates as high as 70% or more on the part of borrowers... wow, that's a lot of court time! But we know that isn't going to happen, because the unwashed masses have drank the purple Kool-Aid and ares so fixated on them evil ol' moneylenders and making out the borrowers to be the unwitting victims.

Like many Americans you seem to live in a vacuum.

See Lance, you just don't pay attention, whether it's not looking at the sub prime issue beyond what the claptrap tabloids are publishing or even bothering to look at my name in the posts. See that little part where it says "SE BC and NW Montana" by my name. SE BC should be your first hint I'm not necessarily an American. In fact, I'm a Canadian, and still currently a Canadian as far as residency status goes, although that will probably change this year when I spend more time in the US than in Canada for the first time - by choice. But by virtue of my visa and the fact I own property and work in both countries, I also have the priviledge of paying personal taxes in both countries.

So now that you've let your anti-American stereotypes out of the closet for all to see, should I just assume that like many Australians you don't think very clearly because you drink too much? Stereotypes are dangerous things to play with.

The fallout from the subprime market affects the *whole world* market, not just the USA - remember the rest of the world? Every country in the developed world is affected by the ineptness of these charlatans who gave out these loans.

Here's that question for you again: who put a gun to the head of your money managers to force them to invest in the US market and particular high risk investments? Nobody, right? That was their CHOICE, as it was the CHOICE of investors to then buy into those high risk investments that were offered.

Once again, an excellent example of everybody refusing to take personal responsibility and single out somebody else to be the scapegoat for the consequences of their own actions. If those high risk investments had paid off as they hoped and they'd all made a killing on them, they'd be too busy slapping each other on the back about what a great investment vehicle they'd cashed in on to be throwing words around like "charlatan". But they didn't, and suddenly all the "charlatans" are the US lenders - and everyone else merely a pathetic, helpless victim who just didn't know what they were getting into.

You, me and the rest of the developed world are paying the price for "your freedoms" that you so fondly speak of.

You're also paying the price every day for allowing the population access to alcohol. Are you as bitter about that too - or is the price of alcohol in society one you're happy to accept? How many people die of booze related causes in Australia every year? And how many people are going to die in Australia of causes related to the sub-prime mess in the US?

I suspect you're a little choosy about what prices you find are unacceptable or not, but I'll take human life over speculative investment losses any day.

Furthermore, I'll still take the freedom of self determination over an intrusive nanny state any day of the week. Fortunately, I do have that option and I'm voting with my feet. A government powerful enough to do everything for you is also a government powerful enough to do everything to you - and God knows we're seeing enough of that recently.

But that's my point. This is done *before* anything gets out of hand, before they do the unscrupulous lending, not afterwards when the damage is done and it is tto late. Prevention is better than cure.

You seem to think that the market is a completely unregulated system *when it is not*, it is *very* regulated, but obviously not regulated enough in this case. If it was not regulated at all, like you would like, then all the wealth would reside with a very select few and you me and just about everybody else would be paupers with no money at all. This is irrefutable no matter what you would *like* to think. Do you really want to go to a completely unregualted system and end up on poor street? Don't give me this garbage that it is an unregulated system and that buyer beware. That is just crap.

You absolutely will not even begin to acknowledge that there was more wrongdoing on the part of borrowers than lenders - and certainly more criminal activity on the part of borrowers than lenders. It is all about the "unscrupulous lenders" in your mind, and everyone else an unwitting victim.

I'm glad you do seem to realize that the market is regulated in the US - although obviously not as regulated as you would prefer it to be from your alien vantagepoint over in Oz. Living part time under those laws in the US, and soon to be full time, permit me to prefer US residents making their decisions on their laws, rather than being instructed on what we should be doing by foreign investors from another continent who apparently lost some money somewhere along the way gambling on high risk investments.

I'll also have to have a look at my past posts to confirm that I never for one minute suggested that I supported a wide open marketplace free of regulation. Reasonable regulation is both necessary and common sense - nanny state regulation restricting everyone in an effort to prevent some people from being hurt by making risky and/or stupid investment decisions is something else again, and I don't support that.

Of course, if you can find anywhere that I posted support for an unregulated financial system, feel free to post a quote of that here to prove me wrong. I just don't agree with your view that Americans should regulate themselves to the point they're treated like children by their government. If that works for you in Australia, fine, go for it, but I'd prefer not to have that over here.

But they are not telling *you* how to do anything. They are merely putting in place a system that will ensure that people are not put into debt over their heads. These systems are already in place, just that they need tightening up.

"Tightening up" to a nanny state with government control over how I invest is not what I want. I prefer to be governed as though I'm an adult, not an idiot.

You are, however, remarkably consistent in your view that it is all about going after the lenders and not the borrowers - who of course are merely the poor duped victims in all of this.

No government is going to stop you eating fatty foods, or drink beer or skydive, but they *will* put in place laws that stop unscrupulous vendors from selling food that has salmonella in it, or arsenic and they will puit in laws that make sure that your parachute opens when you deploy it. The same thing goes for the lending laws. It's no different no matter what you would *like* to believe.

Exactly. Both consumer goods and financial transactions are regulated - but while you want Americans to tightly regulate themselves in the financial world to coddle them away from the potential of financial harm due to poor decisions, you sure wouldn't want the same strictness put in place for food and drink to prevent them from incurring much more serious physical harm from similarly poor decisions.

A complete, absolute lack of consistency in approach.

... and also some unscrupulous borrowers

Aha... we've finally got to "some" unscrupulous borrowers. Ummmm... mortgage fraud is CRIMINAL, not "unscrupulous". Fraudulent loan applications ran as high as 70% in some reviews, with violations of occupancy agreements running around 25% as a result of people using these mortgages to flip houses and speculate.

Perhaps not in Oz, but in North America, when you get to figures like 25% and 70%, you're well beyond what people envision when somebody says "some borrowers".

You are conveniently forgetting that I said that there were the unscrupulous lenders and also the unscrupulous borrowers. It matters nout who duped who, the fact of the matter is that due to the shenanegans of the lenders to make a quick buck, the US economy and the rest of the world has to suffer.

You just can't help yourself. You can manage to acknowledge that there were unscrupulous borrowers - but you immediately follow that by putting the blame on the lenders trying to make a quick buck. What were all those lenders involved in mortgage fraud, speculation, and house flipping doing? Trying to earn Boy Scout badges? I think they were trying to make a quick buck, myself.

What a price for your so called the freedom of choice.

Y'know, I distinctly get the feeling you lost some money here and there.

It's a very acceptable price to me to have a country where the government does not regulate every aspect of my life from cradle to grave. And until the person steps up to the plate says they also think alcohol should be removed from society because of the price that freedom of choice leads to, they don't have a single moral or legal leg to stand on and lecture Americans to move into a nanny state to prevent people from making bad investment decisions because of that cost.

Do you really think it a good thing that these people were duped into signing mortgages they couldn't serve? Are you really that heartless?

Lance, I have to hand it to you. You are incredibly consistent in making this all about the hapless borrowers being duped by the heartless moneylenders. But audits of the mortgage applications for defaulted mortgages found SEVENTY PERCENT had misleading and/or false information in them. Occupancy violations alone were around 25%, and lenders reported 20% more suspicious mortgage activity to the feds than ever before. Yet none of this apparently registers in your world, where all these borrowers were duped and anyone who thinks otherwise is apparantly heartless.

Mortgage fraud on the part of the borrower is a CRIME, not "unscrupulous". I don't think for one minute that all the fault and wrongdoing in this was on the part of borrowers, but you cling to this position that despite those high rates of CRIME among the borrowers, it's all about the lenders.

Do you honestly think that some people could not be duped by lenders with a fast tongue that could baffle them with facts and figures into believing that they *could* afford a home? You really live in a small world indeed if you think that.

Well, not a small enough world that a 70% rate in falsified mortgage applications still translates into my interpreting it to mean that most of these people were duped.

How big does my world have to be before it's like your big world and I can look at a 70% mortgage application fraud rate on the part of borrowers and still claim most of those people were naive and duped?

Could some lenders have lied to these people? Promised them they would double their money, the rates would never go up, housing prices would never drop? Perhaps psychologically or emotionally pressured them? You bet they could, and some probably did. However, there are ALREADY laws about luring people into mortgages with those kinds of promises, and bringing us into the nanny state with a redundant set of laws is not where I want the country I live in to go.

Why don't you try, just for one single minute, to wrap your mind around the significance of what a 70% rate in falsified mortgage applications means. A 25% rate in occupancy violations? If I told you that 70% of the customers of that multi million dollar business you have had falsified their credit applications with you, would you look at those customers as poor misguided dears who needed more protection from the law - or would you be a little bit concerned about the character and quality of who you were dealing with. To take it one step further, if somebody then came up and said that YOU'RE to blame because they falsified their credit applications... would you find that a little bit unjust?

Again, you conveniently miss my point. It matters nout who duped who. The result is the same. US recession and high interest rates. Great! Fantastic! Well done! I am sure you're as happy as a pig in sh!t.

You did lose some money, didn't you!

Cheer up. First, the US economy is inevitably headed into the tank anyways, whether you want to blame it on sub prime, the war in Iraq, enormous deficit budgeting for decades, baby boomers now retiring, or whatever. Second, you can take solace that it is going to cost me one hell of a lot more than it is going to cost you - and my business doesn't and never will reach the multi million dollar levels that yours is at so I can afford it a lot less.

In your world, there would be no speed limits, no laws governing this. Let people suck it and see the consequences.

No. In my world we have a consistent approach. Not a hypocritical one where we say we want a nanny state to protect people from financial misfortune, but God Damn... DON'T YOU DARE TAKE THAT SAME APPROACH TO MY BOOZE AND MY MOTORCYCLE EVEN THOUGH THEY CAN CAUSE ME AND SOCIETY AT LARGE MUCH MORE HARM.

I don't care which way you go - but a little consistency in approach would be nice. Something that apparently is a foreign creature in your world.

There is a far bigger difference from borrowing a few dollars for a toy than a major investment like a house that has the ability to cripple the economy.

Hmmmm... it's almost as though what you're really concerned about is losing some money on high risk investments - not about the well being of the stupid. So it isn't that a young kid and how he spends his money on expensive toys instead of school and a future shouldn't be protected by commerce restrictions while an adult in his 30's should be protected when trying to flip houses. It's about what it costs YOU.

How much do you figure you lost on sub prime related investments, Lance?

So you're saying that due to the weak US economy that it is ok to have the subprime fallout to add icing on the cake and make *sure* that the US economy falls over and drags the rest of the world with it. That's fantastic. You're an economic giant.

No. What I'm saying is that your claim that the sub prime situation is what is ruining the US economy is pure nonsense. Here, let me help you once again by reminding you of what you posted:

this is hardly going to ruin the US economy like these home defaulters are.

I may not be an economic giant in your eyes, but I'm pretty certain that I'm right when I don't agree with your belief that the sub prime situation is what is ruining the US economy. A dumb ol' mountain boy I might be, but I think it is due to many, many issues and years of mismanagement all coming to a head. If Lance the Economist thinks that the ruin of the US economy is all about the home defaulters, then we'll just have to disagree on that point.

So, what you're saying is that if we limit alcohol consumption that we will save lives and hospital expenses? Would that be a good thing? Sounds pretty good to me.

No. Restrictions to the point where we eliminate the potential of risk from consumption - just like the degree of restriction you want to ensure no economic harm can ever befall people with money related decisions they make. Which would mean about one drink per day, anything else being a crime. Let me know when you're going to publicly propose that in Oz, will ya. 'Cause I want to watch that one when the bars, restaurants, night clubs, and your fellow Aussies hear about that one.

Consistency, please.

While they're at it, maybe they should ban heroin, oh wait, that *is* banned. Is *this* an invasion on your civil liberties?

Actually, I'm not the only former cop who thinks drug laws (or alcohol laws for that matter) are violations of civil liberties, not to mention being stupid in concept.

On the other hand, if we're going to have a policy of protecting people from making stupid decisions by way of regulating how they live their lives, we can't just do it with their financial decisions while ignoring what they eat and drink, now can we? Because then we'd just be a bunch of arsehole hypocrites.

It seems as though you want some laws but not others.

Consistency Lance. Think "consistency". You want the US to bring in nanny state laws to prevent their investors from making stupid decisions that might hit your pocketbook, but you sure as hell aren't going to lobby over in Oz to have alcohol banned to eliminate the much more serious harm and death being caused by booze.

And then you turn around and talk about people who want some laws but not others. It is nothing but hypocritical to have a position on one hand that government should enact laws to prevent people from making stupid or overly risky decisions with their money. And yet not be advocating exactly the same sort of laws that would eliminate the ability of people to make stupid decisions regarding their consumption of alcohol - something that can outright kill them and is a causal factor in half the violent crimes committed.

Actually, no, your economy affects the whole world. That is why I think it is a travesty that not only are people duped into taking out loans they should never have taken out, but that it affects *everybody* else in the process.

Actually, you are consistent. Right to the end - despite findings like 70% mortgage application fraud on failed sub prime loans and 25% violations on occupancy requirements - you still hold to the position that all these people were "duped". Who "duped" them into falsifying their mortgage applications? Who duped them into violations on occupancy requirements?

First they were mostly of sub normal intelligence and couldn't understand. Now they were duped.

70% rate on mortgage applications for these failed sub primes. 70%. Think about what a 70% mortgage application falsification rate and what that means. But no... they were "duped".

*You* me and everybody else will be paying for your so called freedom to dupe laws.

Don't invest in American markets anymore Lance. Unlike me, you don't have to pay US taxes. If you want me to find sympathy for the 70% or so who committed criminal acts when getting their mortgages, you're barking up the wrong tree.

And this mortgage fraud is a good thing? You have a warped sense of justice and freedom my friend.

No, I think a 70% mortgage fraud rate is not a good thing. However, my "warped sense of justice and freedom" does not lead me to want to repeatedly put the blame on the lenders for that as you want to. Another cultural difference, I suppose.

Nobody is saying we need a nanny state. You are taking it to the nth degree which is a stupid argument.

That's your decision, from another country with a different ethos. If I want to live like a Brit or an Aussie, I'll move there. Meanwhile, I don't want my domestic policy dictated to me by foreigners. What you think is an acceptable level of government intervention in what I can and can't do with my money is not my values. That is consistent whether you talk about financial regulations, gun control, police powers of arrest and detention, or anything else.

And while you think my argument is stupid, I find yours to be hypocritical, deliberately narrow minded, and selfishly financially self serving. So yet again, we have differences of opinion and values. Which is why cultural differences exist in the first place.

They aren't stopping people from taking out a mrotgage, just stopping people from being duped *on both sides*.

Fine. We'll just ramp up sufficient laws and restrictions on access and use of alcohol so that it will be practically impossible to get legally impaired. You won't have a problem with that and how it impacts how people make choices with their lives, will you? After all, the impact of alcohol related deaths is far more significant than losing your shirt speculating on high risk investments.

Your argument would be that due to speeding drivers we will ban cars and this is never going to happen.

Not ban cars - effectively prohibit speeding and ban vehicles capable of speeding. Which, given todays GIS technologies, could be easily done and very cheaply at that.

But you're right it won't happen. Because the self serving who demand that how people choose to spend their own money be regulated and controlled by government so their investment vehicles won't take a hit would never tolerate government action that would prohibit much more harmful behavior with alcohol, motor vehicles, etc. Because that would impact THEM and what they do in their lives.

It's also worth noting that in the US one of your civil rights is that of ownership and use of private property, including your money. To the best of my knowledge, driving a vehicle to begin with is a state issued priviledge - not a civil right. Given that, there's a lot more legal justification for restricting what people can manufacture in the way of motor vehicles and how they drive them than there is for restricting how people dispose of their property.

Here we go again, you conveniently miss that I said that *both* lenders *and* borrowers were guilty.

Oh no. You do manage to choke that out once in a while - and only after the facts are shoved in your face repeatedly. But anyone reading through your messages will see the ongoing consistent theme that what the lenders did was criminal, the borrowers were of sub normal intelligence, the borrowers were duped, and what needs to be done holding the lenders responsible for all of this. I'm tempted to go back through your posts and see how many times each post you keep repeating your mantra that the borrowers were duped.

Bugger all about holding the borrowers who committed mortage fraud accountable. Bugger all about regulating them. Bugger all about their criminal activities - which really WERE criminal in many cases (70% mortgage application fraud, remember?). Your theme is all about the lenders and how the US should change it's laws to protect your financial wellbeing over in Australia.

A very one sided view of things to say the least.

Personal responsibility only occurs *if* the person involved believes that what they are doing is right. Many of these borrowers were told that they could afford these repayments by unscrupulos lenders and these lenders baffled them with jargon and facts and figures so that they really did *believe* that they could afford the home.

Yep. Right on schedule. There's the old "they wuz duped" theme again. Can't go more than two paragraphs before repeating that claim.

"Duped" Which apparently includes the 70% who submitted falsified mortgage applications...

That just makes me feel warm and fuzzy all over knowing that your so called freedom of choice is working for you and me.

I feel just as warm and fuzzy knowing your acceptance of alcohol in society and the toll of death, violence, disease and broken families it brings leaves us all that much safer. I'll take broke over dead any day, thanks.

I'll make you a deal. If you don't try to dictate how people residing in the US legally regulate their personal activities, I won't try to dictate how people in Australia regulate their personal activities.

I can see that you do not want to see my side of the discussion and I am not going to reply further as I could not really care any more what you think.

I don't take the time to point out the hypocrisy in the arguments you're putting forward to convince you, Lance. Your mind is made up and it's mostly fixated on what's best for your pocket book over in Oz, not how people choose to live their personal lives in a foreign country.

The only reason I take the time to write this is so that readers have the option of seeing something other than the pablum that this is all the fault of the nasty lenders and all those poor innocent borrowers (70% of mortgage applications falsified, remember) were low intelligence people who were duped.

Where people go after that is completely up to them.

[Rick]

Am I the one that find sit amusing to see an American tell an Australian about house flipping?

I'm amused that someone from Toronto would not understand that BC under my user name stands for "British Columbia".

Jesus Australia is the home to the highest priced real estate (compared to incomes) ont he face of the planet. It's the sole reason I am living in the rather bland city of Toronto right now, as bland as it may be I can runa mortgage of 300K and live like a king, in Sydney that gets me what .... a cardboard box?

See what 300k will buy you in Calgary these days. Or Vancouver. Or Burnaby. Or Kelowna. Or Edmonton. Or... We put our house in Calgary up for sale three years ago. 58 year old house, tiny but near SAIT, $300K. It sold after a two day bidding war for $375K, and the purchaser sold it a few days later for something like $386K. Where it went after that I have no idea.

And the real estate speculation right now is nothing like it was in the 70's. I knew one guy who managed to buy and sell four different houses in one single day, a bit of a feat even back then - while putting in a shift in City Traffic no less. Of course, he also got caught for income tax offences a few years later on unreported income and kicked out of the RCMP because of it. A fitting end and another story.

Meanwhile, being in Canada, check out all the speculative investment vehicles being offered for investing in all that US property now up at fire sale prices. Will they come out at the end of that looking like clever little investors - or crying about the unscrupulous investment brokers who duped them while the pundits wring their hands about what a crime it was and the government should do something?