Rules: Read Me!
Admin: sue943
Legal / Conditions of Use

Topic Options
#655388 - Wed Sep 21 2011 12:34 PM Real trivia toughies
satguru Offline
Forum Champion

Registered: Thu Feb 17 2000
Posts: 6498
Loc: Kingsbury London UK           
Here's a good one (I think adding to this thread may work if not too many new questions are asked):

This reminds me of my old question about cheating in the three card trick. The bank crisis was caused by clear reasons. Mortgages were sold to so many people who couldn't pay them back that when that day came the money was lost, either by the banks directly, or by the poor mugs who bought the mortgage based bonds when the banks got rid of them after taking their fees.

There are a few problems with this scenario. The whole essence of a mortgage is it is a secured loan on the property. Thus every single deed holder has the right to call in the loan at any time and if the requested money is not paid the property is repossessed, and any losses would only be from a fall in value plus associated fees.

Instead the 'lost' money (it is physically impossible to lose money without actually destroying the assets behind it, any cash can be reimbursed if possible to prove it has been damaged in any way) has simply been shifted elsewhere. This is only one possible place, the homeowners, who have never to my knowledge been mentioned anywhere. If indeed what happened is numerous people were effectively given houses free or mainly sold at a huge discount, then the actual money has simply been transferred to the future wealth of the homeowners who are now debt free and as a result will be able to use the future money to the value of the cost saved in other ways. No money has been lost, instead all that has happened is instead of the future payments for say 25 years going to the banks they will go elsewhere into the economy. That just means the homeowners would have been gifted the money by the banks, meaning there is no less money than there was before as all the actual value lost were future mortgage payments.

But that aside the real question is that wherever these loans were passed to, whoever had the parcel when the music stopped should have the right to recall them, even if it involved litigation abroad the opportunity does not ever go away. Clearly the asset value of a house is always going to be worth recovering compared to nothing, and the usual course of action by any financial institution who still holds the right to repossess would be to do so as soon as it was clear they were not going to be paid back. You will usually make a loss on these as speed is of the essence and prices discounted, but far better than a write off. So far I've heard no talk either of direct repossessions anywhere in the world (US especially as it was their activities that contributed most of the debts that spread around the world in hidden bonds) even though a secured loan is supposed to be failsafe for that very reason.

So can anyone explain why this money appears to have been donated to the US buyers who were given mortgages above and beyond their wildest dreams (the companies all knew this, it's called predatory lending as they earn transaction fees for each loan and then sell it on) and not clawed back en masse as would happen in every single individual case in a normal market?
_________________________
"The climate system is a coupled non-linear chaotic system, and therefore the long-term prediction of future climate states is not possible."

UN IPCC

Top
#655466 - Wed Sep 21 2011 05:04 PM Re: Real trivia toughies [Re: satguru]
mehaul Offline
Forum Champion

Registered: Wed Feb 03 2010
Posts: 5235
Loc: Florida USA
What about the money that went from the homeowner to the original property seller? Once there was a market where product was not going to sell, so incentives (low interest rates and extensive remortgaging) were allowed into the market. But the money didn't go to a homeowner sitting on a stuffed mattress. It went to the entities who'd put the asset together: the contractor, the investment developer and the realtors. The homeowner was left with a bill-for-life to pay. And much repossesing has occurred leaving those paper signers with ruined credit ratings and none of the bank money you mention.
In the adult community where I live, many retirees had bought the way they'd been taught all their life to acquire property, by mortgage. The money went to the rehabber, the prior owner (many times a bank) and the realtors. The buyer trusted the title to the mortgagor (bank again, maybe a different one). With the title in the bank's hands, it was burdened with the taxes and other ongoing property fees while the homeowner (sic) just had to make payments on the loan. Many never read the fine print on their low interest paper which granted the banks the ability to raise by any amount (not a controlled increment as had been the case decades prior) the interest rate on the loan should any of many small changes occur (late payment, raised tax rates and other hidden triggers). Suddenly, folk who expected to have the interest paid off by twenty years were looking at fifty years to pay the interest. Banks stopped paying fees to homeowners associations, foreclosed on the properties and took possession, turning homes into rentals. These actions have left my community with a nearly 10% member fee delinquency rate. Who pays the money needed to make up that difference? The ones of us who own our property outright. We must wait ten years for the courts to grant our foreclosure actions on the banks to satisfy liens placed to recoup the fee vacancies on those properties, all the while the banks are collecting rents and not paying community taxes and fees. The problem is quietly escalating and won't end until the courts take the properties away from the banks.
_________________________
If you aren't seeing Heaven while you dream, you're doing something wrong.
Dreams allow escape from the passage of Time.

Top
#655510 - Wed Sep 21 2011 08:57 PM Re: Real trivia toughies [Re: mehaul]
satguru Offline
Forum Champion

Registered: Thu Feb 17 2000
Posts: 6498
Loc: Kingsbury London UK           
That's another twist as any banks who convert a failed mortgage into a rental (something I'd never come across, here as far as I know they either let people stay and hope for the best until they finally give up and kick them out or kick them out quickly when they fail to pay for a while, but maybe it's an American thing), but any bank who simply manages to get their money as rent instead of mortgage payments without selling the property on have lost very little, so could not contribute to their ultimate failures.

Clearly the banks en masse- whether original lenders or subsequent buyers of the loans, fell in sequence, and whether holding regular rental contracts or deeds clearly ought to have had assets in the form of cashflow and capital stopping them from failing. But as they all failed (and only here today as governments both side of the Atlantic saved them with our cash) what on earth happened to the assets? Clearly everyone left holding the baby with junk debt found it ultimately worthless, but when you buy a mortgage secondhand then who gets the deeds and with it the right to repossess? That buck has to stop somewhere and can't work out why the deeds don't follow the loans but clearly a way of splitting them must exist to further complicate the situation. No wonder so many financial organisations with highly qualified staff lost track if we can't even see into the morass of this puzzle.

So to me, there are unaccounted for assets here in the form of now both the rights to repossess, in the form of the legal ownership of the mortgaged properties (as the mortgagor owns the property jointly until it is paid in full) and now rental incomes. It gets more and more of a mystery but it's got an answer somewhere.
_________________________
"The climate system is a coupled non-linear chaotic system, and therefore the long-term prediction of future climate states is not possible."

UN IPCC

Top
#655568 - Thu Sep 22 2011 12:58 AM Re: Real trivia toughies [Re: satguru]
mehaul Offline
Forum Champion

Registered: Wed Feb 03 2010
Posts: 5235
Loc: Florida USA
The Realtors setting up the rent leases get their fees from processing the reantal agreements. Sure it's a little less than the fee for a sale but it happens more often for them! So, they push that option as property managers onto the banks who are looking for their asset to be managed for them. Is the difference from there to here based in your LandLord system versus our individual property rights traditions?
_________________________
If you aren't seeing Heaven while you dream, you're doing something wrong.
Dreams allow escape from the passage of Time.

Top
#655575 - Thu Sep 22 2011 01:50 AM Re: Real trivia toughies [Re: mehaul]
kevro03 Offline
Explorer

Registered: Wed Sep 21 2011
Posts: 61
Loc: Illinois USA
Easy answer. It(the money) stays where it always was. The one and only way money actually moves is when a property is used in a more efficient manner. Usually, that does not help in the long run. Do not forget whrn Japan and the U.S. decided to buy up each others property. So what, Japan owns half of L.A.! Not really. Try to foreclose MGM.

Ownership of property is whoever is there... whomever claims it.. and who gives up first. Same as always.

The argument needs to shift. As of today, no person owns any land or propety that can not be attatched or usurped by the government. Until that changes the lenders are secure.

Top
#655689 - Thu Sep 22 2011 11:24 AM Re: Real trivia toughies [Re: kevro03]
mehaul Offline
Forum Champion

Registered: Wed Feb 03 2010
Posts: 5235
Loc: Florida USA
With rentals there is another big chunk of money that is in the mix on the owner/manager/realtor side. Most leases here are written to require, First and last months' rent and a hefty security deposit for wear and tear and damage should any occur. Whether that last month and deposit get back to the renter is inconsistent, but the interest earned does get split by the owner's side. I bet there are even banks out there that'll make loans on that escrow as collateral for bigger money advances. And the inflation spiral grows.
(edit)If you want to consider mortgages imaginary money, there is a very big chunk of upfront real money associated with that transcation. Most banks require around 10% for a down payment and that money goes mostly to the contractor/developer/realtor with the bank adding the rest as book swaps.


Edited by mehaul (Thu Sep 22 2011 05:13 PM)
_________________________
If you aren't seeing Heaven while you dream, you're doing something wrong.
Dreams allow escape from the passage of Time.

Top
#658298 - Mon Oct 03 2011 03:38 PM Re: Real trivia toughies [Re: mehaul]
satguru Offline
Forum Champion

Registered: Thu Feb 17 2000
Posts: 6498
Loc: Kingsbury London UK           
I just read an article in yesterday's paper which shed some light on the US mortgage disaster. Apparently predatory mortgages (ones where they are not expected to pay but sold for commission) relied on the permanent rising US housing market, allowing profits to be made from repossession. As it fell even selling the properties left many with a loss. I feel so sorry for the banks now...
_________________________
"The climate system is a coupled non-linear chaotic system, and therefore the long-term prediction of future climate states is not possible."

UN IPCC

Top
#658344 - Mon Oct 03 2011 08:08 PM Re: Real trivia toughies [Re: satguru]
mehaul Offline
Forum Champion

Registered: Wed Feb 03 2010
Posts: 5235
Loc: Florida USA
Just today, the Palm Beach Post carried a story in my local section about approx 5 acres of prime downtown real estate our Urban Redevelopers took off the market (and tax base) in 2002. A group of connected pols and speculators razed all the mom and pop stores in the area. Intended to go up on the site was $105 million reidential/commercial mix. So almost $100,000,000 was funneled through the hands of the developers and banks for the past decade and they've built NOTHING but a chain link fence! Everybody passes the buck in public but the real money (bucks) are passed in private. This 5 acres is on the main downtown street and runs on one side for a full 1/4 of the commercial area. They have blighted our downtown for their profit for a decade and now guess who has bought it at half price at a foreclosure auction? A bank, who will probably continue to milk the public coffers (after their investment is recouped) getting property tax deals on the land. For more info, the writer of the article was eliot_kleinberg@pbpost.com. The article title was "Boynton Sees Hope for Empty Eyesore".

The Redevelopers are called the "Community Redevelopment Agency (CRA)". Their existence was to bring interest to the downtown and in so doing RAISE the tax base. The opposite has happened as the funds the Agency has to buy the parcels is doled out to those Bankers, pols, developers, speculators and realtors while the only way to get a builder is to promise a tax break. Free money, nothing else like it in the world.
_________________________
If you aren't seeing Heaven while you dream, you're doing something wrong.
Dreams allow escape from the passage of Time.

Top
#659361 - Fri Oct 07 2011 03:43 PM Re: Real trivia toughies [Re: mehaul]
mehaul Offline
Forum Champion

Registered: Wed Feb 03 2010
Posts: 5235
Loc: Florida USA
Okay, at the beginning of the week Bank of America announced they wanted to start charging handling fees on a $5/mo rate on debit cards. Those are cards where people have the money to pay for the goods but perform the transaction with plastic to better keep records of their spending. The bank earns interest on the holdings while people decide what to spend it on. I hardly write a check anymore, it's all plastic. This proposed action on their part would have them getting fees for the checking account and the debit account (usually the same account) literally doubling the take on each account.
Today they announced that homeowners facing foreclosure could take $20,000 off the mortgage if the mortgagee does a 'short' sale meaning they, the bank, will accept $20,000 less than what is owed them to help the owner move the property, What I see in this whole situation is that they will take my money that I saved before buying something and give it to someone who spent before they even knew if they'd have the money for the deal. But the bank makes out again when that new buyer assumes the debt and I'm the one poorer for it. Time to move my money as far away from their sticky fingers as I can get it.
_________________________
If you aren't seeing Heaven while you dream, you're doing something wrong.
Dreams allow escape from the passage of Time.

Top
#659427 - Fri Oct 07 2011 07:01 PM Re: Real trivia toughies [Re: mehaul]
satguru Offline
Forum Champion

Registered: Thu Feb 17 2000
Posts: 6498
Loc: Kingsbury London UK           
America has been the first country this time round to literally create a negative interest rate for investors. Technically it is perfectly viable, all you do is have an interest rate below inflation to average a loss despite earning a nominal profit, but if you then charge as well you create a loss even with a silly rate of interest. They can't offer a minus rate of interest on paper, so just charge more than you get and the result is identical.

There is a solution of course, and if everyone both reads it here and does it the policy will last a day. If you are losing money in a current account then you are better off either keeping it at home or investing in a credit union or other mutual arrangement which does not. The banks will soon be cured of their criminality.


Edited by satguru (Fri Oct 07 2011 07:03 PM)
_________________________
"The climate system is a coupled non-linear chaotic system, and therefore the long-term prediction of future climate states is not possible."

UN IPCC

Top
#660737 - Thu Oct 13 2011 08:54 AM Re: Real trivia toughies [Re: satguru]
satguru Offline
Forum Champion

Registered: Thu Feb 17 2000
Posts: 6498
Loc: Kingsbury London UK           
Here's a good question that just popped into Ask which is the sort of one I meant the place was really for:

"Which marine animal bears the same name as a flower?"

Try searching that, it won't be easy, and yes, the answer was off the top of my head wink
_________________________
"The climate system is a coupled non-linear chaotic system, and therefore the long-term prediction of future climate states is not possible."

UN IPCC

Top
#662144 - Tue Oct 18 2011 07:00 PM Re: Real trivia toughies [Re: satguru]
satguru Offline
Forum Champion

Registered: Thu Feb 17 2000
Posts: 6498
Loc: Kingsbury London UK           
It was periwinkle, although anemone was an additional offering.

I think at least one alphabet followed our V/W rule, Igbo, and as far as I know also has the same J and Y sounds which are also rare elsewhere, and the other Nigerian language Yoruba. Yoruba alphabet I'd be interested if there are any others as well as I can't think of any more- eg:

Scandinavian/Germanic sounds- J=Y
French- J=zh
Spanish- J= about cH
Italian- J= ? Not sure of this one.
_________________________
"The climate system is a coupled non-linear chaotic system, and therefore the long-term prediction of future climate states is not possible."

UN IPCC

Top
#662274 - Wed Oct 19 2011 03:12 PM Re: Real trivia toughies [Re: satguru]
AlexxSchneider Offline
Enthusiast

Registered: Fri Jun 26 2009
Posts: 234
Loc: Perth Scotland UK             
I'm not sure if Italian even uses the letter j - perhaps in borrowed words, but I don't know how they would be pronounced if that is the case.
_________________________
Alexxandra

Top
#662348 - Wed Oct 19 2011 07:20 PM Re: Real trivia toughies [Re: AlexxSchneider]
satguru Offline
Forum Champion

Registered: Thu Feb 17 2000
Posts: 6498
Loc: Kingsbury London UK           
The only example I know was Juventus, but presumably sets some sort of precedent?
_________________________
"The climate system is a coupled non-linear chaotic system, and therefore the long-term prediction of future climate states is not possible."

UN IPCC

Top
#662513 - Thu Oct 20 2011 01:00 PM Re: Real trivia toughies [Re: satguru]
AlexxSchneider Offline
Enthusiast

Registered: Fri Jun 26 2009
Posts: 234
Loc: Perth Scotland UK             
http://en.wikipedia.org/wiki/Wikipedia:IPA_for_Italian

They pronounce it as English 'y' too.
_________________________
Alexxandra

Top
#662514 - Thu Oct 20 2011 01:03 PM Re: Real trivia toughies [Re: AlexxSchneider]
AlexxSchneider Offline
Enthusiast

Registered: Fri Jun 26 2009
Posts: 234
Loc: Perth Scotland UK             
For clarity, it's mentioned in the small 'semi-vowels' section at the bottom of the page.
_________________________
Alexxandra

Top

Moderator:  TabbyTom