Passive Resistance?

[Undertow]

This is just my personal opinion, but some of those industries are not exactly the same and the consequences of of letting something slip are not the same. Health insurance- where someone not paying for a claim might mean you're going to die because you can't receive treatment- is totally different than financing a mortgage. Nobody ever died because they were denied a mortgage.

We'd all be in a better financial place if the banks had denied more mortgages.

Ok, so Bianca works in mortgage lending. She KNOWS the Williams family can't afford the mortgage they've applied for, but protocol (her photocopied checklist that she plugs a few numbers into) says it's alright to lend to them. In fact, her boss and his boss encourage her to approve an Arm loan which will be "easier to pay" the first five years, but inflates considerably afterwards. "Remember, The Willams family can always refinance," the boss says.

If Bianca DOES NOT approve them for a loan, her manager is going to have a sit-down about her numbers, and he's going to remind her she's not meeting target for the month. And he's going to talk about how difficult decisions could be made if necessary.

If Bianca DOES approve the loan, she's just as guilty as the company.

She can shrug her shoulders and say, "I'm just following orders," or she can resist. How should she resist?

 

[Noirblack]

First, haven't these balloon type mortgages been banned in the US?

Second, you can get a 3.5% mortgage for 30 years now in the US. Get them to take that type.

Third, if balloon mortgages are still available and the borrowers want it instead of a fixed rate, and they know the payments will increase, then give it to them.

 

[sheeplady]

Ok, so Bianca works in mortgage lending. She KNOWS the Williams family can't afford the mortgage they've applied for, but protocol (her photocopied checklist that she plugs a few numbers into) says it's alright to lend to them. In fact, her boss and his boss encourage her to approve an Arm loan which will be "easier to pay" the first five years, but inflates considerably afterwards. "Remember, The Willams family can always refinance," the boss says.

If Bianca DOES NOT approve them for a loan, her manager is going to have a sit-down about her numbers, and he's going to remind her she's not meeting target for the month. And he's going to talk about how difficult decisions could be made if necessary.

If Bianca DOES approve the loan, she's just as guilty as the company.

She can shrug her shoulders and say, "I'm just following orders," or she can resist. How should she resist?

Well, she could be honest and explain the ARM mortgage to them and how it works and what they could afford. I really don't like people lying to others and I find it disgusting that banks did that. She can let them make their own decisions if she is required to approve the loan. It's not her fault if a family is greedy and wants to borrow more than they should. It's equally disgusting that so many people knew they couldn't afford a mortgage and took it anyway as "free money" - you should be aware enough of your own finances if you're making a 30 year contract.

Also, given the fact that A. There are banks that didn't do this, she could have found a new job pre-2008 (although she wouldn't likely be as rich because to get the big bucks you needed poor ethics) and B. That banks aren't even making a lot of "good loans" to people who can well afford them, I don't see where this is such an ethical problem.

 

[Stanley Doble]

Undertow is right about the mortgage thing. The mortgage mess of 5 years ago was totally the fault of the mortgage companies and big banks gaming the system for big profits. When their illegal schemes collapsed they ran to the government for a bailout. Some of the biggest banks in America were selling these mortgages out the front door to other banks, insurance companies and pension funds as good investments while betting they were going to blow up out the back door, and calling them "vomit" and "dog crap" in confidential internal memos.

The mortgage industry is full of fraud from top to bottom. If anyone wanted to prosecute there are literally hundreds of thousands of cases just like he describes, all of them illegal, and many of them far worse.

 

[Stanley Doble]

I also find it hard to put the onus on the borrower when every bank in America, every mortgage lender, every government agency and every media outlet was telling them to do it.

It happens I have been involved in real estate for almost 40 years. When they started handing out mortgages like candy my first thought was "this goes against hundreds of years of banking experience and sound banking practice. Yet, all the best banks are doing it. The government backed mortgage insurers approve of it. All the regulators are ok with it. So are they crazy, or am I? There must be something new here that I don't know about".

It turns out there was something wrong. The point is, if the biggest banks in the world said it was ok, the government said it was ok, the media said it was ok, how is a first time home buyer to know there is something wrong?

I put the onus on the financial industry leaders who literally made billions, and on the regulators who spend their days surfing for porn then leave their government jobs to go to work for the big banks a twice the salary , not the poor shmos who lost their houses and had their lives ruined.

 

[Stanley Doble]

Very good question though. What are you supposed to do when you are caught up in a corrupt system that you have no power to change? Stick up for what you believe is right, lose your job and face ruin? Or go along with the system, keep your head down, collect your pay, and keep mumbling "I was only following orders"?

I have no answer. If anyone has a good answer to this problem I would love to hear it.

 

[Noirblack]

But if the borrowers knew the payments would increase, and they knew the amount of the increases then they have to bear some of the responsibility. We could flip everything around and say if the borrowers weren't so greedy, they wouldn't have borrowed for homes they can't afford. If that hadn't happened the bankers would have been unable to give out these balloon mortgages and unable to securitize them. And then things wouldn't have gone bust. It's all a matter of perspective.

If you know that you start out paying, say $1,000 per month, and that it will go up to $2,000, and you take that deal you are definitely part of the problem.

But every part of the system is responsible. I just wouldn't let the borrowers off to easily.

 

[sheeplady]

I put the onus on the financial industry leaders who literally made billions, and on the regulators who spend their days surfing for porn then leave their government jobs to go to work for the big banks a twice the salary , not the poor shmos who lost their houses and had their lives ruined.

While I would say that 99.9% of the crisis was the fault of the financial industry and regulators, plenty of people were gaming the system and taking out loans they well knew they couldn't afford. I'm not including people who lost their homes because they lost their jobs, their bank foreclosed on them illegally, etc. But I believe that people need to take personal responsibility for their actions, especially if they were purposefully gaming the system. I will not feel sorry for someone who took out a mortgage(s) with a monthly payment(s) that was 80-100% of their monthly paycheck- they had the option to buy a lesser home or to not buy a home if none were available in their price range. Not everyone is automatically entitled to own a $300,000 or a $600,000 home, no matter their income.

There are a lot of people out there who took out multiple mortgages on a single home and would use this money to buy cars, boats, etc. thinking that by owning a home, the price would go up and they would be automatically rich. There are also people out there who can afford to pay their mortgage but are instead squatting, knowing that it will take years for the bank to repossess their home, essentially living in their home for free and not giving a darn about their commitment. People who don't live up to their financial commitments (particularly by choice) hurt those of us who do. Really badly.

 

[Undertow]

I hear alot of people on this board, an in other public forums, talk big about how they would stand up to this organization, or defend this group of people, or resist this corporate such and such, yet here we are in 2012 and it's happening all around us everday - and often due to our own efforts.

So if you're a 1939 German clerk, and you have a duty to process "transfer" papers, do you risk losing your job and possibly losing yours and your family's lives; or do you stamp the transfer papers and move on to the next stack? (Replace German with Soviet/Ottoman/Chinese if you like.)

I'm not arguing healthcare rules, or 5/2 arm loan vs 30yr fixed; I'm suggesting that Western society has become saturated with pencil pushing, bean counting clerks steeped in corporate bureaucracy. It seems many of us have the opportunity to change someone's life - but we risk losing our own life if we try to do so. And thus the machine rolls forward - whether its mortgage lending, health insurance or faulty product sales. Do we resist, or do we count on until the 5pm whistle? And if we resist, how do we do it?

 

[MissMittens]

First, haven't these balloon type mortgages been banned in the US?

Second, you can get a 3.5% mortgage for 30 years now in the US. Get them to take that type.

Third, if balloon mortgages are still available and the borrowers want it instead of a fixed rate, and they know the payments will increase, then give it to them.

I'm going to chime in here. I applied for a mortgage with several banks during the boom. I did not want to live beyond my means, and chose a modest pricerange within which to look for a home. EVERY BANK I APPLIED TO PRE-APPROVED ME. Now, here's the rub.....when it came to UNDERWRITING, I was refused by 2 banks because the home was TOO CHEAP - it did not meet their minimum lending figure. I had no choice but to look at a more expensive home. I am not alone here, this was rife during the bubble. Realtors and real estate companies, as well as banks, were telling everyone that buying a house was an investment, that you should buy a bigger home, flip it in a few years, buy another larger home, and repeat the cycle until you had enough money left over to buy the house you want to retire in outright.

It was considered "smart" to "invest" in real estate. I am now no longer a homeowner because of this. Because I stupidly "invested" in real estate.

Now, people like myself number in the millions.........and none of us can get another mortgage for years.

These 3.5% mortgages are in real terms only for people with equity who want to REFINANCE. New home purchasers don't get that rate, IF they can get a mortgage in the first place

 

[MissMittens]

It seems many of us have the opportunity to change someone's life - but we risk losing our own life if we try to do so. And thus the machine rolls forward - whether its mortgage lending, health insurance or faulty product sales. Do we resist, or do we count on until the 5pm whistle? And if we resist, how do we do it?

Very well said, Sir

 

[LizzieMaine]

I hear alot of people on this board, an in other public forums, talk big about how they would stand up to this organization, or defend this group of people, or resist this corporate such and such, yet here we are in 2012 and it's happening all around us everday - and often due to our own efforts.

So if you're a 1939 German clerk, and you have a duty to process "transfer" papers, do you risk losing your job and possibly losing yours and your family's lives; or do you stamp the transfer papers and move on to the next stack? (Replace German with Soviet/Ottoman/Chinese if you like.)

I'm not arguing healthcare rules, or 5/2 arm loan vs 30yr fixed; I'm suggesting that Western society has become saturated with pencil pushing, bean counting clerks steeped in corporate bureaucracy. It seems many of us have the opportunity to change someone's life - but we risk losing our own life if we try to do so. And thus the machine rolls forward - whether its mortgage lending, health insurance or faulty product sales. Do we resist, or do we count on until the 5pm whistle? And if we resist, how do we do it?

The way I resisted was by never going into that line of work in the first place. Sure you make more money by living the corporate life, sure a mortgage broker will always make more money than a small-town theatre manager, but at what cost?

We, as a society, need to stop snapping at the carrot being dangled in front of us by the people who are driving the cart. If you don't jump at the corporate bait, you won't make six figures within your first five years out of school. So damn what. Reevaluate your personal priorities -- because it's misplaced priorities that are causing all this.

 

[Noirblack]

I hear alot of people on this board, an in other public forums, talk big about how they would stand up to this organization, or defend this group of people, or resist this corporate such and such, yet here we are in 2012 and it's happening all around us everday - and often due to our own efforts.

So if you're a 1939 German clerk, and you have a duty to process "transfer" papers, do you risk losing your job and possibly losing yours and your family's lives; or do you stamp the transfer papers and move on to the next stack? (Replace German with Soviet/Ottoman/Chinese if you like.)

I'm not arguing healthcare rules, or 5/2 arm loan vs 30yr fixed; I'm suggesting that Western society has become saturated with pencil pushing, bean counting clerks steeped in corporate bureaucracy. It seems many of us have the opportunity to change someone's life - but we risk losing our own life if we try to do so. And thus the machine rolls forward - whether its mortgage lending, health insurance or faulty product sales. Do we resist, or do we count on until the 5pm whistle? And if we resist, how do we do it?

I don't know if I understand your question. For example, many pencil pushers just do stuff like work for the phone company and send out the bills. Or take customer complaints etc. The point is that for Joe average pencil pusher, there isn't any opportunity to change someone's life. It that is the problem you are referring to, it might not really be a widespread problem.

As for your other examples, I expect that when something was on the line many people, myself included, would just "do our jobs". I think that many people believe they would stand up to the system, but history proves otherwise.

 

[MissMittens]

The way I resisted was by never going into that line of work in the first place. Sure you make more money by living the corporate life, sure a mortgage broker will always make more money than a small-town theatre manager, but at what cost?

We, as a society, need to stop snapping at the carrot being dangled in front of us by the people who are driving the cart. If you don't jump at the corporate bait, you won't make six figures within your first five years out of school. So damn what. Reevaluate your personal priorities -- because it's misplaced priorities that are causing all this.

Exactly. Unless you already have a small fortune, the markets and corporate America are a giant ponzi scheme. People should try and be happy with what they have, rather than allowing themselves to be force-fed to want to over-achieve

 

[Noirblack]

I'm going to chime in here. I applied for a mortgage with several banks during the boom. I did not want to live beyond my means, and chose a modest pricerange within which to look for a home. EVERY BANK I APPLIED TO PRE-APPROVED ME. Now, here's the rub.....when it came to UNDERWRITING, I was refused by 2 banks because the home was TOO CHEAP - it did not meet their minimum lending figure. I had no choice but to look at a more expensive home. I am not alone here, this was rife during the bubble. Realtors and real estate companies, as well as banks, were telling everyone that buying a house was an investment, that you should buy a bigger home, flip it in a few years, buy another larger home, and repeat the cycle until you had enough money left over to buy the house you want to retire in outright.

It was considered "smart" to "invest" in real estate. I am now no longer a homeowner because of this. Because I stupidly "invested" in real estate.

Now, people like myself number in the millions.........and none of us can get another mortgage for years.

These 3.5% mortgages are in real terms only for people with equity who want to REFINANCE. New home purchasers don't get that rate, IF they can get a mortgage in the first place

A pre approval means nothing. Until the lender knows what property you want to buy they cannot underwrite the mortgage. If 2 of the banks had minimum requirements you need to deal with another bank. Are you saying there was no bank that would lend a smaller amount? How many did you apply at?

 

[LizzieMaine]

But if we're happy with what we have, the whole Holy Sacred Economic System will collapse. And the Boys From Marketing sure don't want is to realize just how much power we really have to accomplish that.

 

[MissMittens]

A pre approval means nothing. Until the lender knows what property you want to buy they cannot underwrite the mortgage. If 2 of the banks had minimum requirements you need to deal with another bank. Are you saying there was no bank that would lend a smaller amount? How many did you apply at?

I was working with a broker who used HSBC, Citi and BoA....... If there were a truly independent inquiry, I am sure that banks were already seeing the writing on the wall regarding the sub-prime mortgages, and were trying to lend higher amounts to people they knew would and could pay in the non-sub-prime market, to spread the debt. Even the Attorney General in my state is aware of the "predatory lending tactics" banks employed in my state (which also happens to be where all the banks are based)

 

[MissMittens]

But if we're happy with what we have, the whole Holy Sacred Economic System will collapse. And the Boys From Marketing sure don't want is to realize just how much power we really have to accomplish that.

It's the one thing that keeps the whole thing going, Lizzie. You too can become a millionaire, if you work hard in school, and already have family or friends who are rich enough to fund your College and your first foray into business....

 

[Undertow]

But if we're happy with what we have, the whole Holy Sacred Economic System will collapse. And the Boys From Marketing sure don't want is to realize just how much power we really have to accomplish that.

Isn't that the truth? The minute everyone stops making needless purchases is the minute the short-fuse timebomb starts ticking.

Perhaps Kruschev was right?
"What the bourgeoisie therefore produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable."

 

[Noirblack]

I was working with a broker who used HSBC, Citi and BoA....... If there were a truly independent inquiry, I am sure that banks were already seeing the writing on the wall regarding the sub-prime mortgages, and were trying to lend higher amounts to people they knew would and could pay in the non-sub-prime market, to spread the debt. Even the Attorney General in my state is aware of the "predatory lending tactics" banks employed in my state (which also happens to be where all the banks are based)

OK, so that's three you applied to, (perhaps more if I am reading the ellipses correctly) but you said two banks turned you down. What happened at the third?