11/21/07: Yeah, the greed of those fuckers

Imagine buying a retirement home:

http://www.myrtlebeachonline.com/news/local/story/248431.ht ml

Home builder files for bankruptcy
Seasons community seeks answers
By Jessica Foster - The Sun News

Indebted home builder Levitt and Sons and 37 of its subsidiaries have filed for bankruptcy, leaving residents of its unfinished Murrells Inlet project wondering whether they will ever live in the carefree, active retirement community builders promised.

Fort Lauderdale, Fla.-based Levitt and Sons, which built the famed Levittown project on Long Island 60 years ago, cited downturns in the homebuilding industry and failed attempts to restructure its debt as reasons for filing Chapter 11 in the U.S. Bankruptcy Court late Friday.

The move leaves some residents of Seasons at Prince Creek West, a community for people ages 55 and older, wondering whether they will get the amenities and services they paid for.

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Those greedy geezers! Fuck 'em. Or how about those minority folks, thinking they could afford to buy a house? The absolute nerve of people! The system was rigged to bend 'em over a barrel, so it did exactly what it was supposed to while lining lenders' pockets:

http://www.boston.com/business/globe/articles/2007/10/19/su bprime_cowboys/

Subprime cowboys
By Steve Bailey, Globe Columnist | October 19, 2007

Why did so many home buyers - a disproportionate percentage of them black and Hispanic - wind up with high- rate subprime mortgages when they could have qualified for far better deals? The sad, short answer: The system worked exactly way it was built to work.

* * *

But to understand what went wrong, you have to start at the beginning. That is, where the mortgages were made.

Massachusetts Attorney General Martha Coakley has drawn us a convenient road map through this mess with her lawsuit against Fremont Investment & Loan, once the state's second- largest subprime lender. Of particular interest: the way the mortgage brokers get paid. Give people attractive incentives to behave in a certain way, and they usually do. Mortgage brokers are sometimes paid to put people in crappy loans, and now we are cleaning up after them.

Fremont's own rate sheet for its brokers tells the story. The higher the rate, the higher the commission. In a common industry practice called a "yield spread premium," mortgage companies pay a fee to a broker based on selling a loan with an interest rate above what a borrower qualifies for. For example, if a broker sold a buyer a mortgage that had a rate 1.25 percent higher than he qualified for, Fremont would pay the broker 2 percent of the loan, or $7,000 on a $350,000 mortgage, the Coakley suit says. Fremont also offered brokers bounties for selling subprime mortgages with expensive penalties for paying off a mortgage early.

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Gee, you think some people got steered into too much mortgage or a bad rate by their bank just because it would put a few thousand extra dollars into the pocket of the guy writing your loan? Naaah, that would never happen. And it would never, ever happen with first-time buyers or unsophisticated buyers flim-flammed by the preposterous notion that they, too, were entitled to home ownership.

THAT's where the blame lies: All those poor people pushing around financial big boys like Countrywide! Think I'm kidding:

http://www.nytimes.com/2007/11/11/business/11angelo.html? _r=1&ref=business&pagewanted=all&oref=slogin

Countrywide’s Chief Salesman and Defender

By GRETCHEN MORGENSON and GERALDINE FABRIKANT Published: November 11, 2007

AS the credit crisis sent financial markets into a tailspin in August, Countrywide Financial, the nation’s biggest mortgage lender, was in dire need of cash. In a move that fueled anxiety among investors, it decided to tap an $11.5 billion credit line it held with a number of other banks.

* * *

For decades, as Mr. Mozilo built Countrywide into the nation’s biggest mortgage lender, his bravado had served him well. But the same traits that helped him create the dominant lender left him off balance as the growing mortgage crisis threatened to engulf Countrywide.

To this day, he says his beleaguered company did nothing wrong during the loose-lending craze that is now unraveling nationwide with record foreclosures and mountainous losses. Instead, Mr. Mozilo considers himself and his company to be victims of financial forces beyond their control.

At a conference sponsored by the Milken Institute about two weeks ago, for example, he explained that borrowers forced lenders like Countrywide to lower their mortgage standards. The industry faced special pressure from minority advocates to help people buy homes, he said.

* * *

OVER the last few months, Mr. Mozilo has declined repeated interview requests. “No one, including Mr. Mozilo, could have foreseen the unprecedented combination of events that led to the problems borrowers, lenders and investors face with many of these loans today,” said Rick Simon, a Countrywide spokesman.

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Oh yes, the "no could have foreseen" defense. Sure, there were people saying that this looked artificial, that lenders were duping people, pocketing their fast score, and dumping the mortgages into hedge funds where other investments could cover the big shitpile that undergirded so many of these funds. But those people weren't big shots on the teevee, so who are you going to listen to? The guy with the manicure, tailored suit and Rolex, or somebody who's got the time to trace all of that greed?

Poor beleaguered overrich fatcats! Victims of people trying to buy homes to live in. Another round of tax cuts for the oligarchs!

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