Missing The Story On IndyMac

The unfolding story of the year seems to be that the mortgage industry uninhibited exuberance has come to an abrupt halt. It seems that while many mortgages written were legit, many others were written with no real expectation that the mortgagees would be able to pay. No documentation loans, otherwise known as liar loans, were especially popular. Many other loans were written to persons who had little or no comprehension what they were getting into.

How did this happen??? It reminds me of the Savings and Loan fiasco of the 1980's. The potential damage here is much, much larger. Most people depend on mortgages to buy their home. If mortgages become harder to come by, homes are harder to sell and home prices may fall. At the same time, banks have pulled back on all sorts of lending to businesses and consumers. Furthermore, the slowdown in housing is affecting other segments of the economy such a retailers.

With a colossal oversight like the mortgage mess occurring, one has to wonder why we even have government. This shouldn't have happened. There is incredible potential for this to severely hobble the American economy. Our leaders have failed us badly.

Dominion Homes worked alot of folks over. TSK TSK! Then they sell their problems off to Wells Fargo. TYPICAL! Hide hide and HIDE!

Refinancing of mortgages was very popular for a long time and then it hit a brick wall all of the sudden. There are thousands of mortgage refinancing firms that do nothing but roll over mortgages as much as they can and convince people to do it more and more. Now all these refinancing firms are either shutting their doors or opening new refinancing plans as an alternative to losing your home. The media doesn’t pay much attention to them because they are slimy institutions dedicated to putting people in debt for profit but the reality is that these firms had effectively tied single mortgages to several other banks this entire time. That creates a sink hole effect which takes the banks and the home owners down at the same time while the refinancing firms walk away happy with their filing and finder’s fees. Back during the S&L scandals (like Powel and Vogt here in Louisville); it was the banks themselves who were scamming people.
People should have been looking at the bigger picture. That no economy can be this disposable for very long and sinking real cash into loans and debt does not get you ahead, it only makes your definite potential a liability while any profit potential is a gamble at best. It is a result of “trickle down”, economics combined with bleeding domestic capital over the past 40 years. To many people believed that the economics of a few would prove profits for the many in the long run.
America is literally going to have to get it’s lazy ass back to work to build capital again. All of the outsourcing has to end. It will mean higher prices on everything we buy but if we keep outsourcing for lower costs then we will eventually make nothing that anyone else in the world wants. Which we hardly do as it is. We need to regulate loans and financing better and make it less of a profitable institution to refinance using a third party firm outside of banks.
We have to get our national health index up so we can prove a better labor standard than the countries we outsource to.

I struggle a bit with holding the credit card companies and mortgage companies as the culprit here.
I am sure I don't know all the details, but I have yet to read or hear of anyone having a gun held to their head in order to sign a loan agreement or credit card application.
True, it was once much harder to get loans and cards, but it does not release the individual from behaving and spending responsibibly.

No one forced anyone to over extend credit, outsource our capital into oblivion or establish a standard of mortgage bank rolling for home owners like it was some secondary line of credit at a casino. The problem comes from a general lack of foresight to the potential risks.
50% of bankruptcies in America stem from medical expenditures and the other 50% stem from over extension of credit through credit cards, criminal activity, lawsuits or mortgage failures. Most problems are a result of poor economic practices both in government and among the general population. The boom of our economy was reliant on a consumer market with an ever shrinking source of domestic resources and production for outsourcing and product out-stripping.
However, the larger corporations have known this entire time what the end result would be. They’ve known since the end of the robber baron era. Thay have banked on it.
People act as if this is an entirely unexpected surprise but deep down we all know better.
OPEC was formed all the way back in the 60’s with the openly expressed purpose of controlling what they knew would be the world’s most valuable commodity, they have never considered the US for membership, every country on the membership list enjoys the lowest gas prices in the world and they have their annual convention on 9/11. Could it be more obvious? It is a joke to them not because they control the oil market the way they do. What makes it funny to them is how little the US has taken the situation seriously until just now.
Then we have millions of people with bank rolled credit lines and in debt over medical costs that our largest competitors have not had to worry about for over THREE decades. That is quite a head start.