$700 B Bailout

FRPLG

I meant how to fic it and prevent it recently. The underlying causation for this goes back to the late 70's. Right now cause doesn't mean much though.

SmootSmack

It's hard for people not to get upset when they read something like this

FOXNews.com - WaMu Gives New CEO Mega Payout as Bank Fails - Local News | News Articles | National News | US News

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Sheriff Gonna Getcha

It is certainly understandable why people would get upset with that story. It's really tragic that some are making millions while others are losing their jobs, watching the value of their pensions plummet, and losing their homes.

But, keep in mind that WaMu's new CEO had nothing to do with the bank's failure. Moreover, "golden parachutes" aren't as crazy as they sound. Suppose CEO X has a proven track record of turning around struggling businesses, makes $5,000,000 per year at his current job, and has great job security. He's probably a very hot commodity and will not leave his job unless he's paid handsomely and is given some job security (i.e., guaranteed money). That guaranteed money is typically payable if his employment is terminated for no fault of his own and is forfeited for certain bad conduct (e.g., fraud). It's a form of job security and isn't much different from an NFL signing bonus, except it's paid at the end of the employment instead of at the beginning.

Basically, it does suck, but it makes sense.

SmootSmack

I understand. I was just saying that if someone were to just pick up the paper (or I guess log onto the Internet) today and see this-and only this-it would enrage them.

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djnemo65

Sorry First, you are behind on this. What you are describing is the collapse of the US housing market, which is only the first part of the story. The bailout does not purport to address this, which is a major reason why the public is not supporting it. How we went from a correction in an overvalued US housing market to the potential collapse of the global economy is a bit more complicated than you are allowing.

firstdown

I was not talking about the bail out. Someone asked how the whole mess got started and that how it got started. Yes there is more to the whole story but thats how it started.

redsk1

I understand what you're saying but what's wrong w/ a 5/1 Arm?

I think what you mean is Option Interest Only ARMs. Big difference.

redsk1

Pelosi should be ashamed at throwing POLITICS into whether this bill should be passed or not. She was quoted in her speech. Not the right time or place. Regardless, if you think it should or shouldn't be passed let's talk about why and why not rather than who's fault it is.

REP. NANCY PELOSI, (D-CA), HOUSE SPEAKER: For too long this government, for eight years has followed a right wing ideology of anything goes, no supervision, no discipline, no regulation.

Sheriff Gonna Getcha

I agree that Pelosi's comments were ill-timed. However, the Republicans who supposedly switched their votes should be even more ashamed. Essentially, they concluded the package was in the best interests of the economy and our country, but they decided to say "f' the best interests of our country," I want to get back at Pelosi.

SmootSmack

People who bit off more than they can chew essentially shouldn't simply completely be absolved of blame here.

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saden1

Assuming you own your own home I am curious as to how many people in here actually read their loan documents in their entirety before they signed them?

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Slingin Sammy 33

I didn't read every last document to the letter, but I reviewed the settlement documents and loan repayment schedule and fees in detail on every home transaction I've done. I've never gone for an ARM, only 30 year fixed rate mortgages.

If you're making a six figure financial decision it's definitely your responsibility to understand what's going on or get an independent attorney to review and explain the documents to you.

This financial crisis is about much, much more than the 5% or so of mortgages that are defaulting. There is plenty of blame to go around on both sides of the aisle and from Wall Street to Main St. We all share in some of the blame here. It's just an egregious shame that Congress can't get a package together to stem the crisis.

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firstdown

I read very little of my loan papers but I also have an established ralationship with the person who did my loan. We did not have any fancy stuff in the loan and put 15% down (conservative traditional banking) and have a fixed 30 year loan with a rate around 5 3/4. We had to buy 4 years ago when the market was just crazy. We found a home that we liked ( could have been bigger) but we also found a home for sale by owner which was about $80,000 below its market value. I'm not the smatest guy in the world but common sense said the market had to correct itself and could not keep up the pace it was on. We have our eye open for another home if we find something that we really like at a good price (I want to live on the water). We can sell our current home and still make around $100,000 with the price we paid for the home. Oh, if I did not have the relationship with my lender I would have read more of the papper work.