WaMu is now on the verge of failing....

[CJATE]

google CRA. it may be the worst banking idea ever.

[BigBlueDodge]

The first reaction in this financial crunch is to blame the banks. It's there fault. But at what point do the people start shouldering the blame themselves. Start reading some of the stories on loans that went into default, and it makes you wonder if people have any common sense at all. For example, a single mother of 3 makes $40,000 a year. She wants to buy a house valued at $500,000 using an adjustable rate mortage. She can barely afford the first payments, but still decides to buy the house. Then 3 years later when the rate changes and her payment doubles, she goes into default. She blames the bank. At no point did she really think that someone making $40K a year could afford a $500K house. She stretched her budget to the limit just to afford the initial house payment, not leaving herself any room for stuff like, food, bills, etc. I've read tons of stories of people in California that just made insane purchasing decisions and are now feeling the ramifications of that.

Yes, the bank should have never backed that loan, but at the same time I would say that the buy should have used common sense and realized that she couldn't afford the house. In the end, rather than those people shouldering at least some of the blame, it's far to easier to blame the "big business".

I've seen the scenario time and time again. When the housing market was at it's peak, and interest rates were low, I saw many families decide that they wanted that bigger house in the nicer part of town. They stretched their budges and bought more house than they should have using adjustable rate mortgages. Then 2-3 years after they bought the house they found out that they couldn't afford it and were forced to sell, or default on their loan, or declare bankruptcy.

[aardwolf]

The first reaction in this financial crunch is to blame the banks. It's there fault. But at what point do the people start shouldering the blame themselves. Start reading some of the stories on loans that went into default, and it makes you wonder if people have any common sense at all. For example, a single mother of 3 makes $40,000 a year. She wants to buy a house valued at $500,000 using an adjustable rate mortage. She can barely afford the first payments, but still decides to buy the house. Then 3 years later when the rate changes and her payment doubles, she goes into default. She blames the bank. At no point did she really think that someone making $40K a year could afford a $500K house. She stretched her budget to the limit just to afford the initial house payment, not leaving herself any room for stuff like, food, bills, etc. I've read tons of stories of people in California that just made insane purchasing decisions and are now feeling the ramifications of that.

Yes, the bank should have never backed that loan, but at the same time I would say that the buy should have used common sense and realized that she couldn't afford the house. In the end, rather than those people shouldering at least some of the blame, it's far to easier to blame the "big business".

I've seen the scenario time and time again. When the housing market was at it's peak, and interest rates were low, I saw many families decide that they wanted that bigger house in the nicer part of town. They stretched their budges and bought more house than they should have using adjustable rate mortgages. Then 2-3 years after they bought the house they found out that they couldn't afford it and were forced to sell, or default on their loan, or declare bankruptcy.

If she flipped the house for $700k you can bet she wouldn't be giving the $200k profit to you and me.
So why should we have to bail her out if she doesn't make money?

Why should we have to bail out banks that didn't require sufficient down payment?

Why should we bail out homeowners who lived in flood zones and didn't buy buy flood insurance?





Where's the candidate for PRESIDENT who is willing to answer (or even ask) these simple questions?

[KBCraig]

WaMu, AIG, Lehman, etc., are exactly like hurricane-ravaged coastal Texas: if the mess is worth cleaning up and rebuilding, then either the current owners or prospective buyers will do so.

If not, then the mess should be left to lay. Someone, someday, might find it worth cleaning up and rebuilding. Unless/until then, it's simply undesirable and uninhabitable turf.

I have the deepest sympathy for our friends on the Gulf Coast who have seen their homes and lives destroyed by a storm, just like I have the deepest sympathy for our friends who trusted the government to protect their bank savings. But the sad fact is that "helping" them by spreading the pain around won't help them at all; it subsidizes the choices they made and makes them seem reasonable, and increases the chance that more people will be wiped out by similar storms in the future.

[aardwolf]

When you punish success you get less of it.

When you reward incompetence you get more of it.

That explains most of the government's influence on business and the economy.

[Mike1951]

Please forgive me for being small minded regarding Washington Mutual.

Given their anti-gun leadership, the more bad things that happen to WaMu, the better!

[Skiprr]

When you punish success you get less of it.

When you reward incompetence you get more of it.

Yeah. Funny how that happens, isn't it?

[WarHawk-AVG]

I can tell you one thing, we had to bail out some of these companies because they are flat out too large to let fail. It would destroy our economy.

On top of that, in the end it's congresses fault for requiring the companies to basically "donate" their money. They knew there was going to be a high rate of failure when it comes to repaying the loans, but there was not a darned thing they could do about it, because it was the law.

Personal responsibility doesn't come into play here when you are taking about this market segment of people the banks were required to give loans to. If it did, they wouldn't be in this position to begin with.

If we bail them out..we just band aid an injury that has been hemorrhaging for far too long...delaying the inevitable!

Those pinhead CEO's and such of those failed companies need to rot in jail, those who default on their loans need to loose everything..its not mine or your responsibility to PAY for other peoples mistakes!!!!!!!!!!!

[BigBlueDodge]

You guys are missing a key point. It is better for OUR government to bail them out, or otherwise our core financial institutions are vulnerable for take over by FOREIGN investors. Do you really want the core financial institutions of this country being owned and controlled by Japanese, or European investors? Yes, no one likes it, but the government did the right thing.

With the weak US dollar, ailing US companies are becoming bargains for overseas investors. If we don't do something, we will begin losing ownership in our US based companies.

[flb_78]

You guys are missing a key point. It is better for OUR government to bail them out, or otherwise our core financial institutions are vulnerable for take over by FOREIGN investors. Do you really want the core financial institutions of this country being owned and controlled by Japanese, or European investors? Yes, no one likes it, but the government did the right thing.

With the weak US dollar, ailing US companies are becoming bargains for overseas investors. If we don't do something, we will begin losing ownership in our US based companies.

The best thing would be NO core financial institutions.

So what if a foreign bank buys up some American Banks. They're already buying up everything else American and taking jobs. They also loan us all the money the Government in running on. Well, they did until China told it's banks to stop loaning monies to the US. Let the banks fail. Pull the Government out of it and let a true free market run and watch how fast these banks will jump up and take off running again.

http://www.reuters.com/article/marketsN ... 3720080925" onclick="window.open(this.href);return false;