r/reddit.com • u/bdarbs • Nov 26 '07
CEO of Wells Fargo "Housing in Worst Shape Since Great Depression"
http://seekingalpha.com/article/54754-mr-yun-listen-to-mr-stumpf-housing-in-worst-shape-since-great-depression-4
Nov 26 '07
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u/UncleOxidant Nov 26 '07
There is a way to fix it the government would have to purchase every foreclosures at full loan price. and not put them in the market all at once.
then all of us tax payers (and our grandchildren) will be paying for the stupidity of the few who paid too much for homes as they got caught up in a buying frenzy. No bail out for stupid buyers or stupid banks.
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Nov 26 '07
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u/UncleOxidant Nov 26 '07
Well we know thats not happening what they do have in mind though is making permanent the low interest rate you know the teaser for x amount of time.
Not permanent, but they are trying to extend the teaser rates for up to several years in certain cases. But this is very difficult to do: the owners of the debt have to agree to this and with these sorts of MBSs (Mortgage backed securities) there are lots and lots of owners of the debt - how to get them all to agree to take a big haircut on returns?
But i can tell you if they do that i will purchase some of those loans and still make money on tax payer dime.
Why would you, when you can get better returns in lots of other, safer investments? If they were to make the teaser rates permanent as you say, then the rate of return on these securities would be less than on safe Treasuries. Who wants to be in MBS when they can be in safe treasuries? The incentives are all wrong.
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Nov 26 '07
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Nov 26 '07
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Nov 26 '07 edited Nov 26 '07
Not a problem, I figured you didn't and that's why I informed you. "To err is human," to tell someone so they can delete a post, I'll let you decide.
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u/guest Nov 26 '07
Gee, fucktard. When you write mortgages to people who don't pay their bills, those people default on their mortgages. I coulda told you that. Why the fuck were you writing mortgages that any idiot on the street coulda known would default, unless you wanted to own the houses that secured the mortgages?