Advisen: Subprime Writedowns Trigger Avalanche of Lawsuits

January 15, 2008

  • January 15, 2008 at 2:58 am
    Exadjuster says:
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    Were there any lawsuits while the baloon was rising?

  • January 15, 2008 at 3:07 am
    Nope says:
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    No suits, just smiles & winks at each other over the desks.

  • January 16, 2008 at 12:19 pm
    love the business says:
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    Lawsuits should be to the directors of the large institutions. How can these companies lose all this money and yet the golden parachute is there for some. why should we pay for the 110 million the ceo of country is getting after he bankrupt the company

  • January 16, 2008 at 12:20 pm
    Compman says:
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    I have a question that no one seems to be able to answer. I know I am not stupid nor am I an Einstein, but everytime you read about the subprime “meltdown”, it makes me wonder. First, subprime loans make up a minority of the loans out there. Second, which is the one that really boggles my mind, is that the perception is that once a house is forclosed on, the whole loan is written off as bad debt. Did the actual house get swallowed up into a black hole? Don’t the lenders still own the house? Let’s say they lent $500,000 for a home to a borrower, the borrower defaults with $499,000 left to pay. And, with the availability of more houses on the market, it can only be sold for $400,000. So, they are only out $100,000, not $500,000. Everywhere you hear and read it makes it sound like the houses are not worth anything. Personally, I think there are more people in trouble due to speculation and greed then ones who got “taken” in a subprime loan. How does one actually believe they can afford a $700,000 house when the total family income is only $3000 per month!. I know from personal experience as I witnessed one of my friends take his 4000 sq ft house, which he bought for $175,000 back in 2002, then turn around and sell it for $350,000 in 2005, and buy a new custom home with 5000 sq ft on a lake for $800,000. I told her she was nuts and it would never fly. She makes 6k a month. Sure enough, within 18 months, she has been forclosed. Now she has lost all her equity and lives in a 1500 sf rental now. This woman is not stupid either normally. But greed took over. She felt she could live in the new home for 5 years and make a tidy profit. Even though she is my friend, it is hard to feel sorry for these people.

  • January 16, 2008 at 3:10 am
    Blonde says:
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    I watched a realtor buy a house for 11K he took out a Mn fix-it fund loan for 22K, put 7500 into the house and sold for 115K, then sold it a friend who sold it for 175K who sold it to a friend for 225K. Then the music stopped and the one who bought it for 225K
    was stuck with the house and it went back to the bank. The real crooks took the money and ran back in 05.

  • January 16, 2008 at 4:02 am
    love the business says:
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    I agree with all guys, it was all about greed.They blame brokers, bankers etc but the real truth is no every American can manage a mortgage nor should every one be able to own a house. What kills me is that news groups beat everyone in the industry except the Realtor and i have had experience with relators and fraud that would creep us all.

    The banking dept is at fault for not putting measures in place to eliminate the liars and crooks that got into the business of mortgages. Anyone that has $500 and no experience can become a broker.”Wow” what controls. Allthey wanted is the appliction money and audit money from these people.

    Stock brokers, lawyers, apprasiers, insurance agents realtor all hava a code of ethics and they need continuing education as well as years of experience prior to getting a license but Mortgage people do not. Why?

    ahh i co go on but i will not solve the current situation
    best of luck to all

  • January 28, 2008 at 2:50 am
    Mike says:
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    I won’t pretend to be able to answer all your questions, nor dismiss them as invalid. I think the simple answer is based around greed and short-sightedness.
    I have a cousin who was foreclosed upon last September. 2 years ago, he sold his 1,500 square foot home for $480,000 (bought 5 years prior for $135,000), and bought a 2,000 square foot home for $550,000. One year later, the house was valued at $650,000. Greed inspired him to take out a second mortgage to buy toys, and invest into a few remodeling projects.
    Now, the bank owns the house, and they forgave the balance of about $600,000 he owed against the house, and put it on the market for $499,995. The best offer they have received so far is $375,000.
    Obviously, we live in northern California. It’s not just the abundance of houses available, it’s the declining market overall. Jobs are harder to find, and lay-offs are abundant. Home builders and developers are offering homes at little or no profit, and sometimes even at a loss, just to get out from under the loans they took out to build them.
    One would assume my cousin would have over $300,000 in equity in the first house he sold. He would, had he not taken out many loans to buy all kinds of toys. He’s got all the new cars and flashy electronics to compete with the neighbors in suburbia, but he and his wife moved their 2 kids into a rental just down the street from their foreclosure a few months ago. His former lending agent is out of business, along with thousands of his peers. Dozens of large home developments are sitting half-built, because the developers have no money to pay the subcontractors and banks they are past-due to, let alone pay for the materials and labor required to finish their projects.



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