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That's true, but also a non-sequitur, since nobody "stole" home equity from anyone. The value of homes went down across the board because of oversupply, and tha

That's true, but also a non-sequitur, since nobody "stole" home equity from anyone. The value of homes went down across the board because of oversupply, and that is a phenomenon that required potential homeowners, financiers, builders, and other entities to tango. It's not something the banks caused to happen on their own, nor something they bear sole and unmitigated responsibility for.

yourbandsucks 8y ago
I'd argue you're into red herring land a little yourself with the systemic goings-on. From Joe Sixpack's perspective, he paid his mortgage every month for 20 years, was all set to retire on his home equity, and then poof, the rug got pulled out from under him. It's a bit of a tall ask to say he should've seen that his home was overvalued and planned accordingly when all of Wall St couldn't see it either.
- oihoaihsfoiahsf 8y ago
  If Joe Sixpack owned for twenty years, he was not underwater after the crisis. He might not be in as good of a shape as he was at the top, and I can understand how that would be disappointing, but he's still doing fine. If he got greedy and did a big cash out ARM refinance, well, that sucks, but people are told from a very young age that when something seems too good to be true, it probably is. Caveat emptor! And there are warnings ALL OVER the documents you have to sign to actually participate in such a transaction. I reject the notion that American adults should not or cannot be custodians of their own financial lives. I'm certainly not saying that I expect the average American to understand what actually happened. The average American believes all kinds of things that aren't true, even in much simpler domains of knowledge. I am just saying what actually happened.
- isoskeles 8y ago
  What about the Joe Sixpacks who bought homes because housing always goes up and I can just flip this in three years?
- stale2002 8y ago
  But he can retire. He owns a house. Nothing poofed away. He owns it, and is not getting evicted. He can continue to live in that same house that he has lived in for 20 years.
chadbaud 8y ago
The banks did cause it to happen. They had an insatiable appetite for mortgage backed securities and would shop credit rating agencies (who were newly public companies) to get a AAA rating on total garbage they knew would explode. Municipalities and pension funds would buy AAA securities even though the originators and packagers of the mortgagers knew they were garbage. It was a big fraud caused by the bankers greed.
- oihoaihsfoiahsf 8y ago
  Yes, the banks were part of the cause. That is not in dispute, as you can see by reading my previous comments. But they would not have been able to commit their fraud without the aid of credulous buyers willing to purchase far more house than they could afford. That's all I'm saying.
  - wiz21c 8y ago
    >>> without the aid of credulous buyers or with the aid of people with that necessary skill needed to convince regular people to do something only credulous people would do. What was the name of that skill,... hmm... isn't it "manipulation" or "marketing" ? You see, if someone's is going to make a mistake, I tend to help him by preventing him to do so. I don't give him the pen to sign its destiny.
    - oihoaihsfoiahsf 8y ago
      Y'all keep trying to explain the morality of what the banks and lenders did to me like I don't already know. I know. It's not good. That's irrelevant to the question of whether they were solely responsible.
    - deleted 8y ago
      [deleted]
  - chadbaud 8y ago
    In a functioning market, a buyer would not have received a loan, no matter how much they wanted to over extend themselves. But, because fraud was being committed from the rating agencies, investment banks and mortgage originators, they got the loan. I understand what you saying, but I think you underestimate the lack of accountability that allowed people to get loans they were not in the best interest of anyone.

yourbandsucks 8y ago

I'd argue you're into red herring land a little yourself with the systemic goings-on. From Joe Sixpack's perspective, he paid his mortgage every month for 20 years, was all set to retire on his home equity, and then poof, the rug got pulled out from under him. It's a bit of a tall ask to say he should've seen that his home was overvalued and planned accordingly when all of Wall St couldn't see it either.

oihoaihsfoiahsf 8y ago
If Joe Sixpack owned for twenty years, he was not underwater after the crisis. He might not be in as good of a shape as he was at the top, and I can understand how that would be disappointing, but he's still doing fine. If he got greedy and did a big cash out ARM refinance, well, that sucks, but people are told from a very young age that when something seems too good to be true, it probably is. Caveat emptor! And there are warnings ALL OVER the documents you have to sign to actually participate in such a transaction. I reject the notion that American adults should not or cannot be custodians of their own financial lives. I'm certainly not saying that I expect the average American to understand what actually happened. The average American believes all kinds of things that aren't true, even in much simpler domains of knowledge. I am just saying what actually happened.
isoskeles 8y ago
What about the Joe Sixpacks who bought homes because housing always goes up and I can just flip this in three years?
stale2002 8y ago
But he can retire. He owns a house. Nothing poofed away. He owns it, and is not getting evicted. He can continue to live in that same house that he has lived in for 20 years.

chadbaud 8y ago

The banks did cause it to happen. They had an insatiable appetite for mortgage backed securities and would shop credit rating agencies (who were newly public companies) to get a AAA rating on total garbage they knew would explode. Municipalities and pension funds would buy AAA securities even though the originators and packagers of the mortgagers knew they were garbage. It was a big fraud caused by the bankers greed.

oihoaihsfoiahsf 8y ago
Yes, the banks were part of the cause. That is not in dispute, as you can see by reading my previous comments. But they would not have been able to commit their fraud without the aid of credulous buyers willing to purchase far more house than they could afford. That's all I'm saying.
- wiz21c 8y ago
  >>> without the aid of credulous buyers or with the aid of people with that necessary skill needed to convince regular people to do something only credulous people would do. What was the name of that skill,... hmm... isn't it "manipulation" or "marketing" ? You see, if someone's is going to make a mistake, I tend to help him by preventing him to do so. I don't give him the pen to sign its destiny.
  - oihoaihsfoiahsf 8y ago
    Y'all keep trying to explain the morality of what the banks and lenders did to me like I don't already know. I know. It's not good. That's irrelevant to the question of whether they were solely responsible.
  - deleted 8y ago
    [deleted]
- chadbaud 8y ago
  In a functioning market, a buyer would not have received a loan, no matter how much they wanted to over extend themselves. But, because fraud was being committed from the rating agencies, investment banks and mortgage originators, they got the loan. I understand what you saying, but I think you underestimate the lack of accountability that allowed people to get loans they were not in the best interest of anyone.