Tycoons in banking

[Gwizz]

Washington Mutual a savings and loan bank worth 307 Billion in assists was taken over by the Feds

and for a cost of under 2 billion it was given to a New York bank.  What a deal for future profit for the NY bank at the expense of WM stock and bond holders.

WM bank got in trouble when it complied voluntarily but under pressure of being call raciest, with a law passed by the Democrats and signed by then President Clinton that proposed to give loans to people who could not afford these loans.  people at Freddie Max and Fannie Mae stated that the government would guarantee these loans,  so it should have been safe for banks to buy these loans from them, for people who did not provide IDs, (Mostly Illegals) and people who did not have jobs.  As these loans went bad it was discovered that there was no government loan guarantee for the bank.  It was a lie.  WM Bank's liquidity went South.  Without enough cash, they had a run on the bank by people who wanted to take all their Money out of the bank.  Now I wonder who passed around the word that the bank was low on cash

The rest is history as many banks fell to this same law.  Socialism fails again because of greedy people in positions of power.   

[Gwizz]

I just heard that Washington Mutual had just hired a new CEO 3 weeks ago for over a 19 million dollar contract.

He was to fix the problems and make the bank viable again.

Now he is out of work.  I wonder if he gets to keep the money.

[Gwizz]

Well I think the elitists are now bailed out.  Now how about the rest of us?

The stock market Friday ended up lower than it was when it dropped 777 on last Monday.

If it doesn't make a big gain on this coming Monday, we could be headed for some hard times.

survivalists are talking about stocking up on a lot of extra grocery's, about having extra money on hand by not buying anything you don't need.  Keep the car gassed up and buy gold and bullets.  Geese.

One comment I heard was: we will most likely have to spend another 5 trillion just to keep the bailout from sinking us further.

Here is a look of some parallels of the 1929 stock market crash.

How bad is the current crisis? Dan Hyde takes a look at what happened on Wall Street in 1929 and finds some startling parallels to today's stock market chaos.

http://www.thisismoney.co.uk/investing/article.html?in_article_id=453151&in_page_id=166&in_page_id=166

[Gwizz]

The Stock Market in the rest of the world is suffering more than we are. 

I heard that the bailout set a record of the most pork ever in a bill.

The rest of the world looks at the bailout and says the US is not interested in solving the money problem. Just look at all the pork they plan to buy.  Why would anyone want to help us.

[Hawk]

This bailout is a great example of the 'Kick 'em when they're down' strategy.  ::)

[Gwizz]

You hit the nail on the head Hawk.

I heard this morning that banks are taking all the bailout money they receive to replenish their reserve and to buy gold.

Few are trying to help those citizens who they made loans to and are now losing their homes.

I have a neighbor that was taken to the cleaners by the seller and by both real-estate agents and by the bank.

His 3 percent mortgage went to 11 percent interest.  He was given a second mortgage to do the repairs that the seller was required to complete from an inspectors report.  The seller provided forged receipts that he had done the repairs and his Real-estate agency released all the money to the seller. 

These buyers share some blame for getting into a deal that was over their head without studying it out.  They said they fell in love with the house the pool and the location and just didn't read the fine print.

Now they don't even have enough money to move.  I told them to stay in the house they bought and save their money so one day they can afford to move.  Maybe some day the bailout money might even reach them. 

[thomasjordan]

His 3 percent mortgage went to 11 percent interest.  He was given a second mortgage to do the repairs that the seller was required to complete from an inspectors report.  The seller provided forged receipts that he had done the repairs and his Real-estate agency released all the money to the seller. 

These buyers share some blame for getting into a deal that was over their head without studying it out.  They said they fell in love with the house the pool and the location and just didn't read the fine print.

Bingo.  The buyer is 100% responsible for the loan he signed.  If he did not read it, did not hire a lawyer to read it for him, too damn bad.  He fell in love with the pool, and now has contributed to ruining the economy of this country so he could have his damn pool and all the while expecting me to pay my mortgage and his too.

He didn't order his own home inspection, either?  That guy had no business buying a house.  Not even the playhouse in my backyard for the grandkids.

(*&YUI*&^ him and the horse he rode in on.

[Gwizz]

I guess I left too much out.

He did order an inspection and the report stated the defects of the house.  The seller cheated him by not doing any of the work.  These extra costs came out of his pocket. The real-estate people were of little help. they already had their commissions. To make matters worse,  he apparently didn't expect such big increase in interest, nor the big increase in the amount of his payments.  He was told they would be a lot less.

He is a car salesman who was making very good money as a manager and the companies top salesmen. He should have known about fine print. Shortly after buying the house, he had a heart attack. He has now lived in the house for over a year and is back to work.  His wife was also working.  But, she just had back surgery. Now his income is falling fast with the falling economy of the auto market.

I believe in the beginning he was able to afford the house, but the economy debacle and illness wasn't something he could have foreseen.

[thomasjordan]

Gwizz:

Thanks for straighening that out.  I take back a few of the cuss words I typed.

I've bought 5 houses and sold 4.  Here are a few tips.

1.  Everybody is out to rip off the buyer.  As the buyer, do not believe anything the seller says, or the realtor says.  The realtor (both the buyer's and seller's) are working for the seller, and are paid by the seller.

2.  As the buyer, always order an independent home inspection, paying for it out of your own pocket if necessary.  Do not trust an inspection report supplied by the seller or a realtor.

3.  As the buyer, always hire a lawyer.  Some states (Louisiana for one) require it.  I recommend it in any event.  You are paying that lawyer, not the seller, and he or she will represent your interests.

4.  As the buyer, never believe that the seller will fix anything in the home after the sale goes through.  What are you going to do when the seller doesn't, hire a lawyer and sue him?  The suit would most likely be in small claims court, and small claims court has no enforcement authority, even if you do win a judgment.  Get it fixed before closing, or take it as a given it won't be fixed (except by you, at your expense).

5.  As the seller, never commit yourself to anything.  Offer the house as is, period.  Reject offers that demand you fix something at your expense for the benefit of the buyer.  If you lived in the house with a broken garage door opener, then if the buyer wants a working a garage door opener, let the buyer pay for it.

6.  As the seller, do comply with any state inspection requirements.  Washington requires a radon inspection (I sold home in Tacoma in 1990), and Louisiana requires a pest inspection (I sold one there in 2003).  Colorado requires some type of soil inspection because there is a type of unstable clay in the greater Denver metropolitean area (I forget the specifics, sold that house in 1993).  I don't recall Virginia having any requirements (sold that house in 1981).

7.  As the seller, tell the realtor right up front you refuse to pay their 6% or 7% commissions.  Tell them exactly how much you will pay them (I've found 3% to 4% works).

8.  As the seller, may sure your home is neat, clean and uncluttered.  You want the buyer to visualize themselves living in this house.  If its full of dirty dishes in the kitchen or a pile of dirty laundry, you probably just lost them.

I really should have my wife type this.  She's the expert at selling homes.