problem for me is that you both are making this political, I do not see it like this. Sure you can find articles blaming Biden and the liberals and appointees blah blah sure you can do that but in the end it is the decision of the company and I guarantee it is not COMPLETELY politically based. This is for sure were we see things differently. I see this as a rebalance of an injustice and a way to bolster their balance sheet where you both see it as some liberal agenda ploy to attack the conservatives like everything is with your side.
Where is the outrage at other scenarios like I mentioned about marketing ploys that choose winners and losers? Where is the outrage at fees and rate screw jobs at other banks?
The fact Fannie was charging MODERATE credit score groups 3 points while charging .25 pt to high credit rated borrowers is absurd and abusive. A 670 score is not junk and a fair percentage of the population were paying that fee for a long long time, where was the outrage of that injustice? You guys just like to complain about liberals and Biden, this is just the target of the week and its a pretty lousy one.
Where was your fervor and angst when reasonable credit score people were getting raked relative to another group when the difference in credit score is NOT THAT LARGE?
0
@Raiders22
problem for me is that you both are making this political, I do not see it like this. Sure you can find articles blaming Biden and the liberals and appointees blah blah sure you can do that but in the end it is the decision of the company and I guarantee it is not COMPLETELY politically based. This is for sure were we see things differently. I see this as a rebalance of an injustice and a way to bolster their balance sheet where you both see it as some liberal agenda ploy to attack the conservatives like everything is with your side.
Where is the outrage at other scenarios like I mentioned about marketing ploys that choose winners and losers? Where is the outrage at fees and rate screw jobs at other banks?
The fact Fannie was charging MODERATE credit score groups 3 points while charging .25 pt to high credit rated borrowers is absurd and abusive. A 670 score is not junk and a fair percentage of the population were paying that fee for a long long time, where was the outrage of that injustice? You guys just like to complain about liberals and Biden, this is just the target of the week and its a pretty lousy one.
Where was your fervor and angst when reasonable credit score people were getting raked relative to another group when the difference in credit score is NOT THAT LARGE?
If it is not political, or at least idealogical how is it good economics? That is what the market shows as good lending business for quite some time.
When you try correct what YOU see as an 'injustice' -- that is the definition of political and idealogy. Otherwise the economists would agree with you -- they do not.
What do you do later on down the road when you fail these people greatly by putting this financial burden and risk on them?
Do you then try to over-correct it? Do you admit then that you did it for reasons other then correcting a 'supposed abuse and injustice'?
Of course, it can be seen as good intentions -- no one disputes that.
1
@wallstreetcappers
If it is not political, or at least idealogical how is it good economics? That is what the market shows as good lending business for quite some time.
When you try correct what YOU see as an 'injustice' -- that is the definition of political and idealogy. Otherwise the economists would agree with you -- they do not.
What do you do later on down the road when you fail these people greatly by putting this financial burden and risk on them?
Do you then try to over-correct it? Do you admit then that you did it for reasons other then correcting a 'supposed abuse and injustice'?
Of course, it can be seen as good intentions -- no one disputes that.
"Where is the outrage at other scenarios like I mentioned about marketing ploys that choose winners and losers? Where is the outrage at fees and rate screw jobs at other banks?"
There are. Just a totally different issue. Start another thread on this. If you do not like military and students getting discounts, start that thread. Then we can discuss whether a good-credit rated military person deserves a discount. This is a BUSINESS decision -- these are not high-risk in their assessments.
I am sure a middle aged white guy with great credit would not like a young, minority military student getting a better discount or rate. But that assumes a completely level playing field -- it is not.
Ask yourself two questions: why do businesses see it in their best interests to offer these discounts and why do they differentiate between Any individuals at all?
That will help you answer why they do it and why there is not the outrage you seem to expect.
0
@wallstreetcappers
"Where is the outrage at other scenarios like I mentioned about marketing ploys that choose winners and losers? Where is the outrage at fees and rate screw jobs at other banks?"
There are. Just a totally different issue. Start another thread on this. If you do not like military and students getting discounts, start that thread. Then we can discuss whether a good-credit rated military person deserves a discount. This is a BUSINESS decision -- these are not high-risk in their assessments.
I am sure a middle aged white guy with great credit would not like a young, minority military student getting a better discount or rate. But that assumes a completely level playing field -- it is not.
Ask yourself two questions: why do businesses see it in their best interests to offer these discounts and why do they differentiate between Any individuals at all?
That will help you answer why they do it and why there is not the outrage you seem to expect.
"The fact Fannie was charging MODERATE credit score groups 3 points while charging .25 pt to high credit rated borrowers is absurd and abusive. A 670 score is not junk and a fair percentage of the population were paying that fee for a long long time, where was the outrage of that injustice?"
This is your opinion and NOT their opinion, nor the opinion of any financially-minded person. Again. 540<640<740<840 for very good reasons. Only you seem to see it as an 'injustice'. This has NOTHING to with the topic of this thread. It might be good to add to the other thread you can start.
If this were even remotely related or considered -- then they would have used this as a sort of justification for what they just did; they did not, for a reason.
0
@wallstreetcappers
"The fact Fannie was charging MODERATE credit score groups 3 points while charging .25 pt to high credit rated borrowers is absurd and abusive. A 670 score is not junk and a fair percentage of the population were paying that fee for a long long time, where was the outrage of that injustice?"
This is your opinion and NOT their opinion, nor the opinion of any financially-minded person. Again. 540<640<740<840 for very good reasons. Only you seem to see it as an 'injustice'. This has NOTHING to with the topic of this thread. It might be good to add to the other thread you can start.
If this were even remotely related or considered -- then they would have used this as a sort of justification for what they just did; they did not, for a reason.
So if that imbalance is just my opinion it is also my opinion that counter balancing an imbalance is a reasonable action and making it political is unnecessary. My comments really are not just opinion, a 670 score is not junk high leverage sub prime borrower credit score, that is not an opinion that is fact from the credit bureaus, the fact that this subset was being charged 3 pts while someone with a very small score higher was being charged .25 pts IS abusive, it is more unfair than this thread you are replying to.
Regarding my retort about other injustices, if your side wants to cry about all the liberal ills it would be less hypocritical to only throw your arms up about "liberal" attacks as you see it, that way you are not coming off as a political play toy which this entire topic is. You were thundering into all the injustices this made not even knowing all the full details, that tells me you see most things as political. You hammered me about the fact they commented about bolstering the balance sheet and yapped several times about it trying to nitpick something that was right there to see. Several of your group lumped this as some long term penalty because you read commentary but do not read the fine print regarding the commentary. The political kids in that piece were lumping in that people were rolling closing costs into the loan and thus they were paying more interest, but you didnt even realize that it only happened if you rolled the closing costs into the loan, it was just an injustice of borrowing costs for the high score individual. ANY closing cost that you roll into a loan will impact long term borrowing cost. This did not raise rates on high score borrowers, this COULD raise borrowing costs if you rolled into the loan, but would high credit score people be stupid enough to finance closing costs like that?
After finding this gem of a topic I am more bothered that moderate score people were getting jobbed 3 pts than this balancing to a whopping 1% especially when you have other choices and you are not forced to use Fannie if you do not choose to. I am more bothered by the crappy business practices of most banks than Fannie leveling the fee a SMALL ammt like this. But one person sees everything with political goggles, others do not.
0
@Raiders22
So if that imbalance is just my opinion it is also my opinion that counter balancing an imbalance is a reasonable action and making it political is unnecessary. My comments really are not just opinion, a 670 score is not junk high leverage sub prime borrower credit score, that is not an opinion that is fact from the credit bureaus, the fact that this subset was being charged 3 pts while someone with a very small score higher was being charged .25 pts IS abusive, it is more unfair than this thread you are replying to.
Regarding my retort about other injustices, if your side wants to cry about all the liberal ills it would be less hypocritical to only throw your arms up about "liberal" attacks as you see it, that way you are not coming off as a political play toy which this entire topic is. You were thundering into all the injustices this made not even knowing all the full details, that tells me you see most things as political. You hammered me about the fact they commented about bolstering the balance sheet and yapped several times about it trying to nitpick something that was right there to see. Several of your group lumped this as some long term penalty because you read commentary but do not read the fine print regarding the commentary. The political kids in that piece were lumping in that people were rolling closing costs into the loan and thus they were paying more interest, but you didnt even realize that it only happened if you rolled the closing costs into the loan, it was just an injustice of borrowing costs for the high score individual. ANY closing cost that you roll into a loan will impact long term borrowing cost. This did not raise rates on high score borrowers, this COULD raise borrowing costs if you rolled into the loan, but would high credit score people be stupid enough to finance closing costs like that?
After finding this gem of a topic I am more bothered that moderate score people were getting jobbed 3 pts than this balancing to a whopping 1% especially when you have other choices and you are not forced to use Fannie if you do not choose to. I am more bothered by the crappy business practices of most banks than Fannie leveling the fee a SMALL ammt like this. But one person sees everything with political goggles, others do not.
@wallstreetcappers "The fact Fannie was charging MODERATE credit score groups 3 points while charging .25 pt to high credit rated borrowers is absurd and abusive. A 670 score is not junk and a fair percentage of the population were paying that fee for a long long time, where was the outrage of that injustice?" This is your opinion and NOT their opinion, nor the opinion of any financially-minded person. Again. 540<640<740<840 for very good reasons. Only you seem to see it as an 'injustice'. This has NOTHING to with the topic of this thread. It might be good to add to the other thread you can start. If this were even remotely related or considered -- then they would have used this as a sort of justification for what they just did; they did not, for a reason.
The creator of these outrage articles are not the company, they are not blogging about the change in fee structure that is what political goggles doobies do, like ZH they look for angles to outrage the subset and it works, this thread which really is nothing of high value outraged many of you erroneously with pretty thinly guised premises (like rolling closing costs and the headline of 75 pt increase while not giving much of any perspective about the fact previously it was much worse in the other direction).
And yes the core of this thread is about injustice and political unfairness, that is all your side hits on and THAT is based on credit scores, and several including you tossed some stink lumber on the fire about this giving a borrower who is likely to default the trap of borrowing and that they are not financially prepared for home ownership and this will create another real estate disaster, that is so absurd it is hilarious. These are not subprime default borrowers, these are middle of the road average score individuals who do own homes, do have jobs and credit. There is no mention of 120 LTV and subprime yet you guys wander over into crazy tangents and assumptions because that makes this seem even more grandiose and that sells the point. A borrower is not going to RUN to Fannie because instead of 3 pts they now only pay 1.5 pts, that is not how people who are looking for a home think, that in the scheme of things is minor. 1.5 pts on a 500k home is 7500 bucks, good grief that is not a reason why someone who has no plans of owning a home now will go do so, AND it is no guarantee they will get approved anyway, especially since your comments were regarding lesser credit scores. A 600-650-670 borrower is not subprime it is not massively heavy risk, it is right near the lower range of a high credit score, you make it out as if they pulled a BK last week and will be borrowing 120 LTV so they can buy a Navigator for free.
0
Quote Originally Posted by Raiders22:
@wallstreetcappers "The fact Fannie was charging MODERATE credit score groups 3 points while charging .25 pt to high credit rated borrowers is absurd and abusive. A 670 score is not junk and a fair percentage of the population were paying that fee for a long long time, where was the outrage of that injustice?" This is your opinion and NOT their opinion, nor the opinion of any financially-minded person. Again. 540<640<740<840 for very good reasons. Only you seem to see it as an 'injustice'. This has NOTHING to with the topic of this thread. It might be good to add to the other thread you can start. If this were even remotely related or considered -- then they would have used this as a sort of justification for what they just did; they did not, for a reason.
The creator of these outrage articles are not the company, they are not blogging about the change in fee structure that is what political goggles doobies do, like ZH they look for angles to outrage the subset and it works, this thread which really is nothing of high value outraged many of you erroneously with pretty thinly guised premises (like rolling closing costs and the headline of 75 pt increase while not giving much of any perspective about the fact previously it was much worse in the other direction).
And yes the core of this thread is about injustice and political unfairness, that is all your side hits on and THAT is based on credit scores, and several including you tossed some stink lumber on the fire about this giving a borrower who is likely to default the trap of borrowing and that they are not financially prepared for home ownership and this will create another real estate disaster, that is so absurd it is hilarious. These are not subprime default borrowers, these are middle of the road average score individuals who do own homes, do have jobs and credit. There is no mention of 120 LTV and subprime yet you guys wander over into crazy tangents and assumptions because that makes this seem even more grandiose and that sells the point. A borrower is not going to RUN to Fannie because instead of 3 pts they now only pay 1.5 pts, that is not how people who are looking for a home think, that in the scheme of things is minor. 1.5 pts on a 500k home is 7500 bucks, good grief that is not a reason why someone who has no plans of owning a home now will go do so, AND it is no guarantee they will get approved anyway, especially since your comments were regarding lesser credit scores. A 600-650-670 borrower is not subprime it is not massively heavy risk, it is right near the lower range of a high credit score, you make it out as if they pulled a BK last week and will be borrowing 120 LTV so they can buy a Navigator for free.
You guys do realize this story is all a distraction, right? Banks on fire and y'all still up in arms about this nonsense. Open your eyes. This is a distraction away from the real issues. But don't worry, inflation is transitory and there will be a soft landing and the banks are fine.
0
You guys do realize this story is all a distraction, right? Banks on fire and y'all still up in arms about this nonsense. Open your eyes. This is a distraction away from the real issues. But don't worry, inflation is transitory and there will be a soft landing and the banks are fine.
@Raiders22 So if that imbalance is just my opinion it is also my opinion that counter balancing an imbalance is a reasonable action and making it political is unnecessary. My comments really are not just opinion, a 670 score is not junk high leverage sub prime borrower credit score, that is not an opinion that is fact from the credit bureaus, the fact that this subset was being charged 3 pts while someone with a very small score higher was being charged .25 pts IS abusive, it is more unfair than this thread you are replying to. Regarding my retort about other injustices, if your side wants to cry about all the liberal ills it would be less hypocritical to only throw your arms up about "liberal" attacks as you see it, that way you are not coming off as a political play toy which this entire topic is. You were thundering into all the injustices this made not even knowing all the full details, that tells me you see most things as political. You hammered me about the fact they commented about bolstering the balance sheet and yapped several times about it trying to nitpick something that was right there to see. Several of your group lumped this as some long term penalty because you read commentary but do not read the fine print regarding the commentary. The political kids in that piece were lumping in that people were rolling closing costs into the loan and thus they were paying more interest, but you didnt even realize that it only happened if you rolled the closing costs into the loan, it was just an injustice of borrowing costs for the high score individual. ANY closing cost that you roll into a loan will impact long term borrowing cost. This did not raise rates on high score borrowers, this COULD raise borrowing costs if you rolled into the loan, but would high credit score people be stupid enough to finance closing costs like that? After finding this gem of a topic I am more bothered that moderate score people were getting jobbed 3 pts than this balancing to a whopping 1% especially when you have other choices and you are not forced to use Fannie if you do not choose to. I am more bothered by the crappy business practices of most banks than Fannie leveling the fee a SMALL ammt like this. But one person sees everything with political goggles, others do not.
I think you misunderstand. It is NOT a political issue. It is a BAD economic and business decision done by a LEFTIST political appointee. That is the ONLY political part. So, it happens to have been done by a DEMOCRAT. But it would have been a BAD decision if a REPUBLICAN had done it. It wasn't, so that is the ONLY part that is political.
YOU are the one trying to make it political when it is economics and at most IDEALOGICAL but just happens to be done by a leftist.
Again, it does NOT matter what you are more worried about. THAT is NOT the issue at hand. Start a thread about perceived bank 'injustices' and stop changing the subject to that.
Tell me HOW this can be seen as GOOD economics. I do NOT care what you consider a 640 score to be rated. IT is FAR worse than an 840. That is why they are charged less -- they are less risky to lend to. It is simple economics and financial decisions -- NOT an idealogical one. They did not decide to 'abuse' lower rated folks for political reasons. Take the political view out of it that you have and decide what you would do.
0
Quote Originally Posted by wallstreetcappers:
@Raiders22 So if that imbalance is just my opinion it is also my opinion that counter balancing an imbalance is a reasonable action and making it political is unnecessary. My comments really are not just opinion, a 670 score is not junk high leverage sub prime borrower credit score, that is not an opinion that is fact from the credit bureaus, the fact that this subset was being charged 3 pts while someone with a very small score higher was being charged .25 pts IS abusive, it is more unfair than this thread you are replying to. Regarding my retort about other injustices, if your side wants to cry about all the liberal ills it would be less hypocritical to only throw your arms up about "liberal" attacks as you see it, that way you are not coming off as a political play toy which this entire topic is. You were thundering into all the injustices this made not even knowing all the full details, that tells me you see most things as political. You hammered me about the fact they commented about bolstering the balance sheet and yapped several times about it trying to nitpick something that was right there to see. Several of your group lumped this as some long term penalty because you read commentary but do not read the fine print regarding the commentary. The political kids in that piece were lumping in that people were rolling closing costs into the loan and thus they were paying more interest, but you didnt even realize that it only happened if you rolled the closing costs into the loan, it was just an injustice of borrowing costs for the high score individual. ANY closing cost that you roll into a loan will impact long term borrowing cost. This did not raise rates on high score borrowers, this COULD raise borrowing costs if you rolled into the loan, but would high credit score people be stupid enough to finance closing costs like that? After finding this gem of a topic I am more bothered that moderate score people were getting jobbed 3 pts than this balancing to a whopping 1% especially when you have other choices and you are not forced to use Fannie if you do not choose to. I am more bothered by the crappy business practices of most banks than Fannie leveling the fee a SMALL ammt like this. But one person sees everything with political goggles, others do not.
I think you misunderstand. It is NOT a political issue. It is a BAD economic and business decision done by a LEFTIST political appointee. That is the ONLY political part. So, it happens to have been done by a DEMOCRAT. But it would have been a BAD decision if a REPUBLICAN had done it. It wasn't, so that is the ONLY part that is political.
YOU are the one trying to make it political when it is economics and at most IDEALOGICAL but just happens to be done by a leftist.
Again, it does NOT matter what you are more worried about. THAT is NOT the issue at hand. Start a thread about perceived bank 'injustices' and stop changing the subject to that.
Tell me HOW this can be seen as GOOD economics. I do NOT care what you consider a 640 score to be rated. IT is FAR worse than an 840. That is why they are charged less -- they are less risky to lend to. It is simple economics and financial decisions -- NOT an idealogical one. They did not decide to 'abuse' lower rated folks for political reasons. Take the political view out of it that you have and decide what you would do.
"And yes the core of this thread is about injustice and political unfairness, that is all your side hits on and THAT is based on credit scores, and several including you tossed some stink lumber on the fire about this giving a borrower who is likely to default the trap of borrowing and that they are not financially prepared for home ownership and this will create another real estate disaster, that is so absurd it is hilarious."
Wow. This needs to be reconsidered. ABSOLUTELY NO SANE ECONOMIST AGREES WITH YOU ON THIS.
I would read up on what the experts say on this. It is not even close to a 50-50 on it.
0
@wallstreetcappers
"And yes the core of this thread is about injustice and political unfairness, that is all your side hits on and THAT is based on credit scores, and several including you tossed some stink lumber on the fire about this giving a borrower who is likely to default the trap of borrowing and that they are not financially prepared for home ownership and this will create another real estate disaster, that is so absurd it is hilarious."
Wow. This needs to be reconsidered. ABSOLUTELY NO SANE ECONOMIST AGREES WITH YOU ON THIS.
I would read up on what the experts say on this. It is not even close to a 50-50 on it.
You guys do realize this story is all a distraction, right? Banks on fire and y'all still up in arms about this nonsense. Open your eyes. This is a distraction away from the real issues. But don't worry, inflation is transitory and there will be a soft landing and the banks are fine.
Partially correct. But this is NOT nonsense. This could possibly add to the woes or exacerbate them. It is unfair to do this to lower rated buyers -- this is another well-intentioned idea that could go bad. That is why so many of both parties are up in arms about it.
Take the effects on the markets out of it; they are potentially harming the VERY people they claim to help with this.
0
Quote Originally Posted by BigGame90:
You guys do realize this story is all a distraction, right? Banks on fire and y'all still up in arms about this nonsense. Open your eyes. This is a distraction away from the real issues. But don't worry, inflation is transitory and there will be a soft landing and the banks are fine.
Partially correct. But this is NOT nonsense. This could possibly add to the woes or exacerbate them. It is unfair to do this to lower rated buyers -- this is another well-intentioned idea that could go bad. That is why so many of both parties are up in arms about it.
Take the effects on the markets out of it; they are potentially harming the VERY people they claim to help with this.
Quote Originally Posted by BigGame90: You guys do realize this story is all a distraction, right? Banks on fire and y'all still up in arms about this nonsense. Open your eyes. This is a distraction away from the real issues. But don't worry, inflation is transitory and there will be a soft landing and the banks are fine. Partially correct. But this is NOT nonsense. This could possibly add to the woes or exacerbate them. It is unfair to do this to lower rated buyers -- this is another well-intentioned idea that could go bad. That is why so many of both parties are up in arms about it. Take the effects on the markets out of it; they are potentially harming the VERY people they claim to help with this.
I get that. But nobody is making anyone sign the loan to buy a home. If a borrower can not understand the market they are buying into, that's on them. Same shit with the banks failing right now. Just because the regulations were loosened (0% rates, basically free money at super low rate of return) DOES NOT MEAN ANYONE HAS TO GO THROUGH WITH IT. The banks that are currently failing are the ones who mismanaged their monies and investments. Same shit with this situation. If you think the deal is bad (because you have a high credit score, DO NOT SIGN THE LOAN). If this deal looks good to you (low score), sign the deal. But make no mistake, just because you have the loan, DOES NOT MEAN PROPERTY VALUES WILL GO UP AND YOUR HOME WILL GAIN EQUITY. Stop and think what this will do. If it's not for you, don't sign it and let someone else try to bite the worm. IT'S A LAST DITCH EFFORT TO KEEP THE HOUSING MARKET MOVING.
1
Quote Originally Posted by Raiders22:
Quote Originally Posted by BigGame90: You guys do realize this story is all a distraction, right? Banks on fire and y'all still up in arms about this nonsense. Open your eyes. This is a distraction away from the real issues. But don't worry, inflation is transitory and there will be a soft landing and the banks are fine. Partially correct. But this is NOT nonsense. This could possibly add to the woes or exacerbate them. It is unfair to do this to lower rated buyers -- this is another well-intentioned idea that could go bad. That is why so many of both parties are up in arms about it. Take the effects on the markets out of it; they are potentially harming the VERY people they claim to help with this.
I get that. But nobody is making anyone sign the loan to buy a home. If a borrower can not understand the market they are buying into, that's on them. Same shit with the banks failing right now. Just because the regulations were loosened (0% rates, basically free money at super low rate of return) DOES NOT MEAN ANYONE HAS TO GO THROUGH WITH IT. The banks that are currently failing are the ones who mismanaged their monies and investments. Same shit with this situation. If you think the deal is bad (because you have a high credit score, DO NOT SIGN THE LOAN). If this deal looks good to you (low score), sign the deal. But make no mistake, just because you have the loan, DOES NOT MEAN PROPERTY VALUES WILL GO UP AND YOUR HOME WILL GAIN EQUITY. Stop and think what this will do. If it's not for you, don't sign it and let someone else try to bite the worm. IT'S A LAST DITCH EFFORT TO KEEP THE HOUSING MARKET MOVING.
"If a borrower can not understand the market they are buying into, that's on them."
This is the overriding issue -- they do not! And it is not necessarily their fault. Now they are 'duped' in a sense into a situation where they buy a house that cannot afford or 'too much' house. Why add to someone's ignorance or in a sense 'prey' on it.
0
@BigGame90
"If a borrower can not understand the market they are buying into, that's on them."
This is the overriding issue -- they do not! And it is not necessarily their fault. Now they are 'duped' in a sense into a situation where they buy a house that cannot afford or 'too much' house. Why add to someone's ignorance or in a sense 'prey' on it.
@BigGame90 "If a borrower can not understand the market they are buying into, that's on them." This is the overriding issue -- they do not! And it is not necessarily their fault. Now they are 'duped' in a sense into a situation where they buy a house that cannot afford or 'too much' house. Why add to someone's ignorance or in a sense 'prey' on it.
Think about who's pushing this idea...it falls back to them. They desperately need to keep RE up since everything else is falling. They need the economy to hold into the next election. Just trying to kick the can to save one more week at a time. They did the same shit with student loans. More empty promises to buy votes. Just wait for AI to infiltrate every online sub to create a narrative they want. Soon (if not already. Hi Third you'll be chatting with bots) The left tricks people to gain votes. This is nothing but a trick at the cost of their own. But hey, if the market rallies and they get a good deal, than shame on them at the cost of credit worthy borrowers.
0
Quote Originally Posted by Raiders22:
@BigGame90 "If a borrower can not understand the market they are buying into, that's on them." This is the overriding issue -- they do not! And it is not necessarily their fault. Now they are 'duped' in a sense into a situation where they buy a house that cannot afford or 'too much' house. Why add to someone's ignorance or in a sense 'prey' on it.
Think about who's pushing this idea...it falls back to them. They desperately need to keep RE up since everything else is falling. They need the economy to hold into the next election. Just trying to kick the can to save one more week at a time. They did the same shit with student loans. More empty promises to buy votes. Just wait for AI to infiltrate every online sub to create a narrative they want. Soon (if not already. Hi Third you'll be chatting with bots) The left tricks people to gain votes. This is nothing but a trick at the cost of their own. But hey, if the market rallies and they get a good deal, than shame on them at the cost of credit worthy borrowers.
Banks are in major trouble. They are losing collateral quickly (see bank stocks today and look into why they are free falling). As rates rise (tomorrow will likely be a BS .25 raise) banks fall into more trouble. Banks never expected rates to rise and now their investments are practically garbage and depositors are moving their money elsewhere. The last thing banks needs right now are defaults, on any loans they issue. Damned if you do, damned if you don't. Fed is in a pickle they can't get out of.
0
@Raiders22
Banks are in major trouble. They are losing collateral quickly (see bank stocks today and look into why they are free falling). As rates rise (tomorrow will likely be a BS .25 raise) banks fall into more trouble. Banks never expected rates to rise and now their investments are practically garbage and depositors are moving their money elsewhere. The last thing banks needs right now are defaults, on any loans they issue. Damned if you do, damned if you don't. Fed is in a pickle they can't get out of.
Quote Originally Posted by Raiders22: @BigGame90 "If a borrower can not understand the market they are buying into, that's on them." This is the overriding issue -- they do not! And it is not necessarily their fault. Now they are 'duped' in a sense into a situation where they buy a house that cannot afford or 'too much' house. Why add to someone's ignorance or in a sense 'prey' on it. Think about who's pushing this idea...it falls back to them. They desperately need to keep RE up since everything else is falling. They need the economy to hold into the next election. Just trying to kick the can to save one more week at a time. They did the same shit with student loans. More empty promises to buy votes. Just wait for AI to infiltrate every online sub to create a narrative they want. Soon (if not already. Hi Third you'll be chatting with bots) The left tricks people to gain votes. This is nothing but a trick at the cost of their own. But hey, if the market rallies and they get a good deal, than shame on them at the cost of credit worthy borrowers.
Sure. I agree. But my concern is the economics behind it. I know where it originated from.
The issue I have is later as it falls apart -- no one will admit what a disaster this was. We have seen this before with this industry, etc.
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Quote Originally Posted by BigGame90:
Quote Originally Posted by Raiders22: @BigGame90 "If a borrower can not understand the market they are buying into, that's on them." This is the overriding issue -- they do not! And it is not necessarily their fault. Now they are 'duped' in a sense into a situation where they buy a house that cannot afford or 'too much' house. Why add to someone's ignorance or in a sense 'prey' on it. Think about who's pushing this idea...it falls back to them. They desperately need to keep RE up since everything else is falling. They need the economy to hold into the next election. Just trying to kick the can to save one more week at a time. They did the same shit with student loans. More empty promises to buy votes. Just wait for AI to infiltrate every online sub to create a narrative they want. Soon (if not already. Hi Third you'll be chatting with bots) The left tricks people to gain votes. This is nothing but a trick at the cost of their own. But hey, if the market rallies and they get a good deal, than shame on them at the cost of credit worthy borrowers.
Sure. I agree. But my concern is the economics behind it. I know where it originated from.
The issue I have is later as it falls apart -- no one will admit what a disaster this was. We have seen this before with this industry, etc.
@Raiders22 Banks are in major trouble. They are losing collateral quickly (see bank stocks today and look into why they are free falling). As rates rise (tomorrow will likely be a BS .25 raise) banks fall into more trouble. Banks never expected rates to rise and now their investments are practically garbage and depositors are moving their money elsewhere. The last thing banks needs right now are defaults, on any loans they issue. Damned if you do, damned if you don't. Fed is in a pickle they can't get out of.
What do you mean here? For example?
Defaults. Of course. But now they get defaults even more down the road because of this -- how do you fix it? More bailouts, etc.
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Quote Originally Posted by BigGame90:
@Raiders22 Banks are in major trouble. They are losing collateral quickly (see bank stocks today and look into why they are free falling). As rates rise (tomorrow will likely be a BS .25 raise) banks fall into more trouble. Banks never expected rates to rise and now their investments are practically garbage and depositors are moving their money elsewhere. The last thing banks needs right now are defaults, on any loans they issue. Damned if you do, damned if you don't. Fed is in a pickle they can't get out of.
What do you mean here? For example?
Defaults. Of course. But now they get defaults even more down the road because of this -- how do you fix it? More bailouts, etc.
The banks in trouble are those who have too many loans in illiquid investments, that is why the two bigger names got in trouble. They loaned out to areas where the underlying business or assets are not easy to liquidate and if you have to in a hurry you get raked. Then the news of this snowballs and their once safe ratios are no longer safe and they have to sell other assets which they are probably underwater on also.
So if that bank who lent to silicon valley limited partnerships (which isnt a terrible investment) cant turn that loan into cash if they need to and their safe liquid investments might not be market to market properly...meaning a treasury that they bought 3 years ago and now is worth less than it will be at maturity and it snowballs from there.
Also those banks in the commercial lending market are going to be under the scope in the near future too. It is interesting I wondered how banks werent more damaged when treasury rates went up, all those notes and bonds purchased in the last decade are worth much much less and that should have damaged banks more than it has thus far.
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@BigGame90
The banks in trouble are those who have too many loans in illiquid investments, that is why the two bigger names got in trouble. They loaned out to areas where the underlying business or assets are not easy to liquidate and if you have to in a hurry you get raked. Then the news of this snowballs and their once safe ratios are no longer safe and they have to sell other assets which they are probably underwater on also.
So if that bank who lent to silicon valley limited partnerships (which isnt a terrible investment) cant turn that loan into cash if they need to and their safe liquid investments might not be market to market properly...meaning a treasury that they bought 3 years ago and now is worth less than it will be at maturity and it snowballs from there.
Also those banks in the commercial lending market are going to be under the scope in the near future too. It is interesting I wondered how banks werent more damaged when treasury rates went up, all those notes and bonds purchased in the last decade are worth much much less and that should have damaged banks more than it has thus far.
Quote Originally Posted by BigGame90: @Raiders22 Banks are in major trouble. They are losing collateral quickly (see bank stocks today and look into why they are free falling). As rates rise (tomorrow will likely be a BS .25 raise) banks fall into more trouble. Banks never expected rates to rise and now their investments are practically garbage and depositors are moving their money elsewhere. The last thing banks needs right now are defaults, on any loans they issue. Damned if you do, damned if you don't. Fed is in a pickle they can't get out of. What do you mean here? For example? Defaults. Of course. But now they get defaults even more down the road because of this -- how do you fix it? More bailouts, etc.
Banks invested in super low rate or return investments while basically giving depositors practically 0% interest for parking cash. If a bank invests in a long term investment that returns 3% a year for them, they used cash from the depositor to make that investment (because banks were allowed to basically carry little to no cash reserve). The banks make 3% return, the depositor makes .5%, banks nets 2.5% on the depositors monies. Cool, banks make money. Now add in inflation. Banks making 2.5% (on investments that they have to hold until maturity which is a lonngggggg way away) is actually losing money due to inflation. Banks holding cash is a liability, they need to park that money somewhere. Ideally something that returns more than inflation. Not many places to find that right now. Look into RRP. Banks sitting on trillions of cash and they get a steady rate of return each night. That rate of return just magically happens to rise with the fed rate increases. So banks are just surviving another day with a shit ton of cash (hello inflation and covid). These banks that are going under made long term investments in notes that are considered hold to maturity and the rates they are getting are far behind inflation rates. So those deals are now garbage. Add in depositors pulling cash out (cash that banks didn't hold because regulations were pulled back which allowed banks to invest that extra cash instead of holding it). Banks simply made plays that did not consider future rate hikes. Now the bond market is garbage and bonds are not selling because investors think the gov't will default on debt. It's one giant cluster fuck of a mess. Someone needs to hold the bags and it sure as hell won't be the gov't of fed.
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Quote Originally Posted by Raiders22:
Quote Originally Posted by BigGame90: @Raiders22 Banks are in major trouble. They are losing collateral quickly (see bank stocks today and look into why they are free falling). As rates rise (tomorrow will likely be a BS .25 raise) banks fall into more trouble. Banks never expected rates to rise and now their investments are practically garbage and depositors are moving their money elsewhere. The last thing banks needs right now are defaults, on any loans they issue. Damned if you do, damned if you don't. Fed is in a pickle they can't get out of. What do you mean here? For example? Defaults. Of course. But now they get defaults even more down the road because of this -- how do you fix it? More bailouts, etc.
Banks invested in super low rate or return investments while basically giving depositors practically 0% interest for parking cash. If a bank invests in a long term investment that returns 3% a year for them, they used cash from the depositor to make that investment (because banks were allowed to basically carry little to no cash reserve). The banks make 3% return, the depositor makes .5%, banks nets 2.5% on the depositors monies. Cool, banks make money. Now add in inflation. Banks making 2.5% (on investments that they have to hold until maturity which is a lonngggggg way away) is actually losing money due to inflation. Banks holding cash is a liability, they need to park that money somewhere. Ideally something that returns more than inflation. Not many places to find that right now. Look into RRP. Banks sitting on trillions of cash and they get a steady rate of return each night. That rate of return just magically happens to rise with the fed rate increases. So banks are just surviving another day with a shit ton of cash (hello inflation and covid). These banks that are going under made long term investments in notes that are considered hold to maturity and the rates they are getting are far behind inflation rates. So those deals are now garbage. Add in depositors pulling cash out (cash that banks didn't hold because regulations were pulled back which allowed banks to invest that extra cash instead of holding it). Banks simply made plays that did not consider future rate hikes. Now the bond market is garbage and bonds are not selling because investors think the gov't will default on debt. It's one giant cluster fuck of a mess. Someone needs to hold the bags and it sure as hell won't be the gov't of fed.
@BigGame90 The banks in trouble are those who have too many loans in illiquid investments, that is why the two bigger names got in trouble. They loaned out to areas where the underlying business or assets are not easy to liquidate and if you have to in a hurry you get raked. Then the news of this snowballs and their once safe ratios are no longer safe and they have to sell other assets which they are probably underwater on also. So if that bank who lent to silicon valley limited partnerships (which isnt a terrible investment) cant turn that loan into cash if they need to and their safe liquid investments might not be market to market properly...meaning a treasury that they bought 3 years ago and now is worth less than it will be at maturity and it snowballs from there. Also those banks in the commercial lending market are going to be under the scope in the near future too. It is interesting I wondered how banks werent more damaged when treasury rates went up, all those notes and bonds purchased in the last decade are worth much much less and that should have damaged banks more than it has thus far.
RRP maybe? surviving one more day while rates trickle up...
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Quote Originally Posted by wallstreetcappers:
@BigGame90 The banks in trouble are those who have too many loans in illiquid investments, that is why the two bigger names got in trouble. They loaned out to areas where the underlying business or assets are not easy to liquidate and if you have to in a hurry you get raked. Then the news of this snowballs and their once safe ratios are no longer safe and they have to sell other assets which they are probably underwater on also. So if that bank who lent to silicon valley limited partnerships (which isnt a terrible investment) cant turn that loan into cash if they need to and their safe liquid investments might not be market to market properly...meaning a treasury that they bought 3 years ago and now is worth less than it will be at maturity and it snowballs from there. Also those banks in the commercial lending market are going to be under the scope in the near future too. It is interesting I wondered how banks werent more damaged when treasury rates went up, all those notes and bonds purchased in the last decade are worth much much less and that should have damaged banks more than it has thus far.
RRP maybe? surviving one more day while rates trickle up...
Quote Originally Posted by Raiders22: Quote Originally Posted by BigGame90: @Raiders22 Banks are in major trouble. They are losing collateral quickly (see bank stocks today and look into why they are free falling). As rates rise (tomorrow will likely be a BS .25 raise) banks fall into more trouble. Banks never expected rates to rise and now their investments are practically garbage and depositors are moving their money elsewhere. The last thing banks needs right now are defaults, on any loans they issue. Damned if you do, damned if you don't. Fed is in a pickle they can't get out of. What do you mean here? For example? Defaults. Of course. But now they get defaults even more down the road because of this -- how do you fix it? More bailouts, etc. Banks invested in super low rate or return investments while basically giving depositors practically 0% interest for parking cash. If a bank invests in a long term investment that returns 3% a year for them, they used cash from the depositor to make that investment (because banks were allowed to basically carry little to no cash reserve). The banks make 3% return, the depositor makes .5%, banks nets 2.5% on the depositors monies. Cool, banks make money. Now add in inflation. Banks making 2.5% (on investments that they have to hold until maturity which is a lonngggggg way away) is actually losing money due to inflation. Banks holding cash is a liability, they need to park that money somewhere. Ideally something that returns more than inflation. Not many places to find that right now. Look into RRP. Banks sitting on trillions of cash and they get a steady rate of return each night. That rate of return just magically happens to rise with the fed rate increases. So banks are just surviving another day with a shit ton of cash (hello inflation and covid). These banks that are going under made long term investments in notes that are considered hold to maturity and the rates they are getting are far behind inflation rates. So those deals are now garbage. Add in depositors pulling cash out (cash that banks didn't hold because regulations were pulled back which allowed banks to invest that extra cash instead of holding it). Banks simply made plays that did not consider future rate hikes. Now the bond market is garbage and bonds are not selling because investors think the gov't will default on debt. It's one giant cluster fuck of a mess. Someone needs to hold the bags and it sure as hell won't be the gov't of fed.
Banks never expected rates to rise
This is what I am asking about?
Maybe the sudden outflows were not as expected but rate increases were by most.
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Quote Originally Posted by BigGame90:
Quote Originally Posted by Raiders22: Quote Originally Posted by BigGame90: @Raiders22 Banks are in major trouble. They are losing collateral quickly (see bank stocks today and look into why they are free falling). As rates rise (tomorrow will likely be a BS .25 raise) banks fall into more trouble. Banks never expected rates to rise and now their investments are practically garbage and depositors are moving their money elsewhere. The last thing banks needs right now are defaults, on any loans they issue. Damned if you do, damned if you don't. Fed is in a pickle they can't get out of. What do you mean here? For example? Defaults. Of course. But now they get defaults even more down the road because of this -- how do you fix it? More bailouts, etc. Banks invested in super low rate or return investments while basically giving depositors practically 0% interest for parking cash. If a bank invests in a long term investment that returns 3% a year for them, they used cash from the depositor to make that investment (because banks were allowed to basically carry little to no cash reserve). The banks make 3% return, the depositor makes .5%, banks nets 2.5% on the depositors monies. Cool, banks make money. Now add in inflation. Banks making 2.5% (on investments that they have to hold until maturity which is a lonngggggg way away) is actually losing money due to inflation. Banks holding cash is a liability, they need to park that money somewhere. Ideally something that returns more than inflation. Not many places to find that right now. Look into RRP. Banks sitting on trillions of cash and they get a steady rate of return each night. That rate of return just magically happens to rise with the fed rate increases. So banks are just surviving another day with a shit ton of cash (hello inflation and covid). These banks that are going under made long term investments in notes that are considered hold to maturity and the rates they are getting are far behind inflation rates. So those deals are now garbage. Add in depositors pulling cash out (cash that banks didn't hold because regulations were pulled back which allowed banks to invest that extra cash instead of holding it). Banks simply made plays that did not consider future rate hikes. Now the bond market is garbage and bonds are not selling because investors think the gov't will default on debt. It's one giant cluster fuck of a mess. Someone needs to hold the bags and it sure as hell won't be the gov't of fed.
Banks never expected rates to rise
This is what I am asking about?
Maybe the sudden outflows were not as expected but rate increases were by most.
Banks invest depositors cash and make 3% a year (before inflation) in securities that they have to hold for years until maturity (hold to maturity)
Bank depositors makes .5% a year by leaving cash with the bank. (bank can borrow and loan this cash)
Banks make 2.5% from the cash of the depositors. So banks are doing well making 2.5% on depositors cash.
Banks should have kept more of that cash in the RRP (before covid the rates were super low so it wasn't attractive to a bank looking to make large profits. Rates were less than what they could get if they invested in hold to maturity)
Banks didn't account for inflation or the fed to raise rates.
Rates rise.
Banks notes with hold to maturity papers are now underwater because inflation is higher than the rate of return that cash could have made in todays market. IF banks still had that cash, they could find other investments (like RRP) that would bring in a higher rate of return. But banks didn't plan on rate hikes so they parked as much cash into bad investments. Now the depositors want their cash back, the cash that banks parked in low rate of return, hold to maturity deals.
Those numbers I gave are not exact. They are a rough idea of what's happened. Please make corrections if I'm wrong. I'm kind of a moron. Hopefully this makes a little sense. There's probably some mistakes with this.
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@Raiders22
Banks invest depositors cash and make 3% a year (before inflation) in securities that they have to hold for years until maturity (hold to maturity)
Bank depositors makes .5% a year by leaving cash with the bank. (bank can borrow and loan this cash)
Banks make 2.5% from the cash of the depositors. So banks are doing well making 2.5% on depositors cash.
Banks should have kept more of that cash in the RRP (before covid the rates were super low so it wasn't attractive to a bank looking to make large profits. Rates were less than what they could get if they invested in hold to maturity)
Banks didn't account for inflation or the fed to raise rates.
Rates rise.
Banks notes with hold to maturity papers are now underwater because inflation is higher than the rate of return that cash could have made in todays market. IF banks still had that cash, they could find other investments (like RRP) that would bring in a higher rate of return. But banks didn't plan on rate hikes so they parked as much cash into bad investments. Now the depositors want their cash back, the cash that banks parked in low rate of return, hold to maturity deals.
Those numbers I gave are not exact. They are a rough idea of what's happened. Please make corrections if I'm wrong. I'm kind of a moron. Hopefully this makes a little sense. There's probably some mistakes with this.
Sorry. I was in the middle of trying to close out a bunch of positions before close. I reread what you wrote. Yes -- that is a big part of it, sure.
But the 'given' reason and the aftereffects are my main concern with it. It was poorly though out for purely idealogical reasons and might have bad effects all around.
I do not see it fixing the issues you mention or helping.
Like WSC said: people are not obligated to get a loan at all.
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@BigGame90
Sorry. I was in the middle of trying to close out a bunch of positions before close. I reread what you wrote. Yes -- that is a big part of it, sure.
But the 'given' reason and the aftereffects are my main concern with it. It was poorly though out for purely idealogical reasons and might have bad effects all around.
I do not see it fixing the issues you mention or helping.
Like WSC said: people are not obligated to get a loan at all.
basically, banks can not sell their hold to maturity papers (which is likely from depositors cash that was deposited) or else they take a major hit on their returns by breaking the deal early. Think of a penalty for breaking a contract early. IF depositors want to take their cash because they want to buy 100 yachts, an island, and 200 homes, they have the right to take their cash that's in savings. IF the banks don't have that cash readily available (the ones failing do not), the banks must sell other investments, or get more deposits (think ponzi), to cash out depositors looking to buy yachts, cars, homes or other investments. That puts downward pressure on markets. Not good for those invested in the markets.
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@Raiders22
basically, banks can not sell their hold to maturity papers (which is likely from depositors cash that was deposited) or else they take a major hit on their returns by breaking the deal early. Think of a penalty for breaking a contract early. IF depositors want to take their cash because they want to buy 100 yachts, an island, and 200 homes, they have the right to take their cash that's in savings. IF the banks don't have that cash readily available (the ones failing do not), the banks must sell other investments, or get more deposits (think ponzi), to cash out depositors looking to buy yachts, cars, homes or other investments. That puts downward pressure on markets. Not good for those invested in the markets.
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