Poland and Polish Discussion Group and Forum

Welcome to the original English language Poland and Polish discussion group board. This message forum is a place where English-speaking Poles, foreigners (expats) living in Poland, and anyone with a genuine interest in Poland can discuss and read the views of others concerning Poland. Subjects include: Polish news and current affairs; Life in Poland; politics; genealogy research; Polish culture and history; advice and tips on visiting Poland; Polish property and investment issues. The aim of our group is to increase awareness of wonderful Poland using the English language and allow and foster the honest debate and exchange of opinions on anything vaguely related to Poland and Polish - positive, negative and/or neutral! To state the obvious: all opinions and views expressed on this site are solely those of their respective authors and are not necessarily those of anyone else! Messages consisting of ads will be deleted.

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Poland and Polish Discussion Group and Forum
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A Second Mortgage Disaster On The Horizon?

A recent US 60 minutes report has highlighted a 2nd mortgage disaster in the US as a result of Alt-A and Option Arm loans!

Mike C are you able to shed light on this?

Re: A Second Mortgage Disaster On The Horizon?


Essentially, to get the home loan you needed to buy your dream (nightmare) house, you could get it on the basis of "stated income" - i.e. you could make a declaration of how much you earned without having to prove it. See the potential for fraudulent declarations? The lender's staff wants to get the bonus for writing X amount of business, headquarters is happy, customer is happy - a victimless fraud ...

Re: A Second Mortgage Disaster On The Horizon?

There are still echoes to the turmoil yet to be heard. If you ignore the political diatribe on the last part of this video the first part is not too bad at capturing one root cause of the current economy.


Re: A Second Mortgage Disaster On The Horizon?


Don’t buy what you can’t afford?

Couple of years ago in the US it seemed that many people were quitting their jobs in droves to become mortgage brokers. I was pretty shocked when the guy that serviced my car called me one day to tell me to call him if I needed a mortgage because he was leaving his profession (this guy was a fn mechanic, at a BMW dealership, nonetheless, those guys actually make decent $) to start his own mortgage company. He’s back working on cars.

When mechanics, bartenders, and others are allowed to get in the business of money lending without substantive training, where the goal is to close the loan at any cost without the regard for individual’s ability to pay, disaster is inevitable. That’s what happened in the US.

The bigger issue now seems to be how this affected business lending and business lines of credit, which are used to service payrolls and many were closed virtually overnight – forcing small companies to default on payroll and other obligations - even the ones that were actually cash positive and had solid cash flows. All of a sudden, they were forced to re-work their entire business models.

But at the end of the day, businesses (and individuals) that were floating purely on credit couldn’t sustain it in the long run anyway. Flushing all that bad debt down the toilet will be long and painful.

I have to say that my new hero is Angela Merkel, who is holding strong and is refusing to indulge German economy in socialistic bailouts like the ones that our current President Elect fantasizes about on daily basis. German government may actually end up saving capitalism in the long run.

Re: A Second Mortgage Disaster On The Horizon?

Last thing – arm loans had always been a financing tool used by businesses. They were never intended to be used for consumer/consumption credit. Just like bank “overnight” loans.

They should be illegal with regards to residential real estate financing.

Re: A Second Mortgage Disaster On The Horizon?

The govt dominated rail "industry" in the UK has brought an order for new trains forward due to the credit crunch - oops, it forgot that due to its inability to order new and needed trains years ago no-one in the land of George Stephenson actually makes trains anymore ... d'oh!