A truly scary story

[herb fellows]

Hey, Bruce, weird radical thinking like that is totally unacceptable. If everybody acted responsibly, God only knows where we would all be today!

[radhak]

The borrower should be charged with stupidity borne out of cupidity.

The agent on the other hand, actively set out on a very thin line bordering fraud. If he/his employer were shelling out the money from their own pocket, then he would have been like a tight-wad giving that money out.

The agent's care-free attitude sprang from the fact that he (or his firm) would never be asked to guarantee that money or justify his actions. Where did he think that money would come from?

Everybody who talks of 'victimless crimes' should be taught the concept of pyramid schemes which this was, of sorts.

[MilDoc]

A "very thin line bordering fraud."???

"What about my alimony and child-support obligations? No need to mention them. What would happen when they saw the automatic withholdings in my paycheck? No need to show them. If I wanted to buy a house, Bob figured, it was my job to decide whether I could afford it. His job was to make it happen"

Uh, isn't that instructing the "client" to lie about his expenses? Directly, and without reservation? IMHO that is outright fraud, on the agent's part for suggesting it and the client's part for saying OK.

This laisse fair attitude on the part of mortgage agents is what REALLY got us into this mess. Had they been HONEST, people would not have been sucked into NINJA, NINA, LIAR loans.

IMHO most of the blame and the damages lies on the irresponsible, fraudulent mortgage agent practices. Then on companies that packaged all these toxic assets and sold them, then on companies like AIG that backed them.

Yeah, people are stupid. But isn't what the agents did in the first place sort of the same as the FBI launching a "sting" that is "too tempting to pass up?" That's illegal for the FBI, gets thrown out of court. What these folks did should be viewed the same.

[Shep]

I'm just surprised that he and his wife never changed their habbits. She was still buying Starbucks, flying the kids into town for Christmas, and buying $700 on J.Crew gifts for Christmas. The wife was even upset with him because she didn't/doesn't want to change her spending habbits.

I don't blame the lender outright. This guy sought him out, to lend him the money, to buy the house he couldn't afford. Granted, the loan rep shouldn't have structured the loan the way he did, but if he didn't I'm sure the writer would have gone to someone else that could.

Another thing. How does this guy still have a job as a financial and economic writer? All of his recommendations are irrelevant due to his stupidity with his own finances. This is why I don't read the Times.

[Ed62]

This is exactly why it should be mandatory for public schools to give courses in how to handle finances, and focusing on what the consequences might be if you break the rules.

Ed

[jackellis]

It's about the lure of irrational thinking when it comes to money, especially ironic since this guy's a financial writer.

There's a Wall Street cliche that says markets are ruled by fear and greed. There's also a lot of research that shows how irrational humans can be. Put the two together...

There's also a sense of entitlement. In part, it's because government is truly interested in improving the lives of its citizens. In part, it's hucksters on TV, radio, books and in the print media who tell us we can get rich quick and have anything we want. In part it's envy, greed, and our tendency to be irrational.

[BobSch]

This is exactly why it should be mandatory for public schools to give courses in how to handle finances, and focusing on what the consequences might be if you break the rules.

Ed

Yes, yes. A thousand times YES! I cannot believe the number of intelligent, college-educated people I work with that have no idea of how to handle their own finances.