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Dr. Mercola
January 17 2008
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Mortgage Meltdown -- American Capitalism at its Worst

The last year that home prices have fallen the way they are today was 1941: the year the United States entered World War II.

What happened to spur this downward spiral that is threatening to push the United States and the rest of the world into recession? Unscrupulous, predatory lenders and the creation of the subprime market.

You’ve surely heard of the subprime market, but do you really know how it came to be? The video above explains exactly how the subprime market was created, and reveals how unregulated and often unscrupulous predatory lenders targeted people they knew couldn’t pay.

I’m not entirely sure if you would ever see a video like this made in the United States.

This highly informative video comes to us from Australia, and is far more objective than the typical U.S. video documentary would be.

Entire U.S. cities are being devastated by the predatory lending practices facilitated by Wall Street. It is no longer just inner cities or low-income families being affected. Everyone, from the poor to the wealthy, is being hit by this crisis.

Many U.S. economists are now convinced that a recession is inevitable, as the mortgage crisis is FAR from having peaked. In fact, it is just beginning.

Amazing … it seems the situation will get far worse before it gets better.
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Community Comments ( 62 )
 Comment on this Article
  
  
Swami Barmi
 [ Joined on 10/06 ] [ Posted on January 4, 2008 ]
20 Points        
   
 
Savvy User
Rubbish. More of the kind of rubbish that is EXACTLY what caused this nightmare, i.e., government intervention.

The mortgage loan system is not only HEAVILY regulated, it was created by the government. The government also created the corporations that would bail out failed lenders instead of allowing them to learn hard lessons and LOSE THEIR OWN MONEY when they do stupid things. The government also created the corporations that buy mortgages in secondary markets to sell in financial markets to . . . make more money to lend for more mortgages! The Federal Reserve, another pseudo-private organization under government manipulation, artificially cut interest rates down to 1 percent. ONE PERCENT! The government has been encouraging people to buy and refinance homes (and use other forms of credit) to keep people spending money on indicators that make it look like the economy is just swell.

The people who are now blaming this collapse on capitalism are precisely the people who are responsible for this mess. Now they want government to make it even worse.
 [ Reply ]
Mercola
  
rmille39512
 		 [ Posted on January 18, 2008]
1 Points        
   
Novice User
  Mercola

Swami Barmi

I agree with everything you just said except one... The Federal Reserve manipulated the Goverment, not the other way around.  In fact you could say that the Goverment is the Federal Reserves &%#@ (Female DOG IN HEAT).  If you have not yet watched Zeitgeist, you really should.

PEACE
  
  
Dex
 [ Joined on 11/06 ] [ Posted on January 2, 2008 ]
18 Points        
   
 
Savvy User
The lessons here are not new. Here are the dangers:
• Greed—buying at the top of a speculative market is precarious.
• If the payment is more than 25% of your monthly income, you can't afford it, regardless of how much house you "qualify" to buy.
• In the words of David Ramsey, "Debt is dumb." Borrowing against equity for unnecessary spending is throwing away your value.
• Interest only loans—if you can't afford a conventional mortgage on your property, you can't afford it when the rates adjust.
• The mortgage company is a for-profit company. You have to watch out for your own interest.
• You, the consumer, have to take responsibility for your own security. Don't count on bailouts or legislative protection.
Finally, don't buy into paranoia. Mortgage lenders don't need to be bailed out. They understand the risks of real estate investing and cut their losses by selling dog properties. The losers are individuals who bought above their means, using mortgages they shouldn't have considered in the first place, speculating on a bubble they knew had to burst.


 [ Reply ]
Mercola
  
Russ Bianchi
 		[ Joined on 09/06 ]  [ Posted on January 2, 2008]
11 Points        
   
Savvy User
  Mercola
Once again, lobbying powers protecting vested interests with Uncle Sam bail outs at taxpayer expense.

RON PAUL FOR PRESIDENT IN 2008!
Mercola
  
EQ
 		[ Joined on 03/07 ]  [ Posted on January 2, 2008]
14 Points        
   
Savvy User
  Mercola
I completely agree that the tax payers should not bail out the loan sharks.
  
  
Patty D
 [ Joined on 06/07 ] [ Posted on January 1, 2008 ]
8 Points        
   
 
Savvy User
I bought a trailer because I didn't want to get conned into these programs to get a house.  Yes, Wall Street and these companies share the blame, but I'm sorry, people have to start accepting personal responsibility for their decisions.  If you KNOW you can barely afford something when it's 0% interest, then you KNOW you can't afford it when interest kicks in etc etc.  If you are going to buy a house, it should follow that you know and understand what you are signing.  If you don't understand, ask or don't sign.  Greedy, gullible brainwashed consumers helped create this mess.  I feel bad for them, yes, but in this case I can't totally blame Big Business!
PS:  I digest and retain the written word much better than videos and can also store the written word for later review.  IMHO there are way too many videos appearing lately.
 [ Reply ]
Mercola
  
moises
 		[ Joined on 06/06 ]  [ Posted on January 2, 2008]
8 Points        
   
Apprentice User
  Mercola
Patty D,

I don't agree with your politics but I will defend to the end your right to express them. I do, however, support your comments about videos.

moises
Mercola
  
EQ
 		[ Joined on 03/07 ]  [ Posted on January 2, 2008]
13 Points        
   
Savvy User
  Mercola
Patty,

I live out of my RV for the same reason (plus I LOVE the freedom).  A few years ago I had a good paying job in Las Vegas, NV.  Many of my work friends were talking about how great the market was there.  They were all buying houses and condos.  I probably could have qualified for a couple of house loans because my credit is awesome (I avoid debt like the plague), but it didn't feel like a good investment/gamble.  Vegas was not my style anyway, but I needed a job at the time, and it's a great gig to put on my resume.  I listened to my intuition about the market there.  I felt like it was headed for a crash.  I'm not educated in economics, but it just seemed like common sense.  I still don't think the Vegas economy can sustain.  I finished my 2+ year contract and left immediately.  Such a great lesson for me about listening to my own intuition as opposed to some outside person claiming expertise.  I'm glad I learned the easy way on this one.  Whew!
Mercola
  
JanD
 		[ Joined on 10/06 ]  [ Posted on January 17, 2008]
       
   
Novice User
  Mercola

Way to go!

The question now for those of us who haven't put all their savings into a house: where do we have to invest it to keep our hard earned money from being eaten by inflation?

I'm living in Europe but the oncoming recession in the US will cause a lot of misery overhere too. Our banking stocks tanked too in 2007. I just sold my house and am at a loss as to where to invest it. Gold doesn't pay an interest and might do like in 1980, stocks are less safe than they used to be, fixed-income investments aren't very interesting with the rising inflation... what a headache!

Suggestions welcomed!
Mercola
  
write2bonnie
 		[ Joined on 02/07 ]  [ Posted on January 17, 2008]
5 Points        
   
Novice User
  Mercola

I agree Patty... about consumer responsibility and way too many video's.  I would rather read an article than watch a video, another example of the "dumbing down" of America.  In a few years there will be reports of only 1% of Americans knowing how to read!  Hmm.. that is probably the plan so the vast majority won't have a clue...oh wait...they don't now... already done!
Mercola
  
Cinnabar
 		[ Joined on 11/07 ]  [ Posted on January 17, 2008]
6 Points        
   
Apprentice User
  Mercola

I worked at a bank a few years ago, and one of the managers (who didn't make that much) was buying a house with $2,000 monthly payments and huge property taxes. His wife was having a baby, they had a big wedding with a huge honeymoon, they were both in school with loans, and they had two nice (stupid) cars.  I wonder what's going on with them now.

The mortgage broker was trying to get the tellers to buy houses!  They were making about $10/hr and in school.  Give me a break.  I was making a little more, but I knew what was coming.  Thank goodness my family taught me to stay out of debt.  It's only going to get worse now that the news is getting out and the momentum builds.
Mercola
  
green1
 		[ Joined on 01/08 ]  [ Posted on April 26, 2008]
       
   
Novice User
  Mercola

I am one of the many who had a loan that was subprime. There are a few things that you might find interesting as to how and why consumers may get caught in this crisis. First, I couldn't rent. My credit is bad due to a bankrupsy caused by illness and a lack of health insurance and healthcare. I was "homeless" living in the back of my bookstore with my child, trying to finish college and better our lives. I could afford rent, I just didn't have the credit. I did have "good enough" credit to get a small home loan though. I bought a fixer-upper for $79,000. So you know I wasn't a speculator, I just wanted a home.

More importantly though, I WAS LIED TOO!!!!! I was lied too by the mortgage co. and the lawyer about how much the payment was to increase. It is illegal to do so, but how can I prove it? Well, I was due to be graduated, had the money for the payment I expected, had fixed much of my credit, the bankrupsy would be off my credit report soon and I hoped to refinance after I graduated and improved my credit.

Instead I got cancer (with no insurance), lost my income, because I couldn't work, and put off graduation for several years. Then my mortgage payment increased more that three times what I was told it would. Well, I couldn't pay and became a homeless cancer patient.

Was this the fault of the mortgage co.? Cancer, lack of insurance, and my unemployment were not their fault. But lying to me and not being willing to negotiate a deal with lesser credit is.

  
  
shiva
 [ Joined on 10/06 ] [ Posted on January 1, 2008 ]
7 Points        
   
 
Savvy User
... And do yah think that the FED knew this was going to happen when they lowered the interest rate so dramatically after 911? ... You betcha!

It's called creating conditions for a greater consolidation of wealth.

911 has served as a lot more than just a pre-text for war.
 [ Reply ]
Mercola
  
Mr.AK
 		[ Joined on 06/06 ]  [ Posted on January 2, 2008]
1 Points        
   
Apprentice User
  Mercola
Another reason to suspect our administration's complicity in creating 911. They are the ones who profited.
Mercola
  
lively
 		[ Joined on 12/06 ]  [ Posted on January 5, 2008]
2 Points        
   
Novice User
  Mercola
FOLLOWING THE MONEY:

Goldman Sachs + Co.: Next 9/11 False Flag vs. China?
by ewing2001

Chapter 1  How U.S. Credit Institutes lost track against Goldman Sachs
Chapter 2: The Goldman Sachs- Blackstone Alliance
Chapter 3: Is Chinatown 'hub' for an eurasian WW Invasion?
Chapter 4: Bankers in China

http://forum.911movement.org/index.php?showtopic=2587


Quote (non-native English):
"There had been many attempts in the last 6 years to distract from this Issue (among smokescreens like Iran, Iraq, Afghanistan),
but ironically thanks to this year's Mortgage Subprime Disaster in the american finance world it's becoming now very clear,
that the real winners from 9/11 had been Russia, China and India and some specific so called "Shadow Bankers" linked to this alliance."

Please note: Forum comments following the article might contain colorful language (in reverse proportion to quality of content), so don't read them if your feathers ruffle easily.

  
  
vuth