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Can I use your Pyramid of Greed in a post I'm working on for next week? It would fit in perfectly and I'll give you credit for it?
Tom
clear somehow.
"lenders" category but most people come to think "lenders" as the folks who
offered the big commissions to brokers, etc. So I will update w/Mortgage
Originators. Great suggestion.
How this one, let's send it to Paulson suggesting he update the pyramid that is currently on the back of the Dollar Bill with this one. I think it would be QUITE APPROPRATE!!!
I was going to cut and paste and sending it out with full credits, but I'll wait for any redesigns!
THANK YOU!!!!
Feel free to distribute as you wish. Just finished with a couple of
touch-ups.
Do you consider yourself part of this as a past owner of New Day Trust Mortgage?
this blog - but i can't absolve myself of responsibility.
Most of the clients that I worked with are ok..but others are in trouble...why?..bad investment properties that were gobbled up when I told them not to buy(everybody wanted to be the next star of Flip This House), people who moved from nice modest homes, to grand McMansions(now I know how they got them...mostly with the toxic Neg Ams) and others who used one the equity in their main home to purchase additional properties for vacations..., they can't take, can't afford, or can't find a renter...but they were all motivated by GREED..more, more and more...
But all along the food chain..from these people..ridiculous amounts of money were made...by everybody...and now unfortunately...we are are going to give it all back...and then some..and as taxpayers, its going to hit us ALL in the wallet..
my company - I'll dig it up and repost. It was a huge percentage of 30-year
fixed loans, but I know there are some loans that in retrospect should
probably never have been made...
How about "stupidity"?
appraisers and ratings agencies will go in asap.
Yeah, also add appraisers, but they could be grouped together with real estate agents.
Starting at the bottom of the pyramid, homeowners trusted real estate agents and mortgage orginators to be responsible and tell them if they couldn't qualify for a lown. Mortgage originators trusted the lender's risk layering guidelines, because they were told the lenders have professional financial analysts and risk mitigators and they are not going to let unqualifed borrowers get loans. What 25 year old originator is going to disagree?
Greed is held in check by responsible and trustworthy authorities at all levels, and moving up the pyramid, the authorities became increasingly negligent.
Remember the proverb: The fish always stinks from the head downwards.
They can be considered part of lenders,
they are supposed to be "cops".
There is also a case to be made that
one category should be "Passive Citizens",
who don't feel obligation beyond family.
It's more than informed voting and ethics.
It should be raising alarms, agitation,
and sometimes the pain of litigation.
Credit agencies are part of the Wall Street Club,
but they should not be.
Ignorance about history dooms those who don't heed the instruction to repeat the events with similar results.
Paul in Bellevue
Then, many builders opened their own lending arms, I guess they'd fall into your Lender/Originator category then. They got in on toxic loans, predatory and at times fraudulent lending, etc. Including heavy use of questionable "down payment assistance programs" (DPA's) that the IRS called a scam, HUD tried to shut down, and that some have compared to money laundering. Builders are one of the biggest users of DPA's.
I think the builders have kind of slipped under a lot of people's radars because most of us have this image of builders being just regular guys who are good with their hands, trying to make a living. In reality many building co's are run not by this type but by CEO types. Anything to make a profit.
This industry spends millions annually to change laws and get what they want. It threatened to withdraw congressional campaign donations if it didn't get what it wanted this year. Funding restored a few months later, and it has a bailout bill in progress, labeled as being for homeowners of course.
Shoddy construction is bad enough. Add funny lending to it and I am surpised more have not mentioned builders as being part of this problem. Perhaps it's because many of the co's can afford to pay millions in fines to HUD without admitting wrong-doing.
Great pyramid, that really sums it up. You could also add title companies and credit bureaus. And local lender associations who turned a blind eye. Maybe even state and fed agencies that failed to enforce the laws (specifically RESPA and FTC false/misleading advertising).
That pyramid keeps growing!
Thanks for changing the word broker to originator. It's a subtle difference but more accurate. All originators, both banker and broker, must shoulder the burden when discussing their role in the mortgage crisis.
The banks like to intimate to consumers and the media that they are 'less' to blame. Not true. Keep up the good work.