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Amazing post, Tanta. Yes, the people who willingly put borrowers into those loans are sociopaths.
I greatly enjoyed your latest book. When can I post a review on Amazon?
Nice work.
but if the world keeps telling you it is your patriotic duty to confuse yourself with your economic betters
Is there some sort of decal I can get to stick on my hummer to let people know I'm just doing this to be patriotic?
Thank you, Tanta. Marvelous, as usual!
may I ask why the ee cummings tag?
Thank you for the Mortgage 101. I hadn't been aware of this stuff.
You write:
even when [the economy] wasnt busy inflating home prices out of reach.
I had thought that this was a vital part of the equation, that the dream was that capital appreciation could make any deal into a good deal, and that a borrower who got into a payment crunch could just sell out and pay off the loan with the profit.
Was I off track?
The whole thing seemed to be an attempt to keep consumerism going despite burgeoning inequity, and the disappearance of money from the bottom of the economy. The big lesson will be that if you try to make credit do duty for wages, the highest possible interest rate, in the long run, will be zero (and REALLY long maturities.)
may I ask why the ee cummings tag?
That was supposed to be a hint for people who would otherwise be asking what the post title means, or what the Marbles and Piracies Division is, or . . .
Just this morning I got another email from someone reporting that I had misspelled "complete" in "Compleat UberNerd." I also did a post a while ago on some obscure shit--I think it was document custody--in which there were references to trouts in milk which also generated some puzzled emails. So I thought this time maybe I could offer those of you who flunked American Lit Since 1860 a little hint.
Not that I really thought that would work. I just like doing goofy stuff like that. Wheeeee!
Front and center AP article on news.yahoo.com about a new analysis of 45 percent of total credit card debt that finds alarming rises in overdue payments and DQs.
Yahoo! 404 - Page Not Found
unpaid credit cards bedevil americans
I had thought that this was a vital part of the equation, that the dream was that capital appreciation could make any deal into a good deal, and that a borrower who got into a payment crunch could just sell out and pay off the loan with the profit.
That was certainly the mentality of the last several years.
I'm simply observing that it was not always the only mentality mortgage lenders had. For instance, there was a time not really that long ago that we were all firmly convinced that if we ever saw RE appreciation of more than 2% a year, we'd break out the champagne.
What we did believe, however, was that everybody would always have a good middle-class job and get a raise every year, and so everybody could always save money that would be "reserves" against mortgage stupidity.
Strangely enough, we seem to have given up that latter view right about the time we decided that HPA would bail everyone out. Coincidence? Nah.
Terrific article.
wheeee indeed!
now i'll go spell check your post.
A truly amazing post, Tanta. Thanks much.
So much in that post and the others - I do hope you put it all together in some sort of "All Creatures Great and Small" style book and I hope its a megahit.
On the subject at issue, I had a balloon mortgage, it was a top-up/second 5 year wayy back in 1994 - and not only did we have cash to not need one anyway but we very casually ensured we put money away so that we had the balloon payment in 5 years.
One extrapolates from one's own current experiences however much one has past (childhood) experiences that are discordant and however much one associates with one's (economic) lessers.
Your money quote struck me:
"but if the world keeps telling you it is your patriotic duty to confuse yourself with your economic betters, it wont do you any good."
Thanks again. One day I expect to make greater progress on the path to less money-grubbing, psychotic ways of being. Its a freaking addiction I think. Till then.
-K
What we did believe, however, was that everybody would always have a good middle-class job and get a raise every year, and so everybody could always save money that would be "reserves" against mortgage stupidity.
I dunno. The bubble seemed to require a lot of magical thinking on the part of the buying public. I personally know people with decent middle-class income (~$50K/yr) who somehow thought a $300K house was affordable. They knew it wouldn't work long term, but why worry since they got what they wanted and "lender knows best" anyway.
Tanta, Thank you for the history lesson of the Depression. Revionist history blames the small farmers and homeowners of losing their property because they could not make the monthly payments (you know how THOSE people are). In fact many (most?) could pay but ,as you describe, the banks lacked the capital to refinance the balloon. What I didn't see in your post was what happened to bank capital? Every bank had it's own story but in a large number of cases (again I cannot quantify) banks throughout the country had transferred their capital to NYC banks in order to participate in the lucrative margin loan business on Wall Street - and we know how that went.
Again we are seeing foreclosures on the poorest among us brought about by reckless lending and leverage. Margin loans today may be limited by regulation but SIVs and hedge funds are not (thank you Mr Greenspan).
History has not repeated but the rhymes are sweet.
Just this morning I got another email from someone reporting that I had misspelled "complete" in "Compleat UberNerd."
Well I'm enough of an 80s head that when somebody says Compleat Angler, I think Jon Astley, not Izaak Walton.
Justin, nice find. I've been betting heavily that CC debt is the next "subprime". The MSM readers will soon learn everything debt related is subprime. The ultra convenient subprime label needs to be exposed as the decoy it was intended to be in the first place. Subprime was nothing but the first domino in the debt nuclear chain reaction.
The man behind the curtain in the illusion of an economy is about to get his ass kicked.
In light of Tanta's inimitably creative style and a request for the e. e. cummings tag, it is only just that on a weekend post we take time to smell the roses...
Chansons Innocentes: I
in Just-
spring when the world is mud-
luscious the little
lame balloonman
whistles far and wee
and eddieandbill come
running from marbles and
the queer
old balloonman whistles
far and wee
and bettyandisbel come dancing
from hop-scotch and jump-rope and
it's
spring
and
the
goat-footed
balloonMan whistles
far
and
wee
capitalization is overrated
unlike ocelot sauces
brevity? not likely
questions? though many i shall ask but one:
NegAms and IOs are carried on the books of the lenders as if fully amortizing closed end full term loans right? Do they take a hit larger than the outstanding balance at the end or do they go back in tim and back out those theoretical revenues?
i got halfway through, but now with all this talk of hybrids i think i need to go get a CPB & J sandwhich before i finish.
We bought our house in 1996 with a 5-year amortizing balloon at 6.875%, which was a good rate for the time. It had a conversion feature, which we exercised in 2001 to the FHA index + 0.5 %. That increased the rate to something like 7.5 % (still not bad). Then in 2003 we re-fied to a 5.875 % 30 year fixed. But, even if we had been unable to re-fi the rate increase was pretty small and it was a good deal overall.
If folks had been placed in amortizing balloons in 2004-05, most of them would be in OK shape right now.
If folks had been placed in amortizing balloons in 2004-05, most of them would be in OK shape right now.
AND if they haven't Heloc'd AND they've improved their credit AND the lenders are willing AND their values haven't fallen too much.
Thanks, glm, but I see that Halo (probably) garbled part of your paste. (It's hard to copy & paste cummings, because of all those odd spaces and tabs.) So, it goes:
and eddieandbill come
running from marbles and
piracies and it's
spring
when the world is puddle-wonderful
Your quote dropped the piracies, which I always consider very important. At least while we're on the subject of mortgage lending.
Robert Cote- Not true. As long as no HELOC, they'd be fine. Converting a balloon did not depend on credit rating (other than being current on mortgage) nor did it depend on the value of the house.
nice find. I've been betting heavily that CC debt is the next "subprime".
i think the last thing I read was that 25% of MEW went to pay off credit cards. Looks like everyone ran up the the credit cards again, didn't pay off the HELOCs and its go time.
I make my payments in full every month on my CC. And yet they just jacked it to 17% from 9%. For those who don't pay as well as I, I hear that 30% isn't out of the question.
Merry Christmas.
Thank you Tanta.
The cummings metaphor so on topic. For all your stated reasons and the lack of capitalization and all...
Sure hope the test is "open book!"
Merry Day-Before-Christmas-Eve, Tanta. The parental units are with us in the great state of Florida - where every other beach house is for sale (Price Reduced!) and the condos, they just aren't a-positive-cash-flowin'.
Been watching the mother-ship stock sink? Like the Baron vR - I finally sold too soon. Just waiting for the next name change.
I'm glad I don't have to say "sorry for ever getting you into this business" - you've managed to carve out an interesting space for yourself. The rest of us are going to "leave to pursue other interests".
Harpy Harridays! Time to hack the head off of the goose!
Illuminating post. Thank you.
OT--As I understand it, banks count "uncollected" interest as income on negative amortization loans. If this is true, then:
1) is this "uncollected" income taxable ? for banks and
2) do households get to deduct this "uncollected" ("unpaid") mortgage interest payment on their taxes?
Wow, and no mention of GM's latest article in the NYTs today
Honestly Tanta probably should gather her columns into a book. There might be a significant market for such a compilation, given the increasing media exposure of the debt crisis.
OT:
If CCs start to sour, that's another dagger in many CDOs, right?
Yikes.
idoc, rich, or any other aggressive bear types-
Anyone willing to short MA?
I am thinking this weekend is the last gasp in the consumerism marathon. Been tough to bet against the consumer since plastic has been plentiful and limits were made to be raised. Finally we're going to witness exhaustion play out in all its post bankruptcy rules glory. More credit contraction as CC receivables are no longer a sought after product.
Anyone know who the leading counter-parties are in the CC CDO market? Not ACA by chance?
I have never seen Walgreens do this before and have shopped there for 50 years. $10 OFF your purchase of $30 or more good Sunday Dec. 23, 2007. Guess I'll run out and get some vitamins and a big box of chocolate for Tanta.
Sales and Value | Save | Shop | Walgreens
Thanks FFDIC!
OK so the borrowers borrowed inordinate amounts of money under terms they didn't understand, but they definitely knew they would never have to pay the loan off. They just had to ride the tide for a little bit and get rich off of the miracle of home ownership.
Tell me - is the borrower not a sociopath?
Especially now that they are finding borrowers are quite willing to walk away from homes when they are upside down. They are deciding to "rent and start over". There's no "rent and start over" for the investors of these loans. They're the ones taking the financial hits, not the borrowers. They don't get to reset it to the point just before the loan was made.
There's no "rent and start over" for the investors of these loans. They're the ones taking the financial hits, not the borrowers. They don't get to reset it to the point just before the loan was made.
Your solicitude for those investors is really quite touching.
You're right, of course, that the investor gets to take the losses. It has always been so. There were, in fact, always those disclosures on those prospectuses warning of this. But investors bought MBS backed by no-down speculator loans anyway.
In the real world, you know, lenders used to be rather more cautious about whom they lent money to and under what terms, since they did, in fact, know that the borrower could walk but they couldn't. Somehow, you had a period of several years in which lenders lent money to anyone at terms that practically guaranteed jingle mail down the road. And now they want sympathy? No, I don't think so.
It is, actually, a lot easier to not lend money than it is to lend it. This, I know from experience. Making loans is among other things a lot of work. In any case I fail to understand your sympathy for the one party most likely to have had the most information and the best advice, and hence the most likely to have known better.
Have you ever read the confessions of a sociopath? They'll explain to you in quite lengthy detail how the people they victimized really brought it on themselves. Everyone who has ever had to listen to the endless self-justifications of the schoolyard bully is familiar with this long litany of how the victim brought in on himself. If you ask whether the victim somehow stalked the bully, or forced his presence on the bully, you get a little silence. Turns out the bully usually has to lie in wait for the victim, who then is transformed into the instigator.
Honey, I am not at all naive about some borrowers. They'd take to you the cleaners if you let them. That's why I kept my vault locked with the check-printer inside. Nobody ever got a loan from me that I didn't give them.
It was wonderful to find a present from Tanta! At my age I usually just get a pair of socks.The Toys R Us stores here are having a 75% off sale this weekend.75% off everything...
I'd like to suggest the design for a T-shirt.across the top "Calculated Risk",below that a portrait of Marie Antoinette,and at the Bottom "Let Them Eat Mortgages".
Totally Off Topic:
Aren't the GSEs and the FHLB equivalent to SIVs for the US gov't?
They are somehow off balance sheet. The gov't is somehow "implicitly" on the hook for them. And they are selling short or medium term securities so they can buy mortgages from CFC and WaMu!
ARGHHH!
Excellent Tanta. I especially like the historical and social context. It makes the subject all that more interesting and relevant.
I would like to add that I also think you have a text in you that would be of lasting value.
What a fine addition to the uber-nerd series. Every time I read one of Tanta's posts, I think back to my younger days in the student loan division of a large southeastern bank (if you ever worked in student loans, you know who I mean). In a way, a student loan is just an unsecured home loan.
I took out an ARM in the early 1990s. It was an old-fashioned ARM, adjusted once a year, maximum adjustment 1/2 percent per year, maximum adjustment life of loan 3 percent up or down. What it amounted to was a shared risk, I took some of the interest rate risk and the bank took some of it. Over the years, my rate adjusted down, down, down. It worked out very nicely for me, and nicely for the bank as well - there was no great incentive for me to refinance, and I let them draft my payment each month, very easy and cheap servicing. I just paid the loan off (like Tanta said, even a 30 year loan is really a 7 year balloon, or 14 years in my case). No point in carrying a mortgage when the balance is too low to let you break the standard deduction...
What does this have to do with anything? Nothing really.
Hoping everyone is happy, healthy and safe this holiday season.
Correcting a bit of history, self-amortizing mortgages were not an FHA innovation. They came out of the Home Owners Loan Corp, which was created 2 years before FHA and was foled into Home Loan Bank System.
Doth sayeth Spock : "Fascinating."
bobn- That is a scary comparison.
fwiw, here's how you calculate the monthly payment for a fully amortizing fixed rate loan. first you calculate the monthly payment factor:
= (interest rate*((1 + interest rate) ^ loan term)) / (((1 + interest rate)^loan term) - 1)
where the interest rate is the monthly rate, ie the yearly rate divided by 12.
then you multiply that by the loan balance and viola, you just wasted time doing something you could have done in two seconds in excel!
Very interesting post on the history of mortgages. This kind of stuff is great, packed with useful information on things I know very little about. The last two paragraphs are more rant like. I guess that is what the market is looking for but I would love to see the rant part put in a separate post.
Nice post none-the-less!
Thanks
Jim
Correcting a bit of history, self-amortizing mortgages were not an FHA innovation. They came out of the Home Owners Loan Corp, which was created 2 years before FHA and was foled into Home Loan Bank System.
Spoken like the biggest Nerd I've ever had the pleasure to meet.
You can drop fun little historical nuggets like that on us anytime you want. We thrive on such things.
I have actually been looking for a decent online history of that period to point our readers too, since I think a lot of people are interested in the general post-Depression stuff. If you know of any in your vast store of online reading, and you wanted to share, we would bless you and your offspring unto the seventh generation of those that are nerdlike.
Thanks for the post Tanta, and looking forward to the first newsletter.
I was thinking about the pay-option products and how deadly they must be to the lender as well (not that I give a shat about someone making such a loan).
I'm thinking here of an S&L with a portfolio of bubbleicious loans (think CA,FL AZ).
Every month the bank gets the min. payment from the borrower, but the bank must know the loan has a good chance of heading for default.
With a fully amortizing structure the problem would be exposed relatively quickly - the borrower made the full payment or not. And it could be administered in a timely manner.
Ticking time bombs indeed.
Is there an equivalent loan product in the commercial space?
I took out an ARM in the early 1990s.
Hey, I took an ARM in 1985. It was a one-year convertible. Damn, I miss those convertibles: they were so much fun to price (not).
I have never claimed that interest rate risk is never something a particular consumer cannot or should not take. I simply point out that it is properly understood as taking on risk, and therefore should involve examination of risk tolerance for each borrower. That is why we traditionally required bigger down payments and lower ratios for the things. In the case of my ARM, which had a discounted start rate of nearly 11%, it was hardly worth it to pay up for 30-year rate protection, given how many points you'd have to have paid to get a 13% FRM. It looked to me like rates had nowhere to go but down, and in fact that's what they did.
However, that has nothing to do with people who took ARMs when the underlying index was 1.50% and the damned loan they got had a rate floor. I am merely trying to point out that ARMs were not exactly invented for such shennanigans; they became a thing to use to keep the house price party going, but they weren't intended originally as an "affordability" product in the way they became in the last few years.
Is there an equivalent loan product in the commercial space?
Actually, balloons and IOs are standard commercial loan products.
I don't think anyone does neg am in commercial; there isn't that much amortization in commercial RE. Of course, once upon a time commercial lenders had this thing about "income producing properties." I guess that went out of style along with "equity."
Excuse me if I'm lost after understanding everything you wrote, but... what was the point of 2/28s then? To have a structure that makes money either with early prepayment (refi), or with amortization way beyond the 24th month? Was it lack of interest rate risk? Was it volume? Was it entry into the securitization marketplace? Opportunity for cross-marketing? all of the above?
And what role does Greenspan play? Clearly he shifted interest-rate risk to the consumer. Is that it?
Hey, I took an ARM in 1985. It was a one-year convertible. Damn, I miss those convertibles: they were so much fun to price (not).
I am in total agreement. The modern day ARM is a marketing ploy designed to hold down the monthly payment in the short term at the expense of a higher payment in the long term. It is a way for the lender and the borrower to bet on price appreciation.
The ARM of years past was a way for borrowers and lenders to share the risks (and rewards) of interest rate variability. It works best for both parties in a time of high but declining interest rates. The borrower sees steadily declining interest charges and the lender gets to keep the loan. The standard fixed rate loan with no prepayment penalty is a no win situation for the lender. If the interest rate goes up, the borrower keeps the loan and the margin declines. If the rate goes down, the borrower refinances.
There's no doubt that in the current environment I would opt for a fixed rate loan if I were the borrower.
OMG T, mine personal memory has overflowed and the buffers have verily been filled. I just love your turn of phrase and that sweet sweet cynicism. Am it not wunderbar how the lowest common denominator, greed, hath brought low the mighty works of the Street?
Seek ye alpha while the sun doth shine, oh mighty managers of funds. For soon shall come a day when the darkness shall seek thee and thy brethren.
Actually, balloons and IOs are standard commercial loan products.
Not anymore. I know someone at a REIT who tells me the IO loans are just totally gone.
Good thing this is all so contained, and stuff.
Tanta,
Late to this thread -- excellent post, as usual -- but was wondering when exactly the various terms (e.g. 10, 20, 30) of FRM were introduced.
Tanta et al: Much of this was driven by loan officers getting paid fees to steer certain loans. We bought a largish (5000+ sq ft) house in So Cal two years ago at the interest rate nadir. Loan officer tried to twist my arm multiple times into an interest only 5 or 7 year product "invest the difference and refi". Difference of $200/month- yeah right. We're pretty savvy and we wanted as much money for as long as the bank was willing to give it to us. Some of my colleagues took the ARM/IO bait...can you say "yield spread premium"?
I must say that these two sentences are the most exquisite I have read in all the electrons that have been spilled on this topic, anywhere: "Thats hardly surprising, given that anyone who willingly put borrowers into loans like this is, objectively speaking, a sociopath. If you expected them to take their licks like grownups, you dont understand much about the essential dynamics of sociopathology."
Thank you. Thank you. Thank you.
And on the ARM topic: the real problem with these new variants has been the teaser rate, and qualifying borrowers on this basis. Otherwise, a perfectly acceptable product. For an example, look to the North: all loans in Canada are ARMs or hybrids. But they didn't get carried away with the max LTVs, and (so far as I can tell) didn't qualify on the basis of the (limited) teasers. And they have prepayment penalties, but generally limited as well.
Great work again, Tanta. I know something of the subject, not being a beginner, and expected to be bored while searching for the nuggets I don't know, but you do have a way of making boring subjects interesting.
As far as the so-called rant in the last two paragraphs, I disagree with the commentor who thought they should have been placed in a separate post. They belonged right where they were.
Not sure what the market would be for a book, but T-shirts, ball caps and coffee mugs are guaranteed winners.
Excellent exposition.
Tanta,
Loved the ee cummings (a fan of his from my childhood; my daughter's in-laws live in one of his old houses) and the history, too much of which is within my personal memory. Of that which is not, may I offer family memory:
- my grandfather owned a profitable shoe store in Phoenix before the Depression;
- he took out a mortgage on his house, but kept more than the balance owned on deposit in the same bank;
- the bank sold the mortgage but kept the deposit;
- the bank then failed, taking with it my grandfather's savings;
- but the mortgage matured shortly thereafter (terms being then so short) and the mortgage-holder demanded payment;
- so my grandfather was forced into bankruptcy, not because he didn't have the money, but because his bank didn't have his money.
My grandfather sold his shoe store, and my father was sent to live with my grandmother's relatives in San Francisco. My grandparents being, as you can imagine, extremely embarrassed by their failure to pay their debts, my father wasn't told why he was sent away; so he concluded his parents didn't love him. My grandparents divorced shortly after that, since both my grandparents were embarrassed by my grandfather's failure (although that was only a failure to predict the failure of his bank).
After his arrival in San Francisco, my father was sexually abused by my grandmother's brother. Many years later, he sexually abused me. I swore not to abuse my children, but chose a spouse who did, whom I divorced too late although as soon as I could. My children are basically OK, I hope.
My grandfather's mortgage-holder neither intended nor predicted these consequences of its actions, although (had it considered the question) it would have known the result was immoral; it thought its obligation was to adhere to the business practices of its day, not to address the greater moral issues. This is a failure in the structuring of society that predates my grandfather's day and persists to our own. We need an algorithm that acknowledges individual as well as business (taken to be corporate, but effectively management) rights.
Guess I've blown my cover...
Tanta, you just most thorough blogger on the internets. how do you have time to churn all this stuff out?
--
Thats hardly surprising, given that anyone who willingly put borrowers into loans like this is, objectively speaking, a sociopath. If you expected them to take their licks like grownups, you dont understand much about the essential dynamics of sociopathology.
Sorry, Tanta, they were behaving like plain crooks. They knew exactly what they were doing making money by screwing others, mostly the vulnerable segment of the society. They committed financial equivalent of premeditated murder. They were committing sin pushing debt. It is not clear to me if you admit to the difference between pushing debt and proper lending. Americas financial gangs were pushing debt in spades. The complexities were merely there as cover-ups. Finance doesnt lend itself to innovation. Innovation is a means to an end fraud.
Jas
Great piece. Very informative.
Two points that I think require more treatment for you to make a valid point:
"(Note to those who keep insisting that the New Deal-era invention of the government mortgage agencies started the whole problem: this was an attempt to put risk where it could be withstood...)"
Arguing that the New Deal GSE's are the entire cause of the current crisis is surely too simplistic, but your assertion that they aren't a contributing factor is also to simplistic. The New Deal creation of the government mortgage agencies socialized the risks which individual middle-class citizens could not handle on their own. The risks, and potential costs associated with them didn't go away, but rather were rolled into systemic risk, and were guaranteed by either tax dollars or monetization. The key factor being that the individual decision makers no longer had to consider the ill-effects of this risk when making decisions, whether consciously or sub-consciously. Whenever the benefits of a decision are individual, but the costs are socialized, you're going to get excessive risk-taking behavior. This does not indict only the individual middle-class citizen alone, because the benefits were enjoyed by the entire industry. The costs will be born disproportionately by everyone else who acted responsibly.
"The current situation with toxic mortgages was brought to you courtesy of an ideological fixation on free markets..."
Please explain how the banking system at any point this century was a free market. You do a serious injustice to promoters of free markets by implying that bankers and their advocates also promote free markets. I can't think of a profession that is more regulated and government-managed that banking. Marginal moves either towards or away from a free market in such a system aren't going to change this fact. Anyone who endorses the current banking system and claims to be an advocate of free markets is either ignorant, confused, or lying.
Great read thank you tanta for the knowledge...I have friends who have balloon payments due in a ten year period.....but its funny these days when you go over to visit...no more is the attitude...look what i have...its much more nimble and somber...I hate to say it...but i told them so...and i was the fool in the corner.
If I've understood the last paragraph correctly, you think that people who borrow on complex terms they don't understand, have done so out of vanity or delusions about their wealth and social status. But the borrowers aren't responsible for these moral failings. The lenders, or society are.
It's an interesting viewpoint. Could you extend it to drunk driving? What about people who take jobs for which they lack the requisite training and require commitments of time and energy they don't want to make?
Tom Stone: How about Mozillo in a Marie Antoinette Wig?
I don't understand why the borrowers couldn't get a lawyer to look over any documents they couldn't understand. Lawyers working on a per hour basis aren't all that expensive. You should have enough time to have one examine the documents before closing. Granted, I've only bought (and sold) one house--30 year fixed FHA as I understood the term "historically low rates" and bailed when I couldn't manage the property tax increases. So I guess I don't buy all the excuses on the borrower's part.
OT
Very nice Tanta, mein Liebschen, as per usual. BUT I'm still trying to find a place where I can read the "freeze plan". I'd like to know what is proposed in hot air and what is actually proposed/committed on paper.
Is there anywhere I can find a link to a copy of an official "freeze" document, or do I have to rely on what is reported in the MSM and blog-osphere. And BTW where do those people in the MSM and blog-osphere get all their information about this issue? Is it just blather and distracting feed-back?
And while I'm on a rant; when did "loan" become a verb? The last I heard -- law school, class of '65 -- "loan" was a noun and "lend" was the corresponding verb. Just as you can't have a "borrow" from someone (unless you are Pogo), you can't "loan" them something -- you have to LEND it to them.
Wonderful, Tanta. Where else in the economic world can you get such insider erudition AND references to Thoreau, Walton and cummings.
Two things:
One: "Not sure what the market would be for a book, but T-shirts, ball caps and coffee mugs are guaranteed winners."
cafepress.com has a wide variety of products and has been around for a while. I had a friend make a fair amount of money with the "all your base are belong to us" a few years ago. I went to a talk by the folks at printfection.com and they talked a good game.
Two: Here's a PDF which has a list of (USA) housing specific government programs and when they were established. http://www.cura.umn.edu/Programs/Housing-Forum/2006/Housing_Policy_Timeline.doc
I also found this, but given Timeline
The site hasn't been updated for a while, but might be interesting to others.
Thanks for all the info.
PS reality-based-lawyer: I'm feel for you and your anguish (and your children), for what that is worth.
Gawd. All fascinating. Glad I took the easy way out with a Ph.D in theoretical physics.
I did sometimes wonder, during the recent refinancing boom-- who, exactly, was paying me to lower my mortgage rate, and, um, why?...
Tanta - this credit market is a lot closer to hearing 'a fly buzz by' than go all 'puddle wonderful' on us. JMHO.
Any more liberal posts like this and Tanta is going to be taken off the Young Republicans Xmas card list.
Thanks for the overview Tanta, as always I wish you had taught econ at my Alma Mater.
Thank you for your nerdy information. This is very helpful stuff to know.
It seems to me balloons are coming back now. I have two family members who have talked about getting balloon mortgages the past month or so.
Extremely niggling point: What Fannie called a balloon with a “conditional right to refinance” and Freddie called the “reset option” was known to many of us as a "rollover" mortgage, named after its Canadian cousin, and so called because it rolled over into a new rate.
Yes, there's no end to mortgage trivia!