Author Topic: WARNING....HEADS UP!!! A WAKE UP CALL FOR ALL FORNIT READERS  (Read 10225 times)

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Offline Anonymous

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WARNING....HEADS UP!!! A WAKE UP CALL FOR ALL FORNIT READERS
« on: February 25, 2007, 09:57:13 PM »
Please read...this includes everyone.

ok...I'm anti program...but that doesn't matter right now.

I have been away from fornits for the most part for almost a year.

My background...post program...is in Economics.

We are currently fucked...most of us.

Stop reading fornits...stop watching mainstream television...start looking at what is happening with the housing meltdown and the sub-prime lender meltdown that is currently snowballing at an alarming rate.

I could direct you to all kinds of economic literature that would show the seriousness of what has been discussed for the past few years during the global "Housing Bubble"...but if you would rather read about it in entertaining...albeit alarming...way...then go to

http://housingpanic.blogspot.com

Read all you want.  You will then understand as the blogger is very educated in the topic on what he speaks...he cashed out at the peak in Phoenix and is now renting in London and travelling around the world studying it.

It is not a lib vs dem thing...and has jack shit to do with programs.

Right now the shit is hitting the fan and with the equity/speculative asset market bubble that we have created the "crash" will make the great depression look like a walk in the park.

It is nothing new...it is a cycle...nothing can be done...it has happened throughout time...all booms eventually bust.

I wish you all well...survivors, programmies and trolls alike.

Time to stop arguing about programs...the parents that have their kids there will most likely end up going bankrupt due to their exotic mortgage that they got or the cash out refinancing where people thought there house was little more than an ATM.

Study...learn how to prepare for an economic depression...and you will be better off in the long run.
« Last Edit: December 31, 1969, 07:00:00 PM by Guest »

Offline Anonymous

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WARNING....HEADS UP!!! A WAKE UP CALL FOR ALL FORNIT READERS
« Reply #1 on: February 25, 2007, 10:00:56 PM »
Paging Ginger to the main forum. Ginger to delete the spam please.
« Last Edit: December 31, 1969, 07:00:00 PM by Guest »

Offline Antigen

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WARNING....HEADS UP!!! A WAKE UP CALL FOR ALL FORNIT READERS
« Reply #2 on: February 25, 2007, 10:06:21 PM »
Guest, you mind if I move this over to Open Freeforall?
« Last Edit: December 31, 1969, 07:00:00 PM by Guest »
"Don\'t let the past remind us of what we are not now."
~ Crosby Stills Nash & Young, Sweet Judy Blue Eyes

Offline CCM girl 1989

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« Reply #3 on: February 25, 2007, 10:27:52 PM »
Well, you can move it but it is relavent to the Troubled Teen Industry. The reason being is that a lot of parents do not have $40,000 laying around, and take money out of their homes to get their kids into these schools (false equity).

I can't tell you how many people I deal with on a daily basis that got themselves into 2/28 ARMS with a 3 year pre-payment penalties. The mortgage industry had appraisers in their back pockets basically letting the mortgage brokers tell them how much they needed these homes to appraise for, and they did. These parents looked at this as free money. It was the only way to be able to afford these schools.

Now, these people are stuck in these homes that they cannot afford since the interest rates keep rising, and rising. They can't afford to refinance. They end up having to sell their home. It's tragic, it really is. Most parents cannot afford to send their kids away at $40,000 a year.

Most of these kids problems can be solved at home. The ones with more serious problems sometimes do need treatment. But, these parents get themselves in way over their head. Afterwards when they are renting a tiny little apartment because they lost their home they probably blame their kid.

What to say except it is very sad.
« Last Edit: December 31, 1969, 07:00:00 PM by Guest »
f you were never in a program, or a parent of a child in a program, then you have no business posting here.

Offline Anonymous

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« Reply #4 on: February 25, 2007, 10:29:58 PM »
Quote from: ""CCM girl 1989""
What to say except it is very sad.


For the kids, yes.

To their parents, I have only one message:

« Last Edit: December 31, 1969, 07:00:00 PM by Guest »

Offline Deborah

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« Reply #5 on: February 25, 2007, 10:54:20 PM »
I've been watching this for years.
Used to be that your mortgage payment couldn't exceed 25% of your annual income.

And as you said CCM:
Quote
The mortgage industry had appraisers in their back pockets basically letting the mortgage brokers tell them how much they needed these homes to appraise for, and they did.


among other things.
When home sales decreased due to overinflated prices, they increased the limit to 33%.

Price of housing continued to escalate.

Now we have "No Disclosure" loans. Don't even have to state or prove you have an income. For a price, of course.

There is a ceiling on everything. I'm surprised it took this long.
« Last Edit: December 31, 1969, 07:00:00 PM by Guest »
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Hidden Lake Academy, after operating 12 years unlicensed will now be monitored by the state. Access information on the Federal Class Action lawsuit against HLA here: http://www.fornits.com/wwf/viewtopic.php?t=17700

Offline Oz girl

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« Reply #6 on: February 25, 2007, 11:17:27 PM »
I agree with CCM it is tragic. For all we know that money could have been going to the College fund of the TBS student. Now they are without it. Surely Milk you are not suggesting that the other children in the family deserve to be out of a home or an education as well because of their parents mistake?
I know if this system took off here banks would be doing a happy dance. The retail bank i used to work for would cry with joy when a youing married couple would come in. It would start with the mortgage upsell. "it is a hot climate you need enough for a pool as well" then shift gears to the kids education.
"Yes i know there is an adequate public school in the expensive area you live in but we hear they are becoming violent cesspools. Borrow some more for private education. "
Throw schhols for delinquency into the mix and the bank is laughing
« Last Edit: December 31, 1969, 07:00:00 PM by Guest »
n case you\'re worried about what\'s going to become of the younger generation, it\'s going to grow up and start worrying about the younger generation.-Roger Allen

Offline Anonymous

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« Reply #7 on: February 25, 2007, 11:33:26 PM »
Ginger...by all means...move it where you like...I just wanted to post it where I knew it would be seen.

and no...this is not spam...CCM knows what's up but there has been and will be futher spillover into the alt-A and the Prime markets.

and trust me...this really isn't a laughing matter.

sorry for the multiple posts also...that was an accident...if you could delete those that would be great.

okb4rma
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Offline Ursus

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« Reply #8 on: February 26, 2007, 12:08:06 AM »
Here, perhaps, is a related concern...  Did you know that there is nothing more "federal" about the Federal Reserve Bank than there is about Federal Express?  The Federal Reserve Bank is a private bank, a cabal, actually, made up of several banks whose identities are apparently kept secret from us plebian sorts...  The Federal Government pays the Federal Reserve to print out our money, said payment being actually our taxes.  The gold at Fort Knox which is supposed to back our currency is being held by the Federal Reserve "in trust".  And you wonder about the source for inflation... And a "crash" when the money is meaningless...

I posted some links to a movie about this in Tacitus' Realm.  I would love to get some feedback...  My background clearly is NOT economics and ordinarily I am so focused on problems that are more belly-button in nature to have much of a clue about this kind of thing...

http://fornits.com/wwf/viewtopic.php?t=20720
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Offline Nihilanthic

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« Reply #9 on: February 26, 2007, 12:13:38 AM »
Quote from: ""CCM girl 1989""
Well, you can move it but it is relavent to the Troubled Teen Industry. The reason being is that a lot of parents do not have $40,000 laying around, and take money out of their homes to get their kids into these schools (false equity).

I can't tell you how many people I deal with on a daily basis that got themselves into 2/28 ARMS with a 3 year pre-payment penalties. The mortgage industry had appraisers in their back pockets basically letting the mortgage brokers tell them how much they needed these homes to appraise for, and they did. These parents looked at this as free money. It was the only way to be able to afford these schools.

Now, these people are stuck in these homes that they cannot afford since the interest rates keep rising, and rising. They can't afford to refinance. They end up having to sell their home. It's tragic, it really is. Most parents cannot afford to send their kids away at $40,000 a year.

Most of these kids problems can be solved at home. The ones with more serious problems sometimes do need treatment. But, these parents get themselves in way over their head. Afterwards when they are renting a tiny little apartment because they lost their home they probably blame their kid.

What to say except it is very sad.


Well said. Too bad the ACTUAL treatment that is ACTUALLY needed out of the home, when there is the need, already exists outside of the program industry, costs a hell of a lost less and isn't a freaking ponzi scheme. Oh, and insurance can cover it, imagine that!
« Last Edit: December 31, 1969, 07:00:00 PM by Guest »
DannyB on the internet:I CALLED A LAWYER TODAY TO SEE IF I COULD SUE YOUR ASSES FOR DOING THIS BUT THAT WAS NOT POSSIBLE.

CCMGirl on program restraints: "DON\'T TAZ ME BRO!!!!!"

TheWho on program survivors: "From where I sit I see all the anit-program[sic] people doing all the complaining and crying."

Offline Anonymous

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« Reply #10 on: February 26, 2007, 12:18:53 AM »
Quote from: ""Ursus""
Here, perhaps, is a related concern...  Did you know that there is nothing more "federal" about the Federal Reserve Bank than there is... blah, blah, blah


Oh Jesus please not on this forum. I used to type up bank documents for a living. The Federal Reserve is heavily integrated with federal agencies, particularly the IRS and the Financial Crimes Enforcement Network (FinCEN). I don't give a fuck what the hell happened on Jekyll Island. The Federal Reserve is nothing but another bureaucracy. Period.
« Last Edit: December 31, 1969, 07:00:00 PM by Guest »

Offline Deborah

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« Reply #11 on: March 07, 2007, 01:14:36 PM »
Housing collapse: lenders going bankrupt
http://www.economist.com/finance/displa ... id=8706627
American mortgages
Bleak houses
Feb 15th 2007 | NEW YORK
From The Economist print edition
America's riskiest mortgages are set to pop. Where will the shrapnel land?

LAST March, ResMAE, a mortgage lender catering to risky borrowers, cut the ribbon on its new headquarters in Brea, California. The sprawling, 135,000-square-foot building dwarfed the company's 458 local employees. But it fitted the firm's outsized ambitions. Less than a year later the company, rather than its ribbon, was facing the chop. This week it said it had filed for bankruptcy and was selling its assets for a diminutive $19m.

ResMAE is one of over 20 casualties among America's ?subprime? mortgage lenders, which serve borrowers with spotty credit histories at higher interest rates. This end of the market took on $605 billion of new mortgages last year, more than a fifth of the total. But as interest rates have climbed, these loans have soured and the shares of bigger subprime lenders, such as Countrywide Financial and IndyMac, have sagged.

Does the rot run deeper? That fear ran down a few spines on February 7th, when HSBC, Europe's biggest bank, revealed that bad loans at its American subprime mortgage division were 20% higher than expected. The same week New Century, the second-biggest such lender in America, projected a big drop in loans this year because of poor market conditions.

They are not the only ones exposed to America's home-loan blues. Citigroup peddles mortgages to risky borrowers through CitiFinancial, its consumer-finance arm. Subprime lenders have also been scooped up by investment banks, including Morgan Stanley, Merrill Lynch and Deutsche Bank, in recent months. Notably absent are Fannie Mae and Freddie Mac, America's government-sponsored mortgage giants. Both were set up for people who dreamt of homeownership, but could not afford it. They also have the best data on borrowers, including those rejected for loans in the past. Perhaps they knew something others did not.

Indeed, the woes of the subprime lender are mostly self-inflicted. After interest rates turned up in 2004, mortgage-makers could no longer count on custom from homeowners looking to switch to new mortgages at cheaper rates. Saddled with expensive lending platforms, mortgage-writers were desperate for a new source of revenues. They found two: riskier borrowers and riskier products.

They loosened their lending standards as the demand for loans started to drop in 2004. They also resorted to ?alternative? products with enticing terms and off-putting names, such as ?negative-amortisation? loans (which set repayments so low that the debt gets bigger) or ?hybrid? adjustable-rate mortgages (with low teaser rates that jump after a few years). About 27% of all mortgages made in 2006 were of such non-traditional kinds, according to Inside Mortgage Finance, a newsletter.

Not content with these two moneypots, the more eager lenders began to combine them to make a third. They offered risky products to insecure borrowers. According to the Federal Deposit Insurance Corporation (FDIC), hybrid mortgages made up three-quarters of all new subprime loans in 2004 and 2005. The FDIC reckons many firms underwrote hybrid loans assuming that borrowers would refinance them quickly, before the low introductory rates jumped. But this was a reckless assumption when interest rates were rising and house prices softening.

An over-reliance on unseasoned risk models is also partly to blame for bad underwriting. Subprime and alternative mortgages belong to ?uncharted territory?, says Sheila Bair, head of the FDIC, making ?modelling credit performance exceptionally difficult?. The chief executive of HSBC, Michael Geoghegan, admitted as much in a conference call last week: ?You've got to have history for analytics...the fact of the matter is there [isn't history] for the adjustable-mortgage rate business when you've had 17 jumps in US interest rates.?

The pressure to lend did not only come from within. Even as mortgage-writers lured borrowers with soft terms, they were themselves tempted by the strong appetite of investors for riskier assets. Wall Street banks did a roaring trade packaging bunches of subprime loans into mortgage-backed securities, and selling them on to investors, greedy for yields (see chart).

The art of securitisation, as it is called, adds liquidity to the market and allows risks to be parcelled out to those most eager to bear them. Over the past few years, it has also freed up cash for more lending and earned banks pots of money. But it may have made a wobbly subprime market even wobblier. Banks are traditionally supposed to know a bit about the borrowers on their books. But in many cases, their loans did not stay on their books long enough for them to care. Mortgages were written for a fee, sold to investment banks for a fee, then packaged and floated for another fee. At each link in the chain, the fees mattered more than the quality of the loans, which could always be passed on. ?This was classic market failure,? says Anthony Sanders, a mortgage expert at Ohio State University's Fisher College of Business. ?The private sector wanted fees and got them, and they did not much care what happened afterwards.?

Some banks do get caught holding the live grenade. FDIC reckons that depository institutions hold $3 trillion of mortgages. Much of this is higher-quality stuff, but not all. And even banks eager to securitise their loans sometimes retain the ?residual??the most risky slice where losses hit first. CreditSights, a research firm, notes that Bear Stearns holds about $6.8 billion in residuals, although only a fraction is below investment grade. Banks that write mortgages are also contractually obliged to buy back securitised loans if their underwriting is shown to be shoddy or if the loans sour too quickly. That is what felled ResMAE and is hurting Accredited Home Lenders Holding, a San Diego lender.

Burnt palms

Diversified banks will not meet the same fate. Many big ones, notes Howard Mason of Sanford Bernstein, a research outfit, were careful not to mix risky products with risky borrowers. Wells Fargo, for instance, sells most of its alternative mortgages to ?prime? customers. Citigroup sells to subprime borrowers but does not offer alternative mortgages. However, the unregulated non-bank mortgage lenders, like New Century, could suffer.

Should loan losses climb, investors in mortgage-backed securities will also get burnt, especially those holding the riskier, higher-yielding bonds. Financial engineers worked their mysterious magic with these securities, turning the junkiest mortgages into high-grade, sometimes AAA-rated, securities. They could do this only with the blessing of credit-ratings agencies, which made a profitable business out of rating these securities. But critics say the agencies got complacent, and doubt the pooled loans were sufficiently diverse, or sliced up with sufficient art truly to have dispersed risk. One possible blind spot is that the dodgiest mortgages all behave similarly in times of stress. Another is that it is hard to avoid heavy exposure to mortgages from California, the biggest market in America, where alternative products were popular.

No one quite knows in whose hands these little bombs will ultimately explode. The hope is that the risks are widely and thinly spread. The fear is that they all sit in the lap of a few big hedge funds. But the real casualties may be homeowners, who often took out risky loans they could barely afford or did not understand. The FDIC has already tightened rules on underwriting negative-amortisation loans, and the Senate has begun to hold hearings on predatory mortgage lending. With Democrats now in charge of Congress, there is a fair chance the politicians will act. The Eliot Spitzer of the housing downturn may be about to start his charge.
Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.
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Hidden Lake Academy, after operating 12 years unlicensed will now be monitored by the state. Access information on the Federal Class Action lawsuit against HLA here: http://www.fornits.com/wwf/viewtopic.php?t=17700

Offline Karass

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WARNING....HEADS UP!!! A WAKE UP CALL FOR ALL FORNIT READERS
« Reply #12 on: March 07, 2007, 04:15:42 PM »
As for parents using their home equity to finance loony-tunes "therapy" programs, it is tragic. Part of me thinks they get what they deserve for being so stupid. But part of me understands that their desperation can cloud their judgement and contribute to irrational actions -- especially given the fact that many so-called health care professionals recommend these private correctional facilities, and some courts even support them, directly or indirectly.

Despite the problems of high-risk mortgages and the risk of homelessness for middle-class 'program parents' and their families, the real problem here is deception. It should not be legal to call oneself a "school" or a "treatment center" when the primary purpose of the institution is detention and corrections.

The success of this evil industry is built on the premise that desperate parents -- even well-educated ones -- can be deceived into handing over their children and lots of their money to complete strangers who have few credentials in any field other than Sales & Marketing. All it takes is the false promise of good things like "school" and "therapy" and the testimonial support of a few shrinks, social workers, brainwashed kids, brainwashed parents and clueless pinheads on national TV that sing the praises.

Like P.T. Barnum said, "there's a sucker born every minute."

But that doesn't make it right to take advantage of him -- or worse, to take advantage of his kid.
« Last Edit: December 31, 1969, 07:00:00 PM by Guest »
Like its politicians and its wars, society has the teenagers it deserves. -- J.B. Priestley

Offline Anonymous

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« Reply #13 on: March 09, 2007, 09:06:53 AM »
Quote from: ""70sPunkRebel""
The success of this evil industry is built on the premise that desperate parents -- even well-educated ones -- can be deceived into handing over their children and lots of their money to complete strangers who have few credentials in any field other than Sales & Marketing. All it takes is the false promise of good things like "school" and "therapy" and the testimonial support of a few shrinks, social workers, brainwashed kids, brainwashed parents and clueless pinheads on national TV that sing the praises.

Like P.T. Barnum said, "there's a sucker born every minute."

But that doesn't make it right to take advantage of him -- or worse, to take advantage of his kid.


 :rofl:  :rofl:  :rofl:

Yeah right, the 'evil industry' taking advantage of poor ignorant parents. That's the biggest myth in this industry right there.
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Offline Anonymous

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« Reply #14 on: March 09, 2007, 09:11:25 AM »
I would tend to agree... fucked-up parents just wanna pass the buck,,

Ooooohhh!!!! Burn, bitch!!!!!  :rofl:
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