Foreclosure Q and A – The Moody’s Blues
Before a focus group of Homeowners in foreclosure the topic was: What role did credit ratings agencies play?
Q- Good morning. Let’s get right to it. If I had a train load of junk, toxic waste and used diapers…would you buy this train load or parts of an investment?
A- what does that have to do with my foreclosure?
Q- According to The Louisiana Municipal Police Employees Retirement System, U.S. House investigators, Connecticut Attorney General Richard Blumenthal, the Financial Times and California Atty. Gen. Jerry one did just a train load of kryptonite to superman. Do any of like superman?
A- I feel like a train did run over me.
Q- In the financial train load of kryptonite was sold as if it were bars of gold. You would invest in gold you thought the price had a realistic chance to increase over time and give you a steady income…right?
A- Gold is expensive…I never had that kind of money.
Q- Pension systems did have that kind of money. And they invested these pensions represented your pension would happen to your pension?
A- Golly, I don’t what’s this got to do with my foreclosure situation?
Q- Let’s connect the dots. Your pension dumps trillions into the investment market, based on triple A ratings into ‘solid’ investments. Those dollars are used to fund new mortgages. But it’s more money than the real estate market has a demand for. In other words…there really aren’t that many qualified buyers in the marketplace to soak up all that money. Are you with me?
Q- Let’s try it another way. You all drive cars…correct?
Q- How many times in 5 years do you buy a new car?
A- My car is 9 years old.
Q- Exactly. You don’t have a need to buy a new car every 5 you?
Q- What if a new car you Joe…”your grandson will be 16 in 3 years. You’ll have this car paid off in 3 about the time your grand son turns that’s when the insurance starts…because between now and park the car in your garage. you buy this car nothing down, at this really low, low monthly payment of $50 dollars a month and here’s the great are guaranteed to qualify…because I won’t ask much you make…could you pass a deal like this?
A- Not if you put it that way.
Q- Now if I was moving cars that could I continue to get funding for such picturesque loans?
A- Beats me.
Q- Well, suppose my dealership was being bankrolled by Big Money Guys on Wall Street. And Big Money Guys was selling kryptonite to pension funds. And the Ratings agencies were telling pension kryptonite was rated…triple A. Do you think the pension funds would pour money into Big Money Guys?
A- You Money Guys was lying to the rating agencies?
Q- No. I rating agencies seem to know they had just didn’t care.
A- ‘s how I got stuck with this McMansion with an ARM that’s about to reset and take by arm, leg and bowels with it?
Q- Did it really happen that way at your closing?
A- No…I thought I was getting a 30 year at the kids, the Mrs. and my friends all waiting for the good news…I signed the papers…because the lender told me…”don’t can always refi…’because the home prices are still going up.”
Q- Weren’t you concerned…about the loan reset?
A- Well, like I said…”the lender assured me…I could ‘refi’ or sell make a killing.”
Q- never really concerned you that the people who put up the money, the pension investors…might get caught with their pants down?
A- Why should they were willing to put up the I could get the not?
Q- That’s why we called this Moody’s Blues…because now everyone has the blues…because of Moody’s. Did you get something out of this meeting?
A- Well, I still got the what am I gonna do about my foreclosure?
Q- In our next ‘ll address that. But before we I ask you thought about whether your pension fund bought into this junk?
A- . You think that’s why my company is talking about abolishing our pension system and going to a 401K?
Q- Let me think on that. If there is no longer any money in your pension ‘re in a unique a an investor. How does it feel to be an ?
A- Between a rock and…a hard place? When is your next session……