Jezebel
Single minority women are big victims of the subprime mortgage meltdown, reports the New York Times today. But not one single minority woman, notes the Journal! Remember Mei Sze Chan? She was single and lonely, but in the beginnings of the mortgage crisis she met a man in the Hamptons named Jeff Greene, they hit it off, and in November they finally wed at their 27-acre 24-car garage Beverly Hills estate in a wedding featuring Oliver Stone and Mike Tyson. (He told Vows "I just wish I had met Mei Sze 20 years ago" — when she was 12! LoL.) So just how did Jeff Greene get so rich? Well...one day in the Hamptons Greene met this hedge fund manager and v. smart contrarian named John Paulson. Were houses getting too expensive, Greene wondered? He didn't know; nothing was too expensive for him because he sold houses! But he wanted protection.
Paulson was convinced that the housing market had gotten out of hand and to keep prices rising, tin pot lenders were making people (like Kue McIntyre of Baltimore) believe they'd be able to afford mortgages they'd never be able to afford if interest rates went up. It didn't take a genius to see that! What did take brains was figuring out how to buy this form of insurance called a"credit-default swap" that big banks could buy to protect themselves in the case that a bunch of people wound up having to give up their houses. Usually only banks could do that! And they weren't buying too much of it, because everyone just assuuuumed stupidly that the housing market would keep going up! Anyhow, so Paulson figured out how to do this, and one day in the Hamptons he told Jeff Greene about his strategy in hopes that he would invest in his hedge fund, which was not doing so well at the time because the stupid housing market kept stupidly rising, but instead Jeff Greene just copied the strategy himself and made his own little killing. That he is now sharing — awwwww! — with Mei Sze.
To his credit, Paulson is giving money to homeowners facing foreclosure and also, rich white dudes like him are not only kinds of dudes those of you who will ever be able to afford mortgages should keep in mind before taking one out, but the dudes who make finance interesting to study. Dudes like Jeff Greene, on the other hand, are what make finance nauseating to study. Knamean?
Baltimore Finds Subprime Crisis Snags Women [NYT]
Trader Made Billions On Subprime [WSJ]
The Meltdown Mogul Of Beverly Hills [WSJ]
Mei-Sze Chan and Jeff Greene [NYT]
Comments
Wow. What shitty people! What beautiful, shitty people!
Ugh, what a prick.
How equally saddening and uplifting. Single minority women losing their homes, but one such ladies finds love in the arms of a man that basically raped the housing market...ooooohh, America.
Money is cool, and I can totally respect the people that make it their life's ambition to get as much as possible - sort of, to an extent, I mean it IS interesting mathematically and psychologically - but they just seem like a different species or something. Like monkeys. Close, but not quite me.
A 24 car garage is fucking ridiculous.
So all you have to do to be financially secure is fucking marry an old rich guy! Cha-ching!
A garage for 24 cars but not a bodice that fits and flatters. It's so hard to have it all.
And people wondered why they stormed the Bastille.
How lovely!
Greene must really like the taste of the blood, sweat, and tears of the working poor.
I had a graduate finance class on the subprime crisis last semester, and some of the stories about what people would do to get another dime off anyone with their greedy schemes were disgusting.
Unfortunately, I think a lot of people in the class with me were looking for pointers for their own get-rich-quick schemes.
I work for the largest financial institution on the Street, and we're facing thousands of layoffs next year thanks to the brilliant minds that decided to do this cockamamie sub-prime mortgage shit that I can't begin to understand. But I can understand that YOU DON'T LEND MONEY TO PEOPLE WHO CAN'T AFFORD TO BUY THE FUCKING MONEY IN THE FIRST PLACE.
Am I missing something? Is there a reason I'm working my butt off to make sure I pay my mortgage and don't default on things?? Why do I have to play by the rules, but so many people just file Bankruptcy and don't give a shit about credit scores?
@MissSamAdams: Not if you have 23 cars and a table saw.
@Rona: because we're ADDICTED TO LIQUIDITY in this country.
@Rona: But isn't the real issue: WHY THE FUCK WOULD THE GENIUSES YOU WORK FOR BET ON PEOPLE THAT DON'T HAVE MONEY AND LOW CREDIT SCORES to just not walk away when their mortgages went bad. BESIDES, predatory lending made it so that GENIUSES on YOUR side of the street sold these people on impossible mortgages that they didn't understand.
That comment about wishing he could have met her when she was 12 kind of nails his assclownishness right in the ol' nutshell.
@Rona: One of the saddest things I read about this is how immigrants were being tricked into getting these subprime mortgages. They legitimately might not have known that getting a $600,000 mortgage when you make $30,000 a year and have $100 in the bank is not a good idea.
@Rona: Don't lash out at the people who accepted the money! I don't think it's so much that 'people don't give a shit about credit scores' as it is people don't have options. You're educated about financial planning and the consequences of doing it badly, many are not. Sucks for your co., but that was obviously unsound. The Street's making you crazy, lady (man?).
@Scoregasm: I'm sure those tears taste great with a nice malbec, but we should probably ask Greene for his pairing recommendation.
See, if I had a 24-car garage, I'd fill it with baby seals, lemurs, koalas, and binturongs. I've got big dreams.
@SinisterRouge: Having worked for The Nation's Largest Mortgage Lender, I can say with complete alacrity that they had no interest/desire in making sure the sub-rpime borrowers knew what their mortgages entailed,. including what the real implications of an ARM are.
@Rona: I'd have a lot more sympathy to the lenders if so many of these mortgages weren't horribly confusing and sold to people who really were not capable of understanding what they were signing. This is not just new homebuyers. There are so many older folks who may lose their homes because someone convinced them to get a second mortgage or to refinance when it was clearly not in their best interests to do so.
does anyone peep that blonde in the back...she's just waiting in the wings for mei's market share to go down.
make that two blondes in the back.
@rmontcal: You're right.
@Pinkosaurus: You're asking for waaaay too much! Just like that house, the dress was there before she got there.
Why are you saying Greene is evil? Because he has new money tastes in consumption, like buying a 24 car garage? You know that just because he bet against the housing market continuing to appreciate doesn't mean he caused the collapse, right? Do you just hate people who are smart and make money? Please explain.
@hamsterpants: Half of people with a college degree couldn't figure out those mortgages...and now we're going to blame the less than rich for taking mortgages some guy in a suit told them was their chance at owning a home and completely doable? C'mon.
Just did the "Ew ew ew ew ew ew" dance and shook my hands a little. Ugh.
@Lemonyc: Just doesn't it leave a bad taste in his mouth that he made money because he bet that people with lower incomes would collapse. That's what's evil about it. It's not the making of the money, it 's the way it was made. It's gross.
@Rona: I agree. As a responsible adult, I bought a home within my means at a fixed rate. If you were too stupid to figure out that you couldn't afford a 300k house on a 30k salary, well, I have no sympathy.
i think it would be fair to say that mortgage lenders tried to operate like credit card companies...that is, give out the credit cards willy nilly even if people can't pay them off because it makes the credit card companies more money. oh, but wait - in this new scenario with mortgage, not so much.
the media is acting like this sort of thing is some new phenomena, but it's really not. people have lost homes because of adjustable mortage rates for YEARS because their credit wasn't stellar. banks have gone through this cycle too...just not at the level we're seeing it now.
rule of thumb: don't buy more than you can afford to pay (sounds basic, and yet...), recycle, and pay your bills in full on time all the time.
@Lemonyc: whoa whoa whoa! Where'd I say "evil"? He actually sounds kinda okay. But Paulson is the "smart" one, I think.
@rsr26: Well, I hope for your sake you do not ever become older or more easily confused because, as a responsible adult, you are able to buy a house within your means. Many vulnerable people were taken advantage of and were intentionally mislead about what they were agreeing to. Go ahead, blame the victim.
@Pinkosaurus: According to rsr26, the victim should have had the presence of mind to know what he/she was doing. Even if the mortgage lenders were praying on their lack of education and understanding of extremely difficult financial language to sell their wares. But they should have grabbed the boostraps and pulled!
@Pinkosaurus: Have you considered the possibility that many people bought houses that they had no business buying? I hold adults responsible for their choices--there is no "victim" here.
@Lemonyc: Oh no.....is this the "Don't Hate Rich People" argument rearing its ugly head again????
@rsr26: Have you considered that many of these loans were refinances (of houses that the owners could otherwise afford) that were ill-advised and pushed by unethical brokers and greedy banks and investors?
@Moe: Well, I think that level of conspicuous consumption is not necessarily evil, but is definitely bad.
Also, maybe I'm naive, because I thought that the comment you were responding to was a joke.
@Pinkosaurus: Did they put a gun to these people's heads? If you have some old Alzheimer's victim that would be one thing. But it sounds to me like you are just making excuses for irresponsible people.
@rsr26: *Cough* BULSHIT! *cough*
Seriously, I was buying our house during the ARM freakout, and we were not in any way looking for a $300,000 home, period. We were looking at a very reasonable sum (100-125) and we had people crawling all over themselves to get us into an ARM. We ended up going fixed and I'm sure disappointed the hell out of a few lenders.
It wasn't people trying to get into a house they couldn't afford, although that was some of it. It was people trying to get into a house they could afford, and lenders had to do some tap-dancing to make it work...
...but didn't explain the ramifications of what they were doing. Or even worse! Making it sound like what they were doing made all the sense in the world! Believe me, I was there watching it happen.
taken advantage of? by the morgage lenders? what the hell did the morgage lenders get out of writting bullshit loans to people that couldn't repay them? most of them are now out of a job because the market went bust as a direct result of the stupid decisions they made. that's the whole reason there's a credit crunch, because lenders lost boat loads of money on their retarded decisions. if there is a victim here it's the lenders, vitctims of their own stupidity.
@rsr26: Well, the courts disagree with you. HSBC (Household) paid out $484 million in predatory lending settlements and Ameriquest has paid out $325 million with more lawsuits to come.
I'll tell you what the lenders got--they got to sell the loan to someone else and make an assload off of it. Eventually the loans had to stop somewhere and the dipshits that bought them and didn't sell them fast enough are losing their shirts. But the dipshits who approved the loan in the first place and sold it before it could break down made a killing. My mortgage (a boring normal fixed at 6 and a quarter) has been sold twice since 2002.
You'd think with all that money, she'd splurge on a pair of boobs to hold up that dress. Just sayin'.
As for the subprime mess: it takes two to tango. The financial institutions were morons, but what about a little personal responsibility here? Only YOU can determine what you can/cannot afford.
@Pinkosaurus: That's because we are a nation of cry-babies where no one takes responsibility for anything.
Here is what is really going on. 1) Some people were making bad decisions/falsifying loan applications/speculating on real estate, figuring they were just going to sell the house in three years, before their ARM adjusted, so who gives a fuck about whether they could afford it over the long run. Remember that I am Facing Foreclosure guy?
And 2) Mortgage brokers and shitboxes like Countrywide completely bullshitted a lot of homebuyers into thinking they could afford loans they couldn't, strongarmed them or lied to them and let them end up screwed, blued, and tattooed.
It's everybody's fault. You can't categorically blame the big corporate banks, just like you can't categorically blame the homebuyers.
Honestly, the fingerpointing isn't helping - what we should be talking about is the failure of our government to provide accurate and timely oversight of issues, and why the bureaucracy of the federal and state governments is so fucking behind the times that shit like this can happen and nobody notices until it all goes tits up. We should be talking about how we streamline our oversight committees to anticipate what I think is the inevitable corporate tendency toward fraud, and the inevitable consumerist tendency towards fiscal irresponsiblity.
Subprime loans, in themselves, are not evil or bad things. They're one of the main ways that minorities and other traditional "credit risk" groups acheive homeownership.
@tetracycloide: Because the lenders sold the loan to the banks. The banks turned around and sold the loan to subsidiaries or put them into funds that were bought by managers and those bad loans may now be buried in your 401K plan. It's when the average working Joe/Jane starts to feel it when his/her retirement fund starts to shrink that we will really start to see the true effects of this debacle.
Remember the concept of "consumer protection"? Another "quaint" idea fallen by the wayside during the Bush years.
@triedandtrue: the current credit crunch is a blip on the radar compared to a retirement portfolio that matures across 40+ years. no long term investors are going to suffer much if at all as a result of whats happened in the last two years. furthermore lenders can't repackage loans as securities and sell them nearly as easily as they could before and that situation doesn't look to be changing any time soon. alot of the money the lenders made is also getting eaten up by settlements like the HSBC one pink already mentioned.