If you thought the subprime mortgage crisis was bad...

[StrangeSox]

Subprime car loans:

http://jalopnik.com/355234/sub+prime-bmw-crisis

 

In all seriousness, I think this woman represents why many people are opposed to whole-sale bailouts of the people who bought way more than they could afford based on their own stupidity, vanity, and greed.

[southsider2k5]

Subprime car loans:

http://jalopnik.com/355234/sub+prime-bmw-crisis

 

In all seriousness, I think this woman represents why many people are opposed to whole-sale bailouts of the people who bought way more than they could afford based on their own stupidity, vanity, and greed.

 

Seriously, the nanny state has to stop. There is a reason that you are charging 20% plus to these people, and that is because they have a history of not paying their bills, and it works vice versa as well, if you paid your bills, you wouldn't be getting charged 20% for a car loan.

[Texsox]

In additional to the ladies mistakes, isn't there some fraud on the part of the dealership? They submitted incorrect information. Seems like that is where the lender was duped, not by offering credit to someone whose correct information would not have qualified them, or at least I hope would not.

 

Things get sketchy when you hear that the salesperson at the dealership allegedly filled out her paperwork to initially read "$6000" as her monthly income. To top things off, that figure was later changed, supposedly behind the customer's back, to "$8600.00."

[StrangeSox]

In additional to the ladies mistakes, isn't there some fraud on the part of the dealership? They submitted incorrect information. Seems like that is where the lender was duped, not by offering credit to someone whose correct information would not have qualified them, or at least I hope would not.

 

This happened a lot with the mortgages, too, and is why the lenders are under investigation.

 

Still, this woman is not a victim, but a moron. She has a fixed income of $2500. She knew the payments would be $1300. That doesn't even include the insurance on a $100,000 car with 500 HP, which I can only imagine are through the roof. She took out her life savings as a down payment on a LEASE, so she won't ever see that money again.

 

Yes, the delaer fudged the numbers to get the loan approved, but she knew what her payments were. This isn't even like an ARM where they adjusted suddenly.

[Texsox]

This happened a lot with the mortgages, too, and is why the lenders are under investigation.

 

Still, this woman is not a victim, but a moron. She has a fixed income of $2500. She knew the payments would be $1300. That doesn't even include the insurance on a $100,000 car with 500 HP, which I can only imagine are through the roof. She took out her life savings as a down payment on a LEASE, so she won't ever see that money again.

 

Yes, the delaer fudged the numbers to get the loan approved, but she knew what her payments were. This isn't even like an ARM where they adjusted suddenly.

 

I agree, she's a moron. But I imagine what the dealer did was criminal, or should be.

[StrangeSox]

I agree, she's a moron. But I imagine what the dealer did was criminal, or should be.

 

Definitely should be, and I would imagine that it is. This ties back into the other thread about who's really responsible and should feel the pain from the subprime crisis. Little bit of column A, a little bit of column B.

[southsider2k5]

Definitely should be, and I would imagine that it is. This ties back into the other thread about who's really responsible and should feel the pain from the subprime crisis. Little bit of column A, a little bit of column B.

 

And they both are going to get what they deserve out of this. If the dealership did indeed committ fraud, they need to be charged, and they deserve to eat the losses on the car.

 

The lady also should have known better when she tried buying a 100k car. You have to be intelligent enough to live within your means.

[Texsox]

I don't like the conclusion this leads to, but my thinking has changed in this particular case.

 

The car dealer committed fraud to get this woman a loan. Phrased another way, the result of their crime was a lender lent money to someone who should not have received the loan ~and~ a woman was given a loan she could not afford. If the car dealer does not commit fraud, she does not get the loan and lose her life savings.

 

Is this much different then an unethical contractor who takes someone's life savings in costly and unnecessary repairs?

 

Again, in case you forgot, I don't like the conclusion this leads to. And perhaps if she was just greedy and not stupid, she got what she deserves. But we do have laws to protect stupid people, and we know she should have known, but it seems the dealer had a greater responsibility.

[NUKE_CLEVELAND]

So now that we're just beginning to get our heads around the damage done by subprime HOME loans, now we have subprime CAR loans?

 

LOL!!!

 

Does this mean that in 6 months we'll get another check from the federal government that I can just dump into my mutual funds..........er.....I mean help stimulate the economy?

 

[southsider2k5]

I don't like the conclusion this leads to, but my thinking has changed in this particular case.

 

The car dealer committed fraud to get this woman a loan. Phrased another way, the result of their crime was a lender lent money to someone who should not have received the loan ~and~ a woman was given a loan she could not afford. If the car dealer does not commit fraud, she does not get the loan and lose her life savings.

 

Is this much different then an unethical contractor who takes someone's life savings in costly and unnecessary repairs?

 

Again, in case you forgot, I don't like the conclusion this leads to. And perhaps if she was just greedy and not stupid, she got what she deserves. But we do have laws to protect stupid people, and we know she should have known, but it seems the dealer had a greater responsibility.

 

She agreed to the figures, at least implicitly when she signed the paperwork verifying her personal information. Even if it was just because she didn't review the information put down, she is still considered an accessory to the crime.

[kapkomet]

Screw personal responsibility! It's the government here to save the day!

 

[Balta1701]

Screw personal responsibility! It's the government here to save the day!

Screw corporate responsibility! If they lie to people or commit fraud, it's the people's fault for not uncovering it!

 

Seriously, do statements like that actually do anything or illustrate any important point? If we're going to actually debate this issue, here's the question I think is worth answering Re: the government; how much responsibility do they have to make it where a mess like this can't happen? Not as a matter of personal responsibility...but as a matter of avoiding screwing over the 90% of us who do things right.

 

Here's my point. If 10% of Americans are complete fools and take out mortgages they can't afford and finance $100,000 on $30,000 cars like we've seen the past 5 years...when the system hits a bump in the road, like it has now...it's not just those 10% who suffer. 10% of Americans lose their house, but then the construction industry collapses, unemployment goes through the roof, the banking system teeters on the edge of collapse, etc.

 

Simply sticking your fingers in your ears and saying "People should know better!" ignores the fact that there are always going to be a group of people who never know better, who lie, who are stupid, etc. I would argue that the fact that this mess hurts everyone is exactly the reason why we need stronger regulation of these lending markets and more transparency in how they're being treated as investments. Would you disagree?

[Texsox]

She agreed to the figures, at least implicitly when she signed the paperwork verifying her personal information. Even if it was just because she didn't review the information put down, she is still considered an accessory to the crime.

 

I didn't read the article that way.

Things get sketchy when you hear that the salesperson at the dealership allegedly filled out her paperwork to initially read "$6000" as her monthly income. To top things off, that figure was later changed, supposedly behind the customer's back, to "$8600.00.

 

We don't know what she knew and when.

 

I don't like the conclusion that someone is not responsible, but then I think of retirees being bilked out of their life savings and see some similarities to this. If we say, she's an idiot and should have known better, should we not also say that old person should have known her furnace would not fail three times in three weeks requiring $10,000 in repairs each time?

 

IIRC banks and lenders have restrictions from making questionable loans, who is that designed to protect?

[EvilMonkey]

I don't like the conclusion this leads to, but my thinking has changed in this particular case.

 

The car dealer committed fraud to get this woman a loan. Phrased another way, the result of their crime was a lender lent money to someone who should not have received the loan ~and~ a woman was given a loan she could not afford. If the car dealer does not commit fraud, she does not get the loan and lose her life savings.

 

Is this much different then an unethical contractor who takes someone's life savings in costly and unnecessary repairs?

 

Again, in case you forgot, I don't like the conclusion this leads to. And perhaps if she was just greedy and not stupid, she got what she deserves. But we do have laws to protect stupid people, and we know she should have known, but it seems the dealer had a greater responsibility.

I would agree with you completely except that she signed the forms with the wrong info on it. Yes, the dealer changed it again, but she still signed it knowlingly with the wrong amount for income.

[StrangeSox]

I didn't read the article that way.

We don't know what she knew and when.

 

I don't like the conclusion that someone is not responsible, but then I think of retirees being bilked out of their life savings and see some similarities to this. If we say, she's an idiot and should have known better, should we not also say that old person should have known her furnace would not fail three times in three weeks requiring $10,000 in repairs each time?

 

IIRC banks and lenders have restrictions from making questionable loans, who is that designed to protect?

 

Tex, you have to see the difference between your furnace breaking and someone on a small fixed income with little savings leasing a $100,000 ultra-luxury sports car.

 

She wasn't bilked out of this. She went into the BMW dealership herself and decided to lease a car that costs more than three times her annual income.

[Texsox]

Screw personal responsibility! It's the government here to save the day!

 

Not in all cases, you would also be saying the retiree who gets bilked out of their life savings by an unethical contractor should be on their own as well. And I know you would not believe that.

 

Screw corporate responsibility and lets have an open season on anyone who can get swindled or talked into a bad deal? Is that in our nation's best interest?

[Texsox]

Tex, you have to see the difference between your furnace breaking and someone on a small fixed income with little savings leasing a $100,000 ultra-luxury sports car.

 

She wasn't bilked out of this. She went into the BMW dealership herself and decided to lease a car that costs more than three times her annual income.

 

She could not afford it and the dealer committeed fraud to get her the loan. If we learned she had an IQ of 75 or was 85 years old would your opinion change?

 

My example is the furnance isn't broke, just needs a filter change and the contractor charges the victim $5,000. She should have known, she should have taken personal responsibility.

[Balta1701]

Tex, you have to see the difference between your furnace breaking and someone on a small fixed income with little savings leasing a $100,000 ultra-luxury sports car.

 

She wasn't bilked out of this. She went into the BMW dealership herself and decided to lease a car that costs more than three times her annual income.

If a college student walked in to a BMW dealership, declared no provable income, and the dealer leased him a car anyway, who is responsible there? Why is there no responsibility on the lender to verify these things?

 

Yes, she was clearly wrong. But If I walked in to a BMW dealership 8 years ago and tried to lease a car, I'd have been laughed out of the place. Why isn't it the job of someone above them to actually verify income levels before giving out a loan? This exact same thing was done all the time in the mortgage business, people would just ask a person for a number, and sometimes even suggest an income level in order to give them a loan. Should that be ok?

Edited February 13, 2008 by Balta1701

[StrangeSox]

She could not afford it and the dealer committeed fraud to get her the loan. If we learned she had an IQ of 75 or was 85 years old would your opinion change?

 

No. The dealer didn't trick her or lie to her. She knew what the payment terms were when she signed the lease. The dealer lied to the bank, not her, to get her the lease.

[StrangeSox]

My example is the furnance isn't broke, just needs a filter change and the contractor charges the victim $5,000. She should have known, she should have taken personal responsibility.

 

that's not the same situation at all. The BMW dealership wasn't dishonest with the customer. They told her the payments. She CHOSE to buy a BMW.

 

In your situation, the person didn't choose to have their furnace break and the contractor was dishonest with the homeowner. That's more akin to how the dealer was dishonest with the lender.

 

edit:changed bank to dealer

Edited February 13, 2008 by StrangeSox

[Balta1701]

No. The dealer didn't trick her or lie to her. She knew what the payment terms were when she signed the lease. The dealer lied to the bank, not her, to get her the lease.

So why does the dealer have no responsibility to make sure that the loans he's sending to the bank aren't pieces of garbage? I've sold stuff on credit before when I was selling vacuums, and I'll tell you up front that I always took efforts to try to qualify people before even writing up a contract. If a person was unemployed or had a recent bankruptcy, even if they wanted the thing, I didn't waste my time on it. For an even more expensive piece of equipment, like a BMW, the person actually dealing with the consumer should have some responsibility. At least I felt that way when I was selling those.

[southsider2k5]

Screw corporate responsibility! If they lie to people or commit fraud, it's the people's fault for not uncovering it!

 

Seriously, do statements like that actually do anything or illustrate any important point? If we're going to actually debate this issue, here's the question I think is worth answering Re: the government; how much responsibility do they have to make it where a mess like this can't happen? Not as a matter of personal responsibility...but as a matter of avoiding screwing over the 90% of us who do things right.

 

Here's my point. If 10% of Americans are complete fools and take out mortgages they can't afford and finance $100,000 on $30,000 cars like we've seen the past 5 years...when the system hits a bump in the road, like it has now...it's not just those 10% who suffer. 10% of Americans lose their house, but then the construction industry collapses, unemployment goes through the roof, the banking system teeters on the edge of collapse, etc.

 

Simply sticking your fingers in your ears and saying "People should know better!" ignores the fact that there are always going to be a group of people who never know better, who lie, who are stupid, etc. I would argue that the fact that this mess hurts everyone is exactly the reason why we need stronger regulation of these lending markets and more transparency in how they're being treated as investments. Would you disagree?

 

Perhaps you missed the part where EVERYONE said the company should be charged with a crime?

 

Also remember ignorance is no excuse for illegal activity.

[StrangeSox]

If a college student walked in to a BMW dealership, declared no provable income, and the dealer leased him a car anyway, who is responsible there? Why is there no responsibility on the lender to verify these things?

 

Yes, she was clearly wrong. But If I walked in to a BMW dealership 8 years ago and tried to lease a car, I'd have been laughed out of the place. Why isn't it the job of someone above them to actually verify income levels before giving out a loan? This exact same thing was done all the time in the mortgage business, people would just ask a person for a number, and sometimes even suggest an income level in order to give them a loan. Should that be ok?

 

No, it shouldn't be ok and isn't. But its still her fault that she's in this situation. She signed the terms of the loan knowing what the payments would be. This isn't even like an ARM where it adjusted and the people didn't realize how high their payments could jump or that their house could lose value. This was a straight "This car is this much, sign here."

[StrangeSox]

So why does the dealer have no responsibility to make sure that the loans he's sending to the bank aren't pieces of garbage? I've sold stuff on credit before when I was selling vacuums, and I'll tell you up front that I always took efforts to try to qualify people before even writing up a contract. If a person was unemployed or had a recent bankruptcy, even if they wanted the thing, I didn't waste my time on it. For an even more expensive piece of equipment, like a BMW, the person actually dealing with the consumer should have some responsibility. At least I felt that way when I was selling those.

 

Like I said, they're BOTH in the wrong, but the woman is not, in any way, shape or form, a victim.

[southsider2k5]

If a college student walked in to a BMW dealership, declared no provable income, and the dealer leased him a car anyway, who is responsible there? Why is there no responsibility on the lender to verify these things?

 

Yes, she was clearly wrong. But If I walked in to a BMW dealership 8 years ago and tried to lease a car, I'd have been laughed out of the place. Why isn't it the job of someone above them to actually verify income levels before giving out a loan? This exact same thing was done all the time in the mortgage business, people would just ask a person for a number, and sometimes even suggest an income level in order to give them a loan. Should that be ok?

 

If the student agreed that they had a level of income that they did not, they are committing a crime. If the fraud was being committed soley by the dealership, then they should be the only ones being charged.

 

My question would be, what exactly is a college student who has no income doing trying to get approved for a BMW? Doesn't that by itself deserve some level of being responsible for your own actions?