Wells Fargo to pay $3.7B for mistreating customers
finance.yahoo.com
finance.yahoo.com
Imagine a family with a new born, working 50+ hours at a physically demanding job, making $80k/yr combined, and then losing their home for no reason... and then being expected to do everything else right while dealing quietly.
Incidents like this make it easier for me to understand "protest voting" against the system politically. Not sure of constructive ways to prevent this more broadly.
I share this story because once you have experienced something like this, it is totally understandable why people want to burn parts of the system down. Sometimes, they’re not wrong. There is a special place in hell for the people behind these corporate transgressions, who seemingly never face sufficient punishment for the harm they cause.
Always vote, run for office if you can, and/or become and stay engaged as a citizen activist. See something? Report it to regulators. Think something’s up? Go digging. Engage with other folks who are doing the same and provide logistical support if able to.
I spend thousands of dollars a year on FOIA fees and attorney opinion and correspondence costs, but I have the means and the time. Overarching thesis is “Find someone to help and help them.” -DeviantOllam [1] of “Lawyer. Passport. Locksmith. Gun.” Saintcon talk fame [2].
Talk to your neighbor and explore a run for office if it interests you. Actually wanting to be engaged is the first step, and it sounds like you want to. No one is coming to save us, it’s just us.
That would be counterproductive and probably only cause them to treat us with less empathy than they do already.
You only live once.
*your opinion, not mine. I don’t think USA is that bad of a place and I don’t put Australia on a pedestal.
If this is not true, then ... well then you're just wrong.
(I also contribute time to helping anyone wanting to expat out of the US get to higher quality jurisdictions, Europe, Australia, etc)
https://old.reddit.com/r/expatFIRE (search for “Portugal D7 visa”)
I asked for a letter stating in no uncertain terms that the account was closed and that I wouldn't be liable for anything if they screwed up. They bombarded me with emails and calls for a week trying to avoid working through the CFPB before finally answering the complaint with what I asked for. I was adamant that it happen with the CFPB so their statement would be on file. Now the PDF is there if the bank gives me any trouble.
People report similar success filing FCC complaints to get action from phone companies and ISPs that otherwise ignore them.
Naturally, the GOP has been trying to gut it for years.
Ever wonder why the rich folks are often the loudest about that sort of framing? It's (in part anyway) because it lets them get away with the sort of shenanigans Well's Fargo just got slapped on the wrist for.
I am homeless as well.
That fine should all go to ending homlessness. And if you vote for the D or R you are voting for the same party; the O Party, as in Oligarchs.
I don't agree with this. I don't think homelessness can be solved by building more housing. Not sure if you have lived near homeless encampments before. If you know you know.
Meanwhile both sides just shout at each other and funnel millions of dollars into groups that don't make any real progress and have no accountability. It's the same useless polarization that exists in politics except I'm not even sure it's a political issue at this point given how 1-party the place i live in is.
I'm happy to put it all out there so people can judge where I'm coming from.
I'm not an expert on homelessness, either in a scientific sense or a first-hand one. I have a few long-term friendships with people who have at various points been homeless for a year or more (some traveling, some local to an area). For a couple years, I worked near a few hotspots for where homeless people would gather during the day and/or sleep at night in the downtown of a relatively small city. In college, I often had neighborly chats with the local homeless people who regularly went through the dumpsters in my apartment complex's parking lot. We'd chat whenever we met while I walked out there to take out the trash or let my dog go potty. Shortly after I graduated, some friends (now moved away, employed, and safely housed up!) who were homeless (then as well as when I first met them) moved in with me for a few months when the weather around us was utterly brutal and physically dangerous for them. When it feels safe (and I'm not on my way to appointment), which is pretty often, I stick around to chat a bit when a stranger approaches me to beg or vent about their life or meet my dog or whatever, whether they seem likely to be homeless or not.
I have seen people violently raving to themselves or at passersby, and I have seen people fight viciously over spaces in which to sleep or beg. I've conversed with people who seemed very lucid and insightful in some ways and paranoid or mentally disorganized in others. I have nervously avoided some people who were so agitated and incoherent that it made me feel unsafe. But admittedly, I have not ever lived in a huge city which has truly massive encampments of desperate people.
Over the years, I have talked in depth with people, including presently and formerly homeless people, about housing, employment, physical health, mental health, capitalism, familial rejection/abandonment, drug addiction, etc., and how those things relate to homelessness.
Personally, I think homelessness is a problem that requires a multifaceted approach to make people physically and financially secure, and to embed them in meaningful personal and professional supporting relationships in their communities. I think that approaches to addressing homelessness falling under the broad banner of 'housing first' are humane, scientific, and workable. And to me, access to housing as a public good is indeed way more important than promoting individual ownership of single-family homes (fwiw, like you, I'm a renter who'd rather not be).
But my main point in that remark you're replying to is that it's useless and incredibly tone-deaf to scold someone who is currently struggling with that level of hardship and societal rejection/abandonment for not buying into the prevailing political system, or for having a perspective in which the important similarities between the two parties are more salient than their differences.
Who says it has to be your tax money? There are plenty of millionaires and billionaires in this country, and yet for some reason the only solutions that ever get traction are to put the tax burden on literally everyone other than the people with the most wealth. Hmm, gee, I wonder why? Probably nothing to do with the political duopoly said millionaires and billionaires bankroll, right?
> I don't think homelessness can be solved by building more housing.
It definitionally can and is solved by building housing for the people who lack housing.
Yes.
> While I cannot afford to buy a house myself
Affordable housing should be a right to everyone. Anyone, including you, should have the option to live in affordable housing that is nice, ideally with amenities and gardens and common areas if they cannot afford to pay for that on their own. Public housing, like it is in some other countries, should be not a stigmatized fallback but the normalized default. And that’s what the property taxes on the home I currently own should be paying for, so if — for whatever reason — I can no longer afford it or no longer want it, I can move into a dignified public housing accommodation too.
> Not sure if you have lived near homeless encampments before
I have. And my conclusion doesn’t change— they should have housing. Nice housing and the help they need to get back on their feet. We all should.
[0]https://www.reddit.com/r/politics/comments/2pwhvt/the_differ...
He says while confronted with a list of every Democrat voting for important things, and important things ultimately not passing because Republicans block it.
> It’s not because one party wants it any other party doesn’t
It's literally only that. You can look at their voting records.
> It’s like how Obama could’ve codified roe versus wade in the law
Obama had a 2 month window of a supermajority, which he used to push the biggest healthcare reform the US has ever seen.
Seems to me it's better to try and be kind, and treat others right despite your horrible situation. The person you're treating cruelly because of your personal trauma could easily be going through a trauma worse than yours.
Apologies if I misunderstood what you were getting at, though. I wasn't clear on which social boundaries you'd propose to exempt people from.
Reading this article prompted this observation about myself.
I do wonder how often I have been wrong to get frustrated with someone, rather than extend more grace. I'll try to remember to consider this in the future.
to paraphrase Frank Herbert, it is the mark of a human that they will remain in the trap, that they can kill the hunter and thus remove a threat to their species.
The main difference in my view is struggling commercial banks get absorbed, where as struggling credit unions close.
I am not sure which one is better, but I am wary of all the calls to go all in on credit unions. They've been available for almost a century now. They have a noble goal in that they've always tried to serve those in need, but I am not sure they are the solution.
The FDIC exists to keep banks afloat, because they're untrustworthy on their own.
For people, credit union accounts are federally insured just like bank accounts are, but credit unions are typically much more resilient than banks given the additional restrictions on how much leverage they can engage in. They close less often than banks, and also seem to be more likely to merge than close[1], contrary to your claim.
You're welcome to keep banking elsewhere, but it's all credit unions for me and my extended family.
0. https://thefinancialbrand.com/news/bank-culture/tarp-on-cred...
1. https://www.bankrate.com/banking/credit-unions/list-of-faile...
(your linked sources are horrible sources just in case you were not aware: both are paid media fronts designed to drive revenue through clicks, not reliable sources)
One of the reasons we don't, is because the socially required reaction to this abuse is to suck it up, and suffer in silence.
What is the equivalent of a bank having its home wrongly taken away from it? Locking the doors on one of its branch offices and boarding it up for a few months?
There's an enormous level of asymmetry in the damage a large institution can inflict on a person, either by accident, or malice, compared the reverse. And that's not okay, and we shouldn't consider it to be okay. We need to do better.
Solve the second problem, and then maybe the first one will become the bottleneck.
But this was after they tried to steal his home (which they didn't even have a mortgage on) and dragged him through court and refused to pay the court costs.
So, not optimal, but still something that should be happening more frequently. If a few hundred thousand bank branches got repo'd every year, one for each time they ripped someone off, that should cause them to take notice.
https://www.cbc.ca/news/business/wronged-homeowners-reposses...
I don't mean to put words in obblekk's mouth (text box) so what I perceived them as meaning is: I don't think the person you're replying to was advocating for direct person-on-person action. When we see people protesting or pushing back against or loudly saying "this is wrong and I won't have it and neither should you" kinds of things, we should consider how our personal situation could rapidly change to be like theirs. And, in a lot of cases, would have been like theirs but for some skill at leveraging a few strokes of uncontrollable luck.
To me, it's like when people complain that "those damn unionized trash truck drivers are making $90,000 with a lot of overtime and a pension." Why is the response to try to tear them down, when the correct, to my mind, question is "why don't I have that, too?"
Because if total salary income were uniformly distributed across the population, the average would be like $80,000 a year.
And that overlooks that whatever measures would be needed to flatten the income distribution like that would also shrink the overall pie, as in Europe. The fact is that, even accounting for what the OECD calls "transfers in kind" (such as provision of government health insurance) American households have a lot more disposable income than European households: https://data.oecd.org/hha/household-disposable-income.htm (select the "gross, incl. social transfers in kind" drop down under "perspectives").
Americans aren't irrational. The majority is deliberately voting for an economy that produces more disposable income for the top 60%, at the expense of the safety net for the bottom 40%. This feature of the economy is reinforced over time due to immigration. Europeans migrate here to work as programmers, because they can make $500k/year in San Francisco versus $150k/year in Germany. My immigrant mom just came back from a long trip to Australia the other day, complaining how "small and close together the houses were." She said "America is really a land of opportunity. You can get rich here. You can't get rich in Australia." She doesn't care about communities suffering in generational poverty in Appalachia or Baltimore. And she is a party-line Democrat voter!
Do we have more detail on how these homes were lost? It sounds like Wells Fargo refused, improperly, to modify a mortgage.
> On home loans, the CFPB said the bank improperly denied mortgage modifications over a seven-year span, with some customers losing their homes.
This says it started in 2011 (maybe earlier). If they already had a mortgage, in a good labor and good housing market, I doubt that many people actually lost their homes who wouldn't lose them anyway. Mortgage modifications are for people already behind on their payments.
I find it strange because in Europe the norm is to disturb the daily life. Farmers spray policemen with milk, train operators stop working, the younger and more anarchist ones burn cars and clash with the police, the more pacifist ones tie or glue themselves to something making a huge scene.
We've all heard of cases of police running over crowds in some circumstances, or of the odd shooting (actually when?). But that's not what the average protester in the US will realistically, honestly deal with on the average protest.
There have been 104 incidents of vehicles driving into protests between May 27 and September 27, 2020, with two fatalities in that time period https://en.wikipedia.org/wiki/List_of_vehicle-ramming_incide...
> happily beat you up, run you over, or shoot and kill you for disruptive protests.
Fun fact: most people arrested at protests end up arrested because they try to follow police instructions to disperse. The police keep directing them into a closed off area (aka bottling) and then arrest them in for failure to disperse.
Elsewhere, people were firing fireworks mortars into occupied federal buildings, with little to no recourse.
"Good" protesters were overshadowed in media coverage of "bad" protesters, but I also saw a grocery store get completely ransacked for no reason other than people decided they could. There was so much damage that the store was closed for months to renovate, turning a poor neighborhood into a food desert.
Also note the entire crowd chanting "burn it down".
Also worth noting that the people who started the fire were there because they thought people protesting police violence was bad - they weren't dangerous liberals or antifa or whatever other nonsense you'll spew: they were far-right "bugaloo boys"
No, people can protest wherever they want as a rule, under the freedom of assembly clause in the first amendment. It's pretty clear, and is well established (as are the exceptions). The wording of Article 12 in the E.U. fundamental rights charter is, by my reading, purposefully more restrictive than how the Supreme Court has generally interpreted "Freedom of Assembly" in the U.S., but I am not an expert on that.
In practice, you sometimes see things like "Free Speech Zones", which are indeed Orwellian, but also controversial and exceptional. You shouldn't think of them as the rule, because you also see things like the CHOP in Seattle.
Maybe redirecting that anger against another segment of society is a way to avoid social upheaval while maintaining the status quo? That anger does seem prone to being co-opted, though.
It's about having a relatable example, that's it.
It makes one realize that if you were put in such a disastrous position in life, the theoretical concept of an armed marxist uprising is not the most absurd thing ever conceived. And what root causes might possibly motivate groups of people towards such a thing.
The other poster replying to the same thread here says:
> " The fact that people experience this and then somehow don't say "burn it all down" is miraculous. "
I feel like life won’t start for another 5+ years for people like me, unless we gamble on being underwater on an inflated mortgage entering at the peak of the housing market paying more for a fraction of the home you could get just 1-2 year ago. You can’t even refi an underwater mortgage, anyone have anny advice for people in my unenviable position?
I don't understand how people who do not have 6-figure tech salaries are expected to have anything other than a poverty lifestyle when housing is so expensive.
I also don't understand these well-dressed young families parading around Boston and New York with their expensive baby carriages and $75k SUVs. Did I miss a memo on how to get rich at 30? Are they all going broke living like that? Did they all inherit a lot of money? Do they live in tiny apartments?
But it's extremely disappointing and frustrating to feel like I personally will not be able to do this for my own children, despite having a higher income than most people my age.
If in year N an item costs $1000 and you earn $10k a year, but in year N+M the item costs $1100 but you earn $12k a year, the real price of the item has gone down.
That would imply prices return to the previous levels. That will never happen with inflation.
Now, whether or not that's a likely scenario is a separate question, but it is absolutely not impossible and has happened before.
Have you ever had anyone say "cars cost so much more now, they were only $800 in 1942" and be taken seriously? (or whatever similar example you want to use)
Nobody would complain about $10 bags of chips if they made 4000x that a month.
We are well past the peak of the housing market.
Mortgage rates are currently back to something more historically normal.
If you’re upset about anything, it should be a about rates being so low for so long, which drove up home prices.
I am in a growing town that is quickly turning into a sprawling suburbia that I wanted to escape from originally and already have my eye on a little town that is a lot more slow paced and remote.
First, you have a tech industry salary, which is probably at least twice as much as the median wage, if not more. Not only is it white-collar work with practically no risk to your physical safety (assuming you exercise, eat right, etc), but monetarily this puts you _way_ ahead of most people right out of the gate.
If you literally can't find a home to buy (assuming you want to buy one), then either you live in an HCOL area (in which case, owning property was _always_ a fantasy even among the highly-paid), or you aren't looking hard enough.
As a landlord, I can assure you that landlords have never gotten 2% mortgages on their properties, unless landlord==bank or some ridiculously well-connected billionaire.
Except for 2008, the housing market has _always_ been at a peak. Prices may flatline if we head into a (worse) recession but they are not going down to where they were again. You only options are to accept that and adjust your budget/income/location appropriately, or opt to rent forever, which is not at all a bad thing since owning a primary residence is never an investment. (Although there is room for nuance here that I won't get into.)
In the US, the vast majority of people _never_ pay off their mortgage until late in life, if all at. This is because the "normal" thing to do is to buy a house and "upgrade" two or three times until retirement. When interest rates were low, it didn't even make financial sense to pay off a mortgage because the money could be put to better use buying investments.
Even with my high-paying jobs, I didn't manage to get above $0 in net worth until I was about 40. I think that's pretty good in a society where an increasing number of people have to work their whole lives for a number of factors, not all of which have to do with wall street and a broken government.
I don't know your age, but it sounds like you're still closer to the beginning of your career. Either way, life has "started" for you already, it's happening right now, and it will be even better if you make a concerted effort to understand the world and your place in it right now, and figure out which decisions you need to make that will benefit you the most in the future.
Since you asked for it, my advise is to live well under your means, save aggressively, set goals, and never stop learning. If you want to challenge yourself, look into a concept called "early retirement." Good luck.
Ah yes, glamorizing the hustle. You'll surely make it if you just "work hard enough," wink wink. Working a 9-5 career is (and has been) a net negative ROI for at least 2 decades, if not more. To be completely honest, this is why I'm on HN: doing your own startup is one of the few relatively low risk gambles one can take.
Thinking that it's okay for an entire generation (millennials), scratch that, two generations, (also gen-Z now)—that literally can't afford housing where they work is beyond societally harmful. Birth rates will continue plummeting, among other things.
This is all happening because Obama didn't have the balls to just let the shoddy banks crash and burn, and we continued QE for around a decade to alleviate blowback from 2008. This, combined with other factors (a lax policy w.r.t. foreign investments in real estate), will screw us in the long run.
I was under the impression that around 90% of startups failed. Was I mistaken, have the numbers changed, or do we just have very different thresholds for "low risk"?
I know people that made low 7 figures last year flipping NFTs, but the risk profile (to me, at least) was untenable. At least in Vegas you get free drinks.
What do people want? To marry a cute girl, buy a house, have a few kids, retire, go fishing; if they get that big promotion maybe even buy a boat. But this life is simply not attainable today.
The average millionaire is just a schmuck with a high paying 9-5 job. Doctors, lawyers, engineers, generic corporate drones etc. I don't know where you got the idea that it's impossible to make more than a subsistence wage with a W2 job but you are wrong.
In the corporate world you are still trading your time for money. When you own a business you decide what and how much you want to do, up to and including nothing at all while still making an income. Boring businesses make it easy to hire people to do the stuff you don’t want to.
You can also make passive income by investing your large corporate salary and earn extra income without working. There’s no such thing truly passive, zero labor income when running a business, there’s always some managerial overhead even if you delegate as much as possible. Index funds are truly 100% passive.
The boomers were the largest generation of Americans and also are close to retiring or starting to retire, at the same time their children's children are entering the workforce, all of which were still relatively large demographics. This has created a temporary situation where we have a lot of people currently in the property market, because the boomers haven't quite retired and left their homes at the same time the millenials and zoomers are entering the market.
In another 10 years as the boomers begin to move to retirement homes, and assisted living centers, and die off (the move to sedentary office work along with poor dietary habits led to this) we'll see the pressure on the housing market ease as the massive generation currently occupying homes, the boomers, cease to occupy these homes and put them back into circulation.
The biggest risk in this case is that investment firms, such as Goldman and Berkshire try and steal the housing without ever intending to release onto the market.
If that happens I would say "reasonable men [will end up doing] unreasonable things", Madame Guillotine becomes a popular political figure, and trees start getting watered and “Wo unto them that join house to house, that lay field to field, till there be no place, that they may be placed alone in the midst of the earth!”[1]
1. Isaiah 5:8
Pretty sure this is actually already happening at a furious pace — PE firms, right? In fact I’m pretty sure I’ve read HN threads about it.
https://en.m.wikipedia.org/wiki/Emergency_Economic_Stabiliza...
This take is relatively…naive
Most startups fail and you would be much better off “grinding LeetCode and working for a FAANG” (tm r/cscareerquestions).
That’s just like people “starting their own business” and buying a franchise where their net profit is less than $70K a year and that’s only after the owner works 60+ hours a week.
Give me a cushy $BigTech job any day.
The irony of calling me naive when not even understanding macroeconomic effects is… something.
Counterpoint - tech professional about 20 years out of college. Just bought a house in a nice suburb of NYC and all my neighbors are likewise working professionals. Some are in medicine, some in tech, some in things like construction management and education.
So seems like there is plenty of people for whom working has paid off.
Or to say it another way, who do you think lives in all these houses? Boomers and Russian oligarchs?
On the bright side, you timed the dot-com dip perfectly!
If you aren't talking about genx then what is your 20 year comment about?
Eh, I'm someone who graduated high school around that time and have a similar experience. Many of my peers have houses and work well paying 9-5's and have families and save for the future. They don't live in San Francisco though. There's plenty of homes for sale and tech jobs in markets that aren't Manhattan or Silicon Valley.
It also happened because most of the FBI agents who worked on white-collar fraud prior to 9/11 were reassigned to counter-terrorism work afterwards, and so the rampant fraudulent appraisals and mortgages prior to the housing crash were never investigated, let alone prosecuted.
Contrast 2008 with the reaction to the S & L debacle.
You've chosen to believe a lot of incorrect things in service of your ideological commitments. You should learn to distinguish between things that are actually true and things that you want to be true because it would validate your politics.
The recent run up in housing prices is nothing new, it's happened at least twice before that during my life time.
It sounds like I'm an extreme edge case, but I really don't feel that way. I have several co-workers in the same age range who also own property. The details being recapped in this thread are very foreign to me, so I feel like this must be a geographic issue and not a generational issue.
My experience could just be unique, of course.
A lot of my older millennial friends have paid off their houses in the last year or two.
Here in the Midwest (Pittsburgh), it’s not unusual if you’re fiscally responsible on even a single developer salary (2022, $120-200k) to both have bought a home and mostly paid it off especially if you bought within the last 10 years before the pandemic so we’re talking $140k-285k for a 4 bedroom, 3 bath, garage with yard and finished basement depending on your neighborhood preference.
That said, you turned on the prior poster for basically saying “set a budget” — that’s not “glamorizing the hustle” that’s “live with intention”.
Sure, millennials and gen-z can’t afford housing in LA — but basically the only generation that widely owned property is the boomers, and that corresponded with insane labor scarcity (thanks, WW2) and the era before housing moratoriums.
Want more housing? Vote against laws restricting housing. Or, move to where housing isn’t restricted. There are tons of millennials and gen-z buying property, it’s just not in SF, LA, NYC, Seattle, or Portland — those metros have spoken, and they’re 100% invested in not letting newcomers in unless they’re very rich.
This is exactly his point. If he can't make it with what he has going for him, who can?
> You only options are to accept that and adjust your budget/income/location appropriately, or opt to rent forever, which is not at all a bad thing since owning a primary residence is never an investment. (Although there is room for nuance here that I won't get into.)
You only list two options: (1) budget better, (2) give in to renting forever. I agree that, if the above poster wants a better shot, he should do his best to budget well. However, he should also help support policies that tax the dickens out of people who own more than their primary residence and maybe 1-2 other properties. There is more at stake here than just his own situation.
What about banks and REITs that are passthru entities for the same folk above ?
What about SV out-of-staters that don't pay state taxes but work remote at places like LV, Salt Lake, or Boise ?
You want to fleece your own... but others you let just... walk in ?
I don't recall the person you replied to mentioning that. Why is it impossible to levy property taxes on real estate in your own state from people who live somewhere else?
10k year in property tax is a pittance to a Sheik, a shenzen factory owner, an indian tech entrepreneur, your average venezuelan govt bureaucrat, or a REIT.
10k is not peanuts to the average wage earner in the US.
The former all buy in USA to keep their wealth safe from confiscation and leverage the US justice system and FDIC. Because back in their home countries they are 1 election away from communism or a bank collapse.
We have no adequate means to raise the cost of entry for them, and mentioning change to favor local purchases, is almost taboo.
Meanwhile, we say "tax the rich" here. Yet foreigners keep loading up on real estate and US citizens end up renting forever..
That can be fixed - namely, via land value taxation, at a rate as close to 100% as possible.
This literally describes 2 people I know.
Grandma didn't do anything to you or me.
Why would you punish granma who just want to live out her retirement ?
Why not just go after the foreign demand to hide cash, making housing expensive for everyone else ?
For every "retired grandma who happened to buy a house in a forgotten part of town that suddenly became a bohemian mecca", I can show you dozens if not hundreds of grandmas who already got pushed out of town because of skyrocketing rents - thanks in no small part to your homeowning grandmas stubbornly insisting on living in a single-family home in the middle of Downtown, on a lot that could and should be housing dozens or hundreds of households.
And I haven't even begun to dig into the socioeconomic safety nets like citizens' dividends that a land value tax could readily fund, thus producing a negative tax burden for all renters and the vast majority of homeowners.
Why would you punish those hundreds of grammas who just want to live out their retirements? Not to mention the thousands of working Americans who just want a place to live that doesn't entail multi-hour-long commutes?
> She can't move because she doesnt know how to drive and can't take a bus in the suburbs
There are these things called "moving companies" which would be happy to move her and her stuff into an apartment nearby. With the hundreds of thousands (if not millions) of dollars in equity she's accumulated due to her property appreciating in value, she can almost certainly afford to hire such a company to move her and her stuff. With LVT motivating the construction of said apartments to amortize said LVT across as many tenants as possible, she will have no trouble finding a new home - and the denser urbanization would mean that the grocer and pharmacist and GP and such would be right around the corner instead of involving a half-hour bus ride through sprawling suburbia.
> Why not just go after the foreign demand to hide cash, making housing expensive for everyone else ?
Because that is far from the only cause of housing shortages. You could play whack-a-mole with ad hoc taxes specifically targeting foreign investors and domestic investors and property management companies and Old Money billionaires and wannabe AirBNB moguls and agricultural conglomerates and commercial/industrial landlords and everyone else directly profiting on the very land speculation driving costs of living through the roof... or you could just tax land value, and thus address all that in one fell swoop with a tiny fraction of the bureaucratic overhead and with countless social and economic benefits on top of that.
If it weren't for foreign "investment" in real estate, there would still be housing in the U.S. It would just be cheaper.
Real estate is a finite resource. More people showing up and bidding just drives the price up for the people who were already at the auction.
No reason for me to be happy about it.
Right. Which is why the person you replied to specifically mentioned supporting efforts to change those policies.
0: https://www.nar.realtor/newsroom/annual-foreign-investment-i...
A non-us citizen real estate tax (in the style of NZ) is like the 3rd rail of politics. God forbid anyone daring to mention a ~200% FV tax on any residential property purchase by a non-us citizen.
> but others you let just... walk in ?
My guy we can do both, we can fleece all the third and fourth home owners, foreign and domestic, it’ll be glorious, join us
Sorry for the late reply...
No, I don't want these people to just "walk in."
I support BTFO'ing all of the above people with punitive taxes.
I might give the SV bros a pass if they only have one house that is their primary residence or maybe one other place. It's the people (and organizations) who have many properties who frustrate me.
Presumably they are living in a HCOL area, so definitely not indicative of life in America in general.
I know a few folks who live in the mid-west (typically derided as "fly over country") who have blue collar jobs making $70,000 who bought a house in their twenties.
You're not going to get too much sympathy from them when you're making 3-5x their salary and complain you can't afford a $1.5M single family home in the most expensive cities in the US.
Why not? That someone makes much more than someone else and endures a higher cost of living does not establish anything other than that the people who work those kinds of jobs want to live in those kinds of places (or the companies want to be there but it is hard to disentangle the two). Lack of sympathy because someone is in a different situation seems somewhat course considering that there are problems which either party does not experience but are objectively bad and should be remedied. Because they are different does not mean they are less impactful to quality of life.
No, sorry.
Both might be "struggling", but there is a massive difference between "I make $500,000 per year and can't buy a $3M home" and "I make $60,000 per year and can't afford a $300,000 home."
The person making $500,000 per year in another stratosphere of economic wealth that someone who makes $60,000 can't even fathom.
It's like someone who makes $1M per year complaining they can't afford a private jet. Sure, they are experiencing an "impact to their quality of life", but no, it's nowhere close to the same situation, hence they get no sympathy from people who have actual financial difficulties.
I have little sympathy for someone who is in the top 1% of income earners in the US not getting what they want.
You said it yourself:
> the people who work those kinds of jobs want to live in those kinds of places
In other words, rich people get to live where they want. They get to live in the cool places with good schools and nice houses far from the freeways and toxic waste dumps and with lots of interesting things to do. Poor people have to make do with whatever is left over.
There is happiness and fulfillment to be found in a very reasonable dedication range. I work, like WORK work barely 5 hours a week from home and make $300k a year. My company is over the moon with my contributions.
I didn’t graduate last year. I put in the work, learned the craft and I have valuable contributions to give from my experiences. You will too someday. But right now you need to learn.
Five years later everything on the street is now $2.75X while my wage has increased by about 6% in that same time. Rents have also been going yo quite dramatically.
This is in a regional city of about 100,000 in Australia.
The idea that all you need to do is realign your expectations, and work harder, is embarassing.
I doubt we’ll ever see those low interest rates again in the next decade.
These are frightening prospects for people that want to play this game.
That decision really sucks. Previous generations didn't face this. Yes of course, we have to set our expectations accordingly. But some acknowledgement from people like yourself who got started in easier times, and didn't actually go through this, would be appreciated.
https://www.longtermtrends.net/home-price-median-annual-inco...
First, previous generations were significantly more thrifty which meant more cash on hand. Don't believe me? Let's say you save 30 bucks a day starting at 20 (most of us can easily do that by controlling how much we eat out) - that means you have 110k in your bank for a down payment on your 30th birthday (ignoring interest). How much of the current generation thinks that way and cares about saving 30 bucks a day?
Second and perhaps more obviously - our parents generation and their parents traded off affordable housing for long commutes. They weren't buying 3 bedroom apartments on park avenue, they bought 3 bedroom houses in the burbs and commuted an hour+ each way every day.
Compare to that, your options of working remote or living somewhere basic for a bit sound obviously better.
If you aren't willing to trade off what you want long term for something you can give up now, you won't have anything. And neither would anyone in a previous generation.
So I never dug into this before but I found this interesting chart from the US government [1]
It does seem like a relatively smaller percentage of young people own homes today vs 40 years ago - but not as shocking as you'd imply:
Percentage of people <35 who own a home: 1982: 41% 2021: 38.5%
Percentage of 35-40 who own a home: 1982: 70% 2021: 62%
So while the trend is down - it still seems like over a third of people under 35 own a home, and over 60% of those 35-40 do.
That sounds very far from impossible.
[1] https://www.census.gov/housing/hvs/data/charts/fig07.pdf
Meaning - if guy and girl are married and own a house together, that counts as 2 people towards home owner bucket.
If they are not married, they'd need to each own a house for the same rate to hold.
You can refer to https://www.bls.gov/ooh/computer-and-information-technology/..., or https://www.bls.gov/ooh/computer-and-information-technology/... - those people are all in tech, and most aren't new grads. Median salaries for "computer programmers" and "software developers" are 91K and 107K respectively.
The vast majority of IT work in the US pays around half that.
Even taking that figure at face value...
> or have much fat to trim in your expenditure.
Yeah, fat like exorbitant rents that landlords keep jacking up year after year solely because they have the power to do so. Fat like corporations charging more for less because they can get away with it. Fat like our federal government and the banking system it artificially props up debasing our currency and whittling away at the buying power of those dollars.
The fat to trim ain't in individual working Americans' budgets. The fat to trim is systemic - and by God are we overdue for some trimming, no matter how badly it might hurt the feelings of the ownership class.
Take a look at average home price by year: https://www.fool.com/the-ascent/research/average-house-price...
Now compare that to average wages: https://www.ssa.gov/oact/cola/awidevelop.html
https://www.atlanticbay.com/knowledge-center/history-of-mort....
Trade offs.
Are there people who this is out of reach of? Yes. Would it be cool if it were free? Of course. Is it crippling debt that makes a comfortable life impossible? Don’t be absurd.
And apply to scholarships. Lots and lots of scholarships.
So that graphs never align that well when you look back and try to say 'in the past it was 3x salary for a house, now it is 6x'
That is as buyer are now competing for houses with two good salaries to buy with.
In the UK at least, the move has broadly been in line with the 3x joint salary with mild adjustment for increased borrowing opportunities, but largely driven by the increase in joint salary.
> [...] opt to rent forever, which is not at all a bad thing since owning a primary residence is never an investment. (Although there is room for nuance here that I won't get into.)
I suspect you "won't get into" it because you know full well that you're the one who stands to benefit from that advice, at the expense of the vast majority of everyone else.
I mean this as kindly and respectfully as possible: landlords - you included - are a large part of the reason why there is a housing crisis here in the US (and, from what I gather, other "developed" countries). Y'all buy up housing as investments, acting in a literal-rentseeking capacity and offering no value beyond maybe maintenance that tenants themselves could be performing (whether directly or by hiring the same professionals you'd be hiring). People like you are the ones who exploited my father until the day he died, who continue to exploit the surviving members of his household, who continue to exploit myself, my friends, my coworkers, my neighbors, all for that nice cushy "passive income". People earning "at least twice as much as the median wage" are unable to escape the rent treadmill because of people like you keeping them on that treadmill in the first place - not to mention having the gall to suggest that being stuck on said treadmill is "not at all a bad thing".
Out of respect for Hanlon's razor, I'm going to assume that you genuinely lack the self-awareness to understand how your income derives from economic parasitism; the alternative interpretation - that you are indeed aware of the externalities you impose on the rest of us, and yet choose anyway to peddle advice that's patently to your benefit and to the recipient's detriment - is far less charitable.
You're welcome for all that rental income. You can properly thank me and every other American stuck subsidizing you and your fellow landlords by selling your rental properties to your tenants - at the prices you paid, minus what they've already paid back to you in rents.
literally one of the few jobs you can do from anywhere and you probably picked downtown SF.
I'm extra judgmental because due to my ADHD, I basically can't do 100% remote jobs
Outside of closing costs mortgage rates are temporary (can always refi). Land is a finite resource. It should continue to go up.
As another poster commented - where have you looked and what have you tried?
From recent experience, a nice but modest house in the suburbs of NYC is like 1.5 million. An equivalent house in a nice suburb of Cleveland is like 500k, and a smaller 3 bed/2 bath there can be had for under 300. If you are willing to go further afield (but still be in a town with a decent school etc) you can get that for under 170 [1]
What's the thing you can't afford, the 1.5 mil or the 170k house? And if you really can't swing the later on a tech salary, maybe we can talk about what's going on there because you should be able to.
Also heuristically, whenever someone talks about stuff like their landlord's mortgage rate rather than factors under their own control, it's a bad sign.
[1] https://www.zillow.com/homedetails/9672-E-Idlewood-Dr-Twinsb... for example.
Before we bought a house we rented a bedroom in somebody else's house, then a crappy apartment and bought basically nothing else. It sucked, but we lived below our means and saved up. It took a few years, and then we were in.
I think that two things are simultaneously true:
1 - The housing situation isn't great today and isn't getting better.
2 - The up and coming generation has unrealistic expectations of what it's taken to get into home ownership based on stories from very out of date economic conditions from before the Vietnam war and some strange ideas that they should be able to buy a single family home in the central business district of a big city for 30% of minimum wage.
Here's the tip: Live well under your means, grind hard, commute long distances, rent the cheapest place you can practically live in, and save your money. When you have 20% of a house, buy it, refinance if you can for lower rates, grind hard, commute long distances, and save your money. Turn the growth in equity from that house and the new money you saved to buy either what you want or where you want. This is how it's worked in most medium-big metro areas for at least three generations.
Here's how to action this tip (assuming the Bay Area):
The average 30-year Mortgage Rate since 1971 is 7.76% -- that's your baseline.
20% down on a $800k is $160k -- if you live around the Bay Area, that's your target. Why? That's around the jumbo loan limit for the Bay Area (check your local limits). This is how you get the lowest rate.
I checked, there are plentiful properties under that amount, within commuting distance from San Francisco. Commuting distance should be calibrated at under 90 minutes each way during off-peak traffic conditions. Either travel early or late. I picked both Oakland and Lafayette/Walnut Creek areas.
Assuming you make Bay Area pay as an engineer, it's not unreasonable to assume you bring home more than $100k after taxes. We'll use $100k to make it simple.
Rent should be around 30% of your income. I found plenty of current listings where you can live by yourself within commuting distance of downtown San Francisco that are under $2000/mo. You can always room with somebody, or look for single room rentals.
Looking up some average cost of living indexes let's say it costs about $2500/mo to exist. So we need about $4500/mo.
That leaves us with $46k/yr in raw savings towards that down payment. That's 3.5 years of tough disciplined savings. Voila, you can buy a home.
You said you have student loans? Okay, looks like you did the math, 5-6 years is not unreasonable. Voila, you can buy a property.
Get a roommate, a live in significant other, or a spouse, and you can dramatically reduce these numbers by increasing income and/or lowering living costs. Voila you can buy a property.
Over 3-6 years you'll most likely get raises, bonuses, and other opportunities. Voila you can buy a property.
This pattern has been remarkably persistent since the 70s at least. It sucks, but it's what it is.
When the options are "pay hundreds to a couple thousands of dollars per month for 30 years or less" v. "pay hundreds more than that per month in perpetuity", it should be entirely unsurprising that the former is vastly preferable.
This really should not be surprising, considering the number of SFHs owned by landlords using their tenants' rent payments to pay for the mortgage and property taxes and profit on top of that (that being the situation of my now-deceased father and still-living stepmother, whose landlord has on multiple occasions jacked up the rent to cover the new mortgage payments from refinances).
Generally if you are living in a place where you can't afford to buy, you also shouldn't rent in the same neighborhood.
But that's not what happens -- e.g. people move to San Francisco and then see the high house prices and convince themselves they can afford to rent there but not own. It's not cheaper to rent, on average [there is a lot of variability and opportunity for trading gains in real estate due to leverage] -- but overall, the price of these two is comparable, however renting is a more accessible way to overspend than owning.
As a result of this increased accessibility, rental property prices are higher than they should be, due to increased demand, and what actually happens is that people who rent tend to lose more, on average, than those who own, because they are more likely to overspend on rent, given their income and financial situation.
If prospective renters had to go through the same third party vetting processes as those who take out a mortgage - everything from an independent assessment of the value of the property, an inspection, third party vetting of your financial history -- you would also see a reduction in foolish renting choices and then renters would not, on average, experience greater losses than owners.
But right now they do.
Because they can claim that expense on their tax report and dynamically downsize or upsize if they are growing or shrinking fast?
You literally can not compare private homeownership with large companies owning their offices.
> When you buy a home you have to pay mortgage interest, property taxes, maintenance costs, HOA dues, and you have the opportunity cost of not being able to invest your mortgage principal instead of locking it up in your house.
All negligible compare to the fact that you own actual property, you have the freedom to do what you please and the value of your home is one of the best assets against inflation, because housing is always needed.
If owning a home was not worth the trouble, how come gigantic corporations like blackrock are buying homes 30% over asking price as soon as they can?
Of course it‘s not true that only losers don‘t own their homes, but in the last 30 years, if you do own yours you‘ve automatically won. Housing prices are so astronomically high that suburbian property beats anything else.
If you are not attending conferences, going to meetups and participating actively of the tech scene in a way that advances your career, you will be just wasting money in rent.
One useful thing a person could do is try to come up with a means of teaching a larger percentage of the population to have the ability to think in the manner that you have here. It is a very tricky problem space, but the payoffs could be huge.
I don't get this. Would it make it any different if they weren't "hard working people"?
If so, how and why?
If not, why even mention that?
https://demodexio.substack.com/p/should-a-system-of-voting-a...
Hell, it makes me understand arson and kidnapping.
There should be serious discussions around withdrawing their banking license. It's incredibly difficult to get a banking license in this country, and it does not serve the public good to have this predatory institution operating under the aegis of the American government.
Pull their license, let some new entrants into the market.
I am all for a corporate death penalty.
Unfortunately, the FDIC can't just waltz in and shut down the whole damn bank without causing a nation-wide panic attack. Similar to failed banks, something like this would need to be dealt with using a special procedure to prevent bank runs.
I think the best course of action would be to vacate the Wells Fargo board (and all officers), replacing them with members sourced from other US financial institutions.
You could, I suppose, use exactly the same procedure you use for a failed bank, which is force them to auction off their assets and liabilities, rolling their depositors into other, better-behaved banks.
New management is important, and in this case Wells Fargo has had 4 CEOs since the scandal, and multiple board chairpersons. There has been significant turnover on its board and executive team. [2]
[1] https://www.spglobal.com/marketintelligence/en/news-insights...
[2] https://www.reuters.com/business/finance/wells-fargos-long-r...
In a $25T economy, 13 new banks (roughly 1 for every 4 states) effectively rounds down to zero. There is a trivial amount of new bank creation relative to the size and dynamism of our country and economy.
In a more liberal banking regime, one could easily imagine 2022 having seen 13 new banks chartered in the northern half of California alone.
Using this logic, in an infinitely large universe, your comment’s importance effectively rounds down to zero. Arbitrary picking economy output to measure regulatory regime efficiency is ludicrous.
“Wells Fargo is a criminal enterprise masquerading as a bank”
Funny enough, about a decade ago, there was an actual account created that I was able to shutdown. Shady.
There must be some bad, little, everyday incentives permeating working at WF that causes the people there to produce these bad behaviors year after year. You can blame and change the execs, but they're not even in control of (or maybe even aware of?) the systems that are making people behave the way they do?
Edit: shit, someone else pointed out that they buy mortgages. Nevermind.
If I close it, my credit score is negatively impacted by losing a decades old credit line. I don't particularly care about my credit score, and this sort of lock-in is pretty low friction, but changing banks can have costs.
I hate them, over the years that I banked with them, they have consistently been a bad bank. I think I have at least two complaints that went to the CFPB with them (both ended in my favor). I switched my banking activity to another institution years ago, but I do still have accounts open with them.
I'm a financially saavy rich white dude with a degree, and I still find it hard to sever the relationship. Imagine how lesser advantaged people feel. If you're choice is between WF and BOA because of geography or whatever, and you're used to financial institutions being shitty, why bother switching from one predatory institution to another?
That gives you 10 years to build up a credit history with other accounts.
I closed an ancient Bank of America account several years ago because I didn’t want to do business with them anymore. It still contributes to my credit score. By the time it falls off, the other accounts will more than make up for it.
I'm just trying to give a real world example of why someone might keep doing business with a known unethical entity.
It comes down to: I know that they suck, but there is a real non-zero cost to switching (my time and credit score), while continuing to do business with them is free.
In my experience, just getting the CFPB involved generally lit a fire under the ass of whichever company I had been dealing with. At the very least it will escalate your problem to a tier of support where a single person will be responsible for deeply understanding the issue, and ensuring that they get into compliance or respond ASAP.
I very quickly came to the conclusion that all of their quality assurance rules were designed to whitewash, not catch, fraud, let alone simple mistakes. No one cared if what was going on our reports was total nonsense, so long as it was nonsense that fit the rules the underwriters had.
Basically the job was to research negative items on credit reports, and if I could get the creditor to say one of a dozen things, I could take it off the report and get it rescored. So a lot of phone calling.
There was a guy in my unit that'd been there years. He made less than 1 or 2 phone calls a day, but yet cleared the exceeds expectations number of reports consistently. I realized he was just never calling anyone, and writing up total fabricated notes on the files. But because the quality assurance sampled random calls, not random files, this was totally accepted.
This was great for WF: workers would commit fraud, but only in the direction that got more loans sold, and if it ever got noticed, they could just fire the call center worker and claim it was a "bad apple."
When I saw the story about WF branch managers opening accounts in customers names without permission I wasn't surprised in the slightest.
I believe the entire company leadership is consciously behind this sort of winking internal corruption that just so happens to increase the bottom line and bonuses for everyone involved.
BofA or Citi or Chase are no different, they are just better at getting away with it.
What you've posted is completely wrong, but it's the answer to a question I had, which was why the fuck does anyone still bank with Wells Fargo? There must be a lot of people cynical enough to think all banks are that bad.
[0] https://en.wikipedia.org/wiki/Wells_Fargo_cross-selling_scan...
The former CEO's total compensation was > $130M. That sounds much more like a cost of doing business, and a great risk. Heck, fines are classified as an expense for taxes.
Nothing that should keep you from banking with them, mind you... ahem.
At some point these are not fines, they just represent the governments' way of taking their share on the criminal revenues of these banks while they are guiding us straight into the next iceberg. And there is no incentive on either side to make it stop.
When it comes to solutions, I'm reading that the system has to burn to the ground or worse even on HN now... I'm personally of the mind that systems can only change when incentives exist in alternatives. As much as HN dislikes crypto, Bitcoin is one which has taken a principled approach from the start and its community and incentives always presented it as a way to opt-out of the current financial system backed by central-banks/governments (powered by traditional banking). If banks stop being provided with ways to infinitely create debt with politicians behind them promoting it to be able to pretend that everything is fine economically under them, you might see things change... but for this we can't continue playing their game by their rules. We need to opt-out.
If other radical and non-violent ways to solve this exists I am willing to listen and study them... crisis after crisis, I'm becoming more and more cynical about it.
Wells Fargo is the 2nd largest mortgage lender in the USA (after Quicken), #4 bank in terms of assets under management, #3 by market cap, #2 in number of branches. It is absolutely massive.
And why are they still in business!?
~5% of their 2021 gross profits. A hearty laugh goes around the Wells Fargo boardroom, and some new scheme will be devised to defraud their unwitting customers. Without criminal liability, this is no disincentive at all.
> Shares of the company rose 0.7% to $42.11 at 9:57 a.m. in New York.
Sooo... the market likes this slap on the wrist
And a little story from my own experience. I was completely broke, and they slapped me with a big fine for not having enough money in my account. Then the teller smugly explained that I should be thankful because they could have fined me even more if they wanted to... I closed my account at that point.
And for people who don't know what it's like being poor, here's an article on how expensive it actually is: https://finmasters.com/cost-of-being-poor/
Your standard free checking account won't have a minimum balance, but also isn't going to be earning any interest worth mentioning.
On the other hand, there are account types with higher interest earnings rates or other perks which require that you maintain a minimum balance. The minimum balance ensures that the bank is able to use the money in its other investments, which is why you are rewarded with higher tier perks.
Dropping below the minimum balance means that you haven't kept up your end of the bargain, so to speak. For example, the Way2Save savings account has a small monthly fee which is waived as long as you maintain a $300 minimum daily balance, or have automatic transfers, are under 24 years old, etc. The "Platinum" savings account tier has a $12 monthly fee which is waived only if you maintain $3,500.
It is of course worth noting that the "perks" of these savings accounts are practically worthless- the earnings interest rates are far below inflation.
Case in point: I have a WellsFargo account. It was mostly dormant for 4-5 years with enough cash to avoid the penalty fee. In the last year, I used it for most of transactions (doing $10k+/month at some points). I got my credit card limit upgraded in a short amount of time (by around $5k). I was out of the US, and needed a new credit card. WellsFargo contacted me (got back to me) shipped a new card overnight overseas for free and waived the fees for the credit card and gave some credit/gift things.
I mean completely different experience?
If I knew of another bank in North Carolina with decent coverage I would swap for sure. That said, don’t really use the atm that often so maybe I shouldn’t worry about that.
Only at WF because Chase wasn’t in NC and yes they opened extra accounts for me.
been banking with them my entire life, literally 0 problems
their mobile app aint amazing, but hell, I can overlook that
Penalizing Wells Fargo as a company will not solve the problem of institutional-scale bank fraud, but clawing back the compensation of executives will.
Accountability and skin-in-the-game need to make a comeback.
Example number ten thousand of how everything bad is blamed on "capitalism." It's a lazy, shallow, knee-jerk reaction that is plaguing this site and ought to be forbidden by the guidelines.
When you apply for a mortgage you are informed in advance that it might be sold. In fact, when I got mine I was told it would be sold. This information is given to every applicant as a legal requirement and people who don't like it don't need to go through with the application.
There are also significant legal requirements for mortgage servicers (such as Wells Fargo) which constrain them to such an extent that they are pretty much interchangeable. This is far from a free market. If you have a beef with this system, you should take it out on Congress and the CFPB, not "capitalism."
I would be more than happy to discuss why it is some of us have beef with capitalism, if you're open to a level headed discussion.
The idea that a free market allows the creation of opportunity and choice is powerful, but what I think many of us have seen happen is that a free market doesn't remain free, as wealthier interests will move to cement power through use of funds. The banks are the most prone example of this I can think of.
Ah yes, the good ol' American practice of victim blaming: "Well, we specifically told you we'd screw you over; look, it's in paragraph 151, subsection 15, article G of the document you signed as we hovered over you impatiently that time you came in when we didn't tell you we were closing 10 mins after that appointment we setup the day before the deadline to sign... so it's really YOUR fault!"
Don’t agree to things you don’t like and claim to be a victim, unless you had a gun to your head. We should have higher expectations than that.
Don’t like the mortgage process? Don’t get a mortgage. Pay cash, or rent. The world doesn’t owe you the exact terms you want. That’s not the fault of capitalism, it’s as bad or worse under any other system.
You also seem confused about how the process works. Nobody hovers over you under time pressure. Escrow takes like 30 days, and during that time the lenders will freak out about any reason to prevent you from getting the mortgage. They are more worried about getting screwed than the applicants are.
If you cannot give informed or willing consent, you are not a participant, you are a victim. Impenetrable, hard to read terms are not informed consent, particularly when the terms are in a contract of adhesion.
> Don’t like the mortgage process? Don’t get a mortgage. Pay cash, or rent.
Couple of points here. First, I take it you've never read a modern leasing contract. In most jurisdictions, especially where the large corporate landlords have almost entirely conquered the market, they are just as opaque. Landlord associations promulgate so-called "standard leases" that contain myriad difficult to comprehend terms.
> The world doesn’t owe you the exact terms you want. That’s not the fault of capitalism
Perhaps it does not, but yes, it is the fault of capitalism. When all of the participants in a market operate in virtually identical ways because the optimal path, under capitalism, is to legalese first and ask questions later, that is absolutely a failure caused by the capitalistic system. It all stems from the idea that, under capitalism, an individual or group's highest and best course of outcome is to feverishly grab for every single available resource to hoard it against use by others. Along the way, some of those resources are (often temporarily) lent out at an inflated rate to ensure that more resources are grabbed.
This works fine when it comes to a mobile phone device or a book or a toy. Those are optional, often called "luxury", goods that we can leave or take as we desire. Housing, water, food, transportation, energy; we need all of these to live as humans, yet that's where capitalism extracts its most gains because the more desperate someone is for one of these, the more resources they will throw in to fill the need they must fill.
Ok, and where can I go get the mortgages that won't be sold and have comparable financing terms to the ones that do?
Oh wait, those don't exist (or cost way more)? Hmm. I see.
Here's the thing: free markets can only ever hope to work in a world where people have total freedom of association. If I can't take my business elsewhere, then I'm not dealing with a private corporation anymore. I'm dealing with government with extra steps.
Likewise, capitalism and free markets aren't interchangeable terms. Free markets are a system of resource allocation, and capitalism is just private ownership of an enterprise. There's been plenty of examples of brutally repressive regimes which still had private capital ownership, free markets be damned. Because free markets do not actually maximize profits for capitalist owners.
So I think it's fair to blame capitalism, even if there's some government floating around in there, too. Consider them joint-and-severally liable.
Why should they exist? If they can't be sold, the lender needs to find some other way to make their money on them. What kind of sane economic system would deliver mortgages like that? Should the government subsidize all mortgages?
I think that's how mortgages were before the 1970s. The bank lent some money and accepted the payments. They didn't sell the mortgage to anyone.
Selling and securitizing mortgages is how 2008 happened. Maybe the old system was better in that way. Again I'm not an expert, so I don't know the side-effects of doing that.
A key goal was to get out from underneath WF.
Every mortgage that I've had has ended up in WF. WF is a mortgage black hole, they buy everything and it's pretty clear that a vast majority of the mortgage industry is to act as service bureaus for WF. I completely understand both business models, I just don't want to play.
When I got the new mortgage, I mentioned to the person handling our application that I was hopeful they would not be selling my paper to WF. Chase is not a mere broker, they're the whole kit. He said he couldn't guarantee they wouldn't sell the paper, and I understood that. But loans are Chases business too, so far they're holding on to it (typically they're sold in the first few months).
So, for the moment I'm out from underneath WF, and have been for several years.
My backpack got stolen and it had my checkbook in it. I went into Wells Fargo (I became their customer because they bought my regular bank) to figure out what to do. I was told that I had to close my account (connected to the checkbook) and open a new one. Kinda weird, but I went with it. They sent me a new checkbook and new ATM card. Landlord only took payment with checks so I wrote a check with my new checkbook; it bounced. It was really surprising because I thought I had the funds. I check with my balance with my new ATM card; plenty of money. I call customer service to figure out what was going on. It turns out that they had created two new accounts for me. One was connected to my checkbook and one to my ATM card. The one for my checkbook had a bunch of fines for the bounced check and fines for not paying the fines. The one for my ATM card had plenty. They tried several times to open another account to combine the two accounts together, which would have forced me to indirectly pay the fines that weren't my fault; I objected. In process of all of this they canceled my new ATM card accidentally.
I went into my local branch and withdrew all of my money and canceled all of my accounts (I had somehow ended up with 4). I ended up paying my tuition, rent, etc. with cash which was a huge pain.
It is the worst experience I've had with any bank and it was with many different employees.
As a former "customer", in many cases, like ours, it's because they use their capital/position to buy loans from other businesses, and there's nothing the borrower can do about it.
One thing I do not understand though is that when deposit via their mobile app, they ask you to write something like “Used for Wells Fargo mobile deposit” on the check, which is a pain, not sure how other banks do it.
Hey, there is!
https://violationtracker.goodjobsfirst.org/parent/wells-farg...
Current Parent Company Name: Wells Fargo
Penalty total since 2000: $22,081,458,643
Number of records: 229
Oh, honey
Most of those employees are just normal people trying to make a living, and it would be wrong to screw them because their bosses, who they never met or had anything to do with, did something wrong.
Shutting down a company is the nuclear option -- it hurts many people who did nothing wrong, including most of the employees and the shareholders. It is not justice.
Without advocating for/against the proposal, to clarify: typically this means either business units are spun out as smaller companies, or sold off to competitors. You’d expect some job losses due to consolidation but it’s not like you are closing down all of the branches and sending everyone working there home.
This is especially bad for a bank. Customers would freak out and leave. I can't find a single historical example of a bank breakup that didn't result in the destruction of the entire business.
Like, asbestos miners losing their jobs was a necessary result of shutting down the asbestos industry. It's not that it's fair, but it's not a reason to keep mining asbestos. Obviously ideally Wells Fargo could be reformed somehow, but the "corporate death penalty"[0] exists for a reason!
But it does send a message to the broader industry. Sometimes a few rouge cancer cells can kill the entire host. And this is the second time around for them.
2) A vacuum provide ample opportunity for these people to start a new, honest bank as if there will be a need for it.
3) Sometimes evil just needs to be shutdown, Im sorry these people are working for a criminal organization, someone should have spoken up (Whistleblower money is huge for these types of things).
Boo-fukken-hoo. They were all part of the problem - the grease of the machinery if you will; something this bad doesn't go unnoticed by so many people. This was clearly an "inside job" with many, many people involved internally.
I would have no sympathy for any of them, even if they'd end up losing their own homes as a result (sweet, sweet irony that would be!)
It should be seized and either converted into a credit union (give ownership to the affected people) or a state run non-profit banking service. (And also implement the proposals for the postal service to offer banking services)
That would avoid both a lot of smaller wells fargos doing worse things and further financial damage to the economy, clients, and workers of splitting up a private company.
Republican senators want to move CFPB under congressional annual funding and a five-member commission.
Which sounds a lot like Defund the Bank Police.
https://www.cucollaborate.com/blogs/republicans-urge-quick-p...
I had a house that I kept vacant for several years thinking I might return and several things I learned is 1) service people don’t like doing business over the phone because they fear not being paid so it’s very difficult to maintain things remotely 2) about half the time people don’t do the work if they think you won’t notice (i.e I paid almost five grand for monthly termite control over three years but when I flew in and inspected the stations it was obvious they had not been maintained for an extended time, the lawn company I hired kept sending me bills long after they stopped coming out) 3) if people think your house is vacant they dump trash there and the city charges you hundreds of dollars each time it happens - plus you then have to pay to dispose it. Having a tons of construction waste someone dumped in your driveway removed is expensive 4) raccoons don’t perceive drywall as a barrier, and if they get in they bring all their friends.
(looking for my pitchfork...)
I had a persistent medical issue I couldn’t treat because it was determined by insurance companies that treatment would be elective. Not my insurance, mind you, I couldn’t afford any. But they got to decide whether I’d be able to get surgery on debt versus paying up front.
After months trying to find a solution, family footed the bill, somewhat gofundme style but strings attached. And I was expected to go fund them back. I dutifully obliged, as soon as I could go back to work. I sent the first check, 10% of the surgery…
That check sat gathering dust for over a year. I’ll never know why it got deposited, but WF knew it was illegal to honor it. They knew it didn’t matter what I had already been through, the check was expired and they could not legally honor it.
I had of course forgotten the check was written over a year later. When I got hit with compounding overdraft fees I couldn’t opt out of, they would not discuss the fact that they illegally processed my check. I’m supposed to be good for my checks, they said. So for a decade I was guilty of “fraud” because WF illegally debited my account and then hit me with recursive fees for illegally charging me money they couldn’t charge. My only recourse was to just hunker down and manage my money carefully as I always had, for ten years. 1/4 of my life so far was set back because they knew I couldn’t afford a lawyer to do anything about the law they admitted knowing they broke.
And that’s nothing compared to what they did to most of these victims.
That does not sound evil. And how big were these fines that you’re claiming it took a quarter of your life away?
Edit: and the fines were too much to afford at the time but were not nearly as harmful as a decade record of “fraud” I didn’t commit. Maybe people here don’t realize it but when you have a record of fraud you can’t… do the things you all think are normal? Having a record of fraud because a bank told you they don’t care they know you didn’t commit fraud is ten years of recovering your financial reputation.
Looks like funds have been allocated specifically for that. Whether $2 billion is enough or not, I don't know.
Edit: also with a non-buggy mobile app? My credit union has the worst app. They don't seem capable of improving it... probably outsourced.
So will First Republic. So will TD Bank. Many Credit unions do the same.
I'm not sure how great a loss it is-- USAA's formerly amazing quality of service has declined dramatically in the last two years, at least on the banking side.
I'd hardly call BofA a good group.
Their app is decent and works (so far) on a rooted LineageOS device.
Ethics is full of gray areas, and refusing to engage in hard conversations increases the risk that your kid will make the wrong call if they ever find themselves in a shitty situation.
I've never stolen anything, except for a few hearts, and was taught to never steal, and yet I can somehow piece together that it is better to steal something trivial to a person rather than the means of their survival if need be.
But that seems off-place here. It leads to the question about "when is it okay to steal?" There's an obvious "defense of necessity", but that doesn't stop at stealing someone's means to a living. If it's legal to steal food in a disaster, it doesn't matter if that food comes from a neighbor's pantry or the bakers shelfs. The colloquialism described seems like one of those heuristics that feels true at first glance but quickly breaks down on further inspection (which is what a lot of ethical debate seeks to accomplish).
This isn't something that I brought up with my kid, btw. He led the conversation, he was asking honest and innocent questions. Shutting the door in his face loses the opportunity to discuss nuanced ethics when he's receptive to the conversation. If I drive, then it's just an abstract lecture.
This is a misinterpretation of my point, though. When I brought up the "defense of necessity", it was a direct acknowledgement that sometimes stealing is ok (or is at least, the more moral action).
However, communicating vague heuristics based on shaky principles can set the ground for rationalization that leads to immoral behavior. When we read about abhorrent behavior (like in the featured article), it's more often than not the result of a line of rationalizations rooted in human biases rather than a principled moral stance. All I'm saying is the OP's guideline of "don't steal tools or a vehicle" isn't a particularly good first principle (for one, as the previous example shows, it could still result in starving).
Next in line would be a completely different situation -- small business. Multiple times over long years of small business, I have seen crooked things done with money, by ordinary people.. probably parents. Some of those small business owners may have been from recent migrants, and felt pressured that way in a new city, but also not. Some small business people have certain words, phrases, they brush off the story, make it sound like it is the other person's fault, or that the questioner is confused somehow. And it continues... do they "teach their children not to steal" those small business people ? I dont know, but these stories are real.
There are certainly situations where it is _morally_ OK to steal. You're confusing the question with when it is _legal_ to steal, which by definition there is none.
> If it's legal to steal food in a disaster
See above.
> The colloquialism described seems like one of those heuristics that feels true at first glance but quickly breaks down on further inspection
Slippery slope?
>which by definition there is none.
This is not true, if you consider stealing to be theft of property. See my comment below, where it is not illegal to steal in times of necessity. Legally, you are allowed to takes someone else's property to protect life or seriously bodily harm. This is because we recognize a hierarchy of legal rights. If you consider stealing to be whatever the law says is a crime of theft of property, then it's a begs-the-question fallacy.
>Slippery slope?
No. This is quite literally what ethicists do. The point of finding use-cases where a maxim breaks down is to find the limits of an ethical framework and to determine the first principles. E.g., if you say it's illegal to steal, full-stop, and I show you an instance where it is not illegal to take someone's property, it is a demonstration that your first principle is incorrect.
And yea on stealing things. I remember someone locally was stealing Cadillac symbols on cars, it made big news, and my dad telling me something like, "don't assume the person is a bad person. They could just be feeding their kids." This was during the 2008-crisis and with an emphasis of, yea they are stealing, but it is rather benign in comparison to what they could be stealing.
I’m not a gun nut. I don’t even own a gun. But I support anyone’s right to shoot someone who breaks into their home while they are there
https://www.fool.com/investing/2022/05/20/warren-buffett-ber...
It didn’t happen to me, but I will never trust an institution that treats customers this way.
Shocking to me that people would use a bank like this.
I had excellent experiences with Wells Fargo up until they closed my account. Instant car loan approval and overnighted loan. At the time they had one of best online experiences. I have no intention of returning, I don't ever want to experience an account closing again.
they will continue until it is not profitable to do so. large fines are basically the only leverage that the CFPB has that can really hurt, and historically fines for this thing have been very low, to my knowledge, which has not done a lot to deter the behavior that they are trying to deter.
I would personally like to see the CPFB have the power to sue banks on behalf of customers to get financial redress. This money needs to get back to the people who suffered the most.
Hell, paying only $3.7B with a pinky promise you won't do it again would still be profitable if you made $5B on the scheme.
This very same thing happens with the SEC - they just keep the fines. How do people not think this is robbery is beyond me.
My reading of the article is different. This reads as though $2bn of the $3.7bn was to go directly to the consumers whom Wells Fargo harmed:
a $3.7 billion settlement with federal regulators, including a record $1.7 billion fine [...] The agreement with the Consumer Financial Protection Bureau includes more than $2 billion in “redress to consumers” [...] The CFPB is ordering Wells Fargo to refund billions of dollars to consumers across the country. Wells Fargo had systematic failures in its servicing of automobile loans that resulted in $1.3 billion in harm across more than 11 million accounts.
Specifically, Wells Fargo will have to pay:
More than $1.3 billion in consumer redress for affected auto lending accounts.
More than $500 million in consumer redress for affected deposit accounts, including $205 million for illegal surprise overdraft fees.
Nearly $200 million in consumer redress for affected mortgage servicing accounts.