Or maybe their mortgage financing fell through at the last minute? Not that it helps resolve things, but presumably, as contracts were exchanged, your sister can also sue her buyer?

If only. No, the money is IN the bank at the buyers lawyers. The LEGAL contract exchange went through but 2 mins before the completion time, their lawyer confirmed he did not have CLEAR instruction to go ahead from her buyer. Her buyer said he was pulling out, then he said it was on. Now my sisters buyers lawyer doesn't trust his client and wants CLEAR instruction.

What a mess. My guess is the BUYER is having a change of heart because who knows what HIS personal problems are... Gotta believe they are major to pull this one on everyone

That's what I was thinking...hopefully she didn't sign contracts to buy before the buyers of her house had signed.

Well, what part of it's so wrong? This is your field of work right? I'd certainly appreciate hearing more.

Your sister's lawyer should threaten to sue for specific performance (or whatever the English legal equivalent is). That might straighten out the buyer. And if it doesn't she should sue, particularly as she is being sued.

You are right - the mortgage crisis was known as early as April 2003 and the govt. did nothing to stop it and instead fueled it further....

More than five years ago, in April 2003, the attorneys general of two small states traveled to Washington with a stern warning for the nation's top bank regulator. Sitting in the spacious Office of the Comptroller of the Currency, with its panoramic view of the capital, the AGs from North Carolina and Iowa said lenders were pushing increasingly risky mortgages. Their host, John D. Hawke Jr., expressed skepticism.

Roy Cooper of North Carolina and Tom Miller of Iowa headed a committee of state officials concerned about new forms of "predatory" lending. They urged Hawke to give states more latitude to limit exorbitant interest rates and fine-print fees. "People out there are struggling with oppressive loans," Cooper recalls saying.

Hawke, a veteran banking industry lawyer appointed to head the OCC by President Bill Clinton in 1998, wouldn't budge. He said he would reinforce federal policies that hindered states from reining in lenders. The AGs left the tense hour-long meeting realizing that Washington had become a foe in the nascent fight against reckless real estate finance. The OCC "took 50 sheriffs off the job during the time the mortgage lending industry was becoming the Wild West," Cooper says.

This was but one of many instances of state posses sounding early alarms about the irresponsible lending at the heart of the current financial crisis. Federal officials brushed aside their concerns. The OCC and its sister agency, the Office of Thrift Supervision (OTS), instead sided with lenders. The beneficiaries ranged from now-defunct subprime factories, such as First Franklin Financial, to a savings and loan owned by Lehman Brothers, the collapsed investment bank.

Some states, including North Carolina and Georgia, passed laws aimed at deterring rash loans only to have federal authorities undercut them. In Iowa and other states, mortgage mills arranged to be acquired by nationally regulated banks and in the process fended off more-assertive state supervision. In Ohio the story took a different twist: State lawmakers acting at the behest of lenders squelched an attempt by the Cleveland City Council to slow the subprime frenzy.

A number of factors contributed to the mortgage disaster and credit crunch. Interest rate cuts and unprecedented foreign capital infusions fueled thoughtless lending on Main Street and arrogant gambling on Wall Street. The trading of esoteric derivatives amplified risks it was supposed to mute.

One cause, though, has been largely overlooked: the stifling of prescient state enforcers and legislators who tried to contain the greed and foolishness. They were thwarted in many cases by Washington officials hostile to regulation and a financial industry adept at exploiting this ideology.

The Bush Administration and many banks clung to what is known as "preemption." It is a legal doctrine that can be invoked in court and at the rulemaking table to assert that, when federal and state authority over business conflict, the feds prevail -- even if it means little or no regulation.


More here:
http://biz.yahoo.com/bizwk/081010/08...036827981.html

It was inevitable that the financial system would blow up. Everyone wanted a piece of the action that the worlds financial centers controlled and the worlds financial centers did not want to relinquish control. Everyone deregulated (or reduced regulations) to get their fair share. Although the US subprime mortgage mess triggered the current crisis, a crisis would have been inevitible in the future even without the current subprime mess. If regulations around the world had not been relaxed, the current crisis would have been nothing more than the S&L bailout of the 1980s.

Icelandic banks had liabilities that were 12 times their GDP compared to about 70% in the US, Ireland banks have more than 2x their GDP, Luxembourg has 155 different banks, and then there is Switzerland (UBS alone has liabilities that is 4x the GDP), Bermuda, Singapore, and the many Caribbean islands that could never insure their deposits if there was a run on the banks. Many of these countries are just giant hedge funds that create enormous wealth as well as risk for the country.

In 2004 the US allowed investment banks to increase their leverage from 12:1 to 40:1 and the UK allowed its normal banks to be leveraged to 20:1 to more effectively compete with those unregulated countries.

New derivatives were introduced that few understood and unregulated credit default swaps made it very difficult and costly for governments to make troubled banks insolvent when the crisis occurred. Credit default swaps (insurance) may be more of a problem than subprime mortgages since banks, insurance companies, and hedge funds insured everything from companies going bankrupt to securities not paying off. Credit default swaps can be purchased by anyone even if they didn't own the securities that are being insured. This would be like many people purchasing insurance on your house and then hoping (or even starting the fire) that your house will burn down so they can collect the insurance on the value of your house.

If you look at the richest countries in the world that are small, all of them have either a large financial system or is sitting on top of oil.

Yes, the credit crunch is certainly biting in the UK.....

..... "Will one be wanting fries with that?"

Well, we are ploughing cash into cc debt like there is no tomorrow.
My contract ends at Xmas and we are reining in the monthlies just in case.

Seems America is in a state of flux and fear.
Sometimes it makes sense to me to let it all "burn baby burn" - but there are so many (who didn't light the match) who'll suffer really, really badly.

Here's a silly question. What historically works really well to get an economy out of a depression or even a state of chaos?
What is it that gets people off the dole queues; gives them something to completely distract them from social problems, rapidly decreases the excess population, kick-starts industrial production & rallies public opinion away from personal issues towards a national effort?

War

The US has a few of those already on the go though...

I was holding that realistic thought back too....... Maybe this time, if our enemies believe in history, they will not push us too far... We can dream..

They're just getting geared up mate.

In 1943, the US churned out 29.5 thousand tanks.
3.2 million tons of seagoing floaty things with guns on them.
12.5 million tons of other floaty things which could carry all the tanks.

In 1944, they rivetted together 96.3 thousand warplanes.
In 1945, there were almost 12 million yanks of various sexes and colors in uniform.

.......and they still found time to make silk stockings (awww, bless), posh soap and lugnuts.