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Warren Buffett, who controls the biggest shareholding of the No. 1 U.S. mortgage lender, said banks were victimized by some homeowners who refinanced their loans before getting evicted.

“Large numbers of people who have ‘lost’ their house through foreclosure have actually realized a profit because they carried out refinancings earlier that gave them cash in excess of their cost,” Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A), said Feb. 25 in his annual letter. “In these cases, the evicted homeowner was the winner, and the victim was the lender.”

Foreclosures have claimed about 5 million homes since the property market began its slide in 2006. That has saddled lenders like Bank of America Corp. with defaults, vacated properties and lawsuits. Berkshire, whose stake in Wells Fargo & Co. (WFC), the largest U.S. mortgage lender, is valued at more than $11 billion, invested $5 billion in Bank of America last year.

“It’s the mercenary side of Buffett,” said Jeff Matthews, a Berkshire shareholder and author of “Secrets in Plain Sight: Business & Investing Secrets of Warren Buffett.” “Rationally, it’s an interesting observation. But it ignores the huge human- cost side of the equation.”

Buffett, who publicly defended Goldman Sachs Group Inc. in 2010 against accusations it misled clients, used the letter to renew his support for banks. The industry is facing criticism from Democrats including President Barack Obama, who in his January State of the Union address said bets by lenders prompted the 2008 credit freeze and “left innocent, hard-working Americans holding the bag.”

‘Enough With the Lambasting’

Buffett, an ally of Obama’s, has won praise from Democratic lawmakers as the billionaire campaigned for higher taxes on the wealthy. Omaha, Nebraska-based Berkshire owns warrants to purchase $5 billion of stock in New York-based Goldman Sachs.

“Maybe this was kind of a message to his Democratic buddies,” said David Rolfe, chief investment officer of Berkshire shareholder Wedgewood Partners Inc. “Buffett is saying, ‘We know where the egregious acts were, so enough with the lambasting of the banking system and all these bankers.’”

Blame for the housing bubble and subsequent slump should be shared among lenders and borrowers, as well as the government, bond-rating firms and the media, Buffett has said. In his letter, read by investors around the world, Buffett praised Jamie Dimon, CEO of JPMorgan Chase & Co., and Bank of America’s Brian T. Moynihan. JPMorgan, Goldman Sachs, Wells Fargo and Bank of America have all repaid U.S. bailout funds.

“The banking industry is back on its feet,” Buffett said.

‘Megalomania, Insanity’

Buffett and Berkshire Vice Chairman Charles Munger, 88, have criticized bankers for contributing to the housing bubble. Munger, in July, blamed the real-estate boom on “megalomania, insanity and evil in, I would say, investment banking, mortgage banking.” Buffett said in October 2010 that Wall Street helps society through finance, while its bets may do harm, “like a church that’s running raffles on the weekend.”

Charles Ortel, managing director of Newport Value Partners, said lenders failed to do sufficient underwriting because they counted on selling the mortgages to investors.

“So nobody had any skin in the game, except we the taxpayers, as it turned out,” Ortel said. “Banks didn’t do the required credit work.”

Wells Fargo posted record profit for the fourth quarter as mortgage financing improved, the San Francisco-based company said last month. Charlotte, North Carolina-based Bank of America has gained 42 percent this year in New York through Feb. 24 as it swung to a quarterly profit.

“Wells Fargo is prospering,” Buffett said. “At Bank of America, some huge mistakes were made by prior management. Brian Moynihan has made excellent progress in cleaning these up.”

catamount man wrote:I have seen people refinance homes and personal loans all to take the money and go file personal bankruptcy because their sorry butts couldn't afford them to begin with. Want to nominate a douchebag, Barney Frank and anybody else at Fannie and Freddie who forced banks to make loans to deadbeat trash to begin with.

catamount man wrote:I have seen people refinance homes and personal loans all to take the money and go file personal bankruptcy because their sorry butts couldn't afford them to begin with. Want to nominate a douchebag, Barney Frank and anybody else at Fannie and Freddie who forced banks to make loans to deadbeat trash to begin with.

kalm wrote:

catamount man wrote:I have seen people refinance homes and personal loans all to take the money and go file personal bankruptcy because their sorry butts couldn't afford them to begin with. Want to nominate a douchebag, Barney Frank and anybody else at Fannie and Freddie who forced banks to make loans to deadbeat trash to begin with.

Banks weren't forced to make those loans. There are problems with Fannie and Freddie but that's a myth.

dbackjon wrote:

kalm wrote:
Banks weren't forced to make those loans. There are problems with Fannie and Freddie but that's a myth.

Exactly - a conk talking point to try to place the blame on helping the poor. It was greed by the banking industry that caused the problem. Fannie and Freddie, while they had issues, were just a drop in the bucket.

Ibanez wrote:Personal responsibility has no place in America. Read your loan documents, be aware of your finances. The lenders shouldn't have been greedy an shortsighted by preying on the ignorant

Too few mortgage accounts

GrizFanStuckInUtah wrote:

Ibanez wrote:Personal responsibility has no place in America. Read your loan documents, be aware of your finances. The lenders shouldn't have been greedy an shortsighted by preying on the ignorant

I had my credit report pulled recently and one of my negative contributing factors was:

Too few mortgage accounts

So, since I pay my bills on time, haven't refinanced my house and paying the mortgage on time, I get knocked down. Pretty crazy to see that. My credit is good, one has me at 738 and the other 2 are 777 and 782 and all show similar issues. I guess I don't borrow enough and put enough on credit cards too. I installed a personal policy a long time ago, if you put it on the credit card, you pay it every statement. I guess I need to go into more debt to get a better rating. I am taking personal responsibility and they are knocking me down for it.

GrizFanStuckInUtah wrote:

Ibanez wrote:Personal responsibility has no place in America. Read your loan documents, be aware of your finances. The lenders shouldn't have been greedy an shortsighted by preying on the ignorant

I had my credit report pulled recently and one of my negative contributing factors was:

Too few mortgage accounts

So, since I pay my bills on time, haven't refinanced my house and paying the mortgage on time, I get knocked down. Pretty crazy to see that. My credit is good, one has me at 738 and the other 2 are 777 and 782 and all show similar issues. I guess I don't borrow enough and put enough on credit cards too. I installed a personal policy a long time ago, if you put it on the credit card, you pay it every statement. I guess I need to go into more debt to get a better rating. I am taking personal responsibility and they are knocking me down for it.

89Hen wrote:

dbackjon wrote:
Exactly - a conk talking point to try to place the blame on helping the poor. It was greed by the banking industry that caused the problem. Fannie and Freddie, while they had issues, were just a drop in the bucket.

Fannie/Freddie expanded their guidelines to buy more borderline loans from banks on orders of the feds to increase opportunities for homeownership and championed (and lied about) by people like Barney Frank. Are you saying that the banks should have turned down loans that met Fannie/Freddie guidelines?

BTW "It was greed by the banking industry that caused the problem" is a Lib talking point to place the blame on banks and not on Barney Frank, Fannie/Freddie, homeowners and everyone else that shares in the blame.

GrizFanStuckInUtah wrote:

Ibanez wrote:Personal responsibility has no place in America. Read your loan documents, be aware of your finances. The lenders shouldn't have been greedy an shortsighted by preying on the ignorant

I had my credit report pulled recently and one of my negative contributing factors was:

Too few mortgage accounts

So, since I pay my bills on time, haven't refinanced my house and paying the mortgage on time, I get knocked down. Pretty crazy to see that. My credit is good, one has me at 738 and the other 2 are 777 and 782 and all show similar issues. I guess I don't borrow enough and put enough on credit cards too. I installed a personal policy a long time ago, if you put it on the credit card, you pay it every statement. I guess I need to go into more debt to get a better rating. I am taking personal responsibility and they are knocking me down for it.

GrizFanStuckInUtah wrote:

Ibanez wrote:Personal responsibility has no place in America. Read your loan documents, be aware of your finances. The lenders shouldn't have been greedy an shortsighted by preying on the ignorant

I had my credit report pulled recently and one of my negative contributing factors was:

Too few mortgage accounts

So, since I pay my bills on time, haven't refinanced my house and paying the mortgage on time, I get knocked down. Pretty crazy to see that. My credit is good, one has me at 738 and the other 2 are 777 and 782 and all show similar issues. I guess I don't borrow enough and put enough on credit cards too. I installed a personal policy a long time ago, if you put it on the credit card, you pay it every statement. I guess I need to go into more debt to get a better rating. I am taking personal responsibility and they are knocking me down for it.

AZGrizFan wrote:

GrizFanStuckInUtah wrote:
I had my credit report pulled recently and one of my negative contributing factors was:


So, since I pay my bills on time, haven't refinanced my house and paying the mortgage on time, I get knocked down. Pretty crazy to see that. My credit is good, one has me at 738 and the other 2 are 777 and 782 and all show similar issues. I guess I don't borrow enough and put enough on credit cards too. I installed a personal policy a long time ago, if you put it on the credit card, you pay it every statement. I guess I need to go into more debt to get a better rating. I am taking personal responsibility and they are knocking me down for it.

You have credit scores in the top 2% of Americans and you're bitching because you're being "knocked down" for something nitpicky? You do realize that credit scores only GO to 850? There's not a hell of a lot more you could do....you're already A++ credit.

AZGrizFan wrote:

89Hen wrote: Fannie/Freddie expanded their guidelines to buy more borderline loans from banks on orders of the feds to increase opportunities for homeownership and championed (and lied about) by people like Barney Frank. Are you saying that the banks should have turned down loans that met Fannie/Freddie guidelines?

BTW "It was greed by the banking industry that caused the problem" is a Lib talking point to place the blame on banks and not on Barney Frank, Fannie/Freddie, homeowners and everyone else that shares in the blame.

Don't bother them with facts, Hen. THey're on a roll. Donks don't do well with facts.

Cap'n Cat wrote:

AZGrizFan wrote:
Don't bother them with facts, Hen. THey're on a roll. Donks don't do well with facts.

Fact: Your boy W was asleep at the wheel for all this. Swallow that, dick.

AZGrizFan wrote:

89Hen wrote: Fannie/Freddie expanded their guidelines to buy more borderline loans from banks on orders of the feds to increase opportunities for homeownership and championed (and lied about) by people like Barney Frank. Are you saying that the banks should have turned down loans that met Fannie/Freddie guidelines?

BTW "It was greed by the banking industry that caused the problem" is a Lib talking point to place the blame on banks and not on Barney Frank, Fannie/Freddie, homeowners and everyone else that shares in the blame.

Don't bother them with facts, Hen. THey're on a roll. Donks don't do well with facts.

travelinman67 wrote:

AZGrizFan wrote:
Don't bother them with facts, Hen. THey're on a roll. Donks don't do well with facts.

Mr. Potter and his cheering section...

The banking industry and Wall Street investors were in bed with Barney (Capitol Hill), Fannie and Freddie.

Rome was burning (U.S. economic health) and the Pols (both sides of the isle) loosened the guidelines to sell the delusion that everything was fine.
The Conks, because it covered up Bush's failed "laissez faire" incompetence; the Donks, because it bought votes concealing their unsustainable policies.

Once the stage had been set, the banks simply pushed the debt hard and fast, rolled up the CDO's and sold them to Wall Street like hot dogs at a ball game. Wall Street rolled the CDO's into funny money ABS's which became part of the derivative's market, and the pea-shell game went into hyper-speed.

It was a win-win for everyone until guy holding the derivatives tried to cash them in.

To blame this on the folks at the bottom of the scheme (who were simply dumb, lazy and greedy - think "lottery" players) is tantamount to blaming the robbery victim for not doing a better job protecting their belongings.

Buffet made billions playing the game, as did most further up on the food chain. And in the end, the taxpayers (workers) foot the bill; the lottery players wound up wasting their money on a gamble for the American Dream; and the bankers and Wall Street recouped their political payoff (contributions) by getting Washington to cover their losses.

It's reasonable to presume were justice to be carried out, around a quarter of Washington's officials and Wall Street should be sitting in a Federal Prison for bribery and fraud.

I'm a conservative and that's the truth.

Cap'n Cat wrote:Now, why don't you show balanced, reasonable thoughts like that all the time, T???

travelinman67 wrote:

Cap'n Cat wrote:Now, why don't you show balanced, reasonable thoughts like that all the time, T???

It's called the truth.

I don't push thoughtless dogma.

You might try it sometime.

catamount man wrote:Jew hating Jimmy Carter and his ilk are to blame for the housing BS to begin with. When Mr Ghetto started getting his $50,000.00 house in 1979 on his $3.00 an hour income, you just KNEW there was gonna be issues, but this is America, so everybody deserves the same thing.

work for your own shit you lazy ass!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! i talk blacks and whites everyday who use medicaid cards like most of us use debit cards. Unemployed, have no desire to work, yet that cell phone is working, pile up shit loads of medical debts and have no desire to pay them and you can't tell these fucksticks that there actions are what is ruining America and putting a burden on the healthcare system.

LEARN PERSONAL RESPONSIBILITY!!!!!!!!!!!!!