| I work in the subprime qworld. My thoughts? We've become a nation of I want it all & I want it now brats. These brats also want an OUT if it doesn't go their way. They expect to be cut breaks time & again even when they default on their OWN terms.
Todays borrowers need to take a step back in time.Wasn't so long ago that folks realized their first home didn't have to be enormous & bank breaking. No, the first home was considered a starter home..Autos didn't need to be bank breaking either! |
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| Above Posted By:
Anonymous
| Fri, 20 Apr 2007 22:56:49 EST |
| I am a collector who has the great task of talking to the subprime customer. I will tell you the great majority of these people simply don't care if they keep there homes or not. They bought homes they couldn't afford and they knew it when they signed the papers. Almost all of them in collections are in adjustable rate mortgages and they haven't started adjusting yet! Just wait we haven't seen anything yet. Someone needs to remind people what responsibilty is IT"S NOT THE EASY ROAD. |
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| Above Posted By:
collector
| Sun, 15 Apr 2007 08:26:45 EST |
| As a broker I see borrowers that think they can afford a home that is outside the realm of sanity. But their first repsonse is " I know so and so and they make less than I do and they bought a house for twice as much with no money down" and actually got money back at closing for some repairs!!!!! I firmly tell them I dont do business like that !!!!
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| Above Posted By:
RB
| Fri, 30 Mar 2007 04:48:04 EST |
| Being an insider in this business, I'd blame 50% of the fault on the BROKERS who make up the documents, and push the lenders. The other 25% on appraisers who over-inflate the value. 5% on borrowers who are trying to flip the homes, and the remaning 20% on underwriters who approve any file they fet. |
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| Above Posted By:
arv
| Thu, 29 Mar 2007 11:46:08 EST |
| Wow this freakin me out. Glad I'm hearing about this now. I'm a newly wed who along with my wife have worked are tails off to be completely debt free. We are a few months away with some savings and have been talking about buying our first home. The first for both of us. Sounds like I should start looking at foreclosures and make really low-ball offers at them. |
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| Above Posted By:
PFDK
| Mon, 26 Mar 2007 13:13:23 EST |
| Borrowers get abused for not being financially educated. Lenders take advantage because they can.
Borrowers often aren't honest with themselves and the lenders are usually less honest.
Someone is getting hustled. |
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| Above Posted By:
therealwayno
| Tue, 20 Mar 2007 10:19:30 EST |
| Unfortunately, this is what we've come to as a society. Accountability for one's actions is as rare as a 3-dollar bill. I'm not in the mortgage industry but months ago, I could see where things were going. The borrower is the most to blame in this situation. Only the borrower has the ability to walk away. The problem is that people believe that it is their natural-born right to own a home. IT IS A PRIVELEGE!!! (continued)... |
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| Above Posted By:
George
| Fri, 16 Mar 2007 10:34:47 EST |
| As an appraiser, I see how some (most) mortgage brokers will only use appraisers that can get their value. I am not one of those appraisers. I explain right from the start that we use the best comparables available. For this reason, most of our business is with BANKS not Brokers. I suppose that blame can be spread out among many. IMO the brokers are most to blame. |
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| Above Posted By:
Appraiser
| Thu, 15 Mar 2007 09:22:04 EST |
| The current subprime scenario will surely be in college text books - Investment Strategy 101. Phase I - Wall Street sets the guidelines. Surprise...Lenders and Brokers go and get those loans like rats following a piper. PhaseII - WS suddenly announces "we'll only pay .90 on the dollar, not 1.02" Another surprise -lenders fold, employees lose their jobs, loans go at a loss and investors pick up a $100M or so on every Billion $ pool. I wish I had thought of it! The rich really do get richer! |
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| Above Posted By:
Ken
| Wed, 14 Mar 2007 17:00:01 EST |
| All of the major "players" are facing the same type of losses they are responsible for giving their misinformed clients. When greed is the basis of their system, the system throws up from over-eating. Their are mortgage products out their with counseling that puts the client first as far as their long term goals are in stabilizing communities. My advice is to get their information from at least 3 credible sources before making life changing financial decisions. |
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| Above Posted By:
Mr BIG Realty
| Tue, 13 Mar 2007 11:20:41 EST |
| I'm an underwriter in the mortgage business. I've seen consumers with high fico scores and little credit, consumers with credit trades reflecting a 10yr history of payments made on time, yet they did not qualify because they had too much credit, which gave them a low fico score. I have seen buyers declare bankruptcy and foreclosed upon and in 12 mos they had fico scores in the high 600 to 700 range. Are the scores manipulated? Where do I see banking? Guideline: If they qualify, approve.
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| Above Posted By:
anonymous
| Tue, 13 Mar 2007 09:54:06 EST |
| First time home buyer, Im 42 yrs old, just married, 820 FICO, no credit card dept,$120,000 combined anual income nice savings account and I have never felt so broke before in my life! While I watched everone run it up everyone I knew below us had no business in the game but seem to get into a loan and treated this as their own greedy cash machine. I guess the next 5 years are going to be very interesting. |
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| Above Posted By:
Anonymous
| Tue, 13 Mar 2007 00:03:34 EST |
| Well, it is happening now, alot of foreclosures and short sale at whose detriment, the Lender. It is high time the lenders restructured their guidelines so that borrowers don't fall into their hussy hubby game. If possible, the lender should consider lowering the interest rates on those loans they see as high risk so that the borrower will fall in-make his/her payment accordingly instead of defaulting completely. |
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| Above Posted By:
uwaomah
| Mon, 12 Mar 2007 17:10:52 EST |
| Hmmm- Lets think about this. I can't refinance, there's no equity in the property, or the loan I need, can not be offered. I can't sale without bringing money to the closing. I don't want foreclosure. How to make it through this cyle? I need to make more money: 1) 2nd job? (America is not choosing according to lastest stats), 2) Find a couple roommates? (Perhaps, but most won't), 3) 0% credit card cash advance, delay until rates drop? (America, I bet you'll choose this one.) |
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| Above Posted By:
Jason
| Sun, 11 Mar 2007 04:46:36 EST |
| And the FBI should prosecute? Fidelity, Bravery, Integrity!? I suppose the runaway successes of McCarthyism to CoIntelPro to the fight against music piracy leave them aptly qualified, yes? NO! There are hardworking honest people AND criminals everywhere, but because I shared a little of the spoils I have a RESPONSIBILITY to also help carry the bag! |
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| Above Posted By:
R
| Fri, 9 Mar 2007 10:46:16 EST |
| Forgive my insensitivity, but to claim mortgage fraud because my broker padded my income w/o my knowledge? Because I didn't know my arm would expire? Because banks borrow money from other banks @ a rate of 5%, but loaned it to me for my house @ 2% and I thought I just got lucky!? What was the purpose of RESPA? No! I need to read the final paperwork BEFORE I sign it! What I need is more education! |
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| Above Posted By:
R
| Fri, 9 Mar 2007 10:45:49 EST |
| Everyone has had a reckless summer w/ a credit card. Most of us have seen our credit scores under 750 @ some point! I have a vested interest in my home, and when brokers/ lenders/ appraisers were falsifying reports, when the housing market was fueling the economy and my property value skyrocketed I didn't complain then, did I? But now that the industry is correcting itself I don't want to take responsibility? I want someone else to live in the shadow? I need more protection!? |
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| Above Posted By:
R
| Fri, 9 Mar 2007 10:43:57 EST |
| Miami and sy are correct! The grace of limited liability ends well before foreclosure. I also agree w/ REIBroker everyone is not responsible enough to deserve a home. It is a privilege not to be taken lightly, but, while EVERYONE will not attain that privilege, that some of you even imply EVERYONE does not have the right to pursue it is criminal! Is it possible to be ignorant enough to believe YOU are deserving of something and someone else isn't? |
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| Above Posted By:
R
| Fri, 9 Mar 2007 10:42:53 EST |
| Have you read the mantra of the GSEs? Home ownership is paramount,yet obviously not all are responsible paying their debts,hence subprime world was created.Is this prudent lending? Exotic loans,like cars aren't for everyone. Lenders may be greedy,but how about borrowers who want financing so desperately,they'll lie&falsify docs? #1 rule- lenders/banks don't want your property! They lend money. Guidelines were relaxed in response to consumer demand. When will we learn-consumers aren't risk managers? |
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| Above Posted By:
Miami
| Thu, 8 Mar 2007 14:55:28 EST |
| Anonymous ... mortgage brokers do pay. They have to return their "thousands of dollars" in commissions (does that company need help?) Brokers do have to repay and they can lose their ability to send loans to the lender in the future. So in the end it does hurt the broker even if they followed lender guidelines. The mortgage broker is definitely not "out of the picture at the closing table". Far from it. |
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| Above Posted By:
REIBroker
| Thu, 8 Mar 2007 14:05:53 EST |
| continued.. It angers me that my responsible behavior of paying my bills and saving $$ for a home is taken so lightly by regulatory branches of the government and lending underwriting. My "homeownership" was earned!!!! and giving irresponsible borrowers the ability to have the same "priveledge" that I and every other financially responsible will more than likely end up paying for is unacceptable. With each foreclosure the mortgage broker should pay a fine - hey maybe the check from closing!!!! |
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| Above Posted By:
anonymous
| Thu, 8 Mar 2007 10:58:53 EST |
| Subprime borrowers have nothing to lose. Take the house? Big deal they have nothing into it. Bad credit? Big deal never had good credit. I have excellent credit and a "vested" interest in my home. Bail out the subprime borrower and the borrowers deserving of homeownership will be the ones that suffer. The mortgage brokers that got these borrowers in the risky loan won't pay either. They got their checks (thousands of $$) are out of the picture at the closing table. |
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| Above Posted By:
anonymous
| Thu, 8 Mar 2007 10:45:09 EST |
| Wow, sy! I couldn't have said it better myself. Have you been reading my Active Rain posts? This boils down to two things: ignorance and greed. It started out with a few companies wanting to compete with or beat the quasi-governmental offers on SFR's and when the real estate re-boom came so did the greed. But it was not just greedy lenders ... oh no! Greed requires a dance partner, it was the ignorant AND greedy borrowers. Education Not Regulation! |
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| Above Posted By:
REIBroker
| Wed, 7 Mar 2007 15:35:26 EST |
| This is just another cycle that we mortgage bankers don't seem to learn from. We loosen guidelines, foreclosures start. We tighten guidelines, foreclosures stop. Homeowner statistics go down so we loosen guidelines. When will we learn that not everyone is responsible enough to deserve a home? |
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| Above Posted By:
sy
| Wed, 7 Mar 2007 10:45:02 EST |
| There are some crooks in the mortgage business, but most of us are just trying to help people have their own home. We try to help the people that have had bad credit in the past and those who don't have the money for down payment. People need to take responsibility for their actions, & quit blaming others. That woman had to sign her final application & would know what income was used. She also knew the payment, but now it is the big bad mortgage company's fault. Take responsibility, folks! |
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| Above Posted By:
sy
| Wed, 7 Mar 2007 10:41:42 EST |
| As a mortgage lender myself I can clearly see how this has happened. We have inflated the price of housing in the San Francisco area to the point that almost none of the people currently living in those homes can really afford them. As they scramble to refinance before their credit score is shot they are realizing that the programs that allowed them to get into their homes are gone. They do not qualify for any loans that are out there and now what? Foreclosure? Likely. |
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| Above Posted By:
anonymous
| Wed, 7 Mar 2007 09:06:55 EST |
| Suggested changes in subprime lenders:
1. All borrowers should receive counseling from an independent agency to ascertain if they understand the terms and conditions of the loan (similar to counseling required before you file for bankruptcy). The fee should be incorporated into the closing costs.
2. The subprime lenders should be required to restructure a percentage of the subprime loans, rolling the delinquent amount into the loan and fully amortizing it over longer periods. |
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| Above Posted By:
Mortgaganna
| Wed, 7 Mar 2007 07:02:30 EST |
| As a former subprime mortgage underwriter, I've observed that loans that were considered subprime loans seven years ago are now considered A or A- loans in the prime market. |
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| Above Posted By:
Anonymous
| Wed, 7 Mar 2007 07:00:49 EST |
| The blame for the subprime debacle must be shared by appraisers, realtors, lenders and borrowersbut not equally.
Lenders with billion dollar subprime loan portfolios were greedy and encouraged price inflations.
The FBI needs to prosecute the culprits (lenders, brokers and appraisers). Lenders should be forced to restructure these predatory loans and give the borrowers an opportunity to save their homes. In some cases, the loans need to be canceled as compensatory damage.
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| Above Posted By:
Mortgaganna
| Wed, 7 Mar 2007 06:56:40 EST |
| This is just the begining. Lenders made these loose lending practices to get the revenues in and beef up their share prices. All the while knowing that there would be a mess to clean up in the future. Just like the Dot Coms - this game was played by the CEO's and guys who get the BIG parachute paychecks when the stock goes up. Get ready, it will be RAINING foreclosures in about 6 months. |
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| Above Posted By:
Mortgage Planner
| Tue, 6 Mar 2007 22:11:12 EST |
| Hello, I was a victim of mortgage fraud when I bought a condo in GA almost 5 years ago. I believe that the mortgage broker padded my income without telling me. I only found out about it when I thought it was too late to turn back and my condo foreclosed in November 2005. |
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| Above Posted By:
Eugenia
| Tue, 6 Mar 2007 19:11:07 EST |
| Part 2
Yet, the every day person, who has had some problems with their credit in the past but who are capable of paying their monthly mortgage, can not get past the front door of a mortgage company, because of the lack of "creativity". Now you wonder why they resort to special financing. |
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| Above Posted By:
Anonymous II
| Tue, 6 Mar 2007 16:52:28 EST |
| Part 1
One of the biggest problems with the lending institutions is their need to make more and more money. They are responsible for our current situation by creating qualifying factors, which can easily be manipulated in order for the wrong person to qualify for a home loan. |
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| Above Posted By:
Anonymous II
| Tue, 6 Mar 2007 16:52:07 EST |
| When is the Government going to pay attention to what is realing causing prooblems? Subprime borrowers are effected by immediate changes ie: gas prices going up to $ 3.00 a gallon, credit card pymts going up by 2%, and the rates on those cards sky rocketing! Credit cards need to have some rules! We have plenty already. The gentleman who said we don't let our customer know what are fees are, dosen't know about GFE's?? or RESPA?? |
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| Above Posted By:
Cat Holt
| Tue, 6 Mar 2007 16:38:17 EST |
| Been at this for a long period of time. While the option arms and IO's have their place, too many folks use these vehicles to buy homes they can't, long term, afford. But the scariest of them all is the "stated" income trans make up an income and I will grant you a loan. I figured we had come full circle when an underwriter asked if I would mind if she kicked up the income $2500 a MONTH so the customer would qualify! Just downright scary...... |
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| Above Posted By:
Jim
| Tue, 6 Mar 2007 15:02:20 EST |
| Lender pressure on appraisers to inflate property values, though not limited to the sub prime lending area, will further exacerbate problems surfacing among the sub prime loans. |
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| Above Posted By:
anonymous
| Tue, 6 Mar 2007 14:14:20 EST |
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