Federal Reserve New Mortgage Lending Rules

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Amen! to the first comment on buyers who says they did not know. Buyers would call, can you do a 'NO INCOME" loan, if I did not do same,then another banker would. We tell them this is the amount you can qualify for, but they brought a contract for $100,000 more and expect bankers to make the payment the same as previously qualified. They use their family to be a co-borrower on their loan, I explain, keep in mind that only you will make the payment...they want a new home in a good neighborhood....sure, knowing that you cannot afford the payment. They become insulted, if you tell them they cannot afford that house and leave to another banker. The builders did the same, incentives, model homes looks great, but when they get the house, it has no furniture! so they get charge cards amounting to $30-40,000 to furnish this new home! They call 6 months later, I need an equityline to 100%...to pay off my bills.....no you cannot qualify....they go to another banker. Those who bought more home than they can qualify for, should be held responsible! stop blaming the lenders. Banks wrote and approve and close the loan programs that were sold to the consumers by originators! Some buyers and banks & the gov. should be held responsible.

Above Posted By: SMJ | Thu, 14 Aug 2008 18:09:13 EST

I have worked for the 4th largest bank in the US for over 5 years and am ill at the fact that home buyers are upset at their situations. I agree that the inflation of home values was at much a great part of what we are dealing with, but those who feel they were "take advantage of"?? Simply because you state you "didn't know anything about the loan process"?? Unless you just didn't graduate from highschool and can not do simple math... people (for example) that were say, a hari dresser or a waitress applying and trying to buy a home for $200k is rediculous!! You couldn't afford the home, and you knew it but you wanted to live above your means. Now that you are in the mess you are in, you feel you should be handed a free be? What about those of us, that went for the higher fixes rate.. BECAUSE it was fixed? Now, you who had the ARM at 5% should be bailed out, while you knew the whole time it would change and you did nothing to get yourself into a better credit situation? I am sorry, but that is disgusting.

Above Posted By: Chelsey | Tue, 12 Aug 2008 10:38:36 EST

I believe a lot of the problem started when property prices rose quickly and everyone started flooding the market (in FL anyway!) with properties with high prices. You couldn't turn down any street without seeing 50% of the houses up for sale!They didn't really want to sell, or need to sell, were just greedy. Those of us who made a move out of the State and needed to sell to continue living, got stuck with property that no longer has any value, we can't afford to keep or keep up and we end up becoming "investors" and can't refinance due to debt to income ratios. The mortgage companies and mortgage people who were greedy and deceitful also contributed to the problems. They have been an unregulated, unlicensed and undereducated bunch of vultures! They deal with huge amounts of peoples money, put people into situations that they make a huge chunk of money off of, and know the buyer is going to have a problem with. They do "bait and switch" tactics at the closing table!! And the gov't has not put any form of CE requirements, License requirements on them ever! To be an insurance agent or a realtor, however, they require both education and licensing, and in most cases, E&O insurance!! It's time to reform the mortgage people and make them be honest and held to it as well.

Above Posted By: Sharon | Mon, 4 Aug 2008 07:45:43 EST

I used to joke around with my wife that when we finally were able to save enough and buy a home, the market would probably collapse. We bought our first home in 2006. After you are finished laughing, please continue. Our mortgage company is Third Federal. They approved us for well over $200,000. By my math, the number we could afford was 120,000. We had to have PMI because of the low down payment. Given the fact that I don't know jack about any of this, I have to trust what they say. After all, they came recommended by my REALTOR. I was told that the PMI would come off the monthly amount in about a year. So I figured that we will pay a little more with regards to the mortgage for a year and then appx. $95 will be removed. (laughter). After closing, I commented to the bank officer that we were ok struggling for a year. "Well, it might take a little longer than that." Excuse me? Did I forget to mention that when they did the work-up, the taxes were underestimated? They included a homestead exemption! (Stop laughing!) Currently, like many people, I am way upside down. I also have not worked since April because of 5 fractures in my foot. I am in therapy. I do not receive any money from anyone. We are running out of our savings and have already gone through the small amount of our 401k. Next month, before we miss a payment, I will be talking to Third Federal about a forebearance. Wada u think? I have no intention of walking away but.... If they are not responsive.... BYE.

Above Posted By: vtop1 | Sat, 26 Jul 2008 11:33:45 EST

I am glad that someone from the legal profession has finaly stepped forward, like M. Calvit in Florida. I would have liked it if in my state someone would have stepped up to the plate before I lost my home too. I would gladly have offered up most prize posession to prevent the foreclosure of my home. Unfortunately, it was not enough to satisfy the greedy nature of the attorneys that expected a $10,000.00 up front retainer so we were forced to go pro se. At the time, we had all of our ducks in a row: reciepts,letters, a whole box of "evidence". We were treated as if we didn't even count by the magistrate (not judge, with $1,000's in question?) Our evidednce was waived away as if it was an annoying fly. When we tried to appeal it at the federal level, a Federal District Judge told us he could not "be othered with our petty problems". I guess when your voracity is being questioned because of bad conduct, everyone else's problem is considered petty. The house is still vacant, though it's changed hands many times on paper, in my estimation to better hide what has really transpired, a game that the lender was very good at, even prior to the foreclosure. The FBI was brought in by us but it was "inconclusive" the last time we checked on it. Before the foreclosure, my husband was employed in another state and was making good money, I was partime employed making a fair wage. My husband came home to help me deal with this mess. He's a vetran and has some issues left over from the first gulf war. With this foreclosure, having done everything he could to try and stop it he went into a depression. He hasn't worked since. We are now living on my part time employment. I hear everyday about 100' of people still loosing their homes. Mine was in my family for three generations, five generations treated it as the family center. We had $40,000.00 in equity still left in the home. I guess what I'm getting at is that it's more than just the monetary value and real estate that this problem is destroying...It's our families...it's our lives...We HAVE to do something!

Above Posted By: C.J.H. | Thu, 17 Jul 2008 16:12:56 EST

It is true that there have been unfair or deceptive acts and practices by sub-prime Lenders although, not necessarily by Lenders only. In the last 12 years, that I have reviewed these loans for the secondary market, I have seen for the most part, the pre-pay penalty time implemented for the fixed rate period of time only prior to it adjusting to an Arm. The Borrower usually has an option to accept a higher interest rate to eliminate the pre-pay penalty. In the 1990's the loans originated were primarily 6 mos Arms with pre-pay penalties. Thereafter, the programs implemented with fixed rates for 2, 3 or 5 yrs and then adjusting to an Arm appeared to be fair. Borrowers had enough time to work on their credit and cash reserves to later refinance to a better product. Because these products made money on Wall Street in various ways, Wall Street gave incentives to Lenders and Lenders gave incentives to Brokers for more business and therefore, more programs were implemented to these products to qualify more people such as the "Interest Only". Today, our business is global and therefore, it is affecting people around the world that invested in these real estate backed securities. The riskier these loans are, the higher the yield. It wouldn't surprise me that our companies across the nation filing for BK's invested in these types of investments which in turn would also affect their employee’s 401K portfolios. After reviewing so many of these files, I came to the conclusion that most of these Borrower's are irresponsible people to themselves, to their families and to our society. In order to obtain a huge debt, you must prepare yourself to pay it back. Sometimes, due to tragedy, hardship may occur. This is a great nation, a nation of opportunities. We all need to make better decisions in the future.

Above Posted By: Ingrid | Tue, 15 Jul 2008 10:41:24 EST

Throwing more laws at the problem a only a bandage for a gushing wound. I am a Florida lawyer working with more and more people every day trying to keep them in their homes. There are already laws in place to defend most of the folks I represent. Many of them come to me with perfect credit and are paid up on their loans, however they are having trouble buying anything else like food and gas to go to work. They want to do the right thing and try to modify their loans before they go into default but the lenders are telling them they are great customers and there is nothing they can do! Even after they go into foreclosure the lenders are unwilling to mitigate the loss. I have had people in their homes for over 2 years and have not made a single payment. This is not for lack of trying, but the lenders refuse to do anything about it, even though we have judges sympathetic to the problem and are doing everything they can to "encourage" lenders to come to the table. The lenders don't care about their borrowers, the economy or even taking back properties which mean even more expense and diminished investor value. The CEOs will take their golden parachutes of 30 million or more and leave the problem behind for all of us to deal with waiting for the bailouts. In 2002, Bush promised that by 2006 over 500,000 low income people would own their own homes. Well...here we are. Whoever becomes the next president will inherit one monsterous pile of steaming poop.

Above Posted By: M Calvit | Tue, 15 Jul 2008 07:37:17 EST

Let’s face it. It seems that each time the government introduces new laws to combat real estate fraud someone introduces innovative schemes to permeate the industry. For example those who are upside down on the overpriced properties they purchased in 2005 are utilizing the short sale clause to basically transfer ownership of that property to none other than distant family members with out disclosing that fact. The idea is that perhaps later that family member could also find him or herself in financial hardship having no other choice but to conduct another short sale at which time the previous owner can buy it back at perhaps one third of one fourth the price he or she paid in 2005. Instead of implementing new laws that are not going to be enforced why not establish a law enforcement agency specifically to investigate and prosecute perpetrators. The FBI does not have the manpower nor do they have the capabilities to investigate the vast majority of real estate fraud being perpetrated throughout the Unite States.

Above Posted By: Jose | Tue, 15 Jul 2008 02:13:51 EST

Sure does look suspiscious that no one has put a comment on this one! Just shows you all where the fingers need to be pointing!

Above Posted By: N24Real | Mon, 14 Jul 2008 14:37:30 EST

What is he doing about the Gas Prices that is causing the crisis???

Above Posted By: David | Mon, 14 Jul 2008 13:47:17 EST

What about those of us who got took? Are we just out?

Above Posted By: 12345 | Mon, 14 Jul 2008 12:28:54 EST

Why won't the Bush Administration, Senate, Congress concentrate on one thing at a time. Bernanke pointed to deceptive practices as the key reason for the inappropriately high cost of loans, but my questions is what are you doing about it except meeting and talking? Why won't they take care of the homeowners instead of trying to take care of everybody at the same time, the lenders, changing the law, etc. Concentrate on one thing at a time, the homeowners who are crying out. The lenders are daily still foreclosing on these victims of this predatory lending and the judicial system is allowing it. It seems that while the Bush Administration is dragging it feet promising help to the victims they would use their power to stop these foreclosures. Could it be they don't know and understand that we are dealing with natural laws here. What goes around comes around. The government forgot about and didn't treat the victims in Lousiana right . . . many of these people are still suffering and have no where to live and as a result nothing but natural disasters all over the world... Iowa and other states are sitting in water...Fire is burning up California...until they offer relief to the hurting everybody will hurt.

Above Posted By: grace | Mon, 14 Jul 2008 11:29:31 EST

Bravo..about time. I would like to see regulation on after the fact loans that are modified after documents have been signed. It is time to nail the crooks. There should be a 1 year time frame to dispute documents that were modified without having to go to an attorney and create a huge expense.

Above Posted By: Burtman | Mon, 14 Jul 2008 11:14:06 EST

Fed is Moving into Consumer Protection Role on Mortgages

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