Current State of the Mortgage Market

RE:Current State of the Mortgage Market

Crystal — Wed, 09 Jan 2008 13:00:00 GMT

Thanks for the insight. My husband and I had a contract that started last March and the night before closing the bottom fell out and the lender did not say anything about this and we have been very angry with the lender and the builder who owns the mortgage company. The home is still unsold and the national builder still have our money.

RE:Current State of the Mortgage Market

Marco — Wed, 21 Nov 2007 13:00:00 GMT

Chris: the reason he "dodged" who is responsible is because it is not "simple". Everyone from GREEDY SPECULATORS (buyer's/borrowers) to GREEDY SPECULATORS (investors) are responsible. The Realtors and Mortgage Brokers didn't sign the documents to the house you shouldn't have bought or the loan papers you signed saying "This lender is really stupid enough to let me get away paying the minimum payment?".

Real estate agents and Mortgage Brokers will advise their clients as best as possible but ultimately their livelihood depends on giving the client what they want. How can you possibly blame someone for selling you what you're demanding to be sold. Fraud and deception are an exception. This issue is not caused by fraud and deception alone. Rather it's the result of greed. The buyer/borrower is as guilty as the Realtor, LO, underwritter, lender, securitizer and investor.

RE:Current State of the Mortgage Market

Marco — Wed, 21 Nov 2007 13:00:00 GMT

Jean: "If home prices had stayed where they belong, and interest rates had remained capped at the former 8 percent maximum, we would now have millions of new homeowners with GOOD credit, instead of all these newly minted "risky" borrowers." Again ridiculous and illogical. Where do home prices belong? Who determines what that price is? Doesn't the market determine what price it will bear for a commodity? When have interest rates ever been capped at 8%? Never! Don't quit your day job.

RE:Current State of the Mortgage Market

John — Thu, 08 Nov 2007 13:00:00 GMT

Great article! Can someone explain to me why lenders just can't delay or freeze the rate rather than resetting it? It seems keeping the borrower in the house is the least expensive option for all involved. The lenders would still be making something on the loan rather than a write off of what the house would fetch in a foreclosure auction, not to mention the overhead costs. There would have to be some guidelines IMO, like the borrower being current prior to the planned reset.

RE:Current State of the Mortgage Market

Grandpa Bear — Mon, 05 Nov 2007 13:00:00 GMT

Comments by Mark, Lucia, DaisyNavidson & Mike are spot on!! Personally, I put 60% of problem at the feet of Realtors and mortgage brokers, and appraisers who cave to pressure from them, 20% to greedy investors flipping property, 15% to bad underwriting decisions, and 5%+/- to fraud, most of which is still against RESPA. Regretfully, I will need more than the allotted 500 characters to put in my entire $12.49 (today's inflated value of $0.02 in 1967). I agree, we haven't seen the end.

RE:Current State of the Mortgage Market

pajmortgages — Mon, 05 Nov 2007 13:00:00 GMT

At last someone who really sees what is going on. You can certainly tell just by the article that you are and have been on the inside. Not just someone who doesnt have a clue about the industry placing blame on everyone in sight.

RE:Current State of the Mortgage Market

Mark — Mon, 05 Nov 2007 13:00:00 GMT

Good points. However, one thing not considered is "cost comparison" as noted in appraisals. All of my deals are closing below this number. Certainly land is a big part and those values are coming down. But most important is that all materials and labor are more expensive. With worldwide demand for construction materials growing, prices will continue to increase. My point is that I do not believe we will see a freefall in home values just the correction we are experiencing.

RE:Current State of the Mortgage Market

Kelly — Sat, 03 Nov 2007 11:00:00 GMT

Matt-Thank you for writing such an amazing and easy to understand article on the current state of the mortgage market. Some of your other articles have helped my family and I appreciate your honest and accurate contributions. I agree with the other posts - you need to get this published in all the major papers!

RE:Current State of the Mortgage Market

Hewitt — Sat, 03 Nov 2007 11:00:00 GMT

This has been an excellent article: It has not pointed blame to any party and has made clear the dynamics of the circumstances. Another point that is not covered is a push to affect the nature of us as humans. We, humans, fail to do what we should at the time that we should do it. Why do we not prepay the principal, and result in shorting the number of payments that we have to make? Just $1,000 in capital, prepaying the principal of a property owner, could net me 5 - 6% per year.

RE:Current State of the Mortgage Market

Rachell — Fri, 02 Nov 2007 11:00:00 GMT

Matt, Thanks for the wonderful article! You are right and it's great someone has pointed out the reality of this. Everyone should read this.

RE:Current State of the Mortgage Market

MICHELLE — Fri, 02 Nov 2007 11:00:00 GMT

Excellent article. Well Done Matthew!!! I think you are trying to say that there is more than one reason for this BIG mess. Not just say....broker...or realtor...or lender....or...... I totally agree with you. There were many factors involved and many actors from many walks of life that played this out. This article should be published around the nation. I would like to see more of Matthew's articles. Keep them coming.

RE:Current State of the Mortgage Market

Mike — Fri, 02 Nov 2007 11:00:00 GMT

Thanks for the accurate review of the last few years. The problem is you have dodged who is responsible? That is simple also. Realtors and Mortgage Brokers...the two least regulated partners that almost single handedly destroyed the concept of the Arms Length Transaction? Greed, and the look the other way UWs on every banks wholesale side....played their part too. So now what...? The likes of CHL's CEO doing jail time is a great start.

RE:Current State of the Mortgage Market

Cecil Streets PI — Fri, 02 Nov 2007 11:00:00 GMT

"One who knowing or strongly suspecting that he is involved in shady dealings and who takes steps to make sure that he does not acquire full or exact knowldge of the nature of those dealing is held to have criminal intent." -Anonymous (Judge)

RE:Current State of the Mortgage Market

Cecil Streets PI — Fri, 02 Nov 2007 11:00:00 GMT

Too many, not all, loan agents became more interested in their own bank balances than that of the lenders they represent. These agents in a position to screen out unworthy candidates instead enabled and encouraged borrowers who had no business borrowing any amountmany had no accumulated savings, prior and sometimes even existing credit problems, and limited income. These agents and their employers exhibited no common sense and in too many cases knowingly committed and/or enabled fraud.

RE:Current State of the Mortgage Market

Matthew Graham — Fri, 02 Nov 2007 11:00:00 GMT

In response to Rachael's good point about appraisals, although foreclosures and bank owned's aren't included in comps, they do drive down value in the areas without question. Moreover, "Short Sales" are the bigger problem when it comes to comps. I wrote an article on http://www.mortgagenewsdaily.com/wiki/Short_Sale_Defined.asp that is also on this site.