1reguL8NSTi

I couldn't agree more and it gives me better job security.

Salty

iTrader: (14)

What sucks is the fact that lenders were so careless in the last years when they've seen significant declines in the market before. I mentioned this in a politics thread recently.

Lenders were basically asking clients and/or mortgages brokers with clients to provide miniscule parts of potentially huge paper-trails in order to qualify someone for 100%+ financing on half million dollar homes. Sometimes you could get into a decent program without knowing a shred of English. Hypothetically, you could be 21 years old and working a low-paying job but have good enough credit for a stated-income, stated-asset loan because mommy and daddy put your name on their credit in order to establish your credit during high school. Can you say payment shock? It was insane what loopholes existed if you really wanted to qualify your client for a program.

Now, huge lenders and wholesale lenders have shut their doors. I know people that worked for 20+ years at some places that are now recently unemployed. Those that are barely alive quickly reverted back to 80% LTV financing programs as the MAX. All the programs are basically what they were back in the 1980s and prior.

Even though it's part of the consumers' responsibility to do proper research I’m going to have to blame the government mostly on this one. I usually don't take this bleeding-heart stance but here it goes...

Nothing is as regulated as it should be when it comes to the mortgage and real estate industry (except the fact FHA and VA loans were sometimes audited). You can take correspondence from home and pass a measly exam with help from a test memorization course. Most do it. Then, assuming you're not a certain type of felon, the DRE will issue a sales license. A license with the power to negatively alter the course of families lives.

When you go to the doctor or lawyer odds are you're going for something that can change the trajectory of your life as well. And you expect them to have 7 years of schooling and enough experience to give you proper advice and direction. So why is there so little regulation and education requirements for real estate professionals? Even to become a broker you can qualify for the broker's exam with a 4 yr degree (of whatever field of study) or a few years experience in most any field of real estate. I agree that consumers need to have an understanding of basic economics before getting in over their heads with a mortgage. But I also think that the idea of consumers relying on the advice of mortgage professionals shouldn't be a far-fetched concept either.

Not to mention everyone HERE has a family member with a fly-by-night sales license these days. Why on earth do you think I stopped being a broker? I got muscled out by everyone that had a sibling or knew a friend with their license. You think they knew what the **** they were doing?

So do you still think it's the consumers fault here? Or are multiple factors to blame here? I still say it's the borrowers fault in the end but I can't say I blame them entirely. At least we can hope for proper government regulation in the future.

PURIST

No, not just the consumer, everybody involved. I know people from the bay area who bought 2 to 3 even 4 homes for investment on borrowed money. A great idea when there weren't enough homes to go around for everybody wanting to live here, but when home builders don't stop building and new homes are cheaper than ones you bought 2 years ago, you have a big problem. At that point you have a couple choices 1) either rent it out ( if you can find a decent renter in a cutthroat market) and suffer from negative income, because there is no way you are going to rent out a house for what you pay in a 100% loan mortgage. 2) you can sell it, but unless you bought it more than 4 years ago you aren't in a positive equity position, so you lose money or be stuck with a mortgage you can't pay. Either way that person goes, costs me money. I live in the U.S., because it's the most even playing field on the planet and I'm thankful for what I have, but when you start spending my tax dollars it better not go to illegal immigrants who don't pay taxes, bailing other countries starving kids when people are starving here and I sure as hell don't want to shell out one dime in bailing out people who took money out of thier houses to buy Denalis when they can't afford it.

nachomc

iTrader: (7)

I think the majority of the responsibility falls on the consumers, but the banks and brokers hold some as well.

The banks instituted the no-doc loans to speed up the process and fire out as many loans as they could. The brokers got GREEDY, and with nothing to lose, they enabled buyers to fudge their incomes and liabilities in order to get approved for loans that were not in their best interest (neg-am interest only for example) that they couldn't afford. The buyers that agreed to this are ultimately responsible though. They decided to be dishonest and knowingly said they had income they didn't, or left out payments they did have. Unfortunately for the whole situation, the buyers have the most to lose, the banks are next in line but end up with the asset and typically have enough capital to absorb the foreclosures (since they're getting most of their money back by selling the home) and the brokers, those that enabled the buyer to screw themselves and their lives while profiting like crazy, lose basically nothing, except maybe their job as the housing market slows.

It's a ****ed up situation, and nearly everyone is suffering from it.

Salty

iTrader: (14)

Correction: Most often the brokers do not have the power to give the conditions required in order to go to docs. It's the lenders and beneficiaries that do this with their underwriting dept. Depending on credit, an underwriter could ask for stated income and stated asset or whatever else. It's all on them - they are the enablers and the brokers are the bad advice. If an underwriter wakes-up on the wrong side of the bed that morning or doesn't feel right about the borrower(s), they can ask for a huge list of conditions for docs. They could make it to where the option for stated income or assests isn't even there despite perfect credit. I've seen it done many times. Most of the time they’re pretty damn strict because it’s their job find fraud in the process.

Bottom line is a lot of bad, fly-by-night and/or greedy brokers gave bad advice while the lenders were doing risky business with stupid programs. Sorta defeated the purpose of their top-notch, very observant, red pen wielding underwriting deptartments.

So this problem could have been fixed with tighter regulation in just one area even. But nope, there wasn't ANY real regulation with brokers/salespeople and the beneficiaries. It's a huge mess. The government could have fixed this a long time ago by regulating licensees better, raising the bar for licensees, not allowing certain programs and practices, or all the above. Then the consumers wouldn't have been able to make poor choices because of government protection.

I just don't think it's fair to compare a person's want and dreams for a house versus investing in intangible stocks and bonds. It’s a big step for families and they deserve proper direction and advice.

RussB

iTrader: (2)

salty - so you got out of the biz? that sucks bigtime... i've dealt with one other independent broker and 2 large companies besides you. by far you were the most professional and honorable person to do up a mortgage for me.

i really appreciated the time you "told me how it is" with all the different loan options out there. that really helped me decide that i'm a fixed rate kind of guy.

Irrational X

iTrader: (1)

fixed ftw...

Salty

iTrader: (14)

No problem, Russ.

My mom is still in the business. She's a landmark in the industry now, even with all this crap going down. She's been around since rates were near the 20s. If you ever wanted to work with someone look her up. Even better to tell her what you want and she'll shop wholesale for you.

RussB

iTrader: (2)

what did you fix?


i'll keep that in mind.

Irrational X

iTrader: (1)

ummm... my interest rate on both houses. i think you mistook my comment as "intarn3ts!" but i was actually being serious

RussB

iTrader: (2)

nachomc

iTrader: (7)

I'll be calling her in a few months.

Irrational X

iTrader: (1)

i may ping you as well, im considering a refi on the 2nd house... assuming i just don't sell it since i dont really care

STi deede

It looks are though the initiative has been passed.

I saw this on the front page of Yahoo.com
http://finance.yahoo.com/expert/arti...lionaire/44325

Here's the plan one of the plans he put into action
http://www.fha-refinance-program.com/FHAsecure.html

Here's the requirements for assistance:
To qualify for FHASecure, eligible homeowners must meet the following five criteria:

A history of on-time mortgage payments before the borrower's teaser rates expired and loans reset;
Interest rates must have or will reset between June 2005 and December 2009;
Three percent cash or equity in the home;
A sustained history of employment; and
Sufficient income to make the mortgage payment.
"FHASecure is designed for families who are good borrowers but were steered into high-cost loans with
teaser rates," said Assistant Secretary for Housing-FHA Commissioner Brian Montgomery. "These
homeowners, many of whom are minorities, need a safe, affordable mortgage product that will help build
wealth. All FHA borrowers pay mortgage insurance premiums to offset claims to the FHA insurance fund and
ultimately prevent risk to the taxpayer."

I don't like the idea of bailing people out for their ignorance and stupidity. Was there anyway to prevent this from being done? This wasn't something that we voted on, he just put it in to action, right?

FW Motorsports