Subprime 'crisis' is just how our free market works

[bushwacker canton]

yona wrote:

A true conservative asks not for help from the government, but takes responsibility for his or her own lives.
Some people made really bad mistakes. I know a few friends of mine in trouble right now. They bought big homes that were a little more than they could afford. Then they kept refinancing every year or so, for the last six or seven years. They found that their property value kept going up so they could pull money out of the property for remodeling or trips. Now the bubble burst, and their property is going down in value. They are left with huge mortgage payments, and no way to sale the house.
I feel for my friends that did this to themselves, but I don't think it is our governments job to bail them out.

I guess it just a coinsidence that everything goes all to hell evertime we have a repuke pres.

[Frank Rizzo]

bushwacker canton wrote:

<quoted text>
I guess it just a coinsidence that everything goes all to hell evertime we have a repuke pres.

Take note that none of these problems happened until the democrats were in control of congress.

One of the things they ran on was that they had a plan to lower gas prices. Prices up over $1 a gallon since the democrats took over and they haven't shown one word of their "plan".

[yona]

bushwacker canton wrote:

<quoted text>
I guess it just a coinsidence that everything goes all to hell evertime we have a repuke pres.

The lower interest rates and subprime mortgage debackle started pre 2000. It was a Clinton initiative that has been builing to the point of unsustainability. Now it bursts on Republican watch, and not only do we have to fix it, but memory impared Democrates blame President Bush for it.

Who should I vote for? Clinton the high tax, illegal amnesty, socialist? Obama the terrorist molifying, surrender happy, high tax, illegal amnesty, communist? McCain the stay the failing course, more of the same, in the laps of liberals, illegal amnesty, who knows what he really is? I have not seen one candidate that doesn't make me weap for the next four years.

[mac vs pc showdown]

Frank Rizzo wrote:

<quoted text>
Take note that none of these problems happened until the democrats were in control of congress.
One of the things they ran on was that they had a plan to lower gas prices. Prices up over $1 a gallon since the democrats took over and they haven't shown one word of their "plan".

what were the gas prices before an oil man republican president took office? then complain because the dems haven't fixed the mess?
just create alternate realities as you go, as usual...

[CIVICS 101]

As The subprime mortgage mess continues you should find the following very interesting.
Today, quasi-government agencies, including Fannie Mae and Freddie Mac, and the government agency Ginnie Mae facilitate the bundling of loans into mortgage-backed securities (MBS) to sell to institutional investors. Lenders use the proceeds from these sales to finance new mortgages. The government sets limits on the size and quality of the mortgages these agencies can purchase. Those that qualify — generally prime loans of under $417,000 made to borrowers whose total debt meets agency standards — are called conforming loans.(That limit has been temporarily increased through December 2008 to help make credit more affordable for qualifying borrowers.)
Investment bank securitization
More recently, investment banks began competing with the agencies in the securitization of mortgages. According to Inside Mortgage Finance, from 2003 to 2006, the agencies’ share of mortgage-backed securities (MBS) issuance fell from 76% to 43%. On the other hand, Wall Street’s share of the secondary mortgage market climbed from 24% to 57% during the same period. The rapid proliferation of so-called private label issues went hand-in-hand with an equally profound change in mortgage underwriting. Fannie Mae and Freddie Mac purchase and securitize loans they acquire based on guidelines which do not allow for the purchase of many subprime loans, or loans with balances above the conforming loan limit. Private label issuance was an outlet to the secondary market for many subprime and other non-conforming loans.
Please stop blaming Clinton for allowing freddie mac to buy subprime loans as it was the private label mortgage notes that are most to blame for this crisis.
Further to that idea John McCain was nearly indicted along with the other co-defendants in the savings and loans scandal of the 1980s.
These people fleeced Americans of their homes by giving them astronomical interest rates and selling their homes for a profit once they were in default.
I am a libertarian who voted for Bush the first time and I could never support McCain.

[CIVICS 101]

ps I am a Mortgage broker

[Jim C]

Frank Rizzo wrote:

<quoted text>
I suspect you are not a realtor.
I did mortgages for 10 years. I never made 15K on a loan. And it is illegal to change the rate and terms at the closing table. If you were really a realtor you would know that.
The rate reset was explained to all "subprime" borrowers. The most common loan taken was a 2/28 ARM. And the borrowers knew their rate would go up and they had 2 years to improve their credit so they could refinance to a conforming A paper loan.
Refinancing previous customers is a sizeable source of mortgage closings for mortgage lenders. I would always take a look at my subprime customers situation 18 months after original closing to try and get them out of that loan and into a conforming loan. The % of those who had actually improved their credit during those 18 months was in the single digits. Most of them got WORSE!
And the subprime market was a direct result and response to the governments demands for expanding who money was lent to under the guise of the Community Reinvestment Act.

It's great that you do follow-up for those customers who had the 2/28 loans 18 months after the loan was issued.

Having a 2/28 loan myself, the goal you mentioned with trying to improve your credit within those two years was our aim once set into this type of loan.

I'll have to read the intended goals for the Community Reinvestment Act. I would like to read the proposals and the not too bright "solutions".

[Realtor as well]

Frank Rizzo wrote:

<quoted text>
I suspect you are not a realtor.
I did mortgages for 10 years. I never made 15K on a loan. And it is illegal to change the rate and terms at the closing table. If you were really a realtor you would know that.
The rate reset was explained to all "subprime" borrowers. The most common loan taken was a 2/28 ARM. And the borrowers knew their rate would go up and they had 2 years to improve their credit so they could refinance to a conforming A paper loan.
Refinancing previous customers is a sizeable source of mortgage closings for mortgage lenders. I would always take a look at my subprime customers situation 18 months after original closing to try and get them out of that loan and into a conforming loan. The % of those who had actually improved their credit during those 18 months was in the single digits. Most of them got WORSE!
And the subprime market was a direct result and response to the governments demands for expanding who money was lent to under the guise of the Community Reinvestment Act.

Oh, I am a realtor all right. Over 20 years. And if you are a lender, you are scum if you deny many lenders prey on poor folks with suspect credit and make way too much than they should. I have seen the closing statements, my friend.

[Lake28804]

Realtor as well wrote:

<quoted text>
Oh, I am a realtor all right. Over 20 years. And if you are a lender, you are scum if you deny many lenders prey on poor folks with suspect credit and make way too much than they should. I have seen the closing statements, my friend.

There are scam artists of every variety but there are and have been limits to what even a scammer could do. NC mortgage law has recently tightened up, but even before that the max that could be charged to a borrower was 5%, including the broker fee, lender fee and other closing costs. If you know of someone paying $12K or $15K to a broker, all I can gather is you are selling homes in the >$1MM range.(For the record, I am not a broker nor lender but I am involved with financial institutions and I do know the law.)

I don't understand real estate agents who get off on screaming about mortgage lenders/brokers who typically ask for 1% of the selling price as their fee. Real estate agents get a 6% fee. Who's scamming who?

[Frank Rizzo]

Realtor as well wrote:

<quoted text>
Oh, I am a realtor all right. Over 20 years. And if you are a lender, you are scum if you deny many lenders prey on poor folks with suspect credit and make way too much than they should. I have seen the closing statements, my friend.

Let me know when a mortgage broker has a bigger commission that you. I am no longer in the mortgage business. I do remember several times though the agent trying to get me to reduce the 1% orgination fee to freeup some money at closing and reduce how much the buyer had to bring. I asked how much they were going to reduce their %. The answer, none. So neither did I.

I still doubt you're a realtor. Claiming it is not illegal to change the terms and rate of the loan at the closing table from the documents signed previous.

[Frank Rizzo]

Jim C,

If you have a 2/28 and have been able to improve your credit and will be able to refinance out of it I applaud you. You are in a very small minority. The vast majority just continue compounding their problems.

[Lake28804]

Frank Rizzo wrote:

Jim C,
If you have a 2/28 and have been able to improve your credit and will be able to refinance out of it I applaud you. You are in a very small minority. The vast majority just continue compounding their problems.

The VERY small minority. From all I have seen of subprime borrowers, a leopard does not change its spots. Assuming people would improve their credit and refi to an improved mortgage/rate was a pipedream everyone fell for. It didn't happen because their credit got worse, not better. Sad but true.

[Stone Jack Baller]

Lake28804 wrote:

<quoted text>
There are scam artists of every variety but there are and have been limits to what even a scammer could do. NC mortgage law has recently tightened up, but even before that the max that could be charged to a borrower was 5%, including the broker fee, lender fee and other closing costs. If you know of someone paying $12K or $15K to a broker...

For $12K to $15K in commisions I'm guessing the broker has a broken nose and a name like -- Luca Brasi!

[Lake28804]

Stone Jack Baller wrote:

<quoted text>
For $12K to $15K in commisions I'm guessing the broker has a broken nose and a name like -- Luca Brasi!

Right you are and he will sleep with the fish! Lol

[Ghost Dog]

"Countrytime, countrywide", you knew what I was talking about, just didn't take the time to get the name right, shooting from the hip, same with Alito, meant Scalia, both Italian, both Republican appointees. I may not know the "ins and outs" of the mortgage business but what I was referring to was the fact that unscrupulous mortgage lenders and real estate persons were involved in giving mortgages to people who couldn't afford them in the first place, only so they could make more money. Used to be that people who could not afford a $200 thousand house were denied the mortgage, not encouraged to take an "interest only" mortgage that would increase payments down the road. The people wanted a house they couldn't afford and the mortgage lenders were eager to put them in without concern for what would happen to them down the road. Countrywide was "buying" mortgages, so they were involved in the buying ans selling of mortgages. It was the extra fees, abnormal charges, etc. that the SEC is still investigating.

[Jim C]

Lake28804 wrote:

<quoted text>
The VERY small minority. From all I have seen of subprime borrowers, a leopard does not change its spots. Assuming people would improve their credit and refi to an improved mortgage/rate was a pipedream everyone fell for. It didn't happen because their credit got worse, not better. Sad but true.

A pipe dream it was I agree. I did not anticipate the job loss of my spouse and a long time passing before she again found stable employment. We would still be in a bad situation since the 2/28 reset in dec 07 and the housing prices tumbled. Previously to my wife losing employment my credit rating was higher and climbing and if home values did not tumble we may now be in a fixed rate VA insured loan.
Anyway, with your leopard cannot change spots and only a single digit success rate, these loans should become illegal. for a single digit success rate, these loans must be at a minimum 90% garbage.
As you know, after reset these loans are 100% or greater garbage entities. At least I still have a house though it is tough to hold onto, ever so often some remarkable streak of luck comes our way. The latest great streak of luck was the loan company somehow figured my taxes twice and wanted to double the amount of escrow. They are checking it out since somehow they had me for three parcels for taxes. In about 12 days they should have it resolved. I guess bad fortune has a lot to do with some matters and the competences of those one does business with. Either that or 2/28 borrowers were cursed also.

[Jim C]

Ghost Dog wrote:

"Countrytime, countrywide", you knew what I was talking about, just didn't take the time to get the name right, shooting from the hip, same with Alito, meant Scalia, both Italian, both Republican appointees. I may not know the "ins and outs" of the mortgage business but what I was referring to was the fact that unscrupulous mortgage lenders and real estate persons were involved in giving mortgages to people who couldn't afford them in the first place, only so they could make more money. Used to be that people who could not afford a $200 thousand house were denied the mortgage, not encouraged to take an "interest only" mortgage that would increase payments down the road. The people wanted a house they couldn't afford and the mortgage lenders were eager to put them in without concern for what would happen to them down the road. Countrywide was "buying" mortgages, so they were involved in the buying ans selling of mortgages. It was the extra fees, abnormal charges, etc. that the SEC is still investigating.

You cover the situation pretty fair. If you drop the home by 20k it would almost be a diary entry I could have made. Hopefully the SEC uncovers and prosecutes as much of the abuse that they find.

[Jim C]

Frank Rizzo wrote:

Jim C,
If you have a 2/28 and have been able to improve your credit and will be able to refinance out of it I applaud you. You are in a very small minority. The vast majority just continue compounding their problems.

I got a little way toward the goal but then joined the majority. Credit ratings were improving, then setbacks happened. I guess you can hold the applause.

I still appreciate you following up for your customers to see if they bettered their situation and could finance into a better termed loan.

[Jerry Cohen]

bushwacker canton wrote:

Where were you people who don't believe in a bailout when w gave 30 billion to Bears Stern?Guess your like most repukes it o.k to give bailouts to big company's just not the average person.

I protested any bailout for investors as well as mortgagees

[Realtor as well]

Frank Rizzo wrote:

<quoted text>
Let me know when a mortgage broker has a bigger commission that you. I am no longer in the mortgage business. I do remember several times though the agent trying to get me to reduce the 1% orgination fee to freeup some money at closing and reduce how much the buyer had to bring. I asked how much they were going to reduce their %. The answer, none. So neither did I.
I still doubt you're a realtor. Claiming it is not illegal to change the terms and rate of the loan at the closing table from the documents signed previous.

You're a huge fool if you would tell folks of just a ONE percent fee. What about the money on the back end? Many unscrupulous mortgage brokers make THOUSANDS and THOUSANDS on the back end. You know that.
Typically we as realtors split the commission with a co-op realtor. Then we split with our broker.
So we may get 1.5%, out of which we pay taxes and advertising.
We don't get a damn dime on the back end, screwing folks like you do, and then telling them how you "got" them a good rate.
Laughing all the way to the bank because they could have got 1-2-3% less, but YOU wanted to make more for yourself.
Predatory lending.
I personally could care less that you doubt if I am a realtor. We avoid your type like the plague, and that is why you don't sek our business because we recommend good ethical lenders, unlike your self.
SO, put that in your pipe and smoke it.