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mrplunkey
New member
I agree, with your concept here.
But one caveat: We're both dumb-asses for not riding the bubble up and hopping off at its peak. There was money to be made and neither of us took advantage of it.
Libya to adopt Sharia Law
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I agree, with your concept here.
But one caveat: We're both dumb-asses for not riding the bubble up and hopping off at its peak. There was money to be made and neither of us took advantage of it.
redsamurai
Banned
What do middle class govt employees have to do with banks giving people making less than 18k a year 300k mortgages? That is not "real estate speculating".
This ^^^^
Their new government, their new freedom, their new problem.....
As long as they keep to themselves and don't export any dangerous ideas, or blow up any more airplanes.
javaguru
Banned
Riding a bubble is mostly about luck...I never count on my luck because I have none...
javaguru
Banned
They were giving people making 40k a year 300k mortgages who misrepresented their income, do the math, these greedy middle class government employees closed on two properties in the same week. My point being, they knew if they closed on two houses in the same week the banks wouldn't catch they were speculating and knew they couldn't afford the mortgage over the long term... It's the definition of a bubble...The trial lawyers would be all over this if evil banks and mortgage companies were defrauding people; I can't watch ten minute sof TV without telling me that I need to join a class action lawsuit if [insert scenario here] happened. Barry was all about the rhetoric of taking down the corrupt practices that lead to the real estate bubble....How many have been indicted under Obama? Nobody on Wall Street broke the law by creating credit default swaps but I guarantee many of these hard working middle class people lied about their income to materially misrepresent their income to get a loan....That violates contract law in my state...
redsamurai
Banned
wrong java, banks were hiring ex convicted drug dealers to sell mortgages. Now why would they do that? Cause these guys had swing in their old dealing grounds. Do you think they were using tactics like that to sell to middle class american suburbia? No......and of course if you go into a ghetto and hand someone a loan application and tell them that they won't be income verified, they are going to lie like a mother fucker to get that 300k loan. The whole purpose of those loans was default, turn that property around and default it again in 6 months.....they were making SHIT TONS of money doing that java. C'mon man you know this, this has been plenty written about.
mrplunkey
New member
redsamurai
Banned
javaguru
Banned
The fact someone was convicted of a crime in the past is irrelevant; Were they committing crimes in their capacity as loan officers? Did they materially misrepresent the terms of the agreement? It seems like you are blaming salesmanship for the housing crisis and excusing greed from people that aren't ceo's.
Finally, I can tell you that banks HATE defaulting loans because they almost always lose money on foreclosed property. They're in the business of making money on loans, not flipping foreclosed properties.
No. Some mortgage brokers may have done that, but not banks or lenders. They all have underwriters to go over every single part of the loan, to verify everything on the documents. If it was a stated income loan of a W2 wage earner, they looked at salary.com to verify the salary was in range. They verified employment too. If it was stated income, self-employed, they verified the business and looked at everything that was stated to see if it made sense. There were still checks and balances.
They still also used credit history and FICO scores. You can tell a lot about someone by their credit. People with experience can read someone's credit history and tell you most of that person's life story.
LOL @ going into the ghetto to give some no job having ngr with a 450 credit score because he defaulted on the only rent-a-center line of credit he ever had a fucking 300k loan. You serious? You've been eating up all the bullshit they've been feeding you.
Java > you
redsamurai
Banned
yeah actually that's exactly what happened dude. ARe "you" serious? You don't know that they "WERE NOT" doing income verification? Are you just now coming out of a long sabbatical in the woods? Did you just finish shavin off a 5 year beard and decide to reply to my post? You could put any income you wanted on the forms and they were hinting at you the whole time that it's "Illegal for us now to verify your income". That was a big part of this whole mess that people who had no chance in hell of making payments on a 300k home were gettting the mortgages. These people weren't lasting 6 months in their house's....and yeah Java the banks were making money on foreclosures, they were packaging off the high risk debt and selling it to the chinese who I realy don't know why but were eatin that shit up.
Seriously you guys don't remember any of this? wtf where am I?
mrplunkey
New member
I'm pretty sure this was the old process:
1) Mortgage company writes loan.
2) Mortgage company then pockets up-front fees and resells loan to Fannie/Freddie
3) Fannie/Freddie bundles groups of mortgages and sells them as mortgage-backed securities to secondary investment market.
Then:
1) Mortgage companies encouraged to make riskier loans in the name of home ownership. Lending standards are lowered.
2) Riskier loans became attractive to non-GSE investment firms who began bundling them into riskier portfolios.
3) GSE's continued to lower standards as well to compete with private-label mortgage bundlers.
4) Riskier portfolios are then secured with credit default swaps or insurance policies.
5) Housing prices continue to escalate via access to even cheaper and more plentiful money.
6) Bubble bursts.
7) We all learn first-hand that credit default swaps and insurance don't protect against broad-scale systemic failure.
Lessons We Should Learn:
1) Don't make crappy loans.
2) GSE's will chase business opportunities into the crapper just like private firms will. There's no benefit (and some detriments) to the government being in the secondary mortgage market.
3) Systemic risk should be priced into these portfolios as well as their associated credit default swaps and insurance policies
Lessons We Will Probably Learn Instead
1) Home ownership is an American right (completely wrong)
2) GSE's allow government to participate in and interject public policy issues into private-sector activities. (nighmarishly bad idea)
3) Banks need more regulation (another nighmarishly bad idea).
1) Mortgage company writes loan.
2) Mortgage company then pockets up-front fees and resells loan to Fannie/Freddie
3) Fannie/Freddie bundles groups of mortgages and sells them as mortgage-backed securities to secondary investment market.
Then:
1) Mortgage companies encouraged to make riskier loans in the name of home ownership. Lending standards are lowered.
2) Riskier loans became attractive to non-GSE investment firms who began bundling them into riskier portfolios.
3) GSE's continued to lower standards as well to compete with private-label mortgage bundlers.
4) Riskier portfolios are then secured with credit default swaps or insurance policies.
5) Housing prices continue to escalate via access to even cheaper and more plentiful money.
6) Bubble bursts.
7) We all learn first-hand that credit default swaps and insurance don't protect against broad-scale systemic failure.
Lessons We Should Learn:
1) Don't make crappy loans.
2) GSE's will chase business opportunities into the crapper just like private firms will. There's no benefit (and some detriments) to the government being in the secondary mortgage market.
3) Systemic risk should be priced into these portfolios as well as their associated credit default swaps and insurance policies
Lessons We Will Probably Learn Instead
1) Home ownership is an American right (completely wrong)
2) GSE's allow government to participate in and interject public policy issues into private-sector activities. (nighmarishly bad idea)
3) Banks need more regulation (another nighmarishly bad idea).
redsamurai
Banned
In lowered you mean dropped through the floor right? lol
Omg did plunkey just drop a morsel of sanity on this discussion?
Everyone outside do you see a rider upon a pale horse?
redsamurai
Banned
???
redsamurai
Banned
redsamurai
Banned
.
Yeah no a couple banks got caught doing exactly that right here in my hometown. Reporters posing as meager income people were being offered 250k loans WITHOUT ANY INCOME VERIFICATION.. First class in my business school was Econ and this was the first two weeks of the class, talking about how banks were making over on these practices.
I DISTINCTLY remember a black girl, and god I hate to relate this story cause it's so stereotypical, but that girl after the professors explanation and example of one of the local banks was like "damn i need to get my ass over to that bank asap". I distinctly remember the mortified like on the professors face as he just got done explaining how all of this shit tanked the economy and here was this black girl saying I need to hop through that loophole before they close it. And she was being dead serious, she was asking the professor the exact branch where one of these reporters caught them doing that. This was going on through the whole country dude.
I worked for a large lender. I think I know how it worked and what happened. I told you how income was "checked" on a stated income loan. If it didn't line up, the loan was rejected. On no doc loans, they relied heavily on credit history. No credit or bad credit (aka, your ghetto buyers) - NO FUCKING LOAN.
Was there massive fraud done on those types of loans? You bet! And it was all about money. On both sides (borrower and broker/LO). Someone with a lawn mowing business could state they made $12,000 a month to buy that $500,000 home on 100% financing, sure. They could even go file for a business license at the beginning of the loan process, put a "business listing" on superpages.com (free), and take a picture of their truck with a law mower, weed eater, and a couple rakes in the back as proof of their business (it would be better if they had a sign on the truck too). And say they mowed 12 yards a day at $40 a yard working 25 days a month on average and it would be possible. Not probable, but possible. But that borrower still had to have a decent FICO with minimal credit history (3 lines - at least one installment (like a car loan) with at least 12 months history on that and 2 years of total history) .
Also, you are a fucking fool if you think a bank/lender writes a loan hoping it will default. Stick with killer unpaid, hay bailing, 400% efficient turbines producing all natural pot smoke internships bro.
redsamurai
Banned
Despite your protestations to the contrary it's "exactly" what happened. Did you just wake up last year Van Winkle?
Let me put it as simply as possible...you walked into a bank, wrote down "a number", and if you were from a certain part of town and were of minority status...you got the fucking loan. Was there govt. collusion involved in this....OF COURSE, but that's not the point. Again, the banks were making bank packaging off high risk debts in ways nobody could even figure out what was high risk and what wasn't. I don't know what loophole they were exploiting I"m not a finance guy. But I know this is what they were doing BECAUSE IT HAS BEEN EXTENSIVELY WRITTEN ABOUT FOR YEARS NOW. Look I don't know the how's and why's they got past the underwriters, my best friend underwrites large business loans for PNC and he doesn't know either how they got around that. But it happened. Did some of those people know they were getting in over their head and were taking advantage of the system....obviously. But the fact banks in certain areas were hiring ex convicted drug dealers to peddle mortgages....sorry that's nuff said. End of discussion. Shave the beard and read a paper Rip.
redsamurai
Banned
yeah just txted with my friend, he confirmed people were getting up to 250k loans without dick for proof. So sorry "not 300k"
....MY BAD BORLY U MAD?
....MY BAD BORLY U MAD?
I have come to the conclusion that you quickly capitalized on the opportunities to turn this into a troll thread. Nicely done sir.
**edit** Jesus, I just realized this thread was about sharia law in libya. How the hell did it get so far off track?! Trollolololol
**edit** Jesus, I just realized this thread was about sharia law in libya. How the hell did it get so far off track?! Trollolololol
TableFun
Banned
yeah just txted with my friend, he confirmed people were getting up to 250k loans without dick for proof. So sorry "not 300k"
Lol sounds legit
mrplunkey
New member
I think we'd both agree his argument is overwhelmingly compelling.
Irregardless of subprime mortgage beef on sale
redsamurai
Banned
Yeah that was pretty much started by you but whatever, I felt like an ass tonight asking my PNC underwriter friend about the whole thing. He kind of looked at me like "are you serious I thought this was old news". I told him about a "discussion" I had with another guy who claimed to work for a large lender and he said that Banks weren't making any money on the subprime defaults. To which he laughed and said your "friend" should have paid more attention in the meetings when he was bringing the coffee in. "Of course they made money, why else would they be giving people 6 figure mortgages and NOT care about income?". These people never had a dime of equity in those homes, everything was straight interest to the bank.
Then he said remember that guy Todd we hung out with, this was when I was getting my engineering degree, he got snapped up in 04-05 by one of these subprime outfits in Arizona somewhere. Guy made utterly stupid money for a couple years then the whole division got sacked when the subprime thing got exposed. His whole job was to engineer these debt packages off to oversea's customers. He's not even working in finance anymore cause nobody will touch him for where he was. Guy is apparently trying to drink himself out leaving las vegas style.
So I dunno bro....maybe we hail from alternate universe's, ever think of that?
Then he said remember that guy Todd we hung out with, this was when I was getting my engineering degree, he got snapped up in 04-05 by one of these subprime outfits in Arizona somewhere. Guy made utterly stupid money for a couple years then the whole division got sacked when the subprime thing got exposed. His whole job was to engineer these debt packages off to oversea's customers. He's not even working in finance anymore cause nobody will touch him for where he was. Guy is apparently trying to drink himself out leaving las vegas style.
So I dunno bro....maybe we hail from alternate universe's, ever think of that?
redsamurai
Banned
yeah actually it was....
anyway, my last two cents in this post...here's a response from another friend of mine who's out in SF working for BoA...
"At every level there were fees that were paid out...anywhere between 250-750 bucks a pop....when I was at Wells the initial fee alone was 500 for an approved app its usually an origination fee to start....underwriters get a piece of that...remember too that this where Fannie and Freddie get inot the mix...Fr and Fan baought mort on the secondary market in total they bought 1 in 2 of all new morts..for a total of 5 trillion dollars in face value morts (the paper is no longer worth anywhere close to that)...those morts are insured by the fed gov so even if they're shit the bank that sold the mort to freddie gets a kick back fee...freddie gets an origination fee...if the loan goes inot the shitter..the tax payer pays the bill...for the foreclosure part fees were alos generated much the same way...Tom Woods as a great book on all of this...but they all knew how it worked and they were all getting paid...it was a total scam..."
In the end it was the usual utterly corrupt collusion between the govt (really the fed) and free market but that wasn't the issue here. You claimed that banks weren't making out on this scheme. That is utterly woefully inaccurate and something tells me you know it.
redsamurai
Banned
javaguru
Banned
Well, just because they were businessmen involved in the sale of illegal narcotics doesn't mean they were dishonest people. To use an analogy EF people might understand....there are trusted and untrusted sources and many steroid dealers behave in an ethical manner because they know it's good for long term business. Scammers are usually scammers because they know the buyer has no recourse when they get screwed....unlike legal enterprises. Where are the trial lawyers and their lawsuits? Big banks with the deepest pockets in America are the targets trial lawyers dream about....
It currently takes over 300 days on average to foreclose on a default mortgage, in Ohio it was that long or longer well before the housing crisis...Many of those properties where someone lived free for almost a year were vandalized by the foreclosed person adding additional cost. Look at the data, banks LOSE money on foreclosures....
On a different note, the new version of sharia in Libya changes the polygamy law from one where all parties had to agree to the new marriage agreement to one where the man decides...seems like they are moving to a more fundamental version of sharia law...
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