Sub-Prime Mortgage Meltdown

[Altius]

Truth, exaggerated or not taken seriously enough?

Subprime mortgage defaults will increase this year and holders of securities linked to those home loans may record losses well into next year, JPMorgan Chase & Co. analysts said.

The worst is not over in the subprime mortgage market

 

[Gymgurl]

Most the members on EF are not not smart enough to understand you....Just so you know

 

[alien amp pharm]

Most the members on EF are not not smart enough to understand you....Just so you know

Shut up!








....wait, explain to me what he is talking about before shutting up. Thanks.

 

[Gymgurl]

Im not sure lol

 

[BNG]

I don't think it's getting worse. Sub-prime is a riskier investment, real estate is cyclic and always will be. I'm in the industry and we have a program that is tailored to immigrants that is growing off the hook! The Hispanics are buying foreclosures like crazy right now here. That's pretty savvy of them I think.

 

[the_clockwork]

actually there are a lot of mortgage brokers here.. I know several helped me before I purchased my first house..

 

[slat1]

People are morons. When the market went crazy a few years ago everyone got in and had no idea what they were doing. There was ZERO cash backing the earnings of most stocks then. When the market tanked everyone was up in arms!
In the last year in Ma. mortgage defaults were up 90%.
How is that possible you ask. The dumbass's were getting adjustable rate mortgages.
People don't seem to research big decisions in their lives. It blows my mind.
I think the new qualification standards for lending should help save people from themselves...

 

[the_clockwork]

People are morons. When the market went crazy a few years ago everyone got in and had no idea what they were doing. There was ZERO cash backing the earnings of most stocks then. When the market tanked everyone was up in arms!
In the last year in Ma. mortgage defaults were up 90%.
How is that possible you ask. The dumbass's were getting adjustable rate mortgages.
People don't seem to research big decisions in their lives. It blows my mind.
I think the new qualification standards for lending should help save people from themselves...

it's stupid b/c a house is the biggest investment the majority of america makes

 

[TanOsaurus]

exaggerated.... & the U.S. government (tax-payers) shouldn't pay to bail out anyone involved in the sub-prime market.

A mortgage is the largest contractual commitment most people will make in their lives. If they didn't seek the legal advice they were instructed they should, before hand then too bad. Suck it up or get out.

 

[BNG]

I don't think ARMs are all bad for every person. Some make sense. SOME make sense. The trouble was there were people buying houses getting ridiculously bad loans because they thought they'd buy one before they went any higher and then be able to sell at a huge profit.

It's all about shopping and understanding what you're getting. My company offers Option ARMs, with caps, and a reasonable period. We have people come in now looking to refi a house that's dropped in value, they have to cap on the APR, and are tied into it for five years before they can refi with no penalties. I feel bad for some people but I can't help them all.

 

[jnevin]

ARM's aren't bad loans. People didn't think about what they were doing when they bought their houses. Quite a few people that refinanced to ARM's saved up to $1,000/ mo. doing so when they included their debts in the loan. If they can't afford their payments now that their loans are due to adjust, that's irresponsible spending on their part. As far as new purchases and what people can or can't afford, that's irresponsibility on their part as well. Granted, there are lenders that will lend irresponsibly and unethically, but I think it's more on the borrower.

 

[heatherrae]

I hope that they all go bankrupt and the investors are left in ruins. That is pretty much what they set out to do to homeowners. I hope karma works its magic back on them.

 

[jnevin]

I hope that they all go bankrupt and the investors are left in ruins. That is pretty much what they set out to do to homeowners. I hope karma works its magic back on them.

The banks didn't set out to do anything but make money. A number of companies have gone under because of the high amount of defaults. Honestly, what kind of business sets out to buy back billions of dollars in uncollectable paper and go out of business? The fault on the industry's side is with brokers. They're the ones that originate the loan, get all of the info for underwriters and the secondary market, and really get the borrowers the loans. It's so easy to commit fraud, and that's what has happened in most cases when homes are foreclosed on. Income is overstated, assets are lied about, appraisals are inflated. If a broker is doing a loan in say, Kansas, and the underwriter is in Chicago, they don't know how much income could be overstated, they also don't know how much properties are worth from one area to the next.

 

[Smurfy]

People are morons.

And there you have it.

 

[heatherrae]

The banks didn't set out to do anything but make money. A number of companies have gone under because of the high amount of defaults. Honestly, what kind of business sets out to buy back billions of dollars in uncollectable paper and go out of business? The fault on the industry's side is with brokers. They're the ones that originate the loan, get all of the info for underwriters and the secondary market, and really get the borrowers the loans. It's so easy to commit fraud, and that's what has happened in most cases when homes are foreclosed on. Income is overstated, assets are lied about, appraisals are inflated. If a broker is doing a loan in say, Kansas, and the underwriter is in Chicago, they don't know how much income could be overstated, they also don't know how much properties are worth from one area to the next.

Look, I did nothing but foreclosures for 2 years straight. I've handled well over 3,000 of them. I know all about these companies. They are pieces of shit that set the owners up to fail. In over 3000 cases that I foreclosed on people's homes, only one of them lied on their application. For the most part, these lenders are predatory and foreclose and take the homes into their REO's and resell them.

Don't get me started on these POS companies that buy up all the bad paper either.

 

[jnevin]

Look, I did nothing but foreclosures for 2 years straight. I've handled well over 3,000 of them. I know all about these companies. They are pieces of shit that set the owners up to fail. In over 3000 cases that I foreclosed on people's homes, only one of them lied on their application. For the most part, these lenders are predatory and foreclose and take the homes into their REO's and resell them.

Don't get me started on these POS companies that buy up all the bad paper either.

Ok, so you're telling me that the lender that services the paper, that is responsible for the loan, and that approved a borrower for 100% financing on a property that went into first payment default because of loan fraud was actually hoping for that to happen so they could be out thousands of dollars in legal fees and would be stuck with a property that they're upside down in? From an underwriter's standpoint, and from a person that used to deal directly with the secondary market for the nation's largest mortgage servicer, no, definitely not. I think you have the lenders and the originators mixed up. I do agree that there are a ton of mortgage brokers (Bob's Mortgage Co. or whatever) and a direct lender (Countrywide) mixed up or think they're the same. Loan fraud and foreclosures are the worst thing that can happen to a mortgage servicer like CW, Wells, etc. When they sell their paper to the secondary market, the $$$ they can make on the initial sale is affected by the way their paper performs. CW would make 4-7% when it was sold when the average for other companies was 2-4%, because of how well the paper performed (lack of first pmt default).

Option One was part of H&R Block. When they tanked, it caused Block to take an 85% loss company wide. How do you think the investors and the bank were hoping that would happen? & LOL @ the customers saying they're innocent when it comes to fraud. They have to sign a number of forms a number of times verifying the info they've given their L.O. is accurate. Then they have to do it for real at either a title company or with an attorney. They lie flat out and it's a bank's fault for giving them hundreds of thousands of dollars based on the info they gave? Come on...

 

[H_T_]

get this out of C&C, it's not entertaining me in the slightest....fuckin' homos...

 

[heatherrae]

Ok, so you're telling me that the lender that services the paper, that is responsible for the loan, and that approved a borrower for 100% financing on a property that went into first payment default because of loan fraud was actually hoping for that to happen so they could be out thousands of dollars in legal fees and would be stuck with a property that they're upside down in? From an underwriter's standpoint, and from a person that used to deal directly with the secondary market for the nation's largest mortgage servicer, no, definitely not. I think you have the lenders and the originators mixed up. I do agree that there are a ton of mortgage brokers (Bob's Mortgage Co. or whatever) and a direct lender (Countrywide) mixed up or think they're the same. Loan fraud and foreclosures are the worst thing that can happen to a mortgage servicer like CW, Wells, etc. When they sell their paper to the secondary market, the $$$ they can make on the initial sale is affected by the way their paper performs. CW would make 4-7% when it was sold when the average for other companies was 2-4%, because of how well the paper performed (lack of first pmt default).

Option One was part of H&R Block. When they tanked, it caused Block to take an 85% loss company wide. How do you think the investors and the bank were hoping that would happen? & LOL @ the customers saying they're innocent when it comes to fraud. They have to sign a number of forms a number of times verifying the info they've given their L.O. is accurate. Then they have to do it for real at either a title company or with an attorney. They lie flat out and it's a bank's fault for giving them hundreds of thousands of dollars based on the info they gave? Come on...

These companies set people up with loans and interest rates that were obviously impossible based on income, etc. They don't plan to be out thousands. They intend to gvie the loans at outrageous interest rates, foreclose, resell the house and do it all over again.

In my experience, some of the loans were not even in default. They would erroneously send them to foreclosure. Then, when the homeowners called and provided PROOF of payments that the lender said were missed, they couldn't even get anyone to review the documentation. Why? Because they hire 19 year olds who didn't even know how to look at the amortization charts.

I've also seen plenty of cases where the lender entered into a forbearance agreement with the homeowner to make up missed payments. So the homeowner would send the lender, for example, $3000 and agree to make up the difference in the arrearage over 6 months along with their monthly mortgage payment. The lender then broke the written forbearance agreement and foreclosed anyway knowing that the homeowner would have no money left to file a counterclaim in the foreclosure to assert the validity of the forbearance agreement.

They are POS. Thank god I don't have to deal with them anymore.

 

[Lestat]

I've got a lot of cash stashed for when the bottom falls out of the market, I will be able to come in with cash and pick up some properties because of distressed sales.

 

[mobro]

I've got a lot of cash stashed for when the bottom falls out of the market, I will be able to come in with cash and pick up some properties because of distressed sales.

yep, already falling in some places

 

[Mavafanculo]

Most the members on EF are not not smart enough to understand you....Just so you know

He's talking about food, right?

-

 

[Spartacus]

People are morons. When the market went crazy a few years ago everyone got in and had no idea what they were doing. There was ZERO cash backing the earnings of most stocks then. When the market tanked everyone was up in arms!
In the last year in Ma. mortgage defaults were up 90%.
How is that possible you ask. The dumbass's were getting adjustable rate mortgages.
People don't seem to research big decisions in their lives. It blows my mind.
I think the new qualification standards for lending should help save people from themselves...

doing well in the bookie forum lately aren't you?

 

[jnevin]

These companies set people up with loans and interest rates that were obviously impossible based on income, etc. They don't plan to be out thousands. They intend to gvie the loans at outrageous interest rates, foreclose, resell the house and do it all over again.

In my experience, some of the loans were not even in default. They would erroneously send them to foreclosure. Then, when the homeowners called and provided PROOF of payments that the lender said were missed, they couldn't even get anyone to review the documentation. Why? Because they hire 19 year olds who didn't even know how to look at the amortization charts.

I've also seen plenty of cases where the lender entered into a forbearance agreement with the homeowner to make up missed payments. So the homeowner would send the lender, for example, $3000 and agree to make up the difference in the arrearage over 6 months along with their monthly mortgage payment. The lender then broke the written forbearance agreement and foreclosed anyway knowing that the homeowner would have no money left to file a counterclaim in the foreclosure to assert the validity of the forbearance agreement.

They are POS. Thank god I don't have to deal with them anymore.

You're talking Household and Ameriquest there. I'd have to agree with you on those, but making a blanket statement about the whole industry is off.

 

[heatherrae]

You're talking Household and Ameriquest there. I'd have to agree with you on those, but making a blanket statement about the whole industry is off.

I probably already said too much. I'm talking about 90% of the lenders out there that do those sorts of loans. They were even nasty for their own attorneys to deal with.

 

[Lestat]

what do you think of reverse mortgages?

 

[heatherrae]

what do you think of reverse mortgages?

Theoretically okay. In practice in the real world, I've seen lots of old people get snowed/scammed.

 

[Lestat]

Theoretically okay. In practice in the real world, I've seen lots of old people get snowed/scammed.

exactly. better ways to leverage the value of your home to get some disposable income

 

[Gymgurl]

He's talking about food, right?

-

Food would be more entertaining...