New York Times mortgage article

[Mango]

A very close friend of mine is a attorney whom we have shared case studies together. One case that he handled was against Westinghouse. That company financed satellite dish's to home owners. A 99 dollar dish could end up costing you 5k or more over the life of the loan. He sued and won on behalf of the 2 plaintiffs. One plaintiff was blind and the other did not even own a TV. Both were poor and lived in the rural south. Not all folks are like you say.

I had to read this a few times because at first I thought you were joking.

So, if I am knowingly allergic to shellfish, and I walk into a seafood restaurant and order a lobster and shrimp, then have a violent reaction and get rushed to the hospital, are you saying I would have a case against the restaurant who sold it to me because they didn't ask if I was allergic to it?

I didn't say all folks. I said most subprime Borrowers. Subprime loans are people with BAD credit. :roll:

 

[Mango]

As it continues to unfold, the implosion of the subprime mortgage system will be an interesting story to watch as it winds its way through the economy. The weeks and months ahead will provide never-ending casts of guilty and innocent characters, perp walks, finger-pointing, fraud, manipulation and greed--it will eclipse the Worldcom/Enron debacles in size and scope.

To provide added insight, a former "Mortgage Insider" is blogging series on the Subprime Lending fiasco: HERE

Seen this before, but it still cracks me up.
Socalmtgguy works for a Bank (wholesaler) and helps Brokers place subprime and Alt A loans, and then 2) he has a link for visa/MC for consults of $150 for 30 minutes to tell you if you are being stiffed. :roll:
The Banking Dept. could have a field day with this guy.

 

[SHELLY]

The cost of a toxic mix of "easy money" and "easy credit" during a housing boom? Taxpayers, prepare to open your wallets.

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?U.S. lawmakers will have to consider providing aid to about 2.2 million subprime mortgage borrowers who are at risk of defaulting and losing their homes, Senate Banking Committee Chairman Christopher Dodd said today.?

??The impact of losing 2.2 million homes I suspect will be in a lot of areas of our cities and towns that are already pretty hard hit, so we clearly want to look at that and legislate,? Dodd told reporters.?

?Federal aid ?would come at a cost,? said Douglas Duncan, chief economist at the Mortgage Bankers Association. ?It has to be paid for and the question is would the 34 percent of homeowners who have no mortgage be willing to pay taxes to support the bailout of people who traditionally have not managed credit well???

 

[SHELLY]

Seen this before, but it still cracks me up.
Socalmtgguy works for a Bank (wholesaler) and helps Brokers place subprime and Alt A loans, and then 2) he has a link for visa/MC for consults of $150 for 30 minutes to tell you if you are being stiffed. :roll:
The Banking Dept. could have a field day with this guy.

If you go back several months, you'll find he saw the writing on the wall and bailed out of the mortgage biz.

Some of his early stories he related from "inside" were unbelieveable at the time (what people were getting away with)--now we're seeing that they were true.



.

 

[Mango]

If you go back several months, you'll find he saw the writing on the wall and bailed out of the mortgage biz.

Some of his early stories he related from "inside" were unbelieveable at the time (what people were getting away with)--now we're seeing that they were true. .

Or was fired or layed off. He still has his little consulting business it appears though. What he is doing is illegal. If you collect fees from someone and consult on a mortgage, you MUST be licensed in that State as Broker or Banker. It's akin to someone dispensing legal advice without attending law school, hanging a shingle, and getting paid.

I have to say though that although I got mailings from subprime lenders, I did not pay much attention to them, but quite a few of those ads he has posted are not truly indicative of the programs offered. That Countrywide one looks like it is multiple loan programs, not just one. There is a teeny weeny disclaimer on the bottom regarding FICO scores.

I am not implying that subprime lenders didn't get crazy with their offerings compared to when I got in the business 19 years ago.

 

[Mango]

The cost of a toxic mix of "easy money" and "easy credit" during a housing boom? Taxpayers, prepare to open your wallets.

--------------------------------------------------

?U.S. lawmakers will have to consider providing aid to about 2.2 million subprime mortgage borrowers who are at risk of defaulting and losing their homes, Senate Banking Committee Chairman Christopher Dodd said today.?

??The impact of losing 2.2 million homes I suspect will be in a lot of areas of our cities and towns that are already pretty hard hit, so we clearly want to look at that and legislate,? Dodd told reporters.?

?Federal aid ?would come at a cost,? said Douglas Duncan, chief economist at the Mortgage Bankers Association. ?It has to be paid for and the question is would the 34 percent of homeowners who have no mortgage be willing to pay taxes to support the bailout of people who traditionally have not managed credit well???

Maybe Dodd could get Arthur Anderson to pay for it. He saved them millions during the Enron crisis. :roll:
Wonder who he's cowtowing (sp?) now too.

 

[bdc63]

The cost of a toxic mix of "easy money" and "easy credit" during a housing boom? Taxpayers, prepare to open your wallets.

--------------------------------------------------

“U.S. lawmakers will have to consider providing aid to about 2.2 million subprime mortgage borrowers who are at risk of defaulting and losing their homes, Senate Banking Committee Chairman Christopher Dodd said today.”

“‘The impact of losing 2.2 million homes I suspect will be in a lot of areas of our cities and towns that are already pretty hard hit, so we clearly want to look at that and legislate,’ Dodd told reporters.”

“Federal aid ‘would come at a cost,’ said Douglas Duncan, chief economist at the Mortgage Bankers Association. ‘It has to be paid for and the question is would the 34 percent of homeowners who have no mortgage be willing to pay taxes to support the bailout of people who traditionally have not managed credit well?’”

This just pisses me off to no end.

These people made a choice to live beyond their means ... rather then letting them fail and learn a valuable life lesson from it, what are we going to do? Use taxpayer money to bail them out. What's the message? Its okay to take risks and live beyond your means 'cause the government is there to bail you out.

I found this on iTulip.com:
"I have a better idea. How about this time Goldman Sachs, J.P Morgan, Merrill Lynch, Citibank, BoA, et al, clean up their own mess and pay for the bailout instead of taxpayers? Sure, the cost might put some of these banks out of business, but who cares? Other better run banks will take their place."

Amen.

I need a drink.

 

[Bob]

(From the Wall Street Journal)

At a Mortgage Lender, Rapid Rise, Faster Fall

By James R. Hagerty, Ruth Simon, Michael Corkery and Gregory Zuckerman
From The Wall Street Journal Online

Ruthie Hillery was struggling to make the $952 monthly mortgage payment for her three-bedroom home in Pittsburg, Calif., last summer when a mortgage broker called. The broker persuaded the 70-year-old Ms. Hillery to refinance into a "senior citizen's" loan from New Century Financial Corp. that she thought would eliminate the need to make any payments for several years, according to her lawyer.

Instead, the $336,000 adjustable-rate loan started out with payments of $2,200 a month, more than double her income. In December, Ms. Hillery received notice that New Century intended to foreclose on the property. Then, earlier this month, after a formal demand by the lawyer, New Century agreed to refund all its fees and cancel the loan once Ms. Hillery gets refinancing elsewhere.

The lawyer, Alan Ramos, says the loan never should have been made. "You have a loan application where the income section is blank," Mr. Ramos says. "How does it even get past the first person who looks at it?
---------------------------

Who is the greedy party is in the story above....

(a) The 70 year old lady struggling with a $952 monthly payment?

(b) The mortgage broker who CALLED her and offered her a "senior citizen's rate" that was double the amount she was struggling to pay?

(c) The Mortgage Company who processed the loan with the income section left blank?

(d) President Bush

(e) FEMA

(Hint: Whose pockets were lined by the event above?)

.....................................................................................

The borrower is the greedy party trying to deflect, because the scenario you have described is a no-doc loan. The income section is left blank, and the borrower is aware because she signs every page of the application, including, in Florida, about 20 odd other disclosures[good faith estimate and truth-in-lending et al.] fully illustrating the scope of the transaction. Don't know about Ca., but Florida has a 3 business day right of recission on all refinances. Regarding whose pockets were lined, I guarantee the borrower's pockets were lined by a cash-out closing, because if the rate and term were less advantageous, then the borrower had to be receiving funds at closing for the loan to fly. New Century folded on this loan, because, with no way to reference income on a no-doc, the case becomes Little Old Lady versus Darth Vader Mortgage Inc., a classic he said-she said. It's the same reason disclosure requirements are growing faster than Bill Clinton's black book....litigationlitigationlitigation....no one is responsible because....fill in the blank!!!!!!!!!!!

 

[Mango]

The borrower is the greedy party trying to deflect, because the scenario you have described is a no-doc loan. The income section is left blank, and the borrower is aware because she signs every page of the application, including, in Florida, about 20 odd other disclosures[good faith estimate and truth-in-lending et al.] fully illustrating the scope of the transaction. Don't know about Ca., but Florida has a 3 business day right of recission on all refinances. Regarding whose pockets were lined, I guarantee the borrower's pockets were lined by a cash-out closing, because if the rate and term were less advantageous, then the borrower had to be receiving funds at closing for the loan to fly. New Century folded on this loan, because, with no way to reference income on a no-doc, the case becomes Little Old Lady versus Darth Vader Mortgage Inc., a classic he said-she said. It's the same reason disclosure requirements are growing faster than Bill Clinton's black book....litigationlitigationlitigation....no one is responsible because....fill in the blank!!!!!!!!!!!

You go Bob. ;-)

The three day right of recission is nationwide law (Reg Z- part of Truth in Lending) pertaining to refinances of primary residences, which means you have 3 full days, excluding Sundays and holidays, to cancel the loan. By law, you are to receive every penny back spent relative to the transaction, which even includes the Banks eating the appraisal fees.
It's obvious she got lots of cash out since you do not go from a $952 payment on a $335k loan to $2200 a month unless you had an interest rate of 1.% or so.:roll:
In a case with a fixed income Borrower, you can not do a stated income loan (income stated, but not verified), so the only type of loan they could do was a NO DOC, which means they do not list employment or any any income whatsoever.

It's unfortunate because if she had that much equity in the house, and was having trouble paying she should have been in a reverse mortgage.
She could have easily walked into any Bank and got that type of loan, but probably didn't explore all options available.

 

[Bob]

Thanks Mango, Certain states have even more consumer protection in place. Texas, has a 12 day cooling off period for home equity transactions, and a three calendar day rescission period running with federal protections.