New York Times mortgage article

[SHELLY]

The strip mall subprime gang have their fingerprints all over this trainwreck. But their defense will be that they were merely trained (well-paid) chimps who worked boiler room cold calling centers and typed up loan documents....period! If this is the case, they never provided a value-added service to the client who paid dearly for their services. If that is true, then their jobs can be totally eliminated and replaced by a "fill in the blanks" website going forward.

 

[Bob]

Shelly, The two biggest lenders in the country do subprime, Countrywide and Wells Fargo. Regarding the hatchet job article, the likes of which you continually paper this board with, the term describing the referenced transaction was "benefit to the borrower". The cash received by the borrower was the value-added service. I'll bet you a Norman Vincent Peale seminar that said borrower took the cash at closing and has no intention of repaying the lender. I guess she needs it for her attorney. He's the only person to listen to her story other than the reporter who has no knowledge of the lending industry.

 

[Babyblue]

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:

You did not refer to the old lady as "knowingly" and a good trial lawyertwisted: ) would say you have a case. They would just sue for the limits of the policy.

 

[Mango]

The strip mall subprime gang have their fingerprints all over this trainwreck. But their defense will be that they were merely trained (well-paid) chimps who worked boiler room cold calling centers and typed up loan documents....period! If this is the case, they never provided a value-added service to the client who paid dearly for their services. If that is true, then their jobs can be totally eliminated and replaced by a "fill in the blanks" website going forward.

You're right about strip mall subprime monkeys in boiler rooms, I have seen it with my own eyes, and it's pathetic, the reason I got out of subprime wholesale lending, however, ultimately it's the responsibitlity of the "preyed upon" to not be caught, If you sat in my office and fielded calls from people who are looking around for that deal that I wouldn't do and many others, you'd see that some do not listen to reason. Now the government is supposed to be a counselor/protector/ bailout sugar daddy to protect the rights of those that do not pay and are fiscally irresponsible?

You did not refer to the old lady as "knowingly" and a good trial lawyertwisted: ) would say you have a case. They would just sue for the limits of the policy.

Hmmm, :scratch: I just call them ambulance chasers.

 

[SHELLY]

Now the government is supposed to be a counselor/protector/ bailout sugar daddy to protect the rights of those that do not pay and are fiscally irresponsible?

If the government is going to foot the bill for the cleaning up the mess left behind by *subprimates, then they should test, license and regulate them.


(* The chimps that work the subprime mortgate industry )

 

[Mango]

If the government is going to foot the bill for the cleaning up the mess left behind by *subprimates, then they should test, license and regulate them.


(* The chimps that work the subprime mortgate industry )

That would also mean training their own chimps (the government) since Fannie Mae and Freddie Mac, all Federal agencies, bought subprime loans as well. While they are at it, they can train the chimps that do their accounting since they seem to misreport their income.

 

[30A Skunkape]

This article dedicated to Shelly


Top investor sees U.S. property crash
Wed Mar 14, 2007 12:59PM EDT
By Elif Kaban

MOSCOW (Reuters) - Commodities investment guru Jim Rogers stepped into the U.S. subprime fray on Wednesday, predicting a real estate crash that would trigger defaults and spread contagion to emerging markets.

"You can't believe how bad it's going to get before it gets any better," the prominent U.S. fund manager told Reuters by telephone from New York.

"It's going to be a disaster for many people who don't have a clue about what happens when a real estate bubble pops.

"It is going to be a huge mess," said Rogers, who has put his $15 million belle epoque mansion on Manhattan's Upper West Side on the market and is planning to move to Asia.

Worries about losses in the U.S. mortgage market have sent stock prices falling in Asia and Europe, with shares in financial services companies falling the most.

Some investors fear the problems of lenders who make subprime loans to people with weak credit histories are spreading to mainstream financial firms and will worsen the U.S. housing slowdown.

"Real estate prices will go down 40-50 percent in bubble areas. There will be massive defaults. This time it'll be worse because we haven't had this kind of speculative buying in U.S. history," Rogers said.

"When markets turn from bubble to reality, a lot of people get burned."

The fund manager, who co-founded the Quantum Fund with billionaire investor George Soros in the 1970s and has focused on commodities since 1998, said the crisis would spread to emerging markets which he said now faced a prolonged bear run.

"When you have a financial crisis, it reverberates in other financial markets, especially in those with speculative excess," he said.

"Right now, there is huge speculative excess in emerging markets around the world. There will be a lot of money coming out of emerging markets.

"I've sold out of emerging markets except for China," said Rogers, long a prominent China bull.

Even in China, the world's fastest expanding economy, Rogers said stocks were overvalued and could go down 30-40 percent.

But he added: "China is one of the few countries in the world where I'm willing to sit out a 30-40 percent decline."

The last stock market bubble to burst was the dot-com craze which sparked a crash from March 2000 to October 2002.

When the last bubble burst in Japan, said Rogers, stock prices went down 85 percent despite the country's high savings rate and huge balance of payment surplus.

"This is the end of the liquidity party," said Rogers. "Some emerging markets will go down 80 percent, some will go down 50 percent. Some will most probably collapse."

? Reuters 2006. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

 

[SHELLY]

This article dedicated to Shelly


Top investor sees U.S. property crash
Wed Mar 14, 2007 12:59PM EDT
By Elif Kaban

MOSCOW (Reuters) - Commodities investment guru Jim Rogers stepped into the U.S. subprime fray on Wednesday, predicting a real estate crash that would trigger defaults and spread contagion to emerging markets.

"You can't believe how bad it's going to get before it gets any better," the prominent U.S. fund manager told Reuters by telephone from New York.

"It's going to be a disaster for many people who don't have a clue about what happens when a real estate bubble pops.

Hell...compared to Jim, I sound like David Lereah


.


.

 

[SHELLY]

That would also mean training their own chimps (the government) since Fannie Mae and Freddie Mac, all Federal agencies, bought subprime loans as well. While they are at it, they can train the chimps that do their accounting since they seem to misreport their income.

Not as many as you think.

March 16 WSJ had an article about that. Here's an excerpt:

"For decades, the FHA was a major backer of mortgage funding for borrowers with poor credit. But the FHA’s share of the market has dropped sharply in the past decade as hordes of aggressive subprime lenders wooed away borrowers with an array of seemingly attractive options, including no-money-down mortgages and interest-only payments. The subprime players also offered faster approvals, instant home appraisals, less paperwork and fewer hassles, winning over consumers even though subprime mortgage rates were generally higher than rates for FHA-insured mortgages.

According to Inside Mortgage Finance, subprime mortgage originations, or the dollar volume of such new loans nationwide, totaled $600 billion last year, more than triple the 2002 volume of $185 billion. FHA-backed loan volume fell to $53.7 billion last year, down from $145.1 billion in 2002."

----------------------------------------------------------
In addition, for anyone who is interested, there is an EYE OPENING series starting today in the Charlotte (NC) Observer about how Beazer Homebuilders did some hocus-pocus to get first-time buyers to qualify for FHA-Insured Mortgages: Sold a Nightmare Now many of those buyers are finding themselves with poorly built houses, underwater in payments and facing foreclosure. Moreover, we taxpayers are going to have to make good on these loans.
.

 

[Mango]

FHA is a separate entity than Fannie Mae and Freddie Mac. They are much more difficult loans to get, the Bankers who are approved by them go through rigorous approval processes to get their "wings". They have been doing high LTV loans for as long as I have been in the business. They have their own appraisers who go out to the properties (also FHA approved)

As far as the Beezer article, 1) what were people expecting to get for $100K or so on a home (top of the line siding, slate roofs?) :roll:

Further, FHA has been doing 3 year rate buy downs forever. The $100 difference in payments bewteen 2 wage-earners at the end of 3 years is not considered a hardship by FHA since they expect that people will be at least getting raises according to inflation.

Then the noted family says they had wanted to get a bigger house in 5 years, then go and have the husband stay home to watch their daughter in lieu of working. Once again, poor financial decisions.
I really wonder where for $1000 a month, they thought they could live with 2 kids.
FYI- if the car wasn't in her name on the credit report and they didn't use his income, you would NOT put it on the loan application since it is not her debt.
This is just another example of people who have big dreams, but once again are fiscally irresponsible. The article doesn't tell you they probably went and bought all new furniture on credit after they closed, (of course you can't have a new house without new furniture....:roll: ) or how much their rent was prior to buying this house.