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RESIDENT EXPERT

Whose Fault Is This?

The mortgage industry defends itself.

By Daniel McGinn | Newsweek Web Exclusive
Jan 29, 2008 | Updated: 2:47  p.m. ET Jan 29, 2008

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  • Posted By: pduncan2000 @ 03/13/2008 1:02:27 PM

    Comment: A few Broker's were were parlt reposible for the qualifying of certain borrowers., But the biggest responsible party was the wholesale lender that was offering terms with high debt ratios allowed, up to 60% or more of your total gross income for a house payment, before you even pay your taxes, groceries, utilities and insurance and clothing. The lender wouldalso allow the waiving of monthly escrow to collect the property tax payment every month. And then comes along the rate adjustment period 24 months after the loan began. It is always a 1 percentage point increase in your rate, which will drive your payments up by as much as 30%. And it doesn't stop there. The rate then increases by another 1% every six months until it hits usually 12%.
    Now at the start of the loan they had a rate of say 6.5%, then, two years later it goes to 7% then six months later to 8% then six months later it goes to 9%, etc. Can you see that the problem is the loan product, not the borrower. He can't keep up with those increase in interest rates. Am I making sense here? Then you also have to pay your property taxes at the end of the year on top of being cash poor already. The system was rigged to fail from the beginning. But the secondary market could sell these potentially profitable loan packages in blocks of $5M-$10M bundles to unsuspecting buyers because for great sums of money on wall street because of the illusion of safety in U.S. Mortgages. Why not feel safe. U.S. Mortgages have been historically safe for generations. because of regulated policies that forbod them to sell such shoddy high risk ventures. Blame Wall St. and trhe greedy lightly regulated (FREE-MARKET) Banks.
    Pat in Plano, TX
    Former Mortgage Broker

  • Posted By: pduncan2000 @ 03/13/2008 1:02:08 PM

    Comment: A few Broker's were were parlt reposible for the qualifying of certain borrowers., But the biggest responsible party was the wholesale lender that was offering terms with high debt ratios allowed, up to 60% or more of your total gross income for a house payment, before you even pay your taxes, groceries, utilities and insurance and clothing. The lender wouldalso allow the waiving of monthly escrow to collect the property tax payment every month. And then comes along the rate adjustment period 24 months after the loan began. It is always a 1 percentage point increase in your rate, which will drive your payments up by as much as 30%. And it doesn't stop there. The rate then increases by another 1% every six months until it hits usually 12%.
    Now at the start of the loan they had a rate of say 6.5%, then, two years later it goes to 7% then six months later to 8% then six months later it goes to 9%, etc. Can you see that the problem is the loan product, not the borrower. He can't keep up with those increase in interest rates. Am I making sense here? Then you also have to pay your property taxes at the end of the year on top of being cash poor already. The system was rigged to fail from the beginning. But the secondary market could sell these potentially profitable loan packages in blocks of $5M-$10M bundles to unsuspecting buyers because for great sums of money on wall street because of the illusion of safety in U.S. Mortgages. Why not feel safe. U.S. Mortgages have been historically safe for generations. because of regulated policies that forbod them to sell such shoddy high risk ventures. Blame Wall St. and trhe greedy lightly regulated (FREE-MARKET) Banks.
    Pat in Plano, TX
    Former Mortgage Broker

  • Posted By: pduncan2000 @ 03/13/2008 1:00:07 PM

    Comment: A few Broker's were were parlt reposible for the qualifying of certain borrowers., But the biggest responsible party was the wholesale lender that was offering terms with high debt ratios allowed, up to 60% or more of your total gross income for a house payment, before you even pay your taxes, groceries, utilities and insurance and clothing. The lender wouldalso allow the waiving of monthly escrow to collect the property tax payment every month. And then comes along the rate adjustment period 24 months after the loan began. It is always a 1 percentage point increase in your rate, which will drive your payments up by as much as 30%. And it doesn't stop there. The rate then increases by another 1% every six months until it hits usually 12%.
    Now at the start of the loan they had a rate of say 6.5%, then, two years later it goes to 7% then six months later to 8% then six months later it goes to 9%, etc. Can you see that the problem is the loan product, not the borrower. He can't keep up with those increase in interest rates. Am I making sense here? Then you also have to pay your property taxes at the end of the year on top of being cash poor already. The system was rigged to fail from the beginning. But the secondary market could sell these potentially profitable loan packages in blocks of $5M-$10M bundles to unsuspecting buyers because for great sums of money on wall street because of the illusion of safety in U.S. Mortgages. Why not feel safe. U.S. Mortgages have been historically safe for generations. because of regulated policies that forbod them to sell such shoddy high risk ventures. Blame Wall St. and trhe greedy lightly regulated (FREE-MARKET) Banks.
    Pat in Plano, TX
    Former Mortgage Broker

  • Posted By: Ultimate1 @ 03/12/2008 7:22:33 PM

    Comment: There are some Good Loan officers out there. I have been in the business for nearly 10 years now. I have owned a Mortgage Company in Denver for most of those 10 years. We strive to make sure that the loan makes sense for the borrower and NOT stick them into a loan that will eventually send them into default. We know how important repeat and referral business is, so we make sure that the transaction fits the borrower and they are happy. We are here for the duration and Not a fly by night company.

    Ray
    UltimateFinancial.net

  • Posted By: MyPOVj @ 03/12/2008 3:56:08 PM

    Comment: In California, you don't even need a Real Estate License to be a loan officer. Lenders were hiring criminals straight out of jail to solicit new loans. Those criminals knew a hell of a lot of subprime borrowers.

    • Posted By: Bond0481 @ 03/12/2008 16:32:28

      Comment: Actually, in California one either needs to be a licensed real estate sales person or work for a Corporation registered as a California Corporation to originate and service loans. I personally know of one incident where a felon was hired by a broker (First Financial in the Mission Valley area of San Diego) and got a couple in a huge mess making more than $50k on the transaction.

      But that is few and far between. Unfortunately, the problems with the current state of real estate doesn't rest solely on the shoulder of brokers...it started all the way at the top with FannieMae and FreddieMac and rapidly slide down on both the consumer and investor sides of the house.

  • Posted By: kcarizona @ 02/11/2008 5:45:17 AM

    Comment: i reckon this is time for an analogy: set your sights on fundamentals or find yourself skidding out of control. Fundamentals: Respect, watch your speed, buckle up, go to school, work hard and spend within your limits. Or back to my favorite topic and the core lesson: setting your sights on candidates that promise change (appreciation) but have no real substance is VERY risky for your future but kinda fun to get caught up in like the housing bubble or set your sights on what is known, proven, time tested, bullet hardened, real American a## kicking, maybe a little boring (same old Clinton politics) and you limit risk (never eliminated) and a couple years from now you could sit like me who can ride a job loss out for a while because i did not get into that fatty house that seemed so fun and good at the time.

  • Posted By: twebster321 @ 02/10/2008 5:48:23 PM

    Comment: Yet another casualty of the housing market here. I thought for sure I would have seen this coming. Now I'm just CHASE-ing my tail, so to speak!

    I lost my job in May of 2007. After 6 months without any prospect of finding employment, our savings were near tapped. I was discouraged, under pressure and felt like it was only a matter of time before we were going to lose our home. Fortunately for us, God came through and my wife was able to secure employment here in town. We would now be able to start catching up on our mortgage payments!

    We found out that Chase has a (barely mentioned) 'homeowners-assistance' program. It was set up to provide relief to purchasers under a new federal program and is supposed to help people like us who are having trouble making their mortgage payments. Luckily we heard about it ourselves because it certainly wasn't mentioned at all by our lender.

    So in January of this year we contacted Chase and informed them that we needed to speak with someone in the 'homeowner-assistance' program. That was more than 4 weeks ago. Both my wife and I have placed calls and left messages for the 'homeowners-assistance' department. Time and time again we were told someone would contact us. It still hasn't happened.

    We were fiscally conservative in our attempt to purchase a home which meant we did not attempt to purchase above our means. There was no intention on our part of 'flipping' the home like many others did. We didn't take an adjustable rate mortgage, we relied on an 'appraisal' and felt comfortable that the builders financing and closing company would streamline the process, save us money and in the end would protect us from overpaying for a new home - wrong!


    BOTTOM LINE:


    *A piece of legislation created by the federal government that was supposed to help folks like us who are at risk of losing their homes does absolutely nothing for me and my family because we didn't purchase our home on an adjustable rate mortgage.

    *The representatives from Chase's homeowners (un)assistance have yet to get back in touch with us and it's been well over a month since we first initiated contact with them.

    *Our clock is ticking and we are now further behind on our payments. How is it that in this day and age a company like Chase has no desire to call this homeowner to try and figure out a solution. I care about repaying my debt and I am not interested in walking away from my obligation. So what's the deal here?

    I wonder how many other homeowners are waiting to hear back while they slip further behind on payments? Oh well, I'm sure they'll be able to write off the loss but our family is certainly going to have a tough time trying to even rent a place with a foreclosure on our credit history.

    Thanks for all your help Chase... way to go!

    Sincerely,


    T A Webster
    Unsatisfied Customer
    Central FL
    twebster321@hotmail.com

  • Posted By: GeorgeDiScala @ 01/31/2008 12:07:25 PM

    Comment: Until homes become affordible for teachers police officers firefighters and many othe hard working classes and not just your Wall Street speculators. Then the price of homes is going to continue to fall. and I say Its about time

  • Posted By: creid26 @ 01/30/2008 10:49:23 PM

    Comment: My credit score is 780. I pay my bills on time. I lost my job selling new homes which had earned me an average of 75-80 k per year in 2005-2007. I had purchased a new home in 2005 based on my income and credit score. I did not forsee a downturn in the market and the subsiquent lay off by my builder/employer. I had my home on the market for almost a year. I could not afford to take a loss. People need to understand it is not only the the unreasponsible that are being affected by the current market conditions. I am not alone. No one intends to default. We are caught between a rock and a hard place. The irony is that I am currently employed selling sub-prime mortgages in my new employment. Education is key. Personal finace should be taught at the high school level to prepare all Americans. Perhaps I gambled on my ability to earn a stable income and loss. Perhaps I gambled on the state of the economy and loss.

  • Posted By: gandhi_rj @ 01/30/2008 3:34:44 PM

    Comment: My problem is, everyone wants LESS REGULATION, LESS GOVT. (just see what Republican candidates such as John McCain, Mitt Romney are telling the people.) The mortage meltdown is a good example of Govt "asleep at the switch" (Feds, regulators, ....). Either that or they deliberately looked the other way as housing was saving the economy, so why rock the boat? Now that the whole economy is impacted, everyone wants govt to bail them out, including "steep" interest rate cuts.
    SO, ALL THOSE WHO WANT LESS GOVT, DON'T ASK GOVT TO BAIL YOU. If it's truly a "free economy", then take your lumps.
    I believe that, SOME Regulations and OVERSIGHT are a MUST in the highly complex and Integrated FINANCIAL world we live in. An average investor or person just doesn't have the "capability" to understand the COMPLEX schemes that WALL ST. cooks up, even the regulators, SEC, FED RESERVE, don't get it until it's too late.

  • Posted By: GeorgeDiScala @ 01/30/2008 3:20:59 PM

    Comment: Well Wall Street you got the 50 basis points from Bernake you so long sought after. Now you are on your own Wall Street. If the economy doesn't turn soon there is not much more he can do. You are on your own

  • Posted By: hoopes_az @ 01/30/2008 1:09:06 PM

    Comment: I work for a big mortgage lender. I find it difficult to have sympathy for either side of the argument. I do believe there were plenty of people who wer dupped into loans they never should have been in by predatory loan officers. The lenders deserve to get nailed on such loans. If you want to throw money to someone with a sub-par credit rating, or kick up the interest a bit to someone who doesn't want to provide documentation of their ability to repay, well...then you stinking deserve to lose your money.

    But, there were PLENTY of people I personally know buying houses WAY to big for their pocket book. I kept wondering how people making half of my salary could afford to move into a house I would NEVER feel comfortable purchasing. Well, they couldn't and now several of them are working two jobs, holding down a night job at Wal-Mart for extra money and benefits.

    Lenders and borrowers both have legit gripes about unscrupulous loan officers, but there is plenty of blame on both sides of the fence.

  • Posted By: sksforchange @ 01/30/2008 10:05:51 AM

    Comment: How many of you posting on this blog have taken a loan application? Seriously, the lenders are to blame to an extent. Loan officers sell what they have available to them to sell. They are 100% commission in most cases and will sell anything. Underwriters and processors are given guidelines to follow. The decision to approve or deny the loan is based on the underwriter and if the borrower fits into those guideliens. We also have something called automated underwriting. Automated underwriting is FNMA, Freddie and FHA's system. These systems get tweaked and updated numerous times a year. All of these systems are put in place and supplied by the higher powers. These people behind the scenes are just Americans trying to make a living. How can we label all of them crooks? Numerous consumers over the years have beat me up for rate, closing costs, no money down, term of the loan and to top it they have a 550 credit score. As americans we want everything for free! As americans, we were the driving force behind all of these programs being created and put out there for us to utilize. We did not educate ourselves, just saw the payment and looked for the best deal when it cames to working with a lender. You get what you pay for!! Now we ll are paying for it! So beating this person up or any one else who lost their job last year is just plain crap!

    • Posted By: Frank Wagner @ 01/30/2008 10:55:11

      Comment: I purchased a house last year 20 percent down 30 year fixed.... Not a problem. To those of you out there that can afford the loan or loans you are in, you are not the problem. The only bail out I would support is to offer a 30 year fixed to those that bought into fancy ARMs and other strange mortgages. As to you or the others in a industry that got stupid drunk on free money... Get a new job, and remember you are part of the world you live in. You aren't responsible for all of the mess but you can't ignore that you are responsible for some of it. So are the poor victims in this story as are we all. You can't be a part of a corrupt industry without any of the blame.

  • Posted By: retmilvet @ 01/30/2008 9:55:22 AM

    Comment: Bottom Line:
    When Law Enforcement ie. the FBI starts/widens its probes/investigations into this 'problem' and those who caused it, hopefully there will be accountability. A lot of innocent folks who were just buying a home after years of renting or moving were caught up in the same market with those who were strickly there out because of greed. Unfortunately we suffer as others get away scott free, hopefully only for the moment. As a retired enlisted military veteran I hope that` those who got golden parachutes from this find them filled with holes, their lines get twisted, and they miss the LZ by a mile in the end. Perhaps this is all caused by our turning away from what our forefathers founded this great nation on and we have evolved into a modern day Rome and will go the same way in the end believing it is someone elses problem and not our own or of our own making...

  • Posted By: dewcooper @ 01/30/2008 9:19:41 AM

    Comment: If this is what passes for investigative journalism, God help us. Any mortage industry personnel who offered a sub-prime mortgage (and not the office manager in this story) bares the lion's share of the responsibility for this mess. These loans should have never been offered, period. Consumers who failed to re-finance these ridiculus loans or who over-extended by purchasing 'too much' house are also partially to blaim. Me the tax-payer or the Federal government are not, and neither should be bailing out these consumers and companies. If these companies profitted from these loans, they should also bare the loss from these loans, period.

  • Posted By: Frank Wagner @ 01/30/2008 7:13:13 AM

    Comment: Somehow I can't get to worked up about lost horseback riding lessons. These people were greedy and self serving, while underminding the entire economy of the world. And the greed didn't stop there... The borrowers that thought they were going to make a killing playing flip that house. The big investment houses that bundled these loans into the world economy as if they were gold. The Federal Reserve that looked the other way when regulation was needed... What a deal... So no more riding lessons for little Suzy, I bet the CEO's that road down the trail of broken markets bought the ranch with there golden parachutes... Ask them if Suzy can have a ride... We all have.

  • Posted By: Holly Garfield @ 01/30/2008 6:58:09 AM

    Comment: When someone buys a house with 20% down then the bank owns 80% of the house or the money associated with the house purchase. The consumer is not a finance professional and relies on the finance pro's advice. That professional is responsible following company policy, and the company is responisble for setting the policy on what loans to accept. If the finance pro is working within company policy then he/she is doing his/her job. The key responsibility is with the lender policy makers in this case, for they are the ones responsible the lender's money. The rating agencies for the security bonds are responsible for giving justifiable assessments, and the investment bankers are responsible for making sure that their investments don't jeopardize the investment company. There were breakdowns in responsibility all along the way. If any one of these steps are done responsibly then the problem never happens. The lenders can't get the money for subprime loans if they can't sell their existing loans. Investment bankers won't buy the loan packages if the rating agencies give accurate evaluations, and the investment bankers didn't double check ratings that should have seemed too good to be true. There is lots of responsibility to go around, and the home buyer is the least of the problems, and the one problem that can't be corrected. Home buyers will never stop going to the bank and asking 'how much house can I afford?' The normal business cycle, price to income ratios and the supply/demand principle were forcing housing prices down for some time, and are easy to spot through published reports. The upward price forces eventually have to lose out. The bubble was easy to predict, at least in general terms when many of the failing mortgages were being made. The management at the various companies have no excuse for not knowing this and acting accordingly.

  • Posted By: stillpayingafteralltheseyears @ 01/30/2008 12:38:21 AM

    Comment: The biggest problem is that even if you -- the consumer -- played by the rules, you are going to pay for this mess. Look around you; if your neighbor forecloses or is forced to sell his house for less than it is worth, it brings down the value of your house, too. Add to this the fact that the government is going to help bail out a number of these people with your tax money. Lastly, the government is going to print out ???rebate??? checks of $1200 per couple as stimulus which will not only increase our National Debt but also cause inflation. So, yes consumer ??? you played by the rule but you get to pay for this debacle for many years to come.

  • Posted By: Stan A @ 01/29/2008 11:34:36 PM

    Comment: Whose personal responsibility?
    We also have structural responsibility. Brokers got paid on commissions whether the loans they made were bad or good. The investment bankers set quotas for loans whether or not they were good or bad. No one understands mortgage documents or the pricing of subprime loans well enough to match the professionals. People tend to trust the experts and assumes that regulators will weed out the crooks and bad products. Those people have more personal responsibility and if they succumb to greed we have big problems.

  • Posted By: mistymay @ 01/29/2008 11:24:44 PM

    Comment: what ever happened to personal responsibility! People have become victims in every aspect of their pitiful lives. suck it up and grow up you whiners

  • Posted By: susanshore @ 01/29/2008 11:22:42 PM

    Comment: what ever happened to personal responsibility! People have become victims in every aspect of their pitiful lives. suck it up and grow up you whiners

  • Posted By: susanshore @ 01/29/2008 11:20:44 PM

    Comment: what ever happened to personal responsibility! People have become victims in every aspect of their pitiful lives. suck it up and grow up you whiners

  • Posted By: cpr1274 @ 01/29/2008 8:59:26 PM

    Comment: I still hear no one placing any blame on the consumer. When rates dipped to "40 year lows", how many consumers lowered their payment on the home they lived in versus how many that bought more house? They saw what they could get for the same payment and liked it. Then they saw how much more house they could get for just a few hundred dollars more per month, and liked it even more. I bet their friends were so jealous.

    I saw on the news tonight the average American has 9 credit cards. They interviewed a couple that said the $20,000 in debt keeps them from doing what they want to do. It sounds like they did $20k worth of things they wanted. Accountability is a dwindling trait anymore.

  • Posted By: Caocao8888 @ 01/29/2008 8:49:48 PM

    Comment: Caveat emptor. Buyer beware. A person old enough to buy a house has to be sophisticated enough to exercise due diligence. "I didn't know..." "They didn't tell me..." "I just needed a bigger place.." These and a million similar comments you read everday are what a child might make, not a well-educated adult in the strongest and richest nation the world has ever seen. No one gives me back the money I've shelled out on bad business deals over the years, but I've picked up the pieces, learned from my mistakes, and forged ahead. No one owes you or me a thing.

  • Posted By: GeorgeDiScala @ 01/29/2008 8:25:53 PM

    Comment: Well I hope to buy my first home in New York soon. I have not bought one until now because the prices were over inflated by weekend real estate brokers. Until a few months ago you could not ask any real estate broker the price of a bent garbage can, that you would here the real estate agent say "this is a prime garbage can in a prime location in a prime city. Tou are going to need at least a million dollars" Well I would like to buy a home at forclosed prices posibly the last owner being a real estate agent

  • Posted By: retmilvet @ 01/29/2008 6:16:32 PM

    Comment: It is hard to believe that adults - who should know better - belived all the garbage associated with int. only and other low payment setups. At some time you have to pay the piper! Perhaps--- those that really did not know and only have one loan against their primary residence need some help. But that should come from the mortage industry that created the mess, not the Fed. Govt. and utimately the taxpayer. Sheezz, if you bail out all the speculators as well than why not pass on help to those of us who do OR did act responsibility and bought within our means/budget and yet because of this boondoggle have lost 100 of thousands in value in such a short time? Who is reimbursuing us for the hefty downpayments that we took out of SAVINGS to finance our dream(s). If the FED does a bailout then they should just as well provide a tax break to those of us who play by the rules and realize that a house is more than a get rich quick scheme, but a home to reside in. Sorry I do not have any sympathy for someone having to give up items not of neccessity. A home is a necessity, yet to have all the equity that you placed into it, at closing, vanish within a few short months is a hard pill to swallow and the blame lies with the housing industry, not the homeowner. However if I had the annual income --or better yet-- the Golden parachutes that have been discussed in this article, perhaps this would not be an issue at all.

  • Posted By: bill50 @ 01/29/2008 6:11:35 PM

    Comment: I am a real estate agent that currently helps people in foreclosure. I have done this for going on seven years. I can tell you the mess we are in is the lenders fault and will not get better until the lenders get the idea that we the tax payers will not bail them out. In my business I try to get deeds in lieu for people, getting the lender to take the home back for what is owed, and forebearances, getting the people back on track to make their payments. In both instances I find the lenders, to include Countrywide, very difficult to work with. We also sell these homes for people but with the falling market most own more than it is worth. For these we have to do what is called a short sale. That is getting the lender to take less than what is owed. It is a fair market value and we try to do this before the lender does the foreclosure. I have offered a major lender $245000 for a home and the lender turn us down. They then spent $59,000 to foreclose and put the home on the market for $199,000. Losing money like this does not make sense but it happens all the time.
    Not all people that are going through this process are bad people. A lot of them were lied to when they purchased the home or lost a job, illness or a divorce. Lenders are unwilling to work with these people or want everything they have. I did one Short sale before the foreclosure where the client had a job if they had a foreclosure or a bankruptcy they lost their job. The lender took everything they could and then said they would have to give the lender their 401K. I explained to the lender that this was all the money this family had for any other emergency. The lenders exact words were "We don't care give it to us or we will foreclose and Mr. ____________ will lose his job." The lender knew that this was a case of fraud but still did not care. Fortunately this lender has closed their doors.
    Countrywide will not do a short sale unless they have a purchase agreement. Once you send them the paperwork it they will not look at it for 21 business days. This is how long it takes them to assign the packet to someone. It then takes 45 business days for them to answer you. Most buyers will not wait that long at least not in this state. So Countrywide forecloses and losses even more money.
    Lenders have created this problem because of their greed and because of their attitude and unwillingness to work with anyone they will lose billions more than they have to. The only people who will make money out of this are the lenders CEO's

    • Posted By: SDDan @ 01/29/2008 18:43:09

      Comment: "I am a real estate agent that currently helps people in foreclosure. I have done this for going on seven years. I can tell you the mess we are in is the lenders fault and will not get better until the lenders get the idea that we the tax payers will not bail them out."

      Unfortunately it is not up to the taxpayer. Just look at the backdoor stuff in the new one time tax rebate deal that is soon to get approved. Yep the goverment (ie Fannie Mae) will be buying up all those bad jumbo loans from lenders like Countrywide, etc as soon as it gets passed. Guess who will be paying the massive debt that Fannie Mae will eventually rack up from owning all the bad/defaulted mortgages? Yep the taxpayer.

  • Posted By: sksforchange @ 01/29/2008 5:59:40 PM

    Comment: How do you know who is suffering and who is not? In your big "six years" of lending what did you see? Im guessing you did not hack it which is why your not in the business! 20 years of doing this, then you can say you see ALOT! The support staff never have been paid a huge salary to begin with, but I witnessed first hand the underwriters, processors, closers and assistants work themselves ragged to get the loans closed for the consumer! Labeling everyone as greedy is unfair! Wake up and look at the whole picture! Oh wait, six years makes you the expert you already have it all figured out!

    • Posted By: Doug75 @ 01/29/2008 18:15:36

      Comment: I am looking at the whole picture. What I saw was unchecked and unregulated greed that put us into the situation that we have presently. Though I am sure during your 20 years in the industry greed never motivated you right? I am sure every loan that you wrote was because of your deep sense of altruism right?

      ps: Being a loan officer you might need a dictionary to figure out what 'altruism' means. Look it up though...you might be pleasantly surprised!

  • Posted By: matsci @ 01/29/2008 5:58:04 PM

    Comment: Just wondering. If, instead of firing Mozilo, BofA just demoted him to the mailroom with a minimum-wage salary, couldn't they avoid the severance package? Clearly, he was no longer capable of responsibly doing his job, so a demotion is certainly in order. If he doesn't like it, he can quit. No severance needed. This just seems so obvious to me, I can't figure out why it isn't done except that the new CEO wouldn't want it done to him., but it cedrtainly would be much better for shareholders.

  • Posted By: Doug75 @ 01/29/2008 5:06:57 PM

    Comment: What a sad day indeed when the crooks in the mortgage industry cant afford to send their kids to ballet lessons or horseback riding lessons. I mean what is this world coming too?

    • Posted By: sksforchange @ 01/29/2008 17:33:21

      Comment: Wow! People can be cruel! Not all lenders and loan officers are bad people! Maybe all this person wanted to say is that there are a lot of people behind the scenes that really want to make a difference! If you asked this person if they had to sacrafice more than horseback riding and ballet. I would be willing to bet they have suffered greatly and that was just good writing to get a rise out of you which it worked!! Good grief, someones income gets cut in half and they cut out riding lessons and ballet? I am a loan officer myself and will be life! I have seen first hand what that would cause and would be willing to bet that their situation is far worse than led on here! Educate yourselves instead of blaming! Its amazing what you will learn!.

      • Posted By: Doug75 @ 01/29/2008 17:46:57

        Comment: I am educated on the situation...I spent six years in the industry. After witnessing all that greed first hand I just cant find any sympathy for someone who cannot afford to send their kids to horseback riding lessons. Boo hoo. How about the parents who are paying a high rate mortgage that you wrote that cant even afford to feed their kids? Home ownership is the American dream - the mortgage industry has turned that dream into a nightmare.

    • Posted By: loanofficer#1 @ 01/29/2008 17:18:37

      Comment: your comment is so pathetically ignorant that I almost died of embarassment for you

      • Posted By: Doug75 @ 01/29/2008 17:27:10

        Comment: You 'almost died'? So wouldnt that make one less scumbag loan officer trolling the planet? And the problem with that is what exactly?

      • Posted By: Doug75 @ 01/29/2008 17:24:44

        Comment: How is that ignorant? I am supposed to feel sorry for someone who was sending their kids to something that parents who dont work for a crooked industry cant afford to do? I used to work in the mortgage industry and I am so glad that I am out of it. Immoral loan officers ripping off seniors and minorities - there is a special place in hell for them if you ask me.

        • Posted By: loanofficer#1 @ 01/29/2008 17:31:35

          Comment: she wasn't a loan officer, sounds like she was a processor. you are making broad sweeping generalizations of a problem that is complex on so many levels. i live and work in Michigan. People here lost there jobs because the auto industry didn't compete, That caused foreclosures, and home values to plummet, and lot's of people can't refinance now because their homes aren't what worth what they owe. But I guess that makes me a crook because I work in the mortgage industry. You sound like a bitter troll who couldn't hack it in a commission only gig to me and never understood the first thing about this business, just like so many who in here who are running their mouths, pointing fingers, and making overly simplistic generalizations that is a multi faceted problem. And why is it just the seniors and minorities that you think were taken advantage of by immoral loan officers...again, you have painted yourself into a tiny little corner without any basis for your rationale other than your own glaring bias.

          • Posted By: Doug75 @ 01/29/2008 17:41:09

            Comment: If the industry and appraisers (often in the pocket of the industry) would have actually given these financed properties true value in the first place maybe this wouldnt have happened. Trust me on that. I have encountered first hand many loan officers 'suggesting' what a home is worth and the appraiser writing it up that way. I was in the business for six years so to say that I didnt understand the business is completely wrong. And I saw what I saw....who are you to argue with that?

  • Posted By: Doug75 @ 01/29/2008 5:05:21 PM

    Comment: Too bad the crooks...oops....individuals in the mortgage industry cant send their kids to ballet and horseback riding lessons. When will the insanity stop? I mean what is this world coming to?

  • Posted By: rvrent @ 01/29/2008 4:50:36 PM

    Comment: One giant ponzi scheme.....fist in first out make the money; last in last out pay for it all..........Construction companies making gigantic profits and providing full employment, mortage brokers making 2-3K a day.....hedge funds showing big returns.........not to mention the bank points, realtor commissions, escrow fees, appraiser fees, pre-pay penalties and a host of other leeches making money on paper. Offering "Americas dream" for no money down was just too good for the uneducated to pass up....That's the reason we have banking laws and regulations to prevent systematic abuses of the system. This is what to expect when unleash unregulated capitalism on an uneducated public.

  • Posted By: apust @ 01/29/2008 4:38:25 PM

    Comment: Most of the comments provided here offer much to be learned from. Although many of the comments are a response to another's comments made, they both appear to be right. Mortgage lending is much like any other profession, it provides a service that in return for a fee, improves the lifestyle of the client/customer. Many in the mortgage lending industry approached their clients with the insensitive attitude of "I will never see them again, or never put a face to their client(s) since many deals were done via email/phone/fax/mail. This impersonates the deal and may I add accountability. Why is the personal element important? Because, when a doctor sees the patient before surgery, he understands a soul lies in his or her hands. Many mortgage lenders did not care about this element and still don't. Instead, they just collected paystubs/w-2s and a bank statement that looked good that month because it just happened to be tax return time, not taking into consideration this person gets layed off regularly and lives from month to month and on a prayer. The mortgage professionals job is to make a face-to-face interview with the client and determine if this person is not only qualified, but to also determine if this person is financially established enough to make payments on a house, not to mention the up keep that can unexpected arise. Buy a home is a big, big deal. It is the place families are raised, relatives meet on holidays, and identities are established. For one to lose thier house is one of the most degrading experiences for parents and children. It often leads to divorce, drug abuse and so forth. In addition, it affects the extended family who may have to take in the family for a while as well as pets that may be abandoned. I believe the problem we have on our hands today is a prime example of what happends when a profession is reduced to fast food service. Alot of thought, research, interviewing, and verification must go into the process because a wrong decision can determine the direction of peoples lives, an economy and perhaps even the country. A few failed ventures are expected in the industry, but a collosal of foreclosures will be devastating. -From a mortgage loan professional who has been in the business for 11 years.

  • Posted By: rvrent @ 01/29/2008 4:37:17 PM

    Comment: one giant ponzi scheme.....first in first out make the money, last in last out have an empty basket.....everyone saw it coming but no one could stop the train.....construction companies providing full employment and making gigantic profits, mortgage brokers making 2-3k a day, investors seeing huge returns in their hege funds and the unsophistacted consumer getting his lifes dream for "no money down".......Greenspan's legacy.

  • Posted By: LafKen @ 01/29/2008 4:33:14 PM

    Comment: It is easy to blame others, but all of these "victims" need to take responsibility too. Owning a home is one of the most critical financial decision people will make, yet it was taken so lightly. Homeowners are to blame for not understanding the terms and conditions and the mortgage industry is at fault for preying upon this stupidity and offering credit to high-risk clients. The fact that some mortgage lenders didn't even confirm applicant's salaries and work history is incredible to me. It amazed me when fresh-out-of-college coworkers got big, interest only loans without any credit history. They never once believed that this bubble would burst, just like the dot.coms. It is really difficult to feel bad for anyone that got involved in this mess.

  • Posted By: mortgagemess @ 01/29/2008 4:20:07 PM

    Comment: Don't borrower what you can't afford. No more than 45% of your gross pay should be for debts! Period you moron, now you want the banks to forgive past due amts and have the Fed's bail you out....Losers

  • Posted By: stevenbhorse @ 01/29/2008 4:18:36 PM

    Comment: occums razor says the fault lies with the fed.

    thoguhts??

  • Posted By: stevenbhorse @ 01/29/2008 4:17:23 PM

    Comment: occums razor's says it's the fault of the FEDERAL RESERVE

    any naysayers are welcome. just remember who gives credit to banks to loan out. remember who slashed interest rates to 1% in 2003. just remember who endoresed the villified neg-am, int-only, arm.

    like i say. occums razor says it was the fed, and you idiots want them to bail everyone out. how is that even logical. the creators of the problem are the ones that people look to for a fix. no criminal charges will come of this. wall street turned your home into a cash stream for investors that live in china, hooray for financial engineering/inovation. you turned my home into a piece of paper, tradable to the greediest bidder.

  • Posted By: mortgagemess @ 01/29/2008 4:17:05 PM

    Comment: It's the Freakin Brokers!!! FRAUD, they feel it's OK to forge documents and lie in order to obtain a loan approval......END OF STORY!!!

    Signed by a WAMU U/W

    • Posted By: loanofficer#1 @ 01/29/2008 16:35:57

      Comment: didn't WAMU offer all kinds of NINA programs...perhaps you still do. typical underwriter....blame the broker first. take a good long look in the mirror and put down the kool aid your company is serving you....

  • Posted By: achuchman @ 01/29/2008 4:14:52 PM

    Comment: I feel for Seay, but she will experience, first hand, the exact lack of sympathy that employees of WorldCom and Enron felt during their scandals. The media and the public could care less for the white collar employee that pushes paper for these companies, never having a say in what caused the scandal, but they will forever be branded as crooks by association. I know this from personal experience.

  • Posted By: newsman9 @ 01/29/2008 4:14:48 PM

    Comment: It's a shame that the media and homeowners themselves all collectively point the finger of blame at lenders and mortgage brokers. Yes there are some dishonest people in the industry, as in all industries, however most are honest and did what their clients asked. The blame is more so everyone's fault equally ; from the homeowners who either mis managed their debt or used their homes as atms for cash

  • Posted By: newsman9 @ 01/29/2008 4:13:41 PM

    Comment: It's a shame that the media and homeowners themselves all collectively point the finger of blame at lenders and mortgage brokers. Yes there are some dishonest people in the industry, as in all industries, however most are honest and did what their clients asked. The blame is more so everyone's fault equally ; from the homeowners who either mis managed their debt or used their homes as atms for cash and refinanced to the lenders who made it very easy to obtain mortgages.

    • Posted By: SDDan @ 01/29/2008 16:19:27

      Comment: It is comical watching mortgage brokers rationalize things.

      I have a 6 year old that asks for all kinds of things, but that doesn't mean I should give it to him. Mortgage brokers gave what their clients asked for because they made a ton of money for doing so.

      • Posted By: loanofficer#1 @ 01/29/2008 16:53:00

        Comment: it's comical hearing you compare your 6 year old wanting a piece of candy or a toy to an adult making the largest financial decision of their life.......

        • Posted By: SDDan @ 01/29/2008 16:59:41

          Comment: Yes because in retrospect it is apparant that adults in the United States are capable of making responsible decsions in regards to their finances.

  • Posted By: horizon07 @ 01/29/2008 4:10:24 PM

    Comment: I am a mortgage banker and my main job is determine the fair value of the loans that banks and mortgage companies carry on their balance sheet. We warned several companies to stay away from purchasing those risky loans from mortgage brokers. We wondered why UBS, Merrill Lynch, JP Morgan and other wallstreet firms encourages the likes of Countrywide to originate those loans. We understood the risks involved with those loans and I believe that greed and quick profits for wall streets firms made this mess.

  • Posted By: B Zimmer @ 01/29/2008 4:09:20 PM

    Comment: This article is inane and irrelevant. Notice that our protagonist, Mrs. Seay, says that "we're not ALL crooks...SOME of us blah blah blah." Wow...that's remarkable. SOME of the half a million people who work in the biz are good people...what irrelevant fluff and garbage!!!

    I'm particularily interested in this "housing crisis" language. We say that people are "losing their homes," which is evocative language. It evokes tattered t-shirt wearing round bellied third worlders and shanty-towns. It evokes the crumpled face of misery and a deluge of tears. Truth is, these people aren't losing their ability to earn along with the homes that they had maybe a 10% equity ownership in (the rest was owned by the bank.) They'll find a place to rent...which'll be less expensive...and whadya know, suddenly they have more room to breathe in regards to income.

    Nobody who is a victim of this "crisis" is ending up on the streets. They're ending up in 2 br apartments...OH THE HUMANITY!!!!

    The only people in true crisis are the "masters of the universe" suits who hedged their portfolios on bad paper...and that's their problem.

    Call your rep and tell them to quit trying to save the suits!!! We'll all pay for it!!!

  • Posted By: NumberCruncher @ 01/29/2008 4:07:16 PM

    Comment: It is so sad and disgusting to keep reading comments where the 'buyer' feels taken. No one forced you to sign loan documents or overextend yourself. The society we live in is too busy trying to keep up with the "Joneses" that they never realize that just because you CAN, doesn't always mean you SHOULD. I have seen many of my relatives go through foreclosures and I dont feel a bit sorry for them. I wondered in the beginning how they got a house in the first place. One of my relatives was straight out of Chapter 13 bankruptcy. Couldn't even pay his bills on time, but because he could get it, went and got a home. Oh yeah, his employment was seasonal too. I, too, could have qualified for all of these loans, but looking at the bigger picture, I knew it would be the WORST decision I could ever make. Unless you have CONSISTENT high income and a very secure job, ARM are not for you. Find a fixed and if you can't qualify...it's not your time. Mortgage lenders did not seek out these buyers...the buyers went and sought out what they could get. Deal with the repercussions of your greedy actions. You knew it wasnt your time, but because you wanted to be like the rest of the folks who owned houses...you took a huge gamble...and LOST.

  • Posted By: SDDan @ 01/29/2008 4:06:15 PM

    Comment: Mortgage brokers milked billions and billions of dollars from what will end up being taxpayer pockets (who will end up holding the burden of paying the eventual bailout) for basically doing nothing. They took a few calls a day from people who should not have been buying homes, filled out a few forms, told a few lies and most used unethical practices to close deals. Even the laziest of mortgage brokers were making 100k+ a year with many making 250k+. I have been watching these people jumping ship on the mortgage industry and taking sales jobs at my company (business to business sales) over the past year and 1 person has stayed out of about 50 or so because they don't want to work, they are too used to the pretty much free 100k+ a year they made while handing out houses to people who should not have been owning houses in the first place.

  • Posted By: TheBroker @ 01/29/2008 4:03:36 PM

    Comment: I agree with the sentiment that there were/still are predatory lending practices. I.E. Negative Amortization loans (which I have never written). However, there are plenty of people who took these loans, even though they had been fully educated on the in's and out's of the terms because they had no other choice. They had 2 options, file bankruptcy on their credit card debt or refinance and save a ton of money on a monthly basis. What would you do? These are the people who are now crying about their situation. I wonder if, JUST MAYBE, the $75,000.00 in credit card debt was the catalyst for them needing these so-called, predatory loans in the first place. They're lucky they ever had the opportunity to own a home with their spending habits and questionable payment histories. These lenders gave them a chance to change their habits and own a piece of the american dream. Just like every other aspect of their financial life, they blew it, and it's still everyone else's fault. If these "predatory loans" hadn't bailed you out, this article would be discussing the high interest rates and unfair practices of the credit card industry, since naturally, it's never your fault.

  • Posted By: inflnluvinit@hotmail.com @ 01/29/2008 4:00:04 PM

    Comment: Not all loan officers, mortgage brokers or any one else in the industry are crooks but yes they are out there. Yes there should be blame placed on those who took advantage of the people trying to get a loan and weren't educated on the loan they were getting however, it is not just the people in the industry to blame. There should be some blame placed on those who signed thier names on those notes, yes I mean the borrowers. If you went to buy a car are you going to sign without understanding the terms of your loan? I don't think so... Granted it isn't fully the same as buying a home but you are giving it back to the bank the same as a house. I find it hard to believe that people with adjustable rates had no idea they were going to adjust causing the payments to inflate. So yes people in the industry who took advantage and did a poor job of educating their clients should be blamed but not 100% - The clients who signed the notes should be partially blamed...

  • Posted By: inflnluvinit@hotmail.com @ 01/29/2008 3:59:04 PM

    Comment: Not all loan officers, mortgage brokers or any one else in the industry are crooks but yes they are out there. Yes there should be blame placed on those who took advantage of the people trying to get a loan and weren't educated on the loan they were getting however, it is not just the people in the industry to blame. There should be some blame placed on those who signed thier names on those notes, yes I mean the borrowers. If you went to buy a car are you going to sign without understanding the terms of your loan? I don't think so... Granted it isn't fully the same as buying a home but you are giving it back the same as a house. I find it hard to believe that people with adjustable rates had no idea they were going to adjust causing the payments to inflate. So yes people in the industry who took advantage and did a poor job of educating their clients should be blamed but not 100% - The clients who signed the notes should be partially blamed.

  • Posted By: joejoe72 @ 01/29/2008 3:57:03 PM

    Comment: Buyers: you bought houses you COULDN'T afford. It doesn't take a brain surgeon, a mortgage expert or an attorney to figure that out. Banks: you made loans to people who couldn't afford the houses they were living in, and/or, had bad credit. Bad credit means there's a high risk of the borrower not paying. You're both to blame and now we will all pay. Next time use your head!

  • Posted By: happyboat @ 01/29/2008 3:56:40 PM

    Comment: I hate to say this, but one of the biggest problems we have right now, is that people do not want to take responsibility for their own actions. When they were applying for that mortgage, and were told they should wait instead of taking that 100% 9.9% loan (because ultimately, if they qualify it is up to them) the people didn't want to wait. They had to have that house and that loan. Now they are crying because they can't afford it. Not that I don't believe that some people might have been deceived, but I know a lot of them knew exactly what they were doing and are now blaming everyone and holding their hand out to be saved

    • Posted By: joejoe72 @ 01/29/2008 15:58:15

      Comment: EXACTLY. Well said.

  • Posted By: rangersmith1997 @ 01/29/2008 3:51:09 PM

    Comment: This article seems to make it personal. I understand why the writer would do this, because blaming the industry doesn't make sense without a story. However, I think the focus should shift to lending practices, not individuals. By underwriting both Jumbo and subprime mortgages, the mortgage industry produced an unsustainable shift in the demand curve for houses. This competition to make sure no application went un-underwritten was the pressure that produced the newest version of irrational exuberance. Morgage industry practice changed fundamentally from bygone years when bankers were more frugal about how much and for whom they wrote loans. Individual lenders are not to blame, but the mortgage system and governments role in the mortgage industry certainly are to blame. I hope we create new regulatory laws in the vein of those laws that followed the stock market crash and great depression. With new laws in place, we may be able to figure out who is real estate's version of Milliken, Stewart, Lay, and Ebbers. As it now stands, individual mortgage lenders were just playing fair in an unregulated game.

  • Posted By: middle.road @ 01/29/2008 3:46:58 PM

    Comment: reading this article was a total waste of time, may I please have those two minutes of my life returned? ? ? 37Mil for driving your company into the ground? man, how-do-they-do-it?!?!?

  • Posted By: Maddogp99 @ 01/29/2008 3:41:55 PM

    Comment: It's kind of hard for me to sympathize with poor Ms. Seay. It really must be hard when you have to pull your daughters out of ballet and horseback riding. Try pulling your kids out of your home because of predatory lenders and see how you feel. Yes, you should read the fine print on all documentation you put your name on, however, these lenders created an environment that led to this mess and all for the love of the dollar, not their neighbor.

  • Posted By: Mort_gage @ 01/29/2008 3:40:08 PM

    Comment: Wall street is to blame. They asked for the products for them to profit on. They rated sub-prime loans as AAA for each other so as to increase profits. Now they are losing billions and we are paying for it with tighter credit. After losing billions, they still kicked out millions in bonuses to each other while laying off the workers ( with out severance packages ) that they help make them billions.

  • Posted By: sovereignappraisals @ 01/29/2008 3:39:03 PM

    Comment: I am an appraiser. The data we used to support the value of any home was concrete supportable data. The people we need to look to and hold accountable, yet who are not licensed, are here today/gone tomorrow and behave like used car salesmen...are LOAN OFFICERS who will say, do and make any kind of deal possible to get a loan.

    • Posted By: loanofficer#1 @ 01/29/2008 15:57:15

      Comment: dear sovereignappraisals, nice generalization, moron. what about all the appraisers that companies like Ameriquest had in it's pockets. whenever i order an appraisal, i don't hear you guys complaining. and, btw, you guys get paid no matter what...why don't you try doing a real man's job a work for commission? please get off your highhorse and know a little about what you're talking about before you run your silly stupid little piehole because if you think loan officers are the only ones at fault (and yeah, there were/are plenty who are buzzards) then you better put down the scotch. sincerely, a loan officer who is still in the business and has helped people buy homes and save millions upon millions of dollars by refinancing into lower rates and better programs....

  • Posted By: tomdavie @ 01/29/2008 3:38:25 PM

    Comment: Obviously newsweek has contributers from the National Association of Real Estate Agents. They are the ones who control the buyers, the seller and everything else. They guard all the doors, and hold all the keys. They also make 3 to 6% commission. They are the ones who flooded the market with homes for sale, and thus are driving down prices as they cut and undercut each other to make a sale. Newsweek knows all this, but says nothing about it.

  • Posted By: sunrunner @ 01/29/2008 3:37:40 PM

    Comment: Let's look at this mortgage mess. Do the research and this will be proven correct after you do a little pondering. Way back when in the 90's and earlier...America knew one had to have good credit, a job, a fair down payment and documentation to back all this up. But...certain segments of American society traditionally and historically failed to pay their bills, save money and didn't care about credit scores. Solution to their problem...class action lawsuits against mortgage companies to lower standards for those that couldn't even qualify for a secured Providian bank card. THese people had FICO scores well below 600 or even 500 yet they cornered the mortgage industry into giving these groups a a mortgage to increase percentages of "Disadvantaged" home owners and to quell any suits aginst red lining. To cover the risk the lenders were forced into, they tried to cover their risk by charging higher interest and ARMS, etc. A good business practice becasue the risk was great that these people would not pay their mortgages...can't pay off a credit card or light bill...not going to pay a mortgage. So now the mortgage industry is the bad guy because thay tried to increase diversification in the homeowner pool. Any first year business student could have seen this one coming. THese people defaulted and now...get this...various cities like Baltimore, MD are suing mortage companies for a new thing called "Reverse Redlining". This is so called setting up buyers in known minority areas with abusive loans. If people would just work, pay bills and build credit like the rest of the nation, then this would not have happened. THis goes for ALL races and groups. Many banks and mortgage lenders stuck with the good business practices, payed the class action fines and still made obscene profits by using the fundamentals. So who is to blame??? The individual idiot that can't pay bills and can't read past the 7th grade level to look over a loan package.

  • Posted By: sunrunner @ 01/29/2008 3:36:51 PM

    Comment: Let's look at this mortgage mess. Do the research and this will be proven correct after you do a little pondering. Way back when in the 90's and earlier...America knew one had to have good credit, a job, a fair down payment and documentation to back all this up. But...certain segments of American society traditionally and historically failed to pay their bills, save money and didn't care about credit scores. Solution to their problem...class action lawsuits against mortgage companies to lower standards for those that couldn't even qualify for a secured Providian bank card. THese people had FICO scores well below 600 or even 500 yet they cornered the mortgage industry into giving these groups a a mortgage to increase percentages of "Disadvantaged" home owners and to quell any suits aginst red lining. To cover the risk the lenders were forced into, they tried to cover their risk by charging higher interest and ARMS, etc. A good business practice becasue the risk was great that these people would not pay their mortgages...can't pay off a credit card or light bill...not going to pay a mortgage. So now the mortgage industry is the bad guy because thay tried to increase diversification in the homeowner pool. Any first year business student could have seen this one coming. THese people defaulted and now...get this...various cities like Baltimore, MD are suing mortage companies for a new thing called "Reverse Redlining". This is so called setting up buyers in known minority areas with abusive loans. If people would just work, pay bills and build credit like the rest of the nation, then this would not have happened. THis goes for ALL races and groups. Many banks and mortgage lenders stuck with the good business practices, payed the class action fines and still made obscene profits by using the fundamentals. So who is to blame??? The individual idiot that can't pay bills and can't read past the 7th grade level to look over a loan package.

  • Posted By: trickytom @ 01/29/2008 3:29:16 PM

    Comment: The people who signed these mortgage contracts were either stupid, lazy, or greedy. If people read their mortgage contract as closely as they read the sports page, we wouldn't be in this mess. If they analyzed the terms of that mortgage as carefully as they analyzed the NFL Superbowl, they wouldn't be in this mess.

  • Posted By: samhome @ 01/29/2008 3:28:14 PM

    Comment: Greed. It was located in all levels of the home industry. Appraisers, brokers and agents were the front line. However, it was the banks utimately who are at fault as they are/were profitting from selling loans. They had no reason to worry as they were passing the buck. But they were the business interest controlling the flow of money. I would pass a law preventing high risk, adj rate mortgages from being sold. They must be held by the original lender. It would still be legal to sell 15,20, 25 and 30 year fixed mortgages. Finally the lender must hold a percentage of all loans. Selling loans on the stock market is junk to me. I can buy shares of the bank. Why do i need to buy the junk they are selling.

    • Posted By: garelj @ 01/29/2008 17:04:06

      Comment: I agree this guy dooesnt know what he talking about. "would pass a law preventing high risk, adj rate mortgages from being sold. " Guess what, then that means the banks would not orginate them and you just ruined the market for ARM's. I'm a proud owner of a 5/1 ARM (1st home) and 5/1 ARM Int Only (2nd home), with both having 20% down payments and documented income to qualify for both loans. I have saved hundreds of thousands of dollars due to these and look forward to refing shortely to save even more. Your proposal would have not made this possible and taken my choice of freedom out of the equation. Don't even get me started on holding a % of loans. Just like prostitutes, if there is not a market for them the product would dry up. Its the I-banks and Inst Investors job to do the due dilligence. In fact, the banks are the least at fault as they just funneled the loans through so that more loans could be orginated as mandated by the government.

    • Posted By: mdvulpio.rtmtg@juno.com @ 01/29/2008 15:46:27

      Comment: This guy probabl can't read his mortgage papers. He certainly hasn't read the papers. If the banks were "profiteering", how come they all lost huge amounts of money in this mess? The "original lender" didn't come up with the demand for the loans. Wall Street wanted to sell something with a higher yield than your average CD and therre is no free lunch. High risk, high reward. Anyone who bought the mortgage paper was taking the risk. The people who lost "their" houses (no downpayment and no income sufficient to make the payments) should have stayed in apartments. They should consider the payments they made as rent. The damage to their credit ratings was entirely self-inflicted.

  • Posted By: trickytom @ 01/29/2008 3:25:42 PM

    Comment: Here we are, again. We love our freedoms, but we don't always like the responsibility that comes with them. We are stringently opposed to the government meddling in our personal affairs, until we find that our irresponsibility (not reading a mortgage contract) has us in hot water; then we practically beg the government to meddle in our personal affairs! It's time to grow up and read your mortgage contract as carefully as you read the sports page, boys and girls.

 
 
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