Whose Fault Is This?

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

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

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

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

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.

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

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

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.

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.

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

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.

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...

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.

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.

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.

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.

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.

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