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sillycrap
Flash in the pan


Joined: 19 Mar 2011
Posts: 32

Throwing out the baby with the bathwater
PostPosted: Sat Sep 03, 2011 1:24 pm Reply with quoteBack to top

There was nothing wrong with NO DOC LOANS:
IF DONE CORRECTLY
The problem was the BANKS, not the No Doc Program. There are many self employed POTENTIAL BUYERS who can put down 25% and have excellent credit, but they don't qualify with their schedule C or they don't take all their money in their Corporation and leave it in the company.

These loans would perform at least as well as a FNMA loan with their 28/36 ratios. The problem was the Greedy banks who lowered and lowered their down payment requirements to 10% and THEN TO ZERO; 100% loans!! Then they lowered the credit scores from 700+ to oh about 550.
Then the banks turned around and blamed the Brokers for selling them "liar loans". The banks are full of c**p; the only ones responsible for screwing up this viable program was them. So, now we have Dodd/Frank and the states pass laws that completley outlaw No doc loans; not the way they were done, but the loan itself. Government at its finest!
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toldyouso
Dud?


Joined: 10 Apr 2009
Posts: 10

Re: Throwing out the baby with the bathwater
PostPosted: Sat Sep 03, 2011 4:03 pm Reply with quoteBack to top

You are 100% right. These loans had a place and purpose. I used them for self employed only. Customers with large net worth. These savey clients new what they were doing. They understood the product and its value.

However, The idiot real estate agents and large wholesalers got involved and pimped and perverted the product. I had a**whole re come to my office with clients making 10 an hour looking to buy 500k homes. It was all down hill from there. Wholesalers telling me the magic of the product, "3 points on the back, easy easy, just sign and submit". Then companies like CW with there retail mass marketing to anything that moves and it was over before you knew it.

Oh well!!!!! Real Estate Agents are self serving a**wholes. FACT! I bust their balls so bad these days. A few are still around from high flying days and I do anything I can to make their lives beyond F*@King miserable. If I can make them cry I did my job. Especially the females. If you can remember the cry of the bitchy female "If you don't do this now I will take it to my guy who can do it in 20 mintues!" Her guy now is washing cars and delivering pizza. HOW DO YOU LIKE ME NOW BEACH? As for the guys their chests are not as puffy these days. I love telling them what to do and when to do it. If they so much as look at me wrong or voice an opinion
I let them know bad things can happen quickly that can jeopardize the current health condtion. They all wimper and say "YES SIR!"

Let me be clear(thanks potus) I am not knocking it down by anymeans.Struggling like anyone else still in the business. Good days and bad days. But it beats washing cars and delivering pizza with all the ex re agents and idiot los.
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KBB
Cherry Bomb


Joined: 16 Sep 2008
Posts: 163
Location: Illinois

Re: Throwing out the baby with the bathwater
PostPosted: Sat Sep 03, 2011 5:35 pm Reply with quoteBack to top

I do agree that the stated income loans did have their place. As was said, it was mainly for the self-employed borrower who could also document high liquidity. It was practical for both the borrower and the lender. Why submit a stack of personal and business tax returns that realistically would require a CPA to determine the actual income. But the blame cannot all go to the banks. But I'm frankly tired of the blame going solely to the banks and the government. As I've said before, there is an individual accoutability from borrower, LO, processor, UW, etc. I can recall reviewing a file in which the borrower was a manacurist and stated monthly income of $10000...seriously, $1000 per polished nail. The assets that were verified didn't even total her supposed monthly income. There's common sense and logic that needed to be applied. Unfortunately, very few people had these traits. For the majority, it was greed, irresponsibility and short-term ...if you can call that 'thinking.'

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sillycrap
Flash in the pan


Joined: 19 Mar 2011
Posts: 32

Re: Throwing out the baby with the bathwater
PostPosted: Sat Sep 03, 2011 6:46 pm Reply with quoteBack to top

very little blame can be put on the borrower, processor and LO; they didn't
come up with the program of 100% LTV and 550 credit score and even NO asset too. This program was designed and bought by the BIG BANKS.

they just packaged and sold THEIR PROGRAM.

If the program was only fro 75% LTV and 700 credit score with asset verification, then that is what would have been sold and purchased.

Dodd and FRANK? Frank's "girlfriend" at FNMA is one of those who wanted the 100% NO DOC NO ASSET loan. They should throw Frank as far as some CRANE can heave his derrier, not allow him to pass laws.
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KBB
Cherry Bomb


Joined: 16 Sep 2008
Posts: 163
Location: Illinois

Re: Throwing out the baby with the bathwater
PostPosted: Sat Sep 03, 2011 7:09 pm Reply with quoteBack to top

I respectfully disagree that very little blame can be attributed to other parties other than the banks and government. Actually, a lot of blame can be attributed. The borrowers know how much they can afford; it's simple math and they have a choice to say yes or no to the loan offered to them. If the LO knows that after reviewing paystubs, W2s, etc., the borrower does not qualify, the solution is not to put them in a No Doc loan. Nor should those Processors make the documentation magically disappear from the file. The same holds true for the UW along with exercising some common sense and fiduciary responsibilty. A manager once told me, 'the loan is only as good as the day you close it.' His intention was that even the best/vanilla loans can go bad. Things do happen. But when initial actions are blatent irresponsibility, that loan is nothing but a default waiting to happen.

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sillycrap
Flash in the pan


Joined: 19 Mar 2011
Posts: 32

Re: Throwing out the baby with the bathwater
PostPosted: Sat Sep 03, 2011 9:06 pm Reply with quoteBack to top

that is ridiculous. You want to put the blame on the LO and processor for selling a product put out by the banks?

the LO and processor didn't throw away anything... The program was
NO DOWNPAYMENT, NO DOC, NO ASSET AND CREDIT AS LOW AS 550.

There was nothing to throw away. The above program was not only designed by the banks and FNMA but PUSHED BY THEM. Almost of all of California was put into this program and then one step more; PICK A PAYMENT.

It is mind boggling that you want to blame the LO and processor.
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BillyBob
Dud?


Joined: 21 Aug 2011
Posts: 9
Location: Atlanta

Throwing out the Baby with the Bathwater
PostPosted: Sun Sep 04, 2011 2:47 pm Reply with quoteBack to top

THE BORROWER DID IT. An owned home for every family is a noble thought; but it is unrealistic. That light got brighter, however, with each GSE tweak of the guidelines --- the political mandate soon outweighed traditional risk assessment. We didn’t get to a NINA 100% LTV with 620 credit scores overnight. The evolution did, however, have more supporters than detractors. Everyone bought into it for emotional or financial gain: policy writers, GSE’s, Wall Street, banks, lenders, brokers, loan officers, underwriters, and the homeowner we all wanted to help (????). Please, let’s not turn the pyramid upside down and place all the blame on Mr. and Mrs. Smith (she’s also a manicurist). They should be okay because real estate “always” appreciates --- per my college professors.

I read this morning that the only, and final, remedy for false debt is debt forgiveness. Isn’t it time to stop pointing fingers and have the policy makers make this right? GSE’s are already doing short-sales and discounted REO sales. There are a limited number of benefactors to this policy and it sure distresses values and activity for everyone else. Those who make their payments every month need help too.
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sillycrap
Flash in the pan


Joined: 19 Mar 2011
Posts: 32

Re: Throwing out the baby with the bathwater
PostPosted: Sun Sep 04, 2011 4:22 pm Reply with quoteBack to top

HOW MUCH DO I QUALIFY FOR? Most buyers, not all, but probably 80% have this as their first question when meeting with a Loan Officer. In the days of the NO Doc, they "qualified" for whatever house the Realtor was showing them. Not the Realtor's fault or even the borrower's; it is squarely on the Bankers who DEVISED the NO Doc program with No qualifying, No asset verification, NO DOWN PAYMENT, and Credit as low as 580! How can anyone not put 99% of the blame on the people WHO DEVISED THE PROGRAM? And... it is not even the Program; the program is a good one and needed one for people putting down 25% and verifying those assets and with good credit. The bankers Basterized the program to fill their own coiffers!

Now they are crying it must be everyone else's fault, even the processor who put their loan together UNDER their guidelines or lack thereof.
Frank, of Dodd/Frank fame, is busy passing laws of what WE ALL DID WRONG! No Frank, if anyone should have known what was being done wrong, it was YOU. Pass a law that throws your derrier off a bridge.
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BillyBob
Dud?


Joined: 21 Aug 2011
Posts: 9
Location: Atlanta

Throwing out the Baby with the Bathwater
PostPosted: Mon Sep 05, 2011 12:29 pm Reply with quoteBack to top

Now we are getting closer: Putting people in homes was on a political agenda. Sure Wall Street, Realtors, Bankers, and Consumer Groups were a strong lobby; but, it was the back office massaging of risk models that brought us higher LTV’s, DTI’s, lower Credit Scores, and finally “no docs”.

I obviously wasn’t there; but, can easily envision all the variables in a complicated algorithm being tweaked to produce the maximum number of homeowners within an acceptable mortgage default rate. Someone had to then say “Let’s Go”. I don’t think there was a Realtor, Mortgage Banker/Broker, or lowly Consumer in the room.

In hindsight, I’d like to proffer that declining property values were not considered in the formula. There was no historical reason to factor it in. Simple supply-and-demand logic says “activity breeds value” --- hence, rapid appreciation as more homes were bought and sold.

“Those with the Gold make the rules”. Current note holders, whoever they are (???), are only interested in limiting their loan level losses. The problem with a short sale or discounted REO is it “is a sale” and becomes an appraisal comp --- lower neighborhood values and fewer transactions for all of us. Curtailing loan balances would not be a recorded sale. This is a national problem that cannot be solved without first restoring home equity. Where are the policy makers? The Baby is on life support
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BIGTXLENDER
Dyn-o-mite!


Joined: 22 Nov 2008
Posts: 217
Location: TEXAS

Re: Throwing out the baby with the bathwater
PostPosted: Mon Sep 05, 2011 1:18 pm Reply with quoteBack to top

Tolyouso!!

you rock!! you put it so perfect now..

I do not hear a peep out of any Realtor about missing a closing date or cant do the loan due to tighter UW guides...Not to many Realtors out there who actually care about anything but their 3 and 6% commissions..

There was and is this agent here in Central Texas who would have these Seminars in California telling Investors how great Austin was and how high the rents were. lies, lies and more lies about half those Investors went into Foreclosure in 2008,2009

I simply tell them write your Congressman for they are the ones who killed the Lending Biz

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