Banks over Homeowners - what has America come to?

[WillowTree]

Yeah and remind me how many people bought when they couldn't afford a house????

They were told by a lender that the COULD afford to buy a house.

well that just epitomizes stupid donut? just cause someone tells you you can afford it you think you can afford it? waaaaay damn dumb if you ask me.

 

[Jarhead]

underwriters are the ones who approve or deny a loan.
They are independant and make decisions based on exact calculations.
But if they are furnished false infomrmation, they will approve when it should be denied.

The government set it up with the demand for equal ledning practices by race...not by income
The banks comlpied by not checking income and hoping borrowers will lie
The borrowers complied by lying about their income.

All are guilty.

All will get off scott free.

 

[Zoom-boing]

You want all Americans to have to understand finance to buy a home.

Someone who is going to purchase a home better have some damned understanding of their own finances and how it all works. You don't have to be some financial wizard to understand the basics.

I guess that is how you see the world but there would be alot fewer people owning homes.

And? How many people were given loans that they never should have had in the first place? How many people over-bought what they could reasonably afford? How's that working out?

Here's a newsflash: I know it gives you a nice, warm, fuzzy to have 'a home for everyone and everyone in a home' but the reality is that NO, not everyone should own a home. Only those who can afford it should own a home.

How is that good for the economy?

How's a burst housing bubble good for the economy?

 

[rdean]

If corporations are people, so are banks.

 

[OODA_Loop]

If corporations are people, so are banks.

Indeed.

 

[Jarhead]

y'all just want to spew talking points...and completely ignore the truth of what happened, who is to blame, and why no one will be prosecuted.

 

[Oldstyle]

Yeah and remind me how many people bought when they couldn't afford a house????

They were told by a lender that the COULD afford to buy a house.

Not for nothing, Truth but that's a REALLY stupid excuse. If you go into a car dealership and the salesman tells you that HE thinks you can afford a Mercedes should that opinion push you to make the deal? Or should you look at what you make per year and make a rational decision to buy something cheaper?

At some point people have to take responsibility for their own decisions. You've got to be intelligent enough to KNOW that you can't afford a $300,000 house when you make $30,000 a year. I'm sorry if you think using your head while making the largest purchase you'll ever make in your lifetime, isn't something people should have to do but I think that people who didn't think before buying a house got what they deserved.

That being said I think the banks are also at fault for not standing up to the people who bullied them into giving out sub-prime housing loans to applicants that should never have qualified for a mortgage. Sound banking practices would have kept this last crisis from happening.

 

[ClosedCaption]

So an expert that you rely on tells you you can afford a loan and the fault lies with the borrower? I understand Cavet Emptor *sp* but now you guys are being ridiculous. In order to never rely on an expert you have to be an expert on everything.
Want your car fixed? Become a Auto Mechanic before getting it fixed.
Want your computer fixed? Become a computer tech before taking it to Geek Squad...
And if you dont become an expert, its all your fault for whatever happens to you?

 

[Two Thumbs]

Yeah and remind me how many people bought when they couldn't afford a house????

Proper vetting of customers should have eliminated those folks.

Your right. It should have and back in the day it would have. You used to have to have a pretty hefty down payment to buy a house. You used to have to have good credit to buy a house.

Fannie and Freddie did away with that.

They also did away with the requirment of having a job.

 

[ClosedCaption]

Proper vetting of customers should have eliminated those folks.

Your right. It should have and back in the day it would have. You used to have to have a pretty hefty down payment to buy a house. You used to have to have good credit to buy a house.

Fannie and Freddie did away with that.

They also did away with the requirment of having a job.

FHA loans always require a 3.5% down payment and nothing has changed with that. I know NO LENDER ON EARTH that does not require 2 months of pay stubs either

 

[OODA_Loop]

So an expert that you rely on tells you you can afford a loan and the fault lies with the borrower? I understand Cavet Emptor *sp* but now you guys are being ridiculous. In order to never rely on an expert you have to be an expert on everything.
Want your car fixed? Become a Auto Mechanic before getting it fixed.
Want your computer fixed? Become a computer tech before taking it to Geek Squad...
And if you dont become an expert, its all your fault for whatever happens to you?

A lender or lender's representavtive is not your agent or advocate by law.

 

[Jarhead]

Proper vetting of customers should have eliminated those folks.

Your right. It should have and back in the day it would have. You used to have to have a pretty hefty down payment to buy a house. You used to have to have good credit to buy a house.

Fannie and Freddie did away with that.

They also did away with the requirment of having a job.

That is not true. They did away with checking if the job history you claimed on the appication was true.

What people dont understand is the loan is put through underwriting....and underwriter makes the same money whether the loan is approved or not...and they make a calculated decision based on the information furnished to them. The guidelines the underwriters followed never changed....what changed was the effort made by the banks to ensure the information was accurate that they forwarded to the underwriter.

 

[Jarhead]

Your right. It should have and back in the day it would have. You used to have to have a pretty hefty down payment to buy a house. You used to have to have good credit to buy a house.

Fannie and Freddie did away with that.

They also did away with the requirment of having a job.

FHA loans always require a 3.5% down payment and nothing has changed with that. I know NO LENDER ON EARTH that does not require 2 months of pay stubs either

Then you are not aware of the NINJA loans...that was at the core of the problem

No Income No Job or Asset check

But you are correct about the down payment for FHA loans

 

[Marie888]

From what I understand....besides being a first time home-buyer and getting down payment assistance, there is no way anyone can get into a financing home w/o the 3.5% down payment on FHA or 5% on Conventional right now. They have cracked the whip. Hopefully we can bounce back soon, hopefully not too late.
.

 

[Avorysuds]

You want all Americans to have to understand finance to buy a home.

I guess that is how you see the world but there would be alot fewer people owning homes.

How is that good for the economy?

It's just not that hard to understand...

Maybe people shouldn't spend 600,000k they don't have when they don't understand that they will be paying something around 1.2 million back over 30 years... And with an ARM it can be more as the rate can change.

 

[Jarhead]

So an expert that you rely on tells you you can afford a loan and the fault lies with the borrower? I understand Cavet Emptor *sp* but now you guys are being ridiculous. In order to never rely on an expert you have to be an expert on everything.
Want your car fixed? Become a Auto Mechanic before getting it fixed.
Want your computer fixed? Become a computer tech before taking it to Geek Squad...
And if you dont become an expert, its all your fault for whatever happens to you?

A lender or lender's representavtive is not your agent or advocate by law.

Exactly true. As a matter of fact, the settlement attorney, (the attorney who ensures the legality of the transaction) has the responsibility to make it clear that they represent the lender and not the borrower...and when a borrower asks questions, they can answer, but not advise.

 

[Jarhead]

So an expert that you rely on tells you you can afford a loan and the fault lies with the borrower? I understand Cavet Emptor *sp* but now you guys are being ridiculous. In order to never rely on an expert you have to be an expert on everything.
Want your car fixed? Become a Auto Mechanic before getting it fixed.
Want your computer fixed? Become a computer tech before taking it to Geek Squad...
And if you dont become an expert, its all your fault for whatever happens to you?

YOU ARE MISSING THE POINT.

The loan agent tells the borrower how much money they need to make to get6 the loan through underwriting.....that is not advice...it is information..

The borrower then makes the consious decision to either lie about his income or tell the truth.

With the NINJA loans, many opted to lie.

But common sense should tell you...

"if you need to lie to get the loan, then maybe it is not a good idea to take the loan"

You see, people did not use common sense...they simply assumed they will somehow make it work.

 

[editec]

"Treasury Secretary Tim Geithner is pushing a settlement with the big banks and Wall Street firms that caused the mortgage crisis—letting them get away with a slap on the wrist.

Wall Street bankers have not faced any serious punishment for the widespread fraud that crashed our whole economy—pushing bad loans, lying to investors, forging foreclosure documents—and banks are making profits again while homeowners continue to suffer.

Unbelievably, Geithner wants state attorneys general to agree to a sweetheart deal where these banks would pay only $20 billion—a fraction of what they could owe if fully prosecuted—and would get immunity from investigation and prosecution of the criminal greed, negligence, and fraud that caused this crisis. This would eliminate any leverage regulators have to pressure banks to help out the homeowners they've hurt."

Let your representatives know American homeowners should come first, not the greedy unethical banks. Tell Treasury Secretary Geithner, "No more sweetheart deals for Wall Street. Let states investigate and prosecute the crimes that crashed our economy."

Click here to let them know:
MoveOn.org Civic Action: No Sweetheart Deal for Wall Street on Mortgage Fraud

So much for the theory that the DEMOCRATS are going to be there for the little guy, eh?

 

[Marie888]

So an expert that you rely on tells you you can afford a loan and the fault lies with the borrower? I understand Cavet Emptor *sp* but now you guys are being ridiculous. In order to never rely on an expert you have to be an expert on everything.
Want your car fixed? Become a Auto Mechanic before getting it fixed.
Want your computer fixed? Become a computer tech before taking it to Geek Squad...
And if you dont become an expert, its all your fault for whatever happens to you?

YOU ARE MISSING THE POINT.

The loan agent tells the borrower how much money they need to make to get6 the loan through underwriting.....that is not advice...it is information..

The borrower then makes the consious decision to either lie about his income or tell the truth.

With the NINJA loans, many opted to lie.

But common sense should tell you...

"if you need to lie to get the loan, then maybe it is not a good idea to take the loan"

You see, people did not use common sense...they simply assumed they will somehow make it work.

It's true what you are saying. I know of "someone" who was recently pre-approved for a MUCH higher amount than their debt to income ratio. Sure, steady job, Sure, good credit, but still, the amount approved for financing WAY higher than should be. They may have cracked down on the down payments, but the pre-approval amounts are still way higher. The buyer has to know where they are standing; they shouldn't go by what they are approved for.

.

 

[Jarhead]

You want all Americans to have to understand finance to buy a home.

I guess that is how you see the world but there would be alot fewer people owning homes.

How is that good for the economy?

It's just not that hard to understand...

Maybe people shouldn't spend 600,000k they don't have when they don't understand that they will be paying something around 1.2 million back over 30 years... And with an ARM it can be more as the rate can change.

the ARM is a different issue in itself...

That was where people took advice from the loan agents that was valid assuming all things being equal...but as we saw, all things werent.

To explain...

People took the ARM for re-fi's....a great teaser rate for a year or two...1.5%....
But they also committed to a rate jump to prime plus X (depending on creditworthiness).....and that made it much more expensive...so people said..."I dont want to worry about the "unknown" down the road...."

And the loan agents responded with...

"dont worry, when your teaser rate expires, you can re-fiannce again for another teaser rate...as there is no pre payment penalty with this loan"

The problem?

Becuase of what happened with the NINJA loans, real estate devalued...something that was unheard of...and people found themselves with negative equity in their homes making it impossible to re-fi...

So their teaser rate expoired, they couldnt re-fi...and all of a sudden thgeir mortgage payments as much as tripled.