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PostPosted: Sun Apr 15, 2007 2:23 pm 
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They wouldn't really do that would they? I am gree-blue politically and hate Republicans. I would love to hear the hate mongers start howling though, Hilary and Shumer talking federal tax money bailout to pay for these idiots who did not know that they couldn't afford that humongous house they bought. Check out Noriel Roubini's website RGEmonitor.com. The NINJA loan some were actually promoting ( these uncredulous *SPAM* companies)stands for No Income, No Job, No Assets. People were given mortagage loans without any proof of income or assets- just their word of what they made. Everyone has money in the hedge funds who were feeding the frenzy( if you have a pension or a mutual fund IRA). I say it will take the economy down for a while, but let the hedge fund managers, stupid people who took the loans that they knew were too good to be true, and slimey companies who made tons of money for 2+ years take it on the chin.


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PostPosted: Mon Apr 16, 2007 8:00 pm 
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ill jump in on this one, as ive been in the m0rtgage business for over 4 years, and lost my job due to the company i worked for going out of business abruptly (see M0rtgage Lenders Network, subprime lending crash...). ill try to make this short...the media (surprise surprise :roll: ) is skewing this way out of proportion to make it sound like these people are victims, which they are not. are there some unscrupulous brokers, lenders, clients, attorneys, appraisers, etc out there? absolutely. now lets take a step back and see why there is subprime lending to begin with (subprime lending for those of you who dont know is lending money to clients with blemished, or *bad* credit). conventional lending (fannie mae/freddie mac "A" paper) has a "box" that a borrower has to fit in to meet the lending criteria. MANY borrowers do not fit into this criteria, along with not fitting into FHA (government) loan programs, although FHA is more geared towards 1st time homebuyers and offer higher loan amounts in relation to what the property is worth, compared to what conventional loans historically offered. now, what happens when you have a ton of people who dont fit into this box and still want to own a home, and not rent? you have subprime lending, companies who are geared for these types of clients and are willing to take the much higher RISK on lending on these borrowers. in taking this risk, these companies charge higher interest rates, and usually limit the amount of money they will lend because of a couple major reasons: 1. the client cant get conventional financing. 2. because they have clearly established due to their poor credit history that they cannot pay their loans on time, or at all. this is the only game in town. so these people know they dont pay their bills, and the lenders know this as well, but lending on homes offers more collateral for the bank in case of default (which is why in a lot of cases its easier to buy a house than a car with poor credit...houses appreciate, cars DEpreciate...its all about collateral...and RISK). now i dont want to paint with a broad brush and say all subprime borrowers are bad news, because they are not, im trying to explain how subprime lending came into existence in the first place...because of a need in the market. subprime lending offers great opportunities for people to get their foot in the door to home ownership, also it has programs setup for people with hard to document income, especially self employed people, along with attractive programs for people to buy 2nd/vacation, and investment homes. now i would say more than 90% of all subprime loans that are made come in a loan product called a 2/28, fixed for 2 years, then goes variable for the remaining 28 years on a 30 yr loan. no one keeps these loans for more than 2 years...they are a vehicle for the client to get in the door, make timely m0rtgage payments for 2 years, prove that they are responsible borrowers, and if they are good borrowers they should be able to be refinanced in conventional "A" loans after that time, as fannie/freddie basically need 2 years of good m0rtgage pmts. these are also referred to "band-aid" loans because they serve a temporary purpose to achieve a long term goal.
if the government comes in and bails these people out, the government could run into some serious issues taking on all this risk, and literally wiping peoples asses for them. a lot of the time the brokers are more to blame than the actual lenders, or even the clients, because as we've seen with stated income ("no documentation income") these people overstate their income and literally bite off more than they can chew, and end up getting themselves into trouble making their payments. so i rambled on, but because borrowers that cant/dont pay their loans, end up messing it up for other borrowers that can no longer get these products. they are tightening credit guidelines and it will only get more strict for people to borrow money, which sucks for the rest of us...and not only that, but because they dont pay their loans, thousands of people like me lose their jobs. sorry this is so long, def the longest post ive ever done. :)

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PostPosted: Tue Apr 17, 2007 6:20 am 
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thanks for your clear insight john, some of the media over here in europe is having a field day with this saying how it's going to bring down some european banks that cover the small private contingent in the states, and how interest rates are going to soar in the next few (fill in the blank). Our presidential candidates all have programs to make every single French family a homeowner (with completely loony financial engineering techniks), but the truth of the matter is that there will always be people who cannot be homeowners, period. To let people get into debt for 30 (and now up to 40years) in order to buy a very cheap (as in low quality)little house that wont be kept up and wont be worth shit in 15 years is truly criminal.

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PostPosted: Tue Apr 17, 2007 6:36 am 
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thats pretty interesting about the french government coming into help. its a great idea but unfortunately there are many, many issues that they have to consider (like getting themselves in debt, some people might consider it free money, etc). the european markets (and worldwide markets...) will see changes from this...as the US economy is really the cornerstone for the world economy i'm guessing you'll see some "tightening of the screws" like we've seen already. for instance, in our last month of business (Dec 2006), we were already making big guideline changes because we knew that wall street wasnt so keen on buying subprime paper, because it wasnt performing well due to default, etc. we cut back 100% financing to 1st time homebuyers to 95% maximum, which was huge. we also raised credit (FICO) score minimums fo all programs, especially stated income loans. this is going basically industry wide, so its really the 1st time homebuyers that will be feeling the pinch. fortunately, FHA (government) loans are supposedly to come in and help, with adjusting their guidelines to help fill in the huge gap this has left, but i havent seen anything concrete myself as i havent been working.... :cry:

edit, new article today: (link wont work due to a spam word filtered.

M0rtgage giants may help borrowers:

WASHINGTON - The heads of Fannie Mae and Freddie Mac said Tuesday the *SPAM* finance giants are developing new types of loans to help distressed borrowers with high-risk *SPAM* keep their homes at a time of rising foreclosures.

The moves by the two government-sponsored companies, the biggest buyers and guarantors of home *SPAM* in the country, came in response to the turmoil in the market for so-called subprime *SPAM*, higher-priced loans for people with tarnished credit or low incomes who are considered greater risks. In recent weeks, the distress has roiled financial markets and stoked anxiety that it could spill over into the broader economy.

The initiatives by the companies were disclosed in testimony prepared for a House hearing by Daniel Mudd, president and chief executive of Fannie Mae, and Richard Syron, Freddie Mac's chairman and CEO.

"We are ... working on a major effort to develop more consumer-friendly subprime products that will provide stable financing alternatives going forward," Syron said in his testimony for the hearing by the House Financial Services Committee. "We plan to have our new offerings in the market by midsummer."

He said the new products will include 30-year and possibly 40-year fixed-rate *SPAM* as well as adjustable-rate *SPAM* with longer fixed-rate periods.

Fannie Mae, in a new program called "HomeStay," is offering new options so that lenders can help subprime borrowers refinance out of high-interest adjustable-rate *SPAM* or other difficult loans, Mudd said. He said the company plans to stretch the term on subprime loans to 40 years from the current maximum 30 years — which will reduce monthly payments for borrowers by around 5 percent, Mudd said.

Adjustable-rate *SPAM* are especially prevalent in the subprime market. They are considered higher-risk loans because they typically draw borrowers in with an initial teaser interest rate, which can rise sharply over time.

On Monday, a high-level group of federal officials, bankers and *SPAM* industry executives met and agreed on a goal of keeping deserving borrowers with high-risk *SPAM* in their homes, said Sheila Bair, chairman of the Federal Deposit Insurance Corp. Financial institutions making changes to the terms of home loans — such as extending the initial low, or "teaser" interest rates on adjustable-rate *SPAM* — may help ease the distress of borrowers who are making regular payments but facing possible default, Bair said.

There was consensus among the regulators, Wall Street executives, bankers and others attending that "it will be in everyone's interest to keep borrowers in their homes," Bair said in a telephone interview after the seven-hour, closed-door meeting.

"It's going to be a very challenging task. ... We're not going to be able to save everybody," Bair said. But regulators can try to serve as catalysts for financial institutions to make changes, she said.

The meeting at FDIC headquarters and Tuesday's congressional hearing come against a backdrop of mounting pressure on Congress and regulators to do something about rising foreclosures among homeowners unable to meet high payments. Millions of homeowners are said to be at risk of losing their homes in coming years. While a number of politicians, consumer advocates and community activists are clamoring for Congress to act, industry interests and some Republican lawmakers are warning that new restrictions on *SPAM* lending could choke off credit to those who most need it.

Democrats in power positions on Capitol Hill have started drafting legislation to curb abusive *SPAM* lending practices that especially target minorities and the elderly, putting people into home loans that they cannot afford to repay.

The *SPAM* business has exploded in the last two decades with big Wall Street investment firms buying loans in bulk from banks and other lenders, and bundling them into securities to be sold to investors, spreading the risk.

Fannie Mae and Freddie Mac were created by Congress to pump money into the *SPAM* market by buying home loans from banks and other lenders and turning them into securities for sale on Wall Street. They have grown dynamically in recent years and now finance or guarantee some $4 trillion of home *SPAM*, representing about half of the single-family *SPAM* in the country.[/b]

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 Post subject: John from Conneticut
PostPosted: Wed Apr 18, 2007 8:12 am 
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Location: Springfield, IL
Sorry you got laid off. It was an interesting post. Don't worry- you will find something in with your expertise soon.


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PostPosted: Wed Apr 18, 2007 9:20 am 
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thanks zenbret, i appreciate it! actually things are looking up...i went 3 months with nothing, now i have possibly 3 or 4 opportunities. and my best one could be to relocate to horsham PA, north of philly...in jaypfunks territory haha. so we'll see! :)

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PostPosted: Tue May 14, 2019 6:13 am 
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PostPosted: Tue May 14, 2019 9:28 am 
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Payday advance type of business like Check And Go are also a big part of the problem along with preditory lending, keeping the working poor on the wheel of debt. 25% APR for legal loansharking. Pay off the $75 you owe or we will take your entire check.

Rent-a-center will help you outfit your new house.
For $3,000 you can purchase a $1,000 living room set.

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