$700 B Bailout

[redsk1]

Originally Posted by hesscl34

Sorry, it's not the "people" that created these loans and sold them to the buyers telling them "I'll get you into a house no matter what". You want to blame someone?.. then you blame the banks and loan processors. They should go to jail for giving people those options and letting them believe they could afford it. Most home buyers are clueless when it comes to the loan process. They depend solely on their real-estate agent and loan processor for advice. They took the "good faith" out of the estimate and just made it bullshit.

I'm a Mortgage Loan Officer going on my 8th year in the business. I'm not saying that SOME loan officers are not to blame. There are some of them.

I've got to take up for alot of good loan officers that you are just throwing under the bus. I offer recommendations to clients based on their situation.

I've never done an Option Arm (which i'm proud of now). I have done Alt A loans though (less than perfect credit) over the last few years of the housing boom. When a client calls to get pre-approved i routinely ask, "What do you want to keep your payments under?"

Once i tell them what they can afford, I routinely would get.. how much are my payments at this higher sales price? I would consult, advise, and tell them...make sure you are comfortable w/ your payments! That's the #1 thing.

Now should I not offer them or tell them they don't qualify b/c i don't think they can afford it...even when Fannie Mae guidelines say they do qualify? I can only advise but so much. So, when you come out and put a blanket statement that Loan Officers should go to jail...come on. That's what makes me mad.

I've done maybe 2 subprime deals in 8 years and I have done some Alt A's, but 90% of my business is A paper.

Hell, I remember a couple years ago, getting folks qualified for Alt A's, consulting them, and saying theres no way these people can afford this house. They were approved by Fannie Mae's online underwriting guidelines. Maybe i should have let the 10 other lenders that were lining up behind me to do the loan. I did my job and my customers knew exactly what they were getting. I can speak for the majority of other lenders i know that handles things similar to me.

By the way the majority of Alt A's are fixed too....people couldn't afford the fixed payment.

By the way...i have a 5/1 I/O Arm that's fixed for 5 years at 3.5%...not bad huh. When I make my "normal amortizing payment" each month I get more principal reduction that the normal fixed rate that i would have gotten at the time. So structured right and explained right an ARM is not a bad thing. The worst regular ARM adjustment over the last 7 years....was in the 7.5% range...but has averaged in the lower 6's