$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

[djnemo65]

Originally Posted by firstdown

It not at hard to figure out. Too many people had loans which they should not have ever had and they could not afford them. When the housing market was doing so great people with mortgage issues or payments too high could just sell their home at a profit and walk away. Now when the sh&* hits the fan they cannot sell their home in a soft market and the trouble begins. Back before the mid 90's about the only way people lost their homes was do to a loss of a job. Now days people are just loosing their homes and still have the same income as they did when they purchased them. Now its going to get much tougher to buy a home and hopefully we do not repeat this again.

Sorry First, you are behind on this. What you are describing is the collapse of the US housing market, which is only the first part of the story. The bailout does not purport to address this, which is a major reason why the public is not supporting it. How we went from a correction in an overvalued US housing market to the potential collapse of the global economy is a bit more complicated than you are allowing.

[firstdown]

Originally Posted by djnemo65

Sorry First, you are behind on this. What you are describing is the collapse of the US housing market, which is only the first part of the story. The bailout does not purport to address this, which is a major reason why the public is not supporting it. How we went from a correction in an overvalued US housing market to the potential collapse of the global economy is a bit more complicated than you are allowing.

I was not talking about the bail out. Someone asked how the whole mess got started and that how it got started. Yes there is more to the whole story but thats how it started.

[SmootSmack]

Rejected.


Bailout moves towards congressional approval - Sep. 29, 2008

[mheisig]

C'moooon free market! Do your thang!

[FRPLG]

I meant how to fic it and prevent it recently. The underlying causation for this goes back to the late 70's. Right now cause doesn't mean much though.

[SmootSmack]

It's hard for people not to get upset when they read something like this

FOXNews.com - WaMu Gives New CEO Mega Payout as Bank Fails - Local News | News Articles | National News | US News

[Sheriff Gonna Getcha]

Originally Posted by SmootSmack

It's hard for people not to get upset when they read something like this

FOXNews.com - WaMu Gives New CEO Mega Payout as Bank Fails - Local News | News Articles | National News | US News

It is certainly understandable why people would get upset with that story. It's really tragic that some are making millions while others are losing their jobs, watching the value of their pensions plummet, and losing their homes.

But, keep in mind that WaMu's new CEO had nothing to do with the bank's failure. Moreover, "golden parachutes" aren't as crazy as they sound. Suppose CEO X has a proven track record of turning around struggling businesses, makes $5,000,000 per year at his current job, and has great job security. He's probably a very hot commodity and will not leave his job unless he's paid handsomely and is given some job security (i.e., guaranteed money). That guaranteed money is typically payable if his employment is terminated for no fault of his own and is forfeited for certain bad conduct (e.g., fraud). It's a form of job security and isn't much different from an NFL signing bonus, except it's paid at the end of the employment instead of at the beginning.

Basically, it does suck, but it makes sense.

[SmootSmack]

Originally Posted by Sheriff Gonna Getcha

It is certainly understandable why people would get upset with that story. It's really tragic that some are making millions while others are losing their jobs, watching the value of their pensions plummet, and losing their homes.

But, keep in mind that WaMu's new CEO had nothing to do with the bank's failure. Moreover, "golden parachutes" aren't as crazy as they sound. Suppose CEO X has a proven track record of turning around struggling businesses, makes $5,000,000 per year at his current job, and has great job security. He's probably a very hot commodity and will not leave his job unless he's paid handsomely and is given some job security (i.e., guaranteed money). That guaranteed money is typically payable if his employment is terminated for no fault of his own and is forfeited for certain bad conduct (e.g., fraud). It's a form of job security and isn't much different from an NFL signing bonus, except it's paid at the end of the employment instead of at the beginning.

Basically, it does suck, but it makes sense.

I understand. I was just saying that if someone were to just pick up the paper (or I guess log onto the Internet) today and see this-and only this-it would enrage them.

[redsk1]

Pelosi should be ashamed at throwing POLITICS into whether this bill should be passed or not. She was quoted in her speech. Not the right time or place. Regardless, if you think it should or shouldn't be passed let's talk about why and why not rather than who's fault it is.

REP. NANCY PELOSI, (D-CA), HOUSE SPEAKER: For too long this government, for eight years has followed a right wing ideology of anything goes, no supervision, no discipline, no regulation.

[Sheriff Gonna Getcha]

Originally Posted by redsk1

Pelosi should be ashamed at throwing POLITICS into whether this bill should be passed or not. She was quoted in her speech. Not the right time or place. Regardless, if you think it should or shouldn't be passed let's talk about why and why not rather than who's fault it is.

REP. NANCY PELOSI, (D-CA), HOUSE SPEAKER: For too long this government, for eight years has followed a right wing ideology of anything goes, no supervision, no discipline, no regulation.

I agree that Pelosi's comments were ill-timed. However, the Republicans who supposedly switched their votes should be even more ashamed. Essentially, they concluded the package was in the best interests of the economy and our country, but they decided to say "f' the best interests of our country," I want to get back at Pelosi.

[SmootSmack]

People who bit off more than they can chew essentially shouldn't simply completely be absolved of blame here.

[saden1]

Assuming you own your own home I am curious as to how many people in here actually read their loan documents in their entirety before they signed them?

[Slingin Sammy 33]

Originally Posted by saden1

Assuming you own your own home I am curious as to how many people in here actually read their loan documents in their entirety before they signed them?

I didn't read every last document to the letter, but I reviewed the settlement documents and loan repayment schedule and fees in detail on every home transaction I've done. I've never gone for an ARM, only 30 year fixed rate mortgages.

If you're making a six figure financial decision it's definitely your responsibility to understand what's going on or get an independent attorney to review and explain the documents to you.

This financial crisis is about much, much more than the 5% or so of mortgages that are defaulting. There is plenty of blame to go around on both sides of the aisle and from Wall Street to Main St. We all share in some of the blame here. It's just an egregious shame that Congress can't get a package together to stem the crisis.

[firstdown]

Originally Posted by saden1

Assuming you own your own home I am curious as to how many people in here actually read their loan documents in their entirety before they signed them?

I read very little of my loan papers but I also have an established ralationship with the person who did my loan. We did not have any fancy stuff in the loan and put 15% down (conservative traditional banking) and have a fixed 30 year loan with a rate around 5 3/4. We had to buy 4 years ago when the market was just crazy. We found a home that we liked ( could have been bigger) but we also found a home for sale by owner which was about $80,000 below its market value. I'm not the smatest guy in the world but common sense said the market had to correct itself and could not keep up the pace it was on. We have our eye open for another home if we find something that we really like at a good price (I want to live on the water). We can sell our current home and still make around $100,000 with the price we paid for the home. Oh, if I did not have the relationship with my lender I would have read more of the papper work.