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Opinions on mortgage crisis, irresponsible lending and borrowing, foreclosures, mortgage companies to blame for national crisis lending to people who should not own homes
I just want to make a couple comments. There are just some people who should never own a home. There are some who are too irresponsible to pay for anything with a commitment. They get tired and want to move on with something else. These are the ones who aren't interested in the help from the mortgage companies and would rather be foreclosed on. They also leave their "family pets" to suffer their irresponsibility too. I have four children, at least one of them should never be allowed to borrow money. How the mortgage companies ever were allowed to do this to our country is beyond me.
I agree to a certain degree. Many people, who aren't necessarily good with money, were led to believe that they could afford the home of their dreams. While it wouldn't be totally over-the-top to partially blame those individuals, it's also important to remember that the lenders ALSO knew the borrower couldn't afford the home, but let them borrow the money anyway.
I know several people who may be in this mess within the next couple of years and I feel for them, because they make good money, have no debt, but may have bitten off more than they can chew. They turned to the mortgage "professionals" for assistance and were led to believe they would be just fine. Not all of us are in the banking industry and we turn to those indivuals/companies for guidance - that's what they're supposed to be there for. The blame can't be placed solely on the borrowers, although many people believe it's their fault and their fault only.
I agree to a certain degree. Many people, who aren't necessarily good with money, were led to believe that they could afford the home of their dreams. While it wouldn't be totally over-the-top to partially blame those individuals, it's also important to remember that the lenders ALSO knew the borrower couldn't afford the home, but let them borrow the money anyway.
I know several people who may be in this mess within the next couple of years and I feel for them, because they make good money, have no debt, but may have bitten off more than they can chew. They turned to the mortgage "professionals" for assistance and were led to believe they would be just fine. Not all of us are in the banking industry and we turn to those indivuals/companies for guidance - that's what they're supposed to be there for. The blame can't be placed solely on the borrowers, although many people believe it's their fault and their fault only.
The way I look at it everyone has blood on their hands... the country was dealt an unrealistic expectation from the top down.
Now I don't want to make this political... I merely want to illustrate a point. Our President was extremely proud of those record housing numbers in 2002-2005. It attributed to his job growth numbers and in many address speeches he flat our encouraged Americans to go out and live the dream... finance a home. He beemed about markets like Florida and Atlanta where lower income families owned homes for the first time contributing to the record growth of our economy. Greenspan set advantagous fed rates to promote lenders and buyers to partner in this grand scheme. Just like day traders nearly a decade before, 'would be' real estate developers were leaving their careers behind and buying, selling foreclosures flips with no money down. Banks encouraged people to take out home equity loans and use it to help pay for everything from home improvements to college tuition, to vacations, to new cars. And finally, those that would never have a decent opportunity to own a home in their lifetime were encouraged through Agents, brokers and sub-prime lenders, family and friends to buy a house of their dream and just refinance when they wanted.
The whole country from the top to bottom had something to gain. Now that there is a HUGE mess everyone wants to look away and point fingers at everyone.
Our entire country has become a case study in deficit spending. In the 1920's and 30's a whole generation on Americans learned a painful (but valuable) lesson about money and how it pertains to personal wealth. In this decade, a whole new generation of Americans will learn a painful lesson about personal finance.
The way I look at it everyone has blood on their hands... the country was dealt an unrealistic expectation from the top down.
Now I don't want to make this political... I merely want to illustrate a point. Our President was extremely proud of those record housing numbers in 2002-2005. It attributed to his job growth numbers and in many address speeches he flat our encouraged Americans to go out and live the dream... finance a home. He beemed about markets like Florida and Atlanta where lower income families owned homes for the first time contributing to the record growth of our economy. Greenspan set advantagous fed rates to promote lenders and buyers to partner in this grand scheme. Just like day traders nearly a decade before, 'would be' real estate developers were leaving their careers behind and buying, selling foreclosures flips with no money down. Banks encouraged people to take out home equity loans and use it to help pay for everything from home improvements to college tuition, to vacations, to new cars. And finally, those that would never have a decent opportunity to own a home in their lifetime were encouraged through Agents, brokers and sub-prime lenders, family and friends to buy a house of their dream and just refinance when they wanted.
The whole country from the top to bottom had something to gain. Now that there is a HUGE mess everyone wants to look away and point fingers at everyone.
Our entire country has become a case study in deficit spending. In the 20's and 30's a whole generation on Americans learned a painful (but valuable) lesson about money and how it pertains to personal wealth. In this decade, a whole new generation of Americans will learn a painful lesson about personal finance.
To me as an European it is unbelievable when I hear on tv how much credit card debt the avarage American has..... How can they live with that. In Europe in most countries you can have a debt so high just because you won't have a limit that high. Credit scores work different. You have a better score if you pay your bills on time, not when you have a loan, mortgage. So if I make all my payments on time that gives me a higher score and to me it sounds better to learn how to go around with money. Most things are better over here To much to write about. This is a great Country. The bad thing that happened is that for every mortgage deal, closing they realtor or bortgage broker got a commision. They should get a percentage every year the mortgage is in place that would make them give a more honest advise. The way it was is more like, just get them in a mrotgage and if the foreclose, who cares... not the mortgage broker, he had his commision and is gone.... Get a CPA or a real estate lawyer to get a fair advise. I learned today how much value I can give to the mortgage broker from my bank after speaking to my lawyer. The mortgage broker basicly gave me illegal advise, well he doesn't care...... I would be the one that is liable after all if I would do it.....
I just want to make a couple comments. There are just some people who should never own a home. There are some who are too irresponsible to pay for anything with a commitment. They get tired and want to move on with something else. These are the ones who aren't interested in the help from the mortgage companies and would rather be foreclosed on. They also leave their "family pets" to suffer their irresponsibility too. I have four children, at least one of them should never be allowed to borrow money. How the mortgage companies ever were allowed to do this to our country is beyond me.
How do you go from the majority of your train of thought to the last sentence?
I agree to a certain degree. Many people, who aren't necessarily good with money, were led to believe that they could afford the home of their dreams. While it wouldn't be totally over-the-top to partially blame those individuals, it's also important to remember that the lenders ALSO knew the borrower couldn't afford the home, but let them borrow the money anyway.
There have been and still are unscrupulous lenders, bad apples seem to make up a portion of every profession, but I think that it's very important to remember that when people shopped for mortgages they knew all the costs upfront. If they didn't consider the costs of actual homeownership (maintenance, new furniture, etc.) then they only have themselves to blame. It's not the job of mortgage lenders to provide comprehensive home ownership education.
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I know several people who may be in this mess within the next couple of years and I feel for them, because they make good money, have no debt, but may have bitten off more than they can chew.
Can you share some insight into what exactly amounts to more than they can chew? If they make "good money" and have "no debt" then it should be very clear to them what they can afford and what they can't.
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They turned to the mortgage "professionals" for assistance and were led to believe they would be just fine.
They very likely would be just fine. How are the rest of their spending habits? What is it that is about to get them into trouble, in your opinion?
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Not all of us are in the banking industry and we turn to those indivuals/companies for guidance - that's what they're supposed to be there for.
We are in the industry to help people select a mortgage that is best for their life plans and their financial abilities. What kind of guidance do you think your friends' loan officer should have provided but didn't? I would really like to know so I can take it into account when I deal with my clients.
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The blame can't be placed solely on the borrowers, although many people believe it's their fault and their fault only.
Borrowers surely aren't the only ones to blame but when it comes to personal finances no one knows them better than the borrowers.
There have been and still are unscrupulous lenders, bad apples seem to make up a portion of every profession, but I think that it's very important to remember that when people shopped for mortgages they knew all the costs upfront. If they didn't consider the costs of actual homeownership (maintenance, new furniture, etc.) then they only have themselves to blame. It's not the job of mortgage lenders to provide comprehensive home ownership education.
Hmmmm I disagree. When I was shopping for my first mortage I went direct to two lenders (one being my Credit Union) before finally settling on a reffered broker. The reason I chose this particular broker was because he was willing to take the time to educate me about the entire process not to just cut the best deal. We looked at tax obligations, school district costs, possible deductions, and estimated the future cost of ownership. He had a background in finance and was in most respects more knowledgeable about advantages of the regional RE markets than some of the RE's I used (especially in terms of local taxes). In turn, he created a client for life (and twice a year a golfing partner). You're absolutely correct. The average person buys and sells a home every eight years. I'm on my third house in 19 years and ready to do some actually investment properties.
I think the lending industry would greatly benefit if they took a stronger position on educating consumers a few lessons in personal finance. Is it the loan officer's responsibility to lay out all the roadblocks a home owner may experience with the total cost of home ownership? Maybe not. However, the true professional who wants to earn clients and develop relationships may take the time to do so. Those in it for a buck will just cut and run.
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We are in the industry to help people select a mortgage that is best for their life plans and their financial abilities. What kind of guidance do you think your friends' loan officer should have provided but didn't? I would really like to know so I can take it into account when I deal with my clients.
You are also in an industry that knowingly used creative marketing techniques such as teaser rates and adjustable rate mortgages to 'slide' individuals into loans they were probably not capable of completely paying off. Low doc 'liar loans' to entice unqualified applicants became less the exception and more the norm. Countrywide,WaMu and a whole layer of now defunct sub prime lenders were guilty of this. I'm not say you or your firm specifically. I'm talking about a large piece of the industry.
I nearly had a heart attack when my daughter(25) in her second year of her Medical school called me about co-signing for a $180,000 townhouse as a good 'investment'. Her only income was from a $26,000 stipend and some parttime work at a hospital. One of her 'friends' was a mortgage 'professional' convinced her she could afford it. When I sat down to go over the application he asked straight out what her current income was. He then asked what she thought her income would be in five years.
That's when I ended the conversation and we walked out.
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Borrowers surely aren't the only ones to blame but when it comes to personal finances no one knows them better than the borrowers.
Agreed
This is a big mess we're in but both borrowers and lenders shoulder alot of the blame.
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,848,281 times
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Quote:
Originally Posted by goboy2112
I think the lending industry would greatly benefit if they took a stronger position on educating consumers a few lessons in personal finance. Is it the loan officer's responsibility to lay out all the roadblocks a home owner may experience with the total cost of home ownership? Maybe not. However, the true professional who wants to earn clients and develop relationships may take the time to do so. Those in it for a buck will just cut and run.
As a loan officer, I couldn't agree more.
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How can they live with that. In Europe in most countries you can have a debt so high just because you won't have a limit that high. Credit scores work different. You have a better score if you pay your bills on time, not when you have a loan, mortgage. So if I make all my payments on time that gives me a higher score and to me it sounds better to learn how to go around with money. Most things are better over here 
To much to write about. This is a great Country. The bad thing that happened is that for every mortgage deal, closing they realtor or bortgage broker got a commision. They should get a percentage every year the mortgage is in place that would make them give a more honest advise. The way it was is more like, just get them in a mrotgage and if the foreclose, who cares... not the mortgage broker, he had his commision and is gone.... Get a CPA or a real estate lawyer to get a fair advise. I learned today how much value I can give to the mortgage broker from my bank after speaking to my lawyer. The mortgage broker basicly gave me illegal advise, well he doesn't care...... I would be the one that is liable after all if I would do it.....
