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I just wanted to put out there that while we may be salespeople, a lot of us value our reputation above $$ and I suppose that is why we will soon celebrate 30 years.
Sorry to ramble but I had to defend some of the good guys. We would have loved to have profitted the way a lot of other brokers did but not at the risk of our own reputation.
I didn't mean to imply that all lenders are bad or that all salespeople are trying to rip you off. I just meant that when anyone is selling you a product-- any product, financial, real estate or otherwise-- it is up to the buyers to do their due diligence. Salespeople's jobs are to sell and buyers need to make their own choices and not blame others when they make the wrong ones.
I think that there are some unethical lenders in this mortgage mess and they should pay the price (some already have by going out of business), but in many, many cases they sold an otherwise acceptable product to a buyer who had no business buying it... and in many cases flat-out lied to get it. In those cases, the lender isn't at fault. Not everyone gets to walk away from this mess... and sometimes, the very ones who're doing it are the ones who really should be stuck with the consequences. Not the other way around.
I think that there are some unethical lenders in this mortgage mess and they should pay the price (some already have by going out of business), but in many, many cases they sold an otherwise acceptable product to a buyer who had no business buying it... and in many cases flat-out lied to get it. In those cases, the lender isn't at fault. Not everyone gets to walk away from this mess... and sometimes, the very ones who're doing it are the ones who really should be stuck with the consequences. Not the other way around.
If someone "lied to get a loan"... Isn't it the job of the lender to verify information and then make their decisions based on facts?
I didn't mean to imply that all lenders are bad or that all salespeople are trying to rip you off. I just meant that when anyone is selling you a product-- any product, financial, real estate or otherwise-- it is up to the buyers to do their due diligence. Salespeople's jobs are to sell and buyers need to make their own choices and not blame others when they make the wrong ones.
I think that there are some unethical lenders in this mortgage mess and they should pay the price (some already have by going out of business), but in many, many cases they sold an otherwise acceptable product to a buyer who had no business buying it... and in many cases flat-out lied to get it. In those cases, the lender isn't at fault. Not everyone gets to walk away from this mess... and sometimes, the very ones who're doing it are the ones who really should be stuck with the consequences. Not the other way around.
I agree that there a lot of unethical lenders out there. Like I said, I worked for some in S. Fla and almost got out of the business entirely because I was tired of being accused of being self rightous from all of my co-workers who were doing massive fraud. Thankfully I moved from there and got in with one of the good guys. My post was kind of just to show some people who may be turned off on the entire industry that there are some good ones out here. You just may have to look real hard for them sadly. I hope if one thing is learned from all of this mess is that before you make the biggest purchase in your lifetime you should do an incredible amount of research not only on what is in your range but also who you choose to do business with. It blows my mind how many people just select a lender or broker based on a pretty ad and do not research the company at all. I sure wouldn't trust just anyone with hundereds of thousands of dollars.
If someone "lied to get a loan"... Isn't it the job of the lender to verify information and then make their decisions based on facts?
Again, who is to blame?
Well;if they lied to get a loan that is fraud. If the lender knew and did nothing then he is also gulity.Two wrongs don't make a right. More like a conspircay .B0oht should at least suffer a loss;if not criminal action.I didn't understand isn't good enough under the law.
If someone "lied to get a loan"... Isn't it the job of the lender to verify information and then make their decisions based on facts?
Again, who is to blame?
A stated income/no doc loan is just that: the borrowers state their income. There is no verification. The borrower does not have to provide proof. No W-2s, no tax returns, no paycheck stubs. The borrower signs a legal document that says everything they have stated is the truth and the docs are notarized. The lender accepts this legally binding statement as a condition of the loan, because that's how the loan works. This loan product has been around for decades without rampant abuse, deceit and implosion. The loan hasn't changed; people have.
It's not the lender's job to police which buyers are lying on stated income loans. How would they do that when the terms of the loan do not allow them to check employment or verify income or tax records? All they can check is a credit score and proof of funds. I don't understand why everybody keeps thinking all these buyers were duped. The vast majority of defaults and foreclosures are not people who hit a hard patch or suffered unforeseeable financial reverses-- they are precipitated by people who lied on no doc loans to purchase a property they could not have otherwise afforded. Why is it the lender's, the government's, the taxpayer's or ANYBODY else's responsibility to monitor/police/handhold/bankroll/watch out for those who are dishonest/greedy/ignorant/pick your adjective?
When a stated income loan goes into default because the buyer knowingly lied about their income or financial assets to stretch into a property they knew they couldn't afford otherwise, it's 100% their fault. Why should anybody else share the blame? And why should the taxpayers pay a penny to help them out of a jam they created?
Borrowers are 100% at fault because they did not think about the ramifications of their purchase.
My husband and I bought our home 4 years ago, I was 23 he was 24. We were just a few years out of college and making about 50k combinded. On that income lenders told us we qualified to buy a home up to $200k. All I did was run simple math to learn qualifying does not mean can afford. I read up on mortgages and learned all about intest only loans and ARMS and all that jazz. In the end we bought a 116k home and took out a 30 year fixed rate mortgage because it made sense.
Our goal was to have a home we could afford on one persons salary. Now 4 years later our salaries have increase quite a bit but we still live in that same home and love it. We bought what we knew we could afford. Now with the economy if one of us looses our job we can still pay for our mortgage.
It is not 100% anyone's fault. Some seem to want to assume that all of the buyers were liars.
Someone mentioned "stated income loans"... I wonder what percentage of the failed loans were "stated income" loans???
I can tell you for sure that Realtors knew exactly where to send certain people for loans. And, the Mortgage Brokers (salespeople) were cooperating with the fraud to receive their commissions.
The lenders, the people making the loan, must always be responsible for the risk they're assuming.
If they're NOT responsible - who is? Someone who couldn't afford the house to begin with?
How can you expect them to now pay for something they couldn't afford to begin with?
IMHO, the lenders should be the ones bailing themselves out. They made their bed. They were the ones looking for windfall profits. They KNEW the consequences for their actions. They knew the rules.
That's why the taxpayers are stuck with the bill.
Last edited by World Citizen; 07-10-2008 at 03:05 PM..
If someone "lied to get a loan"... Isn't it the job of the lender to verify information and then make their decisions based on facts?
Again, who is to blame?
Who is to blame??
The liar versus the one who believed the lie? Hehehe... Thats like asking someone who was scammed who was at fault, the scammer or the one who was scammed.... I blame them both, the idiot who believed the lie and the liar... if you are going to bail someone out... I wouldn't bailout the liar... or the one who believed the lie... sometimes greed blinds the person who believed the lie... both are at fault... the buyer trying to scam the lender and the lender being greedy to believe in the lie...
The liar versus the one who believed the lie? Hehehe... Thats like asking someone who was scammed who was at fault, the scammer or the one who was scammed.... I blame them both, the idiot who believed the lie and the liar... if you are going to bail someone out... I wouldn't bailout the liar... or the one who believed the lie... sometimes greed blinds the person who believed the lie... both are at fault... the buyer trying to scam the lender and the lender being greedy to believe in the lie...
And then when you apply the words "subprime market" to the equation, how does that play out? The very words indicate that the lenders were well aware of the risk.
The lenders weren't scammed by the borrowers. If anything the banks were scammed by the middle men - the mortgage brokers. I don't believe that the majority of the borrowers went in trying to defraud anyone. The brokers chose to be ignorant - because there was a door of opportunity.
I think that our government is the one who was scammed. How many times have they stepped in and bailed out similar situations?
Last edited by World Citizen; 07-10-2008 at 05:01 PM..
I'm not sure about who's at fault or whether taxpayers ought to bail out anybody, but the mortgage/lending industry certainly has some responsibility. There were a lot of banks and lenders known for their conservative lending practices who loosened their lending practices. Maybe they needed to in order to remain competitive , but at some point, some formerly conservative lenders were simply checking to see if you had a pulse in order to qualify for half million dollar loans.
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