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FHA requires no reserves, and most of the ppl who have a FHA mortgage dont have any money. They have very bad credit, and no money.
The funny thing is that FHA loans have a much less rate of foreclosures than the exotic mortgages or even the vanilla conventional mortgages.
How dare you compare mortgages to cocaine?
Are you implying that I'm similar to a drug dealer?
I highly doubt that your clients are 'sophiscated' as you can't have a normal debate w/out insulting someone.
"Calm down son." is also not a proper way of communicating to another person.
Quote:
Originally Posted by Buckhead_Broker
First of all, if any of the people who bought the homes I sell used an "exotic" mortgage, they did so with greater financial knowledge than the average American with far less in reserves or income. And second, I didn't say all mortgage brokers were bad - I simply pointed out the behavior of one young loan officer whose attitude was part of the overall problem.
To my earlier point, the Joint Center for Housing Studies found that "Almost two thirds (62.4%) of the mortgage default clientele had no savings at all. Less than 3% of clients reported $50 in savings, a slightly higher percent (3.8%) reported $100 in savings, and 6% reported having between $700 and $2,500 in savings."
Clearly, these people should have never been given a mortgage! There is a clear difference between giving a person with little or no savings a no-doc/stated income/option ARM mortgage and giving a guy who makes $1M per year and has a net worth of $5-20M an interest only or similar type of mortgage.
Saying that the mortgage bankers didn't invent these mortgages, but were only the bottom step in the marketing chain is like saying that the guys in Colombia who manufacture the cocaine are the only bad guys, not the local pusher. After all, he is just the bottom of the marketing chain!
Now, I am not saying that all mortgage brokers/loan officers are bad. But after 25+ years in the development/financing/real estate business, I've seen plenty who are.
FHA requires no reserves, and most of the ppl who have a FHA mortgage dont have any money. They have very bad credit, and no money.
The funny thing is that FHA loans have a much less rate of foreclosures than the exotic mortgages or even the vanilla conventional mortgages.
How dare you compare mortgages to cocaine?
Are you implying that I'm similar to a drug dealer?
I highly doubt that your clients are 'sophiscated' as you can't have a normal debate w/out insulting someone.
"Calm down son." is also not a proper way of communicating to another person.
Were we talking about FHA mortgages? No, I certainly wasn't. And the drug dealer comparison was only in response to your comment of "we only give the public what they want" and "we're the last step in the marketing ladder". Seems you can dish it out but can't quite take the heat when it is returned.
I didn't write we. I would be lying if I told you that I have given someone an option arm, no doc, or stated loan.
My point is that having a 'savings' is hardly any point at all.
Those who received exotic mortgages were those with high credit scores.
FHA borrowers have low credit scores, AND no money.
How is it that someone who has no money, and are very irresponsible with credit can have a much lower foreclosure rate?
I apologize as I didnt know you work for the US government.
These are the ppl who I blame.
Anyone who wants to solely blame 1 person in the loan process hasn't done any research.
I dont blame Exxon for providing fuel that is ruining our atmosphere.
I blame the US government who hasn't intervene with something that is ecofriendly.
When we had a meat problem we didnt blame Walmart, Publix, Harris Teeters', etc. We blamed it on the actual distributor.
When Taco Bell had contaminated lettuce, we blamed it on the lettuce distributor NOT Taco Bell.
How can anyone blame the person for selling the product?
So we should send the prosecutors to your home because of the carbon monoxide coming out of your car? It's polluting our atmosphere, and will have much long effects in our lives than mortgages will. Heck...even your great grandchildren will feel the effects on this.
Everyone loves extremists. Especially when they're comparing 'mortgages' to drugs. I would hope our society is a little bit more educated than this.
These mortgages ARE LEGAL. They're not even IMMORAL.
Alcohol is killing americans everyday with drunk drivers, but I dont see anyone boycotting bars or restaurants that sell liquor.
Mortgage brokers sold a 'fraction' of these mortgages, but it seems everyone wants to blame the brokers. Banks like Countrywide have sold the majority of these mortgages, but nobody is looking at them?
FHA requires no reserves, and most of the ppl who have a FHA mortgage dont have any money. They have very bad credit, and no money.
The funny thing is that FHA loans have a much less rate of foreclosures than the exotic mortgages or even the vanilla conventional mortgages.
How dare you compare mortgages to cocaine?
Are you implying that I'm similar to a drug dealer?
I highly doubt that your clients are 'sophiscated' as you can't have a normal debate w/out insulting someone.
"Calm down son." is also not a proper way of communicating to another person.
FHA is a Lenin inspired entity that subsidizes and socializes housing under the guise of the "American dream". Coupled with the sweet tax breaks accompanying mortgage debt, the gobbermint seems to enjoy throwing good money after bad. It's amazing that I see folks touting this heavily socialist program time and time again.
In addition: mark my words, with these new limits against a WAY overleveraged Fannie and Freddie, both WILL go bankrupt. While the taxpayer will likely bail out some of the loans (there's not enough taxpayer money to take care of all of them), one can only speculate what interest rates will be without an implied backing of the government available in the future, as well as an impotent and insolvent FHA post-credit bubble. The real flood of writedowns is being held back just long enough to pass it off to the next president. You ain't seen NOTHING yet.
Remember, Fannie and Freddie are only about 40 years old. There's nothing that say they have to remain in business.
I guess everyone doesnt know that Fannie/Freddie are government corporations. If they go bankrupt, then I'm moving to Argentina. lol
Quote:
Originally Posted by ViewFromThePeak
FHA is a Lenin inspired entity that subsidizes and socializes housing under the guise of the "American dream". Coupled with the sweet tax breaks accompanying mortgage debt, the gobbermint seems to enjoy throwing good money after bad. It's amazing that I see folks touting this heavily socialist program time and time again.
In addition: mark my words, with these new limits against a WAY overleveraged Fannie and Freddie, both WILL go bankrupt. While the taxpayer will likely bail out some of the loans (there's not enough taxpayer money to take care of all of them), one can only speculate what interest rates will be without an implied backing of the government available in the future, as well as an impotent and insolvent FHA post-credit bubble. The real flood of writedowns is being held back just long enough to pass it off to the next president. You ain't seen NOTHING yet.
Remember, Fannie and Freddie are only about 40 years old. There's nothing that say they have to remain in business.
I guess everyone doesnt know that Fannie/Freddie are government corporations. If they go bankrupt, then I'm moving to Argentina. lol
FNMA is a government sponsored organization but is completely private. They receive no direct government money, and the backing is only implied. There is not enough money to extract from taxpayers to bail these puppies out from the crap securitized mortgages they've bought over the past 5 years and still keep them in business.
Laugh all you want about Fannie/Freddie. People laughed when I told them folks like Bear Stearns held worthless paper. Now they are bought out for only 1/4 the value of the physical real estate their offices occupy. It's also amazing that people are stunned by this news story. Poor poor sheeple.
Interesting you bring up Argentina, since we're on track to replicate their inflation scenario.
Fannie and Freddie going under won't be all that bad. Real estate will be a LOT cheaper and thus more people could pay with cash. It will just suck for those overleveraged in the RE market.
I'm not sure if you know this, but FHA has a really low rate for default.
Also, FNMA/Freddie are not involved in these exotic mortgages.
This is why they're still in business today.
Quote:
Originally Posted by ViewFromThePeak
FNMA is a government sponsored organization but is completely private. They receive no direct government money, and the backing is only implied. There is not enough money to extract from taxpayers to bail these puppies out from the crap securitized mortgages they've bought over the past 5 years and still keep them in business.
Laugh all you want about Fannie/Freddie. People laughed when I told them folks like Bear Stearns held worthless paper. Now they are bought out for only 1/4 the value of the physical real estate their offices occupy.
I'm not sure if you know this, but FHA has a really low rate for default.
Also, FNMA/Freddie are not involved in these exotic mortgages.
This is why they're still in business today.
Their stock (FNM) dropping from 70 to 28 per share over a 52-week period isn't exactly inspiring confidence to a rational investor. That's just nominal losses too. Real losses with the high inflation we're experiencing make the losses even greater.
They have so much garbage on their books, there's no hope the taxpayer can save 'em.
I'm skeptical about FHA statistics. You're likely including zero down "homeowners" when comparing against FHA. At least FHA requires 3% down.
Ironic they're buying up even more expensive garbage on rapidly depreciating real estate.
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