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In a surprisingly short conference call with analysts, [CEO Jamie] Dimon suggested that losses in JP Morgan’s prime mortgage book could triple in the foreseeable future as the credit mess moves out of subprime and into Alt-A and jumbo loans.
“Prime looks terrible,” he told analysts on the call. “And we’re sorry, and there’s nothing else we can say.”
To this day I can't believe people bought into neg am loans. How many people actually understand what that loan is? I only understand a little but enough to know it's a bad idea to pay the minimum of anything and watch your balance go up. Then your balance gets re-set and your payment increases. Is this correct?
In my opinion people just looked at that low number and didn't think about the rest of the payment being tacked back on to the back end of their loan. I wonder how many people actually notice their balance increasing?
After hearing this guy. I say no bailout. From what I go out of what he says most people are just financially irresponsible. Jeez, what a surprise?
To this day I can't believe people bought into neg am loans. How many people actually understand what that loan is? I only understand a little but enough to know it's a bad idea to pay the minimum of anything and watch your balance go up. Then your balance gets re-set and your payment increases. Is this correct?
In my opinion people just looked at that low number and didn't think about the rest of the payment being tacked back on to the back end of their loan. I wonder how many people actually notice their balance increasing?
After hearing this guy. I say no bailout. From what I go out of what he says most people are just financially irresponsible. Jeez, what a surprise?
Its great for self-employed or independent contractors that have seasonal or other variable income. That is what this program was designed for... high credit, high asset individuals that wanted flexibility in their payments. In those cases it works great, you pay down the loan aggresively the good months but when business is slow you can lower your payment temporarily to the minimum. Its better than getting behing on your mortgage and ruining your credit.
The requirements (initially) were large down payments and strict standards. Of course those quickly vanished when lenders realized that sales people could line up more home buyers for higher loan amounts by selling payment. It didn't take a financial advisor or any experience to sell on low, low payment.... just gloss over the risk and by the time the customer realizes the sales person is long gone.
To this day I can't believe people bought into neg am loans. How many people actually understand what that loan is? I only understand a little but enough to know it's a bad idea to pay the minimum of anything and watch your balance go up. Then your balance gets re-set and your payment increases. Is this correct?
In my opinion people just looked at that low number and didn't think about the rest of the payment being tacked back on to the back end of their loan. I wonder how many people actually notice their balance increasing?
After hearing this guy. I say no bailout. From what I go out of what he says most people are just financially irresponsible. Jeez, what a surprise?
Unlike, subprime lending, neg-am loans are (were) not some new, exotic loan. Neg-ams have been around for decades..and they worked for decades. For many it was actually a good loan.
I know that neg-am's aren't new. World Savings Bank was selling them I think since the 1990's. A lot of people got that loan and didn't know what it was, they just looked at the payment. I know a few neighbors that got that loan and were excited they could "pick their payment" and that's all they cared about.
I had family members that got into Countrywide's pick a pay, POA and I told them that was not a good idea because their increasing their balance. They didn't listen to me since I was just a lowly loan processor, pushing paper, what did I know!
This will help a lot of ppl realize that there's more than what the media is pushing you to believe in....
the subprime market crashing is now trickling into the alt =A market.. I'm in the Alt-A. If the subprime mess hadn't occurred I would have been able to refi into a fixed..but the subprime mess has made an AltA imdividual locked out of refinancimg and has pulled down the value of the property (which is why we are trapped ). Alt a's put money down and alt a's are not low teaser rate or interest only loans.
negative am's are not the definition of an Alt-A loan.. moreover Alt a loans were given to those with okkay credit (not great, not bad) and mostly those self employed individuals. Not all alt-A's are neg amortization.
and.. just to state.. alt -a's are the more fixable and workable group of people.. they are the ones with assets, they are the ones with the incomes.. if my mortgage company would have simply remodified to a fixed rate they wouldn't be taking over $100K less in a short sale..or possibly foreclosing.. but would continue to hav recieved their full loan amount back at a fixed interest ratE
Trickling? I'm not sure if you watched the video or have watched the news lately, but you can clearly see that ALT-A has surpassed the damages of subrpime mortgages.
You didn't have to put money down for ALT-A loans....I'm not sure where you're getting this information from. I work in the industry, and know the parameters of ALT-A/Subprime.
Quote:
Originally Posted by TristansMommy
the subprime market crashing is now trickling into the alt =A market.. I'm in the Alt-A. If the subprime mess hadn't occurred I would have been able to refi into a fixed..but the subprime mess has made an AltA imdividual locked out of refinancimg and has pulled down the value of the property (which is why we are trapped ). Alt a's put money down and alt a's are not low teaser rate or interest only loans.
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