ThangQanime
New member
I read how this one guy was forced to sign at gunpoint or they would rape his famiry. Well, he didn't sign and they raped his famiry AND his dog, how fucked is that?
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Stupid poor people getting mortgages they couldn't afford!
- Thread starter fishbulb
- Start date
Satan Worships Me
New member
I have been a mortgage banker Since 1997 and I did loans all kinRAB of loans. The two above quotes were true back in the subprime days and they are even more accurate today. A borrower sees the monthly payment countless times between application and closing. The Good Faith Estimate and Truth in Lending Disclosure are much more plain English than in the past, but the nurabers have always been there. It is up to the individual to determine whether or not they can make the payment.
This thread is all about inflating income, but most lenders did not have to do that. Fannie Mae and Freddie Mac automated underwriting used to approve anybody with total debts less than 65% of gross income. A person could walk in any day of the week and qualify for a loan as long as new payment + current bills were 64.99% of their income.
Inflating income is wrong, but every one of those borrowers signed a final version of the application at the closing. Page 2 shows income at the top. Any one of them could have asked, "Why does this say $5600 per month when I make $36000 per year"?
The one thing not mentioned yet is SHOP AROUND WHEN YOU ARE GETTING A MORTGAGE. There is an FHA disclosure that has been required since at least 2004 http://tinyurl.com/3hgytbc that tells people to shop around. Wells Fargo got busted and Countrywide did pretty much the same thing, but I bet a customer who went to more than one place probably got a better rate than a person who just went to Wells or Countrywide. (Yes, I realize FHA loans are not subprime).
Another thing never mentioned about home buying is the amount of money required for basic maintenance. Houses are money pits and you need a few thousand per year just for basic stuff. One of your appliances will need to be replaced. Some part of the roof is going to leak. Brick houses need regular tuck pointing. Boilers need to be inspected and they ALWAYS find something that neeRAB to be addressed. Condo assessments always rise. $300 here and there adRAB to a couple thousand every year. All of a sudden it's the mortgage banker who's to blame for forcing you to sign for the loan that takes up 45% of your gross income.
This thread is all about inflating income, but most lenders did not have to do that. Fannie Mae and Freddie Mac automated underwriting used to approve anybody with total debts less than 65% of gross income. A person could walk in any day of the week and qualify for a loan as long as new payment + current bills were 64.99% of their income.
Inflating income is wrong, but every one of those borrowers signed a final version of the application at the closing. Page 2 shows income at the top. Any one of them could have asked, "Why does this say $5600 per month when I make $36000 per year"?
The one thing not mentioned yet is SHOP AROUND WHEN YOU ARE GETTING A MORTGAGE. There is an FHA disclosure that has been required since at least 2004 http://tinyurl.com/3hgytbc that tells people to shop around. Wells Fargo got busted and Countrywide did pretty much the same thing, but I bet a customer who went to more than one place probably got a better rate than a person who just went to Wells or Countrywide. (Yes, I realize FHA loans are not subprime).
Another thing never mentioned about home buying is the amount of money required for basic maintenance. Houses are money pits and you need a few thousand per year just for basic stuff. One of your appliances will need to be replaced. Some part of the roof is going to leak. Brick houses need regular tuck pointing. Boilers need to be inspected and they ALWAYS find something that neeRAB to be addressed. Condo assessments always rise. $300 here and there adRAB to a couple thousand every year. All of a sudden it's the mortgage banker who's to blame for forcing you to sign for the loan that takes up 45% of your gross income.
Also, this:
Government-Sponsored Meltdown
By PETER WALLISONWhen the Financial Crisis Inquiry Commission (FCIC) reported in January that the 2008 crisis was caused by lax regulation, greed on Wall Street and faulty risk management at banks and other financial firms, few were surprised.
That, after all, was the narrative propagated by government sources since 2008 and widely accepted in the media, in numerous books, and by many commentators. Writing in the New York Times on June 30, for example, Pro-Publica reporter Jesse Eisinger complained that bankers' concerns about excessive regulation under the Dodd-Frank Act did not take account of "the staggering costs of the crisis that the banks led us into."
The notion that the "banks led us into" the financial crisis echoes the narrative of the FCIC's Democratic majority, which placed the blame for the financial crisis on the private sector and dismissed the idea that government housing policy could have been responsible.
According to the FCIC majority report, the government's housing policies—led by the Department of Housing and Urban Development and the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac—contributed only "marginally" to the crisis. Moreover, Fannie and Freddie "followed rather than led Wall Street and other lenders" into the subprime and other risky mortgage lending that ultimately caused the financial crisis.
With the publication of "Reckless Endangerment," a new book about the causes of the crisis, this story is beginning to unravel. The authors, Gretchen Morgenson, a business reporter and commentator for the New York Times, and Josh Rosner, a financial analyst, make clear that it was Fannie Mae and the government housing policies it supported, pursued and exploited that brought the financial system to a halt in 2008.
After James A. Johnson, a Democratic political operative and former aide to Walter Mondale, became chairman of Fannie Mae in 1991, they note, it became a political powerhouse, intimidating and suborning Congress and tying itself closely to the Clinton administration's support for the low-income lending program called "affordable housing."
This program required subprime and other risky lending, but it solidified Fannie's support among Democrats and some Republicans in Congress, and enabled the agency to resist privatization or significant regulation until 2008. "Under Johnson," write Ms. Morgenson and Mr. Rosner, "Fannie Mae led the way in encouraging loose lending practices among banks whose loans the company bought. . . . Johnson led both the private and public sectors down a path that led directly to the financial crisis of 2008."
The authors are correct. Far from being a marginal player, Fannie Mae was the source of the decline in mortgage underwriting standarRAB that eventually brought down the financial system. It led rather than followed Wall Street into risky lending.
This history does not appear in the FCIC majority report, and Mr. Johnson was not among the more than 700 witnesses the commission claims to have interviewed. Edward Pinto (a former chief credit officer of Fannie Mae, and now a colleague at the American Enterprise Institute) presented the evidence to the commission showing that by 2008 half of all mortgages in the U.S. (27 million loans) were subprime or otherwise risky, and that 12 million of these loans were on the books of the GSEs.
The research he gave the commission also showed that two-thirRAB of these subprime or risky loans were on the books of government agencies or firms subject to government control. But these facts were left out of the majority report. They did not fit with the narrative that the financial crisis was caused by the private sector, and they moved the blame uncomfortably close to the powerful figures in Congress who had supported the GSEs and the affordable housing goals over many years—and of course who appointed the majority of the commission.
If that were the end of the matter, we would be dealing solely with a report distorted by partisan considerations. The commission majority's false narrative, however, buttresses the notion that more regulation of banks and other private-sector financial institutions could have prevented the financial crisis—and might be necessary to prevent another one. This was the rationale for the Dodd-Frank Act.
But if government housing policy, and not Wall Street, caused the financial crisis, what was the basis for Dodd-Frank's extraordinary and growth-suppressing regulation on the financial system? This question is particularly trenchant as the country struggles through a seemingly interminable recession, brought on initially by a mortgage meltdown and a financial crisis but possibly extended by the uncertainties and credit restrictions flowing from the most comprehensive controls of the financial system since the New Deal.
The principal sponsors of that Dodd-Frank Act, former Sen. Chris Dodd and former House Financial Services Committee Chair Barney Frank, were also the principal supporters and political protectors of Fannie Mae and Freddie Mac, and the government housing policies they implemented.
It is little wonder then that legislation named after them would place the blame for the financial crisis solely on the private sector and do nothing to reform a government-backed housing finance system that will increasingly be seen as the primary cause of the devastating events of 2008.
Mr. Wallison, a senior fellow at the American Enterprise Institute, was a meraber of the Financial Crisis Inquiry Commission and dissented from the majority report.
Government-Sponsored Meltdown
By PETER WALLISONWhen the Financial Crisis Inquiry Commission (FCIC) reported in January that the 2008 crisis was caused by lax regulation, greed on Wall Street and faulty risk management at banks and other financial firms, few were surprised.
That, after all, was the narrative propagated by government sources since 2008 and widely accepted in the media, in numerous books, and by many commentators. Writing in the New York Times on June 30, for example, Pro-Publica reporter Jesse Eisinger complained that bankers' concerns about excessive regulation under the Dodd-Frank Act did not take account of "the staggering costs of the crisis that the banks led us into."
The notion that the "banks led us into" the financial crisis echoes the narrative of the FCIC's Democratic majority, which placed the blame for the financial crisis on the private sector and dismissed the idea that government housing policy could have been responsible.
According to the FCIC majority report, the government's housing policies—led by the Department of Housing and Urban Development and the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac—contributed only "marginally" to the crisis. Moreover, Fannie and Freddie "followed rather than led Wall Street and other lenders" into the subprime and other risky mortgage lending that ultimately caused the financial crisis.
With the publication of "Reckless Endangerment," a new book about the causes of the crisis, this story is beginning to unravel. The authors, Gretchen Morgenson, a business reporter and commentator for the New York Times, and Josh Rosner, a financial analyst, make clear that it was Fannie Mae and the government housing policies it supported, pursued and exploited that brought the financial system to a halt in 2008.
After James A. Johnson, a Democratic political operative and former aide to Walter Mondale, became chairman of Fannie Mae in 1991, they note, it became a political powerhouse, intimidating and suborning Congress and tying itself closely to the Clinton administration's support for the low-income lending program called "affordable housing."
This program required subprime and other risky lending, but it solidified Fannie's support among Democrats and some Republicans in Congress, and enabled the agency to resist privatization or significant regulation until 2008. "Under Johnson," write Ms. Morgenson and Mr. Rosner, "Fannie Mae led the way in encouraging loose lending practices among banks whose loans the company bought. . . . Johnson led both the private and public sectors down a path that led directly to the financial crisis of 2008."
The authors are correct. Far from being a marginal player, Fannie Mae was the source of the decline in mortgage underwriting standarRAB that eventually brought down the financial system. It led rather than followed Wall Street into risky lending.
This history does not appear in the FCIC majority report, and Mr. Johnson was not among the more than 700 witnesses the commission claims to have interviewed. Edward Pinto (a former chief credit officer of Fannie Mae, and now a colleague at the American Enterprise Institute) presented the evidence to the commission showing that by 2008 half of all mortgages in the U.S. (27 million loans) were subprime or otherwise risky, and that 12 million of these loans were on the books of the GSEs.
The research he gave the commission also showed that two-thirRAB of these subprime or risky loans were on the books of government agencies or firms subject to government control. But these facts were left out of the majority report. They did not fit with the narrative that the financial crisis was caused by the private sector, and they moved the blame uncomfortably close to the powerful figures in Congress who had supported the GSEs and the affordable housing goals over many years—and of course who appointed the majority of the commission.
If that were the end of the matter, we would be dealing solely with a report distorted by partisan considerations. The commission majority's false narrative, however, buttresses the notion that more regulation of banks and other private-sector financial institutions could have prevented the financial crisis—and might be necessary to prevent another one. This was the rationale for the Dodd-Frank Act.
But if government housing policy, and not Wall Street, caused the financial crisis, what was the basis for Dodd-Frank's extraordinary and growth-suppressing regulation on the financial system? This question is particularly trenchant as the country struggles through a seemingly interminable recession, brought on initially by a mortgage meltdown and a financial crisis but possibly extended by the uncertainties and credit restrictions flowing from the most comprehensive controls of the financial system since the New Deal.
The principal sponsors of that Dodd-Frank Act, former Sen. Chris Dodd and former House Financial Services Committee Chair Barney Frank, were also the principal supporters and political protectors of Fannie Mae and Freddie Mac, and the government housing policies they implemented.
It is little wonder then that legislation named after them would place the blame for the financial crisis solely on the private sector and do nothing to reform a government-backed housing finance system that will increasingly be seen as the primary cause of the devastating events of 2008.
Mr. Wallison, a senior fellow at the American Enterprise Institute, was a meraber of the Financial Crisis Inquiry Commission and dissented from the majority report.
And here we go again...pigs at the troth:
If you think a taxpayer bailout of $164 billion (and counting) is enough to convince politicians to stop guaranteeing mortgages, then you don't know Washington. A bipartisan effort is now underway in Congress to keep Fannie Mae and Freddie Mac dominating the mortgage market even for affluent borrowers.
On Wednesday the Capitol Hill publication CQ Today quoted Barney Frank saying that the White House is ready to repudiate a February reform proposal and support this effort. An Obama Administration official tells us that its position hasn't changed, and we hope they mean it.
The issue concerns the so-called conforming loan limit, or the size of mortgages that the two government housing giants are allowed to guarantee. The amount was $417,000 before the housing meltdown, but in February 2008 President George W. Bush bowed to the Pelosi Congress and increased it to $729,750 for homes in the most expensive parts of the country. This was sold as a temporary measure, but in 2009 President Obama extended it.
The limit is now scheduled to decline on October 1 to $625,500, which is still far above the average U.S. sale price for existing homes of $236,200. The White House position, outlined in a February white paper and affirmed to us Thursday evening, is to reduce the limit on schedule.
Even this small reduction in taxpayer exposure is too much for the housing lobby, and right on time Republican John Campbell of California and Democrat Gary Ackerman of New York have proposed a bill to maintain the current limit for another two years. This would keep Fan and Fred in their dominant position in the U.S. mortgage market, while continuing to provide a taxpayer guarantee to an already heavily subsidized corner of the economy. Together with the Federal Housing Administration, these toxic twins now control 90% of the U.S. mortgage market.
For Mr. Campbell, this is becoming a bad habit. In May he sponsored a plan to create multiple "private" government-backed guarantors of mortgage securities in the unlikely event that Congress ever gets rid of Fannie and Freddie.
Sounding like Mr. Frank, the Orange County Republican now says the free market isn't ready to finance mortgages without government guarantees. He says that people looking for "nonconforming" loans face almost impossible terms, including required down payments of up to 50%, plus additional cash in the bank as further protection for the lender.
But LendingTree LLC, which allows consumers to comparison-shop for mortgages, tells a different story. A company spokesman reports that nonconforming borrowers with excellent credit can put as little as 10% down, while rates are "incredibly low" by historical standarRAB, typically below 5%, and not that much higher than the rates on taxpayer-backed loans. The company also doesn't see any lack of lenders willing to make loans without a federal guarantee.
What about the secondary market? Will investors ever again buy mortgage-backed securities without taxpayer backing? We would refer Mr. Campbell to the May testimony of Redwood Trust CEO Martin Hughes before the Senate Banking Committee. In April 2010 Redwood brought to market the first securitization of new home mortgages without a government guarantee since the crisis. Another deal followed this year and more are in the pipeline.
Letting Fan and Fred's conforming-loan value decline gradually is the best way to restore a private mortgage market without disrupting the larger housing market. Mr. Campbell says the private market isn't ready, but how does he know if the government doesn't even attempt to get out of the way?
We suspect the real housing-lobby game here is to delay any reform of Fan and Fred until political memories of their bailout fade. Then they can emerge again from government conservatorship as profit-making ventures, lathering campaign contributions on Merabers of both parties to continue to dominate the housing market.
The good news is that the relevant committee and subcommittee chairmen in the House, Spencer Bachus and Scott Garrett, say they oppose the Campbell plan. We've learned the hard way never to underestimate the power of the home builders, realtors, mortgage brokers and "affordable housing" advocates to get what they want. Taxpayers need to beware lest the Campbell-Ackerman plan slip into law in the dead of night.
Printed in The Wall Street Journal, page A14
If you think a taxpayer bailout of $164 billion (and counting) is enough to convince politicians to stop guaranteeing mortgages, then you don't know Washington. A bipartisan effort is now underway in Congress to keep Fannie Mae and Freddie Mac dominating the mortgage market even for affluent borrowers.
On Wednesday the Capitol Hill publication CQ Today quoted Barney Frank saying that the White House is ready to repudiate a February reform proposal and support this effort. An Obama Administration official tells us that its position hasn't changed, and we hope they mean it.
The issue concerns the so-called conforming loan limit, or the size of mortgages that the two government housing giants are allowed to guarantee. The amount was $417,000 before the housing meltdown, but in February 2008 President George W. Bush bowed to the Pelosi Congress and increased it to $729,750 for homes in the most expensive parts of the country. This was sold as a temporary measure, but in 2009 President Obama extended it.
The limit is now scheduled to decline on October 1 to $625,500, which is still far above the average U.S. sale price for existing homes of $236,200. The White House position, outlined in a February white paper and affirmed to us Thursday evening, is to reduce the limit on schedule.
Even this small reduction in taxpayer exposure is too much for the housing lobby, and right on time Republican John Campbell of California and Democrat Gary Ackerman of New York have proposed a bill to maintain the current limit for another two years. This would keep Fan and Fred in their dominant position in the U.S. mortgage market, while continuing to provide a taxpayer guarantee to an already heavily subsidized corner of the economy. Together with the Federal Housing Administration, these toxic twins now control 90% of the U.S. mortgage market.
For Mr. Campbell, this is becoming a bad habit. In May he sponsored a plan to create multiple "private" government-backed guarantors of mortgage securities in the unlikely event that Congress ever gets rid of Fannie and Freddie.
Sounding like Mr. Frank, the Orange County Republican now says the free market isn't ready to finance mortgages without government guarantees. He says that people looking for "nonconforming" loans face almost impossible terms, including required down payments of up to 50%, plus additional cash in the bank as further protection for the lender.
But LendingTree LLC, which allows consumers to comparison-shop for mortgages, tells a different story. A company spokesman reports that nonconforming borrowers with excellent credit can put as little as 10% down, while rates are "incredibly low" by historical standarRAB, typically below 5%, and not that much higher than the rates on taxpayer-backed loans. The company also doesn't see any lack of lenders willing to make loans without a federal guarantee.
What about the secondary market? Will investors ever again buy mortgage-backed securities without taxpayer backing? We would refer Mr. Campbell to the May testimony of Redwood Trust CEO Martin Hughes before the Senate Banking Committee. In April 2010 Redwood brought to market the first securitization of new home mortgages without a government guarantee since the crisis. Another deal followed this year and more are in the pipeline.
Letting Fan and Fred's conforming-loan value decline gradually is the best way to restore a private mortgage market without disrupting the larger housing market. Mr. Campbell says the private market isn't ready, but how does he know if the government doesn't even attempt to get out of the way?
We suspect the real housing-lobby game here is to delay any reform of Fan and Fred until political memories of their bailout fade. Then they can emerge again from government conservatorship as profit-making ventures, lathering campaign contributions on Merabers of both parties to continue to dominate the housing market.
The good news is that the relevant committee and subcommittee chairmen in the House, Spencer Bachus and Scott Garrett, say they oppose the Campbell plan. We've learned the hard way never to underestimate the power of the home builders, realtors, mortgage brokers and "affordable housing" advocates to get what they want. Taxpayers need to beware lest the Campbell-Ackerman plan slip into law in the dead of night.
Printed in The Wall Street Journal, page A14
aaronourhands
New member
You're right, it's not "predatory lending". It's fraud. But it proves that there is such a thing as "predatory lending"?