$10 Billion? That’s not very much money in the grand scheme of things. Who pays the bills at these “non-profits”? They have overhead just like any other organization don’t they?

naw

loans cant be closed properly by min wagers.

they will figure that out soon

and when they realize they need mortgage professionals, and have to pay more… they will.

do pendulums swing one direction, then return and stop in the middle? i forget.

loans cannot be properly closed by minimum wage earners? LOL….. That’s why most loan officer’s have college degrees, wrong. A lot of people that work for non-profits are educated consumer activists and not greedy capitalists (some may beg to differ).

This is the future Chuck.

Borrower walks into local non-profit mortgage co.

1. App taken & Credit is ran.
2. 689 mid fico and that borrwer is sent to window 3
3. Window 3 has 5 or so motgagte options with fully disclosed terms and fees.
4. Borrower picks loan and signs disclosures
5. Sent to processing and then underwriting.
6. 30 days later loan closes

Doesn’t seem like rocket science to me.

But, hey, I know some LO’s that make a stated/stated SISA, 600 FICO wage earner 100% refi’s seem like they are puting together a skeleton fossil from an ancient dinosaur in the Egyptian Desert.

Just a point about NACA…You must have rate over 10%, 24 months in your property,owner occ., live in certain area codes…

If you have 689 credit you would not have rate over 10% and if you did either your Lo drilled you or just plain out of touch!!

NACA does good work but it will not replace mortgage business!

Its unfortunate that the industry is viewed as similar to a used car salesmen. There are still good and honest people in this business. And in time, the bad stigma will fall off. However, mortgage brokers aren’t going to go completely away. Like anything new to society, a product must be infused into our society and then recalled for an overhaul and to remove malfunctions. That’s where we are right now. In the recall era. Complaints, laws, regulations, blame, money lost and money gained is what happens with any product is introduced, then the new improved model emerges. It will operate smoothely and then it will break again. So as long as there are consumers, brokers will still be in business.

WallStreet doesn’t want to deal directly with consumers. Never had, never will. But they want that money. They put buffers in front of them to get that money and not have to interact with consumers directly. In any industry thats how it’s set up. In the real estate industry the current mortgage buffer has been exhausted. The result is foreclosure, companies shutting down. Is this the end. Everyone please. Do you not think all of this is planned? Money is being made because of this mess. WallStreet is going to play some hocus pocus with the media. Blow blue dust at the already confused consumer and confuse them even further, get the politicians to change the rules they themselves created for brokers and blame the brokers for the change, then get some lobbists to attack every aspect of real estate; Title Co, Realtors, Appraisers, etc, just to buy time to cement the new money plan.

Just look at what’s happening in MA and NV. That not going to last long. GA tried this years ago and lenders came back when the rules adjusted more realistically and people complained that they couldn’t buy a home. Wallstreet is the only entity that knows when the reset will take place. As some sort of joke, they are allowing us to guess at before they do something. Will this end in 08′,09′, never? Now we are all panicking and shortly will be willing to accept any new solution to the current problem, wether its to our benefit or not. When it reaches its zenith and everything is appearing to completely not work, is when you will see the roll out of the new mortgage industry. Most of the same players we are complaining about if not all, will still be there giving us a new improved product. The funny part is we are going to forgive them and fall in love with them again.

To the customer, which I’m apart of: We are just as guilty as the industry is for this mess. Enough of us wanted houses we couldn’t afford. We knew we couldn’t afford it. We didn’t need someone else to advise us on that one. We wanted to live like our rich neighbor or our t.v. hero. We convinced ourselves that we are “owed” having a piece of the american dream of being a homeowners, even if we didn’t work at it or properly prepare for it. Why buy a 1500 sqft house when a 3000 sqft is right up the street? I have good credit but no money. I have a little money but bad credit. I have money, good credit but I can’t afford it. Something can be down for me if I keeping bitching because I(consumer) want what I want. So complain and complained we did and banks, lenders, realtors, appraisers, insurance agents obliged us.

Now we are losing our ass off. The same “i deserve to have this” attitude now has us blaming everyone for us not paying our bill. And yes, some consumers were deceived but not to the tune of all the millions of homeowners losing their homes as you are seeing now. Some of these mortgages are going bad not because they are adjusting, but because they weren’t being paid for. Some of these mortgages are fixed rate mortgages. So as these nonprofit companies make this “run,” remember this. Doing the loan for free won’t stop foreclosure. There will be lots of those clients still who won’t pay their note on time or at all. My question then will be, who’s fault will it be then? And allowing nonprofits to take over mortgages completely. Nahh. Its only going to be a new facet of generating money for WallStreet. Check the criteria of getting one of these non-profit loans. If it was that easy, then brokers would have been eliminated years ago. Bank lending too. Everyone needs to relax, get their credit back in line and be prepared to spend a little money next time they want to buy a house. Just this time, make sure its something you can afford.

If you need a loan go to your local Bank or Credit Union, while they are still around, be aware to read your Settlement Statement or HUD 1, there should be no garbage fees other than points if any, appraisal, and/or rebates-YPS, remember if larger than .375% this is really costly to your rate, and how these brokers make their money and can be extremely costly in the long haul, pay no garabe fees such as Admin, Processing, Discount fees, Underwriting, Credit Report, ETC…NO POINT, NO FEE LOANS are becoming very popular, it is usually the unfortunate ones without good credit and desperate borrowers (Subprime) that are targets of brokers and because these products are not offered by banks or credit unions that is unfortunate, that we prey on the less fortunate, it’s awful, but it is no different than a Consumer Lender, Title Pawn business etc… Your not going to wash out all the brokers overnight these parana’s are going to be around for a long time just with less popularity due to a weak maket.

Moe,

Looking at your NACA list, I’m not covinced that there won’t be massive problems. When the assembly line starts who answers the assortment of questions that will be asked from the consumer? If this is how its going to go, whats happening to the rest of the industry’s vendors? Appraisers, Insurance Agents, Title Company’s Inspectors, etc? When moving to window 3 what happens if the client picks the wrong option and loses their home. Who’s to blame then? Who will do the loan for the 615 fico client? As easy as your list is, it’s not practical. Lenders, brokers and bankers are a necessary.

Underwriter is definitely pissed. I don’t know why. If he/she keeps that attitude up he will be unemployed underwriter. Underwriters have guidelines to follow, not personal opinions to interject. If the guidelines match up, then you must go with it. You are a facilitator. Ironically, you don’t blame the lender who made the crazy products you sign off on and you don’t blame the borrower who wants the deal they know they shouldn’t be getting, but you blame the broker who is delivering the same instrument you need to keep your job. Doesn’t make sense, however, if it bothers you that much, then quit.

Paul,

So someone is making some money off of these loans. What is the $50-$100 monthly fee called? And how long do the client pay that fee?

Chris,

I am not a expert on NACA but the fee last 5-10 years and depends on loan size. 0-99k $50 100k-199k $50 and over 200k $100…but they do not pay MI…They pay this fee .

Paul- the 10% you are speaking of is a special deal they have with Countrywide for loan modifications of loans that have a reset or starting rate of 10% or higher. I reported on that deal last month.

Of course the homeowner gets to keep any profits on the sale of their home.

They are a mortgage broker and these lenders have committed $10 billion to fund these mortgages on NACA’s terms and NACA’a way. Below market rates.

Chris- They will still have title rep and appraisers, but it is the mortgage broker/LO who needs to worry about this new breed of mortagage company. The non-profits have arrived and they are now backed BIG TIME by our government.

Like I said, good for consumers, BAAAAAAD for brokers.

Here is their mortgage program;

PURPOSE: Purchase
Purchase & Rehab
PROPERTY TYPES: One to Four Family, condos, and co-ops.
Existing, New Construction, and Renovations
DOWN PAYMENT: None
CLOSING COSTS: None (paid by lender)
INTEREST RATE: One percent below the prime market rate
Current Interest rate: 5.375% 30 year fixed (as of 12/28/2007)
BUY-DOWN: Additional funds can reduce the interest rate
Paying one percent of the mortgage amount up front reduces the interest rate by one quarter of a percent (.25%)– a tremendous added benefit.
APPLICATION FEE: None (paid by lender)
POINTS & FEES: None (paid by lender)
CREDIT HISTORY: Perfect credit not required
P.M.I.:
(Private Mortgage Insurance) None
NSF/Membership:

(Neighborhood Stabilization Fund) $50 per month for five to ten years
This payment occurs once you purchase through NACA and is part of your mortgage payment. This is a required payment as a NACA Homeowner Member, and as a Member you can receive assistance to NACA’s membership assistance program if you are ever at risk of losing your home. You would also receive the other benefits of NACA Membership.

OTHER TERMS: No yield spread premium; No pre-payment penalty; No balloon payment; No required credit life, or other unnecessary or overpriced insurance.

Let me ask you this. Can you beat this rate and terms? 5.375% on a 30 year fixed with no fees.

No I can beat the rate but they only serve 5 towns in NJ.

they serve many more town then that Paul.

Their main office is in MA. and they have over 30 offices in 16 states.

I think they do it the right way and commit homeowners to ownership not just of their home, but of their communities. Like it should be. I would say that it’s a safe bet that many of these people do not walk away. Especially when NACA teaches consumer activism and community involvement.

https://www.naca.com/members/eligibilityIntro.jsp

General Requirements

The following are the general eligibility requirements to participate in the NACA Program. There are no income limits, but there are maximum purchase price limits and you must purchase within a NACA service area.

Be a Member in good standing

NACA provides the NACA Workshop to everyone without becoming a NACA Member. After attending the workshop, should you decide to begin the NACA Program and the initial counseling, you need to be a NACA Member in good standing. This requires that the Membership Agreement and Authorization be signed by all household members. At your first individual meeting with a Mortgage Consultant, you will need to pay the Membership Fee, (for 2007 is $20 for the year). Once you purchase your home, you will need to pay the Membership Fee, which includes the Neighborhood Stabilization Fund Fee,of $50 a month for a period of between five and ten years, depending on the amount of the mortgage. The Membership fee entitles you to not only NACA’s comprehensive counseling to assist you throughout the home buying and mortgage process, but also to NACA’s membership assistance for NACA homeowners that provides comprehensive foreclosure prevention assistance.

No member of the household can have an ownership interest in any other property

NACA focuses on people who have not been able to purchase a home. The program, however, is not limited to first-time homebuyers; you may participate as long as you do not own another home at the time of purchase. Current NACA homeowners must have lived in their home for at least three years and have been active participants in the NACA program to be eligible to purchase through the program again.

Occupy the home for as long as you have the mortgage through NACA
NACA believes that owner-occupants stabilize neighborhoods. Therefore, NACA requires that you live in your home for as long as you have a mortgage through NACA. Being an owner-occupant involves you in all aspects of the community because you own a piece of the community, not just real estate. NACA is very serious about Members adhering to the occupancy requirement. Therefore, NACA takes out a lien on the property—in addition to other enforcement mechanisms—to ensure that homeowners live in the home.

This does not prevent you from selling your house for a profit, refinancing your house, or purchasing other property while continuing to live in the house purchased through NACA. These serious actions and remedies are in place to prevent the abuse of the NACA Program. Lenders participating in the NACA Program also require owner-occupancy and may have their own enforcement mechanisms beyond NACA’s. Obtaining a second mortgage requires that NACA subordinate its lien to the second mortgage, which NACA may or may not, in its sole discretion, agree to provide; therefore, your ability to obtain a second mortgage may be limited.

Participate in at least five actions and activities a year in support of NACA’s mission

Every Member is encouraged to contribute their unique skills to NACA and its mission. Many people say the NACA program sounds too good to be true. It is real because of the active participation of NACA’s huge Membership. Participation and direct action have made NACA successful and will continue to strengthen our neighborhoods and organization. There are numerous ways for you to participate:

Join advocacy campaigns that may include protests, demonstrations, actions and/or engaging in litigation against persons or companies that discriminate against or victimize others;

volunteer in the NACA office;
participate on the peer lending committee; and
assist other Members with the home buying process.

um….5.375????? How? From Where? How does one keep the door open? expenses to do loan? All for low cost loans, but lets be real here. Someone seems too low…. not feasable for the long term! Same level of costs that banks face. Dollars and cents… Do the MATH!!! Short Termer…

What does the pay structure look like for a Non-profit LO? Sounds interesting to be in a non-greed driven market, but I still need to make a living. I would love to continue helping people in to homes with good mortgage, but I also have big bills to pay. So how much does the average Non-profit Loan Officer make per year?

Oh by the way..where is your precious NAMB?? They were too busy enjoying the boost in membership fees to care about its members..to busy enjoying the bigger budget for their expense accounts than caring about the destruction of their industry…funny how so many of your higher ups have already jumped ship!

Give them a call and ask them what are they doing about your future??

Mortgage brokers have never had a good reputation. I don’t know what planet you are living on. They have never been respectable and have always been thought of as used car salesman. Wake Up!!!

Hey folks, using words like “always” and “never” do not support your “facts.” Those words just show how pissed off everyone is.

If all of some of these banks fold, us brokers might be the only ones left???

Chris,

Yeah, I know we need them. Just being silly.

As somebody said many years ago “This too shall pass”

Moe

Non profits may be a new player but with loan limits in Burlington County at 270k is very limited. Bergen county loan limits of 370k does not buy you a garage. A 370k loan limit is lets say in not a good area!

I am not trying to blow smoke up anybodies ass, but most of my loans are 500k- 2 million. The average price for a starter home in North Jersey,Bergen, Morris and Monmouth County is 600k range, even after a price corrections. Remember this part of Jersey is were all the Wall Street players and CEO LIVE.

I do not see any nonprofits here…just Newark!

America’s Best Mortgage!
One Mortgage Product - $10 Billion Committed
5.375%
Fixed 30 Year (as of 12/28/2007)
No Down Payment, No Closing Costs

NACA is a national non-profit community advocacy and homeownership organization providing the best homeownership program in America
Home About NACA The Fight Partnerships Purchase Home Save Property Rehab Members Vendors
Purchase Overview Purchase Product Eligible Criteria NACA Service Areas Maximum Purchase Price Mortgage Calculator Ten-Steps To Your Home Workshop Sign-up Overview Eligibility Criteria Refinance Product Mortgage Questionnaire Hardship Letter Authorization Steps To Homesave Mortgage Calculator NACA Service Areas Maximum Mortgage Limits Workshop Sign-up Urgent Situation Overview Membership Counseling Appointments Information & Documentation Status Credit Report Property Listings Property View Repairs Membership Assistance Program Testimonial Make Payments Member Services Task List Agreement Authorization Fax Cover Sheet Budget Employment Information Bank Information Rental Information Fax Received Foreclosure Prevention Procedures Concerns/Complaint Compliments Workhop Evaluation Property Rehab Overview Rehab HAND Rehab Process Contractor Selection Rehab Administration Payment Process Completion of Repairs/Renovation Overview Current Campaigns Predatory Watch Predatory Lending Forum Campaign Victories Neighborhood Stabilization Committees Predatory Lending Legislation Politicians Report Card Subprime Lending Predatory Lending 1991 – 2000 Fleet Bank Associates / Ford First Union Senator Phil Gramm Overview Bank of America Citigroup Union and Management Neighborhood Stabilization Overview Real Estate Agent Contractor Home Inspector Settlement Agent Appraiser Credit Reporting Agency NACA Overview NACA History Offices NACA’s Team Services Press Materials Participation Goals and Tactics Timeline Office Map By Zip Code Establish new Offices CEO - Bruce Marks Job Opportunities Free Services Technology Press Clips Press Releases NACA Video NACA Radio Volunteering Contacting NACA
Home Save/Refinance
Overview
Eligibility Criteria
Refinance Product
Mortgage Questionnaire
Hardship Letter
Authorization
Steps To Homesave
Mortgage Calculator
NACA Service Areas
Maximum Mortgage
Workshop Sign-up
Urgent Situation
Refinance Eligibility Criteria

The below criteria is for a NACA Refinance. Even if you do not meet the below qualifications it is likely that we can assist you with your mortgage as long as you live on the property and do not own other properties.
You cannot own other property, and the property to be refinanced must be owner-occupied.
You must have a predatory interest rate or unaffordable loan terms. The interest rate for the current mortgage(s) must be 10% or greater or considered to be predatory, or the home must be in need of substantial repairs. NACA considers loans predatory that have a teaser rate, but become high rate once they reset.
The property to be refinanced must be within a NACA region where the NACA Program is available.
The property to be refinanced and all requested money for improvements cannot exceed NACA’s maximum purchase price limits set for that region.
You cannot have multiple refinances where you are continually taking money out to pay for your living expenses. This does not include refinances to obtain lower rates or to pay for one-time expenses such as home repairs, medical expenses, or education.
You must have had your current mortgage for at least 24 months.
All properties to be refinanced must have thorough home inspections—a complete house inspection and termite inspection. If applicable, a septic inspection will also be required.

If your situation does not meet all of these criteria, we will not be able to refinance you. However, we may be able to assist you in other ways. You need to complete the Mortgage Questionaire, attend a NACA Workshop and meet with a NACA Mortgage Consultant. If you believe the lender or broker engaged in illegal or unethical activities, you should contact the Federal Trade Commission and state and federal banking regulators.

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For information about the NACA program, contact service@naca.com. Questions, comments, or concerns about this Web site? Contact webmaster@naca.com.
Join our mailing list to stay informed about NACA. This site is copyright (c) Neighborhood Assistance Corporation of America.

Moe,

It’s always a pleasure to visit your site and share comments with you. NACA has its place and it works for a facet of situations. It’s been here for years; long before this meltdown happen. It won’t replace brokers, bankers or lenders. It will however, create another avenue for clients to obtain a piece of the American Dream. If you take aother look at its structure, that’s all its designed to do. The people that should be afraid aren’t on this site. It’s the ones who are doing idiots deals and jamming people into impossible situations. But let us not forget we are here because we actual care about our industry.

Paul

Pats 3/ Gaints 7

Paul,

Did you just see that?

NACA does great work, I am not here to beat them up. There program is almost like WAMU Affordable gold program. WAMU gives the broker a much better rate .5 below normal and pays the broker a much bigger YSP. the underwritting guidelines are very felxible!!! Boarder income, second job that pays cash…lets say you are a teacher you could say you tutored on the side and use that income to quailfy!!! You must be in the medium income level for the county you live in, just like NACA. DO you know why they do this???? because the goverment requires them to!!! because they are federal chartered bank!! They have no choice and if the money is not loaned out they (WAMU) must find ways to approve borrowers!!! No wonder we have problems!!!

So my point is NACA is nothing new but is does have its place!

Citi and other lenders have the same programs or CRA YSP bonus in certain zip codes!!!

Moe - I have been a mortgage professional since 1994. I am currently in mourning, realizing that my career is pretty much over. The impending boundaries that will be put in place, as a result of the scum that has operated and prospered for the past 5 years has ruined this industry. I will emphasize here that “I” have never, EVER put my interests before my clients interests in structuring or pricing a loan transaction. I played the game by the “golden rule” and it pisses me off that I am now trying to figure out “what next?”. Because I know that I will never work for a bank.

I hope that what you believe to be true about the “non-profits” comes to fruition in some shape or form. This is the ONLY way to finally get the preditors out of our industry, except for the BIG banks cause they are preditors too. It really is time for some radical reform. The entire industry is corrupt and the compensation structure is corrupt - whether you work at a bank, correspondent, or a broker - it is ALL CORRUPT.

While we are it how about we make every industry disclose there profit margin. When I buy a car I want to know how much the dealer made! When I drive the car off the lot it is worth 25% less, we all know it but we still buy one!!! Lets see a 30k car minus 25% after the first mile is….7500…now thats profit baby!!!When I pick up blood pressure( just an example) meds I want to know how much Merck is grossing!! 200%????

All I ask is that I can make 1.5-1.75%… Pretty fair if you ask me!!! What business works on a 1.5% margin??? Fraud is the problem, bullshit programs and people who really beleive there rate is 1.95%!!!

This is a broad statement but “you pay for what you want.” If you don’t have the 500k for the house you want, you then you have to borrower the money to get it. Borrowering money cost. The product is the money, not the house. The house is what is lost when you don’t pay back the product(money). Don’t pay for your car and see what happens. Don’t pay that credit card and see what happens. Don’t pay your rent and see what happens. When you don’t have the 500k for the house you can’t phase out the process. The process cost.

The NACA process cost. To eliminate and have someone totally take responsiblity for initiating your finance, you have to perform acts and pay “membership” fees for a long time. You have to take classes and attest to others that the program is ok. You have no choice in the matter. You are going to have liens on your house if you try to be slick. The rules can be compared to lender guidelines. And that’s ok.

Question. When the borrower has completed the program, do they get the $50×5 years or 100×10 years back? What’s the twenty dollars at the initial application for?

When you have 750 credit and 20% and verifiable income, you’ve already paid for a the option to get the best loan and that cost. When you haven’t done any of that and the sh**ty loan is the only thing availlabe, whose fault is that? And that cost. This crisis isn’t about people who had what they needed before they went house buying. Its about the ones who said “i deserve this just because.”

By the way, car dealerships are given the cars on consignment and split the profit after the sale. When you trade in your car, you are sure getting in the ass and the down payment they get out you goes to the car gods. Yeah Paul, everyone bitches but they buy the car anyway and if you have the balls to tell the sales man any of that, you might get a worse deal. No disclosures and you know you are getting the business. But there are no laws on this and in two years your car is garbage and you are usually forced to buy a new one. Almost like the 2/28.

Pats 16/ Giants 28 Don Shula is losing his mind right now

Beeeeeeep………Beeeeeep Don’t be suprise if Don or his boys come out on the field and shoot Brady in the head

Yes. Plastic does rust. But if you take the 5year or 50k mile warranty for $2000, it won’t rust……Really it won’t rust. Or the priceless, limited and ancient floor mats for an extra $800 and the $750 destination fee for getting the car from the back of the lot. Though its free is you take the upgraded LX model for an extra $1550.

sorry……… hear me????

boy I really need to get a life.

Starting CPR again… I don’t know how much he can take!!!

WOW What a play!!!!

Extra high

Mr. Shula do not go into the light!!!!!!!!!!!!!!

Virginia

Good for you for standing up for yourself!!!!!!!! Your repuatation is everything, your soul is not for sale at any cost!!!

Who is underwritter???

Its been a rough 4 quarters. Its o.k.

Underwritter you sold yourself to the devil…do not sign off on shit loans. Document your employers thearts to push loans to close, call a good wrongful termination attorney!

Moe~

I wouldn’t give any credence to any underwriter that signed off on any loan that he/she knew was fraudulent. All mortgage bankers have a system: If an underwriter suspected fraud, it went to quality control for a complete audit . If the underwriter was still uncomfortable, they could take it to their UW or Ops Mgr. NO UNDERWRITER IS REQUIRED TO SIGN OFF ON A LOAN THEY DON’T BELIEVE IN. There are rules and regulations regarding that position. Any underwriter that knowingly pushed fraudenlent loans through the system is part of the problem and should be prosecuted. If he/she was coerced, I agree with Paul….get a good wrongful termination attorney!

Lucille,

Do you know anything about the mortgage business?? All loans, every single loan originated in America costs money to originate. The advertisements themselves offering a “no cost” loan are nothing but smoke and mirrors and border on fraud. Every loan requires a credit report, some sort of valuation determination, title work and insurance, etc. These loans are only called no-cost due to the fact that the interest rates charged are higher than the current market rate thus enabling the lender to receive a premium on the secondary market (which banks do not have to disclose) that covers the costs associated with the origination of said loan. Get a grip, there is no free lunch…

All I have to say is that a great majority of this is bullshit. I’m so sick and tired of hearing the same old rhetoric regarding all these poor victims who were duped into a loan that they could not afford. Take a hard look at the statistics and you will see that the numbers tell a different tale. An astounding percentage of these homeowners falling behind on their mortgages have done so PRIOR to an adjustable rate reset. Whose fault is this? Does personal responsibility not play a factor in all of this? The masses all thought they were Donald Trump’s in the making and rushed out to get their tickets to ride on the real estate train and the consequences be damned. Every 2/28 I sold (as a mortgage professional with over 15 years in the business) to a borrower was due to one simple fact - they could not qualify for anything else - plain and simple. I clearly spelled out the terms of their loans on numerous occasions throughout the process. Those with less then perfect credit all knew that they had less than perfect credit and were perfectly fine with a 2/28. They simply didn’t care as they all had dreams of selling for a huge profit before the rate re-set. Something that is not being discussed is the role of the Realtors in all of this. I can’t count the times when a borrower came to me with a house already picked out (and emotionally committed) prior to the application process. You would then run their application and discuss their financing options with them. Countless times I urged clients to reconsider their purchase as too expensive for them only to be countered with such responses as how can you get my payment lower? What about an ARM, what about an interest only payment, what about a 40 or even 50 year amortization? How much can the seller contribute to my closing costs as I have no money to put down? I would ask where they learned of these various options and the response was almost always the same - from our realtor. You had a situation where realtors were showing borrowers houses that they could never afford while at the same time feeding them inaccurate information regarding the mortgage process. In North Carolina, if you work for a mortgage broker as a loan officer, you must be licensed by the state which involves a strenuous examination and background check conducted by the SBI. Sadly, this only applies to brokers and not bank loan officers or realtors. Realtors were specifically exempted from this legislation (due to their powerful lobby) and are therefore free to discuss mortgage financing with their customers. What’s the problem with this you ask? They don’t know what the hell they are talking about! They poison the minds of their customers with loan scenarios and payment options that are not realistic. This takes place before the customer has come to see me. Now imagine this scenario: The borrower has been shown a variety of houses without regard to their ability to qualify by their “trusted” Realtor. Now they sit down with me after they are emotionally attached to a particular property and wonder why they don’t qualify for what the realtor had presented to them. They beg and plead for any option available that will get them into this house. So who’s fault is this now? As their mortgage consultant I am required to present them with all of their available options regardless of suitability. Ultimately, it is the client who must decide what is best for them…

Case and point: A few years ago we were solicited by a previous client’s sister to perform a refinance. She had a really good fixed rate first mortgage in combination with a “silent” second held by the city. She was not required to make any payments on the second mortgage. She was adamant in her request to receive a lower mortgage payment while also getting cask back if possible. Unfortunately, her credit situation only afforded her the option of a 2/28 interest only ARM in order to meet her desires. She closed on the mortgage as requested and we hadn’t heard from her for a couple of years until we were served with a lawsuit accusing us of predatory lending practices. She claimed that we should have never “put” her into her current loan and that she couldn’t afford to make her payments. As it turns out she was about a week away from foreclosure and the judge granted a stay of the proceedings until the suit was worked out. She not only sued us but the original lender, the attorney, the trustee for the lender, a previous owner of the mortgage and the current owner, Wells Fargo. Long story short, her claims were bogus. Wells Fargo produced documented evidence that she fell behind on her payments a year before the rate reset. They had recorded transcripts of all of her hardship stories regarding her financial position at the time period of her late payments. None of which had to due with her interest rate adjustment. She has successfully stayed off foreclosure and cost all of us involved thousands of dollars in legal fees for no reason at all. I know for a fact that this is happening all over the country each and every day. Consumer advocate attorney’s smell blood and are suing everyone in sight. Unfortunately, unlike a criminal case, the state does not provide free legal assistance for a civil defense. How is this fair???

All this being said, I must agree with the original thread’s premise. With all of this legal wrangling going on and everyone pointing the finger at mortgage brokers, while the Realtors and the borrowers fail to accept personal responsibility for their own actions, we may very well be doomed…It says a lot about where we are as a society. We seem to have adopted a secular view where every wrong is always someone else’s fault. I am deeply troubled about my child’s future as our society is certainly sending the wrong message

The second biggest issue I see is we have legislation all over the place. We do not have enforcement of the legislation. So who’s fault is that? Why is it the small business person is the scapegoat? Government representatives are insulated from the realities of business.

A professor of econonics from the Milton Friedman School of Business, Chicago, stated this week the following:

People have tapped their home equity. Now prices have leveled and there is little or no equity. So this is done. Next people have used their credit cards. They’re now tapped. So this is done. Next people’s wages/incomes really haven’t kept pace with inflation. And particularly with energy costs and real estate taxes. Case in point: Energy costs and real estate taxes vs. adjustable mortgages - up $425 vs. $200 respectively for a $150,000 home. Hmmmmmmmmmm. So now people have little or no equity, tapped our credit cards, income not keeping pace, energy and real estate costs up and adjustable mortgages up.

Sorry, folks, but all of this is not the fault of the professional mortgage banker or broker.

Did you know that real estate taxes have gone up 50% since 2002? Check it out.

Joe~ post #83 is spot on.

Virginia:
Sorry, what is “spot on”?

Paul and Chris - I do see NACA expanding big time as the awareness and also massive funding of these non-profits is coming to fuitation as we comment back and forth.

I see other “smart” brokers that have a sense of reality and a pulse on the street that will apply for their 501 (c) 3’s and change their tunes and start being community leaders where they can exist, thrive and keep their doors open.

You see, that’s where I see the business going.

Anyone can open a non-profit mortgage brokerage and offer every product available in wholesale. All they would have to do is charge low fees that cover costs and expenses. Just because they are non-profit does not mean they do not charge fees and they can be more than NACA. So, when a non-profit mortagge brokerage opens down the street in your community, good luck marketing against that.

Andrew - I am glad you see the light.

Cynthia - My heart goes out to all the ethical and honest mortagge professionasl that are suffering and being black balled as a result of all the scum and scammers that entered and most likely exited the business. It’s is a travesty that everyone has to suffer for and be black balled.

Virginia - underwriters have a holier than thou approach as if they were some kind of guardian angel to the gold with no faults. you and I both know that they were the last line of defense for fraud and guess what, the angels were a sleep at the job the last 5 years, based on a money and greed induced coma.

rcf - Great view form the table with clients and Realtors. I know real estate agents have a huge part in this, but they have NAR and years and years of community involvement. If anything NAMB needs to get off their a$$e$ and so do brokers and get involved in their communities instead of counting how many loans they are closing.

Joe - there is only so much you can do when advising a client on what they should do to protect themselves. I know that a lot of professionals fully explained the terms of a mortagage how it works. But at the same time, there were just as many loan officers that did not do that and placed borrowers in predatory mortgages with predatory fees where that LO and broker made the most cash. Same can be said for Realtors.

All I know, that way of business is gone and no one will make the money they were making.

Oh and one more thing, watch out for the non-profits because they will be opening these types of shops everywhere and most likely in your town too.

Moe

You have to admit NACA IS WIDE OPEN for FRAUD!!!! 100 LTV, LESS THAN GREAT CREDIT!!! Is this why we are in this mess!!!!!

I still the think the 20% down, 680 credit, full doc conforming loans are not going to NACA. I can get to 5.625% and make 1.25-1.5 ysp. You seem to missing the fact that peoples time is worth a quater point in rate….no 5 requirements for the next 10 years!!!!!!! Two income households with 2.4 kids running around like crazy do noy have the time over the next 10 years just to save a quater point!! Just my opinion!!!

Moe:
Why would I get the 501(c)3 if I all I can do is cover costs and not make any money?
Again, I probably shouldn’t be asking this since I don’t know enough about it. But if it is a way to expand my existing business, I will have to look into it.

Paul - You are not being thick headed, just failing to see that NACA can do what you can do. Not now, but soon. You see these companies will soon have the pick of the litter on who they can hire. I am sure we will see people such as yourself, with experience and integrity working for these non-profits.

You can still operate a non-profit mortgage company and a for profit side by side. Th enon-profit would be for low income borrowers who qualify and the for profit would be for people who can afford to pay for mortgage service fees.

If brokers survive, then yes, the upper class and jumbo loans may very well go to you and you can pay your mortgage for a year.

BUT - if a non-profit opens down the street and they offer jumbo loans etc and charge minimum fees to do the same thing you did, well, bud, you soon will be out of business because those referalls will be going to them.