“We see this in the subprime crisis. If in fact residential mortgage loans were made only by banks or thrifts or credit unions, then we would not have a sub prime crisis. And we would not have the economic problem we now have.”
And with the mess in the real estate markets, sub prime mortgage crisis, the collapse of Bear Stearns, Frank says after years of deregulation, the time has come for some reregulation.
No Responses
It is absolutely the responsibility of any borrower to completely understand the terms of the contract they are signing. If they are unable to meet the terms of the contract they sign, the signer must face any and all consequences for that failure. STOP BLAMING THE LENDERS !!!
Posted on May 22nd, 2008 at 10:46 am
Michael,
I was in the mortgage industry for 6 years and got out 2 years ago, I was disgusted by the way everyone got Greedy and didn’t give a shit about the person or their family.
Now Granted some of the borrowers did know exactly what they were doing, because either they were going to flip the property or cash out as much as possible & take the money & run
But for those buyers who truly wanted to buy a property for their family got screwed on many levels.
You should know as well as anyone else that those documents are hundreds of pages and most borrowers do not understand the lingo, so they’ll ask their mortgage broker or realtor or lending tittle co., or lender etc. to explain this to them and trust that their advice is correct since they are the professional. I have seen first hand how some Loan Officers & Lenders have sugar coated the loan or straight out omitted explaining Negative Amortization or how an arm really works. They have told the borrower exactly enough for them to sign and receive their hugs commission checks. I have even seen when a borrower asks what is the YSP (Yield Spread Premium) on the POC (paid out of closing) and they borrowers have been told - that is nothing in that column - that is a bank figure or whatever they can come up with. everyone is to blame, especially the greedy lenders who came up with BS programs like NO Doc & stated/stated knowing full right 90% of those loans were BS. and they looked the other way, winked and made their money.
& now that the shit hit the fan ! Well guess what everyone is paying for it one way or another…. Lets find solutions
Posted on May 22nd, 2008 at 11:37 am
You state this is a mtge servicer abuse: They failed to report good payment history to the credit reporting bureaus, thus preventing borrowers from improving their credit scores.
I have this problem. Can you direct me to a solution?
Thanks
Posted on May 22nd, 2008 at 12:56 pm
YSP is not always a detriment to the borrower. I am a mortgage broker in NY, and yield spread premium allows me to give my borrowers no point loans. I do mostly purchase money mortgages, and many times my borrowers may not have enough money to pay points. Yield spread premium is what the lender pays the broker for the loan,and yes it is based on the interest rate. News flash people, the banks profit is based on interest rates! In most cases my rate as a broker is lower than what the banks offer, so why cant I get paid for a service that I provide? My borrowers always have the option to pay points or to have my fee paid by YSP. Too many bad apples have tainted the reputation of YSP. It can be a valuable tool to help the borrower get the best loan/
Posted on May 23rd, 2008 at 7:12 pm
Moe:
You talk about mortgage servicers and lenders almost interchangeably. Let me ask you this, is it the responsibility of the servicer –at that time– to be able to furnish all life-of-loan information, cradle to grave, even before they assumed servicing responsibilites? And will this documentation also include the actual owners of the loan?
I have a mortgage serviced by SunTrust. Frankly, I’m not sure who owns my loan except that Suntrust had to consult with ‘investors’ before agree in to a forbearance plan. So I’m guessing it’s not SunTrust. Can I simply ask SunTrust who the owner of my mortgage is? I’m thinking of the Federal case in Ohio where Duetschebank was unable to substantiate their ownership of a number of mortgages.
How large do you think this ‘misplaced mortgage note’ problem is for the industry? With all the securitization, packaging, tranching etc., I could imagine the industry might have gotten too fancy for its own good.
Thanks for your interesting blog.
Posted on May 26th, 2008 at 10:42 am
Well Everyone, America can sleep soundly tonight! I think I’ve figured out why things are so messed up. People who wear Droopy pants!
Down here in ‘Lousyana’, rather than figure out how to build a levy that can withstand a cat. 5 hurricane, our legislators, who want ANOTHER raise, are spending your tax dollars debating the ‘droopy pants’ issue.
Yes,it’s been almost three years since the worst disaster many have/will ever experience. Entire communities remain deserted wastelands. Some communities’ land is now water. People still live in FEMA trailers full of formaldehyde, and gas prices are going up as fast as the heat index. The war drags on, and still we cannot find one spindley Arab with our expensive, advanced technology. Thousands of innocent homeowners are having their homes stolen by thieves calling themselves ‘responsible lenders. The earth is shaking; the poles are melting, and these folks have time to discuss DROOPY PANTS! I’m afraid it’s worse than I thought…The injustice of the war, the mortgage crisis, and getting ‘raped’ at the gas pumps all pale in comparison to the pressing need for a law telling people they can’t dress like ‘Humpty Dumpty’. How does one compete with that? As long as there are DROOPY PANTS,we have little chance for justice against our oppressors. I am doomed to homelessness if even one person walks this earth w his boxers showing…Please help stamp out Humpty Dumptys everywhere!
Maybe the snow blower at the ‘Ski Dubi Resort’ is on the blink. That would explain the high gas prices…
I could be way off here, but seems like this country needs to get it’s priorities straight, or we’ll end up having more 9/11’s while our lawmakers are busy getting paid ridiculous amounts of money to be ‘fashion police’. Joan IS the ‘fashion police’, after all.
Posted on May 28th, 2008 at 1:32 am
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