The comments that the AJC readers posted are interesting, to say the least.
I concur with a lot of the comments. There are a lof of folks out there that went with ‘scab’ loans so that they could buy ‘more’ house than they could afford and/or needed. I know a ton of people that bought more than they could realisitically afford trying to “keep up with the Joneses”…
If you buy property with a “smoke and mirrors” loan that you don’t understand and then it adjusts to a level that you can’t deal with, I feel like that is your problem, not the government’s. I’ll bet that, in every case, the terms are spelled out in the loan agreement contracts.
Yeah, there are some sleazy lenders that need to be dealt, but a lot of these are “self-inflicted sucking chest wounds”.
Keith
He’s going to provide leftover trailers from Katrina.
:bs
:shocked
I have some credit card debt…please Mr. Bush, help me too! :bs
To all you real estate pros… How do you feel this will impact the investment community… negative or postive…
I’m more worried about how it will affect the country as a whole.
Yea I’m concerned that will to. Especially those of us who do Sub-2 , lease options and preforclosures. I guess we will have to see how it plays out…Maybe we can catch a break and make some money.
We do not make money by taking advantage of people in need. We help people sell fast, or sell houses they could not otherwise sell on their own. I always try to help those in default stay in their home by refinancing, my goal is not to take their home away there are enough sellers out there who just want out so the gov’t stepping in to help those in default is a good thing.
From what I have read, the program now allows FHA to insure refinanced loans not just new loans as long as the reason for the default is the adjusted mortgage rate due to an ARM, and as long as the owner has 3% equity in the house. The 3% equity is no brainer, any appraisal will give them that except maybe in the troubled markets such as some areas of Florida and California I guess.
The ARM is the key here. People would have to show that they made payments until the rate adjustment went into effect. My guess is that this will also affect higher priced markets where people purchased on ARMs to afford the houses more so than cheaper markets such as Texas where houses were still affordable.
Dems may expand on the changes, which is good. Hopefully this will help stabalize the market and we would not have to go back to the 10% and 20% down payment requirements.
We have laws in place to prosecute mortgage brokers if they commit mortgage fraud. Many mortgage brokers greased the wheels of their client’s loan by doing things for them. For example, many underwriter’s requirements make people with bad credit explain WHY they have bad credit. Acceptable excuses, as far as the underwriter is concerned might be death, divorce, job loss, or poverty. The mortgage brokers know this, so they write their client’s letter for them….To whom it may concern: blah blah couldn’t afford my mortgage because {dad died, I had a crappy job, I was going through a downsizing/divorce} Thank you. Now the underwriter has the letter they need. Another trick was to have an appraiser in their pocket, who would give them basically any price they named. Another trick was to go to a credit repair company, and there is a cookbook recipe for disputing information on the credit record in the name of improving mid FICO scores. For $800, you can have clean credit too.
Federal truth in lending requirements are very clear that consumers need to know the terms of a debt instrument when they go to buy a home. Everyone who gets a home loan should get a good faith estimate of what the loan will ultimately cost, and the cost of monthly payments. I believe that we got a little sloppy with truth in lending statements, and buried the actual terms in the mortgage note, and did not bother to extrapolate the probable actual cost of borrowing money. There were several incentives to do this: first, everyone was stupidly convinced that the price of real estate would never plateau or go down; second the bank didn’t care because if they had to foreclose on the home, it looked like a no lose situation because values were rising so quickly, and demand was so frenetic.
Caveat Emptor “let the buyer beware” I hate to break it to many folks in our society, but you have to care. If you’d like to have good health, then don’t eat fast food every day drink like a fish, or smoke like a chimney. If you’d like to have a government that is transparent and accountable, perhaps you should consider voting with the consideration of something besides you NRA membership or your uterus. Furthermore, if you would like to make the largest financial transaction in your life, perhaps you should take the time to read the good faith estimate of the settlement statement, and read the mortgage note.
Did we make the mortgage process so convoluted and complicated that the last words during closing were “screw it…give me the pen.”? That’s really too bad. It really is sad that we lacked the foresight and good judgment to do this right in the first place. It does seem ridiculous that we should have to bail everyone who was involved in this perfect storm out…but what choice do we have? Obviously, there are global economic implications involved with mortgage backed securities and collateralized debt obligations. I don’t think that the Fed or the government is getting involved because they want to bail anyone out, they’re doing this because the alternative is economically devastating on a global level.
Personally, I am sick and tired of the government bailing everyone out. A person should have a right to be an idiot and then pay the consequences for being an idiot. Is the government going to bail out all the millions of wannabe investors who ignorantly bought properties because they watched some moron make big bucks on a fake “flipping” show on TV? Surely, these investors were defrauded by the networks who put on shows that were staged! They deserve to be bailed out too - don’t they?
When I become Czar, ALL of the money for the lazy and all the handouts for our the tens on millions of whiny VICTIMS will stop - right after we get rid of all the idiot contingency lawyers!
Mike