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-   -   ZOMFG The Economy (http://www.pokertips.org/forums/showthread.php?t=62973)

JJS6866 Sep 08, 2008 4:07pm

ZOMFG The Economy
 
I do mortgages. It sucks. Fannie Mae and Freddie Mac are taken over by the gov't. It may actually be a good thing if interest rates stabalize and some lending programs reopen but I fell like the gov't taking over anything=BAD.

MRVEGAS Sep 08, 2008 4:41pm

Then maybe you shouldnt have suckered all those ppl into ballon mortgages:biggrin:


just kidding!




V

JJS6866 Sep 08, 2008 5:15pm

Hehe. I've never done a balloon mortgage or a negative amoritization loan(a loan where the customer has options each month for how much they pay and if they make the min payment they add the deferred interest to their principal loan amount)...Those loans were just insane and anyone stupid enough to take one or try and sell it deserves what they get.

However every lender used to have a "fast and easy" or "quick and simple" or Stated Income Stated Assets" These loans are bad news and lots of people bit off more than they could chew. If anyone is truly interested in how these loans worked I will go into further detail...i doubt anyone cares though.

jds2381 Sep 08, 2008 6:02pm

enlighten us:P

Mr Beaks Sep 08, 2008 7:14pm

Quote:

Originally Posted by JJS6866 (Post 708981)
I fell like the gov't taking over anything=BAD.

Yeah, better to just let the entire world economy go down the tubes and find yourself out of a job imo.

Your industry messed up. You failed to self-regulate and you got greedy. This is the price you pay for cashing in without any thought of what happens down the road.

Not aimed at you obviously, but for every one like you who hasn't taken advantage there are plenty who have.

TJTay89 Sep 08, 2008 8:41pm

I know about a couple who were told that they could afford a $1,500 mortgage when they only made $2,500 a month. They got approved for a $240k home when the highest they should have responsibly been able to get a mortgage for is something around the $140-$175k range. Once you start going over 1/3 of your income on a mortgage you are just asking for trouble.

Greed by some mortgage companies + stupidity on the part of the consumer = mass foreclosures

I feel sorry for some homeowners who lost there home due to crisis or injury. However, a lot of people wouldn't have gotten into the trouble they did if they actually did some homework and bought a book or attended a seminar on home buying and budgeting. I mean some people spend more research effort when they pick out there new appliances then they do when they are going through the process of buying the house.

JJS6866 Sep 08, 2008 10:51pm

If anyone is to blame it would be Lenders that offered these exotic mortgages. 2 years ago I could get anyone with a pulse, 2 year work history, and a 620 credit score 100% financing with a 6% percent seller concession. The best part is the income could be "STATED" on the application as long as it was reasonable. This is LUNACY!!!! The problem lies in the fact that EVERYONE could do these loans...

So here comes Joe Schmo with 2 years on the job making 15 bucks an hour.

Joe says I've never paid a bill on time in my life except for my 500/mon truck payment can you get me financed?

JJS looks at his list of lenders and rate sheets and says "well joe you are a deadbeat with very marginal credit but there are literally 20 different loans that I can get you...with your debt to income ratio you can only afford x per month...well that isn't good enough for Joe. He is a balla.

Joe "needs" to live in a 280k 4 bedroom 3 bath, god forbid he lives within his means...I say to him..Well joe I don't think you can afford that. Joe is not happy he REALLY wants that 280k 4 bedroom. His wife who's credit is so bad she can't go on the loan has a job and income I can't use for qualifying purposes. Joe insists with this extra income he can afford the house.

Here is where the problem comes in. If I don't get a joe a mortgage there are 300 other dudes out there that will do him "stated" Just put the income you need on the application to make the loan sellable to investors on the secondary market and push it through. The lenders offer the program, the account execs from the lenders push it down your throat...gotta keep numbers up afterall. So what is a guy like me supposed to do? Do I turn down Joe and have him go somewhere else so he can say what an asshat I am because I couldn't get him financed? Or do I state his income at 5k a month and collect monies? It depends on the situation. This is obviously an extreme example and i've never done anything this bad but I certainly have "fluffed" up income to get people the house they wanted. They all knew what the monthly payment would be when they signed papers and if they couldn't handle it they should have known that.

Here is the worst thing I've ever done: My GF has excellent credit. My credit not so good. We found a bomb ass duplex type house out in the sticks that she could never dream of buying on her own. So myself, my woman, my best friend, and his woman decided to buy this house. I stated my GF's income at like 8000 dollars a month. Made up some bullshit "title" for her and got us 100% financing with 6% for closing costs. We now live in a really nice house. Between the 4 of use we make WAY more than 8k a month and more than afford our house. IMO these SISA-stated income state asset-loans WERE for exactly this type of situation. The bottom line is I lied my balls on her application and believe me when I say that EVERYONE!!!!!!!!!! did just this and a hell of a lot worse. Not everyone has 4 incomes to draw on when it comes time to pay the house bills.

This type of shenanigan is now over. Everything is "full doc" meaning you show up with paystubs, w2's, clean credit, and a downpayment or you are SOL. This is how it should have been. At the height of the mortgage boom it was possible to get a person with a 580 credit score and collections(unpaid bills) 100% financing if you could prove their income. So you are letting someone who has NEVER paid a bill on time in their life a house that they didn't have to put any money into? Well at the first sign of trouble guess who is going to bail on that responsibility...its not like their credit is going to be ruined. Looking back on it I was always the one in this office that said "this shit is going to come back to fuck this industry in the ass" I was right :) my vindication has been bittersweet. lol.

Luckily the douches of this industry are dropping like flies and those of us that aren't completely retarded are starting to reap the benefits of decreased competition.

TWLLM Sep 08, 2008 11:00pm

@ JJS - any chance you could send some of those douchebags up to Toronto's condo market, let them screw it up for a few years, then when I'm ready to buy one they will have crashed the market to the benefit of someone like me who will check out on paper as a legit loan? :biggrin: Personally I think the condo market needs to crash a bit so it's more affordable, but being who I am the only way to ensure that happens is to buy one. :wink: I'd rather buy it *after* the market comes down.

staphros Sep 08, 2008 11:21pm

Buy too much house - pay the price IMO. Simple math can give you a pretty good ballpark as to what you can afford. I don't want to pay more tax to help greedy people keep what they shouldn't have had in the first place.

Axis of Evil Sep 09, 2008 1:24am

+1


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