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12/10/2008 05:07:46 AM · #1 |
I sure think this sounds like a Nice Idea! I have a pretty good rate on my current mortgage but would gladly spend what I could save under this plan... In fact I would probably be willing to take on another car payment and would buy a new Vehicle to help save that industry!
//www.remortgageamerica.blogspot.com/ |
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12/10/2008 05:19:08 AM · #2 |
Isn't America, (and the rest of the world), in this mess because of the cheap debt that was freely offered in the first place ?
And amazingly, this guy's idea is to offer additional cheap debt to everyone? Yeah it's a great short term fix but all it's going to do is extend or prolong the debt bubble and we all know how bigger bubbles end up.....
bazz. |
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12/10/2008 05:22:31 AM · #3 |
| I suggest Prozac, lots of it. That will fix America's depression. Counseling might help too. |
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12/10/2008 05:31:37 AM · #4 |
| A Valid point. It would work great for me, and a lot of people who work hard to keep their credit strong, pay their bills and are responsible with spending within their means etc... but this very well could lead to getting more unqualified people into positions that they shouldn't be in... Hmmm. Good Response. Maybe only offer it to those who have never missed, or been late on their mortgage? a credit score based economic stimulus to free up additional funds to fuel the economy as a reward to those that spend more appropriately? |
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12/10/2008 05:33:38 AM · #5 |
| Ha! Tog... America definitely could use some counseling right now! Funny! |
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12/10/2008 06:02:25 AM · #6 |
What already helps is that the price of oil is coming down to a more realistic level. This will free up some money to spend on normal things instead of flowing into the pockets of a few who only use it to get on the frontpage of Quote.
I am however shocked that at this moment they try to attack this crisis by creating more room to go in deeper debt. It is simply postponing to an even worse recession.
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12/10/2008 06:26:06 AM · #7 |
| You cannot borrow yourself out of debt!!! |
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12/10/2008 08:13:16 AM · #8 |
The problem wasn't making loans and offering credit. It was making risky loans, hiding that risk and reselling those loans to unsuspecting investors many of whom had no idea what they were really buying, nor was there any way for them to find out.
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12/10/2008 08:55:47 AM · #9 |
Originally posted by CarlvanHeerden:
You cannot borrow yourself out of debt!!! |
Unless they're interest free loans.
eta bad spelling/grammar
Message edited by author 2008-12-10 09:34:15. |
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12/10/2008 09:05:16 AM · #10 |
I have had not car payments for years, I paid off all my credit cards several years ago and just killed off my second mortgage. All I owe now is my regular mortgage payment. I'm not going back to debt again if I can help it. Too much risk for my taste.
Would this be a good time to mention Dave Ramsey? If you can look past the strong religious aspects, there is a lot of good sound financial advice to be had from his show. |
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12/10/2008 09:11:28 AM · #11 |
Originally posted by Jac:
Unless their interest free loans. |
Even an interest free loan is putting yourself at risk if you have difficulty paying it back. However, if you are already committed to payments, it makes sense to reduce your interest rate if you can. |
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12/10/2008 09:15:50 AM · #12 |
Originally posted by yospiff:
Originally posted by Jac:
Unless their interest free loans. |
Even an interest free loan is putting yourself at risk if you have difficulty paying it back. However, if you are already committed to payments, it makes sense to reduce your interest rate if you can. |
Yes, I was too lazy to elaborate. thanks |
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12/10/2008 09:52:47 AM · #13 |
| I don't think the gov could afford paying out all the loans requested. And determining who qualifies for what and making sure they make their monthly payments would be a nightmare. I would love to be able to take advantage of it though! |
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12/10/2008 10:08:04 AM · #14 |
What lesson is everyone getting from this? Is it: We can borrow until we drop because our government will help us out in the end just as they did with the banks. or Maybe I shouldn't want so many things I can't afford because in the end they're not making me more happy, they're giving me insurmountable amounts of stress because of the debt I've incurred to acquire them?
hmmm
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12/10/2008 10:12:04 AM · #15 |
| Well, I guess this idea isn't any worse than giving $700 billion dollars to the people that oversaw the ruin in the first place. |
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12/10/2008 10:16:48 AM · #16 |
And why invite the government to be more involved with our private enterprises when it's their policys that are largely to blame for the mess that we're in?
And it would create another huge bureaucracy that will be subject to more corruption and influence peddling and theft and waste and inefficiency.
And throw many thousands of people out of honest capitalist work making and administering loans at a profit...what the American economy is built on.
No, no bigger government involvement for me, thank you.
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12/10/2008 10:39:20 AM · #17 |
Originally posted by farfel53:
And throw many thousands of people out of honest capitalist work making and administering loans at a profit...what the American economy is built on. |
I am taking from this line that your comment is sarcastic? |
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12/10/2008 12:49:24 PM · #18 |
It sound good on paper but I see two three main problems with the idea.
1. What happens to all the banks that are in the mortgage business. If everyone one was offered a government loan on a home then they would no long be in the mortgage business. That would cost jobs as some banks would close.
2. Where would the US get enough money to give every eligible US Citizen a loan and especially up to $500,000 lifetime limit. Estimates say there are upward of 200,000,000 homes with over half having mortgages. IE. 150,000,000 x 250,000 = $37,500,000,000,000...that $37.5 trillion dollars and that a low end estimate. Were having a hard time finding $700 billion.
3. And the biggest problem of all; Most Americans are gluttons! Sorry to have to say it that blunt but it's true. Let me explain. If the government offers someone a mortgage with interest that will reduce there payments by half, what are they going to do? - find a larger, more expensive house and end up with the same payments if not higher payments than before the government home loan.
Message edited by author 2008-12-10 12:52:10. |
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12/10/2008 02:10:43 PM · #19 |
Originally posted by vxpra:
Originally posted by farfel53:
And throw many thousands of people out of honest capitalist work making and administering loans at a profit...what the American economy is built on. |
I am taking from this line that your comment is sarcastic? |
No sarcasm intended. Not sure where you see any. The vast majority of lenders are reasonable and responsible. I don't see why we want to take away a whole industry for the sake of granting government functionaries more power.
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12/10/2008 02:18:17 PM · #20 |
This won't work.
If we can all refi at 1.5% we will - and EVERY bank and mortgage company will go under IMMEDIATELY. Not to mention the HUGE load on whoever it is that has to do all the paperwork for the refi (title work, deed/morrgage recordings, closings, etc).
Deficit won't go up? Perhap not long term but if I refi'd my loan today the US Govt would have to pay Wells Fargo about 109,000. TImes that by 150 MILLION homeowners (or more) and that's a LOT of cash that the gov't has to come up with. Immediately.
It can print it but that will create hidieous inflation.
Dumb idea.
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12/10/2008 03:07:18 PM · #21 |
Originally posted by farfel53:
Originally posted by vxpra:
Originally posted by farfel53:
And throw many thousands of people out of honest capitalist work making and administering loans at a profit...what the American economy is built on. |
I am taking from this line that your comment is sarcastic? |
No sarcasm intended. Not sure where you see any. The vast majority of lenders are reasonable and responsible. I don't see why we want to take away a whole industry for the sake of granting government functionaries more power. |
On my desk at this very moment:
1) A woman that claimed to earn $19,000 per month as a manager of a Days Inn in Seattle.
2) A Las Vegas man with seventeen primary residences (all in Florida), he took out all seventeen mortgages within one week, using the same lender, same loan originator. He claimed to be making $16,000 per month as a "consultant" according to his taxes- he made $1,264 in the year these loans originated. He failed to disclose all the other loans.
3) Twenty seven files from one loan originator that worked with a developer and appraiser in Georgia to originate loans, overvalue properties (most by 45%), misstate incomes and employments, and in five of the files forge signatures of borrowers that decided to back out of the investments, oh...all these loans were originated as primary residences. None of the properties were ever occupied.
4) Three files from Minnesota where the borrowers don't even exist, the SSN's are phony. The employers have never heard of these people, the "Present Address" they gave on the loan application isn't even a real property.
5) I have a loan on a property that, if it existed, would be six miles out to sea.
6) Five colorado files with multiple undisclosed liabillites (additional properties bought by the borrowers, but not disclosed on the loan application). All originated by one loan originator.
7) Two Oregon files where houses were never built (despite claiming the properties were five years old).
Those are just my retail loans (bank originated, not brokered). I have miles of interviews with loan origintors telling me that they knew loans were bad, but bank officials told them to "push them through, we need money on the books" I have loans from BOA, Countrywide, Wachovia, WaMu, IndyMac, SunTrust..... the list goes on. I audit 70-75 loans every month 70% have fraud that we track directly back to lenders. As a company, we audited 4,000 loans last month- less than 10% did not have verifiable fraud.
I admit there are honest loan originators out there, there just isn't enough of them. And alot of the problems came from the banks themselves, contests to reward whoever could originate the most loans, minimums on the $ amount of mortgages you had to originate or lose their jobs, its just a real mess. Of course it did give me job security for the next five or six years. Probably more judging by some of the conversations that I see in loan origintor forums.
Message edited by author 2008-12-10 15:10:24. |
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12/10/2008 03:52:54 PM · #22 |
Jeff- I would be last to argue that there are a pile of big messes to deal with in the mortgage market. But I would guess that maybe you see more than your share of bad ones, in your position. I could be wrong. But, let's fix the problems with the market, and not just toss the whole thing on the heap. We already rely far too much on government.
Just my opinion. I will always lean toward free markets, self-reliance, honesty and hard work. Government to keep us off each others' toes, and little else. But that's a dream, and reality is way more complicated.
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12/10/2008 04:05:30 PM · #23 |
Originally posted by vxpra:
minimums on the $ amount of mortgages you had to originate or lose their jobs, its just a real mess. |
There's much of the problem right there. Pressure to perform or lose your livelihood will make someone do whatever they must, and it's ok, because "the boss told them to do it this way". In my mind, this is not unlike the uncaring retail policies we were discussing in another thread yesterday. People will do what they are told, even if they feel it is wrong, when you threaten their job. |
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12/10/2008 04:32:01 PM · #24 |
Originally posted by yospiff:
Originally posted by vxpra:
minimums on the $ amount of mortgages you had to originate or lose their jobs, its just a real mess. |
There's much of the problem right there. Pressure to perform or lose your livelihood will make someone do whatever they must, and it's ok, because "the boss told them to do it this way". In my mind, this is not unlike the uncaring retail policies we were discussing in another thread yesterday. People will do what they are told, even if they feel it is wrong, when you threaten their job. |
Add to that out and out greed. I had an interview last week with the owner of a, now defunct, mortgage brokerage. He was very forthcoming. His business grew out his ability to control it. He thought the managers he had in place were honest and would watch out for the best interest of the business. Instead they looked to see how much money they could make. His employees worked on commision, he took 15% of the origination fee as his "desk charge" and the rest was divided between managers and originators. He had ten to fifteen loan originators making 15,000 per month each (this was California). He said that he thought everything was on the up and up. Now he knows alot of these loans were pushed through and his employees falsified incomes and whatever else was needed to get the loans sold to lenders. He's being sued by four lenders for millions of dollars in defaulted loans. He said if he had it all to do over again he'd ban commisions out right and his employees would be salary only and he would have no more than 5-7 originators and he would look at every piece of paper before it went onto the lender. He was living high a couple years ago, now his life is probably ruined. I feel for the guy, but I see it all the time.
farfel:sorry if my reply came across harsh. But, this whole mess points to the fact that there must be regulation in the banking industry. Maybe someday they can deregulate and start it all over again, but they've lost their right to self regulate. My problem is I don't trust the government to impose that regulation any more than I trust the banks to do it themselves. I look at this as having been the banks second chance at self regulation (the first being the S&L meltdown in the 80's). Not sure if we can afford to give them a shot at strike three. And I admit I am jaded by the files I see, its refreashing (well for me) to see a file that went bad because of some factor other than fraud, someone lost their job, a divorce (I've heard some classic divorce stories- like the wife that didn't know her husband had bought a $525,000 condo in Florida because he had bought it for his mistress- of course when the lender started calling about the missed payments she found out. Hmmm, actually that one wasn't a fraud free file, he had lied about his income).
Sorry about my rambling, time to get back work and bust some liars. |
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12/10/2008 04:47:25 PM · #25 |
Originally posted by vxpra:
He said if he had it all to do over again he'd ban commisions out right and his employees would be salary only |
Though I am not in sales, (I am on the technical side of things, thank goodness!) I have worked closely with a lot of salespeople and I think many industries would not get salespeople who could sell if they went to salary. There's got to be some means of setting up an incentive structure that rewards salespeople for the quality of their sales. In the office equipment business, that is often done by a recurring income from the deal, based on equipment usage, rather than a flat commission on the original sale. I don't know how that could be applied to mortage lending.
Message edited by author 2008-12-10 16:48:31. |
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