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Here4Good

Beach Fanatic
Jul 10, 2006
1,269
527
Point Washington
This has to be new dumb decisions or lingering ramifications from old ones. As for lending, the guidelines are changed forever and are hardfast rules. I have faith that they are changed forever.


You stand alone in your faith. The previous guidelines had stood for 25 or 30 years, and were wiped out in months.
 

Lynnie

SoWal Insider
Apr 18, 2007
8,176
431
SoBuc
You stand alone in your faith. The previous guidelines had stood for 25 or 30 years, and were wiped out in months.


There was pressure to loosen lending in the 90's (80/20 programs under Clinton's Admin) and then guidelines were relaxed after 9.11.2001. Everything was relaxed from buying an auto to FED taking the discount down to 1%. From approx. December 2001 through 2003, we had record bankruptcy filings. And, mortgage lending guidelines became increasingly more relaxed....until we actually used the words 'subprime' lending.

It is tougher now than ever to secure a mortgage. I am not alone in knowing that we won't repeat this mistake. And, am thrilled to see the light at the end of the tunnel. :D
 

scooterbug44

SoWal Expert
May 8, 2007
16,732
3,330
Sowal
It may be tougher now to secure a mortgage, but I still think there are some dumb contracts being written, exceptions being made, ...................... and that it's a temporary condition that will soon be forgotten.
 

Lynnie

SoWal Insider
Apr 18, 2007
8,176
431
SoBuc
It may be tougher now to secure a mortgage, but I still think there are some dumb contracts being written, exceptions being made, ...................... and that it's a temporary condition that will soon be forgotten.

It is an absolute impossibility for any exception with regard to Fannie Mae, Freddie Mac or FHA. Absolute Impossibility. If you know of something, please report it. That mortgage/lending operation will be out of business in less than 24 hours.

There are private lenders and they can do whatever they want but they are expensive, very expensive.
 

Matt J

SWGB
May 9, 2007
24,643
9,496
While I don't agree with the people who bought 2nd, 3rd, and 4th homes to either rent for cash flow (SHELLY's lurking and snickering) or flip for a profit and got caught during the burst walking away to simply avoid the financial hit. I do understand some instances. I'm not going to call out one of the people I know who did this, but they did so because the bank was not responding. While I understand the concept of a payment schedule and obligation if a bank is completely ignoring a borrower who is desperate to keep the home and pay back the obligation through either a restructuring of the loan, postponing some payments, or at least starting over because they can't catch up. Then I say puck the bank and walk. How many banks used the we work with our clients and care for them line when they were selling the mortgage?

Before anyone points to a mortgage as though it's carved in granite and unchangeable that's B.S. A lender can always amend a contract unless the amendment is illegal.
 

robertsondavies

Beach Fanatic
Apr 16, 2006
500
28
While I don't agree with the people who bought 2nd, 3rd, and 4th homes to either rent for cash flow (SHELLY's lurking and snickering) or flip for a profit and got caught during the burst walking away to simply avoid the financial hit. I do understand some instances. I'm not going to call out one of the people I know who did this, but they did so because the bank was not responding. While I understand the concept of a payment schedule and obligation if a bank is completely ignoring a borrower who is desperate to keep the home and pay back the obligation through either a restructuring of the loan, postponing some payments, or at least starting over because they can't catch up. Then I say puck the bank and walk. How many banks used the we work with our clients and care for them line when they were selling the mortgage?

Before anyone points to a mortgage as though it's carved in granite and unchangeable that's B.S. A lender can always amend a contract unless the amendment is illegal.

It seems like the banks are bending over backwards to amend, or modify loans to big borrowers. (i.e. the borrower into a bank for $4 Million on a shopping center plaza) THey should be diligent in modifying things for individuals as well, and to date, they have not been. They ignore the small borrower at their peril. Some loans cannot be restructured of course, and many more could be. I know a small business man, who purposely borrowed more money when he was in trouble about a year ago now, b/c he knew the old adage.. "If I owe the bank 600K, that's my problem, if I owe them 1.5M then its THEIR problem" true story.
 

Lynnie

SoWal Insider
Apr 18, 2007
8,176
431
SoBuc
While I don't agree with the people who bought 2nd, 3rd, and 4th homes to either rent for cash flow (SHELLY's lurking and snickering) or flip for a profit and got caught during the burst walking away to simply avoid the financial hit. I do understand some instances. I'm not going to call out one of the people I know who did this, but they did so because the bank was not responding. While I understand the concept of a payment schedule and obligation if a bank is completely ignoring a borrower who is desperate to keep the home and pay back the obligation through either a restructuring of the loan, postponing some payments, or at least starting over because they can't catch up. Then I say puck the bank and walk. How many banks used the we work with our clients and care for them line when they were selling the mortgage?

Before anyone points to a mortgage as though it's carved in granite and unchangeable that's B.S. A lender can always amend a contract unless the amendment is illegal.

It seems like the banks are bending over backwards to amend, or modify loans to big borrowers. (i.e. the borrower into a bank for $4 Million on a shopping center plaza) THey should be diligent in modifying things for individuals as well, and to date, they have not been. They ignore the small borrower at their peril. Some loans cannot be restructured of course, and many more could be. I know a small business man, who purposely borrowed more money when he was in trouble about a year ago now, b/c he knew the old adage.. "If I owe the bank 600K, that's my problem, if I owe them 1.5M then its THEIR problem" true story.


If Private Mortage Insurance was involved in the underwriting (first lien over 80% loan to value and PMI co. still solvent), this could be one glaring reason why the mortgage co. is ignoring the debtor. If there is a default, the PMI protects the lender. Not saying this is the case always, but certainly in some instances.
 

Miss Critter

Beach Fanatic
Mar 8, 2008
3,416
2,116
My perfect beach
This story ran in the Daily News Sunday. You wonder why people are walking? They are trying to do the right thing, and the lenders are simply not responding.
Real Estate - Government Mortgage Plan Aids 7% of Borrowers - CNBC

Government Mortgage Plan Aids 7% of Borrowers
The Obama administration's mortgage relief plan provided help to only 7 percent of borrowers who signed up last year, another black mark for the struggling program.

About 900,000 borrowers have enrolled in the $75 billion program since it launched in March, the Treasury Department said Friday. But as of last month, only about 66,500 homeowners had received permanent relief. Another 46,000 have been approved and should be finalized soon.
The plan aims to make borrowers' mortgages more affordable by reducing the mortgage interest rate to as low as 2 percent. They receive temporary modifications, which are supposed to become permanent after borrowers make three payments on time and complete necessary paperwork, including proof of income and a letter explaining the reason for their financial hardship.
The Treasury Department is pressing the 102 mortgage companies that are participating in the program to do a better job.
The mortgage companies say they have struggled to get homeowners to return the necessary paperwork. Wells Fargo executives project that only about half of the borrowers who enrolled last summer will wind up being approved.

The rest will either won't send back all the required documents or will be deemed ineligible according to the government's formula. Collecting the documents up front would make the process much easier, said Mike Heid, co-president of Wells Fargo & Co.'s mortgage division.
"You could make a better decision for the consumer right up front," he said.
Nevertheless, homeowners and housing counselors say navigating the bureaucratic maze often seems impossible.
The nation's economic woes have made more borrowers fall behind on their payments. More than half of the borrowers approved for a loan modification have seen their income cut, according to the Treasury Department.
Unemployment, now at 10 percent, is expected to remain elevated for the whole year. Industry executives and housing advocates alike have been in talks with the Treasury Department to develop a program to aid the unemployed, but nothing has been rolled out yet.

And lest you believe the mortgage companies' claims that homeowners are not completing the paperwork, ask any Realtor who's handled a short sale about their dealings with lenders. They never speak with the same person. Documents have to be re-sent time and again. And entire files get "lost" well into the process. It's a nightmare. This is far from over.
 

scooterbug44

SoWal Expert
May 8, 2007
16,732
3,330
Sowal
Yes, they really are being unresponsive and unreasonable.

I can't quite figure out why the banks are so slow to respond aside from not wanted to show a loss on their books. :dunno:

They sure as hail better not be waiting for some bailout or new program. :angry:
 
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Busta Hustle

Beach Fanatic
Apr 11, 2007
434
34
You guys may want to start paying attention to the battles between elizabeth warren and christopher dodd. There are articles attached to todays huffington post and reuters...
 
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